Civil Revision No.765 of 2010 IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARAYANA AT CHANDIGARH Civil Revision No.765 of 2010 Date of Decision: February 22, 2011 Ashok Gupta son of Shri S.P. Gupta ….Petitioner Versus M/s Glorious Chit (P) Ltd. ….Respondent CORAM: HON’BLE MR. JUSTICE A.N. JINDAL Present: Mr. M.K. Sood, Advocate for the petitioner. Mr. Vivek Singla, Advocate for Mr. Rahul Vats, Advocate for the respondent. *** A.N. JINDAL, J. This petition assails the order dated 24.11.2009 passed by the learned Addl. District Judge, Faridabad, dismissing the objection petition filed by the petitioner. The facts in the background of the case are that on account of dispute having arisen between the parties the matter was referred to Mr. D.P. Gautam, Arbitrator who vide his order dated 15.11.1999 passed ex parte award in favour of the respondent to the tune of Rs.1,23,901/- along with interest at the rate of 18% per annum on compound basis from 01.01.1999 till the realization of the aforesaid amount along with Rs.10,000/- as costs. Execution was filed on 24.04.2003 for recovery of the said amount in which the objection petition was filed by the petitioner on 04.01.2007. The -1- Civil Revision No.765 of 2010 objector-petitioner has come up with the plea that there was no amount due towards the objector, therefore, question of payment of amount does not arise. No proper procedure was adopted while appointing the arbitrator, therefore, the award is neither executable nor valid. The award was ex parte and he was not served while passing the award. The arbitrator had no jurisdiction to award interest at the rate of 18% per annum on compoundable basis. It was also urged that criminal proceedings with regard to the cheque had taken place and by virtue of the judgment dated 30.09.2009, the complaint filed by the respondents was dismissed. Thus, in view of the verdict dated 30.09.2009 it stands proved that judgment debtor was not having any existing liability towards the decree-holder. Having heard the rival contentions of the parties, it may be observed that the award was passed on 15.11.1999. Objection of the petitioner is that he was not in the knowledge of the said ex parte award is without any merit. The award itself speaks that the petitioner had due knowledge of the award. The relevant extract of the award is reproduced as under: “The claimant appeared before me on 27.03.1999 but the respondent did not appear despite having received the notice. I, however, gave another opportunity to the respondent and accordingly, I adjourned the matter for 07.08.1999 and issued notices to the respondent on all his available addresses by registered post, courier and under UPC. The respondent received all those notices and thereafter he did not appear before me on 07.08.1999 at 4.30 p.m. as directed. It is pertinent to mention here that I received a letter dated 26.07.1999 along with a Photostat copy of the registered letter dated 22.03.1999. All -2- Civil Revision No.765 of 2010 those letters were by one Sh. R.K. Metry, Authorized Signatory. These letters are kept on the record and marked as Exts. A-1 to A-3. The said copies of letter dated 22.03.1999 addressed to me were written by the respondent. Those copies of the said letter are marked as Exts. A4 to A6. All the three envelops containing the said letters are kept on the record of the arbitration proceedings and marked as Exts. A-7 to A-9. In the letters dated 26.07.1999 i.e. Exts. A-1 to A-3 the said authorized signatory informed me that a copy of the letter dated 22.03.99 was being sent to me as I had not seen the letter dated 22.03.1999. In the photocopies of letters dated 22.03.1999 sent by the respondent under his signature Exts. A-4 to A-6, the respondent informed that he never consented to my appointment as arbitrator and the respondent did not owe any money to the claimant. In the letter dated 22.03.1999 the respondent further asked for a copy of my appointment letter.” The award further reveals that despite notices petitioners- respondent did not appear before him on 07.08.1999, therefore he was proceeded against ex parte. If the petitioner wanted to challenge the authority of the arbitrator then he would have adopted the course as provided under the law but instead he remained silent and did not challenge the appointment of the arbitrator as well as award dated 15.11.1999 which became final for execution. Even after the filing of the execution on 24.04.2003, the petitioner did not file any objections, therefore, these belated objections appear to have been filed just to delay and defeat the execution of the award. If he wanted to challenge his liability to pay the amount then he -3- Civil Revision No.765 of 2010 would have come forwarded before the arbitrator to set up such pleas but he having failed to do so. He is stopped to raise such pleas in the objection petition. It has also not been explained as to on what grounds he has challenged the authority of the arbitrator. As regards the knowledge of the petitioner with regard to the passing of the award, from the extract reproduced above, it would be difficult to hold that the petitioner had no knowledge of the passing of the award. As regards the complaint under Section 138 of the Negotiable Instruments Act, filed by the petitioner and having been dismissed by Addl. Sessions Judge, on 30.09.2009, it is observed that the findings of the criminal court are not binding upon the tribunal and the tribunal has to decide independently on the evidence before it. Thus, the judgment passed by the criminal court is not binding upon the tribunal, as such these objections raised by the petitioner, at this stage, are not tenable. As regards interest, the awarding of interest compoundably at the rate of 18% per annum appears to be very exorbitant and against the statute. As such the order could be modified to that extent. Resultantly, this petition is dismissed, however the respondent would be entitled to pendente lite and future interest at the rate of 12% simple interest per annum. 22.02.2011 (A.N. JINDAL) vcgarg JUDGE -4-