High Court Of Calcutta
I.P. Mukerji, J.
Amrik Singh : Appellant
Versus
Magma Fincorp Ltd. : Respondent
A.P. 484 of 2010
Decided On : Dec 03,2010
ARBITRATION AND CONCILIATION ACT, 1996 - SECTION 3 - LIMITATION FOR SETTING ASIDE AWARD - AWARD SENT BY REGISTERED POST WITH ACKNOWLEDGEMENT DUE - ACKNOWLEDGEMENT CARD NOT RETURNED - PRESUMPTION OF SERVICE - APPLICATION DISMISSED AS BARRED BY LIMITATION.
Fact of the Case:
The petitioner, a borrower from the respondent, filed an application under section 34 of the Arbitration and Conciliation Act, 1996, challenging an arbitral award. The respondent contended that the application was barred by limitation as it was filed more than three months from the date of receipt of the award.
Finding of the Court:
The court held that the award was sent by registered post with acknowledgement due to the petitioner and the respondent No.2, and that the postal receipts showed such sending. The court further held that the petitioner had not rebutted the presumption of service under section 27 of the General Clauses Act, 1897, and that the petitioner had deliberately not taken any steps after receiving the award.
Issues: Whether the application was filed within the limitation period under section 34 of the Arbitration and Conciliation Act, 1996.
Ratio Decidendi: The court held that the award was deemed to have been received by the petitioner in the usual course for receipt of ordinary letters shortly after the date of posting, as per the presumption under section 27 of the General Clauses Act, 1897. The court further held that the petitioner had not provided any evidence to rebut this presumption and that the surrounding circumstances indicated that the petitioner had received the award and had deliberately not taken any steps.
Final Decision: The court dismissed the application as barred by limitation.
I.P. Mukerji, J.
1. AN application under section 34 of the Arbitration and Conciliation Act, 1996 (hereafter called "the Act") was filed by the petitioner challenging an award made and published by the arbitrator on 17th December 2009. According to the records, this application was filed on 26th August 2010. Prima facie, it appeared to this Court to be barred by limitation. Therefore, I did not admit it when it was moved on 14th September 2010. I asked the parties to file affidavits to ascertain whether the application was filed within time.
2. SUCH an exercise became necessary because of section 34 of the Act. It says that an application to set aside an award has to be made within three months from the date of its receipt by the party making the application. It can be made within a further period of 30 days on satisfying the Court that the applicant had sufficient cause for not making the application within that time, "but not thereafter". Now, it is well settled that once, the period of 30 days after the initial period of three months has expired, the Court has no power to condone any further delay under section 5 of the Limitation Act. The language of the section is such that this time period is absolute and un- extendable.
The petitioner is a borrower of money from the respondent No. 1. He says in paragraph 8' of the petition that on 28th May 2010 he received "a bunch of papers" from M/s. Sinha and Company, advocates along with a letter dated 24th May 2010, apprising him of an order dated 20th May 2010 passed by this Court in Execution Case No. 132 of 2010 appointing a receiver to take physical possession of some of his assets. Therefore, time is to run from that date. Hence, the setting aside application was made on time.
3. AFFIDAVITS have been duly exchanged between the parties. The relevant records are before the Court.
4. BEFORE proceeding further with this judgment it is very relevant to note that the award was sent by the Arbitrator through the Indian Postal Authorities by "Registered Post with Acknowledgement Due" to the borrower petitioner, the respondent No.2 being or described as co-hirer by the first respondent, financier and the respondent No.3 being or described by them as the guarantor. All three despatches were made on the same day, that is, 6th of January 2010. Postal receipts are annexed to the respondent No. 1's affidavit -in -opposition. The packet addressed to the petitioner, borrower has not been returned undelivered by the postal authorities. But the Acknowledgement Due card showing its receipt by him has not been received by the Arbitrator from the postal department. The respondent No.2 according to records did receive the packet. The packet addressed to the respondent No.3 has been returned with the remark "un claimed".
How is the Court to deal with the question of limitation on such facts?
5. SINCE, only the borrower makes this application, I will only consider the legality of service upon him. Sub section 3 of section 34 says that an application to set aside the award has to be made within three months from the date of its receipt. Now, the questions are: Who is to send the award? Who is to receive it? and how are such sending and receiving to be made? Section 3 of the Act is a pointer. According to sub section (a) "any written communication" under the Act has to be delivered "personally" at the place of business or residence of the addressee. An Award is undoubtedly a written communication of the Arbitrator. Sub section 5 of section 31 of the Act says that after the arbitral award is made a signed copy of it shall be delivered to each party. Sub section (b) of section 3 says that if either the place of business or place of residence cannot be found there is deemed receipt if any communication is sent to the last known address by registered letter or by any other means which provides record of the time of its delivery.
6. IT is not the respondent/financier's case that the address could not
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