IMPORTANT POINT
Section 31(5), Arbitration and Conciliation Act, 1996.

JUDGMENT

Altamas Kabir, J.-In this Special Leave Petition, a question has been raised as to whether the service of an Arbitral Award on the agent of a party amounts to service on the party itself, having regard to the provisions of Section 31(5) and Section 34(3) of the Arbitration and Conciliation Act, 1996, hereinafter referred to as “the 1996 Act”.

2. The Petitioner is a Committee of Managing Landlords, who are co- owners of the Benarsi Krishna Estate at the Moti Cinema compound, Chandni Chowk, Delhi. The property apparently belongs to the Khanna family and the Seth family. The Respondent No.1 is a Private Limited Company incorporated under the Companies Act, 1956, and is an estate developer and builder of both residential and commercial properties. The Petitioner Committee entered into a Collaboration Agreement dated 16th November, 1990, by which the Respondent agreed to convert the Moti Cinema compound into a commercial complex. Subsequently, the agreement was amended on 2nd May, 1991, by which certain changes were introduced with regard to the scheme of payment. Inasmuch as disputes arose between the parties over the working of the agreement, the Respondent filed an application under Section 11 of the 1996 Act for appointment of an Arbitrator and by an order dated 14th May, 2001, the Delhi High Court appointed Justice K. Ramamoorthy, a retired Judge of the said Court, as the Sole Arbitrator. After considering the materials brought on record, the learned Arbitrator passed his Award upon holding that the Respondent had committed breach of the terms of the Collaboration Agreement and directed the Petitioner to refund the sum of Rs.41 lakhs which had been received from the Respondent, within three months from the date of the Award and in default of payment within the said period, the amount would carry interest @ 12% per annum from the date of the Award till the date of payment.

3. As will appear from the records, copies of the Award, duly signed by the learned Arbitrator, were received by the counsel for the respective parties. As far as the Respondent is concerned, the endorsement shows that the copy of the Award was received by its counsel on 13th May, 2004. However, no application for setting aside the Award was filed by the Respondent within the period of three months from the date of receipt of the Award, as provided under Section 34(3) of the 1996 Act.

4. On 3rd February, 2005, the Respondent filed a Petition, being O.M.P. No.51 of 2005, under Section 34 of the 1996 Act, to set aside the Award of the learned Arbitrator. According to the Petitioner, the said petition was filed after a delay of more than 9 months from the date of the receipt of the Award. The said objection of the Petitioner was considered by the learned Single Judge of the High Court who by his order dated 28th August, 2009, dismissed the Respondent’s petition on the ground that the same was time barred. The learned Single Judge accepted the contention of the Petitioner that the expression “party” used in Section 31(5) of the 1996 Act, would also include the agent of the party.

5. The matter was carried to the Division Bench of the High Court by the Respondent on 5th October, 2009, by way of F.A.O. (OS) No.578 of 2009. Accepting the case of the Respondent that service of the Award had not been properly effected, the Division Bench remanded the matter to the Single Judge to decide the objections on the Award on merits, upon holding that for compliance with the provisions of Section 31(5) of the 1996 Act, a copy of the Award had to be delivered to the party itself and service on its counsel did not amount to service within the meaning of Section 31(5) of the aforesaid Act. The Special Leave Petition has been filed against the said judgment and order of the Division Bench of the Delhi High Court.

6. In arriving at its decision which has been impugned in these proceedings, the Division Bench of the Delhi High Court referred to its own judgment in Natio