2018 Supreme(Bom) 400
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NARESH H. PATIL, G.S. KULKARNI, JJ.
JSC Ispat Pvt. Ltd. & Others - Appellants
Versus
M/s. HDB Financial Services Ltd. - Respondent
Appeal (L) No. 80 of 2018 in Notice of Motion (L) No. 2556 of 2015 (for condonation of delay) in Arbitration Petition No. 40 of 2018 (Arbitration Petition (L) No. 1814 of 2015) with Notice of Motion (L) No. 130 of 2018 (for stay)
Decided On : 06-03-2018
Advocate Appeared:
For the Appellants : M. Rajan i/b. Harshad A. Sathe
For the Respondent: Viraj Kandpile
The delivery of an arbitral award is not a mere formality and has the effect of conferring certain rights on the party. If the copy of the award was not served on the appellants, and it is established that there was no fault on their part in approaching the Court beyond the prescribed period of limitation, a party cannot be prevented from resorting to the statutory remedy.
Headnote:
Arbitration Act - Delay in Filing Arbitration Petition - Section 34 - Section 2(1)(h), Section 3, Section 31, Section 34(3) and (4) - Section 27 of the General Clauses Act, 1897
Fact of the Case:
The appellants sought condonation of delay in filing an arbitration petition under Section 34 of the Arbitration and Conciliation Act, 1996, after receiving the Award with a delay. The respondents contended that the delay was not satisfactorily explained and the arbitration petition was filed beyond the prescribed period of limitation.
Finding of the Court:
The Court found that the copy of the award was not served on the appellants, and the explanation for condoning the delay deserved consideration. The Court allowed the appeal, quashed the impugned order, and allowed the Notice of Motion for condonation of delay. The Arbitration Petition was directed to be heard and decided on its own merits.
Issues: Delay in filing arbitration petition, service of arbitral award, and condonation of delay.
Ratio Decidendi: The delivery of an arbitral award is not a mere formality and has the effect of conferring certain rights on the party. If the copy of the award was not served on the appellants, and it is established that there was no fault on their part in approaching the Court beyond the prescribed period of limitation, a party cannot be prevented from resorting to the statutory remedy.
Final Decision: The appeal was allowed, the impugned order was quashed and set aside, and the Notice of Motion for condonation of delay was allowed. The Arbitration Petition was directed to be heard and decided on its own merits.
Naresh H. Patil, J.
1. This appeal is directed against the order passed by the learned Single Judge of this Court dated 4th January, 2018 dismissing the Notice of Motion (l) No. 2556 of 2015 seeking condonation of delay in filing the arbitration petition.
2. The petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'Arbitration Act' for short) was filed praying for setting aside the Award passed on 28th August, 2014. There was delay in filing the said petition. Therefore, a Notice of Motion was filed by the appellants herein for condonation of delay in filing the arbitration petition.
3. On behalf of the petitioners in arbitration petition, Mr. Deepak Bansal filed affidavit before the learned Single Judge. It was contended by the petitioner in the affidavit that the Sole Arbitrator passed Award on 28th August, 2014. The petitioners received Notice of Execution Proceedings filed by the respondents before the Faridabad Court on 16th January, 2015. At that point of time the petitioners came to know about passing of such an Award. They tried to contact their Advocate but were unable to contact. Thereafter, they applied for certified copy of award before the Faridabad Court on 13th May, 2015 which was supplied to them on 14th May, 2015.
4. It is the categorical contention of the appellants that till filing of the Notice of Motion, they did not receive copy of the Award. They have calculated the delay from the date of receipt of copy of the Award. Thereafter, they approached an Advocate for opinion and after taking opinion on 9th September, 2015, the present proceedings were preferred. A draft of arbitration petition was prepared and approved and finally a petition was filed on 11th September, 2015. There was delay of 30 days in filing arbitration petition. The appellant preferred Notice of Motion for condonation of delay.
5. The Counsel appearing for the appellants submits that in accordance with provisions of Arbitration Act, a copy of Award was required to be served on the appellants which was not served at all. Reliance placed on the service acknowledgement of the postal department does not establish that the Award was sent by the Arbitrator which was served on the appellants. In absence thereof the delay is required to be condoned otherwise the appellants would loose their statutory right to file appeal and would suffer consequences without there being any fault on their part. It is submitted that the postal record do not establish service of the award on the appellants. On behalf of respondents it was submitted that a 'Detailed Track Events' produced on record conclusively establishes that award was delivered and served on the appellants. The delay is not at all explained satisfactorily. The arbitration petition was filed beyond prescribed period of limitation.
6. The learned Counsel appearing for the respondents submits that the learned Single Judge had gone through the record and proceedings. The view adopted by the learned Single Judge is reasonable and proper view. The appellants did not bother to attend to the proceedings of the arbitration. Copy of Award was dispatched on their mailing address. The track record of the postal department shows that items were delivered. Therefore, no case was made out for interfering in the impugned order.
7. We had called for the original record of Arbitration Petition maintained by the Arbitrator. We have perused the postal details of the Track Events 'endorsement' which were referred to by the learned Single Judge.
8. Section 2(1)(h) of the Arbitration and Conciliation Act, 1996 defines “party”, which reads as under:
“2. Definitions.
(1) In this Part, unless the context otherwise requires,
(a) ….
(b) ….
(c) ….
(d) ….
(e) ….
(f) ….
(g) ….
(h) “party” means a party to an arbitration agreement.
Section 3 refers to receipt of written communication, which reads as under:
3. Receipt of written communication.
(1) Unless otherwise agreed by the parties,
(a) an