Bombay High Court
Madhur Pandey vs M/S. Larsen & Toubro Infotech Limited on 9 April, 2013
Author: Anoop V. Mohta
Bench: Anoop V. Mohta
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dgm
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO. 745 OF 2012
1 Madhur Pandey,
adult, Indian Inhabitant,
residing at 938, Dildar Nagar,
Khati Baba, Jhansi, Pin 284 003
2 Smt. Shashi Pandey, adult,
Indian Inhabitant, residing at
938, Dildar Nagar,
Khati Baba, Jhansi, Pin 284 003
3 Mrs. Pramila Bajpai,
adult,
Indian Inhabitant, residing at
938, Dildar Nagar,
Khati Baba, Jhansi, Pin 284 003 .... Petitioners
vs
M/s. Larsen & Toubro Infotech Limited
having their office at South Block,
Ground Floor, Gate No.2, Saki Vihar Road,
Powai, Mumbai 400 072 .... Respondent
Mr. Rohan Rajayadhyaksha with Mr. Sanjay Gawade for the
petitioners.
Mr. Vishal Kanade i/by Mr. Ashish Pyasi the for respondent.
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CORAM: ANOOP V. MOHTA, J.
RESERVED ON : February 20, 2013
PRONOUNCED ON: April 09, 2013.
JUDGMENT:
The Petitioners have challenged Award dated 7 September 2011 passed by the sole Arbitrator in view of the arbitration agreement in the letter of undertaking given by Petitioner No.1 (the trainee) for Software Engineer Trainee. Petitioner Nos. 2 and 3 were the guarantors.
2 The operative part of the award is as under :
"A) The Respondents are jointly and severally liable to pay to the Claimants a sum of Rs.2,00,000/-
(Rupees Two lakhs only) together with interest thereon at the rate of 12% p. a from the date of absence of the Respondent No.1 from the services of the Claimants i.e. from 17.6.2010 till the date of payment / realization of the amount by the Claimants from the Respondents.
B) The costs of the Arbitration and the Arbitrators Fees are fixed at Rs.5,500/- which shall be paid by the parties to the Arbitration.
C) Initially the costs of the Arbitration and the Arbitrators Fees of Rs.5,500/- shall be paid by the claimants, who may recover the same from the Respondents."
::: Downloaded on - 09/06/2013 19:49:20 :::3 arbp-745-12.sxw 3 The basic events are as under :
Petitioner No.1 was a student of B. Tech (Electronics & Communications) in Galgotia College, Uttar Pradesh, applied to the Respondent for a placement from campus. In December 2009, he received a call for a placement as "Software Engineer Trainee". On January 25, 2010, the Respondent issued the Letter of Appointment, treated him as a "trainee". The training period was one year. Clause 2 refers to the Apprentice Act, 1961. On 17 February 2010, a Letter of Undertaking executed. Clause 4(c) provides for "liquidated damages" of Rs. 2 lakhs.
4 On 16 June, 2010, Petitioner No.1 left for his native town of Jhansi to take care of his ailing mother. Petitioner No.1's father had already expired. On 20 June, 2010, he addressed an email to the Respondent indicating that he cannot continue with the training. The Respondent by return email relied it on 20 June 2010.
5 On 29 May, 2011, the Respondent referred the matter to Arbitration by appointing Mr. N. F. Khumana as a sole Arbitrator in view of the arbitration clause. Statement of Claim sent along with the appointment. On 27 June, 2011, the learned Arbitrator accepted the ::: Downloaded on - 09/06/2013 19:49:20 ::: 4 arbp-745-12.sxw appointment and issued directions to file the Statement of Defence etc. On 27 July, 2011, first meeting was held, time till August 23, 2011 for filing the Statement of defence was granted. On 23 August, 2011, the Petitioners' erstwhile Advocate telephoned the learned Arbitrator and sought time and stated that she would not be able to attend the meeting. Second meeting before the learned Arbitrator held on 23 August, 2011. Since neither Petitioner No.1 nor his erstwhile Advocate were present and the Statement of Defence had not been filed, the learned Arbitrator proceeded ex parte and held that the claim is admitted by the Petitioners and passed the impugned Award for the full claim amount without calling upon the Respondent to lead any evidence in support of its case. On 9 September, 2011, the learned Arbitrator passed the impugned Award.
6 Relevant clause No.7 of the Letter of Undertaking dated 17.02.2010, where Petitioner No.1 was treated as a trainee, is as under :
"7 In the event of any dispute or difference arising under this undertaking, the same shall be resolved by reference to arbitration by sole arbitrator in accordance with the Arbitration & Conciliation Act, 1996. Such sole arbitrator shall be appointed by L & T Infotech. The venue of Arbitration shall only be at Mumbai."::: Downloaded on - 09/06/2013 19:49:20 :::
5 arbp-745-12.sxw 7 The order of appointment as Software Engineer trainee dated 25 January 2010 issued by the Respondent nowhere provides settlement through arbitration, except jurisdiction of the Mumbai Court. The undertaking and the Bank Guarantee were condition precedent for the appointment of Software Engineer. The Respondent was admittedly the employer.
8The learned counsel appearing for the Petitioners has strongly relied upon a judgment of this Court in Arbitration Petition No.439 of 2008(Mr. Gaurav Dayanand Dongaonkar and others v.
Larsen & Toubro Limited) dated 21 August, 2009 and thereby contended that in view of similar facts and circumstances, this Court has set aside the Award passed by the Arbitrator by holding that "The arbitrator could not have entertained the arbitration proceedings in view of the bar enforced by Section 20 of the Apprentices Act, 1961."
There was no such issue raised before the Arbitrator and, therefore, the Arbitrator proceeded with the matter ex parte against the Petitioners as they failed to appear on the given date.
9 The learned Arbitrator, without giving further opportunity ::: Downloaded on - 09/06/2013 19:49:20 ::: 6 arbp-745-12.sxw inspite of the reason so submitted, by overlooking the e-mails addressed by the Petitioners to the Respondent held that the Petitioners failed to appear and as the averments and the documents remained unchallenged and un-controverted, passed the Award, directing all the Petitioners to pay the agreed liquidated damages of Rs.2,00,000/- at 12% interest from 7.6.2010 till the date of payment.
The whole approach, in my view, is against the breach of principles of natural justice, fair play and equity.
10 Strikingly, the judgment so relied upon by the learned counsel appearing for the Petitioners was against the Respondent in a similarly situated matter of Graduate Engineer Training. There also such similar undertaking was given by the trainee. The breach was committed and, therefore, the Award was passed. The learned Judge, as recorded above, has quashed the same. The Respondent should have placed this judgment [ Mr. Gaurav (supra) ] before the learned Arbitrator before proceeding exparte against the Petitioners.
11 I have also noted that the Arbitrator was appointed by the Respondent in view of the agreed clause in the Undertaking. There is nothing to show that there was any consent obtained from the ::: Downloaded on - 09/06/2013 19:49:20 ::: 7 arbp-745-12.sxw Petitioners to appoint and/or nominate the Arbitrator.
12 The submission of the learned counsel for the Respondent that the case is distinguishable on facts is unacceptable. The principle so laid down, in my view, needs to be considered by the Arbitral Tribunal first as the judgment in Gaurav (supra) was not placed nor the plea was raised by the Petitioners as they were absent. The arbitrability, therefore, needs to be adjudicated first by giving opportunity to all the parties.
13 Therefore, taking overall view of the matter, I am inclined to quash and set aside the Award. However, considering the facts and circumstances, I am inclined to remand the matter back for giving full opportunity to the Petitioners to contest the matter on all points.
14 In view of above, I am inclined to grant costs to the tune of Rs.10,000/- to be paid to Petitioner No.1 as inspite of the clear judgment against them, the same was not placed before the learned Arbitrator and the matter proceeded exparte against the Petitioners by overlooking the emails and requests for the adjournment, and the issue already decided against the Respondent.
::: Downloaded on - 09/06/2013 19:49:21 :::8 arbp-745-12.sxw 15 Though the matter was closed for orders on 20 February, 2013, the parties were directed to file written notes of arguments before 6 March 2013. The same was ultimately filed on 21 March 2013/22 March 2013. The same were taken on record.
16 Resultantly, the following order :
O R D E R
(i) The Arbitration Petition is allowed.
(ii) Award dated 7 September, 2011 passed by the learned Arbitrator is quashed and set aside.
(iii) The matter is remanded back for re-
consideration on all the points.
(iv) All the points are kept open.
(v) The matter be disposed of as expeditiously as
possible and preferably within four months.
(vi) The Respondent to pay costs of Rs.10,000/- to Petitioner No.1 before the commencement of the arbitration proceedings.
(vii) No costs.
(ANOOP V. MOHTA, J.) ::: Downloaded on - 09/06/2013 19:49:21 :::