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2013 DIGILAW 583 (BOM)

Motilal Oswal Securities Ltd. v. Uttam Chand Garg

2013-03-08

ANOOP V.MOHTA

body2013
Judgment The Petitioner-Appellant (Trading member) has challenged an Award dated 29th September, 2010, passed by the Appellate Tribunal in the matter of arbitration under Rules, Bye-laws and Regulations of Bombay Stock Exchange Limited (hereinafter referred to “BSE”) between the parties. 2. The Petitioner trading member has challenged Award dated 18th March, 2010, passed in the matter of an Arbitration Award under the Rules, Regulations and Bye-laws of the BSE, whereby the claim of the Applicant was rejected and so also the counter claim of the Respondent (constituent). The Appellant initially withdrew Reference No.195 of 2009, as recorded in the minutes dated 25th July, 2009. The counter claim was also withdrawn. The Applicant, thereafter, filed a fresh reference application on 29th September, 2009 (Reference No.420 of 2009) Lower Bench of the Arbitral Tribunal dismissed the Appeal by holding that second application in view of the earlier unconditional withdrawal without any liberty, and also it is beyond limitation in view of Bye-laws 252 (2). The Appellate Tribunal noted that the last transaction between the parties was on 7th July, 2008 and the reference was filed on 29th September, 2009. Therefore, it was beyond six months as per bye-laws 252(2) and in view of the earlier unconditional withdrawal dismissed the Appeal. 3. The second reference was moved on the basis of a alleged transaction dated 27th July, 2009. The Respondent disputed the same and thereby objected the second reference filed by the Applicant and the Petitioner. The last admitted transaction was carried out on 14th February, 2008. However, earlier reference was withdrawn on 23rd July, 2009. The second reference was filed on 29th September, 2009, based upon the last transaction as recorded. 4. Admittedly, the impugned award was passed on 18th March, 2010. The Appeal was filed on 15th April, 2010, by the Appellate Authority and it was dismissed on 29th September, 2010. The Arbitration Petition lodged on 7th October, 2010/20th October, 2010. This Court issued notice on 19th January, 2011 and admitted the matter on 7th July, 2011. It was adjourned for time to time for reply and hearing. The other petitions filed by the Respondent (Constituent) against the order passed by the Arbitral Tribunal and under the Bombay Stock Exchange, regularization was pending. Therefore, ordered to be heard together. Heard both the parties finally, by consent. 5. It was adjourned for time to time for reply and hearing. The other petitions filed by the Respondent (Constituent) against the order passed by the Arbitral Tribunal and under the Bombay Stock Exchange, regularization was pending. Therefore, ordered to be heard together. Heard both the parties finally, by consent. 5. The learned counsel appearing for the Petitioner apart from other submissions read and referred Rules and Regulations and specifically Rule 252 (2) of the Bye-laws and contended that the very rejection of the Petition on the ground of delay of six months need to be reconsidered in view of the SEBI circulars referred in Arbitration Petition No.609 of 2009 by this Court (Corum: Anoop V. Mohta, J.), and the matter is remanded back for reconsideration on all points. 6. In India Infoline Limited Vs. Shyamlal Daulatram Vachhani (2012(3) All MR 206). I have already dealt with the facet and aspect of such limitation issue in the following words:- “3 By this, the SEBI has intended to change the mechanism of settling the dispute instead of six months to three years by extending the provisions of Limitation Act, 1963, which are available in normal transactions. The relevant clause is as under:- “i. Where three years have not yet elapsed and the parties have not filed for arbitration with the stock exchange, or ii. Where the arbitration application was filed but was rejected solely on the ground of delay in filing within the earlier limitation period of six months; and three years have not yet elapsed;” 4. Therefore, taking over all view of the matter and if the provisions of Limitation Act are extended, the learned Arbitral Tribunal has to reconsider this facet by giving the opportunity to both the parties.” “The Arbitral Tribunal once held and disposed of the award on the basis of limitation, there is no question of deciding the issue/matter on merits. This creates further complications. In the present case, as recorded above, the claim and the counterclaim need to be connected and interlinked. I have already observed in M/s. Gulraj Engineering Construction Co. Vs. Hotel Corporation of India Ltd. (Arbitration Petition NO.341 of 2009, dated 7 September, 2012), that the Court under Section 34 of the Arbitration Act, has power to remand the matter. In the present facts and circumstances, by keeping all points open, I am inclined to set aside the award for reconsideration”. 7. Vs. Hotel Corporation of India Ltd. (Arbitration Petition NO.341 of 2009, dated 7 September, 2012), that the Court under Section 34 of the Arbitration Act, has power to remand the matter. In the present facts and circumstances, by keeping all points open, I am inclined to set aside the award for reconsideration”. 7. The learned counsel appearing for the Respondent would not show any other Judgment and/or enable to dispute these SEBI circulars. 8. In the present petition, I am inclined to observe that though the cause of action arose on 4th August, 2008, being last admitted date of transaction, yet the fact remains that the proceedings are pending since 2009 till this date including the present Arbitration Petition. The Petitioner has challenged the dismissal of second reference petition on the ground of resjudicata and limitation. As per the Petitioner as fresh cause of action arose on 27th July, 2009, in view of the transaction as recorded and, therefore, the fresh reference was initiated in the year 2009. Both the authorities however rejected the reference filed by the Petitioner. The present Petition was filed in the year 2010. The same is now heard finally. Therefore, taking over all view of the matter without expressing any thing on merits and even if we consider first admitted date of transaction, considering the SEBI circular in question and to give opportunity to both the parties and in view of the change of law of limitation, so far as Bombay Stock Exchange and National Stock Exchange Bye-laws are concerned and specially in view of the Judgment so referred and relied, I am inclined to pass the following order: a) The impugned Awards dated 29th September, 2010 and 18th March, 2010, passed by the Arbitral Tribunal under the Bombay Stock Exchange Rules and Regulations, are quashed and set aside. b) The matter is remanded back for re-consideration on all points. c) The parties to take steps accordingly. d) The Arbitral Tribunal to dispose of the matter expeditiously by giving opportunity to both the parties. e) The Arbitration Petition is, accordingly, disposed of. f) All points are kept open. g) There shall be no order as to costs.