Delhi High Court
Shri Balkishan vs Mohini Finance Company on 18 April, 2007
Author: J Malik
Bench: J Malik
JUDGMENT
J.M. Malik, J.
1. The Trial Court made the award dated 25.8.1993 the rule of the court against one Sh. Mangat Ram Gulati and Bal Kishan, appellant. Aggrieved by this order, the present appeal has been filed. The only defense set up by the appellant is that he was never served in this case. I have perused the record of the Arbitrator which is available on the Trial Court file.
2. Record reveals that the proceedings before the Trial Court started on 7.1.1993. Shri Ajit Kumar Ahuja, sole Arbitrator gave notice of appearance on 19.5.1993. The said notice was sent through registered AD. There is no conflictions on the point that the notice was sent through registered AD on correct address. It was reported by the postman that the appellant was not available though he visited the premises on 19.5.1993, 27.5.1993 and 31.5.1993.
3. Second notice was sent by the Arbitrator on 10.6.1993 through registered AD. Counsel for the appellant did not pick up a dispute with the address mentioned on the registered AD. The postman visited the premises on 15.6.1993, 16.6.1993 and 19.6.1993, where he came to know that the appellant used to attend the office during night. However the appellant has failed to produce evidence in this context.
4. Despite service by registered notice, appellant did not appear before the Arbitrator. Consequently, he was served through publication in the 'Statesman' newspaper dated July 23, 1993. Despite publication in the newspaper, the appellant did not appear. Under these circumstances, the case was decided ex-parte against him.
5. I have heard the counsel for the parties. Learned Counsel for the respondent vehemently argued that it is surprising to note that though the postman visited the office of the appellant a number of times, at least on seven/eight occasions, yet, the appellant could not know about the pendency of this case before the Arbitrator. Again, the respondent had to suffer a lot and spent a lot of money on process fee and service through publication. He urged that the appellant intentionally did not attend the proceedings pending before the Arbitrator. He also stressed that the new Act has no application to the facts of this case and it is covered under the old Act. He also pointed out that the the case reported in C.P. Madan (Shri) v. National Small Scale Industrial Corporation Ltd. 2007 II A.D. Delhi 493, decided by me has got no application to the facts of this case.
6. On the other hand, counsel for the appellant vehemently argued that he was never served personally at any time and that there is no service in the eyes of law. He pointed out that, although, he was proceeded against ex-parte, yet, it was the duty of the Arbitrator to summon him again at the time of leading of evidence by the respondent.
7. I find force in the argument urged by the counsel for the appellant in a measure. The appellant is entitled to get one opportunity of being heard subject to further conditions. In C.P. Madan (Shri) v. National Small Scale Industrial Corporation Ltd. (Supra) I came to the following conclusions:
3. I am of the considered view that the said order passed by the learned Arbitrator is not tenable in law. Under the old Act, this Court in case Lovely Benefit Chit v. Purandutt 1983 Rajdhani Law Reporter 420 held:
From these authorities, it is apparent that an arbitrator ought not to proceed ex-parte against a party if he has failed to appear at one of the sittings. The arbitrator should fix another date for hearing and give notice to the defaulting party, of his intention to proceed ex-parte on a specified date, time and place. Even after notice if the defaulting party does not take part in the proceedings the arbitrator may proceed in his absence.
Under the new Act, Section 24(3) envisages:
24(3) All statements, documents or other information supplied to, or applications made to the arbitral tribunal by one party shall be communicated to the other party, and any expert report or evidentiary document on which the arbitral tribunal may rely in making its decision shall be communicated to the parties.
4. This is clear as a day that the proceedings before the Arbitrator are not to be equated with the Civil Procedure Code. The above said authority under the old Act and Section 24(3) of new Act clearly make a departure from the Code of Civil Procedure. There is no such provision like Section 24(3) in the Code of Civil Procedure. The Arbitrator should have given another notice to the appellant specifying his intention that he wanted to proceed against him ex-parte or regarding the evidence which was produced against him.
8. At the time of admission, I had ordered that execution is stayed subject to appellant's furnishing bank guarantee to the extent of 30 per cent of the decretal amount with the Trial Court. Keeping in view the above said facts and circumstances and in the interest of justice, I hereby set aside the ex- parte order against the appellant subject to his furnishing bank guarantee to the extent of further 30 per cent of the decretal amount with the Trial Court. The said bank guarantee be deposited within a month. The parties are directed to appear before the Arbitrator on 30th May, 2007. The Arbitrator will give an opportunity of being heard to the appellant after satisfying that he has furnished the bank guarantee. The trial court is directed to issue a certificate in that context. The Arbitrator is further directed to dispose of the case within one month after receipt of the file. No further opportunity or notice be given to the appellant. Registry is directed to send the LCR to the court below and the Arbitrator will collect the record from the Trial Court itself or the High Court as the case may be. Copies of this judgment be given to the parties dusty.
The appeal and the application stand disposed of in terms aforesaid.
