Delhi District Court
vs Sh. Vinod Nayar on 10 March, 2017
IN THE COURT OF SH. MUKESH KUMAR, ADJ02 & WAQF TRIBUNAL, NEW
DELHI DISTRICT, PATIALA HOUSE COURTS, NEW DELHI.
Arb. No. 11407/2016
Master Capital Services Limited
1012, Arunanchal Building,
10th Floor, 19, Barakhamba Road,
New Delhi110001.
Through its A.R
Petitioner
Vs.
1. Sh. Vinod Nayar
S/o Sh. Harkishan Lal Nayyar
Nayyar Cottage,
Mall Road,
Hoshiarpur, Punjab146001.
2. Officer in Charge
Arbitration Department,
National Stock Exchange of India Limited
4th Floor, Jeevan Vihar Building,
Parliament Street,
New Delhi110001.
3. Sh. Pankaj Agarwal
Arbitrator
National Stock Exchange of India Limited
4th Floor, Jeevan Vihar Building,
Parliament Street,
New Delhi110001.
..... Respondents
Date of institution : 29.06.2015
Arb. No. 11407/2016 Master Capital Services Limited Vs. Vinod Nayar & Ors. Page No. 1 of 10
Date on which reserved for judgment : 10.03.2017
Date of decision : 10.03.2017
ORDER:
1. Vide this order, I shall dispose off the Objections filed under Section 34 of the Arbitration & Conciliation Act, 1996 on behalf of the petitioner against the award dated 27.02.2015 passed by the Ld. Sole Arbitrator.
2. The petitioner in its objections has stated that petitioner is a limited company duly incorporated under the provisions of the Companies Act. The petitioner is also the member of the National Stock Exchange of India Limited and Bombay Stock Exchange Limited in both capital market and future and option segments having duly registered with SEBI. It is submitted that respondent is a registered client of the petitioner company since 08.10.2009 and has been allotted client code no. H0260 and same were uploaded with respective exchange. It is further submitted that the respondent has duly signed the valid and enforceable agreement i.e Member Client Agreement collectively known as KYC. It is further submitted that the complete set of documents signed by the respondent along with KYC kit was provided to him at the time of opening his account. It is further submitted that the respondent has been trading in shares and securities since opening of his trading account through the petitioner company and executed various trades in his account and generated profits/losses on may occasions which were debited and credited in his account. It is further submitted that during the trade in share and securities by the respondent, last transaction being on 30.08.2011 reflecting in his Arb. No. 11407/2016 Master Capital Services Limited Vs. Vinod Nayar & Ors. Page No. 2 of 10 daily transaction report and debit balance of Rs. 1,89,676.21 p resulted in his account as on 31.10.2011 and respondent was also very much aware about his debit balance but on the petitioner demand the respondent neglected to clear his debit balance.
3. It is further submitted that as per norms of the petitioner company and guidelines of the exchange, the transactions details in mode of digitally signed contract notes and account statement were regularly sent on emailid of the respondent registered with them. It is further submitted that the information about the transactions executed by the respondent was also confirmed through SMS on his mobile phone no. 9872021711 registered with the petitioner company. It is further submitted that the respondent is liable to pay interest @ 18% per annum for any delay in the payment of charges, margin or any other sum due to the petitioner company. It is further submitted that the petitioner sent demand notice dated 03.06.2014 through speed post to the respondent to demand the debit balance as reflected in his account and the notice was served upon the respondent but he did not respond. It is further submitted that petitioner company is entitled to recover the sum of Rs. 1,89,676.21 p as per account statement from the respondent and the respondent is bound to pay the said amount to the petitioner company together with interest @ 18% per annum from the date of dues i.e 01.11.2011.
4. The petitioner has challenged the award on the grounds that the Ld. Arbitrator has miserably ignored the contents of the member client agreement and its annexure duly signed by the respondent. It is submitted that the Ld. Arbitrator has failed to appreciate Clause 34 and 39 of the Arb. No. 11407/2016 Master Capital Services Limited Vs. Vinod Nayar & Ors. Page No. 3 of 10 agreement. It is further submitted that the Ld. Arbitrator has failed to appreciate the fact that the respondent has been executing various trades in share and securities and in respect of the same was giving cheque against his transaction. It is further submitted that the Ld. Arbitrator has failed to appreciate that respondent had opted for Electronic Contract Notes and in pursuance to that the petitioner company had confirmed the transaction details in the mode of digitally signed contract notes on his e mail. It is prayed that the objections of the petitioner may be allowed and award dated 27.02.2015 may be set aside.
5. While on the other hand, respondent has denied the case of the petitioner and submitted that the present objections are liable to be dismissed as the same has been filed without any basis, unfounded and does not have any merit at all. Using of Mobile No. 9872021711 is also denied by the respondent, it is submitted that at the relevant time the respondent was using the Mobile No. 9356435121 and the documents i.e Annexure 1 available on record file also having the Mobile No. mentioned as 9356435121.
6. I have heard arguments as submitted by Ld. Counsels for the parties. I have gone through the entire materials on record including the Award of Ld. Arbitrator.
7. Written submissions also filed by the petitioner and respondent.
8. Before going into the merits of the case, I deem it appropriate to refer provisions which deals with the making of application U/s. 34 of the Arbitration & Conciliation Act, 1996. I have gone through the provisions of Section 34 of the Arbitration & Conciliation Act, which reads as under:
Arb. No. 11407/2016 Master Capital Services Limited Vs. Vinod Nayar & Ors. Page No. 4 of 10 "Section 34:Application for setting aside arbitral award: (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with subsection (2) and subsection (3).
(2) An arbitral award may be set aside by the court only if
(a) the party making the application furnishes proof that
(i) a party was under some incapacity: or
(ii) the arbitration agreement is not valid under the law to which he parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
(b) the Court finds that
(i) the subjectmatter of the dispute is not capable of settlement by arbitration under the law for the time Arb. No. 11407/2016 Master Capital Services Limited Vs. Vinod Nayar & Ors. Page No. 5 of 10 being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
Explanation - Without Prejudice to the generality of subclause (ii) of clause (b), it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81. (3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application has received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal:
Provided that if the court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter. (4) On receipt of an application under subsection (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award."
9. The grounds so taken by the Objector/applicant in the objections are not covered under Section 34 of the Arbitration & Conciliation Act. Reliance is placed on the judgment cited as 2013 (5) R.A.J., 35 (Del) titled as M/S. SMCCSCCPVCC JV Vs. Rail Vikas Nigam Ltd, wherein it was held that "As can be seen, the objections filed by the petitioner are not covered by Arb. No. 11407/2016 Master Capital Services Limited Vs. Vinod Nayar & Ors. Page No. 6 of 10 any of the grounds enumerated in Section 34 or any other section, hence, the award can not be set aside. Merely saying that the award is against the public policy is not enough; the petitioner has to make out a strong case within four corners of the provision. In the present case, the petitioner has failed to demonstrate any ground to show that the award can be set aside despite of the fact that the petitioner owe a duty to do so and that too convincingly, for the Court to come to a finding that the arbitral award is in conflict with the provisions."
10. Further, in case cited as 198 (2013) DLT 738 titled as National Highways Authority of India Vs. Oriental Structure Engineers Ltd., it was held that "The scope of Section 34 of the Arbitration & Conciliation Act, 1996 is limited to the stipulations contained in Section 34 (2) of the Act. The jurisdiction of the Court to interfere with an Award of the Arbitrator is always statutory. Section 34 is mandatory nature, and an Award can be set aside only on the Court finding the existence of the grounds enumerated therein and in no other way.
The word in Section 34 (2) that, " An Arbitral Award may be set aside by the Court only if " are imperative and take away the jurisdiction of the Court to set aside an Award on any ground other than those specified in the Section. The Court is not expected to sit in appeal over the findings of the Arbitral Tribunal or to reappreciate evidence as an appellate Court."
11. Even the Hon'ble High Court in the judgment titled as 'National Highways Authority of India Vs. Oriental Structure Engineers Ltd' (supra) has also relied upon the judgment titled as Oil & Natural Gas Corporation Limited V. SAW Pipes Ltd., (2003) 5 SCC 705. In the aforesaid judgment, Hon'ble High Court has been pleased to held in para No. 24 as under: "The petitioner has challenged the arbitral award on the grounds as set out in the petition and there is not Arb. No. 11407/2016 Master Capital Services Limited Vs. Vinod Nayar & Ors. Page No. 7 of 10 even a whisper in the said grounds as to how they fall under the limited and narrow mandate of Section 34 of the Arbitration & Conciliation Act, 1996. Even if the additional grounds under Section 34, as laid down by the Supreme Court in the case of ONGC VS. Saw Pipes Ltd., 2003(2) Arb. LR 5 (SC), are considered, which are patent illegality arising from statutory provisions or contract provisions or that the award shocks the conscience of the court, no such facts are narrated in the petition. The endeavor of the petitioner is thus to convert the challenged to the arbitral award into an appellate proceeding involving a total rehearing of the matter and reappreciation of evidence, and which endeavor as per the consistent dicta of the Supreme Court is impermissible in law".
12. Further, in case cited as 198 (2013) DLT 738 titled as National Highways Authority of India Vs. Oriental Structure Engineers Ltd., it was held that "The scope of Section 34 of the Arbitration & Conciliation Act, 1996 is limited to the stipulations contained in Section 34 (2) of the Act. The jurisdiction of the Court to interfere with an Award of the Arbitrator is always statutory. Section 34 is mandatory nature, and an Award can be set aside only on the Court finding the existence of the grounds enumerated therein and in no other way. The word in Section 34 (2) that, " An Arbitral Award may be set aside by the Court only if " are imperative and take away the jurisdiction of the Court to set aside an Award on any ground other than those specified in the Section. The Court is not expected to sit in appeal over the findings of the Arbitral Tribunal or to reappreciate evidence as an appellate Court."
13. Further, as per the settled proposition, the scope of interference by the Court in respect of an award under the Act is limited. The award is not open to challenge on the ground that the arbitrator has reached on wrong Arb. No. 11407/2016 Master Capital Services Limited Vs. Vinod Nayar & Ors. Page No. 8 of 10 conclusion or has failed to appreciate facts.
14. Further, with regard to the other grounds taken by the petitioner it is note worthy that the Ld. Arbitrator while deciding the dispute and after due consideration of claim of the petitioner, passed the impugned award. The law is settled that this Court is not supposed to sit in appeal U/s 34 of the Act qua the impugned award and the grounds for setting aside the impugned award cannot be allowed to be deviated from the grounds as mentioned U/s 34 of the Act. This Court has limited jurisdiction to decide the objections U/s 34 of the Act.
15. Further, a perusal of impugned Award clearly shows that the learned Arbitrator has duly dealt with the matter. The detailed well reasoned impugned Award has been passed. He has dealt with each and every aspect of the matter. The finding arrived at by the learned Arbitrator are supported by cogent reasons. After considering the record the arbitral award has been passed. In these circumstances, this court is of the view that, the impugned Award passed by learned Arbitrator is well reasoned award. The court is not required to appreciate and reevaluate the findings given by the learned Arbitrator. The Ld. Arbitrator has duly explained for arriving at its decision.
16. Further, the learned Arbitrator has duly explained for arriving at its decision. It is a well settled principle of law that when the arbitrator has given reasons, it is not for the court to see the reasonableness of the reasons given by the arbitrator or sufficiency of the reasons. However, what reasons are required, it depends upon the facts of the each case.
17. In the instant case, in view of the above said discussion and after Arb. No. 11407/2016 Master Capital Services Limited Vs. Vinod Nayar & Ors. Page No. 9 of 10 considering the contention of learned counsel for parties and in view of the various authoritative pronouncements discussed above and as this court is not sitting in appeal against the impugned Award passed by Sole arbitrator, the court is not required to reappreciate or reevaluate the material on record before the learned Arbitrator, the objector has failed to show as how the passing of the impugned award is against principles of natural justice. Therefore, there is nothing in the impunged award to show that there was no evidence to support the findings of the Arbitrator which calls for interference, as such the findings of Arbitrator which have been objected are upheld.
18. Accordingly, in view of the guidelines in the aforesaid judgments, I do not find any substance in the objections filed by the objector, as the same are without any basis. The award so passed by the Ld. Arbitrator is fully justified and reasoned and Ld. Arbitrator has decided all the issues and there is no irregularities in the award itself. Accordingly, the petition is meritless and is hereby dismissed. No order as to cost. The file be consigned to record room.
Dated: March 10, 2017. (Mukesh Kumar) Announced in the open Court. ADJ02 and Waqf Tribunal, New Delhi District, Patiala House Courts, Delhi.
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