In so far as the judgment of the Supreme Court in the case
of Union of India Vs. Tecco Trichy Engineers and Contractors (supra)
relied upon by the petitioners is concerned, the Supreme Court has
considered the situation where the General Manager of the southern
railway, in-charge of the matter was not served with the copy of the
award at his address and thus, the Supreme Court took a view that the
General Manager who was the departmental head and was best person to
take a final decision, whether the arbitral award shall be challenged or not
and thus since he was the person directly connected with and involved
in the proceedings and who was in control of the proceedings before
the learned arbitrator ought to have served with the copy of the award
was not served, limitation had not commenced. In my view, the said
judgment does not apply to the facts of this case.
In my view, the petitioners were duly served with the copy
of the award by the learned arbitrator in the year 2012 itself whereas
the petitioners have lodged the petition on 22nd April 2014 which is
beyond the period of three months from the date of service of the
impugned award. The petition is thus ex facie barred by law of limitation
and is accordingly dismissed.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO.1231 OF 2014
Francisco A. D'Souza
Vs.
L & T Finance Ltd.
CORAM : R.D. DHANUKA, J.
DATE : 30th April 2015
Citation:2016 (3) ALLMR803
By this petition filed under Section 34 of the Arbitration
and Conciliation Act, 1996, the petitioners have impugned the arbitral
award dated 18th September 2012 made by the learned arbitrator.
2. At the threshold, Mr. Poojary, learned counsel for the
respondent raises an objection of the limitation in filing present
arbitration petition impugning the arbitral award dated 18th September
2012 which was lodged on 22nd April 2014. In support of this
submission, learned counsel for the respondent invited my attention to the
compilation of documents forming part of the record before the learned
arbitrator and in particular some of the acknowledgments duly signed by
the petitioner no.1 and/or his relatives. In so far as the service of the
impugned award is concerned, my attention is invited to page 75 of the
compilation which indicates that the award was sent by the learned
arbitrator at the two addresses i.e. House No.142/B, Acoi, Karaswada,
Mapusa, Bardez, Goa – 403 507 and also House No.247, Acoi,
Karaswada, Mapusa, Bardez, Goa – 403 507.
3. In so far as the award sent at the address of House
No.142/B, Acoi, Karaswada, Mapusa, Bardez, Goa – 403 507 is
concerned, the same has been acknowledged by the person who claimed
to be the relative of the petitioner no.1.
4. Learned counsel for the respondent invited my attention to
the cause title of the petition in which the petitioner no.1 has given both
the addresses as his addresses which were mentioned in the two
acknowledgment cards. My attention is also invited to paragraph 1.1 of
the petition in which the petitioners have averred that the petitioner no.1
has been residing at the addresses mentioned in the cause title of the
petition.
5. Learned counsel for the respondent invited my attention to
the rejoinder filed by the petitioner no.2b in which it is alleged that the
petitioner no.1 does not reside at House No.247, Acoi, Karaswada,
Mapusa, Bardez, Goa – 403 507 but resides at House No.142/B, Acoi,
Karaswada, Mapusa, Bardez, Goa – 403 507 and his relative Mary
D’Souza resides and she has taken the service of the award. The
petitioner no.1 has himself not filed any rejoinder. Learned counsel for
the respondent accordingly submits that the copy of the award was sent
by the learned arbitrator at the last known address of the petitioners.
He submits that at the same address, various notices were also sent to
the petitioner no.1 by the learned arbitrator, the receipt of which the
petitioners did not dispute. The petitioners had made false and incorrect
statements in the rejoinder that the petitioner no.1 was not residing at
House No.247, Acoi, Karaswada, Mapusa, Bardez, Goa – 403 507 which
is also ex facie inconsistent with the averments made in the petition.
6. In support of his submission, the learned counsel placed
reliance on the judgment of this Court in the case of Jasvinder Kaur Vs.
L & T Finance Ltd. & Anr. delivered on 12th March 2015 in Arbitration
Petition No.1053 of 2012 and in particular paragraphs 15 and 18 thereof
and would submit that since the award was delivered at the last known
addresses which addresses were not disputed by the petitioner no.1 in
the petition, in view of Section 3(1)(b) of the Arbitration Act, the copy
of the award is deemed to have been served upon the petitioner no.1 at
the last know addresses and cause of action for filing of the arbitration
petition under Section 34(3) of the Arbitration Act would be commenced
from the date of such service or in any event deemed service under the
provisions of the Arbitration Act. Paragraphs 15 and 18 of the said
judgment read thus :-
“15. Section 3 (1) (b) of the said Arbitration Act makes it clear that
even if a place of business, habitual residence or mailing address of a
party cannot be found after making a reasonable inquiry, a written
communication is deemed to have been received if it is sent to the
addressee’s last known place of business, habitual residence or mailing
address by registered letter or by any other means which provides record
of the attempt to deliver it.
16. A perusal of the endorsements made by the postal department
clearly indicates that various attempts were made by the postal
department to deliver the copy of the award at the last known place of
residence and business of the petitioner. In my view, thus the copy of the
said award is deemed to have been received by the petitioner on 14th
January 2011. Admittedly, the arbitration proceedings having been
lodged on 30th August 2012 are thus not within the time prescribed under
Section 34 (3) of the said Arbitration Act and is thus barred by limitation
under the said provision.
17. Be that as it may, a perusal of the record forming part of the
compilation and also the arbitration proceedings clearly indicates that
the learned arbitrator had sent several notices to the petitioner from time
to time at the last known address. The petitioner does not dispute the
address mentioned in the notices issued by the learned arbitrator and
shown on the acknowledgement card.
18. In these circumstances, I am not inclined to accept the bare
submission of the learned counsel for the petitioner that none of the notices
or pleadings were served upon the petitioner at any point of time during
the pendecy of the arbitration proceedings either from the respondent no.1
or from the learned arbitrator. In view of Section 3(1) (b) of the said
Arbitration Act, all such notices of the arbitration proceedings are deemed
to have been received by the petitioner. Since the petitioner has chosen
not to remain present inspite of the service of the notices of the record
and proceedings of the arbitration, the petitioner cannot be shown any
indulgence by this Court under Section 34 of the said Arbitration Act.
Learned arbitrator thus is justified in making an ex parte award against
the petitioner. In my view, the petitioner has not made out any case of
violation of the principles of natural justice in this matter.”
7. Learned counsel for the respondent also placed reliance on
the judgment of this Court passed on 16th July 2014 in the case of Apex
Encon Projects Pvt. Ltd. & Anr. Vs. L & T. Finance Ltd. & Anr. in
Arbitration Petition (L) No.501 of 2014 and other connected matters and
more particularly paragraphs 12 to 15 in which this Court has taken a
similar view about deemed service relying upon the provisions of
Section 3(1)(b) of the Arbitration Act and Section 27 of the General
Clauses Act. Paragraphs 12 to 15 of the said judgment read thus :-
“12. With regard to the service upon petitioner No.2 in each of the above
petitions, who are Directors of the company, one Nekkanti Rama Rao and
one Padmavati Rama Rao, the packets containing award have been sent by
registered post to the place of business of the guarantors which is the
corporate address of the petitioners. Aside from Section 27 of the General
Clauses Act which shows the deeming provision of the service, a similar
deeming provision is under Section 3(1) (a) of the Act. Under section 3(1)
(a) any written communication is deemed to be received if it is delivered to
the addressee interalia at its place of business just as in section 27 of the
General Clauses Act the service is deemed to be effected by properly
addressing, prepaying and by positing by registered post, a letter containing
the document.
13. It is argued on behalf of the petitioners that delivery by post is
different from receipt by the party and that the service contemplates both
delivery as also receipt. The delivery is deemed to be received under Section
3(1) (a) if the aforesaid provision is complied and consequently such service
would show the award received by the party in a manner prescribed by law
as held in the case of State of Maharashtra (Supra).
14. It is argued that the learned arbitrator served the award upon the
address of the respondent which was other than its registered address and if
the facility was given to the respondent it should have been also given to the
petitioners. Indeed it is seen that the facility has been granted though the
arbitrator is not mandatorily required to grant it unless the mailing address
is provided. There are only two addresses of the petitioners and the learned
arbitrator has served the award upon both the addresses. Having seen that
it is deemed to have been received by the corporate office and that it is
actually delivered to and received by the registered office, the learned
arbitrator cannot be faulted upon the service.
15. The service is, therefore, seen to have been effected upon the both
the addresses of the first petitioners in April, 2013. The service upon the
petitioner No.2, the guarantors in each of the above petitions, is also
correctly made. The petitions have not been filed until 10th March, 2014.
The petitions filed about year after such service are barred by the special Law
of Limitation under Section 34(3) of the Act.”
8. Per contra, learned counsel appearing for the petitioners
submits that the petitioner no.1 was not staying at the addresses at
which the award is alleged to have been served. She submits that the
copy of the award was received by the petitioners for the first time
when the execution proceedings were filed by the respondent against the
petitioners. She submits that unless the copy of the award was received
from the learned arbitrator, limitation to file the petition under Section
34 (3) of the Arbitration Act did not commence and thus, the petition is
within time.
9. In support of her submission, the learned counsel placed
reliance on the judgment of the Supreme Court in the case of Union of
India Vs. Tecco Trichy Engineers and Contractors, reported in AIR
2005 SC 1832 and in particular paragraph 7 thereof and it is submitted
that since the copy of the award was not personally served upon the
relative of the petitioner no.1, it would not amount to a proper service
and limitation did not commence. Paragraphs 7, 10 and 11 of the said
judgment read thus :-
“7. It is well-known that the Ministry of Railways has very large area
of operation covering several Divisions, having different Divisional Heads
and various departments within the Division, having their own
Departmental Heads. The General Manager of Railways is at the very apex
of the Division with a responsibility of taking strategic decisions, laying
down policies of the Organisation, giving administrative instructions and
issuing guidelines in the organisation. He is from elite managerial cadre
which runs entire Organisation of his Division with different Departments,
having different Departmental Heads. The day to day management and
operations of different departments rests with different Departmental
Heads. Departmental Head is directly connected and concerned with the
departmental functioning and is alone expected to know the progress of the
matter pending before the arbitral Tribunal concerning his department. He
is the person who knows exactly where the shoe pinches, whether the
arbitral award is adverse to Department's interest. Departmental Head
would naturally be in a position to know whether the Arbitrator has
committed a mistake in understanding Departmental's line of submissions
and the grounds available to challenge the award. He is aware of the
factual aspect of the case and also the factual and legal aspects of the
questions involved in the arbitration proceedings. It is also a known fact
and Court can take judicial notice of it that there are several arbitration
proceedings pending consideration concerning affairs of the Railways
before arbitration. The General Manager, with executive work load of entire
Division cannot be expected to know all the niceties of the case pending
before the arbitral tribunal or for that matter the arbitral award itself and
to take a decision as to whether the arbitral award deserves challenge,
without proper assistance of the Departmental Head. General Manager,
being the head of the Division, at best is only expected to take final decision
whether the arbitral award is to be challenged or not on the basis of the
advise and the material placed before him by the person concerned with
arbitration proceedings. Taking a final decision would be possible only if
the subject matter of challenge namely, the arbitral award is known to the
Departmental Head, who is directly concerned with the subject matter as
well as arbitral proceedings. In the large organizations like Railways,
"party" as referred to in Section 2(h) read with Section 34(3) of the Act has
to be construed to be a person directly connected with and involved in the
proceedings and who is in control of the proceedings before the Arbitrator.
The delivery of an arbitral award under sub-Section (5) of Section 31 is not
a matter of mere formality. It is a matter of substance. It is only after the
stage under Section 31 has passed that the stage of termination of arbitral
proceedings within the meaning of Section 32 of the Act arises. The delivery
of arbitral award to the party, to be effective, has to be "received" by the
party. This delivery by the arbitral tribunal and receipt by the party of the
award sets in motion several periods of limitation such as an application
for correction and interpretation of an award within 30 days under Section
33(1), an application for making an additional award under Section 33(4)
and an application for setting aside an award under Section 34(3) and so
on. As this delivery of the copy of award has the effect of conferring certain
rights on the party as also bringing to an end the right to exercise those
rights on expiry of the prescribed period of limitation which would be
calculated from that date, the delivery of the copy of award by the tribunal
and the receipt thereof by each party constitutes an important stage in the
arbitral proceedings.
10. In the present case, the Chief Engineer had signed the agreement
on behalf of Union of India entered into with the respondent. In the arbitral
proceedings the Chief Engineer represented the Union of India and the
notices, during the proceedings of the Arbitration, were served on the Chief
Engineer. Even the arbitral award clearly mentions that the Union of India
is represented by Deputy Chief Engineer/Gauge Conversion, Chennai. The
Chief Engineer is directly concerned with the Arbitration, as the subject
matter of Arbitration relates to the department of the Chief Engineer and he
has direct knowledge of the arbitral proceedings and the question involved
before the arbitrator. The General Manager of the Railways has only
referred the matter for arbitration as required under the contract. He
cannot be said to be aware of the question involved in the arbitration nor
the factual aspect in detail, on the basis of which the arbitral tribunal had
decided the issue before it unless they are all brought to his notice by the
officer dealing with that arbitration and who is in-charge of those
proceedings. Therefore, in our opinion, service of arbitral award on the
General Manager by way of receipt in his inwards office cannot be taken to
be sufficient notice so as to activate the Department to take appropriate
steps in respect of and in regard to the award passed by the arbitrators to
constitute starting point of limitation for the purposes of Section 34(3) of
the Act. The service of notice on the Chief Engineer on 19.3.2001 would be
the starting point of limitation to challenge the award in the Court.
11. We cannot be oblivious of the fact of impersonal approach in the
Government departments and organizations like Railways. In the very
nature of the working of Government departments a decision is not taken
unless the papers have reached the person concerned and then an approval,
if required, of the competent authority or official above has been obtained.
All this could not have taken place unless the Chief Engineer had received
the copy of the award when only the delivery of the award within the
meaning of sub-Section (5) of Section 31 shall be deemed to have taken
place.”
10. Learned counsel for the petitioners also placed reliance on
the judgment of this Court in the case of Mukesh Nanji Gala Vs.
Heritage Enterprises, reported in 2015(2) Bom C.R. 123.
11. A perusal of the record indicates that there is no dispute that
the learned arbitrator had sent various notices at the last known addresses
of the petitioners mentioned in the petition. A perusal of the affidavit in
rejoinder filed by the petitioner no.2b indicates that the petitioners had
not disputed that such notices sent by the learned arbitrator in past at the
same addresses were received by the petitioners. In the arbitration
petition, it is also admitted by the petitioners that he has been residing
at the same two addresses at which the learned arbitrator had sent notices
as well as the copy of the award. Only for the first time in the affidavit
in rejoinder filed by the petitioner no.2b stated that the petitioner no.1
was not residing at House No.247, Acoi, Karaswada, Mapusa, Bardez,
Goa – 403 507 which is contrary to the averments made in the petition.
12. In my view, the stand taken by the petitioners in the
rejoinder that the petitioner no.1 does not reside at House No.247, Acoi,
Karaswada, Mapusa, Bardez, Goa – 403 507 is inconsistent and contrary
to the statement made in the petition. It is thus clear that the petitioners
have not come to this Court with clean hands. This Court in the case of
Apex Encon Projects Pvt. Ltd. & Anr. Vs. L & T. Finance Ltd. & Anr.
(supra) and in the case of Jasvinder Kaur Vs. L & T Finance Ltd. &
Anr. (supra) after adverting to the provisions of Section 3(1)(b) of the
Arbitration Act and Section 27 of the General Clauses Act has held that
the notices are sent by the Registered Post A.D. at the last known
addresses of the petitioners and the same have not been returned by the
postal authority and therefore, it would amount to a deemed service of
such notices and proceedings. In my view, the said two judgments
squarely apply to the facts of this case. I am respectfully bound by the
aforesaid two judgments.
13. In so far as the judgment of the Supreme Court in the case
of Union of India Vs. Tecco Trichy Engineers and Contractors (supra)
relied upon by the petitioners is concerned, the Supreme Court has
considered the situation where the General Manager of the southern
railway, in-charge of the matter was not served with the copy of the
award at his address and thus, the Supreme Court took a view that the
General Manager who was the departmental head and was best person to
take a final decision, whether the arbitral award shall be challenged or not
and thus since he was the person directly connected with and involved
in the proceedings and who was in control of the proceedings before
the learned arbitrator ought to have served with the copy of the award
was not served, limitation had not commenced. In my view, the said
judgment does not apply to the facts of this case.
14. In so far as the judgment of this Court in the case of
Mukesh Nanji Gala Vs. Heritage Enterprises (supra) relied upon by
the learned counsel for the petitioners is concerned, in that matter, this
Court has considered the questions as to whether the party who was not
a party to the agreement could have challenged the award under Section
34 of the Arbitration Act or not. In my view, the said judgment relied
upon by the learned counsel for the petitioners does not apply to the facts
of this case. Thus the reliance placed on these two judgments is
misplaced.
15. In my view, the petitioners were duly served with the copy
of the award by the learned arbitrator in the year 2012 itself whereas
the petitioners have lodged the petition on 22nd April 2014 which is
beyond the period of three months from the date of service of the
impugned award. The petition is thus ex facie barred by law of limitation
and is accordingly dismissed. No order as to costs.
R.D. DHANUKA, J.
of Union of India Vs. Tecco Trichy Engineers and Contractors (supra)
relied upon by the petitioners is concerned, the Supreme Court has
considered the situation where the General Manager of the southern
railway, in-charge of the matter was not served with the copy of the
award at his address and thus, the Supreme Court took a view that the
General Manager who was the departmental head and was best person to
take a final decision, whether the arbitral award shall be challenged or not
and thus since he was the person directly connected with and involved
in the proceedings and who was in control of the proceedings before
the learned arbitrator ought to have served with the copy of the award
was not served, limitation had not commenced. In my view, the said
judgment does not apply to the facts of this case.
In my view, the petitioners were duly served with the copy
of the award by the learned arbitrator in the year 2012 itself whereas
the petitioners have lodged the petition on 22nd April 2014 which is
beyond the period of three months from the date of service of the
impugned award. The petition is thus ex facie barred by law of limitation
and is accordingly dismissed.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO.1231 OF 2014
Francisco A. D'Souza
Vs.
L & T Finance Ltd.
CORAM : R.D. DHANUKA, J.
DATE : 30th April 2015
Citation:2016 (3) ALLMR803
By this petition filed under Section 34 of the Arbitration
and Conciliation Act, 1996, the petitioners have impugned the arbitral
award dated 18th September 2012 made by the learned arbitrator.
2. At the threshold, Mr. Poojary, learned counsel for the
respondent raises an objection of the limitation in filing present
arbitration petition impugning the arbitral award dated 18th September
2012 which was lodged on 22nd April 2014. In support of this
submission, learned counsel for the respondent invited my attention to the
compilation of documents forming part of the record before the learned
arbitrator and in particular some of the acknowledgments duly signed by
the petitioner no.1 and/or his relatives. In so far as the service of the
impugned award is concerned, my attention is invited to page 75 of the
compilation which indicates that the award was sent by the learned
arbitrator at the two addresses i.e. House No.142/B, Acoi, Karaswada,
Mapusa, Bardez, Goa – 403 507 and also House No.247, Acoi,
Karaswada, Mapusa, Bardez, Goa – 403 507.
3. In so far as the award sent at the address of House
No.142/B, Acoi, Karaswada, Mapusa, Bardez, Goa – 403 507 is
concerned, the same has been acknowledged by the person who claimed
to be the relative of the petitioner no.1.
4. Learned counsel for the respondent invited my attention to
the cause title of the petition in which the petitioner no.1 has given both
the addresses as his addresses which were mentioned in the two
acknowledgment cards. My attention is also invited to paragraph 1.1 of
the petition in which the petitioners have averred that the petitioner no.1
has been residing at the addresses mentioned in the cause title of the
petition.
5. Learned counsel for the respondent invited my attention to
the rejoinder filed by the petitioner no.2b in which it is alleged that the
petitioner no.1 does not reside at House No.247, Acoi, Karaswada,
Mapusa, Bardez, Goa – 403 507 but resides at House No.142/B, Acoi,
Karaswada, Mapusa, Bardez, Goa – 403 507 and his relative Mary
D’Souza resides and she has taken the service of the award. The
petitioner no.1 has himself not filed any rejoinder. Learned counsel for
the respondent accordingly submits that the copy of the award was sent
by the learned arbitrator at the last known address of the petitioners.
He submits that at the same address, various notices were also sent to
the petitioner no.1 by the learned arbitrator, the receipt of which the
petitioners did not dispute. The petitioners had made false and incorrect
statements in the rejoinder that the petitioner no.1 was not residing at
House No.247, Acoi, Karaswada, Mapusa, Bardez, Goa – 403 507 which
is also ex facie inconsistent with the averments made in the petition.
6. In support of his submission, the learned counsel placed
reliance on the judgment of this Court in the case of Jasvinder Kaur Vs.
L & T Finance Ltd. & Anr. delivered on 12th March 2015 in Arbitration
Petition No.1053 of 2012 and in particular paragraphs 15 and 18 thereof
and would submit that since the award was delivered at the last known
addresses which addresses were not disputed by the petitioner no.1 in
the petition, in view of Section 3(1)(b) of the Arbitration Act, the copy
of the award is deemed to have been served upon the petitioner no.1 at
the last know addresses and cause of action for filing of the arbitration
petition under Section 34(3) of the Arbitration Act would be commenced
from the date of such service or in any event deemed service under the
provisions of the Arbitration Act. Paragraphs 15 and 18 of the said
judgment read thus :-
“15. Section 3 (1) (b) of the said Arbitration Act makes it clear that
even if a place of business, habitual residence or mailing address of a
party cannot be found after making a reasonable inquiry, a written
communication is deemed to have been received if it is sent to the
addressee’s last known place of business, habitual residence or mailing
address by registered letter or by any other means which provides record
of the attempt to deliver it.
16. A perusal of the endorsements made by the postal department
clearly indicates that various attempts were made by the postal
department to deliver the copy of the award at the last known place of
residence and business of the petitioner. In my view, thus the copy of the
said award is deemed to have been received by the petitioner on 14th
January 2011. Admittedly, the arbitration proceedings having been
lodged on 30th August 2012 are thus not within the time prescribed under
Section 34 (3) of the said Arbitration Act and is thus barred by limitation
under the said provision.
17. Be that as it may, a perusal of the record forming part of the
compilation and also the arbitration proceedings clearly indicates that
the learned arbitrator had sent several notices to the petitioner from time
to time at the last known address. The petitioner does not dispute the
address mentioned in the notices issued by the learned arbitrator and
shown on the acknowledgement card.
18. In these circumstances, I am not inclined to accept the bare
submission of the learned counsel for the petitioner that none of the notices
or pleadings were served upon the petitioner at any point of time during
the pendecy of the arbitration proceedings either from the respondent no.1
or from the learned arbitrator. In view of Section 3(1) (b) of the said
Arbitration Act, all such notices of the arbitration proceedings are deemed
to have been received by the petitioner. Since the petitioner has chosen
not to remain present inspite of the service of the notices of the record
and proceedings of the arbitration, the petitioner cannot be shown any
indulgence by this Court under Section 34 of the said Arbitration Act.
Learned arbitrator thus is justified in making an ex parte award against
the petitioner. In my view, the petitioner has not made out any case of
violation of the principles of natural justice in this matter.”
7. Learned counsel for the respondent also placed reliance on
the judgment of this Court passed on 16th July 2014 in the case of Apex
Encon Projects Pvt. Ltd. & Anr. Vs. L & T. Finance Ltd. & Anr. in
Arbitration Petition (L) No.501 of 2014 and other connected matters and
more particularly paragraphs 12 to 15 in which this Court has taken a
similar view about deemed service relying upon the provisions of
Section 3(1)(b) of the Arbitration Act and Section 27 of the General
Clauses Act. Paragraphs 12 to 15 of the said judgment read thus :-
“12. With regard to the service upon petitioner No.2 in each of the above
petitions, who are Directors of the company, one Nekkanti Rama Rao and
one Padmavati Rama Rao, the packets containing award have been sent by
registered post to the place of business of the guarantors which is the
corporate address of the petitioners. Aside from Section 27 of the General
Clauses Act which shows the deeming provision of the service, a similar
deeming provision is under Section 3(1) (a) of the Act. Under section 3(1)
(a) any written communication is deemed to be received if it is delivered to
the addressee interalia at its place of business just as in section 27 of the
General Clauses Act the service is deemed to be effected by properly
addressing, prepaying and by positing by registered post, a letter containing
the document.
13. It is argued on behalf of the petitioners that delivery by post is
different from receipt by the party and that the service contemplates both
delivery as also receipt. The delivery is deemed to be received under Section
3(1) (a) if the aforesaid provision is complied and consequently such service
would show the award received by the party in a manner prescribed by law
as held in the case of State of Maharashtra (Supra).
14. It is argued that the learned arbitrator served the award upon the
address of the respondent which was other than its registered address and if
the facility was given to the respondent it should have been also given to the
petitioners. Indeed it is seen that the facility has been granted though the
arbitrator is not mandatorily required to grant it unless the mailing address
is provided. There are only two addresses of the petitioners and the learned
arbitrator has served the award upon both the addresses. Having seen that
it is deemed to have been received by the corporate office and that it is
actually delivered to and received by the registered office, the learned
arbitrator cannot be faulted upon the service.
15. The service is, therefore, seen to have been effected upon the both
the addresses of the first petitioners in April, 2013. The service upon the
petitioner No.2, the guarantors in each of the above petitions, is also
correctly made. The petitions have not been filed until 10th March, 2014.
The petitions filed about year after such service are barred by the special Law
of Limitation under Section 34(3) of the Act.”
8. Per contra, learned counsel appearing for the petitioners
submits that the petitioner no.1 was not staying at the addresses at
which the award is alleged to have been served. She submits that the
copy of the award was received by the petitioners for the first time
when the execution proceedings were filed by the respondent against the
petitioners. She submits that unless the copy of the award was received
from the learned arbitrator, limitation to file the petition under Section
34 (3) of the Arbitration Act did not commence and thus, the petition is
within time.
9. In support of her submission, the learned counsel placed
reliance on the judgment of the Supreme Court in the case of Union of
India Vs. Tecco Trichy Engineers and Contractors, reported in AIR
2005 SC 1832 and in particular paragraph 7 thereof and it is submitted
that since the copy of the award was not personally served upon the
relative of the petitioner no.1, it would not amount to a proper service
and limitation did not commence. Paragraphs 7, 10 and 11 of the said
judgment read thus :-
“7. It is well-known that the Ministry of Railways has very large area
of operation covering several Divisions, having different Divisional Heads
and various departments within the Division, having their own
Departmental Heads. The General Manager of Railways is at the very apex
of the Division with a responsibility of taking strategic decisions, laying
down policies of the Organisation, giving administrative instructions and
issuing guidelines in the organisation. He is from elite managerial cadre
which runs entire Organisation of his Division with different Departments,
having different Departmental Heads. The day to day management and
operations of different departments rests with different Departmental
Heads. Departmental Head is directly connected and concerned with the
departmental functioning and is alone expected to know the progress of the
matter pending before the arbitral Tribunal concerning his department. He
is the person who knows exactly where the shoe pinches, whether the
arbitral award is adverse to Department's interest. Departmental Head
would naturally be in a position to know whether the Arbitrator has
committed a mistake in understanding Departmental's line of submissions
and the grounds available to challenge the award. He is aware of the
factual aspect of the case and also the factual and legal aspects of the
questions involved in the arbitration proceedings. It is also a known fact
and Court can take judicial notice of it that there are several arbitration
proceedings pending consideration concerning affairs of the Railways
before arbitration. The General Manager, with executive work load of entire
Division cannot be expected to know all the niceties of the case pending
before the arbitral tribunal or for that matter the arbitral award itself and
to take a decision as to whether the arbitral award deserves challenge,
without proper assistance of the Departmental Head. General Manager,
being the head of the Division, at best is only expected to take final decision
whether the arbitral award is to be challenged or not on the basis of the
advise and the material placed before him by the person concerned with
arbitration proceedings. Taking a final decision would be possible only if
the subject matter of challenge namely, the arbitral award is known to the
Departmental Head, who is directly concerned with the subject matter as
well as arbitral proceedings. In the large organizations like Railways,
"party" as referred to in Section 2(h) read with Section 34(3) of the Act has
to be construed to be a person directly connected with and involved in the
proceedings and who is in control of the proceedings before the Arbitrator.
The delivery of an arbitral award under sub-Section (5) of Section 31 is not
a matter of mere formality. It is a matter of substance. It is only after the
stage under Section 31 has passed that the stage of termination of arbitral
proceedings within the meaning of Section 32 of the Act arises. The delivery
of arbitral award to the party, to be effective, has to be "received" by the
party. This delivery by the arbitral tribunal and receipt by the party of the
award sets in motion several periods of limitation such as an application
for correction and interpretation of an award within 30 days under Section
33(1), an application for making an additional award under Section 33(4)
and an application for setting aside an award under Section 34(3) and so
on. As this delivery of the copy of award has the effect of conferring certain
rights on the party as also bringing to an end the right to exercise those
rights on expiry of the prescribed period of limitation which would be
calculated from that date, the delivery of the copy of award by the tribunal
and the receipt thereof by each party constitutes an important stage in the
arbitral proceedings.
10. In the present case, the Chief Engineer had signed the agreement
on behalf of Union of India entered into with the respondent. In the arbitral
proceedings the Chief Engineer represented the Union of India and the
notices, during the proceedings of the Arbitration, were served on the Chief
Engineer. Even the arbitral award clearly mentions that the Union of India
is represented by Deputy Chief Engineer/Gauge Conversion, Chennai. The
Chief Engineer is directly concerned with the Arbitration, as the subject
matter of Arbitration relates to the department of the Chief Engineer and he
has direct knowledge of the arbitral proceedings and the question involved
before the arbitrator. The General Manager of the Railways has only
referred the matter for arbitration as required under the contract. He
cannot be said to be aware of the question involved in the arbitration nor
the factual aspect in detail, on the basis of which the arbitral tribunal had
decided the issue before it unless they are all brought to his notice by the
officer dealing with that arbitration and who is in-charge of those
proceedings. Therefore, in our opinion, service of arbitral award on the
General Manager by way of receipt in his inwards office cannot be taken to
be sufficient notice so as to activate the Department to take appropriate
steps in respect of and in regard to the award passed by the arbitrators to
constitute starting point of limitation for the purposes of Section 34(3) of
the Act. The service of notice on the Chief Engineer on 19.3.2001 would be
the starting point of limitation to challenge the award in the Court.
11. We cannot be oblivious of the fact of impersonal approach in the
Government departments and organizations like Railways. In the very
nature of the working of Government departments a decision is not taken
unless the papers have reached the person concerned and then an approval,
if required, of the competent authority or official above has been obtained.
All this could not have taken place unless the Chief Engineer had received
the copy of the award when only the delivery of the award within the
meaning of sub-Section (5) of Section 31 shall be deemed to have taken
place.”
10. Learned counsel for the petitioners also placed reliance on
the judgment of this Court in the case of Mukesh Nanji Gala Vs.
Heritage Enterprises, reported in 2015(2) Bom C.R. 123.
11. A perusal of the record indicates that there is no dispute that
the learned arbitrator had sent various notices at the last known addresses
of the petitioners mentioned in the petition. A perusal of the affidavit in
rejoinder filed by the petitioner no.2b indicates that the petitioners had
not disputed that such notices sent by the learned arbitrator in past at the
same addresses were received by the petitioners. In the arbitration
petition, it is also admitted by the petitioners that he has been residing
at the same two addresses at which the learned arbitrator had sent notices
as well as the copy of the award. Only for the first time in the affidavit
in rejoinder filed by the petitioner no.2b stated that the petitioner no.1
was not residing at House No.247, Acoi, Karaswada, Mapusa, Bardez,
Goa – 403 507 which is contrary to the averments made in the petition.
12. In my view, the stand taken by the petitioners in the
rejoinder that the petitioner no.1 does not reside at House No.247, Acoi,
Karaswada, Mapusa, Bardez, Goa – 403 507 is inconsistent and contrary
to the statement made in the petition. It is thus clear that the petitioners
have not come to this Court with clean hands. This Court in the case of
Apex Encon Projects Pvt. Ltd. & Anr. Vs. L & T. Finance Ltd. & Anr.
(supra) and in the case of Jasvinder Kaur Vs. L & T Finance Ltd. &
Anr. (supra) after adverting to the provisions of Section 3(1)(b) of the
Arbitration Act and Section 27 of the General Clauses Act has held that
the notices are sent by the Registered Post A.D. at the last known
addresses of the petitioners and the same have not been returned by the
postal authority and therefore, it would amount to a deemed service of
such notices and proceedings. In my view, the said two judgments
squarely apply to the facts of this case. I am respectfully bound by the
aforesaid two judgments.
13. In so far as the judgment of the Supreme Court in the case
of Union of India Vs. Tecco Trichy Engineers and Contractors (supra)
relied upon by the petitioners is concerned, the Supreme Court has
considered the situation where the General Manager of the southern
railway, in-charge of the matter was not served with the copy of the
award at his address and thus, the Supreme Court took a view that the
General Manager who was the departmental head and was best person to
take a final decision, whether the arbitral award shall be challenged or not
and thus since he was the person directly connected with and involved
in the proceedings and who was in control of the proceedings before
the learned arbitrator ought to have served with the copy of the award
was not served, limitation had not commenced. In my view, the said
judgment does not apply to the facts of this case.
14. In so far as the judgment of this Court in the case of
Mukesh Nanji Gala Vs. Heritage Enterprises (supra) relied upon by
the learned counsel for the petitioners is concerned, in that matter, this
Court has considered the questions as to whether the party who was not
a party to the agreement could have challenged the award under Section
34 of the Arbitration Act or not. In my view, the said judgment relied
upon by the learned counsel for the petitioners does not apply to the facts
of this case. Thus the reliance placed on these two judgments is
misplaced.
15. In my view, the petitioners were duly served with the copy
of the award by the learned arbitrator in the year 2012 itself whereas
the petitioners have lodged the petition on 22nd April 2014 which is
beyond the period of three months from the date of service of the
impugned award. The petition is thus ex facie barred by law of limitation
and is accordingly dismissed. No order as to costs.
R.D. DHANUKA, J.
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