ACTAL Vs. INDIA INFOLINE LTD.

JUDGEMENT

(1.) THE Learned Single Judge dismissed a petition that was filed by the Appellant under Section 34 of the Arbitration and Conciliation Act, 1996 to challenge an award of the appellate tribunal constituted by the Bombay Stock Exchange.

(2.) THE Respondent is registered as a broker and member of the Bombay Stock Exchange. The Appellant was a person sharing brokerage with the Respondent, initially on a sharing basis and thereafter on a base brokerage model basis. The Appellant filed a claim before the arbitral tribunal constituted by the Bombay Stock Exchange for an amount of Rs.59.19 lacs towards arrears of the share of brokerage, Rs.14.37 lacs towards incentives earned on interest charged to non-banking financial companies and interest of Rs.21.48 lacs on brokerage and incentive claimed to be due and payable. The Respondent raised a counter claim. During the course of the proceedings, the counter claim was restricted to an amount of Rs.55.98 lacs. The arbitral tribunal rejected the claim of the Appellant and allowed the counter claim of the Respondent in part. The counter claim of the Respondent was allowed to the extent of Rs.25.82 lacs, while the balance of the claim came to be rejected. Both the Appellant and the Respondent filed appeals before the appellate tribunal. The appellate tribunal confirmed the rejection of the claim filed by the Appellant. In the Appeal filed by the Respondent, the entire counter claim came to be allowed.

(3.) FOR convenience of reference, we would address the issue of the counter claim of the Respondent first since that is the principal focus of the arguments of the learned counsel in appeal. The arbitral tribunal in its award dated 14 March 2011 recorded that the Respondent had restricted its counter claim to the extent of an amount of Rs.55.98 lacs. This claim represented amounts due in respect of liabilities which were incurred by the Respondent towards payments which became due and payable on account of transactions executed on behalf of six parties. In respect of these six parties, it is common ground that the transaction was executed by the Appellant. Since there was a failure on the part of the six parties to pay the outstanding dues, the Respondent sought to assert an entitlement under bye-law 218 under which an indemnity is furnished by the person sharing brokerage (the Appellant) to the member of the Stock Exchange viz. the Respondent. Bye-law 218(d) provides as follows :