IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 22ND DAY OF MARCH, 2019 BEFORE THE HON'BLE MR.JUSTICE ASHOK G. NIJAGANNAVAR M.F.A. NO.7303 OF 2013 (AA) Between:
Smt. K.S. Swarnalatha W/o Sri. K.L. Suresh Aged about 53 years No.6, Krishna Road Basavanagudi Bangalore-560 004 …Appellant (By Sri. V.B. Shivakumar, Advocate) And:
1. M/s Kotak Securities Limited No.229, First Floor, bakhtawar Nairman Point, Mumbai-400 021 2. Sri. Mahesh Kumar Asst. manager National Stock Exchange of India Ltd., 2nd Floor Ispahani Centre Door No.123-124 Nungambakkam Chennai-600 034 ...Respondents (By Sri. Ganapathi Bhat, Advocate for R1; Notice served to R2) **** This Miscellaneous First Appeal is filed under Section 37(1)(b) of the Arbitration and Conciliation Act, against the order dated 29.06.2013 passed in A.S.No.53/2008 on the file of the VI Additional City civil and Sessions Judge, Bangalore, Dismissing the suit filed under section 34 of the Arbitration and conciliation Act, to set aside the award dated 02.09.2008 in NO.F and o/c-0021/2008.
This appeal coming on for admission this day, the Court delivered the following:
JUDGMENT This appeal is filed for setting aside the impugned judgment dated 29.6.2013 passed in A.S. No.53/2008 by the VI Additional City Civil and Sessions Judge, Bengaluru (CCH 11).
2. The facts briefly stated are that the appellant had signed some blank documents on 30.07.2007 which were duly filled by the respondents without giving proper information to the appellant. On account of trust and confidence she had put the signature and she had deposited a sum of Rs.5 lakh in August, 2008 when the respondents’ representative allotted client code K– 37M5 for trading. The representatives of Kotak Securities Limited were Mr. Ritesh and Mr. Vivek. Appellant vehemently protested for the respondents reckless trading for their business turnover to augment brokerage and incentives, thereby the representatives went on inducing that the traders carried out would be in the interest of the appellant upon certain slab brokerage of 50% would be refunded. The appellant found that some traders were ratified after strict warnings and finally in November, 2007 some amount of Rs. 1 lakh was paid to close the account. The respondent promised to close the account after expiry of settlement. The representatives of the respondent promised that the amount would be settled along with the quarterly statement ending December. Despite several requests and reminders, the respondent failed to pay the balance amount due to the appellant. There is an outstanding balance of Rs.2,87,321.47 payable by respondent No.1, the National Stock Exchange of India Ltd., Hence the matter was urged before the 2nd respondent National Stock Exchange for seeking adjudication in view of arbitration clause provided therein. The second respondent National Stock Exchange of India Ltd., wrote a letter dated 24.04.2008 informing about the eligible arbitrators. The claim statement was submitted by the first respondent wherein a prayer was put forward calling upon the arbitrators to pass an award for Rs.2,87,321.47/- along with interest at 24% p.a. But the arbitrator did not hold proper enquiry. A denovo enquiry was required to be conducted to adjudicate the dispute, but the arbitrator failed to consider about calling upon the witnesses to be examined in the course of arbitration proceedings. Thereafter no witnesses were examined and sufficient opportunity was not given by the arbitrator for allowing the settlement of issues in terms of Arbitration Award. The appellant was left with no alternative but to approach the Court below, filed Arbitration Suit in A.S. No.53/2008 for setting aside the award passed by the sole arbitrator in arbitration matter No.F and O/C- 0021/2008. But the trial Court has dismissed the suit. Being aggrieved by the said order the appellant has preferred the present appeal.
3. The main grounds urged for setting aside the impugned order passed by the learned trial Court is that no proper opportunity was given. The Court below without considering the material facts and the evidence placed on record has dismissed the suit. The representatives of the respondents namely, Sri Ritesh and Mr. Vivek were necessarily required for the purpose of proper identification and also no witnesses were examined.
4. This Court had no opportunity to hear the arguments/submissions of the counsel for the appellant.
5. The counsel for the respondent submitted that there are no valid grounds to interfere with the impugned order. The learned Judge has rightly observed that sufficient opportunities were given to the appellant and there are no records to show that the appellant had filed an application to examine the witnesses. Thus, the order passed in the arbitration suit is legal and justified. The grounds stated in the appeal are all imaginary and baseless.
6. As could be seen from the impugned order the trial Court has observed that the suit was filed by the appellant - plaintiff on the ground that she was not given an opportunity to appoint proper arbitrator and thereafter the arbitration proceedings were not properly held and the award was passed without giving an opportunity to examine the witnesses. But the learned trial Judge has observed that all these contentions raised in this suit were not urged before the arbitrator and there are no documents to show that the appellant has filed an application seeking permission to examine the witnesses in support of her defence. The reasons stated in the appeal memo for setting aside do not justify any interference and there are no valid grounds to admit the appeal. Accordingly the appeal is dismissed.
Sd/- JUDGE ykl