Bombay High Court
Satco Capital Markets Ltd vs Rahul H. Bajaj on 25 August, 2016
Author: Anoop V. Mohta
Bench: Anoop V. Mohta, G.S. Kulkarni
ssm 1 nmal1861.16.sxw
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
NOTICE OF MOTION (LODGING) NO. 1861 OF 2016
IN
APPEAL (LODGING) NO. 235 OF 2016
IN
ARBITRATION PETITION NO. 104 OF 2014
Satco Capital Markets Ltd.
formerly known as Satco Securities
and Financial Services Limited,
a trading member of National Stock
Exchange and the Bombay Stock Exchange,
having office at 205, 2nd Floor,
Silver Pearl Waterfield Road, Bandra
Mumbai-400 050. ...Applicant.
IN THE MATTER BETWEEN
Satco Capital Markets Ltd.
formerly known as Satco Securities
and Financial Services Limited,
a trading member of National Stock
Exchange and the Bombay Stock Exchange,
having office at 205, 2nd Floor,
Silver Pearl Waterfield Road, Bandra
Mumbai-400 050. ...Appellant.
Vs.
Rahul H. Bajaj,
Adult, Mumbai Inhabitant, having
office at 406, Commerce House,
104 N.M. Road, Fort,
Mumbai-400 023. ....Respondent.
1/23
::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:18 :::
ssm 2 nmal1861.16.sxw
Mr. Aspi Chinoy, Senior Advocate a/w Mr. Nimay Dave, Mr.
C.D.Mehta, Ms. Trupti Shetty, Ms. Pooja Shah i/by M/s. Dhruve
Liladhar & Co. for the Applicant/Appellant.
Mr. D.A.Khambatta, Senior Advocate a/w Mr. Kunal Dwarkadas i/by
Prasad Das Associates for the Respondent.
CORAM : ANOOP V. MOHTA AND
G.S. KULKARNI, JJ.
RESERVED ON : 10 AUGUST 2016.
PRONOUNCED ON : 25 AUGUST 2016.
ORDER (PER-ANOOP V. MOHTA, J.):-
The Appellant/Applicant-Original Respondent (Satco), has taken out this Notice of Motion for stay of the execution and operation of the award as confirmed by impugned order dated 7 January 2016, passed by the learned Single Judge, dismissing the Arbitration Petition under Section 34 of the Arbitration and Conciliation Act, 1996 ("the Arbitration Act"), thereby maintaining award dated 30 September 2014, passed by the Sole Arbitrator. The operative part of the award is as under:-
"ORDER
1. For the aforesaid reasons prayers clauses (a) to (c) and (h) of the Statement of Claim are rejected.
2. Prayer clauses (d), (e) and (f) of the Statement of Claim are granted.
3. Prayer clause (e) is granted with modification that the rate of interest shall be 12% p.a. simple.2/23 ::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:18 :::
ssm 3 nmal1861.16.sxw
4. The Respondent shall deliver to the Claimant 1,50,000 shares of ARBL as mentioned in prayer clause (d) within 120 days from the date of receipt of this Award.
5. the Respondent shall pay to the Claimant dividend of Rs.19,83,500/- and interest @ 12% p.a. on the same from the respective effective dates of accruement within 120 days from the passing of this Award.
6. That the Respondent shall transfer to Applicant/Claimant all the benefits which have accrued on said 1,50,000 shares from the date of this claim till the delivery of the said shares to the Claimant, within 120 days from the date of receipt of this Award."
2 On 27 July 2016, after hearing the parties, this Court has admitted the Appeal and expedited the hearing.
3 This Notice of Motion is listed today for hearing. There is no issue about the maintainability of such Motion, as the present Appeal is arising out of the provisions of the Arbitration Act. Once the award is confirmed by the learned Single Judge, it has become executable/enforceable "decree" of the Court under the Civil Procedure Code (CPC) read with Section 36 of the Arbitration Act.
Therefore, this Motion by the Appellant, along with supporting 3/23 ::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:18 ::: ssm 4 nmal1861.16.sxw affidavit dated 21 June 2016, seeking the stay of execution of the Award/Decree.
4 The Appellant is a broker member of National Stock Exchange ("NSE") and the Bombay Stock Exchange ("BSE"). The Respondent is the constituent of the Appellant. The Appellant had been executing various transactions for the Respondent, since 5 January 2001 based upon a Member-Constituent Agreement in a form prescribed by the Securities and Exchange Board of India ("SEBI") along with other related documents. As agreed, there was a consolidated account for the transactions at NSE and BSE. They used to adjust against each other resultant debit/credit paid or received by the concerned parties. Also a common ledger was maintained.
5 Both the parties are fully aware of the nitty-gritty of the share-market, the fluctuations and its immediate effect on the transactions and their respective obligations. In view of the Member-
Client Agreement, the Constituent (Respondent) is required to make the payment of daily margin, settlement fees, brokerage, commission and other charges. Both the parties are aware that in case of such 4/23 ::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:18 ::: ssm 5 nmal1861.16.sxw default, the Member, (the Appellant) is entitled to square off and liquidate the outstanding amount and all the consequential losses and is entitled to claim the balance amount, arising therefrom. It is to be borne by the constituent alone. The parties option to settle the dispute is always available, even after the institutional arbitral award, by making the payment/or by handing over the shares of the date of award or the Court. The basic cause of action in this case arose in the year 2001 to 2002 and not in the year 2014.
6 The Applicant has made averments revolving around the market position and fluctuations, specifically of Amara Raja Batteries Limited, ("ARBL") between 5 March 2001 upto 15 March 2001. The Appellant in the supporting affidavit has referred to show cause notices dated 6 July 2001 and 27 July 2001 under Section 12 of the Securities and Exchange Board of India, Act 1992 ("the SEBI Act") issued by the SEBI to the parties for their respective breaches.
7 The Respondent's default in making payment to several brokers and the various other defaults of market obligations, on or around 9 March 2001, are part of the record. The Special Leave 5/23 ::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:19 ::: ssm 6 nmal1861.16.sxw Petition (SLP) filed by the SEBI, is still pending in the Supreme Court, around these issues.
8 As noted on 18 October 2001, the Respondent filed Arbitration Reference before BSE and sought delivery of 8000 shares of ARBL, which was later enhanced to 10000 shares. Ultimately, in the arrangement, the Respondent claimed Rs.24,76,344/- as the monetary value of 10000 shares. The Applicant could not continue with the counter-claim, as the transaction took place at the NSE therefore, the issue arising out of it, could not be entertained by the BSE Tribunal for want of jurisdiction.
9 On 27 April 2002, the BSE Arbitral Tribunal partly rejected the claim of the Respondent and only awarded the amount of Rs.4,75,328/-. The Appellate Bench of BSE, on 10 January 2003 directed the Appellant to pay an amount of Rs.26,99,232/- and Rs.33,803/- towards interest and future interest @ 12% p.a. on 4,75,328/-. The stated amount was the monetary equivalent of 10000 shares on that date. This award was not challenged by the Respondent. The Appellant, however, challenged the same. This 6/23 ::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:19 ::: ssm 7 nmal1861.16.sxw Court on 7 April 2003, set aside Award dated 10 January 2003 and confirmed award dated 27 April 2002 made by BSE. The Respondent got credited the amount of Rs.6,28,941/- in view of the award passed by BSE. The Appeal against it was rejected by the Division Bench on 15 March 2004.
10 The Appellant, in the meantime, filed a claim before the NSE Arbitral Tribunal for claiming an amount of Rs.1,71,324.13/-
with interest thereon, being the amount due and payable by the Respondent in the ledger account. The Respondent also filed a counter-claim. The Tribunal (NSE), on 18 November 2002, directed the Respondent to make payment along with the interest. The Respondent's Petition against the same, was dismissed by this Court on 7 April 2003. The Appeal preferred against the same, was also disposed of on 9 January 2009, and the matter was remanded back to the Arbitral Tribunal. The said order was also challenged by the Respondent in this Court. As recorded, by order dated 5 February 2013, pursuance to the consent terms filed, the Hon'ble Supreme Court disposed of this Appeal by referring the disputes to the reconstituted Tribunal. This was after about 10 years of the Award of 7/23 ::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:19 ::: ssm 8 nmal1861.16.sxw the sole Arbitrator. Strikingly, the basic cause of action and the disputes remained at the year 2001/2002 only, as noted above.
11 The Respondent filed a fresh statement of claim before the Tribunal and the Appellant has filed its written statement and counter-
claim. The Appellant led evidence through an affidavit on 25 February 2014. The Respondent did not lead any evidence. The learned arbitral Tribunal, on 30 September 2014, has passed the award as recorded above. Section 34 Petition filed by the Appellant was also dismissed on 7 January 2016. This Court, after hearing the parties and considering the grounds so raised and noting the submissions admitted the present Appeal.
12 Both the learned Senior Counsel appearing for the parties have read and referred to the various submissions, including the specific averments made the Notice of Motion. The Respondent has also filed affidavit opposing the Motion and referred various paragraphs/contentions, with prayers and opposed the grant of stay on execution of the impugned award, even if it should be conditional one, by directing the Appellant to deposit 10500 share of ARBL or 8/23 ::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:19 ::: ssm 9 nmal1861.16.sxw deposit the amount in lieu of the shares. The valuation of those shares as per the Appellant, as of today, is about 13 crores. The Appellant, by its affidavit in rejoinder resisted the same and submitted that the conditional order of stay be restricted to the original amount Rs.24,76,344.46/-, so awarded by the Arbitrator in March 2002 and at the most, with interest as of today on the said amount, being the basic sale price in lieu of 1000 ARBL shares.
13A reference is made to the various written submissions and grounds so raised including the statement in Special Leave Petition.
Some of them are as under:-
i) "Since the Respondent has admittedly disposed off the 10,000 shares of ARBL and has drawn appropriate bills for the same at the BSE, the Ld. Arbitrator may direct the Respondent to pay the sum of Rs.24,76,344.46 as admittedly shown by the Respondent at the foot of its own Statement of Account as submitted by it before the Tribunal."
ii) "the learned judge erred in holding that the relief sought for by the Appellant in the reference was specifically for the return of the 8000 shares, while not only in the sur rejoinder, written submissions as well as in the Appeal Memo filed by the Appellant before the Appeal Bench of Bombay Stock had the Appellant prayed for the return of monies accrued by the Respondent as and by way of the sale of the said 10,000 shares of ARBL on the Bombay Stock Exchange for which appropriate Bills had also been drawn by the Respondent and accounting entries also 9/23 ::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:19 ::: ssm 10 nmal1861.16.sxw appropriately passed."
iii) "passed an award on 10th May 2002, allowing the Petitioner's claim in respect of the sale price of sale of 10,000 shares of ARBL sold by the Respondent on the BSE".
"for the sale price in respect of 10,000 shares of ARBL sold on the BSE."
iv) "the same was made when the Petitioner was not aware of the fact of the sale of the 10,000 shares of ARBL." and "that subsequently on coming to know of this sale, in the Sur-Rejoinder, Written Submissions as well as the Appeal Memo filed by the Petitioner before the BSE Arbitrators, the Petitioner had claimed the sale price in respect of the 10,000 shares of ARBL sold by the Respondent on the BSE."
"erred in holding that the relief sought for by the Petitioner in the reference was specifically for the return of 8,000 shares, while not only in the sur rejoinder, Written submissions, as well as in the Appeal Memo filed by the petitioner before the Appeal Bench of Bombay Stock Exchg, the Petitioner had claimed the sale price in respect of the said 10,000 shares sold on the BSE for which appropriate bills had also been drawn by the Respondent & accounting entries also appropriately passed by the Respondent."
14 The learned Senior Counsel appearing for the Respondent, however, referred to the affidavit filed by the Respondent that for want of specific pleadings and grounds and submitted that the Appellant is not entitled for any stay and/or he may be directed to 10/23 ::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:19 ::: ssm 11 nmal1861.16.sxw deposit the sale price amount at today's rate, at this stage, in lieu of 10500 ARBL shares. The learned Senior Counsel appearing for the Respondent has referred and relied the operative part of the Judgment of the Division Bench of this Court (Coram:- Anoop V. Mohta and A.S. Gadkari, JJ) in Rahul Bajaj Vs. Mangal Keshav Securities Limited & Anr.
(Appeal No. 732 of 2005) dated 15 July 2016, which reads as under:-
"b) However, the financial liability and/or the payment and the reciprocal obligations, for handing over the shares or payment in lieu of shares, of both the parties would be on the basis of the date of confirmation of award i.e. the date of Judgment-2 February 2005."
15 The learned Senior Counsel for the Respondent however, has distinguished the above Judgment on facts, that was also of a case of ARBL shares, where the Respondent himself was the Appellant.
That was a case of National Stock Exchange transactions against some other party. The transactions of ARBL shares were of the same fluctuations period between 1 March 2001 to 19 March 2001. The Court, in para 3 of the said Judgment [Rahul Bajaj (Supra)] observed as under:-
"3 In view of peculiarity of the case and how the delay in Arbitration proceedings decision would cause great injustice and hardship to Respondent No.1, as the award, at the relevant time/stage could not be executed because of pendency before the Court initially 11/23 ::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:19 ::: ssm 12 nmal1861.16.sxw of Section 34 Application and later on because of the present Appeal arising out of the same. After hearing the parties and considering the submissions so made, we are inclined to deal with the issue of withdrawal of the Appeal and so also the resistance of the same in the background of effect of fluctuations of share prices in the share market.".....
The Court did not permit the Respondent (Rahul Bajaj) to claim the share price as of the date of disposal of Appeal dated 15 July 2016. It was restricted based upon the basic date of transactions and the date of the confirmation of the award so passed in the year 2005. In the case in hand, had the award was to be implemented and/or parties agreed to accept the same by exercising the option of settlement within reasonable time, the sale price amount so awarded of the relevant time of sale was remained to be paid. There was no direction/award at that point of time in the first round to deposit the shares and on the contrary, as prayed and argued and the restricted sale price amount was directed to be paid by the Appellant to the Respondent.
16 The background so referred above and in view of the award passed by the learned Arbitrator in the year 2014, the Respondent's submission to direct the Appellant to make the payment 12/23 ::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:19 ::: ssm 13 nmal1861.16.sxw in lieu of 10500 ARBL shares at the current market price, practically after more than 14 years, is undoubtedly very harsh situation and an important issue, which is required to be considered finally in this peculiar facts. The issue is whether the date for valuation of the shares should be at the time when the cause of action arose or the date of award passed or the related period or the date of the Appellate award/or Courts, when the basic cause of action has remained the same. The liability of the Appellant as per the basic date of award in the first round was 24 lakhs and odd with interest, but the liability based upon the present market value of the shares, comes to about 14 crores. Admittedly, the matters were pending in the Courts.
Ultimately, concluded by the sole Arbitrator as appointed in the year 2014, by the Supreme Court, by the consent of the parties. However, due to passage of time, how the parties reacted and factually what was the position of the claim inter-se needs to be examined.
17 The pleadings made by the Respondent, who was Appellant (Petitioner) in the Appeal before the Supreme Court, as relevant, are as under:-
13/23 ::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:19 :::ssm 14 nmal1861.16.sxw "VIII. .............. The Bombay High Court ought to have appreciated that subsequently on coming to know of the fact of this sale. In the Sur-Rejoinder, Written Submissions as well as the Appeal Memo filed by the Petitioner before the BSE Arbitrator/s, the Petitioner had claimed the sale price in respect of the 10,000 shares of ARBL sold by the Respondent on the BSE. The Hon'ble Bombay High Court failed to appreciate that it was erroneous to conclude that there was a deficit against the Petitioner in the joint account maintained by the Respondent. ......................"
The relevant paragraphs of the consent order passed by the Supreme Court dated 5 February 2013 are as under:-
"3. Civil Appeal is disposed of in terms of the consent terms (Mark "X") entered into between the parties by invoking our jurisdiction under Article 142 of the Constitution of India.
4. The existing arbitral awards, and any interim orders passed therein, passed on the disputes between the parties by the Arbitral Tribunals of BSE as well as NSE, as also Orders passed by Bombay High Court thereon, are hereby set aside."
The relevant paragraphs of the Consent Terms are as under:-
...........
1. That the parties hereby agree and consent to the appointment of Mr. Shailesh Shah, Senior Advocate, High Court of Bombay, Resident of Mumbai, to act as the Sole Arbitrator to arbitrate and decide all the disputes arising out of and in respect of the transactions done on 14/23 ::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:19 ::: ssm 15 nmal1861.16.sxw behalf of the Appellant by the Respondent either at Bombay Stock Exchange or at National Stock Exchange.
Subject to the paragraphs 2 & 3 below, the parties are at liberty to raise all contentions available to them in law notwithstanding any order, interim or final award hitherto made either by the arbitrators at Bombay Stock Exchange or National Stock Exchange; in respect of the disputes between the parties. The Arbitrator will hold sittings in Mumbai.
2. That neither party would raise any objection to the jurisdiction of the Sole Arbitrator to adjudicate on the aforesaid disputes.
3. It is further agreed that the award dated 27.04.2002 passed by the Ld. Arbitrator of Bombay Stock Exchange Arbitration forum in Arbitration Reference No. 867/2001, order of the Appeal Bench of Bombay Stock Exchange dated 10.01.2003 in Appeal No. 16A/2002, the order of the Single Judge of Bombay High Court dated 07.04.2003 in Arbitration petition No. 143/2002, the order of the Division Bench of Bombay High Court dated 15.03.2004 in Appeal No. 950/2003, as well as the order of the Ld. Arbitrator of National Stock Exchange dated 12.04.2010 in Arbitration Matter No. CM/M-016/2002; including the interim awards made by the said arbitrators are expressly consented to have been set aside by the parties herein."
"6. That the Sole Arbitrator will adjudicate all the claims between the parties uninfluenced by any prior order/remarks passed/made in any prior proceedings before any arbitrator/s, Courts/High Court and the disputes between the parties will be adjudicated de novo."
(Emphasis added) The date of cause of action of such transactions in the share/capital 15/23 ::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:19 ::: ssm 16 nmal1861.16.sxw market goes to the root of the related disputes. Such dispute cannot be resolved on the basis of date of appointment of new Arbitrator.
The time and date of transaction in the volatile and/or fluctuating capital/financial/money market, any trading of financial securities, commodities, derivatives and other fungible items of value can make or mar the concerned people; "buyers" and "sellers", "investors", "brokers" and "constituents", including the listed companies/institutions or individuals. These markets are regulated by the SEBI. There are many stock exchanges for trading in the equities and other listed securities at national or international places. There are huge number of share transactions or contracts entered into in such markets in a (trading/closing sessions) given time and the declared period. The crash or rise of the volatile market is known phenomenon to all the concerned. The peculiarity of such transactions cannot be compared with the other types of transaction/contract.
18 A "share trading account" with the "stock broker or sub-
broker or individual or corporate broker" is an important step, followed by a "Member Client Agreement Form", for the 16/23 ::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:19 ::: ssm 17 nmal1861.16.sxw "client/constituent". There are other documents undertakings required to be signed. The order can be placed by the Client on phone or through a web based interface and the internet contacting the broker/sub-broker directly. Online screen based trading (BOLT) platform can deal with more than 75 lakh transactions per day.
19 There are known mechanisms for such transactions and its respective obligations covering the "variation margin" or "maintenance margin" which is not collateral a daily payment of "profits and losses". Futures are market-to-market (MTM) everyday to ascertain the price. Any such variations in the price of the asset, always have a direct impact on the investment strategy.
20 "Cash/Margin trading", "trigger point", "pay in-pay out on the day", "the settlement on Second working day from the day of trading (T+2 basis)", "Day Traders", "Hedgers", all these terms and its effect are required to be noted by the Arbitrator and the Courts, before considering the settlement or disputes between the parties, governed by the stock exchange rules and regulations, apart from early and timely decision. The early disposal and timely completion of 17/23 ::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:19 ::: ssm 18 nmal1861.16.sxw respective obligations by the parties is a must in such trading, because of impact of volatile and fluctuation in the money and security market. No one can afford to wait for long. No one can be the sufferer because of the pendency of Arbitration and/or the Court Arbitration proceedings. Prima facie, there is much substance in the submissions as made on behalf of the Appellant that this is a peculiar case of great injustice and hardship and irreparable injury to one party, if stay to the award/decree not granted. On considering the averments so made in the supportive affidavit and the reasons so recorded, we are therefore, inclined to grant stay to the execution of the award, however, subject to condition of depositing an amount of market value of the shares in question as observed in the appellate award dated 10 January 2003, with interest thereon, considering the peculiar facts.
21 Whether there is an election made by the Respondent or not and/or whether the Appellant has made out a case on merits, in the background, about the share transactions of NSE by BSE Tribunal need to be considered, taking into consideration the position of law, then existing prior to the order passed by the Supreme Court to refer 18/23 ::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:19 ::: ssm 19 nmal1861.16.sxw the matter to the sole Arbitrator, in question and the position taken by the parties at the relevant time, which we have noted above. We may also note that under the consent terms, the only embargo on the learned sole Arbitrator was that he would adjudicate all the claims between the parties uninfluenced by any prior order/remarks passed/made in any prior proceedings before any Arbitrator, Courts/High Court and the disputes were accordingly to be adjudicated de-novo. This would definitely not mean that the learned Arbitrator could be unmindful of the position, the parties have taken in the past in asserting their respective case, as also the factual background which subsisted. There is no dispute that the shares in question were already sold by the Appellant and that the same were not available to be returned. The Respondent being conscious of this position and accordingly had raised specific pleas in that regard, prima facie cannot be overlooked. This becomes a relevant fact not only touching the adjudication of the dispute but at all such material times when issues of rights between the parties are raised and when issues in that regard fall for judicial consideration. Even otherwise, the aspect of fluctuation in share markets and pendency of such litigations, are relevant factors, which need to be considered in the 19/23 ::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:19 ::: ssm 20 nmal1861.16.sxw present facts and circumstances also. On this conspectus, we are of the clear opinion that for the purpose of interim relief, it would be proper that the market value of the shares as prevailing on the date of its actual disposal which would be a relevant consideration.
22 As regards interim stay pending the hearing of Section 37 Appeal, the position of law is quite clear. The Supreme Court in Kanpur Jal Sansthan and Anr. Vs. Bapu Constructions 1, considering the provisions of Sections 36/37 of the Arbitration Act read with Order 41, Rule 5, CPC, has reiterated as under :-
"13 We have referred to aforesaid authority solely for the purpose that whatever may be the status of the award under the Act in respect of any other Statute, but when it is challenged in an appeal under Section 37 of the Act the underlying principle of the Code of Civil Procedure is applicable. We have thought we should clarify the position as it may not be understood that the decision in Pramjeet Singh Patheja (supra) conveys that it is not a decree for all purposes and the principles under the Code while an appeal is preferred is not applicable."
"14 In Pandey and Co. Builders Pvt. Ltd. v. State of Bihar and Anr., AIR 2007 SC 465, it has been held that a forum of an appellate court must be determined with reference to the definition thereof contained in the 1996 Act. The aforesaid decision further reinforces the conclusion that Order XLI Rule 5 in principle is 1 (2015) 5 SCC 267 20/23 ::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:19 ::: ssm 21 nmal1861.16.sxw applicable to an appeal preferred before the High Court, for there is no provision in the Act prohibiting the appellate court not to take recourse to the underlying principles of the Code of Civil Procedure as long as they are in consonance with the spirit and principles engrafted under the Act."
"18. ..........
A bare reading of the two provisions referred to hereinabove, shows a discretion having been conferred on the appellate court to direct either deposit of the amount disputed in the appeal or to permit such security in respect thereof being furnished as the appellate court may think fit. Needless to say that the discretion is to be exercised judicially and not arbitrarily depending on the facts and circumstances of a given case. .............."
23 Section 36 of the Arbitration Act and/or provisions of Order 41 Rule 5 of the CPC, itself provide and permit the Court to pass an appropriate conditional order, after considering the facts and circumstances of the case and the nature of disputes so raised. The Court may grant conditional or unconditional stay of execution of the Award/Judgment. This is in the background that the parties have proceeded to resolve their dispute of the year 2001/2002 through the Arbitrator. Now, as re-confirmed by the Court under Section 34, in the year 2014, as if the cause of action was of recent origin. The grounds so raised and the submissions so made by the Appellant, based upon the averments and the documents on record, and as the case is made 21/23 ::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:19 ::: ssm 22 nmal1861.16.sxw out as recorded above, we are inclined to grant the Motion to stay the effect and operation of the award confirmed by the impugned Judgment dated 7 January 2016, but on condition to deposit the amount of equivalent to the market value of shares as recorded in the order of Appellate Bench-BSE dated 10 January 2003, at Rs.26,99,232/- with interest of Rs.33,803/- with future interest @ 12 p.m. on Rs.4,75,328/-, as it was calculated as monetary equivalent of 10500 ARBL shares, which we prima facie find could have been the claim of the Respondent. The issue of bonus shares and its valuation will be considered at the time of final hearing. As the different amount charts are placed on record, at this stage, without prejudice to the rights and contention of both the parties, we are inclined to direct the Appellant to deposit a lumpsum amount of Rs.70,00,000/-
(Rupees Seventy Lacs only). We are taking this basis for monetary deposit and as an interim arrangement, pending the final Appeal. It is made clear that, we are not restoring order dated 10 January 2013, but to arrive at an amount to be deposited as condition for stay, we are referring to it.
24 In the result, following order:-
22/23 ::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:19 ::: ssm 23 nmal1861.16.sxw
ORDER
a) Notice of Motion is allowed in terms of prayer clause
(a), which reads thus:-
"(a) That pending the hearing and final disposal of Appeal (L) No. 235 of 2016, the stay, effect and operation of the impugned Award dated 30th September 2014 as confirmed by order dated 7 th January, 2016 be stayed."
however, on condition that the Applicant/Appellant depositing a lumpsum amount of Rs.70,00,000/-
(Rupees Seventy Lacs only) in this Court, within four weeks from today.
b) The Prothonotary and Senior Master, High Court Bombay to invest the said amount in a fixed deposit in a Nationalized Bank, initially for a period of six months and further renew from time to time for the same period. The fixed deposit would be subject to the further orders passed in the Appeal.
c) All points are kept open.
d) Notice of Motion is disposed of accordingly.
e) There shall be no order as to costs.
(G.S. KULKARNI, J.) (ANOOP V. MOHTA, J.)
23/23
::: Uploaded on - 30/08/2016 ::: Downloaded on - 31/08/2016 00:08:19 :::