BEFORE THE SOLE ARBITRATOR
Mr. JASBIR SALUJA
(Appointed as the Sole Arbitrator by the National Stock Exchange of India Ltd.
Mumbai vide its letter no.NSE/ARBN/F&OIM{,01.T nO141236923-K dt..2UW2O1 4\
In the matter of Arbitration under the Byelaws, Rules, Regulations
of National Stock Exchange of India Ltd.(NSE)
Arbitration Matter No.
-
F&O|M-001712O14
Between
IndiaNivesh Securites Pvt. Ltd.
Having its registered office at,
601/602 Sukh Sagar, N.S.Patkar Marg,
Girguam Chowpatty,
Mumbai 400 002.
And
Mrs. DeepaNayak
'I
0 ShriNiketan, VithalBhaiMarg
Near SanyasAshram,Vile Pade East
Mumbai-
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400056,
........,........Responderfi
Appsarance:
Mr. Jignesh Doshi , Company Secretary, alongwith Mr. Sumit Gadhia AVP
app€ared forthe Applicant
Company
Complian{
Mr. Bhavik Nayak Husband ofthe Respondsnt and POA holder appeared for
ResDondent Constituent
AWARD
i
the
S
is
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-\
FilE#
This Arbitration Application is filed by the Applicant Company Vs. fnOi$.riv$ni
1.
!e:
directing Applicant Company (Trading Member) to pay Rs. ZO,ZSSlito $"i
Respondent Constituent (Original Complainant) (Rs.20,000/- on accountof
tsg
Securities Pvt. Ltd. impugning the order dated 28{3-2014 passed by
tG
in NtFTy trade on 19120-11-2013 and Rs.6255/- in respeci of wrongfutlosslnt
2s-1-2o14.
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BACKGROUND OF THE CASE
The Respondent Constituent was registered with the Trading Member M/s.
IndiaNivesh Securities Pvt. Ltd. since 11-7-2013 and was issued a unioue client
code VADJOI after duly complying and executing KYC reglstration iorm and
other relevant documents.
It is a case
ofthe Respondent Constituent that on 19-11-2013, she bought 3000
quantity of Nifty 6300 CE at approx. Rs.31/- and out of which she sold 1000 at
Rs.34/-. Around 3.00 pm she instructsd one Mr. Snehal Pawar, employee of the
Trading member over phone, to sell the balance 2000 quantity
of
Nifty 6300 CE
at the same rate but due to lapse on the part of Mr. Snehal Pawar the same was
nol sold on that
day.
Ultimately, on 20-11-2013, Mr. Snehal Pawar sold
itfor
Rs.10/- thereby resulting in loss of Rs.48056/- to the Respondent Constituent..
Besides, the Respondent Constituent further suffered loss of RS.4OOO/- i.e. on
19-11-2014 Mt- Pawar informed the Respondent thai he has bought 1000 qty. of
.
Bank Nifty 11300 CE @Rs.86l As per Contract Note of 19-11-2019 money
debited to Respondent's A,/c @Rs.89.90 which culminated in loss of RS.40OO/-.
The Respondent further submitted that, despite \.vaming Mr. Pawar to be careful
the next time in carrying out the instructions, similar lapse occuned on 29-1-2014
i i.e.. On 27-1-2014, the Respondsnt Constituent bought 1000 qty. of Nifty 6200
CE @ Rs.34l-
appox.
and on 28-1-2014 instructed to put stop toss @Rs.19r
but once again, due to lapse on the part of the Trading Msmber, it was sold
@Rs.12.70 thereby resulting loss of Rs.6,255/- which the Trading Member
admitted in their reply of 28-5-2014, with assurance to give credit of Rs.6255/- to
the Respondent Constituent. Furlher, an amount of Rs.215/- was
wrongly
debited being penalty due to Margin short-fall for trade on .t9-11-2013 which was
purely for negligence on the part of the Trading Member for not carrying the
instructions of the Respondent. Constituent. All this resulted to a total loss of
Rs.58,5621 to
On
the Respondent
C,onstituent
29-1-2014, the Respondent Constituent through email made a complaint to
the Trading Member, that she had suffered loss of Rs.70,000/- to 80,000/- due to
non placement of selloder and nsgligence on their part, for reasons refened to
in paragraph 2 herein above. Thereafter, the Trading Member vide th6ir email of
5-2-2014 requested the Respondsnt Constituent to provide details of loss as
claimed for, in terms of her email of 29-11-2013. The Trading Member vide
their emall of 5-2-14 acknowledged the comptaint dt.29-1-j4 of the Respondsnt
and replisd back stating thal they are reviswing the case and requested the
Respondent to fumish the details of the loss sustained by her. The Respondent
on the same day vide her trailing email informed the Trading Member that she
has in her email of 29-1-14 already fumished the details of the losses suffered by
her and therefore requested the Trading Member to check their recods and
revert as soon as possible. The Trading Member vide their email ol 13-2-14
replied stating that the stop loss was not placed in system due to non availability
of margin as per SEBI/Exchange Rulss, but however, to rsinstate her confidence
in the Trading Member, and as a geslure of goodwill took this opportunity to
confirm that
will credit her
ledger account with Rs.6255/- which had occurred
due to their dealer not placing thg stop loss. Thereafrer, the Trading Member
vide their email
of
17-2-14 denisd
to
compensate
the loss sustained by
ResDondent, for the reasons that ths Respondent Constituent chose to not to
bring the mattsr to the notice of managemenl and continued trading afier paying
off debits which implied that since she was continuously trading the question of
reimbursing any loss did not arise.
4.
On 24-2-14,lhe Respondent Constituent tiled a written complaint in the format
prescribed by the Exchange nanating the entire sequence of the complaint. On
27-2-14, the Exchange vide their leller ot 27-2-14,informed the Trading Member
about the complaint of the Respondent Constituent and requested them lo
fesolve the same and / or respond wlth relevant documentary evidence on or
before 5-3-14. The Managing Direc{or of Applicant Trading Member vide his
letter dt. 5-2-14 to the Exchange replied with annexur€s, which tum out to be
unsatisfactory and therefore the Exchange on '10-3{4, once again informed the
Trading Member to reply with documentary evidence on or before
l+$.14.
The
Managing Director of the Applicant Company vide his letter dated 13-3-14 replied
reiterating ths same mntents of his reply dt. 5-2-14. On 21-3-14, the Exchange
informed the Trading Member that they have constituted Investor Grievancs
Resolution Panel (lcRP) for redressing the Respondent Constituent Comptaint.
The letterydocuments liled and rslisd upon by both parties are being refered to
the said Panel for redressal of the Respondent's Complaint.
On 28-3-14 the lnvsstor Grievance Resolution Panel (IGRP) heard
the
proceedings and afier considering the written submissions of both the parties,
passed orders allowing the claim to the extent of Rs.26,255^ and accordingly
directed the Trading Member to pay Rs.20,000/- on ac@unt of loss in NIFTY
trade on 19/20-11-13 & Rs.6255/- in respecl of wrongful loss on 29-l-.14. The
sald order of the IGRP was part and parcel of the replies / annexures filed by
both the oarties.
\.(
I
6.
Aggrieved by the said order dated 28-3-14 passed by th€ IGRP, the Applicant
Trading Member prefened the pressnt Arbitration Application datsd $4-14 in the
prescribed format, form No.1 under Regulation 5.9 of the Exchange Byelaws and
filed the same with the NSE.
7. Tha NSE, through its Centralized Arbitrator Appointment Process (CMP)
selected and appointed the above named Sole Arbitrator in the captioned
arbitration matter vide its letter Ref. No. NSE / ARBN I F&O I M4017 I 2014 I
23692rK da!€d 24+2014 and refened the captioned arbitration matter for
adjud ication.
Wh6n the Sole Arbitrator entet€d rsference on 14-5-14 it was observed that the
statoment
of case of the Applicant Trading Member and the reply of
the
Respondent was not in the desired fomat, and moreso, ths representative of the
Trading Member and the Respondent Constituent's husband , holding Power of
Attomey, not being well prepared to argue their case, the Ld. Sole Arbltrator
adioumed the hearing to 20-6-2014 with direction to the Trading Member to fite
proper papers and proce€dings with documentary evidence within 15 days i.e.285-14 and the Respondent Constitusnt to file her reply on or before 2-6-14. The
Trading Member filed fresh proceedings with supporting documsnls on 2g-S-14
with the Exchange, while the Respondent Constituent on medicat ground
sought fuJther time till 10{-14 to fils her proper reply with supporting documents.
On
'10-6-14
the Respondent Constituent filed her reply with
supporting
documents with the Exchange.
9.
The proceedings was conducted on 20-06-14 , when ths Trading Member was
represented by Mr. Jignesh Doshi, Company Secretary alongwith Mr. Sumit
Gadhia AVP Compliance, of the Applicant Trading Member. Mr. Bhavik Nayak,
Husband
After
of the Respondent Constituent represented the Respondent
hearing
both the parties and golng through tho documents
/
Wife.
material
the recorded conversations/transcripts dated 19/20-11-13 olaced
me, it was observed that the Trading Member was unable to place on
including
before
record, ihe recorded convsrsation/transcripts dt.
both the parties which was the bone
of
lgnll3
ofarouM
3.OO pm
of
contentionVallegation/statements
made by the Respondent Constituent, that th6 instructions given on phone
aound 3.00 pm by the Respondent Constituent to one Mr. Snehal pawar
emplo)ree authorized to transact on behalf of th6 Trading Member, in tems of
order to sell 2000 of Nifty 6300 CE @ Rs.34t not being adhered and instead
sofd @ Rs.lo/-,on 20-11-13, caused loss of Rs.€,05€i/- to the Respondent
V
Constituent. Similarly, as stated in the forgoing paragraphs, the loss caused to
the Respondent Constituent in terms of transaction on 28-1-14 which is
admifted by the Trading Member with assurance to give credit of
Rs.6255/- and which
is
paid off to the Respondent Constituent by the
Trading Member, sometime in June,2014. Besides, the R6pondent
Conslituent also suffered loss of Rs.4000/- in terms of lransaction of 1911-'13 of Bank Nifty 1'1500 CE as discussed above and so also penalty
of Rs.215l- wrongly debited due to the lapse on part of the Trading
Member.
10.
The contentionvsubmissions of the Respondent Constituent,
regards the losses suffered by
her,
as
is quite apparent on the face of
record, more particularly , the Trading Member failed to place on record
the recorded conversation^Ensc.ipts dt.19-11-13 of around 3.OO pm
between the parties, I am of the opinion that the order dt. 28-3-14
passed IGRP appear
to bs quite reasonable in the facts
and
circumstances discussed/observed herein above. Hence the oresent
Arbitration Application of the Trading Member need to dismissed for the
reason discussed herein above. Considaring all these aspec{s, the
order dated 28-3-2014 passed by the tcRP is up held..
Hence I pass the following Award.
a.
The Arbitration application/reference of the Applicant Trading
Member stands dismissed and accordingly the order dated 2g-32014 passed by the Ld. tcRP is uphetd.
D.
The Applicant Trading Member is directed to pay RS.2O,OOO| in
tems of the order dt. 28-3-14 passed by the Ld. lGRp, save and
except Rs.6,255/-which the applicant has already paid to the
Constituent within a period of two u€eks from the receipt of this
Award.
The Award is signed and issued in 3 stamped originals. The
NSEIL may retain one original and foMard one stamped original
each to the Applicant Trading Member and the Respondent
Constituent,
SOLE ARBITRATOR
Mumbai
o"t"' 16.1,4ilJ