riuIUIuU CALISE

Registration Department,
Government of Blhar nINDIA NON JUDICIAL
Other

First Party Name Not Applicable

Second Party Name. : PREM KUMAR GUPTA

Purchased By : PREM KUMAR GUPTA

Certificate Number :BRO381565aj706605292515

Consideratlon Price : K0.00/
Stamp Duty Paid :100.00/
Registration Fee & Other Fees 0.00/
LLR & Proc Fee 0.00/
Miscellaneous Fees :R0.00/
Discore SC :KO.00/
Total Amount :100.00/- (One Hundred )

sstamp paper will only be valid if embossed below with special RED ink impression
d NDIA
4302021
Fhone No
So1d To lssued Io IISAOEEFIUE
PREN UWAR GUPIA
For hom/ID Prool
PATNA SADAR
BO0001
0000100/
PREM KuMAR GUPtA
652 170sC25 1651t-0pcs
2015654 n2192
ARBITRATION AWARD
Arbitration Matter No. NSEPAT/0006249 /23-24/1SC/IGRP/ARB
UNDER THE BYE LAWS, RULES, AND REGULATIONS OF NATIONAL STOCK
EXCHANGE OF INDIA LIMITED (NSEIL)
Between

RANJEET KUMAR (Constituent)

HUME PIPE FACTORY, CAMPUS SANDAL, ...APPLICANT
PURBAZAR SAMITI, PATNA BAZAR SAMITI,
MAHENDRU, PATNA, BIHAR- 800006
PAN - DTNPK4605J

And

RELIGARE BROKING LIMITED (Trading Member)

A-3, 4, 5 CLUB 125 (TOWER A) ...RESPONDENT
2ND FLOOR SEC - 125 NOIDA,
UTTAR PRADESH -201301
PAN AAHCR8454M

BEFORE THE LEARNED SOLE ARBITRATOR: PREM KUMAR

GUPTA

Page 1 of 7
 NATIONAL STOCK EXCHANGE
OF INDIA LTD.
PATNA
5 TAN 2024
RECE I VE D
(Subject to Checking &Verification)
Date of Hearing November 28, 2023

Appeatance-Present for the Applicant Mr Raneet Kumar represented himself

The Respondent represented themselves through Mr Naveen Kataria by virtue
of a Board Resolution through virtual mode

1 The Applicant, Ranjcet Kumar, filed an arbitration application dated

September 05, 2023, in Form No. I under Regulation 5.9h) of NSE
Regulations with a monetary claim of Rs. 94,777.50 which was not
admitted in the Grievance Redressal Committee (GRC) proccedings by the
Ld. GRC Member. The dispute in this case, as stated in the application is
that the Applicant's gricvances were not propcrly addressed by the GRC.
While executing online trade on June 27, 2023, the Applicant experienced
severe technical glitch resulting in erroneous trade execution such as, the
Options bought were sold and Trades were executed much beyond the
margin limit resulting in a huge loss of Rs. 94,777.50 to the Applicant. The
Applicant lost opportunity to effectively manage his position by executing
the intended trades due to the said glitch on the relevant date. The
technical glitch persisted from 12.50 PM to 06.12 PM on the relevant

date which indicates that the Respondent TM failed to promptly resolve

the technical issue adversely affecting the users' trading activities. The
Applicant knew about the said glitch being an employee under the
Respondent. The claim of the TM has got no relevance for any purpose in
deciding the Respondent's issues and that, the TM cannot evade their
liability to compen sate the loss suffered to him.

2 The Applicant filed a complaint before the Investor Services Cell of the
Exchange on July 13, 2023 alleging unauthorised trading by the
Respondent Trading Member which was subsequently placed before the
Grievance Redressal Committee (GRC). The Ld. GRC heard both parties
and passed an order on August 18, 2023, in favour of the Respondent not
admitting his claim for a sum of Rs. 94,777.50. In the present application,
Page 2 of 7
 the Applicant stated that the Applicant's grievances were not properly
addressed by the GRC

In the statement of defence, the Respondent stated that the Applicant had
a margin of t56,000/- on the relevant date but due to the alleged technical
glitch, he succeeded in cxecuting online trades which required a huge
margin of approximately Rs. 20,40 lakhs thercby incurring a loss of Rs.
94,777.50 to him (the details of the contract/instrument, its quantity and
strike price ctc. are not disputed by any of the partics) but the Respondent
TM cannot be held liable for the same in any manner in view of clauses 9
& 10 of Annexure 3 at page 18-A of the statement of defense.

4 The matter was fixed for hearing on November 28, 2023 wherein the
Applicant, Mr. Ranjeet Kumar appeared himself. The Respondent Trading
Member was represented by Mr. Naveen Kataria by virtue of a Board
Resolution through virtual mode. Mr. Ranjeet vehemently stated that the
Applicant's grievances were not properly addressed by the GRC. While
executing online trade on June 27, 2023, the Applicant experienced severe
technical glitch resulting in erroneous trade executions cush as the
Options bought were sold and trades were executed much beyond the
margin limit resulting in a huge loss of Rs. 94,777.50 to the Applicant. The
Applicant lost opportunity to effectively manage his position by executing
the intended trades due to the said glitch on the relevant date. The
technical glitch persisted from 12.50 PM up to 06.12 PM on the relevant
date which indicates that the Respondent TM failed to promptly resolve
the technical issue adversely affecting the users' trading activities. The
Applicant knew about the said glitch being an employee of the Respondent.
The claim of the TM has thus got no relevance for any purpose in deciding
the Respondent's issues and the TM cannot evade their liability
compensate the loss suffered by the Applicant.

Page 3 of 7
 The representative of the Respondent stated that anything erroneous
could happen in online trading activities during technical glitch and the
same is beyond the control of any TM and they cannot be held liable for
any kind of loss as prayed by the Applicant. He further submitted and
pointed out that the Applicant happens to be an employee of the TM herein
and being an employee of the TM, he knew about the technical glitch on
the relevant date, hence he cannot claim compensation of any kind. In this
connection, he further drew my attention to the contents of clauses no. 9
and 10 of Anncxurc 3 at page 18-A of the SOD (forming part of the bipartite
agreement) to show that the TM cannot be held liable in any manner as
contended by the Applicant. These two clauses are being reproduced
hereinbelow for the sake of convenience:
Clause No. 9. "The cllent is aware that trading over the internet
involves many uncertain factors and complex hardware, software,
systems, communication ines, peripherals etc. are susceptible to
interruptions and dislocations. The Member and the Exchange do
not make any representation or warranty that the Member's IBT

Service will be avallable to the Client at all times without

interruption".

Clause No. 10- "The Client shall not have any claim against the
Exchange or the Member on account of any suspension, tnterruption,
non-avatlability or malfunctioning of the Member's IBT System or
Servtce or the Exchange's Service or System or non-execution of his
orders due to any ink/system failure at the Client/Member/Exchange
end for any reason beyond the control of the Member/Bxchange."

6 On careful consideration of the arguments placed and evidence produced

by both parties I would like to make the following observations before
making any conclusive remarks.

Page 4 of 7
(a) On going thtough the pleadings of the parties on record, I find that

opening of Trading/ Demat accounts, execution of KYC documents etc.

onl1ne trade activities by the Applicant on the disputed date (lune 27,
2023), details of seript and quantity thereof and strike price etc. as well as
CXIstence/persistence of the technical glitch on the relevant date from

12.50 PM up to 06.12 PM are not in dispute

(b) It is also apparent from the pleadings of the parties on record that the
Applicant had a margin of 256,000/- in his account on the relevant date

but erroneously the Options bought by the Applicant were indicated as

sold. The Applicant affirmed during the course of hearing that he had a
margin of only 256,000/- but curiously trade requiring margin of over Rs.
20 lakhs got executed and consequently, a loss of Rs. 97,444.50 resulted
in his account due to faulty service provided by the TM. In this scenario,
the Applicant submitted that the TM may kindly be directed to make good
the loss in his account.

(c) The Respondent claimed that the Applicant was an employee of the
Respondent Trading Member and hence knew about the technical glitch.
In my view this argument has no legs to stand. Being an employee and
being a Client of the TM, are two distinct and separate legal
entities/concepts and one cannot be substituted for the other in the matter
under con sideration. This is a baseless contention advanced on behalf of
the TM and accordingly, the same stands rejected.

(d) It is clear from the pleadings of the parties on record that whatever loss
was incurred in the account of Applicant was due to glitch in the system
of Respondent TM and not due to any technical issue on the side of the
Applicant. Under such circumstances, the TM was held liable by the
Honourable Delhi High Court in order dated October 27, 2010 rendered in
FAO - 330/2009 (Reliance Securities Ltd (Appellant) Vs. Vivek Sharma
(Respondent)].

Page Sof 7
 (c) The Hon ble Delhi High court have taken into consideration the contents

of the SEBI Circular dated Januarv 31, 2000 in paragraph no. 10 (of the
order) which are being reproduced hereinbelow:

The operational and system requirements provides that the Stock

Exchange must ensure that the system used by the broker has provision for
security reliability and confidentiality of the data through use of encryption
technology.
"System capacity provides that the Stock Exchanqe must en sure that the
Broker have adequate system capacity for handling data transfer and
arrange for alternative means of communication in case of internet failure.

7 In the case before this Tribunal, admittedly the technical glitch persisted
for about six hours from 12.50. PM up to 06.12 PM. This fact alone clearly
indicates that the system provided by the Respondent TM for IBT is/was
not equipped with adequate capacity as envisaged in the above quoted
SEBI Circular dated January 31, 2000. Iam of the considered view that
the provisions of the above quoted SEBI Circular dated January 3 l, 2000
must prevail upon the contents of the said clause 9 and 10 of Annexure-3
quoted hereinabove in paragraph no. 5.4 because any agreement in
conflict with a provision of law is not enforceable in law.

8 The long duration of the alleged technical glitch on the relevant date
further indicates that like the Applicant before this Tribunal, thousands of
other clients throughout Bharat must have faced similar difficulties in
suitably managing their position. Thus, in view of the above quoted order
of the Hon'ble Delhi High Court, the TM cannot be allowed to take the plea
of technical glitch for evading their liabilities arising out of the
consequences of providing IBT System/Platform to their Clients which is
not up to the mark according to the provisions of the SEBI Circular dated
January 31, 2000 quoted hereinabove.

Page 6 of 7
 The following final conclusions emerge out of the observations made above
The Respondent TM is legally bound to unconditionally restore/credit the
margin of Rs, 56,000/ cxisting in the account of the Applicant on the
relevant date prior to the exccution of the disputed trade with interest

AWARD

(i The order of the Ld. GRC is not acceptable and, therefore, set aside.

(ii) The Respondent, Religare Broking Limited is directed to unconditionally

restore/credit Rs. 56,000/- in the account of the Applicant, Mr. Ranjeet
Kumar which existed as margin (prior to the disputed Trade activities)
within one month after service of this Award together with interest (a 10%
per annum since the disputed date up to the date of payment, failing

which, the rate of interest will be 12% per annum for the period of default.

(iü) This award is being prepared in three copies- one copy each for the
Applicant and the Respondent, and the third copy for the Exchange.

Remkumals
Date: February 1, 2024 PREM KUMAR GUPTA
Place: Patna Sole Arbitrator

Page 7 of7