F.A.O No.2885 of 2008 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. F.A.O No.2885 of 2008 Date of Decision: 12.11.2009 M/s Puneet Construction Company ....Appellant Versus Union of India ...Respondent CORAM : Hon'ble Ms. Justice Nirmaljit Kaur Present:- Mr. Vipin Mahajan, Advocate for the appellant. Mr. Ram Chander, Advocate for the respondent. ***** 1. Whether Reporters of Local Newspapers may be allowed to see the judgment ? 2. To be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest ? ** NIRMALJIT KAUR, J. This is an appeal against the Order dated 10-05-2008 passed by the District Judge, Gurdaspur, vide which, the objection petition under Section 34 of the Arbitration and Conciliation Act, 1996, moved by the appellant for setting aside the arbitral award dated 29-05-2003, was rejected. Learned counsel for the appellant submitted that the Arbitrator vide ex-parte award dated 29-05-2003, awarded an amount of Rs.2,64,815/- in favour of the respondent and against the appellant. While dismissing the petition, the District Judge, Gurdaspur, F.A.O No.2885 of 2008 2 held the following issues against the appellant :- 1. Whether there are sufficient grounds to set aside the award dated 29-05-2003 as alleged the application? OPP 2. Whether the application is within time? OPP Thereby, holding that the appellant had due notice and did not appear inspite of notice. Secondly, the same was time barred. While challenging the said impugned order and award, learned counsel for the appellant has raised two fold arguments. Firstly, The appellant step into the witness box as AW/1 and specifically stated on oath that he was not served with any notice by the Arbitrator to appear before him for arbitration proceedings. He was cross examined, but nothing favourable to the respondent came up in the cross examination. The respondent, in support of their claim, produced one witness, namely, Subedar Major Balwinder Singh, who stated that award was not passed in his presence. No postal receipt in support of sending registered letter to the appellant was produced before the District Judge. Therefore, the District Judge gravely erred in reaching to the conclusion that the appellant was served with the notice. Secondly, the appellant appeared for the first time in pursuance of the summon, issued by the District Judge and received on 29-11-2003 to appear on 20-12-2003. The objection application was filed on 17-01-2004, within a period of 30 days, as required under Section 34(3) of the Arbitration and Conciliation Act, 1996. The District Judge erred in holding that the appellant was served on 29-11-2003 and therefore, 30 days' period is to be counted from that date. Whereas, on 29-11-2003, the appellant was only served to appear before the District Judge on 20-12-2003. When the appellant appeared on 20-12-2003, he came to know about the ex-parte arbitration award. If 30 days' period is to be F.A.O No.2885 of 2008 3 counted from 20-12-2003, the application is within the time. Prior to 20-12-2003, the appellant was not aware about the ex-parte arbitration award. Therefore, the findings of the District Judge, Gurdaspur, on issue No.2 are liable to be set aside. Learned counsel for the respondent, on the other hand, submitted that the appellant, while appearing as AW-1, has admitted that he has been residing at the address given in his affidavit, Ex. A.1 and was present at that address through-out the year 2002-2003 and that being so, a presumption of service of various registered notices upon him arises in terms of Section 27 of the General Clauses Act, 1897. That being so, the contention that the appellant was not served during arbitration proceedings, is liable to be rejected. Secondly, that no application for condonation of delay, having been filed, the petition cannot be said to be within time. Moreover, no question was put to RW-1 Subedar Major Balwinder Singh, with respect to the receipt of letters, having been sent under registered cover. As such, it cannot be said that the registered letters were not issued just because no receipt was produced. Learned counsel for the parties were heard at length. The main issue, involved in the present case is, as to whether, the respondent can take advantage of Section 27 of the General Clauses Act, 1897. The said Section reads as under :- “Where any Central Act or Regulation made after the commencement of this Act authorizes or requires any document to be served by post, where the expression “serve” or either of the expressions “give” or “send” or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre- paying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the F.A.O No.2885 of 2008 4 letter would be delivered in the ordinary course of post.” From the facts and the records, it transpires that letters dated 30-11-2002, 09-01-2003, 20-01-2003, 04-02-2003, 19-02-2003, 05-04-2003 and 05-05-2003 and other similar letters were addressed to M/s Puneet Construction Company, Onkar Nagar, near Gurudwara, Police Line, Gurdaspur (Punjab) and it was duly mentioned in these letters that the same were being sent under registered cover. However, there is no such receipt of despatch has been pointed out from the record of the case. Thus, the admission of the appellant AW-1 that he was residing on the given address i.e. Onkar Nagar, near Gurudwara, Police Line, Gurdaspur (Punjab), will not cover the case under Section 27 of the General Clauses Act, 1897. A careful reading of Section 27 of the General Clauses Act, 1897, says that there has to be a prove of the fact that the said registered letter was posted on the address. Unless and until, the prove of the despatch of the letter to the particular address is not brought on the record, it cannot be said that the service has been effected. Learned counsel for the respondent, however, stated that RW-1 Subedar Major Balwinder Singh, had appeared along with the record and he had duly filed his affidavit. In his affidavit, he has stated as follows:- “ The applicant did not turn up, nor submitted any claim/pleading in defence before the Arbitrator. Thereafter fresh registered letter was issued to the applicant vide letter No.P/BKG/Arb/GSR-13/9/E8 dated 19 Feb 2003 to submit pleading in defence by 28.2.2003 but the applicant did not respond. Again Registered letter No.P/BKG/Arb/GSR-13/10 dated 05 April 2003 was issued to the applicant to submit pleading in defence by 15 April 2003 otherwise the case will proceed exparte. But the applicant did not care to submit any reply/defence.” Reliance has been placed on the judgment of Hon'ble the F.A.O No.2885 of 2008 5 Apex Court, rendered in the case of M/s Green View Radio Service vs. Laxmibai Ramji & another 1991 Civil Court Cases 314. In that case, the statement of appellant that he had not received the registered post, was disbelieved. It was otherwise observed that the presumption of the service of notice arises when the acknowledgment is received, showing its receipt. However, the said presumption can be rebutted by the addressee by appearing as a witness and stating that he never received such letter. If his testimony is accepted then the burden shifts on the plaintiff who wants to rely on such presumption to prove by oral or documentary evidence to prove the service of such letters on the addressee and accordingly, it was held in para 3 of the same as under :- “3. In this connection, we may also point out that the provisions of Section 106 of the Transfer of Property Act require that notice to quit has to be sent either by post to the party or be tendered or delivered personally to such party or to one of his family members or servants at his residence or if such tenant or delivery is not practicable, affixed to a conspicuous part of the property. The service is complete when the notice is sent by post. In the present case as pointed out earlier, the notice was sent by the plaintiff's advocate by registered post acknowledgment due. The acknowledgment signed by the party was received by the advocate of the plaintiff. Thus, in our view the presumption of service of a letter sent by registered post can be rebutted by the addressee by appearing as witness and stating that he never received such letter. If the acknowledgment due receipt contains the signatures of the addressee himself and the addressee as a witness states that the never received such letter and the acknowledgment due does not bear his signature and such statement of the addressee is believed then it would be a sufficient rebuttal of the presumption drawn against him. The burden would than shift on the plaintiff who wants to rely on such presumption to satisfy the Court by leading oral F.A.O No.2885 of 2008 6 or documentary evidence to prove the service of such letter on the addressee. This rebuttal by the defendant of the presumption drawn against him would of course depend on the veracity of his statement. The Court in the facts and circumstances of a case may not consider such denial by the defendant as truthful and in that case such denial alone would not be sufficient. But if there is nothing to disbelieve the statement of the defendant then it would be sufficient rebuttal of the presumption of service of such letter or notice sent to him by registered post.” In the present case, there is nothing to show that the registered letters were dispatched or whether they were received or not. No receipt with respect to its dispatch or acknowledgment received, showing its receipt, has been placed on record. The appellant duly appeared as AW-1 and put forth his testimony that he had not received any such letter. Thus, thereafter, it was upon the respondent to prove the service of such letter on the addressee. No postal receipt in support of sending the registered letter to the appellant was produced. No postal receipt is found to be attached in support of the registered letters. When no postal receipts were produced, the presumption of delivery cannot be raised. There is no acknowledgment. Section 27 of the General Clauses Act, 1897, may come into play if acknowledgment was sent along with the registered letter, if any. In the present case, it is apparent that there was no acknowledgment card attached. Hence, the question of its having been received back with due acknowledgment does not arise. In such a situation, there is no service as per Section 27 of the General Clauses Act, 1897. The learned counsel for the respondent, however, submitted that the appellant did not put any question to the witness RW-1 with respect to the receipt of these letters. However, I do not find any merit in F.A.O No.2885 of 2008 7 the argument so raised by learned counsel for the respondent, as much as, in case, the respondents were in possession of the receipt, then the same was best evidence to produce that the Registered letters had been duly received by the appellant and they were duly served. Not having produced the receipts on record invites adverse inference against the respondent. Even the affidavit submitted by RW-1 Subedar Major Balwinder Singh, which is relied upon by the respondent, is silent and not a word has been mentioned about the receipt of these registered letters. Even otherwise, there is no reason as to why the appellant should not have appeared to contest the claim, in case, they had been duly served. It is obvious that they had no knowledge of the appointment of the Arbitrator or the award till 29-11-2003 i.e. the date, when the summons for the execution of the award were received. Thus, the findings recorded by the District Judge, Gurdaspur, that the appellant did not appear before the Arbitrator, inspite of the knowledge that the Arbitrator had been appointed, cannot be sustained and the same is, accordingly, set aside. Once, it is held that the appellant was not served and nor did, he receive the letters or the award, it transpires that the appellant learnt about the award and the execution proceedings for the first time on 29-11-2003. It is not denied that the appellant had received the summons of the execution proceedings on 29- 11-2003 for 20-12-2003. Thus, taking 29-11-2003, as the date of the knowledge of the award, the petition filed on 17-01-2004 is well within the limitation period, as prescribed under Section 34(3) of the Arbitration and Conciliation Act, 1996, which is as under :- “34(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under Section 33, from the date on which that F.A.O No.2885 of 2008 8 request had been disposed of by the Arbitral Tribunal: Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.” Three months' period from 29-11-2003, when he first learnt about the award, expired on 28-02-2004. The petition was filed on 17-01-2004. Thus, the same would be within the limitation. Thus, the following conclusion by the District Judge, while holding the same to be time barred, is contradictory, which is as follows :- “ XXX XXX XXX 25. Though it is neither here or there that the petitioner was not aware of making of the Award of May 29, 2003 but even if the plea that petitioner came to know of passing of the award during pendency of the execution proceedings is accepted to be correct, though arguendo, it transpires that the petitioner was served in the execution proceedings on 29-11-2003 and even if the explanation was found to be valid for not presenting the petition within period prescribed by sub-section (3) of Section 34 of the Arbitration and Conciliation Act, 1996, it has been laid down that even if Court is satisfied that the petitioner was prevented by sufficient cause from making petition within three months, petition filed beyond 30 days of the expiry of those three months, cannot be entertained. Thus, petition filed on 17-01-2004, cannot be said to be within time by any stretch of imagination, the date of award being May 29,2003. The limitation cannot be taken from the date of the award but from the receipt of the award. The award was never received by the appellant. He came to know about the award of the execution proceedings for the first time on 29-11-2003, when he was served to the execution F.A.O No.2885 of 2008 9 proceedings. Thus, the limitation has to be counted from this date. Thus, the conclusion of the District Judge, Gurdaspur that the petition filed on 17-01-2004, is not within time, cannot be accepted, by any stretch of imagination. Under Seciton 34(2)(iii) of the Arbitration and Conciliation Act, 1996, the award can be set aside, in case, 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. The award, as already held above, is ex parte and passed without proper notice to the appellant. The Objection Petition under Section 34 of the Arbitration and Conciliation Act, 1996 was also well within limitation. In view of the above, the Order dated 10-05-2008 passed by the District Judge, Gurdaspur, is set aside. However, the parties are at liberty to proceed afresh, in accordance with law. The appeal is allowed in the above terms. (NIRMALJIT KAUR) 12.11.2009 JUDGE gurpreet