In the present set of Petitions, interim award as passed by the sole Arbitrator was challenged by way of objections under Section 34 of the Arbitration and Conciliation Act, 1996 (Act). The petitioners had prayed that the objections were filed in time by counting limitation from the ‘date of knowledge. It was stated that the interim award was neither received through post nor through email. The AD card addressed to petitioner No.1 bears the signatures with the date 5th April, 2010 are not that of petitioner No.1 which can be matched with the other papers filed by him before the arbitration proceedings,
The submissions however were objected by the Respondent and various documents were refered to show that the Petitioners had received the post at the address mentioned while sending the signed copy of the interim order by speed post. The other documents filed by the respondents by way of declaration, affidavits, stamp papers (purchased by the petitioner), wedding card advertisement and from various Government authority disclosed the same address where the signed copy of the Award was dispatched.
It was argued by the Petitioner that speed post service of award is not a sufficient compliance under the provisions of the Act. As per scheme of the Act and the nature of controversies involved in the issue, the signed copy of the Award is either to be handed over to the petitioners personally by the Arbitrator or to be served to the parties by sending it by registered A.D. post.
The Supreme Court in Tecco Trichy Engineers case observed that under Section 31(5) the mere delivery of “any kind of a copy of the Award” is not sufficient but the said provision requires the “delivery of a copy of the Award that is duly signed by the members of the Arbitral Tribunal.” Further, it was held that the period of limitation prescribed under Section 34(3) of the Act “would start running only from the date a signed copy of the Award is delivered to/received by the party making the application for setting it aside under Section 34(1) of the Act.” Therefore, the two factors highlighted are the Award having to be signed by the learned Arbitrator and a certified copy thereof having to be delivered to the parties to the arbitral proceedings who propose to make an application to challenge it under Section 34(1) of the Act. the period of limitation prescribed under Section 34(3) of the Act would start running only from the date a signed copy of the award is delivered to/received by the party making the application for setting it aside under Section 34(1) of the Act. The legal position on the issue may be stated thus. If the law prescribes that a copy of the order/award is to be communicated, delivered, dispatched, forwarded, rendered or sent to the parties concerned in a particular way and in case the law also sets a period of limitation for challenging the order/award in question by the aggrieved party, then the period of limitation can only commence from the date on which the order/award was received by the party concerned in the manner prescribed by the law.” In the present case, the signed copy was sent by speed post. It was not delivered personally. E-mail copy sent to the address of petitioners without bearing the signatures of the sole Arbitrator. The signature appearing on A.D. Card placed on record after allegedly served does not match the Actual signature of the Petitioner no. 1.
Another issue in this case related to Section 114 illustration (f) of the Evidence Act, 1872 and Section 27 of the General Clauses Act, 1897 which mandates that there is a presumption that the addressee has received the letter sent by registered post but it further mandates that the presumption is rebuttable on a consideration of evidence of flawless character by showing that the address mentioned on the cover was incorrect and postal authorities never tendered the registered letter to him. The burden to rebut the presumption lies on the party, challenging the factum of service.
In the present case, the presumption of service was held to be doubtful and the grounds opposing maintainability of Petitions were rejected.
IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment pronounced on: June 04, 2014
O.M.P. 455/2012
YOGESH JAIN & ORS
versus
RAKESH JAIN & ORS
CORAM:
HON'BLE MR.JUSTICE MANMOHAN SINGH
MANMOHAN SINGH, J.
1.
The petitioner in both OMPs i.e. Yogesh Jain, Preeti Jain and
Apoorve Jain have challenged the interim Award dated 1st April, 2010
passed by the sole Arbitrator who is related to both parties. The objections
OMP No.688/2012 & OMP No.455/2012
Page 1 of 11
are filed under Section 34 of the Arbitration and Conciliation Act, 1996
(hereinafter referred to as “the Act”).
2.
Signed copy of the Award was allegedly sent to the petitioners by
speed post.
3.
The case of the petitioners i.e. Yogesh Jain and Preeti Jain is that they
came to know of this Award only on 7th February, 2012 when copy of
execution petition No.308/2011 was served. The objections were filed on 7 th
May, 2012. Thus, the objections were filed within time.
4.
Similarly, Apoorve Jain who is the petitioner in OMP No.688/2012
filed the objection on 26th July, 2012 has made a statement that it was only
on 16th April, 2012 when he received show cause notice for his appearance
for 17th May, 2012 in Execution Petition come to know about the passing of
Award. He is residing outside India. The objections were filed through
Anupraksha Jain. It is stated in the petition that he was not aware about the
Award, therefore, the objection filed by him are within the prescribed period
of time.
5.
When OMP No.455/2012 was listed before Court, an objection was
raised by the respondent stating the arbitral record would show contrary to
the statement made by both petitioners. The record was summoned. As
insisted by the respondent, on issue of limitation, both the parties have made
their submission.
6.
It was reiterated by the petitioners that interim award was neither
received through post nor through email.
The AD card addressed to
petitioner No.1 bears the signatures with the date 5th April, 2010 which are
not that of petitioner No.1 which can be matched with the other papers filed
by him before the arbitration proceedings. The said AD card does not
OMP No.688/2012 & OMP No.455/2012
Page 2 of 11
carry his habitual residential address which is 4525 A, 7/33 Ansari Road,
Darya Ganj, New Delhi-110002. Therefore, the complete address has not
been given which is known to the respondent as he himself has given in
execution petition. The said address i.e. 7/33 Ansari Road, Darya Ganj,
New Delhi is shared/used by 19 families residing there. He on 8 th June,
2002 alongwith his family shifted to the house at 4525 A; 7/33 Ansari
Road, Darya Ganj, New Delhi which had come to his share. Thus, there is
no proper service. As far as emails are concerned, the petitioners have also
denied having received the copy of Award and stated that sending of any
Award through email is not contemplated under Section 31(5) of the Act.
7.
The respondent on the other hand has filed large number of
documents to show that the petitioners had received the post at the address
mentioned while sending the signed copy of the interim order by speed post.
The other documents filed by the respondents by way of declaration,
affidavits, stamp papers (purchased by the petitioner), wedding card
advertisement and from various Government authority which disclose the
same address where the signed copy of the Award is dispatched. It was
argued by the Mr.Vijay Hansaria, learned Senior Counsel appearing on
behalf of the respondent that from the said document placed, it is clear that
the interim order dated 1st April, 2010 was sent at the permanent postal
address and the petitioner No.1 in fact has received the signed copy of the
Award on 5th April, 2010. Therefore, the petitions filed by them are liable to
be dismissed as the same are time barred.
8.
It is argued by Mr. Hansaria that the petitioners were fully aware
about the passing of Award in the month of April, 2010 itself in view of
record documents/correspondence available on record which speak for itself.
OMP No.688/2012 & OMP No.455/2012
Page 3 of 11
The interim Award was not challenged by the petitioners because as per the
Award, the respondent was to discharge certain liabilities in order to get the
properties to be transferred in his name as per interim award within 18
months. The respondent as per Award has discharged the liabilities of the
firms. The petitioners by taking the advantage are now making false and
flimsy grounds after the expiry of 18 months. The conduct of the petitioners
are mala fide and afterthought. The petitioners should not be allowed to
take the advantage of their own wrong.
9.
Learned Senior counsel has referred few decisions in support of his
submission that under Section 114 illustration (f) of the Evidence Act, 1872
and Section 27 of the General Clauses Act, 1897 which mandate that there is
a presumption that the addressee has received the letter sent by registered
post and in the present case a letter sent by registered post and in the present
case a letter which was sent by speed post containing the signed copy of
award is received and admittedly it has not returned back nor it is the case
where the address has refused. The address in the present case was correct
address in view of large number of documents produced by the respondent.
Therefore, the documentary evidence is sufficient to raise strong
presumption of Section 27 of the General Clauses Act that a signed copy of
the Award by letter had been properly served by post. The statement made
by the petitioners is bald statement who are interested in denial of service.
The entire onus is upon the petitioner to rebut the presumption of service. In
the present case, the conduct of the petitioners speaks for itself.
10.
During the course of hearing, Mr.Hansaria, learned counsel for the
respondent has fairly not disputed the following factual position of the
matter:
OMP No.688/2012 & OMP No.455/2012
Page 4 of 11
(i) The signature appearing on the A.D. card after alleged service of
petitioner No.1 do not match with the signature available on record
of the Arbitration proceedings
(ii) Copy of the Award sent by the Arbitral Tribunal by email on
subsequent date does not bear the signature of the arbitration.
(iii) The signed copy of the Award was dispatched to the petitioners by
speed-post.
11.
Mr. S.C.Ladi, learned Senior counsel appearing on behalf of the
petitioners has argued that in view of the admissions made by the
respondent, presumption goes in favour of the petitioner. He argues that the
speed post service of award is not a sufficient compliance under the
provisions of the Act. As per scheme of the Act and the nature of
controversies involved in the issue, the signed copy of the Award is either to
be handed over to the petitioners personally by the Arbitrator or to be served
to the parties by sending it by registered A.D. post. He referred the decision
of Division Bench of Bombay High Court in the case of Amidev Agro Care
Pvt. Ltd. vs. Union of India, 2012 (279) ELT 353 (Bom) apart from few
other decisions referred by him.
12.
In the present case, it emerges that a signed copy was sent by speed
post. It was not delivered personally. E-mail copy sent to the address of
petitioners without bearing the signatures of the sole Arbitrator. The
signature appearing on A.D. Card placed on record after allegedly served
does not match the actual signature of the petitioner no. 1.
13.
This Court speaking through Hon’ble Mr. Justice S. Muralidhar in
batch matters along with Exp. 63/2008, Rajeev Kumar Agrawal and Ors. Vs.
OMP No.688/2012 & OMP No.455/2012
Page 5 of 11
Sri Chand and five other cases decided on 24.07.2012 has discussed law of
Apex Court on similar issue in para 18 to 21, the same are reproduced:-
“18. After orders were reserved in the execution petition and
in the aforementioned OMP, Shri Chandra Prakash Gupta on 30th
June 2012 filed OMP No.568 of 2012 under Section 34 of the
Act. In the said petition, Shri Chandra Prakash Gupta admitted
that he had given a POA in favour of Shri D.K. Agrawal. He
stated that although he was re-assured by D.K. Agrawal that his
interests would be taken care of, the manner in which the
execution petitions were prosecuted, made it clear that Shri D.K.
Agrawal was “only concerned with his own interest and those of
his wife and children, which he had already secured in the
Award and was only concerned in sidelining the Petitioner, while
at the same time giving the Petitioner fake assurances.”
19.
In all the objections to the execution petitions as well as
in OMP Nos.938 of 2011 and 568 of 2012 the principal point
raised is that none of the parties has been communicated a
certified copy of the Award dated 19th August 2000 and that in
terms of the decision of the Supreme Court in State of
Maharashtra v. Ark Builders Private Limited (2011) 4 SCC 616
(hereinafter ‘Ark Builders case’), the period of limitation for
filing objections to the Award does not arise. Elaborate
arguments have been advanced by the parties in this behalf.
The decision in the Ark Builders case
20.1 In order to appreciate the above principal objection, this
Court proceeds to discuss the decision in Ark Builders case in
some detail. The question that arose in the Ark Builders case for
consideration is set out in para 1 of the said decision and reads as
under:
“Whether the period of limitation for making an application
under Section 34 of the Arbitration and Conciliation Act,
1996 (hereinafter “the Act”) for setting aside an arbitral
award is to be reckoned from the date a copy of the award is
OMP No.688/2012 & OMP No.455/2012
Page 6 of 11
received by the objector by any means and from any source,
or it would start running from the date a singed copy of the
award is delivered to him by the arbitrator.”
20.2 The facts were that on 20th March 2003 the Arbitrator in
that case gave a signed copy of the Award to Ark Builders
Private Limited, Respondent in that case, (‘Ark Builders’) in
whose favour the Award was made. However, no copy of the
Award was given to the State of Maharashtra, which was the
appellant in that case before the Supreme Court or to the other
parties in the proceedings since both the State of Maharashtra and
the other parties had failed to pay the cost of arbitration. Ark
Builders submitted a copy of the Award in the office of the
Executive Engineer of the State of Maharashtra on 29th March
2003 claiming payment in terms of the Award. On 16th April
2003, the Executive Engineer put up a proposal for challenging
the Award before his superior officer.
20.3 Meanwhile on 15th January 2004, the Executive Engineer
informed the Ark Builders that the State of Maharashtra had
decided to challenge the Award before the appropriate forum. A
decision in that behalf was taken on 16th December 2003 but no
application to challenge the Award was made since the copy of
the Award had not been received from the Arbitrator. On 17th
January 2004, a messenger was sent to the learned Arbitrator
with a letter seeking a copy of the Award. The Arbitrator made
an endorsement on the letter and sent along with it a xerox copy
of the said Award certified by the Arbitrator as a true copy. This
xerox copy of the Award certified by the Arbitrator was received
on 19th January 2004 and on 28th January 2004 the State of
Maharashtra filed its petition under Section 34 of the Act.
20.4 The question that arose before the Principal District
Judge, Latur, was whether the petition under Section 34 of the
Act was barred by limitation. The said objection raised by Ark
Builders was upheld by the Principal District Judge and the State
of Maharashtra then preferred an appeal before the Bombay High
Court. A contention before the said High Court was that since the
OMP No.688/2012 & OMP No.455/2012
Page 7 of 11
Arbitrator had not sent a copy of the Award, as envisaged under
Section 31(5) of the Act, the period of limitation had not begun
to run. Reliance was placed on the decision of the Supreme
Court in Union of India v. Tecco Trichy Engineers &
Contractors (2005) 4 SCC 239 (hereinafter ‘Tecco Trichy
Engineers case’). The High Court held that under Section 31(5)
of the Act it was not necessary for copy of the arbitral record to
be sent by the learned Arbitrator to the party concerned but only
to be handed over to the appropriate parties. It was held that since
the Executive Engineer had admittedly received the copy of the
Award in April 2003, the Appellants had to blame themselves for
not acting till January 2004 to challenge the Award. It was held
that there was sufficient compliance with Section 31(5) of the
Act since the appellant had received the copy of the Award in
April 2003. The State of Maharashtra then appealed to the
Supreme Court.
20.5 After discussing the earlier decision in the Tecco Trichy
Engineers case, the Supreme Court had observed as under:
“15. The highlighted portion of the judgment extracted
above, leaves no room for doubt that the period of limitation
prescribed under Section 34(3) of the Act would start
running only from the date a signed copy of the award is
delivered to/received by the party making the application for
setting it aside under Section 34(1) of the Act. The legal
position on the issue may be stated thus. If the law
prescribes that a copy of the order/award is to be
communicated, delivered, dispatched, forwarded, rendered
or sent to the parties concerned in a particular way and in
case the law also sets a period of limitation for challenging
the order/award in question by the aggrieved party, then the
period of limitation can only commence from the date on
which the order/award was received by the party concerned
in the manner prescribed by the law.”
OMP No.688/2012 & OMP No.455/2012
Page 8 of 11
20.6 Thereafter, the Supreme Court discussed the decision of
Patna High Court in Sheo Shankar Sahay (Dr.) v. Commr. 1965
BLJR 78 and held in paras 17, 18 and 19 as under:
“17. In light of the discussions made above we find the
impugned order of the Bombay High Court unsustainable.
The High Court was clearly in error not correctly following
the decision of this Court in Tecco Trichy Engineers &
Contractors and in taking a contrary view. The High Court
overlooked that what Section 31(5) contemplates is not
merely the delivery of any kind of a copy of the award but a
copy of the award that is duly signed by the members of the
Arbitral Tribunal.
18. In the facts of the case the appellants would appear to be
deriving undue advantage due to the omission of the
arbitrator to give them a signed copy of the award coupled
with the supply of a copy of the award to them by the
respondent claimant but that would not change the legal
position and it would be wrong to tailor the law according to
the facts of a particular case.
19. In the light of the discussion made above this appeal
must succeed. We, accordingly, set aside the judgments and
orders passed by the Bombay High Court and the Principal
District Judge, Latur. The application made by the
appellants under Section 34 of the Act is restored before the
Principal District Judge, Latur, who shall now proceed to
hear the parties on merits and pass an order on the
application in accordance with law. Since the matter is quite
old, it is hoped and expected that the Principal District
Judge will dispose this matter preferably within 6 months
from the date of receipt of this order.”
20.7 The ratio of the above decision is that under Section
31(5) the mere delivery of “any kind of a copy of the Award” is
not sufficient but the said provision requires the “delivery of a
copy of the Award that is duly signed by the members of the
OMP No.688/2012 & OMP No.455/2012
Page 9 of 11
Arbitral Tribunal.” Further, it was held that the period of
limitation prescribed under Section 34(3) of the Act “would start
running only from the date a signed copy of the Award is
delivered to/received by the party making the application for
setting it aside under Section 34(1) of the Act.” Therefore, the
two factors highlighted are the Award having to be signed by the
learned Arbitrator and a certified copy thereof having to be
delivered to the parties to the arbitral proceedings who propose to
make an application to challenge it under Section 34(1) of the
Act.
Was a signed copy of the Award delivered to the parties?
21.
It was repeatedly urged before this Court by the JDs that
there was, in fact, no original signed copy of the Award is
available as no party had seen such copy. Secondly it was
submitted that, in any event, a signed copy of the Award was not
delivered to each of the parties as was mandatory under Section
31(5) of the Act, as explained by the Supreme Court in the Ark
Builders case. It is further submitted that a xerox copy of the
signed Award cannot be equated with a signed copy of the
Award. In other words, each copy of the Award which is to be
delivered to the parties has to bear the original signature of the
Arbitrator and signing one Award and making several
photocopies of it does not fulfil the requirement of Section 31 (5)
of the Act. Delivering a photocopy of the Award is not
compliance. A further aspect of this argument is that since
without the delivery of a signed copy of the Award the arbitral
proceedings cannot be said to have terminated under Section 32
of the Act, the Award does not become enforceable as such. The
limitation for challenging the Award under Section 34 cannot
begin to run till the ingredients of Section 31 are not satisfied.”
14.
As far as presumption under Section 114 illustration (f) of the
Evidence Act 1872 and Section 27 of the General Clauses Act1897 is
concerned, law mandates that the presumption is rebuttable on a
consideration of evidence of impeccable character by showing that the
OMP No.688/2012 & OMP No.455/2012
Page 10 of 11
address mentioned on the cover was incorrect and postal authorities never
tendered the registered letter to him. In view thereof, it is undisputed
position in law that the burden to rebut the presumption lies on the party,
challenging the factum of service.
15.
In order to satisfy the Court, the petitioners’ counsel submits that the
service of signed copy of the award is clear and cogent without any doubt.
In the present case, it is admitted by the respondent, the signatures on the
after service do not match the signatures of petitioner no. 1. Copy of award
sent by e-mail also does not bear the signature of petitioner and the signed
copy of Award was admittedly sent by Speed Post and not by registered AD
and a signed copy of the Award was not personally delivered to the
petitioner. However, it appears to the court in view of documentary evidence
produced by the respondent that the petitioners had knowledge of the
passing of interim order and are taking full advantage of the situation and
the prescribed law. The presumption of service is doubtful and in view of
peculiar facts in the matter, this court is not inclined to dismiss the petitions
in view of peculiar circumstances except to expedite the hearing of the main
petitions when this issue of limitation would also be kept in mind while
deciding the matter on merit.
16.
Pleadings are complete. Written submission, if any, be filed by both
parties on merit within 8 weeks from today. List the matters on 1st
September, 2014 in the category of ‘Short Cause’
(MANMOHAN SINGH)
JUDGE
JUNE 04, 2014
OMP No.688/2012 & OMP No.455/2012
Page 11 of 11
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