BEFORE JUSTICE (Retd.) MAHMOOD ALI KHAN SOLE ARBITRATOR. A.M. No. D-061 of 2011

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1 BEFORE JUSTICE (Retd.) MAHMOOD ALI KHAN SOLE ARBITRATOR A.M. No. D-061 of 2011 IN THE MATTER OF: Smt. Lalita Jain Constituent w/o Shri Vinod Kumar Jain 58, Krishna Marg Govind Nagar (East), Amer Road Jaipur PAN No.AHAPJ8893R Applicant Aditya Birla Money Ltd. Ali Trading Member Tower, 55, Greens Road Chennai Versus AWARD Respondent I. The applicant has filed this arbitration application claiming Rs. 2,60,000/- from the respondent - Trading Member. The dispute in relation thereto has been referred by the NSE for adjudication in arbitration proceedings. 2. The applicant has not filed statement of case but has filed copy of her complaint made to the Exchange on In the complaint, it was stated that in the earlier complaint inadvertently the date was written by mistake and it should be read as ' '. According to the applicant all trades, which have been carried out by the franchise of the respondent in her account from , were without her permission and instructions. She had not carried out any trades herself after It is stated that in January, 2009 her account had a credit balance of Rs. 12,000/-. She had also not been supplied trade related documents after On receiving trade SMS she made many telephonic calls to the respondent and she was assured that there was nothing to worry about it and her account would be settled. In March, 20 I 0 she found that her account was in debit. She personally contacted the respondent and also saw that late payment charges have also been debited in the account. The respondent gave a cheque of Rs. 5,000/- towards the compensation for late payment charges levied but the said cheque was bounced on presentation to the bank. Thereafter she made several complaints to the respondent but to no effect.

2 3. In the reply, the respondent has repudiated the claim of the applicant. It is stated that the applicant started trading in equity on and Derivative Segment of the market on but she disputed the trades which were executed after The trades have been executed in NSE and SSE but they have not been segregated and the loss has also not been specified in two Exchanges separately. According to the respondent, the Contract Notes of all trades have been regularly sent to the applicant through her registered ID. The statement of account and transaction statement of security had also been sent to her periodically. In the complaint made to the Investors Service Cell of the NSE she has alleged that the trades after I 0 were unauthorized but changed her version when the respondent submitted reply. It is stated that the applicant is disputing trades executed after but she made the first complaint on The complaints dated , and , copies of which have been filed by the applicant were not received by the respondent. The delay in making complaints against the trades belies her allegations. The respondent also alleged that the applicant has taken pay-out from her account during the disputed period but did not raise any dispute at that time. According to the respondent the debit balance in the statement of account, as on , was Rs. 82, and that the applicant should be directed to pay it with interest at the rate of 24% p.a.. With respect to the cheque for Rs. 5,000/- alleged to have been issued by Shri Vinod in lieu oflate payment charges levied, it was stated that there might be some private transaction between the applicant and Shri Vinod with which the respondent had no concern. Furthermore, according to the applicant a sum of Rs. 60,000/- was charged by the respondent towards late payment but the applicant alleged that a cheque of only Rs. 5,000/- was issued by Shri Vinod in lieu thereof. The applicant has concocted the story to escape her liability. 4. I have heard the parties and have gone through the record carefully. The applicant opened the trading account with the respondent in October, 2007 and she started trading from December, She did not have any complaint against any of the trades done in her account till It is stated that she had Rs. 12,000/- credit balance in her account in January, The allegation of the applicant is that all the trades, which have been carried out in her account

3 after , are without her permission and instructions and these trades have caused loss of Rs. 2,00,000/-to her. She is also claiming Rs. 60,000/- which has been levied by the respondent in her account as delay payment charges. From her allegations made in the complaint, which was filed with the arbitration application, it appears that she had been receiving the Contract Notes and the SMS of the trade. It is also alleged by her that she was protesting against them the respondent over phone but she used to be pacified by assurance that nothing was wrong in her account. She has not explained as to why she did not make written complaint immediately on receipt of trade SMS and the Contract Notes of the impugned trades. According to the respondent the first complaint was received by it on It is denied that complaints dated , and allegedly made by the applicant were received by it. Even otherwise, there is no explanation as to why the first complaint was made by the applicant in June, The applicant has heavily relied upon a writing dated purported to have been made by Mr. Vinod. The writing is in vernacular script. It is reproduced below: "T.No , Shri Vinodji Broker A-22,Prem Nagar, Khatipura Road,Jhatwara,Jaipur dt tak ka vayaj paid (-) nakadjama (-) Recd * baki nakad adv. ch. Share trading alc No meinjo kam swayam kestar per kiya hai uska hissab va vayaj Dec.2009 mein pura karoonga. * Is terah se bhugtan ho jayega. sd/- Vinod

4 6. Assuming that this writing was made by Shri Vinod, franchisee of the respondent, but it did not show that this writing was made by him on behalf of the respondent. Rather it showed that there was some personal deal and understanding between the applicant and Shri Vinod in pursuance to which Shri Vinod was liable to pay some interest, which he had paid, upto It also shows that Shri Vinod had carried out some trades in the account of the applicant and had undertaken to give complete account of it and the interest due in December, The manner in which the payment was to be made upto December, 2009 is also mentioned. This document shows that whatever had taken place was with the consent of the applicant. The applicant never made any complaint to the respondent against Shri Vinod for having executed trades without her permission and consent in her account. She also did not send this writing to the respondent to hold it responsible for the trades done in her account by Shri Vinod and to ensure that she received full amount in terms of this writing. A writing in the hand of the applicant, which is below this written document, shows that neither the payment was made nor was the interest paid by Shri Vinod and the cheque dated issued by Shri Vinod also bounced for insufficiency of funds. The applicant did not complain to the respondent even in December, 2009 when the payment was not received in accordance with the abovementioned writing. She also did not make any complain in April, 2010 when the cheque for Rs. 5,000/- issued by Shri Vinod to her towards levy of late payment charges bounced. There is no mention of late payment charges even in the writing dated produced above. Thus, this writing purported to have been made by Shri Vinod or even the cheque for Rs. 5,000/- allegedly issued by Shri Vinod to the applicant do not prove that these trades were executed in the account of the applicant after by the respondent - Trading Member. 7. From the above discussion, I do not find that the applicant has been able to prove that unauthorized trades have been execute in the account of the applicant by the respondent and that the respondent is liable to compensate for the loss which has been suffered by the applicant due to such trades.

5 8. The applicant has failed to prove the claim pleaded in the arbitration application. 9. As regards the counter claim of Rs. 82, pleaded by the respondent, during the hearing of arguments, representative of the respondent has withdrawn it. He has stated that it has been recovered by squaring off on Accordingly, the applicant's arbitration claim, against the respondent - Trading ~ Member is dismissed. The respondent - Trading Member s counter claim against the applicant Constituent is also dismissed. No costs. Award announced on 31 st October 2011 JUSTICE M.A. KHAN SOLE ARBITRATOR..