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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
R.D. DHANUKA, V.G. BISHT, JJ.
M/s. Satish K. Narang and Co. – Appellant
Versus
Jamnadas Morarje Secs. Ltd. – Respondent
Appeal No. 989 of 2005, Arbitration Petition No. 36 of 2004
Decided On : 04-05-2021
Arbitration and Conciliation Act, 1996 - Sections 34, 37 and 2(4) - Bombay Stock Exchange - Application for setting aside arbitral award - Reconciliation of statement of accounts - Appellant is an investor whereas respondent is a corporate member of - Bombay Stock Exchange Limited and is carrying on business as share, stock and finance broker - Shares - Whether any period of limitation was applicable to the transactions in question prior to 29th August, 1998 or thereafter in view of Section 2(4) read with Section 43 of Act, 1996 - Whether any vested rights had accrued in favour of appellant by virtue of Section 2(4) of Act even though no arbitral proceedings were filed by appellant prior to 29th August, 1998 - If amended provision of Bye-law 252(2) of Bye-laws inserted on 29th August, 1998 applies to transactions in question with effect from date of such amendment, whether appellant had filed arbitral proceedings within period of three years from date of such amendment - Held, Court not inclined to accept submission of counsel for appellant that by virtue of Section 2(4) r/w S.43 of Act, 1996, there would be no period of limitation even after amendment to Bye-Law 252(2) framed by Stock Exchange.
Limitation Act, 1963 - Section 5 and 30 - Case of appellant that during period between 17th September, 1996 and 18th October, 1998, there was exchange of correspondence between parties. On 29th August, 1998 Bye-law 252(2) was amended providing that provisions of Limitation Act, 1963 would be applicable - What is effect of amendment to Bye-law 252(2) amended by Stock Exchange, Mumbai providing that provisions of Limitation Act, 1963 would be applicable - Held, Limitation once starts does not stop unless there is acknowledgment of liability or there is part payment and that also only if liability is acknowledged or part payment is made within period of limitation.
Finding of the Court:
Section 34 of Arbitration and Conciliation Act, 1996 rightly did not interfere with findings of facts and did not re-appreciate the evidence. Appellant did not make out any case for interference with award rendered by learned Single Judge. Scope of Section 37 of Act, 1996 is very limited. Appellant cannot expand scope of Section 37 of the Arbitration and Conciliation Act, 1996 by advancing various arguments which are not advanced before learned Single Judge while arguing application under Section 34 of Arbitration and Conciliation Act, 1996. Court do not find any infirmity in impugned award rendered by arbitral Tribunal and also in impugned judgment rendered by the learned Single Judge.
Result: Appeal dismissed.
JUDGMENT :
R.D. DHANUKA, J.
1. By this appeal filed under section 37 of the Arbitration and Conciliation Act, 1996 (for short ‘Arbitration Act’) the appellant has impugned the judgment dated 2nd May, 2005 passed by the learned Single Judge dismissing the arbitration petition filed by the appellant under section 34 of the Arbitration and Conciliation Act, 1996. Some of the relevant facts for the purpose of deciding this appeal are as under.
2. The appellant was the original petitioner/claimant before the learned Single Judge and also before the arbitral tribunal. The respondent herein was the original respondent before the learned Single Judge as well as in the arbitral proceedings. It was the case of the appellant that the appellant is an investor whereas the respondent is a corporate member of the Bombay Stock Exchange Limited and is carrying on business as share, stock and finance broker.
3. On 3rd August, 1994, the appellant purchased 1000 shares of Prakash Tubes Ltd. through the respondent. On 27th August, 1994, 200 shares of the said company were returned to the respondent as the same were returned by the said company Prakash Tubes Ltd. on the ground that the signature differed. On 12th August, 1995, 100 shares were returned by the respondent after rectification along with 75 bonus shares on the said 100 shares to the appellant. It is the case of the appellant that the respondent was right to return 100 shares plus 75 bonus shares of the said Prakash Tubes Ltd. to the appellant.
4. It is the case of the appellant that on 4th January, 1995, the appellant purchased 100 shares of Brook Bond Ltd. through the respondent. On 23rd January, 1995, the respondent delivered 50 shares of the said Brook Bond Ltd. to the appellant and did not deliver the balance 50 shares of the said company. It is the case of the appellant that on 4th May, 1994, the appellant purchased 1,00,000 shares of Torrent Gujarat Bio Tech Ltd. through the respondent. On 24th November, 1994, the appellant returned 100 shares to the respondent with objection memo of the said company Torrent Gujarat Bio Tech Ltd. The respondent however did not return those 100 shares after rectification of the objection to the appellant.
5. It is the case of the appellant that on 30th March, 1995, though the respondent had sold 100 shares of Atlantic Spinning on behalf of the appellant, the respondent did not give credit of the sale proceeds of those shares to the appellant. The respondent sent a statement of account of the appellant for the period between 27th March, 1995 and 11th August, 1995. According to the appellant, the statement of account showed the difference of Rs. 3,100/- in settlement nos. 5527 and 7453. The last transaction between the appellant and the respondent was on 6th December, 1995. On 29th May, 1996, the respondent sent a letter to the appellant for reconciliation of the statement of accounts. It is the case of the appellant that on 25th June, 1996, the appellant forwarded his reconciliation statement to the respondent. According to the appellant, during the period between 17th September, 1996 and 14th October, 1998, the appellant sent various reminders to the respondent for payment due to the appellant. The respondent however did not make any payment due to the appellant.
6. On 26th March, 1998, the SEBI called upon the Bombay Stock Exchange to amend its bye laws to include the applicability of the Limitation Act, 1963. On 31st March, 1998, the Governing Board of the Bombay Stock Exchange passed a resolution thereby adopting the instructions of the SEBI and resolved to amend the bye-laws. On 29th August, 1998, the bye-laws of the Bombay Stock Exchange were amended. The provisions with respect to the limitation were added by amending the bye law no. 252. The amendment were two fold i.e. claim against defaulter members and the claim between the members and non-members.
7. It is the case of the respondent that as far as the claim against the defaulters are concerned,
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