MONEY NAIR Vs. SHAREKHAN LIMITED

JUDGEMENT

(1.) BY this Petition filed under Section 34 of the Arbitration And Conciliation Act, 1996 (hereinafter referred to as 'the 1996 Act), the Petitioner/original Respondent impugns the Award dated 21.05.2009 passed by the sole Arbitrator under the Bye -laws, Rules and Regulations of the National Stock Exchange of India Limited (NSE) by the sole Arbitrator. The operative part of the impugned Award reads as follows:

(2.) THE case of the Respondent/original Applicant before the Arbitral Tribunal was that it was a trading member of the NSE and the Petitioner/original Respondent was their constituent. The Petitioner executed Member -Client Agreement on 04.04.2007 with the Respondent and opened a trading account with them and was allotted Client Code No. 140027. The Petitioner started trading operations in this account with the Respondent. The Respondent had issued contract notes and bills as and when trades were executed by them as per instructions of the Petitioner and the same were dispatched to the Petitioner on her email id which was given by the Petitioner to the Respondent while opening the account. The Petitioner traded in cash and derivative segment of NSE (and BSE). The Respondent had annexed a copy of the Log Report as proof of dispatch as also the Ledger to the Statement of Claim. The Petitioner did not make payment for the positions taken by her. Therefore, the Respondent requested the Petitioner to clear her debit balance. However, in spite of reminders and follow up, the Petitioner did not clear her dues. The Petitioner had issued two cheques of Rs. 5,00,000/ - each were dishonoured on presentation. The Respondent had sent notice for payment of the amount due as well as notice under Section 138 of the Negotiable Instruments Act in respect of dishonour of the cheques. In these circumstances, the Arbitration Application came to be filed by the Respondent on 03.07.2008 claiming a sum of Rs. 24,42,649.49 paise.

(3.) THE controversy involved in the present proceedings essentially is whether in view of the margin requirements including of mark to market losses, the Respondent was justified in squaring off the open positions held by the Petitioner. After hearing learned Counsel for the parties, the learned Arbitrator held as under: