Delhi High Court
M/S Richlook Garments Pvt Ltd & Ors vs Reliance Capital Ltd on 24 March, 2015
$~64
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 24.03.2015
+ FAO(OS) 134/2015
M/S RICHLOOK GARMENTS PVT LTD & ORS .... Petitioners
versus
RELIANCE CAPITAL LTD ..... Respondent
Advocates who appeared in this case:
For the Petitioners : Mr Subodh K. Pathak and Mr Rohit Aggarwal, Advocates.
For the Respondents : Mr Rajat Katyal, Advocate
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE SANJEEV SACHDEVA
JUDGMENT
BADAR DURREZ AHMED, J (ORAL)
CM No.5406/2015 (for Exemption)
Exemption is allowed, subject to all just exceptions.
CM No. 5407/2015 (for condonation of delay)
This is an application for condonation of delay of 17 days in filing
the appeal.
The application is allowed.
FAO(OS) 134/2015 and CM No.5405/2015
1. This appeal has been preferred against the order dated 06.01.2015
passed by a learned Single Judge of this Court in OMP No.170/2013
which was a petition under Section 34 of the Arbitration and Conciliation
Act, 1996 (hereinafter referred to as the said „Act‟). The said petition
was a challenge to an ex parte award dated 25.09.2012 passed by the sole
Arbitrator. By virtue of the said award, the appellants were held to be
jointly and severally liable to pay the respondent/claimant, Reliance
Capital Limited, a sum of Rs 3,00,97,712.79 together with interest
thereon @ 12.5% per annum from 30.05.2012 till realisation etc.
2. We need not go into the details of the case inasmuch as the same
have been dealt with by the learned Single Judge in the impugned order
dated 06.01.2015. The main point of challenge is that the appellants were
not granted an opportunity of presenting their case before the Arbitrator.
This submission has been rejected by the learned Single Judge and, in our
view, correctly. This is so because on 26.06.2012, the learned Arbitrator
sent a letter inter alia to the appellants fixing the preliminary meeting on
25.07.2012 at 5 p.m.. Both, the claimants and the respondent were
directed to be present at the given address on that date and time failing
which the learned Arbitrator had indicated that he shall proceed ex parte
and give necessary directions in the matter.
3. On receiving the said notice dated 26.06.2012 from the learned
Arbitrator, the appellants sent a letter on 19.07.2012 requesting the
learned Arbitrator to adjourn the matter to a date in September, 2012 on
account of certain personal difficulties. The said letter reads as under:
"Shri N.F.Kumana
Senior Advocate & Arbitrator
C/o Kumana & Company Advocates & Solictors
106, Old Bake House
Opp. MSCB Bank Ltd.
MSCB Lane, Fort
MUMBAI-400001
Re: Arbitration No.RCL/NFK/380 of 2012
(RE: Loan Account No.RLHLDEL000045044)
Reliance Capital Ltd. ...Claimant
Vs.
M/s. Richlook Garments Pvt. Ltd & Ors. Respondent
Sir,
We are in receipt of your letter dated 16.06.2012 fixing the
Preliminary Hearing in the above Arbitration matter on 25.07.2012
at Mumbai.
2. Owing to our personal difficulties it would not be possible
for us to appear for the Preliminary Hearing fixed on 25.07.2012 at
Mumbai, hence, we request your good offices to adjourn the above
matter for a date in September, 2012.
Thanking you in advance.
For Richlook Garments Private Limited.
Shiv Ratan Goyal
Director
Shiv Ratan Goyal
Mrs. Sareena Goyal"
4. On 25.07.2012, the learned Arbitrator noted that the respondents
were absent, however, in the interest of justice, the learned Arbitrator
granted another opportunity to the respondents/appellants herein to file
their written submissions along with the documents by 13.08.2012 and
the hearing was kept for 14.08.2012 at 5 p.m. at the learned Arbitrator‟s
office. The Minutes of the arbitration proceedings held on 25.07.2012
were sent to the appellants along with a letter dated 25.07.2012. In the
said letter, the learned Arbitrator had made it clear to the appellants that,
in case, they did not file their written submissions before 13.08.2012 and
did not appear on 14.08.2012, the Arbitrator shall be constrained to hear
the matter ex parte. The appellant did not file their written submissions
as directed nor did they appear on 14.08.2012 before the learned
Arbitrator. The Minutes of the arbitration proceedings held on
14.08.2012 reveal that the Arbitrator had received a request from the
appellants stating that they had received the letter dated 25.07.2012 only
on 14.08.2012 which was the date on which the matter was fixed and,
therefore, they were unable to either file their written submissions or
appear before the learned Arbitrator on 14.08.2012. Considering the said
request, the learned Arbitrator granted one more opportunity to the
appellants to file the written submissions and they were directed to do so
by 24.09.2012 and the matter was listed for hearing on 25.09.2012 at 5
p.m. The Minutes of the proceedings held on 14.08.2012 were also
enclosed along with a letter dated 21.08.2012 addressed to the appellants.
In the said letter dated 21.08.2012, the learned Arbitrator had once again
intimated to the appellants that, in case, they did not file their written
submissions on or before 24.09.2012 and did not appear on 25.09.2012,
he shall be constrained to proceed with the hearing ex parte. In the
meanwhile, the appellants had also sent a letter dated 18.08.2012
requesting the learned Arbitrator to fix a date in September, 2012. We
have already indicated that the Arbitrator had fixed the dated of
25.09.2012 as per the proceedings held on 14.08.2012. Thus, the
appellants‟ request had been acceded to.
5. However, despite these opportunities, the appellants did not file
their written submissions before the learned Arbitrator nor did they
appear for the arbitration proceedings on 25.09.2012 on which date the
award was published, which was impugned before the learned Single
Judge by way of the said petition under Section 34 of the Act.
6. In the circumstances narrated above, it is clear that the appellants
have been given ample opportunities to file their written submissions and
appear before the learned Arbitrator. In fact, three opportunities were
given and none of them were availed of by the appellants. Therefore, we
are entirely in agreement with the learned Single Judge in his rejecting
the plea of the appellants that they were not granted a reasonable
opportunity to participate in the arbitration proceedings. The appellants
did not participate in the said proceedings despite, peremptory notices on
each occasion by the learned Arbitrator. Therefore, there is no infirmity
in the impugned order of the learned Single Judge.
7. The learned counsel for the appellants made a plea before us
which, obviously, was not made before the learned Arbitrator, that the
respondents had received the entire money and the claim stands satisfied.
He drew our attention to the document at page 381of the paper book. It is
a copy of a letter stated to have been issued by the DLF Universal
Limited on 09.08.2012 in favour of the respondent. The said letter
indicates that an amount of Rs 2,25,73,844.98 vide cheque No.1032588
dated 26.07.2012 drawn on ICICI Bank had been issued in favour of the
respondent as full and final settlement. According to the learned counsel
for the appellants, this was not brought to the notice of the learned
Arbitrator or the learned Single Judge by the respondents. It is further
submitted by the learned counsel for the appellants that in view of the
said refund nothing was due from the appellants to the respondents.
8. The submissions of the learned counsel for the appellants are not
tenable for two reasons. First of all, despite opportunities having been
given to the appellants they did not file the written submissions nor did
they participate in the arbitral proceeding and, therefore, they cannot
make any grievant about the letter dated 09.08.2012 not having been
placed before the learned Arbitrator or noticed by the Arbitrator.
Secondly, in reply to the Section 34 petition filed by the appellants before
the learned Single Judge, the respondent has categorically taken a stand
as under:
"That the contents of Ground „É‟ as stated by the
Petitioners are wrong and denied. It is denied that the
answering Respondent has improperly procured the Award
by playing and perpetrating fraud and concealing material
fact of receiving and also acknowledging the payment of
Rs2,25,73,844.98/- received by the respondent in full and
final satisfaction of their claim vide letter dated 9th
August, 2012 and the fact of receiving a sum of Rs
10,26,297/- (three cheques of Rs.3,42,099/-) from the
Petitioners on the pretext that they would withdraw the
arbitration proceedings at Mumbai, which the Respondent
failed and neglected to do. It is submitted that an amount
of Rs.2,52,73,844.98/- has been received directly from the
DLF in view of the answering respondent‟s lien marked on
property. The alleged settlement of account is done by the
Petitioners herein with the DLF and it is submitted that
there is no full and final settlement of the present loan
account as alleged by the Petitioners. The petitioners are
deliberately misreading the said letter as issued by DLF.
The petitioners are still required to make the payment of
the remnant dues as are being reflected in the foreclosure
statement." (underlining added)
9. Thus, on both counts the appellants have no case. The appeal is
dismissed.
BADAR DURREZ AHMED, J
MARCH 24, 2015 SANJEEV SACHDEVA, J
SV
