W.P.(C) No.

1531/2014 Page1 of 4


THE HIGH COURT OF DELHI AT NEW DELHI

% Judgment delivered on: 16.10.2014

+ W.P.(C) 1531/2014
RAJ KUMAR GURSAHANI ..... Petitioner
versus
SECURITIES & EXCHANGE BOARD
OF INDIA ..... Respondent
Advocates who appeared in this case:
For the Petitioner : Mr Ashok Kriplani.
For the Respondent : Mr Neeraj Malhotra with Mr Prithu Garg,
Mr Virat K. Anand for SEBI along with
Ms Rajamany K., AGM, SEBI.
CORAM:-
HONBLE MRJUSTICE VIBHU BAKHRU
JUDGMENT

VIBHU BAKHRU, J
1. The petitioner impugns the circular No. PR No. 03/2011 dated
06.01.2011 issued by the respondent (SEBI).
2. The grievance of the petitioner is that the impugned circular (PR No.
03/2011) modifies the period of limitation for invoking the arbitration from
six months to three years.
3. According to the petitioner, the circulars issued by SEBI are
detrimental to the interest of the investors and have been issued at the
instance of brokers and thus, are contrary to the object of the Securities and
Exchange Board of India Act, 2002 (hereafter SEBI Act).


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4. The petitioner had entered into an agreement with M/s India Infoline
Ltd. (hereafter IIL), a member of the National Stock Exchange of India
Ltd., for carrying on transactions in shares of listed companies. According
to IIL, the petitioner owed a sum of `3,57,176/- to the said company as on
31.03.2009. IIL invoked the arbitration agreement as contained in the
byelaws of the National Stock Exchange of India. And on 10.01.2011, IIL
preferred a claim before the Arbitral Tribunal for a sum of `5,03,703/-
including interest for a period 31.03.2009 to 15.12.2012 amounting to
`1,46,550/-. The said claim was filed, admittedly, within a period of three
years - but beyond the period of six months - from the date the amounts
claimed became due. The Arbitrator made an award on 15.06.2011
awarding a sum of `4,30,451/- in favour of IIL. It was also directed that
interest @12% on the said amount would be payable in case of delay in
payment of the awarded amount. The petitioner preferred an application
under Section 34 of the Arbitration and Conciliation Act, 1996 for setting
aside the said award before the Additional District Judge, Delhi. The said
application was dismissed by an order dated 20.05.2013. Aggrieved by the
same, the petitioner preferred an appeal under Section 37 of the Arbitration
and Conciliation Act, 1996 before the Single Judge of this Court which was
also rejected by an order dated 04.10.2013.
5. In view of the above, the award made by the Arbitrator in respect of
disputes between petitioner and IIL have attained finality. It is also relevant
to note that the petitioner had specifically challenged the arbitral award on
the ground that it was beyond the period of limitation of six months and the
subsequent amendment increasing the limitation period to three years could


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not be given a retrospective effect. The petitioners contention was rejected
by the Additional District Judge in the following words:-
5. Given the facts I am unable to concur with the Ld.
Counsel for the petitioner that the NSEs increasing the
limitation to three years would not applicable to the
present case.
The arguments of the Ld. Counsel for the petitioner that
the amendments would not be applicable retrospectively
can apply to cases which have been disposed off. The
amendment of the Rules and Byelaws of Stock
Exchange in increasing the period of termination was
made so as to facilitate looking into the grievance of
parties who may have lost out in filing their claim
within six months and bringing it at par with the
statutory provisions.
6. It is, thus, seen that the petitioners challenge to the increase in the
period of limitation has already been negated by the ADJ and the present
petition is another attempt to open concluded issues. Therefore, in this
view, this petition is liable to be dismissed.
7. The learned counsel for the SEBI has pointed that the circular
impugned by the petitioner has been issued in exercise of powers conferred
on SEBI under Section 11(1) of the SEBI Act read with Section 10 of the
Securities Contract (Regulation) Act, 1956 to protect the interest of
investors.
8. A plain reading of the impugned circular also indicates that the
increase in the period of limitation is available to both parties and is not
limited only to claims made by brokers against their clients. Thus, no mala
fides can be attributed to SEBI in framing the impugned circular. In Biba


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Sethi v. Dyna Securities Limited: 2009 (112) DRJ 512, a Single Judge of
this Court had held that Byelaws of the National Stock Exchange of India
(NSE) prescribing a limitation period of six months for making a reference
of disputes/claims to arbitration were void as the relevant byelaw restricting
the period of limitation would run contrary to the provisions of Section 28
of the Indian Contract Act, 1972.
9. In this view, the impugned circular issued by SEBI which advises the
recognised stock exchanges to make amendments in their relevant byelaws,
rules and regulations only ensures that the period for invoking the
arbitration clause is in conformity with the settled law. I, thus, find no
infirmity with the impugned circular. The writ petition is, accordingly,
dismissed. No order as to costs.

VIBHU BAKHRU, J
OCTOBER 16, 2014
RK