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2. As per pleadings in petition, clientele relationship of OMP (Comm) No 102/2019 M/s Kaynet Finance Limited vs Arun Kumar & Ors Page No. 2 of 44 respondent no. 1 was mapped by Delhi Branch of petitioner and client code 102A54 was allotted to respondent no. 1 after his due execution of the KYC, Member-Client Agreement, Risk Disclosure Documents (RDD), which clearly stated the risk associated while dealing in capital market and rights/obligations of the member and the constituent. Even as per the case of respondent no. 1, he was trading previously with one ILFS and in year 2016, he transferred his account to petitioner, which established of experience of respondent no. 1 in trading of stocks and as a reasonable person of ordinary prudence could be assumed to know that investments in stocks/capital market did not have guaranteed returns. The KYC was executed between parties on 05/02/2016, which had arbitration clause in terms of bye-laws of NSE/SEBI read with Section 2(4) of The Arbitration and Conciliation Act. In terms of above said KYC, which governed the contract between petitioner and respondent no. 1, respondent no. 1 opted to receive the Electronic Contract Notes (ECN) at his e-mail id. Further, respondent no. 1 gave his mobile phone number in KYC as his registered mode of communication. Hence, any communication of said e-mail and phone amounted to valid communication. In terms of clause 13 of KYC Contract, it was OMP (Comm) No 102/2019 M/s Kaynet Finance Limited vs Arun Kumar & Ors Page No. 3 of 44 agreed that client will give any order either in writing or in such other form/manner, as may be mutually agreed between company and client. As a part of KYC, respondent no. 1 had executed Power of Attorney in favour of petitioner towards adjustment of securities in DEMAT account without having separate individual instructions every time. Respondent no. 1 signed receipt for understanding all rules and delivery of KYC to him on 09/02/2016. Only on 22/03/2018 SEBI came with circular with effect from 01/04/2018 that all order placing calls placed by clients shall be mandatorily recorded. As an organization's internal compliance policy, petitioner sent a detailed Welcome Letter to each client, which mentions in detail his key KYC details along with necessary precautions to be taken by the client while dealing through petitioner in Securities/Derivative market. In terms thereof, it was agreed between petitioner and respondent no. 1 that Electronic Contract Notes (ECN) shall be sent on registered e-mail id of client within 24 hours of execution of trade, which shall be in terms of order placed by respondent no. 1 on telephone lines. In this respect, Clause 23 of Welcome Letter was explicit and clear that contract note sent to respondent no. 1 shall be in terms of order placed by him on OMP (Comm) No 102/2019 M/s Kaynet Finance Limited vs Arun Kumar & Ors Page No. 4 of 44 telephonic lines, which are not recorded. It was informed to respondent no. 1 by petitioner at the time of account opening that the organization does not involve itself into the business of Portfolio Management Services and do not guarantee any returns on the funds invested through it. The same was informed through recorded Welcome Call and Welcome Letter, which were dispatched at registered correspondence address of respondent no. 1 and registered e-mail id. Apart from sending contract notes on e-mail in terms of order placement calls of client, as internal compliance SMS, IVR calls and post trade confirmation calls were done. These post trade confirmation calls were recorded from recorded lines at dealing desk. The logs of all SMSs sent on registered mobile, recorded trade post confirmation calls, logs of delivery of daily contract notes and periodical ledger on registered e-mail were furnished by petitioner before arbitral tribunal.

(ii) No unauthorized trading was established since Electronic Contract Notes (ECN) were sent for transactions as mandated under contract and respondent no. 1 ratified every act of petitioner;
(iii) There was no requirement to prove any pre-trade order and consent for all pre-trades were implied by ratification of Electronic Contract Notes and contents of post trade verification calls with SMS alerts;