IN THE COURT OF SH. HARISH KUMAR : ADDL. DISTRICT JUDGE -13 : CENTRAL DISTRICT ; TIS HAZARI COURTS : DELHI CS No. 616039/2016 In re :- [ENTITY] S/o Shri Bani Ram R/o Vill. & P.O. Kharak Kalan Distt. Bhiwani, Haryana Objector VERSUS 1. [ENTITY] 3384, Deshbandhu Gupta Road, Karol Bagh, New Delhi-110 005 Having one of its Branch Office at: Near Radha Swami Satsang Bhawan, Rohtak Road, Bhiwani, Haryana 2. Sh. [ENTITY], Sole Arbitrator A-9, Ganpati Apartment, 6, Alipur Road, Civil Lines, Delhi-110 054 Respondents Date of institution of present suit : 18.05.2016 Date of hearing arguments : 23.01.2018 Date of Judgment : 23.01.2018 Objection/ Appeal/ Application under Section 34 of The [ACT] against the Impugned Award dt 12.09.2014 passed by the Ld. Arbitrator/Respondent no. 2 in Arb. Case/File No. ARB/BLG/3842/2014, titled as "Shri Ram Transport Finance Co. Ltd. vs. [ENTITY] and ors." JUDGMENT
1. Brief facts as set out in the objection petition is that the objector took a Vehicle Loan of Rs. 5,50,000/- from the respondent no. 1, which was agreed to be repaid in 45 monthly installments including interest @ 10.50% per annum. For availing the loan, several blank, unfilled, stamped papers, later called to be as documents were taken by the respondent no. 1. The respondent CS No. 616039/2016 [ENTITY] vs. [ENTITY] Page No. 1 of 10 no. 1 also did not supply the copies of the said documents to the objector despite several oral requests/reminders.
2. After availing the loan, the objector started making payments and paid 7-8 installments, but due to financial health, the objector became unable to pay the equated monthly installments. As the objector, did not pay the installments regularly, the officials of the respondent no. 1 without any court order, forcibly and illegally took over the actual physical possession of the vehicle on 27.12.2013 and the officials of the respondent no. 1 threatened that they would recover their loan after selling the said vehicle. It is submitted that on 27.12.2013 the objector informed the respondent no. 1 that he had changed his residence from Parnami Mandir Wali, Dadri Gate, Bhiwani, Tehsil and District Bhiwani-127201, Haryana to village and post office Khark Kalan, District Bhiwani, Haryana. It is pertinent to mention here that the officials of respondent no. 1 after taking over possession of vehicle, handed over to M/s Krishna Motor, Aligarh on the same very day for selling the said vehicle. It is also pertinent to mention here that at the time of taking possession of the vehicle, the vehicle was duly ensure and market price at that time was Rs.8,00,000/- approximately.
3. In the second week of May 2016 Shri [ENTITY] handed over some documents to the objector and Respondent No.1 after engaging an advocate came to know that respondent No.1 has filed execution petition in respect of ex-parte award dt 12.09.2014 passed against the petitioner. Hence the present objection petition on the following grounds.
a. Because the impugned Arbitral Award has been passed by the Ld. Arbitrator/Respondent no. 2/Respondent no. 2 without due application of mind and is thus liable to be set aside.
b. Because the impugned award cannot withstand the test of CS No. 616039/2016 [ENTITY] vs. [ENTITY] Page No. 2 of 10 judicial scrutiny and is thus to be set aside.
c. Because the impugned Award is a nullity in the eyes of law and is thus, liable to be set aside.
d. Because there was no proper service of summons/notice of the Ld. Arbitrator/Respondent no. 2/Respondent no. 2. The objector was duly informed that he changed his residence from Parnami Mandir Wali, Dadri Gate, Bhiwani, Tehsil and District Bhiwani-127201, Haryana to village and post office Khark Kalan, District Bhiwani, Haryana and same is mentioned in the seizure memo dated 27.12.2013 while taking over physical possession of the vehicle from the objector. Respondent no. 2 failed to given opportunity to submit objections against the claim of the respondent no. 1.
e. Ld. Arbitrator sent notice for appearance of the objecor inviting objections on 10.03.2014 for on 04.04.2014 and registered post was not received back Ld. Arbitrator presumed that objector was duly served and ordered ex-parte proceedings. Address mentioned on the summons was incorrect as the objector had already informed his fresh correct address to the respondent no. 1, therefore, service should not be presumed to be valid service.
f. Respondent no. 1 intentionally and deliberately did not place the true and correct facts before Ld. Arbitraror regarding actual physical possession of the vehile from the objector on 27.12.2013.
g. Respondent no. 1 has been charging and debiting interest and various others misc. charges at rates and amounts which are manifestly illegal, harsh and exorbitant.
h. Arbitral Tribunal failed to appreciate that as in alleged loan CS No. 616039/2016 [ENTITY] vs. [ENTITY] Page No. 3 of 10 agreement the respondent no. 1 agreed to grant loan agreement to the respondent no. 1 agreed to grant loan to the objector @ 10% per annum and on which rate of interest, the loan was authorised by the respondent no. 1. the calculations comes to Rs. 4,55,442/- however, respondent no. claimed an alleged rate of interest @36% per annum, upon which respondent no. 2 granted pendente-lite and future interest @ 18% per annum. But according to guidelines of RBI that banks will claim interest on base rate basis, upper limit of which was fixed by RBI as 10%.
i. Without prejudice the above ground, the Arbitrator has given interest @ 18% per annum though agreement is only for payment o9f interest at the rate of 10.5 % per annum, hence award is liable to said aside as the same is against the public policy. Arbitrator cannot go beyond the terms of the contract.
j. Award is liable to be set aside in view of the rulings laid down in [PRECEDENT]; [PRECEDENT]; [PRECEDENT]; [PRECEDENT].
k. The impugned award is liable to set aside as Ld. Arbitrator had no jurisdiction to entertain, try and decide the alleged references.
l. The impugned award is liable to be set aside as Ld Arbitrator failed to give proper and just opportunities to the objector, as held by Hon'ble High Court of Delhi in [PRECEDENT] On aforesaid grounds, Petitioner has sought setting aside of the CS No. 616039/2016 [ENTITY] vs. [ENTITY] Page No. 4 of 10 award passed against him.
4. Arguments heard. Arbitral Proceedings perused.
5. 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 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. CS No. 616039/2016 [ENTITY] vs. [ENTITY] Page No. 5 of 10
6. 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.
7. 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 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."
8. 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 CS No. 616039/2016 [ENTITY] vs. [ENTITY] Page No. 6 of 10 a competent one. The court has invariably met those applications by saying, "You have constituted your own tribunal; you are bound by its decision."
9. 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 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."
10. It is otherwise also settled position 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.
11. One of the ground of challenge to award is that petitioner was not at all served in the matter and therefore award is liable to be set aside. Whereas Ld Counsel for the petitioner has drawn attention of the Court to the CS No. 616039/2016 [ENTITY] vs. [ENTITY] Page No. 7 of 10 order 04.04.2014 to contend that since notices sent by way of Regd. Post to the respondents not received back as unserved hence LD. Arbitrator in terms of Clause 27 of the [ACT] presumed due service upon the petitioner and proceeded against them ex-parte, hence it is contended that it cannot be said that petitioner was not served. He has also placed on record order sheets of the Executing Court also to support that petitioner maintains the same address.
12. This Court has gone through the Arbitral Proceedings and found that no notice of statement of claim was issued to the petitioner. On 10.03.2014 Ld Arbitrator issued notice of his appointment to both parties inviting statement of claim/ counter statement of claims, if any, from parties for 04.04.2014. On 04.04.2014 Petitioners did not appear and respondent 1 filed statement of claim with documents but Ld. Arbitrator instead of issuing Notice of the statement of claim proceeded against the petitioner ex-parte without issuing notice of the statement of claim. The earlier notice issued by the Ld. Arbitrator was not in respect of statement of claim. Hence, petitioner is right in contending that he was not served at all.
13. Ld Counsel for respondent No.1 has strongly contended that present petition is time barred as same has been filed much after period of three months and 30 days. Ld Counsel for the petitioner contend that Petitioner came to know of the award only in the first week of May 2016 and therefore he contends that petition filed on 18.05.2016 cannot be said to be time barred.
14. Hon'ble Supreme Court in [PRECEDENT] has categorically held that Court have no power to condone delay beyond 30 days after three months from the date of receipt of award. Thus, it has got to be seen if the present petition is within the time allowed or not. After passing of the award Ld Arbitrator directed serving CS No. 616039/2016 [ENTITY] vs. [ENTITY] Page No. 8 of 10 of award upon the petitioner and accordingly a copy of award was sent to petitioner upon the address given by him in the loan agreement which did not returned unserved.
15. Ld Counsel for petitioner submitted that petitioner has changed address and has accordingly intimated the respondent No.1 when the vehicle in question was repossessed by the respondent No.1. He further contends that admittedly neither notice of appointment of arbitrator nor the award was sent to the petitioner at the new address and hence petition is well within limitation.
16. Perusal of the Inventory List prepared at the time of repossession of vehicle shows that petitioner mentioned his address as resident of Village and Post Karak Kalan, Bhiwani, Haryana. But question is whether mentioning of address only amounts to intimation for change of address for future communication? Answer is NO. If one wants to get the record corrected so as to get recorded his new address for the purpose of communication he must do so consciously inviting attention of the addresses to the said fact. The way petitioner is claiming intimation regarding change of address is not acceptable. Since petitioner never informed the respondent about the change of his address therefore, all notices/award sent to petitioner on the address given in the loan document and which did not returned back unserved, shall be presumed to have been served after 7 days of registered post in view of [SECTION] of the [ACT]. Accordingly, award sent on 17.09.2014 by way of registered post and which did not returned undelivered, must have been served after 7 days from the date of post and accordingly petitioner should have been filed within three months plus 30 days from 25.09.2014 and therefore petition filed on 19.05.2016 is clearly beyond the period of limitation.
17. Besides there is nothing on record to suggest that he changed his address from the one given in the loan documents to the one he claims. He has not placed on record any documents such as Voter I Card, Driving Licence, CS No. 616039/2016 [ENTITY] vs. [ENTITY] Page No. 9 of 10 Electricity bill, Gas Connection Bills etc. to show that he has become resident of Village & P.O Karak Kalan, Bhiwani, Delhi.
Since the present objection petition has been filed beyond 30 days after three months from the receipt of impugned award, hence, present objection petition being barred by limitation is hereby dismissed.
File be consigned to Record Room after necessary compliance.
([ENTITY]) Announced in open Court ADJ-13(Central)/THC (Judgment contains 10 pages) Delhi/23.01.2018 CS No. 616039/2016 [ENTITY] vs. [ENTITY] Page No. 10 of 10