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2021 Supreme(Del) 592
IN THE HIGH COURT OF DELHI AT NEW DELHI
C. Hari Shankar, J.
Augmont Gold Pvt. Ltd. - Appellant
Versus
ONE97 Communication Limited - Respondent
ARB. A. (COMM) 30 of 2021
Decided On : 27-09-2021
Advocate Appeared:
For the Appellant : Mr. Dayan Krishnan, Sr. Adv. with Mr. Pankaj Bhagat, Adv.
For the Respondent: Mr. Sandeep Sethi, Sr. Adv. with Mr. Niraj Singh, Adv.
Point of Law : Liability to pay customers who chose to exercise their option of redemption or in respect of whose gold, Augmont chose to exercise its option of re-purchase, to pay the customers, cannot be gainsaid.
Headnote:
Indian Evidence Act, 1872 - Section 34 –Code of Civil Procedure,1908 - Order XXXVIII Rule 5 - Arbitration and Conciliation Act, 1996 - Section 11(6) 17,37 and 9 - Dispute arises out of an agreement – Arbitration clause – Plea of fraud.
Finding of the Court : Court, given up its right to plead fraud in arbitral proceedings - After order - Which, it appears, was never carried further – Court is not open, in my opinion, for Augmont to urge such a contention - Clearly, learned Arbitral Tribunal is correct in holding that Augmont had given up its right to plead fraud in arbitral proceedings - As a result thereof, it was averred that customers were able to place repeated orders for sale of same gold, resulting in remittance, by One97 to customers, of a total amount of court amount, it was asserted, was required to be remitted by Augmont to One97, by next day.- One97 alleged that, even after when glitch no longer continued, several customers had sold - Court, in exercise of its Section 37 jurisdiction, is mercifully not called upon to unravel - Court, awaiting outcome of arbitral proceedings, instead of being paid to his client - Court opinion that no case for interference with direction, to One97, to pay- Can be said to exist, subject to payment being made, not to One97 but being deposited with Registrar General of Court. - Aspect is, however, of significance in present case, given fact that learned Arbitral Tribunal has directed Augmont.
Result : Appeal Disposed of
JUDGMENT :
1. The appellant impugns order dated 24th January, 2021, passed by the learned Arbitral Tribunal in Arb. P. 303/2019.
2. For the sake of convenience, the appellant and respondent are referred to as “Augmont” and “One97”, respectively.
Facts
3. The dispute arises out of an agreement, dated 1st August, 2018, between Augmont and One97. Vide Clause 2.1 of the agreement, One97 undertook, against consideration, to host a Gold Accumulation Plan (GAP) of Augmont, over the Paytm platform owned and managed by One97. The manner in which transactions were effected, under the agreement, is perhaps best represented by the following process charts, provided with the agreement, of which Chart 1 sets out the manner in which the customer could purchase digital gold, Chart 2 sets out the manner in which the customer could redeem the gold and Chart 3 sets out the manner in which the customer could sell back the gold to Augmont, which may be reproduced thus:
CHART 1
Step Process Owner Process Action
1 Customer Customer sees the live price of gold on Paytm Platform
2 Customer Customer confirms the buy quantity of Rs 1 upwards
3 Customer Customer redirected to payment page
4 One97 Customer makes payment through preferred payment options
5 Augmont-Bullion Augmont-Bullion generated invoice details are relayed to One97 system
6 One97 One97 system generates a digital invoice on behalf of Augmont-Bullion
7 Augmont-Bullion Augmont-Bullion credits the quantity in the customer account.
CHART 2
Step Process Owner Process Action
1 Customer Customer selects ‘Get Delivery’ within Gold section of Paytm Platform and is redirected to product catalogue. Each product has its making + delivery charges indicated
2 Customer Customer selects the product
3 Customer Customer confirms delivery address
4 Customer /One97 Customer pays for making + delivery + taxes on the Paytm Platform
5 One97 One97 system tells Augmont to debit customer GAP Account balance
6 Augmont-Bullion Augmont-Bullion debits corresponding Gold from customer GAP account balance
7 One97/ Augmont-Bullion Order gets created in both One97 system and Augmont system
8 Fulfillment Augmont-Bullion processes the order and the invoice is generated
CHART 3
Step Process Owner Process Action
1 Customer Customer desirous of selling gold in the GAP Account goes to Paytm Platform
2 One97 System to check if the customer has the holding of gold in his account
3 One97/ Augmont-Bullion If yes, gold rate is blocked and system allows customer to proceed further
4 Customer Customer confirms account details and confirms the transaction in the time window for which gold rate is blocked
5 One97 One97 issues an instantaneous digital receipt of sale on behalf of Augmont-Bullion
6 One97 One97 initiates transfer of money to customer’s account
7 Augmont-Bullion Augmont-Bulllon remits the money to One97 on T + 1
4. The present dispute does not concern Chart 2, and essentially involves the procedures stipulated in Charts 1 and 3, more specifically in Chart 3.
5. In simple terms, the procedure followed, for purchase of gold and sale back of gold to Augmont, may be explained thus:
(i) Procedure for purchase of gold
(a) A customer, who desires to avail the benefit of the scheme promulgated vide the aforesaid agreement, would have to open an account, known as the GAP account.
(b) The customers would make payment to Augmont, across the Paytm platform of One97, to purchase the digital gold.
(c) The details of the invoice, required to be raised on the customer, would be transmitted by Augmont to One97.
(d) On the basis of the said details, One97 would generate a digital invoice on the customer, on behalf of the Augmont.
(e) The quantity of digital gold purchased by the customers would be credited into the GAP account of the customers by Augmont.
(ii) Procedure for sale back of gold to Augmont
(a) This procedure applies where the customer desires to sell gold, earlier purchased by it, held in its GAP account, to Augmont.
(b)
