The central legal point established in the judgment is the requirement of proper notice of the appointment of the arbitrator under section 21 of the Arbitration and Conciliation Act, and the consequences of its violation on the validity of the arbitration award.

1. This petition is filed under section 34 of the Arbitration and Conciliation Act, 1996 to set aside the award passed by the Sole Arbitrator dated 3. 2005, directing the petitioner herein, who was the second respondent before the Arbitrator to pay jointly with the first respondent therein an amount of Rs.1,80,719/- apart from the arbitration fees.

.2. The award which came to be passed exparte against the petitioner and another is challenged by the petitioner, who is the guarantor under the agreement mainly on the ground that (i) there is no notice of appointment of arbitrator and the award itself is silent about such notice and communication to the petitioner; (ii) the petitioner has not signed as guarantor under the original contract in respect of which the petitioner was never involved; (iii) the petitioner shifted his place to Mangaon even in 1989 and while so, in the arbitration proceedings which started in the year 2002, the old address was stated; and (iv) the signature of the petitioner in the alleged contract and some of the signatures put up by him before the authorities like, Income-tax Department would show that on the face of it, the petitioner cannot be termed as a party to the original contract as guarantor. Therefore, it is the submission of the learned counsel for the petitioner that the award on the face of it is liable to be set aside since the same is in violation of section 21 of the Arbitration and Conciliation Act,1996 (in short, "the Act") apart from section 34(2)(iii) of the said Act. It is his contention that even the arbitration award duly signed by the Arbitrator has not been served on the petitioner and therefore, the award is liable to be set aside under section 31(5) of the Act.

3. On the other hand, it is the contention of the learned counsel for the first respondent, who is the claimant before the Arbitrator, that in fact, the first respondent terminated the contract and appointed the Arbitrator as per the terms of contract. His contention is that notice was sent by the arbitrator. It is also his contention that even if it is found that there has been some defect on the part of the Arbitrator in following certain provisions, the Original Petition can be directed to be kept pending and the matter can be referred to the Arbitrator once again under section 34(4) of the Act.

4. The Arbitrator has sent the entire file relates to arbitration proceedings maintained by him. A reference to the award which is no doubt an exparte award shows that the first respondent was the claimant in the Original Petition, which was formerly known as M/s.Ashok Leyland Finance Limited, carrying on finance business. It entered a hire purchase agreement dated 15. 2002 with the third respondent in the Original Petition and the petitioner, in respect of a vehicle taken by the third respondent. It is stated that in the agreement, the petitioner signed as guarantor. Since there was failure on the part of the third respondent in making payment as per the terms of the hire purchase agreement, by invoking the arbitration clause, the first respondent made a claim before the Arbitrator to the extent of Rs.1,80,719/- jointly against the petitioner and the third respondent.

5. Even though the arbitration award states that notice sent by the Arbitrator to the third respondent, who is the principal debtor was served and acknowledged, it is stated that the notice sent to the petitioner was returned with an endorsement in Gujarati language. It is also stated that the proceedings of the Arbitrator dated 211. 2004 was sent to both the respondents therein and the same was returned and the Arbitrator also directed for paper publication in vernacular newspaper and publication was effected by the first respondent herein in a Gujarati daily dated 2. 2005 and thereafter, the respondent therein were set ex parte. In those circumstances, as per section 25 (c) of the Act, the Arbitrator proceeded with the enquiry and passed the award