S{AME: AEDRESS: THROUGH
RECEIPT NO.: lN
DIA
srAlp DUTY trAxAnaslnnAUnder the Rules, Bye Laws & Regulations of National Stock Exchange of India Ltd'INSEIL] B€fore the Sole Arbitrator shri Nishikant Deshpande
Arbitration Matter No. :CM/PU-OOO3/2015
was given to them to present their respective SIGNATORY
Date of entering the Reference:
-
5th October' 2015 Date of issuing theAward
:-
3oth November' 2015 TheParties:-The Applicant [Constituent]- Mr. Sagar Nathmal Rakhecha' 5' SANIOG -3, Off D.P. Road, Aundh, Pune 411007' Tel' (020) 25880215' 9226440473'
Ucc-Ucc500072965,SARHo218.Mobi|enumberdu|ynotifiedfor
Trading purpose
-
Email Id-
h Drakhecha@vahoo'co in lopted for ECN]'The Respondent
lTrading
Member!-Reliance SecuritiesLtd
llth
Floor' R -Tech I.T. Park, W. E. Highway, Goregaon (East), Mumbai 400063sEBr scoREs ID: - SEBIE/MH15/1000545511 dated 27 /08/2OI5
complaint rD:
-
15082912 34801543 dated 31/08/2015IGRP Hearing was held on 76lOg/20L5 at the RAC, Pune'
It
observed that (1) the online sell order No. 2015081357f726g9 dated 13th August' 2015Was for the sale of 164 Equity shares of Sun Pharma on|y, (2) the detai|ed
order log presented by the TM explained how the order is processed
till
itsexecutionatthebackendoftheirsystem,(3)thusthec|aimofthe
Applicant cannot be accepted. IGRP further observed that the suggestions given Oy the Applicant were worth considering and TM shall consider it' for incorporating the same in their system.
The arbitration claim has been made within the defined time limit'
The 1't and Final Arbitration Hearinq was held on 1gcn october, 2015'
The
Applicant
[Constituent]was
representedby his
father
Mr'N.P.Rakhecha, FCA,
as
an
Authorised Representative' The Respondent [Trading Member] was represented by Mr. Himanshu Maurya, their PuneBranch Head, asslsted by Mr. Alok Kumar, Relationship Manager' Both the Parties accepted
the
documents submittedby the
opponent(s)'At
the outset,explored
but
it
did not
work
out.
Consequently, beginningwith
theCase of the Applicant
-1)
The
Applicantstated
that he
is
trading
in
securities; through the Respondent [TM] since 19'n December, 2007, smoothly,till
12!n August, 2015 almost on daily basis and that he is well conversant with the trading rules and procedures of different segments.2) He claimed
that
his trading history would provethat
he never sold the entire DP holdingof
particular scrip andthat
noneof
his
securities transactions wereof
sucha
hioh amount. That Droved his investment pattern.3) He further stated that even after the lodoment of complaint under SEBI SCORES
on
27th August. 2015he
is
continuingto
tradein
securities throuq h the Respondent [TM].+) On 13th August, 2015 his DP Holding for the scrip of Sun Pharma, at the time he logged in, was 165 Equityshares. Around 1511 hours he placed an online order for the sale of one Equitv share of Sun Pharma which was duly executed. Again by 1526 hours same day, he placed an online order for the sale of one more Equitv share of Sun Pharma which was wrongly executed by the Respondent, allegedly due to any'system bug' by picking up the entire balance holding of 164 Equity shares as per the DP Holding. He was shocked
and
was
left with no
other
alternativebut
to
immediately repurchase the wrongly sold lot of 164 Equity shares of Sun Pharma. In this process, he incurred financial loss.5) On 27th August, 2015 he filed a complaint under SEBI SCORES INo. allotted was 15082912348015431 and claimed from the Respondent [TM] a sum of Rs. 15,000/- only towards financial loss as also comDensation includino the chanqe
of
statusof the
reourchasedlot,
sold wrongly, from long term holding to short term holding.6) He complained that the system of the Respondent did not display, at the time
of
the
executionof
his 2nd sale order,on
13th August, 2015 thequantity of Equity shares entered for sale and that due to a system bug' the system picked up the entire DP holding of the particular scrip'
8)
7) That the mechanism of the Online Trading Platform operation is the root cause of the error.
To avoid the recurrence of such incident [alleged erToneous picking up the entire DP Holding for salel, he gave a suggestion to the Respondent during the IGRP Hearing that their system be modified so that a separate window
will aooear on the screen for displaying the quantity of securities entered
Defense of the RespondentlTMl
The Respondent has
out
rightly deniedall
the averments madein
the Statementof
Claim and have allegedthat
the
Applicant has willfully suppressed the factual position. Their defense is summarised as follows:-1. The Applicant is well conversant with the rules and procedures of tradingin securities; he was provided an option
to
trade online through the online trading portalby
usingthree
level securitiesi.e.
User Id, Password and Security token key. From 19th December, 2OO7to
72thAugust,
2015
[about8
years]
he
had
smooth dealingswith
the Respondent, almost on daily basis, without any complaint. Even after lodging this complaint/ claim, the Applicant is continuingto
use the trading account with the Respondent, without any problem.2. On August 13, 2015 around 1526 hours the Applicant placed the sell order INo. 2Ol5OAl357172699] thru his account online, for 164 Equity shares of Sun Pharma from his Demat account. The trade log and the detailed order log [copies annexed] confirm it.
3. Their 'online trading system' does give an option to the Constituent to modify or reconfirm the buy
/
sell order for securities entered in till the order is executed. However, the Appllcant did not modify the order priorto execution for which he cannot hold the Respondent responsible. The "Demo PPT"
of
the
online portal, enclosedas
AnnexureD to
theStatement
of
Defence, confirmsthat
the Applicant had an option to modify his order before execution As an afterthought, the Applicant tried to recoup his losses in the transaction executed by the Respondent. Thus, the Claimof
the Applicantis
baseless, false and frrvolous and should be dismissed in limine.Issues framed for Arbitration
AFter hearing both the parties, written suggestions were sought From the Parties for framing the issues. The following issues were
framed:-1) Whether the sale order No. 2015081357172699 date August 13, 2015 given by the Applicant (Constituent) was duly executed?
2) Whether
there
could have beenany
alleged systembug
in
the Respondent ITM]'s Online Software'lnsta
Plus' on August 13,2015around 1526
hours which
would have
confusedthe
Applicant (Constituent) in confirming his trade orders?Findings
after the
scrutinyof the
documents'oral
submissions & the conclusionsdrawn:->
After hearing theto
rece ive any reference to thisApplicant, the undersigned asked him whether he was yet more trading related details from
the
Respondent with arbitration claim. It was replied negatively>
Duringthe
hearing,the
Applicant confirmedthe
receiptof
Defence Statement dated Il/LO/2015 sent to him directly by the Respondent & had no comments thereon.It
contained/ as AnnexureD,
a
printoutof
the Power Point Presentation on the TM,s Trading platform_
DEMO bearino Page Numbers seriallyfrom 24
to
38.
A
careful
reading
thereoi confirmsthat the .Insta
plus'
ontinetrading
system does givean
option
to
the Constituentto
modifyor
reconfirmthe buy/sell
orderfor
securities entered intill
the order is executed [c.f. page numbers26,29 & 301. A s€parate'Cancel button, is provided on the extreme
left
which should be clickedto
cancel the trade order, Under euickTrade, Equity
-
Dp Holdings-
on extremeright
side .S,button
isprovided
which facilitates
the
saleof
(entire) Dp
Holdingsof
a particular scripI
page No. 38]>
It
is confirmed from the documents submitted by both the parties that the (a) the Applicant had togged in Trading Account IUCC 500072965] around15:10
hours
on
13tn August,2015,
enteredthe
Sale
order
No.2O15Oa1357 772699 under Equities
for
764 No. Sunpharma, which was confirmed by him and was duly executed by the Respondent (TM). This clarifies the 1sc issue framed for arbitration.Only on the basis of the documents submitted;
it
is not possible for the undersignedto
examine the contentionof
the Applicantthat due
to
a system bugin
the
Respondent [TM]'s Online Software.Insta
plus, on August 13, 2015 around 1526 hours his sellorder
[for
1 Equityshare
of
Sunpharmal
was wrongly
executedby
picking up
the(entire)
DP Holding of 164 shares.Neither
in
his
statement
of
claim
nor
during
the
hearing
theApplicant
has
explained
how
did
he arrive
at
the
claim
of
Rs.15,O00/-.
In
his letter addressed to the NSEIL, RAC, pune the Applicant has, under para 3.C. has carried the screen print of his trading log under dispute.It
isfor
the order placed, under Equity, wherein the quantityof
Sunpharma shares to be sold is clearly indicated as 164, According to the Aoplicant this editable. So he edited it and chanqed it lfrom 164 sharesl to 1 share onlv. shares and soldit
@Rs. 882.25 per share. Hence he has alleged that thesystem has
a
bug which caused him financial loss [repurchase was done immediately, within a minute, @Rs. 882,65x163 shares =Rs.65.20 only + applicable STT+ applicable brokeragel.According to
the
Respondent, the Applicant operated.euick trade-under Equity
-
DP Holdings & clickedthe.S'
button provided on theextreme
right
which
is
meantfor the
saleof
entire
holdings las explained on the pre page, refer the last page (No.3g) of the Annexure D to the Defense Statementl. There is no questjon of any bug in their system.I
agree
with
it. It
wasan
'operationalerror
of the
applicant,. The allegedly erroneous execution of his sale order under dispute and thereafterimmediate repurchase of same quantity of Sunpharma Equity shares are
two different, independent transactions.
>
The admission of the fact that even after the aforesaid rncidentwhich red to the dispute, the Appricant continues to operate his trading account
with the Respondent smoothly reflects his acceptance of the
Respondent,s Trading
software'lnsta plus,to be in order.
>
rn
my opinion,this
craim of negrigibre notionar ross, whose breakupwas
not
furnished,is.an
abuse'of
the Arbitration platform
madeavailable,
by
the
NSEIL,to
individual
/small
investors,
free
of charges [upto a prescribed limit]. The matter shoutd have ended
at
the IGRP level as a'Grievance Redressal System,.>
I
invite the kind attentionof
NSEILto
the clause6
of
the Form No. I,Arbitration Application IRegulation
5.9(h)]
which statesthat for
cases having claim amount upto Rs. 25,OOO/_ holding of Arbitration Hearing is not compulsory but the Arbitrator may, at his discretion, hold a hearing, if need be. This was afit
case not requiring anarbitration
hearing. However, in the Email received from NSEIL [CAAP],I
was not informed of the claim amount.It
is suggested that in future, while seeking the consentof
an empanelledarbitrator
for
acceptinga
particular assignment;this information [as also the amount of any Counter claim] may be furnished. This
will
effect cost savingfor
NSE[no
needto
hirethe
commercial premises for holding a hearingl, time, money and energy for the parties, officials of the RAC of NSEIL; the Arbitral Tribunal and expedite the makino of the Award.1.
2.
3.
AWARD
In
view of the aforesaid findings after the scrutiny of the documentssubmitted & the conclusions drawn,
the
arbitration
application of the Applicant (Constituent) is dismissed,No order as to costs.
The award is made in three originals with one each to be furnished to the Applicant, the Respondent and third one for the
Place: Pune
Date: 30cn November, 2015
( N ish