Delhi District Court
M/S. Waves vs Sh. Ashok Chaudhary on 2 September, 2013
IN THE COURT OF SH. ANIL KUMAR SISODIA :
ADDITIONAL DISTRICT JUDGE06 : WEST DISTRICT
TIS HAZARI COURTS : DELHI.
ARBT NO. 295 OF 2012
M/s. WAVES
through Sh. Harsh Sahni
Partner,
F15, Kirti Nagar,
New Delhi110015. ....Petitioner
VERSUS
SH. ASHOK CHAUDHARY
Proprietor
M/s. JPM Impex, 1118/2,
First Floor, Kooncha Natwa,
Chandani Chowk, Delhi110008. ....Respondent
Date of Institution : 17.04.2012
Order reserved on : 06.08.2013
Date of Decision : 02.09.2013
O R D E R
1. Vide this order I shall dispose off the Objections filed by the Petitioner/ Objector u/S. 34 of the Arbitration & Conciliation Act, 1996 against the Arbitration Award dated 18.02.2012 passed by Sh. Mukesh Sachdeva, Ld. Sole Arbitrator.
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2. The Objector has submitted in the application that petitioner firm never had any business dealings with the respondent who was a rank stranger to the petitioner and the entire claim setup by him is sham. The respondent confirmed in the crossexamination that the alleged deal was the first and last dealing, though, in the legal notice and pleadings, he purports that it had various dealings with the petitioner. Further, in the crossexamination, the respondent also stated that the business dealing was with some agent and not with the petitioner directly. It has been submitted that on 21.04.2008, purportedly a legal notice was sent by the respondent to the petitioner but arbitration was not invoked therein. The petitioner received a letter dated 26.11.2008 alongwith copy of the claim from Delhi Hindustani Mercantile Association regarding appointment of Sh. Mukesh Sachdeva as Arbitrator on the behest and request of M/s. JPM Impex through its proprietor Sh. Ashok Chaudhary. It has been stated that the petitioner was shocked to receive the claim from the abovenamed arbitral institution as the petitioner had not given any mandate to the said institution to dispose off the disputes between the petitioner and the respondent. Thereafter, the petitioner ARBT No. 295/12 Page: 2/11 filed a WS denying the execution of arbitration agreement and it challenged the jurisdiction of the Arbitration Tribunal. The arbitral Tribunal did not deal with its competence under the provisions of Section 16 of the Act, rather proceeded to hear the matter on merits. The respondent/ claimant filed Rejoinder mechanically denying all the objections/ material facts brought into light by the petitioner. The petitioner raised various objections before the Ld. Arbitrator regarding the sham and bogus arbitration proceedings and the manner of conduct of proceedings. However, the same were not dealt with by the Ld. Arbitral Tribunal. During the cross examination, Sh. Ashok Chaudhary admitted that the alleged goods were supplied on a request received from a broker on phone and he does not personally know the petitioner or the firm. The claimant also admitted that no written demands were made with regard to overdue amount, as alleged, from the petitioner and only oral demands were made. The petitioner specifically denied bill no. 1951 and challan no. 560 or the receipt of alleged goods. The petitioner pointedout various discrepancies in the account of respondent in his crossexamination.
3. Aggrieved by the said Award, the applicants have challenged the ARBT No. 295/12 Page: 3/11 award on the grounds that (1) the award passed by the Ld. Sole Arbitrator is illegal, arbitrary and has been passed in collusion with the respondent; (2) the claimant/ respondent was unable to produce any arbitration agreement much less a valid arbitration agreement written and signed by both the parties as per Section7 of the Arbitration & Conciliation Act, 1996; Ld. Arbitrator exceeded its jurisdiction in proceeding to conduct arbitration proceedings; Ld. Arbitrator erred in law in not deciding challenge to its competence raised by the petitioner in regard to no arbitration agreement and regard to competence of Delhi Hindustani Mercantile Association to appoint Arbitrator; the claimant/ respondent was unable to show any proof of delivery of goods; the claimant/ respondent resiled from his pleadings and admitted in his crossexamination that the present dealing was the first and last dealing with the petitioner; the alleged broker, who allegedly placed order, was not called to lead evidence by the claimant. A prayer was made for setting aside the Award.
4. Notice of the objections was issued to the respondent who has filed reply to the objections denying its contents and raising preliminary objections that on the invoices there is printed clause of arbitration and clearly mentioned on delivery of challan that jurisdiction ARBT No. 295/12 Page: 4/11 D.H.M.A. The Arbitrator had sent the notice of appointment of Arbitrator to the petitioner and respondent as well as claimant had also sent a legal notice for invoking the arbitration agreement and the same has been duly received by the petitioner. Hence, it is clear that the objection had admitted the arbitration agreement. The objector has not come before this Court with clean hands and has tried to mislead this Court.
In the reply on merits, the contents of the objections have been denied and it has been stated that the Ld. Arbitrator had passed the present Award which is a reasoned Award and not having any illegality on the face of it. It has been denied that the proceedings are liable to be set aside on the short point that the document containing the arbitral agreement was never exhibited. It has been denied that there was no mandate for appointment and constitution of Arbitral Tribunal.
In reply to the brief facts, the contents were denied and it has been submitted that the goods were purchased by the petitioner and duly received with the rubber stamp by the competent person of the objector firm. It has further been submitted that the objector had not filed any application u/S. 16 of Arbitration & Conciliation Act.
ARBT No. 295/12 Page: 5/11 Hence, it is clear that his right to challenge the arbitration agreement has been waivedoff. It has been submitted that all the objections raised by the Objector were false and vague and despite that Ld. Arbitrator had decided all his pleas and defence in the Award.
5. In the parawise reply, the contents were denied and it has been submitted that in the crossexamination, the respondent had clearly mentioned that the Objector was dealing with his another firm M/s. Bhagwati Enterprises and he was dealing with the objector in both firms; oral Purchase Order was given on telephone and goods were delivered to the Objector; original bills had been sent to the Objector at the time of purchase of the goods and counterfoil was signed by the Objector; stamp of receiving of the goods is of objector firm and the goods had been delivered to the objector firm; legal notice was sent when the Objector had not made payment inspite of so many demands and requests on telephone; there is no mistake in the account of the respondent; the goods of account and all the documents filed by the respondent/ claimant are correct.
In parawise reply of the grounds, all other contents were denied and prayer was made for dismissal of the objections.
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6. I have heard Ld. Counsel for the petitioner as well as Ld. Counsel for the respondent and have perused the record carefully. Ld. Counsel for the petitioner has relied upon the following judgments in support of his arguments : (1) ONGC Vs. Saw Pipes Ltd. AIR 2003 SC 2629 (2) DDA Vs. R.S. Sharma & Company 152 (2008) DLT 6738 (SC) (3) Sankar Sealing Systems Pvt. Ltd. Vs. Jain Motor Trading Co. & Anr. AIR 2004 Madras 127 (4) DDA Vs. Krishna Construction Company 183 (2011) DLT 331 (5) Sineximco Pte. Ltd. Vs. MMTC Ltd.
7. Counsel for the respondent, on the other hand, has relied upon the following judgments in support of his arguments : (1) P.R. Shah Shares and Stock Brokers Pvt. Ltd. Vs. BHH Securities Pvt. Ltd. 2011 (XI) AD (SC) 333 (2) Kailash Rani Dang Vs. Rakesh Bala Aneja AIR 2009 SC 1662 (3) M. Anusuya Devi Vs. M. Manik Reddy & Ors. (2003) 8 SCC 565 (4) Rukmini Bai Gupta Vs. The Collector, Jalabpur AIR 1981 SC 479 ARBT No. 295/12 Page: 7/11
8. Records of arbitral proceedings were also summoned and the same were filed in the Court on 21.08.2012.
9. At the outset, it may be mentioned that the scope of Section 34 Arbitration & Conciliation Act is very limited. The Award can be set aside u/S. 34(2): (1) for the reasons mentioned in Section 34 (2)a(i) to (v); (2) for the reasons stated in Section 28(a); (3) for the reasons stated in Section 34(2)(b)(ii) on ground of conflict with the public policy of India, that is to say, if it is contrary to (a) fundamental policy of Indian Law; or (b) the interest of India; or (c) justice or morality; or (d) if it is patently illegal; (4) for the reasons stated in Sections 13(5) and 16(6).
10.It is also an equally settled proposition of law that the Courts while dealing with the applications u/O 34 Arbitration & Conciliation Act do not sit as a Court of appeal and it cannot reappreciate the evidence.
11.The objector has raised objections to the Award on the ground that there is no valid arbitration agreement between the parties and the arbitration proceedings are void ab initio. The objector in the WS ARBT No. 295/12 Page: 8/11 denied the execution of the arbitration agreement and had also challenged the jurisdiction of the arbitratral tribunal but the Tribunal did not deal with its competence u/S. 16 of the Act.
12.Ld. Counsel for the respondent, on the other hand, has argued that this objection raised by the objector is without any merits. A bare perusal of the arbitration Award would show that the issue no.1 deals with the question of existence of arbitration agreement between the parties. The Ld. Arbitrator after examining the documents i.e. the Bill Book and the Challan has held that there exists an arbitration clause in the Bill No. 195 and Challan No. 560 and the Arbitrator had the jurisdiction to proceed with the Arbitration proceedings. Ld. Counsel for the respondent has also relied upon the judgment of Rukmini Bai Gupta (Supra) wherein it was held that arbitration agreement is not required to be in any particular form. What is required to be ascertained is that whether the parties have agreed that if the dispute arises between them in respect of the subject matter of contract such dispute shall be referred to arbitration, then such an arrangement would spell out in arbitration agreement. It has been argued that in the present case, the Objector accepted the resolution of dispute by Arbitrator and ARBT No. 295/12 Page: 9/11 also participated in the same.
13.I have gone through the record of arbitration proceedings. The Challan No.560 contains the term "jurisdiction DHMA". Similarly, respondent has placed on record the copy of sample bill which contains arbitration clause. Not only this, the Power of Attorney filed by the respondent at page no. 25 of the arbitration proceedings shows that the respondent acquiesced to the jurisdiction of the Arbitrator. Hence, it cannot be said that there was no arbitration agreement between the parties or that the Arbitrator did not decide the issue of jurisdiction u/S. 16 of the Arbitration & Conciliation Act.
14.The Objector has also raised various objections disputing the findings of the Arbitrator and has sought to challenge the same by taking the grounds such as that the objector had no business dealings with the respondent; that the legal notice dated 21.04.2008 did not invoke arbitration proceedings; that the respondent admitted that orders were not placed by the objector and the bill does not bear the signatures of the objector. It was also argued that the objector did not examine the broker who had allegedly placed the orders on behalf of the objector. However, objections now sought ARBT No. 295/12 Page: 10/11 to be raised by the objector cannot be entertained as the same would amount to reappreciation of the evidence which has already been appreciated by the Ld. Arbitrator. It is a settled principle of law that this Court while dealing with the objections u/S. 34 of the Arbitration & Conciliation Act does not sit over the Award as an appellate Court and it cannot reappreciate or reexamine the evidence. The scope of the Court hearing the objections is very limited, as has been explained by Hon'ble Supreme Court in the case of ONGC (Supra).
15.In my considered opinion, the respondent has not been able to show any patent illegality which goes to the root of the matter and vitiates the Award warranting its setting aside. Hence, the objections filed by the objector are dismissed being devoid of any merits.
File be consigned to Record Room after completion of necessary formalities.
ANNOUNCED IN THE OPEN COURT ON: 2nd September, 2013.
(ANIL KUMAR SISODIA) Additional District Judge06/ West Tis Hazari Courts, Delhi.
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