9911796707
TMI Blog2003 (1) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... 99 the Respondent executed for and at the instance of the Petitioner transactions in shares of the Companies listed on the National Stock Exchange (NSE) from time to time. The total amount that is claimed, Rs. 31.62 lakhs, was in respect of dealings made up to August 2000. The Respondent filed before the Arbitral Tribunal, copies of its Ledger Account reflecting transactions made during the period December 1999 and March 2000 which showed a debit balance of Rs. 31.39 lakhs and an endorsement by the Petitioner recording thereon that these outstandings were "seen". Thereafter, a meeting was held between the parties at which joint minutes were drawn up on 4th June, 2000. The minutes recorded that the Petitioner had agreed to liquidate the outstandings of the Respondent by restarting business dealings with the Respondent. According to the Respondent, transactions continued until 15th August, 2000 as of which date an outstanding of Rs. 31.62 lakhs became due and payable. Thereafter, there were no further transactions with the petitioner. 4. The defence of the Petitioner to the arbitral proceedings would show that the Petitioner admitted in paragraph 14 of the reply that he had signe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorised by the Petitioner and the contention of the Petitioner that the authorisation was limited only to the Bombay Stock Exchange could not be accepted. 6. In assailing the correctness of the arbitral award, the following submissions have been urged on behalf of the Petitioner: ( i )There was no agreement between the parties to refer their dispute to arbitration; ( ii )The claim of the respondent was barred by limitation since it was not preferred within a period of six months prescribed by bye-law 3; ( iii )The statement of case did not specify any claim amount in arbitration; ( iv )There was a non-joinder of J.P. Goenka who was necessary party to the proceedings; and ( v )The defence of the Petitioner has not been duly considered. 7. Before dealing with the correctness of the challenge that has been preferred by the Petitioner, it would be necessary to reiterate that insofar as a challenge to an arbitral award under the Arbitration and Conciliation Act, 1996 is concerned, a Division Bench of this Court consisting of Mr. Justice, B.N. Sri Krishna (as the Learned Judge then was) and Mr. Justice S.A. Bobde held in Vijaya Bank v. Maker Development Services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Single Judge had another view of the matter. That is not the jurisdiction which is vested while looking into the question of the legality or validity of the award when it is challenged under section 34 of the Act. Similarly as far as the question of public policy is concerned, by linking it with natural justice and thereafter linking it to law of limitation, the learned Judge has found fault with the majority judgment. This very approach has been criticised by a Division Bench of this Court in the case of Vijaya Bank ( supra ). In that judgment, the Division Bench clearly observed that the expression "public policy" cannot mean contravention of law simpliciter. That being the judgment rendered by a Division Bench, we are bound by the same and we have no reason to differ therefrom." 8. The challenge to the arbitral award can now be considered in the context of these binding principles. Insofar as the ground that there was no arbitration agreement between the parties is concerned, that contention is without any merit whatsoever. In dealing with this submission, it would be necessary to notice at the outset that the Ledger Account ending on 31st March, 2000 and the Minutes of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber shall in all cases be deemed to be made subject to Bye-laws, Rules and Regulations of the Exchange. Bye-law 1 provided that this shall be a part of the terms and conditions of all contracts. Bye-law 1 of Chapter XI provides that all claims, differences or disputes between Trading Members and between Trading Members and constituents arising out of or in relation to dealings, contracts and transactions made subject to the Bye-laws, Rules and Regulations of the Exchange shall be submitted to arbitration. The Learned Single Judge then noted that Bye-law 1 of Chapter XI provides that the Arbitrator shall decide all questions including the question as to whether dealings, trades and transactions have in fact, been entered into or not under the Bye-laws and Regulations. The Learned Judge held that contract notes are framed under the Regulations of the Stock Exchange and these Regulations are made under a special law, namely, the Securities Contracts (Regulation) Act, 1956. Under section 9 of the Securities Contracts (Regulation) Act, 1956, a recognised Stock Exchange is entitled to make Bye-laws inter alia for the regulation and control of contracts and to provide for terms and con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w 226( c ) provides that in cases of all claims (whether admitted or not), differences and disputes arising out of or in relation to all contracts referred to in sub-clause ( a ) the parties concerned shall be deemed to have agreed and acknowledged that such contracts have been entered into and are to be performed within the City of Bombay, that they are subject to Arbitration in accordance with the provisions relating to Arbitration contained in these Bye-laws and Regulations. Thus Bye-laws 226(a) and 226(c) make it very clear that all such Contracts or dealings, irrespective of the fact that there may be no contract notes, are deemed to be subject to these Rules, Bye-laws and Regulations. It is clear that these Rules, Bye-laws and Regulations will govern such Contracts and dealings. Such contracts and dealings are also subject to Arbitration in accordance with these Rules, Bye-laws and Regulations. " [Emphasis supplied]. The Law laid down by this Court in the aforesaid two judgments of the Learned Single Judges, noted above, furnishes a clear answer to the first submission that has been urged on behalf of the Petitioner. That is, quite independent of the position that the find ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
