M/S. Sri Amar Constructions & Ors. vs Escorts Finance Ltd. & Anr.
2009 Latest Caselaw 5112 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELH


+                         O.M.P. No.383/2001

                                                            December 9, 2009.



M/S. SRI AMAR CONSTRUCTIONS & ORS.                              ...Petitioner


                          Through:     Mr. Sudhir Nandrajog, Senior Advocate.

                                VERSUS

ESCORTS FINANCE LTD. & ANR.                                     ....Respondent

                          Through:

CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

    1. Whether the Reporters of local papers may be allowed to see
       the judgment?

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

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

    %                     JUDGMENT(ORAL)

VALMIKI J. MEHTA, J.

1. This petition under Section 34 of the Arbitration and Conciliation

Act, 1996 challenges the Award dated 20.7.01 passed by the sole Arbitrator.

The non-objector/respondent was the claimant before the Arbitrator. The non-

objector is a finance company which had advanced monies to the present

OMP No.383/2001 Page 1 petitioner. The admitted facts are that no pleadings or evidence was filed on

behalf of the present objector before the Arbitrator. The Arbitrator in para 4 of

the Award records that the present petitioner did not turn up for even one

hearing and was accordingly proceeded ex-parte. The Arbitrator has

consequentially passed an Award with respect to the claims of the claimant.

2. The only objection of the petitioner before this Court is that by the

letter dated 16.3.01 the petitioner had informed the Arbitrator that the petitioner

was not accepting/agreeable to the appointment of the Arbitrator as the sole

Arbitrator in the matter. It is therefore contended that once the petitioner

refuses to submit to the jurisdiction of the Arbitrator, the Arbitrator could not

pass an Award against the petitioner. It is further contended that the objection

before this Court is that it was the Managing Director who could appoint an

Arbitrator whereas in the present case, the Arbitrator was appointed by only a

Law Officer of the present respondent.

3. I am not inclined to go into the issue as to the interpretation of the

clause whether the Arbitrator was validly appointed or not. This is for the

reason that a reference to the letter dated 16.3.01 shows that such objection was

not raised before the Arbitrator. The letter dated 16.3.01 shows that such

objection now pressed has not been raised as a ground in the said letter, and the

only ground mentioned is that the agreement numbers which were found in the

OMP No.383/2001 Page 2 books of the petitioner were different than the agreement numbers mentioned in

the notices of arbitration. In view of the fact that the present petitioner did not

file any pleadings nor lead any evidence and in fact was proceeded exparte

because of non-appearance, I am of the opinion that it does not lie in the mouth

of the petitioner to raise the objection now argued at the present stage. Further,

even if the objection was raised before the Arbitrator it was necessary that the

objection is pressed and pursued, in that, an application under Section 16 of the

Arbitration and Conciliation Act, 1996 ought to have been moved and pressed

which admittedly has not been done. Even if the letter dated 16.3.01 is treated

as an application the same had to be pressed and argued before the Arbitrator

and which has not been done. Further, since the petitioner failed to press the

objection effectively it has taken the chance of the Award on merits, going in its

favour because having failed to participate, the present petitioner was hoping

that in spite of the same, the Award may go in its favour. It has been held by

the Supreme Court in the case of Inder Sain Mittal Vs. Housing Board

Haryana (2002)3SCC 175 that if a person does not pursue his objections with

respect to the jurisdiction of the Arbitrator in the arbitration proceedings and

takes the chance of the Award going in his favour, then, if the Award goes

against the person, he cannot thereafter object to the jurisdiction of the

Arbitrator. Reference is also invited to the judgment reported as Bharat Engg.

OMP No.383/2001 Page 3 Enterprises Vs. DDA 2006 (Supp.)Arb. LR 129 in which it was laid down that

if a plea is not raised before the Arbitrator the same cannot be subsequently

raised before the Court.

4. I may also state that the jurisdiction of this Court while hearing the

objections under Section 34 is indeed very limited. It is necessary that there

must be illegality, violation of contractual provisions or perversity in the

Award. I do not find that there is any illegality, perversity or violation of

contractual provisions. This is all the more so, because as stated by me above,

no pleadings were filed by the petitioner before the Arbitrator and nor was any

evidence led on its behalf.

5. In view of the aforesaid, I do not find any merit in this petition

which is, therefore, dismissed, though without any order as to costs since the

respondent is not present in the Court.

                                                        VALMIKI J.MEHTA, J


December 9, 2009
Ne




OMP No.383/2001                                                              Page 4