ASHWANI KUMAR MITTAL Vs. VIMLA SECURITIES PVT LTD

JUDGEMENT

(1.) By this petition under Section 34 of the Arbitration & Conciliation Act, 1996 ("the Act" for short) the petitioner has assailed an award dated 16th March 2006 passed by learned Arbitrator rejecting the claim of petitioner on the ground that the references were barred by limitation.

(2.) It is submitted by petitioner that the learned Arbitrator wrongly relied upon the bye-laws of New Delhi Stock Exchange Limited (NDSL) which provided that the parties had to submit for arbitration within a period of six months from the date on which claim/dues or disputes arose. It is also submitted that the learned Arbitrator wrongly came to conclusion that the disputes /differences arose on 22nd December 2001 and the learned Arbitrator wrongly held that the reference was barred by limitation.

(3.) Brief facts relevant for purpose of deciding this petition are that the petitioner worked as sub-broker of respondent for National Stock Exchange during 1998-2001 and petitioner alleged that he was having a mutual running demat account with the respondent and used to carry trade as sub-broker of respondent. The petitioner had to recover certain securities from respondent for which he had made payment in 2001. Respondent closed down its office in Delhi and shifted to Mumbai. The petitioner continued sending letters to respondent. Ultimately, the petitioner addressed a letter to Stock Exchange Board of India (SEBI) about conduct of respondent on 8th December 2004 and SEBI referred the matter to Investors Grievance Cell of National Stock Exchange, New Delhi. After exchange of certain correspondences NSEIL advised petitioner to move arbitration. The petitioner then moved an arbitration application and the matter was referred to the learned Arbitrator under National Stock Exchange's Rules. When the notice of this arbitration was sent to respondent, respondent took objections that the reference was barred by limitation under Chapter II of Rules of NSEIL. Respondent also raised issue of territorial jurisdiction of the arbitrator at New Delhi. The learned Arbitrator framed two issues, one about the territorial jurisdiction and the other about limitation. The issue of territorial jurisdiction was answered in favour of the petitioner, however, the issue of limitation was answered against petitioner and the learned Arbitrator observed that Bye-Laws (2) and (3) of National Stock Exchange, under which reference was made provide for raising a dispute within six months from the date of such arising claim or dispute. The Bye-laws, however, also provides that the time taken for conciliation proceedings, if any, initiated and continued as per the provisions of the Act and the time taken by relevant authorities to administratively resolve the claims/ disputes is excluded for the purpose of determining the period of six months. The petitioner contended that in view of the bye-laws, the entire period for which he has been corresponding with respondent and he had made complaint to SEBI and the SEBI had been administratively dealing with the disputes, should have been excluded by the learned Arbitrator.