SC Directs Broker to Pay Rs.21 Lakh Plus 12% Interest from Date of Arbitral Tribunal’s Award, Ending 2012 Litigation

Case Details: Sharda Kapur v. Angel Broking Ltd. - [2024] 160 taxmann.com 669 (SC)

Judiciary and Counsel Details

• Abhay S. Oka & Pankaj Mithal, JJ.
• Dr Meneka Guruswamy, Harshwardhan, Utkarsh Pratap, Lavkesh Bhambhani, Ms Navya Jannu, Ms Pinki Aggarwal, Animesh Upadhyay, Ms Tanvi Nigam, Advs. & Priya Puri, AOR for the Petitioner.

Facts of the Case

In the instant case, the appellant opened a trading account with the respondent broker. The appellant filed a claim petition before the sole arbitrator appointed as per the bye-laws of the National Stock Exchange (NSE), seeking restoration of securities held by the appellant which were allegedly illegally sold by the respondent firm.

According to the case of the appellant, the loss incurred was Rs. 21 lakh. However, the sole arbitrator rejected the claim of the appellant. The Appellate Arbitral Tribunal of NSE observed that there was negligence on the part of the respondent, as NSE Regulations were breached by the respondent.

Consequently, an award was made directing the respondent to give credit of Rs. 21 lakh to the appellant’s account. The High Court by the impugned order upheld the order passed by the Appellate Arbitral Tribunal. However, the respondent had not chosen to offer the said amount till date.

It was noted that to put an end to litigation which started in 2012, this was a fit case to exercise Extra Ordinary Jurisdiction of the Supreme Court under Article 142 of the Constitution of India.

Supreme Court Held

The Supreme Court held that the respondent was directed to pay simple interest at the rate of 12% per annum on the amount of Rs. 21 lakh from the date of award of the Appellate Arbitral Tribunal.

Accordingly, the impugned judgment was modified and the respondent was instructed to pay Rs. 21 lakh to the appellant along with a simple interest thereon at a rate of 12% per annum from the date of award of Appellate Arbitral Tribunal.