IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION IN ITS COMMERCIAL DIVISION COMMERCIAL ARBITRATION PETITION NO. 1175 OF 2019 WITH ARBITRATION PETITION NO. 1216 OF 2019 Ulhas Dandekar …Petitioner Versus Sushil Financial Services Pvt. Ltd. …Respondent Mr. Rohan Rajadhyaksha a/w Shanay Shah, Darshan Mehta, Aaditya Mapara, i/b Dhruve Liladhar & Co., Advocates for the Petitioner.

Mr. Simil Purohit, Senior Counsel a/w Jayant Gaikwad, i/b Ajay Khandar & Co., Advocates for Respondent.

CORAM : SOMASEKHAR SUNDARESAN, J.

Reserved on : March 21, 2025 Pronounced on : March 27, 2025 JUDGEMENT :

Context and Background:

1. The core issue that falls for consideration in these Petitions under Section 34 of the Arbitration and Conciliation Act, 1996 (“the Act”) is whether the absence of a prior written or recorded instruction for every transaction effected by a client through a stock broker would be fatal to a claim by the Page 1 of 29 Digitally signed AARTI b G y A J A A A N R A T N I GAJANAN PALKAR PALKAR D 20 a 2 te 5 : .03.27

16:01:19 +0530 stock broker to settle accounts. For the reasons set out in this judgement, I am unable to agree with the Appellant that in the facts of this case, he has no liability to pay his dues owing to admitted absence of such instructions.

2. The captioned Petitions challenge two arbitral awards, both dated May 29, 2019 (collectively, “Impugned Award”), which are passed by an appellate arbitral tribunal constituted under the bye-laws of the National Stock Exchange of India Ltd. (“NSE”), disposing of cross-appeals against an earlier award dated January 22, 2019 (“First Award”) passed by the arbitral tribunal of the first instance.

3. In a nutshell, Mr. Ulhas Dandekar (“Dandekar”), said to be an architect by qualification has had a broking account with his stock broker Sushil Financial Services Pvt. Ltd. (“Sushil”) since 2006. The know-your-client (“KYC”) documentation executed by Dandekar with Sushil provided for a designated email ID and a designated mobile number of Dandekar for correspondence and communication. The disputes relate to the period between April 1, 2017 and July 4, 2018 (“Dispute Period”).

4. During the Dispute Period, there have been sales by Sushil to close out the dues owed by Dandekar, which sales are assailed by Dandekar as being unauthorised, on the premise that there is an admitted absence of prior recorded and written instructions to effect any sale during this period. Disallowance of the sales during the Dispute Period as being unauthorised and giving effect to the implications of rejecting them in the running account balance, is the Dandekar’s request in the proceedings below. Sushil’s request is to treat the dues owed by Dandekar pursuant to the trades as legitimate dues, and to ask Dandekar to pay up the balances owed.

5. The First Award had rejected the claim from Sushil against Dandekar asking him to pay up the running debit balance between the parties. The First Award also rejected a Counter-Claim from Dandekar asking Sushil to pay up for the allegedly unauthorised sales effected by Sushil on Dandekar’s behalf. Sushil appealed the rejection of its claim while Dandekar appealed the rejection of the Counter-Claim. Both appeals were disposed of by the Impugned Award. Effectively, Sushil’s appeal was allowed, and Dandekar’s appeal was dismissed. Contention of Parties:

6. Both the Petitions filed by Dandekar were taken up for hearing together. Commercial Arbitration Petition No. 1175 of 2019 challenges the rejection of the Counter-Claim while Arbitration Petition No. 1216 of 2019 challenges the Impugned Award upholding Sushil’s appeal, directing Dandekar to pay Rs. ~69.20 lakhs with interest at the rate of 12% per annum. 7. I have heard Mr. Rohan Rajadhyaksha, Learned Counsel on behalf of Dandekar and Mr. Simil Purohit, Learned Senior Counsel on behalf of Sushil, and examined the record with their assistance.

8. The gravamen of the Dandekar’s case, stressed emphatically