ALANKIT ASSIGNMENTS LTD Vs. CDR S.P. PURI

JUDGEMENT

(1.) The Petitioner Alankit Assignments Ltd. challenges in this petition under Section 34 of the Arbitration and Conciliation Act, 1996 ( Act') an Award dated 10 th December 2009 passed by the learned Arbitrator in the dispute between the Petitioner and Respondent No. 1, Cdr. S.P. Puri, whereby the Petitioner has been directed to return to Respondent No. 1 all the shares which were transferred on 28 th June 2004 from his account with all incidental benefits such as dividend, bonus shares, rights shares and splitting up of the shares etc.

(2.) Respondent No. 1 entered into an agreement on 2 nd January 2004 with the Petitioner, which is a trading member of the National Stock Exchange ('NSE'), for trading in securities under Code No. NV 327. Respondent No.1 also had a DEMAT account (No.10651928) with the Petitioner, which is also a Depository Participant under No. DP-IN 300118 with the National Securities Depository Ltd. ('NSDL'). Respondent No.1 also had a speed-e facility which enabled him to issue delivery instructions to the Petitioner, download his DEMAT account details and access the transaction details and statements.

(3.) According to the Petitioner, Respondent No.1 had on 30 th March 2004 issued two cheques in favour of the Petitioner, one in the sum of Rs. 32,32,645.31 and another in the sum of Rs. 30 lakhs towards the dues in his account. It is further stated that due to heavy trading undertaken by Respondent No.1, an amount of Rs.1,08,56,840.24 was outstanding in his trading account as on 28 th June 2004. According to the Petitioner it made several requests and sent reminders to Respondent No. 1 to liquidate the outstanding amount. In order to square up a part of the outstanding, Respondent No. 1 transferred securities from his DP Account No.10651928 to the Petitioner's Pool Account No.10000004 and advised the Petitioner to sell the same and adjust the proceeds against the outstanding balance. Respondent No. 1 also advised the Petitioner to re-present either the cheque for Rs.32,32,645.31 or the cheque for Rs.30 lakhs. The Petitioner states that they sold the securities transferred to their pool account by Respondent No.1 for a total value of Rs.74,85,681.24 on 29 th June 2004. The cheque of Rs.32,32,645.31 dated 30 th March 2004 was re-presented but was returned dishonored.