Rajen Kirtanlal Shah vs Sebi

Securities Appellate Tribunal7 December 2020

CitationAppeal No. 389 of 2020

Ratio decidendi

The rule this decision rests on

A private dispute arising from financial transactions between an investor and a portfolio manager, which turns on the parties' contractual terms, is not one that can be adjudicated on the SCORES grievance-redressal platform; the investor's remedy lies in the arbitration clause of the agreement, which the parties are bound to invoke. An order disposing of a complaint on the SCORES platform is not vitiated merely because its reasons are brief or imperfectly framed, where the order does not suffer from any manifest error of law.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

BEFORE THE SECURITIES APPELLATE TRIBUNALMUMBAIDate of Decision: 07.12.2020Appeal No. 389 of 2020Rajen Kirtanlal Shah1201, Joy Whitehouse Road,Plot No. 79A, Tagore Road,Santacruz West,Mumbai 400 054 ...AppellantVersus1.Securities and Exchange Board of India,SEBI Bhavan, Plot No. C-4A, G-Block,Bandra-Kurla Complex, Bandra (East),Mumbai- 400 0512. Piramal Fund Management Pvt. Ltd.Ground Floor, Piramal Tower,Peninsula Corporate Park,Ganpatrao Kadam Marg,Lower Parel,Mumbai- 400 013 ...RespondentsMr. Prateek Seksaria, Advocate with Mr. Viraj Maniar andMs. Sneha Patil, Advocates i/b Maniar Srivastava Associates forthe Appellant.Mr. Pradeep Sancheti, Senior Advocate with Mr. AnubhavGhosh, Advocate i/b The Law Point for the Respondent No. 1Mr. Gaurav Joshi, Senior Advocate with Mr. Angad Varma,Mr. Prashant Kumar and Mr. Arunadhri Iyer, Advocatesi/b Dua Associates, Advocates & Solicitors for RespondentNo. 2CORAM: Justice Tarun Agarwala, Presiding Officer (Oral)2Justice M. T. Joshi, Judicial MemberPer: Justice Tarun Agarwala, Presiding Officer (Oral)1. We have heard Shri Prateek Seksaria, learned counsel forthe appellant and Shri Pradeep Sancheti, learned senior counseland Shri Gaurav Joshi, learned senior counsel for therespondents through video conference.2. The appellant has filed the present appeal questioning thedisposal of his complaint on the SCORES platform by an orderdated August 26, 2020. It transpires that the appellant enteredinto a Portfolio Management Agreement on December 13, 2017with respondent no. 2 for providing Portfolio ManagementServices and to manage the investments of the appellant. Onthe basis of an offer/ proposal given to the appellant, a termsheet was executed which set out the terms and conditionsrelating to investment, based on which the appellant remitted acertain sum of money to respondent no. 2.

3. It is alleged that the terms and conditions in the term sheet

were unilaterally changed to the disadvantage of the appellant

based on which the appellant has lodged a complaint on the

SCORES platform contending that the registration of 3

respondent no. 2 as a Portfolio Manager should be cancelled

since he had committed breach of his duties under the relevant

Regulations and that he was not acting diligently. The said

complaint was disposed of by respondent no. 1 on the SCORES

platform.

4. Having heard the learned counsel for the appellant, we are

of the opinion, that the impugned order does not suffer from

any manifest error of law. Brief reasons have been given though

not in the right perspective, but nonetheless, the said order

cannot be vitiated on this ground. We are of the opinion, that

the complaint of the appellant is purely a private dispute with

regard to the investments made by the appellant with the

respondent no. 2. Such private disputes relating to financial

transactions cannot be adjudicated on the SCORES platform.

The appellant has a remedy of invoking the arbitration clause

under the agreement which the appellant has invoked. In view

of the aforesaid, we do not find any error in the impugned order.

The appeal fails and is dismissed summarily.

5. The present matter was heard through video conference

due to Covid-19 pandemic. At this stage it is not possible to sign

a copy of this order nor a certified copy of this order could be 4

issued by the Registry. In these circumstances, this order will be

digitally signed by the Presiding Officer on behalf of the bench

and all concerned parties are directed to act on the digitally

signed copy of this order. Parties will act on production of a

digitally signed copy sent by fax and/or email.

TARUN Digitally signed by TARUN AGARWAL DN: c=IN, o=PUBLIC WORKS DEPARTMENT UTTAR PRADESH, postalCode=221505, st=Uttar Pradesh, 2.5.4.20=30fcf68685192bbc53e6ff1608a83fb3881de7 ac2ab7954d509c85ed6e0f7c41,

AGARWAL Justice Tarun Agarwala serialNumber=095f8b286bb0b1cd07ff676611f4f5e79 99727d404aa38ca422f9d3529bdb8a3, cn=TARUN AGARWAL Date: 2020.12.07 20:25:16 +05'30' Presiding Officer

Justice M. T. Joshi Judicial Member 07.12.2020 PK

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