Bombay High Court
Health Care Medical And General Stores vs Amulya Investment on 1 April, 2024
Author: R.I. Chagla
Bench: R.I. Chagla
2024:BHC-OS:5797
3-IA(L) 2154.24 in ARBP(L) 26145.2023.doc
Kavita S.J.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INTERIM APPLICATION (L) NO.2154 OF 2024
IN
ARBITRATION PETITION (L) NO.26145 OF 2023
M/s. Health Care, Medical & General Stores & ...Applicants/
Ors. Petitioners
Versus
M/s. Amulya Investment Through Proprietor ...Respondents
Mr. Sameer Gurunath Narvekar and Ors.
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Mr. Jeetendra Ranawat for the Applicants/Petitioners.
Mr. Yogendra Kanchan a/w Ajay K. Rao i/b Vasant Dhawan for
Respondent No.1.
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CORAM : R.I. CHAGLA, J.
DATED : 1ST APRIL, 2024.
ORDER :
1. By this Interim application, the Applicants/Petitioners KAVITA are seeking condonation of delay in filing the Arbitration Petition. SUSHIL JADHAV Digitally signed This Interim Application is filed despite the Arbitration Petition by KAVITA SUSHIL JADHAV Date: 2024.04.05 16:50:18 +0530 proceeding on the premise that there is no delay in filing the 1/20 ::: Uploaded on - 05/04/2024 ::: Downloaded on - 16/04/2024 08:47:40 ::: 3-IA(L) 2154.24 in ARBP(L) 26145.2023.doc Arbitration Petition. The challenge in the Arbitration Petition is to the Ex-parte Award dated 1st July, 2017 passed by Respondent No.3.
2. The Applicants/Petitioners have stated that the Applicants had never been served with any of the alleged notices of Respondent No.3 at any point of time. The Applicants/Petitioners states that the Ex-parte Award dated 1st July, 2017 was never served upon the Applicants by the Respondent No.3.
3. The Applicants/Petitioners have further stated that the Applicant No.3 herein had appointed the Advocate Rohan Waghmare to appear before the Execution Court as Execution Application No.2181 of 2018 had been filed. He had appeared and filed the Vakalatnama for Applicant No.3 on 27 th July, 2022. On the date of hearing, he informed the learned Officer to direct the Advocate for the Decree Holder to serve the papers and proceedings of the Execution Application to him. The Applicant No.3 has stated that the learned Officer orally directed the Advocate for the Decree Holder to serve the papers and proceedings to the Advocate for Respondent No.2 therein.
4. The Applicants/Petitioners have further stated that the 2/20 ::: Uploaded on - 05/04/2024 ::: Downloaded on - 16/04/2024 08:47:40 ::: 3-IA(L) 2154.24 in ARBP(L) 26145.2023.doc Advocate for Decree Holder never served the papers and proceedings to Advocate Rohan Waghmare despite the directions given to him by the learned Officer. It is further stated that the Applicant No.2 herein / Respondent No.2 therein had learnt of the Arbitration Proceeding filed against the Applicants herein qua Ex-parte Award dated 1st July, 2017 sometime in April 2023. On 21 st April, 2023, the Respondent No.2 therein made the Application for certified copy of the papers and proceedings in the Execution Application filed by the Decree Holder. It is only thereafter that the Respondent No.2 therein obtained certified copy of the Execution Application on 15 th June, 2023.
5. The Applicants/Petitioners have further stated that when they approached the present Advocate with the certified copy of the papers and proceedings, he informed them to get the papers and proceedings of the Arbitration proceedings filed before Respondent No.3 for enabling the filing of the Arbitration Petition.
6. It was thereafter that on request of the Applicants that the present Advocate addressed letter dated 5 th August, 2023 to Respondent No.3 to furnish the certified copy of the Arbitral 3/20 ::: Uploaded on - 05/04/2024 ::: Downloaded on - 16/04/2024 08:47:40 ::: 3-IA(L) 2154.24 in ARBP(L) 26145.2023.doc proceedings conducted by him.
7. The Applicants/Petitioners have stated that their Advocate informed them that Respondent No.3 vide Reply dated 10 th August, 2023 informed that he had returned the papers to the Advocate for Respondent No.1. The Applicants have stated that the Respondent No.3 has recorded in its Ex-parte Award dated 1 st July, 2017 that he has retained one copy of the Award with him. Despite that, Respondent No.3 didn't serve the certified copy of the Ex-parte Award to the Petitioners.
8. The Applicants/Petitioners have stated in Paragraph 10 of the Interim Application that there is no delay in filing the Arbitration Petition in this Court as it is filed within stipulated period from the date of receipt of Award from the Certified Copy Department. Even otherwise, the Petitioners have averred in Paragraph 22 of the Arbitration Petition that they are within limitation as prescribed under Section 34(3) of the Arbitration Act. The Applicants/Petitioners have submitted that if this Court comes to the conclusion that there is delay in filing the Arbitration Petition under Section 34 of the Arbitration Act, the same may be condoned 4/20 ::: Uploaded on - 05/04/2024 ::: Downloaded on - 16/04/2024 08:47:40 ::: 3-IA(L) 2154.24 in ARBP(L) 26145.2023.doc in the interest of justice.
9. The Applicants/Petitioners state that they have good grounds for setting aside the impugned Award, particularly considering that it is an Ex-parte Award.
10. The Applicants/Petitioners had moved this Court on 3 rd January, 2024 in view of the Warrant for Sale having been issued in the Execution Proceedings. It was observed in the Order dated 3 rd January, 2024 that the Arbitration Petition was clearly barred by limitation as having been filed beyond the permissible period of 120 days under Section 34(3) of the Arbitration Act.
11. The Counsel for the Respondent had referred to the letter dated 3rd July, 2017 sent by the learned Arbitrator vide Registered Post A.D. to the parties to the Arbitration enclosing the signed copy of the Award dated 1st July, 2017. There is an Acknowledgment of receipt of the said Award. Further, considering that there was no Interim Application that had been filed for condonation of delay at that point of time, liberty had been granted to the Applicant/Petitioner to file the present Interim Application. 5/20 ::: Uploaded on - 05/04/2024 ::: Downloaded on - 16/04/2024 08:47:40 :::
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12. This Court on 6th March, 2024 had recorded that the Counsel for the Applicant/Petitioner had disputed having received the communication of the Sole Arbitrator dated 3 rd July, 2017 enclosing impugned Award dated 1st July, 2017. Further, the signature on the Acknowledgment Card of the Department of Post as that being the signature of Petitioner No.2 who is the partner of Petitioner No.1 had been disputed. Further, there was an Acknowledgment Card where the name of Petitioner No.3 was appearing but it was not bearing signature of the Petitioner No.3.
13. Accordingly, leave was granted to the counsel for the Petitioner to file Report of Forensic Expert to show the signature appearing on the Acknowledgment Card of Department of Post at Page 121 of the Petition is not the signature of Petitioner No.2.
14. Thereafter, the Forensic Examination Report has been filed by the Applicants/Petitioners.
15. It is relevant to bear in mind that the Forensic Report which has been filed by the Applicants/Petitioners has compared the signature of Petitioner No.2 with the signature appearing on the Acknowledgment Card at Page 121 of the Petition. The signature 6/20 ::: Uploaded on - 05/04/2024 ::: Downloaded on - 16/04/2024 08:47:40 ::: 3-IA(L) 2154.24 in ARBP(L) 26145.2023.doc appearing on the Acknowledgment Card is of one Mr. Botekar who had acknowledged receipt of the communication dated 3 rd July, 2017 which had been sent by the learned Arbitrator enclosing the signed copy of the impugned Award dated 1st July, 2017. Accordingly, the Forensic Report has upon such comparison of the signature of Mr. Botekar with the signature of Petitioner No.2 - Sitaram G. Narkar has opined that the signatures are entirely different and there is no attempt to copy original signatures. Thus, no weightage can be given to the Forensic Report considering that Mr. Botekar is not the same as Mr. Narkar and Mr. Botekar, Clerk of the Petitioner-Partnership firm has signed the Acknowledgment Card.
16. Mr. Ranawat, learned Counsel appearing for the Petitioners has submitted that the law is well settled that a signed copy of the Arbitration Award is required to be delivered to each of the parties to the Arbitration after the Arbitral Award is made. He has submitted that this has been provided in Section 31(5) of the Arbitration Act. Further, under Section 34(3) of the Arbitration Act, an Application for setting aside of the Award may not be made after three months have lapsed from the date on which the party making the Application and receiving the Arbitral Award. A further period of 7/20 ::: Uploaded on - 05/04/2024 ::: Downloaded on - 16/04/2024 08:47:40 ::: 3-IA(L) 2154.24 in ARBP(L) 26145.2023.doc 30 days is provided in the proviso thereto, but Application cannot be made thereafter.
17. Mr. Ranawat has submitted that the Division Bench of this Court in JSC Ispat Pvt. Ltd. & Ors. Vs. HDB Financial Services Ltd., 1 has referred to the definition of party to an Arbitration Agreement as provided in Section 2(1)(h) of the Arbitration Act. This Court has also referred to Section 3 of the Arbitration Act which refers to receipt of written communication and provides that 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. Further, Section 31(5) as well as Section 34(3) of the Arbitration Act have been referred to as well as Section 27 of the General Clauses Act, 1897 has been referred to which provides for meaning of service by Post. The Division Bench of this Court has upon considering these provisions and the scheme of the Arbitration Act, held that it is obligatory on the Arbitral Tribunal to make the Award in writing and after signing it, it is mandatory that the signed copy of the Award is delivered to each of the parties to the Arbitration Agreement. A signed copy of the Award is 1 Arbitration Petition No.40/2018 - decision dtd.6/3/2018 8/20 ::: Uploaded on - 05/04/2024 ::: Downloaded on - 16/04/2024 08:47:40 ::: 3-IA(L) 2154.24 in ARBP(L) 26145.2023.doc normally delivered to the party by the Arbitrator himself. In the facts of that case, the Division Bench found infirmities in respect of service of the Award claimed to have been made on the Appellants and that there was nothing on record to show that the Arbitrator had forwarded the copy of the Award which is said to be received by the Appellants. The Division Bench of this Court has accordingly upon considering the object of provisions of Section 34 of the Arbitration Act and in view of absence of conclusive material on record in respect of delivery of service of Arbitral Award on the Appellants, found that a case is made out by the Appellants that they were prevented by sufficient cause from making an Application.
18. Mr. Ranawat has also referred to the decision of the Supreme Court in the State of Maharashtra & Ors., Vs. M/s Ark Builders Pvt. Ltd., 2, wherein the Supreme Court has considered the expression "party" making the application had received the arbitral award cannot be read in isolation and it must be read in light of Section 31(5) that requires a signed copy of the award to be delivered to each party. Reading of Section 34(3) with Section 31(5) together, the Supreme Court held that it is quite clear that limitation 2 Civil Appeal No.2152/2011 - decision dated 28/02/2011 9/20 ::: Uploaded on - 05/04/2024 ::: Downloaded on - 16/04/2024 08:47:40 ::: 3-IA(L) 2154.24 in ARBP(L) 26145.2023.doc prescribed under Section 34(3) of the Act would commence only from the date a signed copy of the Award is delivered to the party making the Application for setting it aside.
19. Mr. Ranawat has further placed reliance upon the decision of the Supreme Court in Benarsi Krishna Committee & Ors. Vs. Karmyogi Shelters Pvt. Ltd., 3, wherein the Supreme Court has also construed the definition of "party" under Section 2(1)(h) of the Arbitration Act read with provisions of Section 31(5) and 34(3) as well as its prior decisions in Union of India Vs. Tecco Trichy Engineers & Contractors 4 and M/s Ark Builders Pvt. Ltd. (supra). The Supreme Court has held that proper compliance of Section 31(5) of the Arbitration Act would mean delivery of a signed copy of the Arbitral Award on the party himself and not on his Advocate, which gives the party concerned the right to proceed under Section 34(3) of the Arbitration Act.
20. Mr. Ranawat has also referred to the decision of the Supreme Court in Tecco Trichy Engineers & Contractors (supra) which has also been referred to in Benarsi Krishna Committee 3 Spl. Leave Petn. (Civil) No.23860/2010 4 (2005) 4 SCC 239 10/20 ::: Uploaded on - 05/04/2024 ::: Downloaded on - 16/04/2024 08:47:40 ::: 3-IA(L) 2154.24 in ARBP(L) 26145.2023.doc (supra) and where the Supreme Court has referred to the party making application under Sub-Section (3) of Section 34 which is to be read with Section 31(5) of the Arbitration Act. The Supreme Court has held that the "party" as defined in Section 2(1)(h) of the Arbitration Act means a person directly connected with and involved in the proceedings and who is in charge of the proceedings before the Arbitrator. It is upon him that service of the Award is required. In that case the service of Notice on the Chief Engineer of the Ministry of Railways would be the starting point of limitation to challenge the Award in the Court.
21. Mr. Ranawat has also referred to the decision of Delhi High Court in Ministry of Health & Family Welfare & Anr., Vs. M/s Hosmac Projects Division of Hosmac India Pvt. Ltd. 5 wherein the Delhi High Court has considered the aforementioned decisions of the Supreme Court in relation to the expression "a party" as defined in Section 2(1)(h) of the Arbitration Act. The Delhi High Court has held that a signed copy of the Arbitral Award is to be delivered to each party and the delivery should be to a party who is competent to take a decision as to whether or not the Award is to be challenged; 5 FAO(OS) (COMM) 326/2019 & CM No.49717/2019 11/20 ::: Uploaded on - 05/04/2024 ::: Downloaded on - 16/04/2024 08:47:40 ::: 3-IA(L) 2154.24 in ARBP(L) 26145.2023.doc the expression "party" does not include an agent or a lawyer of such party; the limitation under Section 34(3) of the Arbitration Act commences "when the party making the Application has received the Award". Every Arbitral Award as well as any corrigendum thereto must be served upon all of the parties in order for it to constitute valid service under sub-Section (3) of Section 34 of the Act.
22. Mr. Ranawat has accordingly submitted that in the present case, it can be seen from Paragraph 51 of the impugned Award that the Award has been signed and issued into two stamped original. One for each party and copy of the same is retained by the Sole Arbitrator. He has submitted that the signed copy of the impugned Award was required to be made available to all the parties to the Arbitration proceeding and which included the partners of the Petitioner No.1 - Partnership Firm. He has submitted that the communication dated 3rd July, 2017 purportedly enclosing the impugned Award has not been received by the parties. He has further submitted that Mr. Botekar had no authority to receive the impugned Award on behalf of the Petitioners. He has further submitted that the signature of the Advocates for the Applicants appearing in the communication dated 3rd July, 2017 is the signature when the 12/20 ::: Uploaded on - 05/04/2024 ::: Downloaded on - 16/04/2024 08:47:40 ::: 3-IA(L) 2154.24 in ARBP(L) 26145.2023.doc document was filed in this Court and has nothing whatsoever to do with the receipt of the document.
23. Mr. Ranawat has accordingly submitted that based on the law laid down by the Supreme Court, the 'party' under Section 2(1)(h) of the Arbitration Act requires to be the party to the Arbitration proceedings who is competent to take a decision as to whether the Award is to be challenged or not. Further, the impugned Award is an Ex-parte Award and the Applicants/Petitioners had no knowledge of the Arbitration proceedings as well as the Ex-parte Award having been passed.
24. Mr. Ranawat has submitted that the communication under Section 3 of the Arbitration Act has nothing to do with communication of the Award for which Section 31(5) read with Section 34(3) of the Arbitration Act applies. He has accordingly submitted that the signed copy of the impugned Award had to be served on the parties to the Arbitration which has not been done in the present case and accordingly, there is no delay in filing of the Arbitration Petition. The Arbitration Petition has been filed within the stipulated period as provided under Section 34(3) of the Arbitration 13/20 ::: Uploaded on - 05/04/2024 ::: Downloaded on - 16/04/2024 08:47:40 ::: 3-IA(L) 2154.24 in ARBP(L) 26145.2023.doc Act.
25. Mr. Yogendra Kanchan, learned Counsel appearing for the Respondents has submitted that the communication dated 3rd July, 2017 has been addressed by the Sole Arbitrator to the parties to the Arbitration proceedings and it is expressly mentioned that the impugned Award dated 1st July, 2017 has been enclosed with the communication. He has submitted that the Acknowledgment Card of the Department of Post clearly bears the signature of Mr. Botekar who has accepted the communication on behalf of the Petitioners and which communication has been addressed to the mailing address of the Petitioner No.1 - Firm, which address has been borne out from the cause title of the Arbitration Petition and present Interim Application.
26. Mr. Kanchan has placed reliance on Section 3 of the Arbitration Act which provides that 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. The communication is deemed to have received on the date it is so delivered. He has submitted that as the signed copy of the 14/20 ::: Uploaded on - 05/04/2024 ::: Downloaded on - 16/04/2024 08:47:40 ::: 3-IA(L) 2154.24 in ARBP(L) 26145.2023.doc impugned Award has been sent by the written communication dated 3rd July, 2017 to the mailing address of the Petitioners, it is deemed to have been received on the date it is so delivered. Further, the receipt has been acknowledged by Mr. Botekar, who has not even been produced by the Applicants/Petitioners to dispute the receipt.
27. Mr. Kanchan has referred to the decision of this Court in Francisco A D'souza & Anr., Vs. L & T Finance Limited, Mumbai 6, wherein this Court had considered an objection on limitation in filing of the present Arbitration Petition impugning the Arbitral Award. This Court had perused the record which indicated that there is no dispute that the learned Arbitrator had sent various notices at the last known addresses of the Petitioners mentioned in the Petition. This Court had referred to Section 3(1)(b) of the Arbitration Act and Section 27 of the General Clauses Act as well as the prior decisions of this Court in the case of Apex Encon Projects Pvt. Ltd. and Anr., Vs. L and T Finance Ltd and Anr., 7, which have adverted to these provisions and held that the notices sent by the Registered Post A.D. at the last known addresses of the Petitioners and the same having not been returned by the Postal Authority, would amount to a deemed service 6 [2015 (5) Mh.L.J.390] 7 Arbitration Petition (L) No.501 of 2014 15/20 ::: Uploaded on - 05/04/2024 ::: Downloaded on - 16/04/2024 08:47:40 ::: 3-IA(L) 2154.24 in ARBP(L) 26145.2023.doc of such notices and proceedings. This Court has considered the decision of the Supreme Court in Tecco Trichy Engineers and Contractors (supra). This Court was of the view that the Petitioners having been duly served with the copy of the Award by the learned Arbitrator in the year 2012 itself, the Petitioner had lodged the Petition on 22nd April, 2014 i.e. beyond the period of 3 months from the date of service of the impugned Award. Accordingly, the Petition was found ex-facie barred by law of limitation and dismissed.
28. Mr. Kanchan has submitted that in the present case, the impugned Award is dated 1st July, 2017 and the communication enclosing the impugned Award had been sent to the parties to the Arbitration proceedings on 3rd July, 2017 as well as there is an Acknowledgment Card of Department of Post, which irrefutably establishes that the parties including Petitioners to the Arbitration has received the impugned Arbitral Award and despite which, the present Arbitration Petition has been filed much beyond the permissible 120 days for filing the Arbitration Petition under Section 34(3) read with proviso of the Arbitration Act. The Arbitration Petition is accordingly liable to be dismissed on the ground of limitation. 16/20 ::: Uploaded on - 05/04/2024 ::: Downloaded on - 16/04/2024 08:47:40 :::
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29. Having considered the rival submissions, the relevant factor to be considered is that by the communication dated 3 rd July, 2017, the learned Arbitration had enclosed the impugned Award dated 1st July, 2017. The said communication had been addressed to the parties to the Arbitration and there is an Acknowledgment Card of the Department of Post, wherein one Mr. Botekar has acknowledged the receipt on 5th July, 2017. Mr. Botekar has not been produced by the Applicants/Petitioners, though he has acknowledged the receipt on their behalf. Further, the Forensic Report, for which liberty had been granted to the Applicants/Petitioners to file the same, has erroneously compared the signature of Mr. Botekar with the signature of Mr. Sitaram Narkar - Petitioner No.2 who is the Partner of Petitioner No.1 - Firm and thereby opined that the signatures are entirely different. This would be an obvious conclusion arrived at considering that the signatures could never have been the same as they pertain to two different people. There is absence of averment in the Interim Application that Mr. Botekar had no authority to acknowledge the receipt of the signed copy of the Arbitral Award on behalf of the Petitioners.
30. I have perused the relevant provisions in the Arbitration 17/20 ::: Uploaded on - 05/04/2024 ::: Downloaded on - 16/04/2024 08:47:40 ::: 3-IA(L) 2154.24 in ARBP(L) 26145.2023.doc Act including the definition of 'Party' in Section 2(1)(h) which has defined 'Party' as a 'Party to an Arbitration Agreement'. Further, I have considered Section 3 of the Arbitration Act which refers to the receipt of written communication and that written communication is deemed to have been received if it is delivered to the Addressee at his mailing address which in the present case would apply to the communication dated 3rd July, 2017 which has been addressed to the mailing address of the Petitioners and is received and / or deemed to be received by the Petitioners at such mailing address. I do not accept the submission of Mr. Ranawat that there is misplaced reliance upon the aforesaid provision.
31. I find from the decisions relied upon by Mr. Ranawat that the signed copy of the Arbitral Award is to be served upon the party who was competent to take a decision as to whether the impugned Award is required to be challenged. Further, Section 31(5) of the Arbitration Act provides that signed copy of the Arbitral Award is to be delivered to the parties. In my view, there has been delivery of the signed copy of the Arbitral Award to the Petitioners, who are parties to the Arbitration and competent to take a decision as to the challenge to the impugned Award. Further, in view of Section 34(3) of the 18/20 ::: Uploaded on - 05/04/2024 ::: Downloaded on - 16/04/2024 08:47:40 ::: 3-IA(L) 2154.24 in ARBP(L) 26145.2023.doc Arbitration Act, the Petitioners have failed to make the Application for setting aside the impugned Award within the statutory period of three months as well as the further period of 30 days. The Arbitration Petition cannot be entertained. This beyond the prescribed period.
32. The decision relied upon by Mr. Kanchan viz. Francisco A D'Souza (supra) which is the decision of this Court is applicable, as it holds that Section 3 of the Arbitration Act applies to receipt of an Arbitral Award. This Court in the said decision has construed Section 3(1)(b) of the Arbitration Act read with Section 27 of the General Clauses Act and held that notices sent by Registered AD at last known addresses of the Petitioners and the same having not been returned by the Postal Authority would be deemed to be service of such Notices and Proceeding. This Court has construed these provisions and held that in the facts of that case the Petitioners have been served with copy of the Award by the learned Arbitrator in year 2012 itself, whereas the Petitioners have lodged the Petition on 22nd April, 2014 which is beyond the prescribed period from the date of service of the impugned Award under Section 34(3) of the Arbitration Act. The Petition is accordingly held to be ex-facie barred by law of limitation and dismissed.
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33. I am accordingly of the view that the present Petition is ex-facie barred by limitation and that the Application for condonation of delay cannot be entertained considering that the delay is beyond the permissible period of three months and further period of 30 days as provided in Section 34(3) of the Arbitration Act.
34. Accordingly, the Interim Application is rejected.
35. The Arbitration Petition stands dismissed on the grounds of limitation.
36. No orders as to costs.
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