2012 (10) TMI 1198 - HC - Indian Laws

Summary

Issues Involved:
1. Validity and reasoning of the arbitral tribunal's award.
2. Burden of proof and evidence for the counterclaim.
3. Application of byelaws versus the Indian Contract Act.
4. Consideration of TDS certificates as acknowledgment of liability.
5. Procedural fairness regarding the application for bifurcation of particulars.

Summary:

1. Validity and Reasoning of the Arbitral Tribunal's Award:
The petitioner challenged the award u/s 34 of the Arbitration and Conciliation Act, 1996, arguing that the arbitral tribunal and appellate tribunal failed to provide reasons for allowing the respondent's counterclaim, violating section 31(3) of the Act and byelaw 255(2) of the BSE. The court found that both tribunals had recorded sufficient reasons in their awards, thus rejecting the petitioner's claim of lack of reasoning.

2. Burden of Proof and Evidence for the Counterclaim:
The petitioner argued that the respondent failed to discharge its burden of proof for the counterclaim, as no evidence was presented to prove the loss sustained. The court noted that the respondent had provided documentary evidence and contract notes, which the petitioner did not dispute. The arbitral tribunal had allowed the counterclaim based on byelaw 218(d) and 218(f), and the appellate bench upheld this decision. The court found no merit in the petitioner's submission and upheld the findings of the tribunals.

3. Application of Byelaws versus the Indian Contract Act:
The petitioner contended that byelaws 218(d) and 218(f) of the BSE were inconsistent with sections 124 and 125 of the Indian Contract Act and should not have been applied. The court held that the byelaws of the BSE are statutory in nature and would prevail over the provisions of the Contract Act. The petitioner had not raised this issue before the arbitral tribunal or the appellate bench, and thus could not raise it for the first time in this court. The court upheld the application of the byelaws by the tribunals.

4. Consideration of TDS Certificates as Acknowledgment of Liability:
The petitioner argued that TDS certificates issued by the respondent indicated acknowledgment of liability. The court referred to the judgment in S.P. Brothers Vs. Biren Ramesh Kadakia, which held that TDS certificates do not amount to acknowledgment of liability within the meaning of section 25 of the Indian Evidence Act. The court agreed with the tribunals' rejection of the TDS certificates as acknowledgment of liability.

5. Procedural Fairness Regarding the Application for Bifurcation of Particulars:
The petitioner claimed that the tribunals did not decide the application dated 25th November, 2010, seeking bifurcation of particulars of BSE and NSE transactions. The court found that this application was a repetition of an earlier application, which had already been decided, and the directions had been complied with by the respondent. The court held that there was no merit in the petitioner's submission regarding procedural unfairness.

Conclusion:
The court dismissed the arbitration petition, upholding the awards of the arbitral tribunal and the appellate bench, and found no merit in the petitioner's submissions. There was no order as to costs.