Delhi High Court
Mr. Rajiv Singla & Anr. vs M/S Ruldu Ram Jain & Company & Anr. on 23 May, 2011
Author: Valmiki J. Mehta
Bench: Valmiki J.Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO Nos.137/2011 & 138/2011
% May 23, 2011
1. FAO No.137/2011
MR. RAJIV SINGLA & ANR. ...... Petitioners
Through: Mr. C.S.Yadav, Adv.
VERSUS
M/S RULDU RAM JAIN & COMPANY & ANR. ...... Respondents
Through:
2. FAO No.138/2011
MR. RAJIV SINGLA & ANR. ...... Petitioners
Through: Mr. C.S.Yadav, Adv.
VERSUS
M/S RULDU RAM JAIN & COMPANY & ANR. ...... Respondents
Through:
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
1. Whether the Reporters of local papers may be
allowed to see the judgment?
2. To be referred to the Reporter or not?
3. Whether the judgment should be reported in the Digest?
VALMIKI J. MEHTA, J (ORAL)
1. Both these appeals are disposed of by this common judgment inasmuch as they arise from identical orders of the Trial Court passed between the same parties in the Objection Petitions under Section 34 of the Arbitration and Conciliation Act, 1996.
FAO Nos.137/2011 & 138/2011 Page 1 of 5
2. The facts of the case are that the respondents herein sought arbitration under the Rules and Regulations of the Delhi Hindustani Mercantile Association, inasmuch as, the appellants had failed to pay the dues with respect to goods supplied. The appellants failed to appear in the arbitration proceedings in spite of notice resulting in the ex parte Award dated 13.1.2005.
3. The only ground on which the appellants had challenged the Awards, being for the sum of Rs.1,46,303/- and Rs.1,62,776/- along with interest under Section 34 of the Act was that the appellants were not served in the arbitration proceedings. The Arbitrator has dealt with this issue in the following words:-
"Ld. Counsel for the petitioners vehemently submitted that the respondent no.1 sought appointment of arbitrator unilaterally without first putting the petitioners to notice about the same. It is further submitted that the petitioners never received any notice from the arbitrator and they were kept in dark about the whole arbitration proceedings deliberately in order to prevent them from defending the claim of the respondent no.1. I find the submission of the Ld. Counsel contrary to the record. It appears from the record that the respondent no. 1 had issued a notice dated 2.1.2004 through counsel to the petitioner asking them to pay the balance sum alongwith interest failing which the matter shall be referred for arbitration. The notice was dispatched to the petitioners by registered AD post as well as UPC. The notice was duly served upon petitioner no.2 as the AD cards were received back by the counsel for the respondent no.1 which have been filed in original in the arbitration proceedings. The genesis of whole dispute between the parties has been set out in detail in the aforesaid notice and thus it cannot be said that the petitioners were not aware about the claims of the respondent no.1. The record further shows that arbitrator sent his first notice dated 14.7.2004 to the petitioners intimating them about the next date of hearing as 26.7.2004. The notice was sent through registered AD FAO Nos.137/2011 & 138/2011 Page 2 of 5 post as well as UPC and was duly served upon the petitioners as the AD cards were received back by the arbitrator which form part of the arbitration proceedings. The arbitrator thereafter again sent notice dated 27.7.2004, 1.9.2004 and 28.9.2004 to the petitioners which were received back by him unserved with the report "refused" or "unclaimed". Arbitrator then sent another notice dated 20.10.2004 to the petitioners intimating them that they have been proceeded ex parte vide order dated 18.10.2004 and giving them one more opportunity to appear before him on 2.11.2004. This notice also was sent through registered AD sot as well as UPC and was received back unserved by the arbitrator with the report "refused in case of petitioner no.3 and "unclaimed" in case of petitioner no.2."(Emphasis added).
4. The aforesaid findings make it quite clear that the appellants were issued notices but they failed to appear in the arbitration proceedings. The notices were dispatched, both by registered AD post and UPC. First notice was sent for 26.7.2004 and thereafter again notices were sent on 27.7.2004, 1.9.2004 and 28.9.2004. The notices were received back either with the report "refused" or "unclaimed". At this stage, I may refer to Section 3 of the Arbitration and Conciliation Act, 1996 as per which notices sent to the last known addresses of the respondent in the arbitration proceedings will be deemed to be taken as service. Thus, the procedure with respect to the service in arbitration proceedings having been provided by Section 3 of the Act and the same having been repeatedly complied with, inasmuch as, the appellants were sought to be served as many as 5 times in the arbitration proceedings, and yet they failed to appear, consequently the Award was validly passed and so also the impugned order dated 5.7.2010.
FAO Nos.137/2011 & 138/2011 Page 3 of 5
5. Learned counsel for the appellants pressed the applications being CM No.10256/11 in FAO No.137/2011 and CM No.10255/11 in FAO No.138/11 filed under Order 41 Rule 27 CPC for leading additional evidence. These applications, in my view, are clearly misconceived because no such grounds were taken up before the Trial Court as urged in the applications which are now filed under Order 41 Rule 27 CPC to bring additional documents to allegedly show that the address was not correct. Once, no such objection is taken in the petition under Section 34, and which is so admitted by learned counsel for the appellants before me, then there does not arise the question of considering these applications for the first time in an appeal under Section 37. I may note that the objections which are filed under Section 34 are not in the nature of appeal against the Award and stricto sensu the provisions of Order 41 Rule 27 CPC may not apply even in the Objection Petition. However, even assuming that they may apply at the first stage in objections under Section 34, there is no reason why at an appellate stage, which is, in fact, almost in the nature of a second appeal to the Award, should the applications be considered when such objection was not taken up in the Petition under Section 34 of the Act before the Trial Court. The appellants have received the material and therefore are bound to pay the amount for the same and should not therefore be allowed to unnecessarily delay and linger on the recovery of dues against them. These applications are therefore dismissed.
FAO Nos.137/2011 & 138/2011 Page 4 of 5
6. The scope of hearing of an objection to an Award is limited, and if that scope is limited, then surely the scope of an appeal challenging an order dismissing the objections would have to be further limited. Unless there is a clear-cut and gross illegality/perversity which causes grave injustice, this Court will not exercise powers under Section 37 of the Act. In view of the facts stated above I do not find that there exists any gross illegality or perversity in the impugned order dated 5.7.2010 for this Court to interfere.
7. The appeals therefore, being devoid of merits, are dismissed. The amount deposited by the appellants in FAO No.137/2011 will be available to the respondents towards execution of the Award which is the subject matter of FAO No.138/2011. The Trial Court record be sent back.
May 23, 2011 VALMIKI J. MEHTA, J.
ak
FAO Nos.137/2011 & 138/2011 Page 5 of 5