HCG STOCK & SHARE BROKERS LIMITEDversusGAGGAR SURESH

A                   HCG STOCK & SHARE BROKERS LIMITED
                                    v.
                             GAGGAR SURESH

                                 DECEMBER 8, 2006

B                     [G.P. MA THUR AND A.K. MA THUR, JJ.]


          Limitation-Arbitration proceedings-Objection that claim time
    barred-Sustainability of-Held: As per the Bye-laws the claim was to be
C   submitted to arbitration within six months from the date on which dispute
    arose-Dispute arose much earlier and the complaint was filed after two
    years from the last date for filing complaint-Thus, complaint hopelessly time
    barred-Order of courts b~low upheld-Bye-laws ofNational Stock Exchange
    of India Limited

D         Appellant used to carry out transaction on behalf of the respondent.
    Certain amount became due to the appellant from the respondent towards
    the trade and transaction. Appellant made a Claim before the Arbitral
    Tribunal. Respondent raised an objection that the claim was barred by
    limitation as per the Bye-laws of National Stock Exchange of India
    Limited. Appellant contended that the cause of action arose when it filed
E   a complaint with the Economic Offences Wing on 21.03.2003. Arbitral
    Tribunal upheld the objection of the respondent and rejected the
    appellant's claim. Both the Single Judge and the Division Bench of the High
    Court upheld the order of the Arbitral Tribunal. Hence the present appeal.

          Dismissing the appeals, the Court
F
           HELD: As per the Bye-laws of National Stock Exchange of India Limited,
    all claims, differences or disputes referred therein were to be submitted to
    arbitration within six months from the date on which dispute arose. In the
    instant case, the time started running from the date on which the dispute has
G   arisen. The last date on which the appellant carried out a transaction on behalf
    of the respondent was 1.7.1999. On the basis of the letter dated 8.2.2001,
    appellant called upon the respondent to clear up the outstanding dues on or
    before 16.2.2001. Then by another letter the appellant again called upon the
    respondent to clear the outstanding dues before 19.3.2001. Reference to this
                                         408
H
-             HCG STOCK& SHARE BROKERS LIMITED v. GAGGAR SURESH [A.K. MATHUR, J.] 409

      communication leaves no manner of doubt that the dispute has already arisen        A
      on 8.02.2001 and the last date for resolving the dispute was 19.3.2001.
      Therefore, even ifthe last cut off date is taken as 19.3.2001 then too the last
      date for filing the complaint would be September, 2001. In fact, the complaint
      was filed in September 2003. Therefore, the complaint was hopelessly barred
      by time. Thus, the view taken by the Arbitral Tribunal as upheld by the Single     B
      Judge and the Division Bench of High Court calls for no interference.
                                                         (411-A-C; 411-E-H; 412-A)

              CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5669 of2006.

            From the final Judgment and Order dated 2.12.2004 of the High Court          C
      of Judicature at Bombay in Appeal No. 738/2004 in Arbitration Petition No.112/
      2004.

            P.H. Parekh, Suneel Goel and Diksha Rai (for Mis. P.H. Parekh & Co.)
      for the Appellant.
                                                                                         D
              D.P. Singh and Sanjay Jain for the Respondent.

              The Judgment of the Court was delivered by

              A.K. MATHUR, J. Leave granted.

            Both these appeals involve similar question of law therefore, they are
                                                                                         E
      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       p
      of the Bombay High Court in Appeal No.738 of2004 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.                   G
             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    H
       claim was barred by time and accordingly rejected the appellant's claim.
    410                     SUPREME COURT REPORTS (2006] SUPP. IO S.C.R.

A 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
B   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
C    respondent raised any dispute regarding the extract of the accounts. At the
     foot of the said account of the 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 3LJ2.1999. The appellant also sent confirmatfon 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
D    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
E   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
F   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
G    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:

H
          HCG STOCK & SHARE BROKERS LIMITED v. GAGGAR SURESH [A.K. MATHUR, J.]   411

                " ... All claims, differences or disputes referred to in Bye laws (I),   A
            (IA), (IB) and (ID) 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         B
            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      C
    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 D
            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 for your ready reference) on or before 15th Feb. 2001."
                                                                                         E
    That means on 8.2.200 I 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     F
    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 19.3.200 I then too the       G
    last date for filing the complaint would be September, 200 I. 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         H
    412                   SUPREME COURT REPORTS [2006] SUPP. 10 S.C.R.

A   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.
B
    NJ.                                                      Appeals dismissed.