Delhi District Court
M/S Shivam Sharma vs M/S Alankit Assignments Limited on 8 September, 2016
IN THE COURT OF SHRI RAJ KUMAR: ADDL. DISTRICT
JUDGE09: TIS HAZARI COURTS : DELHI
Arbtn No.584376/16 (Old Arbtn No.46/16 )
Unique Case ID No. 02401C0063392016
M/s Shivam Sharma
S/o Sh. Ashok Sharma
G232, Pratap Vihar,
Ghaziabad, UP 201 001
PAN No. DDXPS6352A ........... Petitioner.
VERSUS
1. M/s Alankit Assignments Limited
Through its Managing Director
205208, Anarkali Complex,
Jhandewalan Extension,
New Delhi - 110 055
2. Sh. Tejinder Singh Laschar
Ld. Sole Arbitrator
National Stock Exchange of India
4th floor, Jeevan Vihar Building
Parliament Street,
New Delhi - 110 001 .........Respondent.
Date of institution of the petition : 29.01.2016
Date on which order was reserved : 01.09.2016
Date of decision : 08.09.2016
Arbtn No.584376/16 ( 46/16) Page No. 1/7
OBJECTION PETITION U/S 34 OF THE ARBITRATION &
CONCILIATION ACT, 1996 AGAINST THE ARBITRATION
AWARD DATED 09.11.2015
JUDGMENT
1. The petitioner in the present petition was the constituent/respondent before the Ld. Arbitrator in the award dated 09.11.2015. As per the admitted position, the petitioner herein was having a trading account with the respondent no.1 and also a Demat account with the respondent no.1. The respondent, admittedly is a trading and clearing member of NSC since 1996. The petitioner was having various tradings with the respondent no.1 for the sale and purchase of the shares/scripts, both in cash/F&O(future and options) segments. The petitioner herein lodged a complaint against the respondent no.1 alleging unauthorized trades in the disputed period of April 2015. In the present petition, the petitioner has further stated that on 30.07.2015, respondent no.1 traded upon various shares without the consent of the petitioner. It has been further stated that the IGRP(The Investor Grievance Resolution Panel) meeting was held at NSE(National Stock Exchange) on 27.05.2015 in pursuance to the complaint dated 14.05.2015. It has been further stated that by virtue of the orders passed by IGRP, the claim of Rs. 1,91,076.69/ was held admissible against the respondent no.1. It has been further stated that the NSC appointed Sh. Tajender Singh Laschar as the Ld. Sole Arbitrator, who took over and conducted the arbitration proceedings resulting into the passing of the Arbtn No.584376/16 ( 46/16) Page No. 2/7 impugned award dated 09.11.2015. The Ld. Arbitrator by virtue of the said award dated 09.11.2015, the Ld. Sole Arbitrator came to the conclusion that the petitioner herein failed to substantiate his plea of unauthorized trade and as such, the petitioner was entirely liable for the losses suffered by him on account of his trades and the burden could not be shifted upon the respondent no.1.
2. Now, the petitioner has challenged the said award dated 09.11.2015 on the ground that the said award is in conflict with the public policy and the same suffers from excess of jurisdiction at the hands of the Ld. Sole Arbitrator. It has been further stated that the said award is in gross violation and breach of the principals of natural justice which have been laid down by the Hon'ble Supreme Court of India in the authority cited as (2014) 9 SCC 212 titled as Anand Bros. Vs. Union of India. It has been further stated that the findings of the Ld. Arbitrator are also against the principals of law as laid down in the authority cited as (2003) 5 SCC 705 titled as ONGC Vs. Saw Pipes. It has been further stated that consent of the petitioner was never taken for carrying out the trade in the shares during the disputed period. It has been further stated that the issue of placing order can be determined from the oral/written communication between the parties, the payments exchanged and other circumstantial evidence but nothing was placed on record by the respondent no.1 to show that the petitioner had placed the orders upon the respondent no.1 for carrying out the trade in shares during the relevant period. It has been further stated that the Ld. Sole Arbitrator has committed a patent illegality by considering the SMS and Email which were after the execution of the alleged transactions. It has been further Arbtn No.584376/16 ( 46/16) Page No. 3/7 stated that the communication of the acceptance was incomplete as there was no offer from the side of the petitioner. It has been further stated that the Ld. Sole Arbitrator failed to consider the recordings of the voice clips provided by the petitioner. It has been further stated that there was no contract or there was no consent of the petitioner on the Econtract notes. It has been prayed that the impugned award dated 09.11.2015 be set aside.
3. In the reply filed on record by the respondent, it has been stated that the petitioner has not approached this court with clean hands. It has been further stated that the petitioner, in the first complaint to NSE through SEBI dated 04.05.2015 mentioned only four scripts in the complaint but when the respondent no.1 raised the objection before the Ld. Arbitrator to the effect that the petitioner had adopted pick and choose policy and had mentioned only those four scripts in which there were losses whereas the scripts on which the profits were earned were not shown, the petitioner changed his stand. It has been further stated that all the trades done by the respondent no.1 have been confirmed through SMS and Econtract notes which were duly sent to the petitioner in the normal course of the business and the same were duly received and accepted by the petitioner herein. It has been further stated that the petitioner had also given the authorization to receive the Electronic Contract Note which does not require the acknowledgement of the recipient. It has been further stated that ECN sent by the respondent company are always digitally signed and are according to the byelaws of SEBI. It has been further stated that otherwise also, the present petition is not maintainable under the provisions of Order 34 of the Arbitration Arbtn No.584376/16 ( 46/16) Page No. 4/7 and Conciliation Act. It has been prayed that the present petition be dismissed with heavy costs.
4. I have carefully gone through the entire material available on record and heard the rival submissions of Ld. counsels for both the parties. I have also meticulously perused the original arbitration proceedings, which have been requisitioned by this court from the Ld. Sole Arbitrator.
5. The factual aspect of the matter has already been narrated herein above. The crux of the controversy in between the petitioner and the respondent no.1 is to the effect that during the relevant time, the respondent no.1 carried out unauthorized trade in respect of the shares in the account of the petitioner as per the case of the petitioner herein. The grievance of the petitioner is that the orders were not placed by him for the trade in the disputed period. It has been further stated by the petitioner that there was no confirmation from the side of the petitioner of the trade done by the respondent no.1. It has been further stated that the messages sent through SMS and Email were after the period of contract/trade.
6. Perusal of the impugned award dated 09.11.2015 passed by the Ld. Sole Arbitrator reveals that all the abovesaid aspects have been dealt with by the Ld. Arbitrator. The Ld. Arbitrator has stated that the respondent no.1 relied upon the ledger account, contract notes and SMS messages. The Ld. Arbitrator has come to the conclusion that the respondent no.1 had been sending the account by Email and the petitioner herein also received the SMS messages during the disputed period but no objection was raised at all by the petitioner after the receipt Arbtn No.584376/16 ( 46/16) Page No. 5/7 of the contract notes received by him during the disputed period. The Ld. Arbitrator has come to the conclusion that the petitioner was fully aware of the trades done in the disputed period in his account but he chose not to raise any objections to the trade. Ld. Arbitrator has further come to the conclusion that there was enough evidence on record to show that the petitioner was fully aware of the trade done during the disputed period but he chose not to object to the same. I am of the opinion that the Ld. Arbitrator has rightly observed that as per the own admission of the petitioner, his father was having a direct contract with the respondent no.1 The father of the petitioner was ringing up on behalf of the petitioner to the respondent no.1. The Elog of the record of the contract notes sent to the petitioner by the respondent no.1 on the registered E mail address of the petitioner was also filed by the respondent no.1 before the Ld. Arbitrator. Ld. Arbitrator has further observed that there was no dispute of Email address of the petitioner. The Ld. Arbitrator has further held that the petitioner had accepted the receipt of SMS and E mail of the contract notes sent by NSE in this regard.
7. To my mind, the abovesaid observations as contained in the impugned award dated 09.11.2015 passed by the Ld. Sole Arbitrator are based after appreciation of the evidence led by the parties and after a close scrutiny of the documents placed on record by both the parties. To my mind, the petitioner has failed to point out as to how the present petition falls within the ambit and purview of Section 34 of the Arbitration and Conciliation Act. I have no hesitation to hold that the impugned award dated 09.11.2015 passed by the Ld. Arbitrator cannot be said to be against the public policy of India or against the settled Arbtn No.584376/16 ( 46/16) Page No. 6/7 principals of law. As a result, the present petition fails and the same is hereby dismissed. The file of the Ld. Arbitrator be sent back against receipt.
File be consigned to Record Room after due compliance.
Announced in the open court (RAJ KUMAR) on this 08th day of September 2016. ADJ09 (Central) Tis Hazari Courts, Delhi.
Arbtn No.584376/16 ( 46/16) Page No. 7/7
CS no. 84376/16(46/16)
08.09.2016
Present : None
Vide my separate judgment of even date, announced in the open court today, the arbitration petition filed by the petitioner is hereby dismissed. The file of the Ld. Arbitrator be sent back against receipt.
File be consigned to Record Room after due compliance.
(Raj Kumar) ADJ-09, Central Delhi/08.09.2016