FAO No.2024 of 2010 (O&M) 1 In the High Court for the States of Punjab and Haryana at Chandigarh. Decided on April 21,2010. Abhay Singh -- Appellant vs. IndusInd Bank Ltd and another --Respondents. CORAM: HON'BLE MR.JUSTICE RAKESH KUMAR JAIN Present: Mr.Shailendra Jain,Advocate, for the appellant Rakesh Kumar Jain, This order shall dispose of two appeals bearing FAO No.2024 of 2010 titled as Abhay Singh Vs. IndusInd Bank Ltd and another and FAO No.2025 of 2010 titled as Abhay Singh Vs. IndusInd Bank Ltd and another. Both these appeals are being taken up together on the statement of learned counsel for the appellant that questions of law involved in them are similar and the facts are also almost identical. In both the appeals, Abahy Singh is the borrower, whereas in FAO No.2024 of 2010, Joginder Singh is the guarantor and in FAO No.2025 of 2010, Balwant Singh is the guarantor. In FAO No.2024 of 2010, vide his arbitral award dated FAO No.2024 of 2010 (O&M) 2 2.1.2009, the arbitrator had held as under:- “It is, therefore, as concluded above the respondents have committed breach of loan agreement by default in making payment of instalments and liable to pay the claimant a sum of Rs.2,16,867/- . As regards the entitlement of interest on the sum due, though the loan agreement constitutes the contractual rate of interest in the event of delay/default, this Tribunal arrives at a conclusion that interest at 18% p.a. on the sum outstanding i.e. Rs.1,90,791/- as per the statement of account viz. Ex.A10 would be reasonable from the date of claim petiton till its realisation”. In FAO No.2025 of 2010, vide his arbitral award dated 2.1.2009, the arbitrator had held as under:- “It is, therefore, as concluded above the respondents have committed breach of loan agreement by default in making payment of instalments and liable to pay the claimant a sum of Rs.4,18,575/-. As regards the entitlement of interest on the sum due, though the loan agreement constitutes the contractual rate of interest in the event of delay/default, this Tribunal arrives at a conclusion that interest at 18% p.a. on the sum outstanding i.e. Rs.3,78,692/- as per the statement of account viz. Ex.A10 would be reasonable from the date of claim petiton till its realisation”. In both the cases, objections under Section 34 of Arbitration and Conciliation Act, 1996 (for short,the Act) were filed, which have been dismissed vide the impugned order dated 08.3.2010 passed by FAO No.2024 of 2010 (O&M) 3 Addl.District Judge, Rewari. Howeve, for the sake of convenience, facts are being extracted from FAO No,.2024 of 2010. Appellant Abhay Singh (hereinafter referred to as the borrower) obtained a loan from IndusInd Bank Limited (hereinafter referred to as the Bank) by way of loan agreement dated 04.2.2006 and Joginder Singh stood as guarantor (hereinafter referred to as the guarantor). The loan amount was Rs. 14,34,530/- which was required to be repaid in 45 monthly instalment. The borrower paid Rs. 7,32,500/- but was in continuous default, as a result of which the vehicle was repossessed by the bank and sold on 2.6.2008 for a sum of Rs.4,50,000/- but even after adjusting the sale proceeds, there existed liability of Rs. 2,16,867/- for which the borrower and guarantor were jointly and severally liable. A sole arbitrator was appointed in terms of clause 23.0 of the loan agreement, who served notices upon the borrower and guarantor about the arbitration proceedings, but on their refusal to accept the notices, they were proceeded against exparte. After taking into account the exparte evidence, the claim set up by the bank was awarded vide arbitral award dated 2.1.2009 as indicated above. The appellant filed objection under Section 34 of the Act on 27.2.2010 against the arbitral award dated 2.1.2009. After issuance of notices in the objections, learned counsel for the parties had appeared. The learned Civil Court recorded an order dated 08.3.2010, which reads as under:- “ Learned counsel for the parties stated that they are ready with their arguments on the application and the same should be decided without framing any issue etc. Arguments FAO No.2024 of 2010 (O&M) 4 heard. Vide separate judgment of even date, the application/appeal has been dismissed. File be consigned to the record room” In terms of the aforesaid statement suffered by learned counsel appearing on behalf of the appellamt, learned Civil Court observed that there is no need to frame issue and the objections were decided on the basis of material available before the Court much-less on the ground that the same were barred by limitation. Learned counsel for the appellant has raised two fold arguments in these appeals (i) that the learned Civil Court has erred in law in not deciding the objections after framing the issues in terms of the Punjab, Haryana and Union Territory, Chandigarh Arbitration and Conciliation Rules, 2003 (for short, the Rules) which provides that provisions of Code of Civil Procedure,1908 (for short CPC) would apply to the proceedings before a Court which includes Order XIV of CPC. (ii). The borrower and the gurarantor have been illegally proceeded against exparte by the Arbitrator on the basis of report of refusal and in the absence of the framing of issues, the same could not have been proved. I have heard learned counsel for the appellant at length and have perused the record with his able assistance. Insofar as the first arguments raised by learned counsel for the appellant is concerned, undoubtedly, the rules which have been referred to have been framed under Section 82 of the Act by the High Court of Punjab and Haryana in relation to the proceedings before a Court under the Act which provides that provisions of CPC namely, Order XIV would apply to the proceedings before the Court. On the basis of this rule, it is contended FAO No.2024 of 2010 (O&M) 5 that the Court should have framed the issues allowing the appellant an opportunity to lead evidence before deciding the objections filed under Section 34 of the Act. In this regard, learned counsel has placed reliance upon a decision of this Court in the case of Amrik Singh and another Vs. Vardhan Properties and Investment Ltd. 2006 (4) R.C.R.(Civil) 521 in which it has been held that as per rules, the parties are entitled to framing of issues and lead evidence in respect of their claims. The argument raised by learned counsel for the appellant appears to be attractive but is lacking rigour in view of decision of the Supreme Court in the case of Fiza Developers & Inter-Trade P.Ltd. Vs.AMCI (I) Pvt.Ltd & Anr. 2009 (4) R.C.R.(Civil) 288, wherein it has been held that in case of challenge to award before Civil Court , framing of issues is not necessary as the ground for setting aside the award under Section 34 (2) of the Act are specific. In this regard, learned counsel for the appellant has also argued that this judgment would not be applicable as it does not deal with the the rules which have been framed by the High Court. Be that as it may, the appellant cannot wriggle out of his statement which was recorded by learned Civil Court on 08.3.2010 and has been reproduced here-in-above, in which the Court has recorded that the party has stated before him that they are ready with the arguments on the objection which may be decided without framing any issue. The appellant has pleaded in the grounds of appeal and has also argued before this Court that no such statement was made by their counsel that they do not require framing of issues. To my mind, this is an act of over-reaching the Court after having lost before the Court below as the appellant cannot be allowed FAO No.2024 of 2010 (O&M) 6 to contradict the record of the Court by way of a bold statement and even without going before the same Court which had passed the said zimini order. In this regard, reference could be made to the decision of the Supreme Court in the case of State of Maharashtra Vs. Ramdas Shrinivas Nayak and another, AIR 1982 Supreme Court 1249, it which it has been held as under:- “The Court is bound to accept the statement of the Judges recorded in their judgment., as to what transpired in Court. It cannot allow the statement of the Judges to be contradicted by the statement at the Bar or by affidavit and other evidence. If the Judges say in their judgment that something was done,said or admitted before them, that has to be the last word on the subject. The principle is well settled that statements of fact as to what transpired at the hearing, recorded in the judgment of the Court, are conclusive of the facts so stated and no one can contradict such statements by affidavit or other evidence. If a party thinks that the happenings in Court have been wrongly recorded in a judgment, it is incumbent upon the party, while the matter is still fresh in the minds of the Judges to call the attention of the Judges who have made the record to the fact that the statement made with regard to his conduct was a statement that had been made in error. That is the only way to have the record corrected. If no such step is taken, the matter must necessarily end there”. FAO No.2024 of 2010 (O&M) 7 In view of the fact that right of seeking framing of issues was waived off by the appellant himself as recorded in the zimini order dated 08.3.2010 and no such application had been filed before the same Court contradicting the recording of zimini order in view of the judgment of the Supreme Court in the case of State of Maharashtra (Supra), the argument raised by learned counsel for the appellant that no such statement was made before the Court for not framing issue is hereby rejected. Insofar as second point is concerned, it is alleged by learned counsel for the appellant that neither borrower nor guarantor had ever refused to accept notice of the arbitrator and the report of refusal is manipulated. There is no evidence on record in this regard, therefore, it has to be presumed that notice which had been sent by speed post, which is always presented for acceptance to the person to whom it is addressed, has been refused by the same person. Moreover, objection has been dismissed by the learned Court below on the ground that the arbitral award was passed on 2.1.2009 which should have been challenged within a period of 90 days with an extended period of 30 days, which cannot be further extended with the aid of Section 5 of the Limitation Act,1963,whereas the objections have been filed almost after one year on 26.2.2010, despite the fact that arbitral award was served upon the appellant, who again had refused to receive it on 15.1.2009. As a matter of fact, it appears that the appellant was trying to avoid the Court proceedings under an impression that if he would not take the summon or notice, then no proceedings would be carried out against him forgetting that in case of refusal of accepting summon/ notice, it is always deemed to have been served. FAO No.2024 of 2010 (O&M) 8 Thus, in the totality of circumstances mentioned here-in-above, I do not find any merit in both these appeals and the same are hereby dismissed in limine. No costs. April 21,2010 RR (Rakesh Kumar Jain) Judge