Mr. Rajiv Singla & Anr. vs M/S Ruldu Ram Jain & Company & Anr.
2011 Latest Caselaw 2753 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                   FAO Nos.137/2011 & 138/2011
%                                                       May 23, 2011

1.       FAO No.137/2011

MR. RAJIV SINGLA & ANR.                                ...... Petitioners
                     Through:         Mr. C.S.Yadav, Adv.

                          VERSUS

M/S RULDU RAM JAIN & COMPANY & ANR.                  ...... Respondents
                     Through:

2.       FAO No.138/2011

MR. RAJIV SINGLA & ANR.                                ...... Petitioners
                     Through:         Mr. C.S.Yadav, Adv.

                          VERSUS

M/S RULDU RAM JAIN & COMPANY & ANR.                  ...... Respondents
                     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?

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


VALMIKI J. MEHTA, J (ORAL)


1.            Both these appeals are disposed of by this common judgment

inasmuch as they arise from identical orders of the Trial Court passed

between the same parties in the Objection Petitions under Section 34 of

the Arbitration and Conciliation Act, 1996.



FAO Nos.137/2011 & 138/2011                                    Page 1 of 5
 2.          The facts of the case are that the respondents herein sought

arbitration under the Rules and Regulations of the Delhi Hindustani

Mercantile Association, inasmuch as, the appellants had failed to pay the

dues with respect to goods supplied. The appellants failed to appear in

the arbitration proceedings in spite of notice resulting in the ex parte

Award dated 13.1.2005.


3.          The only ground on which the appellants had challenged the

Awards, being for the sum of Rs.1,46,303/- and Rs.1,62,776/- along with

interest under Section 34 of the Act was that the appellants were not

served in the arbitration proceedings. The Arbitrator has dealt with this

issue in the following words:-


            "Ld. Counsel for the petitioners vehemently submitted that
            the respondent no.1 sought appointment of arbitrator
            unilaterally without first putting the petitioners to notice
            about the same. It is further submitted that the petitioners
            never received any notice from the arbitrator and they
            were kept in dark about the whole arbitration proceedings
            deliberately in order to prevent them from defending the
            claim of the respondent no.1. I find the submission of the
            Ld. Counsel contrary to the record. It appears from the
            record that the respondent no. 1 had issued a notice dated
            2.1.2004 through counsel to the petitioner asking them to
            pay the balance sum alongwith interest failing which the
            matter shall be referred for arbitration.    The notice was
            dispatched to the petitioners by registered AD post as well
            as UPC. The notice was duly served upon petitioner no.2
            as the AD cards were received back by the counsel for the
            respondent no.1 which have been filed in original in the
            arbitration proceedings. The genesis of whole dispute
            between the parties has been set out in detail in the
            aforesaid notice and thus it cannot be said that the
            petitioners were not aware about the claims of the
            respondent no.1. The record further shows that arbitrator
            sent his first notice dated 14.7.2004 to the petitioners
            intimating them about the next date of hearing as
            26.7.2004. The notice was sent through registered AD
FAO Nos.137/2011 & 138/2011                                 Page 2 of 5
             post as well as UPC and was duly served upon the
            petitioners as the AD cards were received back by the
            arbitrator which form part of the arbitration proceedings.
            The arbitrator thereafter again sent notice dated
            27.7.2004, 1.9.2004 and 28.9.2004 to the petitioners which
            were received back by him unserved with the report
            "refused" or "unclaimed". Arbitrator then sent another
            notice dated 20.10.2004 to the petitioners intimating them
            that they have been proceeded ex parte vide order dated
            18.10.2004 and giving them one more opportunity to
            appear before him on 2.11.2004. This notice also was sent
            through registered AD sot as well as UPC and was received
            back unserved by the arbitrator with the report "refused in
            case of petitioner no.3 and "unclaimed" in case of
            petitioner no.2."(Emphasis added).
4.          The aforesaid findings make it quite clear that the appellants

were issued notices but they failed to appear in the arbitration

proceedings.   The notices were dispatched, both by registered AD post

and UPC. First notice was sent for 26.7.2004 and thereafter again notices

were sent on 27.7.2004, 1.9.2004 and 28.9.2004.        The notices were

received back either with the report "refused" or "unclaimed".     At this

stage, I may refer to Section 3 of the Arbitration and Conciliation Act,

1996 as per which notices sent to the last known addresses of the

respondent in the arbitration proceedings will be deemed to be taken as

service.   Thus, the procedure with respect to the service in arbitration

proceedings having been provided by Section 3 of the Act and the same

having been repeatedly complied with, inasmuch as, the appellants were

sought to be served as many as 5 times in the arbitration proceedings,

and yet they failed to appear, consequently the Award was validly passed

and so also the impugned order dated 5.7.2010.




FAO Nos.137/2011 & 138/2011                                 Page 3 of 5
 5.          Learned counsel for the appellants pressed the applications

being CM No.10256/11 in FAO No.137/2011 and CM No.10255/11 in FAO

No.138/11 filed under Order 41 Rule 27 CPC for leading additional

evidence.   These applications, in my view, are clearly misconceived

because no such grounds were taken up before the Trial Court as urged in

the applications which are now filed under Order 41 Rule 27 CPC to bring

additional documents to allegedly show that the address was not correct.

Once, no such objection is taken in the petition under Section 34, and

which is so admitted by learned counsel for the appellants before me,

then there does not arise the question of considering these applications

for the first time in an appeal under Section 37.     I may note that the

objections which are filed under Section 34 are not in the nature of appeal

against the Award and stricto sensu the provisions of Order 41 Rule 27

CPC may not apply even in the Objection Petition.           However, even

assuming that they may apply at the first stage in objections under

Section 34, there is no reason why at an appellate stage, which is, in fact,

almost in the nature of a second appeal to the Award, should the

applications be considered when such objection was not taken up in the

Petition under Section 34 of the Act before the Trial Court. The appellants

have received the material and therefore are bound to pay the amount for

the same and should not therefore be allowed to unnecessarily delay and

linger on the recovery of dues against them.       These applications are

therefore dismissed.




FAO Nos.137/2011 & 138/2011                                  Page 4 of 5
 6.          The scope of hearing of an objection to an Award is limited,

and if that scope is limited, then surely the scope of an appeal challenging

an order dismissing the objections would have to be further limited.

Unless there is a clear-cut and gross illegality/perversity which causes

grave injustice, this Court will not exercise powers under Section 37 of the

Act. In view of the facts stated above I do not find that there exists any

gross illegality or perversity in the impugned order dated 5.7.2010 for this

Court to interfere.


7.          The appeals therefore, being devoid of merits, are dismissed.

The amount deposited by the appellants in FAO No.137/2011 will be

available to the respondents towards execution of the Award which is the

subject matter of FAO No.138/2011. The Trial Court record be sent back.




May 23, 2011                                    VALMIKI J. MEHTA, J.

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