Delhi Court Issues Summons In Suit Against Business Of Carrying Forward Trading In Cryptocurrencies Without Regulatory Approval

A Delhi Court recently issued summons in a suit filed against the business of carrying forward trading in cryptocurrencies in the Country, without any statutory or regulatory approval.

Additional District Judge Geetanjali of the Saket Court was dealing with a suit filed by one Vidyut Kayarkar against a website called Olymptrade, operated by Saledo Global LLC, seeking a direction that such a business of carrying forward trading in cryptocurrencies is against the public policy of India and that any agreement to that effect will be barred under Section 23 of the Indian Contracts  Act, 1872. Section 23 stipulates lawful consideration/ object of an agreement. 

The suit filed through Advocate Nipun Saxena also sought a permanent injunction against the said Defendant, thereby restraining it from operating its business through the website being www.olymptrade.com, www.olymptrade.in, or any other websites, mirror links and Mobile Application "Olymptrade" in the Country.

According to the suit, various transactions were being carried out by the said defendant on its website and mobile application in the name of "Olymptrade" in the form of alleged trading.

It is also the case of the plaintiff that the Olymptrade website makes false and erroneous claims that its client can earn profit and withdraw upto 55300 US Dollars on an initial investment of only 10 US Dollars.

During the course of hearing, Advocate Saxena argued before the Court that physical delivery of goods is a sine qua non for the conclusion of a valid contract and that the entire agreement becomes a wagering contract in case there is no actual delivery of goods.

To this effect, he argued that the agreements become void on account of being hit by Section 30 (Agreements by way of wager are void) of the Indian Contract Act, 1872.

It was further argued that trading in derivatives is per se legal in the Country, provided it is carried out on a recognized stock exchange or a recognized market association and is carried out by an entity which is registered and incorporated in India, however, there has to be an actual physical delivery of goods.

He also placed reliance on various click wrap Service Agreements to argue that the Contracts for Difference are per se illegal in India and would tantamount to wagering contracts thus being void under Section 30 of the Indian Contract Act, 1872.

Hearing the arguments, the Court ordered thus:

"Let summons for settlement of issues be issued to defendant no. 1, alongwith notice of interim application, if any, on filing of PF returnable for 24.02.2022."

The matter will now be considered on February 24, 2022.

Case Title: VIDYUT KAYARKAR Vs. SALEDO GLOBAL LLC