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Unauthorised Trading – Arbitral Award of NSE – Limitation

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Judgment dated 14.8.2025 of the High Court of Bombay in Arbitration Petition No.1341 of 2015 of Bhanuchandra J. Doshi  Vs.  M/s.  Motilal Oswal Securities Ltd and another

 Unauthorised Trading – Dispute of margin shortfall  – Arbitral Award – NSE byelaws

 The petitioner has been trading with the respondent no.1 through the sub-broker respondent no.2 since 2004 until January 2008.   The disputes on account of trading in the context of margin short fall and withholding of cheques was considered in the Arbitral Award.

 Chapter XI of the NSE Bye-laws governing arbitration in Rule 13(b) provides that the arbitrator shall make the award normally in 3 months from the date of entering upon the reference i.e. the date on which the first hearing was held.  Clause (c) provides for request of extension beyond three months.

 HELD that in this case, the first hearing was held on 28.1.2013 and the first Award was made on 27.4.2013. 

 HELD throughout the period of 2004 to 2007 not a single trade either the cash segment or the derivatives segments had been contested by the petitioner.  However, the purchase of some shares is challenged on the ground of delivery of contract notes.   It would, therefore, follow that the contract notes were indeed were sent on email, courier and the petitioner had always access to the contract notes.  The petitioner had consciously issued the cheque for margin shortfall after being aware of the trades and then gave instructions to stop cheque payment purportedly realising that he had no authorised that trade. Not only that but the petitioner had thereafter issued further cheque for SBI rights share on 18.3.2018.   Thus, the Award that the petitioner had validly authorised the trades.

 

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