IN THE COURT OF SH. HARISH KUMAR : ADDITIONAL DISTRICT JUDGE -13 : CENTRAL DISTRICT ; TIS HAZARI COURTS : DELHI [CASE NUMBER] In re : 1. Sh. [ENTITY] S/o Sh. Aamin R/o House No. 374, Block 3, Village Pinganwa, Tehsil- Punhan Distt. Mewat, Haryana 2. Sh. [ENTITY] S/o Sh. Kale Khan, R/o Village Dhana, Tehsil- Punhan, Distt. Mewat, Haryana Petitioners Versus M/s Shriram Transport Finance Company Limited Mookambika Complex, 3rd Floor No.4, Lady Desikachary Road, Mylapore, Chennai-600004 Also At: M/s Shriram Transport Finance Company Limited Above Corporation Bnak Delhi-Alwar Road, Sohna, Disttrict- Gurgaon Haryana Respondent Date of institution of petition : 10.03.2016 Date of hearing arguments : 21.04.2018 Date of Judgment : 10.05.2018 ORDER
This order shall dispose of the petition under [SECTION] of [ACT], for setting aside ex-parte award dated 24.03.2014 passed by Ld. Sole Arbitrator Sh. [ENTITY] (ADJ Retd.) in [CASE NUMBER] titled as "Shri Ram transport Finance Co.
[CASE NUMBER] [ENTITY] & Ors. Vs. Sriram Transport Finance Company Limited Page No. 1 of 12 Ltd. V. Sh. [ENTITY] & others".
1. Briefly stated case of the petitioner No.1 availed loan of Rs 4,00,000/- from respondent against the security of vehicle i.e. Bolero bearing registration No. HR74-9240 having Chasis No. MAIZN2GHKB37922 and Engine No. GHB1G74051 vide Loan-cum-Hypothecation agreement No. GRGA10810011 dt. 20.08.2011. Petitioner No.2 stood guarantor to the said loan. Said loan was repaid with 31 equal monthly installments of Rs 16,000/-.
2. Unfortunately on 31.12.2011, the said vehicle was stolen against which an FIR No. 494 was registered under [SECTION] dt 31.12.2011 and an intimation to this effect was given to respondent on the same day. Subsequently the vehicle was traced by police and same was released by court to the petitioner on Superdari. Respondent was also informed of the same. Thereafter petitioner paid the installments pertaining to the month of January February and March 2012. Unfortunately on 11.04.2012, the vehicle met an accident and an FIR No. 77/2012 was registered at Police Station Nagina.
3. Petitioner same day went to the office of the respondent to inform of the accident but the then manager Sh. [ENTITY] and field officer namely Sh. [ENTITY] told the claim pertaining to the theft of the vehicle has received by the respondent and petitioner can take his payment. Petitioner was shocked and surprised as petitioner neither claimed payment for the said theft nor respondent had right to claim the payment. Moreover respondent was regularly receiving monthly installments. Petitioner got an FIR registered against the said officials of the respondent vide FIR No. 320/2012 dt 19.06.2012 with P.S. Nuh, District Mewat.
4. In the month of February 2016 petitioner No.1 came to know that the respondent has filed a execution petition in the court of Sh. [ENTITY], District Judge, Mewat, At Nuh, Haryan vide which petitioner came to know about the passing of the impugned award against the respondent [CASE NUMBER] [ENTITY] & Ors. Vs. Sriram Transport Finance Company Limited Page No. 2 of 12 and received copy of the award in the execution petition from where petitioner came to know that the respondent fraudulently, mischievously, without any basis and at the back of the petitioner or without giving any information to the petitioners appointed the arbitrator and arbitral proceeding was initiated fraudulently. Hence aggrieved of the said impugned award petitioners have preferred the present objection petition under [SECTION] of the [ACT] interalia on following grounds:-
Because the arbitral ex party award is arbitrary unlawful and unjustified and passed against the provision of law and principle of natural justice.
Because the Ld. Sole Arbirator passed the award without giving any op- portunity of being heard to the petitioners.
Because the respondent has fraudulently received entire amount from the insurance on 23.01.2012, from the insurance company to which the petitioner have not raised any claim with respect of the said vehicle and it is also pertinent to mention here that the respondent company after receiving the monthly installment from the petitioner No.1 which is il- legal, unlawful, mischievous and against the provision of law and also against the terms and conditions of the loan agreement.
Because the respondent company intentionally, deliberately and know- ingly concealed the material facts from the sole arbitrator, which de- barred the respondent company from claiming any amount from the pe- titioners.
Because the petitioner has not received any notice of the appointment of Sole Arbitrator and the petitioners had not also received any notice regarding submission of the statement of the claim filed by the respon- dent and proper arbitral proceedings opportunity of being heard was not given to the petitioners.
Because Ld. Arbitrator failed to apply his judicial mind while pasing the impugned award.
Because the Ld. Arbitrator had neither checked the veracity and au- thencity of the fake documents, pleadings, evidence led y the respon- dent nor had applied judicial mind while conducting the enquiry/pro- ceedings and not even consider the statement of account pertaining the [CASE NUMBER] [ENTITY] & Ors. Vs. Sriram Transport Finance Company Limited Page No. 3 of 12 loan/finance of the said vehicle i.e. Bolero while passing the impugned award.
5. On the aforesaid grounds petitioner has sought setting aside of the Arbitration award dated 24.03.2014.
6. Respondent filed reply to the objection petition whereby raising preliminary objection to the effect that petitioner has not been able to give any valid reason for his non-appearance before the arbitrator. It has been further mentioned that petition has been filed beyond the limitation period. It has been stated that ground for challenge under [SECTION] of the [ACT] are limited in scope and the petition to be raised ought to fall strictly and validly within the four corners of the ground specifically mentioned in [SECTION] of the said Act of 1996. It is further stated that grounds of challenge in the petition under reply are in the nature of grounds in the Memorandum of Appeal seeking this Hon'ble Court to re-appreciate the evidence as well as review the reasonableness of the reasons given by Ld. Arbitrator.
7. Arguments were heard on behalf of the respondent but petitioner did not come forward to address argument despite an opportunity being given to them.
8. At this stage, it will be relevant to know the legal position regarding the scope of objection U/[SECTION] of the [ACT] and it will be in the fitness of things to reproduce [SECTION] of the said Act of 1996 which provides the ground for setting aside an arbitral award. The relevant provision reads under:-
"2(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 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 [CASE NUMBER] [ENTITY] & Ors. Vs. Sriram Transport Finance Company Limited Page No. 4 of 12 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 decision 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.
9. In judgment titled [PRECEDENT] relying upon the [PRECEDENT] it was held that a Court should approach an award to support 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 [ACT] still holds the field. It was further observed that the jurisdiction of the Court when called upon to decide the objection raised by a party against an arbitral award is limited, as expressly indicated in the [ACT]. 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 cannot sit in appeal over the view of the arbitrator.
10. In case titled [PRECEDENT] it was held - "In our opinion, the scope of interference of the court is very limited. Court would not be justified in reappraising the material on record and substituting its own view in place of Arbitrator's view. Where there is an error apparent on the face of the record or [CASE NUMBER] [ENTITY] & Ors. Vs. Sriram Transport Finance Company Limited Page No. 5 of 12 the Arbitrator has not followed the statutory legal position, then and then only it would be justified in interfering with the award published by the Arbitrator. Once the Arbitrator has applied his mind to the matter before him, the Court cannot reappraise the matter as if it were an appeal and even if two views are possible, the view taken by the Arbitrator would prevail."
11. In the leading decision of [PRECEDENT], [ENTITY] J. Stated:- "The law has for many years been settled, and remain so at these days, that, where a cause or matters in difference are referred to an arbitrator, whether a lawyer or a layman, he is constituted the sole and final judge of all questions both of law and of fact. Many cases have fully established that position, where awards have been attempted to be set aside on the ground of admission of an incompetent witness or the rejection of a competent one. The court has invariably met those applications by saying, "You have constituted your own tribunal; you are bound by its decision."
12. In case title [PRECEDENT] Supreme Court held:-
"An award being a decision of an arbitrator whether a lawyer or layman chosen by the parties and entrusted with power to decide a dispute submitted to him is ordinarily not liable to be challenged on the ground that it is erroneous. In order to make an Arbitration effective and the award enforcible, machinery is device for lending the assistance of the ordinary courts. The court is also entrusted with power to modify or correct the award on the ground of imperfect form or clerical errors or decision on questions not referred, which are severable from those referred. The court has also power to remit the award when it has left some matters refer undetermined, or when the award is indefinite or where the objection to the legalities of the award is apparent on the face of the award. The court may also said aside an award on the ground of corruption or misconduct of the arbitrator, or that a party has been guilty of fraudulent concealment or willful deception. But the court cannot interfere with the award if otherwise proper on the ground that the decision appears to it to be erroneous. The award of the arbitrator is ordinarily final and conclusive, unless a contrary intention is disclosed by the agreement. The award is the decision of a domestic tribunal chosen by the parties, and the Civil Courts which are entrusted with the power to facilitate Arbitration and [CASE NUMBER] [ENTITY] & Ors. Vs. Sriram Transport Finance Company Limited Page No. 6 of 12 to effectuate the award, cannot exercise appellate powers over the decision. Wrong or right the decision is binding if it be reached fairly after giving adequate opportunities to the parties to place their grievances in the manner provided by the Arbitration agreement."
13. It is otherwise also settled provision of law that Arbitrator are selected by parties and when parties have themselves chosen to get their dispute adjudicated through an Arbitrator of their choice and upon whom they had reposed faith in the wisdom of the said arbitrator then they should not have grievance to say that Arbitrator should not have acted the way he acted.
14. Keeping in mind the aforesaid principal as noted above and seen in the background of aforesaid principal, it has got to be seen if present petition is sustainable or not. Admittedly, present award is an ex-parte award , therefore, there is nothing against the contents of the claim petition which could be said to have not been account by the Ld. Arbitrator while passing the impugned award. Obviously when there is no counter version and when version of the claimant is not against the usual course of business or nature of human conduct, Ld. Arbitrator can be faulted with for his conclusion. Whether respondent concealed material fact cannot be anticipated by Ld. Arbitrator unless alleged counter truth is placed before him. It is not the case of the petitioners that facts of the respondent as pleaded by the respondent in its claim petition itself dis-entitled the respondent from relief or no person of ordinary prudence could have arrived at such conclusion as was arrived by the Ld. Arbitrator. Hence, on merits so far as ex-parte proceedings and findings are consideration award cannot be questioned.
15. LD. Counsel for the respondent has argued that present objection petition has not been filed with the period of three months and 30 days as laid down, from the receipt of award, hence objection is not maintainable. Ld Counsel for the petitioner has argued that petitioner received the copy of the award only in execution petition in the February, 2016 and therefore present [CASE NUMBER] [ENTITY] & Ors. Vs. Sriram Transport Finance Company Limited Page No. 7 of 12 objection petition is well within time. Ld. Counsel for the respondent has contended that Ld. Arbitrator immediately after passing of the award has got sent the copy of award at the correct address of the petitioners and postal receipts are there available in the Arbitral proceedings and therefore limitation for filling the present objection start from the delivery of the copy of award. Ld. Counsel for the respondent has relied upon [PRECEDENT] Subhiksha Trading Services Ltd. [CASE NUMBER] decided by Hon'ble Delhi High Court on 3.12.2010 to contend that copy of award sent at correct address of the petitioner can be deemed to have been served upon the petitioners. Ld. Counsel for the petitioner has submitted that petitioners did not receive the copy of award allegedly sent by Ld. Arbitrator and therefore limitation cannot be computed from the said date. Ld . Counsel or the petitioner despite availing opportunity to cite case law in support of his contention has not been able to cite any case law on the point involved.
16. There is no dispute that the address given on the statement of claim as well as on impugned award is the same as has been given by the petitioner in the present objection petition. It is also not the case of the petitioners that during the relevant time i.e. when award was allegedly sent they were not in town and an intimation to this effect was given to the concerned post office Hence in this circumstance it has got to be seen what is the effect of sending award by registered post.
17. In [PRECEDENT], the notice sent by the landlord to the tenant by registered post was received back with the endorsement "left without address returned to sender". The relevant statutory provision which in the case before Hon'ble Supreme Court was [SECTION] of [ACT] which provided for receipt of a notice of demand of rent by the tenant. The question which came up for consideration before the Court was as to whether the notice sent by registered post could be said to have been served and the [CASE NUMBER] [ENTITY] & Ors. Vs. Sriram Transport Finance Company Limited Page No. 8 of 12 tenant could be said to have received it. It was observed by the Court all that a landlord can do to comply with the requirement of sending notice is to post a pre-paid registered letter, containing the tenant's correct address, and once he does this and the letter is delivered to the post office, he has no control over it. It is then presumed to have been delivered to the addressee under [SECTION] of [ACT]. It was further observed that a tenant can so many way manipulate the matters that the notice gets returned to the sender with vague endorsement such as "not found" "not in station", "addressee has left" and so on. It was contended before the Court that a landlord knowing that the tenant is away from the station for some reasons, could go through the motions of posting a letter to him which he knows will be served. Recognizing such a possibility, the Court was of the view that if a registered letter, addressed to a person at his residential address does not get served in the normal course and is returned, it can only be attributed to the addressee's own conduct and that if he is compelled to be away for some time, all that he has to do is leave necessary instructions with the postal authorities either to detain the letters addressed to him for some times until he returns or to forward them to the addressee where has gone or to deliver them to some other person authorized by him.
18. In [PRECEDENT], the notice sent under [SECTION] of [ACT], was returned with endorsement "addressee absent" and "intimation served on addressee's house". Observing that giving of notice is distinguished from receiving of notice, it was observed by Hon'ble Supreme Court that a person gives notice to another by taking such steps as may be reasonably required to inform the other in the ordinary course, whether or not such other actually comes to know of it. It was further observed that if a strict interpretation is given that the drawer should have actually received the notice, for the period of 15 days to start running, no matter that the payee sent the notice on the correct address, a trickster cheque drawer would get the premium [CASE NUMBER] [ENTITY] & Ors. Vs. Sriram Transport Finance Company Limited Page No. 9 of 12 to avoid receiving the notice by different strategies and he could escape from the legal consequences of [SECTION] of the Act. It was held that when a notice is returned by the sender as unclaimed such date would be the commencing date for reckoning the period of 15 days contemplated in Clause
(c) to the proviso of [SECTION] of the Act. Of course such reckoning would be without prejudice to the right of the drawer of the cheque to show that he had no knowledge that the notice was brought to his address.
19. In [ENTITY] Shivappa vs. Nanda Belliappa (2006) 6 SCC 456, Hon'ble Supreme Court while dealing with a notice issued under [SECTION] of [ACT] and sent by registered post inter alia observed as under:
"This leaves us with the third situation where the notice could not be served on the addressee for one or the other reason, such as his non availability at the time of delivery, or premises remaining locked on account of his having gone elsewhere etc. etc. If in each such case the law is understood to mean that there has been no service of notice, it would completely defeat the very purpose of the Act. It would then be very easy for an unscrupulous and dishonest drawer of a cheque to make himself scarce for sometime after issuing the cheque so that the requisite statutory notice can never be served upon him and consequently he can never be prosecuted."
20. In [PRECEDENT], dealing with a case where the notice could not be served on account of the fact that the door of the house of the drawer was found locked, Hon'ble Supreme Court held that the principle incorporated in [SECTION] of [ACT] will apply to a notice sent by post and it would be for the drawer to prove that it was not really served and he was not responsible for such non- service.
21. In [PRECEDENT], the [CASE NUMBER] [ENTITY] & Ors. Vs. Sriram Transport Finance Company Limited Page No. 10 of 12 respondent managed to have the notice returned with postal remarks "not available in the house", "house locked" and "shot closed". It was held that the notices had been served on the respondents.
22. In [PRECEDENT], a Three-Judges Bench of Hon'ble Supreme Court was called upon to re-consider an earlier decision of Two-Judges Bench in the case [ENTITY] (supra), Hon'ble Supreme court reiterated that where the payee dispatches the notice by registered post with correct address of the drawer of cheque, the principle incorporated in [SECTION] of [ACT] would be attracted. During the course of the judgment, the Court, inter alia, observed as under:-
"[SECTION] gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to be address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business."
23. Coming to the case in hand before, from the perusal of the arbitral proceedings it is evident that copy of impugned award was sent be to the petitioners by way register post on 01.04.2014 and same has not received back. It has already been noted above that there is no dispute about the address of the petitioners. Hence, in view of the law discussed above as laid down by Hon'ble Supreme Court petitioners can be deemed to have been served with copy of award on 8.04.2014 i.e. 7 days after the same was posted by registered post. Hence, objection petition filed on 10.03.2016 is grossly time barred.
24. For the same reason petitioners can also be deemed to have been [CASE NUMBER] [ENTITY] & Ors. Vs. Sriram Transport Finance Company Limited Page No. 11 of 12 served with notice of appointment of arbitrator and notice of the statement of claim. No sufficient reason has been shown that he was prevented by any sufficient cause to contest the arbitration claim before the Ld. Arbitrator. Irrespective of the fact that present objection petition is not within limitation, petitioner has not been able to show that he was not served with notice of the statement of claim petition or date and venue of arbitration.
In view of the above discussion the objection petition under [SECTION] of the [ACT] is hereby dismissed.
File along with arbitral proceedings be consigned to record room after necessary compliance.
([ENTITY]) Announced in the open Court. ADJ-13(Central)/THC (Judgment contains 10 pages) Delhi/10.05.2018 [CASE NUMBER] [ENTITY] & Ors. Vs. Sriram Transport Finance Company Limited Page No. 12 of 12