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TMI Blog2012 (10) TMI 1198X X X X Extracts X X X X X X X X Extracts X X X X ..... counter claim made by the respondent partly. Respondent has challenged the award rejecting part of its counter claim. 2. Some of the relevant facts for the purpose of deciding the issues raised in the present proceedings are as under : The Petitioner is engaged in the business of trading in shares, insurance, bonds, mutual funds and the like and was associated with the respondent since 20th January, 2007 as a sub broker. The respondent is a registered broker and member of the Bombay Stock Exchange limited (For short BSE ). According to the petitioner, petitioner received part of its share of the brokerage from the respondent on and from January, 2007 initially on sharing basis and thereafter on a base brokerage model basis. According to petitioner, the respondents did not pay the full brokerage due to petitioner. It is petitioner's case that no brokerage had been paid by the respondent to the petitioner after January, 2008 and on 12th September, 2008, the trading terminal and back office software provided to the petitioner by the respondent was illegally blocked by the respondent. 3. On 15th September, 2008, the petitioner issued notice to the respondent to reestablis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 13th August, 2010, the respondent submitted CD containing various details with respect to transactions effected on BSE by the petitioner. According to petitioner, the details submitted were vague. The respondent did not furnish the details of transactions executed on NSE. On 16th November, 2010 the arbitral tribunal recorded minutes of the meeting held. It was recorded that the respondent had sent CD containing the contract notes of the BSE transactions. The petitioner had not amended the statement of claim though were directed to amend within one week of the bifurcation being given by the respondent. The arbitral tribunal observed that sufficient indulgence had been given to the petitioner and were not inclined to grant any further time to amend the statement of claim. 9. On 25th November, 2010, the petitioner filed another application before the arbitral tribunal seeking directions against the respondent to furnish necessary details with respect to the transactions allegedly conducted on BSE and NSE. According to petitioner, on 30th November, 2010 the arbitral tribunal did not consider the said application dated 25th November, 2010, but proceeded to hear the matter and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nconscionable, unreasonable, against the principles of equity and justice and is in conflict with public policy of India. (c) The respondent filed consent terms in the arbitration proceedings between the respondent and United Capital behind the back and without the knowledge of the petitioner in respect of M/s. Jani, Cancey Richards. The respondent invoked arbitration and obtained the award its favour. The respondents without taking the petitioner into confidence entered into settlement for lower sum in full and final settlement by invoking indemnity which resulted in prejudicing the petitioner's right/remedy against M/s. United Capital Limited and M/s. Jani, Clancey Richards. The award is contrary to law of indemnity under section 124 and 125 of Indian Contact Act and is thus against the public policy of India. (d) The arbitral tribunal as well as appellate bench did not decide the application dated 25th November, 2010 filed by the petitioner for bifurcation of particulars of BSE and NSE and thus denied the petitioner of its right to challenge the same in appeal and or to lead evidence to prove its claim. The application made by the petitioner was for material docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ways (2011) 332 ITR 253 (Bom) (10) State Bank of Saurashtra Vs. Ashit Shipping Services (P) Ltd. (2002) 4 SCC 736 (11) Rajendar Singh Verma Vs. Lieuenant Governor (NCT of Delhi) and Ors. (2011) 10 SCC 1 15. On the other hand, the learned senior counsel for the respondent submits as under:- (a) The award made by the arbitral tribunal as well as appellate bench recorded detailed reasons on all issues and are in accordance with section 36(3) of the Act as well as byelaw 255(2) of BSE. (b) The respondent had produced all the BSE contract notes which constitute primary evidence. None of these contract notes submitted by the respondents were ever disputed or denied. The Petitioner's claim was for brokerage earned from the very same contracts. The respondent proved its counter claim. Though the respondent had furnished all the documents including contract notes and C.D., as directed by the arbitral tribunal and opportunity was repeatedly given to the petitioner to amend its statement of claim, the petitioner did not bother to amend. The claims made by the petitioner were thus totally vague, without particulars and proof and had been rightly rejected by the arbitral trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent for furnishing details to prove the claim of the petitioner. Though the respondents were not bound to furnish any such information to petitioner, but had provided all cooperation and furnished all relevant documents to the petitioner. (j) Under byelaw 218(a) and 218(e) and (f), it was the liability of the petitioner who was sharing brokerage, to reimburse the respondent the payment not effected by the clients introduced by the petitioner. The respondent was entitled to appropriate the loss suffered by the respondent due to such non recovery from the clients introduced by the petitioner against the brokerage payable if any to the petitioner. The respondents thus had not committed any breach of any such byelaws and were fully justified in making the claim for recovery of the payments not made by the clients introduced by the petitioner. (k) The contract note executed by the respondent categorically record agreement that such contracts were subject to rules, byelaws and regulations. Byelaw 192 provides that all contracts between the parties are subject to byelaws. The total brokerage on each transaction was already provided in the contract note. The share percentage of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the same was barred by limitation. The arbitral tribunal rejected part of the counter claim in the sum of ₹ 11,30,177/- on the ground of limitation. The respondent had restricted its counter claim to the extent of ₹ 55,98,050/- as against the original claim of ₹ 1,18,22,303/-. The arbitral tribunal however rejected the counter claim to the extent of ₹ 30,15,888/- and allowed to the extent of ₹ 25,82,162/- with interest. The arbitral tribunal allowed the said claim in respect of four clients introduced by the petitioner out of six clients. The arbitral tribunal placed reliance upon byelaw 218(d) and 218 (f). The arbitral tribunal after recording the reasons allowed the counter claim partly. From the perusal of the award declared by the appellate bench, it is clear that except plea of limitation raised by the petitioner in so far as the counter claim is concerned, no other submissions were advanced. The submissions of the petitioner have been summarised by the arbitral appellate bench in the impugned award. While allowing the appeal filed by the respondent and directing the petitioner to pay a sum of ₹ 30,15,888/- with interest which claim was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed.- A contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person, is called a contract of indemnity . Illustration A contracts to indemnify B against the consequences of any proceedings which C may take against B in respect of a certain sum of 200 rupees. This is a contract of indemnity. 125. Rights of indemnity-holder when sued.-The promisee in a contract of indemnity, acting within the scope of his authority, is entitled to recover from the promisor- (1) all damages which he may be compelled to pay in any suit in respect of any matter to which the promise to indemnify applies; (2) all costs which he may be compelled to pay in any such suit if, in bringing or defending it, he did not contravene the orders of the promisor, and acted as it would have been prudent for him to act in the absence of any contract of indemnity, or if the promisor authorized him to bring or defend the suit; (3) all sums which he may have paid under the terms of any compromise of any such suit, if the compromise was not contrary to the orders of the promisor, and was one which it would have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate bench and thus cannot be allowed to raise this plea for the first time across the bar. The records produced by both the parties indicates that no such issue was raised before the arbitral tribunal or before the appellate bench. In my view, this plea cannot be allowed to be raised for the first time in this court. Even otherwise, bylaw framed by the Bombay Stock Exchange are statutory in nature. The agreement entered into between the parties of contract notes issued by the respondent also record that all transactions were subject to the byelaw of the BSE. The claim was filed by the petitioner before the arbitral tribunal was under byelaw of BSE. The Learned senior counsel appearing for the respondent rightly placed reliance upon the judgment of this court in case of Stock Exchange Mumbai Vs. Vinay Bubna (supra). Paragraphs 29 and 30 of the judgment in case of Stock Exchange Mumbai (supra) reads thus:- 29. Aforesaid decision has thus held that the phrase under any enactment includes bye-laws, rules, regulations, ordinances, statutes etc. From the aforesaid decision it would be clear that the word enactment would mean and include bye-laws, framed under an Act. It would, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the earlier application which was already decided by the arbitral tribunal and the directions were already complied with by the respondent. The petitioner has also admitted in its pleading at page 155 of the compilation that even the said application dated 25th November, 2010 filed by the petitioner was rejected by the appellate tribunal. In my view, thus, there is no merit in the submissions made by the petitioner that the said application dated 25th November, 2010 was not decided by the arbitral tribunal or by the appellate bench. 26. The next submission of the petitioner is that both the tribunals failed to appreciate that the TDS certificates issued by the respondent indicated acknowledgment of liability by the respondent to pay to the petitioner. The learned counsel appearing for the petitioner placed reliance on the judgment of this court in case of Commissioner of Income Tax Vs. Qatar Airways. The learned counsel made an attempt to distinguish the judgment of this court in the case of S.P. Brothers Vs. Biren Ramesh Kadakia. The relevant portion of paragraph (8) of the judgment of S.P. Brothers (supra) reads thus supra) reads thus:- 8. ... The issuance of TDS ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in this case does not amount to any acknowledgment of liability by the respondent in favour of the petitioner. The arbitral tribunal as well as the appellate bench were thus right in rejecting the submission made by the petitioner while refusing to consider the TDS certificate as the acknowledgment of liability. The TDS certificate issued by the respondent in this case was common in respect of the transaction held between the petitioner and the respondent on BSE as well as NSE. 28. The record produced by the parties indicates that the respondent had produced all the contract notes of BSE showing the transaction between the petitioner and the respondent which constitutes primarily evidence. The petitioner had never disputed the contents of the contract notes produced by the respondent. The petitioner had claimed brokerage based on the very same contract notes. The petitioner could not produce any proof to show the percentage of brokerage agreed upon between the parties. Though enough opportunity was given by the arbitral tribunal as well as the bench, the petitioner did not amend its claim and the same was totally vague, without particulars and proof and thus was rightly reject ..... X X X X Extracts X X X X X X X X Extracts X X X X
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