Bangalore District Court
Smt. Asha Devi Jain vs M/S. Fortune Equity Brokers (India) Ltd on 27 June, 2018
C.R.P. 67) Govt. of Karnataka
Form
No.9(Civil)
Title sheet for
Judgment in
Suits
(R.P.91)
TITLE SHEET FOR JUDGEMENTS IN SUITS
IN THE COURT OF XVI ADDL. CITY CIVIL AND
SESSIONS JUDGE, BENGALURU CITY.
(CCH.NO.12)
PRESENT : SRI R.Y. SHASHIDHARA,
B.Com.,LL.B.,
XVI ADDL. CITY CIVIL AND
SESSIONS JUDGE, BENGALURU CITY.
DATED THIS 27th DAY JUNE, 2018.
ARBITRATION SUIT NO.24/2010
*****
PLAINTIFF Smt. Asha Devi Jain
W/o. Manaklal Chopra
Aged about 39 years
R/at No.55/1, 9th B Cross,
Magadi Main Road,
Agrahara Dasarahalli,
Bangalore 560079
(By Sri. K.S. Advocate)
- Vs -
DEFENDANT: 1. M/s. Fortune Equity Brokers (India) Ltd.,
Registered and Corporate office at
K.K. Chambers, 2nd Floor,
Sir P.T. Marg Fort,
Mumbai 400001
2 AS 24/2010
Also at
No.59, Sonawala Building,
B.S. Marg, Fort, Mumbai 400001
Also at
Having branch office at
No.6/7, Sri. Raghavendra Complex,
417/1, 10th Main Road, 4th Block,
Jayanagar, Bangalore 560011
2. Sridharan Krishnamurthy
Sole Arbitrator
C/o. National Stock Exchange of India Ltd.,
Arbitration Department, 2nd Floor,
Ispahani Centre, Door No.123-124,
Nungambakkam High Road,
Nungambakkam
Chennai 6000034
(By Sri A.M.N., Advocate for D1)
(D2 : Exparte)
Date of institution of the suit 15-03-2010
Nature of the suit: Section 34 of Arbitration and
Conciliation Act, 1996.
Date of the commencement of ---
recording of the evidence:
Date on which the Judgment was 27-06-2018
pronounced
Total duration Year/s Month/s Day/s
08 05 12
JUDGMENT
This suit/petition filed by the plaintiff/petitioner under Section 34 of Arbitration and Conciliation Act, 1996 (herein after referred the same as said Act) for setting aside the 3 AS 24/2010 award passed by the defendant No.2/respondent No.2 dated 09-12-2009 in Arbitration case No.CM/C-0070/2009.
2. In the petition, it is stated that on 03-07-2009 the plaintiff filed claim petition before defendant No.2 claiming a sum of Rs.4,80,854/- with costs and interest or restore her securities along with all accrues.
3. It is stated that on 01-09-2008 the plaintiff entered as a trading member with defendant No.1 under client ID No.00064149 and opened a Dmat Account No.12044500. The plaintiff is an uneducated, signed on blank client registration form at the time of registration and opening of dmat account. She had no intention to trade and wanted to retain the securities in the Dmat form. She had refused to sign any kind of power of attorney or letter of authority in favour of the defendant No.1. Taking the advantage of illiteracy of the plaintiff, the defendant No.1 has obtained her signatures. The plaintiff deposited securities like Parshwanath Developers-500 shares, NIIT Technology-400 shares on 05-09-2008, Blue Bird-500 shares, House of Pearl
- 200 shares, Magnum Venture - 2000 shares, Mangalam Cement - 200 shares, Triveni Engineering - 500 shares, 4 AS 24/2010 Tech Mahindra - 50 shares, Sterlite Industries - 50 shares on 15-09-2008, Deccan Aviation - 600 shares, Praj Industries - 433 shares and Unitech Ltd., - 100 shares on 01-10-2008 in her Dmat Account.
4. It is stated that the plaintiff received bunch of invoices on account statement which reflected the illegal purchase and sale of equity shares by the defendant No.1 without her consent. Subsequently she approached the branch office of the defendant No.1 at Bangalore with letter that alleged transactions had taken place without her permission/consent. But, the defendant No.1 did not reply the same. The defendant No.1 had used the code of the plaintiff unauthorizedly while trading. The plaintiff informed the same to the branch office of the defendant No.1. But they refused the said letter and on next working days they sold the securities in the account without her instructions. She also gave complaint to the Chairman of SEBI on 26-11- 2008 in order to initiated appropriate action against the defendant No.1. The defendant No.1 in all transacted to the tune of Rs.46,32,732=21. During time of said transaction the defendant No.1 used the code of the plaintiff unauthorizedly and incurred loss to the tune of 5 AS 24/2010 Rs.1,13,006=06 to her. The plaintiff has deposited securities in her account which were sold by the defendant No.1 without her permission. Hence, she sought for restoration of her securities.
5. It is stated that at no point of time the plaintiff gave instructions to the defendant No.1 to purchase or sell the shares in her name. At the time of signing the blank forms she had never given any e-mail I.D. to the defendant No.1. But, the defendant No.1 fraudulently created an e-mail of the plaintiff in their office at Bangalore and used the same for the purpose of trading. The plaintiff has filed claim petition before the defendant No.2 seeking direction to the defendant No.1 to pay a sum of Rs.4,80,854/- with costs and interest or restore her securities along with accrues.
6. It is stated that the defendant No.1 filed written statement/objections to the claim petition before the Arbitrator with counter claim. The plaintiff filed counter to the written statement, then the defendant No.1 has filed sub-rejoinder. Based on the contentions and submissions raised by both parties, the defendant No.2 has rejected the claim of the plaintiff. But, no issues were framed and 6 AS 24/2010 therefore no evidence was led in the claim petition by the both parties. Aggrieved by the award passed by the defendant No.2 the plaintiff has preferred the present application on the following amongst other grounds.
1. The impugned award is liable to be set aside as not being valid under Indian law, that being the law to which the parties have subjected it.
2. The Learned Arbitrator came to a hasty conclusion without any reasoning and dismissed the claim of the Appellant.
3. The Learned Arbitrator erred in coming to a conclusion that a Dmat form is opened only for the purpose of trading. Thereby, the Learned Arbitrator brushed aside the contention of the Appellant that she opened the Dmat account for converting his shares in to electronic mode which she was holding physically and not for the purpose of trading.
4. The Learned Arbitrator failed to notice the submissions made by the Appellant that "it is very much necessary to obtain the log report for having opened the appellant's e-mail id. The Log report gives the details of the creation of the e-mail id, such as, place, name of the creator, date, time and through which computer this was done". This clearly shows the partiality of the arbitrator in passing the award without giving sufficient opportunity to the appellant to prove the same. The finding of the Learned Arbitrator is perverse and illegal.
5. The Learned Arbitrator in the reasoning portion of the award has held the contentions raised by the Appellant that she did not know English and hence unaware of the contents of the document and that he signed in blank forms are all not acceptable.
6. It is pertinent to note here that even if the appellant has signed the blank form it was out of the trust she signed and was never with the 7 AS 24/2010 intention of trading. But the First respondent taking undue advantage of the same played fraud on the Appellant by transacting in the said Dmat Account without the permission of the Appellant and a blind eye has been turned to this by the second respondent.
7. The Arbitration proceedings were initiated by the Appellant on 03-07-2009 and the final award was passed on 9-12-2009. Throughout the entire award there is no reference to the issues arising out of the dispute between the parties and to the documents or exhibits. This clearly shows that the arbitrator has failed to follow the proper procedure of framing the issues and giving the opportunity to the appellant to prove their case by way of evidence. It is clearly visible to what extent the second respondent was in a hurry to pass the award in favour of the first respondent. The respondent No.2 passed the award in a hurry after he received the intimation from the respondent No.1 regarding the complaint filed by the Appellant before the Cops of Detectives for investigating the IP address and log report for creating an email id.
8. The Appellant never in her life has operated any computer and did not have any email id in her name. The appellant further while signing the forms did not give any email id. The respondent No.1 fraudulently has created an email id in the name of appellant. From the beginning, the Appellant took a contention that she never operated the email id as the password to open the account was not furnished to her by the First respondent. Moreover, the Learned Arbitrator failed to appreciate the fact that in the client registration form furnished by the 1st respondent to the appellant the email column was blank whereas in the client registration form furnished by the respondent No.1 during the course of arbitration the email id column shows [email protected]. Moreover different handwritings have been used in the said registration form. The appellant even suspected that those registration forms furnished by the respondent No.1 during arbitration were not the one which were signed by this appellant at the time of opening the dmat account. The said fraudulent 8 AS 24/2010 act of the First respondent is also clear from the courier received by the appellant in the month of the September 2008 from Mumbai M/s Fortune Equity broking India Pvt. Ltd., through which she received client registration kit in which all the columns were filled except the email id column.
9. The Learned Arbitrator failed to appreciate that the respondent No.1 took a contention that the appellant came to Mumbai and signed the Client registration form. The date of the agreement is 1st September 2008, there is no dispute as regards this date. The date of receipt of the agreement by the appellant as contended by the respondent No.1 from Mumbai is 10th August 2008. The date of receipt of the forms is earlier to the date of the registration which is not at all possible. The respondent No.2 failed to take note of this contradiction which is essential in arriving at the award.
10. To establish that it was a concocted story the appellant had produced the appropriate form which contains the seal of the respondent No.1 dated 10- 08-2008 stating to have received the application form much before the date of the agreement. The appellant had vehemently stated that at no point of time she visited Mumbai and that the original application form signed was not duly filled with the email id. In this regard the appellant had sought for the particulars of the opening of the email id and email transmission log report. The first respondent taking undue advantage of lack and knowledge in computer and its operation by the appellant filled the consent letter of the electronic contract note as well as created and email id., though these contentions were raised by the appellant time and again before the arbitration, the Learned Arbitrator erred in holding that the claim of the appellant is not maintainable before him.
11. The Second respondent in the entire award only highlighted that the appellant being uneducated or illiterate is not a ground for stating that the transaction have taken place without her consent. Apart from the above reason, the second respondent has not given any reasoning or finding in the entire award as to why the claim of the 9 AS 24/2010 appellant is dismissed indicating a clear bias as understood in law.
12. The Learned Arbitrator ought to have examined both the parties with respect to the dispute involved. The Learned Arbitrator has proceeded to pass award based on the mere contentions of the first respondent. There is a clear failure on the part of the Second respondent to apply the law which is totally untenable in law. In view of the failure of the second respondent either in framing the issues or in conducting evidence the fining of the second respondent clearly discloses a species of fraud. The award passed by the second respondent thus exceeds the scope of the submission to arbitration in a much as he has virtually decided that the Appellant's allegation of unauthorized trading in her account is not acceptable as the sale of shares held in the dmat account was carried out through BSE and hence the complaint is not a subject matter of the arbitration.
13. The second respondent while deciding whether an illegal transaction has taken place has brushed aside the contentions or the appellant. The appellant had taken a contention that the respondent has misled the forum by giving wrong information.
14. The respondent No.1 has repeatedly taken a contention that the email id was given by the appellant at the time of signing the form.
However, the Log report from the police shows that the email id was created in the office at Bangalore office of the first respondent on a much later date along with name and accurate time.
15. Time and again the respondent No.1 has stated that the contract notes were sent electronically to the email id of the appellant but the interesting fact remains that the said email id has been operated from the LP.No.122.166.9.49 the address is of the Bangalore branch office of first respondent. (Assuming for the purposes of argument but not admitting that the email id was created by the appellant but the documents show that the email id has been operated from the Bangalore address of the respondent No.1). The 10 AS 24/2010 appellant had registered an FIR under Sec.420 of the Indian Penal Code bearing Crime No.837/2009 as against the first respondent's representatives. In this regard the police have obtained the termination history with respect to the place of address of the operation of the email id pertaining to the said IP No. Copies of the termination history and FIR are produced herewith and marked as ANNEXURE-E and ANNEXURE-F respectively.
16. The Learned Arbitrator has mechanically passed the award without application of mind by giving a finding that both the cases are similar in nature.
17. The first respondent has played fraud and a blind eye has been turned to this by the second respondent. In the award passed by the second respondent there is open partiality towards the first respondent.
On the above mentioned grounds the plaintiff prayed for set aside the award passed by the Arbitrator/the defendant No.2.
7. The defendant No.1 has filed objections/written statement to the present petition and stated as follows :-
It is stated that the defendant No.2 has been passed award in consonance with the rules, byelaws and regulations of the National Stock Exchange of India Ltd., and after following due process of law. There is no infirmity, irregularity and illegality in the award passed by the defendant No.2. Said award is valid, binding and enforceable one. In order to delay and defeat her commercial 11 AS 24/2010 obligations the plaintiff has filed the present suit. The petitioner filed this suit and seeking for re-appreciation of the evidence placed before the defendant No.2 by this Court. This suit/petition filed by the petitioner is in nature of first appeal. Hence, re-appreciation of evidence is not sustainable. As per Section 34 of the said Act, the jurisdiction of this Court is limited and this Court cannot re-adjudicate the merits of the matter.
8. It is denied the grounds contended by the plaintiff in the present petition. It is stated that the plaintiff approached the defendant No.1 and expressed her desire to effect transaction in shares and securities. After satisfied the instruction given by the defendant No.1, the plaintiff had executed "Know Your Client Form" as well as Member-Client Agreement and "Combined Risk Disclosure Documents" and also other voluntary documents, including consent for receiving digital contract notes. It is denied that the plaintiff signed blank forms as provided by the defendant No.1. Details to be provided to the plaintiff in filling the said agreement as per the normal custom including the email ID. Thereafter, the petitioner signed in the client registration form and other documents. It is stated that the defendant 12 AS 24/2010 No.1 created a client ID code of the plaintiff and also account number in her name. After creation of ID code and opening an account in the name of petitioner, the defendant No.1 forwarded to the petitioner as a "welcome letter" along with a set of completed documents. No point of time the plaintiff pointed out any discrepancy in the details filled in the said documents. She opened a depository account in her name after following due process. Thereafter, the transaction taken place. The defendant No.1 forwarded digital contract notes to the plaintiff and the same has been delivered to the email ID belongs to her. They also forwarded trade summary to the petitioner through her mobile. It is denied that the defendant No.1 has obtained signatures of the plaintiff in the blank documents, created ID email belongs to her in fraudulent manner and made a transaction of transfer and shares. It is stated that the petitioner has not made out case of setting aside the impugned order passed by the defendant No.2. On the above said grounds the defendant No.1 prayed for dismissal of the case of the plaintiff with exemplary costs.
9. In this arbitration suit both parties have not adduced any evidence.
13 AS 24/2010
10. Heard the arguments by both side.
11. The following points arises for my consideration :-
1. Whether the plaintiff has made out a grounds under Section 34(2) of the Arbitration and Conciliation Act, 1996 to set aside the award dated 09-12-2009 passed by the defendant No.2 ?
2. Whether award passed by the defendant No.2/Arbitrator is illegal, erroneous and liable to be set aside ?
3. What order or decree ?
12. My answer to the above points are as follows:-
POINT NO.1 In the affirmative
POINT NO.2 In the affirmative
POINT NO.3 : As per final order for the
following :
REASONS
13. POINT NO.1 AND 2:- These two points are inter-
connected, therefore for the purpose of avoiding repeated discussions, I taken up these two points together for consideration.
14. It is the contention of the defendant No.1 that this Court has no territorial jurisdiction to entertain this case. The agreement between the plaintiff and the defendant No.1 was 14 AS 24/2010 executed at Mumbai, the seat of arbitration at Chennai, hence this Court has no jurisdiction to entertain the case. Considering the same I am of the opinion that the plaintiff and the defendant No.1 branch office is situated in Bangalore, it is within the jurisdiction of this Court. Since the provisions of old law and the ordinance do not prescribe the territorial jurisdiction of the Court empower to decide the applications and appeal. As per CPC a Court will exercise territorial jurisdiction over a matter if the property in dispute is situated within its jurisdiction, or the defendant resides within its jurisdiction, or if the contract has been executed or performed within its jurisdiction, or if the cause of action arose within its jurisdiction. As stated above, in the case on hand the plaintiff and defendant No.1 branch office is situated in Bangalore city and cause of action arose in Bangalore city and it is within the jurisdiction of this Court. It is not the case of the defendant No.1 that in the agreement the parties have mentioned about jurisdiction of the Court regarding settlement of dispute. Therefore, I come to the conclusion that this Court has territorial jurisdiction to entertain the present case. 15 AS 24/2010
15. It is the second contention of the defendant No.1 that the present petition filed by the plaintiff is barred by limitation. I have perused the above said contention of the defendant No.1. As per Section 34(3) of the said Act an application for setting aside the arbitration award may not be made after 3 months have elapsed from the date on which the party making that application had received the arbitral award. The plaintiff contended that she received the award on 16-01-2010, thereafter she filed this petition and it is within the period of limitation. I am of the opinion that the present case the defendant No.2 passed an award on 09-12-2009, as per the plaintiff award was communicated to her on 16-01-2010 and thereafter she filed the present suit on 15-03-2010. Hence, I come to the conclusion that this petition filed by the petitioner is within 3 months from the date of receipt of arbitral award as per Section 34(3) of the said Act.
16. As per Section 34 of the Arbitration and Conciliation Act, 1996 an unsuccessful party can challenge the award passed by the Arbitrator under the various grounds. The grounds under Section 34 can be categorized under the following general headings.
16 AS 24/2010
1. Violation of Natural Justice
2. Arbitral Award in derogation of Public policy
3. Misconduct of Arbitrator
4. Exceeding jurisdiction
5. Non-Arbitrable issue
6. Illegality - (same as procedural misconduct)
7. Conflict of jurisdiction (unsettled law)
8. Incapacity of party In the present case on hand the plaintiff has filed claim petition before the defendant No.2/learned Arbitrator. Due to dismissal of his claim petition, as a unsuccessful party the plaintiff approached this Court and prayed for setting aside the award passed by the defendant No.2 under the various grounds as per Section 34 of the said Act. As per proviso of Section 34 (2-A), an award shall not be set aside merely on the ground of erroneous application of law or by re-appreciation of evidence. But, unfortunately in the arbitration proceedings no oral evidence recorded. Therefore the question of considered this case by way of re-appreciation of evidence will not arise.
17. During the course arguments, learned counsel for the plaintiff/appellant submitted that the plaintiff had no intention to trade and wanted to retain the securities in the Dmat form. She never consented for dealing in respect of shares by the 17 AS 24/2010 defendant No.1. The defendant No.1 has created e-mail ID in its office belongs to the plaintiff. IP address for creating e-mail ID has given from the office of the defendant No.1. The plaintiff was not transferred the share and received any amount from the defendant No.1. The plaintiff had filed complaint against the defendant No.1 before the jurisdictional police, after investigation the charge sheet filed against the defendant No.1. In spite of the same, the defendant No.2/learned Arbitrator has not framed issues, recorded the evidence of the plaintiff, not considered alleged fraud committed by the defendant No.1, no opportunities given to the plaintiff to project the alleged fraud committed by the defendant No.1 and learned Arbitrator has hurriedly dismissed the case of the plaintiff. He further submitted that the award passed by the Arbitrator is opposed to the provisions of Section 34 of the said Act and it is liable to be set aside.
18. In support of his contention the learned counsel for the plaintiff relied upon the decisions of Hon'ble Courts reported in (2014) 9 Supreme Court Cases 263 (Oil and Natural Gas Corporation Limited vs. Western Geco International Limited) and (2003) 5 SCC 705 (Oil and Natural Gas Corporation Limited vs. Saw Pipes Ltd.,). 18 AS 24/2010
19. Learned counsel for the defendant No.1 submitted that, as per the consent and permission of the plaintiff, the defendant No.1 has created email ID and made the transaction of sale and purchase of shares. There is no alleged fraud committed by the defendant No.1 as alleged by the plaintiff side. After considering the case of both side, the learned Arbitrator dismissed the claim petition filed by the plaintiff. The learned Arbitrator has not committed any irregularities while passing such order. Hence, the question of set aside the award is does not arise and this suit is liable to be dismissed.
20. In support of his contention the learned counsel for the defendant No.1 relied upon the decision of Hon'ble Court reported in 2010 AIR SCW 232 (M/s Grasim Industries Ltd., and another vs. Ms Agarwal Steel) and 2009 AIR SCW 7191 ( Steel authority of India Ltd., vs. Gupta Brother Steel Tubes Ltd.,).
21. I have perused the arguments canvassed by both side with case on hand. I have perused the award passed by the defendant No.2 dated 09-12-2009. In his award the defendant No.2/learned Arbitator has not accepted the contention of the 19 AS 24/2010 plaintiff that she does not know English and hence she signed all the documents on trust. It was held in the award that the plaintiff transferred her shares in to the new Dmat account opened with the defendant No.1, the welcome letter sent to the plaintiff indicated the emal ID and she should have objected to it at that time itself. It is further held that the plaintiff has not explained the transfer of funds to her account through Axis bank when asked by the investor grievance cell. The respondent categorically denies the appellants allegations of unauthorized trading and states that all the contract notes have been sent to the email id and also physically. The sale of shares held in the Dmat account was carried out through BSE and hence this complaint is not a subject matter for this arbitration and the applicant can take up this matter at the appropriate forum. Hence, it is held that the appellant's allegation of unauthorized trading in her account is not acceptable. From the above said reasons the defendant No.2 has dismissed the claim petition filed by the plaintiff.
22. I have carefully perused the award passed by the defendant No.2. From going through the same, it is clear that there is no issues framed in the arbitration proceedings as per 20 AS 24/2010 the allegation made by the parties and no opportunity offered to them to prove their case with oral and documentary evidence. No evidence recorded in the arbitration proceedings. Without oral and documentary evidence the defendant No.2 considered the claim petition and dismissed.
23. In the claim petition before the Arbitrator the plaintiff specifically contended that she is illiterate, she had no intention to trade and wanted to retain the securities in Dmat form, taking advantage of her illiteracy, the defendant No.1 obtained her signatures in the blank forms. She further contended that the defendant No.1 has committed fraud, he has created her email id in his office, obtained signatures in the blank forms and made transaction of sale and purchase of shares and caused loss to her. She further contended that without her consent the defendant No.1 was sold and purchase of shares in her name and caused loss to her.
24. I am of the opinion that the defendant No.2 has not considered the above mentioned serious allegation made by the plaintiff in the claim petition in respect of fraud committed by the defendant No.1 while dealing with transaction of shares. 21 AS 24/2010 The defendant No.2 has not framed points for settlement/issues on the basis of pleadings of the parties and recording evidence. He has not mentioned in the award that what is the reason for non-framing of issues, oral and documentary evidence not recorded in the arbitration proceedings. I am of the opinion that non-framing of issues and recording oral evidence by the learned Arbitrator is illegal and opposed to public policy. He has not followed the procedure of Section 24 of the said Act. Without framing issues and considered the claim petition filed by the plaintiff on the basis of oral and documentary evidence, the defendant No.2 dismissed the case of the plaintiff. Without oral and documentary evidence he has given findings on the contention taken by the plaintiff against the defendant No.1. Therefore, I am of the opinion that it amounts to violation of natural justice and against the public policy. The defendant No.2 has not given opportunity to the parties to leading oral evidence and production of documents in the arbitration proceedings. I am of the opinion that it will also amounts to misconducted the proceedings. The defendant No.2 has failed to record the findings in respect of some of the distinct matters referred to 22 AS 24/2010 him. Hence, I am of the opinion that the award passed by the defendant No.2 is incomplete.
25. Hon'ble Supreme Court of India by their judgment reported in AIR 2016 Supreme Court 4675 (A. Ayyaswamy vs. A. Paramashivam and others) held that the contention taken by the petitioner regarding alleged fraud committed by the another party can be determined by the Arbitral Tribunal. As stated above, in the case on hand the plaintiff specifically taken contention that the defendant No.1 committed fraud while getting her signatures in the documents, created forged email id and made transaction in respect of shares. Therefore, I am of the opinion that the defendant No.2 has to determine the allegation of fraud against the defendant No.1 as alleged by the plaintiff. But, he has not given any findings on the alleged fraud as per the contention taken by the plaintiff. It is well settled law that non-reasoned award is liable to be set aside. In the decision reported in AIR 1964 A.P. 348, it was held that in case of the Arbitrators failure to record finding in respect of some of the distinct matter referred to the arbitrator, the award is incomplete and liable to be set aside. In the case on hand learned Arbitrator did not framed issues and recorded 23 AS 24/2010 evidence in respect of alleged fraud as contended by the plaintiff and given findings.
26. As discussed above the learned Arbitrator has not followed the procedure laid down under Section 24 of the Arbitration and Conciliation Act, 1996. He has not framed points for settlement or issues, not taken oral and documentary evidence placed by the plaintiff side and passed award with reasons. In the absence of settlement or issues, oral and documentary evidence, the defendant No.2 simply given findings that the plaintiff has not proved her case about alleged fraud and misrepresentation by the defendant No.1. Hence, I come to the conclusion that the award of the Arbitrator is illegal, perverse and not sustainable under law. The object of the arbitration Act and intention of the parties that to approach the arbitrator for decide the dispute between them. The parties chosen the Arbitrator to complete remedy for resolving all their claims. But, in the case on hand even though in the claim petition the plaintiff made several allegation against the defendant No.1, the learned Arbitrator did not considered the same by oral and documentary evidence. Therefore, the award passed by the Arbitrator is liable to be set aside. The plaintiff 24 AS 24/2010 has made out grounds under Section 34(2) of the Arbitration and Conciliation Act to set aside the award passed by the second defendant. I have perused the Hon'ble Court decisions cited by the defendant No.1 side as stated supra. I am of the opinion that looking into the facts and circumstances of the case, Hon'ble Court decisions will not help the case of the defendant No.1.
27. In its award, the defendant No.2 decided that the sale of shares held in dmat account was carried out through Bombay Stock Exchange (BSE) and hence this complaint is not a subject matter of this arbitration and the applicant can take up this matter at the appropriate forum. Considering the same I am of the opinion that the defendant No.2 held that the complaint given by the plaintiff before him is not jurisdiction for try the dispute. But, in spite of the same, without jurisdiction the defendant No.2 given findings on the dispute made in the claim petition. I am of the opinion that it is violation of natural justice and exceeding jurisdiction. On this count also the award passed by the defendant No.2 is liable to be set aside. 25 AS 24/2010
28. It is noticed the contention taken by the plaintiff that due to fraud committed by the defendant No.1, she and her husband lodged complaint before Kamakshipalya Police station against the defendant No.1 and its officials. After investigation the police have filed charge sheet against them punishable under Section 420, 114 r/w Section 34 of IPC. To prove the same the plaintiff has produced certified copy of charge sheet, application filed by the accused for granting bail and order of bail application.
29. Looking to the facts and circumstances of the case and also in order to safeguard the interest of plaintiff, I feel it is just and proper to remand the matter to the defendant No.2 for fresh disposal in accordance with law. Therefore, award passed by the learned Arbitrator is liable to be set side and matter is remitted back to defendant No.2 for fresh disposal in accordance with law. Accordingly, I answer points 1 and 2 in the affirmative.
30. POINT NO. 3:- In view of the findings on point No.1 and 2, I proceed to pass the following order:-
26 AS 24/2010
ORDER The petition filed by the petitioner/plaintiff under Section 34 of Arbitration and Conciliation Act, 1996 is hereby allowed.
The award passed by the learned Arbitrator i.e, defendant No.2 in the matter of Arbitration No.CM/C-0070/2009 dated 09-12-2009 is set aside.
The matter is remanded back to the arbitral tribunal to dispose off the matter afresh after giving reasonable opportunity to the parties to lead evidence as provided under Section 24 of the Arbitration and Conciliation Act, 1996 and to dispose off the matter in accordance with law.
No costs.
(Dictated to the Judgment Writer, transcribed by her, the transcript corrected by me, signed and then pronounced by me in open Court on this the 27th day of June, 2018).
RACHENAHALLI Y SHASHIDHARA Digitally signed by RACHENAHALLI Y SHASHIDHARA DN: cn=RACHENAHALLI Y SHASHIDHARA,ou=HIGH COURT OF KARNATAKA,o=GOVERNMENT OF KARNATAKA,st=Karnataka,c=IN Date: 2018.06.28 12:27:27 IST (R.Y. SHASHIDHARA), XVI Addl. City Civil & Sessions Judge, BANGALORE.
27 AS 24/2010
ORDER
The petition filed by the
petitioner/plaintiff under Section 34 of Arbitration and Conciliation Act, 1996 is hereby allowed.
The award passed by the learned Arbitrator i.e, defendant No.2 in the matter of Arbitration No.CM/C-0070/2009 dated 09- 12-2009 is set aside.
The matter is remanded back to the arbitral tribunal to dispose off the matter afresh after giving reasonable opportunity to the parties to lead evidence as provided under Section 24 of the Arbitration and Conciliation Act, 1996 and to dispose off the matter in accordance with law.
No costs.
(Vide separate Judgment) (R.Y. SHASHIDHARA), XVI Addl. City Civil & Sessions Judge, BANGALORE.