: 1 : USJ IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION PETITION NO.32 OF 2007 Kota Gurunadha Rao .. Petitioner V/s. Motilal Oswal Commodities Broker Pvt. Ltd. .. Respondent ..... Mr. V.K. Nair for the petitioner Mr. Rahul Karnik & G.K. Tripathi for the respondent ..... CORAM : S.C. DHARMADHIKARI, J. DATE : 13th AUGUST, 2009. P.C. : 1. The petitioner who is the original respondent is aggrieved by an award dated 1st November, 2006 made by the learned sole Arbitrator in Arbitration Case No.NCDEX/27/2006. 2. It is the case of the petitioner that the respondent is a Broker of National Commodities and Derivatives Exchange Ltd. The respondent is the original claimant whereas the petitioner was the opponent in the Arbitral proceedings. The petitioner is an ordinary Resident of Hyderabad (A.P.). It is undisputed before me that there was a contract, details of which are set out in para 2 to 4 of the petition. It is alleged that some monies were paid : 2 : as margin monies and, therefore, there were disputes, the nature of which is set out in para 5 and 6. In such circumstances, it is alleged that the respondent closed the three contracts and finally the deal was squared off without information or consent of the petitioner. The petitioner was put to wrongful losses. The complaint was made to the Director, Vigilance and Legal Affairs Division, Forward Market Commission, Mumbai and copy of the complaint is annexed as Annexure "A" to the arbitration petition. There was a legal notice given and certain claims were raised, details of which are also set out in this petition. The petitioner's case is that the complaint came to be forwarded to the National Commodities and Derivatives Exchange Ltd. but in the mean while, the response of the respondent was that he is not liable to pay any sums to petitioner but instead he has to recover huge amounts and, therefore, at the instance of the respondent so also the petitioner, the arbitration proceedings were initiated. Initially, there was a dispute with regard to the venue of the arbitration proceedings and the petitioner protested in that behalf. However, later on the Sole Arbitrator came to be appointed. The petitioner has stated in para 16 of this arbitration petition that he received letters dated 19th July, 2006 and 21st July, 2006 from the Exchange stating that upon the request of the respondent, the hearing has been postponed on 23rd August, 2006 at 3.30 p.m. : 3 : 3. The petitioner states that the award records that on 23rd August, 2006, the petitioner was unable to remain present. The petitioner had viral fever and chikengunia which was suspected and that is how he informed the Arbitral Tribunal his inability to attend the hearing. The Arbitral proceedings were therefore adjourned according to the award but the adjourned date was not informed to the petitioner. The specific grievance of the petitioner is that after 23rd August, 2006, the sole Arbitrator proceeded Ex-parte and without any notice to the petitioner. All of a sudden, the petitioner received the impugned award which on the face of it is Ex-parte and directs the petitioner to pay a sum of Rs.1,67,769.85 including interest @Rs.12% so also arbitation costs. 4. It is this ex-parte award which is under challenge in this Petition under Section 34 of the Arbitation and Conciliation Act, 1996. 5. Taking the findings and observations in the award as they are the only contention raised beore me by the learned Counsel appearing for the petitioner is that the Award is vitiated as the petitioner was not given proper Notice of the arbitral proceedings and he was otherwise also unable to present his case on account of illness and absence of intimation of further hearing. : 4 : 6. The award clearly recites that the petitioner was absent on 23rd August, 2006 but had sent written intimation / request for postponement of the proceedings. However, the award proceeds to state that the arbitrator was of the opinion that one final opportunity should be given to the petitioner and therefore he directed that a notice be issued to the petitioner. However, the award does not state anything with regard to the receipt of the notice or that the petitioner had knowledge of the proceedings otherwise. 7. Learned Counsel appearing for the respondent tried to support this ex-parte award by urging that the Exchange had sent notices at the very address at which the petitioner was ordinarily residing but the remark of the authorities / courier is no such person is residing therein . Learned Counsel urged that there is a presumption that if notice has been duly despatched in accordance with the settled practice and procedures, then, it has been duly delivered. 8. In the instant case from the award itself, I find that the Arbitrator has not proceeded on the basis that the petitioner had knowledge of the adjourned date or that the intimation from the exchange has been duly received and despite receipt of the same, the petitioner has remained absent. This is not a case of the petitioner continuously : 5 : remaining absent and without any justifiable cause. If the petitioner had forwarded his request to the tribunal to postpone the proceedings and that was granted, then, principles of fairness and justice demanded that the petitioner should have been intimated of the adjourned date and the notice should have clearly indicated that the matter would proceed ex-parte, if he fails to remain present. There is no proof that any such intimations have not been sent or if sent duly received. In such circumstances, the award is liable to be set aside. It is established that the petitioner was not given proper notice of the arbitral proceedings and was otherwise also unable to present his case. In these circumstances and finding that the award is ex-parte and vitiated for want of proper notice, there is no alternative but to set aside the same. The petition accordingly succeeds and is made absolute in terms of prayer clause (a). However, there shall no order as to costs. 9. At this stage, both sides requested that fresh arbitration proceedings can commence by appointment of a Sole Arbitrator. Accordingly, the National Commodities and Derivatives Exchange Ltd. is directed to appoint an Arbitrator from its panel as a Sole Arbitrator to adjudicate upon the dispute between the parties afresh and in accordance with law. The venue of the arbitration shall be at Mumbai. The petitioner s Counsel states that the : 6 : petitioner is ordinarily residing at the address mentioned in the cause title of this Petition and any Notice or intimation dispatched at this address shall be deemed to be good service of the proceedings and the award. The Arbitral proceedings shall commence afresh and the Sole Arbitrator to render his award without being influenced by any of the observations in the award, which is already set aside. All contentions on merits are kept open. (S.C. DHARMADHIKARI, J.)