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

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1 BEFORE THE SOLE ARBITRATOR SHRI S C GUPTA IN THE MATTER OF ARBITRATION UNDER THE BYELAWS, RULES &REGULATIONS OF NATIONAL STOCK OF INDIA LIMITED (NSEIL) ARBITRATION MATTER NO. CM/M-0038/2010 BETWEEN NIKITA.D SHAH, 3, MIRA APARTMENTS, SANSKAR BHARTI SOCIETY, ANKUR, NARANPURA, AHMEDABAD , GUJARAT APPLICANT AND INTERFACE BROKERAGE & RESEARCH LIMITED, 401, VISHWA COMPLEX, 4 th FLOOR, OPPOSITE JAIN DERASAR, NAVRANGPURA, AHMEDABAD GUJARAT RESPONDENT APPEARENCES For Applicant For Respondent Shri Dilipbhai L Shah, POA holder Applicant in person Shri Hitesh Patel, Authorised Representative AWARD 1) The Applicant Ms Nikita D Shah, an investor, has filed the present reference for arbitration dated 24 th February,2010 against Interface Brokerage & Research Limited, a trading member of the National Stock Exchange, claiming Rs 67850/- being the value of the 50 shares of Maruti Udyog ( as on 24thFebruary) purchased on October 1,2009 but not credited to her demat account.

2 2) The arbitration proceedings were initiated by issue of notice to the Respondent and the first hearing was originally fixed for 19 th April, However at the request of the Respondent, it was postponed to 3 rd May, At the first hearing, the Applicant along with her father and her power of attorney holder Shri Dilip L Shah was present. Advocate Shri B A Parmar appeared on behalf of the Respondent and filed his vakalatnama. However as the Applicant was not represented by an advocate,shri Parmar was not allowed to represent the Respondent. One Miss Divya Parmar appeared claiming to be the representative of the Respondent and undertook to produce the resolution passed by the Board of the Respondent authorizing her to represent the Respondent at the next date of hearing. However, the Written Statement dated 26 th April, 2010 filed by the Respondent was taken on record. The Applicant who was present in person submitted the general Power of Attorney 29 th April, 2010 authorising the donee to represent her,interalia, before the appropriate authorities in respect of her demat account with the Respondent. Thereafter, the matter was fixed for further hearing on 4 th June, At the request of the Respondent, the further hearing was adjourned first to 28thJune, 2010 and again to 2 nd July,2010. In the meantime, the Applicant submitted her rejoinder dated 15 th May, 2010 along with the annexures. On 2 nd July,2010 when the matter was called for further hearing, Shri Hitesh Patel,an employee of the Respondent, appeared as the authorized representative of the Respondent and submitted the letter of authorization given in his favour. The Applicant submitted a letter dated 1 st July,2010 along with a print out of the transaction statement as on 24 th June,2010 from CDSL a copy of which was given to Shri Patel. who requested for a seven days time to give the response,if any, by the Respondent. The matter was, thereafter, adjourned for final hearing on 16 th July,2010. On that date ie 16 th July,2010 while Shri DilIp L Shah,the POA of the Applicant was present,no body appeared on behalf of the Respondent. After Shri Shah had made the submissions on behalf of the Applicant, the arbitration proceedings were closed. 3) It is the case of the Applicant that she had purchased 50 Nos of shares of Maruti Udyog on 1 st Rs per share through the Respondent vide the Respondent s contract no T18309/45, settl No: , Ref Bill No683045, amounting to the final value of Rs 83,415/. A copy of the CM BP ID- IN duly signed by the Respondent was submitted by the Applicant to prove the purchase of the shares on 1 st October, 2009, However, the Respondent did not credit the 50 Nos of shares of Maruti Udyog purchased by her to her Demat Account against the said purchase. In support of her claim, the Applicant has submitted a copy dated 7 th November, 2009 of the confirmation of Accounts from 1 st April, 2009 to 31 st March,2010 from the Respondent. The Applicant has also submitted a copy of the Contract Cum Bill dated 1 st October,2009 showing the purchase of 50 shares of Maruti 1660 per share at the total price of Rs 83000/ and after adding brokerage,service tax and stamp duty, the total cost was shown at Rs 83,573.67/- 4) The Respondent in its Written Statement dated 26 th April, 2010, has stated that no cause of action has accrued in favour of the Applicant and that the cause of

3 action as set out in the Arbitration Reference including the Statement of claim submitted by the Applicant, is illegal, vexatious, bad in law, misconceived and untenable and therefore the Reference for arbitration is liable to be dismissed with costs. The Respondent has denied all the averments made in the statement of the claim of the Applicant. The Respondent has stated that excess deliveries of various scripts were given to the Applicant. According to the Respondent, it had submitted the details of the excess deliveries to the Applicant on various occasions and requested the Applicant that this was a pure matter of taking accounts and after the arithmetics is worked out, the alleged claim of the Applicant would become crystal clear. According to the Respondent, this was only an example whereas there are many such adjustments which were required to be made amongst all the applicants who have signed the Annexure 2(Authorisation of Group/ Family Dealings). However, no such Annexure was filed by the Respondent. According to the Respondent, the Applicant has falsified the various documents deliberately, intentionally and dishonestly with ulterior motives.the Respondent has stated that if full, free and complete inspection is given and true account is taken, some amount would be found to be due to the Respondent and not to the Applicant. The Respondent, in para 5 of the Written Statement, has stated that right from 3 rd October,2009, Central Depository Services (India) Limited ie CDSL has terminated the Respondent s D P operations after postponing the data several times from 14 th September,2009 According to the Respondent, it has not received the data from CDSL. In para 8 of the Written Statement, the Respondent has alleged that the Applicant has deliberately, knowingly, intentionally and with an ulterior motive avoided making the payment of the legitimate dues of the Respondent & put up a false claim. In para 11 of the Written Statement, the Respondent has stated that after full, free and complete inspection is given and all the copies are provided to him it would be entitled in law to file additional replies if warranted by complete inspection and perusal of the copies of the documents. 5) The Applicant, in his rejoinder dated 15 TH May, 2010, has denied the various allegations made by the Respondent in its written statement dated 26 th April, 2010 and has categorically denied all the allegations, averments and contentions raised in the Written Statement and termed them as being not true, baseless and completely misconceived. The Applicant also objected to appearance of the advocate Shri Parmar as the counsel for the Respondent as the Applicant was not being represented by an advocate and one Miss Divya Parmar as the authorized representative as she was not an employee of the Respondent. The Applicant has stated that she had purchased 50 shares of Maruti Udyog on 1 st October, 2009 for Rs83415/ and the Respondent had debited the amount from her account. The Respondent should have, therefore, credited those shares in her account but did not credit the shares to her account. She has further submitted that because of the suspension of depository business of the Respondent, her demat account was assigned to M/s Innovate Securities Private Ltd.She has enclosed a copy of the letter dated 3 rd October, 2009 from Innovate Securities Private Limited which interalia stated that her holding in the demat account with the Respondent would be automatically transferred to the new demat account. She has also submitted a

4 copy of the holding statement from Innovate Securities Private Limited which does not show the transfer of 50 shares of Maruti Udyog to her demat account. She has also annexed a copy of the handwritten statement dated 7 th December,2009 by the director Shri Hemal Parikh of the Respondent company on its bill no that it had to deliver 250 shares of to various group account 6) The Respondent, in its reply to the rejoinder dated 15 th May, 2010 by the Applicant, has stated that the copy of the accounts submitted by the Applicant has not been authenticated or approved by it. It has further stated that transaction and holding statement by the other depository participant submitted by the Applicant does not prove that it has not given the delivery. The Respondent has further stated that the final data of the D P business has not been received from CDSL. According to the Respondent, without the receipt of data from CDSL, it is in no way able to verify the claim of the Applicant on delivery of certain shares. The Respondent has stated that the rejoinder filed by the Applicant is based on completely false, fabricated, vexatious and misconceived averments and thus being bad in law. The Respondent also prayed for directions to the Applicant to prove its contentions by adducing necessary corroborative evidence 7) I have heard the oral submissions of the Applicant and have gone through the pleadings by the Applicant and the Respondent. It is clear from the Contract cum Bill dated 1 st October,2009 that 50 shares of Maruti Udyog were purchased by the order and on account of the Applicant by the Respondent for Rs and the Contract cum Bill note was signed by the authorized signatory of the Respondent. It is also clear from the transaction & holding statement of the D P M/s Innovate Securities Private Limited and the copy CDSL transaction statement that the Respondent had not credited the shares so purchased by the Applicant to her demat account. While the Applicant has produced documentary evidence to substantiate her claim, the Respondent did not produce any evidence to rebut the claim of the Applicant. In fact, it had been taking the non receipt of data from CDSL as a ground for contesting the claim of the Applicant. Probably, the Respondent also had the data from CDSL with it but did not produce because it was not favourable to it. The Respondent, in para 6 of its Written Statement dated 26 th April, 2010 had stated that if true account is taken, the amount would be found to be due to the Respondent and not to the Applicant. Further, in its reply dated 18 th June,2010,the Respondent has taken a stand that the account statement submitted by the Applicant has not been approved or authenticated by it. However, the Respondent has chosen not to submit the account of the Applicant which, in any case, was maintained by it probably because it was adverse or unfavourable to it. On the basis of the evidence on record, I hold that the claim of the Applicant against the Respondent for non credit of 50 shares of Maruti Udyog is proved. 8) In view of my findings above, I hold that the Applicant is entitled to Rs 67850/ being the market value of 50 shares of Maruti Udyog as on 24 th February, 2010 that is the date of claim by the Applicant against the Respondent in the present reference for arbitration. According, I pass my award as under

5 AWARD (1) The Applicant is entitled to Rs 67,850/- along with interest calculated at the rate 15 percent per annum from the date of his claim till payment. (2) The entire cost of arbitration will be borne by the Respondent. (3) This award is made in three originals; one copy for each of the parties and the third will be retained by NSEIL for its records Mumbai August, 13 th 2010 S C Gupta Sole Arbitrator

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

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