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IN THE HIGH COURT OF CALCUTTA
Sanjib Banerjee, Abhijit Gangopadhyay, JJ.
Manohar Lal and Co. – Appellant
Versus
Axis Bank Ltd. – Respondent
Arbitration Petition No. 667 of 2017, 668 of 2017; Appeal From Order No. 247 of 2018, 248 of 2018; General Application No. 2453 of 2018, 2455 of 2018
Decided On : 04-10-2018

Advocates Appeared:
Aniruddha Mitra, Adv., Nilanjana Adhya, Adv., Rashmita Sen, Adv., Satarup Banerjee, Adv., Paritosh Sinha, Adv., Sukrit Mukherjee, Adv., Joydeep Roy, Adv., Avijit Dey, Adv.

The main legal point established in the judgment is the burden of proof regarding the service of arbitral awards and the credibility of claims regarding awareness of arbitral references.

Headnote:

Arbitration - Service of Arbitral Award - Section 34 of the Arbitration and Conciliation Act, 1996 - Section 24 of the Partnership Act, 1932 - Section 31(5) of the Act of 1996 - Benarsi Krishna Committee vs. Karmyogi Shelters Private Limited (2012) 9 SCC 496

Fact of the Case:

The appellant purchased a second-hand Jaguar car, failed to pay the instalments, suffered an arbitral award, and pretended to be unaware of the arbitral reference in the execution proceedings.

Finding of the Court:

The court found that the appellant's claim of being unaware of the arbitral reference was not credible and dismissed the appeals. The court imposed costs on the appellant for the waste of time and needless misadventure.

Issues: The issues included the service of the arbitral award, the appellant's awareness of the arbitral reference, and the imposition of costs for the unworthy cause.

Ratio Decidendi: The court held that service of the arbitral award was appropriately effected on the appellant, and the burden was on the appellant to demonstrate otherwise. The court also emphasized the lack of credibility in the appellant's claim of being unaware of the arbitral reference.

Final Decision: The appeals were dismissed, and the appellant was ordered to pay costs to the respondent and the West Bengal State Legal Services Authority.

JUDGMENT :

1. This appeal and the time wasted in course thereof may be as a consequence of the extreme indulgence shown to this appellant by the Single Bench in not imposing costs for an unworthy cause.

2. Indeed, the present appeal demonstrates exactly what ails the civil justice system in this country where, possibly because of the judge-lawyer nexus, disingenious litigants are spared costs even in commercial matters.

3. This appellant wanted to ride a Jaguar. He clearly does not have the means to take on the mechanical version of the Jaguar that comes at a pretty price. He purchased a second-hand Jaguar car, failed to pay the instalments therefor, suffered an arbitral award, waited till the time to challenge the award had expired and, in the execution proceedings, pretended that he was completely unaware of the arbitral reference. The car has been sold in the execution. In fact, there were two cars covered by these two appeals.

4. The facts have been appropriately recorded in the common judgment and order impugned dated July 19, 2018. The appellant has not questioned the recording of the facts.

5. By a letter dated June 21, 2016, the arbitrator apparently informed the parties to the reference that he had been appointed as the arbitrator by the respondent bank to adjudicate upon the disputes between the parties covered by the agreement of August 5, 2015. The arbitrator's letter indicated a schedule of the hearings and the dates for filing pleadings. The appellant herein was not represented in course of the references and awards were rendered on December 17, 2016.

6. The arbitral awards were despatched to the appellant under cover of letters sent by registered post with acknowledgment due. The postal receipts and acknowledgment cards show that the appellant had been served the arbitral awards on December 23, 2016. There is no dispute that the wife of the principal person in control of the appellant partnership firm received the awards at the Alipore address of such principal partner and accepted the receipt thereof by signing on behalf of her husband. No case is made out that the wife of the relevant partner is estranged or that she is not favourably disposed towards her husband.

7. The challenge to the arbitral awards dated December 17, 2016 was carried to this Court on August 11, 2017; long after the period of three months and thirty further days as envisaged in Section 34 of the Arbitration and Conciliation Act, 1996 had expired. In the meantime, the appellant had resorted to the usual trick that the debtors who are unable or unwilling to discharge their debts adopt: the appellant waited for the institution of the execution proceedings and pretended to be aware of the arbitral reference only upon receiving a copy of the affidavit in support of the tabular statement. The appellant sought to make out before the Single Bench that since the appellant came to be aware of the execution proceedings, and consequently of the arbitral reference and the awards rendered therein only in June or July of 2017, the period envisaged in Section 34 of the Act would begin to run from such point and not from the date of receipt of the awards by the appellant's controlling partner at his recorded address.

8. The Single Bench reasoned that since the postal article was addressed to the appropriate address of the principal person in control of the partnership business and the same was received by the wife of such principal partner, service was deemed to have been effected appropriately on the partner. The Single Bench, thereafter, referred to Section 24 of the Partnership Act, 1932, which recognises that the receipt of any notice by a partner is deemed to be good service of such notice on the firm, unless the interest of the receiving partner is contrary to the interest of the firm.

9. In the context of how to effect service of an arbitral award, the appellant refers to Section 31 of the Act of 1996 and to a judgment of the Supreme Court reported at (Benar





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