Surender Kumar Gupta vs Moti Lal Oswal Securities Limited
2017 Latest Caselaw 2038 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         FAO No. 188/2017

%                                                        26th April, 2017

SURENDER KUMAR GUPTA                                        ..... Appellant
                                         Through:     In person.

                          versus

MOTI LAL OSWAL SECURITIES LIMITED                         ..... Respondent

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?

VALMIKI J. MEHTA, J (ORAL)

C.M. Appl. No. 15514/2017

Exemption allowed, subject to all just exceptions.

C.M. stands disposed of.

FAO No. 188/2017

1. This first appeal under Section 37 of the Arbitration and

Conciliation Act, 1996 impugns the judgment of the Court below dated

29.3.2017 dismissing the objections filed by the appellant under

Section 34 of the Arbitration and Conciliation Act.

2. By the objections, the appellant had challenged the award

of the panel of three arbitrators dated 10.2.2016 rejecting the claim

petition. The Award of the arbitrators dated 10.2.2016 achieved

finality on dismissing of the appeal by the appellate award dated

30.5.2016 of the panel of three arbitrators. The issue in the arbitration

proceeding was the case of the appellant that the respondent, a stock

broker with whom the appellant was registered, conducted

unauthorised trades in the appellant's account, and accordingly the

appellant is entitled to refund of the total loss caused of Rs.52,75,052/-.

3. The impugned awards dated 10.2.2016 and 30.5.2016, as

also the impugned judgment gives the following conclusions for

holding the claim petition of the appellant in the arbitration as being

misconceived:-

(i) Appellant claimed that transactions/trades were done in his

account without his consent but this case was false, inasmuch as,

respondent filed in the arbitration proceedings documents such as e-log

reflecting the delivery of e-mails of the appellant at the registered e-

mail id of the appellant as regards the trades, SMS log reflecting the

delivery of SMSs to the registered mobile number of the appellant as

regards the trades, and a CD containing the sample voice recording of

the appellant containing directions as regards the trades to be

conducted. These documents were not questioned during the course of

the arbitration proceedings and it is so noted by the arbitrators in the

original award dated 10.2.2016 as under:-

"The respondent in reply to the applicaotn of amendment denied that allegation. The respondent trading member also claimed that he has visited the office of the respondent trading member. The trading member has also filed documents as mentioned below:

1. Annexure II-A copy of KYC-MCA executed by the Applicant.

2. Annexure III-A copy of E-Log reflecting delivery of emails to the registered email id of the Applicant

3. Annexure IV-A copyof SMS-Log reflecting delivery of SMS to the registered Mobile no. of the Applicant

4. Annexure V- A CD containing sample Voice recordings.

5. Annexure VI- A copy of IGRP minutes dated July 31, 2015.

6. Annexure VII- A copy of POD reflecting deliverly of Welcome Kit to the Applicant.

These documents had not been questioned during the course of argument. As such, this is not reason to discard the version of the respondent in peculiar circumstances of this case." (underlining added)

Therefore, it was clear that when trades were conducted by the

respondent for the appellant details of the same were sent to the

appellant both by e-mail as also by SMSs, and therefore appellant

cannot question the trades as being unauthorised.

(ii) It is also required to be noted that the voice recording was

played before the IGRP members and which showed the active

participation of the appellant in trading.

(iii) The arbitration tribunal in its original award dated 10.2.2016

notes that the appellant at different points of time had been changing

stands with respect to amounts which he is entitled to. In the claim

petition dated 4.8.2015 the appellant/claimant claimed the loss suffered

by him of Rs.34,08,000/-. Thereafter the statement of the appellant

Sh.S.K. Gupta was recorded on 17.12.2015 which showed that actually

there was also a further loss of Rs.13,25,000/- and which was in

addition to the original claim of Rs.34,08,000/-. Appellant moved an

application accordingly for amendment but since it was moved at a

belated stage it was dismissed and the arbitrators had given liberty to

the appellant to file a fresh claim with respect to any additional amount

which was not the subject matter of the arbitration proceedings. Again

then on 10.11.2015, the appellant amended his actual loss figure to a

figure of Rs.52,75,052/-. Accordingly, it has been rightly found by the

arbitration tribunal that appellant could not be believed as he was

repeatedly changing his stands with respect to the loss suffered by him,

i.e firstly he claimed Rs.34,08,000/- in his letter of claim, to this he

added loss of Rs.13,25,000/- and ultimately he raised his claim to the

loss figure of Rs.52,75,052/-.

(iv) Though the contention of the appellant was that trades were

conducted without his instructions, however, it is seen that the

appellant had regularly gone to the office of the respondent for placing

orders, inasmuch as, a copy of the visitor's register was filed by the

respondent showing the presence of the appellant on different days in

the office of the respondent. Accordingly, the arbitration tribunal held,

and rightly so, that it could not be argued by the appellant that the

trades conducted by the respondent were beyond his instructions.

(v) The arbitration tribunal in the appellate award dated 30.5.2016 has

observed that if the case of the appellant was that three agents/employees

of the respondent, namely Smt. Shashi, Sh. Sh. Mritunjay, Ankur have

conducted unauthorized trades and that appellant was being threatened by

these three employees that more unauthorized trades will be conducted,

then why appellant did not straightaway stop trading, and which he did

not do, and thus such facts falsify the assertions of the appellant of

unauthorized trades having been conducted.

4. It is therefore seen that various documents were filed by the

respondent, being e-mails, SMSs, visitors register and voice recordings

alongwith the transcripts, and all of which documents showed that

appellant was actively participating in the trades, and hence it was not

permissible for the appellant to argue that transactions/trades in his

account were unauthorized.

5. During the course of arguments, this Court put a query to

the appellant, who argued his case in person, that once there are e-mails

which were sent to the appellant by the respondent then how could the

appellant contend that appellant was not aware of the trades, and to this

query appellant argued that he was not given the password with respect to

the account for operating the account and also that the appellant is not

conversant with computers and hence he could not access the account.

Clearly once again the appellant is making statements which cannot be

believed, inasmuch as, it has not been the case of the appellant in the

arbitration proceedings that he did not have the password for operating

his account. Also the appellant cannot argue with credibility that he

cannot operate computers at this day and age, and that therefore the e-

mails received by him should not be looked into.

6. The law with respect to hearing of objections under Section

34 of the Arbitration and Conciliation Act is well settled. Only if there is

a clear illegality in law or a completely perverse finding or an issue of

public policy that courts will interfere with the awards. In the present

case, the awards of the arbitrator as also the impugned judgment give

valid reasons, as stated above, for dismissing the claim petition of the

appellant and also for rejecting of the objections under Section 34 of the

Arbitration and Conciliation Act. Hence, there is no merit in this appeal,

and the same is therefore dismissed.

APRIL 26, 2017/ AK/ib                          VALMIKI J. MEHTA, J