Indian Kanoon - Search engine for Indian Law

26. Shri Desai submitted that in the statement of Shri Shah and in the affidavit referred to in the order there is no indication that the Appellant had cautioned the sub broker against dealing with Shri Harinarayan Bajaj, that the objection was dealing with Shri Shailesh Bajaj and therefore, the Appellant's submission that by notifying the sub broker the Appellant had exercised due skill and care is not tenable.

27. Shri Desai submitted that the Appellant was transacting in the ARBL shares for Bajaj from October 2000 to March 2001. He submitted that by the Appellants own admission by February 2001 it knew that the sub broker was trading for Bajaj, that despite such knowledge the sub broker was allowed to buy 1,20,000 shares for Shri Bajaj on 5.3.2001 i.e. in Settlement No. 50 and out of the said purchase 30,000 shares were carried forward, that it is also a fact that on 9.3.2001 the said 30,000 shares devolved on the Appellant and the Appellant had to take delivery of the same and the Appellant has not challenged the said position. Learned Counsel submitted that it is on record that the Appellant was buying and selling in huge quantities of shares of ARBL but took delivery of only small quantity of shares, that as per the enquiry report "the Appellant executed trades in the scrip of ARBL amounting to a total volume of 1950160 (purchases) and 11898460 (sales) from Settlements 30 to 50, that the Appellant had taken delivery of 21,700 shares during the aforementioned period", that it is also on record that 95% of the trade in ARBL scrip was carried out through its sub broker.