Karmyogi Shelters Pvt. Ltd. vs Benarsi Krishna Committee & Anr
2009 Latest Caselaw 3422 Del

     *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                 OMP No.51/2005.

%                                  Date of decision: 28.08.2009

KARMYOGI SHELTERS PVT. LTD.                         ....Petitioner
                        Through: Mr. Mr Sudhir Nandrajog, Sr. Advocate
                                 with Mr. Rakesh Mishra, Advocate for
                                 the Petitioner.

                               Versus

BENARSI KRISHNA COMMITTEE & ANR. ... Respondents

                        Through:     Mr. N.N. Aggarwal with Mr. Kapil
                                   Gupta & Mr. Rohit Gandhi , Advocates
                                   for the Respondents.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.    Whether reporters of Local papers may
      be allowed to see the judgment?                 Yes

2.    To be referred to the reporter or not?          Yes

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


RAJIV SAHAI ENDLAW, J.

1. This Petition under Section 34 of the Arbitration Act, 1996 has

been preferred with respect to the arbitral award dated 12th May,

2004. The petition was filed in this court first on 3rd February, 2005.

In para 25 of the petition it is stated that the counsel for the

petitioner informed the petitioner about the award in the last week

of November, 2004 and asked the petitioner for necessary amount of

"court fees"; the petitioner provided the necessary "court fees" on

29th November, 2004 and the award was provided by the learned

arbitrator to the petitioner on 15th December, 2004. The OMP came

up before this court first on 7th February, 2005 when the counsel for

the respondent also appeared and contended that the copy of the

award had been supplied to the petitioner in May, 2004 itself and the

petition was thus time barred. This court, to find out the correct date

when the copy of the award had actually been furnished to the

petitioner, requisitioned the arbitral record. The arbitral record has

been received. This order shall deal with the question of whether

the petition has been preferred within the prescribed time or not.

The counsels have been heard.

2. The counsel for the respondent has contended that upon the

award being published on 12th May, 2004, both parties had appeared

before the arbitrator on 13th May, 2004. The endorsement, on the

copy of the award in the arbitral record received in this court, of

receipt of copy of the award by both the parties is shown in this

regard. It may be noted that there is an endorsement on behalf of

the respondent and also an endorsement of "receipt" "for P.B.

Suresh, Advocate" who was representing the petitioner before the

arbitrator. The counsel has also drawn attention to the award filed

by the petitioner in this court alongwith the petition. The same also

on the first page after the stamp papers, bears a notation on the top

left hand corner of "received" with the date "13th May, 2004".

3. It is urged that from the aforesaid it is unequivocally

established that the petitioner received the signed copy of the award

and on the basis whereof this petition has been filed, on 13th May,

2004. It is thus contended that the petition filed on 3rd February,

2005 was barred by time and liable to be dismissed.

4. Attention is also invited to the affidavit filed by the petitioner

in this court pursuant to the order dated 16th May, 2005. It is stated

in the said affidavit that the hearing / arguments concluded before

the arbitrator on 31st December, 2003 and judgment/award was

reserved; that the director of the petitioner regularly enquired from

his counsel about the award for about a month; during this time the

award was not published; subsequent to that the said director of the

petitioner stopped enquiring about the award from the counsel and

was under the impression that the award would be sent to the

petitioner directly by post as provided under Section 31(5) of the

Act; that on 28th October, 2004 the counsel for the petitioner

informed the said director telephonically that the respondent had

offered the monies in terms of the award to the petitioner and sought

instructions as to whether to accept the same or not. It is further the

case in the said affidavit that on this date the director of the

petitioner came to know that the award had been made; then he

asked the counsel to provide him a copy so that he could form an

opinion on acceptability thereof. It is further stated by the director of

the petitioner in the affidavit that in November, 2004 a letter was

received by the petitioner also from the advocate for the respondent;

till then the petitioner had not received any copy of the award.

5. Thereafter in para 8 of the affidavit aforesaid it is mentioned

"as requested by the deponent the counsel for the petitioner

provided the petitioner with a copy of the "unstamped" award. The

award was on plain paper. The counsel also informed the petitioner

that the award is yet to be engrossed and the petitioner would have

to provide stamp papers worth Rs 4100/- for engrossing the award

and making it executable".

6. It is further stated in the affidavit that the petitioner thereafter

on 29th November, 2004 purchased the stamp paper and sent it to

the arbitrator under cover of letter dated 15th December, 2005 and

on the same date the arbitrator signed the stamp papers and

returned the same to the petitioner.

7. It is further stated in the affidavit that Shri T.K. Pradhan,

Advocate engaged by the petitioner in this court on inspection of the

arbitral record had come to know that the award had never been

sent to the petitioner by the arbitrator as provided under Section

31(5) of the Act. It is also contended in the affidavit that an

unstamped award is no award in the eyes of law inasmuch as the

arbitrator is functus officio after making of the award and cannot

even stamp the award; the award is thus complete only on stamping.

It is thus the case of the petitioner that the award was passed only

on 15th December, 2004 and the petition is within time.

8. The counsel for the respondent has laid much emphasis on

para 8 (supra) of the affidavit. It is urged that the petitioner has

intentionally left it vague as to when the counsel provided the

unstamped award received from the arbitrator to the petitioner. It is

further contended that the petitioner concealed the said facts in the

OMP and sought to convey an impression that the award was

received by it on 15th December, 2004 only.

9. The counsel for the respondent has further urged that the

matter is now no longer res intergra. Reliance is placed on M.M.

Jawhar Merican Vs Engineers India Ltd 2009 (4) AD, Delhi 161

where the Division Bench of this Court has held that the limitation

for filing a petition under Section 34 commences from receipt of a

signed copy of the award and cannot be said to be commencing from

the date of the stamping of the award or of the date of delivery of the

stamped copy of the award.

10. The respondent has also relied upon Nilkantha Shidramappa

Ningashetti Vs Kashinath Somanna Ningashetti AIR 1962 SC

666 where in respect to notice under Section 14(2) of the Arbitration

Act, 1940 it was held that the communication to the pleader of the

parties that an award has been filed is sufficient compliance with

the requirements of the said provision with respect to the giving

notice to the parties concerned. Reference is also made to Union of

India Vs Wishwa Mittar Bajaj & Sons MANU/DE/7479/2007.

11. Per contra, the senior counsel for the petitioner has urged that

the requirement of Section 31(5) and Section 34(3) of the Act is of

delivery of the signed copy of the award to the "Party". Attention is

invited to the definition of "party" in Section 2(h) of the Act, as

meaning a party to the arbitration agreement only. It is contended

that thus the delivery has to be on the party to the arbitration

agreement personally and cannot be on the advocate of that party as

in this case. Attention is also invited to Section 3 providing for

service of communications and it is urged that the same is also to the

party only and not to its advocate. Lastly it is urged that since

Section 5 of the Limitation Act has been made inapplicable to

Section 34(3), the court ought to give a rigid interpretation to the

statutory provision regarding commencement of limitation

inasmuch as there can be no condonation. Reliance is placed on

National Projects Constructions Corporation Ltd Vs Bundela

Bandhu Constructions Company AIR 2007 Delhi 202 DB para 16

in support of the said proposition; paras 12, 14 and 15 of the same

judgment are also relied upon to contend that the delivery of the

signed copy of the award ought to be on the person who is to take a

decision whether to accept the award or to prefer a petition under

Section 34 with respect thereto. It is argued that the said person

could be the petitioner or its director only and could not be the

advocate engaged for the arbitration proceedings and who could not

have taken such a decision.

12. It is further urged that while in CPC, in Order 3 specific

provision has been made for representation through

advocate/pleaders and service of notices on them, the same has been

intentionally omitted in the 1996 Act. It is thus contended that the

delivery of signed copy of the award cannot be on any person other

than the party to the agreement.

13. Reliance is also placed on Union of India Vs. Tecco Trichy

Engineers & Contractors 2005 4 SCC 239 where in relation to

Railways it was held that only when the arbitral award is delivered to

the person who has knowledge of the proceedings and who would be

the best person to understand and appreciate the arbitral award and

also take a decision in the matter of moving an application under

Section 33 or under Section 34, would the limitation start running.

14. The counsel for the respondent has in rejoinder argued that

nowhere in the petition or in the affidavit has the petitioner denied

the authority of the counsel who received the award on 13 th May,

2004; it is also contended that the petitioner did not take any second

copy of the award from the arbitrator and in fact has acted on the

basis of the copy received by the advocate on 13th May, 2004. It is

argued that in the absence of said pleas, the award is deemed to

have been delivered to the petitioner on 13th May, 2004 and the

petition is barred by time.

15. The entire plea of the petitioner is structured as if the award

was collected on 13th May, 2004 from the arbitrator, by the advocate

for the petitioner and it is suggested that the said advocate did not

inform the petitioner of the same. An impression is also sought to be

created in the affidavit as well as during hearing as if the advocate of

the petitioner before the arbitrator and before this court are

different. It is this impression which led the court to, during the

course of hearing enquire whether the petitioner had taken any

action against the advocate before the arbitrator. Then also, while

replying in the negative, the said impression was continued.

16. However, while minutely going through the affidavit it is found

that the petitioner has nowhere stated that it is the advocate who

collected the award from the arbitrator on 13th May, 2004; nor is it

stated as to who collected the award on that date. The receipt as

aforesaid is signed "For P.B. Suresh, Advocate". It could very well

have been an employee/representative of the petitioner who signed

the same. From the conduct of the petitioner of keeping quiet on

this aspect, adverse inference has to be drawn, i.e. that if the truth

had been revealed, it would have hurt the petitioner.

17. The impression sought to be given of the advocate having not

informed the petitioner of the award or of the advocate in these

proceedings on inspection of arbitral record received in this court

finding that award had not been sent by the arbitrator to the parties,

(as stated in para 10 of the affidavit) is also found to be wrong.

During the hearing a perusal of the arbitral record showed that the

Vakalatnama of the advocate who has filed the present petition also

exists on the arbitral record. His presence is also recorded in several

of the arbitration hearings along with that of Mr. P.B. Suresh and he

has also filed application under Section 17 under his own signatures

before the arbitrator. Upon the same being pointed to the senior

counsel, this position was not disputed.

18. Thus the alibi of the advocate on which the petitioner leaned, is

not available to the petitioner. The factum of the petitioner in these

proceedings continuing with the same advocates as representing the

petitioner before the arbitrator shows that the petitioner was not

aggrieved in any manner from the said advocate and had knowledge

of and received copy of the award on 13th May, 2004 itself. The

petitioner is guilty of misrepresenting facts and conveying a false

impression to the court. The petitioner has rather tried to use the

name of advocate to get over the bar of limitation.

19. Though the aforesaid conduct of the petitioner is enough to

dismiss this petition as time barred, but the legal pleas raised may

also be considered.

20. The first submission to be considered is whether Section 31 (5)

& Section 34 (3) insist upon delivery personally to the party to the

arbitration agreement only or it can also be to the agent of the said

party. In my view, "party" would include the agent of the party. In

the present case, the petitioner is a juristic person. It has to be

necessarily represented through natural persons. A perusal of the

arbitral record shows that the petitioner in the matter of arbitration

before the arbitrator, who is a retired judge of this court, was

throughout represented by its advocates only and the other

representatives of the petitioner appeared in the arbitration

proceedings only at the time of recording of their evidence. Thus, as

far as the arbitrator was concerned, the advocates representing the

petitioner were the agents of the petitioner and entitled to fully

represent the petitioner. The delivery of the arbitral award to such

an agent of the party would be the same as delivery to the party

himself/itself.

21. The Vakalatnamas on behalf of the petitioner on the record of

the arbitrator also show that the advocates were authorized by the

petitioner fully, including to accept notices on behalf of the

petitioner. Since the language of the Vakalatnama is geared towards

litigation in courts and not for arbitrations, the word „award‟ does

not expressly find mention in the Vakalatnama. However, the same

is immaterial. Once the advocate has been authorized to act on

behalf of his client and to file and take back documents and to

submit to arbitration, the delivery of the award to such advocate of

the party is the same as delivery to the party.

22. I had also drawn the attention of the senior counsel for the

petitioner to several other provisions of the Act requiring the party

to act. For instance, Section 11 (6) requires the application to the

Chief Justice to be filed by the party. It was put to the senior counsel

that if his contention was to be accepted, it would follow that the

application under Section 11 (6) would be filed by the party

himself/itself and not through any advocate. The senior counsel

replied that the advocate, if authorised is competent to file the

application. In my view, the same principle would apply to the matter

of delivery of the arbitral award also. Delivery on any person

expressly or impliedly authorized by the "party" is delivery on the

party. It may be noticed that the arbitrator even by sending the

award by post or courier cannot ensure delivery on the party

personally and the delivery in such cases on the persons who in the

normal course receive such dak on behalf of the party or delivery at

the address of the party would be delivery on the party.

23. The senior counsel appeared to suggest that the authority of

the advocate engaged by the petitioner before the arbitral tribunal

would come to an end on the proceedings terminating. However the

said argument also does not prevail with me. The proceedings

before the arbitral tribunal terminate under Section 32 of the Act

only by the final arbitral award and subject to Section 33 of the Act.

Thus, it cannot be said that the authority of the advocate engaged by

the petitioner before the arbitral tribunal came to an end on

addressing the arguments and did not continue till the making of the

arbitral award.

24. There is yet another reason. From the factum of the

representatives of the petitioner as well as the respondent appearing

on the same day before the arbitrator for collecting the copy of the

award on 13th May, 2004, it appears that a communication was made

by the arbitrator to the parties of the publication of the award on 12th

May, 2004. Though there is no letter of the arbitrator on record to

this effect but it appears that the arbitrator may have telephonically

informed the counsels for the parties who were communicating with

the arbitrator on behalf of their respective parties, of the making of

the award and asked them to collect the signed copy of the award

from him on 13th May, 2004. If the authority of the advocate had

terminated, the advocate would not have collected the award.

25. An advocate under Section 30 of the Advocates Act, 1961 is

entitled as of right to practice law inter-alia before any tribunal or

person legally authorized to take evidence. An arbitrator is legally

authorized to take evidence (Section 27). The expression right to

practice includes both pleading and to act (Aswini Kumar Ghosh

Vs. Arabinda Bose AIR 1952 SC 369). The Supreme Court in

Jamilaben Abdul Kadar Vs. Shankarlal Gulabchand AIR 1975 SC

2202 held that the right of the advocate to practice, i.e. to act, also

included the authority to settle/compromise the lis on behalf of the

client. In the face of such authority of advocate, it cannot be said

that the advocate, though authorized to settle/compromise on behalf

of client, has no authority to take delivery of an award on behalf of

the client. In fact in S. Maharaj Baksh Singh Vs. Charan Kaur

AIR 1987 Punjab & Haryana 213 (DB) it is held that a lawyer is

understood to embody his client in his own person. Seen in this

light, Order 3 of the CPC only codifies what an advocate, by virtue of

his right to practice and act, is entitled to do. One such facet is to

receive service of processes, as also provided in Order 3. The

contention of the senior counsel for petitioner that there is an

intentional omission of Order 3 of CPC in the 1996 Act does not

appear to be sound. Nothing in the 1996 Act prohibits the advocates

from practicing before the arbitral tribunal or bars the application of

CPC. Section 19 (1) merely provides that the arbitral tribunal shall

not be bound by CPC. Else, the procedure prescribed in CPC, being

the procedure with which the parties, their advocates and even the

arbitrators steeped in law are familiar, is in practice, followed in

arbitration also, unless otherwise agreed by parties. The same

procedure appears to have been followed before the arbitrator in the

present case also and there is nothing to show that the petitioner in

the present case notified the arbitrator that the authority given to its

advocate was any less from that which the advocates are generally

understood to have. Thus I find that the advocate of the petitioner

was authorized to take delivery of the award from the arbitrator.

26. The law with respect to Railways or Govt. Departments, as laid

down in Bundela Bandhu Construction Co. & Tecco Truchy

Engineers & Contractors, (Supra) cannot be made applicable to a

Private Ltd. Co., as the petitioner is. There are no pleadings even

that the petitioner is in any way comparable. Similarly, from the

facts of this case of the same team of lawyers continuing, it is borne

out that the decision to file this petition was to be taken and has

been taken by the same lawyers-clients and the argument built does

not sustain. Though the Division Bench in M.M. Jawhar Merican

(Supra) has already held that time under Section 34 (3) runs from

delivery of signed copy of award, even if unstamped and not from

delivery of stamped award, it is interesting to note that in the

present case the stamp papers were merely got signed from the

arbitrator and it is not even the case that on that day the arbitrator

delivered any other copy of the award to the petitioner.

27. There is yet another aspect of the matter. To hold that the

award has to be delivered personally to the party and cannot be

delivered to the advocate representing the party would be creating

unnecessary delay/drag in the arbitration proceedings. In fact

delivery personally to the advocate is more secure than insisting

upon the arbitrator dispatching the award by post to the party. The

same would make the delivery of the award dependent upon the

vagaries of post. Otherwise, the advocate is a responsible agent of

the party. It may be noticed that there are no allegations whatsoever

of the advocate having not delivered the award to the petitioner. Had

the advocate indulged in any such action, the petitioner would have

lost faith in such advocate and would not have continued with the

advocate in these proceedings.

28. I, therefore, hold that the signed copy of the award was

delivered to the petitioner as required by Section 31 (5) & Section 34

(3) on 13th May, 2004. The petition filed on 3rd February, 2005 is

barred by time. The same is dismissed. The petitioner is also

burdened with costs of these proceedings of Rs.35,000/-.

RAJIV SAHAI ENDLAW (JUDGE) August 28th, 2009 M/PP