Delhi High Court
Aurum Infocomm Limited vs Sh. Desh Raj Mangal on 27 March, 2014
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO No. 479/2013
% 27th March, 2014
AURUM INFOCOMM LIMITED ......Appellant
Through: Mr. Sanjay Kumar, Adv.
VERSUS
SH. DESH RAJ MANGAL ...... Respondent
Through: Mr. Shiv Kumar Gupta, Adv.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
CM No. 20177/13 (delay)
For the reasons stated in the application, delay is condoned. CM
stands disposed of.
FAO No. 479/2013 & CM No. 20175/2013 (stay)
1. This first appeal is filed under Section 37 of the Arbitration and
Conciliation Act, 1996 (in short 'the Act') impugning the judgment of the
court below dated 29.8.2013 by which the objections filed by the appellant
under Section 34 of the Act against the Award of the arbitrator dated
FAO 479/2013 Page 1 of 5
12.1.2013 were dismissed. By the Award, the arbitrator awarded a sum of
Rs.1 lac in favour of the respondent-claimant against the appellant/objector
with interest at 12% per annum pendente lite and future.
2. The facts of the case are that the respondent opened a credit
account with the appellant-company/Registered Broker for the Multi
Commodities Exchange. The account was opened at Jalandhar on 20.5.2009
and the respondent deposited a sum of Rs.1 lac, but within 15 days, the
amount stood totally depleted. Respondent contended that he never knew
about the transactions carried out in his account, and aggrieved by the loss,
the claim petition was filed.
3. There were two points which were to be considered by the
arbitrator as to (1) whether the claim of the respondent was within limitation
and (2) whether the appellant had indulged in unauthorized trading in the
respondent's account.
4. So far as the aspect of limitation is concerned, the arbitrator
held the claim to be within limitation for filing of the claim petition on the
ground that the time for filing of claims was extended by the Multi
Commodities Exchange to 3 years as per circular w.e.f. 31.3.2012, and the
defence of the appellant with respect to lack of retrospective operation of the
FAO 479/2013 Page 2 of 5
circular was rejected. Independent of the findings of the arbitrator, I would
like to refer to the judgment of a learned Single Judge of this Court in the
case of Smt. Biba Sethi & Mr. Nitin Sethi Vs Dyna Securities Ltd. 2009 (3)
ARb. L.R 494 (Delhi) which while dealing with similar provision under the
National Stock Exchange held that curtailing any period of limitation with
respect to invoking of arbitration proceedings prior to a period of 3 years is
hit by the amended Section 28 of the Indian Contract Act, 1872 which holds
that the period of limitation and the rights within the period of limitation
cannot be extinguished in a period less than the period provided under the
Limitation Act. Therefore, on this ground I reject the contention of the
appellant that the arbitration proceedings were time barred.
5. So far as merits as to whether the appellant did the trades on
instructions of the respondent or without any instructions is concerned, it
will be necessary at this stage to state that a court hearing objections under
Section 34 of the Act does not sit as an appellate court to reappraise the
findings of facts and conclusions arrived at by the arbitrator in terms of the
evidence on record. Courts only interfere under Section 34 when the Award
is against the contractual provisions or against the law or perverse. This is
held by the Supreme Court in the case of ONGC Ltd. Vs. Saw Pipes Ltd.
FAO 479/2013 Page 3 of 5
(2003) 5 SCC 705. If a court hearing objections under Section 34 has
limited jurisdiction, then, this Court hearing an appeal against the judgment
dismissing objections will have a further limited scope of hearing.
6. The arbitrator has found as a matter of fact that no evidence has
been led by the appellant that any instructions were given by the respondent
for conducting the alleged trades. Appellant did not file any telephonic
record or relied upon any telephonic record with respect to issuing of any
instructions for the trades by the respondent to the appellant. Arbitrator also
notes that trades on certain days were so vast in number that it is not possible
that such instructions could have been given on phone and transactions could
only have been undertaken only if the transactions were being done online
by the respondent, and which is not the case.
7. So far as the sending of notice by the appellant to the
respondent is concerned, the arbitrator notes that contract notes if were sent
in the electronic form, the respondent was entitled to contend that since no
instructions for carrying out trades were given, he did not check the
electronic account more so because the respondent was not a computer
savvy person. So far as sending of any contract notes by post is concerned,
appellant admittedly did not file any evidence that the alleged contract notes
were sent to the respondent by post.
FAO 479/2013 Page 4 of 5
8. Therefore, at best there were two views possible in the
situation. If out of the two possible views, arbitrator adopts one possible
and plausible view, such a decision of the arbitrator cannot be said to be
perverse for being interfered with under Section 34 of the Act, much less for
this Court to entertain an appeal dismissing the objections under Section 34
of the Act.
9. In view of the above, there is no merit in the appeal, and the
same is therefore dismissed, leaving the parties to bear their own costs.
MARCH 27, 2014 VALMIKI J. MEHTA, J.
ib
