Proper notice is essential before making an arbitral award rule of court; lack of jurisdiction due to insufficient notice renders the award invalid.

JUDGMENT :

ROHIT RANJAN AGARWAL, J.

1. These are two connected appeals one being Arbitration Appeal No. 146 of 2022 filed under Section 37 of Arbitration and Conciliation Act, 1996 (hereinafter called as ‘Act of 1996’), treating it to be under Section 39 read with Section 17 of ARBITRATION ACT , 1940 (hereinafter called as ‘old ARBITRATION ACT ’) against the order dated 28.04.2022 passed by Civil Judge (Senior Division) acting as Small Cause Court in Misc. Case No. 4 of 2004 and also arbitral award dated 01.01.1992 made by Kashi Nath, Advocate.

2. The other appeal being F.A.F.O No. 1514 of 2022 has been preferred against the judgment and order dated 27.04.2022 passed by Civil Judge (Senior Division)/ Judge Small Causes Court in Misc. Case No. 5 of 2004 arising out of Original Suit No. 57 of 1992, on the application filed under Order 9 Rule 13 CPC for setting aside the ex-parte decree against the defendant-appellant.

3. The brief facts leading to filing of these two appeals, are that appellant before this Court is a Government of India undertaking under the administrative control of Union Ministry of Heavy Industries and Public Enterprises and registered as Government Company under the Companies Act. The contesting plaintiff-respondent no. 1 is a private limited Company which was incorporated on 28.05.1985 under the provisions of Companies Act, at present, the name of the company has been struck off from Register of Companies maintained by Registrar of Companies, Kanpur, due to non-compliance of the provisions of Companies Act since 2006.

4. One Harindar Singh Chopra, a proprietorship firm entered into an agreement with the appellant on 05.07.1983 as its ancillary unit for manufacture of fabricated items and accessories. The ancillary unit of Harindar Singh Chopra was thereafter registered as a private limited Company in the year 1985, and he became Managing Director of the Company. Clause 19 (viii) of the agreement provides for the validity period which was seven years. Further, Clause 19 (ix) (a) and (b) provided for the matter being referred to an Arbitrator appointed by Executive of the appellant-Company in case of any dispute, and award/decision rendered by the Arbitrator to be final and binding on both the parties. At the time of execution of agreement, old ARBITRATION ACT was in operation.

5. Dispute arose between the parties, and on 05.05.1991, plaintiff-respondent no. 1 gave a notice to the appellant calling for appointing an Arbitrator. In para no. 5 of the notice, it was mentioned that ancillary agreement expired in July, 1990, which was not renewed. Thus, as per the condition of supply contract of appellant which is in print-agreement regarding unpaid bills, interest the notice was given for appointing Arbitrator from the appellant side and one Arbitrator to be appointed by respondent and in case of difference of opinion between Arbitrators, there was a clause of appointing an Umpire and in para no. 9, the names of four umpires were suggested.

6. The respondent on 30.10.1991 informed the appellant that they had appointed one Pandit Kashi Nath Tripathi (Advocate) as their Arbitrator, while the appellant have not appointed Arbitrator from their side. A reply was given by the appellant on 18.11.1991 stating that as per Clause 19 (ix)(a)