Anil Jain vs Madhunam Appliances (P) Ltd.
1997 Latest Caselaw 579 Del

JUDGMENT

Mohd. Shamim, J.

(1) The appellant through the present appeal has taken exception to the judgment and order dated August 19, 1996 passed by the Additional District Judge whereby the learned lower Court allowed the application under Sections 14 and 17 of the Arbitration Act and made the award dated 3rd May, 1988 passed by Shri L.M.Asthana, Arbitrator a rule of the Court.

(2) Facts in brief which led to the presentation of the present appeal are as under: that the respondent herein moved an application under Sections 14 and 17 of the Arbitration Act for making the award alluded to above a rule of the Court and to pass a decree in terms thereof on the ground that the respondent are a company with limited liability having their registered office at 82/2 (33) Chandni Chowk, Delhi Shri Vikas Chander is the Director in-charge of the respondent. He is the principal officer of the said company and is therefore, competent to sign and verify the petition. The appellant and the respondent No. 1 herein entered into an agreement dated September 19, 1993 whereunder Shri L.M.Asthana, advocate, respondent No. 2, was chosen as an arbitrator to settle the disputes and differences in between the parties. Later on the disputes and differences arose in between the parties. Consequently the same were referred as per the aforementioned agreement to respondent No. 2 for decision. The respondent No. 2 made and published his award on April 28, 1984. However the same was set aside by Shri G.S.Dhaka, Additional District Judge vide his judgment and order dated January 17, 1987 and remanded the case to the learned arbitrator for a decision afresh. The learned arbitrator entered the reference after giving a number of opportunities to the appellant to put forward their case, yet the appellant failed to avail, the said opportunities. The learned arbitrator consequently was left with no alternative but to proceed ex parte which he did and made and published his award on May 3, 1988. The intimation with regard to the award having been made and published was received by the respondent on May 21, 1988.

(3) It was in the above circumstances that the respondent No. 1 moved an application before the learned District Judge for making the award a rule of the Court and to pass a decree in terms thereof against the appellant. the appellant herein objected to the said award through his objections under Sections 30 and 33 of the Arbitration Act and prayed for setting aside the same, inter alia, on the following grounds: that no notice of the arbitration proceedings was ever sent and served on the appellant. Consequently the impugned award is liable to be set aside on this short ground alone. The impugned award made and published after the expiry of the statutory period inasmuch as the arbitrator was appointed vide judgment and order dated January 17, 1987 whereas the award in question was made and published on May 3, 1988. The respondent No. 2 i.e. the arbitrator has been the counsel of the respondent. He has been conducting their cases. Hence he is their man. The learned lower Court after the appraisal of the evidence which was led by the parties came to the conclusion that the respondent were entitled to succeed. Hence he rejected the objections and made the impugned award a rule of the Court and passed a decree in terms thereof. Aggrieved and dis-satisfied with the said judgment and decree the appellant has approached this Court.

(4) Learned counsel for the appellant Mr. P.K.Jain, Advocate during the course of his arguments has raised only one point before this Court. According to the learned counsel the appellant was never served with any notice, whatsoever. He was as such not aware of the proceedings pending before the arbitrator. Thus, the entire proceedings before the arbitrator went on in the absence of the appellant. He was never granted any opportunity to participate in the proceedings. Thus, the proceedings which were conducted behind the back of the appellant would be deemed to be no proceedings in the eye of law and the same are, thus liable to be set aside. The learned counsel contends and prays this Court for setting aside the impugned judgment and order.

(5) Learned counsel for the respondent Mr. Kanwal Narain, on the other hand, has argued that it is false and preposterous that the appellant was not given intimation by the learned arbitrator with regard to the proceedings which were pending before him. The fact is that the appellant with an ulterior motive abstained himself intentionally from the proceedings in order to prolong the same. The learned counsel thus argues that this is the modus operandi of the appellant which he has been adopting since long to delay the proceedings by abstaining himself from participating therein. He did so during the earlier proceedings before the arbitrator which resulted in an award made and published on April 28, 1984, but the said award was set aside by Shri G.S.Dhaka, Additional District Judge, on January 17, 1987 who through the said judgment and order remanded the case to the present arbitrator, respondent No. 2, for a decision afresh. Thus it does not lie in the mouth of the appellant to allege that he was not aware of the proceedings pending decision before the arbitrator. Admittedly the said award, adverted to above, was set aside on the basis of the objections filed by the appellant before the learned. Additional District Judge. Thus it was within the knowledge of the appellant that the case had been remanded to the arbitrator for his decision a new. Furthermore, the learned arbitrator had given a good number of notices to the appellant to join the proceedings, yet the appellant avoided the said notices and refused to accept the same. Hence, the appellant cannot be now permitted to put forward this defense that he was not served with a notice prior to the initiation of the arbitration proceedings.

(6) It is manifest from above that the one and the sole point which arises for adjudication in the present case is as to whether the appellant had intimation with regard to the arbitration proceedings pending before the arbitrator? It is not in dispute that an award was made earlier also against the appellant which was made and published on April 28, 1984. A perusal of the same reveals that the appellant took exception to the said award and filed objections against the same and prayed that the same be set aside. The learned Additional District Judge set aside the award vide judgment and decree dated January 17, 1987 and remanded the case for a decision afresh by the learned arbitrator on the disputes in between the parties. Thus the earlier award was set aside at the instance of the appellant. Hence it, can be safely inferred therefrom that it must have been within the knowledge of the appellant that the matter had been remanded to the learned arbitrator for deciding the case again. Hence, the appellant cannot be heard now to allege to the contrary. He should have been on his tiptoe and guard, in order to find out as to when the proceedings were going to be initiated against him over again. In fact, he should have made enquiries in this regard from the office of the arbitrator since the name of the arbitrator was known to him.

(7) There is yet another side of the picture. The learned arbitrator issued quite a good number of notices to the present appellant through registered post and all of them were returned with the report that the appellant was not available and the employees in his office refused to accept the notices (vide report dated November 7, 1987). To the same effect are the reports dated November 27, 1987; December 11, 1987; December 23, 1987; December 25, 1987 and April 11, 1989. Then there is a report of the refusal dated March 1, 1988.

(8) It is crystal clear from above that the learned arbitrator left no stone unturned to get the service effected on the appellant. In fact, the learned counsel for the appellant Mr.P.K.Jain has admitted with commendable fairness on his part that the arbitrator sent as many as 10 notices to the appellant to get him served. Thus, it can be inferred from above that the appellant was trying to avoid the notices and in fact he refused to accept one registered notice vide report dated March 1, 1988. The arbitrator having failed in his attempt to get the appellant served through the registered notices tried to get him served by hand through one Suraj Prakash. A perusal of the report dated February 6, 1988 made by Shri Suraj Prakash goes to show that he met the appellant and tendered the notice to him who refused to accept the same whereafter he pasted a copy thereof near his shop. Now the question which comes to the tip of the tongue is as to whether the appellant would be deemed to have been served in the above stated circumstances? My answer to the above query would be in the affirmative in the circumstances of the present case. The only thing which the arbitrator could have done was to issue a notice to the appellant which he did. The postmen made frantic efforts to serve the appellant and tried to contact him on innumerable cases. The endorsement on different dates bear eloquent testimony to this effect. Thus, if somebody avoids to accept the notice or refuses to accept the same then it is a setting principle of law that he would be deemed to have been served once it is shown that a notice was sent on the correct address which is the case in the present case. Admittedly this is not the defense of the appellant that the address on the envelope was wrong, thus it can be presumed that the notice would have been delivered to him if he had not refused to accept the same. I am supported in my above view by the observations of the Hon'ble Supreme Court as reported in M/s.Madan and Co. Wazir Jaivir Chand, Rcr 1988(2) 654 "...... But as against this, if a registered letter addressed to a person at his residential address does not get served in the normal course and is returned, it can only be attributed to the addressee's own conduct. If he is staying in the premises, there is no reason why it should not be served on him. If he is compelled to be away for some time, all that he has to do is to leave necessary instructions with the postal authorities either to detain the letters addressed to him for some time until be returns or to forward them to the address where he has gone or to deliver them to some other person authorised by him.....". To the same effect are the observations of the Supreme Court as reported in the State of M.P. v. Hiralal & Ors., .

(9) Learned counsel for the appellant has been then argued that the learned arbitrator never issued any notice to the appellant of his intention to proceed ex parte. Hence, the impugned award is liable to be set aside on this ground alone. The learned counsel has in this connection led me through the observations of a Single Judge of this Court as reported in Lovely Benefit Chit v. Purandutt, 1983 Rajdhani Law Reporter 420, " In general, the arbitrator is not justified in proceeding ex parte without giving the party absenting himself due notice, it is advisable to give the notice in writing to each of the parties or their solicitors. It should express the arbitrator's intention clearly, otherwise the award may be set aside......". I would beg to differ from the said view on this point. I feel it is of no use to go on serving a man who is not ready to co-operate and to participate in the proceedings despite the innumerable opportunities granted to him to appear and defend himself. If the arbitrator is required to give a notice over again despite the previous notice given to a party then it would be tantamount to putting premium on his lapses. There is no rule or law which requires, an arbitrator to serve a party with a notice before initiating the ex parte proceedings against him. I am supported in my above view by the observations of a Division Bench of the Allahabad High Court as reported in Dori Lal v. Lal Sheo, "An arbitrator, who has given due notice of the proceeding to the parties is entitled to proceed ex parte if one party does not choose to appear. There is no provision in the Arbitration Act requiring the arbitrator to give a second notice of his intention to proceed ex parte against a person who is absent after service of notice. The fact, therefore, that the arbitrator did not give a second notice of his intention to proceed ex parte cannot amount to legal misconduct. The same view was expressed by a Single Judge of the Punjab High Court as reported in M/s. Azad Hind Chemicals La v. Ram Lal of United Chemical Works, Jullundur and another, " It is litigant who should approach the Court and no duty is cast on the arbitrator to invite a recalcitrant party to be present when it has evinced its intention to remain absent and especially in a case when the entire ex parte evidence had already been recorded against such party......" To the same effect are the observations as reported in P.S.Oberoi v. The Orissa Forest Corporation Ltd., , and M/s. Hemkunt Builders Pvt. Ltd. v. Punjabi University Patiala,, 1993(1) Current Civil Cases 405.

(10) In the circumstances stated above, I do not see any force in the present appeal. Dismissed with costs.