Case Note & Summary
The appeal arose from a judgment of a learned Single Judge dated 1 October 2012 dismissing a petition under Section 34 of the Arbitration and Conciliation Act, 1996, which challenged an arbitral award of the appellate tribunal of the Bombay Stock Exchange (BSE). The respondent, India Infoline Ltd., a member of BSE and NSE, entered into an agreement with the appellant, Shankarlal V. Keswani, a constituent, on 27 November 2006. Transactions were conducted on both exchanges. According to the respondent, transactions on BSE resulted in a debit of Rs. 1.17 crores on 12 February 2008. The respondent alleged that in February, May, and October 2008, the appellant met a director of the respondent in the presence of its Vice President and Deepak Bathija, a Relationship Manager closely related to the appellant, and requested the respondent not to dispose of shares held by the appellant in Opto Circuit Ltd. and IVR Prime Ltd., which were available as collateral security. The respondent waited until 24 October 2008 to sell all shares held on behalf of the appellant. After deducting the value of shares sold from the outstanding, the claim in arbitration was for Rs. 78.63 lakhs. The arbitral tribunal, by its award dated 19 May 2010, held that the claim was barred by limitation under Bye-law 252(2), which required the claim to be presented within six months of the last transaction on 12 February 2008. The tribunal found no justification for the respondent to wait until October 2008 to sell the shares, as there were no transactions between February and October 2008. The appellant had also raised a counter claim, which was also dismissed as barred by limitation. The learned Single Judge dismissed the petition under Section 34, and the appeal was filed against that judgment. The Division Bench of the Bombay High Court dismissed the appeal, holding that the arbitral tribunal's finding on limitation was a finding of fact and not perverse. The court noted that the scope of interference under Section 34 is limited and does not permit reappreciation of evidence. The court also held that the meetings between the parties after the last transaction did not extend the limitation period under Bye-law 252(2). The appeal was dismissed with no order as to costs.
Headnote
A) Arbitration - Limitation - Bye-law 252(2) of BSE Bye-laws - Claim barred by limitation - The claim arose from transactions on the Bombay Stock Exchange resulting in a debit of Rs. 1.17 crores on 12 February 2008. The respondent waited until October 2008 to sell shares and filed a claim in arbitration. The arbitral tribunal held that under Bye-law 252(2), the claim ought to have been presented within six months of the last transaction on 12 February 2008. The court upheld this finding, holding that subsequent meetings did not extend the limitation period. (Paras 2-4) B) Arbitration - Section 34 of Arbitration and Conciliation Act, 1996 - Scope of challenge - The court held that the scope of interference under Section 34 is limited and does not permit reappreciation of evidence. The arbitral tribunal's findings of fact, unless perverse, are final. (Para 5) C) Arbitration - Counter claim - Limitation - The appellant's counter claim was also held to be barred by limitation as it was filed beyond the period prescribed under Bye-law 252(2). (Para 4)
Issue of Consideration
Whether the claim of the respondent was barred by limitation under Bye-law 252(2) of the Bombay Stock Exchange Bye-laws, and whether the meetings between the parties after the last transaction could extend the limitation period.
Final Decision
The appeal is dismissed. The judgment of the learned Single Judge dated 1 October 2012 dismissing the petition under Section 34 of the Arbitration and Conciliation Act, 1996 is upheld. No order as to costs.
Law Points
- Limitation period under Bye-law 252(2) of BSE Bye-laws starts from date of last transaction
- not from subsequent meetings or requests
- Section 34 of Arbitration and Conciliation Act
- 1996 does not permit reappreciation of evidence
- Arbitral tribunal's findings of fact are final unless perverse
