Delhi District Court
Sunglow Capital Services Ltd vs Mr. Ram Avtar Jindal on 31 January, 2023
IN THE COURT OF SH GURVINDER PAL SINGH,
DISTRICT JUDGE (COMMERCIAL COURT)-02,
PATIALA HOUSE COURT, NEW DELHI
OMP (Comm.) No. 74/2020
Sunglow Capital Services Ltd.
R/o 4382/4B, 2nd Floor,
Murari Lal Street, Ansari Road,
Daryaganj, New Delhi-110002 .... Petitioner
versus
Mr. Ram Avtar Jindal
S/o Krishan Kumar Jindal
(now deceased) through Legal Heirs
1. Savita Jindal
W/o Late Ram Awtar Jindal
2. Vikas Jindal
S/o Late Ram Awtar Jindal
3. Harsh Jindal
S/o Late Ram Awtar Jindal
4. Priyanka Jindal
D/o Late Ram Awtar Jindal
5. Anuradha Jindal
D/o Late Ram Awtar Jindal
All Resident Of:-
R/o 72, Savita Vihar,
New Delhi-110092 ...Respondents
Date of Institution : 23/09/2020
Arguments concluded on : 15/12/2022
Decided on : 31/01/2023
Appearances : Sh. Gaurav Singh, Ld. Counsel for petitioner.
OMP (Comm.) No. 74/2020 Sunglow Capital Services Ltd. Vs Ram Avtar Jindal (now deceased) through Legal Heirs Page 1 of 21
JUDGMENT
1. Petitioner had filed the present objection petition under Section 34 of The Arbitration and Conciliation Act, 1996 (herein after referred as The Act), impugning the appellate arbitral award dated 28/12/2019 in Appeal No. NSEDRO/00662/18-19/ARB/ APPL titled 'Sunglow Capital Services Ltd. vs Ram Avtar Jindal' whereas said appeal case had arisen from original arbitral award dated 19/06/2019 in Arbitration Reference No. AM No. NSEDRO/00662/18-19/ARB titled 'Sunglow Capital Services Ltd. vs M/s Ram Avtar Jindal'. The appellate arbitral award dated 28/12/2019 was passed by panel of three Learned Arbitrators comprising of (i) Hon'ble Mr. Justice (Retired) S.N. Kapoor, Learned Presiding Arbitrator; (ii) Sh. Mukesh Aggarwal, Ld. Arbitrator and (iii) Smt Anuradha Gupta, Ld. Arbitrator. Original Arbitral award dated 19/06/2019 was passed by panel of three Learned Arbitrators comprising of (i) Sh. Ashok Kumar Tripathi, Ld. Arbitrator; (ii) Sh. Ashwani Kumar Mehta, Ld. Arbitrator and
(iii) Sh. Nirmal Singh, Ld. Arbitrator. In the original arbitral award dated 19/06/2019 the claim of petitioner/claimant against respondent therein namely Sh. Ram Avtar to pay sum of Rs. 1,13,25,982/- with Rs. 11,89,228/- as pendente lite interest for the period from 01/06/2018 to 31/12/2018 and future interest @ 18% per annum from 01/01/2019 till the date of actual payment; was dismissed. Appellate Arbitral Tribunal affirmed the original arbitral award dated 19/06/2019 and dismissed the appeal.
2. Initially the objection petition was filed against Sh. Ram Avtar Jindal. On 18/10/2021 Sh. Mohit Bansal, Advocate for OMP (Comm.) No. 74/2020 Sunglow Capital Services Ltd. Vs Ram Avtar Jindal (now deceased) through Legal Heirs Page 2 of 21 respondent had filed copy of death certificate of respondent finding mention of date of death 30/04/2021 of respondent Sh. Ram Avtar Jindal. Consequent upon death of respondent Ram Avtar Jindal on 30/04/2021 and later on filing of application by petitioner under Order XXII Rule 4 read with Section 151 of The Code of Civil Procedure,1908 (hereinafter referred as CPC); the legal heirs of deceased respondent Ram Avtar Jindal were substituted in terms of detailed order dated 29/10/2022, after service of notice of aforesaid application on legal heirs of deceased respondent and providing of opportunities to them to file reply. Despite opportunities during his life time respondent Ram Avtar Jindal did not file any reply to petition. After substitution of Legal Heirs of respondent vide order dated 29/10/2022; no reply to petition was filed by Legal Heirs of respondent.
3. I have heard Sh. Gaurav Singh, Ld. Counsel for petitioner and perused the record of the case, arbitral proceedings record, filed brief written arguments filed on behalf of petitioner, relied upon precedents on behalf of petitioner. Despite opportunities neither written arguments nor oral arguments were filed/ addressed on behalf of legal heirs of deceased respondent.
4. Shorn of unnecessary details, following are the relevant brief material facts of the case of petitioner in the filed objection petition. Petitioner is a registered trading member of National Stock Exchange (in short NSE) and engaged in the business of providing trading facilities to its clients in cash as well as the derivative segments. Respondent Sh. Ram Avtar Jindal opened a OMP (Comm.) No. 74/2020 Sunglow Capital Services Ltd. Vs Ram Avtar Jindal (now deceased) through Legal Heirs Page 3 of 21 trading account with the petitioner having Unique Client Code C- 318 to trade in shares and securities through the petitioner on 12/05/2017. Respondent completed the KYC formality on 12/05/2017. Respondent carried out the transaction of purchase of shares of Ashapura Inti Fashion Limited. On 26/03/2018 after settlement there was credit balance of Rs. 4,44,413/- in the account of respondent. On 28/03/2018 respondent again purchased shares. Respondent did not make payment of outstanding amount. Petitioner initiated the arbitration proceedings before the Arbitral Tribunal, National Stock Exchange of India Ltd., Delhi under the bye laws of National Stock Exchange and filed the claim of Rs. 1,13,25,982/- with interest and costs. Arbitral Tribunal vide original arbitral award dated 19/06/2019 rejected the claim of the petitioner/claimant on the ground that petitioner/claimant could not prove that it was executing trade on the instructions of the respondent whereas therein petitioner had also failed to furnish email transcripts and message transcripts which could have been the evidence of informing the respondent about the trades done by the petitioner on behalf of the respondent. Finding no infirmity in the impugned original award, Appellate Arbitral Tribunal vide impugned appellate arbitral award dismissed the appeal of petitioner/claimant finding no reason to interfere in the original arbitral award of Arbitral Tribunal.
5. Petitioner has impugned the appellate arbitral award mainly on the following grounds and was also so argued by Ld. Counsel for petitioner. The impugned award is in conflict with the fundamental policy of the Indian Law and in contravention to the OMP (Comm.) No. 74/2020 Sunglow Capital Services Ltd. Vs Ram Avtar Jindal (now deceased) through Legal Heirs Page 4 of 21 agreed terms between the parties. Ld. Tribunal failed to mention as to under which rules the pre-trade confirmation proof is required to be established by petitioner. Even the same is contrary to the agreement between the parties, since the respondent authorized the petitioner to receive verbal/oral instruction for trade and also undertook to never dispute the trade order on the ground that same were not under his instruction. Impugned award is patently illegal, unreasonable without any substance as the Tribunal had travelled beyond the terms of the contract between the parties and passed the impugned award in the most arbitrary and unreasonable manner. Tribunal has failed to appreciate the terms of the agreement between the parties and even failed to take into consideration material on record and ignored the vital evidence. Ld. Tribunal failed to consider that there is a consistent course of conduct which had taken place by and between the parties ever since the respondent opened his account with the petitioner. There were transactions between 12/05/2017 to 28/03/2018 which were all executed in the same mode and manner. The exact same mechanism had been repeatedly followed. There was instances where the benefit of transactions had been taken by the respondent which is evident from statement of account maintained by and between the parties. It is only when the impugned transaction which were executed on 28/03/2018 and had created huge debit balance then the respondent chose to dispute and challenge the same. Ld. Tribunal chose to ignore all the earlier transactions which were carried out in the same mode, procedure and mechanism out of which the respondent had also made profits. All such transactions were unanimously and ambiguously accepted and confirmed and OMP (Comm.) No. 74/2020 Sunglow Capital Services Ltd. Vs Ram Avtar Jindal (now deceased) through Legal Heirs Page 5 of 21 adopted by the respondent. Ld. Tribunal failed to consider that pre-trade instruction in writing was made necessary and mandatory only by virtue of circular dated 26/09/2017 which was enforceable from 01/04/2018 by virtue of circular dated 11/01/2018. Prior thereto the governing clause between the parties was clause 3.4.1 which provided "Trading members shall ensure that appropriate confirmed order instruction are obtained from the constituents before the placement of an order on the ANET system and shall keep relevant records or documents of the same and of the completion or otherwise of these orders thereof". Learned Arbitrators failed to consider that on 18/05/2017 the respondent authorized the petitioner to carry up trading in his account on his behalf and further agreed that he will not shift the burden approved on the petitioner by asking to petitioner to prove the placement of the orders through telephone recording or otherwise. Apart from this there is agreement between the parties thereby the respondent duly authorized the petitioner to receive verbal order to carry out trading/dealing on his behalf. Learned Tribunal failed to consider that respondent neither denied his email address nor about the acceptance of the mail sent by the petitioner on his mail id in respect of the transaction carried out in his account. The sole plea of the respondent was that the impugned trade dated 27/03/2018 was unauthorized trading committed by the petitioner herein. It is apt to mention that respondent duly received contract notes in respect of that transaction on 28/03/2018 at 5:24 pm but never challenged the same and only after nine months from the date of trade respondent denied the same when petitioner sent him the demand notice. Learned Tribunal failed to consider that the email OMP (Comm.) No. 74/2020 Sunglow Capital Services Ltd. Vs Ram Avtar Jindal (now deceased) through Legal Heirs Page 6 of 21 for all the transactions were sent to the respondent containing contract notes, bills, margin statement etc. on jindaltubes1970@ gmail.com and petitioner had placed on record e logs in support of its assertion and respondent did not deny the same. Learned Tribunal failed to consider that after the receipt of the emails, respondent had thorough and complete knowledge of its state of its affairs and its accounts right from 12/05/2017 and onwards. Learned Tribunal had failed to consider that confirmation in writing was neither necessary nor mandatory under the law applicable and contract governing the parties at the appropriate stage when the impugned transactions had occurred. Petitioner received the impugned appellate arbitral award on 31/12/2019 but could not file the objection petition within three months period due to nationwide lock down on account of Covid pandemic condition and the petition is within the period of limitation in terms of orders of Supreme Court in Moto Writ Petition (C) No. 3/2020 In Re Cognizence For Extension of Limitation. Petitioner through Ld. Counsel prayed for setting aside of the impugned appellate arbitral award and consequently to allow claim petition of petitioner. Ld. Counsel for petitioner relied upon the following precedents: -
1. Nirmal Bang Securities Pvt. Ltd. vs Tilak Bachar, 2019 SCC OnLine Cal 628;
2. Oil & Natural Gas Corporation Ltd. vs SAW Pipes Ltd., (2003) 5 SCC 705;
3. Associate Builders vs Delhi Development Authority, MANU/SC/1076/2014;
4. I-Pay Clearing Services Private Limited vs ICICI Bank Limited, MANU/SC/0005/2022.
6. Supreme Court in Suo Moto Writ Petition (Civil) no. 3 of 2020, In Re: Cognizance For Extension Of Limitation vide OMP (Comm.) No. 74/2020 Sunglow Capital Services Ltd. Vs Ram Avtar Jindal (now deceased) through Legal Heirs Page 7 of 21 order dated 10/01/2022 has excluded the period from 15/03/2020 till 28/02/2022 for computing the period of limitation for any suit, appeal, application or proceedings and the petition under Section 34 of The Act is also eligible for the same. Accordingly, present petition filed on 23/09/2020 is also within the period of limitation.
7. Supreme Court in case of Associate Builders vs. Delhi Development Authority (supra) has held that the interference with an arbitral award is permissible only when the findings of the arbitrator are arbitrary, capricious or perverse or when conscience of the Court is shocked or when illegality is not trivial but goes to the root of the matter. It is held that once it is found that the arbitrator's approach is neither arbitrary nor capricious, no interference is called for on facts. The arbitrator is ultimately a master of the quantity and quality of evidence while drawing the arbitral award. Patent illegality must go to the root of the matter and cannot be of trivial nature.
Also was held therein that:
"33. "...when a court is applying the 'public policy' test to an arbitration award, it does not act as a court of appeal and consequently errors of fact cannot be corrected. A possible view by the arbitrator on facts has necessarily to pass muster as the arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral award.... Once it is found that the arbitrators approach is not arbitrary or capricious, then he is the last word on facts.."
8. In the case of M/s Tamilnadu Telecommunication Ltd vs Bharat Sanchar Nigam Ltd., OMP (Comm.) 430/16, decided by Delhi High Court on 11/11/2016, in para 17, following pronouncements of the case of Oil & Natural Gas Corporation OMP (Comm.) No. 74/2020 Sunglow Capital Services Ltd. Vs Ram Avtar Jindal (now deceased) through Legal Heirs Page 8 of 21 Ltd. Vs Saw Pipes Ltd. (supra) were elicited:
64. ....Under Section 73, when a contract has been broken, the party who suffers by such breach is entitled to receive compensation for any loss caused to him which parties knew when they made the contract to be likely to result from the breach of it. This Section is to be read with Section 74, which deals with penalty stipulated in the contract, inter alia (relevant for the present case) provides that when a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, the party complaining of breach is entitled, whether or not actual loss is proved to have been caused, thereby to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named. Section 74 emphasizes that in case of breach of contract, the party complaining of the breach is entitled to receive reasonable compensation whether or not actual loss is proved to have been caused by such breach. Therefore, the emphasis is on reasonable compensation. If the compensation named in the contract is by way of penalty, consideration would be different and the party is only entitled to reasonable compensation for the loss suffered. But if the compensation named in the contract for such breach is genuine pre-estimate of loss which the parties knew when they made the contract to be likely to result from the breach of it, there is no question of proving such loss or such party is not required to lead evidence to prove actual loss suffered by him.....
67.....In our view, in such a contract, it would be difficult to prove exact loss or damage which the parties suffer because of the breach thereof. In such a situation, if the parties have pre-
estimated such loss after clear understanding, it would be totally unjustified to arrive at the conclusion that party who has committed breach of the contract is not liable to pay compensation. It would be against the specific provisions of Section 73 and 74 of the Indian Contract Act. There was nothing on record that compensation contemplated by the parties was in any way unreasonable. It has been specifically mentioned that it was an agreed genuine pre-estimate of damages duly agreed by the parties. It was also mentioned that the liquidated damages are not by way of penalty. It was also provided in the contract that such damages are to be recovered by the purchaser from the bills for payment of the cost of material submitted by the contractor. No evidence is led by the claimant to establish that stipulated condition was by way of penalty or the compensation contemplated was, in any way, unreasonable. There was no reason for the tribunal not to rely upon the clear and unambiguous terms of agreement stipulating pre-estimate damages because of delay in supply of goods ......"
OMP (Comm.) No. 74/2020 Sunglow Capital Services Ltd. Vs Ram Avtar Jindal (now deceased) through Legal Heirs Page 9 of 219. Statement of Case (claim) before original arbitral tribunal filed by present petitioner inter alia finds mention that petitioner had sent digital contract note, containing details of executed trades in due course to respondent and the petitioner had placed on record as Annexure 2 and Annexure 3 respectively as copy of sample contract notes with sent (delivery) logs.
10. Following is the text of alleged sent (delivery) logs:-
"SUNGLOW CAPITAL SERVICES LTD.
Digital Mail Contract Register For :01-04-2017 To 26-12-2018 Doc. Type : HTML Contract Note(CM) Authorised Signatory: SUNGLOW CAPITAL SERVICES LTD, PARVE Send Date Doc.Date File Name Cert.No BranchCd 12-05-2017 17:10 12-05-2017 NN7089htmlcnt.html 00c57a97 HO 16-05-2017 17:17 16-05-2017 NN7091htmlcnt.html 00c57a97 HO 18-05-2017 17:24 18-05-2017 NN7093htmlcnt.html 00c57a97 HO 26-05-2017 17:33 26-05-2017 NN7099htmlcnt.html 00c57a97 HO 29-05-2017 12:05 26-05-2017 NN7099htmlcnt.html 00c57a97 HO 26-03-2018 17:18 26-03-2018 BR8246htmlcnt.html 00c57a97 HO 28-03-2018 17:18 28-03-2018 NN8060htmlcnt.html 00c57a97 HO ** Totals 0 :EN KUMAR JAIN,, Clientcd Name Email ID Sent Status c318 RAM AVTAR JINDAL [email protected] Ok c318 RAM AVTAR JINDAL [email protected] Ok c318 RAM AVTAR JINDAL [email protected] Ok c318 RAM AVTAR JINDAL [email protected] Ok c318 RAM AVTAR JINDAL [email protected] Ok c318 RAM AVTAR JINDAL [email protected] Ok c318 RAM AVTAR JINDAL [email protected] Ok 0 0"
11. Above said text of alleged sent (delivery) logs finds simple mention of above elicited file name sent but neither attachment(s) to those files are detailed therein nor copies of those files nor copies of those attached files so sent are annexed with Statement OMP (Comm.) No. 74/2020 Sunglow Capital Services Ltd. Vs Ram Avtar Jindal (now deceased) through Legal Heirs Page 10 of 21 of Case (claim) before original arbitral tribunal. Above said text of alleged sent (delivery) logs is a simple chart prepared on a plain piece of paper in two sheets. It is pertinent to mention that with the statement of case (claim) of petitioner before Arbitral Tribunal petitioner did not file any copies of emails sent by it to respondent and more particularly email allegedly sent by it to respondent on 28/03/2018 with respect to the disputed transactions of stock trade. When no such material was so filed by the petitioner in arbitral proceedings record either before original arbitral tribunal or before appellate arbitral tribunal; petitioner was not left with any right or liberty to place any copies of emails including of date 28/03/2018 with the present objection petition, for which endeavor has been made by the petitioner. Accordingly, no such emails can be appreciated by this Court.
12. Order XI Rule 6 (3) of CPC mandates providing of specified information for electronic record documents i.e., (a) the parties to such Electronic Record; (b) the manner in which such electronic record was produced and by whom; (c) the dates and time of preparation or storage or issuance or receipt of each such electronic record; (d) the source of such electronic record and date and time when the electronic record was printed; (e) in case of e-mail ids, details of ownership, custody and access to such e-mail ids; (f) in case of documents stored on a computer or computer resource (including on external servers or cloud), details of ownership, custody and access to such data on the computer or computer resource; (g) deponent's knowledge of contents and correctness of contents; (h) whether the computer or OMP (Comm.) No. 74/2020 Sunglow Capital Services Ltd. Vs Ram Avtar Jindal (now deceased) through Legal Heirs Page 11 of 21 computer resource used for preparing or receiving or storing such document or data was functioning properly or in case of malfunction that such malfunction did not affect the contents of the document stored; (i) that the printout or copy furnished was taken from the original computer or computer resource.
13. For electronic record documents, no appropriate certificate/ declaration/affidavit compliant of mandate of Order XI Rule 6 (3) (a) to (i) CPC has been filed with petition by the petitioner; so none of the electronic record documents filed with petition by the petitioner can be appreciated.
14. In reply/defense of respondent to statement of case filed by petitioner before Arbitral Tribunal, respondent through Ld. Counsel inter alia made following averments: -
"3. That the case of the applicant is not maintainable and is liable to be dismissed as the same is sheer misuse of process of law as the applicant has narrated false, baseless and concocted story before this Hon'ble Tribunal and had filed fabricated & false statement of accounts in the name of the respondent.
4. That the answering respondent has nothing to do with the transactions/debit balance as alleged by the applicant in the present case and it appears that the applicant had himself deliberately with evil designs and motive and had misused the client code of the respondent and had posted dubious and illegal financial transactions in form of securities trades and had thereby misused the trading account of the respondent for illegal and unauthorized security trading without the knowledge and consent of the answering respondent thereby creating a debit balance in the said account of the respondent instead of a clear credit balance of Rs-3,01,972/- as on 27-03-2018, which is in gross violation of the settled norms and conditions of the membership of the applicant with NSE and hence the case of the applicant is liable to be straightway dismissed with heavy cost being barred by jurisdiction.OMP (Comm.) No. 74/2020 Sunglow Capital Services Ltd. Vs Ram Avtar Jindal (now deceased) through Legal Heirs Page 12 of 21
5. That the notice dated 10.12.2018, on the basis of which the applicant is raising the present case was duly replied by the answering respondent on 18.12.2018, which was duly hand received by the applicant himself and no objection to the same has been raised by the applicant till date and the present case is filed by the applicant in a very calculative method to save him from the legal actions of the respondent against him as well as regulatory actions from the exchange and hence the present case of the applicant is liable to be dismissed.
6. That the case of the applicant is also not maintainable as it is in contravention of law as the statement of the case has filed by the applicant is not supported by any affidavit nor any verification has been made by the applicant in his statement of case as filed before this Hon'ble Tribunal and hence the present case of the applicant is liable to be dismissed.
7. That even prima facie the statement of case has filed by the applicant is also not maintainable as the applicant had not signed the statement of case as filed by him in capacity of being its applicant and had rather filed the same for and on behalf of the answering respondent without any valid authorization, hence the present case of the applicant is liable to be dismissed."
15. Following are the findings of original Arbitral Tribunal in original arbitral award dated 19/06/2019: -
"FINDINGS
21. In order to determine the said dispute, in our view, the primary onus lies on the applicant to prove by way of reliable evidence that the orders were placed at the instance, direction and/or duly authorisation of respondent for trading with respect to the shares of Aashapura Inti Fashion Ltd.
22. Admittedly, according to the case of the applicant, there is no physical record written and signed by the respondent for placing such orders. Undisputedly, there is no telephonic recording. There is no email from authorised email ID prior to trades conforming the alleged orders placed by the applicant. There is no log showing internet transaction. It is further undisputed that there is no record of SMS messages sent or any other legally verifiable record available with the applicant.
23. In addition to the above, the applicant has also failed to furnish the email transcripts and message transcripts which would have been the evidence of informing the respondent about the trades done by the applicant on behalf of the Respondent. The applicant has relied upon the copy of contract notes in respect of OMP (Comm.) No. 74/2020 Sunglow Capital Services Ltd. Vs Ram Avtar Jindal (now deceased) through Legal Heirs Page 13 of 21 trade executed on 28.03.2018, the receipt of which has been denied by the respondent. However, the applicant has failed to furnish the transcripts of the email to prove beyond reasonable doubt that the delivery of the said contract notes were made to the Respondent. It is not out of place to mention here that evidence of service of contract note(s) on the Respondent on the date of trade would have been evidence of bringing into knowledge of the Respondent or his consent with respect to these trades. Further, the applicant could have obtained and placed the contract notes sent by the National Stock Exchange to the Respondent to confirm and corroborate that contract notes were also routed through the Exchange to the applicant. This would have been the best reliable evidence in the matter to prove the version of the applicant.
24. Having carefully considered the material available on record, we are inclined to accept the contention of the respondent that primary burden of proof was on the applicant to prove that the transactions were made in which it has utterly failed. It is a well settled law that principle of estoppel does not apply with respect to the statutory provision.
25. In view of the above, the applicant has failed to discharge its burden of proof that the trades were authorised and were made on the instructions of the constituent member i.e. respondent.
CONCLUSION:
27. On the basis of discussions made above, we are of the view that the above applicant has failed to prove its own case and, therefore, the claim deserves to be dismissed.
AWARD For the reasons stated above, the claim is devoid of merits. Consequently, it is dismissed."
16. Appreciating the above elicited findings of the original Arbitral Tribunal; the Appellate Arbitral Tribunal in impugned appellate award dated 28/12/2019 took note of the fact that petitioner kept silent after 28/03/2018; the date of disputed transaction and gave the demand notice of a huge sum of Rs. 1,13,25,982/- as late as 10th December 2018; after nearly nine months whereas in ordinary course of business the petitioner was supposed to demand the claimed amount without any delay, not in any case such a long delay. Appellate Arbitral Tribunal also OMP (Comm.) No. 74/2020 Sunglow Capital Services Ltd. Vs Ram Avtar Jindal (now deceased) through Legal Heirs Page 14 of 21 took note of the fact that this unusual conduct of the petitioner goes against the petitioner, making them to draw an adverse inference against the petitioner. It was also taken note of by Appellate Arbitral Tribunal that in response to demand notice dated 10/12/2018 sent by the petitioner, respondent claimed that no transactions were done by him on 28/03/2018. For that the reply of respondent given on 18/12/2018, duly hand received by petitioner contained clear mention of no transaction having been done by respondent on 28/03/2018, as per the filed reply of respondent to statement of case before original Arbitral Tribunal. Appellate Arbitral Tribunal also took note of the fact that there was credit balance of Rs. 3,01,972/- on 27/03/2018 in the account of respondent with petitioner. Transactions done prior to 28/03/2018 were so done on the behest of respondent, whereas as per respondent before the Tribunal, respondent was to receive Rs.3,01,972/- from the petitioner. Petitioner only filed a sheet showing the status of email which does not mean that it contained correct contents. Petitioner did not attach the copies of email and transcripts of the attachments attached to that mail.
17. It had been the consistent case of respondent (i) in reply in response of demand letter dated 10/12/2018 of petitioner; (ii) before original Arbitral Tribunal and (iii) before Appellate Arbitral Tribunal; that transaction dated 28/03/2018 executed in the trading account of respondent was unauthorized as had been done by petitioner on his own and questions were raised by respondent about the genuineness of those transactions.
18. Consequent to questions raised by respondent in reply sent OMP (Comm.) No. 74/2020 Sunglow Capital Services Ltd. Vs Ram Avtar Jindal (now deceased) through Legal Heirs Page 15 of 21 on 18/12/2018 by respondent to demand letter dated 10/12/2018 of petitioner; every opportunity was available with the petitioner to place every available document with petitioner with respect to the dispute for which reference for arbitration was made. Original Arbitral Tribunal held that petitioner failed to furnish the transcripts of the email to prove the delivery of the contract notes to respondent and that the evidence of service of contract note(s) on the respondent on the date of trade would have been evidence of bringing into knowledge of the Respondent or his consent with respect to these trades. As elicited above, Original Arbitral Tribunal also held that petitioner could have obtained and placed the contract notes sent by the National Stock Exchange to the respondent to confirm and corroborate that contract notes were also routed through the Exchange to the petitioner and this would have been the best reliable evidence in the matter to prove the version of the petitioner. Original Arbitral Tribunal also gave the finding that primary burden of proof was on the petitioner to prove that the transactions were made in which it had utterly failed; so petitioner failed to discharge its burden above said.
19. In this fact of the matter, the elicited grounds impugning the arbitral award are bereft of merits. Petitioner is to blame itself for not placing on record the relevant material evidences before Arbitral Tribunal for laid claims after reference of the matter to arbitration. Material not placed before the Arbitral Tribunal cannot be placed in petition under Section 34 of The Arbitration and Conciliation Act, 1996.
20. Arguments were addressed by Ld. Counsel for petitioner at OMP (Comm.) No. 74/2020 Sunglow Capital Services Ltd. Vs Ram Avtar Jindal (now deceased) through Legal Heirs Page 16 of 21 length on 15/12/2022 when this case was reserved for orders for 31/01/2023.
21. In judicial proceeding/order dated 29/10/2022 it was categorically observed that after arguments were concluded on 28/09/2022 by Ld. Counsel for petitioner on applications of petitioner (i) under Order XXII Rule 4 read with Section 151 CPC and (ii) under Section 5 of The Limitation Act, 1963; it was not open for the petitioner/Ld. Counsel to send any email or to file any precedents few days before date fixed for orders. Whatever precedents are to be relied by parties/Counsel; they are supposed to be relied and filed in the course of addressing of arguments and not later and also not without permission of the Court. Yet on 19/01/2023, i.e., after more than one month of reserving of the matter after hearing at length the arguments of Ld. Counsel for petitioner; Ld. Counsel for petitioner has filed an application under Section 151 CPC to bring on record an uncertified copy/photocopy of Appellate Award dated 17/12/2019 in NSE/Appeal ARBN/NSEDRO/00674/18-19/ARB/APPL titled 'Sunglow Capital Services Ltd. Vs Ram Avtar Aggarwal & Sons HUF' of Learned panel of Arbitral Tribunal comprising of (i) Sh. R.K Ahooja, Ld. Presiding Arbitrator; (ii) Sh. Neeraj Aarora, Ld. Arbitrator and (iii) Sh. Asutosh Lohia, Ld. Arbitrator. What is proposed to be brought on record is not the certified copy of appellate arbitral award nor it has any connect/bearing with the subject matter of the lis; since it is on the facts set out peculiar in said case and on the material placed, evidence led before Arbitral Tribunal in said case. Every case is an island unto itself. Inadmissible photocopy/uncertified copy of appellate arbitral OMP (Comm.) No. 74/2020 Sunglow Capital Services Ltd. Vs Ram Avtar Jindal (now deceased) through Legal Heirs Page 17 of 21 award of Learned Panel of Arbitral Tribunal at NSE in other case would be of no help to petitioner nor can be considered in this case.
22. The proceedings under Section 34 of the Act are summary in nature and the scope of enquiry in the proceedings under Section 34 of the Act is restricted to specify grounds for setting aside only, as was held in the case of Canara Nidhi Limited vs M. Shashikala & Ors., 2019 SCC Online SC 1244. The Court would not construe the nature of claim by adopting too technical an approach or by indulging into hair-splitting, otherwise the whole purpose behind holding the arbitration proceedings as an alternative to Civil Court's forum would stand defeated, as was held in the case of Sangamner Bhag Sahakari Karkhana Ltd. vs Krupp Industries Ltd., AIR 2002 SC 2221. An award is not open to challenge on the ground that the arbitrator had reached a wrong conclusion or had failed to appreciate some facts, but if there is an error apparent on the face of the award or if there is misconduct on the part of the arbitrator or legal misconduct in conducting the proceedings or in making the award, the court will interfere with the award; as was held by Supreme Court in the case of Oil & Natural Gas Corporation vs M/s Wig Brothers Builders & Engineers Pvt. Ltd., (2010)13 SCC 377. Reappraisal of evidence by the court is not permissible and as a matter of fact, exercise of power to reappraise the evidence is unknown to a proceeding under the Arbitration Act; as was held by Supreme Court in the case of Ispat Engineering & Foundry Works vs Steel Authority of India Ltd., (2001) 6 SCC 347. In order to provide a balance and to avoid excessive intervention, the award OMP (Comm.) No. 74/2020 Sunglow Capital Services Ltd. Vs Ram Avtar Jindal (now deceased) through Legal Heirs Page 18 of 21 is not to be set aside merely on the ground of an erroneous application of the law or by re-appreciating evidence; as was held by Supreme Court in the case of P.R Shah, Shares & Stock Brokers Pvt. Ltd vs B.H.H. Securities Pvt. Ltd. & Ors., (2012) 1 SCC 594. At global level the doctrine of 'Contra Proferentem' is generally applied by the Judges/Arbitrator in the cases where a contract appears ambiguous to them; the Judges/Arbitrator in India have appreciated and adopted similar line of reasoning in the cases involving ambiguous contract wherein it is believed that 'an ambiguity is needed to be resolved' in order to find the correct intention of the contract. If the conclusion of the arbitrator is based on a possible view of the matter, the court is not expected to interfere with the award and if the Arbitrator relies on a plausible interpretation out of the two possible views, then it would not render the award perverse; as was held by Supreme Court in the case of M/s Sumitomo Heavy Industries Ltd. vs Oil & Natural Gas Commission of India, 2010 (11) SCC
296. Award is not open to challenge on the ground that the Arbitral Tribunal had reached a wrong conclusion or had failed to appreciate the facts; the appreciation of evidence by the arbitrator is never a matter which the Court considers in the proceeding under Section 34 of the Act, as the Court is not sitting in appeal over the adjudication of the arbitrator.; as was held by Delhi High Court in the case of NTPC Ltd vs Marathon Electric Motors India Ltd., 2012 SCC OnLine Del 3995. Supreme Court in the case of Associate Builders vs Delhi Development Authority, (2015) 3 SCC 449 has restricted the scope of public policy, so the Court does not act as a Court of appeal and consequently errors of fact cannot be corrected. An error relatable OMP (Comm.) No. 74/2020 Sunglow Capital Services Ltd. Vs Ram Avtar Jindal (now deceased) through Legal Heirs Page 19 of 21 to interpretation of the contract by an arbitrator is an error within his jurisdiction and such error is not amenable to correction by Courts as such error is not an error on the face of the award; as was held by Supreme Court in the case of Steel Authority of India Ltd. vs Gupta Brother Steel Tubes Ltd., (2009) 10 SCC
63.
23. The facts and circumstances embodied in the precedents relied upon by Ld. Counsel for petitioner are entirely different and distinguishable to the facts and circumstances of the case in hand and are in no way of any help to the petitioner for getting the impugned award set aside.
24. The awards dated 19/06/2019 and 28/12/2019 were passed by panels of Ld. Arbitrators, including former Learned and Hon'ble Judge, High Court of Delhi as Presiding Arbitrator of Appellate Arbitral Tribunal; who were having special and expert knowledge about the shares and trading, stock market rules, SEBI rules and guidelines etc. Moreover the said Ld. Arbitrators were stated to be on the panel of Arbitrators of NSC and were also having vast experience in dealing with such matters. Before panels of Ld. Arbitrators, each and every piece of admissible evidence was duly appreciated. Findings were given, based on appreciation of facts, evidences and law after giving all reasonable opportunities to the parties to lead their evidence. Not only the reasonings of Learned panels of Arbitrators are logical but all the material and evidences were taken note of by the panels of Arbitrators. The Court cannot substitute own evaluation of conclusion of law or fact to come to the conclusion other than OMP (Comm.) No. 74/2020 Sunglow Capital Services Ltd. Vs Ram Avtar Jindal (now deceased) through Legal Heirs Page 20 of 21 that of the panels of Arbitrators, as per the law laid in the precedents, elicited herein above. Cogent grounds, sufficient reasons have been assigned by the Learned panels of Arbitrators in reaching the just conclusion and no error of law or misconduct is apparent on the face of the record. This Court cannot re- appraise the evidence and it is not open to this Court to sit in the appeal over the conclusion/findings of facts arrived at by Learned panels of Arbitrator. The impugned award does not suffer from vice of irrationality and perversity. No error is apparent in respect of the impugned award. I do not find any contradiction in the observations and findings given by Learned panels of Arbitrator. The award is not against any public policy nor against the terms of contract of the parties. No ground for interference is made out. None of the grounds raised by the petitioner attract Section 34 of the Act.
25. For the foregoing reasons, the petition is hereby dismissed.
26. The parties are left to bear their own costs.
27. File be consigned to record room.
Digitally signed by GURVINDER PAL GURVINDER SINGH
PAL SINGH Date: 2023.01.31
12:52:12 +0530
ANNOUNCED IN (GURVINDER PAL SINGH)
OPEN COURT District Judge (Commercial Court)-02
st
On 31 January, 2023. Patiala House Court, New Delhi.
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