M/S Chandermani Pvt. Ltd. vs M/S Dawer Fabrics
2014 Latest Caselaw 4701 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         C.M.(M) No.3181/2005


%                                                    22th September, 2014

M/S CHANDERMANI PVT. LTD.                                     ......Petitioner
                 Through:                Mr.Seeraj Bagga, Advocate.

                          VERSUS

M/S DAWER FABRICS                                            ...... Respondent

Through: Mr.Rajinder Juneja, Advocate.

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?

VALMIKI J. MEHTA, J (ORAL)

C.M.No.15959/2014 (restoration)

1. For the reasons stated in the application, the petition is restored to its

original number.

2. The application is allowed and disposed of.

CM(M) No.3181/2005

3. This petition under Article 227 of the Constitution of India challenges

the impugned judgment of the first appellate court dated 13.10.2005 by

which the first appellate court has dismissed the first appeal filed against the

order of the original Court dated 04.2.2005 dismissing objections under

Section 34 of the Arbitration & Conciliation Act, 1996 (hereinafter referred

to as 'the Act') which were filed by the petitioner to the Award of the

arbitrator dated 27.1.1999. It is not disputed that objections which have

been filed by the petitioner were to be dealt with under Section 34 of the

Act.

4. I may at the outset note that the scope of a challenge to an Award is

limited, and if the scope of a challenge to an Award is limited, then the

scope of an appeal to challenge of an Award is further limited. If the scope

of the challenge to an Award and scope of an appeal to challenge of the

judgment dismissing objections to an Award is limited, then surely the scope

of a petition under Article 227 of the Constitution of India against a

judgment dismissing the appeal against the judgment dismissing objections

will have to be extremely limited. In spite of all these aspects, I have heard

the counsel for the petitioner on merits.

5. The first ground which was urged on behalf of the petitioner is that

there was no arbitration agreement between the parties and secondly it was

argued that the Award dated 27.1.1999 is an ex parte Award and it could not

have been passed. It is argued that the Award is an ex parte Award, and

therefore the petitioner is entitled to raise objections with respect to the non-

existence of the arbitration agreement in the objections under Section 34 of

the Act.

6. The first ground which is urged on behalf of the petitioner is wholly

misconceived because objections as to the jurisdiction of the arbitrator have

to be taken before the arbitrator immediately on entering appearance before

the arbitrator as per Section 16 of the Act. If the petitioner chooses not to

appear in the arbitration proceedings, and consequently has not raised any

objections under Section 16 of the Act, to the existence of the arbitration

agreement or to the jurisdiction of the arbitrator then, any objections as to

the jurisdiction of the arbitrator on the ground that there is no arbitration

agreement cannot be subsequently taken in the objections in view of the

judgment of the Supreme Court in the case of Narayan Prasad Lohia Vs.

Nikunj Kumar Lohia and Ors. (2002) 3 SCC 572.

7. So far as the second argument is concerned, it is required to be stated

that it was always open to the petitioner to challenge the ex parte Award by

filing an application before the arbitrator for setting aside the ex parte

Award if the case of the petitioner was/is that it was not served in the

arbitration proceedings, but, admittedly no application has been filed in the

arbitration proceedings to set aside the ex parte Award dated 27.1.1999.

8. I may note that disputes between the parties pertained to bills raised

upon the petitioner for goods supplied to the petitioner being papers etc,

arbitration was conducted under the aegis of Delhi Hindustani Mercantile

Association.

9. Therefore, no objections with respect to the existence or otherwise of

an arbitration agreement can be raised under Section 34 of the Act once the

petitioner had not appeared in the arbitration proceedings and not raised any

objections under Section 16 of the Act, and has even had not applied for

setting aside of the ex parte Award on the ground that petitioner was not

served in the arbitration proceedings.

10. I may note that I have examined the merits of the matter, although the

objections are in fact clearly time barred. It is settled law in view of the

judgment of the Supreme Court in the case of Union of India Vs. M/s.

Popular Construction Co. AIR 2001 SC 4010 that there cannot be

condonation of even one day beyond a period of 120 days in filing

objections to the Award. In the present case, objections to the Award dated

27.1.1999 were filed only on 27.9.1999 i.e after about 8 months i.e beyond 4

months/ 120 days period for filing of the objections. The impugned

judgment of the first appellate court notes that there are proper registered

postal receipts and AD card on record of the arbitrator which shows that the

Award was duly sent to the present petitioner. Once the Award was duly

served, at best it could be received within a few days of posting i.e by the 1-

2 week/s of February, and therefore objections could not have been filed on

27.9.1999, and thus which are hopelessly time barred and liable to be

dismissed in limine without going into the merits of the matter.

11. In view of the above, there is not merit in this petition, and the same is

therefore dismissed, leaving the parties to bear their own costs.

VALMIKI J. MEHTA, J SEPTEMBER 22, 2014 KA