SHAREKHAN LIMITED Vs. NITA THAKKAR

JUDGEMENT

(1.) The Petitioner trading member/broker of Bombay Stock Exchange Limited (for short, "BSE") has challenged under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, "the Arbitration Act" ), Arbitral Award dated 26 February 2010 passed by the Appellate Bench comprising of 5 Arbitrators against award dated 8 July 2009 passed by the Tribunal consists of 3 Arbitrators. The Appellate Bench has rejected the Appeal filed by the Petitioner Appellant which was against the grant of claim in favour of the Respondent (Original Applicant).

(2.) The Respondent has filed a statement of claim on 24.03.2009 under the BSE Rules basically claiming wrongful Delay of Paying Charges (DPC) by the Respondent. The same was resisted in every aspect by the Petitioner by its reply dated 1 June 2009. The Petitioner relied on Clause 9.2.5 of the Member Client Agreement and 1.7.5 read with Rule 252(2), 252(3) and 227(a) of the BSE bye laws. Those are as under:

(3.) Bye law 227(a) provides authorization and adjustment between joint accounts. In this case, admittedly there was no sale in this Account. But in view of adjustment letter, all accounts became joint for all the purposes. Admittedly, the parties executed the adjustment letter along with the three relatives namely Arvind Berai, Manjula Thakkar and Dipak Thakkar which authorized the Petitioner to treat the four accounts, as one. It is observed between the same parties, based upon the similar adjustment letter, though it was arising out of National Stock Exchange of India Limited (for short, "NSE") arbitration matter, that it was one account and the stock broker is entitled to adjust the accounts even selling the security. The principle so accepted by this Court have binding effect to the parties considering the similarity in the nature of adjustment letters and transactions. (Arbitration Petition No.1035/10 Manjula Arvind Thakkar v. Sharekhan Limited and Arbitration Petition No.522/10 Sharekhan Limited v. Manjula Arvind Thakkar). I have also noted that the tenure and the contents of the authorization letter are quite similar and as the bye laws permit the parties to sign such letters, it binds the parties and therefore, the learned Arbitral decision by overlooking the same, is incorrect.