Before the Sole Arbitrator Justice V S Aggarwal (Retd.) A.M. No.D-F&O/D-047/2010 In the matter of Neeraj Saini, 636, Kandhla House Behind Col, Kishan Singh Jikaadera, Old Ginnani, Bikaner-33400 Claimant Vs. Kassa Finvest (P) Ltd. Trading Member 17 A/53, III Floor, W E A Gurdwara Road, Near Metro Station, Karol Bagh Delhi-11005. Respondent AWARD The claimant Neeraj Saini is the constituent while respondent Kassa Finvest (P) Ltd is a trading member. The claimant seeks to recover Rs. 3,425,000/- from the respondent. The facts in brief are that a member client agreement was executed between the parties. As per the claimant right from the beginning the
respondent was trading on his behalf and he had been allotted code no. YBK051. As on 16-1-2009 there were large number of shares in the account of the respondent. He applied to Punjab National Bank for another demat account and then requested the respondent on 25th November, 2009 to transfer the shares held in the demat account. He was told that there were no shares in his demat account with Kassa Finvest (P) Ltd. It was after six months on 22 nd July, 2010 that certain shares only were transferred in his demat account and this has resulted loss to the claimant. Hence the present dispute. In the reply filed the respondent asserts that there were no holdings/shares in the applicant's trading account as alleged in the reminder of 25th November, 2009 sent by the applicant and no such letter of stock transfer was received by the respondent. The respondent pleads that statement of demat holding dated 22nd November, 2009 and on 11th January, 2009 are fake. In fact they have been generated manually. It has been done with the ulterior motive of the applicant to make unlawful gain. It is asserted that letter of 30th September, 2009 for change of communication detailed has been signed by the claimant. The claimant chooses three or four types of signatures. So far as the cheques given by Sudhanshu are concerned they are stated to be from the personal account of Sudhanshu Sharma and may have been issued in his personal capacity without the
consent of the respondent. Sudhanshu Sharma is stated to have left the services of the respondent on 15th January, 2010. Similarly, it is stated that delivery bill-scrip wise summary is fake and has been made fraudulently. He is willfully and deliberately showing bills pertaining to the buying of shares and is withholding of sale of the shares. On 30th November, 2010 after some arguments were heard the claimant was called upon to file his bank statement indicating the fact of his purchase of certain shares. Respondent was also directed that they should file a statement indicating that Sudhanshu Sharma had left the services of the respondent and also holding of the applicant as on 315t March, 2009. The claimant appeared in person while respondent's representative put in appearance and were heard. On behalf of the respondent great stress was laid on the fact that claimant is holding two PAN card numbers for purposes of the present adjudication. It is felt that it is for the authorities to take appropriate action if any and, therefore, it is unnecessary to ponder in this respect. The claimant urged that he had on th August, 2009 requested the respondent to de-activate his account and again on 25th November, 2009 requested for transfer of his holdings in his demat account. Both the communications are stated to have been given to Shri Sudhanshu Sharma,
employee of the respondent who had received the same. The first communication reads: "To, Kasa Finvest (P) Ltd New Delhi - 05 Sir, I am your client at Bikaner Branch YBK051 (Neeraj Saini) due to heavy volatility in F&O market I want to deactivate F&O segment form my account till my further request. Thanks Neeraj Jaini (YBK051 ) Received and sent to HO Sd/ Sudhanshu Sharma 7/8/09 Kasa Finvest Pvt. Ltd. Bikaner, Raj" and the second communication is also being reproduced for the sake of facility: "To, Kasa Finvest (P) Ltd Brnach Bikaner Bikaner Subject: For transfer my all holding in my demat account Respected Sir,
Due to my financial condition I am not trading in my trading account YBK051 from long time. I submit a application for transfer my all holding in my demat account dat 10.11.2009, till today my holding are not transfer in my demat account My demat account details: Client Name : Neeraj Saini Bank Name : Punjab National Bank DP ID No. : IN300708 Clint ID : 10465367 My holding detail are: BHARAT ELECTRONICS : 5 LARSEN AND TOUBRO : 60 RELIANCE CAPITAL L TD : 90 SATYAM COM : 600 SESA GOA LTD : 250 VAKRANGEE SOFT LTD : 100 Please look in to the matter immediately and transfer my all holding in my demat account Thanks Enclosure: Holding statement Application received Sd/Sudhanshu Sharma 25/11/2009" Sd/ Client name and signature The respondent in answer stated that Shri Sudhansu Sharma had left the services of the respondent on 15th January, 2010 and further urged that the three chques relied upon by the claimant purported to have been given
by Shri Sudhanshu Sharma for Rs. 1 lakh each are not concerned with the respondent. So far as the cheques are concerned indeed they are dated 26th March, 2010, 26th April, 2010 and 26th May, 2010. They have been given by Sudhanshu Sharma and are of the period after he had left the services of the respondent. Thus they are inconsequence so as to bind the respondent. However, the two communications given by the claimant are of the earlier period. The respondent had pointed that the same had not been received by the respondent. This contention has stated to be rejected. This is for the reason that Sudhanshu Sharma admittedly was the agent of the respondent. The respondent are bound by the act and conduct of the agent. There is precious little on the record nor there is any plea that he had colluded with the claimant or and consequently it must be held that the said communication had been given by the claimant to Shri Sudhanshu Sharma. If there is any act thereafter by the respondent dealing in the account or trading, the same must be held to be unauthorized because for acts and omission of the employee the respondent cannot escape the liability. The respondent had urged that the documents furnished, by the claimant which has stated to be downloaded about his demat holding is
fake and has been generated manually. One finds no reason to uphold the said contention because bare perusal of the same it does not appear that they have been generated manually or could be described as fake. In fact when the communication of 25th November, 2009 was handed over to Shri Sudhanshu Sharma by the claimant pertaining to his holdings and transfer of the same to his demat account there was no immediate denial in this regard. It appears that it is too late in the day to rake such a plea at this stage. The claimant produced copy of his bank statement which shows that he had given certain cheques to the respondent. It was according to the claimant for purchase of the shares in February 2009, March, 2009 and May 2009. Even one glances through the ledger produced by the respondent on the last date when the cheques are stated to have been given and are received the deficit or even if fall in the margin was not so much that he should be required to pay certain amount. One may, therefore, believe the claimant that it was for purchase of the shares as stated. Regarding the loss that is stated to have caused there was little dispute that was raised but on 9th October, 2009 a sum of Rs. 31,500/- had been given to the claimant by cheque. The due credit of the same must be given and claimant thus would only be entitled to Rs. 2,93,500/-.
Accordingly an award is passed for a sum of Rs. 2,93,500/- in favour of the claimant and against the respondent. The claimant should also pay interest @9% p.a. from the date the present arbitral proceedings commenced till the final payment is made. Justice V S Aggarwal (Retd.) 17/02/2011