Delhi High Court
Apoorve Jain vs Rakesh Jain & Ors. on 4 June, 2014
Author: Manmohan Singh
Bench: Manmohan Singh
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment pronounced on: June 04, 2014
+ O.M.P. 455/2012
YOGESH JAIN & ORS ..... Petitioners
Through Mr.S.C.Ladi, Sr.Adv. with
Ms.Deeksha L. Kakar and Mr.Rajesh
Jain, Advs.
versus
RAKESH JAIN & ORS ..... Respondents
Through Mr.Vijay Hansaria, Sr.Adv. with
Mr.Abhimanyu Garg, Adv.
+ O.M.P. 688/2012
APOORVE JAIN ..... Petitioner
Through Mr.S.C.Ladi, Sr.Adv. with
Ms.Deeksha L. Kakar and Mr.Rajesh
Jain, Advs.
versus
RAKESH JAIN & ORS ..... Respondents
Through Mr.Vijay Hansaria, Sr.Adv. with
Mr.Abhimanyu Garg, Adv.
CORAM:
HON'BLE MR.JUSTICE MANMOHAN SINGH
MANMOHAN SINGH, J.
1. The petitioner in both OMPs i.e. Yogesh Jain, Preeti Jain and Apoorve Jain have challenged the interim Award dated 1st April, 2010 passed by the sole Arbitrator who is related to both parties. The objections OMP No.688/2012 & OMP No.455/2012 Page 1 of 11 are filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act").
2. Signed copy of the Award was allegedly sent to the petitioners by speed post.
3. The case of the petitioners i.e. Yogesh Jain and Preeti Jain is that they came to know of this Award only on 7th February, 2012 when copy of execution petition No.308/2011 was served. The objections were filed on 7 th May, 2012. Thus, the objections were filed within time.
4. Similarly, Apoorve Jain who is the petitioner in OMP No.688/2012 filed the objection on 26th July, 2012 has made a statement that it was only on 16th April, 2012 when he received show cause notice for his appearance for 17th May, 2012 in Execution Petition come to know about the passing of Award. He is residing outside India. The objections were filed through Anupraksha Jain. It is stated in the petition that he was not aware about the Award, therefore, the objection filed by him are within the prescribed period of time.
5. When OMP No.455/2012 was listed before Court, an objection was raised by the respondent stating the arbitral record would show contrary to the statement made by both petitioners. The record was summoned. As insisted by the respondent, on issue of limitation, both the parties have made their submission.
6. It was reiterated by the petitioners that interim award was neither received through post nor through email. The AD card addressed to petitioner No.1 bears the signatures with the date 5th April, 2010 which are not that of petitioner No.1 which can be matched with the other papers filed by him before the arbitration proceedings. The said AD card does not OMP No.688/2012 & OMP No.455/2012 Page 2 of 11 carry his habitual residential address which is 4525 A, 7/33 Ansari Road, Darya Ganj, New Delhi-110002. Therefore, the complete address has not been given which is known to the respondent as he himself has given in execution petition. The said address i.e. 7/33 Ansari Road, Darya Ganj, New Delhi is shared/used by 19 families residing there. He on 8 th June, 2002 alongwith his family shifted to the house at 4525 A; 7/33 Ansari Road, Darya Ganj, New Delhi which had come to his share. Thus, there is no proper service. As far as emails are concerned, the petitioners have also denied having received the copy of Award and stated that sending of any Award through email is not contemplated under Section 31(5) of the Act.
7. The respondent on the other hand has filed large number of documents to show that the petitioners had received the post at the address mentioned while sending the signed copy of the interim order by speed post. The other documents filed by the respondents by way of declaration, affidavits, stamp papers (purchased by the petitioner), wedding card advertisement and from various Government authority which disclose the same address where the signed copy of the Award is dispatched. It was argued by the Mr.Vijay Hansaria, learned Senior Counsel appearing on behalf of the respondent that from the said document placed, it is clear that the interim order dated 1st April, 2010 was sent at the permanent postal address and the petitioner No.1 in fact has received the signed copy of the Award on 5th April, 2010. Therefore, the petitions filed by them are liable to be dismissed as the same are time barred.
8. It is argued by Mr. Hansaria that the petitioners were fully aware about the passing of Award in the month of April, 2010 itself in view of record documents/correspondence available on record which speak for itself.
OMP No.688/2012 & OMP No.455/2012 Page 3 of 11The interim Award was not challenged by the petitioners because as per the Award, the respondent was to discharge certain liabilities in order to get the properties to be transferred in his name as per interim award within 18 months. The respondent as per Award has discharged the liabilities of the firms. The petitioners by taking the advantage are now making false and flimsy grounds after the expiry of 18 months. The conduct of the petitioners are mala fide and afterthought. The petitioners should not be allowed to take the advantage of their own wrong.
9. Learned Senior counsel has referred few decisions in support of his submission that under Section 114 illustration (f) of the Evidence Act, 1872 and Section 27 of the General Clauses Act, 1897 which mandate that there is a presumption that the addressee has received the letter sent by registered post and in the present case a letter sent by registered post and in the present case a letter which was sent by speed post containing the signed copy of award is received and admittedly it has not returned back nor it is the case where the address has refused. The address in the present case was correct address in view of large number of documents produced by the respondent. Therefore, the documentary evidence is sufficient to raise strong presumption of Section 27 of the General Clauses Act that a signed copy of the Award by letter had been properly served by post. The statement made by the petitioners is bald statement who are interested in denial of service. The entire onus is upon the petitioner to rebut the presumption of service. In the present case, the conduct of the petitioners speaks for itself.
10. During the course of hearing, Mr.Hansaria, learned counsel for the respondent has fairly not disputed the following factual position of the matter:
OMP No.688/2012 & OMP No.455/2012 Page 4 of 11(i) The signature appearing on the A.D. card after alleged service of petitioner No.1 do not match with the signature available on record of the Arbitration proceedings
(ii) Copy of the Award sent by the Arbitral Tribunal by email on subsequent date does not bear the signature of the arbitration.
(iii) The signed copy of the Award was dispatched to the petitioners by speed-post.
11. Mr. S.C.Ladi, learned Senior counsel appearing on behalf of the petitioners has argued that in view of the admissions made by the respondent, presumption goes in favour of the petitioner. He argues that the speed post service of award is not a sufficient compliance under the provisions of the Act. As per scheme of the Act and the nature of controversies involved in the issue, the signed copy of the Award is either to be handed over to the petitioners personally by the Arbitrator or to be served to the parties by sending it by registered A.D. post. He referred the decision of Division Bench of Bombay High Court in the case of Amidev Agro Care Pvt. Ltd. vs. Union of India, 2012 (279) ELT 353 (Bom) apart from few other decisions referred by him.
12. In the present case, it emerges that a signed copy was sent by speed post. It was not delivered personally. E-mail copy sent to the address of petitioners without bearing the signatures of the sole Arbitrator. The signature appearing on A.D. Card placed on record after allegedly served does not match the actual signature of the petitioner no. 1.
13. This Court speaking through Hon'ble Mr. Justice S. Muralidhar in batch matters along with Exp. 63/2008, Rajeev Kumar Agrawal and Ors. Vs. OMP No.688/2012 & OMP No.455/2012 Page 5 of 11 Sri Chand and five other cases decided on 24.07.2012 has discussed law of Apex Court on similar issue in para 18 to 21, the same are reproduced:-
"18. After orders were reserved in the execution petition and in the aforementioned OMP, Shri Chandra Prakash Gupta on 30th June 2012 filed OMP No.568 of 2012 under Section 34 of the Act. In the said petition, Shri Chandra Prakash Gupta admitted that he had given a POA in favour of Shri D.K. Agrawal. He stated that although he was re-assured by D.K. Agrawal that his interests would be taken care of, the manner in which the execution petitions were prosecuted, made it clear that Shri D.K. Agrawal was "only concerned with his own interest and those of his wife and children, which he had already secured in the Award and was only concerned in sidelining the Petitioner, while at the same time giving the Petitioner fake assurances."
19. In all the objections to the execution petitions as well as in OMP Nos.938 of 2011 and 568 of 2012 the principal point raised is that none of the parties has been communicated a certified copy of the Award dated 19th August 2000 and that in terms of the decision of the Supreme Court in State of Maharashtra v. Ark Builders Private Limited (2011) 4 SCC 616 (hereinafter 'Ark Builders case'), the period of limitation for filing objections to the Award does not arise. Elaborate arguments have been advanced by the parties in this behalf. The decision in the Ark Builders case 20.1 In order to appreciate the above principal objection, this Court proceeds to discuss the decision in Ark Builders case in some detail. The question that arose in the Ark Builders case for consideration is set out in para 1 of the said decision and reads as under:
"Whether the period of limitation for making an application under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter "the Act") for setting aside an arbitral award is to be reckoned from the date a copy of the award is OMP No.688/2012 & OMP No.455/2012 Page 6 of 11 received by the objector by any means and from any source, or it would start running from the date a singed copy of the award is delivered to him by the arbitrator."
20.2 The facts were that on 20th March 2003 the Arbitrator in that case gave a signed copy of the Award to Ark Builders Private Limited, Respondent in that case, ('Ark Builders') in whose favour the Award was made. However, no copy of the Award was given to the State of Maharashtra, which was the appellant in that case before the Supreme Court or to the other parties in the proceedings since both the State of Maharashtra and the other parties had failed to pay the cost of arbitration. Ark Builders submitted a copy of the Award in the office of the Executive Engineer of the State of Maharashtra on 29th March 2003 claiming payment in terms of the Award. On 16th April 2003, the Executive Engineer put up a proposal for challenging the Award before his superior officer.
20.3 Meanwhile on 15th January 2004, the Executive Engineer informed the Ark Builders that the State of Maharashtra had decided to challenge the Award before the appropriate forum. A decision in that behalf was taken on 16th December 2003 but no application to challenge the Award was made since the copy of the Award had not been received from the Arbitrator. On 17th January 2004, a messenger was sent to the learned Arbitrator with a letter seeking a copy of the Award. The Arbitrator made an endorsement on the letter and sent along with it a xerox copy of the said Award certified by the Arbitrator as a true copy. This xerox copy of the Award certified by the Arbitrator was received on 19th January 2004 and on 28th January 2004 the State of Maharashtra filed its petition under Section 34 of the Act.
20.4 The question that arose before the Principal District Judge, Latur, was whether the petition under Section 34 of the Act was barred by limitation. The said objection raised by Ark Builders was upheld by the Principal District Judge and the State of Maharashtra then preferred an appeal before the Bombay High Court. A contention before the said High Court was that since the OMP No.688/2012 & OMP No.455/2012 Page 7 of 11 Arbitrator had not sent a copy of the Award, as envisaged under Section 31(5) of the Act, the period of limitation had not begun to run. Reliance was placed on the decision of the Supreme Court in Union of India v. Tecco Trichy Engineers & Contractors (2005) 4 SCC 239 (hereinafter 'Tecco Trichy Engineers case'). The High Court held that under Section 31(5) of the Act it was not necessary for copy of the arbitral record to be sent by the learned Arbitrator to the party concerned but only to be handed over to the appropriate parties. It was held that since the Executive Engineer had admittedly received the copy of the Award in April 2003, the Appellants had to blame themselves for not acting till January 2004 to challenge the Award. It was held that there was sufficient compliance with Section 31(5) of the Act since the appellant had received the copy of the Award in April 2003. The State of Maharashtra then appealed to the Supreme Court.
20.5 After discussing the earlier decision in the Tecco Trichy Engineers case, the Supreme Court had observed as under:
"15. The highlighted portion of the judgment extracted above, leaves no room for doubt that the period of limitation prescribed under Section 34(3) of the Act would start running only from the date a signed copy of the award is delivered to/received by the party making the application for setting it aside under Section 34(1) of the Act. The legal position on the issue may be stated thus. If the law prescribes that a copy of the order/award is to be communicated, delivered, dispatched, forwarded, rendered or sent to the parties concerned in a particular way and in case the law also sets a period of limitation for challenging the order/award in question by the aggrieved party, then the period of limitation can only commence from the date on which the order/award was received by the party concerned in the manner prescribed by the law."OMP No.688/2012 & OMP No.455/2012 Page 8 of 11
20.6 Thereafter, the Supreme Court discussed the decision of Patna High Court in Sheo Shankar Sahay (Dr.) v. Commr. 1965 BLJR 78 and held in paras 17, 18 and 19 as under:
"17. In light of the discussions made above we find the impugned order of the Bombay High Court unsustainable. The High Court was clearly in error not correctly following the decision of this Court in Tecco Trichy Engineers & Contractors and in taking a contrary view. The High Court overlooked that what Section 31(5) contemplates is not merely the delivery of any kind of a copy of the award but a copy of the award that is duly signed by the members of the Arbitral Tribunal.
18. In the facts of the case the appellants would appear to be deriving undue advantage due to the omission of the arbitrator to give them a signed copy of the award coupled with the supply of a copy of the award to them by the respondent claimant but that would not change the legal position and it would be wrong to tailor the law according to the facts of a particular case.
19. In the light of the discussion made above this appeal must succeed. We, accordingly, set aside the judgments and orders passed by the Bombay High Court and the Principal District Judge, Latur. The application made by the appellants under Section 34 of the Act is restored before the Principal District Judge, Latur, who shall now proceed to hear the parties on merits and pass an order on the application in accordance with law. Since the matter is quite old, it is hoped and expected that the Principal District Judge will dispose this matter preferably within 6 months from the date of receipt of this order."
20.7 The ratio of the above decision is that under Section 31(5) the mere delivery of "any kind of a copy of the Award" is not sufficient but the said provision requires the "delivery of a copy of the Award that is duly signed by the members of the OMP No.688/2012 & OMP No.455/2012 Page 9 of 11 Arbitral Tribunal." Further, it was held that the period of limitation prescribed under Section 34(3) of the Act "would start running only from the date a signed copy of the Award is delivered to/received by the party making the application for setting it aside under Section 34(1) of the Act." Therefore, the two factors highlighted are the Award having to be signed by the learned Arbitrator and a certified copy thereof having to be delivered to the parties to the arbitral proceedings who propose to make an application to challenge it under Section 34(1) of the Act.
Was a signed copy of the Award delivered to the parties?
21. It was repeatedly urged before this Court by the JDs that there was, in fact, no original signed copy of the Award is available as no party had seen such copy. Secondly it was submitted that, in any event, a signed copy of the Award was not delivered to each of the parties as was mandatory under Section 31(5) of the Act, as explained by the Supreme Court in the Ark Builders case. It is further submitted that a xerox copy of the signed Award cannot be equated with a signed copy of the Award. In other words, each copy of the Award which is to be delivered to the parties has to bear the original signature of the Arbitrator and signing one Award and making several photocopies of it does not fulfil the requirement of Section 31 (5) of the Act. Delivering a photocopy of the Award is not compliance. A further aspect of this argument is that since without the delivery of a signed copy of the Award the arbitral proceedings cannot be said to have terminated under Section 32 of the Act, the Award does not become enforceable as such. The limitation for challenging the Award under Section 34 cannot begin to run till the ingredients of Section 31 are not satisfied."
14. As far as presumption under Section 114 illustration (f) of the Evidence Act 1872 and Section 27 of the General Clauses Act1897 is concerned, law mandates that the presumption is rebuttable on a consideration of evidence of impeccable character by showing that the OMP No.688/2012 & OMP No.455/2012 Page 10 of 11 address mentioned on the cover was incorrect and postal authorities never tendered the registered letter to him. In view thereof, it is undisputed position in law that the burden to rebut the presumption lies on the party, challenging the factum of service.
15. In order to satisfy the Court, the petitioners' counsel submits that the service of signed copy of the award is clear and cogent without any doubt. In the present case, it is admitted by the respondent, the signatures on the after service do not match the signatures of petitioner no. 1. Copy of award sent by e-mail also does not bear the signature of petitioner and the signed copy of Award was admittedly sent by Speed Post and not by registered AD and a signed copy of the Award was not personally delivered to the petitioner. However, it appears to the court in view of documentary evidence produced by the respondent that the petitioners had knowledge of the passing of interim order and are taking full advantage of the situation and the prescribed law. The presumption of service is doubtful and in view of peculiar facts in the matter, this court is not inclined to dismiss the petitions in view of peculiar circumstances except to expedite the hearing of the main petitions when this issue of limitation would also be kept in mind while deciding the matter on merit.
16. Pleadings are complete. Written submission, if any, be filed by both parties on merit within 8 weeks from today. List the matters on 1st September, 2014 in the category of 'Short Cause' (MANMOHAN SINGH) JUDGE JUNE 04, 2014 OMP No.688/2012 & OMP No.455/2012 Page 11 of 11