Sawan Kapoor vs Kapil Sahni & Anr.
2017 Latest Caselaw 2234 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         FAO No. 98/2017

%                                                        5th May, 2017
SAWAN KAPOOR                                            ..... Appellant
                          Through:       Mr. Yogesh Chhabra, Advocate.

                          versus

KAPIL SAHNI & ANR.                                    ..... Respondents

                          Through:       Mr. V.D. Pahuja, Advocate for
                                         R-1.

CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)

FAO No. 98/2017 and C.M. Appl. Nos. 7500/2017(for stay), 7502/2017 (for condonation of delay of 72 days in filing the appeal), 7503/2017 (for condonation of delay of 12 days in re-filing the appeal)

1. This first appeal under Section 37 of the Arbitration and

Conciliation Act, 1996 (hereinafter referred to as „the Act‟), impugns

the judgment of the court below dated 11.7.2016 which has dismissed

the objections filed by the appellant herein under Section 34 of the Act.

2. Appellant/petitioner by the objections under Section 34 of

the Act challenged the award passed on 28.9.2013 by the arbitration

tribunal of the Delhi Hindustani Mercantile Association (Regd.). The

respondent no.1 herein had filed the claim petition in the arbitration

proceeding seeking an amount of Rs.16,61,690/- being the unpaid

amount with respect to the goods (cloth) which the respondent no.

1/claimant had supplied to the appellant, and thus the award was

passed in favour of the respondent no.1 herein for the monetary

amount.

3. Appellant did not appear in the arbitration proceedings

and hence was proceeded ex-parte by the arbitration tribunal and

which thereafter on the basis of evidence on record allowed the claim

in the arbitration proceedings.

4. In law, once a respondent in the arbitration proceedings,

being the appellant herein, does not appear inspite of service, such a

person cannot be allowed to challenge the arbitration award on merits,

inasmuch as, merits of the matter have to be seen by the arbitration

tribunal and it was in the realm of jurisdiction of the arbitration

tribunal to consider the evidence on record in the form of bills and

statement of accounts, etc, and consequently pass an award allowing

the claim. This Court at this stage is only to examine whether the

appellant validly did not appear in the arbitration proceedings i.e

whether the appellant was not served in the arbitration proceedings.

5. In the petition under Section 34 of the Act filed by the

appellant, he pleaded that he was never served in the arbitration

proceedings and the registered cover sent to the appellant are forged

and fabricated.

6. To determine the fact as regards service of the appellant

on the arbitration proceedings I have gone through the original

arbitration record before me, and it is seen that as many as eleven times

the present appellant was sought to be served, inasmuch as, there are

eleven registered AD covers in original in the arbitration record. It is

not the case of the appellant in his objections filed under Section 34 of

the Act that the eleven registered AD covers have been sent to the

address at which the appellant has no connection whatsoever. Once it

is not the case of the appellant that the addresses given on the

registered AD covers are such to which the appellant has no

connection, hence it has to be held that the appellant was validly served

in the arbitration proceedings and was rightly proceeded ex-parte as he

failed to appear inspite of service. Sending of registered covers to a

proper address amounts to service under Section 27 of the General

Clauses Act, 1897. Accordingly, I hold that the appellant was validly

proceeded ex-parte by the arbitration tribunal.

7. In fact, in my opinion, the arbitration petition under

Section 34 of the Act was hopelessly time barred and there did not

arise any question of condonation of delay or considering the

objections on merits. The list of dates with respect to passing of the

award and when the objections were filed are dealt with in para 20 of

the impugned judgment and which reads as under:-

"20. Applying the settled principles of law to the facts of the present case, at the very Outset I may observe that a preliminary objection has been raised by the respondent no. 1 that the present objection are not maintainable being barred by the period of limitation. In this regard, I may observe that the impugned awarded was passed on 28.09.2013 after which the execution petition was filed by the respondent no. 1 on 23.12.2014 pursuant to which notice was issued to the petitioner for 10.02.2015 on which date the petitioner had put in this appearance and objections were filed on 13.03.2015 which objections were dismissed vide order dated 28.08.2015. Thereafter, the present objections were filed on 26.10.2015 i.e. within the stipulated period of 90 days and hence, I hereby hold that the present objections are maintainable."

8. It is seen from the aforesaid para 20 that the award was

passed on 28.09.2013 and objections under Section 34 of the Act were

filed on 26.10.2015 i.e after two years and one month. The limitation

period for filing of objections under Section 34 of the Act is a period of

ninety days with condonation of delay being allowed for maximum

period of thirty days thereafter, and after a total period of 120 days

there cannot be condonation of delay in filing of the objections in view

of the judgment of the Supreme Court in the case of Union of India

Vs. M/s Popular Construction Company (2001) 8 SCC 470.

9. I have gone through the arbitration record and it is seen

that the arbitration award was duly sent to the appellant/petitioner by

registered post AD. The award was passed on 28.09.2013 and there

are four registered post receipts dated 1.10.2013 showing of posting of

the award to the appellant. Accordingly, at the very maximum period

of 120 days will have to be calculated from 1.10.2013. The period of

120 days, therefore, expired in around first week of March, 2014.

Objections, however, were filed only on 26.10.2015 and therefore

being hopelessly time barred had to be dismissed in limine by the court

below instead of entertaining the same on merits. It is, therefore, held

that the objections being time barred need not have been at all

considered on merits by the court below.

10. In view of the above discussion, the objections under

Section 34 of the Act filed by the appellant/objector were rightly

dismissed by the court below. There is no merit in the appeal and the

same is hereby dismissed, leaving the parties to bear their own costs.

MAY 05, 2017                                 VALMIKI J. MEHTA, J
AK