Madras High Court
M/S.Goodwill Wealth Management ... vs Mr.Ganesh Subramaniam on 13 July, 2021
Author: N. Sathish Kumar
Bench: N. Sathish Kumar
O.P. No.317 of 2021
O.P. No. 317 of 2021
N. SATHISH KUMAR, J.
This matter is taken up for hearing under the caption “For Being
Mentioned” today at the instance of the learned counsel for the
petitioner.
2. The learned counsel for the petitioner submitted that earlier,
this Court, by an order dated 13.07.2021 appointed an Arbitrator to
resolve the dispute between the parties. However, in the said order, in
paragraph-2, the amount has been wrongly typed as Rs.10,00,000/-, and
it should have been typed as Rs.10,89,756/-. The learned counsel also
submitted that in para 10 of the order, it was stated that he will redeposit
the bank guarantee with the exchange. Now, he is willing to furnish bank
guarantee of ICICI Bank, Velacherry. Hence, for modifying the order,
now the Original Petition is posted today.
3. I have considered the submissions and verified the order.
4. Though the contention of learned counsel that instead of
redepositing the bank guarantee with the exchange, he is ready and
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O.P. No.317 of 2021
willing to furnish bank guarantee of ICICI Bank, Velacherry, considering
the undertaking and indemnity bond given to redeposit the amount with
the exchange, such request cannot be entertained.
5. Accordingly, the Registry is directed to correct only the amount
mentioned in the order as Rs.10,89,756/- instead of Rs.10,00,000/- in
para 2 of the order and issue fresh order copy to the petitioner.
04.08.2021
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O.P. No.317 of 2021
N. SATHISH KUMAR, J.
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O.P.No.317 of 2021
04.08.2021
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O.P. No.317 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Date 13.07.2021
CORAM:
THE HONOURABLE MR.JUSTICE N. SATHISH KUMAR
O.P.No.317 of 2021
and Application No.1627 of 2021
M/s.Goodwill Wealth Management Pvt.Ltd
Rep. By its Legal Head-Mr.M.Sheik Sadique,
2nd Floor, Mashallah Building
Bheema Sena Garden Street
Mylapore, Chennai – 600 004 ...
Petitioner
Versus
1.Mr.Ganesh Subramaniam
APT 3D B-2, Magnolia Park
No.2, Five Furlong Avenue
Guindy, Chennai – 600 032.
2. National Stock Exchange,
Exchange Plaza, C-1, Block G,
Bandra Kurla Complex,
Bandra (E)
Mumbai – 400 051 ...
Respondent
PRAYER : Petition filed under Section 34(2) of Arbitration and
Conciliation Act, 1996 to set aside the award dated 31.12.2020 passed by
the learned Sole Arbitrator.
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O.P. No.317 of 2021
For petitioner : Mr.P.V.Balasubramaniam
For respondent : Mr.S.R.Sundar
ORDER
This original petition has been filed to set aside the award dated 31.12.2020 passed by the learned Sole Arbitrator.
2. The respondent herein had raised a dispute against the applicant herein for unauthorised trading. Admittedly, the respondent is the constituent and the applicant is the stock broker. The entire allegation is that the petitioner herein has unauthorisedly traded the shares which resulted in loss to the tune of Rs.10,00,000/- to the respondent. Therefore, the dispute has been referred to the Arbitrator as per the By- law of NSE.
3. The learned Arbitrator has passed the award as follows:
“I am of the opinion that there is considerable merit in the applicants argument.
Regarding the first claim of the applicant the respondent is directed to refund the loss of Rs.1089756/- to the 5/11 https://www.mhc.tn.gov.in/judis/ O.P. No.317 of 2021 applicant and this issue is decided in favour of the applicant.
Regarding second claim this issue is decided in favour of the applicant and the respondent is directed to pay a sum of Rs.515475/-
Regarding the third claim relating to brokerage this issue is decided in favour of the respondent.
Regarding the fourth claim for compensation for opportunity loss the claim of the applicant is negatived and the issue is decided in favour of the respondent.
To summarize the respondent is directed to pay the applicant a sum of Rs.(1089756+515475) Rs.1605231/- to the applicant.”
4. Challenging the same, this original petition is filled.
5. Admittedly, the award did not contain any reason for reaching such conclusion. It is well settled that in any adjudicatory process, the reasoning is sine qua non. The Arbitrator has not applied his mind and 6/11 https://www.mhc.tn.gov.in/judis/ O.P. No.317 of 2021 not even discussed the respective pleadings and has merely passed the award on his own opinion. Such award cannot be sustained in the eye of law. In fact, it violates the very provisions of Section 31(3) of the Arbitration and Conciliation Act. It is not the case of the parties herein that the parties have agreed that the award can be passed without any reason. Both sides have raised serious allegations against other, leading to serious dispute between the parties. While so, the learned Arbitrator, who is an adjudicator, ought to have framed the necessary issues and decided the same on the basis of the documents and evidence produced before him. Without verifying even a single document, the award has been just passed on the basis of framing of his own opinion. There is no whisper whatsoever made with regard to the reasons for reaching such a conclusion, and moreover, such an opinion has been formed without even looking into the documents and pleadings.
6. In such view of the matter, this Court is of the view that the nature of the award passed by the so called Arbitrator nominated by the NSE is absolutely nothing but perverse and it goes to the root of the 7/11 https://www.mhc.tn.gov.in/judis/ O.P. No.317 of 2021 matter. It is also to be noted that when the Arbitrators are to be nominated, NSE is to take note of the guidelines and regulations with regard to the qualification of the Arbitrator to be nominated. If the Arbitrator like present Arbitrator who authored the award which is the subject matter of this original petition is nominated regularly, then the purpose of the NSE and SEBI Acts, which are said to be client's friendly, would be defeated.
7. This Court is of the view that any decision made in an adjudicatory process should be a result of proper discussion of pleadings, evidence and documents. Any order or decision made without such exercise in adjudicatory process, merely on the basis of the opinion of the Arbitrator, will definitely violate the very fundamental policy of India.
8. In such view of the matter, the award passed by the Arbitrator cannot be sustained in the eye of law. Accordingly, the same is set aside.
9. Both sides agreed to go for a fresh arbitration and consented to 8/11 https://www.mhc.tn.gov.in/judis/ O.P. No.317 of 2021 appoint Mr.Harishankar Mani, Advocate as an Arbitrator.
10. Accordingly, this Court passes the following order:
i]Mr.Harishankar Mani, Advocate of this Court residing at A1, Ceebros Vriddhi, 45, R.A.Puram, I Main Road, Chennai 600028, Mobile No.9841093321, as Arbitrator to resolve the dispute between the parties.
ii] That the learned Arbitrator appointed herein, shall after issuing notice to the parties and upon hearing them, pass an award as expeditiously as possible, preferably within a period of six months from the date of receipt of the Order.
iii] That the learned Sole Arbitrator appointed herein shall be paid fees and incidental charges fixed by him and the same shall be borne by the parties equally.
10. It is stated that, pursuant to the award, the amount has been paid to the respondent and he appears to have given indemnity, in the event of the award being set aside, he will redeposit the amount with the Exchange. In such view of the matter, the respondent herein is directed 9/11 https://www.mhc.tn.gov.in/judis/ O.P. No.317 of 2021 to redeposit the amount to the NSE.
11. In the result, this original petition is allowed accordingly. No costs. Consequently, connected application is closed.
13.07.2021 msv To Mr.Harishankar Mani, Advocate A1, Ceebros Vriddhi, 45, R.A.Puram, I Main Road, Chennai 600028, Mobile No.9841093321 N. SATHISH KUMAR,J.
msv 10/11 https://www.mhc.tn.gov.in/judis/ O.P. No.317 of 2021 O.P.No.317 of 2021 and Application No.1627 of 2021 13.07.2021 11/11 https://www.mhc.tn.gov.in/judis/