Delhi District Court
M/S India Infoline Ltd vs Praveen Kumar Singh (Constitutent) on 7 October, 2015
IN THE COURT OF MS. SAVITA RAO
ADJ (WEST)01, TIS HAZARI COURTS, DELHI
Arbitration No. 21/15
M. No. 423/11
IN THE MATTER OF :
M/s India Infoline Ltd.
71/3, First Floor, DHL Building
Rama Road, Kirti Nagar
New Delhi110015 ........Petitioner
Versus
1. Praveen Kumar Singh (Constitutent)
Executive (Admin)
The Institute of Engineers (India)
Delhi State Centre
2, Bahadurshah Zafar Marg
New Delhi110002
2. Ms. Lakshmi Swaminathan
The Sole Arbitrator
C/o NSE India Ltd.
4Th Floor, Jeevan Vihar Bldg.
Parliament Street
New Delhi110001 .........Defendants
Date of Institution : 30.07.2010
Date of Restoration : 06.08.2015
Date of Arguments : 01.10.2015
Date of Judgment : 07.10.2015
Page No. 1
J U D G M E N T
1. These are the objections U/s 34 of the Arbitration and Conciliation Act, 1996 filed by the objector against the award dated 13.04.2010. As pleaded, objector and claimant entered into memberclient agreement dated 16.08.2008 and based upon the instructions of claimant, the objector entered into trade activities. As per claimant, within about a fortnight i.e. w.e.f. 02.09.2008 to 19.09.2008, all his shares which were valued at about Rs. 1.65 Lakhs had been vanished due to negligent and highly aggressive trading of the objector in both cash and F&O segments without his knowledge and consent. Claimant also placed on record before Ld. Arbitrator regarding his unavailability from September 11 to 13, 2008 as he was busy in safety convention. According to him, he had received SMSs on 10.09.2008 from objector which were not clear and raised the said objection with Relationship Manager on 10.09.2008 itself, orally and asked him to stop trading upon which he was assured that the matter will be sorted out. Claimant also pleaded regarding his grievance in writing on 04.11.2008 which was followed by many more complaints and exchange of correspondence between the parties.
2. Per contra, it was plea of the objector that the trading was conducted on the telephonic instructions of the claimant and he was informed by SMSs and Emails and was also provided SMSs logs about the confirmation of all transactions sent to his mobile Page No. 2 number on daily basis.
3. Accepting the plea of the claimant that he was busy from September 11 to 13, 2008, therefore, could not have given any instructions for trading. Ld. Arbitrator further held the conduct of objector as showing not only lack of diligence but also negligence on the part of trading member in discharging its duties because of their belated replies and also in informing to claimant regarding contact to be made by Relationship Manager who had already left their services earlier in the end of October itself. The claimant before Ld. Arbitrator had also placed reliance upon his letter sent to the objector dated 04.11.2008 whereby it was informed to them that on 10.09.2008 he realised that junk SMSs on his mobile were actually trading information. When he informed the same to Relationship Manager, he received a highly shocking and beyond expectation reply from him. The objector in its reply before Ld. Arbitrator had stated about the claimant being highly qualified and computer savvy person who could have contacted the RM or his superior in order to be clarified about the so called junk SMSs for his satisfaction. It was also submitted by Counsel for petitioner that claimant had not given any reason for filing his complaint only on 04.11.2008 i.e. after a considerable delay of two months who had communicated with the Company in this regard from the same E mail ID on which the debits logs and digital contract notes were sent to him immediately after his trades were executed. Similarly, Page No. 3 the claimant was required to take up this dispute with the objector in writing within 24 hours or before the trading hours on the next day in terms of the contract which was never done by him. The said clause was reproduced in reply to the claim, according to which, all the information contained in digital contracts sent by E mail to designated Email ID was binding upon the client if the client does not object in writing to any of the contents of such trades, confirmation, contract notes etc. within 24 hours to the member broker. The claimant did not register his dispute in writing within 24 hours before the objector and rather filed the written complaint only on 04.11.2008. It is also not disputed that the Emails and contracts notes were not sent, though it was the claim of the claimant that trading was done without his instructions and he has also shown his unavailability from September 11, 2008 to September 13, 2008 but admittedly, the transactions had been carried out from 02.09.2008 to 19.09.2008. Upon the query by the Court regarding nonfiling of the call logs on record by the objector to show that the claimant had actually instructed telephonically, it was submitted by Counsel for objector that it was not mandatory for them to maintain call log record, therefore, they did not have any such record. It was submitted by Counsel for objector that the claimant himself could have brought on record his call logs to show that he never so instructed to the objector.
4. Counsel for claimant placed reliance upon Oil and Natural Page No. 4 Gas Corporation Ltd. v. Saw Pipes Ltd. 2003(2) RAJ 1(SC) wherein it was observed that "award can be set aside if it is contrary to (a) fundamental policy of Indian Law (b) the interest of India (c) justice or morality or (d) in addition, if it is patently illegal, must go to the root of the matter and if its illegality is of trivial nature it cannot be held that award is against the public policy. Award can also be set aside if it is so unfair and unreasonable that it shocks the conscience of the Court."
5. Counsel for objector also placed reliance upon Baron International Ltd. vs. Startron Video P. Ltd. And Anr. OMP No. 124/2009 decided on 25.02.2010 and 2008(3) R.A.J. 612(Del) and Hindustan Lever Ltd. vs. Shiv Khullar wherein interalia, it was held that "a commonly held belief that while considering objections U/s 34 of the Act, the Court cannot look into the evidence before the Arbitrator also needs to be clarified. There is a difference in reappreciating evidence and considering whether material evidence has been ignored. Whereas the former would be an activity prohibited while considering objections U/s 34 of the Act for the reason an Arbitrator is a chosen forum by the parties to conclude rival issues of fact between the parties, the latter would be an activity to find out whether learned Arbitrator has acted within his mandate for the reason the mandate of the Arbitrator is to decide on facts after considering all the relevant facts and not ignoring the same."
Page No. 56. Counsel for objector has also placed reliance upon ONGC Ltd. vs. Garware Shipping Corporation Ltd. AIR 2008 Supreme Court 456 wherein it was observed that "award based on wrong basis and perverse conclusions is liable to be set aside . There is no preposition that the Courts could be slow to interfere with arbitrator's award, even in such cases."
7. There cannot be any dispute with the prepositions of law as laid down in the aforesaid authorities, however, in the instant matter, Ld. Arbitrator has not considered the objections raised by the objector which go to the root of the matter including the information received by the claimant regarding all the transactions. It is correct that this Court not sitting in appeal cannot re appreciate the evidence but the conclusion which can be drawn from the aforesaid discussion is regarding material evidence having not been considered by Ld. Arbitrator which calls for setting aside of the award. Ld. Arbitrator shall consider all the plea raised by the objector with opportunity to both the parties to place on record any other material if they wish so. Objection petition is disposed off in above terms. A copy of this order along with arbitral record be sent to Ld. Arbitrator. File be consigned to Record Room.
(SAVITA RAO) Addl. District Judge, West01, Tis Hazari Courts, Delhi Announced in the open Court on 07.10.2015 Page No. 6