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Delhi District Court

Unicon Securities Pvt Limited vs Mr.Rajiv Kumar Sharma on 15 March, 2012

     In the court of Ms. Ina Malhotra, Additional District Judge­I
     New Delhi District :Patiala House Courts, New Delhi 

Arb. No. 109/11

          Unicon Securities Pvt Limited
          69, IInd Floor, Regal Building
          Connaught Place, New Delhi                           .....Petitioner
                        VERSUS
1.        Mr.Rajiv Kumar Sharma
          35, E Block, New Multan Nagar,
          New Delhi­110056
2.        Sh.K.S.Dhingra
          Sole Arbitrator
          National Stock Exchange of India Ltd.
          Jeevan Vihar Building, Connaught Place
          New Delhi                                                ......Respondent

           Plaint Presented                                    On     23.05.2011
           Arguments Heard                                     On 15.03.2012
           Judgment                                            On 15.03.2012
J U D G M E N T

The petitioner has filed their objections under Section 34 of the Arbitration Act on the ground that Ld. Arbitrator has announced the award by ignoring the terms of the contract and certain material documents which throw abundant light on the disputes.

Arb: No. 109/11 ....1

2. Brief facts of the case are that the petitioner is a company incorporated under the Companies Act engaged in trading of shares. The respondent was a member of the petitioner since 10.07.2009 and had submitted physical shares of MRPL, Picadilly Sugar and Rana Sugar for maintaining them in the D­ MAT form. These were disposed off by the petitioner from his D­MAT account without his consent or authorisation. After filing a complaint with the National Stock Exchange, the respondent initiated arbitration proceedings for recovery of Rs.70,000/­ as his grievances remained unaddressed by the Regulatory Authority. The Ld. Arbitrator while appraising the facts vide the impugned award, awarded a sum of Rs.40,000/­ to the respondent. While adjudicating the respondent's entitlement, the Ld. Arbitrator took into account that the e mail ID and mobile numbers filed in the initial application were not those of the respondent's. As the respondent had not traded in his account, the petitioner was asked to place on record authorisation by the respondent for transferring/selling his D­matted shares and for filing copies of delivery instruction slips/contract notes sent to the applicant from time to time. The petitioner could not file any of the relevant Arb: No. 109/11 ....2 documents except for a power of attorney executed by the respondent. The Arbitrator came to the conclusion that the petitioner herein failed to establish that any instruction was in fact issued by the respondent for disposal of his shares. The reliance of the petitioner on the power of attorney itself did not authorise them to trade on behalf of the respondent. The arbitrator has rightly observed that it was common knowledge that at the time of opening of an account, a person was asked to sign at a number of identified places and such person puts his signatures in good faith which could be misused. The Arbitrator also took note of the fact that the contract notes did not reveal the disposal of the shares and there were discrepancies in the D­MAT account vis­a­vis the contract notes which cast doubts about the correctness of the contract notes.

3. A perusal of the award reflects that Arbitrator has duly applied his mind to the claim of the respondent before passing the award in his favour.

4. The respondent on appearing before this court has reiterated that after dematerialisation of his shares, he had never transacted in the account maintained with the petitioner nor had he authorised anyone to do so.

Arb: No. 109/11 ....3

5. Ld. Counsel for his respondent has pointed out that facts of this case do not warrant any interference under Section 34 of the Arbitration & Conciliation Act, as it is beyond the scope of this court to appraise the evidence or material on record. The Ld. Arbitrator had announced the award after due application of mind on the material produced before him.

6. I find merit in the argument advanced by the Ld. Counsel for the respondent. None of the grounds set out in Section 34 of the Arbitration & Conciliation Act 1996 is applicable in the present case. The grounds invoking Section 34 of the Act are therefore not sustainable. No interference with the impugned Award is warranted. Petition dismissed.

7. The file be consigned to Record Room.

Announced
                                                             (Ina Malhotra)
                                                       Addl.District Judge­1
                                                    New Delhi : 15.03.2012




Arb: No. 109/11                                                                                    ....4
 Arb. No. 109/11

Present :            Counsels for the parties

Vide separate Judgment, the petition stands dismissed in terms thereof.

File be consigned to Record Room.

                                                             (Ina Malhotra)
                                                       Addl.District Judge­1
                                                    New Delhi : 15.03.2012




Arb: No. 109/11                                                                                    ....5