AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (9) TMI 1744
X X X X Extracts X X X X
X X X X Extracts X X X X
....gar and which transaction was said to have been carried out as recorded in contract note no.0012335 of a value of Rs. 14563473.06. The transaction in its descriptive form was referred to as contract no.SM30AMBL2. On the same day, the petitioner instructed the respondent to sell the same quantity of sugar which was purportedly done vide contract note no.0012334. It is not in dispute that the description which applied to the purchase and sale transaction is SM30AMBL2 and SM30AMBL25 respectively. The value of the sale was stated to be Rs. 1,47,94,679/-. 3. The petitioner received two emails dated 16th July, 2013 from the respondent enclosing therewith a digital contract notes for transactions carried out on behalf of the petitioner on the NSEL. (both sent at around 4.51 p.m.). The respondent claimed to have enclosed digitally signed contract notes in respect of the purchase and sale transaction. The contract notes referred to various trades believed to be carried out on behalf of the petitioner. For the sake of convenience contract note no.12335 referred to as the purchase contract and contract note 12334 is referred to as sale contract. 4. It is the case of the petitioner that the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to assist in the investigation. 6. Mr. Dhond, the learned Senior Counsel appearing in support of the petition submitted that at a meeting called by the EOWs third party agency was appointed to assist in the investigation. A meeting came to be called on 23rd April, 2014 at the office of the respondent at which the EOW officers accompanied by one Mr. Chetan Dalal who was the representative of the third party assisting in the enquiry were present. The petitioner's Chairman and Managing Director and CEO Mr. Sudhir Merchant was present. During the course of the discussions, the said Mr. Dalal sought information from the petitioners CMD as to whether he was aware of the contract of sugar under the purchase contract. Mr. Merchant replied that he was aware of the transactions since he had received the contract note through email and had made payment as aforesaid. However, they had not received the signed contract note or the particulars/copy of delivery allocation letter in respect of the contract. The delivery allocation letter(DAL) is a record of quantity of the commodity in question which is deemed to have been delivered in respect of a purchase in view of the intended sale of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....antime, since the respondents had not repaid the amounts demanded by the petitioner, the petitioner made enquiries with the NSEL as to the mismatch of client codes in relation to the sale and purchase transactions. The NSEL disclosed details of the trades governed by contract notes 12334 and 12335 which were issued to the petitioners by the respondents. The NSEL confirmed that the trades both sale and purchase to which the reference had been made and which were carried out on 15th July, 2013 in respect of Sugar were carried out with client code HYDS-1012 allotted to Sujana Sudini. 11. In the course of submissions, the court noticed that the time of the trade in both these transactions were different from those appearing in the contract notes both digital contract notes as well as the signed versions. For instance in the case of the purchase transaction, the trade is said to have been carried out the digital contract note between 1.12 p.m. and 1.13 p.m. whereas the NSEL record indicate that the purchase transaction has been carried out between 12.03 p.m. and 12.04 p.m. In the case of the sale transaction, the digital contract note and the digital copies both referred to similar tim....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to pay these amounts in the usual course it was a genuine transaction. However, in the instant case, the bonafides of the transaction as recorded in the contract notes having been called into question, the fact of purchase itself was doubtful. Mr. Seksaria contested this version of the petitioner by making reference to a circular issued by the NSEL on 14th August, 2013. Firstly made reference to circular dated 31st July, 2013 issued by the NSEL (Exhibit A) to the affidavit in reply which records that all trades in one day forwards the contracts and trading in all contracts except e-series contracts, stand suspended till further notice and that settlement of all pending contracts with effect from 31st July, 2013 would stand deferred for 15 days. A revised settlement calendar was to be announced. Accordingly, on 14th August, 2013 a further circular came to be issued Exhibit B wherein payouts schedule was deferred from 16th August, 2013 and 20th August, 2013. Mr. Seksaria submits that settlement calendar also came to be published along with copy of this settlement schedule seen at part of Exhibit B and according to him the amounts due to the petitioners had now been paid over by the E....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rchase contract and that the respondent had fraudulently and wrongfully entered the above dates on behalf of Sujana Sudini. Thus the reservation of right in the footnote indicated that the petitioner would claim amount of Rs. 1,47,77,170/- from NSEL. The submission is to the effect that the amount of Rs. 1.47 crores had been received under the ledger. Mr. Seksaria submitted that by virtue of the footnote the petitioner is deemed to have conducted the transaction as its own and therefore accepted the fact that the purchase was genuine and not a fraudulent transaction as sought to be made out. He therefore submitted that the petition is misconceived and calls for dismissal. 16. Having heard the parties at length and having perused the documents with their assistance, I find that the only admission is relating to receipt of monies by the respondent towards the purchase transaction. There is no evidence of monies having been received by the petitioners has sought to be conducted by Mr. Seksaria by making the reference to the ledger accounts. The case of the petitioner is a claim for refund of monies paid towards purchase of Sugar. The transaction which according to the petitioner has ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ads "HCE009" in the records of the respondent company whereas Sujana Sudini has been given code no. HYDS-1012. If these were to be entered manually it is impossible to accept the contention of the respondent that the mismatch in transactions are as a result of a wrong code being entered. Even assuming the use of a 'Dropdown menu', it would not be possible to accept the contention that the wrong client code was selected on each occasion and that this error was not realized at the time of sending the digital contract note. The Digital contract note is the first disclosure of the transaction to the petitioners. In the event of any client code errors being noticed and on the basis of the circular providing for client code modification respondent was well aware that the operator had a time window of 10 minutes to correct the codes. There is nothing in the affidavit in reply to the statutory notice or in the affidavit in reply which seeks to explain on what basis the respondent contends that the client code modification could not be carried out. The digitals signed contract note as it is referred to in the subject to all the emails forwarding them, specify that the digital signed contrac....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that the amount of the purchase price paid over on 17th July, 2013 is not repayable because the amount had not been received from the NSEL by the respondent or that as per settlement calendar the amount has been received directly by the petitioner. These argument also cannot be accepted due to the fact that the instances of receipt of amounts by the petitioner referred to during submissions on behalf of the respondent are based on Exhibit G to the affidavit in reply all of which are extracts of the party ledger of the petitioner in the books of the respondent. If the amount had been received directly by the petitioner from the exchange, there was no reason for the same to be reflected in the ledger account maintained by the respondent in respect of the payments received directly from the exchange by client credits would be reflected in the account maintained by the brokers. In the instant case the entries in Exhibit J and specifically at page 155 of the petition referred to and relied upon by the respondent does establish that the amounts claimed in the statutory notice have been received or that the amount of the sale consideration had been received by the respondent. The ledger ....