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Delhi District Court

Also At vs Indiabulls Housing Finance Ltd on 18 May, 2016

                                                              Page 1 of 14




  IN THE COURT OF MS. NAVITA KUMARI BAGHA, ADJ­01 (SOUTH), 
                             SAKET COURTS, NEW DELHI

Arbtn. No.12/14
Unique Case ID No.02406C0061982014

Jagbir Kumar
R/o D­194, Aya Nagar Colony,
Phase­V, Air Force Arjungarh,
New Delhi­110047

Also at:
St. Anthony's Sr. Sec. School,
C­6, SDA (Hauz Khas),
MTNL Telephone Exchange,
New Delhi.
                                                        ............. Petitioner
         Vs.

1.       Indiabulls Housing Finance Ltd.
         Through its Authorized Signatory
         At F­60, Malhotra Building,
         2nd Floor, Connaught Place,
         New Delhi­110001

2.       Sh. Bipin Kumar Sharma
         Sole Arbitrator
         At C­69A, C.L. Joseph Block,
         Tis Hazari Courts, Delhi.
                                                       .......... Respondents


 Objections Petition U/Sec.34 of Arbitration & Conciliation Act, 1996 
     for setting aside the ex­parte Arbitration Award dated 15.05.2013 


Arbtn.12/14
Jagbir Kumar
       Vs.
Indiabulls Housing Finance Ltd. & Anr.
                                                                             Page 2 of 14




 passed by Sh. Bipin Kumar Sharma, Arbitrator in Arbitration matter 
       titled as 'Indiabulls Housing Finance Ltd. Vs. Jagbir Kumar'

O R D E R :

­

1. The present petition U/Sec.34 of Arbitration & Conciliation Act, 1996 (hereinafter referred to as 'the Act') was filed by the petitioners on 12.03.2014 against the Arbitration Award dated 15.05.2013, passed by the Sole Arbitrator Sh. Bipin Kumar Sharma in the Arbitration matter titled as "Indiabulls Housing Finance Ltd. Vs. Jagbir Kumar" vide which the claim of respondent no.1 i.e. Indiabulls Housing Finance Ltd. (hereinafter referred to as 'the Claimant') was allowed and the petitioner was directed to pay to the Claimant a sum of ₹46,611/­ alongwith pendentelite and future interest @ 15% p.a. from 07.02.2013 till the date of realization. Cost of ₹5,000/­ was also awarded in favour of the Claimant.

2. The brief background of the case is that the petitioner had taken a personal loan from Indiabulls Credit Services Ltd. and the latter got amalgamated with Indiabulls Financial Services Ltd. under the scheme of arrangement duly sanctioned by the Hon'ble High Court of Delhi. Later on during the arbitral proceedings, vide application dated 20.03.2013, it was brought to the knowledge of the Sole Arbitrator that the Indiabulls Financial Services Ltd. was got amalgamated with Indiabulls Housing Finance Ltd. Arbtn.12/14 Jagbir Kumar Vs. Indiabulls Housing Finance Ltd. & Anr.

(Claimant/respondent no.1) under the scheme of arrangement duly sanctioned and approved by the Hon'ble High Court of Delhi. As per the Claim filed by the Claimant before the Sole Arbitrator, the case of the Claimant was as follows:­ 2.1 The petitioner had approached the Claimant for obtaining a personal loan and filed a loan application and executed a loan agreement with the Claimant and he was paid a sum of ₹49,319/­ (Rupees Forty Nine Thousand Three Hundred and Nineteen only) as loan by the Claimant. The said loan was to be repaid in 70 equal monthly installments of ₹1686/­. But the present petitioner failed to maintain the financial discipline and defaulted in making payment of the monthly installments.

2.2 The petitioner was served with reminders to pay the amount due but he did not pay any heed to the demands, as a result of which the Claimant terminated the loan agreement and recalled the entire loan and asked the petitioner, vide legal notice dated 01.11.2012, to pay a sum of ₹46,611/­ alongwith interest. But the present petitioner failed to pay the same despite service of legal notice.

2.3 Since there was clause in the loan agreement for referring Arbtn.12/14 Jagbir Kumar Vs. Indiabulls Housing Finance Ltd. & Anr.

the dispute to Sole Arbitrator, so the Claimant appointed Mr. Bipin Kumar Sharma, Advocate as Sole Arbitrator and filed its claim before him.

3. The present petition U/Sec.34 of the Act was filed by the petitioner on 12.03.2014 for challenging the Arbitral Award dated 15.05.2013 by the stating that he came to know about the Award only on 04.02.2014 when the process server came to his house and gave the notice of the execution petition pending in the Court of Ms. Niti Phutela, Ld. Civil Judge, Saket Courts, New Delhi. The petitioner by way of present petition U/Sec.34 of the Act has challenged the Award dated 15.05.2013 on following main grounds:­

(i) That the Ld. Arbitrator had failed to consider the fact that the petitioner was not properly served and irrationally proceeded ex­parte against the petitioner. The Ld. Arbitrator has ignored the basic principle of natural justice that nobody should go unheard and fair opportunity should be given to all the parties to place defence.

(ii) That the Arbitral Tribunal, while passing the impugned Award, committed grave error while ignoring the settled proposition of law that it is the duty of the presiding officer in case of ex­parte case to get proved the entire case on record Arbtn.12/14 Jagbir Kumar Vs. Indiabulls Housing Finance Ltd. & Anr.

with the help of documentary evidence or otherwise.

(iii) That the impugned Award is in conflict with the fundamental policy of Indian Law, justice and morality.

(iv) That the impugned Award has been passed in violation of the provisions of the Indian Contract Act.

(v) That the Ld. Arbitrator has ignored the terms of the contract and usage of the trade applicable to the transaction.

4. In reply to the petition, the Claimant has stated that the petition is liable to be dismissed as it is barred by limitation; each time notice was sent and duly served upon the petitioner and the Ld. Arbitrator had given sufficient time to both the parties to appear and that the Award was passed in accordance with the provisions of the Act, the substantive law governing the parties and the terms of the contract.

5. I have heard the arguments from Counsel Sh. Alok Kumar for respondent no.1/Claimant. But despite seeking a number of adjournments for addressing arguments, nobody came forward from petitioner's side to address arguments. Liberty was also granted to petitioner to file written arguments. But despite that neither written arguments have been filed nor oral arguments addressed from the side of the petitioner. I have perused the record. Arbtn.12/14 Jagbir Kumar Vs. Indiabulls Housing Finance Ltd. & Anr.

6. The first and the foremost ground of challenge of the impugned Award is that the petitioner was not properly served. But there is inconsistency in the stand taken by him with respect to the date of knowledge of the impugned Award. In para no.2 of the present petition, he has stated that he came to know about the Award only on 04.02.2014 when the process server came to his house and gave notice of execution, but in para no.4 of the petition, he has stated that he came to know about the Award only on 03.02.2014 when his employer deducted a sum of ₹8,250/­ from his salary towards satisfaction of the Award. In his application for condonation of delay in filing the petition, he has stated altogether different date. In para no.5 of the said application, he has stated that he came to know about the arbitration proceedings only on 12.02.2014 when his salary was deducted. Thus in the absence of any uniformity or consistency, his plea does not transpire any confidence. The perusal of arbitral record has revealed that the notices were sent to the petitioner by way of speed post at the following stages:­

(i) When notice of appointment of Arbitrator was sent by the Claimant on 24.12.2012;

(ii) When 1st notice of arbitration proceedings was sent by the Sole Arbitrator on 02.02.2013;

Arbtn.12/14 Jagbir Kumar Vs. Indiabulls Housing Finance Ltd. & Anr.

(iii) When the 2nd notice of arbitration proceedings was sent by the Sole Arbitrator on 10.04.2013; and

(iv) When the copy of Award was sent to the petitioner by the Sole Arbitrator on 06.06.2013.

7. The Ld. Arbitrator, while placing reliance upon the case­laws titled as Harcharan Singh Vs. Shiv Rani, (1981) 2 SCC 535, M/s. Madan & Company Vs. Wazir Jaivir Chand, (1989) 2 SCC 602 and Basant Singh Vs. Roman Catholic Mission, (2002) 7 SCC 531, proceeded ex­parte against the present petitioner. In Harcharan Singh's case (supra), the Hon'ble Supreme Court presumed the service of notice under Sec.114 of Evidence Act and Sec.27 of General Clauses Act when there was report of refusal by the postman. In M/s. Madan & Company's case (supra), the Hon'ble Apex Court presumed the service of notice even in a case where the same was received back with the postal endorsement "left without address", by holding that the non­delivery was attributable to addressee's own conduct as he had not left any instructions with postal authorities either to detain his letters or to forward them to the address where he had gone. In Basant Singh's case (supra), the Hon'ble Supreme Court had drawn the presumption of service under Sec.27 of General Clauses Act notwithstanding the loss of AD Card or its non­return for any Arbtn.12/14 Jagbir Kumar Vs. Indiabulls Housing Finance Ltd. & Anr.

reason. In the present case, the petitioner has not denied that his addresses before the Ld. Arbitrator were not his correct addresses. It is pertinent to mention here that the addresses of petitioner as mentioned in the present petition under Sec.34 of the Act and as before the Ld. Arbitrator are the same addresses. Since, the notices were sent to the petitioner by way of speed post at his correct addresses and none of the envelopes were received back unserved, so in view of the above­said case­laws, the Ld. Arbitrator had rightly drawn the presumption of service and proceeded ex­ parte against the present petitioner. Though the legal presumption of service laid down in Sec.114 of Indian Evidence Act and Sec.27 of General Clauses Act is rebuttable, but the petitioner has failed to rebut the same. He has simply stated that he was not properly served. Neither has he denied the correctness of his address nor categorically denied service of each notice sent to him at the stages of appointment of arbitrator, acceptance by Arbitrator & initiation of arbitration proceedings and filing of statement of claim. So in the absence of any rebuttal, it stands established that the petitioner was duly served with the notices of the arbitral proceedings, sent by the Ld. Arbitrator. Accordingly, the ground of petitioner of 'being not properly served' is rejected.

Arbtn.12/14 Jagbir Kumar Vs. Indiabulls Housing Finance Ltd. & Anr.

8. The counsel for the Claimant has vehemently argued that the present petition deserves dismissal as the same is time barred. He has place reliance upon the case­law titled as M/s. SRS Entertainment Limited Vs. M/s. Home Stores (India) Ltd., 2010(1) AD (Delhi) 412 wherein also the petitioner (who was judgment debtor in the Execution Petition before the Court) had filed petition U/Sec.34 of the Act by stating that the signed copy of the arbitral award was never delivered to it and it had learnt of the award only on inspection of a copy thereof filed in the execution petition. It was observed by the Hon'ble High Court in the said case that the arbitral record had revealed that the arbitrator had forwarded to both the parties under cover of his letter the signed copy of the award by speed post (the postal stamp of which was lying on arbitral record evidencing dispatch of the award to both the parties) and the arbitral record was not containing any envelope containing the letter and award returned from the address of the petitioner to the arbitrator. It was held by the Hon'ble High Court, "7..................The awards are usually published after some time of the conclusion of the arbitral hearings and the only way in which the arbitral tribunal can deliver/serve the same on the parties is through the post/courier. Once it is held that the arbitral tribunal is entitled to serve/deliver the award on the parties Arbtn.12/14 Jagbir Kumar Vs. Indiabulls Housing Finance Ltd. & Anr.

through the medium of post/courier, the law with respect thereto including the presumptions arising under Section 114 of the Evidence Act and Section 27 of the General Clauses Act would get attracted.

8. In the present case it has been established from the arbitral record that the arbitrator dispatched the signed copy of the arbitral award to the parties at the addresses of the parties before the arbitrator. The decree holder received the award pursuant thereto. The postal receipts on the arbitral record of dispatch of signed copy of the award to the two parties are evidence of the same. In the absence of the arbitral record containing anything to show that the article sent under the said postal receipt was returned from the address of the judgment debtor to the arbitrator, the presumption is that the same was delivered in the normal course of postal business."

9. Similarly, in the present case also, the service of Arbitral Award upon the petitioner could be presumed under Sec.114 Indian Evidence Act and Sec.27 of General Clauses Act as the Award was sent to him at his correct addresses by way of speed post and the same was never returned unserved. As stated earlier, though the presumption under these provisions is rebuttable, but the petitioner has failed to rebut the same. He has nowhere in the entire petition stated that he had not received the copy of the Award. He has Arbtn.12/14 Jagbir Kumar Vs. Indiabulls Housing Finance Ltd. & Anr.

simply stated that the Ld. Arbitral Tribunal has failed to consider the fact that he was not 'properly' served as there was no proof of service on the record. So his emphasis is on the point of 'no proof of service on record' rather than categorically stating that he had never received the copy of Award. As held in the case of SRS Entertainment (Supra), in the absence of the arbitral record containing anything to show that the article sent under the said postal receipt was returned from the address of the addressee to the arbitrator, the presumption is that the same was delivered in the normal course of postal business. Since in the present case, the Award sent by speed post was never returned undelivered and the petitioner has failed to rebut the said presumption, so it stands established that the petitioner was duly served with the copy of Arbitral Award dated 15.05.2013 by way of speed post. Since the Award was sent through speed post on 06.06.2013 (as evident from the postal stamp), the same must have reached the petitioner by 10.06.2013. But the present petition U/Sec.34 of the Act was filed on 12.03.2014 i.e. much after the expiry of period of limitation of 90 days and hence the same is barred by limitation and accordingly, requires to be dismissed.

10. The second ground of challenge of impugned Award is that the Arbitral Tribunal has committed grave error while ignoring the Arbtn.12/14 Jagbir Kumar Vs. Indiabulls Housing Finance Ltd. & Anr.

settled proposition of law that it is the duty of the presiding officer in case of ex­parte case to get proved the entire case on record with the help of documentary evidence or otherwise. But this ground is totally devoid of merits as the perusal of arbitral record revealed that the case was proved by the Claimant before the Ld. Arbitrator by way of documentary evidence viz. Loan Application Form, Loan Agreement dated 22.08.2005, Statement of Account, Final Loan Recall and Demand Notice, Certificate of Incorporation and SPA. Otherwise also it is settled law that the scope of interference of the Court under Sec.34 of the Act, is very limited. Court would not be justified in reappraising the material on record and substituting its own view in place of the Arbitrator's view. Where there is an error apparent on the face of the record or the Arbitrator has not followed the statutory legal position, then and then only it would be justified in interfering with the award published by the Arbitrator. Once the Arbitrator has applied his mind to the matter before him, the Court cannot reappraise the matter as if it were an appeal and even if two views are possible, the view taken by the Arbitrator would prevail. (See: Bharat Coking Coal Ltd. v. L.K. Ahuja, 2004(3) R.C.R. (Civil) 126.) Hence, the above­said ground of petitioner is rejected being meritless.

11. The other ground of challenge of Award is that it is opposed to Arbtn.12/14 Jagbir Kumar Vs. Indiabulls Housing Finance Ltd. & Anr.

fundamental policy of Indian Law, justice and morality. It has been held by Hon'ble Supreme Court in Oil & Natural Gas Corporation Ltd. Vs. SAW Pipes Ltd., AIR 2003 SC 2629, "The award could be set aside if it is against the public policy of India, that is to say, if it is contrary to:­

(a) fundamental policy of Indian law;

(b) the interest of India; or

(c) justice or morality, or

(d) if it is patently illegal."

The petitioner has failed to show how the impugned Award is contrary to the fundamental policy of Indian Law or is contrary to the interest of India or is contrary to the justice or morality or is patently illegal. Since none of the above­said ingredients have been explained by the petitioner or found in the impugned Award, so it could not be said that it is against the fundamental/public policy of India or is in conflict with justice and morality.

12. So far as the grounds mentioned above in Para 3 (iv) & (v) are concerned, the same are absolutely devoid of merits and appear to have been raised just for the sake of raising objections. The petitioner has just baldly stated that the impugned Award has been passed in violation of provisions of the Indian Contact Act or by ignoring the terms of the contract or usage of trade applicable to the Arbtn.12/14 Jagbir Kumar Vs. Indiabulls Housing Finance Ltd. & Anr.

transaction. He has utterly failed to explain as which provision of Indian Contract Act has been violated or which particular term of contract or usage of trade has been ignored. No Award could be set aside merely on the basis of such kind of bald allegations having no substance.

13. In view of the observations made herein, I find no merits in the present petition filed under Sec.34 of the Act and accordingly the same is dismissed and the Arbitral Award dated 15.05.2013 is upheld.

14. File be consigned to Record Room.

(Announced in open Court on 18.05.2016) (Navita Kumari Bagha) ADJ­01, South District Saket Courts, New Delhi Arbtn.12/14 Jagbir Kumar Vs. Indiabulls Housing Finance Ltd. & Anr.