Delhi High Court
M/S Ms Shoes East Ltd vs Om Prakash Khaitan & Ors. on 4 December, 2014
$~36
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgement delivered on: 04.12.2014
+ CS(OS) 2165/2012
M/S MS SHOES EAST LTD ..... Plaintiff
Through: Mr Pavan Sachdeva, CMD of Plntf.
versus
OM PRAKASH KHAITAN & ORS ..... Defendants
Through
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
RAJIV SHAKDHER, J
IA No. 20267/2012 (condonation of delay of 88 days)
1.
This is an application seeking condonation of delay in filing the
objections under Section 30 and 33 of the Arbitration Act, 1940 (in short the
1940 Act). To be noted, there is no representation on behalf of the
applicant/ defendant no.1, at whose instance the captioned application has
been filed. Defendant no.1 was proceeded ex-parte vide order dated
17.04.2014. No-one has represented defendant no.1 thereafter.
2. In any event, it is averred in the captioned application that notice of
award dated 12.05.2012, was received by defendant no.1 on 12.06.2012. It
is averred that the said notice was dated 05.06.2012. Defendant no.1, further
avers, that the notice issued by this court was received some time in the third
week of August, 2012.
3. To be noted, the captioned application is accompanied by another
application which was filed, evidently, on 10.09.2012. In that application
the prayer made is that delay of 58 days be condoned. In the captioned
application, the assertion is that there is a delay of 88 days. It is not known,
as to which application defendant no.1 is wishing to press. What is clear,
however, is that there is an inconsistency in the prayers made by defendant
no.1. Defendant no.1 is not clear as to the period he should seek
condonation of.
3.1 It is also an averment of defendant no.1 that the principles of natural
justice have been violated, and that, he did not have any notice of the
appointment of the arbitrator or of commencement of arbitration
proceedings. It is also averred that the address of defendant no.1 given in
the award is not the correct address.
3.2 In so far as other defendants are concerned, it is stated that they had
no connection with the plaintiff.
3.3 There is also an averment to the effect that between January, 2012 and
till the date of filing of the application, the wife of defendant no.1 was ill,
which is why defendant no.1 could not move the court at an earlier date.
The captioned application is not accompanied by any medical report
concerning the wife. These are bald averments.
4. Aforesaid shows that, the aspect which defendant no.1 had to suitably
explain, i.e., delay, has not been explained. Defendant no.1 has failed to
cogently explain the delay between the receipt of notice in the third week of
August, 2012 and the date on which the objections under Section 30 and 33
of the 1940 Act were filed.
4.1 The record shows that the objections, along with the captioned
application for condonation of delay, were filed on 08.10.2012. There is no
explanation for delay between August, 2012 and October, 2012. The
averment with respect to illness of wife, taken by defendant no.1, is not
backed by any document.
5. In these circumstances, I can only conclude that delay is not cogently
explained. The injury to the plaintiff, on account of pendency of the present
proceedings, gets compounded by the fact that there is no representation on
behalf of defendant no.1, today. The application is, accordingly, dismissed.
IA No. 20668/2012 (Objections)
6. In view of the fact that the accompanying application for condonation
of delay has been dismissed, the captioned objections would not lie. The
objections are, accordingly, dismissed.
IA No.13001/2012 (u/s 28 of the Arbitration Act, 1940)
7. This is an application filed under Section 28 of the 1940 Act to seek
extension of time for passing the award. In terms of the prayer clause,
extension of time of the arbitration proceedings is sought w.e.f. 20.08.2007
till 12.05.2012, i.e., the date on which the award was passed in the captioned
matter.
8. On behalf of the plaintiff company, Mr. Pavan Sachdeva submits that
court has the requisite powers under Section 28 to extend the time, which is
provided in Rule 3 of the 1st Schedule of 1940 Act even after the award is
passed. The time provided under the said provision has elapsed, and
therefore, an application has been moved for extending the time.
9. It is pertinent to note that notice in the captioned application was
issued on 20.07.2012. Further, the defendants have been proceeded ex parte
in the matter. While defendant nos. 2 to 4 have been proceeded ex parte on
11.12.2013, defendant no.1 has been proceeded ex-parte on 17.04.2014.
10. I tend to agree with Mr Sachdeva that the court has requisite powers
under Section 28 of the 1940 Act to extend the time even after the award is
passed. This is evident on a bare reading of sub-section (1) of Section 28 of
the 1940 Act. Since the non-applicants/defendants have been proceeded ex
parte, I am inclined to allow the application. Even otherwise, I am of the
opinion that there is merit in the application. It is ordered accordingly. The
time for passing the award shall stand extended as prayed.
11. The application is disposed of.
CS(OS) 2165/2012
12. The case of the plaintiff is as follows:-
13. The plaintiff has filed a suit under Sections 14 and 17 of the 1940 Act.
The award in respect of which judgment and decree is sought is dated
12.5.2012. The plaintiff seeks a decree in the sum of Rs. 7,76,154/-, which
is the amount calculated till the date of suit, with future interest at the rate of
18% p.a. till the date of payment.
14. Briefly, the award came to be passed in the background of the
following facts :-
14.1 The plaintiff company had brought out a public issue in January-
February, 1995, which was underwritten by 267 under writers. The
defendants herein were one of the 267 under writers. According to the
plaintiff, the liability devolved on the defendants, as the issue remained
under subscribed. Since the defendants, who were under writers failed to
fulfil their obligation, a request was made to Delhi Stock Exchange, on
02.05.1995, to appoint an Arbitrator.
14.2 To be noted, that since, Delhi Stock Exchange did not oblige, the
plaintiff company approached the court when this court appointed Ms.
Justice Manju Goel, a former Judge of this court, as an Arbitrator vide order
dated 14.03.2007.
14.3 To be noted, defendants did not appear before the Arbitrator,
whereupon Mr.O.P. Faizi, Advocate was appointed to assist her in the matter
and to represent the case of the defendants amongst others. After complying
with the provisions of law, the learned arbitrator proceeded to pass the
award, as indicated above on 12.5.2012.
15. Accordingly, as prayed, the award is made a rule of the court. A
decree is, however, passed in terms of the award. Accordingly, the plaintiff
will be entitled to the sum of Rs. 7,59,304/-, and not Rs. 7,76,154/-, as
prayed, with future interest at the rate of 18% on the former, i.e., Rs.
7,59,304/- till the date of realization. In addition, the taxed costs will also be
paid to the plaintiff.
16. The captioned suit is accordingly disposed of.
17. A decree sheet be drawn up in the aforesaid terms. The suit and the
application be consigned to Record.
RAJIV SHAKDHER, J
DECEMBER 04, 2014
kk
