Delhi High Court
Shri C.S. Ahluwalia vs Mohd. Salim Khatri & Anr. on 19 September, 2011
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO No.225/2006
% 19th September, 2011
SHRI C.S. AHLUWALIA ...... Appellant
Through: Ms. Shobhna Takiar, Advocate.
VERSUS
MOHD. SALIM KHATRI & ANR. ...... Respondents
Through: Mr. M.A. Khan, Advocate with
Mr. Arun Batla, Advocate.
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. The challenge by means of this First Appeal under Section
37 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as
„the Act‟) is to the impugned judgment of the Court below dated
8.3.2006, and by which judgment the Court below dismissed the
objections of the appellant/objector filed under Section 34 of the Act.
2. The facts of the case are that the appellant as an owner of
the shop situated at ground floor of E-3, Lajpat Nagar-II, New Delhi-24
entered into a franchise agreement dated 13.8.2001 with the
respondents whereby respondents were allowed to sell the leather
FAO No.225/06 Page 1 of 5
products under the name of "Aflatoon" and "4 Wheel". The appellant
received various amounts under the franchise agreement totaling to a
sum of Rs.3,16,167/-. The respondents also spent a sum of Rs.50,000/-
towards renovation of the shop. The appellant in spite of having
received the amounts did not allow the respondents to operate the
franchise agreement and sell the products from the shop as a result of
which respondents initiated arbitration proceedings for recovery of the
amounts paid in addition to the amount of Rs.50,000/- spent towards
renovation.
3. The Arbitrator issued notices to the appellant to appear
before him and which notices were sent by registered post AD, by
courier as well by service of posting at the shop premises and where
they were received. Since the appellant did not appear, he was
proceeded exparte and an exparte Award was passed.
4. On behalf of the appellant it was argued before the Court
below, and which is also an argument addressed before me, that the
appellant was no longer at the premises in question where the franchise
agreement was to be operated and in fact he had shifted to Chandigarh
and it was therefore claimed that the appellant was not served in the
arbitration proceedings and the exparte Award is therefore liable to be
set aside. It is also argued that the appellant is a senior citizen of over
80 years of age and therefore he is entitled to discretion from this
Court.
FAO No.225/06 Page 2 of 5
5. In my opinion, the present litigation is a classic case of
gross abuse of process of law and an endeavour by a dishonest person
to retain with him monies received under a franchise agreement which
he deliberately failed to come into operation. The Court below has
noted that the Arbitrator is a retired Judge of this Court and notice
issued shows the mobile number also of the Arbitrator. It is found that
no effort was made by the appellant to contact the Arbitrator. Though it
was argued that the appellant was sick, however, no proof with respect
to the alleged sickness of the appellant was filed. The Court below has
also noted that the entire judicial record shows no residential address of
the appellant either of Delhi or of Chandigarh. On the aspect that the
appellant is a senior citizen, the trial Court has held that he may be a
senior citizen, however, the fact of the matter is that he was otherwise
fully fit and in fact besides travelling abroad to meet his son in London
he was also personally pursuing the litigation.
6. On these various aspects, the Court below has made
pertinent observations which are contained in paras 17 to 21, and which
read as under:-
"17. It is significant to note that even in the affidavit filed in
support of the present objection petition, objector has given
his address as „Prop. of M/s Park-N Shop No.E-3, Lajpat Nagar-
II, New Delhi-24‟. He has not furnished his residential address
anywhere including the present petition. Photocopy of his
passport placed on record by the objector also does not show
his residential address.
18. Further the Objector in para 1 of the objection petition
also claims that due to his old age he is living with this son in
Chandigarh. Significantly objector‟s own affidavit filed in
FAO No.225/06 Page 3 of 5
support of the present objection petition does not mention the
said Chandigarh address. No such address is recorded in the
copy of passport placed on record by the objector. There is no
other evidence either oral or documentary to show the said
Chandigarh address. So the objection of the objector to the
effect that he resides at Chandigarh and he is not using the
premises E-3, Lajpat Nagar-II, New Delhi is false on the face of
it and is not supported by any evidence.
19. Notice dated 27.05.2005 issued by Ld. Arbitrator has
also been placed on record. It clearly shows address and
mobile phone of Ld. Arbitrator. In case of need or help,
objector could have very well contacted Ld. Arbitrator on his
mobile. That was not done. No effort was made by the
objector to meet Ld. Arbitrator. No proof of sickness or
consultation with any doctor has been filed.
20. The objector in the objection petition has repeatedly
claimed that he is a senior citizen of 80 years. He also claims
to have poor eye sight and memory. I am conscious of the fact
that old age by itself is a disease. But the question is does
that ipso facto entitle the objector to get the Arbitral award in
question set aside.
21. As already discussed, objector has not given his
residential address either of Delhi or Chandigarh. Admittedly
objector went to his commercial premises at E-3, Lajpat Nagar-
II, alone. Also admittedly objector came from Chandigarh. He
also went to London alone. In other words objector has been
doing so much of physical movement alone without the aid
and help of anyone. The question is why no effort was made
by him to contact Ld. Arbitrator either on phone or personally.
No record of medical treatment has been filed. So, this is not a
case where the objector lacked the skill, means or opportunity
to present his case before Ld. Arbitrator. It appears to me that
there was a deliberate attempt by the objector to avoid and
thwart the arbitration proceedings. Objector has failed to
establish any sufficient cause, even prima facie, which could
justify his absence from arbitration proceedings. It is clear
that his absence was deliberate and intentional. In the facts of
this case mentioned above, it cannot be said that objector was
unable to present his case before Ld. Arbitrator. In fact he
deliberately avoided appearance and participation during the
arbitration proceedings."
7. I do not find any gross illegality or gross perversity for this
Court to interfere with the impugned order. The scope of hearing
FAO No.225/06 Page 4 of 5
objections to an Award is limited. If the scope of hearing objections to
an Award is limited, then, the scope of hearing an appeal against the
order dismissing objections will have to be further limited. I may note
that even in the present appeal a learned Single Judge of this Court had
recorded that respondents were ready to accept an amount lower than
Awarded of Rs.2 lacs with interest @ 9% per annum, however, the
appellant was not even agreeable to pay this particular amount. In view
of the above, I dismiss the appeal with actual costs. This court is
entitled to impose actual costs in terms of Volume V of the Punjab High
Court Rules and Orders (as applicable to Delhi) Chapter VI Part I Rule
15. A Division Bench of three Judges of the Supreme Court in para 37 of
the decision reported as Salem Advocate Bar Association Vs. Union
of India (2005)6 SCC 344, has also observed that it is high time that
actual costs must be imposed. Considering the facts and circumstances
of the case, therefore, I deem it fit to dismiss the appeal with costs of
Rs.25,000/- and which shall be paid by the appellant to the respondents
within two weeks from today.
8. The appeal is accordingly dismissed with costs of
Rs.25,000/-. The amount deposited by the appellant in this Court be
released to the respondents in part satisfaction of the subject Award.
SEPTEMBER 19, 2011 VALMIKI J. MEHTA, J.
Ne
