2012 Supreme(Mad) 1141
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE A. ARUMUGHASWAMY
Apoorva Dadha & Another
Versus
S. Mohanchand Dadha & Others
Original Application Nos.862 of 2007 & 80 of 2006
Decided on : 02-03-2012
For the Petitioners:Abudukumar, M/s. Iyer & Thomas, Advocates.
For the Respondents:P.S. Raman, Advocate.
Headnote:Arbitration and Conciliation Act, 1996 - Section 34 Summary: The court considered two original petitions filed under Section 34 of the Arbitration and Conciliation Act, 1996, seeking to set aside an award. The petitioner in one petition claimed that he was not aware of the arbitration proceedings and was not served notice, while the petitioner in the other petition argued that the procedure followed by the arbitrators was not in accordance with the law. The respondents argued that the petitioner had authorized his mother to represent him in all legal proceedings. The court examined the arbitration agreement and found that there was no mention of the petitioner being represented by his mother. It held that the petitioner was not given proper notice of the arbitral proceedings and, therefore, the award was liable to be set aside. The court also emphasized that notice to each individual in the arbitral proceedings is mandatory. Both petitions were allowed, and the arbitral award was set aside.
1. These Original Petitions have been filed under Section 34 of the Arbitration and Conciliation Act, 1996, praying to set aside the award dated 10.10.2005 passed by the respondents 1 to 3.
2. According to the petitioner in O.P.No.862 of 2007, he left abroad for pursuing higher studies and he was not in India during the arbitration proceedings and he was not even aware of the arbitration proceedings since no notice was served on him and all arbitrators are his relatives. On receipt of the summons from the Court in O.P.No.80 of 2006, the petitioner came to know about the passing of award and thereafter, only, the petitioner had taken steps by filing the present petition, praying to set aside the award.
3. Likewise, the petitioner in O.P.No.80 of 2006 also came forward to set aside the award, on the ground that the procedure adopted by the arbitrators while passing the impugned award is not in accordance with law and no documents were furnished to the petitioner and no minutes were maintained by the arbitrators. The petitioner was not issued notices of hearing and no opportunity was given to him to verify the genuineness and veracity of the documents relied on by the arbitrators. It is also stated that by passing the impugned award, the arbitrators had indirectly re-written the shareholding pattern in the companies and deprived the petitioner and other shareholders of their valuable in DEPL and DSL for which, the arbitrators have no authority to do so. The award is a defective one since the arbitrators instead of placing reliance on the audited accounts of companies, relied on the documents which were not genuine.
4. 4th respondent has filed counter affidavit, inter alia stating that the petitioner had in collusion with his father, who is none other than the petitioner in O.P.No.80 of 2006. According to the 4th respondent, the arbitration agreement dated 10.5.2005 was entered into by two groups, one consisting of this respondent and his family and another consisting of the petitioner and his family members.Even though, the petitioner was studying in abroad, he appointed his mother Mrs.Madhu Dadha as his power agent, vide Power of Attorney, dated 25.2.2003, empowering her to take care of his interests in India. Being duly empowered, the petitioner's mother signed the arbitration agreement for and on behalf of the petitioner. It is also stated that the said power of attorney was used by the petitioner before the DRT, Hyderabad in CP No.78 of 2004, wherein also, the petitioner was represented by his mother and similarly, the petitioner also initiated rent control proceedings through his mother. Therefore, having authorized his parents to defend/initiate in all the legal proceedings for and on his behalf fright from 2003 till 2009, the petitioner cannot take a negative stand at this stage that too after passing the award. Therefore, the petition is not maintainable and it is liable to be dismissed.
5. As regards O.P.No.80 of 2006, fourth respondent has also filed the counter affidavit, stating that the arbitrators have duly followed the procedure contemplated in the agreement and by letter, dated 19.5.2005, the petitioner submitted his points for consideration and on consideration of both claims, the arbitrators have passed the well considered award, which requires no interference of this Court. It is also stated that at no point of time during the course of arbitration proceedings, this petitioner had not raised any objection regarding the conduction of the arbitration proceedings. Hence, this respondent sought for dismissal of the petition.
6. In view of the rival contentions, the following points arise for consideration.
i) Whether the notice to every individual is necessary in the arbitral proceedings?
ii) Whether petitioner in OP 862 of 2007 is duly represented by his mother by signing the agreement twice for herself and for and on behalf of the petitioner?
iii) Whether the petitioner has authorized his mother t