Delhi District Court
Mrs. Gurjit Chowdhury vs Itc Limited on 19 December, 2020
IN THE COURT OF SH GURVINDER PAL SINGH,
DISTRICT JUDGE (COMMERCIAL COURT)-02,
PATIALA HOUSE COURT, NEW DELHI
OMP (Comm.) No. 52/2020
1. Mrs. Gurjit Chowdhury,
W/o Late Rajpal Chowdhury,
C-4, First Floor, Kalindi Colony,
New Delhi-110065.
2. Mr. Bhirendra Chowdhury,
S/o Late Rajpal Chowdhury,
C-4, Second Floor, Kalindi Colony,
New Delhi-110065. ...Petitioners
vs
ITC Limited
ITC Green Centre,
Plot No. 10, Industrial Area,
Sector-32, Gurgaon ....Respondent
Date of Institution : 18/07/2020
Arguments concluded on : 28/11/2020
Decided on : 19/12/2020
Appearances : Sh. Harsh Gokhale, Ld. Counsel for petitioners.
Sh. Anil Kher, Ld. Senior Advocate and Sh. Kunal
Kher, Ld. Counsel for respondent.
JUDGMENT
1. Petitioner has filed the present petition under Section 34 of The Arbitration and Conciliation Act, 1996 (as amended) (herein after referred as the Act) seeking setting aside of the Arbitral Award dated 29/02/2020 passed by Arbitral Tribunal comprising of Ld. Sole Arbitrator Sh. Amod Kumar Dalela in the ICA case no. Ad Hoc-007/2019, titled as ITC Limited and Rajpal Chowdhury. Vide impugned Arbitral Award dated 29/02/2020 the claimant has been awarded Rs 44,53,499/- plus interest (i) @ 13.5% till 09/08/2019; (ii) OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 1 of 31 further interest pendent-lite @ 13.5% from the date of filing of the claim till the date of award; (iii) future interest on the principal sum, interest thereon and pendent-lite interest all put together at the rate higher by 2% than the current rate of interest; (iv) with cost detailed therein in para 5 (e).
2. Factual Matrix of the case of petitioners is that Original respondent Late Rajpal Chowdhury (respondent in the impugned arbitration) was the disabled senior citizen, who was unable to walk and suffered from severe respiratory issues and was warned and adviced by his doctors to stay away from the pollution and stress. Accordingly, he checked in the Hotel ITC Maurya (of respondent) (here in after referred as the Hotel), in about 2012 and his condition was such that he could not even go the lobby of the Hotel for more than four years of his stay at the Hotel and when he checked-in to the Hotel, somewhere around 2012, the hotel management was briefed about his mobility and respiratory issues. However, the services of the Hotel qua Original respondent (respondent in the impugned arbitration) started deteriorating and did not meet the expectations of the Original respondent (respondent in the impugned arbitration). Eventually, however, the Original respondent (respondent in the impugned arbitration) was wrongfully forced out of the Hotel and on 10/09/2019 respondent expired leaving behind his wife and son i.e., the petitioners in the preset petition without any estate and devolution of any right, title or interest in any property of the Original respondent (respondent in the impugned arbitration) and the petitioners herein desired to bring charges/counter claim against the Hotel for causing death by negligence and recklessness. Respondent herein was also aware of the death of the Original respondent (respondent in the impugned arbitration) since it had issued a text message passing on its condolences and despite having the knowledge of the death of the Original respondent (respondent in the impugned arbitration) proceeded to initiate arbitration proceedings against the Original respondent (respondent in the impugned arbitration) and after obtaining illegal interim orders, proceeded to implead the petitioners OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 2 of 31 herein in order to harass and extort from them. Thereafter the unmarried sister of petitioner no. 1, who resided and owned the ground floor and terrace rights in the property in which the petitioners resided, went into a coma and the petitioners nearly lost her and in the whole environment, checking letters and meeting people was the last thing on the mind of the petitioner. Petitioners were not aware of any notice of invocation of arbitration clause, initiation of any arbitration proceeding and service of pleadings, disclosure under the Act made by Ld. Sole Arbitrator on the Original respondent (respondents in the impugned arbitration) until the petitioners herein received the order of Ld. Sole Arbitrator wherein the petitioners were already impleaded as respondents in the impugned arbitration. No papers or pleadings such as statement of claim, affidavit of evidence etc have been served upon the petitioners. The petitioners had been only served with few orders of the arbitral proceedings held on 22/11/2019, 07/01/2020, 12/02/2020 and 14/02/2020 respectively and not all orders in the impugned arbitration. Ld. Arbitrator had purportedly served the order/minutes dated 22/11/2019 to the Original respondent (respondent in the impugned arbitration) under the cover of letter dated 26/11/2019 only at C-4, Kalindi Colony, which was incorrect address since the Original respondent did not resided there. In any case, the Original respondent had expired on 10/09/2019 and the service of this order on the address of the petitioners cannot be considered to be proper service since the petitioners were not party to the impugned arbitration. The order recorded the request of Ld. Arbitrator to the respondent, herein, to provide the e-mail address of the Original respondent and fixed the next date of hearing to be 04/12/2019. Petitioners herein had no inkling of the proceedings which transpired on 04/12/2019 since no order was served upon the petitioners and if any steps were taken in order to assess if the petitioners were indeed the legal representative of the Original respondent (respondent in the impugned arbitration) and without any effort towards fulfilling that requirement, the Original claimant had filed an application to implead the petitioners as OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 3 of 31 respondents in the arbitration proceedings. The petitioners thereafter received an order dated 07/01/2020 under the cover of the letter of the Ld. Sole Arbitrator dated 10/01/2020 wherein it seem that the petitioners have already been impleaded as respondents in the impugned arbitration without due notice to the respondents. The order recorded the next date of hearing to be 21/01/2020 but the petitioners have not received any order allowing the said impleadment. In order dated 12/02/2020, Ld. Sole Arbitrator passed interim award under Section 17 of the Act and served the same on the petitioner under the cover of letter of Ld. Arbitrator dated 12/02/2020 on the conjecture that the estate of the Original respondent devolved upon the petitioners and that the petitioners were apparently in the process of relocating out of India. Lien over the properties in which the petitioners resided was illegal, as the said properties had devolved upon the petitioners independently of the Original respondent (respondent in the impugned arbitration). Petitioners were in the process of attaining legal Counsel in relation to the impugned arbitration when Ld. Sole Arbitrator, within two days of the interim award, passed an order dated 14/02/2020 closing the pleadings and the right of the petitioners to file their reply without any proper notice. Ld. Sole Arbitrator served the order dated 14/02/2020 under the cover of his letter dated 15/02/2020. In response, petitioner no. 2 firstly contacted Ld. Sole Arbitrator via whatsapp message and thereafter Ld. Sole Arbitrator and petitioner no. 2 communicated over the phone and Ld. Sole Arbitrator requested petitioner no. 2 to address formal e-mail to him in order to take any action, if at all by him. Accordingly, petitioner no. 1 addressed an e-mail dated 26/02/2020 to Ld. Sole Arbitrator putting all the true and correct facts on record in respect of the subject matter of the impugned arbitration. Petitioner no. 1 served a detailed representation via e-mail dated 26/02/2020 explaining to the Ld. Sole Arbitrator as to why the petitioners could not remain present as and when the meetings were fixed by Ld. Sole Arbitrator. However, petitioner no. 1 did not hear anything from the Ld. Sole Arbitrator in response to the e-mail dated 26/02/2020 and the petitioners through Advocate filed an application dated OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 4 of 31 09/03/2020 and forwarded the copy of the same to claimant/respondent as well seeking recall of the order dated 14/02/2020 and permit the petitioners to present their case. In the said application, petitioners placed all the facts on record about (i) the reasons for their non appearance before Ld. Sole Arbitrator; (ii) ill treatment and brutal behavior to Original respondent during his stay at the said Hotel at the hands of respondent herein and its employees and (iii) the petitioners not having inherited any estate from Original respondent upon his demise. In response to the application of the petitioners dated 29/02/2020 and informing the petitioners of the closure of the impugned arbitration; however, Ld. Sole Arbitrator stated in his e-mail that the Original copy of the impugned award had not been sent to the petitioners since the previous letter had returned bearing postal remarks "No such person". Ld. Sole Arbitrator was in complete knowledge of the e-mail address of the petitioners herein and despite the same, Ld. Sole Arbitrator had taken the defence that the impugned award could not be served upon the petitioners, which leaves no doubt that Ld. Sole Arbitrator had not applied his mind to the proceedings at hand. The impugned award was received by the petitioners through Advocate on 12/03/2020 only after taking steps to file the application. During the same time, Government of India, enforced the nationwide lock- down in view of COVID-19 pandemic and the petitioners were unable to proceed to file the present petition. As per the impugned award, the impugned arbitration was invoked by the respondent on 09/08/2019 by approaching the Indian Council for Arbitration (ICA) and ICA referred the alleged dispute to Ld. Sole Arbitrator on 15/10/2019. However, there seems to be no indication if the Original respondent participated in the process of appointment of arbitration under the ICA rules and it was required of the respondents to demonstrate if the appointment of the arbitrator was after due notice to the Original respondent. The petitioners have only gathered from the impugned award that the respondent herein used to bill the Original respondent for services utilized by him during the stay at the Hotel. It is also the case of the respondent herein that the respondent herein forwarded the bills to the OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 5 of 31 Original respondent for the payment from time to time and the Original respondent made all payments until the purported dispute in 2018-2019. The respondent herein had been demanding the payment of the outstanding amount from the Original respondent and had addressed some correspondence in that regard. Since the Original respondent failed to pay the alleged claim of Rs 44,53,499/- towards the utilization of the services and stay at the Hotel, the respondent herein invoked arbitration as per the Registration Form and apparently filed the Statement of Claim before Arbitral Tribunal for the recovery of aforesaid amount with interest. The petitioners were not aware about the particulars of charges of the room as respondent had failed to provide and furnish any particulars of their claim in respect of the charges of the room and the impugned award had failed to disclose any findings on the issue. The petitioners were not aware as to how much the Original respondent had paid and upto what period and all the details in respect of stay of the Original respondent were necessary and required for the adjudication of the alleged claim of the respondent herein. Being aggrieved and dis-satisfied with the impugned award dated 29/02/2020 passed by Ld. Sole Arbitrator, the petitioners have filed this petition on the following grounds:
(A) That the Arbitral Award was perverse, bad in law and passed contrary to the provisions of law as the Ld. Sole Arbitrator proceeded to close the arbitration proceedings despite receiving an e-mail of the petitioners dated 26/02/2020, which was before the date of the impugned award. Yet without taking that into consideration, the impugned award was passed.
(B) That the impugned arbitration had abated qua the petitioners herein since Original respondent had expired in September 2019 and the petitioners have no right, title or interest in the estate of the Original respondent and thus cannot be substituted as respondents in the impugned award.OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 6 of 31
(C) Ld. Arbitrator had erred in impleading the petitioners herein as respondents in the impugned arbitration as legal representatives of the Original respondent without notice to the petitioners.
(D) The impugned award is illegal and perverse as the impleadment of the petitioners by the Ld. Sole Arbitrator was carried out in and around December, 2019 without due notice and serving of any impleadment application to the petitioners herein.
(E) The arbitration proceedings were non-est and void ab initio as the respondent had the knowledge of the death of the Original respondent before the initiation of the proceedings as was evident from the text messages between respondent and petitioner no. 1.
(F) The impugned arbitration was nullity since the petitioner do not fall within the definition of being "Legal Representative" of the Original respondent and in any case it was the responsibility and duty of Ld. Sole Arbitrator to assess if the petitioners were the legal representatives of the Original respondent, as defined by the Act under Section 2(g), and failure to do so does not make the impugned award applicable and enforceable against the petitioners since the impugned award was against the public policy of India and a nullity.
(G) The impugned arbitration was a nullity as the arbitration clause, as relied upon by the respondent to invoke the arbitration, and as reproduced in the impugned award, required the appointment of the arbitrator in accordance with the Rules of ICA. However, the rules of ICA under Rule 23 required both parties to nominate an arbitrator from the list of arbitrators and since the Original respondent had expired by OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 7 of 31 the date of invocation of the arbitration proceedings, hence the requirement was never fulfilled.
(H) The impugned award had been passed in derogation of principles of natural justice as the petitioners had not been served with copy of any pleadings or proceedings in the impugned arbitration even after request was made for the same.
(I) That Ld. Arbitrator failed to even direct the respondent herein to serve the copies of evidence filed by the respondent's witness on 14/02/2020, which was evident from a cursory reading of the order dated 14/02/2020. Further, Ld. Sole Arbitrator proceeded to close the matter on 14/02/2020 itself without according an opportunity to the respondents. (J) The impleadment of the petitioners was illegal as the basis of the petitioners being impleaded was never tested or assessed by the Ld. Sole Arbitrator and in any case Ld. Sole Arbitrator failed to direct the respondent herein to serve the copy of the impleadment application filed by the respondent on the petitioners for proper adjudication.
(K) The entire arbitral proceeding was smeared with deceit and misleading statements and the impugned award was hence illegal. The respondent had false statements before Ld. Sole Arbitrator that the petitioners were legal representatives of the Original respondent and that the petitioners were purportedly selling their estates and may supposedly flee the jurisdiction of India. On basis of the same false statements the respondent also obtained interim orders from Ld. Sole Arbitrator and created a lein over the personal properties of the petitioners.
(L) The impugned award was perverse, bad in law and passed with biased mind, which was evident from the fact that (i) the OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 8 of 31 Arbitral Tribunal failed to consider the case of the petitioners in their e-mail dated 26/02/2020 and (ii) copy of the impugned award was given only on 12/03/2020 when petitioners filed their application for recalling of the order dated 14/02/2020 and other reliefs despite the Arbitral Tribunal having the e- mail addresses and address of the petitioners herein. (M) The Arbitral Tribunal failed to follow the basic principles of law when without considering the facts which were placed on record by the petitioners, Arbitral Tribunal proceeded to pass the impugned award.
(N) That the impugned award is contrary to and in violation of the fundamental policy of Indian Law since the impugned award is contrary to the provisions of substantive laws of India i.e., the Indian Contract Act and also the law in violation of the principles of natural justice and fair play. (O) Ld. Sole Arbitrator had gravely erred in not deciding the core issue as to whether there was sufficient material on the basis of which the respondent was justified in its alleged claim. (P) The impugned award was perverse, bad in law and passed with biased mind, which was evident from the facts when respondent herein and the Arbitral Tribunal were having e-
mail addresses then why the pleadings were not sent to the petitioners through e-mails. Respondent adopted the pick and choose policy herein to avoid the appearance of the petitioners so that actual facts could never be brought on record.
(Q) Ld. Sole Arbitrator failed to file any disclosure which was mandatory requirement under the Act.
(R) Ld. Sole Arbitrator failed to consider the brutal behavior of the officers of the respondent when the Original respondent Mr. Rajpal Chowdhury was availing the services in the said Hotel.
OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 9 of 31Further, Ld. Sole Arbitrator failed to consider the ill treatment and lack in services at the hands of the officers of respondent herein and which were more particularly narrated and mentioned in the e-mail dated 26/02/2020.
(S) That the Arbitral Award was contrary to violation of the fundamental policy of Indian Law since the impugned award was contrary to the provisions of substantive laws of India i.e., The Indian Contract Act and also the law relating to the principles of natural justice and fair play as Arbitral Tribunal was very much aware that the petitioners herein were not having any contract with the respondent herein and petitioners were made parties being legal representatives of the Original respondent.
(T) Thus, Ld. Sole Arbitrator had committed gross and patent illegality and irregularity in passing the impugned award against the petitioners and Original respondent.
(U) That Ld. Sole Arbitrator erred in coming to the conclusion that the claimant had led any credible evidence to prove its case. (V) Ld. Sole Arbitrator ought to have rejected the claim of the respondent herein.
(W) The impugned award was against the public policy, against the provisions of law and against the principles of natural justice and fair play.
(X) The impugned award was passed on the basis of presumption and assumption without following the logical and conclusive reasons.
(Y) That Ld. Sole Arbitrator had erred in passing the impugned award without application of mind and without assigning any plausible reasons.
(Z) That Ld. Sole Arbitrator erred in coming to the conclusion that the claimant had led any credible evidence to prove its case.
OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 10 of 31The petitioner stated that the award was passed on 29/02/2020 and received by he petitioners through their Advocate on 12/03/2020 and the present petition was filed on 14/07/2020. On account of lockdown due to COVID-19 pandemic, petitioner could not file the petition earlier. Hence, there was no delay in filing the present petition. The petitioner had by its Advocate letter/e-mail dated 13/07/2020 given notice to the respondents informing them of the challenge to the impugned award dated 29/02/2020.
3. In filed reply, respondent submitted that the present petition is without merits, therefore was required to be dismissed. The petitioners have not raised any grounds as provided for under Section 34 of the Act and have consciously not disclosed the true and correct facts. Respondent further averred that petitioners neither appeared before Ld. Sole Arbitrator despite service of notice of the proceedings nor paid the fees of Ld. Sole Arbitrator. Hence, the petitioners should not be given any indulgence and the present petition of the petitioners ought to be outrightly rejected. It is further averred by respondent that Ld. Sole Arbitrator while passing the award had taken into consideration all the facts and circumstances of the case and had considered every aspect of the matter and reasoned award had been passed and this Court under Section 34 of the Act cannot re appreciate the evidence and reinterpret the contract terms and conditions, which have already been dealt with by Ld. Sole Arbitrator, so there is no reason for setting aside the award and none of the grounds for seeking the setting aside of the award fall within the ambit of Section 34 of the Act. It is further averred by respondent that petitioners had not disputed the liability of the deceased towards the respondent, and they had accepted being the legal heirs of the deceased and they being aware of the proceedings initiated by the respondent before Ld. Sole Arbitrator. Hence, there was no basis for the petitioners to seek the setting aside of the award. The petition is merit less and calls for outright rejection. It is further averred that on 09/05/2012 the Original respondent OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 11 of 31 before Ld. Sole Arbitrator approached the respondent herein seeking reservation of the accommodation for himself at the Hotel of the respondent. The said Original respondent accordingly filled the registration card and agreed to the terms and conditions of the respondent for availing the accommodation for himself at the said Hotel of the respondent. The respondent herein forwarded its bills to Original respondent for payment from time to time and the Original respondent made a few on account part payments to the respondent herein pursuant to the said bills and as per books of accounts, being maintained by respondent herein a sum of Rs 44,53,499/- became due and payable by the Original respondent to the respondent herein but the Original respondent failed to pay the aforesaid due amount to respondent herein and withheld the aforesaid amount without any reason or cause and failed to pay the amount. So, Original respondent became liable to pay the aforesaid outstanding, due and payable amount with interest @ 18% per annum. As per the registration card, it has been specifically agreed between the parties i.e., Original respondent and respondent herein that all disputes whether arising out of, or incidental to stay at the Hotel, directly or indirectly, shall be referable to the arbitration in accordance with the Arbitration & Conciliation Act, 1996 and shall be conducted in the city where the Hotel is situated by a Sole Arbitrator, who shall have the qualification of ten years experience in the hospitality industry and be duly appointed by the Indian Council for Arbitration. Thereafter the respondent approached ICA for appointment of arbitrator and filed their Statement of Claim on 09/08/2019. The ICA vide its letter dated 15/10/2019 informed the parties that it had appointed Sh. Amod Kumar Dalela as Sole Arbitrator and requested the parties to approach Ld. Sole Arbitrator for further progress in the matter and said letter was also addressed to Original respondent. Ld. Sole Arbitrator vide his letter dated 14/11/2019 called upon the parties to appear before him on 22/11/2019. On 22/11/2019, the respondent herein alongwith Counsel appeared before Ld. Sole Arbitrator, whereas Original respondent failed to appear before Ld. Sole Arbitrator, so the proceeding was adjourned to OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 12 of 31 04/12/2019 before Ld. Sole Arbitrator. It is further averred by respondent that it came to know that Original respondent had expired, so respondent had filed an application for impleadment of the legal heirs of the Original respondent and the said application was allowed by Ld. Sole Arbitrator and notice of the proceedings was issued to the petitioners herein for appearance for 07/01/2020 before Ld. Sole Arbitrator. The petitioners had acknowledged that they have received pleadings and copy of the orders dated 22/11/2019 and 04/12/2019. On 07/01/2020 petitioners herein deliberately omitted to attend the proceedings before Ld. Sole Arbitrator. The Ld. Sole Arbitrator in the given circumstances and especially in view of the fact that the petitioners though being aware of the proceedings had chosen not to appear and contest the proceedings, proceeded the petitioners ex-parte and adjourned the matter to 06/02/2020 for arguments on the application of the respondent for interim relief and on said date respondent herein also filed their evidence by way of affidavit. Thereafter matter was listed on 06/02/2020 and arguments on the application of interim relief were heard and reserved for order on the said application and the order on the said application was passed on 12/02/2020, copy of which was given to the respondent herein and also sent to the petitioners herein. The petitioners acknowledged of receipt of copy of the order dated 12/02/2020. On 14/02/2020 the respondent led its evidence and ex-parte arguments were addressed and then matter was reserved for award. Copy of the said day's order was also sent to the petitioners herein and the petitioners acknowledged having received the same. It is further averred by respondent that petitioners were fully aware of the claim of the respondent and moreover, the petitioners acknowledged having received all the orders of Ld. Sole Arbitrator and they were aware of each and every date of hearing but they have consciously chosen not to appear before Ld. Sole Arbitrator as they know that the amounts as claimed by the respondent were due to them and further Ld. Sole Arbitrator was rightly approached for adjudication of the claim. It is prayed that alleged grounds of petitioners does not fall within the ambit of Section 34 of the Act and the petition should be dismissed.
OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 13 of 314. In filed rejoinder, petitioners submitted that the replies were entirely without any basis and without merit and were utterly misconceived and demonstrated complete lack of bonafide intentions on part of respondent. It is further submitted that there is illegal invocation of arbitration as entire arbitration proceedings were non-est and nullity from the point of invocation. The entire arbitration against the Original respondent as well as the petitioners are barred in law by the statute of limitation. The petitioners could not have relied on this issue before as arbitral record or the pleadings were never provided. It is further submitted that purported arbitration clause relied upon the respondent herein required that the arbitrator be appointed by the ICA, however, the ICA Rules of arbitration under Rule 15(a) required the claimant to also put the Original respondent on notice of invocation of arbitration and the respondent herein had failed to do so. The entire arbitration suffered from illegal invocation and would amount to unilateral invocation by the respondent herein under the ICA Rules. The Hon'ble Supreme Court had made it clear that unilateral invocation would amount to the entire proceedings becoming a nullity. The Arbitration and Conciliation Act, 1996 mandates under Section 11 that a request for arbitration was required to be made by party to the other party and only after such a request had been made, and only upon disagreement between the parties or after a passage of 30 days, the appointment of arbitrator can be referred to the appointing institution i.e., ICA. However, the respondent herein had not issued any letter of invocation to the Original respondent, hence, the entire arbitration process stand vitiated by the respondent herein itself. The aforesaid illegality attracts Section 34 (2)(a)(iii) and 34(2)(a)(v) of the Act, and the impugned award is required to be set aside. It is further submitted that Ld. Sole Arbitrator had incorrectly held in the order dated 07/01/2020 that service had been affected upon the petitioners several times prior to 07/01/2020 and consequently took decision to proceed ex parte. However, Ld. Sole Arbitrator had incorrectly decided to proceed ex parte on the presumption that the Original respondent OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 14 of 31 and the petitioners were alter-egos of each other, which was not the case, in law and in fact. Petitioners stated that the petitioners and Original respondent were independent, fully adult natural persons and thus need to be treated in the same manner. The purported service made in the name of Original respondent prior to the communication dated 10/12/2019 cannot be treated as effective and legal service upon the petitioners since all the correspondence was addressed to the Original respondent, so communication addressed to dead person has no sanctity under the provisions of law. Service on dead person amounts to "no service". The service of proceedings and other communication in the name of Original respondent cannot be treated to be effective service on the petitioners. It appeared from the arbitral record that some correspondence was issued to the Original respondent at the address where the petitioners resided. However, none was actually delivered to the petitioners as the Original respondent never resided at the address. The Original respondent never resided at the address of the petitioners is self evident from the fact that the Original respondent was staying at the Hotel for several years. The said fact is also proved by the e-mail of Ld. Sole Arbitrator dated 13/03/2020, wherein he had himself admitted that the correspondence issued returned with the comment "no such person". Therefore, in the light of service having been effected upon the petitioners only once, it was extremely harsh and excessive on the part of Ld. Sole Arbitrator to have decided to proceed ex parte on the next date of hearing i.e., on 07/01/2020. It is further submitted that the arbitration had concluded under four months and the petitioners had managed to approach Ld. Sole Arbitrator by way of e-mail dated 26/02/2020, it was highly excessive and malafide for the Ld. Sole Arbitrator to have issued the impugned award within three days of the receipt of such e-mail i.e., 29/02/2020 as the office of Ld. Sole Arbitrator had not become functus officio on the date of the e-mail dated 26/02/2020 as the application on the part of the petitioners and ought to have passed reasoned order dismissing or discarding the said application from the record. It is further submitted that around November, 2020 the respondent herein filed an OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 15 of 31 impleadment application before Ld. Sole Arbitrator seeking to implead the petitioners herein on the ground that they are legal heirs of the Original respondent. However, there was no service of the impleadment application on the petitioners and the said application was allowed ex parte by order dated 04/12/2020 without attempting to serve any document on the petitioners nor attempt was there to serve by alternate means of service. Respondent never fulfilled the burden of proving that the petitioners were only Legal Representatives under the Act, as specified in Section 2(g) in the Act and Ld. Sole Arbitrator had allowed the impleadment application without application of mind. Merely referring to the petitioners as legal heirs would not be adequate in law to be impleaded in the proceedings as the Legal Representatives of the Original respondent. Therefore, on account of the (1) failure to serve the impleadment application on the petitioners, (2) allowing the impleadment application without hearing the petitioners on the issue of impleadment, and (3) the respondent not having proved or even attempted to prove in the impleadment application as to how the petitioners became Legal Representatives, as per the Act, Section 34(2)(b)(ii) would be squarely attracted as the entire process was in derogation with the public policy of India. It is further submitted that the petitioners were not the Legal Representatives and were only notional legal heirs as Ld. Sole Arbitrator had proceeded on the assumption that the legal heirs and Legal Representatives were identical positions. However, the Act required that upon death of the Original respondent, the arbitration could have only continued if there were Legal Representatives as defined under the Act, else the arbitration proceedings lapse. The petitioners and Original respondent had estranged relationship and hardly saw each other. The petitioners do not (1) represent the estate of the Original respondent, (2) inter meddle with the estate of the Original respondent, (3) act in a representative character of the Original respondent, and/or (4) have any estate of the Original petitioner devolved upon them. Therefore, no award could have been passed against the petitioners since none of the conditions under Section 2(g) of the Act have OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 16 of 31 been fulfilled and Section 34 (2)(b)(ii) of the Act is clearly attracted. Respondent have also failed to show if there had been any devolution of any estate of the petitioners. The respondent herein was required to show when and where have the petitioners ever undertaken to repay the debts of the Original respondent. Further, no estate was inherited from the Original respondent to petitioners. The Original respondent never had any right, title or interest in the property on which a lien was created without any assessment by Ld. Sole Arbitrator. Thus it is extremely audacious on the part of respondent to try and obtain personal private property on the basis of a completely illegal and irregular process. The subject property was purchased by mother and grand mother of petitioner nos 1 and 2 respectively via Sale Deed dated 06/03/1970. This make it clear that Original respondent had no right, title or interest in the subject property and thus cannot be used to satisfy any debts which the Original respondent may have incurred. So, Ld. Sole Arbitrator had not even bothered to check the veracity of statement of respondent if the subject property belonged to Original respondent. Respondent did not produce any document to prove that the subject property devolved upon the petitioners. Petitioners denied of handing over of certain items by the respondent to petitioner no. 1 and stated that two months prior to the death of the Original respondent i.e., on 25/07/2019 the items on the list were delivered to the petitioners, whereas the Original respondent had expired on 10/09/2019 and delivery of such items cannot considered to be devolution of estate of the Original respondent or inheritance of any nature on the petitioners. Also was averred that no liability can be fastened upon the petitioners as they were not legal representatives of the Original respondent.
5. I have heard Sh. Harsh Gokhale, Ld. Counsel for petitioner; Sh. Anil Kher, Ld. Senior Advocate with Sh. Kunal Kher, Ld. Counsel for respondent and perused their relied upon precedents as well as written arguments and records of the case as well as copy of arbitral proceedings record which was sent by e-mail by Ld. Sole Arbitrator on 28/09/2020 to the dedicated e-mail id OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 17 of 31 of the Court.
6. Ld. Counsel for petitioner argued in terms of the grounds of the petition. It was argued that Ld. Sole Arbitrator did not have the jurisdiction to adjudicate the claims of the respondent and the impugned award was hit by Section 34(2)(b)(ii) of the Act as the contract for services of the Hotel purportedly between respondent and Late Rajpal Chowdhury (Original respondent) was between 09/05/2012 and 08/06/2012, whereas the claim of the respondent was for purportedly unpaid charges from 01/04/2017 and such claim was not connected to the contract period, aforesaid. Reliance was placed upon the case of Associate Builders vs DDA, (2015) 3 SCC 49. It was argued that the impugned award dealt with dispute not contemplated in the contract and was hit by Section 34 (2)(iv) of the Act. Also was argued that the purported dispute was beyond the limitation and was hit by Section 34 (2A) of the Act and also in breach of law of limitation. It was argued that claim was time barred and the arbitral award was patently illegal. Reliance was placed upon the case of Enjayes Spices vs NRDC, 2015 SCC Online Del 6805. It was argued that illegal invocation of arbitration and impugned award was hit by Section 34(2)
(a)(v) of the Act as the respondent never invoked the arbitration proceedings as it did not serve any notice seeking reference to arbitration on the Original respondent, which was mandatory and purportedly went directly to the Indian Council of Arbitration (ICA) for appointment of an arbitrator. It was argued that the appointment of sole arbitrator was invalid and non-est. Reliance was placed upon the cases of International Nut Alliance LLC vs Beena Cashew Company, 2014 SCC Online Mad 425; Perkins Eastman Architects DPC vs HSCC (India), 2019 SCC Online SC 1517. It was argued that non service of impleadment application and other proceedings on petitioners was breach of principles of natural justice and impugned award was hit by Section 34(2)
(b)(ii) and Section 34(2A) of the Act. It was argued that around November 2019, the respondent apparently filed an impleadment application before Ld. Sole Arbitrator seeking to implead the petitioners on the ground that they are OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 18 of 31 the legal heirs of the Original respondent. Said application was never served upon the petitioners, which was in direct contravention to Section 24(3) of the Act, which consequently resulted in a patent illegality in the impugned award attracting Section 34 (2A) of the Act. It was argued that the said impleadment application was allowed ex parte vide order dated 04/12/2019 without the petitioners being allowed to present their case, which was also a contravention of principle of natural justice. It was argued that the petitioners were not given proper notice of the arbitral proceedings and impugned award ought to be set aside under Section 34(2)(a)(iii) of the Act. It was argued that the order of Ld. Sole Arbitrator dated 04/12/2019 served under the cover of the letter dated 10/12/2019 of Ld. Sole Arbitrator was addressed to petitioners for the first time, directed them to appear on 07/01/2020 and when they could not appear that day, Ld. Sole Arbitrator decided to proceed ex parte on 07/01/2020 itself. It was also argued that since the written communication was required to be addressed personally to the persons concerned, as per Section 3 of the Act and Section 27 of the General Clause Act, 1897 inter alia required that post to be properly addressed, so no service can be presumed to be made to the petitioners before letter dated 10/12/2019 and decision to proceed ex parte on 07/01/2020 was malafide and mired in bias. Reliance was placed upon the case of Impex Corporation & Others vs Elenjikal Aquamarine Exports, 2007 SCC Online Ker 125. It was also argued that the petitioners had managed to approach Ld. Sole Arbitrator by way of e-mail dated 26/02/2020 when the arbitration proceedings were still open, however the impugned award was passed within three days of the receipt of such e- mail by Ld. Sole Arbitrator on 29/02/2020 and the receipt of e-mail dated 26/02/2020 was not included in the impugned award. The impugned award was not served upon the petitioners but was served upon the Advocate of petitioners who had filed an application seeking recall of the direction passed on 14/02/2020 and to allow the petitioners to participate in the arbitral proceeding. Reliance was placed upon the case of Benarsi Krishna Committee vs Karmyogi Shelters (P) Ltd., (2012) 9 SCC 496. It was also OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 19 of 31 argued that the petitioners are not legal representatives of the Original respondent as per Section 2(g) of the Act and are only notional legal heirs. It was also argued that as per Section 40 of the Act, upon the death of the Original respondent, the arbitration could have only continued if there are legal representatives as defined in the Act, else the arbitration proceedings lapse. Reliance was placed upon the case of Jaladi Suguna vs Satya Sai Central Trust, (2008) 8 SCC 521. It was also argued that neither the petitioners represent the estate of the Original respondent nor intermeddle with the estate of the Original respondent nor act in a representative character of the Original respondent nor have any estate of the Original respondent devolved upon them.
7. Ld. Counsel for respondent argued in terms of the filed reply. It was argued that Original respondent Late Rajpal Chowdhury had approached the present respondent at its Hotel on 09/05/2012, seeking reservation of accommodation for himself and filled the registration card and agreed to the terms and conditions of the respondent for availing such accommodation there. It was argued that the responded provided the Hotel accommodation to Original respondent upto 20/07/2019 and as per given instructions by Original respondent, the respondent herein billed the Original respondent for the stay and other facilities availed by him during his stay in the Hotel of respondent. It was argued that as per the terms and conditions of the registration card, the disputes were referable to arbitration in accordance with the Act which was to be conducted in the city where the Hotel was situated and by Sole Arbitrator having qualification of ten years experience in the hospitality industry and be duly appointed by the Indian Council for Arbitration. The Hotel of respondent is situated in Delhi. It was argued that respondent approached Indian Council of Arbitration (ICA) for appointment of arbitrator and filed their Statement of Claim as per Rules of ICA on 09/08/2019 and before filing of claim, the copy of the claim was sent to the Original respondent, as per the requirements of ICA. It was argued that the petitioner acknowledged that they had received OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 20 of 31 the pleadings and copies of orders dated 22/11/2019 and 04/12/2019 of Ld. Sole Arbitrator; so the petitioners were thus aware of the date of hearing i.e., 07/01/2020 but they chose not to appear before Ld. Sole Arbitrator on 07/01/2020 and in the given circumstances the petitioners were proceeded ex parte by Ld. Sole Arbitrator on 07/01/2020. It was argued that full opportunity was provided to the petitioners and the petitioners remained absent despite notice, thus abandoned their right to defend. It was also argued that the petitioners acknowledged of having received the Minutes dated 07/01/2020. It was also argued that the petitioners from the beginning were aware of the proceedings initiated by the respondent before ICA and thereafter before Ld. Sole Arbitrator and they even had complete knowledge of the claim of the respondent and the fact that the deceased did not clear the dues of the respondent. It was argued that even petitioners did not dispute the claim of the respondent and the petitioner undisputedly were the legal heirs of the deceased and were rightly impleaded as party to the proceedings within the statutory period. The assets of the deceased were inherited by the petitioners and some of the assets of the deceased were handed over by the respondent to the petitioners when the Hotel room was vacated by the deceased. It was argued that no permissible ground under Section 34 of the Act has been raised by the petitioners. It was argued that the petitioners neither appeared before Ld. Sole Arbitrator despite service of notice of the proceedings and the pleadings of the case nor paid the fees of Ld. Sole Arbitrator and there was no sufficient cause for non appearance of petitioners. Reliance was placed upon the following cases by Ld. Counsel for respondent:
1. Dalmia Cement (Bharat) Limited vs M/s Advance Commercial Co. Ltd, 58 (1995) DLT 791;
2. TV and Radio Publicity Services vs Union of India (UOI), 2007 (4) BomCR 341;
3. Anil Jain vs Madhunam Appliances (P) Ltd., 1997 IV AD Delhi 714;OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 21 of 31
4. Newgen Specialty Plastics Ltd vs INTEC Capital Ltd, 2017 SCC Online Del 9075 and
5. Vaibhav Bhatia & Anr. vs L&T Finance Ltd & Anr, 2014 SCC Online Del 2613.
8. It was argued by Ld. Counsel for respondent that Ld. Sole Arbitrator had passed a reasoned award after taking into consideration of the facts and circumstances of the case. Evidence cannot be re-appreciated nor the contract terms and conditions can be reinterpreted which have already been dealt by the Learned Arbitrator. It was argued that in case any party had any objection to the jurisdiction of the Arbitrator, the said objection is to be raised before the Ld. Arbitrator. Reliance was placed upon the cases of Quippo Construction Equipment Limited vs Janardan Nirman Pvt. Limited, Civil Appeal No. 2378 of 2020 decided on 29/04/2020 by Supreme Court and Salar Jung Museum & Anr vs Design Team Consultants Pvt Ltd., OMP (COMM.) 44/2017, decided on 21/05/2020 by Delhi High Court.
9. An Arbitral Award can be set aside on the grounds set out in Section 34(2)(a), (b) and (2A) of the Act.
10. Section 34 (1) (2) and (2A) of The Arbitration and Conciliation Act, 1996 read as under:
"34. Application for setting aside arbitral award- (1) Recourse to a court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub- section (3).
(2) An arbitral award may be set aside by the court only if-
(a) the party making the application furnishes proof that-
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 22 of 31 thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration;
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
(b) the court finds that-
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
Explanation 1 - For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,-- (i) the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81; or (ii) it is in contravention with the fundamental policy of Indian law; or (iii) it is in conflict with the most basic notions of morality or justice.
Explanation 2.-- For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 23 of 31 merits of the dispute.
(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:
Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.
11. Normally, the general principles are that Arbitrator is a Judge of the choice of the parties and his decision, unless there is an error apparent on the face of the award which makes it unsustainable, is not to be set aside even by the Court as a Court of law could come to a different conclusion on the same facts. The Court cannot reappraise the evidence and it is not open to the Court to sit in appeal over the conclusion of the Arbitrator. It is not open to the Court to set aside a finding of fact arrived at by the Arbitrator and only grounds on which the award can be set aside are those mentioned in the Arbitration Act. Where the Arbitrator assigns cogent grounds and sufficient reasons and no error of law or misconduct is cited, the award will not call for interference by the Court in exercise of the power vested in it. Where the Arbitrator is a qualified technical person and expert, who is competent to make assessment by taking into consideration the technical aspects of the matter, the Court would generally not interfere with the award passed by the Arbitrator.
12. Supreme Court in case of Associate Builders vs. Delhi Development Authority, (2015) 3 SCC 49 has held that the interference with an arbitral award is permissible only when the findings of the arbitrator are arbitrary, capricious or perverse or when conscience of the Court is shocked or when illegality is not trivial but goes to the root of the matter. It is held that once it is found that the arbitrator's approach is neither arbitrary nor capricious, no interference is called for on facts. The arbitrator is ultimately a master of the OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 24 of 31 quantity and quality of evidence while drawing the arbitral award. Patent illegality must go to the root of the matter and cannot be of trivial nature.
13. Supreme Court in case of Ssangyong Engineering & Construction Co. Ltd. vs. National Highways Authority of India, 2019 SCC OnLine SC 677 has held that under Section 34 (2A) of the Act, a decision which is perverse while no longer being a ground for challenge under "public policy of India", would certainly amount to a patent illegality appearing on the face of the award. A finding based on the documents taken behind the back of the parties by the arbitrator would also qualify as a decision based on no evidence inasmuch as such decision is not based on evidence led by the parties and therefore would also have to be characterized as perverse. It is held that a finding based on no evidence at all or an award which ignores vital evidence in arriving at its decision would be perverse and liable to be set aside on the ground of patent illegality.
14. Perusal of the arbitral proceedings record reveals inter alia that the outstanding dues claimed by the claimant/respondent purportedly payable by Original respondent (now deceased) Late Rajpal Chowdhury were with respect to his stay in the Hotel of claimant upto 20/07/2019, whereas initially after filling the registration card, Original respondent had started staying therein from 09/05/2012. The statement of account enclosed with the Statement of Claim also reveals inter alia that as on 01/03/2018 Rs 22,26,501/- was payable by Late Rajpal Chowdhury to claimant/respondent and the Original respondent Late Rajpal Chowdhury had made payments, totaling Rs 24,50,000/- in the period from 22/03/2018 till December 2018, detailed therein and after adjustment of waivers charges detailed therein the balance claimed sum purportedly payable by Original respondent was Rs 44,53,499/- plus interest Rs 5,53,492/- and said sum apparently was with respect to stay of Original respondent for the period of years 2018 and 2019, which stay continued in Hotel of claimant uninterruptedly from 09/05/2012.
OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 25 of 31The registration card dated 09/05/2012 had following Clause No. 5:
"all disputes whether arising out of, or incidental to stay at the Hotel, directly or indirectly, or through any Franchisor, agent etc shall be a subject matter of dispute between Guest and Hotel only and shall be referable to arbitration in accordance with the Arbitration & Conciliation Act, 1996, conducted in the city where the Hotel is situate, by a Sole Arbitrator, who shall have the qualification of ten years experience in the hospitality industry and be duly appointed by the Indian Council for Arbitration.All disputes between Guest and the Hotel shall be governed by Indian law and only Courts in India where hotel is situated shall have jurisdiction"
Accordingly, it is matter of record that the amount claimed by claimant for charges of stay of Original respondent in Hotel of claimant was for the period well within 3 years from the claim and not beyond the period of limitation of 3 years as put forth in the contention of Ld. Counsel for petitioner. So on this facet of the matter, it cannot be said that the purported dispute was beyond limitation and hit by Section 34(2A) of the Act or Ld. Arbitrator was not having jurisdiction to adjudicate the claims of respondent as a result of which the impugned award is hit by Section 34(2)(b)(ii) of the Act or the Ld. Arbitral Tribunal was coram non judice.
15. Section 21 of the Act provides that unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent.
16. Bombay High Court in the case of Bhanumati J. Bhuta vs Ivory Properties & Hotels Pvt. Ltd., 2020 SCC Online Bombay 157 has held that the arbitral proceedings commence in respect of dispute when notice invoking of arbitration agreement is received by other side and not when such notice is only served upon the Arbitral Tribunal. The onus is on the applicant who had issued such notice to prove the delivery of such notice upon the other side.
OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 26 of 3117. Ld. Sole Arbitrator had sent the e-copy of arbitral record by e-mail on 28/09/2020 to the dedicated e-mail id of the Court. In said arbitral record proceedings at pages 16 to 30 are the letter of respondent dated 09/08/2019 to the Registrar ICA with request to initiate arbitration proceedings, Memo of Parties, Statement of Claim of claimant, copy of authorization in favour of Ms. Benita Sharma, AR of claimant, copy of registration card dated 09/05/2012, copy of statement of account of claimant for amounts due from Original respondent, power of attorney. There is no whisper in the aforesaid letter dated 09/08/2019 or its Annexures with respect to sending of any notice to Original respondent wishing to commence arbitration proceedings. It is so per contra to Rule 15 of ICA Rules of Arbitration as well as Section 21 of the Act where it is mandatory for any party wishing to commence arbitration proceedings to give a notice of request for arbitration to the other party (Original respondent in this case).
18. Arbitral proceedings record also reveals that with the affidavit of claimant witness dated 21/01/2020 (at pages 66 to 70), additional documents were filed on behalf of claimant on 21/01/2020 and it included (1) letter dated 06/02/2019 of claimant to Original respondent purportedly Ex CW1/4; (2) letter dated 05/03/2019 of claimant to Original respondent purportedly Ex CW1/5; (3) letter dated 22/04/2019 of claimant to Original respondent purportedly Ex CW1/6; (4) letter dated 01/05/2019 of claimant to Original respondent purportedly Ex CW1/8; (5) letter dated 08/05/2019 of claimant to Original respondent purportedly Ex CW1/9; (6) letter dated 04/06/2019 of claimant to Original respondent purportedly Ex CW1/11 and (7) letter dated 24/07/2019 of claimant to petitioner no. 1 with cc to Original respondent and petitioner no. 2. Also therein are the e-mails (1) dated 23/04/2019 of Original respondent to claimant purportedly Ex CW1/7 and (2) dated 05/06/2019 of Original respondent to claimant purportedly Ex CW1/12. There is no whisper in any these letters sent by claimant to Original respondent of the fact of dispute to be referred to arbitration. Even in the letter dated 24/07/2019 purportedly Ex OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 27 of 31 CW1/13 there is no such mention of fact of dispute to be referred to arbitration. Neither alongwith letter dated 09/08/2019 of respondent to Registrar ICA nor in any subsequent/additional documents filed before Ld. Sole Arbitrator any document has been filed by the respondent containing any fact of sending of request for dispute to be referred to arbitration to Original respondent. Before or along with letter dated 09/08/2019 of respondent filed with Registrar ICA to initiate the arbitration proceedings, Original respondent was never put to notice by the present respondent with request for dispute to be referred to arbitration.
19. Petitioners have claimed that Original respondent i.e., Late Rajpal Chowdhury had expired on 10/09/2019. No death certificate of Original respondent was filed before Ld. Sole Arbitrator by the claimant/present respondent nor has been filed before this Court by the parties to the lis. On the other hand the present respondent has not disputed the date of death of Original respondent i.e., Late Rajpal Chowdhury to be 10/09/2019. In order number 2 of date 04/12/2019 of Ld. Sole Arbitrator starting from page 37 of arbitral proceeding record, there is mention in para 4 that Sh. Kunal Kher, Ld. Counsel for claimant had informed Ld. Sole Arbitrator that Ld. Counsel for claimant had learnt that Original respondent Sh. Rajpal Chowdhury had expired and the Counsel for claimant then submitted an application with Amended Memo of Parties for impleadment of present petitioners as legal heirs of respondent Late Rajpal Chowdhury. On record of Ld. Sole Arbitrator in the arbitral proceedings, whose e-copy has been received in this Court, there is no document finding mention of date of death of Original respondent Late Rajpal Chowdhury. No notice of application for impleadment of legal heirs of Late Rajpal Chowdhury moved by claimant before Ld. Sole Arbitrator was issued to proposed legal heirs of Late Rajpal Chowdhury i.e., the present petitioners on 04/12/2019 by the Ld. Sole Arbitrator but on that very day, without mention of date of death of Late Rajpal Chowdhury, aforesaid application was allowed in same order dated 04/12/2019. Present petitioners OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 28 of 31 were not put to notice of aforesaid application of their substitution as LRs of Late Rajpal Chowdhury and were deprived of notice and hearing and to present their case and to defend and oppose the said application. It is pertinent to mention that before 04/12/2019, no notice was sent by claimant/present respondent; ICA or Ld. Sole Arbitrator, ever to the present petitioner with respect to the claim, the Statement of Claim with Annexures, subject matter of the arbitral proceedings. Accordingly, there was violation of Section 18 of the Act, which embodied that the parties shall be treated with equality and each party shall be given full opportunity to present his case. There is also violation of Section 24 of the Act, which embodied that the parties shall be given sufficient advance notice of any hearing and all statements, documents, information supplied to, or applications made to arbitral tribunal by one party shall be communicated to the other party. Before their impleadment as LRs of deceased Late Rajpal Chowdhury on 04/12/2019, the petitioners were never put to notice of the arbitral proceedings or of the application for their impleadment nor were served upon any document at their place of abode, place of business or mailing address.
20. In the case of International Nut Alliance LLC (supra), it was inter alia held that before composition of arbitrators, a notice to the other party is very much essential.
21. In the case of Impex Corporation & Others (supra), it was inter alia held that where no proper and sufficient notice is given to a party by the arbitrator, there is violation of principle of natural justice and these are also violation of Section 18 and 25 of the Act.
22. In the case of Jaladi Suguna (supra) also was inter alia held that filing an application to bring the legal representatives on record, does not amount to bringing the legal representatives on record and when such an LR application is filed, it is to be considered and decided whether the persons named therein OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 29 of 31 as the legal representatives, should be brought on record to represent the estate of the deceased and until such decision is taken, the persons claiming to be the legal representatives have no right to represent the estate of the deceased nor prosecute or defend the case. If there is a dispute as to who is the legal representative, a decision should be rendered on such dispute. Nothing of the sort has been done in the present matter by Ld. Sole Arbitrator for substitution of petitioners as legal representative of Original respondent deceased Late Rajpal Chowdhury and petitioners at their back without any notice, only on moving of application by the claimant/present respondent, have been substituted as LRs of Original respondent Late Rajpal Chowdhury by Ld. Sole Arbitrator. Accordingly there is violation of Sections 18, 24 and 25 of the Act, as detailed herein above. On record no proper notice of the appointment of an arbitrator and/or no notice was sent by the claimant/respondent to Original respondent that dispute is to be referred to arbitration. The impugned award is accordingly liable to be set aside as per Section 34(2)(a)(iii) of the Act and also under Section 34 (2A) of the Act as the impugned award is vitiated by patent illegality appearing on the face of the award, as elicited in detail herein above. Reliance placed upon the cases of Associate Builders (supra), Ssangyong Engineering & Construction Co. Ltd. (supra), International Nut Alliance LLC (supra), Impex Corporation & Others (supra) and Jaladi Suguna (supra),
23. In the case of Salar Jung Museum & Anr (supra), Delhi High Court had relied upon the law laid in the case of Quippo Construction Equipment Limited (supra) wherein it was held that an objection regarding the venue of arbitration and holding of a common arbitration arising out of several agreements could not be taken at the stage of Section 34 of the Act by a party which did not participate in the proceedings at all.
24. The precedents relied upon by the Ld. Counsel for respondent embody facts and circumstances entirely different and distinguishable to the facts and OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 30 of 31 circumstances of the case in hand and are not applicable to the present case and are no help to the respondent.
25. For the foregoing reasons, the petition is allowed and the impugned award is set aside.
26. The parties are left to bear their own costs.
27. File be consigned to record room.
ANNOUNCED IN (GURVINDER PAL SINGH)
OPEN COURT District Judge (Commercial Court)-02
on 19th December 2020. Patiala House Court, New Delhi.
(Deepika) OMP (Comm.) No. 52/2020 Gurjit Chowdhury & Anr vs ITC Limited Page 31 of 31