M/S Star Shares & Stock Brokers Ltd vs Praveen Gupta & Anr.
Court
Delhi High Court
Date of Judgement:
September 30, 2024
Citation:
Neutral: 2024:DHC:7733
Category:
Section 34
Facts:
Respondent No. 1 began investing in sale and purchase of shares through M/s. Gupta Associates through its proprietor Mr. K.C. Gupta. Respondent no. 1 through Mr. K.C. Gupta deposited security amount time and time again with M/s. Gupta Associates, totalling to about Rs. 20.00 lacs as on 24.02.2001.
Thereafter, M/s. Gupta Associates merged with the petitioner company merged and the security deposit of Rs 20 lakhs was transferred to the books of the petitioner company with effect from 01.04.2004. The same was confirmed by the petitioner company vide letter dated 01.04.2004.
In the year 2006, the shares of respondent No. 1 with the petitioner company totalled to about Rs. 24,49,322/-. It was alleged that neither were the shares delivered to the respondent no. 1 nor were the sale proceeds from selling the said shares (on request of respondent no.1) were paid to the respondent no.1. In this view, respondent No. 1 filed a complaints with the NSE dated 01.06.2006 and 20.06.2006.
Thereafter, NSE vide letter dated 23.08.2006 informed the parties that they may resolve the disputes by way of arbitration. Subsequently, an arbitral tribunal came to be constituted and an Award dated 10.05.2007 was passed whereby the claims of respondent No. 1 were rejected on account of being time barred.
Meanwhile, respondent No. 1 filed a Company petition before the Hon'ble High Court of Bombay for winding up of the petitioner company. The same was allowed vide order dated 21.02.2008 subject to the condition that respondent No. 1 shall fulfil the conditions imposed. Since the respondent No. 1 failed to comply with the imposed obligations, the petitioner company was not wound up.
Aggrieved by the findings of the Award dated 10.05.2007, the respondent no.1 preferred a petition under Section 34 of the Arbitration and Conciliation Act, 1996 before this court. The same was allowed vide order dated 02.04.2008 and the Award dated 10.05.2007 was set aside, referring the parties to fresh arbitral proceedings.
The second Award came to be passed on 06.03.2009, whereby the claims of Respondent No. 1 were once again rejected on the ground that claim is time barred under the NSE Bye-Laws.
Aggrieved by the Award dated 06.03.2009, respondent No. 1 again preferred a petition under Section 34 of the Arbitration and Conciliation Act, 1996 before this court. The said petition was allowed vide judgment dated 30.07.2018 and the Award dated 06.03.2009 was set aside with the direction that the claims of respondent No. 1 will be decided on merits and not by merely holding that the claims are time barred.
The arbitration proceedings began once again and the present Arbitral Award dated 18.02.2019 came to be passed, whereby the tribunal allowed part claim filed by the respondent No. 1 to the tune of Rs 2,86,16,282.29 and rejected the other part of the claim on the ground that the same is time barred.
The petitioner preferred a petition against the impugned Award before the learned District and Sessions Judge, Patiala House Court and the same was returned due to lack of pecuniary jurisdiction.
During the pendency of the above proceedings, Respondent No. 1 also challenged the Award dated 18.02.2019 before the Appellate Arbitral Tribunal, NSE only to the extent of the Award rejected by the Arbitral Tribunal. The appeal was dismissed by the Appellate Arbitral Tribunal, NSE vide order dated 30.09.2019.
Findings:
"26. The petitioners have failed to show any grounds of perversity in the findings of the Arbitral Tribunal. The only ground raised is that the award devoid of any reasoning. A perusal of the award shows that the same is not true. The Arbitral Tribunal has partially allowed the claims of the respondent no. 1 based on the findings of the Hon'ble High Court of Bombay wherein the petitioner has been held to owe sum of Rs. 20 lakhs to the respondent no. 1. The findings of the Bombay High Court relied upon by the Arbitral Tribunal are integral part of the Award. The petitioner has failed to show any variation or modification of the judgment passed by the Hon'ble High Court of Bombay, and hence there is no infirmity in the reliance of the Arbitral Tribunal on the judgment of the Hon'ble High Court of Bombay."
October 8, 2024
Section 34
Parties should be supplied with all materials submitted to the AT, opportunity should be given to respond to such materials. Arbitrator's act of not supplying materials and denying opportunity to respond violates Section 18 of the A&C Act. Arbitral Award set aside.
Flfl Travel Retail Lucknow Private vs Airports Authority Of India & Anr.
Delhi High Court
September 12, 2024
Section 29A - Extension of time
Application for extension of the time period for passing an arbitral award - maintainable even after the expiry of the twelve-month or the extended six-month period, as the case may be. While adjudicating such Applications, Courts to be guided by "Principle of sufficient cause" as elaborated in the Judgement.
Rohan Builders (India) Private Limited vs Berger Paints India Limited
Supreme Court of India
Ratio
Arbitral tribunal under section 31(7)(a) and 31(7)(b) of the Arbitration and Conciliation Act, 1996 has the discretion to grant pre-award interest and/or post-award interest, on either whole or part of the principal amount.
