ORDER :

The petitioner has filed this petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘Arbitration Act’) to challenge arbitral award dated 23.02.2021 passed by a sole arbitrator appointed under the bye-laws, rules and regulations of the National Stock Exchange of India. The sole arbitrator has dismissed the claim preferred by the petitioner and upheld an order dated 11.09.2017 passed by the Investor Grievance Redressal Panel (IGRP). By the said order, the petitioner was directed to pay an amount of Rs.7.18 lakhs to the respondent.

2. The facts, giving rise to the present petition, are that the respondent company engaged the services of the petitioner to open a Demat and Trading Account for dealing in shares and securities in Futures and Options and Currency Derivative segments. Accordingly, in January 2016, such an account was opened and necessary documents were executed between the petitioner and the respondent. Thereafter, certain other group concerns and family members of the respondent also opened such accounts with the petitioner between January 2016 and October 2016. According to the petitioner, such accounts were opened in the light of profits earned by the respondent during the course of trading, upon having engaged the services of the petitioner.

3. On 21.10.2016, the respondent sent a letter to the petitioner, instructing the petitioner not to convey any order / trade confirmation on real time basis through SMS or call as required by the company policy / regulations during market hours. The respondent also irrevocably took responsibility for all the orders placed by the authorized persons / sub brokers of the petitioner. It was also specified that end of day trade confirmation through SMS / e-mails / calls would suffice and if there were any issues with regard to such confirmation, the respondent would revert back to the petitioner within 24 hours of such confirmation. It is in this backdrop that the trading activity continued and according to the petitioner, during the period between 2016-2017, it regularly updated the respondent about trades executed on behalf of the respondent through Electronic Contract Notes (ECNs) on registered e-mail address of the respondent and by SMSes on the registered mobile number. According to the petitioner, the respondent never raised any grievance with regard to the trade and transactions.

4. On 28.07.2017, the respondent filed complaint before the National Stock Exchange, alleging that the petitioner had fraudulently induced it to open account. By initially giving profits from January 2016 to 2017, the respondent was induced into opening further accounts of its concerns and family members. On this basis, it was claimed that the respondent and others had been duped and they had suffered losses due to the aforesaid acts of the petitioner.

5. On 21.08.2017, the petitioner responded to the complaint and denied the allegations, stating that all the trades and transactions were undertaken with the consent of the respondent. The dispute was referred to the IGRP. The other disputes raised by the concerns and family members of the respondent were also referred to various Members of the IGRP.

6. On 11.09.2017, the IGRP passed orders in all such complaints. While 3 complaints were dismissed, 3 were allowed. The complaint forming subject matter of the present petition was partly allowed. The order dated 11.09.2017 of the IGRP made certain observations against the petitioner to the effect that there were variations in the global reports generated from the offices of the petitioner at Mumbai and Kolkata. While the reports generated from Mumbai office showed profit earned by the respondent, the reports from Kolkata office showed losses; there were certain assurances being given on behalf of the petitioner while certain mandatory post transaction intimations were being given through another channel; the two employees of the petitioner, who were consta