Delhi District Court
Sh. Abdul Basit vs M/S Tuberose Estate Pvt. Ltd on 24 September, 2012
IN THE COURT OF AJAY GOEL: ADJ-II (NORTH): DELHI.
CS-254/10
In the Matter of:
Sh. Abdul Basit
W-111, Greater Kailash,
Part-II, New Delhi-110048. .....Petitioner.
VERSUS
1. M/s Tuberose Estate Pvt. Ltd.
Through its Chairman/Managing Director,
Regd. Office: Enkay House,
3 & 4 Malch Marg, Shopping Center
Diplomatic Enclave, Chankyapuri,
New Delhi-110021.
2. Mr. Ashok Popli
Advocate/Sole Arbitrator,
Chamber No. 16, Civil Lines,
Tis Hazari Courts, Delhi. ......Respondents.
Date of Institution: 15.03.2010
Date of Assignment to this court: 11.09.2012
Date of Arguments: 11.09.2012
Date of Order: 24.09.2012
JUDGMENT
1. This is objection petition under section 34 of the Arbitration and Conciliation Act, 1996 against the ex-parte award dated 24.12.2009 CS-254/10 Page No.1/10 passed by Mr. Ashok Popli, Advocate/ Sole Arbitrator seeking therein that award may be set aside. This objection petition is hereby disposed off through this judgment.
2. Today the parties have placed reliance on certain pronouncements of the Higher Courts which are discussed in the order. Both the parties have stated that question of law is involved and facts are not required to be proved by way of evidence, hence the matter is argued straightway.
3. The ground taken in the objections are (henceforth word "objector" will be used for petitioner/JD and "respondent" for opposite party/DH) many folds. The main thrust has been laid by objector on the ground that the award has been passed ex-parte. The arbitrator at Delhi had no jurisdiction. There was no service of the appointment of Arbitrator and he was not allowed to participate in the proceedings so principles of natural justice have been violated as opportunity was not granted. It was also argued that as per clause of Arbitration in the agreement, Arbitrator should have been appointed by the court and not sou moto. On the other hand, respondent has argued that Arbitrator was correctly appointed. Information was sent and by non-participation by objector waiver is implicit and thus award should not be set aside.
4. I have perused the Arbitration award as well as file which has been placed by Arbitrator.
5. Intimation of appointment of Arbitrator was sent by respondent CS-254/10 Page No.2/10 through registered A.D. containing letter dated 05.6.2009. The registered A.D. is duly served and reply dated 30.6.2009 was also sent by the counsel for the objector. The objector had not taken any objection of any kind regarding the wrong appointment of Arbitrator in this reply except to the stand that any proceedings will be done at the risk and peril of the respondent. Notice for entering into reference between parties dated 20.7.2009 was also sent by Arbitrator as well as by the respondent on the address of objector. One notice was also sent to the objector by Arbitrator on 31.7.2009 but to no effect. Thereafter Arbitrator had sent notice dated 01.9.2009 on the same address but it is mentioned on the registered envelop that no such persons resides. In the petition filed before this court, the address of the objector is same. Service has been validly presumed. The Arbitrator was not in hurry and he rather waited on 18.9.2009 for the appearance of objector and fixed the date for 06.10.2009 on which date the objector was proceeded ex- parte. Arbitrator entered into reference on 29.7.2009 and waited till 06.10.2009 so as to give ample opportunity to the objector to defend the claim filed by the respondent and to bring forth his version on file. Whether the Arbitrator was appointed wrongly or illegally is another question but as far as intimation is concerned, same is duly made out from the record and ample opportunity was granted to the objector for the same and if he has chosen not to participate then it is his own fault. It is clear that attempts were CS-254/10 Page No.3/10 made to serve the objector and the non-participation was at the behest of the objector himself and he cannot be permitted to take advantage of his own wrong and argument is of no consequences and brushed aside. He should have informed the Arbitrator and respondent if there was any change in the address and to utter surprise this address as stated above still stands good from the address mentioned in the petition, thus award cannot be set aside on this ground.
6. As far as arguments of wrong appointment of Arbitrator is concerned, this argument could have been taken before Arbitrator and objector has failed to satisfy the court as to why same was not taken before Arbitrator itself. It has been held in 2006 (86) DRJ 751 titled DDA Vs Manohar Lal passed by Hon'ble High Court of Delhi that "Court does not sit in appeal over the award of Arbitrator to re-examine the evidence and if objections regarding appointment of Arbitrator not raised before Arbitrator himself then he is precluded from challenging the authority of Arbitrator in appeal". The counsel for objector has tried to distinguish this judgment on the ground that this position stands good if objector continued to participate in arbitration proceeding but herein he has not participated. As discussed above, presumption of continuation of participation in proceedings is taken against the objector as he himself is guilty of same and could have actually participated in the proceedings.
CS-254/10 Page No.4/107. Another objection is with regard to jurisdiction clause. The counsel has relied upon clause 35 of the arbitration agreement between the parties and submitted that only Gurgaon Courts have jurisdiction hence Arbitrator at Delhi could not have conducted proceedings. This argument is self-destructive because if it was the position then objector should have filed this petition U/s 34 before the court at Gurgaon and not in Delhi and thus this argument does not hold good because he has waived this argument by his conduct. Moreover, this clause defines jurisdiction of courts as vested in Gurgaon and not of Arbitrator. Arbitrator could be appointed anywhere in India as clause 30 says that "matter would be referred to Sole Arbitrator" and nowhere it has been mentioned that the Arbitration can be held in Gurgaon only. Furthermore, it is settled law that "Court wherein jurisdiction does not lie and cause of action has not arisen cannot be vested with exclusive jurisdiction if the jurisdiction otherwise lies somewhere else and cause of action has arisen somewhere else". Herein the parties resided in Delhi, agreement is stated to have been entered in Delhi and thus Delhi court had jurisdiction.
8. Objector has further argued that even though jurisdiction of Arbitrator can be challenged before Arbitrator itself still it is to be seen by court as to whether Arbitrator has been appointed correctly as per agreement clause. I have perused the clause 30 which says that "if any dispute arises the matter would be referred to CS-254/10 Page No.5/10 Sole Arbitrator to be appointed as per Arbitration Act". Now it is not disputed that intimation of appointment was sent which was duly replied by objector as stated above and he came to know about the appointment of Arbitrator. From the scheme of act, it has to be seen whether the Arbitrator was required to be appointed by court as argued by objector or respondent could have appointed it as argued by respondent. Section 3 of Arbitration and Conciliation Act, 1996 explains the receipt of written communication, section 8 defines the power of court to refer the matter to arbitration, section 11 deals with appointment of Arbitrator, Sub section 2 of sub section 11 says as under:-
"Subject to sub section 6 the parties are free to agree on procedure for appointment of Arbitrator or Arbitrators". Sub section (6) says "where under an appointment procedure agreed upon by parties:
(a) a party fails to act under that procedure or;
(b).............. and;
(c)............... The party may request Chief Justice or any persons or institution designated by him to take necessary measures............".
9. Thereby scheme clearly says that firstly parties are free to choose the method of appointment themselves and if that method is not adhered or acted upon then court may intervene. In 126 (2006) DLT 210 Hon'ble Delhi High Court in case titled as Wipro CS-254/10 Page No.6/10 finances Ltd. Vs SRG Infotech (India) Ltd. & Anr has observed that "Appointment of Arbitrator - Scope of provisions of section 11 and procedure for appointment - Necessary for one party to put other party to notice and call upon other party to act as per procedure agreed to between parties for appointment of Arbitrator - Chief Justice would be approached only if party noticed fails to act as per procedure - petitioner filed this petition without exhausting procedure contained in arbitration agreement, it is not maintainable". For this preposition, the counsel for respondent has further relied upon 117 (2005) DLT 369 (DB) Delhi High Court titled Kutub Properties Pvt. Ltd. VS C.L. Construction Company. After going through the law on the point it is crystal clear that Arbitrator could have been appointed by any of the party in case of dispute and there was no need of permission or consent from other party. Respondent exercised the right by duly intimating the other party. Arbitrator had also given notice, thereafter, any lack of jurisdiction in Arbitrator should have been agitated before him. Crux of the discussion is that there may be two situations regarding appointment of Arbitrator:-
i) Firstly there is named Arbitrator in agreement and if so he is to be appointed by any of the parties in case of dispute.
ii)There may not be named Arbitrator but it is mentioned that one or two Arbitrator can be appointed. If so, two situation emerges. Firstly CS-254/10 Page No.7/10 one party can ask other to appoint and if he fails the first party can appoint himself or go to the court; secondly if other party appoints then first party can not question him but if other party does not appoint and first party appoints himself in between or approaches court then second party losses right of appointment. Thus, I do not find any fault in the procedure adopted by respondent in appointing Arbitrator which was as per law. The counsel for objector has relied upon 2011 (1) RAJ 717 M/s Prime Industries Ltd. Vs SEIL Ltd.
& Anr. decided by Hon'ble Delhi High Court. Rather perusal of this judgment shows that it goes against the objector himself because Hon'ble court has clearly stated that arbitration clause must be given its full effect and herein also the same has been adhered. Moreover, in that case, ICA was given power to appoint arbitrator and herein in present case no such clause exists and Sole Arbitrator was required to be appointed which has been done. Another judgment 95 (2002) DLT 855 passed by Delhi High court titled as Union of India Vs Daisy Trading Corporation is also not applicable to the facts of the case because it has been held therein that if there is non-adherence of principles of natural justice then it is misconduct on the part of Arbitrator and thus award is liable to be set aside but in the present matter, there is no violation of principles of natural justice and presumption of service is rightly taken. AIR 2009 SC (Supplement) 2145 titled IOC Vs Raja Transport Company Ltd. is another land mark judgment wherein it has been CS-254/10 Page No.8/10 observed by Hon'ble Supreme court of India that "if agreement provides for appointment of Sole Arbitrator and parties have not agreed upon any appointment procedure then Chief Justice or his designate will have power if the parties failed to agree on the arbitration within 30 days from receipt of the request of the parties from other party". In the present case the Sole Arbitrator was appointed and if the objector was not willing to participate or to oppose the Arbitrator, he could have moved to court for redressal of his grievances for deciding the question of interpretation of clause and should not have waited for passing the award and to take risk. In reply given by objector to the notice of appointment of Arbitrator, the objector has opposed the intimation of arbitration proceedings and not particularly the appointment of particular Arbitrator. The objector had no right to oppose intimation of arbitration proceedings. He cannot try to wriggle out of arbitration clause. Thus this argument also does not hold water and I do not find any fault in appointment of Arbitrator.
10.It has been held by Hon'ble Supreme Court continuously that a court should approach an award with a view to support it if that is reasonable rather than to destroy it by calling it illegal and further that a court cannot substitute its own evaluation or the conclusion of law and facts to come to the conclusion that arbitrator had acted contrary to the bargain between the parties. I find support for this view from 2002(65) DRJ 400 UOI Vs. Hakam Chand and Co.
CS-254/10 Page No.9/10and AIR 1989 SC 1263 Food Corporation of India vs. Joginder Pal Mahinder Pal. This court is not Appellate court in the arbitration matter as it has been held in AIR 1989, Supreme Court 777 that in appeal in arbitration matter, court cannot sit as a Appeal. This legal aspect is not disputed. All the objections of the objector are unfounded and baseless and thus are rejected.
11.Relief:- In view of the above observations, the objections and ex- parte award dated 24.12.2009 being devoid of any force are dismissed. File be consigned to record room.
Announced in open court (AJAY GOEL)
on 24.09.2012 ADJ-II(North)/Delhi.
CS-254/10 Page No.10/10