Delhi District Court
Ritu Goel vs Religare Broking Limited on 26 June, 2021
IN THE COURT OF SH. GURVINDER PAL SINGH,
DISTRICT JUDGE (COMMERCIAL COURT)-02,
PATIALA HOUSE COURT, NEW DELHI
OMP (COMM.) No. 202/2019
Ritu Goel,
w/o Sh. Anand Goel,
New Grain Market, Near Sabji Mandi, Ward no. 4, Gharaunda,
Karnal, Panipat, Haryana-132114 ...Petitioner
vs
Religare Broking Limited
Registered Office at:
7th Floor, A-3/4,5, GYS Global, Sector-125, Noida-201301
...Respondent
Date of Institution : 23.11.2019
Arguments concluded on : 24.03.2021
Decided on : 26.06.2021
Appearances : Sh. S. S Sobti, Ld. Counsel for petitioner.
Sh. Sachin Mittal, Ld. Counsel for respondent.
JUDGMENT
1. Petitioner has filed the present petition under Section 34 of The Arbitration and Conciliation Act, 1996 (herein after referred as The Act) for setting aside of arbitral award dated 23/08/2019 passed by Ld. Appellate Arbitral Tribunal at National Stock Exchange of India Limited in Appeal A.M. No. NSE/APPEAL A.M NO. /F&O/D-0036/2018 titled as "Ritu Goel vs. Religare Broking Limited" as well as against the arbitral award dated 13.03.2019 passed by Ld. Sole Arbitrator Sh. Vijay Kumar Gupta in arbitration matter (A.M.) No: F&O/D-0036/2018 titled as "Religare Broking Limited vs. Ritu Goel". Ld. Sole Arbitrator OMP (COMM.) No. 202/2019 Ritu Goel vs. Religare Broking Limited Page 1 of 20 Sh. Vijay Kumar Gupta in impugned award dated 13.03.2019 awarded sum of Rs. 19,92,707.57 in favour of claimant/present respondent payable by present petitioner with interest @ 12 % per annum from the date of award till realization and the counter claim of respondent was dismissed. Ld. Appellate Arbitral Tribunal dismissed the appeal of present petitioner vide impugned order dated 23.08.2019.
2. I have heard Sh. S. S Sobti, Ld. Counsel for petitioner; Sh. Sachin Mittal, Ld. Counsel for respondent and perused the relied upon precedents and records of the case including written arguments of Ld. Counsel for parties as well as arbitral proceedings record and given my thoughtful consideration to the rival contentions put forth.
3. Shorn of unnecessary details, brief facts of the case of petitioner are as under :
A. Petitioner was a client of Respondent since January, 2016 for trading in NSE Equity/Derivative segment. She was regularly investing/trading in market through respondent. Petitioner had authorized her husband Mr. Anand Goel as her authorized representative for trading with respondent.
B. Petitioner alleges of having always traded in the share market only "telephonically" and orders were always placed through the recorded "Telephone lines" of the respondent. The petitioner alleged of the fact that she used to get the telephonic confirmation in the evening hours through her authorized representative, Mr. Anand Goel, on the same day on which such OMP (COMM.) No. 202/2019 Ritu Goel vs. Religare Broking Limited Page 2 of 20 trades are executed. Petitioner averred that on 18.05.2018, the respondent did unauthorized "Buying" and "Selling" of 30 lots of Scrip "RCOM" in the F&O segment (840000 quantities) expiring on 31.05.2018. Petitioner alleged that as consequence to these illegal trades, a sum of Rs. 38.24 lac was debited from her running account with respondent causing her a huge loss. Petitioner further averred that on 18.05.2018 , she only traded to square off her buying position of 17.05.2018 in 10 Lots of Scrip "ASHOKLEY" and that too, through telephonic call only. Petitioner had sought IP addresses of the said trades done via "ONLINE" modes, through which orders were placed for said illegal trades on 18.05.2018 in 30 Lots of "RCOM" by the respondent and to which respondent failed to provide the IP addresses and only produced the copy of trade log for the transaction dated 18.05.2018 and for period from April, 2018 to May, 2018, which as per petitioner are manipulated, fudged and fabricated documents, that cannot be relied upon. Petitioner further averred that she had reported the matter to SEBI on 18.12.2018 on official website of SEBI and her complaint was registered as complaint no. SEBI/HY18/0000188/1 and was thereafter referred to NSE Chandigarh which registered the same as complaint no. NSECHA/00488/18-19. Petitioner further averred that respondent, as a result of aforesaid unauthorized trade of 30 lots of "RCOM" expiring on 31.05.2018, created the net debit balance of Rs. 23,25,446.44 as on 18.05.2018 which the petitioner is not liable to pay to the respondent. As per petitioner, had such unauthorized trades not carried out by the respondent in the account of petitioner, there would have been a credit balance of Rs. 15,09,098.50/-. It is also the case of the petitioner that she OMP (COMM.) No. 202/2019 Ritu Goel vs. Religare Broking Limited Page 3 of 20 continued to trade in market and she paid Rs. 1,50,000/- on 29.05.2018 and further transferred Rs. 1 lac each in the month of July and August, 2018 making it a total sum of Rs. 3,50,000/- in her running account with respondent for future margin requirements.
C. Petitioner further averred that the Securities and Exchange Board of India (SEBI) vide its Circular No. SEBI/HO/IRSDD/DOP1/CIR/P2018/54 dated March, 2018 relating to the Prevention of Unauthorized Trading by Stock Brokers, has specifically propounded vide clause III, that "all brokers shall execute trades of clients only after keeping evidence of the client placing such order, which could be, inter alia, in the form of
a) Physical record written & signed by client,
b) Telephone recordings'
c) Email from authorized e-mail id,
d) Log for internet transaction,
e) Record of messages through mobile phones,
f) Any other legally verifiable record."
SEBI has further directed the stock brokers vide Clause IV of said circular as under:
"Further, wherever the order instructions are received from clients through the telephone, the stock broker shall mandatorily use telephone recording system to record the instructions and maintain telephone recordings as part of its record".
D. The petitioner further averred that in furtherance of its Circular no. SMDRP/POLICY/CIR-06/2000 dated January 31, 2000 on internet based Trading and Circular no. CIR/MRD/DP/25/2010 dated August 27, 2010 on Securities Trading using wireless technology; SEBI propounded another Circular bearing no. CIR/MRD/DP/8/2011 dated June 30, 2011 thereby directing all stock exchanges that the Stock Exchanges OMP (COMM.) No. 202/2019 Ritu Goel vs. Religare Broking Limited Page 4 of 20 shall ensure that the Broker complies inter alia with the following:
"The Broker shall capture the IP (Internet Protocol) address (from where the orders are originating) for all IBT/STWT orders."
4. The respondent had filed its arbitration claim against petitioner before Ld. Sole Arbitrator of NSE Sh. Vijay Kumar Gupta. Vide impugned arbitral award dated 13.03.2019, Ld. Sole Arbitrator had awarded and directed the petitioner to pay Rs. 19,92,707.57 with interest @ 12 % from date of award till date of payment.
5. Vide impugned arbitral award dated 23.08.2019 of Ld. Appellate Arbitral Tribunal comprising of Hon'ble Mr. Justice M.A Khan (Retd.) (Presiding Arbitrator); Mr. Neeraj Aarora (Arbitrator) and Mr. Asutosh Lohia (Arbitrator), the appeal of petitioner was dismissed after hearing the Counsel for parties and perusal of record including the documents and evidences. The Petitioner impugns the arbitral award dated 13.03.2019 of Ld. Sole Arbitrator and arbitral award dated 23.08.2019 of the Appellate Arbitral Tribunal on the following grounds:
A. All facts and submissions made before Ld. Sole Arbitrator and before Ld. Appellate Arbitral Tribunal were not considered and award in favour of respondent were passed which were erroneous on the face of it and passed in an arbitrary and non judicious manner without application of mind in mechanical manner.
B. It was not appreciated that the Petitioner/her authorized person neither purchased nor sold 30 Lots of derivatives segment (840000 quantities) in scrip of RCOM with OMP (COMM.) No. 202/2019 Ritu Goel vs. Religare Broking Limited Page 5 of 20 expiry date 31.05.2018.
C. Petitioner never traded online and always placed orders/affected trades through telephonic modes only through the recorded telephone lines of the Respondent company and said fact was not appreciated.
D. Respondent did not place nor filed any internet log with its statement of Claim/case. In Rejoinder the Respondent placed on record as Annexure- C/R-1 and Annexure C/R-2, purportedly the copies of the trade logs, however no IP addresses were mentioned in said trade logs. Vital aspect of the matter aforesaid was lost sight and not appreciated in impugned awards. Aforesaid Annexures were manipulated and fabricated documents, fabricated by the Respondent.
E. Respondent had breached/violated circulars of SEBI (1) SEBI/HO/IRSD/DOP1/CIR/P/2018/54 dated March, 22, 2018 and (2) CIR/MRD/DP/8/2011 dated June 30, 2011. In the former circular it was laid down that " all brokers shall execute trades of clients only after keeping evidence of the client placing such order, which could be, inter alia, in the form of :
a) Physical record written & signed by client,
b) Telephone recordings'
c) Email from authorized e-mail id,
d) Log for internet transactions,
e) Record of messages through mobile phones,
f) Any other legally verifiable record."
Also was laid in said circular that " Further, wherever the order instructions are received from clients through the telephone, the stock broker shall mandatorily use telephone recording system to record the instructions and maintain telephone recordings as part of its records."
OMP (COMM.) No. 202/2019 Ritu Goel vs. Religare Broking Limited Page 6 of 20In the later circular the directions of the SEBI inter alia was " a. The Broker shall capture the IP (Internet Protocol) address (from where the orders are originating) for all IBT/STWT orders. "
F. When the Petitioner disputed the trades pertaining to 30 Lots, the representative of Respondent had represented to Petitioner/authorized person that upon the dispute having been raised by the Petitioner, the Respondent company/its concerned officers had escalated the matter to the management of the Respondent company and assured Petitioner/authorized person that the said issue will be resolved soon. Believing the representations made Petitioner/authorized person with the intention of continuing to trade in future, had made a deposit of Rs. 1.50 Lacs on 29.05.2018 and further payments of Rs. 1.00 Lacs each in July and August 2018 with Respondent company to meet further margin requirements. Erroneous interpretation to said payments was done in impugned arbitral awards as if the same were made in discharge of some liability.
G. Petitioner/authorized person had orally disputed the trade of coming to know the unauthorized trade carried out in her account by Respondent and in impugned awards Ld. Arbitrators erred in while holding that complaint lodged by the Petitioner with SEBI was after thought and before that petitioner had not raised any complaint regarding to issue to any forum. Petitioner did not complain to any forum earlier as she was assured by representative of Respondent company that her complaint regarding unauthorized trade had escalated the matter to the management of Respondent company, assuring her/authorized person that issue shall be resolved soon.OMP (COMM.) No. 202/2019 Ritu Goel vs. Religare Broking Limited Page 7 of 20
H. In impugned award it was erred in not appreciating the fact that "being aware of a transaction" and "having carried out a transaction" were/are two distinct propositions. Though not admitted, yet even if it is assumed that Petitioner became aware of the transaction, it would not imply that Petitioner/authorized person had carried out the disputed transaction.
I. Impugned awards were erroneous in assumptions and presumptions.
J. One alleged telephonic conversation dated 05.02.2019 exchanged between petitioner/authorized representative and official of Respondent company was relied upon but Respondent had not placed on record any telephonic recording regarding alleged understanding/settlement entered into with Petitioner and Respondent deliberately avoided to place on record the recordings of entire series of conversation before the Ld. Arbitrators, because had it filed the same, it would have demolished the case of the Respondent.
It was prayed to set aside the impugned awards and allow the counter claim preferred by Petitioner against Respondent directing Respondent to pay Rs. 18,59,985.50 with interest @18 % per annum from 18.05.2018 till realization with costs.
6. Despite grant of opportunities, no reply to petition was filed by the Respondent. However, Ld. Counsel for parties had filed their written arguments.
7. Ld. Counsel for Petitioner argued in terms of the averments and grounds laid in the petition. Reliance was placed upon the following precedents:OMP (COMM.) No. 202/2019 Ritu Goel vs. Religare Broking Limited Page 8 of 20
(1) Associate Builders vs. DDA, (2015) 3SCC 49 and (2) Ssangyong Engineering and Constructions Company Limited vs. National Highways Authority of India (2019) 15 SCC 131.
8. Ld. Counsel for Respondent argued that the impugned awards are well reasoned and speaking, given by Ld. Sole Arbitrator and the Appellate Arbitral Tribunal which comprised of a Retired Hon'ble Judge of Delhi High Court and other Arbitrators who had vast experience of adjudicating disputes pertaining to securities market. It was argued that it is now well settled principle of law that reappraisal of evidences and interference with the arbitral award on merit by the court is not permissible. It was argued that in the present petition, the petitioner, has tried to challenge proceedings like a regular first appeal, which is not permissible in law. It was argued that same allegations, averments and pleas had been repeated by the petitioner which were duly dealt with and adjudicated with reasons in the impugned arbitral awards. It was argued that none of the grounds set out in Section 34 of The Act exists herein, justifying an interference with the impugned arbitral awards and petition is not maintainable and it deserved to be dismissed. It was argued that impugned awards were passed after considering written version/submissions of both the parties after providing them opportunities of hearing and representing their cases and after considering all evidences/documents produced by both parties and the impugned awards are speaking arbitral awards not liable to the interfered with under Section 34 of The Act. Ld. Counsel for Respondent relied upon;
(1) Associate Builders v. DDA, (2015) 3 SCC 49, (2) P.R Shah, Share and Stock Broker (P) Ltd. v. B.H.H Securities (P) Ltd. and Ors., (2012) I SCC 594, (3) Laxmi Mathur v. Chief General Manager, Mahanagar OMP (COMM.) No. 202/2019 Ritu Goel vs. Religare Broking Limited Page 9 of 20 Telephone Nigam Ltd., 2000 SCC OnLine Bom 243, (4) Indu Enginnering & Textiles Ltd. v. Delhi Development Authority, (2001) 5 SCC 691, (5) Vedanta v. MMTC, 2019 (4) SCC 163 It was also argued by Ld. Counsel for Respondent that Court has to be extremely circumspect while exercising jurisdiction under Section 34 of The Act and cannot sit in appeal over an award and can only interfere if the challenge is in terms of Section 34 of The Act. It was prayed for dismissal of the petition.
9. An Arbitral Award can be set aside on the grounds set out in Sections 34(2)(a), (b) and (2A) of The Act in view of Section 5 of the Act.
10. Section 34 (1), (2) and (2A) of The Arbitration and Conciliation Act, 1996 read as under:
"34. Application for setting aside arbitral award- (1) Recourse to a court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub- section (3).
(2) An arbitral award may be set aside by the court only if-
(a) the party making the application furnishes proof that-
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not OMP (COMM.) No. 202/2019 Ritu Goel vs. Religare Broking Limited Page 10 of 20 falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration;
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
(b) the court finds that-
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
Explanation 1 - For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,-- (i) the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81; or (ii) it is in contravention with the fundamental policy of Indian law; or (iii) it is in conflict with the most basic notions of morality or justice.
Explanation 2.-- For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.
(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:
Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.OMP (COMM.) No. 202/2019 Ritu Goel vs. Religare Broking Limited Page 11 of 20
11. Normally, the general principles are that Arbitrator is a Judge of the choice of the parties and his decision, unless there is an error apparent on the face of the award which makes it unsustainable, is not to be set aside even by the Court as a Court of law could come to a different conclusion on the same facts.
The Court cannot reappraise the evidence and it is not open to the Court to sit in appeal over the conclusion of the Arbitrator. It is not open to the Court to set aside a finding of fact arrived at by the Arbitrator and only grounds on which the award can be set aside are those mentioned in the Arbitration Act. Where the Arbitrator assigns cogent grounds and sufficient reasons and no error of law or misconduct is cited, the award will not call for interference by the Court in exercise of the power vested in it. Where the Arbitrator is a qualified technical person and expert, who is competent to make assessment by taking into consideration the technical aspects of the matter, the Court would generally not interfere with the award passed by the Arbitrator.
12. Supreme Court in case of Associate Builders vs. Delhi Development Authority, (2015) 3 SCC 49 has held that the interference with an arbitral award is permissible only when the findings of the arbitrator are arbitrary, capricious or perverse or when conscience of the Court is shocked or when illegality is not trivial but goes to the root of the matter. It is held that once it is found that the arbitrator's approach is neither arbitrary nor capricious, no interference is called for on facts. The arbitrator is ultimately a master of the quantity and quality of evidence while drawing the arbitral award. Patent illegality must go to the root of the matter and cannot be of trivial nature.
OMP (COMM.) No. 202/2019 Ritu Goel vs. Religare Broking Limited Page 12 of 2013. Supreme Court in case of Ssangyong Engineering & Construction Co. Ltd. vs. National Highways Authority of India, (2019) 15 SCC 131 has held that under Section 34 (2A) of The Act, a decision which is perverse while no longer being a ground for challenge under "public policy of India", would certainly amount to a patent illegality appearing on the face of the award. A finding based on the documents taken behind the back of the parties by the arbitrator would also qualify as a decision based on no evidence inasmuch as such decision is not based on evidence led by the parties and therefore would also have to be characterized as perverse. It is held that a finding based on no evidence at all or an award which ignores vital evidence in arriving at its decision would be perverse and liable to be set aside on the ground of patent illegality.
14. In the case of G. Ramchandra Reddy v. Union of India, (2009) 6 SCC 414, Supreme Court asserted that Courts should not normally interfere with the award of an Arbitrator, unless there was a gross error apparent on the face of the record.
15. In the case of M/s Sudarsan Trading Co. v. Government of Kerela & Anr., AIR 1989 SC 890, the observations of the Supreme Court have been that Court cannot substitute its own evaluation of the conclusion of law or fact to come to the conclusion that the Arbitrator had acted contrary to the bargain between the parties. Whether a particular amount was liable to be paid or damages liable to be sustained, was a decision within the competency of the Arbitrator in this case. By purporting to OMP (COMM.) No. 202/2019 Ritu Goel vs. Religare Broking Limited Page 13 of 20 construe the contract the Court could not take upon itself the burden of saying that this was contrary to the contract and, as such, beyond jurisdiction.
16. In para 10 of the case of Municipal Corporation of Delhi vs M/s Paramjeet Singh Narula, 2020 LAW PACK (Del.)75970 (supra), the pronouncements in the case of Associate Builders vs Delhi Development Authority, (2015) 3 SCC 49 were relied upon, which are as follows:
"xxxx xxxx xxxx
33. It must clearly be understood that when a court is applying the "public policy" test to an arbitration award, it does not act as a court of appeal and consequently errors of fact cannot be corrected. A possible view by the arbitrator on facts has necessarily to pass muster as the arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral award. Thus an award based on little evidence or on evidence which does not measure up in quality to a trained legal mind would not be held to be invalid on this score. Once it is found that the arbitrators approach is not arbitrary or capricious, then he is the last word on facts. In P.R. Shah, Shares & Stock Brokers (P) Ltd. v. B.H.H.Securities (P) Ltd., [(2012) 1 SCC 594: (2012) 1 SCC (Civ) 342: 2011 LAWPACK(SC) 50505: 2011(6) R.A.J. 27], this Court held: (SCC pp. 601-02, para 21) "21. A court does not sit in appeal over the award of an Arbitral Tribunal by reassessing or reappreciating the evidence.
An award can be challenged only under the grounds mentioned in Section 34(2) of the Act. The Arbitral Tribunal has examined the facts and held that both the second respondent and the appellant are liable. The case as put forward by the first respondent has been accepted. Even the minority view was that the second respondent was liable as claimed by the first respondent, but the appellant was not liable only on the ground that the arbitrators appointed by the Stock Exchange under Bye-law 248, in a claim against a non- member, had no jurisdiction to decide a claim against another member. The finding of the majority is that the appellant did the transaction in the name of the second respondent and is therefore, liable along with the second respondent. Therefore, in the absence of any ground under Section 34(2) of the Act, it is not possible to re-examine the facts to find out whether a different decision can be arrived at.
xxxx xxxx xxxx"
OMP (COMM.) No. 202/2019 Ritu Goel vs. Religare Broking Limited Page 14 of 2017. In the appreciation, it is recorded by the Appellate Arbitral Tribunal that there is no doubt that there is failure on the part of respondent to provide the IP address from where the disputed orders for 30 Lots of Scrip " RCOM" transactions on 18.05.2018 were placed but the issue remains whether on the basis of other material on record, the veracity of the claim of petitioner can be decided. Ld. Appellate Arbitrl Tribunal adverted to following text of SEBI Circular dated 22.03.2018 "However for exceptional cases such as technical failure etc. where broker fials to produce order placing evidences, the broker shall justify with reasons for the same and depending upon merit of the same, other appropriate evidences like post trade confirmation by client, receipt/payment of funds/securities by client in respect of disputed trade etc. shall also be considered".
It is the finding of the Appellate Arbitral Tribunal that however the other evidences/material on record negate the contention of the petitioner that the petitioner had not executed the transactions as was discussed in Para 21 onwards in the impugned appellate award dated 23.08.2019. It was appreciated therein that the evidence placed on record were considered and from the details of transactions executed in the account of petitioner as per record of Respondent, from 02.04.2018 to 17.05.2018 (Annexure C/R-2) reflected that petitioner had executed large number of transactions through the online as well as offline medium. Also was the finding of the Appellate Arbitral Tribunal that Annexure C/R-1 embodying the detail of transactions executed on 18.05.2018 indicated that number of transactions were executed through online as well as offline medium and out of that some transactions were executed through online as well as offline medium and out of that some of transactions of sale of scrip "ASHOKLEY" were also executed OMP (COMM.) No. 202/2019 Ritu Goel vs. Religare Broking Limited Page 15 of 20 through online medium. It was also the finding of the Appellate Arbitral Tribunal that the transaction of scrip "ASHOKLEY" had been admitted by the petitioner and as such, it falsify the contention of the petitioner that petitioner had never executed any transaction online or petitioner had not executed any transaction online on 18.05.2018. It is also the finding of the Appellate Arbitral Tribunal that disputed transactions were of 18.05.2018 and the contract note and SMS of transactions were sent on same day. Besides that it is also the finding of the Appellate Arbitral Tribunal that now the SMS is also being sent by Exchange directly and it was not refuted by the petitioner that petitioner had not received the contract note through e-mail or SMS.
18. Adverting to statement of claim of claimant/present respondent reveals that in para 3 of said statement of claim (case) it finds mention that the contract notes and other documents pertaining to the trades executed in the account of present petitioner were regularly sent at her registered e-mail id and in Annexure 4 and Annexure 5, on sample basis, copies of such contract notes and logs showing even dispatch of contract notes and other documents for FY 2017-2018 and 2018-2019 sent at registered e-mail id of Respondent were placed on record. In the statement of defence filed on behalf of present petitioner, the afore elicited contents of para no. 3 of the statement of claim were stated to be a matter of record, hence admitted. Appellate Arbitral Tribunal thus gave a finding that it was established that the petitioner was aware about the transaction immediately after the execution on 18.05.2018 itself. It had also been appreciated in OMP (COMM.) No. 202/2019 Ritu Goel vs. Religare Broking Limited Page 16 of 20 the Appellate Arbitral Tribual award that for the first time the petitioner had filed the written complaint with SEBI denying the transaction only on 18.12.2018 whereas the petitioner claimed to have earlier refuted the transaction orally. It was also appreciated therein that if no trade in scrip "RCOM" had been executed by petitioner on 18.05.2018, then petitioner would have a credit balance of Rs. 14,98,705.93 as on date 18.05.2018, so there was no occasion for petitioner to make further payments totaling Rs. 3,50,000 during 29.05.2018 to 31.08.2018 when it was also an admitted position that no further trade was done by the present petitioner. Ld. Appellate Arbitral Tribunal also appreciated the voice recording dated 05.02.2019 inter se authorized representative (husband) of petitioner and official of Respondent and gave finding that said transcript revealed petitioner (through authorized person husband) was acknowledging the debt and promised to settle the same for which there was no occasion for petitioner, had the petitioner not executed the trade because in such a position, there would have been the credit balance and petitioner would have asked the respondent to return the credit balance or at least there was no occasion for the petitioner to indicate to make the payment to clear the debit balance. The entire gamut of facts and circumstances inter alia including of having debit position coupled with the fact that the trade in question was not denied by petitioner till filing of the arbitration claim, making various payments to discharge the liability, led the Appellate Arbitral Tribunal to the inference that petitioner had executed the transaction and was making the payment regularly to clear the debt position.
OMP (COMM.) No. 202/2019 Ritu Goel vs. Religare Broking Limited Page 17 of 2019. In the case of M/s Arosan Enterprises vs Union of India & Anr., MANU/SC/0595/1999, it was inter alia held that reappraisal of evidence by the Court is not permissible in the proceeding under the Arbitration Act. In the event of there being no reason in the award, question of interference of the court would not arise at all. In the event, however there are reasons, the interference would still be not available within the jurisdiction of the Court unless of course, there exist a total perversity in the award or the judgment is based on wrong proposition of law. In the event, however, two views are possible on a question of law as well, the Court would not be justified in interfering with the award. Also was held that the Court as matter of fact, cannot substitute its evaluation and come to the conclusion that the arbitrator had acted contrary to the bargain between the parties. If the view of arbitrator is a possible view the award or the reasoning contained therein cannot be examined. The decisions in the cases of State of Rajasthan vs. Puri Construction Co. Ltd, MANU/SC/0865/1994 and Sudersan Trading Company vs Government of Kerala & Anr., MANU/SC/0361/1989 were relied. Also was held therein that where an Aribitrator makes a mistake either in law or in fact in determining the matters referred, but such mistake does not appear on the face of the award, the award is good notwithstanding the mistake, and will not be remitted or set aside.
20. Reasonableness of reasons given by an Arbitrator in making his award cannot be challenged (Simplex Concrete Piles (India) Limited vs NPCC Limited (2000) 54 DRJ 4971). Court cannot re-appreciate evidence produced before the Arbitrator and come OMP (COMM.) No. 202/2019 Ritu Goel vs. Religare Broking Limited Page 18 of 20 to a different conclusion (Army Welfare Housing Organization vs Gautam Constructions and Fisheries Limited AIR 1998 SC 3244). While considering challenge to arbitral award, the Court does not sit in appeal over the findings and decision of the arbitrator (Steel Authority of India Ltd. vs Gupta Brother Steel Tubes Ltd.(2009) 10 SCC 63).
21. The Learned Sole Arbitrator as well as the Learned Appellate Arbitrators, have appreciated the records, evidences before them with respect to the dispute in question and came to the conclusion that the petitioner had executed the transactions with respect to "30 Lots of derivatives segment (840000 quantities) in script of RCOM with expiry date 30.05.2018 on 18.05.2018. The impugned award dated 13.03.2019 and 23.08.2019 were passed by Ld. Sole Arbitrator and panel of Ld. Arbitrators respectively, whereas said panel was presided over by Hon'ble Retd. Judge of Delhi High Court; who were having special and expert knowledge about the shares and trading, stock market rules, SEBI rules and guidelines etc. Moreover, the said Ld. Arbitrators were stated to be on the panel of the Arbitrators of NSC and were also having vast experience in dealing with such matters. Before Ld. Sole Arbitrator and panel of Ld. Arbitrators each and every piece of admissible evidence was duly appreciated. Findings were given by Ld. Arbitrators based on appreciation of facts and law. The precedents relied upon by Ld. Counsel for Petitioner, elicited herein above infact support the case of the respondent and are in no way of any help to the petitioner for getting the impugned award set aside. The award is not against any public policy nor against the terms of the contract OMP (COMM.) No. 202/2019 Ritu Goel vs. Religare Broking Limited Page 19 of 20 of the parties. The reasonings of Ld. Arbitrators are plausible. Reappraisal of evidence by the Court is not permissible even if two views are possible. The Court would not be justified by interfering with the award. The view of the Ld. Arbitrators is a possible view, so the reasons of the Ld. Arbitrators cannot be substituted. No mistake in impugned award is apparent on the face of the record. Court cannot re-appreciate evidence produced before the Ld. Arbitrators and come to a different conclusion as it does not sit in appeal over the findings and decisions of the Arbitrators. No premise/ground for interference is made out from the grounds raised by the petitioner to set aside the impugned award in terms of Section 34 of The Act.
22. For the foregoing reasons, the petition is hereby dismissed.
23. The parties are left to bear their own costs.
24. File be consigned to record room.
ANNOUNCED IN (GURVINDER PAL SINGH)
OPEN COURT District Judge (Commercial Court)-02
th
on 26 June, 2021. Patiala House Court, New Delhi.
(Vivek) OMP (COMM.) No. 202/2019 Ritu Goel vs. Religare Broking Limited Page 20 of 20