The Arbitral Tribunal cannot grant liberty to file fresh claims after withdrawal, as it exceeds its jurisdiction and renders it functus officio.

JUDGMENT :-

Dr. Neela Gokhale, J.

1) Rule. Rule made returnable forthwith and with consent of the parties, the Petitions are taken up for final hearing forthwith.

2) The Petitioner assails order dated 18^th April 2024 passed by the Arbitral Tribunal in Arbitration Case Nos.3 to 9 of 2023, wherein claims filed by individual Respondents in all the Petitions herein, against the present Petitioner were ‘dismissed as withdrawn, with liberty to file afresh’. The issue in all the Writ Petitions is identical and hence, all the Petitions are being disposed off with this common judgment and order with Writ Petition (L) No.15131 of 2024 being taken as the lead Petition.

3) The Petitioner and the Respondents were parties in their respective disputes referred to arbitration. The following questions arise for determination:

(a) Whether the impugned order warrants interference by this Court, in the exercise of its jurisdiction under Article 226 of the Constitution of India?

(b) If yes, whether the Arbitral Tribunal, in exercise of its powers under Section 19(3) of the Arbitration & Conciliation Act, 1996 ('the Act') can permit withdrawal of a claim with liberty to file a fresh claim?

4) The brief facts leading to the present Petitions are as follows.

The Petitioner is a company registered under the Companies Act, 1956 and is a Depository, an organisation that facilitates the holding of securities in an electronic form and also records the transfer of ownership of securities through beneficial owner accounts held with its depository participants, being entities registered with Depositories. The Respondent/s-Claimant/s are individuals that claim to be beneficial owners of securities and holders of dematerialized accounts registered with the Petitioner.

5) The individual Respondents were all claimants before the Arbitral Tribunal against the Petitioner herein. An agreement was executed between the Petitioner, in the lead Petition i.e. Ketan Shah and Anugrah Stock & Broking Private Limited (‘Anugrah’) as a Depository Participant under the bye laws of the Petitioner. The bye laws of Petitioner/CDSL provides for reference to arbitration. In September 2009, Ketan Shah opened a trading and demat account with Anugrah (Stock Broker). Funds and securities were transferred to the broker from time to time towards margin obligations and for trades in the future options and segments. Disputes arose between the parties leading to Ketan Shah addressing a notice dated 15^th September 2023 calling upon the Petitioner to indemnify him towards loss caused to him due to negligence of the Petitioner and Anugrah along with interest thereon and other expenses incurred by Ketan Shah. By this notice, Ketan Shah invoked arbitral proceedings in terms of the arbitration clause in the agreement to be conducted under the bye laws of the Petitioner ('CDSL Bye-laws'). Thus, the arbitration proceedings commenced from 15^th September 2023.

6) Ketan Shah filed his Statement of Claim ('SOC') bearing Arbitration Case No. 3 of 2023. Claims were also filed on behalf of the other individual Respondents. The Petitioner filed its Statement of Defence ('SOD') in response to the SOC on 27^th October 2023 and a rejoinder, sur rejoinder and sur sur rejoinder were also filed by the respective parties. According to the Petitioner, oral arguments concluded in the arbitration proceedings on 12^th February 2024. Vide an e-mail dated 28^th February 2024, Post Hearing Clarifications (‘PHC’) were submitted to the Arbitral Tribunal. According to the Petitioner, for the first time in the said PHC, Ketan Shah stated that he had engaged a chartered accountant to analyze shares in his demat account resulting in possible material alterations in his claim. He sought a week’s time to place on record his CA's certificate. The Petitioner opposed the introduction of new documents. On 20^th March 2024, during the hearing of the PHC, claimant/s sought an amendment to the prayers in the SOC to include an altered claim. The app