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Delhi District Court

Jagbir Singh vs Apollo Sindhoori Capital Investment ... on 10 August, 2010

                                   1

               IN THE COURT OF SHRI SURINDER S. RATHI:ADJ:07
                                                            
                     ROOM NO.32:TIS HAZARI COURTS :DELHI
                                                                          CS NO: 85/09
                                                             ID NO: 02401CO212882009
JAGBIR SINGH
S/O SH. AMRIK SINGH
R/O 1747,GURUTEG BAHADUR NAGAR
JAGADHARI, DISTT. YAMUNA NAGAR
HARYANA                                    ......PETITIONER / OBJECTOR


vs.


1. APOLLO SINDHOORI CAPITAL INVESTMENT LTD.
      HAVING ITS CORPORATE OFFICE AT 
      ALL TOWERS, 55 GREAMS ROAD, CHENNAI­600006.
      AND BRANCH OFFICE AT B­4/981/A­14,
      RAM PURA AUTO MARKET,
      SCHOOL ROAD, YAMUNA NAGAR
      THROUGH ITS BRANCH MANAGER.          ..CONTESTING RESPONDENT


2. M/s NATIONAL  STOCK EXCHANGE OF INDIA LTD.
      THRUGH ITS SOLE ARBITRATOR,
                              th
      ARBITRATION BRANCH, 4  FLOOR,
      JEEVAN VIHAR BUILDING, PARLIAMENT STREET
      NEW DELHI­1.                                ... PROFORMA RESPONDENT


       
               Application U/s 34 of the Arbitration and Conciliation Act,1996
               for Setting Aside Ex­Parte Award dated 31.1.2009



DATE OF INSTITUTION                    :   19.05.2009
DATE OF FINAL HEARING                  :   10.08.2010
DATE OF FINAL ORDER                    :   10.08.2010


ORDER 

1. By this order I shall dispose off objection petition filed by petitioner against the @contd.

defendant company U/s 34 of Arbitration and Conciliation Act (hereinafter referred to as The Act) against award dated 31.1.2009 passed by Ld. Sole Arbitrator.

2. I have heard argument of LD. Counsel Sh. K.D.Saini advocate for petitioner and Ld. Counsel Ms. Renu Gupta for respondent no.1. I have perused the objection as well as arbitration file.

3. Brief facts as per claim petition filed by respondent no.1 are that it is a duly registered company and is a member of NSE (National Stock Exchange) and BSE (Bombay Stock Exchange) and are in the business of stock broking of shares and F&O. The company had a branch office at Yamuna Nagar, Haryana where petitioner Sh. Jasbir Singh was its client and he had entered into a Member Constituent Agreement (MCA) for sale and purchase of shares , script and F&O segments with are on line facility. Petitioner started trading with the respondent no.1 on 9.5.2007 under code no.715309. As per respondent on account of trades done by petitioner through them there was a debit balance of Rs.76,370.78p. Despite request the debit balance was not cleared and finally respondent no.1 / claimant was constrained to invoke clause 30 of MCA which provides for resolution of disputes by arbitration @contd.

through an arbitrator appointed by NSE at Delhi. Notice qua appointment of sole arbitrator was issued by NSE to the petitioner and was responded to by the petitioner herein. Subsequently the claim petition dated 24.5.008 was assigned to Mr. Ravi Kant , Ld. Sole Arbitrator by NSE . Another letter was issued by NSE qua appointment of Mr. Ravi Kant as sole arbitrator on 6.11.2008 whereby both the parties were directed to appear before Ld. Arbitrator for first hearing on 21.11.2008. As per proceedings sheet none appeared on behalf of petitioner on that date and matter was posted for 15.12.2008 and another notice was issued to the petitioner through speed post. On this date as well, none appeared for petitioner despite service. Thereafter petitioner herein was proceeded exparte by LD. Sole Arbitrator on 20.1.2009. After conclusion of the arbitration proceedings the impugned award dated 31.1.2009 was passed whereby respondent no.1 herein was awarded a sum of Rs.76,370/­ apart from interest @12% per annum .

4. Aggrieved by the award the objection petition in hand was filed by the petitioner. While opening his argument on the objection petition in hand LD. Counsel for petitioner has prayed for setting aside the impugned award on the ground that the arbitration clause 30 in the MCA is not binding on his client. It @contd.

is argued that petitioner herein was made to sign unfilled blank document and as such the arbitration clause is not binding on him. The MCA dated 9.5.2007 shows that clause 30 is a printed format which bears signature of the petitioner right under it on each and every page. Once entire MCA has been admittedly signed by the petitioner it can not be said that petitioner was made to sign the blank document. The plea that no witness was asked to sign this document and columns like employment details etc. are not filled, cannot discredit the admittedly signed agreement. More so, when admittedly petitioner traded for more than a year with the respondent under the same agreement. The petitioner can not be allowed to approbate and reprobate in the same breath. When he traded in shares and scripts for more than a year with respondent no.1, he had no objection qua the execution of agreement. When he was asked to clear the debit balance, he can not be allowed to do the fault finding in the MCA in the manner sought to be done.

5. The next ground taken by the Ld. Counsel for petitioner herein is that dispute of non clearing of debit balance does not come within the ambit of clause 30 under Arbitration. Plain reading of clause 30 shows that it begins with the word " in case of any claim / complaint / dispute or difference between @contd.

the member and constituent . . . . . . . . . . . will be resolved only by arbitration." Non clearing of debit balance is a claim and is as such well covered within clause 30 qua arbitration.

6. Another objection taken is that before invoking the arbitration clause, no demand notice was issued by the respondent company to the petitioner. It is evident that since the petitioner was member of an on line trading account, he was issued all the transactions details through Internet and even other wise all his details are accessible to him under a security passward. There is no clause in the MCA which necessitates issuance of the hard copy of the contract note a pre requisite before raising arbitration. As such in my opinion there is no merit in this plea.

7. Another objection taken is that there is anomaly in the maintenance of account of the petitioner by the respondent. Attention of the Court is drawn to couple of entries in the statement of account of Rs.50,000/­ and Rs.90,000/­. Both these cheques find due reference in the impugned award. The only grievance of the petitioner is that a cheque of Rs.90,000/­ was credited to his account even though he never delivered it. As far as Rs.50,000/­ amount is concerned, it is admitted that it was never credited and was dishonored on @contd.

STOP PAYMENT by the petitioner.

8. In any case It is a settled legal proposition that in the petition U/s 34 of the Act minute detailed appreciation of factual matrix of the dispute is not permissible .

9. In case titled MCD vs. M/s Gupta 2008 IX AD (Delhi) 401, Hon'ble High Court has categorically ruled "

At the outset it may be noted that the law on the scope of interference under Section 34 of the Act is well settled. A number of judicial pronouncements have indicated that the courts while examining the award of an arbitrator are not required to re appreciate the evidence placed on the record as if sitting in appeal and that the learned Arbitrator is the master of the fact and law. It is also settled law that the court should endeavour to uphold the award unless the same is on the face of it, illegal, arbitrary or perverse. In Hindustan Construction Co. Ltd Vs. Governor of Orissa & Ors AIR 1995 SC 2189, Hon'ble Supreme Court observed that :

"The court can not re­appreciate the material on the record."

@contd.

In another case titled Nalini Singh Associates Vs. M/s Prime Time IP Media Services Ltd. 2000 X AD (Delhi)60, Hon'ble High Court ruled :

"Scope of review U/s 34 of the Act is limited and not as wide as that of an Appellate Court. This Court can not reappraise and re­examine finding of facts laid and found by the learned Arbitrator."

10.Further more if the petitioner had any grievance he should have participated in the arbitration proceedings,. Record shows that he was well aware of initiation of arbitration proceeding against him. The decision of the petitioner of not to participate in the arbitration proceedings was conscious one. I find no strength in the objection raised by the petitioner herein.

11.Another objection taken is qua territorial jurisdiction on venue of arbitration proceedings. While referring to clause 21 of MCA, it is argued by Ld. Counsel for objector that only Chennai Court had jurisdiction to adjudicate over the dispute. The preceding clause 30, admittedly, does not contain any specific stipulation qua place of arbitration. All that clause 30 of MCA qua arbitration lays is that of dispute shall be resolved only by arbitration in accordance with by­laws, rules and regulations of the Exchange (NSE). Since no place of @contd.

arbitration was specified in the Clause 30, it has to be treated as per Section 20 of The Act that the venue of arbitration was left open to be decided by the Arbitrary Tribunal . Section 20 of Arbitration and Conciliation Act 1 and 2 runs as under:

20. Place of arbitration -

(1) The parties are free to agree on the place of arbitration.

(2) Failing any agreement referred to in sub­section (1), the place of arbitration shall be determined by the arbital tribunal having regard to the circumstances of the case including the convenience of the parties.

12.Plain reading of this statutory provision shows that arbitral tribunal would decide about the place of arbitration having regard the circumstances of the case as well as convenience of the parties. Admittedly respondent's / claimant company has registered office at Chennai while objector is a resident of Yamuna Nagar, Haryana. Respondent No.1 also has office in Yamuna Nagar, Haryana. As such it was convenient for both the parties to have Arbitration Proceedings held at Delhi as compared to Chennai. In this backdrop I found no fault in the decision of NSE to hold arbitration proceedings at Delhi. Moreover, para 16 of the Act provides that in case a @contd.

party has a objection qua jurisdiction of arbitrator, he shall raise the dispute at a stage not later than submissions of statement of defence. It is argued by LD. Counsel for the petitioner that he has raised the objection at the time of appointment of sole arbitrator. Record shows that neither at the pre appointment stage nor after the appointment of Ld. Arbitrator , objector herein ever raised any objection qua territorial jurisdiction. This objection is as such sought to be raised for the first time in section 34 Objection Petition. Further more, in a letter addressed by objector to LD. Arbitrator on 18.11.2008 as well, no objection qua territorial jurisdiction was raised. As such I find no strength in this plea.

13.As such in view of the above discussion, I find no merits in the objection petition and same stands dismissed. Arbitration record be received by Arbitrator . Objection petition be consigned to RR. ANNOUNCED AND DICTATED IN OPEN COURT ON : 10.8.2010 (SURINDER S.RATHI) ADJ:DELHI @contd.

CS NO: 85/09 ID NO: 02401CO212882009 JAGBIR SINGH Vs. APOLLO SINDHOORI CAPITAL INVESTMENT LTD.

10.8.2010 Pr: Ld. Counsel Sh. K.D. Saini Advocate for petitioner / objector Ld. Counsel Ms. Renu Gupta Advocate for respondent Submissions from both the sides heard at length and file as well as arbitration record perused.

Vide a separate order of the day objection petition of the objector / petitioner stands dismissed. Ld. Arbitrator to receive the the arbitration record. Objection petition be consigned to RR.

(SURINDER S.RATHI) ADJ:07:CENTRAL DELHI 10.8.2010 @contd.