RAJNISH KHOSLA Vs. FAIR WEALTH SECURITIES PVT LTD

JUDGEMENT

(1.) This is an appeal under Section 37 of the Arbitration and Conciliation Act. The appellant's grievance is with respect to the order of learned Single Judge who rejected his petition under Section 34 of the Act. The appellant has challenged the award by the Appellate Tribunal constituted by virtue of Regulations framed under the National Stock Exchange Act.

(2.) Shorn of the procedural history of the dispute, the brief and conceded facts are that the appellant at the relevant time was an online trader, who transacted business with the stock exchange by purchasing and selling shares. He also carried on forward trading. In the course of these transactions, it was essential - especially in respect to the forward category of trading, that margin money had to be deposited; undisputedly it was. Depending on the nature of the daily transactions and the closure, notified by the stock exchange, the losses or gains, as the case may be, were duly accounted and in the event, the trader (such as the appellant) was in a red, he had to make good the deficiency by depositing the balance within a stipulated period failing which the shares standing to his credit would be exposed to auction and sale by the stock exchange or the broker, as the case may be - inasmuch as in certain cases, margin funding was resorted to. The appellant also claimed to be a Consultant to the respondent broking house (hereafter referred to as "Fair Wealth").

(3.) On 01.05.2008, Fair Wealth sent a letter to the appellant demanding Rs. 36,00,000/-, as dues payable to it. The appellant by his reply dated 14.05.2008 disputed it and claimed on the other hand that the business association that he had entered into with Fair Wealth, had resulted in dues payable to him. This dispute became a subject matter of arbitration. In a first round, the Arbitral Tribunal, which adjudicated the dispute, had to consider the claims by Fair Wealth and the counter claims of the appellant. The resultant award rejected both the counter claims and claims. In these circumstances, Fair Wealth approached the Appellate Tribunal - which is provided by virtue of bye-laws of the National Stock Exchange. The Tribunal - which was manned by three Member panel, accepted the appellant's plea that there was no credible material to disclose that the digital credit notes, were ever sent to the appellant's valid e-mail identity and that the other e-mail identities that it had relied upon, were defective or not.