Allowed

M/S Garnet Finance Co. Ltd. Hyd. v. B.Raja Narasimham and 3 Others

Telangana HC21 Mar 2022CMA/2235/2003

Case brief

AI extract

What is this about?

In this Civil Memorial Appeal, the High Court, Hyderabad, allowed the appellant finance company's challenge to set aside a lower court order. The lower court had set aside an arbitral award due to alleged improper service of notices and lack of proof of receipt. The High Court held that notices were sent via registered post, revised notices were issued, and awards were subsequently served via regi

What did the court decide?

Set aside the order dated 19.07.2002 passed by the Chief Judge, City Civil Court, Hyderabad in O.P. No.1061 of 2000.

M/S Garnet Finance Co. Ltd. Hyd. Vs B.Raja Narasimham… — Consumer Protection | Telangana HC (2022)

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HIGH COURT FOR^{THE STATE OF TELANGANA} AT HYDERABAD

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MONDAY, THE^{TWENTYFIRST DAY OF IUARCH} TWO THOUSAND^{AND TWENTY TWO}

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PRESENT

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THE HONOURABLE^{SMT JUSTICE P.SREE SUDHA}

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C.M.A. NO:2 235^{0F 2003}

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Appeal under Section^{39 of Arb.Act, againstthe JudgmenV decree in OP} No.1061 of 2000 dated^{19/07/2002 on the file of the court of the chiefJudge' city} Civil Court, Hyderabad.

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Between:

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M/s Garnet Finance^Co rep. by its Director

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Ltd., 12-13-1275/2,^{Moula Ali Road, Tarnaka,Hyderabad,}

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...APPELLANT/^R1

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AND

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B.Raia Narasimham,^{(died)S/o. Narasaiah,ServiceR/o DEPEP' Ramudugu'} Koheha Mandal,^{Karimnagar District}

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z. $ri Cr,. nrf,^{nuoov,5lo.Mukunda Reddy,ServiceR/o Battulavanipally'} Koheda M'andal,^{Karimnagar District. (died)}

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S. Sf O. nat"rfr,^{Slo. Lachiih,Service'R/oSamudrala'Koheda Mandal'} Karimnagar District.

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a cls. viiirinitham,^{S/o. not knownR/o. 2-2-1130122,New Nallakunta'} Hvderabad.

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Smt Kamala,Wio.late^{Ch Raja Reddy. lr/ajor}

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- Sri [Vukunda^{Reddy, S/o late Ch.Raja Reddy' Major,}

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f eothit" R/o.H.No.15-71-5,^{Balaji Nagar, Jbwaharnagar,JJ Nagar' Near} bammaiaguda, Ranga^{Reddy District.)}

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?. s;i P;;;;- Laina^{w7o. tateR'a;aN aradim rr am, N o'10-2- 448, Vidvana gar'} Karimnagar.

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iRZ^{is Ur6ughton record as LR of.$edeceased Rl vide cout Order dated} oZtOttlZ in CMP No.1792110) infi^{S a-O ,r" broughton rec5rd as LRs of deceased R2 vide Court Order}

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dated 13l7l12inCMP 2414110)

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.,.RES'ONDENT/^R2

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For the Appellant^{: SRI M.PAPAREDDY,Advocate}

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For the Respondent^{No.4 : SRI K.B'RAMANNA DORA, Advocate}

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Forthe Respondent Nos.3,^{5 to 7 : NONE APPEARED}

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The Court delivered the^{following: JUDGMENT}

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HON'BLE SMT JUSTICE^{P.SREE SUDHA}

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C.M.A.No.2235 of 2OO3

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JUDGMENT

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M/s.Garnel Finance Company^{Limited filed this} appeal against the respondents^{and their1ega1} representatives seeking to set aside the^{order dated} lg.O7.2OO2 passed in O.P.No.1061^{of 2000 on the file of} the learned Chief Judge, City^{Civil Court, Hyderabad,} u'here under the Award of the Arbitrator^{in Case No.1 of} I999 dated 24.O4.1999 r'r'as^{set aside.}

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Learned counsel for the appellant^{wouid argue that} though the notices u,'ere served to^{Respondents1 to 3, the} Court belorv observed that they^u'ere not^{served properly on} the first respondent and in^{fact, the notice sent to the} second respondent was^{returned with an endorsement} 'refused'. Ile would further contend^{that the notice sent to} the third respondent was^{served and notice sent to the lirst} respondent was returned and,^{as such, again the notice} lvas sent by substituted service.^{He would also contend}

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that the limitation for setting aside the Arbitral Award is three months from the date of receiving the Arbitral Award, and therefore, it is beyond the iimitation period and on that ground also it can be set aside.

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The facts of the case are that as per the agreement dated 29.03.1996 entered into between the parties, the appeliant herein filed arbitration proceedings against one B.Raja Nartasimham-lessee and two guarantors, who proposed to take Philips Colour TV with Antennae and Videocon Washing Machine, 400 T Grey on lease basis for Rs.38,885/- and agreed to pay the same in 35 monthly instalments alorrg u,ith late charge at 6% per month. As per the agreement if there is any violation, the matter shall be relerred to the Arbitrator - G.S.Viswaanatham, a Retired Chief Engineer, APSEB, lor settlement. Accordingly, the matter was referred to the Arbitrator when lessee failed to pay the instalments. Thereafter, the Arbitrator served letters through Registered Post with Acknowledgment Due on 08.02.1999 with a request to appear before him on 27.O2.1999. Receipt of notice was acknowledged by lesser

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on 09.02.1999 and the second guarantor on 17.O2.1999. Notice sent to the lessee was returned with an endorsement 'party out of station,. Notice sent to the first guarantor was returned with an endorsement ,refused,. The second guarantor acknowledged the receipt ol notice, but failed to appear before the Arbitrator. As per the Award, the Arbitrator in order to afford further opportunity sent a revised notice to the lessee and guarantors once again on 14.03.1999 by Registered post with Acknowledgment Due with a direction to appear before him on 24.03.1999. It was acknowledged by the lesser on 15.03.199g and the second guarantor on 17.03. 1999, but the notice sent to the lessee was returned rvith an endorsement ,un_delivered,. The first guarantor relused to take the de1ivery. Since the lessee, the first and second g.uarantors failed to appear before the Arbitrator on 24.03.1999, a public notice was issued on 05.04.i999 in a Daily News paper in the name of B.Raja Narasimham-lessee and hearing was fixed on 0g.04. 1999. Even on that day, as the lessee and guarantors remained absent, they were set ex parte and an Award was passed on 24.O4.t999,

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In O.P.No.1O6 1 of 2000, the Court belorv observed that though two notices were addressed to the g.uarantors, only one notice was sent to the iessee and then publication was ordered. As there is definite address of the petitioners therein, instead of sending arother notice, the Arbitrator ordered substituted service and as such it is not proper. Moreover, the first notice could not be served as he was out of station. The Court below also observed that the Arbitration Award was sent rto the petitioners in the O.p. was not through Registered post, but it was sent through Certificate of Posting, and thus, there was no proof whether the petitioners received the arbitration proceedings, and hence, the first petitioner has no knowledge of the arbitration proceedings. The Court below further observed in the order that both the parties should be treated equally and should be given full opportunity to present their case, and accordingly set aside the Award.

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From a perusal of the record, two notices were sent to the first petitioner in the O.p., but they were returned with an endorsement that the said person was not available at

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Koheda. As such,^{substituted service was ordered and even} in the Award it^{was specificailymentioned that to afford} another opportunity^{to the petitioners in the O'P'' a revised} notice was sent^{to them But the Court belowwithout} noticing the^{same, observedthat there is no properservice} and so also admittedly^{the Awards were sent to all the} parties through^{RegisteredPost with Acknowledgment Due'} WhentheAwardsweresenttotherespectiveparties'it cannot be said^{that copy of the Awardwas not served to} them. ln fact,^{they liled the presentO'P' to set aside the} Alvard, and thus,^{it cannot be doubtedthat Au'ardccopy} was not served^{upon them' Moreover, the first and second} guarantors stood^as Suarantors^{to the lessee' In fact' he} had taken the^{householditems on lease from the appellant} herein on^{paymentof instalments,but failed to pay andas} per the terms, the^{matter was referredto the Arbitrator'} Accordingly,^{the Arbitrator sent notices' but they have not} received and^{afterwards paperpublication was given' and} Iater they^{.'ere set ex parte and Award was passedand} communicated to^{ai1 the parties'Therefore'the order of the}

Court below deserves to be set aside as it lacks^proper

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appreciation of facts.

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Accordingly, this appeal is allowed and the order dated 19.07.2002in O.P.No.106 1 of 2000 on the file of the learned Chief Judge, City Civil Court, Hyderabad, is set aside. However, there shall be no order as to costs.

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7 . Miscellaneous Petitions, if any,^pending in this appeal

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sha11 stand closed in the iight of this final order.

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Sd/-K.SRINIVASA^RAO JOINT REGISTRAR

//TRUE^COPY//

SECTION^OFFICER

Tl an" Judge'^{City CivilCourt'Hyderabad'(with records)} "n,u, I i 3. o One "i, .-c CC t^{to Sri K.B Rams ii} "H,r e d a :iXXr#3":"f 3 i? l?,8 Y3l, "

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Two^{CD CoPies}

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One^SPareCoPY

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HIGH COURT

DATED:2110312022

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JUDGMENT

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CMA.No.2235 of 2003

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ALLOWING THE CMA.WITHOUT COSTS.

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M/S Garnet Finance Co. Ltd. Hyd. v. B.Raja Narasimham and 3 Others

Case brief

What is this about?

What did the court decide?

M/S Garnet Finance Co. Ltd. Hyd. v. B.Raja Narasimham and 3 Others

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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