Delhi District Court
M/S. G.D. Traders vs M/S. Intec Capital Ltd on 7 September, 2019
IN THE COURT OF ANKUR JAIN: ADDL.DISTRICT
JUDGE-10 (CENTRAL): TIS HAZARI COURTS: NEW DELHI
Arbtn No. 17/18 (85317/16)
1. M/s. G.D. Traders
Through its Proprietor Umesh Kumar,
2746 Raj Guru Road, Chuna Mandi,
Pahar Ganj, Delhi - 110055.
2. Umesh Kumar
231, Guru Apartment, Sector-14,
Rohini, Delhi -85. ..... Petitioner/Applicants
Versus
M/s. Intec Capital Ltd.
Through its Managing Director,
Having its office at 701-704,
Manjusha Building, 57 Nehru Place,
New Delhi. .....Respondent
Petition filed on : 24.12.2016
Order reserved on : 08.08.2019
Order announced on : 07.09.2019
OBJECTION PETITION U/S 34 OF THE
ARBITRATION & CONCILIATION ACT AGAINST THE
AWARD DATED 27.10.2016.
ORDER:
01. This order shall decide the objection petition filed U/s 34 of Arbitration & Conciliation Act, 1996 (hereinafter Arbtn. 17 of 2018 Page no. 1 of 6 referred to as Act) against the award dated 27.10.2016.
02. The brief facts of the case as necessary for disposal of the present petition are that petitioner no. 1 had obtained a loan of Rs. 11,75,000/- from the respondent which was repayable in 48 EMIs. Petitioner did not adhere to the financial discipline and the respondent initiated the Arbitration proceedings which culminated into the award dated 27.10.2016. Hence, the present petition has been filed challenging the award.
03. Ld. Counsel for the petitioner has argued that the notice of initiation of arbitration proceedings was never received by the petitioner and even after the arbitrator entered the reference no notice was received by or on behalf of the Arbitrator and the petitioner was proceeded exparte, therefore, the award is liable to be set aside. Ld. Counsel for the petitioner has relied upon the judgment of Sachin Gupta Vs. K.S. FORGE Metal Pvt. Ltd. 2013 (10) SCC 540. He further submits that tracking report only shows that articles were delivered at S.O. Rohini. Lastly it is argued that as per clause 19 of the loan agreement the seat of the Sole Arbitrator was to be at New Delhi whereas the arbitration has taken Arbtn. 17 of 2018 Page no. 2 of 6 place within the jurisdiction of Central Delhi.
04. On the other hand Ld. Counsel for respondent has argued that notices were duly served which is clearly reflected from the record of the Ld. Arbitrator. Secondly, he submits that in terms of the loan agreement, the seat was to be at 'New Delhi' he submits that 'New Delhi' here is in respect of the city being New Delhi and not the district being New Delhi. He submits that there is no infirmity or illegality in the award of Ld. Arbitrator.
05. I have heard Ld. Counsels for the parties and have perused the record.
06. ONGC Vs. Saw Pipes (2003) 5 SCC 705 has held that award could be set aside if it is contrary to:-
a) Fundamental policy of Indian law; or
b) the interest of India; or
c) justice or morality, or
d) in addition, if it is patently illegal.
07. The Hon'ble Delhi High Court in Alupro Building Systems Pvt. Ltd. Vs. Ozone Overseas Pvt. Ltd. 2017 Arbtn. 17 of 2018 Page no. 3 of 6 (162) DRJ 412 has clearly held that issuance of notice u/s 21 of the Arbitration & Conciliation Act is a s mandatory. Ex. PW1/8 is a notice dated 20.07.2016 issued through the counsel for the respondent whereby the respondent had invoked the Arbitration clause as well as made the intention clear that they would appoint Mr. M.S. Sabharwal, Advocate, as the Sole Arbitrator. The speed post receipts were filed and tracking report clearly showed that notices were delivered. Secondly it was argued that Ld. Arbitrator proceeded exparte in a haste and no notice was given. On 20.07.2016 the Ld. Arbitrator had entered the reference and issued notice of appearance to the petitioner herein the said notice was dispatched on 25.07.2016 through Speed Post, the receipts have been filed with the tracking report, which clearly shows that these notice were duly served upon the petitioners. On 22.08.2016 none appeared for the petitioners before the Ld. Arbitrator and by way of abundant caution fresh notice was served for 26.09.2016. This notice which is dated 29.08.2016 clearly records that in the event of failure of appearance the matter shall be proceeded exparte. This notice was sent on 27.08.2016 and they were again delivered to the petitioner on 31.08.2016 despite that petitioner chooses not to appear. Section 27 of the General Clauses Act raises a presumption in Arbtn. 17 of 2018 Page no. 4 of 6 favour of the respondent with respect to the service of notice. The address mentioned in these notices, issued to the petitioner and subsequently by the Ld. Arbitrator is the same as mentioned in the petition as well as in the loan agreement.
08. There can be no dispute to the proposition that in case notice is not served, the award is liable to be set aside as held in Sachin Gupta (Supra). On facts it cannot be said that notices were not served. Ld. Counsel for the petitioner had argued that tracking report only shows that articles/notice was delivered "Rohini Sector 7 S.O.". The arguments appear to be attractive however, cannot be believed as the award was also sent at the same address through Speed post, the tracking report in respect of the award was also filed which also shows that item was delivered at "Rohini Sector 7 S.O.". The petitioner has stated in his objection petition that he had received the copy of the award only through courier. The record of the arbitrator does not reveal that it was sent through courier. The petitioners are making incorrect statements and taking false grounds. The petitioners have been unable to rebut the presumption. Thus the objection of the Ld. Counsel for the petitioner that notices were not served is meritless and is liable to be rejected.
Arbtn. 17 of 2018 Page no. 5 of 6
09. It was lastly contended that since the Arbitration Clause records that the seat was to be at New Delhi and the arbitration proceedings have been held in Central District therefore, the award is liable to be set aside.
10. I am unable to accept this arguments since the reference to New Delhi was with respect to the city being New Delhi. The word New Delhi is not qualified by the word "District". The petitioner was deliberately and intentionally avoiding to join the proceedings. Petitioner does not dispute the grant of Loan agreement and the fact that he had defaulted in payment.
Accordingly there is no merit in the objection petition. Same stands dismissed.
File be consigned to record room.
Digitally
signed by
ANKUR ANKUR JAIN
Announced in the Date:
open Court on 07.09.2019
JAIN 2019.09.09
14:49:59
+0530
(Ankur Jain)
Addl. District Judge (Central)-10
Delhi
Arbtn. 17 of 2018 Page no. 6 of 6