Time-barred claim cannot be allowed.

Common Order:

This Original petition No.756 of 2000, has been filed under Section 34 of the Arbitration and Conciliation Act, 1996, hereinafter called the Act, to set aside the award dated 19. 1998 of the 2nd respondent in A.M. No. 29 of 1997.

2. Application No. 2402 of 2005 has been filed by the applicant/1st respondent to dismiss the above O.P.No.756 of 2000 with exemplary costs.

3. The brief facts as culled out from the above petitions are as under:

.4. The petitioner is a Trading member of the National Stock Exchange (NSE) and carries on business in the sales and purchase of shares and securities on its own behalf and on behalf of clients and constituents. The petitioner is also a trading member of the Madras Stock Exchange Ltd. The 1st respondent became a client of the petitioner and placed orders for sales and purchases of shares and securities on the NSE of India Ltd., through the petitioner. The 1st respondent was represented in all its activities by UR. Lakshmi Narasemhan, its Director. Apart from 1st respondent, its associate company Uttathur Shares and Securities Pvt. Ltd., also entered into transactions on the NSE through the petitioner from 26. 1996 onwards and the associate company was also represented by the very same UR. Lakshmi Narasemhan.

5. Uttathur Securities Pvt. Ltd., the associate company of the 1st respondent, was required by the petitioner to place a deposit of Rs.14,00,000/-on account of the trades committed by them through the petitioner. The same was complied with by the associate company by issuing a cheque for Rs.14.00,000/- dated 26. 1996.

6. The petitioner executed and transacted the orders placed by the 1st respondent on NSE up to 110. 1996 and the final statement of account was also furnished to the 1st respondent. Insofar as the associate company of the 1st respondent is concerned, the trading operations were discontinued on 8. 1996 as there was a default in payment of a sum of Rs.5,20,403.25 to the petitioner. The petitioner sent a letter dated 19. 2006 calling upon the associate company of the 1st respondent to pay the outstanding amount of Rs.5,20,403.25 by enclosing the complete statement of accounts. It was received by them on 19. 1996 and as there was no response even after a period of 6 months, the petitioner sent a legal notice dated 12. 1997 informing the associate company of the 1st respondent that legal action would be initiated for recovery of the money due to the petitioner. The associate company of the 1st respondent by letter dated 22. 1997 informed that they needed 15 days time to give a suitable reply and on 3. 1997, a reply notice was sent by them denying the trades transacted on their account.

.7. At that stage, the 1st respondent initiated arbitration proceedings against the petitioner by contending that the sum of Rs.14,00,000/-paid by the cheque dated 26. 1996 issued by the associate company of the 1st respondent was issued in favour of the petitioner with instructions to give credit for the sum in the account of the 1st respondent and the associate company had no dealings on the NSE and the sum of Rs.14,00,000/- was given to the petitioner to enable the petitioner to tide over a financial crunch. The petitioner besides contesting the matter on merits, put forward three preliminary objections, i.e., (1) the claim is stale claim and barred by limitation, (2) the associate company of the 1st respondent is not a party to the proceedings and hence the claim is to he dismissed for not adding necessary parties and (3) the claim itself is beyond the jurisdiction of the Tribunal as it is the case of the 1st respondent that the sum of Rs.14 lakhs was given by way of a loan and not relating to trading on NEAT System and securities. The petitioner also made a counter claim for a sum of R. 5,35,147.1 0 due to them from the associate company of the 1st respondent and for another sum of Rs.13, 743.85 due from the 1st respondent. The 2nd respondent arbitrator by an awar