Bombay High Court
Sbicap Securities Limited vs Shailesh Bhupatrai Bhalaria And Anr on 29 September, 2021
Author: G. S. Kulkarni
Bench: G. S. Kulkarni
Digitally
signed by
PRASHANT
PRASHANT VILAS
VILAS RANE
RANE Date:
2021.10.02
19:04:35
3-arbpst 20247-21.doc
+0530
Prajakta Vartak
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION (ST.) NO.20247 OF 2021
SBICAP Securities Limited ...Petitioner
V/s.
Shailesh Bhupatrai Bhalaria & Anr. ...Respondents
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Mr. Simil Purohit with Mr. Deepak Dhane i/b. Corporate Pleaders for
Petitioner.
Mr. Ranjit Bhonsale with Mr.Anshuman Sugla i/b. Joby Mathew &
Associates for Respondents.
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CORAM : G. S. KULKARNI, J.
DATE : SEPTEMBER 29, 2021
PC :
1. Heard learned counsel for the parties. This petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 challenges the final award dated 29 June, 2021 passed by the appellate tribunal as constituted under the rules, bye-laws and regulations of the National Stock Exchange (NSE). By the impugned award, the appellate tribunal has confirmed the award dated 17 December, 2020 of the arbitral tribunal of a counter-claim of Rs.36,61,000/- made in favour of the respondents. By the impugned award the petitioner is directed to pay respondent no.1 an amount of Rs.36,61,000/- with interest @ 9 % from 25 October 2020 being the date of the order of the IGRP till the date of the appellate award and with interest @ 12% from the date of arbitral award dated 29 June 2021 till payment/realization.
2. It appears to be not in dispute that there was a client membership agreement between the petitioner and respondent no.1. There were also 1/3 3-arbpst 20247-21.doc share purchase transactions between the parties between the period of 1 July, 2014 to 20 October, 2015. The respondent no.1 however for the first time by his complaint dated 25 October, 2019 made a claim for an amount of Rs.42,86,000/- which according to him, was paid during the period 1 July, 2014 to 20 October, 2015 as per the statement of account. The case of respondent no.1 was peculiar in as much as he asserted that he paid certain amounts to Mr.Moily, one of the employees of the petitioner. His case was also that there was some independent and a private arrangement with such employee of profit sharing, which was independent of the agreement between the petitioner and the respondent no.1.
3. The tribunal below recognized such agreement and the payments made by respondent No.1 to Mr.Moily, except the cash of Rs.15 Lakhs which the respondent no.1 claimed to have paid to Mr.Moily, and has held the petitioner vicariously liable.
3. Mr. Purohit, learned counsel for the petitioner submits that the client membership agreement does not recognize any profit sharing between the employee of the petitioner and respondent no.1. In fact there are contrary clauses in the member client agreement. He submits that it is strange that the tribunal has held the petitioner liable for the acts of its employees. He submits that as to what has been held by the arbitral forums is contrary to the agreement entered between the parties.
4. On the other hand, Mr.Bhonsale, learned counsel for the respondents would not dispute that there were transactions between Mr.Moily and his clients. It is also not disputing that the claim made by respondent No.1 which was for the period 01 July, 2014 to 20 October, 2015 there were 2/3 3-arbpst 20247-21.doc other transactions as well. It is also not in dispute that no claim whatsoever was made by his client upto the end of the period till October 2015 and was made for the first time before the arbitral tribunal.
5. In my prima-facie opinion, it is difficult to accept that the petitioner was vicariously liable for the actions of its employee which was one of the claim of the respondent. Considering the aforesaid circumstances, in my opinion, this petition requires final hearing. It is accordingly admitted. Respondents waive service.
(G. S. KULKARNI, J.) 3/3