The service report dated 6.4.2010 is filed on record by the respondents of its Superintendent. The burden lies upon the respondent claimant to prove the valid service. The service of arbitration proceedings is a must, as the arbitrator was not appointed by the consent of the parties, but through the provisions of MSCS Act.
10 There is no affidavit in support of the service on record. The submission is that these service reports are part of record and, therefore, the Arbitrator proceeded accordingly and passed the impugned award, is unacceptable. In the affidavit filed by the respondent there is no specific reference made about the service of notices
11 I am of the view that there is a dispute and/or doubt raised with regard to the acknowledgments referring to the service of notices to petitioners 1, 2 and 3. It is not proved and as no affidavit of service is filed on record to show that it was duly served, the reliance on such acknowledgments and the reports, just cannot be the foundation to pass such exparte award. The respondent/Bank except filing these acknowledgments on record unable to demonstrate that the notices were duly served on petitioners 1, 2 and 3. Merely signature or acknowledgment by unknown person, that itself is not sufficient to accept the case of the Bank that the notices were duly served.
12 Even before the Arbitrator though there is no strict compliance of provisions of Code of Civil Procedure or the Evidence Act is necessary, yet so far as the service of arbitration notices, in my view, as it goes to the root of the matter, must be taken care of in all respects and unless it is satisfied and/or reliable material and/or affidavit placed on record to show effective service, such exparte award definitely causes great injustice and hardship to the person affected by such award.
13 So far as petitioners 4, 5 and 6 are concerned, though there was an order of pasting and there is a report filed by the officer of the Bank, that itself, in my view, is not sufficient. It is also not supported by additional affidavit and/or affidavit to show that it was duly pasted at appropriate place. The same service is also disputed. In the present case, they failed to prove the valid and effective service.
14 In view of above, without observing anything on the merits of the matter and as there is no serious dispute that the petitioners were absent and there was no opportunity given to the petitioners to proceed with the matter on the merits, therefore, in the interest of justice and considering the principles of natural justice, fair play and equity, I am inclined to set aside the award solely on these grounds.
Bombay High Court
Shunk Corrugators Pvt.Ltd. & 5 Ors vs The Bharat Co-Op. Bank (Mumbai) ... on 7 January, 2011
Bench: Anoop V.Mohta
3 The petitioners have challenged the impugned award dated 21st April 2010 passed by the learned Arbitrator appointed under Section 84(4) of the Multi-state Co-operative Societies Act, 2002 on the application/reference filed by the respondent/Bank in view of the dispute raised regarding various monetary claims.
4 The learned counsel appearing for the respondent/Bank submits
that the provisions of Arbitration and Conciliation Act, 1996 (Arbitration Act) are applicable to the proceedings initiated under Section 84(4) of the Multi-state Cooperative Societies Act, 2002 (MSCS Act). Therefore, in view of Section 19 of the Arbitration Act, the Arbitrator need not follow the procedure of taking evidence strictly in accordance with the Code of Civil Procedure and/or the Evidence Act. The certified copies of the documents have been relied upon by the Arbitrator instead of originals as they were not available as the same were in the custody of police officials. The fact is not in dispute that there was no separate application filed to lead such secondary evidence. There is nothing on record to show that the parties have agreed and permitted to accept evidence in such fashion.
5 Furthemore, the award itself shows that the petitioners were absent through-out the arbitration proceedings. There was no reply and/or any defence raised by the petitioners to the statement of claims filed by the respondent/Bank. An affidavit in Examination in Chief was taken on record by the Arbitrator and on the same day the present award has been passed. Therefore, there was no opportunity given to the petitioners even to cross-examine the respondent's 3 arbp-1204-10.sxw witness.
6 The learned counsel appearing for the respondent has submitted that if the petitioners deliberately, inspite of service, failed to appear before the Arbitrator, then the Arbitrator has no option but to proceed exparte and pass appropriate order accordingly and as done in the present case. Therefore, the award so passed need not be interfered with at the instance of the petitioners, who are defaulters in all respects.
7 The provisions of Code of Civil Procedure and the Evidence Act even if not mandatorily to be followed by the Arbitrator, but the facet of the principles of natural justice, fair play and equity just cannot be overlooked, at any stage of the arbitration proceedings even arising out of both the Acts.
8 The strong reliance is placed on the notices and the acknowledgments to show that the petitioners, inspite of service, deliberately not appeared before the Arbitrator. The copies of the notices, acknowledgments are part of the record. There is an issue raised by the petitioners' counsel so far as the service of notice sent by 4 arbp-1204-10.sxw the Arbitrator to petitioner nos.1, 2 and 3, by contending that it was never signed by the concerned noticees. It was served through some relatives as per the report. So far as petitioner nos. 4, 5 and 6 are concerned, the Arbitrator has passed the order of pasting of service and accordingly the same was pasted at the residential address of petitioners 4, 5 and 6.
The service report dated 6.4.2010 is filed on record by the respondents of its Superintendent. The burden lies upon the respondent claimant to prove the valid service. The service of arbitration proceedings is a must, as the arbitrator was not appointed by the consent of the parties, but through the provisions of MSCS Act.
10 There is no affidavit in support of the service on record. The submission is that these service reports are part of record and, therefore, the Arbitrator proceeded accordingly and passed the impugned award, is unacceptable. In the affidavit filed by the respondent there is no specific reference made about the service of notices.
11 I am of the view that there is a dispute and/or doubt raised
5 arbp-1204-10.sxw
with regard to the acknowledgments referring to the service of notices to petitioners 1, 2 and 3. It is not proved and as no affidavit of service is filed on record to show that it was duly served, the reliance on such acknowledgments and the reports, just cannot be the foundation to pass such exparte award. The respondent/Bank except filing these acknowledgments on record unable to demonstrate that the notices were duly served on petitioners 1, 2 and 3. Merely signature or acknowledgment by unknown person, that itself is not sufficient to accept the case of the Bank that the notices were duly served.
12 Even before the Arbitrator though there is no strict compliance of provisions of Code of Civil Procedure or the Evidence Act is necessary, yet so far as the service of arbitration notices, in my view, as it goes to the root of the matter, must be taken care of in all respects and unless it is satisfied and/or reliable material and/or affidavit placed on record to show effective service, such exparte award definitely causes great injustice and hardship to the person affected by such award.
13 So far as petitioners 4, 5 and 6 are concerned, though there was
6 arbp-1204-10.sxw
an order of pasting and there is a report filed by the officer of the Bank, that itself, in my view, is not sufficient. It is also not supported by additional affidavit and/or affidavit to show that it was duly pasted at appropriate place. The same service is also disputed. In the present case, they failed to prove the valid and effective service.
14 In view of above, without observing anything on the merits of the matter and as there is no serious dispute that the petitioners were absent and there was no opportunity given to the petitioners to proceed with the matter on the merits, therefore, in the interest of justice and considering the principles of natural justice, fair play and equity, I am inclined to set aside the award solely on these grounds.
The impugned award is quashed and set aside.
15 By consent and as both the parties agree that the matter be placed back for fresh hearing, I am passing the following additional order:
(a) The learned Arbitrator to give opportunity to the parties in all respects, including to file reply/counter claim, pleadings and/or supporting documents, if any.
7 arbp-1204-10.sxw
(b) The respondent/Bank to serve copy of claim and related
documents within two weeks to the concerned Advocates.
(c) The learned Arbitrator to fix further dates of the proceedings as per his convenience and is requested to dispose of the matter within a reasonable time.
The petition is accordingly allowed in the above terms. There shall be no order as to costs.
(ANOOP V. MOHTA, J.)
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