ORDER

This Original Petition has been filed, seeking to set aside the Award of the Arbitrators in F&O/C-0004/2012 dated 31.07.2012 as confirmed in Arbitration Appeal No.F&O/C-0004/2012_2 dated 11.02.2013 on the file of the National Stock Exchange and render justice.

2. According to the Petitioner-Company, it is a Trading Member of National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), having registered with the Securities and Exchange Board of India (SEBI) under the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Rules, 1992 and holding Registration No.INB231097537 and Registration No.INB011097533 respectively and having a Clearing No.179 under BSE. The 1stRespondent had approached the petitioner, with a request to open the Trading and Demat Account with the intention to trade in Cash and Derivatives by signing the KYC to that effect and after due diligence, the petitioner had allowed the 1strespondent to open the account with the petitioner.

3. It was further submitted that the 1strespondent was a Software Engineer in USA with the Annual Income ranging between Rs.10 and 25 lakhs and the 1strespondent had traded till the 1stweek of August, 2011 and not till 22.06.2011. There were Trades done in his account in the 2ndweek of July, 2011 by one Prashanth Rao Boinapally, Relationship Manager of the petitioner without his approval. The 1strespondent, having permitted the said Prashanth Rao Boinapally to operate his account and trade in his account, for three months so as to compensate him for the loss, which is evident from the chat record of the 1strespondent with him, subsequently blamed the petitioner Company, when loss occasioned.

4. The petitioner also submitted that though the 1^st respondent had lodged a complaint with the National Stock Exchange for investor grievance, on being satisfied that the petitioner Company had duly carried out the instructions of the 1^st respondent, did not entertain the same and therefore, the 1^st respondent had initiated arbitration proceedings on 21.03.2012 before the National Stock Exchange claiming Rs.33,23,441/- as refund and Rs.10,00,000/- towards damages. The 1^st respondent had chats with them till 04.08.2011 and the said date would be taken for the purpose of record date and therefore, he is bound by the trades carried on till that date.

5. It was further stated by the Petitioner-Company that the 1^st respondent, having admitted his accounts and having received the payments of Rs.4,79,904.17 as on 05.11.2011, cannot demand any amount from the petitioner-company as per the rules of the Stock Exchange and therefore, no amount is payable by them to the 1^st respondent, as the 1^st respondent had allowed a private party to operate his account without the knowledge of the Petitioner-Company. However, the Arbitrators had arrived at a loss as Rs.17,94,359/- and fastened the liability on the Petitioner-Company, which stood confirmed in the Appeal also. Aggrieved by both the Awards, the Petitioner-Company is before this Court, inter alia contending that the Arbitrators have no jurisdiction to entertain any complaint, which had arisen on account of private treaty or arrangement and that the 1^st respondent had received the payment made on 05.11.2011 without any protest, which amounts to acceptance of the payment under Section 63 of the Indian Contract Act and therefore, the Petitioner-Company is not liable to make any payment. Thus, it was pleaded that the Awards dated 31.07.2012 and 11.02.2013 passed by the Arbitrators are liable to be set aside on the sole ground of maintainability.

6. Per conta, the 1^st Respondent has filed a counter, wherein it has been stated as follows:

i) this Original Petition is not maintainable in law, as the entire cause of action had arisen wholly in Hyderabad and the 1^st respondent had opened his individual Trading Account for the purpose of trading with the petitioner on 18.01.2011, by furnishing required documents to them. Later on, the petitioner-C