Delhi District Court
Tapan Das Pramanik vs The Manager on 16 May, 2011
IN THE COURT OF SHRI VIJAY KUMAR DAHIYA
ADDL. DISTRICT JUDGEII, ROHINI COURTS, DELHI
CS No. 2372/09
IN THE MATTER OF:
1. Tapan Das Pramanik
R/o Dinemardanga, Gondalpara,
Post Office and Police Station - Chandan Nagar,
District Hooghly, West Bengal.
2. Mrs. Karunadas Pramanik
W/o Mr. Tapan Das Pramanik
R/o Dinemardanga, Gondalpara,
Post Office and Police Station - Chandan Nagar,
District - Hooghly, West Bengal.
........Petitioners
Versus
1. The Manager,
G.E. Money Financial Services Ltd.
th
401402, 4 Floor,
Agarwal Millenium Tower,
E1, 2, 3, Netaji Subhash Palace,
Pitampura, Delhi110034.
2. The Manager,
G.E. Money Financial Services Ltd.
6A, Middleton Street,
Chabildas Tower's
Kolkata700071
3.
CS no. 2372/09 Page no. 1 of 16
Mr. Nitin Chadha
Sole Arbitrator,
430, Lawyer's Chamber,
Western Wing, Tis Hazari Court,
Delhi110054.
..........Respondents
Date of Institution the suit : 14.10.2009
Date on which the order was reserved : 03.05.2011
Date of decision : 16.05.2011
JUDGMENT
Vide this judgment I shall dispose off this petition filed against the above mentioned respondent by petitioner U/s 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act). It is directed against the award passed by the Ld. Sole Arbitrator by reference made in terms of agreement/contract allegedly executed between the parties. The petitioner has assailed upon the award passed by the Ld. Sole Arbitrator in the ground that Ld. Arbitrator has passed the exparte award by misappreciating the evidence placed on record. Award passed by the Ld. Sole Arbitrator is pleaded to be set aside.
1. Brief facts, in nutshell, as alleged by the petitioner are that CS no. 2372/09 Page no. 2 of 16 petitioner has availed joint mortgage joint loan facility amounting Rs. 6,30,000/ for running a business on 07.08.2007 being Loan Account No. HCAH00001453 which was scheduled to be paid by the monthly EMI of Rs. 9831/ per month for a period of 13 years but the petitioner no. 1 paid 6 EMI w.e.f 22.09.2007 to 08.03.2008. It has been averred that petitioner no. 1 could not pay the monthly EMI on account of financial losses in his business and request claimant/respondent for reducing the amount of EMI to Rs. 5000/ per month.
2. Notice was also issued by the petitioner no. 1 to the respondent/claimant for reducing the amount of EMI for remaining mortgage Loan as Rs. 5000/ per month. In the mean time, the claimant/respondent appointed a Ld. Sole Arbitrator without the consent of petitioners through the letter dated 31.02.2008. Thereafter, Sh. Molay Majumdar, Ld. Advocate issue a notice dated 05.03.2009 to respondent/claim CS no. 2372/09 Page no. 3 of 16 for reducing the amount of EMI and for settlement before District Legal Service Authority (DLSA), Hooghly. Thereafter, Ld. Arbitrator passed an exparte award. No reply to this petition has been filed by the respondent/claimant. Respondent no. 3 placed the arbitral proceedings in due course of time on record.
3. It has been contended by the Ld. counsel for the petitioner that the petitioner are permanent resident of District Hooghly, West Bengal and claimant/respondent no. 2 is having the office at Kolkata and alleged transaction was executed in Kolkata and EMIs in terms of loan agreement has been paid in Kolkata but the arbitral proceedings has been conducted in Delhi in order to harass and humiliate the petitioners. It has been further contended that no cause of action has accrued in Delhi so the arbitral proceedings could have been commenced either at Kolkata or Hooghly where a part of cause of action CS no. 2372/09 Page no. 4 of 16 has accrued. It has been further contended that exparte award has been passed without following the due process of law so far as the service of petitioner is concerned arbitral proceedings has been concluded in violation of the Act. It is further submitted that the petitioner has no knowledge about the pendency of arbitral proceedings at Delhi. So this impugned award is per se illegal and liable to be set aside.
4. Thereafter, petitioner moved an application for submitting additional ground as part and parcel of the objection which has been already detailed in the petition. These grounds could have not been taken place on record without amendment of ground of appeal/objection already raised in the petition. Otherwise, these ground as sought to be placed on record are verbatim reproduction of earlier objections taken in the petition.
5. On the other hand, Ld. counsel for the respondent has contended that petitioner/nonclaimant were served as per law CS no. 2372/09 Page no. 5 of 16 as notice of arbitral proceedings were sent by the registered AD on 15.01.2009 but those registered cover with AD were not received back either served or unserved. But the Ld. Arbitrator refrained from passing any exparte order against the respondent/claimant and notice of the arbitration proceedings was published in the newspaper "SAMVAD" dated 03.03.2009 and petitioner were proceeded exparte on 23.03.2009, so petitioner were rightly proceeded exparte. It is further contended that copy of award was sent through Speed Post with AD and same was dispatched on 30.03.2009 to the petitioner. So there is compliance of the mandate of Section 31(5) of Act. It has been further contended that impugned award has been challenged in 2010 which is beyond the prescribed period of limitation and therefore, petition is time barred and liable to be dismissed.
6. Before considering merits of the petition, it would be CS no. 2372/09 Page no. 6 of 16 appropriate to analyze the scope of intervention of the courts, in the process of alternative dispute resolution mechanism coined and adopted by the parties. It is a settled proposition of law that the courts established by law are formal disputes resolution mechanism, should minimum interfere in the alternative disputes/resolution mechanism adopted by the parties. It had been observed by the Apex Court in catena of judgments that the courts cannot examine an awards passed by the Ld. Arbitrator, as a Court of Appeal and thus, cannot go into reappraise the documents, pleadings and evidence led before the Ld. Arbitrator. Since, the arbitration is a dispute resolution mechanism evolved by the parties at the time of entering into a contract, the sanctity has to be given to it. The perusal of scheme of the Act also endorses the aforesaid view being expressed by the Courts, reserving themselves with a mandate of minimum interference to the arbitral proceedings CS no. 2372/09 Page no. 7 of 16 and awards, as the Forum was elected by the parties. Section 5 of the Act specifically envisages the scope of judicial intervention during the process of arbitral proceedings, which reads as under: "5. Extent of judicial intervention Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part."
7. Part 1 of the Act deals with arbitration and narrates scope in which the court could intervene. Section 8 envisages an eventuality, when a suit is brought before the judicial authority, which is a subject matter of arbitration agreement, on application by one of the parties before submitting his first statement on substance of dispute, the judicial authority may refer the parties for arbitration. Likewise, the court may pass interim orders/directions to save corpus which is a subject matter of arbitration agreement between the parties or may pass such interim directions as envisaged in Section 9 of the CS no. 2372/09 Page no. 8 of 16 Act. Likewise, in event, the parties fail to appoint arbitrator in terms of agreement, the Chief Justice or any person or institution designated by him to take necessary measures for securing appointment of arbitrator. Further perusal of scheme of the Act spells out the procedure seeking setting aside of awards under Section 34 of the Act, where the judicial authority/courts can interfere/intervene in awards passed by the Ld. Arbitrator, leaving aside the grounds arising under Section 13(5) and 16(6) which de hors Section 34 of the Act, the grounds for setting aside of awards set out in Section 34 of the Act are exhaustive. Careful perusal of SubClause 2 of Section 34 of the Act which opens with words "An arbitral awards may be set aside by the court only if (emphasis supplied). The phrase "only if" in Section 34 (2) of the Act manifests the legislative intent, which restricted the grounds for setting aside the awards passed by the Ld. Arbitrator only in circumstances CS no. 2372/09 Page no. 9 of 16 narrated therein. The aforesaid view is fortified in view of the view expressed by their Lordships in Government of NCT Vs. Khem Chand reported at 2003 (2) RAJ 437 (DEL), where it was observed that leaving aside the grounds arising under Section 13(5) and 16(6), which de hors Section 34, the ground for setting aside awards set out in Section 34 are exhaustive. It was observed by their Lordships in Union of India Vs. Bharat Builders 2002 (2) RAJ 576 (DEL) where their Lordships scribed the scope of the jurisdiction of the Court as under:
(a) unless party succeeds in establishing any ingredient of Section 34 does not entitle subvert of awards.
(b) Court does not sit in Appeal nor required to re appreciate or reassess or revaluate the documents/material placed before Ld. Arbitrator.
(c) Even if erroneous view has been taken by the Arbitrator in respect of finding of fact of ingredient of term and clauses of Agreement, the Court should be reluctant to interfere until or unless perversity or nonapplicant of mind or error is writ large on the fact of awards.
8. The Hon'ble Supreme Court further analyzed in detail the CS no. 2372/09 Page no. 10 of 16 scope of powers of the Courts under Section 34 of the Act, in case title ONGC Vs,, Saw Pipes Limited reported at AIR 2003 (SC) 2629. In the back drop of this discussion, let us examine the ground taken by the petitioner to get the award set aside.
9. The first contention of the petitioner is that he is not served by the Ld. Arbitrator before proceeding exparte. Ld. counsel for the petitioner has contended that Ld. Sole Arbitrator has passed exparte award against the petitioner without following due process provide for the service of petitioner but this contention raised by the petitioner does not hold any water as the petitioner himself placed on record annexure 'E' which is a letter written by the advocate of the petitioner to Ld. Arbitrator, Sh. Nitin Chadha, dated 05.03.2009 that non claimant/petitioner will not be able to present on 18.03.2009 before the Ld. Arbitrator. So the petitioner himself admitted this fact vide annexure 'E' that he is knowing about the pendency of CS no. 2372/09 Page no. 11 of 16 arbitral proceedings before the Ld. Arbitrator. So in view of the admission of Ld. counsel for the petitioner, contention of the petitioner deserves to be rejected.
10. The next contention of the petitioner is that award was suffered from the illegality. This contention of the petitioner has been vehemently opposed by the respondent/claimant that no such illegality has been committed by the Ld. Arbitrator during the arbitral proceedings. It is also settled law that illegality must go to root of the matter and if illegality is of trivial nature it can not be held that award is against the public policy. Ld. counsel for the respondent has placed reliance upon case titled as S.R.P. Industries Ltd. Vs. Gea Process Engg. Ltd., 2009 (109) DRJ 186 (DB).
11. In the judgment titled, Govt. of N.C.T. Delhi Vs. Khem Chand, 2003(2) RAJ 437, it was observed by relying upon AIR 1963 SC 677 that a Court should approach an award to support CS no. 2372/09 Page no. 12 of 16 it if it is reasonable, possible rather than to dispute it, by calling it illegal. The law in this regard as it existed prior to enactment of Arbitration and Conciliation Act, 1996 still holds the field. It was further observed that the jurisdiction of the Court when called upon to decide the objections raised by a party against an arbitral award is limited, as expressly indicated in the Arbitration and Conciliation Act, 1996. The court has no jurisdiction to sit in appeal and examine the correctness of the award on merits with reference to the material produced before the arbitrator, it can not sit in appeal over the view of the arbitral Award.
12. Similar view was taken in India Tourism and Development Corporation Vs. T.P. Sharma, 2003(3) Recent Arbitration Judgments 360, wherein it was held that findings of the arbitrator on the factual matrix need not to be interfered with as the Court does not sit in appeal and the Courts are also CS no. 2372/09 Page no. 13 of 16 refrained from reappreciating or reevaluating the evidence or the material before the arbitrator unless perversity is with respect to large on the face of the award or the award suffers from the vice of the jurisdictional error, sanctity of award should always be maintained.
13. All the above said objection is the matter of facts raised against the award in question more akin to those contemplated U/s 30 and 33 of the Arbitration Act, than the ones under the new Act. The scope of Section 34 of the Act which provides for setting aside of the award is far less than U/s 30 and 33 of the old Act, as observed by Hon'ble High Court in numbers of judgment. The ground for setting aside an arbitral award stated in S. 34 of the Act are exhaustive and Court can set aside an arbitral award only if one of the ground mentioned therein is found.
14. Now coming to the last objection raised by the Ld. CS no. 2372/09 Page no. 14 of 16 counsel for the respondent that the present objections are barred by limitation. On bare perusal of arbitral records depicts that Ld. Arbitrator has sent a copy of award to the petitioner on 30.03.2009 as detailed in the receipt vide which a copy of impugned award has been dispatched by the Ld. Arbitrator to the petitioner whereas the present objection/petition has been filed on 14.10.2009 i.e. after expiry of 7 months of passing impugned award. The time for filing of objection under 34 of the Act is 3 months and further the delay of one month can be condoned by the court on the application, if any, moved by the petitioner, but no such application for condonation of delay has been moved by the petitioner. So objection/petition filed against the impugned award dated 27.03.2009 is hopelessly barred by limitation.
15. Otherwise, all the objections raised by the petitioner relates to the assessment of award on the basis of reappraisal CS no. 2372/09 Page no. 15 of 16 of the evidence, their quality and evidentiary value of the evidence adduced by the parties during the course of arbitral proceedings which does not fall in domain of this Court while considering objections under Section 34 of the Act as this Court is not vested with powers to assess the awards as a Court of First Appeal.
16. From the above discussions, I am of the conclusion that the objections raised by the petitioner against the award passed in the above said case by the Ld. Arbitrator are devoid of merits. Therefore, this petition is hereby dismissed. No order as to cost. File be consigned to Record Room.
Announced in the Open Court (VIJAY KUMAR DAHIYA)
On this 16.05.2011. ADJII : ROHINI : DELHI
CS no. 2372/09 Page no. 16 of 16
CS No. 2372/09
16.05.2011
Present: Ld. counsel for the parties.
Vide separate order, the present petition is hereby dismissed. No order as to cost. File be consigned to Record Room.
(VIJAY KUMAR DAHIYA) ADJII(NW):ROHINI:DELHI.
16.05.2011.
CS no. 2372/09 Page no. 17 of 16