Allahabad High Court
Goldrush Sales & Services Ltd.,A ... vs The Managing Director U.P.State Road ... on 13 September, 2019
Equivalent citations: AIRONLINE 2019 ALL 1780, (2019) 10 ADJ 184 (ALL), (2019) 136 ALL LR 650, (2019) 203 ALLINDCAS 912, (2019) 6 ALL WC 6283
Author: Rajan Roy
Bench: Rajan Roy
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH AFR Judgment reserved on:11.04.2019 Judgment delivered on:13.09.2019 Court No. - 7 Case :- ARBITRATION APPLICATION No. - 29 of 2012 Applicant :- Goldrush Sales & Services Ltd.,A Comp.Incorporated Under Opposite Party :- The Managing Director U.P.State Road Transport Corp. & Anr. Counsel for Applicant :- Shraddha Agarwal,Akash Prasad,Amrendra Nath Tripathi,Prashant Agarwal,Sachin Garg,Shishir Tiwari Counsel for Opposite Party :- Mahesh Chandra,Ratnesh Chandra Hon'ble Rajan Roy,J.
Heard learned counsel for the parties.
This is an application under Section 11 of the Arbitration and Conciliation Act, 1996.
Before proceeding with the merits of the matter it is necessary to mention that in the relief clause cancellation of appointment/ nomination of Shri Niranjan Kumar- opposite party no. 3 as Arbitrator had also been sought. Realizing the mistake, as, such a relief could not be sought under Section 11, although the other part of the relief was admissible, an application for amendment of the relief clause was filed which was objected by the opposite parties on the ground that it should not be allowed at such a belated stage. But, considering the nature of the proceedings and the technicality involved which does not materially affect the substantive disposal of the application for appointment of an Arbitrator, the application for amendment is allowed. As, it does not affect the merits, therefore, no fresh response is called for consequent to the amendment being allowed which is of a technical nature as the words ''cancel the appointment/ nomination of Shri Niranjan Kumar- opposite party no. 3' would stand deleted and the words ''appoint under Section 11(6) of the Arbitration and Conciliation Act, 1996' be substituted in its place and the words ''be appointed' as mentioned in the application, would be deleted.
The application under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ''the Act, 1996') was filed on 08.11.2012. The agreement and the arbitration clause contained therein is not in dispute. As per the arbitration clause any dispute arising out of or in connection with the agreement shall be referred to the sole Arbitration of the Managing Director or his nominee not below the rank of General Manager whose decision shall be binding both on the Contractor and the U.P.S.R.T.C. subject to the provisions of the Act, 1996. A dispute arose between the parties on account of which a notice was given by the applicant on 29.06.2012 to the opposite parties no. 1 and 2 for appointment of an Arbitrator. The opposite party no.1- the Managing Direction, U.P.S.R.T.C., Lucknow is the party to the agreement with the applicant, whereas, the opposite party no. 2 is not a party thereto. In fact the opposite party no. 2 is another Company in respect of which the work mentioned in the agreement was to be performed. In response to the aforesaid notice the opposite party no. 2- the Managing Director, Lucknow City Transport Services Limited is said to have intimated the applicant about the appointment of Shri Niranjan Kumar, Chief General Manager (Technical), U.P.S.R.T.C. as an Arbitrator vide his letter dated 13.07.2012, a copy of the said intimation is annexed as Annexure No. 4 to the application. As the intimation was not by the Managing Director, U.P.S.R.T.C. with whom the agreement had been entered by the applicant, therefore, vide letter dated 20.07.2012 the applicant informed the opposite party no. 2 that copy of letter of M.D., U.P.S.R.T.C. i.e. opposite party no. 1 had not been received nor made available to it and in fact such communication should have come from the opposite party no. 1. A request for a copy of the said order was also made. According to the applicant the alleged order of the M.D., U.P.S.R.T.C. dated 13.07.2012 appointing an Arbitrator was never delivered to the applicant accordingly this application was filed on 08.11.2012 specifically disclosing the factum of receipt of letter dated 13.07.2012 of the opposite party no. 2 and the non receipt of any such order of the opposite party no. 1 appointing an Arbitrator. This fact is mentioned in Para 18 of the application. The opposite parties filed counter affidavit and supplementary counter affidavit stating the intimation of appointment of the Arbitrator vide letter of the opposite party no. 2- The Managing Director, Lucknow City Transport Services Limited dated 13.07.2012 but no such assertion was made in the said counter affidavits that in fact the order of the Managing Director, U.P.S.R.T.C. dated 13.07.2012 was also communicated to the applicant albeit subsequently vide another letter dated 06.08.2012 of the opposite party no. 2. It is only vide affidavit dated 07.02.2019 filed after almost more than seven years that a document numbered as SCA-1 dated 13.07.2012 signed by the Managing Director, Lucknow City Transport Services Limited, Lucknow was annexed, along with its annexure an order of the M.D., U.P.S.R.T.C. dated 13.07.2012, asserting that the appointment of the Arbitrator was by the M.D., U.P.S.R.T.C. The letter dated 13.07.2012 signed by the M.D., Lucknow City Transport Services Limited, Lucknow in part is the same as was sent to the applicant, a copy of which is annexed as Annexure No. 4 to the application but the said letter contained in Annexure SCA-1 to the supplementary counter affidavit itself says that in the original document certain portions of it were not there by using the words ''ewy izfr ij ugha'. It is inexplicable as to why these recitals of endorsement of copies did not exist on the original which was sent to the applicant. Furthermore, the letter contained in Annexure SCA-1 does not refer to any enclosures, yet the order of the M.D., U.P.S.R.T.C. dated 13.07.2012 which does not bear any letter number or reference but appears to have been passed on a sheet of paper, has been annexed with it for the first time i.e. with the affidavit dated 07.02.2019. The said order is no doubt on the record of the file of U.P.S.R.T.C. which has been placed before the Court but it is intriguing as to why it was not filed earlier and why the copy of the letter dated 13.07.2012 is not the same as that of the original. Nevertheless, even at this stage no proof of service of the order dated 13.07.2012 was filed by the opposite parties. It was only when the Court inquired into the matter further and asked the opposite parties to produce the records, then, another supplementary counter affidavit dated 27.03.2019, wherein a letter of the M.D., Lucknow City Transport Services Limited, Lucknow- opposite party no. 2 dated 06.08.2012 was brought on record, in which it was stated that the order of the M.D., U.P.S.R.T.C. appointing the Arbitrator in response to the notice dated 29.06.2012 was served upon the applicant by registered post with acknowledgment due on 06.08.2012. In the interregnum another supplementary counter affidavit dated 08.03.2019 was filed which did not mention this fact nor contain the documents subsequently filed with the affidavit dated 27.03.2019. The dispatch register has been perused by the Court and no doubt there is a mention of the letter dated 06.08.2012 as having been dispatched, but the intriguing aspect still remains as to why this fact was never brought to the notice of the Court or the applicant prior to March, 2019.
It is not out of place to mention that after appointment as Arbitrator, Shri Niranjan Kumar informed the applicant about the date fixed but the applicant sought an adjournment on the ground of pendency of application under Section 11 before this Court. During pendency of this application as Shri Niranjan Kumar retired, another officer Shri Atul Bharti was appointed, but, the proceedings could not take place on account of pendency of this application.
Now, the applicant has consistently filed affidavits denying the receipt of the order of the M.D., U.P.S.R.T.C. dated 13.07.2012 appointing an Arbitrator as per the agreement entered into between the applicant and the U.P.S.R.T.C. The applicant has also denied the averments made by the opposite parties in the supplementary counter affidavits including the receipt/delivery of any such letter dated 06.08.2012 and the letter of the M.D., U.P.S.R.T.C. dated 13.07.2012.
It is the contention of Shri N.K. Seth, learned Senior Counsel for the applicant that under the Arbitration and Conciliation Act, 1996 as per Section 3 which deals with receipt of written communication and says that any such communication in respect to Arbitration is deemed to have been received on the date it is so delivered, therefore, his contention was that mere sending of intimation about appointment of Arbitrator is not sufficient. Such intimation, assuming that it was sent though not admitting it, is required to be delivered. Unless it is delivered, it can not be treated as having been communicated, therefore, his submission was that prior to filing of the application under Section 11 there was no communication by the competent Authority which was the M.D., U.P.S.R.T.C. of his decision appointing Shri Niranjan Kumar as Arbitrator. Accordingly, once the application under Section 11 had been filed no such appointment could have been made and the matter was purely within the domain of this Court to do so. The submission was that considering the objective and requirements of impartiality and independence of the Arbitrator, the M.D., U.P.S.R.T.C. having forfeited his entitlement to appoint such Arbitrator, the Court should appoint an independent and impartial Arbitrator, especially as, inspite of 9 years neither the Arbitrator had been appointed nor Arbitration had taken place on merits. He relied upon the decision of the Supreme Court reported in 2012 (6) SCC 384; S.A. Bipromasz Bipron Trading S.A. Vs. Bharat Electronics Ltd. and 2011 (4) SCC 616; State of Maharashtra Vs. Arch Builders.
It was his contention that once that applicant has repeatedly denied on oath the receipt and delivery of the alleged communication of the order of the M.D., U.P.S.R.T.C. dated 13.07.2012 and the letter of the M.D., Lucknow City Transport Services Limited, Lucknow dated 06.08.2012 the presumption under Section 114 of the Evidence Act as also Section 27 of the General Clauses Act stood rebutted and the onus shifted upon the opposite parties to prove such receipt/delivery of the communication referred hereinabove upon the applicant and as they had failed to do so, therefore, this Court should proceed to appoint an Arbitrator.
Shri Seth, learned counsel for the applicant also raised certain issues with regard to rank of Shri Niranjan Kumar that he was not of the Rank of General Manager, hence ineligible to act as an Arbitrator as per the arbitration clause, but the Court does not find merit in his arguments which are belied from the records.
Shri Ratnesh Chandra, learned counsel for the opposite parties no. 1 and 2 on the other hand submitted that there was clinching evidence on record to show that the communication of the decision of the M.D., U.P.S.R.T.c. appointing Shri Niranjan Kumar as Arbitrator had been made to the applicant firstly by the letter of the M.D., Lucknow City Transport Services Limited, Lucknow dated 13.07.2012. Secondly, by his letter dated 06.08.2012 along with which the order of the M.D., U.P.S.R.T.C. was enclosed, however, on being asked as to why this fact was not averred in the earlier counter affidavits and supplementary counter affidavits, as many as three affidavits having been filed and was asserted for the first time in March, 2019, although, the application had remained pending for almost 7 years and why the relevant documents were not brought on record, he did not have any reply in this regard. This aspect is a matter of inquiry by the concerned Authorities. On the question of rank of Shri Niranjan Kumar, Shri Ratnesh Chandra, learned counsel for the opposite parties asserted that he was of the rank of General Manager and the assertion to the contrary was misconceived. Shri Chandra also relied upon the decision of the Supreme Court reported in (2004) 10 SCC 504; Union of India and Anr. Vs. M. P. Gupta.
Having heard learned counsel for the parties and having perused the records even assuming that any such communication dated 06.08.2012 enclosing therewith the order of the M.D., U.P.S.R.T.C. dated 13.07.2012 was made to the applicant, although, there is no explanation as to why these facts and documents were not brought on record earlier although this application has remained pending before the Court for almost 7 years, the fact of the matter is that such sending of the letters would at best raise a presumption about the fact that the same were sent, but, as per the provision contained in Section 3(2) of the Act, 1996 this is not sufficient in respect of matters pertaining to Arbitration and such communication has to be ''delivered'. Even otherwise, the presumption referred hereinabove in terms of Section 114-III(f) of the Indian Evidence Act or in terms of Section 27 of the General Clause Act is rebuttable and once the applicant has stated on oath by way of an affidavit that it had never received any such letter dated 06.08.2012 or the decision of the M.D., U.P.S.R.T.C. dated 13.07.2012, then, the onus shifted upon the opposite party no. 1 to prove by evidence that in fact it was served and delivered. It was incumbent upon the opposite party no. 1 to produce the postman or ask for his summoning as he would be the best person to testify as to whether the aforesaid letters/orders were served upon the applicant or not or produce a certificate of service issued by the postal department. None of these has been done. As already stated earlier the factum of letter dated 06.08.2012 along with letter of the M.D., U.P.S.R.T.C. dated 13.07.2012 as having been sent to the applicant itself was asserted as a fact for the first time in March, 2019 and no attempt was made to produce the Postman or to seek his presence through the Court within reasonable time, even after filing of such affidavit nor certificate of service by the postal department was filed. In this view of the matter, it can not be said that there is any proof of delivery or service of the decision of the M.D., U.P.S.R.T.C. dated 13.07.2012 upon the applicant. The communication of the order of the M.D., Lucknow City Transport Services Limited, Lucknow dated 13.07.2012 is not material, as, the said Officer or his Corporation was not a party to the agreement in respect of which a dispute has arisen. The Competent Authority for appointing the Arbitrator was M.D., U.P.S.R.T.C., therefore, it is his decision which was required to be served/delivered upon the applicant. The opposite party no. 1 has not been able to prove such service/delivery of his decision upon the applicant. Reference may be made in this regard to a decision of the Supreme Court reported in (1976) 2 SCC 409; Puwada Venkateswara Rao Vs. Chidamana Venkata Ramana wherein it affirmed the view taken by the Bombay High Court that the presumption of service had been repelled by the defendant's statement on oath that he had not refused service by registered post as it was never brought to him and that in this state of evidence unless the Postman was produced the statement of the defendant on oath must prevail. It was a case of endorsement of ''refusal' to receive made by the postman. In the case at hand the applicant has refused on oath the receipt of any such communication and there is no document not even the acknowledgment due containing any such endorsement by the Postman of a refusal by the applicant. The opposite party no. 1, had he taken this plea within a reasonable time, could have obtained a certificate from the postal department about the service/delivery upon the applicant, but this has not been done. There is nothing on record from the conduct of the applicant which could establish that it had in fact received and was served the decision of the M.D., U.P.S.R.T.C. The first letter dated 13.07.2012 of M.D., Lucknow City Transport Services Limited, Lucknow does not mention about the said decision having been enclosed with it and there is no evidence of it, as already noticed. The copy of the said letter filed with the supplementary counter affidavit is not the same as that which was served upon the applicant, a fact which is admitted in the document itself. In the aforesaid decision of the Supreme Court in Puwada Venkateswara Rao's case (supra) a decision of the Calcuttta High Court in the case of Nirmalabala Devi Vs. Provat Kumar Basu reported in (1948) 52 CWN 659 was also affirmed, which was on different lines than the Bombay High Court's decision, however, having affirmed both the views the Supreme Court held that they were reconciliable as what the Culcutta High Court had applied was a rebuttable presumption which had not been repelled by any evidence, whereas, in the Bombay High Court's case the presumptions had been held to be rebutted by the evidence of defendant on oath so that it meant that the plaintiff could not succeed without further evidence. In this case also the applicant has rebutted the presumption but the opposite party no. 1 has not led any further evidence to succeed in his defence and as stated earlier even after a close examination of evidence on record there is nothing to establish that the order of the M.D., U.P.S.R.T.C. dated 13.07.2012 had been actually served/delivered on the applicant, which is a necessary per-requisite specially in terms of Section 3(2) of the Act, 1996. Reference may also be made in this regard to another decision of the Supreme Court on this issue reported in (2008) 17 SCC 321; V. N. Bharat Vs. Delhi Deveopment Authority and Anr. wherein considering the question of presumption of service of notice the Supreme Court held that presumption under Section 114-III.(f) of the Evidence Act is a rebuttable presumption and on denial of receipt of the registered letter from D.D.A. the Appellant discharged his onus and the onus reverted back to the respondent to prove such service by either examining the postal authorities or obtaining a certificate from them showing that the registered article had been delivered to and had been received by the appellant. In this case also the onus sifted upon the opposite party no. 1 who has not been able to discharge it.
The term ''delivered' is distinct from the word ''dispatch'. Delivered means to bring and handover something to the addressee.
The Arbitral proceedings in the present case having commenced on 29.06.2012 the provisions of the unamended Act, 1996 would apply.
In view of the above, it is held that there was no service/delivery of the decision of the M.D., U.P.S.R.T.C. appointing Shri Niranjan Kumar as Arbitrator prior to filing of the application under Section 11 of the Act, 1996. The application for appointment of an Arbitrator under Section 11 is maintainable.
The unamended Act, 1996 is applicable to this case. Considering the arbitration clause agreed upon by the parties the M.D., U.P.S.R.T.C. is appointed as an Arbitrator to himself arbitrate in the matter, as, the applicant had agreed to his Arbitration as per the arbitration clause. He shall conclude the proceedings at the earliest, say, within a period of one year.
The original records comprising the dispatch register and the file bearing No. 31LCT/12 shall be returned by the Bench Secretary to Shri Ratnesh Chandra, learned counsel for the opposite party no. 1.
The application is disposed of.
Order Date :- 13.09.2019
R.K.P. (Rajan Roy,J.)