1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE CIVIL JURISDICTION ARBITRATION APPEAL (ST.) NO. 3384 OF 2010 IN ARBITRATION PETITION NO. 762 OF 2007 WITH CIVIL APPLICATION NO. 5 OF 2010 R.M.H. Diesels Private Limited. ... Appellant. V/s. Kirloskar Oil Engines Limited. ... Respondent. Mr. Narayan Sahu i/b. Mr. Santosh Pawar for the Appellant. Ms. Pallavi N. Dabholkar for the Respondent. CORAM : S.C. DHARMADHIKARI,J. DATED : 12th MARCH 2010. P.C. :- This Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 impugns an order passed by the learned District Judge – III, Pune in Arbitration Petition No. 762 of 2007. 2. By the order dated 11th November 2009, the learned District Judge dismissed the Arbitration Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 which was directed against the Award made by the Sole Arbitrator. The Award of the Sole Arbitrator is delivered on 21st August 2006. By the Award, the Appellant – Opponent was directed to furnish Respondent – Claimant, “C” Forms with respect to the invoices mentioned in Annexure ‘A’ to the claim statement within three weeks from the date of the Award. The Appellant was directed to furnish “Form 17” 2 with respect to the invoices mentioned in Annexure ‘B’ with the claim statement. This had to be done within three weeks from the date of the Award, failing which the Appellant was to pay a sum of Rs.36,05,097/-, alongwith interest from the date of the claim petition till the amount is paid together with cost of arbitration quantified at Rs. 25,000/-. 3. It was this Award which was impugned in the Petition under Section 34 filed before the learned District Judge. 4. The learned Counsel appearing on behalf of the Appellant contended that the Award of the learned Arbitrator was an exparte Award. The Appellant had no opportunity to participate and defend in the arbitral proceedings. The Award proceeds to state that the Appellant had notice of the Arbitral proceedings. However, the Appellant through the Advocate had forwarded to the Sole Arbitrator a letter objecting to his jurisdiction and invited a ruling from the Arbitrator in that behalf. Instead of giving any ruling on the issue of jurisdiction which was squarely raised, the Arbitrator proceeded with the matter and delivered the Award. Further, on merits also, there was ample evidence to indicate that the requisite forms were forwarded to the Respondent – Claimant and there was no default in that behalf. The Respondent had relied upon two letters in which a specific stand was taken by the Appellant that the “C” forms were forwarded and were duly received. In such circumstances, the learned District Judge was in complete error in dismissing the Petition on the ground that the Appellants have failed to make out any case for setting 3 aside the Award. 5. On the other hand, the Respondent’s Counsel would urge that this is an Appeal against the rejection of the Petition under Section 34 of the Arbitration and Conciliation Act, 1996. The District Judge considered the pleas and contentions of both sides and arrived at a conclusion that no case is made out for interference with the Award. The District Judge has found no substance in the arguments that the Arbitral proceedings proceeded exparte and there was no prejudice to the Appellant. Further, on merits also, there was no proof submitted to the Arbitrator or the learned District Judge by the Appellant to the effect that the “C” Forms were forwarded and duly received. In such circumstances and when this plea of the Forms having been forwarded was raised in response to the Arbitration notice, then, all the more, it does not inspire any confidence and has been rightly rejected by the District Judge. In these circumstances, the concurrent findings recorded should not be interfered with and the Appeal be dismissed. 6. With the assistance of the learned Counsel appearing for both sides, I have perused the Award and the Order of the learned District Judge. With their assistance, I have also perused some of the annexures in the Appeal paper- book. To my mind, no case is made out for interference with the order of the District Judge, in my Appellate Jurisdiction. 7. The first contention of the learned Counsel appearing for the Appellant that the Arbitrator proceeded exparte is 4 devoid of any merit. The Arbitrator has recorded that the Appellant had sufficient notice of the Arbitral proceedings. This reasoning of the Arbitrator is supported by the fact that on 23rd September 2005 and on 24th September 2005, a notice was issued by the Respondent – Claimant’s Advocate to the Appellant. Therein, in paragraph 6 it was in clearest term stated that the Respondents have invoked Clause 59 and appointed Mr. M.R. Paranjape as Sole Arbitrator. His address was duly set out and further, the Respondents stated that they would be filing their statement of claim. 8. This letter was duly replied by the Appellant through their Advocate on 3rd November 2005. There a plea was raised on merits of the claim and it was further urged that the unilateral appointment of the Sole Arbitrator of Mr. Paranjape is not acceptable. It was stated that the arbitration was unwarranted. It was stated that the Appellant would resort to proper legal proceedings in case the Respondents – Claimants do not accept their stand in the letter of 3rd November 2005. 9. It is this very letter which was placed before the Sole Arbitrator and from which an interference and conclusion has been drawn by him that the Appellant had sufficient notice of the arbitral proceedings and the claim of the Respondents – Claimants. This conclusion of the Arbitrator is affirmed by the District Judge. He has also observed that the Appellant had sufficient notice of the arbitral proceedings. In such circumstances, the argument now raised that the Award is in breach of principles of natural 5 justice being exparte cannot be accepted. Far from demonstrating any prejudice, the actions of the Appellant go to show that they were aware of the arbitral proceedings and hence, their absence therefrom cannot be a matter to their advantage. 10. The first contention of the learned Counsel must therefore fail. 11. As far as the merits are concerned, in their statement of claim and prior correspondence, the Respondent had taken a specific plea that the forms for the invoices pertaining to the financial year 2002-2003 which are mentioned in the enclosed statement of the invoices (annexures to letter dated 24th September 2005) have not been forwarded and therefore, the Respondents were required to pay the differential sales tax and the amount paid has been also set out. 12. To this letter, a reply is sent on 11th November 2005, in which a reference is made by the Appellant to their letter dated 15th May 2004. A copy of the letter dated 15th May 2004 is annexed at page 47 of the paper-book and paragraph 2 thereof reads thus :- “2. It is true to state that my client was the dealer of your client for marketing the diesel engines. But it is false to allege that in spite of many reminders, my client has not furnished “C” Form under the Sales Tax Act to your client in respect of each order pertaining to the financial 6 year 2002-03. On verification of the records, my client informs me that he had already sent the “C” Form to you for the bill amount of Rs. 55,08,233.28 Ps. Under Serial No.PY/C No.917337 dated 28.2.2003 along with the Form XVII for No. 289143 to 289146 dated 29.2.2004. Which were handed to your client’s Regional Manager of Chennai. Mr. V.D. Sivakumar, in person during March, 2004. But the xerox copy of such “C” Form was already sent on 15.11.2003 itself.” 13. This stand is reiterated in the letter dated 3rd November 2005 (see paragraph 2 page 58). It was open for the Appellants to have produced proof of their forwarding such letters and receipt thereof by the Respondents – Claimants. They could have examined a witness and also cross examined the witnesses of the Respondents – Claimants, whose affidavits have been relied upon by the Arbitrator. The Arbitrator was in no error in placing reliance upon the uncontroverted statements on affidavit and the claim statement. The Arbitrator has relied upon the deposition of two witnesses. The documents and their contents have been proved by the witnesses. Beyond sending a letter dated 3rd November 2005, the Appellants did not participate in the Arbitral proceedings. They have not cross examined the witnesses. They have not produced any proof of the Respondents having received the requisite forms and within the stipulated period. Paragraph 2 of the contents of the letter which have been reproduced by me would demonstrate that the Appellant admits that it was a dealer of the Respondents for marketing diesel engine. If 7 indeed they had forwarded the requisite forms and had also produced the details in that behalf, the stand of the Respondents could have been easily falsified. That stand has been taken throughout and known to the Appellant. It is not as if the Respondents did not make any demand prior to the arbitral proceedings. It was their stand that they have not received “C” Form. If the “C” Form were sent way back on 15th November 2003, nothing prevented the Appellants from producing the requisite proof. 14. In the absence of any such proof, neither the Arbitrator nor the learned District Judge was in any error in concluding that the liability of the Appellant stands proved. Therefore, they were given one final opportunity to forward the “C” forms or else, make the payment. It is clear that they have not availed off the benefit under the Award as well. 15. For all these reasons and looking into the conduct of the Appellant, this is not a fit case for exercising the Appellate jurisdiction. The Appeal is dismissed but without any order as to costs. (S.C. DHARMADHIKARI,J.)