Food Corporation Of India vs M/S Shiva Rice Mills & Ors
2014 Latest Caselaw 2224 Del

          *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                             Date of decision: 2nd May, 2014.

+      FAO(OS) 72/2014, CM No.4467/2014 (of the appellant u/S 151
       CPC and Section 37 of Arbitration Act for stay) & CM
       No.4468/2014 (of the appellant u/S 151 CPC & Section 37 of
       Arbitration act for stay).
       FOOD CORPORATION OF INDIA                 ..... Appellant
                  Through: Mr. Sukumar Pattjoshi, Sr. Adv. with
                            Mohan Lal Sharma & Mr. K. Mathur,
                            Advs.
                                     versus
       M/S SHIVA RICE MILLS & ANR                ..... Respondents

Through: Mr. A.S. Mathur, Adv. for R-2.

                             AND
+                               FAO(OS) 73/2014
       FOOD CORPORATION OF INDIA                  .... Appellant
                  Through: Mr. Sukumar Pattjoshi, Sr. Adv. with
                             Mohan Lal Sharma & Mr. K. Mathur,
                             Advs.
                          versus
    M/S SHIVA RICE MILLS & ORS                ..... Respondents
                  Through: Mr. A.S. Mathur, Adv. for R-2.
CORAM :-
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1. FAO(OS) No.72/2014 under Section 37 of the Arbitration & Conciliation

Act, 1996 impugns the judgment dated 20th November, 2013 of the learned

Single Judge of this Court allowing OMP No.204/2012 preferred by the

respondent no.1, under Section 34 of the said Act for setting aside of the

arbitral award dated 15th June, 2011 of the respondent no.2 Indian Council of

Arbitration and remitting the matter to the arbitrator for carrying out a de novo

adjudication and further observing that the respondent no.2 will take a decision

with regard to the contention of the appellant qua fee payable for such remitted

proceedings.

2. It was the contention of the appellant before the learned Single Judge

that OMP No.204/2012 filed by the respondent no.1 under Section 34 supra

was beyond the time prescribed for filing thereof under Section 34(3) of the

Act. It was argued that the respondent no.2 had dispatched the award to all

the concerned parties under cover of letter dated 20th June, 2011, by

Registered Post on 28th June, 2011 and a presumption should be drawn under

Section 27 of the General Clauses Act, 1897 that the respondent no.1 had

received a signed copy of the award; that since the appellant had received

the award by the Registered Post, there was no reason why the respondent

no.1 would not have received the same; that if the limitation for filing the

petition under Section 34 were to be calculated from June, 2011 then the

petition filed by the respondent no.1 was barred by time.

3. The learned Single Judge, in the impugned judgment, held that the

presumption under Section 27 supra as also under Section 114(f) of the

Indian Evidence Act,1872 of such service is rebuttable; that the respondent

no.1 had clearly stated that it had received the signed copy of the award only

on 19th December, 2011; that an affidavit to the said effect of the partner of

the respondent no.1 was also filed; that it was also the argument of the

respondent no.1 that the respondent no.1 became aware of the award only

upon notice being issued and served upon the respondent no.1 in the

appellant's petition also under Section 34 of the Act, being OMP

No.796/2011 being served upon the appellant. The learned Single Judge

found that the notice of OMP No.796/2011 had been served on the

respondent no.1 in the first week of December, 2011 and held that it was

thus quite possible that the respondent no.1 had knowledge of the award

only then and the petition, being OMP No.204/2012, was within time from

the said date. Another reason given is, that the appellant did not traverse the

averments of the respondent no.1 in the petition, of having received copy of

the award only on 19th December, 2011. Reliance was placed on V.N.Bharat

Vs. Delhi Development Authority (2008) 17 SCC 321 laying down that

where presumption of such service is denied, the onus of proving that the

service was indeed so effected goes back on the person who is so asserting

and in the absence of any such evidence, it has to be held that such service

had not been effected. It was thus held by the learned Single Judge that there

was nothing to show that the respondent no.1 had been served with the

signed copy of the award at any time before 19th December, 2011 and the

petition from that date was within time.

4. It may also be mentioned that in view of the award being set aside,

OMP No.796/2011 preferred by the appellant, objecting only to the rejection

of its claim for interest, was also disposed of as infructuous vide the same

order. FAO(OS) No.73/2014 has been filed thereagainst. However it is

obvious that the outcome of FAO(OS) No.73/2014 would be depended

upon the outcome of FAO(OS) No.72/2014 in as much as if the order of the

learned Single Judge allowing OMP No.204/2012 preferred by the

respondent no.1 and setting aside the award were to be upheld, the question

of granting any interest to the appellant on the awarded amount would not

arise.

5. The learned Single Judge having found the petition supra under

Section 34, preferred by the respondent no.1 to have been filed within time,

otherwise found the award to be without examining the evidence before the

Arbitral Tribunal and accordingly set aside the same.

6. These appeals came up before this Court on 5th March, 2014 when

upon the contention of the counsel for the appellant that proof of delivery of

the award on the respondent no.1 be requisitioned from the respondent no.2,

notice was issued to the respondent no.2 Arbitral Tribunal to furnish the

proof of the delivery status of the award on the respondent no.1.

7. The Registrar of the respondent no.2 has in response filed an affidavit

inter alia stating that the arbitral award dated 15th June, 2011 was sent to

both the parties i.e. the appellant and the respondent no.1, by Registered Post

on 28th June, 2011. The Registrar of the respondent no.2 is also present in

the Court along with his Advocate.

8. The senior counsel for the appellant has argued, that the said affidavit

of the Registrar of the respondent no.2 still does not give the date of service

of the award sent on 28th June, 2011 on the respondent no.1; that it is not

even stated whether any AD Card was received or not and / or whether the

envelope containing the award sent on 28th June, 2011 was returned to the

respondent no.2.

9. There is indeed such a lacuna in the affidavit. However there being no

clear direction in the earlier orders, as to the form of the affidavit, we, rather

than adjourning the case for filing of further affidavit by the Registrar of the

respondent no.2, have in Court enquired from the Registrar of the respondent

no.2 whether the envelope containing the award sent on 28 th June, 2011 was

along with the AD Card and whether the envelope containing the award sent

on 28th June, 2011 was returned back to the respondent no.2.

10. The Registrar of the respondent no.2 states that the award was not sent

along with any acknowledgment due card and the envelope containing the

award dispatched on 28th June, 2011 was not returned to the respondent no.2.

11. The position thus remains the same as before the learned Single

Judge. There is nothing to show that the envelope containing the award sent

by the respondent no.2 to the respondent no.1 on 28 th June, 2011 was

delivered on the respondent no.1 and if so when. Else, there is no dispute

that the respondent no.1 collected the award from the respondent no.2 on

19th December, 2011.

12. We have enquired from the senior counsel for the appellant as to how,

in the absence of anything to show that the arbitral award was received by

the respondent no.1 in June, 2011as averred, can we on presumption, dismiss

the petition under Section 34 of the Act preferred by the respondent no.1, as

beyond time, especially when the legislature has permitted the delay in filing

the petition under Section 34 of the Act to be condoned only if filed within

further period of 30 days but not thereafter and the Supreme Court in Union

of India Vs. Popular Construction Co. (2001) 8 SCC 470 has interpreted

the same to be mandatory and not capable of further extension.

13. We have also drawn the attention of the senior counsel for the

appellant to Union of India Vs. Tecco Trichy Engineers & Contractors

(2005) 4 SCC 239 concerned with delivery of the arbitral award on the

Railways; it was held that the delivery of an arbitral award under Section

31(5) is not a matter of mere formality--it is a matter of substance; that for

such delivery to be effective, has to be "received" by the person capable of

taking a decision with respect to the award and not by any person in the

department.

14. Mention may also be made of the judgment of one of us (Rajiv Sahai

Endlaw, J.) in Karmyogi Shelters Pvt. Ltd Vs Benarsi Krishna Committee

MANU/DE/1879/2009 holding that the arbitral award is not to be personally

delivered to the party and can be delivered to the Advocate representing the

party but which was set aside by the Division Bench of this Court vide

judgment dated 4th May, 2010 in FAO(OS) No.578/2009 titled Karmyogi

Shelters Pvt. Ltd Vs Benarsi Krishna Committee holding that the principles

laid down in Tecco Trichy Engineers & Contractors supra are applicable to

private parties also and that the service of the award has to be on the

concerned party and that where a thing prescribed to be done in a particular

manner it must be done in that manner only, else will be held not to have

been done at all. The said view of the Division Bench was affirmed by the

Supreme Court in judgment dated 21st September, 2012 titled Benarsi

Krishna Committee Vs Karmyogi Shelters Pvt. Ltd (SLP Civil

No.23860/2010) laying down that proper compliance of Section 31(5) of the

Act means delivery of a signed copy of arbitral award on the party himself

and not on his Advocate and only service on the party himself gives the

party concerned the right proceed under to Section 34 of the Act; delivery of

a copy of the signed award on the Advocate for the parties was held to be

non-compliance of the provisions of delivery on the party to the arbitral

award.

15. In this light of the aforesaid two judgments, we are of the view that

the presumption invoked by the senior counsel for the appellant would have

no place in the absence of any proof of delivery of the signed copy of the

award on the respondent no.1itself and which does not exist. We may notice

that this Court in Union of India Vs. Haryana Telecom Limited

MANU/DE/0662/2010, Bharat Sanchar Nigam Ltd. Vs. Haryana Telecom

Ltd. MANU/DE/4113/2010 and Sr. Divisional Commercial Manager Vs.

M/s. Shriram Food & Fertilizer Industries MANU/DE/4526/2013 had

drawn presumption of service of the arbitral award but in view of aforesaid,

the same cannot be said to be a correct exposition of law.

16. Save for the aforesaid, the only other contention of the senior counsel

for the appellant is that a direction be given to the respondent no.1 for

bearing the fee of the arbitration in the remitted proceedings. No notice of

this appeal has been issued to the respondent no.1 as yet and in the absence

of the respondent no.1, we cannot make any such direction. Need is not felt

to issue notice to the respondent no.1 only for the said purpose. Though the

senior counsel for the appellant has also argued that the respondent no.2 be

so directed but we are of the view that the learned Single Judge in the

impugned judgment has sufficiently taken care of this aspect.

17. There is thus nothing in this appeal which is dismissed.

CHIEF JUSTICE

RAJIV SAHAI ENDLAW, J.

MAY 02, 2014 pp