HARINARAYAN BAJAJ Vs. MADHUKAR SHETH

JUDGEMENT

(1.) This is an appeal against the order and judgment of the learned single Judge, dismissing the appellant's petition under section 34 of the Arbitration & Conciliation Act, 1996 to set aside an award passed by the arbitral tribunal dated 07.11.2003. The award directed the appellant to pay the respondent a sum of Rs.1,58,39,459=87 but refused to grant interest or costs.

(2.) The appellant entered into various transactions in respect of shares listed on the Bombay Stock Exchange (BSE). The respondent was one of the appellant's brokers. The parties had entered into a Member Client Agreement dated 31.08.2000. Clauses 1, 6 and 7 thereof read as under :-

(3.) The respondent invoked arbitration under the rules, byelaws and regulations of the BSE. The respondent filed a statement of claim seeking the amounts awarded together with interest at 18% and an amount of Rs.2.00 crores as damages. The claim was on the basis of the amount due at the foot of the account maintained by the respondent in respect of the appellant. The parties had entered into purchase, carry forward and sale transactions. On account of the appellant's alleged default, the respondent had also sought to square off certain transactions. The respondent's statement of case contains the following averments. The amounts claimed were in respect of settlement Nos.A-50, A-51 and A-52 towards the appellant's purchases and margin after giving him credit for the amounts deposited by him. The appellant's account was regularized upto statement No.A-49. The prices of the shares dealt in by the appellant crashed resulting in huge pay-in being required by the appellant. The appellant's default resulted in the respondent's default in pay in to the BSE. The appellant's cheques were dishonoured. Proceedings under section 138 of the Negotiable Instruments Act had been filed by the respondent. The respondent relied upon the copies of the appellant's contracts for the period 12.03.2001 to 23.03.2001.