arbp1431-10.doc 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION PETITION NO.1431 OF 2010 ALONGWITH NOTICE OF MOTION NO.3672 OF 2010 IN ARBITRATION PETITION NO.1431 OF 2010 Kokila B. Thakkar & Ors .. Petitioners Versus Moneyline Credit Ltd .. Respondent Mr.U.S.Rao for the petitioners. Mr.O.K.Shaikh i/by Vikas Salvi & Associates for the respondent. CORAM: S.C.DHARMADHIKARI, J. DATE : 22nd FEBRUARY 2011 P.C. . The petitioners have by this petition under section 34 of the Arbitration and Conciliation Act, 1996 challenged the award made by the sole arbitrator on 19th March 2010. arbp1431-10.doc 2 2 On the earlier occasion, at the hearing of the notice of motion for condonation of delay, several pleas were raised as to how this petition which is filed on 29th November 2010 is within limitation. An order was passed calling upon the petitioners’ advocate to satisfy this Court as to how the two chamber summonses which are stated to have been filed and later on withdrawn, can be said to be a challenge to the award within the meaning of section 34 of the Act and therefore, the delay in presentation of this petition can be condoned with the aid of section 14(1) of the Limitation Act, 1963. 3 However, at the hearing of this notice of motion with consent of parties, I have taken up arbitration petition for admission. Therefore, the delay is condoned in the peculiar facts of this case and the petition is taken up for admission forthwith. 4 The award is challenged on the ground that the clause which contains the arbitration agreement between the parties does arbp1431-10.doc 3 not name any arbitrator. Therefore, the sole arbitrator who is stated to have been appointed by the respondent is a unilateral appointment and such an appointment does not bind the petitioner. In such circumstances, the sole arbitrator had no jurisdiction to make the award. 5 The second argument is assuming without admitting that the sole arbitrator had the necessary jurisdiction, yet, the award is vitiated because the petitioner had neither the notice of the appointment, nor the notice of the proceedings before the sole arbitrator or the notice of the award. Therefore, the principles of natural justice have been violated and such an award is contrary to public policy and therefore, liable to be interfered with and set aside. 6 On the other hand, the respondent’s advocate supported the impugned award by pointing out that at every stage the petitioners were notified but they have deliberately chosen to stay away from the proceedings. Once they are deliberately keeping arbp1431-10.doc 4 themselves away, then, they cannot complain that principles of natural justice have been violated or they had no notice. For all these reasons, this petition be dismissed. 7 With the assistance of the learned advocates appearing for the parties, I have perused the petition and the annexures so also the award. The petitioners are not disputing that a loan agreement dated 20th February 2008 was executed and they are borrowers and the respondents are lenders. A sum of Rs.37,55,000/- was lent and advance as against the equitable mortgage of the property being created. The loan was repayable in 180 equal monthly installments. Further, there are demand promissory notes and other documents executed. There is a default committed as is clear from the statements in the present petition itself. The grounds on which the award has been challenged is that the arbitration agreement is invalid because of uncertainty and that the petitioners had no notice of the appointment of the arbitrator or the proceedings and the award. arbp1431-10.doc 5 8 In my opinion, each of these grounds are without any substance and merit. As far as appointment of the sole arbitrator is concerned, it is apparent that the agreement between the parties contains the arbitration clause. There is no dispute as far as this is concerned. The petitioners had adequate opportunity to raise issue of jurisdiction of the Arbitral Tribunal and the competence of the sole arbitrator. They have not initiated any such proceedings. Instead they chose not to appear inspite of being intimated about the appointment of the arbitrator. In such circumstances, at this belated stage and at their instance the challenge to the appointment, competency and jurisdiction of the Arbitral Tribunal cannot be entertained. 9 As far as the objection that the award is in conflict with the public policy as it violates the principles of natural justice is concerned, even that argument has no merit because a bare perusal of the award would show that at every stage notices were sent to the petitioners. The notices were sent by Registered Post Acknowledgment Due. The notices were dispatched at their arbp1431-10.doc 6 addresses. The notices were not received inasmuch as when the post-man went to deliver the same, there was no acceptance. Therefore, the concerned post office intimated to the petitioners about the receipt of the packet and despite receipt of such intimation, the packets had not been collected from the post office. In these circumstances, the inference drawn by the Arbitral Tribunal on the basis of section 27 of the General Clauses Act, 1897 cannot be said to be erroneous much less perverse. In such circumstances and for the reasons set out from paras 4 to 7 of the award, I am satisfied that the petitioners deliberately kept themselves away from the proceedings. It is not open to them now to urge that the proceedings are violative of principles of natural justice and therefore, award is contrary to public policy. The arbitrator has rightly made reference to the documents and the statement of claim, contents of which have been duly proved. Even the notices prior to the reference being initiated and appointment of arbitrator are referred. The letter dated 25th November 2009 has been referred to in para 11 of the award. Further, clause 11 of the agreement has also been rightly relied upon. In such circumstances, I find that no case arbp1431-10.doc 7 is made out under section 34 of the Act to set aside the subject award. The arbitration petition is devoid of any merit and it is accordingly dismissed but without any order as to costs. 10 At this stage it is submitted by Mr.Rao appearing for the petitioners that the award has been put into execution. In execution the petitioners’ properties have been attached. He prays that for a period of two weeks from today further steps in pursuance of this attachment may not be taken so as to enable the petitioners to challenge this order in a higher Court. 11 It is stated that the petitioners properties have been duly attached and therefore, there is no question of any apprehension that they may be dealt with or disposed off so also transferred with a view to defeat and delay the execution of the award. 12 In these circumstances, it is directed that for a period of two weeks from today, the respondents-claimants shall not take further steps for execution of the award. arbp1431-10.doc 8 13 In view of dismissal of the arbitration petition, notice of motion does not survive and the same stands disposed off. (S.C.DHARMADHIKARI, J)