India Infoline Ltd. vs Sanjay Gupta
2014 Latest Caselaw 1249 Del

6

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                  FAO No. 66/2011 & CM 2926/2011 (Stay)

%                                                   7th March, 2014

INDIA INFOLINE LTD.                                 ......Appellant
                          Through:       Mr. Mukesh M. Goel, Mr. Prem
                                         Grover, Advocates


                          VERSUS

SANJAY GUPTA                                        ...... Respondent

Through:

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?

VALMIKI J. MEHTA, J (ORAL)

1. Respondent has failed to appear for many hearings in spite of being

served. I have therefore heard the counsel for the appellant.

2. Respondent was the claimant in the arbitration proceedings. Out of

five claims made by the respondent, who is the constituent member of the

appellant/broker in the multi-commodity exchange, four claims were

dismissed and one claim with respect to the claim of lots of Rs. 1 lakh was

allowed by the arbitrator. This claim of Rs. 1 lac was allowed on the

ground that the appellant/broker did not modify the bid with respect to four

lots of sugar although instructions were received before end of the closing of

the trade on the relevant date i.e 20.8.2007.

3. Learned counsel for the appellant very vehemently argues that even

assuming the appellant was guilty of not complying with the directions to

modify the bid of four lots of sugar, however, a claim of loss is allowed only

if loss is actually caused and proved in the arbitration proceedings. It is

argued that reference to the entire record of arbitration as also the Award

shows that the respondent/claimant led no evidence and the arbitrator has

awarded this claim without reference to any evidence of alleged loss caused

and without giving any reason as to how the loss is quantified at Rs. 1 lakh.

It is argued that the arbitrator has committed a gross illegality and perversity

and which is violative of the law of the land contained in Section 73 of the

Indian Contract Act, 1872, and which requires that any claim of damages

for breach of contract can only succeed if damages are proved in the legal

proceedings in accordance with law.

4. I agree with that arguments urged on behalf of the appellant inasmuch

as the arbitration record as well as Award does not show as to how the

arbitrator quantified the loss at Rs. 1 lakh once no proof is referred to and

filed as to how the loss is quantified at Rs. 1 lakh. Not only the loss should

not have been awarded at a quantified figure of Rs. 1 lakh, but the claim

petition should itself have been dismissed because unless loss is to be proved

of a specific amount, Award for such amount could not have been passed in

favour of the appellant/plaintiff. Passing of an Award, therefore, violates the

settled law of land contained in Section 73 of the Indian Contract Act, 1872,

and Award cannot be against the law of land as per Section 28(1)(a) of the

Arbitration and Conciliation Act, 1996.

5. In view of the above, appeal is allowed. Objection of the appellant to

the Award of the arbitrator dated 5.1.2009 succeeds. The claim petition of

the respondent/claimant even with respect to the claim of loss of Rs. 1 lakh

is therefore dismissed. Parties are left to bear their own costs.

MARCH 07, 2014                                      VALMIKI J. MEHTA, J
godara