Delhi District Court
Finvasia Securities Pvt. Ltd vs Manoj Kumar on 29 April, 2023
IN THE COURT OF SH GURVINDER PAL SINGH,
DISTRICT JUDGE (COMMERCIAL COURT)-02,
PATIALA HOUSE COURT, NEW DELHI
OMP (Comm.) No. 18/2022
FINVASIA SECURITIES PVT. LTD.
FINVASIA CENTER
D 179, PHASE 8B, SECTOR 74,
MOHALI-160055
[email protected] .... Petitioner/Applicant
Versus
MANOJ KUMAR
D II TYPE B 21
MOTI BAGH
NEW DELHI-110021
[email protected] .... Respondent
Date of Institution : 12/01/2022
Arguments concluded on : 19/04/2023
Decided on : 29/04/2023
Appearances : Sh. Ankur Das, Ld. Junior Counsel for petitioner.
JUDGMENT
1. Petitioner/applicant has filed the present petition/ application under Section 34 of The Arbitration and Conciliation Act, 1996 (herein after referred as The Act) impugning the Arbitral Award dated 21.10.2020 of Ld. Sole Arbitrator Sh. K.S. Dhingra in Arbitration Matter no-MCX/ARB/5001A/19-20 titled 'Finvasia Securities Pvt. Ltd. Vs Manoj Kumar" and Appellate Arbitral Award dated 01/05.07.2021 of Appellate Arbitral Tribunal comprising of (i) Hon'ble Mr. Justice V.S Aggarwal (Retired), Learned Presiding Arbitrator; (ii) Hon'ble Mr. Justice OMP (Comm.) No. 18/2022 FINVASIA SECURITIES PVT. LTD. VS MANOJ KUMAR Page 1 of 19 S.N Aggarwal (Retired), Learned Arbitrator and (iii) Hon'ble Mr. Justice Satish Chandra (Retired), Learned Arbitrator in Appellate Matter No. MCX-APPEAL/DEL/02/2020-21 titled 'Ms. Finvasia Securities Pvt Ltd vs Manoj Kumar"; regarding which Appellate Arbitral Tribunal passed order on 27.08.2021 dismissing application under Section 33 (1) (a) of the Act of applicant/petitioner. Petitioner seeks setting aside of these awards to the extent whereby claim amount to the tune of Rs. 8,97,367/- was rejected and/or for enhancing arbitral award to extent of Rs. 8,97,367/- in addition to arbitral award as claimed by applicant/petitioner in statement of claim. Sh. K.S Dhingra, Ld. Sole Arbitrator in arbitral award dated 21/10/2020 awarded Rs. 3,25,127/- with interest @ 6% per annum from 10/03/2020 up to date of award and post award interest @ 10% per annum from the date of award on award amount till payment in favour of claimant/petitioner payable by respondent. Appellate Arbitral Tribunal in award dated 01/05.07.2021 dismissed the appeal of petitioner. Appellate Arbitral Tribunal dismissed the application under Section 33(1) (a) of the Act of applicant/petitioner vide order dated 27.08.2021.
2. I have heard arguments of Sh. Ankur Dass, Ld. Junior Counsel for petitioner holding letter of authority of Sh. Amitabh Sinha, Ld. Counsel for petitioner to argue. Respondent was served by emails on 14/07/2022 as well as on 27/07/2022. Despite opportunities neither respondent filed replies to petition and applications nor filed any written arguments. On 29/11/2022, Ld. Counsel for petitioner withdrew the application of petitioner under Section 34 (4) of the Act. I have perused the record of the OMP (Comm.) No. 18/2022 FINVASIA SECURITIES PVT. LTD. VS MANOJ KUMAR Page 2 of 19 case, including petition, arbitral proceedings record, filed brief written arguments of petitioner, relied upon precedents on behalf of petitioner.
3. Following is the brief relevant material factual matrix of case of petitioner/applicant. Petitioner/applicant is trading member of MCX registered for providing facility to trade in Commodity Derivatives to its clients. Respondent was registered on 04/01/2017 as the constituent of the applicant/petitioner after it signed and executed KYC documents to trade in commodities derivatives, etc. through the applicant/petitioner. Respondent was allotted trading code FA 7263. Respondent traded on-line till 09/03/2020. Respondent had opted to receive electronic contract notes and other documents by email at email ID [email protected]. The contract notes, financial ledgers, margin statement etc. were sent to respondent on aforesaid email ID. Applicant/petitioner provided the respondent with on-line back office access to enable him to access the reports desired by him. On 06.03.2020, respondent was stated to have number of outstanding positions, mainly in crude oil because of which he had a total margin obligation of Rs. 59,01,742/-, comprising upfront margin of Rs. 51,43,877/- and MTM loss of Rs. 7,58,865/-. Against this liability, respondent was stated to be having credit balance of Rs. 62,85,523/-. On 09.03.2020 there was a sudden fall in crude oil prices which caused MTM loss to respondent on his outstanding positions. Under these circumstances, applicant/petitioner squared off all open positions of respondent. Consequently, respondent is stated to have suffered net loss of Rs. 66,10,650/- which created a net debit OMP (Comm.) No. 18/2022 FINVASIA SECURITIES PVT. LTD. VS MANOJ KUMAR Page 3 of 19 balance of Rs. 11,19,032/- in the account of respondent on 10.03.2020 and it increased to Rs. 12,22,493/- after debit of the net obligations exchange(s) of Rs. 1,03,461/-. Applicant/ petitioner made efforts to recover the outstanding money from respondent; but to no avail. Applicant/petitioner initiated the arbitration proceedings by filing the statement of claim claiming of Rs.12,95,650/- against respondent including amount of Rs.12,22,493/- as on 10.03.2020; interest of Rs. 33,157/- @ 18% per annum from 10.03.2020 to 08.05.2020, the date of application and Rs. 40,000/- towards cost. Respondent did not join arbitral proceedings. Arbitral proceedings culminated in arbitral award dated 21/10/2020 of Sh. K.S. Dhingra, Ld. Sole Arbitrator. Applicant/petitioner preferred appeal which was adjudicated by above said Appellate Arbitral Tribunal vide award dated 01/05.07.2021 by dismissing the appeal. Applicant/ petitioner preferred application under Section 33(1) (a) of the Act before Appellate Arbitral Tribunal which was dismissed by Appellate Arbitral Tribunal vide order dated 27.08.2021.
4. Applicant/petitioner has impugned the award of Ld. Sole Arbitrator and Appellate Arbitral Award mainly on the following grounds, on premise of which following arguments were also addressed on behalf of applicant/petitioner. Impugned arbitral awards are patently illegal, perverse and lie in the teeth of relevant trading laws, bye laws, rules and regulations and are liable to be set aside. Impugned arbitral awards suffer from serious legal infirmities arising out of non-application of mind and errors apparent on the face of record. Impugned arbitral awards are beyond the provisions of the Commodity Trading OMP (Comm.) No. 18/2022 FINVASIA SECURITIES PVT. LTD. VS MANOJ KUMAR Page 4 of 19 Laws, and the law of land, and are clearly opposed to the terms of the contract between the parties as well as the public policy of India. Ld. Arbitrators grossly erred in arriving at the findings while completely ignoring the correct factual position and evidence which was placed before them and due to such non consideration, have rendered completely perverse findings without any cogent reasoning in respect of claims of the claimant/petitioner. Impugned awards were passed in violation of the principle of natural justice as no consideration was placed on the evidence and submissions filed by applicant/petitioner. Since the evidence and submissions placed by applicant/petitioner were not considered, the impugned awards are liable to be set aside under Section 34(2)(b)(ii) of the Act. On 06.03.2020 at the closing of market trading, respondent was having total margin obligation of Rs. 59,01,742/- [Rs. 51,42,877/- towards upfront margin, Rs. 7,58,865/- towards MTM and Rs. 35,041/- towards pay-in obligations]. At the relevant period, respondent was inter alia trading in Futures and Options of Crude Oil derivatives and was having a credit balance of Rs. 62,85,523/-; adequate balance to cover up for the MTM losses and pay-in obligations as of 06.03.2020 and was also meeting the margin requirements for the next trading day i.e., 09.03.2020 (Monday). Since the respondent had suffered MTM loss of Rs. 7,58,865/- and was having pay-in obligation of Rs. 35,041/- as of 06.03.2020, the credit balance for 09.03.2020 was reflected as Rs. 54,91,618/- as on 09.03.2020. However, on the morning of 09.03.2020 (Monday), owing to a sudden downfall in crude oil prices (down almost by 30 %) and to a trading halt, respondent suffered loss of Rs. 66,10,650/- on the outstanding position of the respondent (Rs. 54,91,618/-) and OMP (Comm.) No. 18/2022 FINVASIA SECURITIES PVT. LTD. VS MANOJ KUMAR Page 5 of 19 in such a scenario, under the relevant bye laws of Multi Commodity Exchange of India Ltd. (in short MCX Bye Laws), Securities Contracts (Regulation) Act, 1956 (in short SCR Act) and the rules framed thereunder, the applicant/petitioner had no other option but to close out all the open positions of the respondent resulting in a net loss of Rs. 11,19,032/- (MTM loss of 06.03.2020 + Pay in obligation + Loss due to fall in crude oil price on 09.03.2020). Ld. Arbitrators rendered completely arbitrary, illegal and perverse findings in respect of the claims. Under the relevant MCX Bye Laws, SCR Act and the rules framed thereunder, the open positions and obligations of the respondent as on 06.03.2020 (Friday) was to be settled on 09.03.2020 (Monday) i.e., T+1 days (Trading Session) and similarly obligations on 09.03.2020 were to be settled on 10/03/2020. Hence, as on 09.03.2020, respondent was having MTM loss of Rs. 7,58,865/- and was having pay in obligation of Rs. 35,041/- which escalated to Rs. 11,19,032/- on 10.03.2020 (MTM loss of 06/03/2020 + Loss due to fall in crude oil price on 09.03.2020) due to which there was a debit of Rs. 11,19,032/- in the account of respondent as on 10.03.2020 which was overdue as on date. Further, after debiting the net obligations exchange(s) of Rs. 1,03,461/- for the trade executed on 09.03.2020, there is a total overdue debit of Rs.12,22,493/- (Rs. 11,19,032/-+ Rs.1,03,461/-) which the respondent is liable to pay. Applicant/petitioner had presented sufficient and vital evidence to show as to how a net debit balance of Rs. 11,19,032/- was created in the account of respondent which Ld. Sole Arbitrator and Appellate Arbitral Tribunal failed to consider. Ld. Counsel for applicant/petitioner argued that Ld. Arbitrators have erred in OMP (Comm.) No. 18/2022 FINVASIA SECURITIES PVT. LTD. VS MANOJ KUMAR Page 6 of 19 their reading and interpretation of the documents placed on record and the relevant MCX Bye Laws in a manner which is patently illegal and opposed to the public policy of India. The incorrect appreciation of MTM loss goes to the very root of the matter and Ld. Sole Arbitrator and Appellate Arbitral Tribunal have erred in not subtracting the MTM loss accrued by the respondent on 06.03.2020 against his fund balance before opening of the trade market on 09.03.2020. The understanding of MTM loss is fundamental to the entire dispute and patently illegal interpretation and application of the same renders the award otiose to a limited extent. Ld. Sole Arbitrator and Appellate Arbitral Tribunal erred in disallowing the claim of applicant/petitioner to the tune of Rs. 8,97,367/-. Ld. Sole Arbitrator and Appellate Arbitral Tribunal erred in not appreciating the Daily Margin Statement, Client-wise Net Positions, Contract Note-cum-Tax Invoices and the Financial and Margin Ledger of the applicant/petitioner highlighting the margin position of the respondent on 06.03.2020 till 10.03.2020. In failing to consider the various undisputed documents placed on arbitral proceedings record by applicant/petitioner, resultant award passed by Ld. Arbitrator was in violation of the principles of natural justice. A perusal of the documents placed on record by the applicant/petitioner would sufficiently explain the basis for arriving at a claim of Rs.12,22,493/- (principal amount). Ld. Sole Arbitrator failed to appreciate the same and erroneously granted only Rs.3,25,127/- as the principal amount. Ld. Sole Arbitrator and Appellate Arbitral Tribunal failed to appreciate the undisputed documents placed on record clearly explaining the nature of the financial transactions under scrutiny and correctly OMP (Comm.) No. 18/2022 FINVASIA SECURITIES PVT. LTD. VS MANOJ KUMAR Page 7 of 19 interpreting the manner in which MTM losses are factored in; so arbitral awards suffered from non application of judicial mind, in terms of law laid in the case of Oil and Nartural Gas Corporation Limited vs Western Geco International Limited, (2014) 9 SCC 263. Ld. Counsel for applicant/petitioner relied upon the case of National Highways Authority of India vs P. Nagaraju alias Cheluvaiah & Anr., 2022 SCC OnLine SC 864 with the submission that in the light of arbitrary, illegal and perverse award passed by Ld. Sole Arbitrator and upheld by Appellate Arbitral Tribunal, the impugned awards be set aside to limited extent of dismissal of remaining claim of Rs.8,97,367/- of applicant/petitioner. Ld. Counsel for applicant/petitioner also relied upon the case of Ssangyong Engineering & Construction Company Limited vs National Highways Authority of India (NHAI), (2019) 15 SCC 131 and submitted that since awards suffer from patent illegality, it would be liable to be set aside under Section 34 of the Act. Ld. Counsel for applicant/petitioner argued that awards cannot be passed in an arbitrary and whimsical manner without adhering to the principles of natural justice and relied upon the case of State of Orissa vs M/s. Samantary Constn. Pvt. Ltd. & Anr., 2015 SCC OnLine SC 856 seeking setting aside of the impugned arbitral awards to limited extent, as above said.
5. The scope of interference with an arbitral award under Section 34 of the Act is very limited. Arbitral award can only be set aside on the grounds set out in Section 34 (2) (a), Section 34 (2) (b) and Section 34 (2A) of the Act in view of Section 5 of the Act within the period of limitation.
OMP (Comm.) No. 18/2022 FINVASIA SECURITIES PVT. LTD. VS MANOJ KUMAR Page 8 of 196. Supreme Court in Suo Moto Writ Petition (Civil) no. 3 of 2020, In Re: Cognizance For Extension Of Limitation vide order dated 10/01/2022 has excluded the period from 15/03/2020 till 28/02/2022 for computing the period of limitation for any suit, appeal, application or proceedings and the petition under Section 34 of The Act is also eligible for the same. Accordingly, present petition filed on 12/01/2022 is also within the period of limitation.
7. Following is the reasoning in the impugned arbitral award dated 21/10/2020 for allowing only part of claim of applicant/ petitioner:-
"10. I have considered the matter. The margin statement dated 06.03.2020 filed by the Applicant with the application confirms total upfront margin of Rs. 5142877.42 and MTM of Rs. 758865.00, adding up the margin requirement to Rs. 59,01,742.42, say Rs. 59,01,742/-. The Respondent was stated to be having credit balance of Rs. 62,85,523/- on that date. On 09.03.2020 the Applicant squared off all open positions causing the Respondent net loss of Rs. 66,10,650/-. Prima facie, this would have created a net debit balance of Rs. 3,25,127/- (Rs. 66,10,650/- minus Rs. 62,85,523/-). However, the Applicant has stated that it created a net debit balance of Rs. 11,19,032/- in the Respondent's account. The manner in which net debit balance of Rs. 11,19,032/- has been arrived at has not been explained in the Application. Nor was any attempt made to explain it during the hearing. Further, the Applicant has debited "the net obligations exchange(s) of Rs. 1,03,461/-". It has also not been explained as to how "the net obligations exchange(s) of Rs. 1,03,461/-" has been arrived at. Considering all these facts, the net amount of Rs. 3,25,127/-OMP (Comm.) No. 18/2022 FINVASIA SECURITIES PVT. LTD. VS MANOJ KUMAR Page 9 of 19
becomes payable by the Respondent."
8. Appellate Arbitral Tribunal in appeal of applicant/petitioner dealt with the only question as to whether Learned Single Arbitrator was justified in only allowing part of the claim. Respondent even had not appeared before Appellate Arbitral Tribunal.
9. Following are the findings of Appellate Arbitral Tribunal for dismissal of the appeal of applicant/petitioner:-
"After considering the submissions of the applicant we find ourselves in the agreement with the findings of the learned arbitrator. As is apparent from the appellant's own case there was an outstanding position even on 6th March 2020. The position admittedly was squared off on 9th March 2020. We fail to understand as to why if at all the positions were to be squared off and why it was not done on the 6 th March 2020, 2020 itself. After all certain amount of prudence is required and it is not left to the sole discretion of the appellant to square off the positions as and when required. Therefore, the learned single Arbitrator was justified in taking the position as explained on 6th March, 2020.
Be that as it may even if for sake of argument we assume that when the market fell on 19th March, 2020 (09.03.2020) the appellant had chosen to square off the positions. But there is no indication given by the appellant as to if before doing that the appellant had given any notice to the respondent. Our attention has not been drawn to any regulations or of any agreement which gives power to the appellant to square off the positions as and when required without notice. In circumstances notice can be short but still the appellant should have called upon the respondent to make up the deficiency to avoid squaring up of his positions. It is not pleaded in this regard on behalf of the appellant and therefore, even OMP (Comm.) No. 18/2022 FINVASIA SECURITIES PVT. LTD. VS MANOJ KUMAR Page 10 of 19 on that score the contention of the appellant necessarily must be rejected.
Learned Arbitrator had calculated the amount on basis of the amount mentioned by the appellant itself. We too repeatedly asked the representative of the appellant as to how and in what manner the arbitrator had erred and how and why the appellant has chosen to arrive at another figure and thereby seeking more than what has been awarded by the learned arbitrator but there is no reasonable explanation forthcoming.
No other argument was advanced.
For these reasons we find that the appeal is without merit and as an off shoot of the above reasons it is dismissed."
10. Bye-Laws 8.2.1; 8.2.2 and 8.6.5 of Bye-Laws of Multi Commodity Exchange of India Limited, Mumbai read as under:-
"8 MARGINS ........................................................................................................ 8.2.1 Every clearing member shall pay the appropriate margin amount with the Clearing House of the Exchange or Clearing Corporation against the aggregate open positions cleared by the clearing member (i) for the clearing member's own- account where applicable and (ii) for other members of the Exchange with whom the clearing member has an agreement and; (iii) clients, where applicable.
8.2.2 Every member of the Exchange executing transactions on behalf of clients shall collect from the clients the margins specified from time to time, against their open positions and such collections shall be reported to the Exchange in such manner and within such time as may be prescribed by the Relevant Authority.
..........................................................................................................
8.6.5 An Exchange member may square off an open position of a client when the call for further margin or any other payment due is not complied with by the client."
11. Bombay High Court in the case of M/s Angel Capital & Debt Market Limited vs Mrs. Rajkumari Laddha, 2013 SCC OMP (Comm.) No. 18/2022 FINVASIA SECURITIES PVT. LTD. VS MANOJ KUMAR Page 11 of 19 OnLine Bom 450 inter alia held that merely because the trading member accommodates his constituent by not insisting on his open margin deficit being immediately replenished and gives him time to do so, his right to square off the open position for want of adequate margin cannot be denied.
12. Bombay High Court in the case of Bonanza Portfolio vs Meeta Parikh, Arbitration Petition No. 1149 of 2018 decided by Bombay High Court on 22/08/2019 appreciated the law laid in the case of M/s Angel Capital & Debt Market Limited vs Mrs. Rajkumari Laddha (supra) and held that there is no quarrel with the proposition of law, elicited above, but what is important is that in such a case the trading member must indicate a clear demand of margin short-fall which puts the constituent to a notice that if the margin is not replenished, the open position may be squared off. There is nothing in the records of this case to indicate that in the fact of the matter the trading member applicant/petitioner had given any such notice to respondent that if the margin is not replenished in reasonable time, the open position may be squared off. Also there is nothing on arbitral proceedings record to indicate that the trading member applicant/ petitioner had given any notice to the respondent to replenish the deficit of margin in reasonable time with any clear demand of any specified amount. No such clear demand of any specified amount by trading member applicant/petitioner to respondent exists in arbitral proceedings record though in the Welcome Letter, email id as well as mobile phone numbers and land-line phone number of respondent/client were available with the applicant/petitioner on which there could be clear demand of any OMP (Comm.) No. 18/2022 FINVASIA SECURITIES PVT. LTD. VS MANOJ KUMAR Page 12 of 19 specified amount to replenish the margin as per above elicited Bye-Law 8.6.5 of Bye-Laws of Multi Commodity Exchange of India Limited before squaring off the position of respondent making available with respondent reasonable opportunity to replenish the deficit of margin in reasonable time. Of course, it is true that such a reasonable time, differs from case to case and from facts to facts. In the case in hand, not even the clear demand to respondent was made by applicant/petitioner to replenish the deficient of margin in even an hour. This facet was inter alia taken care of in the elicited reasoning given by Appellate Arbitral Tribunal for dismissing the appeal.
13. In the course of arguments, I had also enquired from Ld. Counsel for applicant/petitioner to show from the Statement of Claim/application of claim laid by applicant/petitioner before Ld. Sole Arbitrator as to how and where therein is described the manner in which the net debit balance of Rs. 11,19,032/- has been arrived at and it was submitted in the arguments on behalf of applicant/petitioner that though in the Statement of Claim/ application of claim in arbitral proceedings record there the manner in which net debit balance of Rs. 11,19,032/- has been arrived at has not been explained but in the present petition/ application it has now been explained. Besides that it was argued for applicant/petitioner that copy of financial ledger has the entries of debit and credit in the account of respondent in the books of applicant/petitioner from which it can be ascertained. Not only Ld. Sole Arbitrator but also Appellate Arbitral Tribunal in the impugned award have recorded that it was not explained as to manner in which the net debit balance of Rs.11,19,032/- in the OMP (Comm.) No. 18/2022 FINVASIA SECURITIES PVT. LTD. VS MANOJ KUMAR Page 13 of 19 account of respondent was arrived.
14. Supreme Court in the case of MMTC Limited vs Vedanta Limited, (2019) 4 SCC 163 inter alia held that as per the proviso to Section 34 (2A) of the Act, an award shall not be set aside merely on the ground of an erroneous application of the law or by appreciation of evidence.
15. Supreme Court in the case of Anglo American Metallurgical Coal PTY. Limited vs MMTC Limited, (2021) 3 SCC 308 inter alia held that when the view taken by the Arbitral Tribunal is a possible view based on oral and documentary evidence led in the case, it cannot be characterized as being either perverse or being based on no evidence. Also was held therein that when there are number of documents exchanged between the parties in the performance of contract, all of them must be read as a connected whole, relating each particular document to "existing facts", which include how particular words are used in a particular sense, given entirety of correspondence between the parties.
16. 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 OMP (Comm.) No. 18/2022 FINVASIA SECURITIES PVT. LTD. VS MANOJ KUMAR Page 14 of 19 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.
17. The proceedings under Section 34 of the Act are summary in nature and the scope of enquiry in the proceedings under Section 34 of the Act is restricted to specify grounds for setting aside only, as was held in the case of Canara Nidhi Limited vs M. Shashikala & Ors., 2019 SCC Online SC 1244. The Court would not construe the nature of claim by adopting too technical an approach or by indulging into hair-splitting, otherwise the whole purpose behind holding the arbitration proceedings as an alternative to Civil Court's forum would stand defeated, as was held in the case of Sangamner Bhag Sahakari Karkhana Ltd. vs Krupp Industries Ltd., AIR 2002 SC 2221. An award is not open to challenge on the ground that the arbitrator had reached a wrong conclusion or had failed to appreciate some facts, but if there is an error apparent on the face of the award or if there is misconduct on the part of the arbitrator or legal misconduct in conducting the proceedings or in making the award, the court will interfere with the award; as was held by Supreme Court in the case of Oil & Natural Gas Corporation vs M/s Wig Brothers Builders & Engineers Pvt. Ltd., (2010)13 SCC 377. Reappraisal of evidence by the court is not permissible and as a matter of fact, exercise of power to reappraise the evidence is unknown to a proceeding under the Arbitration Act; as was held by Supreme OMP (Comm.) No. 18/2022 FINVASIA SECURITIES PVT. LTD. VS MANOJ KUMAR Page 15 of 19 Court in the case of Ispat Engineering & Foundry Works vs Steel Authority of India Ltd., (2001) 6 SCC 347. In order to provide a balance and to avoid excessive intervention, the award is not to be set aside merely on the ground of an erroneous application of the law or by re-appreciating evidence; as was held by Supreme Court in the case of P.R Shah, Shares & Stock Brokers Pvt. Ltd vs B.H.H. Securities Pvt. Ltd. & Ors., (2012) 1 SCC 594. At global level the doctrine of 'Contra Proferentem' is generally applied by the Judges/Arbitrator in the cases where a contract appears ambiguous to them; the Judges/Arbitrator in India have appreciated and adopted similar line of reasoning in the cases involving ambiguous contract wherein it is believed that 'an ambiguity is needed to be resolved' in order to find the correct intention of the contract. If the conclusion of the arbitrator is based on a possible view of the matter, the court is not expected to interfere with the award and if the Arbitrator relies on a plausible interpretation out of the two possible views, then it would not render the award perverse; as was held by Supreme Court in the case of M/s Sumitomo Heavy Industries Ltd. vs Oil & Natural Gas Commission of India, 2010 (11) SCC
296. Award is not open to challenge on the ground that the Arbitral Tribunal had reached a wrong conclusion or had failed to appreciate the facts; the appreciation of evidence by the arbitrator is never a matter which the Court considers in the proceeding under Section 34 of the Act, as the Court is not sitting in appeal over the adjudication of the arbitrator.; as was held by Delhi High Court in the case of NTPC Ltd vs Marathon Electric Motors India Ltd., 2012 SCC OnLine Del 3995. Supreme Court in the case of Associate Builders vs Delhi Development OMP (Comm.) No. 18/2022 FINVASIA SECURITIES PVT. LTD. VS MANOJ KUMAR Page 16 of 19 Authority, (2015) 3 SCC 449 has restricted the scope of public policy, so the Court does not act as a Court of appeal and consequently errors of fact cannot be corrected. An error relatable to interpretation of the contract by an arbitrator is an error within his jurisdiction and such error is not amenable to correction by Courts as such error is not an error on the face of the award; as was held by Supreme Court in the case of Steel Authority of India Ltd. vs Gupta Brother Steel Tubes Ltd., (2009) 10 SCC
63.
18. Precedents relied upon by Ld. Counsel for petitioner are not applicable in the present case as they embody facts and circumstances entirely different and distinguishable to the facts and circumstances of case in hand.
19. The impugned award dated 21.10.2020 of Ld. Sole Arbitrator and impugned award dated 01/05.07.2021 of Appellate Arbitral Tribunal were passed by Learned Sole Arbitrator and panel of Learned Arbitrators respectively, who were having special and expert knowledge about the relevant trading laws, bye laws, rules and regulations of Multi Commodity Exchange of India Limited, Mumbai, SCR Act. Moreover the said Learned Arbitrators on panel of MCX at Delhi were also having vast experience in dealing with such matters. Learned Arbitrators appreciated the pleadings and documents placed in arbitral proceedings records. Not only the reasonings of Learned Sole Arbitrators are logical but findings were given by Learned Arbitrators based on appreciation of facts and law. Cogent grounds, sufficient reasons have been assigned by Learned OMP (Comm.) No. 18/2022 FINVASIA SECURITIES PVT. LTD. VS MANOJ KUMAR Page 17 of 19 Arbitrators in reaching the just conclusion and no error of law or misconduct is apparent on the face of the record. This Court cannot re-appraise the evidence and it is not open to this Court to sit in the appeal over the conclusion/findings of facts arrived at by Learned Arbitrators; including the Former Learned and Hon'ble Judges of Delhi High Court; who were competent to make assessment, while taking into consideration the facet of the matter. Re-appraisal of the matter cannot be done by this Court. I do not find any contradiction in the observations and findings given by Learned Arbitrators. The impugned awards do not suffer from vice of irrationality and perversity. The conclusion of the Learned Arbitrators is based on a possible view of the matter, so the Court is not expected to interfere with the award. The Court cannot substitute own evaluation of conclusion of law or fact to come to the conclusion other than that of the Learned Arbitrators, as per the law laid in the precedents, elicited herein above. Even impugned awards passed by Learned Arbitrators cannot be set aside on the ground that these were erroneous. The impugned awards are not against any public policy nor against the terms of contract of the parties. No ground for interference is made out. None of the grounds raised by the applicant/petitioner attract Section 34 of the Act; though concerted but unsuccessful efforts have been made to give them colour to term the impugned arbitral awards to be (i) perverse; (ii) suffering from patently illegal and (iii) against the fundamental policy of Indian law. For the foregoing reasons, the application/petition is hereby dismissed.
20. The parties are left to bear their own costs.
OMP (Comm.) No. 18/2022 FINVASIA SECURITIES PVT. LTD. VS MANOJ KUMAR Page 18 of 1921. File be consigned to record room.
Digitally signed by GURVINDER PAL GURVINDER SINGH
PAL SINGH Date: 2023.04.29
11:04:39 +0530
ANNOUNCED IN (GURVINDER PAL SINGH)
OPEN COURT District Judge (Commercial Court)-02
On 29th April, 2023. Patiala House Court, New Delhi.
(DK) OMP (Comm.) No. 18/2022 FINVASIA SECURITIES PVT. LTD. VS MANOJ KUMAR Page 19 of 19