STOCK EXCHANGE, BOMBAY vs V.S. KANDALGAONKAR .

The Supreme Court ruled that the Income Tax Department's claim for priority over debts owed by a defaulter member of the Stock Exchange is not valid, as the membership right is a personal privilege and inalienable under the Stock Exchange Rules. The Court held that upon declaration of default, the membership right vests with the Exchange, thus nullifying the Income Tax Department's prohibitory order. The Court quashed the prohibitory order and upheld the Stock Exchange's position regarding the ownership of the membership card under Article 226 of the Constitution of India.