Nirmal Bang Commodities Pvt. Ltd. vs S. Geetha

Anoop V. Mohta, J.—The Petitioner-Broker (original-Respondent) has challenged impugned award dated 27 February 2012 by which, the learned sole Arbitrator directed the Petitioner to pay the amount of Rs. 2,00,000/- with interest @ 6% per annum. None appeared for the Respondent, though served. The matter is of the year 2012 and listed for final disposal. None appeared for the Respondent, even at the time of admission of this Petition. Therefore, I am inclined to dispose of the Petition as the Respondent failed to appear inspite of the service.

After hearing the learned counsel appearing for the Petitioner and after going through the documents placed on record, including the agreement and time to time issued and received contract notes, referring to the account transactions during the period from 14 March 2011 to 7 April 2011 and also for the fact that the Respondent even after these dates, carried out the transaction with the Petitioner on 13 June 2011 and 14 June 2011 and ultimately on 29 November 2011 filed the complaint, merely based upon the oral submission, in my view, goes to the root of the matter against the Respondent, specifically dealing with the transactions of this nature.

The Respondent, having accepted and/or specifically unable to prove the non-receipt of the hard copies of contract for the relevant period, merely by filing the complaint, just cannot claim/make the case on oral submissions, specifically by overlooking the timely communications so made referring to the contract and the transactions of the period in question. There is no dispute that the parties had entered into Member and Constituent Agreement on 31 January 2011. The Petitioner was appointed as Broker for handling derivatives transactions carried out on the MCX. Those terms and conditions were never denied, so also the mode and method of communication of the transactions. There are sufficient materials even admitted by the Respondent about the receipt of those written contract notes/communications. Therefore, the transactions which were entered into and/or held at the relevant time, in my view, just cannot be treated to be unauthorized. The timely communications if not objected, basically in view of nature of the transactions, the subsequent oral submissions just cannot be relied upon and taken note of in support of the monitory claims, so raised. On the contrary, no contra evidence placed, basically by the claimant-Respondent, after filing the complaint as the averments were denied by the Petitioner in the written submissions. The basic burden, in my view, was upon the complainant to show that the transactions were unauthorized, specifically when the written communications, as recorded above, issued by the Petitioner at the appropriate time. The question is not of filing of complaint at such late stage, but still the conduct of the parties definitely relevant to consider such claims, based upon the foundation of oral submissions only.

The learned Arbitrator, in my view, therefore, wrongly put the burden upon the Petitioner, who have placed on record the documentary evidence to support the conduct, as well as, the compliances of the contract conditions, as required, for such transactions. The written communications and subsequent transactions of June, 2011, without raising any objection to the transactions of March and April of 2011, in my view, ought not to have been overlooked by the Arbitrator. Normally, there is no question of interference with the award so passed by the Arbitrator, but the award, if passed, by overlooking the contract conditions and documents placed on record and where there is no question of interpretation of any kind, such award in the present facts and circumstances, is unsustainable. The trading losses, because of nature of transactions, is part and parcel of such business, but at the same stroke, such claims based upon the oral submissions, without leading any contra evidence in its support is impermissible-it is contrary to the law. Therefore, I am inclined to interfere with the impugned award.

The Apex Court in Oil and Natural Gas Corporation Ltd. Vs. Western Geco international Ltd., observed that-

"40 ......What is important in the context of the case at hand is that if on facts proved before them the arbitrators fail to draw an inference which ought to have been drawn or if they have drawn an inference which is on the face of it, untenable resulting in miscarriage of justice, the adjudication even when made by an Arbitral Tribunal that enjoys considerable latitude and play at the joints in making awards will be open to challenge and may be cast away or modified depending upon whether the offending part is or is not severable from the rest."

Hence, taking overall view of the matter, I am inclined to pass the following order-

ORDER

a) Impugned award dated 27 February 2012 is quashed and set aside.

b) The Arbitration Petition is allowed.

c) There shall be no order as to costs.