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2024ArbitrationHigh CourtLatestLegalMay 2024

Arbitration Vs Criminal Proceedings

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Accused No.1 is the Stock Broker and Depository Participant.

Accused No.2 Managing Director

Accused No.3 whole-time Director of accused no.1.

Accused No.4 is stock sub-broker and associate of accused no.1

Accused no.5 is the proprietor of the accused no.4.

They are providing stock broking services through on line computers at Dumka

There was tripartite agreement between the complainant and the accused persons for dealing in shares with NSE and Bombay Stock Exchange for which they obtained his signatures on many printed papers in booklet including power of attorney which accused no.5 got executed from the complainant in favour of accused no.1.

Accordingly, the complainant was registered as a client for cash and derivative segment.  However, on 22.1.2008, the accused fraudulently and dishonestly violated the terms and conditions of agreement and caused immense loss to the complainant.  By the notice dated 18.1.2008, the accused nos.1 to 4 were warned not to make any further transaction without written request of the complainant. By the notice dated 19.9.2009, the power of attorney was revoked.

The accused no.1 initiated arbitration application before the National Stock Exchange by suppressing facts and NSE appointed the arbitrator illegally.

On 17.6.2009, the Arbitrator passed the Award for Rs.1,56,017.64 ps and sent the same to the complainant.

Order dated 21.1.2016 taking cognizance of the offence under Sections 409 and 120B of the Indian Penal Code against the petitioners, respectively,

Simply because there is remedy provided for the breach of contract for arbitral proceeding initiated at the instance of the petitioner, that does not by itself clothe the Courts to come to the conclusion that the civil remedy is the only remedy and initiation of a proceeding is an abuse of process of the court for exercising inherent powers for quashing such proceedings.

Judgment dated 21/22.2.2024 Cr.M.P.No.1241 of 2016 of Asit C. Mehta Investment Intermediates Ltd and others   Vs.  The State of Jharkhand another with connected matters

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