They have written to the exchange informing it about having received these shares as bad delivery. They have further stated that leading broker, Madhukar Sheth, is not taking up the responsibility of this lot of shares despite having been the introducing broker.

According to BSE sources, the lot of shares were picked up by a broker, SN Nangalia to make good his delivery obligation to the exchange when the payments crisis rocked the bourse in June this year.

These shares were procured by him from Madhukar Sheth. The shares belonged to Sheth's client, Ikshu Finvest. The matter has assumed significance in the wake of Sebi charging Ikshu Finvest as being a front company for Harshad Mehta and that it had allegedly played a role in manipulating the prices of three scrips including BPL.

These shares were then routed through thesystem and finally reached the two brokerage outfits, SSKI and Jayanti Khandwala. When these outfits lodged the shares for transfer during the first week of October, the lot was returned back as bad delivery owing to a signature mismatch.

These brokers then took up the matter with the broker, Madhukar Sheth, in his capacity of being the introducing broker. According to sources in BSE, Sheth held the view that the shares were not his and belonged to the client and hence he was not responsible for rectifying them.

The two brokerage outfits, however, maintained that as the shares had been introduced by Sheth, he should take up the responsibility. The matter was brought to the notice of exchange authorities.

BSE has held the view that as these shares had been transacted outside its system, the bourse was not responsible for ensuring their settlement. However, some of these shares may have been routed through the mechanism of the exchange in the negotiated form and hence may go through the auctionroute.

Under the current guidelines of the exchange, bad delivery norms apply to only those shares which are routed through the exchange's trading mechanism. ``The exchange takes up the responsibility of settling only those no-objection cases which emerges on account of trades routed through BOLT,'' explained a BSE source.

Sheth could not be reached for his comments nor could Harshad Mehta.SN Nangalia who had bought the shares from Sheth, too has been held guilty of price manipulation in the same case and has been debarred from trading till the inquiry is over.