Delhi District Court San International vs Atm Exports Pvt Ltd on 9 May, 2022 In the Court of Shri Sanjiv Jain, District Judge (Commercial Court)03, Patiala House Courts New Delhi OMP (Comm) No. 38/19 San International 134, First Floor, Somdutt ChamberII, No. 9, Bhikaji Cama Place, New Delhi110016 .......... Petitioner versus ATM Exports Pvt Ltd 25, Sector15, Faridabad, Haryana ... Respondent Date of institution : 18.02.2019 Date of reserving judgment : 07.04.2022 Date of decision : 09.05.2022 JUDGME NT 1. This petition under Section 34 of the Arbitration and Conciliation Act, 1996 (as amended upto date) hereinafter called the 'Act' challenges the award dated 29.10.2018 passed by Ld. arbitrator Sh. H.P Singh (Retd. District & Sessions Judge), whereby, claim of the respondent was allowed and a sum of Rs. 5,27,400/ along with interest, arbitration fee and litigation cost were awarded to the OMP No. 38/19 San International v/s ATM Exports Pvt Ltd. Page No.1 of 15 respondent. 2. The facts giving rise to this petition are that the claimant / respondent, MSME, engaged in manufacturing of laces, tags, trims, laser cutting etc under the name of style of M/s ATM Exports Pvt Ltd having its registered office at Faridabad and working unit at Faridabad, Haryana had dealings with the petitioner M/s San International having its registered office at Delhi and working office at Gurgaon, Haryana. It had supplied narrow fabrics and garment accessories to the petitioner. As on 15.02.2018, a sum of Rs. 5,27,400/ became due against the petitioner. The respondent issued a legal notice to the petitioner on 15.03.2018 calling upon the petitioner to make the payments but the petitioner did not make the payments though as per Section 15 of MSME Act, 2006, it was incumbent upon the petitioner to make the payments within 3045 days. The respondent filed the claims before Haryana Micro and Small Enterprises Facilitation Council, Chandigarh, Haryana (Council under Section 18 (i) r/w Section 15, 16 and 17 of MSME Act, 2006) on 06.08.2018 for the amount along with interest. Efforts for conciliation were made but the conciliation did not fructify. The matter was referred to the empanelled Arbitrator vide letter dated 27.09.2018 to decide the controversy between the parties. The notice was served upon the petitioner but none appeared on its behalf and it was proceeded against ex parte on 19.10.2018. The respondent produced the record OMP No. 38/19 San International v/s ATM Exports Pvt Ltd. Page No.2 of 15 before the arbitrator who after perusal passed the impugned award. It is relevant to reproduce para 11 of the award interalia as under: "11. This award has been made by me today at Faridabad on 29th Day of October, 2018 and that a signed copy of the award be delivered to the parties free of costs." 3. The petitioner challenged the award alleging to be arbitrary, unjust being against the principles of natural justice, without proper notice, non speaking, unreasoned, lacking proper application of judicial mind, without any basis and calculation, passed in a cursory manner and contrary to the Act. It is stated that the arbitrator proceeded exparte in the proceeding on the very first date after issuance of notice to the petitioner. It is alleged that it was the respondent, who did not adhere to the time frame. Its work was unsatisfactory. It brusquely stopped collecting the materials from it and working further which tarnished its reputation though the execution of the work was time bound. New vendors charged much higher rate which overburdened it with an additional cost of Rs. 5,10,352.30. The rejections were altered / rectified which cost it to Rs. 6,07,879.50. It also bore short shipment value to the extent of Rs. 3,01,350/. It, however, debited only Rs. 6,27,400/. 4. The petitioner challenged the award on the following grounds: i) That the award is nonest in the eyes of law being erroneous and perverse. No notice of intimation of arbitral proceedings much les