2019 Supreme(Mad) 1343

IN THE HIGH COURT OF JUDICATURE AT MADRAS
R. SUBBIAH, KRISHNAN RAMASAMY, JJ.
Moona Abousher – Appellant
Versus
M/s. Cholamandalam DBS Finance Ltd. & Others – Respondents
O.S.A.No. 38 of 2016 & C.M.P.Nos. 3632 of 2016 & 8781 of 2019
Decided On : 04-06-2019

Headnote:

Original Side Rules - Order 36 - Rule 1 - Arbitration and Conciliation Act - Sections 4,12,24,25,28,28(1)(a),34(3), 34(2)(b)(i),30,37 - Contract Act - Section 73 and 74 - Challenge - Suit for possession - Appellants father gifted a part of above property bearing Door Hains Road Bangalore measuring an extent of Sq.Ft - Consisting of ground and first floors registered as Document on file of SRO Bangalore in favour of appellant - Appellant and her father have applied for a loan from Cholamandalam DBS Finance Limited first respondent herein for meeting out their personal and family expenses - First respondent granted a loan of lakhs and same has to be repaid in equal monthly instalments - First respondent at time of granting loan as per their usual practice obtained signatures of appellant and her father in blank white papers promissory notes and cheques - In order to secure amount due under said loan agreement appellant who is sole and absolute owner of property had deposited title deeds pertaining to her property at Bangalore with first respondent with an intention to create an equitable mortgage in favour of first respondent - Factum of said deposit was also confirmed by a Memorandum of Deposit of Title deeds registered as Document on file Sub-Registrar Shivajinagar Bangalore - In said loan transaction between appellant and first respondent father of appellant joined as a co-borrower - Appellant was regularly paying monthly instalments - Due to some problems with her husband in family and also due to some financial difficulties she was not able pay monthly instalments on due dates every time but nevertheless she has been paying dues every month - Whether there is substantial compliance of Sections 24, 25 and 28 of said Act - Whether appellant has made out a case within ambit of Section 34 of Arbitration and Conciliation Act before Single Judge to set aside Award - Held, Claim statement and supporting documents filed by claimant were sent to appellant and co-borrower along with notice of hearing by fixing date of hearing as - On said date authorised representative Senior Manager appeared on behalf of claimant-Company first respondent herein - Notice sent to both appellant and co-borrower got returned with postal endorsement party refused and hence they did not appear - In fact with a view to give opportunity to appellant and co-borrower a copy of its proceedings was sent to them fixing date of hearing as - On said hearing one appeared on behalf of appellant and undertook to file vakalat in next hearing - Matter was adjourned to on which date Advocate filed vakalat and received complete set of documents along with claim statement and sought time to file counter statement and hence matter was adjourned on which date proceedings were and Advocate sought further time to file counter and time was extended till for filing counter by appellant and proceedings were also and counsel for appellant sought time to file counter statement and counsel for appellant informed that co-borrower had expired and hence claimant was directed to file impleading petition if any - Proceedings were also and counsel for appellant had not filed counter statement but filed a petition under Section 12 of Arbitration and Conciliation Act - Interim application was numbered as by Tribunal - claimant had not chosen to file any reply and hence petition was reserved for orders - On said day of proceedings claimant filed Memo requesting for abatement of co-borrower and Memo was taken on record - Interim order was passed by Tribunal dismissing interim application filed by appellant under Section 12 of Arbitration and Conciliation Act questioning jurisdiction of Arbitrator and thereafter Tribunal adjourned proceedings to - Copy of interim order in was also provided to counsel for appellant - Even on proceedings counsel for appellant appeared and sought time to file counter - On date of proceedings being counsel for appellant had not turned up and filed any reply statement - Hence claimant filed their deposition of witness and marked their documents - Matter was adjourned to for filing any reply statement by appellant and for further proceedings - In proceedings also no reply statement was filed and hence matter was adjourned for arguments on which date appellants counsel did not appear and claimant argued matter and case was reserved for orders - All proceedings were sent to appellant through RPAD and duly served upon her - Pursuant to Section 4 of Arbitration and Conciliation Act a party which knows that a requirement under arbitration agreement has not been complied with and still proceeds with arbitration without raising an objection as soon as possible waives their right to object - High Court had appointed an arbitrator in response to petition filed by appellants - At this point matter was closed unless further objections were to be raised - If further objections were to be made after this order they should have been made prior to first arbitration hearing - But appellants had not raised any such objections - Appellants therefore had clearly failed to meet stated requirement to object to arbitration without delay - As such their right to object is deemed to be waived - Court are of opinion that having waived her right and participated in proceedings without raising any objection now appellant cannot raise a ground that no notice for reference of Arbitration was given to her and it has to be construed that there is no commencement of Arbitration proceedings in eye of law - Moreover as stated earlier by filing an application to withdraw excess amount deposited by auction purchaser appellant had waived her right to challenge Award by her conduct - Court find on a perusal of records that earlier appellants mother filed in which appellant herein was second respondent therein - said O.P. was dismissed by this Court stating that her mother is a third party to Arbitration Proceedings and therefore the appellant is well aware of Arbitration Proceedings - According to Senior Counsel appearing for appellant since appellant was not furnished with a copy of Award passed in Arbitration Proceedings she has addressed a letter to second respondent-Arbitrator and thereafter Award copy was furnished and thereafter O.P. was filed and therefore it cannot be said that filing of O.P is hit by limitation - It is well settled that where discretion vested in Court under S.34 of Indian Arbitration Act has been exercised by lower court appellate court should be slow to interfere with exercise of that discretion - In dealing with matter raised before it at appellate stage appellate court would normally not be justified in interfering with exercise of discretion under appeal solely on ground that if it had considered matter at trial stage it may have come to a contract conclusion - If discretion has been exercised by trial court reasonably and in a judicial manner fact that appellate court would have taken a different view may not justify interference with trial courts exercise of discretion - As is often said it is ordinarily not open to appellate court to substitute its own exercise of discretion for that of trial judge but if it appears to appellate court that in exercising its discretion trial court has acted unreasonably or capriciously or has ignored relevant facts then it would certainly be open to appellate court to interfere with trial courts exercise of discretion - Appeal Dismissed