PORECHA GLOBAL SECURITIES PVT LTD Vs. BINA SAHNI

JUDGEMENT

(1.) THIS is a Petition for setting aside a purported award dated 21.3.2001 of the Appellate Bench and a purported award dated 11.10.2000 made by the Arbitral Tribunal. I use the term 'purported' advisedly for I have come to the conclusion that the decisions are not awards either under the Arbitration and Conciliation Act, 1996 or the arbitration agreement between the parties.

(2.) THE Petitioner is a member of The Mumbai Stock Exchange and carries on business as a share and stock broker. The Assistant Commissioner of Gelatine Products Ltd. standing in the name of the Respondent and to deposit the sale proceeds with the Income Tax Department after deducting the brokerage and other expenses. The Petitioner sold 1,02,000 shares at an average rate of Rs.43.18 per share realizing a net amount of Rs.44,69,098/- and requested the company to effect the transfer of the shares in favour of the transferees. The company however refused to register the transfer on the ground that the Respondent had undertaken to I.C.I.C.I. not to transfer the promoters shares. The shares were therefore returned and constituted a bad delivery. The Petitioner informed the Income Tax Authorities of the same. The BSE informed the members of the non-transferability of the Respondent's shares and directed them to close out the transaction in respect of the Respondent's shares. Thereafter 90,200 of the said shares were received back as bad delivery. In accordance with the directions of the BSE, the Petitioner closed out the transaction in respect of all the shares including 11,800 shares still to be received back on account of the bad delivery. This procedure was completed by June, 1996. The Petitioner deposited the sale proceeds with the Income Tax Department.

(3.) AGGRIEVED by the directions of the IGRC, the Petitioner filed a reference before the Arbitral Tribunal. A majority of two out of three members of the Arbitral Tribunal by their purported award dated 11.10.2000, after dealing with the decision of the IGRC, dismissed the Petitioner's application and stated 'Award accordingly Reference closed'. In other words all that the Arbitral Tribunal did was to dismiss the Petitioner' reference which in turn challenged the decision of the IGRC. The Petitioner's reference to the Arbitral Tribunal was only with reference to the decision of the IGRC. It was not an independent reference for the adjudication of a claim in accordance with the arbitral procedure provided in the Rules, Bye-laws and Regulations of The Stock Exchange.