FAO No.4224 of 2007 (O&M) -1- IN THE PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH FAO No.4224 of 2007 (O&M) Date of decision : 4.3.2010 Harchand Singh ..Appellant. Vs. M/s Reliable Agro Engineering Services (Pvt.) Ltd. ..Respondent. CORAM: HON'BLE MR.JUSTICE RAKESH KUMAR JAIN Present : Mr.G.S.Punia, Advocate for the appellant. Mr.I.K.Mehta, Sr.Advocate with Ms.Ranjit Kaur, Advocate for the respondent. RAKESH KUMAR JAIN, J. This order shall dispose of two appeals bearing FAO Nos.4224 of 2007 titled as Harchand Singh Vs. M/s Reliable Agro Engineering Services (Pvt.) Ltd. and 4225 of 2007 titled as Harchand Singh Vs. M/s Reliable Agro Engineering Services (Pvt.) Ltd. arising out of the order of District Judge, Jalandhar dated 1.8.2007 passed in separate Arbitration Case No.18 of 2003 out of which FAO No.4224 of 2007 has arisen and Arbitration Case No.19 of 2003 out of which FAO No.4225 of 2007 has arisen. The point involved in both the appeals is basically the same, therefore, both the appeals are being disposed of together by this common order. FAO No.4224 of 2007 is pertaining to an ex parte award of the Arbitrator dated 10.11.1998 whereas FAO No.4225 of 2007 relates to ex- FAO No.4224 of 2007 (O&M) -2- parte award of the Arbitrator dated 13.11.1998. The question involved in both the appeals is whether the Objections filed under Section 34 of the Arbitration and Conciliation Act, 1996 by the appellant against the ex parte award are within limitation? Brief facts of FAO No.4224 of 2007 are that a hire-purchase agreement dated 12.1.1996 was executed by one Satnam Kaur wife of Anokh Singh in respect of a truck No.PB 23-4487 in which the appellant was the guarantor. The Arbitrator, vide his ex parte award dated 10.11.1998 fixed the liability of the hirer and the guarantor jointly and severally to the extent of Rs.4,24,842/- as on 17.10.1998 along with future interest @ 36% per annum till the date of realisation of entire dues. The facts of FAO No.4225 of 2007 are that a hire purchase agreement dated 30.10.1996 executed by one Gurpal Singh son of Hans Singh in respect of truck No.PB 23-3741 in which the appellant was the guarantor. Vide ex parte award dated 13.11.1998, the Arbitrator fixed the liability of the guarantor jointly and severally to the extent of Rs.3,36,826/- as on 17.10.1998 along with future interest @ 36% per annum till final realisation of the entire dues. In both the aforesaid cases, the appellant filed Objections under Section 34 of Arbitration and Conciliation Act, 1996 ( for short `the Act') on 25.4.2003, on knowing it from one Prem Sagar son of Prithvi Chand, V.P.O. Amloh, District Fatehgarh Sahib. To contradict the plea taken by the respondent that copy of the award was sent by the appellant through UPC on 11.3.1999 in FAO No.4224 of 2007 and on 2.12.1998 in FAO No.4225 of 2007 but he failed to file objections within the stipulated period of 90 days, therefore, the Objections were time barred. The learned District Judge FAO No.4224 of 2007 (O&M) -3- framed an issue as to whether Objections were within limitation. The learned District Judge after discussing the import of Section 3 of the Act and relying upon delivery of copy of the award through UPC held that the copy was duly received by the appellant who could not have filed Objections after delay of 4-1/2 years, which is clearly barred by time. In order to challenge the findings of the Court below returned on issue No.1, counsel for the appellant has vehemently argued that the appellant came to know about the passing of award only on 25.4.2003 and filed an application under Section 34 of the Act within four days i.e. 28.4.2003 after acquiring the knowledge, therefore, the Objections were within limitation. On the other hand, in FAO No.4224 of 2007 learned counsel for the respondent has argued that Arbitrator has sent the copy of the award to the appellant under postal certificate on 11.3.1999 whereas in FAO No.4224 of 2007, counsel for the appellant has argued that Arbitrator has sent the arbitration award under postal receipt on 2.12.1998. It is submitted that appellant must have received the copies of the award in due course by the postal department, therefore, objection filed after 4-1/2 years is clearly barred by time. Learned counsel for the appellant has submitted that appellant appeared as PW1 and had alleged that he came to know about the passing of the award from Prem Sagar on 25.4.2003. He also examined Prem Sagar as PW2, who stated that he apprised the appellant of the passing of the ex parte award on 25.4.2003. The respondent had relied upon the record of the Arbitrator as per which the copy of ex parte award was sent to the appellant FAO No.4224 of 2007 (O&M) -4- under postal certificate (UPC). It is contended that as per Section 3 of the Act, any written communication is deemed to have been received if it is delivered to the addressee personally or at his place of business, habitual residence or mailing residence. It is submitted that as per Ex.RB (hire purchase agreement) that ex-parte award was served through UPC on the same address which has been given in the hire purchase agreement, therefore, it is presumed that it has been received by the appellant. On the contrary, learned counsel for the appellant has relied upon a Division Bench judgment of this Court in the case of The Panchkula Urban Co-operative Bank Ltd. Versus State of Haryana and others 1998(1) PLJ 315 to contend that UPC can be easily procured and that certificate of posting does not inspire confidence. In this regard, he also relies upon a decision of the Supreme Court in the case of Gadakh Yashwantrao Kankarrao Vs. E.V. alias Balasaheb Vikhe Patil and others AIR 1994 SC 678. Learned counsel for the appellant has also referred to the provisions of Section 34(3) as well as Section 3 of the Act to contend that limitation of 3 months would start to run from the date of receipt of arbitral award and as per Section 3 of the Act, written communication is deemed to have been received if it is delivered to the addressee personally or at his place of business, habitual residence or mailing address. It is submitted that no person from the postal authority has been examined by the respondent nor the arbitration award has been sent through registered post. It is also argued that if the Arbitrator could sent notice to the addressee through registered post then why the ex parte award had been sent through UPC. I have heard learned counsel for the parties and have perused FAO No.4224 of 2007 (O&M) -5- the record with their assistance. In these cases, before adverting to the rival contentions of both the counsel for the parties, relevant provisions of law may be noticed: “Section 3: Receipt of written communications – (1) Unless otherwise agreed by the parties- (a) any written communication is deemed to have been received if it is delivered to the addressee personally or at his place of business, habitual residence or mailing address, and (b) if none of the places referred to in clause (a) can be found after making a reasonable inquiry, a written communication is deemed to have been received if it is sent to the addressee's last known place of business, habitual residence or mailing address by registered letter or by any other means which provides a record of the attempt to deliver it. (2)The communication is deemed to have been received on the day it is so delivered. (3)This section does not apply to written communications in respect of proceedings of any judicial authority.” “Section 34: Application for setting aside arbitral award (1) xxxxxxxxxxxxxxxxxxxxxxx (2) xxxxxxxxxxxxxxxxxxxxxxx (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 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 FAO No.4224 of 2007 (O&M) -6- further period of thirty days, but not thereafter.” Undisputedly, the arbitration award has been sent through UPC. It is provided in Section 34(3) of the Act that limitation of three months would be counted from the date of receipt of arbitral award by the person, who is interested in preferring Objections which can be extended for another 30 days' if he satisfies the Court that he has been prevented by sufficient cause from making the application. In Section 3 (a) of the Act, the Legislature has cautiously used the word `delivered' while presuming the receipt of the communication. The word 'delivered' is of course not defined in Section 2 (Definitions) of the Act but its meaning has been provided in the concise Oxford English Dictionary (India Edition). `Deliver' means bring and hand over a letter or goods to the appropriate recipient-formally hand over some.” Similarly word `deliver' is defined in Black's Law Dictionary (4th edition) to mean that “ the act by which the res or substance thereof is placed within the actual or constructive possession or control of another”. Thus, from the definition of the word `deliver', it is apparent to mean that written communication has to be delivered in the hands of recipient only then presumption under Section 114 of the Evidence Act would arise to its receipt. In Section 3 (a) of the Act, it is specifically provided that if it is delivered to the addressee personally or at his place of business, habitual residence or mailing address. Insofar as the service of a document through UPC is concerned, the Apex Court in the case of Gadakh Yashwantrao Kankarrao (supra), has categorically held that a certificate of posting is easy to procure and does not inspire confidence. Similar view has been taken by this Court in The Panchkula Urban Co-operative Bank Ltd. (supra) that certificate of posting could easily be procured. It was a FAO No.4224 of 2007 (O&M) -7- case where there was an election of members of the Society. It was held by this Court that in a meeting where such an important decision has to be taken, the members are not expected to come merely by letters under postal cover. In the present case also, the appellant who was proceeded against ex-parte, should have been served upon and delivered the ex parte award of the arbitrator at least by way of registered post because in case of service by registered post 'delivery' of the written communication can be ensured but not in case of service through UPC. In view of the above discussion, I do not agree with the reasoning adopted by the learned District Judge about the presumption drawn in the ex-parte order of the Arbitrator having been served upon the appellant. Hence, the present appeals are allowed and the matter is remanded back to District Judge, Jalandhar to decide the appeals on merits after considering it to be within limitation. The parties are directed to appear before the learned District Judge, Jalandhar on 15.3.2010. (RAKESH KUMAR JAIN) 4.3.2010 JUDGE Meenu