Saroop Singh & Ors. vs M/S. Orex Auto Infrastructure ...
2013 Latest Caselaw 3529 Del

*                   HIGH COURT OF DELHI AT NEW DELHI
+                            F.A.O. No.11/2013
                                        Decided on : 08.08.2013
SAROOP SINGH & ORS.                                ...... Appellants
             Through:            Mr.Subrat Deb, Advocate.

                        Versus

M/s. OREX AUTO INFRASTRUCTURE SERVICE LTD. & ANR.
                                    ...... Respondents
CORAM:
HON'BLE MR. JUSTICE V.K. SHALI

V.K. SHALI, J. (ORAL)

1. This is an appeal filed under Section 37 (1) (b) of the Arbitration

and Conciliation Act, 1996 ('the said Act' for short) against the

order dated 30.08.2012 passed by the learned ADJ dismissing the

objections filed by the appellants.

2. I have heard the learned counsel for the appellants and also gone

through the record.

3. The main contention of the learned counsel for the appellants is

that there was no default for three continuous months and

consequently the impugned order could not have been passed.

Before dealing with the contention of the learned counsel for the

appellants, it would be worthwhile to mention the brief facts of the

case.

4. The appellant No.1 had taken two loans - one for a sum of

Rs.13,40,000/- for purchase of chassis of a vehicle make TATA

LPS 4018 registered as HR-55-G-4635 and another loan for a sum

of Rs.3,25,000/- for the purpose of body of said commercial

vehicle. Both these loans including interest were to the tune of

Rs.17,20,200/-. The first loan was payable in 47 equal monthly

instalments of Rs.36,300/- while the second loan was payable in 28

equal monthly instalments of Rs.13,710/-. It was alleged by the

respondent No.1 that the appellants frequently defaulted in

payment of the instalments, as agreed to between the parties and

the respondent No.1/claimant was constrained to issue notice to the

appellants and recall the loan amounts. Since there was an

arbitration clause between the parties, the respondent

No.1/claimant referred the matter to an arbitrator. The arbitrator

issued notice dated 28.06.2008 to the appellants by registered post

and other modes as well. These notices were received back with

the report of not being available and avoiding service. The

arbitrator, after recording the evidence and hearing the matter,

passed an award in favour of the respondent No.1/claimant. In the

mean time, the vehicle was also re-possessed by the respondent

No.1/claimant. The receipt of the copy of the award was also

disputed by the appellant.

5. The main plea taken by the appellants in their objections filed

under Section 34 of the said Act was that they were not served and

accordingly they sought the matter to be remanded back to the

arbitrator. The learned court examined this plea of the appellants

that they were not served and found it to be a false plea on account

of the fact that the documents clearly showed that sincere efforts to

serve the appellants and the guarantors were made umpteen times,

but all proved futile. On the contrary, the appellants could not

claim to be ignorant because a reply to the notice was purported to

have been sent on behalf of the main borrower namely appellant

no.1 through one Ms.Archana Chauhan, Advocate claiming that

appellant no.1 has filed a suit for declaration and permanent

injunction in Gurgaon Court against respondent No.1 so far as the

vehicle in question is concerned.

6. The learned ADJ dismissed the objections of the appellant

regarding non service as being without any merit and affirmed the

award passed by the trial court.

7. Feeling aggrieved by the rejection of the objections, the appellant

has now filed the present appeal. The main contention before this

court has been that there has been no default on three successive

occasions which was the only ground because of which the loan

could be recalled and the matter referred to the arbitrator for the

purpose of adjudication.

8. I do not consider this submission in the present appeal to be

relevant for the simple reason that this question as to whether the

appellants were in default or not was essentially a question of fact

which has already been decided by the learned arbitrator. The

appellants did not appear before the arbitrator despite having the

knowledge about the proceedings. This is evident from the fact

that not only repeated notices were sent to them which were

avoided to be received, a reply to the notice of the respondent

No.1/claimant was sent wherein the factum of a suit having been

filed in a Gurgaon court, which stands dismissed, was taken as a

ground for resisting their liability.

9. The learned ADJ has taken note of the fact that on merits the

appellants have not denied the loan having been taken, the default

having been committed or the absence of an arbitration clause and

consequently all these points which have been taken before the first

court raising objections to the award have been found to be false.

10.So far as the plea of default for a period of three consecutive

months is concerned, this plea has been raised for the first time

before this appellate court. It has neither been raised before the

arbitrator nor the court where objections were filed. Therefore, the

appellants have only tried to buildup altogether a new case now.

11. There is no merit in the appeal of the appellants and the same is

dismissed.

V.K. SHALI, J.

AUGUST 07, 2013/dm