Delhi High Court
Tata Capital Financial Services Ltd vs A.G. Aerovision Electronics Pvt. Ltd & ... on 15 January, 2018
Author: Navin Chawla
Bench: Navin Chawla
$~7
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ OMP (ENF.) (COMM.) 150/2016
Date of decision: 15th January, 2018
TATA CAPITAL FINANCIAL SERVICES LTD.,
..... Decree Holder
Through: Mr.Sanjeev Goyal, Mr.Varun
Bedi & Ms.Shireen Kapoor,
Legal Manager for petitioner-
company.
versus
A.G. AEROVISION ELECTRONICS PVT. LTD & ORS.
..... Judgment Debtors
Through: Mr.Ashok Agrawal, Ms.Parika
Gupta, Ms.Charu Rustogi,
Ms.Devyani Bhatt &
Ms.Akanksha Singh, Advs.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
NAVIN CHAWLA, J. (Oral)
1. The present Execution Petition has been filed by the petitioner seeking execution of the Arbitral Award dated 02.12.2015 passed by the Sole Arbitrator.
2. Judgment Debtor Nos. 2 to 4 have taken a preliminary objection on the maintainability of the Execution Petition contending that they have not received the signed copy of the Arbitral Award from the Arbitrator and therefore, as there is no compliance of Section 31(5) of OMP (ENF.) (COMM.) 150/2016 Page 1 the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') the time period for making of the objections under Section 34(3) of the Act has not commenced and the Arbitral Award have not become enforceable in terms of the Section 36 of the Act.
3. On the other hand, the learned counsel for the Decree Holder submits that the Arbitrator had sent the signed copy of the Award to the Judgment Debtor Nos. 2 to 4 at their given residential address on 09.12.2015 itself, however, the envelopes containing the copy of the Award, as far as Judgment Debtors No. 2 and 3 are concerned, were returned back un-claimed with the remark "Locked" and thereafter "Un-claimed". He submits that the envelopes itself would show that three attempts were made for making service of the envelopes on the Judgment Debtor Nos. 2 and 3. As far as Judgment Debtor No. 4 is concerned, attempt of service of the envelopes was made on him on 12.12.2015, however, the same remained un-claimed with the remark "Closed Premises". He further submits that in the reply filed by the Judgment Debtor Nos. 2 and 4 to the present Execution Petition, there is no denial of the fact that the said Judgment Debtors reside at the address on which the envelopes have been sent. He further submits that upon the Judgment Debtor taking objection of non-service of the signed copy of the Award on them, this Court vide its order dated 23.01.2017 had directed the Decree Holder to place on record the proof of service of the signed copy of the Award on the said Judgment Debtor. In compliance with the said direction, the copies of the above mentioned envelopes were filed before this Court. He further submits OMP (ENF.) (COMM.) 150/2016 Page 2 that in compliance with the order dated 11.04.2017, copies of the signed Award were again sought to be served on the Judgment Debtor Nos. 2 and 3, however, again the envelopes containing the same were returned back with the remark that the addressee could not be found in spite of repeated attempts. As far as Judgment Debtor No. 4 is concerned, the envelopes were returned un-claimed with the remark that the premises was found closed. He submits that the Judgment Debtors are clearly missing the process of law and denying service of the signed copy of the Award and at the same time claiming that the Award remains unenforceable due to such non-service.
4. In my opinion, the counsel for the Decree Holder is right in his submission that the signed copy of the Award can be deemed to have been served on the Judgment Debtor Nos. 2 to 4 by the Arbitrator once it was sent at the last known address, which address is not been denied by the Judgment Debtors in their reply, and though the same may have been returned back un-claimed. A perusal of the affidavit in support of the reply filed by Judgment Debtor Nos. 2 to 4, to the Execution Petition would also show that Judgment Debtor No. 2 has claimed his residential address to be 34/37, 2nd Floor, Old Rajinder Nagar, New Delhi-110060, which is the same address on which the Arbitrator and thereafter the Decree Holder had sent the signed copies of the Award.
5. Section 3 of the Act prescribes how written communications are deemed to be served on the opposite party. The same is reproduce herein below:-
OMP (ENF.) (COMM.) 150/2016 Page 3 "3. Receipt of written communications.--(1) Unless otherwise agreed by the parties,--
(a) any written communication is deemed to have been received if it is delivered to the addressee personally or at his place of business, habitual residence or mailing address, and
(b) if none of the places referred to in clause (a) can be found after making a reasonable inquiry, a written communication is deemed to have been received if it is sent to the addressee's last known place of business, habitual residence or mailing address by registered letter or by any other means which provides a record of the attempt to deliver it.
(2) The communication is deemed to have been received on the day it is so delivered.
(3) This section does not apply to written communications in respect of proceedings of any judicial authority."
6. This Court in its judgment dated 22.09.2017 passed in FAO (OS) 338/2016 Shabnam Gulati V. M/S Religare Finvest Pvt Ltd., had discussed the scope of section 3 of the Act and held as under:-
"18. Section 3(1) of the Arbitration and Conciliation Act, specifically states that a written communication is deemed to have been received, if it is sent to the addressee's last known place of business, habitual address or mailing address by registered letter or by any other means which provides a record of "attempt to deliver it". Therefore, unlike Sub-Rule 5 of Rule 9 of Order V of CPC requiring proof of acknowledgment or any other receipt of due delivery of the summons, or drawing of a presumption of due service only where the summons were OMP (ENF.) (COMM.) 150/2016 Page 4 properly addressed but the acknowledgement was lost or mislaid or for any other reason was not received by the Court, under the Arbitration and Conciliation Act sending of notice by registered letter or by other means at last known place of business, habitual residence or mailing address which provides the record of "attempt to deliver it" is sufficient to draw a presumption of service. In fact the sub-section hold that it is deemed service.
19. It is also important to note here that Section 19(2) of the Arbitration and Conciliation Act, specifically provides that the Arbitral Tribunal shall not be bound by the Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872. Arbitration and Conciliation Act is a special statute and would therefore have primacy in matters of procedure, including mode of service of notice issued by the Arbitrator. In view, thereof, Order V of CPC would not have direct application in matter of mode and/or manner of service. Moreover, it is obvious that the appellant was trying to avoid service and wanted to take advantage of slyness and pretence.
20. It is not the case of the appellant that the address given in the envelope was incorrect and/or was not the habitual residence of the appellant. The respondent cannot be made to suffer only because the appellant was purportedly not at her residence, whether intentionally or otherwise, when attempts were made to serve her with the notice issued by the arbitrator."
7. In Jenjon Retail and Services Pvt. Ltd. v. Lavasa Corporation Ltd. 2016 SCC Online Bom 5321, Bombay High Court also discussed the effect of Section 3(1) of the Arbitration Act and held that once the envelopes have been sent at the correct address, it would amount to a good service and if the party refuses to claim the same, it would OMP (ENF.) (COMM.) 150/2016 Page 5 amount to refusal on the part of the party to accept service of the said signed copy of the Award. Paragraphs 21 to 27 of the above mentioned judgment are reproduced herein below:-
"21. Under Section 3(1) of the Arbitration Act, any written communication is deemed to have been received if it is delivered to the addressee personally or at his place of business, habitual residence or mailing address, and if at none of the places referred to in clause (a) of Section 3 can be found after making a reasonable inquiry, a written communication is deemed to have been received if it is sent to the addressee's last known place of business, habitual residence or mailing address by registered letter or by any other means which provides a record of the attempt to deliver it. Under Section 3(2) of the Arbitration Act, the communication is deemed to have been received on the day it is so delivered. There is no dispute that pursuant to the said envelope containing the signed copy of the award having been posted by the learned arbitrator along with his covering letter dated 18th July 2014, the postman had made two attempts to deliver the said copy of the signed award to the petitioner at the last known address of the petitioner. The petitioner however did not collect the copy of the said signed award though the intimation was posted twice by the postman.
22. It is not in dispute that the petitioner had lodged this arbitration petition only on 22nd June 2015 whereas the intimation was posted by the postman on 21 st July 2014 and 22nd July 2014. Since the petitioner not having claimed the copy of the signed award though the intimation was posted on 21st July 2014 and 22nd July 2014, in my view, it would amount to a good service and would amount to refusal on the part of the petitioner to accept service of the said signed copy of the award delivered by the learned arbitrator under Section 31(5) of the Arbitration Act. In my view, the learned arbitrator had already complied with the said provision under Section 31(5) by OMP (ENF.) (COMM.) 150/2016 Page 6 delivering the signed copy of the award to each of the parties to the arbitral proceedings.
23. Supreme Court in the case of C.C. Alavi Haji (supra) while interpreting the provisions of Section 138 of the Negotiable Instruments Act, 1881 has held that if a strict interpretation is given that the drawer should have actually received the notice for the period of 15 days to start running no matter that the payee sent the notice on the correct address, a trickster cheque drawer would get the premium to avoid receiving the notice by different strategies and he could escape from the legal consequences of Section 138 of the Negotiable Instruments Act. It must be borne in mind that the Court should not adopt an interpretation which helps a dishonest evader and clips an honest payee as that would defeat the very legislative measure. Supreme Court also considered the provisions of the General Clauses Act, 1897 in the said matter and held that service is deemed to have been effected on the sendee unless he proves that it was not really served and that he was not responsible for such non-service.
24. Calcutta High Court in the case of New Globe Transport Corporation (supra) while dealing with the issue of limitation under Section 34(3) of the Arbitration Act read with Section 3(1)(a) of the Arbitration Act and Section 27 of the General Clauses Act, 1897 after adverting to the judgment of the Supreme Court in the case of C.C. Alavi Haji (supra) has held that unclaimed service would amount to refusal of service and in that situation, service of arbitral award is deemed to have been effected on the sendee. In my view, the judgment of the Supreme Court in the case of C.C. Alavi Haji (supra) and the judgment of Calcutta High Court in the case of New Globe Transport Corporation (supra) apply to the facts of this case.
25. In my view, the principles laid down by the Supreme Court in the case of C.C. Alavi Haji (supra) while construing the provisions of Negotiable Instruments Act, 1881 and Section 27 OMP (ENF.) (COMM.) 150/2016 Page 7 of the General Clauses Act, 1897 can be extended while construing the expression 'delivery' within the meaning of Section 31(5) and Section 34(3) of the Arbitration Act. I am in agreement with the views expressed by the Calcutta High Court in the case of New Globe Transport Corporation (supra).
26. In my view, if the submission of the learned counsel for the petitioner that till service of signed copy of the arbitral award from the learned arbitrator is actually received by the petitioner though it was not claimed by the petitioner inspite of intimation posted by the postman, it will not amount to delivery of the award under Section 31(5) of the Arbitration Act is accepted, dishonest litigant who deliberately does not claim copy of the signed award sent by the learned arbitrator inspite of the postman having posted the intimation, the limitation would never commence for filing a petition under Section 34(3) of the Arbitration Act and the beneficiary of the award would never be able to apply for execution of such award. The arguments of the learned counsel for the petitioner, in my view, is ex facie contrary to the principles laid down by the Supreme Court in the case of C.C. Alavi Haji (supra) and judgment of the Calcutta High Court in the case of New Globe Transport Corporation (supra), contrary to Section 3 of the Arbitration and Conciliation Act, 1996, Section 27 of the General Clauses Act, 1897 and also to the provisions of Section 31(5) of the Arbitration Act, 1996.
27. In my view, unclaimed service amounts to a good service and amounts to refusal to accept the delivery of the arbitral award which was sent by the learned arbitrator at the correct address and the intimation was posted by the postman to the petitioner. In my view, the limitation for filing of the arbitration petition under Section 34(3) of the Arbitration Act would commence from the date on which the intimation was posted by the postman and the same was not collected by the petitioner from the post office. Admittedly, the intimation was posted in OMP (ENF.) (COMM.) 150/2016 Page 8 this case by the postman on 21st July 2014 and 22nd July 2014 whereas the petitioner has lodged the arbitration petition only on 22nd June 2015. The petition thus having been filed after expiry of three months from the date of deemed delivery of such award, the petition in my view is barred by law of limitation prescribed under Section 34(3) of the Arbitration Act."
8. The learned counsel for the Judgment Debtor Nos. 2 and 4 relies upon the judgment of the Supreme Court in State of Maharashtra and Others v. ARK Builders Private Limited, (2011) 4 SCC 616 to submit that the period of limitation for filing of the objection would not start till the signed copy of the Award is delivered to the Judgment Debtor. He submits that merely because the counsel for the Decree Holder had offered to give a copy of the Award to the counsel for the Judgment Debtors, this would not amount to service of the signed copy of the Award in terms of Section 31(1) of the Act. In my opinion, the above judgment would have no application to the fact of the case. In ARK Builders (Supra), it was an admitted case that no copy of the Award was given by the Arbitrator to the other party of the proceedings, primarily because the said party failed to pay the cost of the Arbitration. In the present case the Arbitrator has duly sent a copy of the Award to the Judgment Debtors, and as held by me above, the same would amount to due service of the signed copy of the Award on the Judgment Debtors.
9. The learned counsel for the Judgment Debtors has also relied upon the judgment of the Bombay High Court in Lalmani Ramnath Tiwari v. Bhimrao Govind pawar 2001 (2) Mh.L.J. 342 to contend that where the envelopes have been returned with the expression "Not OMP (ENF.) (COMM.) 150/2016 Page 9 Claimed", the same would not amount to due service of the same. In my view, the said judgment would have no application to the facts of the present case. Judgment was dealing with the case of notice, which was a mandatory requirement under Bombay Rent Act. The Court further, refused to apply the presumption of service as provided for in the General Clause Act and held that once the tenant denies receipt of the notice, no presumption can be drawn that service has been affected. In the present case, it is not a question of presumption of service but the effect of Section 3 of the Act, which, as noted above clearly states that the service would be deemed to have been affected if it is sent to the addressee's last known place of habitual residence. This is a deeming provision in the Act, which is a special legislation and would, therefore, override the general law of service as contained in the Code of Civil Procedure, 1908.
10. In view of the above, I find no merit in the objections of the Judgment Debtor Nos.2 to 4 to the maintainability of the present petition.
11. The Judgment Debtor Nos.2 to 4 will comply with the order dated 28.11.2016 and file the requisite affidavit within a period of four weeks from today.
12. List on 15th March, 2018.
NAVIN CHAWLA, J
JANUARY 15, 2018/rv
OMP (ENF.) (COMM.) 150/2016 Page 10