Delhi High Court
Rajesh Jain vs Sukhmal Chand Jain on 9 August, 2017
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO No. 333/2017
% 9th August, 2017
RAJESH JAIN ..... Appellant
Through: Ms. Stuti Gupta, Advocate.
versus
SUKHMAL CHAND JAIN ..... Respondent
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
1. This first appeal under Section 37 of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as „the Act‟) is filed by
the appellant (respondent in the arbitration proceedings) impugning
the judgment of the court below dated 6.4.2017 dismissing the
objections filed by the appellant under Section 34 of the Act
challenging the award dated 21.7.2016.
2. The facts of the case are that the respondent initiated
arbitration proceedings in order to recover dues payable by the
appellant to the respondent on account of supply of paper and board
by the respondent to the appellant. As per the dues payable on the
basis of the outstanding invoices the subject arbitration proceedings
were initiated.
3. Appellant appeared in the arbitration proceedings as he
appeared before the Arbitrator for the first time as early as on
4.7.2014. Appellant thereafter also appeared on subsequent dates
being 22.7.2015, 16.9.2015, 6.10.2015, 20.10.2015 and 19.1.2016. On
19.1.2016, the arbitrator passed the following order:-
"Mr. Rajesh Jain defendant stated that proceedings are prejudice against him
and further stated that he will not file any reply and will not cooperate, the
matter can be decided on merits.
The defendant is directed to file the defence in the case and in the interest of
justice one more chance is given to the defendant within 15 days and the
matter will be decided on the reply and merits of the case.
The case is filed for 19.02.2016 at 3:30 P.M."
4. Appellant in spite of the order dated 19.1.2016 did not
file his written statement. In fact in the opinion of this Court the
written statement which should have been filed much earlier because a
long period from July, 2014 till June, 2016 cannot be taken for filing
of the written statement by the appellant.
5. Arbitrator ultimately proceeded ex-parte against the
appellant and thereafter the impugned Award dated 21.7.2016 was
passed allowing the claim petition for a sum of Rs.25,39,358/-.
6. Arbitrator in the award notes that arbitration clause is
printed in the bills and the bills have been accepted by the appellant in
token of acceptance of the arbitration clause as well as the bill amount.
7. Against an ex-parte Award the scope for challenge is
extremely limited. Even against a reasoned Award a court ordinarily
does not interfere and once the Award is an ex-parte Award passed on
account of non-appearance of the appellant, effectively, the challenge
to the ex-parte Award becomes almost non-existent because the
objector/appellant has not filed his defence, and nor lead any evidence
whereas the Arbitrator has considered the case of the
respondent/claimant along with the documents on record being the
unpaid invoices.
8. Learned counsel for the appellant firstly argued that the
Award is bad on account of Section 21 of the Act and which
argument, in my opinion, is an argument which in fact is totally
frivolous because Section 21 of the Act only provides for initiation of
arbitration proceedings and thus arresting of limitation for the claim
petition to be filed, and in the present case it is seen that the appellant
had repeatedly and regularly appeared in the arbitration proceedings
and that ultimately since the appellant failed to appear and also did not
file his defence, appellant was proceeded ex-parte and thereafter the
impugned Award was passed. This argument of the appellant is
therefore rejected.
9. Learned counsel for the appellant also argued with
respect to the fact that the Arbitrator has fabricated the order dated
19.2.2016, but once again I find this argument to be totally frivolous
because it is seen that admittedly till 19.2.2016 appellant had not filed
his written statement in spite of having been served for around one and
a half year earlier in the arbitration proceedings and he had also
appeared on around half a dozen occasions. If according to the
appellant the order dated 19.2.2016 was fabricated recording therein
that appellant had not appeared although the appellant had appeared
then surely the appellant would have brought to the notice of the court
below as also this Court as to when written statement was filed by the
appellant. Obviously, no written statement was filed by the appellant
and appellant was deliberately delaying the conduct of the arbitration
proceedings resulting in his being proceeded ex-parte. Also, if the
appellant had appeared on 19.2.2016 then there was sufficient time
thereafter till the impugned Award was passed on 21.7.2016 for
finding out as to what transpired on 19.2.2016 but the appellant has
failed to do so because the moto of the appellant in the arbitration
proceedings was to delay and drag the proceedings instead of
contesting the case on merits.
10. I also note that the appellant had filed an application
under Section 16 of the Act, but once the appellant fails to appear and
pursue the application, the application is deemed to be not pursued and
hence dismissed and therefore there was no requirement of the
Arbitrator to consider the application under Section 16 of the Act. In
any case, on merits with respect to the existence of arbitration clause
impugned Award notes that with respect to the five invoices that the
same contained arbitration clause of the disputes being decided by an
Arbitrator appointed by the Executive Committee of the Paper
Merchants Association (Regd.) Delhi.
11. In view of the above, there is no merit in the appeal and
the same is hereby dismissed.
AUGUST 09, 2017/AK VALMIKI J. MEHTA, J
