Shri C.S. Ahluwalia vs Mohd. Salim Khatri & Anr.

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                          FAO No.225/2006

%                                                   19th September, 2011

SHRI C.S. AHLUWALIA                                  ...... Appellant
                                   Through:    Ms. Shobhna Takiar, Advocate.

                           VERSUS

MOHD. SALIM KHATRI & ANR.                            ...... Respondents
                                   Through:    Mr. M.A. Khan, Advocate with
                                               Mr. Arun Batla, Advocate.



CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

    1.   Whether the Reporters of local papers may be
         allowed to see the judgment?

    2.   To be referred to the Reporter or not?

    3.   Whether the judgment should be reported in the Digest?


VALMIKI J. MEHTA, J (ORAL)

1.            The challenge by means of this First Appeal under Section

37 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as

„the Act‟) is to the impugned judgment of the Court below dated

8.3.2006, and by which judgment the Court below dismissed the

objections of the appellant/objector filed under Section 34 of the Act.


2.            The facts of the case are that the appellant as an owner of

the shop situated at ground floor of E-3, Lajpat Nagar-II, New Delhi-24

entered     into   a   franchise   agreement    dated   13.8.2001   with   the

respondents whereby respondents were allowed to sell the leather
FAO No.225/06                                                 Page 1 of 5
 products under the name of "Aflatoon" and "4 Wheel". The appellant

received various amounts under the franchise agreement totaling to a

sum of Rs.3,16,167/-. The respondents also spent a sum of Rs.50,000/-

towards renovation of the shop.       The appellant in spite of having

received the amounts did not allow the respondents to operate the

franchise agreement and sell the products from the shop as a result of

which respondents initiated arbitration proceedings for recovery of the

amounts paid in addition to the amount of Rs.50,000/- spent towards

renovation.

3.            The Arbitrator issued notices to the appellant to appear

before him and which notices were sent by registered post AD, by

courier as well by service of posting at the shop premises and where

they were received.      Since the appellant did not appear, he was

proceeded exparte and an exparte Award was passed.

4.            On behalf of the appellant it was argued before the Court

below, and which is also an argument addressed before me, that the

appellant was no longer at the premises in question where the franchise

agreement was to be operated and in fact he had shifted to Chandigarh

and it was therefore claimed that the appellant was not served in the

arbitration proceedings and the exparte Award is therefore liable to be

set aside. It is also argued that the appellant is a senior citizen of over

80 years of age and therefore he is entitled to discretion from this

Court.



FAO No.225/06                                               Page 2 of 5
 5.          In my opinion, the present litigation is a classic case of

gross abuse of process of law and an endeavour by a dishonest person

to retain with him monies received under a franchise agreement which

he deliberately failed to come into operation.      The Court below has

noted that the Arbitrator is a retired Judge of this Court and notice

issued shows the mobile number also of the Arbitrator. It is found that

no effort was made by the appellant to contact the Arbitrator. Though it

was argued that the appellant was sick, however, no proof with respect

to the alleged sickness of the appellant was filed. The Court below has

also noted that the entire judicial record shows no residential address of

the appellant either of Delhi or of Chandigarh. On the aspect that the

appellant is a senior citizen, the trial Court has held that he may be a

senior citizen, however, the fact of the matter is that he was otherwise

fully fit and in fact besides travelling abroad to meet his son in London

he was also personally pursuing the litigation.

6.          On these various aspects, the Court below has made

pertinent observations which are contained in paras 17 to 21, and which

read as under:-


      "17. It is significant to note that even in the affidavit filed in
      support of the present objection petition, objector has given
      his address as „Prop. of M/s Park-N Shop No.E-3, Lajpat Nagar-
      II, New Delhi-24‟. He has not furnished his residential address
      anywhere including the present petition. Photocopy of his
      passport placed on record by the objector also does not show
      his residential address.

      18. Further the Objector in para 1 of the objection petition
      also claims that due to his old age he is living with this son in
      Chandigarh. Significantly objector‟s own affidavit filed in
FAO No.225/06                                               Page 3 of 5
      support of the present objection petition does not mention the
     said Chandigarh address. No such address is recorded in the
     copy of passport placed on record by the objector. There is no
     other evidence either oral or documentary to show the said
     Chandigarh address. So the objection of the objector to the
     effect that he resides at Chandigarh and he is not using the
     premises E-3, Lajpat Nagar-II, New Delhi is false on the face of
     it and is not supported by any evidence.
     19. Notice dated 27.05.2005 issued by Ld. Arbitrator has
     also been placed on record. It clearly shows address and
     mobile phone of Ld. Arbitrator. In case of need or help,
     objector could have very well contacted Ld. Arbitrator on his
     mobile. That was not done. No effort was made by the
     objector to meet Ld. Arbitrator. No proof of sickness or
     consultation with any doctor has been filed.

     20. The objector in the objection petition has repeatedly
     claimed that he is a senior citizen of 80 years. He also claims
     to have poor eye sight and memory. I am conscious of the fact
     that old age by itself is a disease. But the question is does
     that ipso facto entitle the objector to get the Arbitral award in
     question set aside.
     21. As already discussed, objector has not given his
     residential address either of Delhi or Chandigarh. Admittedly
     objector went to his commercial premises at E-3, Lajpat Nagar-
     II, alone. Also admittedly objector came from Chandigarh. He
     also went to London alone. In other words objector has been
     doing so much of physical movement alone without the aid
     and help of anyone. The question is why no effort was made
     by him to contact Ld. Arbitrator either on phone or personally.
     No record of medical treatment has been filed. So, this is not a
     case where the objector lacked the skill, means or opportunity
     to present his case before Ld. Arbitrator. It appears to me that
     there was a deliberate attempt by the objector to avoid and
     thwart the arbitration proceedings. Objector has failed to
     establish any sufficient cause, even prima facie, which could
     justify his absence from arbitration proceedings. It is clear
     that his absence was deliberate and intentional. In the facts of
     this case mentioned above, it cannot be said that objector was
     unable to present his case before Ld. Arbitrator. In fact he
     deliberately avoided appearance and participation during the
     arbitration proceedings."

7.         I do not find any gross illegality or gross perversity for this

Court to interfere with the impugned order.       The scope of hearing

FAO No.225/06                                              Page 4 of 5
 objections to an Award is limited. If the scope of hearing objections to

an Award is limited, then, the scope of hearing an appeal against the

order dismissing objections will have to be further limited. I may note

that even in the present appeal a learned Single Judge of this Court had

recorded that respondents were ready to accept an amount lower than

Awarded of Rs.2 lacs with interest @ 9% per annum, however, the

appellant was not even agreeable to pay this particular amount. In view

of the above, I dismiss the appeal with actual costs.       This court is

entitled to impose actual costs in terms of Volume V of the Punjab High

Court Rules and Orders (as applicable to Delhi) Chapter VI Part I Rule

15. A Division Bench of three Judges of the Supreme Court in para 37 of

the decision reported as Salem Advocate Bar Association Vs. Union

of India (2005)6 SCC 344, has also observed that it is high time that

actual costs must be imposed. Considering the facts and circumstances

of the case, therefore, I deem it fit to dismiss the appeal with costs of

Rs.25,000/- and which shall be paid by the appellant to the respondents

within two weeks from today.


8.          The   appeal   is   accordingly   dismissed   with   costs   of

Rs.25,000/-.   The amount deposited by the appellant in this Court be

released to the respondents in part satisfaction of the subject Award.




SEPTEMBER 19, 2011                              VALMIKI J. MEHTA, J.

Ne FAO No.225/06 Page 5 of 5