IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. F.A.O. No. 892 of 2007 Date of Decision: October 4, 2008 Smt. Sunanda Bajaj and another .....Appellants Versus Sanjeev Kochhar and another .....Respondents CORAM: HON’BLE MR JUSTICE T.P.S.MANN Present : Mr. Narender Hooda, Advocate for the appellants. Mr. Ashwani Gaur, Advocate for respondent No.1. ***** T.P.S.MANN, J ., Objection petition filed by the appellants under Section 34 of the Arbitration and Conciliation Act, 1996(hereinafter referred to as “the Act”), against the award dated 23.9.2003 passed by respondent No.2 was dismissed by learned Additional District Judge, Panipat, on 18.1.2007 by holding that no ground was available to them to get the award set-aside. However, the rate of interest was reduced from 24% per annum to 9% per F.A.O. No. 892 of 2007 -2- annum from the date of award. Aggrieved of the same, the appellants filed the present appeal under Section 37 of the Act. According to the case, as set up by respondent No.1, he was in the business of finance. Shri Satish Bajaj, husband of appellant No.1 and father of appellant No.2 obtained a loan of Rs.2,50,000/- from him on 10.8.2000 in connection with his family and business affairs. At the time of issuance of loan, the parties entered into an agreement containing terms and conditions of the loan. Shri Satish Bajaj also executed a pronote-cum-receipt of the said amount. He agreed to repay the loan amount with interest @ 24% per annum within a period of two years or on demand of respondent No.1. The loanee was not able to return the loan in his lifetime as he died in a road accident. Accordingly, respondent No.1 served a legal notice upon the appellants, being legal heirs of Shri Satish Bajaj, to repay the loan amount, but it was of no avail. As on 9.9.2002, a sum of Rs.3,75,000/- was due from them, respondent No.1 invoked the arbitration clause of the agreement and reported the matter to respondent No.2, who was named as the sole Arbitrator in the agreement. The Arbitrator issued notices to the appellants through registered AD post as well as Under Postal Certificate(UPC) on 19.10.2002 for appearing before him on 7.11.2002. The registered notice was received by Smt. Sunanda Bajaj-appellant on her behalf and on behalf of her son Amit Bajaj-appellant No.2. In spite of the same, they did not appear before the Arbitrator to contest the claim of respondent No.1. The Arbitrator sent fresh notices to the appellants F.A.O. No. 892 of 2007 -3- through registered AD post as well as through UPC for their appearance on 25.11.2002. In spite of the service, the appellants did not appear. Still, once again the Arbitrator sent notice to Amit Bajaj-appellant No.2 on 21.1.2003 for 4.2.2003, but the same was received back with the endorsement that the addressee did not accept the same. Under these circumstances, the Arbitrator proceeded ex parte against the appellants and after hearing respondent No.1 passed the award on 23.9.2003 awarding the aforementioned amount of Rs.3,75,000/- to respondent No.1 along with interest @ 24% per annum with effect from the date of reference till its realization. Respondent No.1 was further awarded a sum of Rs.3,750/- as arbitration fee and Rs.500/- towards miscellaneous expenses including the costs of stamp papers. The appellants then filed an objection petition under Section 34 of the Act for setting aside the award on various grounds. Respondent No.1 filed his reply. As mentioned above, the objections submitted by the appellants were dismissed by learned Additional District Judge, Panipat. However, the rate of interest was reduced to 9% per annum from the date of award. I have heard learned counsel for the parties and perused the impugned order and the award. The main contention submitted on behalf of the appellants is that the appellants were not party to the agreement said to have been arrived at between Shri Satish Bajaj and Sanjeev Kochhar-respondent No.1. Further that they did not inherit any property of said Shri Satish F.A.O. No. 892 of 2007 -4- Bajaj, who in fact left behind no property after his death on 4.9.2000 in a road accident. Therefore, they could not be made to suffer the recovery proceedings in execution of the award obtained by respondent No.1. There is sufficient material on the file from which it stand established that Shri Satish Bajaj, predecessor-in-interest of the appellants obtained a loan of Rs.2,50,000/- from Sanjeev Kochhar- respondent No.1 on 10.8.2000 for utilizing the said amount in his family and business affairs. Said Shri Satish Bajaj executed and signed the pronote-cum-receipt while agreeing to repay the loan amount with interest within a period of two years or on demand by paying the interest @ 2% per month. A formal agreement was drawn up between Shri Satish Bajaj and Sanjeev Kochhar-respondent No.1 on the same very day. In para 4 of the agreement, it was specifically mentioned that in case of non- payment of the amount by Shri Satish Bajaj, Sanjeev Kochhar would have a right to recover the same with interest from the assets of Satish Bajaj and from his legal heirs. Moreover, under the provisions of the Act, the award could be enforced against legal heirs of the person bound by the award or against those persons upon whom the property of the deceased devolved. Though the appellants denied that they did not inherit any property from Satish Bajaj yet learned counsel for respondent No.1 produced copy of the revenue record in the shape of jamabandi for the year 1999-2000, as per which Satish Kumar son of Kasturi Lal was owner to the extent of 53/266 share in khasra no. 89, killa No. 23(6-13) and killa No.25(6-13). F.A.O. No. 892 of 2007 -5- On 10.4.2002 the mutation of the share of land belonging to Satish Kumar was sanctioned in favour of his widow Smt. Sunanda, his son Amit and his two daughters, namely, Supriya and Shweta. It is another thing that on 9.7.2002, aforementioned widow, son and daughters of Satish Kumar sold the entire land, which devolved upon them after the death of Satish Kumar, in favour of one Ajay Partap son of Data Ram vide sale-deed No. 2909. When confronted with the said revenue record, learned counsel for the appellants had no satisfactory reply except to say that the appellants had already sold the entire land for a sum of Rs.1,05,000/- and now they have nothing left from which they could repay the loan amount. During the pendency of the appeal in this Court, an order was passed on 12.11.2007 directing the appellants to satisfy at least 50% of the awarded amount. However, till date the appellants have not complied with the directions. Learned Additional District Judge, Panipat while passing the impugned order was, thus, justified in holding that no ground was available to the appellants to get the award set-aside. However, the appellants were given the benefit in the shape of reduction of the rate of interest from 24% per annum to 9% per annum. In view of the above, there is no merit in the appeal which is, accordingly, dismissed. ( T.P.S. MANN ) October 4, 2008 JUDGE ajay-1