Court dismisses respondent's petition, orders tribunal to rectify inconsistent findings and issue supplementary award.

The court dismissed the respondent's petition (Arbitration Petition No.854 of 2012) and found no merit in the respondent's arguments. Acknowledging inconsistencies in the tribunal's findings, the court adjourned the claimant's petition (Arbitration Petition No.420 of 2013) for four months. The tribunal was directed to address the inconsistent findings and make a supplementary award within three months to rectify grounds for setting aside the award.

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Issues Involved:
1. Unauthorized trading allegations.
2. Margin money requirements and compliance.
3. Delivery and receipt of contract notes.
4. Arbitrability of fraud allegations.
5. Examination of witnesses and evidence.
6. Consistency of arbitral tribunal's findings.
7. Application of bye-laws and business rules.

Detailed Analysis:

1. Unauthorized Trading Allegations:
The claimant alleged that unauthorized trading was conducted in her account by the respondent, particularly by an employee named Priotosh Ghosh. The claimant stated that she had not given instructions for intra-day transactions and that these were carried out without her consent. The claimant also mentioned that she was out of the country during certain periods when these transactions took place, which further supported her claim of unauthorized trading.

2. Margin Money Requirements and Compliance:
The respondent argued that the claimant did not maintain sufficient margin money, which necessitated the squaring off of her positions. However, the claimant contended that there was always a positive ledger balance in her account, except on three specific dates. The arbitral tribunal found that the respondent did not issue any call money notice to the claimant for margin money and continued trading in her account even when there was a debit balance, indicating unauthorized transactions.

3. Delivery and Receipt of Contract Notes:
The claimant asserted that she did not receive contract notes in physical form as requested and that the respondent failed to provide proof of delivery. The business rules of MCX require that contract notes be delivered within 24 hours and proof of delivery be maintained. The respondent could not produce any ECN declaration form signed by the claimant, which would have authorized the delivery of contract notes in electronic form.

4. Arbitrability of Fraud Allegations:
The respondent argued that the arbitral tribunal could not decide on issues involving fraud. However, this argument was not raised before the tribunal and was not included in the petition. The court held that even if fraud allegations were made, the tribunal could decide on them, and thus, this argument was dismissed.

5. Examination of Witnesses and Evidence:
The respondent contended that the tribunal should have allowed the examination of witnesses, particularly Priotosh Ghosh. However, the tribunal's by-law 15.27 states that no party is entitled to insist on examining witnesses without the tribunal's permission. Since neither party requested to lead oral evidence, the tribunal did not deem it necessary to call witnesses.

6. Consistency of Arbitral Tribunal's Findings:
The claimant argued that the tribunal's findings were inconsistent, particularly in para 26 of the award, which contradicted earlier findings. The claimant sought to have the entire claim allowed or, alternatively, to have the matter remitted back to the tribunal for reconsideration of the inconsistent findings.

7. Application of Bye-Laws and Business Rules:
The tribunal found that the respondent failed to comply with the bye-laws and business rules of MCX, particularly regarding the delivery of contract notes and the demand for margin money. The tribunal concluded that the transactions carried out by the respondent without proper authorization and compliance with the rules were invalid.

Conclusion:
The court dismissed the respondent's petition (Arbitration Petition No.854 of 2012) and found no merit in the respondent's arguments. The court acknowledged the inconsistencies in the tribunal's findings and adjourned the claimant's petition (Arbitration Petition No.420 of 2013) for four months, directing the tribunal to resume proceedings and address the inconsistent findings. The tribunal was instructed to make a supplementary award within three months to eliminate the grounds for setting aside the award.

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