Manmohan Singh & Anr vs Ge Money Financial Services Ltd
2013 Latest Caselaw 3842 Del

*           HIGH COURT OF DELHI AT NEW DELHI
+                                  FAO 339/2013
                                               Decided on 30th August, 2013

MANMOHAN SINGH & ANR                                     ..... Appellants
                          Through:      Mr.Basant Kumar Singh, Advocate.

                          versus

GE MONEY FINANCIAL SERVICES LTD                          ..... Respondent

CORAM:
HON'BLE MR. JUSTICE V.K. SHALI

V.K. SHALI, J. (ORAL)

1. This is an appeal against the order dated 23.03.2013 passed by the

learned ADJ vide which the objections of the appellants under Section 34 of

the Arbitration and Conciliation Act, 1996 against the award passed by the

arbitrator, were partly allowed.

2. The main contention of the learned counsel for the appellants is that

the appellants had not received the notice about the proceedings having been

initiated before the arbitrator and consequently an ex parte award was

passed against him. It has been contended by him that since principles of

natural justice were not followed, therefore, the arbitration award passed

again him is void ab initio.

3. In order to support his contention, the learned counsel for the

appellants has also relied upon the judgment of the Supreme Court in Dulal

Poddar vs.Executive Engineer, Dona Canal; 2004 (1) Arb.L.R. 24 (SC).

4. I have gone through the said judgment. There is no doubt that the

case which has been sought to be relied upon by the learned counsel for the

appellant, the apex court has observed that the award which has been passed

by the arbitrator without affording an opportunity of hearing to the

respondent in the said case was illegal and void, but the question is as to

whether a party to an arbitration proceeding has been served or not, is

essentially a question of fact. In the instant case, there is no dispute about

the fact that the appellants had taken a loan of Rs.15 lakhs from the

respondent and mortgaged the property. In the loan agreement, there was an

arbitration clause and the appellants had given their correspondence address

of Rohini. Since the appellants had defaulted in payment of loan, the

respondent appointed an arbitrator in terms of the arbitration clause who

entered into the reference. The arbitrator is purported to have issued two

notices to the appellants at the Rohini address on 04.04.2011 and

08.05.2011. Both these notices were received by the appellant inasmuch as

the acknowledgement card which had gone along with the notices was served on one Ms.Rajini and another person whose signatures were illegible.

5. Despite the said service on Ms.Rajini and another person, there was

no appearance on behalf of the appellants and consequently they were

proceeded ex parte and the arbitrator passed the ex parte award.

6. Prima facie, the acknowledgment card which is purported to have

been accepted by the arbitrator as proof of service shows that the appellant

had been served the notice. It was essentially now for the appellants to have

discharged the onus by putting in appearance and refuting this fact by cogent

evidence by filing an affidavit that they were not the persons who had

received the notice. This has not been done by the appellants. Therefore,

apart from the presumption of fact which may be drawn once a letter is

addressed to the addressee, the acknowledgment card which has been duly

received back after signatures corroborating the fact that the notice has been

served on the addressee. There is nothing wrong in the presumption and the

factum of notice having been served on the appellants being accepted by the

arbitrator as well as by the court below and dismissing the objections of the

appellant in this court.

7. It has also been contended by the learned counsel for the appellants

that the arbitrator had not recorded the evidence. This objection of the learned counsel for the appellants has also been rejected by the court below

on account of the fact that documents have been placed on record before the

arbitrator to the effect that the appellants had taken the loan and signed the

loan agreement. It is admittedly not the case of the appellants that they had

not taken the loan or had not created any charge/security by way of

mortgage on the property in question or they had not signed the loan

agreement. In the absence of such a plea and in the light of the fact that the

documents of loan are not denied by the appellants, it was, in my considered

view, not necessary that evidence ought to have been taken by the arbitrator.

The documents in themselves were sufficient enough to fasten the liability

on the appellants. This objection of the learned counsel for the appellants,

thus, does not have any merit and has been rightly dismissed by the court

below.

8. I do not find that there is any illegality and impropriety in the

rejection of the objections of the appellants by the arbitrator. Accordingly

the appeal is dismissed.

V.K. SHALI, J AUGUST 30, 2013/dm