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2013 Supreme(Bom) 574
High Court of Judicature at Bombay
ANOOP V. MOHTA, J.
Motilal Oswal Securities Ltd.
Versus
Uttam Chand Garg
Arbitration Petition No.351 of 2011
Decided on : 08-03-2013
For the Petitioner:A.R. Lambay i/b. M/s. Juris Matrix, Advocates.
For the Respondent: Uttamchand Garg, In person.
The court emphasized the need to consider the SEBI circulars and the change in the law of limitation, and highlighted the importance of giving both parties an opportunity to present their case.
Headnote:
Arbitration - Bombay Stock Exchange Rules and Regulations - Rule 252(2) - SEBI circulars - Limitation Act, 1963
Fact of the Case:
The petitioner, a trading member, challenged an arbitration award under the Rules, Bye-laws, and Regulations of the Bombay Stock Exchange Limited. The dispute arose from a rejected claim and counterclaim, with issues related to the timing of the reference applications and the applicability of limitation periods.
Finding of the Court:
The court set aside the impugned awards and remanded the matter for reconsideration, citing the SEBI circulars and the change in the law of limitation as reasons for the decision.
Issues: The issues revolved around the rejection of the reference applications based on delay and res judicata, as well as the applicability of SEBI circulars and the change in the law of limitation.
Ratio Decidendi: The court considered the SEBI circulars and the change in the law of limitation, and remanded the matter for reconsideration, emphasizing the need to give both parties an opportunity to present their case.
Final Decision: The impugned awards were quashed and set aside, and the matter was remanded for re-consideration on all points, with the directive for the Arbitral Tribunal to dispose of the matter expeditiously by giving opportunity to both parties.
The Petitioner-Appellant (Trading member) has challenged an Award dated 29th September, 2010, passed by the Appellate Tribunal in the matter of arbitration under Rules, Bye-laws and Regulations of Bombay Stock Exchange Limited (hereinafter referred to “BSE”) between the parties.
2. The Petitioner trading member has challenged Award dated 18th March, 2010, passed in the matter of an Arbitration Award under the Rules, Regulations and Bye-laws of the BSE, whereby the claim of the Applicant was rejected and so also the counter claim of the Respondent (constituent). The Appellant initially withdrew Reference No.195 of 2009, as recorded in the minutes dated 25th July, 2009. The counter claim was also withdrawn. The Applicant, thereafter, filed a fresh reference application on 29th September, 2009 (Reference No.420 of 2009) Lower Bench of the Arbitral Tribunal dismissed the Appeal by holding that second application in view of the earlier unconditional withdrawal without any liberty, and also it is beyond limitation in view of Bye-laws 252 (2). The Appellate Tribunal noted that the last transaction between the parties was on 7th July, 2008 and the reference was filed on 29th September, 2009. Therefore, it was beyond six months as per bye-laws 252(2) and in view of the earlier unconditional withdrawal dismissed the Appeal.
3. The second reference was moved on the basis of a alleged transaction dated 27th July, 2009. The Respondent disputed the same and thereby objected the second reference filed by the Applicant and the Petitioner. The last admitted transaction was carried out on 14th February, 2008. However, earlier reference was withdrawn on 23rd July, 2009. The second reference was filed on 29th September, 2009, based upon the last transaction as recorded.
4. Admittedly, the impugned award was passed on 18th March, 2010. The Appeal was filed on 15th April, 2010, by the Appellate Authority and it was dismissed on 29th September, 2010. The Arbitration Petition lodged on 7th October, 2010/20th October, 2010. This Court issued notice on 19th January, 2011 and admitted the matter on 7th July, 2011. It was adjourned for time to time for reply and hearing. The other petitions filed by the Respondent (Constituent) against the order passed by the Arbitral Tribunal and under the Bombay Stock Exchange, regularization was pending. Therefore, ordered to be heard together. Heard both the parties finally, by consent.
5. The learned counsel appearing for the Petitioner apart from other submissions read and referred Rules and Regulations and specifically Rule 252 (2) of the Bye-laws and contended that the very rejection of the Petition on the ground of delay of six months need to be reconsidered in view of the SEBI circulars referred in Arbitration Petition No.609 of 2009 by this Court (Corum: Anoop V. Mohta, J.), and the matter is remanded back for reconsideration on all points.
6. In India Infoline Limited Vs. Shyamlal Daulatram Vachhani (2012(3) All MR 206). I have already dealt with the facet and aspect of such limitation issue in the following words:-
“3 By this, the SEBI has intended to change the mechanism of settling the dispute instead of six months to three years by extending the provisions of Limitation Act, 1963, which are available in normal transactions. The relevant clause is as under:-
“i. Where three years have not yet elapsed and the parties have not filed for arbitration with the stock exchange, or
ii. Where the arbitration application was filed but was rejected solely on the ground of delay in filing within the earlier limitation period of six months; and three years have not yet elapsed;”
4. Therefore, taking over all view of the matter and if the provisions of Limitation Act are extended, the learned Arbitral Tribunal has to reconsider this facet by giving the opportunity to both the parties.”
“The Arbitral Tribunal once held and disposed of the award on the basis of limitation, there is no question of deciding th
