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CASE NO.: Appeal (civil)  5669 of 2006

PETITIONER: HCG Stock & Share Brokers Limited

RESPONDENT: Gaggar Suresh

DATE OF JUDGMENT: 08/12/2006

BENCH: G.P.MATHUR & A.K. MATHUR

JUDGMENT: J U D G M E N T   [ ARISING OUT OF S.L.P.(C) NO.6963 OF 2005] W I T H : CIVIL APPEAL NO. 5670 OF 2006 [ Arising out of S.L.P.(c) No.7040 of 2005]

A.K.MATHUR,J.  

               Leave granted.

               Both these appeals involve similar question of law  therefore, they are disposed of by this common order.  For  convenient disposal of both these appeals, the facts given in  Civil Appeal arising out of S.L.P.(c) No.6963 of 2005 are  taken up for consideration.                 This appeal is directed against the order passed by  the Division Bench of the Bombay High Court in Appeal  No.738 of 2004  on 2.12.2004 whereby the Division Bench of  the High Court has affirmed the order of learned Single  Judge. Learned Single Judge in turn has affirmed the order of  the Arbitral Tribunal whereby the Arbitral Tribunal has  upheld the objection of the respondent that the claim raised  by the appellant is barred by limitation as per Bye-laws of  the  National Stock Exchange of India Limited.   

               A claim was made by   M/s.HCG Stock and Share  Brokers Limited (hereinafter to be referred to as the  "appellant")  before the Arbitral Tribunal and it was  contested by the present respondent on the ground of  limitation.  The Arbitral Tribunal framed preliminary issue  on  limitation and held that the claim was barred by time and  accordingly rejected the appellant’s claim.  Aggrieved  against that order the appellant filed an arbitration petition  before learned Single Judge of the  High Court of Bombay.   Learned Single Judge upheld  the order of the Arbitral  Tribunal.  Aggrieved against that order dated 26.7.2004  passed by  learned Single Judge, the appellant preferred an  appeal before the Division Bench and the Division Bench   dismissed the appeal and affirmed the order of the learned  Single Judge.   

In regular course of business the appellant maintained  an account of the respondent in its books of accounts and  from time to time the appellant forwarded to the respondent  the extracts of the said account, which was received,  retained and accepted by the respondent and at no point of  time the respondent raised any dispute regarding the extract  of the accounts.  At the foot of the said account of the

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respondent so maintained by the appellant a sum of  Rs.49,79,388.17 paise remained due and payable by the  respondent to the appellant as on 31.12.1999.  The appellant  also sent confirmation letter to the respondent along with  copy of the statement of account and the respondent never  raised any query nor did the respondent raise  any objection  and on the contrary, the respondent kept on promising to  pay the outstanding dues in his accounts. The respondent  sought some time for making the payment because of  financial difficulties.  However, after some time  the  appellant became suspicious  and lodged a complaint against  the respondent  with the Economic Offences Wing on  21.3.2003. The appellant submitted that the cause of action   has arisen when  it filed the complaint against the  respondent with the Economic Offences Wing on 21.3.2003  and therefore,  the claim was within time and the same is not  barred by limitation. The respondent filed his reply and  raised an objection that the claim is barred by time.  Apart  from other objections which have been raised by the  respondent,  the respondent raised the plea of limitation and  submitted that the time prescribed for filing any complaint  arising out of a dispute  redressal of which can be sought  from the panel of Arbitrators  by National Stock Exchange of  India Limited is six months from the date of dispute. In the  present dispute  the time  started running from the date on  which the dispute has arisen. The last date on which the  appellant has carried out a transaction on behalf of the  respondent was 1.7.1999. The respondent submitted that  the arbitration proceedings must be terminated since prima  facie  the dispute is not established as it is hopelessly barred  by time. The Bye-laws of National Stock Exchange of India  Limited provide six months  period for filing of such  complaint and the relevant portion of the bye-laws reads as  under :

               "  \005 All claims, differences or disputes  referred to in Bye laws (1), (1A), (1B) and  (1D)  above shall be submitted to arbitration  within six months from the date on which the  claim, difference or dispute arose or shall be  deemed to have arisen. The time taken in  conciliation proceedings, if any, initiated and  conducted as per the provisions of the Act and  the time taken by the Relevant Authority to  administratively resolve  the claim, differences  or disputes shall be excluded for the purpose  of determining the period of six months."

According to the appellant, the cause of action has arisen on  or about 21.3.2003.  Whether really the cause of action has  arisen to the appellant on 21.3.2003 or prior to that, that is  the question to be decided. On the basis of the letter dated  8.2.2001, the appellant called upon the respondent to clear  up the outstanding dues on or before 16.2.2001.  This is  more than evident from the contents of the letter dated  8.2.2001 in which it has been clearly mentioned as follows :

               "  The above dues are pending for last  one month and you have been already advised  by our official from time to time to clear the  outstanding dues at the earliest. We once  again give an opportunity to you to clear the  outstanding debit balance as per the  statement of account ( once again furnishing  the statement of account with dues as on  date

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for your ready reference ) on or before 15th  Feb.2001."

That means on 8.2.2001  the appellant has already given  notice that the outstanding amount of Rs.49,79,388.17  was  due to it  towards the trade and transaction  but that has not  been paid and it should be paid by 15.2.2001. Then by  another letter dated 24.2.2001 again the appellant called  upon the respondent to clear the outstanding dues before  19.3.2001 failing which  the appellant would proceed to sell  the shares placed with it as collateral security in the market  and the proceeds thereof would be adjusted against the  outstanding dues without any further intimation.  Reference  to this communication leaves no manner of doubt that  the  dispute has already arisen on 8.2.2001 and the last date for  resolving the dispute was 19.3.2001. Therefore, even if we  take the last cut off date to be 19.3.2001 then too the last  date for filing the complaint  would be September, 2001.  In  fact, the complaint was filed in the month of September,  2003. Therefore, the complaint was hopelessly barred by  time.                  In view of the admitted facts, the view taken by the  Arbitral Tribunal as affirmed by the learned Single Judge and  further affirmed by the Division Bench of the Bombay High  Court requires no interference by this Court. Accordingly, the  appeal  is  dismissed. There would be no order as to costs.

               Similarly, the civil appeal arising out of S.L.P.(c)  No.7040 of 2005 is also dismissed for the reasons mentioned  above. There would be no order as to costs.