1. By this petition, the Petitioner seeks to challenge the Award passed by the Sole Arbitrator appointed under the byelaws, rules and regulations of the National Stock Exchange of India Limited.

2. The Petitioner is a member of National Stock Exchange and Bombay Stock Exchange and is a stock broker. Respondent No.1 is a constituent registered with the Petitioner. Respondent No.2 is a Sub-Broker affiliated to Petitioner and registered with the Securities and Exchange Board of India Act, 1992 – SEBI. The Respondent No.1 is a resident of village Saikheda, taluka Niphad, District Nashik. He runs a medical shop in the village.

3. On 28 December 2006, Respondent No.1 approached the Petitioner for opening a Trading account. A Member Client Agreement and other documents were executed between the parties. It is a case of the Petitioner that the Respondent registered himself as an On-line client of the Petitioner and voluntarily had opted for digital mode of communication. On 20 May 2007 there were certain transactions in the account of Respondent No.1. According to the Petitioner, the Petitioner furnished a Contract Note for the transaction executed on 28 May 2007. On 23 June 2009, the Respondent No.1 filed a complaint with the Investor Grievance Redressal Cell – IGRC of National Stock Exchange which was disposed of on 12 January 2010. On 19 April 2010, the Respondent No.1 filed Statement of Claim before the Arbitrator who was appointed as per rules and bye-laws of National Stock Exchange. The Petitioner filed it's reply and both the parties filed their Written Submissions. By Award dated 18 August 2010, the Sole Arbitrator directed the Petitioner and the Respondent No.2 to pay an amount of Rs.4,13,867/- along with interest at the rate of 12 % p.a. from 1 July 2007. The Petitioner filed an appeal before the Appeal bench of National Stock Exchange which was disposed of as not maintainable. Thereafter the present petition under Section 34 has been filed.

4. The learned Arbitrator came to the conclusion that the claim filed by the Respondent No.1 is within limitation. The learned Arbitrator also held that fraud was played upon the Respondent No.1 in as much as he was kept in the dark about the transactions routed through the account of Respondent No.1 without authority of Respondent No.1. The learned Arbitrator held that from the facts on record it was clear that the Respondent No.1 was not aware about the transactions carried through his account. The learned Arbitrator accordingly proceeded to pass the award which is impugned in the present petition.

5. The learned counsel for the Petitioner submitted that the claim of the Respondent No.1 was not within limitation and the Circular dated 2 December 2009 by SEBI relied upon by the Arbitrator was not applicable. He submitted that considering the starting point of limitation as 17 March 2009 is incorrect and 1 June 2008 ought to have been taken as starting period of limitation. On merits he submitted that the Respondent No.1 had executed an Agreement for on-line transaction and he was supplied the Security Token Key and had also carried out transactions through that account. The learned counsel submitted that by executing an Agreement and acting upon it Respondent No.1 had agreed that he will receive communications in digital form. He further contended that the findings recorded by the learned Arbitrator are not borne out by the facts in that regard and the Arbitrator has based its findings on pure conjectures. He submitted that the findings regarding the Respondent No.1 not possessing a computer are not relevant as the Respondent No.1 had voluntarily agreed to enter into a transaction of on-line trading. He submitted that the Award, being contrary to the material on record and based on conjectures should be set aside.

6. The learned counsel for the Respondent No.1 submitted that Respondent No.1 had not opted for accepting communications in digital form as all the communications inc