Petitioner sought to set aside an Exparte arbitral award alleging improper service of notice. The Court held that notices sent to last addresses were deemed served upon postal endorsement of return, rejecting the petition since the award was passed on merits.
Petition dismissed with costs of Rs.5,000 to Madras Bar Association for cyclone relief.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 11.12.2018
CORAM:
THE HONOURABLE MR. JUSTICE S.VAIDYANATHAN
Original Petition No.627 of 2015
K.Vijaya Kumar ... Petitioner
Vs.
1.M/s.Shriram Transport Finance Co. Ltd.,
Represented by its Power of Attorney Holder Mr.S.Vardhan,
Registered office at No.123,
Angappa Naicken Street,
Chennai – 600 001.
2.Mr.V.Paul Das,
Arbitrator,
Civil Judge Senior Division,
No-124, Kutchery Road,
Near Raja Kalyana Mandapam,
Mylapore, Chennai – 4.
3.Sadik ... Respondents
Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the Exparte award dated 30.11.2012 in Arbitration case No.379 of 2012.
For Petitioner : M/s.R.Jayasree For 1st Respondent : Mr.K.S.Ramakrishnan For 3rd Respondent : No appearance
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O R D E R
This Petition has been filed seeking to set aside the Exparte award
dated 30.11.2012 passed by the Sole Arbitrator in Arbitration Case No.379 of 2012.
Hypothecation Agreement was entered into between the Petitioner viz. K.Vijaya Kumar, who is the principal borrower and the 1st Respondent/Finance Company on 01.12.2005 for purchase of a TATA vehicle. A sum of Rs.15,63,900/- was sanctioned as loan to the Petitioner, which was agreed to be repayable in 72 instalments. The 3rd Respondent herein viz. Sadik stood as Guarantor to the said Agreement. As there was default in repayment of loan amount, in order to settle the outstanding dues, the 1st Respondent/Finance Company repossessed the vehicle in question and sold the same for the highest price offered, for a sum of Rs.2,00,000/- and credited the amount in the accounts of the Borrower and Guarantor.
Notices to the Respondents on 21.12.2009, calling upon them to settle the
amount due to them. As the Petitioner herein failed and neglected to pay the outstanding dues, Arbitration proceedings were initiated and the Arbitrator
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came to the conclusion that the petitioner herein, who is the principal borrower along with the 3rd Respondent/Guarantor, are jointly and severally liable to pay the outstanding dues of a sum of Rs.14,43,673/- (Fourteen Lakhs Forty Three Thousand Six Hundred and Seventy Three only) with further interest at 18% per annum from the date of Claim Petition till the date of
realization, to the 1st Respondent herein.
Transport Finance Co. Ltd., produced the original Agreement signed by the petitioner and the 3rd Respondent/Guarantor and also the Notices sent to the parties by Registered Post and submitted that the 3rd Respondent/Sadiq has refused to receive the said Notice.
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material documents available on record.
that the 3rd Respondent/Sadik has refused to receive the notice. Even prior to that, several notices were served on Sadik, which were returned as 'unclaimed'. Also, the Petitioner herein has not claimed service of notice and the endorsement made by the postal authorities clearly indicates that intimation has been given to him.
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6864), it has been categorically held that when notices are sent at the last
known addresses of the parties and the same have not been returned by the postal authority, it would amount to a deemed service of such notices. It was further held therein that it is suffice that notice has been sent to the last
known address of the party as mentioned in the Agreement, unless and otherwise the party is able to produce a document to the effect that change of
address was duly communicated.
addresses of the Petitioner and the 3rd Respondent herein. Hence, the contention of the Petitioner that the Award under challenge is an Exparte Award, cannot be accepted. Even assuming for the sake of argument that the contention of the Petitioner is going to be accepted, the Petitioner may have
to pay the outstanding dues liable to be paid by him as on date together with interest up to the date of the Award, as was agreed in the Agreement, if Arbitration proceedings again commences. Hence, this Court is of the view that the learned Arbitrator has passed the Arbitral Award purely on merits, which needs no interference by this Court.
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11. In the result, this Original Petition is dismissed with costs of
Rs.5,000/- (Rupees Five Thousand only) payable to the Secretary, Madras Bar Association, High Court Buildings, Chennai, within a period of two weeks from the date of receipt of a copy of this order, and the said amount shall
be utilized for purchase of relief materials to persons affected by Gaja
Cyclone.
12. This Court observes that the original records produced by the
learned counsel appearing for the 1 st Respondent/Finance Company has been
returned.
11.12.2018
Index : Yes/No
Speaking Order : Yes/No
(tsg/aeb)
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S.VAIDYANATHAN,J.
(tsg/aeb)
Original Petition No.627 of 2015
11.12.2018
3 issues framed by the court
Whether the Arbitration proceedings were properly served given the return of notices as unclaimed or refused by the postal authority.
Whether the Exparte award is maintainable when the petitioner failed to claim service of notices via registered post.
Whether there exist prima facie grounds for interference under Section 34 of the Arbitration and Conciliation Act, 1996.
Colour shows how this judgement treated each authority
P.T.Thomas vs. Thomas JobDistinguished¶34
P.T.Thomas vs. Thomas Job (2005 (4) CTC 30)
Francisco A. D'souza vs. L & T Finance Ltd.Explained¶37
Francisco A. D'souza vs. L & T Finance Ltd., Mumbai (2015 SCC OnLine Bom 6864) · Who else cites this
1 provisions across 1 enactments
K.Vijaya Kumar
M/s.Shriram Transport Finance Co. Ltd.
Mr.V.Paul Das
Sadik
S.Vaidyanathan
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
