The Court emphasized the importance of adhering to the law of limitation and the need for findings to be based on material evidence and in accordance with public policy.

JUDGMENT - REBELLO F.I., J.:---The petitioner was the respondent and respondent No. 1 was the applicant before the arbitral tribunal. The arbitral proceedings commenced at the instance of respondent No. 1 by his application dated 7th December, 2000 which was received in the office of respondent No. 2 on 8th December, 2000. The case of respondent No. 1 was that, on the 1st day of settlement No. 42 i.e. on 20th October, 1999, the petitioner built up a huge position and purchased shares worth Rs. 1.91 crores. Respondent No. 1 came to know about this position on the evening of 20th October, 1999 whereupon they promptly contacted the petitioner and informed him about his huge position. The case of respondent No. 1 was that the petitioner assured respondent No. 1 that he would reduce the position first thing in the morning of Thursday. To doubly confirm the same, respondent No. 1 personally went to the camp office where he found that Mr. Nagori was sitting in front of the terminal doing trading. Respondent No. 1 impressed upon Mr. Nagori, the necessity to reduce the position immediately, or otherwise it could create problems for all, including the other clients of respondent No. 1. It is the case of respondent No. 1 that, at that time, he telephoned the petitioner asking him to reduce the position of the petitioner immediately. Whereupon, it is contended that the petitioner informed respondent No. 1 that the market would go up substantially. Inspite of that, market fell and margins with National Stock Exchange were consumed and all terminals of respondent No. 1 were deactivated. In these transactions, it is contended that the petitioner has suffered loss of about Rs. 37 lakhs. The petitioner sold out his position on 25th and 26th October. The petitioner promised respondent No. 1 to pay the balance amount as early as possible and ask for a week's time to complete the payments. It is the case of respondent No. 1 that Mr. Nagori also asked to transfer the credit of about Rs. 5.60 lakhs standing in his account to that of the petitioner. It is contended that out of the said dues, the petitioner paid Rs. 5 lakhs by cheque on 4th November, 1999 and another Rs. 5 lakhs on 5th November, 1999. Respondent No. 1, thereafter, contacted the petitioner on phone and by letters through the office bearer. Though the petitioner promised to pay the dues, every time, he did not do so on account of his financial position. The debit balance standing in the name of petitioner was Rs. 22,61,537.80. The amount was not forthcoming. Therefore, a letter was sent on August, 2000 which the petitioner refused to acknowledge. Reference is made to a police complaint, but that is after August, 2000, as informed at the bar.

The petitioner filed his reply in to the said complaint. The petitioner pointed out that the claim filed by respondent No. 1 was a counter blast to the application made by the petitioner with the original office of the National Stock Exchange by letter dated 3rd November, 2000. By that letter, the case of the petitioner was that respondent No. 1 was due and owing to the petitioner a sum of Rs. 12,59,180.39 ps., some shares and interest as claimed thereon. It was a specific case of the petitioner that after the end of settlement No. 41, there were no dealings with respondent No. 1. The allegations made by respondent No. 1 were denied. It was further specifically set out that Mr. Bharat Nagori never asked the applicant to transfer Rs. 5.60 lakhs to his credit to the petitioner at any point of time and/or that the petitioner had made payment of Rs. 10 lakhs as alleged by respondent No. 1. It was also specifically pleaded that the claim of respondent No. 1 was false. Respondent No. 1 never wrote any letter or sent it to the petitioner and/or the petitioner never refused to receive any letter allegedly sent by respondent No. 1. It was specifically pleaded that the application of respondent No. 1 is time barred. The petitioner, on 14th February, 2001 fil

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