AND. Angel Capital & Debt Market Ltd., (Trading Member) G-1, Akruti Trade Centre, MIDC, Road No-7, Andheri (East), Mumbai

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1 Before the Sole Arbitrator, Mr. G.A.Nayak In the Matter of Arbitration under Bye-laws, Rules and Regulations of National Stock Exchange of India Ltd (NSE) Arbitration Matter No. CM/M-0083/2010 BETWEEN Sushilkumar Hazarimal HUF, (Constituent) F-1, Bhavna Complex, Opp. Terapanth Bhavan, Shahibaug, Ahmedabad ( PAN : AABHS4482H) Angel Capital & Debt Market Ltd., (Trading Member) G-1, Akruti Trade Centre, MIDC, Road No-7, Andheri (East), Mumbai AND --- Applicant --- Respondent Appearances: Applicant :- Mr. Atul Sushilkumar Bachhawat, POA Holder Respondent :- 1. Ms. Aparna Pancholi, Asst. Manager-Legal. Duly authorized by the. 2. Ms. Renuka Menon, Executive - Legal. Company. 3. Ms. Monika Choghale, Executive - Legal Page 1 of 6

2 1. The Claim The Applicant, Sushilkumar Hazarimal HUF, (a Constituent of the Respondent) has filed a claim of Rs.38,779/- (Rupees Thirty eight thousand seven hundred seventy nine only) from the Respondent, Angel Capital & Debt Market Ltd., (Trading Member of the NSE) towards difference in the market value of shares due to non-operation of demat account with the Respondent (a Depository Participant) together with per annum. 2. Hearing 2.1 The Arbitration Matter was initiated by issue of letter dated September 30, 2010 by the Arbitration Department of the NSE upon receipt of the Arbitration Application with the relevant documents from the Applicant on September 20, 2010.The initial hearing was scheduled for Oct 27, 2010 by notice issued to both the parties by Arbitration Dept., NSE on Oct 07, The adjourned hearing was held on Nov 19, Statement of case filed by the Applicant 3.1 The Applicant in his statement of case dated Sept 13, 2010 has set out the facts giving rise to the present claim against the Respondent. The statement of the case is given below. 3.2 According to the Applicant, HUF had opened a trading account and demat account with the Shahibaug Branch of the Respondent mapped with the sub-broker viz., J.M Financial Advisory Service, Account code S on August 08, 2009 and subsequently on 20/04/2010 the same were transferred to Vastrpur Branch of the Respondent, the subbroker remaining same. 3.3 The Applicant has stated that both the Respondent and the said sub-broker are neither allowing the HUF to buy and sell the stock nor transferring HUF s trading account back to the Respondent s Shahibaug Branch. The Applicant had made efforts to contact the subbroker s Manager Mr. Vikrantsinh Jadeja, but could reach him over phone. The Applicant also went to the sub-broker s office many times and found that the same was closed. Later, the Applicant went to the Compliance Officer of the Respondent (Mr. Harish Upadhyay) and requested to allow the HUF to operate its trading account by trading as also transfer of his accounts to Shahibaug Branch which was not acceded to. Thus the HUF is not in a position to trade resulting in loss in the valuation of the securities in HUF s demat account. According to the Applicant share value of its holdings in demat account as on 21/04/2010 (i.e., subsequent to transfer of account to Vastrapur Branch) was Rs. 2,42, which came down to Rs.2,19, as on 31/08/2010 resulting in loss of value by Rs.22,976/-. Along with the interest amount of Rs.15,803 at 18% p.a. for the said period, the amount lost by HUF works out to Rs. 38,779/- Page 2 of 6

3 3.4 Thus, the Applicant has lodged the claim of Rs.38,779/- against the Respondent and prayed for the Award in HUF s favour apart from seeking transfer of HUF s trading as well as the demat account to the Shahibaug Branch of the Respondent. 4. Statement of Defence of the Respondent 4.1 The Respondent has filed its statement of reply dated October 25, 2010 against the claim lodged by the Applicant. According to the Respondent, the Angel Broking Ltd., a group company, has taken over the assets and liabilities of the Respondent, Angel Capital and Debt Market Ltd., under a duly approved amalgamation scheme and consequently all the rights, interest and property of the erstwhile Angel Capital and Debt Market Ltd., are now vested with Angel Broking Ltd. A copy of the Bombay High Court order dated Sept 18, 2009 has been submitted in this regard. Accordingly, the new merged company, i.e., Angel Broking Ltd., has now filed the statement of defence which is as given below:- The Applicant HUF, which opened an account with the Respondent, is constituted as such by its Karta, Mr. Sushilkumar Bachhawat. He has at the time of opening the trading account with the Respondent (erstwhile Angel Capital and Debt Market Ltd.) executed necessary documents viz., Client Registration Form, Member-Client Agreement (MCA), Risk Disclosure Document (RDD) and other related documents as Karta and was allotted unique client code(ucc) S76028 which was mapped under Shahibaug Branch of the Respondent. Subsequently, at the request of the Karta, the account was transferred to Vastrapur Branch of the Respondent under the UCC S89086 where the Applicant HUF was mapped under sub-broker, J.M Financial Advisory Services. The said account was opened on 22/09/2009 at Shahibaug Branch and transferred to Vastrapur Branch on 01/05/2010. However, the UCC S88375 quoted by the Applicant HUF in its statement of case is the account of Mr. Sushilkumar Bachhawat maintained with the Respondent in his individual capacity. According to the Respondent, in the statement of case the Applicant HUF has not raised any dispute relating to any transaction in UCC S However, the dispute relating to the UCC S88375, belonging to Mr. Sushilkumar Bachhawat in his individual capacity, has been filed in a separate Arbitration Reference under application A.M. No.CM/M-0077/2010. Thus, the Applicant HUF is deliberately trying to mix up the issues to confuse the Tribunal as to the true and correct nature of the dispute. The Respondent has admitted that the Applicant HUF has also opened a demat account on 22/09/2010 with the Respondent, which is a Depository Participant (DP) with the CDSL. The Respondent has further submitted that the cheque payment of Rs.740/- from Applicant HUF has been duly accounted for in Applicant s BSE trading account. Page 3 of 6

4 The Respondent has stated that while there is no dispute regarding the transfer of accounts from Shahibaug to Vastrapur Branch, the Applicant HUF s dispute strangely is that of non-transfer of his accounts back to Shahibaug Branch. The Respondent has said that the Applicant HUF has not given any reason for re-transfer of its account, whom the Applicant HUF had approached for transfer of its account and pecuniary loss, damage or injury sustained by it on account of its request not being acceded to. The Respondent has further stated that no money claim is maintainable on this ground. Besides, the Applicant HUF has not carried out any transaction in its securities trading account with the Respondent in any segment after it opened the account. Thus, there is no question of any loss sustained by the Applicant HUF and the Respondent being liable for paying the money claim raised by the Applicant HUF in the said reference. The Respondent has submitted that the Applicant HUF has not established any ground to maintain a money claim on it on the basis of frivolous allegations and as such without any substance. The Applicant HUF has computed Rs. 22,976/- being the difference in value of shares between the two dates 21/04/2010 and 31/08/2010 without giving any reason there for and why and for what reason the Respondent is liable to the Applicant HUF for that amount. The Respondent has also denied that the Applicant HUF has placed those shares with the Respondent. The claim of the Applicant HUF is, therefore, absolutely baseless, unfounded, not brought out on the basis of any transactions between the Applicant HUF and the Respondent and bound to fail. The Respondent has averred that the accounts of the Applicant HUF can be transferred from the Respondent or terminated/closed by following the provisions in MCA for closure there of. The Respondent is categorical in its statement that there are no shares lying in the demat account of the Applicant HUF with the Respondent and therefore, the question of transfer of shares from the Respondent does not arise. Even, there are no shares lying with the Respondent as collateral or otherwise belonging to the Applicant HUF. In view of the aforesaid reasons the Respondent has prayed for dismissal of the claim with exemplary cost to the Respondent. 5. Additional information from the Applicant The Applicant has revised its statement of case in which the Applicant has stated that in its demat with the Respondent it had only one scrip i.e., Wire & Wireless India Ltd.,-1000 shares of value of Rs.14,650/-as on 24/05/2010. The Applicant could not sell the same because the sub-broker of the Respondent had misguided it. However, the Applicant has since transferred the same shares to its other demat account with Nutan Nagrik Sahakari Bank Ltd on Page 4 of 6

5 05/08/2010. The value of the said share on the date of transfer was Rs. 14,060/-. Accordingly, the difference is Rs.590/- and the interest thereon at 18% from 24/05/2010 to 05/08/2010 (73days) is Rs The revised claim is Rs. 1, The Applicant has sought revised claim from the Respondent as well as transfer of accounts to Shahibaug Branch of the Respondent. 6. Documents relied upon The Respondent has submitted copies of various documents and statements viz., copies of Client Registration Form, MCA, RDD, ledger statement etc. 7. Proceedings At the initial hearing held on Oct 27, 2010, the parties made oral submissions. As the Respondent submitted statement of defence on the earlier day, the Applicant was given a fortnight s time to submit its reply to the statement of defence of the Respondent. At the adjourned hearing held on Nov 19, 2010, the Respondent was present but the Applicant was absent presumably due to the small amount of its revised claim. This was confirmed by the Applicant over phone to the Exchange. As the matter related to demat account and not connected to any trading through the Exchange, the Sole Arbitrator decided to close the reference for Award. 8. Findings and conclusion The claim of the Applicant has been examined in the light of the statements, documents, submissions and pleadings of both the parties as aforesaid. The dispute arose on account of non-transferability of the demat account and the trading account of the Applicant with the Respondent to Shahibaug Branch from Vastrapur Branch of the Respondent in Ahmedabad. While the Applicant wanted to transfer the accounts back to Shahibaug Branch due to the fact that the sub- broker s office at the Respondent s Vastrapur Branch remained closed when the Applicant visited the sub-broker at his office to sell its shares and operate the trading account, according to the Respondent, the Applicant has not complied with the provisions of MCA as also the reasons for the retransfer of account to the Shahibaug Branch was not given. Thus, it is very clear that there was no transaction, dealing or contracts made subject to the Bye-laws, Rules and Regulations of the Exchange. The claim of Rs. 1, was only on account of delay in transfer of shares from one demat account to the other demat account of the Applicant without effecting any trading on the Exchange. The claim, therefore, does not fall within the ambit of the arbitration mechanism as set out under Chapter XI of the Bye-laws of the Exchange. Accordingly, the Sole Arbitrator has no jurisdiction to adjudicate the dispute through the arbitration under the Bye-laws of the Exchange. Thus, the Sole Arbitrator has no other option but to dismiss the claim and hence dismissed it. Page 5 of 6

6 As regards the transfer of trading and demat accounts to the Respondent s Shahibaug Branch from Vastapur Branch, the parties have to sort out the matter after meeting the requirements set out there for in an amicable manner expeditiously. The Sole Arbitrator gives the following Award:- Award I, the Sole Arbitrator in the Arbitration No: CM/M-0083/2010 between the Applicant, Sushilkumar Hazarimal HUF (Constituent) and the Respondent, Angel Capital & Debt Market Ltd., (Trading Member) give my Award as under:- 1. The claim of the Applicant viz.,sushikumar Hazarimal HUF for Rs.38,779/- (Rupees Thirty eight thousand seven hundred seventy nine only) against the Respondent viz., Angel Capital & Debt Market Ltd., stands dismissed. 2. Cost of the arbitration to be borne by the Applicant. 3. No order as to cost and expenses. 4. The Award is signed in three originals. NSE may retain the stamped original and forward one original each to the Applicant and the Respondent. Place: Mumbai Date: November 30, G.A.Nayak Sole Arbitrator Page 6 of 6

IN THE MATTER OF ARBITRATION UNDER THE BYELAWS, RULES &REGULATIONS OF NATIONAL STOCK OF INDIA LIMITED (NSEIL)

BEFORE THE SOLE ARBITRATOR SHRI S C GUPTA ----------------------------------------------------------------------- IN THE MATTER OF ARBITRATION UNDER THE BYELAWS, RULES &REGULATIONS OF NATIONAL STOCK OF