Delhi District Court
Sh. Amarjeet Singh vs M/S City Financial Consumer on 22 March, 2010
IN THE COURT OF SH. RAKESH KUMAR : ADJ (CENTRAL20) : DELHI
Suit No. 949/08
Unique Case ID No.02401C0270252008
Sh. Amarjeet Singh,
S/o Kanta Singh,
R/o House No.334, Gali Chandiwali,
Mansola, Paharganj, New Delhi. .....Petitioner.
Versus
M/s City Financial Consumer
Finance Industries Ltd.,
3Local Shopping Complex,
Pushp Vihar, New Delhi. .....Respondent.
Date of institution of petition : 22.02.2008
Date on which order was reserved : 26.02.2010
Date of decision : 22.03.2010
J U D G M E N T
1. The instant petition U/s 34 of the Arbitration and Conciliation Act, 1996 has been filed by the petitioner, interalia making a prayer for setting aside the exparte award dated 10.11.2006 passed by Sh. S.K. Jain, Advocate Arbitrator, whereby the respondents/borrowers i.e. petitioner and his wife were held jointly and severally liable to make the payment of sum of Rs.4,32,853/ to the claimant alongwith interest @ 2% per month from 17.07.2006 till the payment of the said amount. Cost and expenses of the claim were also be born by them.
Sh. Amarjeet Singh Vs. M/s Citi Financial Consumer (Suit no.949/08) Page No. 1 of pages 11
2. It has been stated in the petition that the petitioner was ill due to heart trouble and other ailment from 15.10.2007 to 18.12.2007 and he came to know about the impugned award passed by Ld. Arbitrator when his wife received summons from the Court of execution on 20.12.2007. Thereafter, he made the inspection of the court file through his counsel and came to know that the respondent herein has obtained exparte award against the petitioner/objector and his wife. The petitioner is assailing the impugned award only the following grounds:
(i).There has never been any arbitration in agreement between the objector and the respondent and as such the respondent can not refer the dispute to the arbitrator unilaterally. Reference of dispute to the arbitrator without the knowledge of objector is totally unlawful and arbitrary.
(ii).Even otherwise the reference itself is bad in the eyes of law as no notice was ever issued or sent by the respondent to the objector/petitioner for referring the dispute to the Arbitrator and also no request was made by the respondent to the objector for referring the dispute to the Arbitrator.
(iii).The Ld. Arbitrator has never issued any notice of arbitration proceedings to the objector and his wife and service report is collusive service report. In fact, Ld. Arbitrator send the summons through courier only and the summons/notice was never sent through registered post to the objector. The Sh. Amarjeet Singh Vs. M/s Citi Financial Consumer (Suit no.949/08) Page No. 2 of pages 11 objector has never received any notice/summons from the Arbitrator till today.
(iv).Award is also liable to be set aside U/s 31 (5) of Arbitration & Conciliation Act, 1996 as no copy of award has ever been sent to the objector by the arbitrator.
(v).The award itself is bad in the eyes of law as in the execution petition filed by the DH, it has been stated that an amount of Rs.37,890/ has been paid by the objector during the arbitration proceedings but the Arbitrtor has passed the award of Rs.4,32,853/ which clearly shows that the award has been obtained by manipulation and the award was passed exparte by the Arbitrator.
(vi).The award was passed on 08.08.2006 but it was signed by the Arbitrator on 10.11.2006. This shows that the Arbitrator was bias.
The petition is supported by the affidavit of petitioner/objector Amarjeet Singh.
3. The notice of the petition was issued to respondent no.1 and simultaneously the Ld. Arbitrator was also directed to transmit the entire arbitral proceedings to the Court.
4. After service, despite giving of opportunity, the respondent did not prefer to file the formal reply to the objection petition as filed by the objector, rather, it preferred to file its written submission on record directly. The written Sh. Amarjeet Singh Vs. M/s Citi Financial Consumer (Suit no.949/08) Page No. 3 of pages 11 arguments were also filed by the Ld. counsel for the petitioner/objector.
5. I have carefully perused the entire material placed on record. I have also gone through the respective written submissions filed by Ld. counsels for the parties.
6. According to Ld. counsel for petitioner/objector, the impugned award is bad in the eyes of law as there was no valid arbitration agreement between the petitioner and respondent as the loan agreement which contains the arbitration clause is unstamped and and unstamped document can not be seen in any proceedings in any court of law and in that regard Section 35 of Indian Stamp Act is very much clear. Thus the arbitration agreement being an invalid agreement can not be looked into. The Ld. Arbitrator was bias and he has not conducted the proceedings fairly. He has proceeded without satisfying himself that whether the notice issued have actually been served upon the petitioner or not. No service report is available on the record of the Arbitrator. The. Ld. Arbitrator should have also directed the respondent to sent the notices of the Arbitration proceedings to the petitioner through other modes i.e. by way of UPC etc. It is well settled that the Arbitrator should send a notice to the party regarding his intention to proceed exparte against him. In the present case, Arbitrator has failed to send any notice expressing his intention to proceed exparte against the petitioner. The Arbitrator is on the pay roll of the respondent and as such the appellant can not expect justice from such a bias person. The Arbitrator has relied upon the unstamped agreement and also on the promissory note which is insufficiently stamped. The Arbitrator Sh. Amarjeet Singh Vs. M/s Citi Financial Consumer (Suit no.949/08) Page No. 4 of pages 11 has misconducted himself by relying upon these documents.
Per contra, according to Ld. counsel for respondent, the objections under Section 34 of Arbitration & Conciliation Act are barred by limitation as prescribed under the provisions of Section 34 (3) of Arbitration & Conciliation Act, 1996 and it is well settled proposition of law that the provisions of Sec. 5 of the Limitation Act are not applicable in the such like circumstances, where specific provisions of the Arbitration & Conciliation Act, 1996 are applicable. The instant objection petition having been filed on 23.05.2008 much beyond the prescribed period of limitation is thus not maintainable being barred by limitation. Here, in his said submissions, Ld. counsel for respondent has placed reliance upon a judgment reported as 2001 (3) AIR 345 SC, wherein it has been amply clarified that the provisions of Section 5 of the limitation Act are not attracted to these proceedings and the language of Section 34 of the Arbitration & Conciliation Act is specific in respect of the wording but not thereafter. Any delay beyond the time envisaged by the statue would debar the proceedings. The time limit prescribed under Section 34 to challenge the award is absolute and unextendable by a court and objections filed beyond the period envisaged in Section 34 (3) would not be in accordance with law. The present petition has been filed after nearly a one year and four months and thus this court would not have the jurisdiction to condone the delay. Even otherwise the objections are devoid of any merits as it can be appreciated that the loan agreement was admittedly executed by the petitioner and his wife Ms. Sh. Amarjeet Singh Vs. M/s Citi Financial Consumer (Suit no.949/08) Page No. 5 of pages 11 Varinder Kaur, as coborrowers, and admittedly the arbitral notices as well as the arbitration award has been served upon the wife of the petitioner, who was also jointly and severally liable to repay the loan facilities as co borrowers therein. The said Ms. Varinder Kaur has not preferred any objection against the arbitral award and the same has become final. Further, admittedly, the petitioner and his wife are residing at the same address and the notice dated 23.08.2006 and 19.09.2006 were served at the same address, so in these circumstances the denial in respect of the notices or the award are false and self contradictory and thus liable to be rejected. In the entire set of objections, there is no challenge to the correctness of the award or the findings, as arrived at by the Ld. Arbitrator. The factum of availing of loan facility by the petitioner and his wife and their default in making the repayment of said facility are not challenged. The Legal demand notice was duly issued and served upon the petitioner and his wife and thus there is no force in the objection petition as filed by the petitioner. Despite service of the notice dated 23.08.2006, the petitoner and his wife did not appear before the Arbitrator and the arbitrator still as an abondoned caution issued fresh notice on 13.10.2006 but despite service of the same, they did not appear and accordingly the Arbitrator had correctly and in accordance with law proceeded them exparte in accordance with law. The addresses given in the notices is admitted correct, then denial of the receipt of the notices and/or the arbitral award is thus frivolous, false and devoid of any truth.
Sh. Amarjeet Singh Vs. M/s Citi Financial Consumer (Suit no.949/08) Page No. 6 of pages 11
7. After giving due thoughts to the aforesaid rival submissions made before me, I have come to the conclusion that there is substance in the submission as raised by Ld. counsel for the respondent that the instant objections as filed by the objector under Section 34 of Arbitration & Conciliation Act are barred by limitation, in as much as Section 34 (3) prescribes a period of three months for preferring the objections from the date of the receipt of the award. Furthermore, it is provided that the Court if satisfied that the applicant was prevented by sufficient cause for making the application within the said period of three months, may entertain the said application within a further period of 30 days, but not thereafter. In the present case the Arbitral award was passed on 10.11.2006 and a careful perusal of the arbitrator record reveals that the Ld. Arbitrator has duly sent and served the said award by speed post. Thus the instant objection petition having been filed on 23.05.2008 much beyond the prescribed period of limitation is thus not maintainable being barred by limitation. It has been amply clarified by the Hon'ble Apex Court in the judgment reported as 2001 (3) AIR 345 SC titled as Union of India Vs. Popular Construction that, "the provisions of Section 5 of the limitation Act are not attracted to these proceedings and the language of Section 34 of the Arbitration & Conciliation Act is specific in respect of the wording but not thereafter. Any delay beyond the time envisaged by the statue would debar the proceedings. The time limit prescribed under Section 34 to challenge the award is absolute and unextendable by a court and objections filed beyond the period envisaged Sh. Amarjeet Singh Vs. M/s Citi Financial Consumer (Suit no.949/08) Page No. 7 of pages 11 in Section 34 (3) would not be in accordance with law."
The present petition has been filed after nearly a one year and four months and thus this court has no jurisdiction to condone the delay. Even otherwise the objections are devoid of any merits as it can be appreciated that the loan agreement was admittedly executed by the petitioner and his wife Ms. Varinder Kaur, as coborrowers, and admittedly the Arbitral notices as well as the arbitration award has been served upon the wife of the petitioner, who was also jointly and severally liable to repay the loan facilities as coborrowers therein but the said Ms. Varinder Kaur has not preferred any objection against the Arbitral Award and the same has become final and in the said circumstances, where admittedly the petitioner and his wife are residing at the same address and the notice dated 23.08.2006 and 19.09.2006 were served at the same address, so the denial in respect of notices or the award are false and self contradictory and thus liable to be rejected. In the entire set of objections, there is no challenge to the correctness of the award or the findings, as arrived at by the Ld. Arbitrator. The factum of availing of loan facility by the petitioner and his wife and their default in making the repayment of said facility are not challenged. The Legal demand notice was duly issued and served upon the petitioner and his wife and thus there is no force in the objection petition as filed by the petitioner. Despite service of the notice dated 23.08.2006, the petitioner and his wife did not appear before the Arbitrator and the Arbitrator still as an abondoned caution issued fresh notice on 13.10.2006 but despite service Sh. Amarjeet Singh Vs. M/s Citi Financial Consumer (Suit no.949/08) Page No. 8 of pages 11 they did not appear and accordingly the Arbitrator had rightly and in accordance with law proceeded them exparte. The addresses given in the notices is admitted correct, then denial of the receipt of the notices and/or the arbitral award is thus frivolous, false and devoid of any truth.
In Ms. Madan & Co. Vs. Wazir Jaiveer Chand AIR 1989 SC 630, it was held that a landlord can do to comply with this provision is to post a prepaid registered letter (acknowledgment due or otherwise) containing tenant's correct address. Once he does this and the letter is delivered to the post office, he has no control over it.
In Union Bank of India Vs. Bhatia Tanning Industries 27 (1985) DLT 97, it was held that the Arbitrator sending registered A.D. notice to the respondent for appearance and to defend, the notice sent on the last known address was returned back as addressee was not available. It was held that it was sufficient service.
In Prime Industries & Ors. Vs. Faeeq Ahmed 67 (1997) DLT 1212, it was held that the notice sent by registered A.D post as well as UPC, the appellants avoided service of notice by registered post, the notice sent under the UPC, presumption could be drawn under Section 114 of Evidence Act. The notice sent at correct address of the firm. It was held by the Hon'ble High Court of Delhi that notice of demand properly served and it was sufficient compliance of provisions of law.
In 2000 III AD (Delhi) 645 it was held that once the notice and the postal receipt of dispatch of notice is proved then the mere denial to the Sh. Amarjeet Singh Vs. M/s Citi Financial Consumer (Suit no.949/08) Page No. 9 of pages 11 contrary is not enough and notice shall be presumed to be delivered.
From the perusal of the entire record of the proceedings held before Ld. Arbitrator, it is revealed that despite of giving sufficient opportunities the petitioner and his wife did not prefer to represent and defend the case before the Arbitrator. Further, it is not the case where non application of the mind or entirely erroneously or perverse or whimsical approach to the material or evidence produced by the parties is manifest on the face of the award. It is also not the case that Ld. Arbitrator has not applied his minds to the pleadings or the evidence adduced before him and to the terms of the contract. Thus, I do not think, it is within my scope to re apprised the matter as if this were an appeal.
8. In the light of the above, the objections are without any merit and are liable to be dismissed. There is no reason or cause to remit the award or set it aside. The Award is made Rule of the Court and judgment is pronounced in accordance with it.
9. Decree Sheet be drawn up accordingly.
10. Objections dismissed.
11. File be consigned to Record Room after completion of necessary formalities.
(Announced in the open court (RAKESH KUMAR)
today on 22.03.2010) ADDL. DISTRICT JUDGE20 (C)
Sh. Amarjeet Singh Vs. M/s Citi Financial Consumer (Suit no.949/08) Page No. 10 of pages 11
Suit No. 949/08
Sh. Amarjeet Singh Vs. M/s Citi Financial Consumer.
22.03.2010
Present: As before.
Vide a separate judgment, petition of the petitioner stands disposed off.
Decree Sheet be drawn up accordingly.
File be consigned to Record Room after completion of necessary formalities.
(RAKESH KUMAR) ADJ20 (C)/DELHI/22.03.2010 Sh. Amarjeet Singh Vs. M/s Citi Financial Consumer (Suit no.949/08) Page No. 11 of pages 11