Goodwill India Ltd. vs Shri Pala Singh And Another
1993 Latest Caselaw 223 Del

JUDGMENT

Arun Kumar, J.

1. M/s. Goodwill India Limited is a finance company which finances the purchase of vehicles on hire-purchase basis. The finance company entered into a hire-purchase agreement regarding a truck with respondent No. 1. Respondent No. 2 is the guarantor. Hire-purchase agreement contains an arbitration clause. As per an order passed by this court on 30th April, 1979 on a petition under Section 20 of the Arbitration Act Shri Rajpal Sagar, the arbitrator named in the agreement was appointed the sole arbitrator.

2. The arbitrator gave his award on 4th September, 1980. The said award was set aside by this court vide order dated 11th November, 1983 and the proceedings were remanded back to the arbitrator with a direction that fresh opportunity be granted to respondent No. 1 Shri Pala Singh. In pursuance of the said order of this court the claimant company and respondent No. 1 appeared before the sole arbitrator on 22nd November, 1983. Respondent No. 1 filed a reply dated 30th November, 1983. First the claimant company led its evidence before the arbitrator. This was followed by the statement of respondent No. 1 Pala Singh as RW-1. On 12th March, 1984 RW-1, Pala Singh was under cross examination. His cross examination was deferred because the witness was directed to produce certain receipts of payments alleged to have been made by him to the claimant company. On the same date the statement of respondent No. 1 Pala Singh was recorded to the effect that he had no objection to the arbitration proceedings being conducted beyond the period of four months granted by this court vide order dated 11th November, 1983. The case was adjourned to 26th March, 1984 for further cross examination of RW-1. Respondent No. 1 Pala Singh who was in the witness box as RW-1 did not appear. However, his counsel Shri S. K. Chhibbar was present. The case was adjourned on the request of respondent No. 1 to 9th April, 1984 for further cross examination of respondent No. 1 and for reply and arguments on an application which had been moved on behalf of respondent No. 1. On 9th April, 1984 again respondent No. 1 was not present though his counsel was present. As per request of counsel for respondent No. 1 the case was adjourned to 30th April, 1984 for cross examination of respondent No. 1 and hearing of the application moved by respondent No. 1. Same thing was repeated on 30th April, 1984. Counsel for respondent No. 1 was present and respondent No. 1 was not present. Respondent No. 1 was permitted to summon Shri Virender Singh as a witness. This was in pursuance of the application of respondent No. 1 to which reference has already been made. The case was adjourned to 15th May, 1984 for further cross examination of Pala Singh, respondent No. 1 and evidence of Virender Singh, witness.

3. On 15th May, 1984 neither respondent No. 1 nor his witness Virender Singh were present though Shri S. K. Chhibbar, Advocate was present. Shri Chhibbar submitted before the arbitrator that in spite of his letter there was no response from respondent No. 1 and a request was again made for adjournment. Last opportunity was granted to respondent No. 1 for producing his witness and the case was adjourned to 4th June, 1984. Same situation was repeated on 4th June, 1984 and the proceedings were adjourned to 10th July, 1984 subject to payment of Rs. 150/- as costs. Again on 10th July, 1984 neither Shri Pala Singh, respondent No. 1 nor his witness were present. Shri S. K. Chhibbar, advocate for respondent No. 1 who was present again made a request for adjouenment. The costs awarded by previous order was not paid. In these circumstances the arbitrator closed the evidence of the respondent and fixed the case for arguments on 16th July, 1984. On 16th July, 1984 neither the respondent nor the counsel appeared. The matter was argued on behalf of the petitioner. The arbitrator made an award on 21st July, 1984. It is this award which is under challenge in the present proceedings.

4. On 18th May, 1987 the following issues were framed :

(1) Whether the award is liable to be set aside on the grounds urged in the present petition ?

(2) Relief.

5. The parties were given opportunity to lead oral evidence. Only respondent No. 1 has led oral evidence. OW-1 is Shri Pala Singh, respondent No. 1 himself while OW-2 is one Gurmej Singh.

6. The objector has mainly urged the following points in support of his prayer for setting aside the award :

(1) Only the consent of respondent No. 1 for extension of time was obtained on 12th March, 1984, which is illegal. It has been further submitted that the award was made on 21st July, 1984 which is beyond time even if four months' period of extension is calculated on the basis of 12th March, 1984.

(2) In the facts and circumstances of the case the arbitrator misconducted the proceedings by not granting adjournment to respondent No. 1 to complete his evidence.

(3) Vide order dated 27th September, 1979 passed by this court in Suit No. 741-A of 1978 the claimant company was allowed to ply the vehicle and recover whatever money that could be recovered in this manner. It is submitted that the claimant company failed to account for the money realised by running the vehicle and credit for such realisation should have been given to respondent No. 1.

7. So far as point No. 1 is concerned, it is not being disputed that respondent No. 1 had given his consent for extension of time by four months on 12th March, 1984. It is respondent No. 1 who is now raising the issue that the award is beyond time. Having consented to extension of time it does not lie in the month of respondent No. 1 to challenge his own statement regarding extension of time. So far as the question of the award having made beyond four months even from 12th March, 1984 it has been submitted on behalf of the claimant company that the delay, if any, occurred on account of the continued requests on behalf of respondent No. 1 for adjournment of the proceedings. To accommodate respondent No. 1 several adjournments were granted. Under these circumstances according to the learned counsel for the claimant company it is a fit case where the court should exercise its discretion under Section 28 of the Arbitration Act for extending time for making the award. It is not disputed that the court has suo motu power to extend time under Section 28 of the Arbitration Act. Under the facts and circumstances of the case I am inclined to use my discretion in favor of the petitioner company and time for making the award is extended till the date upward was made by the arbitrator.

8. A resume of all the relevant dates has already been given in the opening para of this judgment. It shows that on 12th March, 1984 respondent No. 1 was under cross examination and to enable him to produce the original receipts regarding certain alleged payments which respondent No. I claimed to have made to the claimant company, the proceedings were adjourned to 26th March, 1984. Respondent No. 1 did not appear before the arbitrator thereafter. According to the learned counsel for respondent No. 1 and as per the oral evidence led by respondent No. 1, the law and order situation in the area in which respondent No. 1 was residing was very bad during the relevant period. There was a rise in terrorist activities in the area and it was not possible for anyone to come out of their respective places of residence or fields. Respondent No. 1 is a farmer and has stated that he used to remain throughout in his fields and he used to guard his family during the night and used to sleep during the day. He further submits that the situation was so bad that even mail was not being distributed in the area during those days.

9. In cross examination it was put to PW-1 as to when the situation really became so bad in his area. In response to the suggestion as to whether it was so after the 'Operation Blue Star', the witness admitted that it was correct. The 'Operation Blue Star' was in early June 1984 whereas the date of hearing fixed before the arbitrator was 26th March, 1984. Counsel for respondent No. 1 has also submitted that prior to 26th March 1984 respondent No. 1 used to attend all the hearings before the arbitrator and there is no reason why he should not have appeared on 26th March, 1984 if the law and order situation was normal in his area. In other words he submits that it was only on account of the situation in the area that respondent No. 1 could not appear before the arbitrator on 26th March, 1984. By this if reference was to general political situation prevailing in the area during those days, no advantage can be derived by respondent No. 1 because he was himself admittedly appearing before the arbitrator since November 1983 and up to 12th March, 1984. Respondent No. 1 has admitted that the situation worsened after the 'Operation Blue Star'. Therefore, on 26th March, 1984 or soon thereafter when the case was filed on 9th April, 1984, 30th April, 1984, 15th May, 1984, there was no reason for respondent No. 1 not to appear. It seems that respondent No. 1 had no sufficient evidence in the shape of receipts to place before the arbitrator and, therefore, he did not consider it worthwhile to further continue to appear before the arbitrator. The learned arbitrator has given several adjournments. There has to be a limit of adjournments also. It is significant to note that in none of the requests for adjournments, it has been stated before the arbitrator on behalf of respondent No. 1 when his counsel used to appear on all the dates of hearing, that it was on account of adverse law and order situation in the area of residence of respondent No. 1 or that it was on account of terrorist activity in that area that respondent No. 1 was unable to appear. The request for adjournment before the learned arbitrator was never made on account of adverse political situation or terrorist activity. If the situation was really so bad, even counsel for respondent No. 1 could have stated so before the arbitrator and requested for adjournment on that basis. It is worth nothing in this connection that respondent No. 1 has shown himself to be resident of village Katyanwali in Tehsil Muktsar. However, he had his close links with the adjacent town of Faridkot. He had sent a telegram in the year 1979 to the arbitrator which is on arbitration record in which he had shown his address as 'Okara Transport Malout, Faridkot'. Least he could do was to send a telegram to his advocate or to the arbitrator pointing out his difficulty and requesting for adjournment.

10. Under these circumstances do not find any substance in the plea of respondent No. 1 that the arbitrator misconducted the proceedings in not granting sufficient adjournments to respondent No. 1 enable him to appear as a witness in the arbitration proceedings.

11. Coming to the third point urged on behalf of the objector, my attention has been drawn to the order dated 27th September, 1979 passed by this court in Suit No. 741-A of 1978. It is submitted that in view of the said order the claimant company was permitted to ply the truck and make income there from and the claimant company ought to have accounted for such income before the arbitrator. Credit of such income ought to have been given to respondent No. 1. In reply to this counsel for the claimant company submits that a fresh hire-purchase agreement had been entered into with respect to the truck with one Virender Singh. Vishal Chand who appeared as a witness on behalf of the claimant company before the arbitrator categorically stated that nothing was recovered from the said party in pursuance of the fresh hire-purchase agreement and, therefore, there was no occasion for accounting for any income derived from the truck before the arbitrator. Further it is pointed out that the claimant company produced its account books which showed that no income had been derived from the said truck. In view of this evidence on record there is no substance in this objection raised on behalf on respondent No. 1.

12. Under the circumstances the objections are dismissed. The award dated 21st July, 1984 is made rule of the court. Decree is passed in terms of the award. The award will form part of the decree. Parties are left to bear their own costs. The claimant will be entitled to interest at the rate of 12 per cent per annum from the date of award till realisation.

13. The suit and the objections stand disposed of.