JUDGMENT

04.03.2015

1. The challenge in this petition under Section 34 of the Arbitration and Conciliation Act, 1996 („Act‟) is to an Award dated 27th January 2014 passed by the sole Arbitrator in the disputes arising between the Petitioner and the Respondent (a division of Aakash Educational Services Ltd.)

2. The impugned Award was an ex parte Award requiring the Petitioner to pay to the Respondent Rs.22,74,993 together with interest @ 18% per annum from the date of the claim till realisation apart from costs of arbitral proceedings amounting to Rs.11,000.

3. The Respondent is supposed to be a division of Aakash Educational Services Ltd. („AESL‟) which is in the business of giving tuitions en masse to children studying in classes 11th and 12th and preparing them for appearing in the IIT-JEE and the entrance examinations for medical and engineering courses.

4. The Petitioner was offered a job on probation by the Respondent as a faculty in Physics at its Lucknow Centre. He states that he joined the Respondent‟s Lucknow Centre on 20th August 2009 on a monthly salary of Rs.50,000. According to the Petitioner, he was at the relevant time residing at a tenanted accommodation at 302, Shriram Apartments, New Berry Road, Lucknow and had his old house at 120/1 Beladari Lane Indra Khan Plaza Lal Bagh, UP which he had given out on rent. According to the Petitioner he continued serving the Respondent and was given a rise in salary in 2010, again in 2011 and finally his salary was increased to Rs.63,800 per month in January 2012.

5. According to the Petitioner at the end of February 2012, he was asked by the Respondent to enter into a fresh contract failing which his services would be terminated forthwith. It is stated that under coercion and undue influence, the Petitioner was compelled to enter into a fresh agreement on 1st March 2012. Inter alia under the fresh agreement, the Petitioner had to give three months‟ notice in writing if he were to leave the services and the notice had to be given in a manner that it was co-terminus with the expiry of academic session. If the Petitioner was unable to adhere to the mandatory notice period, he was liable to pay damages to the tune of double the gross salary for the deficient notice period or the remaining period of the academic year/contract period of three years whichever was higher. If the Petitioner did not submit a resignation between 15th February and 28th February it would be deemed that he was willing to continue for another term of three years.

6. As part of the agreement, the Petitioner was asked to give to the Respondent three signed undated blank cheques. If there was a dispute between the parties, the Petitioner had to bear the entire arbitration expenses which would not be less than Rs.10,000 per hearing before the Arbitrator. A further clause permitted the Respondent to hold back 10% of the gross salary of the Petitioner which was to be held in a „sincerity fund‟ which was interest free and repayable after three years. As a result although the Petitioner‟s monthly salary was fixed at Rs.72,222 after deducting Rs.7,222 he was left only with Rs.65,0000 as a carry home pay.

7. The Petitioner states that in view of the extremely one sided arbitrary clauses in the contract, he rescinded the contract on 20th July 2012 and left the services of the Respondent. The Respondent failed to pay the Petitioner the amount in the „sincerity fund‟ which was due to him. After leaving the services of the Respondent, the Petitioner shifted from Lucknow to Chandigarh. It is only when he returned to Lucknow to look after the affairs of his old property on 20th March 2014, he found a speed post letter carrying the ex parte Award dated 27th January 2014. Thereafter he filed the present petition on 28th April 2014

8. Pursuant to the order passed by the Court, the entire arbitral record has been received. At the hearing on 24th November 2014, learned counsel for the Respondent stated that he did not wish to file a