Delhi High Court
Karmyogi Shelters Pvt. Ltd. vs Benarsi Krishna Committee & Anr on 28 August, 2009
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
*IN THE HIGH COURT OF DELHI AT NEW DELHI
+ OMP No.51/2005.
% Date of decision: 28.08.2009
KARMYOGI SHELTERS PVT. LTD. ....Petitioner
Through: Mr. Mr Sudhir Nandrajog, Sr. Advocate
with Mr. Rakesh Mishra, Advocate for
the Petitioner.
Versus
BENARSI KRISHNA COMMITTEE & ANR. ... Respondents
Through: Mr. N.N. Aggarwal with Mr. Kapil
Gupta & Mr. Rohit Gandhi , Advocates
for the Respondents.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. Whether reporters of Local papers may
be allowed to see the judgment? Yes
2. To be referred to the reporter or not? Yes
3. Whether the judgment should be reported Yes
in the Digest?
RAJIV SAHAI ENDLAW, J.
1. This Petition under Section 34 of the Arbitration Act, 1996 has been preferred with respect to the arbitral award dated 12th May, 2004. The petition was filed in this court first on 3rd February, 2005. In para 25 of the petition it is stated that the counsel for the petitioner informed the petitioner about the award in the last week of November, 2004 and asked the petitioner for necessary amount of "court fees"; the petitioner provided the necessary "court fees" on 29th November, 2004 and the award was provided by the learned arbitrator to the petitioner on 15th December, 2004. The OMP came up before this court first on 7th February, 2005 when the counsel for the respondent also appeared and contended that the copy of the award had been supplied to the petitioner in May, 2004 itself and the petition was thus time barred. This court, to find out the correct date OMP No.51/2005. Page 1 of 13 when the copy of the award had actually been furnished to the petitioner, requisitioned the arbitral record. The arbitral record has been received. This order shall deal with the question of whether the petition has been preferred within the prescribed time or not. The counsels have been heard.
2. The counsel for the respondent has contended that upon the award being published on 12th May, 2004, both parties had appeared before the arbitrator on 13th May, 2004. The endorsement, on the copy of the award in the arbitral record received in this court, of receipt of copy of the award by both the parties is shown in this regard. It may be noted that there is an endorsement on behalf of the respondent and also an endorsement of "receipt" "for P.B. Suresh, Advocate" who was representing the petitioner before the arbitrator. The counsel has also drawn attention to the award filed by the petitioner in this court alongwith the petition. The same also on the first page after the stamp papers, bears a notation on the top left hand corner of "received" with the date "13th May, 2004".
3. It is urged that from the aforesaid it is unequivocally established that the petitioner received the signed copy of the award and on the basis whereof this petition has been filed, on 13th May, 2004. It is thus contended that the petition filed on 3rd February, 2005 was barred by time and liable to be dismissed.
4. Attention is also invited to the affidavit filed by the petitioner in this court pursuant to the order dated 16th May, 2005. It is stated in the said affidavit that the hearing / arguments concluded before the arbitrator on 31st December, 2003 and judgment/award was OMP No.51/2005. Page 2 of 13 reserved; that the director of the petitioner regularly enquired from his counsel about the award for about a month; during this time the award was not published; subsequent to that the said director of the petitioner stopped enquiring about the award from the counsel and was under the impression that the award would be sent to the petitioner directly by post as provided under Section 31(5) of the Act; that on 28th October, 2004 the counsel for the petitioner informed the said director telephonically that the respondent had offered the monies in terms of the award to the petitioner and sought instructions as to whether to accept the same or not. It is further the case in the said affidavit that on this date the director of the petitioner came to know that the award had been made; then he asked the counsel to provide him a copy so that he could form an opinion on acceptability thereof. It is further stated by the director of the petitioner in the affidavit that in November, 2004 a letter was received by the petitioner also from the advocate for the respondent; till then the petitioner had not received any copy of the award.
5. Thereafter in para 8 of the affidavit aforesaid it is mentioned "as requested by the deponent the counsel for the petitioner provided the petitioner with a copy of the "unstamped" award. The award was on plain paper. The counsel also informed the petitioner that the award is yet to be engrossed and the petitioner would have to provide stamp papers worth Rs 4100/- for engrossing the award and making it executable".
6. It is further stated in the affidavit that the petitioner thereafter on 29th November, 2004 purchased the stamp paper and sent it to the arbitrator under cover of letter dated 15th December, 2005 and OMP No.51/2005. Page 3 of 13 on the same date the arbitrator signed the stamp papers and returned the same to the petitioner.
7. It is further stated in the affidavit that Shri T.K. Pradhan, Advocate engaged by the petitioner in this court on inspection of the arbitral record had come to know that the award had never been sent to the petitioner by the arbitrator as provided under Section 31(5) of the Act. It is also contended in the affidavit that an unstamped award is no award in the eyes of law inasmuch as the arbitrator is functus officio after making of the award and cannot even stamp the award; the award is thus complete only on stamping. It is thus the case of the petitioner that the award was passed only on 15th December, 2004 and the petition is within time.
8. The counsel for the respondent has laid much emphasis on para 8 (supra) of the affidavit. It is urged that the petitioner has intentionally left it vague as to when the counsel provided the unstamped award received from the arbitrator to the petitioner. It is further contended that the petitioner concealed the said facts in the OMP and sought to convey an impression that the award was received by it on 15th December, 2004 only.
9. The counsel for the respondent has further urged that the matter is now no longer res intergra. Reliance is placed on M.M. Jawhar Merican Vs Engineers India Ltd 2009 (4) AD, Delhi 161 where the Division Bench of this Court has held that the limitation for filing a petition under Section 34 commences from receipt of a signed copy of the award and cannot be said to be commencing from OMP No.51/2005. Page 4 of 13 the date of the stamping of the award or of the date of delivery of the stamped copy of the award.
10. The respondent has also relied upon Nilkantha Shidramappa Ningashetti Vs Kashinath Somanna Ningashetti AIR 1962 SC 666 where in respect to notice under Section 14(2) of the Arbitration Act, 1940 it was held that the communication to the pleader of the parties that an award has been filed is sufficient compliance with the requirements of the said provision with respect to the giving notice to the parties concerned. Reference is also made to Union of India Vs Wishwa Mittar Bajaj & Sons MANU/DE/7479/2007.
11. Per contra, the senior counsel for the petitioner has urged that the requirement of Section 31(5) and Section 34(3) of the Act is of delivery of the signed copy of the award to the "Party". Attention is invited to the definition of "party" in Section 2(h) of the Act, as meaning a party to the arbitration agreement only. It is contended that thus the delivery has to be on the party to the arbitration agreement personally and cannot be on the advocate of that party as in this case. Attention is also invited to Section 3 providing for service of communications and it is urged that the same is also to the party only and not to its advocate. Lastly it is urged that since Section 5 of the Limitation Act has been made inapplicable to Section 34(3), the court ought to give a rigid interpretation to the statutory provision regarding commencement of limitation inasmuch as there can be no condonation. Reliance is placed on National Projects Constructions Corporation Ltd Vs Bundela Bandhu Constructions Company AIR 2007 Delhi 202 DB para 16 in support of the said proposition; paras 12, 14 and 15 of the same OMP No.51/2005. Page 5 of 13 judgment are also relied upon to contend that the delivery of the signed copy of the award ought to be on the person who is to take a decision whether to accept the award or to prefer a petition under Section 34 with respect thereto. It is argued that the said person could be the petitioner or its director only and could not be the advocate engaged for the arbitration proceedings and who could not have taken such a decision.
12. It is further urged that while in CPC, in Order 3 specific provision has been made for representation through advocate/pleaders and service of notices on them, the same has been intentionally omitted in the 1996 Act. It is thus contended that the delivery of signed copy of the award cannot be on any person other than the party to the agreement.
13. Reliance is also placed on Union of India Vs. Tecco Trichy Engineers & Contractors 2005 4 SCC 239 where in relation to Railways it was held that only when the arbitral award is delivered to the person who has knowledge of the proceedings and who would be the best person to understand and appreciate the arbitral award and also take a decision in the matter of moving an application under Section 33 or under Section 34, would the limitation start running.
14. The counsel for the respondent has in rejoinder argued that nowhere in the petition or in the affidavit has the petitioner denied the authority of the counsel who received the award on 13 th May, 2004; it is also contended that the petitioner did not take any second copy of the award from the arbitrator and in fact has acted on the basis of the copy received by the advocate on 13th May, 2004. It is OMP No.51/2005. Page 6 of 13 argued that in the absence of said pleas, the award is deemed to have been delivered to the petitioner on 13th May, 2004 and the petition is barred by time.
15. The entire plea of the petitioner is structured as if the award was collected on 13th May, 2004 from the arbitrator, by the advocate for the petitioner and it is suggested that the said advocate did not inform the petitioner of the same. An impression is also sought to be created in the affidavit as well as during hearing as if the advocate of the petitioner before the arbitrator and before this court are different. It is this impression which led the court to, during the course of hearing enquire whether the petitioner had taken any action against the advocate before the arbitrator. Then also, while replying in the negative, the said impression was continued.
16. However, while minutely going through the affidavit it is found that the petitioner has nowhere stated that it is the advocate who collected the award from the arbitrator on 13th May, 2004; nor is it stated as to who collected the award on that date. The receipt as aforesaid is signed "For P.B. Suresh, Advocate". It could very well have been an employee/representative of the petitioner who signed the same. From the conduct of the petitioner of keeping quiet on this aspect, adverse inference has to be drawn, i.e. that if the truth had been revealed, it would have hurt the petitioner.
17. The impression sought to be given of the advocate having not informed the petitioner of the award or of the advocate in these proceedings on inspection of arbitral record received in this court finding that award had not been sent by the arbitrator to the parties, OMP No.51/2005. Page 7 of 13 (as stated in para 10 of the affidavit) is also found to be wrong. During the hearing a perusal of the arbitral record showed that the Vakalatnama of the advocate who has filed the present petition also exists on the arbitral record. His presence is also recorded in several of the arbitration hearings along with that of Mr. P.B. Suresh and he has also filed application under Section 17 under his own signatures before the arbitrator. Upon the same being pointed to the senior counsel, this position was not disputed.
18. Thus the alibi of the advocate on which the petitioner leaned, is not available to the petitioner. The factum of the petitioner in these proceedings continuing with the same advocates as representing the petitioner before the arbitrator shows that the petitioner was not aggrieved in any manner from the said advocate and had knowledge of and received copy of the award on 13th May, 2004 itself. The petitioner is guilty of misrepresenting facts and conveying a false impression to the court. The petitioner has rather tried to use the name of advocate to get over the bar of limitation.
19. Though the aforesaid conduct of the petitioner is enough to dismiss this petition as time barred, but the legal pleas raised may also be considered.
20. The first submission to be considered is whether Section 31 (5) & Section 34 (3) insist upon delivery personally to the party to the arbitration agreement only or it can also be to the agent of the said party. In my view, "party" would include the agent of the party. In the present case, the petitioner is a juristic person. It has to be necessarily represented through natural persons. A perusal of the OMP No.51/2005. Page 8 of 13 arbitral record shows that the petitioner in the matter of arbitration before the arbitrator, who is a retired judge of this court, was throughout represented by its advocates only and the other representatives of the petitioner appeared in the arbitration proceedings only at the time of recording of their evidence. Thus, as far as the arbitrator was concerned, the advocates representing the petitioner were the agents of the petitioner and entitled to fully represent the petitioner. The delivery of the arbitral award to such an agent of the party would be the same as delivery to the party himself/itself.
21. The Vakalatnamas on behalf of the petitioner on the record of the arbitrator also show that the advocates were authorized by the petitioner fully, including to accept notices on behalf of the petitioner. Since the language of the Vakalatnama is geared towards litigation in courts and not for arbitrations, the word „award‟ does not expressly find mention in the Vakalatnama. However, the same is immaterial. Once the advocate has been authorized to act on behalf of his client and to file and take back documents and to submit to arbitration, the delivery of the award to such advocate of the party is the same as delivery to the party.
22. I had also drawn the attention of the senior counsel for the petitioner to several other provisions of the Act requiring the party to act. For instance, Section 11 (6) requires the application to the Chief Justice to be filed by the party. It was put to the senior counsel that if his contention was to be accepted, it would follow that the application under Section 11 (6) would be filed by the party himself/itself and not through any advocate. The senior counsel OMP No.51/2005. Page 9 of 13 replied that the advocate, if authorised is competent to file the application. In my view, the same principle would apply to the matter of delivery of the arbitral award also. Delivery on any person expressly or impliedly authorized by the "party" is delivery on the party. It may be noticed that the arbitrator even by sending the award by post or courier cannot ensure delivery on the party personally and the delivery in such cases on the persons who in the normal course receive such dak on behalf of the party or delivery at the address of the party would be delivery on the party.
23. The senior counsel appeared to suggest that the authority of the advocate engaged by the petitioner before the arbitral tribunal would come to an end on the proceedings terminating. However the said argument also does not prevail with me. The proceedings before the arbitral tribunal terminate under Section 32 of the Act only by the final arbitral award and subject to Section 33 of the Act. Thus, it cannot be said that the authority of the advocate engaged by the petitioner before the arbitral tribunal came to an end on addressing the arguments and did not continue till the making of the arbitral award.
24. There is yet another reason. From the factum of the representatives of the petitioner as well as the respondent appearing on the same day before the arbitrator for collecting the copy of the award on 13th May, 2004, it appears that a communication was made by the arbitrator to the parties of the publication of the award on 12th May, 2004. Though there is no letter of the arbitrator on record to this effect but it appears that the arbitrator may have telephonically informed the counsels for the parties who were communicating with OMP No.51/2005. Page 10 of 13 the arbitrator on behalf of their respective parties, of the making of the award and asked them to collect the signed copy of the award from him on 13th May, 2004. If the authority of the advocate had terminated, the advocate would not have collected the award.
25. An advocate under Section 30 of the Advocates Act, 1961 is entitled as of right to practice law inter-alia before any tribunal or person legally authorized to take evidence. An arbitrator is legally authorized to take evidence (Section 27). The expression right to practice includes both pleading and to act (Aswini Kumar Ghosh Vs. Arabinda Bose AIR 1952 SC 369). The Supreme Court in Jamilaben Abdul Kadar Vs. Shankarlal Gulabchand AIR 1975 SC 2202 held that the right of the advocate to practice, i.e. to act, also included the authority to settle/compromise the lis on behalf of the client. In the face of such authority of advocate, it cannot be said that the advocate, though authorized to settle/compromise on behalf of client, has no authority to take delivery of an award on behalf of the client. In fact in S. Maharaj Baksh Singh Vs. Charan Kaur AIR 1987 Punjab & Haryana 213 (DB) it is held that a lawyer is understood to embody his client in his own person. Seen in this light, Order 3 of the CPC only codifies what an advocate, by virtue of his right to practice and act, is entitled to do. One such facet is to receive service of processes, as also provided in Order 3. The contention of the senior counsel for petitioner that there is an intentional omission of Order 3 of CPC in the 1996 Act does not appear to be sound. Nothing in the 1996 Act prohibits the advocates from practicing before the arbitral tribunal or bars the application of CPC. Section 19 (1) merely provides that the arbitral tribunal shall not be bound by CPC. Else, the procedure prescribed in CPC, being the procedure with which the parties, their advocates and even the OMP No.51/2005. Page 11 of 13 arbitrators steeped in law are familiar, is in practice, followed in arbitration also, unless otherwise agreed by parties. The same procedure appears to have been followed before the arbitrator in the present case also and there is nothing to show that the petitioner in the present case notified the arbitrator that the authority given to its advocate was any less from that which the advocates are generally understood to have. Thus I find that the advocate of the petitioner was authorized to take delivery of the award from the arbitrator.
26. The law with respect to Railways or Govt. Departments, as laid down in Bundela Bandhu Construction Co. & Tecco Truchy Engineers & Contractors, (Supra) cannot be made applicable to a Private Ltd. Co., as the petitioner is. There are no pleadings even that the petitioner is in any way comparable. Similarly, from the facts of this case of the same team of lawyers continuing, it is borne out that the decision to file this petition was to be taken and has been taken by the same lawyers-clients and the argument built does not sustain. Though the Division Bench in M.M. Jawhar Merican (Supra) has already held that time under Section 34 (3) runs from delivery of signed copy of award, even if unstamped and not from delivery of stamped award, it is interesting to note that in the present case the stamp papers were merely got signed from the arbitrator and it is not even the case that on that day the arbitrator delivered any other copy of the award to the petitioner.
27. There is yet another aspect of the matter. To hold that the award has to be delivered personally to the party and cannot be delivered to the advocate representing the party would be creating unnecessary delay/drag in the arbitration proceedings. In fact OMP No.51/2005. Page 12 of 13 delivery personally to the advocate is more secure than insisting upon the arbitrator dispatching the award by post to the party. The same would make the delivery of the award dependent upon the vagaries of post. Otherwise, the advocate is a responsible agent of the party. It may be noticed that there are no allegations whatsoever of the advocate having not delivered the award to the petitioner. Had the advocate indulged in any such action, the petitioner would have lost faith in such advocate and would not have continued with the advocate in these proceedings.
28. I, therefore, hold that the signed copy of the award was delivered to the petitioner as required by Section 31 (5) & Section 34 (3) on 13th May, 2004. The petition filed on 3rd February, 2005 is barred by time. The same is dismissed. The petitioner is also burdened with costs of these proceedings of Rs.35,000/-.
RAJIV SAHAI ENDLAW (JUDGE) August 28th, 2009 M/PP OMP No.51/2005. Page 13 of 13