Decided on June 19,2019

Angel Broking Private Limited Appellant
Purnima Sarvesh Respondents


N. Sathish Kumar, J. - (1.) Challenge has been made against the impugned Award passed by the Arbitral Tribunal dated 15.09.2017.
(2.) Brief facts leading to filing of this Original Petition is as follows : The Claimant is a registered client of the Respondent from 24th June 2016 and was allotted a unique client code P76740 by the Respondent after duly receiving the payment of the requisite upfront margin deposited as required under the NSEIL (F&O) Regulations and activation of the trading account on 27th June 2016 and was further mapped under Mrs.Josphin J, as the Sub-Broker/Authorized Person. They had also entered into the Trading Member and Authorized Person Agreement dated 29.04.2016 and Sub Broker/Authorized person Agreement dated 24.06.2016 for trading shares on behalf of the Claimant. After opening trading account in June 2016, the trading operations was commenced and performed for the Claimant by one Mr.Joseph Dinesh and had been carrying out trading activities as Sub Broker/Authorized Person of the Respondent on the NSE in Futures and Options segment. The agreed understanding with the respondent was that all the trades to be executed by the Respondent in the name of the Claimant would either have to be explicitly ordered by the Claimant, or else require prior intimation and authorization from the Claimant. The mode of placing orders as agreed upon between the Claimant and the Respondent was either through telephone or personal meeting and the arrangement was such that the concerned trades would be carried out only after obtaining the requisite authorization and thereafter the contract notes in respect of each trade would be sent across to the Claimant in digital form. Further, the digital intimation/confirmation in respect of each trade would be mandatorily intimated to the claimant through SMS on her registered mobile number. The Claimant had been proper and diligent in the operation of her trading account and had always made sure to enter into transactions only after enquiring about the margin available and confined her trading within the limits of such margins and upto December 2016, all trades from the Claimant's account had been carried out within the trading limit set out by the Claimant as per the mutual agreement between the parties. However, in December 2016, the Claimant had received an intimation through SMS and call logs that the Respondent had initiated trades which were in excess of the limits set out by the Claimant.
(3.) The issue was taken up by the claimant with the respondent and a meeting was held with the Respondent and Sub broker to which it was clearly set out that trades would be carried only to the extent of the maximum fixed limit of 2000 shares on inter-day basis for trades and the same stood acknowledged and accepted by the sub broker acting on behalf of the respondent vide his message on 12.12.2016 documenting the above arrangement and provided assurance of the same. On 11.01.2017, she had received messages, just prior to closing of the Market, the outstanding amount towards margin in respect of certain trades, which were not authorized by the Claimant. The claimant had noticed that 54000 shares were traded without any prior consent or authorization by the respondent, which was far in excess of the limit agreed. The said unauthorized trade had resulted in a net loss of Rs.51,00,760.19 to the Claimant and also the respondent debited from the Claimant's account to an extent of Rs.73,326.10 towards other charges. Immediately, the Claimant made a call to the Sub broker acting on behalf of the respondent and demanded an explanation for the same. As he gave evasive reply, the Claimant raised the dispute to the Investor Grievance Cell and the IGRP has taken the complaint on record and issued notice to the respondent on 13.01.2017. The IGRP panel after considering the submissions of the respective parties along with the evidence placed before it held that the respondent is liable for the unauthorised trade performed on 11.01.2017 and further admitted the claim of Rs.51,74,006.19 in favour of the claimant vide its Order dated 07.02.2017.;

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