The Present appeal is filed challenging the judgment

dated 19.04.2021 passed in Com.A.S.No.263/2018 by the

LXXXVIII

Additional

City

Civil

and

Sessions

Judge

(Exclusive Commercial Court), Bengaluru City, (hereinafter

referred to as the 8Commercial Court9 for short).

2.

Brief facts of the case are as follows:

It is the case of the Appellant that it is a Brokerage

Firm registered with the Securities and Exchange Board of

India (SEBI). The first Respondent and her husband

jointly

held

a

Demat

Account

with

the

Appellant.

Subsequent to the death of her husband, the first

Respondent had opened an individual account and the

shares held in the joint account of the first Respondent and

her husband were transferred to the said individual

account.

3.

In 2017, the first Respondent, contending that

the Appellant had illegally, without authorization or

consent sold the shares and the proceeds of which were

4

also not paid to her, filed a complaint which was referred

to the National Stock Exchange (NSE). The Appellant

denied the allegations made by the first Respondent.

4.

After receipt of the complaint, the NSE referred

the same to the Investors9 Grievance Redressal Panel

(IGRP) in accordance with its Rules. Accordingly, the first

Respondent and the Appellant appeared before the IGRP

that

was

constituted

and

participated

in

the

said

proceedings. The IGRP, vide its final order dated

24.11.2017 held that the Appellant had sold the shares of

the first Respondent without authority and the Appellant

was required to reinstate 3257 shares of HDFC Ltc., 1960

shares of HDFC Bank and 300 shares of Deepak Fertilizer;

in the alternative it was ordered that the Appellant was

required to pay the first Respondent the value of the said

shares as on 31.10.2017 i.e., a sum of Rs.92,47,906.80

within seven days.

5

5.

The Appellant, being aggrieved by the said

order, dated 24.11.2017 passed by the IGRP, petitioned

the NSE and accordingly, the NSE referred the dispute to a

Panel of Arbitrators for determination of the dispute in

accordance with law, By-laws, Rules and Regulations of the

NSE. Accordingly, the parties entered appearance before

the Arbitral Tribunal and filed their respective pleadings.

The Arbitral Tribunal, after hearing the parties and

appreciating the entire factual matrix, has categorically,

inter alia, recorded following findings of fact:

i)

The

KYC

documents

were

fraudulently

obtained;

ii)

There has never been any <Pay-in= and <Pay-

out= made by the Appellant to Respondent No.1 as per

NSE norms;

iii)

The alleged contract notes produced by the

Appellant did not correspond with the holding statement of

the first Respondent;

6

iv)

The Phone number and e-mail address of the

first Respondent in the records of the Appellant was

changed to another number allegedly belonging to Mr.Arun

Kumar Mishra, who was admittedly an employee of the

Appellant; and

v)

The Appellant, also having taken various

defences and made counter allegations against the

Respondent No.1 as well as her children before the Arbitral

Tribunal, did not produce any material in support of the

same in substantiating the said defences/allegations.

6.

By recording the aforementioned findings of

fact, the Arbitral Tribunal, by its Award dated 04.05.2018

passed the following Award:

<The Applicant (Trading Member) is ordered

to return to the Respondent 3257 shares of HDFC

Ltd, 1960 shares of HDFC Bank and 300 Shares of

Deepak Fertilizer. In the alternative, the Applicant

is ordered to pay the equivalent value of these

shares as on 31.10.2017 amounting to Rs.92,47,

906.80 (Rs Ninety Two Lakh forty Seven Thousand

Nine hundred and Six and Eighty paise only) within

30 days of this Award.=

7

7.

Being

aggrieved

by

the

Award

dated

04.05.2018 passed by the Arbitral Tribunal, the Appellant

petitioned the NSE to challenge the same and accordingly,

the NSE appointed the Appellate Panel of Arbitrators. Both

the parties appeared before the Appellate Arbitral Tribunal

and participated in the