Jenjon Retail And Services Pvt Ltd vs Lavasa Corportion Ltd
2016 Latest Caselaw 3077 Bom

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           IN THE HIGH COURT OF JUDICATURE AT BOMBAY
               ORDINARY ORIGINAL CIVIL JURISDICTION




                                                                               
                   ARBITRATION PETITION NO.1422 OF 2015




                                                       
    Jenjon Retail and Services Pvt. Ltd.          )
    a Company registered under the provisions     )
    of Companies Act through its                  )




                                                      
    Executive Director, Mr.Reji Thomas            )
    Age- 46 yrs. Occupation- Business             )
    having its address at C-101,                  )
    Golden Square Hsg.Soc.                        )




                                            
    Off C.S.T. Road, Kalina,                      )
    Santacruz (W), Mumbai                         )       ..     Petitioner

                    Versus
                                   
    Lavasa Corporation Ltd.                    )
                                  
    a Company incorporated under the           )
    Companies Act, 1956 and having its address )
    247, "Park", 13th Floor, LBS Marg,         )
    Vikhroli (W), Mumbai - 400 083             )      ..  Respondent
          


                 ---
    Mr.A.Wacha Sundar i/by Mr.Siddharth Deshpande for the petitioner.
       



    Mr.Atul Damle, Senior Advocate a/w Mr.Sandesh Shukla i/by Mr.Santosh
    Sawant for the respondent.
                 ---





                             CORAM : R.D. DHANUKA, J.

                             DATE       :  22nd June 2016
    Judgment :-

    .               By this petition filed under Section 34 of the Arbitration

and Conciliation Act, 1996 (for short "the Arbitration Act") the petitioner has impugned the arbitral award dated 18th July 2014 rejecting the claim made by the petitioner holding that in the absence of the statement of claim and in the absence of any evidence adduced by the petitioner, there was absolutely no dispute of any nature between the parties which could be said to have been pleaded and proved.

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2. The respondent at the threshold has raised an issue of

limitation in filing the present petition beyond the period of limitation prescribed under Section 34(3) of the Arbitration Act. In view of the

objection raised by the respondent in respect of limitation of this petition, both the counsel have addressed this Court on the issue of limitation.

3. Learned counsel appearing for the petitioner submits that though the impugned award was rendered by the learned arbitrator on 18th July 2014, the signed copy of the impugned award was served

upon the petitioner only on 13th March 2015. He submits that the

arbitration petition is lodged by the petitioner on 22 nd June 2015. He submits that the petitioner had applied for certified copy of the award

on 26th February 2015 which was received by the petitioner from the learned arbitrator on 13th March 2015. He submits that period of 16 days in obtaining certified copy of the award from the learned arbitrator is to

be excluded under Section 12(2) of the Limitation Act, 1963. He submits

that the petition is thus filed within the period of three months from the date of getting signed copy of the award from the learned arbitrator and

thus the petition was filed within time prescribed under Section 34(3) of the Arbitration Act.

4. In support of his submission that period of limitation as

prescribed under Section 34(3) of the Arbitration Act would commence from the date of the petitioner getting a signed copy of the arbitral award from the learned arbitrator under Section 31(5) of the Arbitration Act and in support of the submission that unless the petitioner would have refused to accept the signed copy of the arbitral award from the learned arbitrator, limitation would not have commenced till the signed copy of

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the arbitral award was received by the petitioner from the learned

arbitrator, learned counsel placed reliance on the judgment of the Supreme Court in the case of Union of India Vs.Tecco Trichy Engineers

& Contractors, reported in (2005) 4 SCC 239 and in particular paragraphs 8, 9, 12 and 13 thereof, the judgment of the Supreme Court in the case of State of Maharashtra and Ors. Vs. Ark Builders Private

Limited, reported in (2011) 4 SCC 616 and in particular paragraphs 13 to 17 thereof, the judgment of this Court in the case of Mr.Gaurang s/o.

late Vinod Doshi Vs. Vinay A. Choksi, reported in 2015(2) ALL MR 802 and in particular paragraphs 10 and 12 thereof and the judgment

of this Court in the case of Lalmani Ramnath Tiwari Vs. Bhimrao Govind Pawar, reported in 2001 (3) Bom CR 21 and in particular

paragraphs 7 to 9 and 11 thereof.

5. Relying upon these three judgments, it is submitted by the

learned counsel that requirement under Section 31(5) of the Arbitration

Act for delivery of a signed copy of the award by the learned arbitrator to a party is not an empty formality. He submits that the limitation

prescribed under Section 34(3) of the Arbitration Act does not commence from the date of knowledge of the learned arbitrator having delivered such arbitral award but would commence only from the date of the signed copy of the arbitral award is delivered to the party making an application

for setting it aside. It is submitted by the learned counsel for the petitioner that the petitioner had never refused to accept the service of the signed copy of the award from the learned arbitrator.

6. It is submitted that even if the remark mentioned on the envelope containing arbitral award by the post office stating as

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"Unclaimed" was correct, an unclaimed service would not amount to a

good service for computation of the period of the limitation prescribed under Section 34(3) of the Arbitration Act. He submits that from the

plain language of Section 31(5) of the Arbitration Act read with Section 34 (3), it is clear that the limitation for filing in arbitration petition under Section 34(3) of the Arbitration Act would commence only from

the date of service of signed copy of the award from the learned arbitrator and not if the party had claimed service of such award. He submits that

it is not the case of the respondent that the petitioner had refused to accept the copy of the arbitral award from the learned arbitrator.

7. In view of the dispute raised by the parties as to the date of

receipt of copy of the signed award from the learned arbitrator, this Court by an order dated 7th April 2016 requested the learned arbitrator to file original arbitration proceedings in this Court. Pursuant to the said

order passed by this Court, the learned arbitrator filed the records and

proceedings of the arbitration on 30 th April 2016. This Court permitted both the parties to take inspection of the said records and proceedings of

the arbitration.

8. Mr.Damle, learned senior counsel appearing for the respondent, on the other hand, submits that the learned arbitrator had

forwarded copies of the signed award to both the parties along with his covering letter dated 18th July 2014 at the addresses mentioned on the records of the learned arbitrator. Learned arbitrator had forwarded all the notices to the parties at the addresses mentioned on record. He submits that the respondent had collected the copy of the award from the learned arbitrator on 23rd July 2014.

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9. Learned senior counsel for the respondent invited my

attention to the letter dated 26th February 2015 addressed by the petitioner to the learned arbitrator alleging that the petitioner had come

to know that the learned arbitrator had made an award, however, the petitioner did not have any details as to time, date and month of the said award, if any already passed. By the said letter, the petitioner requested

the learned arbitrator to supply to the petitioner an authenticate copy of the award delivered by the learned arbitrator which was required for

the purposes of adopting further legal remedy as may be available in law. In the said letter, the petitioner also contended that under the

provisions of the Arbitration and Conciliation Act, 1996, time would commence against the petitioner only after the date of receipt of the

authenticated copy of the award from the learned arbitrator.

10. Learned senior counsel also invited my attention to the letter

dated 3rd March 2015 addressed by the learned arbitrator to the

petitioner expressing surprise that the petitioner had so far not received the copy of the award in original posted by the learned arbitrator on 18 th

July 2014 from the Stock Exchange Post Office. Learned arbitrator had informed the petitioner that it had not received the said packet back from the post office. Learned arbitrator called upon the petitioner to pay arrears of his fees as noted in the arbitral award and to collect the

arbitral award from his office during any week days from Monday to Friday between the office hours from 11.00 a.m. to 5.00 p.m.

11. Learned senior counsel invited my attention to the original envelope containing arbitral award which was sent by the learned arbitrator along with his covering letter dated 18 th July 2014 showing

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endorsement made by the postal department 'INT POST' dated 21 st July

2014 and 22nd July 2014. He submits that it is thus clear that the said packet was attempted to be delivered at the address of the petitioner

company. He submits that though the intimation was posted by the postal department, the petitioner did not claim the said award from the post office which amounted to good service. He submits that limitation

for filing the arbitration petition under Section 34 (3) of the Arbitration Act had commenced on the date when the petitioner unclaimed the said

copy of the arbitral award sent by the learned arbitrator. He submits that the petitioner having not claimed the copy of the said award sent by the

learned arbitrator, though intimation was posted by the post office, it amounted to a good service. In support of his submission, learned senior

counsel placed reliance on the judgment of the Calcutta High Court in the case of New Globe Transport Corporation Vs.Magma Shrachi Finance Ltd., reported in AIR 2011 Calcutta 72 and in particular

paragraphs 9, 11, 12 and 15 thereof.

12. Learned senior counsel also placed reliance on the judgment

of the Supreme Court in the case of C.C. Alavi Haji Vs.Palapetty Muhammed and Anr., reported in (2007) 6 SCC 555 and in particular paragraphs 13 to 15 in support of the submission that Section 27 of the General Clauses Act, 1897 gives rise to a presumption that service of

notice had been effected when it is sent to the correct address by the registered post. He submits that unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. He submits that since the learned arbitrator had sent a copy of the signed award at the correct address of the petitioner by

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registered post A.D., service was deemed to have been effected upon the

petitioner in view of Section 27 of the General Clauses Act, 1897.

13. Learned senior counsel for the respondent also invited my attention to the averments made by the petitioner in the petition and also in the additional affidavit filed before this Court and would submit that

the plea raised by the petitioner about knowledge of the learned arbitrator rendering the impugned award was totally false and inconsistent. He submits that the said copy of the arbitral award was already relied upon

by the respondent in another proceedings filed by the respondent against

the petitioner. He submits that the petitioner had not disclosed in the arbitration petition that the copy of the award was though sent by the

learned arbitrator at the correct address of the petitioner, the petitioner had unclaimed the copy of the said award though intimation was posted by the postal department. Learned senior counsel distinguishes the

judgment relied upon by the learned counsel for the petitioner.

14. Learned counsel for the petitioner in rejoinder submits that

judgment relied upon by the respondent which is delivered by the Supreme Court considering the provisions of Negotiable Instruments Act, 1881 on the issue of deemed service under Section 27 of the General Clauses Act, 1897 would not apply to the matter governed by the

provisions of the Arbitration and Conciliation Act, 1996 in view of the provisions of these two Acts being totally different.

REASONS AND CONCLUSIONS :-

15. The short question arises for consideration of this Court is whether unclaimed service of the signed copy of the arbitral award sent

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by the learned arbitrator to a party under Section 31(5) of the Arbitration

Act inspite of intimation posted by the postman would amount to a good service and refusal to accept the arbitral award and if whether

limitation for filing a petition would commence under Section 34(3) of the Arbitration Act from the date of such refusal of service of the arbitral award.

16. There is no dispute that the learned arbitrator had rendered the said arbitral award on 18th July 2014. The learned arbitrator along

with his covering letter dated 18 th July 2014 had dispatched the arbitral

award to both the parties at their addresses on record of the arbitral proceedings. The respondent received a copy of the said award by hand

delivery from the learned arbitrator on 23rd July 2014.

17. A perusal of the record indicates that on the said envelope

containing the arbitral award, the postman had made an endorsement

'INT POST' dated 21st July 2014 and 22nd July 2014. The petitioner has suppressed this fact in the arbitration petition as well as in the affidavits

filed before this Court in the aforesaid proceedings. It is only when the respondent raised a plea of limitation in filing the present petition beyond the period of limitation prescribed under Section 34(3) of the Arbitration Act, in the additional affidavit filed by the petitioner on 6 th June 2016,

the Director of the petitioner alleged that on 19 th July 2014, he had left Mumbai to see his old parents who are allegedly staying at Bhopal in Madhya Pradesh as part of regular routine and returned back to Mumbai on 26th July 2014. It is alleged that wife of the said director is employed and his children are school going so there was a possibility that during that period postman had visited his house in the afternoon

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and he had found no one to deliver the said packet. Those allegations

were made for the first time in the said additional affidavit filed on 6 th June 2016. No proof of such alleged visit of the deponent to Bhopal

or that his wife was employed are furnished.

18. In the averments made in paragraph 25 of the arbitration

petition, the petitioner has admitted that the Director of the petitioner came to know that on 18 th July 2014, learned arbitrator had passed an

award. On 26th February 2015, the petitioner addressed a letter to the learned arbitrator stating that the Director of the petitioner had come to

know that the learned arbitrator had made an award. However, he did not have any details as to the time, date and month of the said award, if

any already passed. The respondent had brought on record the fact of declaration of award in another proceedings filed by the petitioner against the respondent and had annexed a copy of the said arbitral award

in the month of August 2014 in the said proceedings. It is thus clear that

though the petitioner was aware of the declaration of the impugned award by the learned arbitrator in the month of July 2014 or August

2014, the petitioner made an application for certified copy of the award only on 26th February 2015.

19. A perusal of the affidavit in rejoinder filed by the petitioner

indicates that the petitioner has also excluded the period of 16 days from 26th February 2015 to 13th March 2015 under Section 12(2) of the Limitation Act, 1963 towards the time alleged to have been taken in obtaining the certified copy of the award from the learned arbitrator during the said period. In my view, the Arbitration Act being a self-

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contained code, time in obtaining the certified copy of the award from

the learned arbitrator under Section 12(2) of the Limitation Act while computing the period of limitation under Section 34(3) of the Arbitration

Act is not excluded. The petitioner thus cannot seek exclusion of period of 16 days under Section 12(2) of the Limitation Act on the ground that the petitioner had applied for certified copy of the award from the

learned arbitrator and the time in obtaining the certified copy of such award has to be excluded.

20. It is not in dispute that at the same address at which the

learned arbitrator had posted signed copy of the arbitral award, the petitioner used to receive various correspondence and notices from the

learned arbitrator. The petitioner had received signed copy of the award also at the same address in the month of March 2015.

21. Under Section 3(1) of the Arbitration Act, any written

communication is deemed to have been received if it is delivered to the addressee personally or at his place of business, habitual residence or mailing address, and if at none of the places referred to in clause (a) of

Section 3 can be found after making a reasonable inquiry, a written communication is deemed to have been received if it is sent to the addressee's last known place of business, habitual residence or mailing

address by registered letter or by any other means which provides a record of the attempt to deliver it. Under Section 3(2) of the Arbitration Act, the communication is deemed to have been received on the day it is so delivered. There is no dispute that pursuant to the said envelope containing the signed copy of the award having been posted by the learned arbitrator along with his covering letter dated 18th July 2014, the

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postman had made two attempts to deliver the said copy of the signed

award to the petitioner at the last known address of the petitioner. The petitioner however did not collect the copy of the said signed award

though the intimation was posted twice by the postman.

22. It is not in dispute that the petitioner had lodged this

arbitration petition only on 22nd June 2015 whereas the intimation was posted by the postman on 21 st July 2014 and 22nd July 2014. Since the petitioner not having claimed the copy of the signed award though

the intimation was posted on 21st July 2014 and 22nd July 2014, in my

view, it would amount to a good service and would amount to refusal on the part of the petitioner to accept service of the said signed copy of the

award delivered by the learned arbitrator under Section 31(5) of the Arbitration Act. In my view, the learned arbitrator had already complied with the said provision under Section 31(5) by delivering the signed copy

of the award to each of the parties to the arbitral proceedings.

23. Supreme Court in the case of C.C. Alavi Haji (supra) while interpreting the provisions of Section 138 of the Negotiable

Instruments Act, 1881 has held that if a strict interpretation is given that the drawer should have actually received the notice for the period of 15 days to start running no matter that the payee sent the notice on the

correct address, a trickster cheque drawer would get the premium to avoid receiving the notice by different strategies and he could escape from the legal consequences of Section 138 of the Negotiable Instruments Act. It must be borne in mind that the Court should not adopt an interpretation which helps a dishonest evader and clips an honest payee as that would defeat the very legislative measure. Supreme Court also

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considered the provisions of the General Clauses Act, 1897 in the said

matter and held that service is deemed to have been effected on the sendee unless he proves that it was not really served and that he was not

responsible for such non-service.

24. Calcutta High Court in the case of New Globe Transport

Corporation (supra) while dealing with the issue of limitation under Section 34(3) of the Arbitration Act read with Section 3(1)(a) of the Arbitration Act and Section 27 of the General Clauses Act, 1897 after

adverting to the judgment of the Supreme Court in the case of C.C.

Alavi Haji (supra) has held that unclaimed service would amount to refusal of service and in that situation, service of arbitral award is

deemed to have been effected on the sendee. In my view, the judgment of the Supreme Court in the case of C.C. Alavi Haji (supra) and the judgment of Calcutta High Court in the case of New Globe Transport

Corporation (supra) apply to the facts of this case.

25. In my view, the principles laid down by the Supreme Court in the case of C.C. Alavi Haji (supra) while construing the provisions

of Negotiable Instruments Act, 1881 and Section 27 of the General Clauses Act, 1897 can be extended while construing the expression 'delivery' within the meaning of Section 31(5) and Section 34(3) of the

Arbitration Act. I am in agreement with the views expressed by the Calcutta High Court in the case of New Globe Transport Corporation (supra).

26. In my view, if the submission of the learned counsel for the petitioner that till service of signed copy of the arbitral award from the

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learned arbitrator is actually received by the petitioner though it was not

claimed by the petitioner inspite of intimation posted by the postman, it will not amount to delivery of the award under Section 31(5) of the

Arbitration Act is accepted, dishonest litigant who deliberately does not claim copy of the signed award sent by the learned arbitrator inspite of the postman having posted the intimation, the limitation would never

commence for filing a petition under Section 34(3) of the Arbitration Act and the beneficiary of the award would never be able to apply for

execution of such award. The arguments of the learned counsel for the petitioner, in my view, is ex facie contrary to the principles laid down

by the Supreme Court in the case of C.C. Alavi Haji (supra) and judgment of the Calcutta High Court in the case of New Globe Transport

Corporation (supra), contrary to Section 3 of the Arbitration and Conciliation Act, 1996, Section 27 of the General Clauses Act, 1897 and also to the provisions of Section 31(5) of the Arbitration Act, 1996.

27. In my view, unclaimed service amounts to a good service and amounts to refusal to accept the delivery of the arbitral award which

was sent by the learned arbitrator at the correct address and the intimation was posted by the postman to the petitioner. In my view, the limitation for filing of the arbitration petition under Section 34(3) of the Arbitration Act would commence from the date on which the intimation was posted

by the postman and the same was not collected by the petitioner from the post office. Admittedly, the intimation was posted in this case by the postman on 21st July 2014 and 22nd July 2014 whereas the the petitioner has lodged the arbitration petition only on 22nd June 2015. The petition thus having been filed after expiry of three months from the date of

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deemed delivery of such award, the petition in my view is barred by law

of limitation prescribed under Section 34(3) of the Arbitration Act.

28. In so far as the judgments of the Supreme Court in the case of Union of India Vs.Tecco Trichy Engineers & Contractors (supra) and in the case of State of Maharashtra and Ors. Vs. Ark Builders

Private Limited relied upon by the petitioner are concerned, Supreme Court in none of these judgments had considered the issue as to whether unclaimed service amount to a good service or refusal on the part of the

sendee to receive copy of the award. In my view, none of these judgments

of the Supreme Court would assist the case of the petitioner and are clearly distinguishable in the facts of this case. Judgment of this Court in

the case of Lalmani Ramnath Tiwari Vs. Bhimrao Govind Pawar (supra) and in the case of Mr.Gaurang s/o. late Vinod Doshi Vs. Vinay A. Choksi (supra) relied upon by the learned counsel for the petitioner

also would not assist the case of the petitioner for the similar reasons. In

my view, the petition is clearly barred by law of limitation.

29. I therefore pass the following order :-

(a) Arbitration Petition No.1422 of 2015 is dismissed on the ground of limitation.

(b) There shall be no order as to costs.

R.D. DHANUKA, J.