Fateh Construction and Others vs Reliance Capital Ltd. and Others

Amit Rawal, J.—This order of mine shall dispose of 44 FAOs as common question of law and facts are involved. Challenge in the present appeals is to the impugned order, whereby objections filed by appellants against the award have been dismissed.

Mr. Ashok Kumar Khunger, learned counsel appearing on behalf of appellants submits that Arbitrator did not resort to the provision of Order 5 Rule 20 of Code of Civil Procedure in effecting the service upon appellants and only sent registered notice. He further submits that even provision of Section 3 of Arbitration and Conciliation Act, 1996 (hereinafter to be referred to as ''the Act'') have not been complied with. The appellants did not receive any notice of the arbitration proceedings and, therefore, were not aware of such proceedings. On going through the award, objections have been filed. He further submits that dispute had arisen on account of non-payment of the loan installments, in respect of loan taken by appellants from the respondents, for purchase of vehicles. Though appellants have been paying the installments on time and there had been defaults of one or two installments, but there was no occasion to refer the dispute to the Arbitrator.

Mr. Sandeep Suri, learned counsel appearing on behalf of respondent No. 1 submits that appellants before arbitration proceedings wrote letter dated 13.08.2012 requesting the Arbitrator to drop the proceedings as there was no dispute between the parties. There was not adherence to the loan schedule and this fact has been noticed by the Arbitrator and despite that appellants did not appear before the Arbitrator and even no explanation, much less, reasonable explanation has been shown for non-appearance before the Arbitrator. In essence, objections in this regard have thus rightly been dismissed by the Additional District Judge, Bathinda as it did not fall within the parameters of Section 34 of the Act.

I have heard learned counsel for parties and appraised the paper book.

There is no dispute to the provision of Section 3 of the Act, notice of the arbitration proceedings either have to be handed over to respondents or through registered post. The Arbitrator has resorted to the procedure of sending the notice by registered post and in response to the notice, Mr. Harpreet Singh, Authorized Signatory of appellants had written letter dated 13.08.2012 to Arbitrator requesting him to drop proceedings. But on receiving the notice of the arbitration proceedings, the appellants could have engaged services of lawyer or participated in the arbitration proceedings on their own in defending the alleged claim of respondents. Having not done so, it appears that appellants did not dispute the alleged claim.

Court below in my view rightly rejected objections as no explanation has been given as to whether the appellants had actually received the notice of Arbitrator or not.

In my view, Arbitrator ought not to have resorted to the provision as envisaged under Order 5 Rule 20 of Code of Civil Procedure in view of letter dated 13.08.2012 noticed above.

There is no illegality and perversity in the impugned order and cannot be said to have been passed without jurisdiction, much less, sutlers from any fallaciousness. There is no merit in the appeals. Same are accordingly dismissed.