The Applicant [Constituent] was represented by his father Mr' N.P.Rakhecha, FCA, as an Authorised Representative' The Respondent

S{AME: AEDRESS: THROUGH

RECEIPT NO.: _lN

_DIA

srAlp DUTY trAxAnaslnnA

Under 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 the

Award

:

-

3oth November' 2015 The

Parties:-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 Securities

Ltd

llth

Floor' R -Tech I.T. Park, W. E. Highway, Goregaon (East), Mumbai 400063

sEBr scoREs ID: - SEBIE/MH15/1000545511 dated 27 /08/2OI5

complaint rD:

-

15082912 34801543 dated 31/08/2015

IGRP Hearing was held on 76lOg/20L5 at the RAC, Pune'

It

observed that (1) the online sell order No. 2015081357f726g9 dated 13th August' 2015

Was 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

its

executionatthebackendoftheirsystem,(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

represented

by his

father

Mr'

N.P.Rakhecha, FCA,

as

an

Authorised Representative' The Respondent [Trading Member] was represented by Mr. Himanshu Maurya, their Pune

Branch Head, asslsted by Mr. Alok Kumar, Relationship Manager' Both the Parties accepted

the

documents submitted

by the

opponent(s)'

At

the outset,

explored

but

it

did not

work

out.

Consequently, beginning

with

the

Case of the Applicant

-1)

The

Applicant

stated

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 prove

that

he never sold the entire DP holding

_of

particular scrip and

that

none

of

his

securities transactions were

of

such

a

hioh amount. That Droved his investment pattern.

3) He further stated that even after the lodoment of complaint under SEBI SCORES

on

27th August. 2015

he

is

continuing

to

trade

in

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

alternative

but

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

status

of the

reourchased

lot,

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

execution

of

his 2nd sale order,

on

13th August, 2015 the

quantity 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 denied

all

the averments made

in

the Statement

of

Claim and have alleged

that

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 trading

in securities; he was provided an option

to

trade online through the online trading portal

by

using

three

level securities

i.e.

User Id, Password and Security token key. From 19th December, 2OO7

to

72th

August,

2015

[about

8

years]

he

had

smooth dealings

with

the Respondent, almost on daily basis, without any complaint. Even after lodging this complaint/ claim, the Applicant is continuing

to

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 prior

to execution for which he cannot hold the Respondent responsible. The "Demo PPT"

of

the

online portal, enclosed

as

Annexure

D to

the

Statement

of

Defence, confirms

that

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 Claim

of

the Applicant

is

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 been

any

alleged system

bug

in

the Respondent ITM]'s Online Software

'lnsta

Plus' on August 13,2015

around 1526

hours which

would have

confused

the

Applicant (Constituent) in confirming his trade orders?

Findings

after the

scrutiny

of the

documents'

oral

submissions & the conclusions

drawn:->

After hearing the

to

rece ive any reference to this

Applicant, the undersigned asked him whether he was yet more trading related details from

the

Respondent with arbitration claim. It was replied negatively

>

During

_the

hearing,

the

Applicant confirmed

the

receipt

of

Defence Statement dated Il/LO/2015 sent to him directly by the Respondent & had no comments thereon.

It

contained/ as Annexure

D,

a

printout

_of

_the Power Point Presentation on the TM,s Trading platform

_

_{DEMO bearino} Page Numbers serially

from 24

to

38.

A

careful

reading

thereoi confirms

_{that the .Insta}

plus'

_ontine

_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 [c.f. page numbers}

26,29 & 301. A s€parate'Cancel button, _{is provided on the extreme}

left

which should be clicked

to

cancel the trade order, Under _euick

Trade, Equity

_-

Dp Holdings

_-

_{on extreme}

_right

_side .S,

_button

_is

provided

_{which facilitates}

_the

_sale

_of

_{(entire) Dp}

_Holdings

_of

a particular _scrip

_I

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] around

15:10

hours

on

13tn August,

2015,

entered

the

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} undersigned

to

examine the contention

of

the Applicant

that due

to

a system bug

in

the

Respondent _[TM]'s Online Software

.Insta

plus, on August 13, 2015 around 1526 hours his sell

order

_[for

1 Equity

share

of

Sunpharmal

was wrongly

executed

by

picking up

the

(entire)

DP Holding of 164 shares.

Neither

in

his

statement

of

claim

nor

during

the

hearing

the

Applicant

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

is

for

the order placed, _{under Equity, wherein the quantity}

_of

_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 sold

it

@Rs. 882.25 per share. Hence he has alleged that the

system 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 & clicked

the.S'

button provided on the

extreme

right

which

is

meant

for the

sale

of

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

was

an

'operational

error

of the

applicant,. The allegedly erroneous execution of his sale order under dispute and thereafter

immediate repurchase of same quantity of _{Sunpharma Equity shares are}

two different, _{independent transactions.}

>

The admission _{of the fact that even after the aforesaid rncident}

which 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 breakup}

was

not

furnished,

is.an

abuse'

of

the Arbitration platform

made

available,

_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 attention

of

NSEIL

_to

_{the clause}

₆

_of

_{the Form No. I,}

Arbitration Application IRegulation

5.9(h)]

which states

that 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 a

fit

case not requiring an

arbitration

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 consent}

_of

_an empanelled

_arbitrator

_for

_accepting

_a

_{particular assignment;}

this information _[as also the amount of any Counter _{claim] may be furnished.} This

will

effect cost saving

for

NSE

_[no

need

to

hire

the

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 documents

submitted & 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

ik;nt:D€strpinaej

Sole

Arbitrator