Due notice in arbitral proceedings is essential for validity; lack of proper service violates principles of natural justice.

JUDGMENT

[Hearing held through video conferencing]

Vibhu Bakhru, J. (Oral)--The petitioners have filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter `the A&C Act'), impugning an arbitral award dated 29.06.2019 (the impugned award) passed by an Arbitral Tribunal comprising of a Sole Arbitrator.

2. The petitioners contend that the impugned award is liable to be set aside in terms of Section 34 (2)(a)(iii) in as much as the petitioners were not given any notice for appointment of an arbitrator or of the arbitral proceedings. The petitioners also claims that they were unable to present their case and contest the said proceedings.

3. This case has a chequered history spanning more than twenty five years. The respondent claims that a substantial amount is owed to him by the petitioners. Accordingly, on 06.05.1995, the respondent filed a civil suit in this court, being Civil Suit no. 168/1995, for recovery of Rs.1,10,73,468/- from the petitioners. The petitioners contested the maintainability of the said suit in view of the arbitration clause as contained in the bye-laws of the Delhi Stock Exchange Limited (hereafter `DSE') and sought reference of the disputes to arbitration. Both parties were members of DSE and admittedly were bound by the bye-laws of the said Stock Exchange. In view of the above, by an order dated 19.11.2001, this Court disposed of the civil suit filed by the respondent (Civil Suit No. 168/1995) and referred the parties to arbitration. It directed DSE to appoint an Arbitrator to adjudicate the disputes between the two parties.

4. There was a considerable delay in appointment of an arbitrator. Finally, on 02.04.2008, DSE appointed Justice J. K. Mehra (Retired) as the Sole Arbitrator to adjudicate the disputes between the parties. The learned Arbitrator delivered an award dated 14.08.2008 rejecting the claims made by the respondent. Aggrieved by the same, the respondent filed a petition for setting aside the arbitral award dated 14.08.2008 (OMP No. 09/2009). The said petition also remained pending in this Court for a considerable period of time. It is pointed out that much of the time was taken in the said proceedings to serve the petitioner. Finally, this Court ordered substituted service and directed publication of notices in a national daily. The said notices were published in the Statesman on 03.04.2017 and 01.08.2017.

5. Despite publication of the said notices, the petitioner did not appear in the matter. On 25.09.2017, the concerned Joint Registrar passed an order recording that the petitioners were duly served and thereafter the matter was listed for hearing.

6. Thereafter, by an order dated 14.11.2018, this Court allowed the respondent's petition for setting aside the arbitral award (OMP 12/2009 captioned Virender Saigal & Co. v. M/s Ram Nanda & Co. & Ors.) Paragraphs 7 to 10 of the said judgment are relevant and are set out below:

"7. The impugned award IS not sustainable inasmuch as the order referring the matter to arbitration had clearly directed reference after parties gave consent and after arriving at a satisfaction that the disputes were arbitrable. The objection of Limitation was also not to be raised by the Respondents or considered by the Arbitrator. The order of reference was passed in 2001, the claims were filed in 2007 and the impugned award was passed in 2009. The award is clearly unsustainable.

8. Under these circumsta