Dismissed

Varsani Construction Company and Anr. v. Religare Finvest Limited

Delhi HC7 Jul 2017FAO/282/2017

Case brief

AI extract

What is this about?

This appeal challenged the dismissal of objections against an arbitral award. The High Court affirmed that the presumption of service under the Evidence and General Clauses Acts could not be rebutted as the appellants denied neither the addresses nor the return of envelopes. Consequently, the petition for setting aside the award was dismissed as time-barred under Section 34.

What did the court decide?

Dismissal of the first appeals and pending applications with the objection petition being held time-barred under Section 34 of the Arbitration and Conciliation Act.

Varsani Construction Company and Anr. Vs Religare Finvest Limited — Arbitration | Delhi HC (2017)

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Signature Not Verified Digitally Signed By:AM UL YA

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. I

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dismissed the objections under Section 34 of the Arbitration and ConciliationAct filed by theappellants/objectors.

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Arbitration proceedings were, initiated; by the respondent/lender for recovery of a sum of Rs.57,53,064.65 along " ' • with interest. In these arbitration proceedings, it has been found as a matter of fact on record, by the. court below that the .,appellants/petitioners were duly served but the appellants/petitioners , failed to appear in the arbitration proceedings. The court below has •V arrived at a 'finding .that notices which were sent to the appellants/petitioners by the registered post were at the admitted addresses of the appellants/petitioners, and therefore, there is deemed ' • service of the arbitration proceedings. The court below has also . referred to the. fact that even the earlier, recall-cum-demand notice , dated 30.8,2013 sent to the appellants/petitioners,the' same was received back with a note of'refusal'. The court below also notes that addresses of the appellaiits/petitidners mentioned in 'the postal envelopes, whether the addresses were those as mentioned in the . , , demand notice or notices issued in the arbitration proceedings . • - includingthe noticeto proceed ex-parte, are the same addressesof the ' •appellants/petitioners as mentioned in their petition under Section 34 ' of the Arbitration and Conciliation Act.. More importmtly, the court . . below has come to a finding of fact that the Award dated 20.12.2013 . was sent to the appellants/petitioners by way of registered post and the ' appellants/petitionerswere duly servedofthe Award on 28.12.2013as' • _ there were,.found two AD cards bearing the stamp of the appellant no.1/petitioher no.1 and the signatures of two other persons on the AD cards, lying in the arbitral record.; The court below has held that the appellants/petitioners have not denied the official stamp of the appellantno.l/petition^rno.1 or the signatureson the Ad cards. The . , aforesaid aspects have been dealt with exhaustively by the court . . below in paras 6 to 8 of the impugned judgment and which paras read ^ , , asunder:' ; ' . , - .

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"6. The counsel for the petitioners has 'argued that the , . petitioners were not served with the notice, of commencement of arbitration,as weir as notice'of arbitrationproceedingsby the Ld. Arbitrator. But the perusal of arbitral record has.revealed that the. notices were sent to the petitioners by way of post at the following , ' • . ^ ' stages:•. . •

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' , . . . (i) When loan recall-cum-demand notice dated 30.08.2013-was sent by the Claimant on 31.08.2013;, ' •

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FAO282/2017& conn. , , Page2of5

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(ii) When notice da^ed'24.09.'2013of arbitrationproceedingswas sent.. by the Sole Arbitrator on 28.09.2013:

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(iii)

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sWhen notice dated 06.11.2013of iiitentionof proceed ex parte was sent by the Sole Arbitrator on 07.11.2013: and when the copy of Award dated 20.12.2013 was sent-to the petitioners by the Sole Arbitrator on 23.12.2013. , .

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• 7. The enyelopes containing loan Recall-cum-Demand Notice dated 30.08.2013:sent to both the petitioners,-were received back with the report "refused". It is settled law that there is presumption of service of notice under Sec. 114 of Eyidence Act and Section 27 of General Clause Act when there is report of 'refusal' written by the postman. (Harcharan Singh Vs. Shiv Rani, (1981), 2 SCC 535). The notice dated 24.09.2013 of arbitration proceedings and notice'dated 06.11.2013' of intention to proceed ex-parte were sent by the Sole Arbitrator to both the petitioners by way of registered post. The postal receipts of the same have been placed,on arbitral record. Though there is no AD card placed on record but it has been held by Hon'ble Supreme , Court in Basant Singh Vs. Roman Catholic Mission, (2002) 7 SCC 531 that where the summons are properly addressed, prepaid and duly sent by registered post with " acknowledgment ,due, notwithstanding the fact that the acknowledgement having been lost or mislaid, the Court shall presume that notice is duly served. In the said case, the Hon'bleSupreme Court had drawn the presumption of service under^Sec.27 of General Clauses Act notwithstandingthe loss of AD Card or its non-return for any reason. In the present case, the petitioners have , not denied the correctness of their addresses mentioned on the above-said notices. Rather it is pertinent to mention here that the addresses of petitioners as mentioned in the present petition under Sec. 34 of the Act are the same addresses where the above-said notices were sent. Since, the notices were sent to the petitioners by way of post at. their correct addresses and none of the envelopes were received back unserved. so in view of the above-said case-law. , the Ld. Arbitrator had.rightly drawn the presumption of services and .proceeded ex-parte against the present petitioners. Thoiigh the legal, presumption of service laid down .in Sec. 114 of IndiianEyidence Act and Sec. 27 of General Clauses Act is rebuttable, but the petitioners have failed to rebut the same. They have simply stated that they were not served. But they have not denied the correctness of their addresses. So in the absence of any rebuttal, it stands established that the petitioners were duly served with the notices of the arbitral proceedings, sent by the Ld.'Arbitrator.' Accordingly, the ground of petitioners of 'being not served' with the notice of arbitration proceedings by the Ld. Arbitrator is rejected. , :

FAO 282/2017& conn.

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The counsel for the Claimant has vehemently argued that ; the present petition'deserves dismissal as the same is time barred. The ArbitralAward was passed on 20.12.2013whereas the present . petition U/Sec^34 of the Act was filed on. 24.11.2015:; But the . cnunselfor petitionershas arguedthat the petitionishot timebarred• as the copv.of Award was never served upon the petitioners by the Ld. Arbitrator arid that thev came to know about the Award only in - - . October; 2015 when notice of Executing Court was' received'by them. But the perusal of arbitral recordhas revealed that the Awardwas sentto boththe petitionersbv the Ld.Arbitratorbywayof post on 23.12.2013 and both the petitioners were duly served, with the same nn 28.12.2013! Two AD cards bearing stamp of petitioner ' no.l and signatures of two persons are lying on arbitral record. Thepetitionershave neither denied,the official stamp of the petitioner no.l nor signatures on the said AD cards. It is also pertinentto • " mentionhere that the addressesof petitionersoh these AD Cards 'are the same as mentionedinthe presentpetition,rneaningtherebythat • the addresses are coirect. ' Hence, it-stands proved that the . petitioners were'duly served with the Award on.28.12.2013. But since the present petition U/Sec.34 of the Act was filed on' 24!11.2015 i.e. much after the expiry of period of limitationof 90 days, the same is barred bv limitation and accordingly, requires to I, " be dismissed." ' (underlining added)

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I may note that,in fact the objection petition need'not have been dealt with in detail on merits inasmuch as the objections were found to have been filed beyond-the period of limitation prescribed . iinder Section34 of the Arbitrationand ConciliationAct,and which is the period of 90 days plus condonationof delay of additional30 days , >, i.e total 120'days,^and hence the objectionpetition necessa,rilyhas to be'dismissed as time barred in view of the judgment of the Supreme' Court in the case of Union of Ihdia Vs. M/s Popular Construction Co.(2b01)8SCC470y /

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,I do'not therefore find any ,illegality br perversity in the,, impugned judghient and which rightly deals,with all the issues,* • - including.1 of• the objections being barred by time.,' ... • • I A . , ' ' ' ' '

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; ' ,, . 5; In view, of the above discussion, the first appeals along w^ith ; ' . * , I,pendingapplicationsare dismissed." - , ' > ^. „i

FAO282/2017&conn.

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Since the facts and issues are identical in these cases, .these appeals are also accordingly dismissed by adopting the reasoning ^contained in the judgment dated 30,5.2017 passed in FAO Nos. 259/2017, 260/2017

and 261/2017.,

VALMIKIJ. MEHTA, J

JULY 07,2017 ib

FAO 282/2017& conn.

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