Delhi District Court
Daya Chand Sharma vs M/S. Bonanza Port Folio Ltd on 3 December, 2018
IN THE COURT OF SHRI VISHAL SINGH
ADDITIONAL DISTRICT JUDGE 06: CENTRAL : DELHI.
New CS No. 542/17
IN THE MATTER OF:
1. Daya Chand Sharma
V.P.O. Fazil Pur, Tehsil & Distt. Sonepat,
Haryana - 131 001. .......PETITIONER
VERSUS
1. M/s. Bonanza Port Folio Ltd.
Through its Directors at 43534C,
Madan Mohan Street, Ansari Road,
Darya Ganj, New Delhi - 110 002.
2. M/s. Sarvodaya Bulls and Bears Pvt. Ltd.
Through its Directors at 702 Jamal Pura,
Near OBC, Gurdawara Road,
Sonepat, Haryana - 131 001.
3. National Stock Exchange of India Limited
At 4th Floor, Jeevan Vihar Building,
Parliament Street,
New Delhi - 01. .......RESPONDENTS
Other Details:
Date of Institution : 28.10.2013
Date of Reserving Judgment : 14.11.2018
Date of Judgment : 03.12.2018
Sh. Daya Chand Sharma
Vs. M/s. Bonanza Port Folio Ltd. & Ors. CS No. 542/17 Page No. 1 of 11
Petition U/s. 34 of The Arbitration & Conciliation Act, 1996, against the
impugned Award dated 17/04/2013, passed in Arbitration Matter No.
CM/D0021/2012 and the impugned Award dated 12/09/2013, passed in
Arbitration Appeal No. CMD0021/2012/2954/2013
JUDGMENT
1. Petitioner has assailed the impugned Award dated 17/04/2013 passed by the Arbitral Tribunal vide which the claim of petitioner was dismissed, and the Appellate Award dated 12/09/2013 vide which the appeal preferred by the petitioner against Arbitral Award dated 17/04/2013 was dismissed and the Award was confirmed.
2. As per petition, the petitioner was under an incapacity to make proper presentation of his case as the Arbitral Tribunal did not allow calling of relevant records from the respondents. The petitioner has also alleged that the impugned Award is in conflict with the public policy of India.
3. The underlying facts of dispute between the parties have been dealt with in detail in the impugned Award and Appellate Award, and the same are Sh. Daya Chand Sharma Vs. M/s. Bonanza Port Folio Ltd. & Ors. CS No. 542/17 Page No. 2 of 11 mentioned in brief here. Petitioner is constituent of the respondents. Petitioner approached respondent no.2 in the month of June, 2015, to sell his securities. Respondent no.2 is a subbroker of respondent no.1, who, in turn, is a trading member of National Stock Exchange of India Limited. Respondent no.2 allegedly obtained signature of petitioner on blank member client agreement and other documents. Petitioner authorized respondent no.2 to deal in equities in cash segment only but respondent no.2 unauthorizedly made transactions in F&O segment.
4. Dispute arose between the parties regarding alleged unauthorized use of ID of the petitioner by respondent no.2 for online trading, although petitioner was a manual trader. Respondent no.2 also did not share contract notes for sale / purchase of the securities and statement of account with the petitioner.
5. Evidence was led by the parties in the arbitral proceedings upon which Award dated 17/04/2013 was passed by the Arbitral Tribunal dismissing the Sh. Daya Chand Sharma Vs. M/s. Bonanza Port Folio Ltd. & Ors. CS No. 542/17 Page No. 3 of 11 claim of the petitioner. Petitioner has alleged that the Arbitral Tribunal did not order the respondents to produce the relevant documents due to which he was under an incapacity to present his case effectively.
6. The incapacity of petitioner as a ground for setting aside an Arbitral Award U/s. 34 (2) (a) Arbitration & Conciliation Act, 1996, has limited application. It refers to lack of capacity of the petitioner to enter into the agreement and on that account to be not in a position to effectively participate in the arbitration proceedings because of age of minority or unsoundness of mind. In addition, incapacity could be due to inability of the petitioner to give free consent to an agreement because of coercion, undue influence, fraud, misrepresentation or mistake, provided under Sections 14 to 22 Indian Contract Act, 1872 (Ref: Commentary on Arbitration & Conciliation Act by Justice R.P. Sethi, 2nd Edition, 2017, pp. 1022 - 1033). The incapacity of such a nature and under foregoing circumstances has not been pleaded by the petitioner. The ground of incapacity U/s. 34 (2) (a) Arbitration & Conciliation Act, 1996, is not available to the petitioner. Sh. Daya Chand Sharma Vs. M/s. Bonanza Port Folio Ltd. & Ors. CS No. 542/17 Page No. 4 of 11
7. It requires no elaboration that the Arbitral Tribunal is not bound by technical rules of evidence prescribed by Indian Evidence Act and so long as the basic principle of fairness and well established principles of evidence are not violated, it cannot be held that Arbitrator has failed to act in accordance with law. The Arbitral Tribunal has the jurisdiction to decide the quantum and quality of the evidence required to adjudicate upon the dispute between the parties. The insufficiency of evidence cannot be the basis of challenge to the Arbitral Award. Merely because the Arbitral Tribunal did not order the respondents to produce the documents desired by the petitioner, he cannot be considered to be under an incapacity to present his case.
8. The other ground of challenge to the impugned Awards is that they were in conflict with the public policy of India as they were in contravention with the fundamental policy of Indian law. As per petition, the Arbitral Tribunal ignored the terms of contract and trade usages applicable to the transaction that it ought to have considered as per Section 28 (3) of The Sh. Daya Chand Sharma Vs. M/s. Bonanza Port Folio Ltd. & Ors. CS No. 542/17 Page No. 5 of 11 Arbitration & Conciliation Act, 1996. The impugned Awards were passed without taking into consideration the substantive laws of India that included bylaws, rules and regulations of the Exchange and SEBI as was stipulated between the parties through Clause 23 of The MemberClient Agreement dated 29/06/2005.
9. As per petition, Clause 28 of The MemberClient Agreement dated 29/06/2005 provided that "the client is aware that the Member tape records the conversation between Client's representatives and the Member, either personally or over the telephone, and hereby specifically permits the Member to do so. Such recordings may be relied upon by the Member as and when required to resolve disputes in connection with the trading transactions". The Arbitral Tribunal arbitrarily refused to order the respondents to produce the tape recorded conversations between them related to the transactions in question due to which he could not properly present his case to the Tribunal. Sh. Daya Chand Sharma Vs. M/s. Bonanza Port Folio Ltd. & Ors. CS No. 542/17 Page No. 6 of 11
10. (a) A bare perusal of the impugned Award would reveal that the petitioner availed of effective and sufficient opportunities to present his case before the Arbitral Tribunal and the Award was based on evidence led by the parties. The copies of digital contract notes provided to the claimant (petitioner) were annexed as annexure 'R1' by the respondents, who asserted that Clause 2 of The Tripartite Agreement between Member, SubBroker and Client, Annexure 'C' provided that the contract notes could be issued by the Member in electronic form. Clause 55 of the MemberClient Agreement, Annexure 'D' stipulated that the documents including contract notes, bills, statement of account etc. sent by the electronic mode would be available for download from the website www.bonanzaonline.com of respondent company, through the option 'client box office'. The Member shall be deemed to have fulfilled legal obligations to deliver to the Client any such document if sent via electronic delivery.
10.(b) Clause 56 of the MemberClient Agreement provided that the information sent to Client by electronic means shall be binding upon the Sh. Daya Chand Sharma Vs. M/s. Bonanza Port Folio Ltd. & Ors. CS No. 542/17 Page No. 7 of 11 Client if the Client does not object either in writing or via mail within 24 hours after any such document is sent to the Client. In the impugned award, the Arbitral Tribunal observed that the claimant never lodged any complaint with the respondent company.
10.(c) Vide Clause 47 of the MemberClient Agreement, the Client (petitioner) confirmed to have read and understood the terms and conditions of the MemberClient Agreement and those relating to various services and products and accepted and agreed to be bound by the terms and conditions including those excluding / limiting the Member's and Exchange's liabilities. The Arbitral Tribunal observed that the claimant cannot be permitted to blow hot and cold or to approbate and reprobate simultaneously. The complainant cannot be permitted to take advantage of his own doings. The Tribunal observed that the claimant was an online constituent and could have assessed the contract notes online anytime if he wished to. It was incumbent upon the claimant to have raised the objections to the transactions within 24 hours, as Sh. Daya Chand Sharma Vs. M/s. Bonanza Port Folio Ltd. & Ors. CS No. 542/17 Page No. 8 of 11 stipulated in the agreement. The Tribunal also observed that it was obvious that the claimant had been transacting in F&O segment as he had been issuing cheques from time to time for such transactions. In M/s. Sudarshan Trading Co. Vs. The Govt. of Kerala & Anr. AIR 1989 SC 890, Hon'ble Supreme Court held that once there is no dispute as to the contract, the interpretation of that contract is matter for the Arbitrator to consider and decide, on which the Court cannot substitute its own decision. If on a view taken of a contract, the decision of the Arbitrator on certain aspects is a possible view, though, perhaps not the only correct view, the award cannot be examined and set aside by the court on the said ground.
10.(d) Thus, it would seem that the Tribunal adjudicated the dispute while keeping the MemberClient Agreement and trade usages in due consideration, as envisaged under Section 28 (3) of the Act. Regarding non production of the alleged MemberClient telephonic conversations during the Sh. Daya Chand Sharma Vs. M/s. Bonanza Port Folio Ltd. & Ors. CS No. 542/17 Page No. 9 of 11 arbitral proceedings, the Arbitral Tribunal observed that the MemberClient Agreement did not make it mandatory that all conversations must be recorded. The Arbitral Tribunal has the jurisdiction to decide the quantum and quality of the evidence required to adjudicate upon the dispute between the parties. The insufficiency of evidence cannot be the basis of challenge to the Arbitral Award. Merely upon the limited grounds raised by the petitioner, it cannot be held that the Arbitral Award was passed in contravention with the fundamental policy of Indian law and, thus, was in conflict with the public policy of India. The law is clear that an award shall not be set aside merely on the ground of an erroneous application of the law or by re appreciation of evidence even if another view is possible [Section 34 (2A) of the Act].
In a petition filed under Section 34 of the Act, the Court cannot sit in appeal over the award unless there is a jurisdictional error, illegality or perversity. Even the possibility of two views cannot be a ground to decide Sh. Daya Chand Sharma Vs. M/s. Bonanza Port Folio Ltd. & Ors. CS No. 542/17 Page No. 10 of 11 that there is an error apparent on the face of award (Ref: Hind Builders Vs. Union of India AIR 1990 SC 1340).
11. I find the petition completely devoid of merits. No cogent ground exists for interference with the impugned award. Hence, the petition U/s. 34 of the Arbitration and Conciliation Act, 1996, is dismissed.
12. File be consigned to record room after due completion.
Digitally
signed by
VISHAL
VISHAL SINGH
Announced in open Court SINGH Date:
2018.12.03
Dated: 03.12.2018 17:17:50
+0530
(VISHAL SINGH)
Addl. District Judge06 (Central)
Tis Hazari Courts, Delhi
Sh. Daya Chand Sharma
Vs. M/s. Bonanza Port Folio Ltd. & Ors. CS No. 542/17 Page No. 11 of 11