M/S M.S. Shoes East Ltd. vs Pressman Ltd.
2015 Latest Caselaw 101 Del

*                  THE HIGH COURT OF DELHI AT NEW DELHI

                               Judgment Reserved on: 14.10.2014
%                              Judgment delivered on: 08.01.2015

+                     IA No. 13652/2013 in
                      CS(OS) 2094/2012


M/S M.S. SHOES EAST LTD.                                  ....Plaintiff

                      Versus

PRESSMAN LTD.                                             .....Defendant

ADVOCATES WHO APPEARED IN THIS CASE:
For the Plaintiff : Mr Pavan Sachdeva, CMD of the Plaintiff.
For the Defendant : Mr Biswajit Choudhury, Advocate.


CORAM :-
HON'BLE MR JUSTICE RAJIV SHAKDHER

RAJIV SHAKDHER, J

IA No. 13652/2013 (u/s 5 of Limitation Act by defendant)

1.

This is an application preferred by the defendant for condonation of delay in preferring objections under Section 30 and 33 of the Arbitration Act, 1940 (in short the 1940 Act). It is averred that the applicant was earlier known by the name Pressman Limited and is now known as Nucent Estates Ltd. By an order dated 14.10.2014, I had allowed the non-applicant's/ plaintiff's application bearing no. 12772/2012. This application was filed under Section 28 of the 1940 Act. While allowing the said application, I had not only given my reasons for allowing the application, but also recorded the stand of the counsel for the applicant/ defendant herein that he had no

objection to the application being allowed. I may only note that the date of the award, in the order dated 14.10.2014 reads as 28.05.2012, whereas it should read as 23.05.2012.

2. In so far as this application is concerned, the applicant/ defendant broadly makes the following averments to seek condonation of delay:

(i) That it was not served either in the suit for appointment of the arbitrator, i.e., suit no. 1299A/2012 or, in the arbitration proceedings, which commenced thereafter.

(ii) For the first time it became aware of the arbitration proceedings when it received a notice dated 02.06.2012 from the learned arbitrator. In other words, it became aware of the award dated 23.05.2012 only on receipt of the said notice. [See paragraph 5(d) of the application.]

(iii) For the first time it became aware of the award dated 23.05.2012, having been filed in this court, when it received a notice from the registry of this court, on 15.01.2013. [See paragraph 5(f) of the application].

(iv) An inspection of record was conducted on 31.01.2013 and 07.02.2013, when it was discovered that the learned arbitrator had not filed the arbitration record. Consequently, on 16.02.2013, an application being: IA No. 3088/2013, was filed.

(v) IA No. 3088/2013 was disposed of on 10.07.2013 by the learned Jt. Registrar as the arbitral record stood filed. Consequently, in CS(OS) 2094/2014, which was in effect an action filed under Section 14 and 17 of the 1940 Act, three weeks' time was given to the applicant/ defendant to file objections to the award.

(vi) On 30.07.2013 inspection was conducted, when it was discovered that the arbitral record ran into four (4) volumes, approximately 2000 pages.

(vii) Having regard to the fact that the record ran into approximately 2000 pages, an application was filed on 31.07.2013, for being supplied with certified copies of the record, which was subsequently "abandoned", and instead, an application being: IA No. 12438/2013 was filed for being granted further four (4) weeks to inspect the arbitral record and file objections. This application was allowed on 07.08.2013 by the learned Jt. Registrar, despite opposition of the non-applicant/ plaintiff to the extension of time sought by the applicant/ defendant to file objections to the award. Consequently, the applicant/ defendant was given further two (2) weeks' to file its objections.

(viii)The objections were filed on 21.08.2013, causing a delay of 186 days, which is explainable, by having regard to the following: The delay between 16.02.2013 till 10.07.2013 (which according to the applicant/ defendant is 145 days) is attributable to non-availability of arbitral record. The further delay of 41 days, i.e., between 11.07.2013 to 21.08.2013, is attributable to the vastness of the record.

3. The non-applicant/ plaintiff has, on the other hand, in the reply filed by it, taken the following broad stand:

(i) That the original award was filed by it on 25.06.2012, along with the present suit, i.e., suit no. 2094/2012. Notice in the suit was issued on 18.07.2012, which was made returnable on 12.09.2012. On 12.09.2012, the learned Jt. Registrar, even while noticing that affidavit of service had been filed, issued fresh summons in the suit, which were made returnable on 20.02.2013. On that date, matter was renotified, as the learned Jt. Registrar

was unavailable. Consequently, the suit was listed on 25.02.2013, along with the application of the applicant/defendant, being IA No. 3088/2013; a reference to which is made hereinabove.

(ii) Despite the fact that, the applicant/ defendant was served on 30.08.2012, it did not participate in the proceedings, though the Vakalatnama was signed on its behalf, on 07.09.2012.

(iii) The applicant/ defendant was aware of the fact that the award has been passed as per its own averment made in paragraph 5(d) of the application, in June 2012; and a copy of the same was received by it, from the learned arbitrator, on 09.07.2012.

(iii)(a) The factum of receipt of copy of the award is sought to be demonstrated by relying upon communication dated 24.12.2012, issued by the learned arbitrator.

(iv) The averment of the applicant/ defendant that it was not served either in suit no. 1299A/1997 or in the arbitration proceedings, is false.

(v) The arbitral record was received by the registry of this court from the learned arbitrator on 16.04.2013 and, therefore, there is no explanation, in any event, qua the delay between that date and 10.07.2013.

(vi) The order of the learned Jt. Registrar dated 07.08.2013, being without jurisdiction, was challenged by way of a Chamber Appeal No. 99/2013; and therefore, would not enure to the benefit of the applicant/ defendant.

(vii) Lastly, the delay cannot be condoned as it is intentional, deliberate and lacks bonafides. Apart from anything else, the lackadaisical approach of the applicant/ defendant is evident from the fact that, it failed to inspect the

record till 30.07.2013, even though the record had been received by the registry from the learned arbitrator, on 16.04.2013.

4. On behalf of the applicant, arguments were addressed by Mr Biswajit Chodhury, while the non-applicant/ plaintiff was represented by Mr Pavan Sachdeva, Chairman-and-Managing Director of the said entity.

4.1 The argument advanced on behalf of both parties, were in line with the stand taken in pleadings.

5. Having heard the learned counsel for the applicant/ defendant and representative of the plaintiff, what has emerged from the record and the pleadings filed, is as follows:

(i) That the applicant/ defendant was aware, at least, of the award having been passed in June, 2012 on receipt of notice dated 02.06.2012. [see averments made in paragraph 5(d) of the application].

(ii) There is no denial in the rejoinder of the fact that a certified copy of the award was received by the defendant from the learned arbitrator, on 09.07.2012.

(iii) There is also no denial of the fact the non-applicant/ plaintiff had filed the original award, along with the instant suit, i.e., CS(OS) 2094/2012, This fact is supported by a communication dated 13.04.2013 of the learned arbitrator, which is indicative of the fact, that the, original award was supplied by her to the non-applicant/ plaintiff. The arbitral record, as indicated above, was received by the registry on 16.04.2013.

(iv) A vakalatnama, was filed by the applicant's/ defendant's advocate, on 31.01.2013, which is indicative of the fact that it was executed in favour of

Messrs I.G. & Associates by the director of the applicant/ defendant on 07.09.2012.

(v) The record of this court was inspected by advocate of the applicant/ defendant, on 31.01.2013, 07.02.2013, 30.07.2013, 13.08.2013 and 21.08.2013.

(vi) IA No. 3088/2013 was filed on 16.02.2013, whereby, two prayers were sought. First, that the non-applicant/ plaintiff be directed to provide the entire arbitral record. Second, the defendant be granted an extension of 30 days for filing objections to the award, commencing from the date when the records are provided to it. IA No. 3088/2013 was disposed of on 10.07.2013, by the learned Jt. Registrar when, he noted that the arbitral record stood already filed. On this date, the Joint Registrar only recorded the submission of the counsel for the applicant/ defendant that three (3) weeks be granted to file objections to the award. Importantly, the Joint Registrar did not rule on this plea. He simply posted the suit on 07.08.2013.

(vii) Yet another application was filed by the applicant being: IA No. 12428/2013, which was disposed of on 07.08.2013, whereby the learned Jt. Registrar granted further two (2) weeks to the applicant/ defendant to file its objections.

(viii)Against order dated 07.08.2013, a Chamber Appeal was filed by the non-applicant/ plaintiff, being OA No. 99/2013, in which, notice was issued on 23.08.2013, which was accepted by the counsel for the applicant/ defendant, on the said date. The notice was made returnable, on 08.10.2013.

(ix) In the interregnum, the captioned application was filed by the applicant/ defendant, i.e., IA No.13652/2013. Notice in this application was

issued on 30.08.2013, which was also made returnable on 08.10.2013. On 08.10.2013, after hearing counsels for both sides, order dated 07.08.2013, passed by the learned Jt. Registrar granting extension of time to file objections, was set aside.

6. Therefore, having regard to the aforesaid facts, one would have to ascertain, whether the applicant/ defendant has set out sufficient cause for condonation of delay. Sufficient cause, to my mind, presupposes absence of negligence and inaction on the part of the applicant, who seeks condonation of delay. The expression implies presence of legal and adequate reasons, and therefore, it is imperative that the concerned applicant, besides acting in a bonafide manner, should also be able to demonstrate that it had taken all possible steps, within its power and control, to approach the court, without unnecessary delay. The test articulated by the courts, that is, whether the cause is sufficient or not, is one, whereby the applicant is able to demonstrate that it could not have avoided the delay, despite, due care and attention. [See judgement dated 20.12.2013, passed in OMP No. 1189/2013, titled: Food Corporation of India vs M/s Sukhbvir Singh & Co. & Ors. and Balwant Singh (Dead) vs Jagdish Singh & Ors. (2010) 8 SCC 685].

7. Undoubtedly, limitation for filing objections, as prescribed under Article 119 (b) of the Limitation Act, 1963 (in short Limitation Act), is 30 days from the date of receipt of notice of the filing of the award. In this case, the original award had been filed by the non-applicant/ plaintiff, along with the instant suit, way back on 25.06.2012. Upon notice having been served in the suit, it would have become apparent to the applicant/ defendant that the award had been filed by the non-applicant/ plaintiff.

7.1 It is the non-applicant/ plaintiff's assertion that the applicant/ defendant was served with the summons in the suit on 30.08.2012. While the applicant/ defendant denies this fact, if the test of preponderance is applied, it appears, that the denial is not quite accurate. The non-applicant/ plaintiff has appended copies of the courier receipts and the tracking report, along with the reply, which seem to indicate that the applicant/ defendant was served both at the Delhi address as also at its Kolkata address. Notably, the applicant/ defendant while taking a stand that it had shifted from its Delhi address more than ten years ago, has not placed any document on record, in support of this stand.

7.2 Be that as it may, the vakalatnama, which was filed on behalf of the applicant/ defendant on 31.01.2013, by Messrs I.G & Associates, lets (in a manner of speech) the cat out of the bag, as it bears the date: 07.09.2012. Therefore, the version of the non-applicant/ plaintiff that the applicant/defendant was served on 30.08.2012, is believable. This is more so, as the vakalatnama makes a clear reference to the number allocated to the instant suit, i.e., CS(OS) 2094/2012; a fact, which it could not have known had it not been served in the suit. This fact has not been adverted to by the applicant/ defendant in its application for condonation of delay.

7.3 The fact that inspection was carried out on at least two occasions, prior to the arbitral record being filed, i.e., on 31.01.2013 and 07.02.2013, is not denied by the applicant/ defendant. These inspections would have clearly revealed that the original award stood already filed.

7.4 The applicant/ defendant seeks to explain the delay after 15.01.2013, when it admittedly received a notice from the registry of filing of the award, by taking recourse to the fact that the arbitral record was not filed. Notably

though, the application (i.e., IA No. 3088/2013) for this purpose was filed, only on 16.02.2013. There is no explanation for delay between 15.01.2013 and 16.02.2013.

7.5 In the aforesaid application, on 01.04.2013, an order was passed to summon the record from the learned arbitrator. The application was put up for further orders on 14.05.2013. On that date, the applicant/ defendant was represented by an advocate, though the matter could not be taken up as the Joint Registrar was not available. The record of this court shows that prior to this date on 16.04.2013, the arbitral record had been filed. On the next returnable date, i.e., on 22.05.2013, same position obtained. No attempt was made, it appears, by the counsel for the applicant/ defendant, to ascertain the exact position vis-à-vis the arbitral record, till the following date, i.e., 10.07.2013, when IA No. 3088/2013 was disposed of by the learned Jt. Registrar, for the obvious reason that the arbitral record had already been received, in the meanwhile.

8. There is, therefore, to my mind, no explanation even for the delay in the inspection of the record between 16.04.2013 and 10.07.2013. The order dated 10.07.2013 shows that the applicant/ defendant sought three (3) weeks to file objections to the award along with appropriate application; a plea on which no order was passed.

8.1 On 07.08.2013, the learned Jt. Registrar disposed of IA No. 12438/2013, filed by the applicant/ defendant seeking extension of time to file objections, by according two (2) weeks for the said purpose. This order, as indicated above, was set aside on 08.10.2013. Therefore, the order dated 07.08.2013, cannot come to the aid of the applicant/ defendant.

9. In these circumstances, could it be said that the reasons given by the applicant/ defendant supply sufficient cause for me to condone the delay. In my view, the answer has to be in the negative for more than one reason. As indicated above, sufficient cause presupposes bonafides and legality, as well as adequacy of reasons. There is a lack of bonafides on display in this case, in as much as the applicant/ defendant did not state that it had received a certified copy of the award on 09.07.2012 from the learned Arbitrator, or that it had knowledge of the instant suit having been filed; a fact which got revealed by way of a Freudian-slip, on account of the date of execution (i.e., 07.09.2012) being mentioned on the vakalatnama filed on behalf of the applicant/ defendant.

10. Even if I were to ignore the above, and take an indulgent view of the matter, I am unable to persuade myself to condone the delay having regard to the fact that the applicant/ defendant chose not to inspect the record after 01.04.2013, even when in the presence of its advocate, a direction had been issued by the learned Jt. Registrar calling upon the learned arbitrator to file the record. It was within the power and means of the applicant/ defendant to ascertain, as to whether or not the original award had been filed. It is pertinent to note that what was being summoned was record sans the original award which was already on record of the court.

10.1 The applicant/ defendant's application being: IA No. 3088/2013, got listed on two occasions prior to 10.07.2013, despite which, the applicant/ defendant's counsel took no steps to file the objections though the arbitral record stood filed nearly three (3) months prior to the said date.

11. As indicated above, the test for a court to ascertain as to whether or not the cause furnished to explain the delay is sufficient or not, is, was the delay

unavoidable, even if due care and attention had been taken by the applicant, seeking condonation. The applicant/ defendant herein, to my mind, did not take due care and pay enough attention, despite the fact, that it was aware that an award had been pronounced in June, 2012 and that it had been filed in this court, if not earlier, at least, since September, 2012. While, dealing with such applications, one would have to keep in mind, not only the period involved, but also the quality of the explanation furnished to explain the delay. To my mind, the applicant/ defendant's explanation for delay, which is, that the record was voluminous, in this case, appears to be hollow. The self-confessed stand of the applicant/ defendant that it had, looking at the vastness of the record, filed an application for being supplied certified copy of the record, which was ultimately, "abandoned", only fortifies my view.

12. Therefore, for the reasons given above, I am not inclined to condone the delay, the application is, accordingly, dismissed.

CS(OS) 2094/2012 and IA No. 13651/2013 (Objections of defendant)

13. Ordinarily the objections of the defendant would follow the same fate as IA No. 13652/2013; however, since, presently, I do not hold the arbitration roster, in fitness of things, list the suit and the objections before the roster Bench, on 16.01.2015, for appropriate orders.

RAJIV SHAKDHER, J JANUARY 08, 2015 kk