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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO. 266 OF 2011
M/s. Zapp India Limited )
Gala No. 111, RIICO Industrial Area, Mansarovar, )
Jaipur-302 020 )...Petitioner
vs.
M/s. Maheshwar Textiles )
70,Ramwadi, Jay Jagruti Niwas,
ig )
Cavel Cross Lane No.3, 2nd floor, Room No. 24, )
Mumbai-400 002 )...Respondent
Mr. Ghanshyam Upadhyay along with Mr. Pawan Kumar Mishra, instructed by
M/s. Law Juris, for the Petitioner.
Mr. S.K. Jain, instructed by M/s. S.K. Jain and Associates for the Respondent.
CORAM: S.J. KATHAWALLA, J.
DATE: OCTOBER 23, 2012.
ORAL JUDGMENT:
1. The above Arbitration Petition is filed by the Petitioner on 19 th January, 2011, challenging the Arbitral Award dated 19 th August 2009, under Section 34 of the Arbitration and Conciliation Act, 1996 ("the Act"). The Award was dispatched to the Petitioner by the Hindustan Chamber of Commerce on 4 th September 2009. However, on 7th September 2009 the Petitioner refused to accept service of the said Award.
2. The brief facts of the matter are set out hereunder:
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3. By a letter dated 2nd February 2009, the Respondent informed the Hindustan Chamber of Commerce that they have sold and supplied goods to the Petitioner at G-111, RIICO Industrial Area, Mansarovar, Jaipur-302 020, Rajasthan vide their various invoices, particulars of which were set out in the said letter and the total outstanding after giving credit for the part payment received, along with interest thereon amounted to Rs. 53,99,688/-. The Respondent requested the Hindustan Chamber of Commerce to use their good offices to collect the genuine dues of the Respondent from the Petitioner as early as possible. The Respondent recorded in the said letter that if no satisfactory reply is received within seven days from the receipt of the said letter/notice, the Respondent will have no other option but to put their dispute before the Learned Arbitrators of the Hindustan Chamber of Commerce, for their decision under its Arbitration Rules.
4. The bills raised by the Respondent on the Petitioner which were submitted by the Respondent to the Arbitral Tribunal, clearly stipulated as follows:
"Any dispute if any relating to this transaction will be subject to the Arbitration Rules, Hindustan Chamber of Commerce, Mumbai only."
5. The Hindustan Chamber of Commerce by its letter dated 10 th February 2009, addressed to the Petitioner, forwarded a copy of the letter dated 2 nd ::: Downloaded on - 09/06/2013 19:19:14 ::: KPP -3-
February 2009, received from the Respondent and informed the Petitioner that as set out in the said letter, the Petitioner is requested to remit the balance outstanding amount of Rs. 53,99,688/- to the Respondent within one week, failing which the Respondent would be taking out appropriate legal/arbitration proceedings against the Petitioner as they deemed fit.
6. On 3rd April 2009, the Respondent filed an application before the Hindustan Chamber of Commerce which was received by the Chamber on 8 th April, 2009, registering their dispute against the Petitioner and requesting the Hindustan Chamber of Commerce to settle the said dispute. The Respondent appointed Shri Parameshwarji Tapadia as their Arbitrator and also forwarded the names and addresses of the Directors of the Petitioner Company.
7. The Hindustan Chamber of Commerce by its letters dated 13 th April 2009, separately addressed to the Petitioner and the three Directors of the Petitioner, inter alia informed them that the Respondent had filed a dispute against them before the Hindustan Chamber of Commerce . A copy of the said dispute along with the list of their panel Arbitrators was enclosed with the said letter with a request to the Petitioner to appoint their arbitrator within a period of 15 days failing which the Arbitration shall proceed under Rule 7 (k) of the Hindustan Chamber of Commerce Rules. The said letters were sent by Registered Post as well as by Certificate of Posting to the Petitioner and its ::: Downloaded on - 09/06/2013 19:19:14 ::: KPP -4-
Directors. From the original acknowledgement cards produced by the Hindustan Chamber of Commerce, it is clear that the said letters were received by the Petitioner as well as its Directors.
8. Since the Petitioner and/or its Directors failed to appoint an Arbitrator, the Secretary, Hindustan Chamber of Commerce under Rule 7(k) of its Rules appointed Shri Rajendraprasadji Bhauwala as an Arbitrator on behalf of the Petitioner.
9. On 18th June 2009, the Petitioner as well as its Directors were once again informed in writing that they should remain present before the learned Arbitrators on 6th July 2009 at 2.30 p.m., along with their witnesses and necessary documents. As can be seen from the original records produced by the Hindustan Chamber of Commerce before this Court, the said letters were forwarded to the Petitioner and its Directors by Registered Post as well as by Certificate of Posting. From the original acknowledgement cards produced by the Hindustan Chamber of Commerce, it is clear that the said letters were received by the Petitioner as well as its Directors. However, the Petitioner as well as its Directors failed and neglected to appear before the learned Arbitrators on 6 th July 2009 at 2.30 p.m. As can be seen from the minutes of the arbitration proceedings held on 6th July 2009, the learned Arbitrators decided to give one more chance to the Petitioner to appear before them.
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10. By a letter dated 10th July 2009, the Hindustan Chamber of
Commerce therefore informed the Petitioner and its Directors that the next
hearing is fixed by the learned Arbitrators on 27 th July 2009 at 2.30 p.m. and that they should remain present along with their witnesses and documents. The said letter was forwarded to the Petitioner as well as to its Directors by Registered Post AD and under Certificate of Posting. From the original acknowledgement cards produced by the Hindustan Chamber of Commerce, it is clear that the said letters were received by the Petitioner as well as its Directors.
Again the Petitioner and its Director failed to appear before the learned Arbitrators. As can be seen from the minutes of Arbitration proceedings held on 27th July 2009, the Arbitrators decided to give a final notice to the Petitioner to attend the arbitration proceedings. In view thereof, by a letter dated 1 st August 2009 addressed to the Petitioner and its Directors, the Hindustan Chamber of Commerce informed the Petitioner as well as its Directors that the arbitration is now fixed on 19th August 2009 at 2.30 p.m. and they should remain present with their witnesses/documents. The said letter was forwarded to the Petitioner as well as its Directors by Registered Post AD as well as under Certificate of Posting.
As can be seen from the original records produced by the Hindustan Chamber of Commerce before this Court, the 3 Directors of the Petitioner received the said letter dated 1st August 2009 . However, the Petitioner has refused to accept the envelope containing the said notice and forwarded to the Petitioner by ::: Downloaded on - 09/06/2013 19:19:14 ::: KPP -6-
Registered A.D. In view thereof the postal authorities have returned the envelope containing the said letter/notice to Hindustan Chamber of Commerce with their remarks "Refused Sd/- 6/8/09". However, the notice sent to the Petitioner under Certificate of Posting is not returned back to the Hindustan Chamber of Commerce and therefore received by the Petitioners.
11. In view of the above, as can be seen from the minutes of the arbitration proceedings dated 19th August, 2009, the learned Arbitrators have after recording that despite repeated intimations sent to the Petitioner and the Directors to attend the arbitration proceedings, they have failed to do so, proceeded to pass their Award against the Petitioners. From the original record produced by the Hindustan Chamber of Commerce before this Court, it is clear that the Petitioner has refused service of the Award because of which the envelope containing the Award is returned by the postal authorities to the Hindustan Chamber of Commerce with the remark "refused sd/- 7-9-09".
However, a copy of the Award sent to the Petitioner under Certificate of Posting is not returned back to Hindustan Chamber of Commerce and therefore received by the Petitioners.
12. The above Petition was initially heard by this Court on 18 th September, 2012, on the basis of the photo copies taken by the Respondent of the original records of Arbitration proceedings, and the same was dismissed. However, this ::: Downloaded on - 09/06/2013 19:19:14 ::: KPP -7-
Court before dictating reasons in the matter, came across an allegation raised in the Affidavit-in-Rejoinder dated 29th August 2012 filed by the Petitioner in Court on 18th September 2012, wherein it was averred that the Respondent has not stated in their pleadings that the Arbitrators had forwarded a signed copy of the Award to the Petitioner. In view thereof, the Petition was placed for directions on 9th October 2012, and the Hindustan Chamber of Commerce was directed to produce the original record pertaining to the Arbitration Proceedings between the above Parties. Accordingly, the Secretary of the Hindustan Chamber of Commerce produced the original record before this Court on 22 nd October 2012.
However, since the Advocate for the Petitioner was not present, the Petition was adjourned to today i.e. 23 rd October, 2012. Today, copy of the sealed envelope received from the postal authorities by the Hindustan Chamber of Commerce and deposited with this Court on 22nd October 2012 was given to the Advocate for the Petitioner who was asked to open the same and ascertain as to whether the copy of the Award sent to the Petitioner and the service of which was refused by the Petitioner, contained a signed copy of the Award, as required under the law. The learned Advocate appearing for the Petitioner has opened the said envelope in Court and has confirmed that the said envelope contains a signed copy of the Award.
13. In the Petition, the Petitioner has made several incorrect and irresponsible allegations against the Hindustan Chamber of Commerce as well ::: Downloaded on - 09/06/2013 19:19:14 ::: KPP -8-
as the Respondent. It is alleged that there was no Arbitration Agreement between the parties; that the documents are fabricated by the Respondent in collusion with the Hindustan Chamber of Commerce ; that the Hindustan Chamber of Commerce was interested in the dispute and as such cannot act as an Arbitrator and cannot judge its own case and that no notice was ever received by the Petitioner from the Respondent. The Original records produced by Hindustan Chamber of Commerce belies all the above allegations made by the Petitioner against the Respondent and the Hindustan Chamber of Commerce.
From the said record it is clear that the Award was passed by the learned Arbitrators on 19th August 2009, the same was forwarded to the Petitioner by Registered Post as well as under Certificate of Posting. Whilst the envelope sent under Certificate of Posting is not returned back to Hindustan Chamber of Commerce , the envelope containing the signed copy of the Award, which was posted to the Petitioner on 4th September 2009 was refused to be accepted by the Petitioner on 7th September 2009 and returned by the postal authorities to the Hindustan Chamber of Commerce on 11 th September 2009. Refusal of service of the Award is good service under the law. However, the Arbitration Petition is filed by the Petitioner on 19 th January 2011 i.e. after more than 15 months from the service of the Award, on grounds which are false and incorrect to the knowledge of the Petitioner. The Petitioner has not sought condonation of delay in filing the Arbitration Petition. However, even if such a condonation Application would have been filed, this Court would not have entertained the ::: Downloaded on - 09/06/2013 19:19:14 ::: KPP -9-
same in view of the decision of the Hon'ble Apex Court in Union of India vs. Popular Construction Co.1 wherein it is held that Section 5 of the Limitation Act , 1963 is not applicable to an application challenging an Award under Section 34 of the Arbitration and Conciliation Act, 1996. The decision of the Hon'ble Apex Court in Bihar Mineral Development Corporation and another vs. Encon Builders (I) (P) Ltd.2 relied on by the Petitioner does not lend any assistance to the Petitioner.
14. In view thereof, the Petitioner has not filed the Petition within the time prescribed under Section 34 (3) of the Act. The above Arbitration Petition is therefore hopelessly time barred and the same is dismissed with costs.
(S.J. KATHAWALLA, J.) 1 AIR 2001 SC 4010 2 (2003) 7 SCC 418 ::: Downloaded on - 09/06/2013 19:19:14 :::