Punjab-Haryana High Court
Parsvnath Developers Ltd vs M/S Wisecan Engineering Pvt Ltd … on 1 April, 2021FAO-150-2021(O&M) 1
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
FAO-150-2021(O&M)
Date of decision: 01.04.2021
Parsvnath Developers Ltd.
…….Appellant
Versus
M/s Wisecan Engineering Pvt. Ltd. And another
……Respondents
CORAM: HON’BLE MR. JUSTICE ANIL KSHETARPAL
Present:- Mr. Gunjan Rishi, Advocate for the appellant
Mr. Vilas Sharma, Advocate for respondent no.1
ANIL KSHETARPAL, J.
Through this appeal filed under Section 37 of the
Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘A&C
Act’), the appellant assails the correctness of the order dated 12.11.2020
passed by the learned Additional District Judge while dismissing the
application seeking condonation of delay in filing the petition u/s 34 of
A& C Act .
The Facts:-
Some skeleton facts are required to be noticed. In this case,
the sole Arbitrator commenced the proceedings under A&C Act in view
of a reference made by the Micro and Small Enterprises Facilitation
Council,(hereinafter referred to as ‘the Council) in exercise of the powers
conferred under Section 18 of the Micro Small and Medium Enterprises
Development Act, 2006 (hereinafter referred to as the ‘MSMED Act
2006’) The Arbitrator, after reserving on 24.09.2018, pronounced the
1 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 2
award on 27.09.2018. A photocopy of the award is available on the
record requisitioned from the Court. On careful perusal thereof, it
becomes apparent that a copy of the award was received by one person
on 29.09.2018. Learned counsel representing the respondent submits
that he has received a copy of the award. There is no endorsement either
by the Arbitrator or by his Secretariat that a copy of the award has been
received by the appellant or dispatched to the appellant.
In the petition filed by the appellant under Section 19 of
MSMED Act, 2006 read with Section 34 of A&C Act on 18.04.2019, it
was asserted that the copy of the award has been received on 19.12.2018.
Apart therefrom, an application seeking condonation of delay of 30 days
was also filed.
No reply to the application for condonation of delay was
filed by the respondent, although, the proceedings remained pending
before the learned Additional District Judge for a period of more than 1
year and 6 months. The Court held that since it was filed beyond the
period of 30 days, after elapse of original period of three months from
the date of award, therefore, the delay in filing the petition cannot be
condoned.
It is important to note that pending proceedings before
Additional District Judge, an application for summoning the record of
the Arbitrator was filed by the appellant, however, it was kept pending.
On the other hand, the respondent filed an application under Section 19
of the MSMED Act, 2006, before the learned Additional District Judge.
Yet another application for release of the amount deposited and
2 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 3
advancement of the date of hearing was also filed by the respondent.
The respondent in support of his oral plea, produced a copy of a receipt
issued by the Indian Posts alongwith a print out of the tracking details of
the consignment in order to prove that the copy of the award was
delivered to the appellant.
The Reasons for dismissal by the Court below:-
On careful perusal of the order passed by the learned
Additional District Judge, it is apparent that the application for
condonation of delay was dismissed on the following grounds:-
(i) On perusal of the photocopy of the award produced
along with the petition it is apparent that there is an endorsement dated
29.09.2018.
(ii)Learned counsel representing the respondent has stated at
Bar that since he belongs to Panipat, therefore, he had sent a copy of the
award to the appellant by speed post and from the receipt and tracking
consignment details, it is proved that the item was delivered to appellant
on 12.10.2018.
(iii) The appellant has pleaded that after a period of two
months from the day when the Learned Arbitrator reserved its award,
they enquired from the sole Arbitrator who informed them that the award
has already been pronounced on 27.09.2018. The Court has observed
that the only source to obtain the copy of the award was from the
Council but photocopy of the award attached with the petition u/s 34 A
& C Act does not show that it was issued by the council.
On these grounds the court has held that since the petition
3 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 4
under Section 19 of the MSMED Act, 2006 read with Section 34 of the
A&C Act, was filed after the elapse of the original period of three
months + 30 days from the date of award which is the maximum period
prescribed enabling the court to condone the delay, hence, the petition
was dismissed only on the ground of delay.
On careful reading of the order passed by the learned
Additional District Judge, it is apparent that the Court has failed to
record the finding as to when the appellant received the signed copy of
the Arbitral Award. As noticed above, the respondent did not file any
reply to the application seeking condonation of delay. In this court, the
respondent has filed written arguments with the assertion that the learned
Arbitrator handed over the copy of the award in an envelope to the
learned counsel representing the respondent with a direction to remit the
same to the appellant and he, after coming back to Panipat, posted the
same through a consignment/item on 09.10.2018 which was delivered to
the appellant on 12.10.2018. However, there is no assertion that the
aforesaid copy of the award was a signed copy, which is the specific
requirement of Section 31 (5) of the A&C Act.
Arguments of Learned Counsels:-
Learned counsel representing the petitioner has submitted
that a specific assertion was made in the application for condonation of
delay that a copy of the award was delivered to the appellant on
19.12.2018 and in the absence of any counter, the assertion made by the
petitioner would be deemed to have been admitted. Further, there is also
no material to prove that a signed copy of the award was ever delivered
4 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 5
to the appellant. In the appeal, the counsel representing the respondent
admits that the Arbitrator gave him an envelope containing a copy of the
award which is alleged to have been dispatched through post from
Panipat. However, there is no material on the record to establish that the
envelope did contain a signed copy of the award and it was delivered to
the appellant.
Per contra, learned counsel representing the respondent has
submitted that the appellant has not pleaded that the copy of the award
was handed over to them on 19.12.2018. In view of the receipt and the
consignment tracker details, it stands proved that the appellant did
receive a copy of the award in the month of October, 2018. It is not
necessary that the Arbitrator himself should deliver the signed copy of
the award to the party. The intention of the Legislature behind Section
31 (5) is to ensure that a signed copy of the award is dispatched by the
Arbitrator to each of the party to the proceedings which has been
complied with. The appellants have failed to prove beyond reasonable
doubt that it received a copy of the award on 19.12.2018. While
drawing the attention of the Court to the record of the court below, he
submits that the appellants have even failed to produce a certified copy
of the award, which is alleged to have been received by them on
19.12.2018.
Statutory Provisions:-
Before evaluating the arguments, it is necessary to notice
the statutory requirements. The word ‘Arbitral award’ has been defined
in Section 2 (1) (c ) of the Act. Section 31 lays down the form and
5 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 6
contents of the Arbitral award. The manner as to how the arbitral
proceedings shall stand terminated is provided in Section 32. Further,
Section 34 gives an opportunity to the party aggrieved from the award to
file objections. Section 36 provides for the enforcement of the award.
The aforesaid provisions are extracted as under:-
“Section 2(1) (c ) “arbitral award”
includes an interim award;
Section 31. Form and contents of
arbitral award:- 1) An arbitral award shall be made
in writing and shall be signed by the members of the
arbitral tribunal.
(2) For the purposes of sub-section (1), in arbitral
proceedings with more than one arbitrator, the
signatures of the majority of all the members of the
arbitral tribunal shall be sufficient so long as the
reason for any omitted signature is stated.
(3) The arbitral award shall state the reasons upon
which it is based, unless–
(a) the parties have agreed that no reasons are to
be given; or
(b) the award is an arbitral award on agreed terms
under Section 30.
(4) The arbitral award shall state its date and the
place of arbitration as determined in accordance with
Section 20 and the award shall be deemed to have
been made at that place.
(5) After the arbitral award is made, a signed copy
shall be delivered to each party.
6 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 7
(6) The arbitral tribunal may, at any time during
the arbitral proceedings, make an interim arbitral
award on any matter with respect to which it may
make a final arbitral award.
(7)(a) Unless otherwise agreed by the parties,
where and in so far as an arbitral award is for the
payment of money, the arbitral tribunal may include
in the sum for which the award is made interest, at
such rate as it deems reasonable, on the whole or any
part of the money, for the whole or any part of the
period between the date on which the cause of action
arose and the date on which the award is made.
41[(b) A sum directed to be paid by an arbitral
award shall, unless the award otherwise directs, carry
interest at the rate of two per cent higher than the
current rate of interest prevalent on the date of award,
from the date of award to the date of payment.
Explanation.–The expression “current rate of
interest” shall have the same meaning as assigned to
it under clause (b) of Section 2 of the Interest Act,
1978 (14 of 1978).]
42[(8) The costs of an arbitration shall be fixed by
the arbitral tribunal in accordance with Section 31-A.]
Section 32. Termination of proceedings (1) The
arbitral proceedings shall be terminated by the final
arbitral award or by an order of the arbitral tribunal
under sub-section (2).
(2) The arbitral tribunal shall issue an order for the
termination of the arbitral proceedings where–
7 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 8
(a) the claimant withdraws his claim, unless the
respondent objects to the order and the arbitral
tribunal recognises a legitimate interest on his
part in obtaining a final settlement of the
dispute;
(b) the parties agree on the termination of the
proceedings; or
(c) the arbitral tribunal finds that the continuation
of the proceedings has for any other reason
become unnecessary or impossible.
(3) Subject to Section 33 and sub-section (4) of
Section 34, the mandate of the arbitral tribunal shall
terminate with the termination of the arbitral
proceedings.
Section 34. Application for setting aside arbitral
award. (1) Recourse to a Court against an arbitral
award may be made only by an application for setting
aside such award in accordance with sub-section (2)
and sub-section (3).
(2) An arbitral award may be set aside by the
Court only if–
(a) the party making the application 44[establishes
on the basis of the record of the arbitral tribunal
that]–
(i) a party was under some incapacity; or
(ii) the arbitration agreement is not valid
under the law to which the parties have
subjected it or, failing any indication
thereon, under the law for the time being
in force; or
8 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 9
(iii) the party making the application was
not given proper notice of the
appointment of an arbitrator or of the
arbitral proceedings or was otherwise
unable to present his case; or
(iv) the arbitral award deals with a dispute
not contemplated by or not falling within
the terms of the submission to
arbitration, or it contains decisions on
matters beyond the scope of the
submission to arbitration:
Provided that, if the decisions on matters
submitted to arbitration can be separated
from those not so submitted, only that
part of the arbitral award which contains
decisions on matters not submitted to
arbitration may be set aside; or
(v) the composition of the arbitral tribunal or
the arbitral procedure was not in
accordance with the agreement of the
parties, unless such agreement was in
conflict with a provision of this Part from
which the parties cannot derogate, or,
failing such agreement, was not in
accordance with this Part; or
(b) the Court finds that–
(i) the subject-matter of the dispute is not
capable of settlement by arbitration
under the law for the time being in force,
or
9 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 10
(ii) the arbitral award is in conflict with the
public policy of India.
Explanation 1.–For the avoidance of any
doubt, it is clarified that an award is in conflict
with the public policy of India, only if,–
(i) the making of the award was induced or
affected by fraud or corruption or was in
violation of Section 75 or Section 81; or
(ii) it is in contravention with the
fundamental policy of Indian law; or
(iii) it is in conflict with the most basic
notions of morality or justice.
Explanation 2.–For the avoidance of doubt,
the test as to whether there is a contravention
with the fundamental policy of Indian law shall
not entail a review on the merits of the dispute.]
(2-A) An arbitral award arising out of arbitrations
other than international commercial arbitrations, may
also be set aside by the court, if the court finds that
the award is vitiated by patent illegality appearing on
the face of the award:
Provided that an award shall not be set aside
merely on the ground of an erroneous application of
the law or by reappreciation of evidence.]
(3) An application for setting aside may not be
made after three months have elapsed from the date
on which the party making that application had
received the arbitral award or, if a request had been
made under Section 33, from the date on which that
request had been disposed of by the arbitral tribunal:
10 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 11
Provided that if the Court is satisfied that the
applicant was prevented by sufficient cause from
making the application within the said period of three
months it may entertain the application within a
further period of thirty days, but not thereafter.
(4) On receipt of an application under sub-section
(1), the Court may, where it is appropriate and it is so
requested by a party, adjourn the proceedings for a
period of time determined by it in order to give the
arbitral tribunal an opportunity to resume the arbitral
proceedings or to take such other action as in the
opinion of arbitral tribunal will eliminate the grounds
for setting aside the arbitral award.
(5) An application under this section shall be filed
by a party only after issuing a prior notice to the other
party and such application shall be accompanied by
an affidavit by the applicant endorsing compliance
with the said requirement.
(6) An application under this section shall be
disposed of expeditiously, and in any event, within a
period of one year from the date on which the notice
referred to in sub-section (5) is served upon the other
party.
Section 36. Enforcement 1) Where the time for
making an application to set aside the arbitral award
under Section 34 has expired, then, subject to the
provisions of sub-section (2), such award shall be
enforced in accordance with the provisions of the
Code of Civil Procedure, 1908 (5 of 1908), in the
same manner as if it were a decree of the court.
11 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 12
(2) Where an application to set aside the arbitral
award has been filed in the court under Section 34,
the filing of such an application shall not by itself
render that award unenforceable, unless the court
grants an order of stay of the operation of the said
arbitral award in accordance with the provisions of
sub-section (3), on a separate application made for
that purpose.
(3) Upon filing of an application under sub-section
(2) for stay of the operation of the arbitral award, the
court may, subject to such conditions as it may deem
fit, grant stay of the operation of such award for
reasons to be recorded in writing:
Provided that the court shall, while considering the
application for grant of stay in the case of an arbitral
award for payment of money, have due regard to the
provisions for grant of stay of a money decree under
the provisions of the Code of Civil Procedure, 1908
(5 of 1908).]
Provided further that where the Court is satisfied
that a prima facie case is made out that,–
(a) the arbitration agreement or contract which is
the basis of the award; or
(b) the making of the award,
was induced or effected by fraud or
corruption, it shall stay the award
unconditionally pending disposal of the
challenge under Section 34 to the award.
Explanation.–For the removal of doubts, it is
hereby clarified that the above proviso shall apply to
12 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 13
all court cases arising out of or in relation to arbitral
proceedings, irrespective of whether the arbitral or
court proceedings were commenced prior to or after
the commencement of the Arbitration and
Conciliation (Amendment) Act, 2015.”
Analysis
On a careful perusal of Section 31 (5), it is apparent that the
statute requires the delivery of a signed copy of the arbitral award to
each party. The importance of delivery of a signed copy is not only to
authenticate its correctness but to ensure that the period for its
enforcement u/s 36 or for filing objections u/s 34 begins to run. . The
signed copy would obviously mean signed by the Arbitrator. Still
further, on careful reading of Section 36, it becomes apparent that the
arbitral award becomes enforceable only when the time for making an
application for setting aside the arbitral award, as provided under Section
34, has elapsed. On a careful reading of Section 34 (3), it is apparent
that an application for setting aside the award is required to be made
within a period of three months from the date on which the party making
the application received the signed copy of the arbitral award. Thus, the
emphasis is on three months time from the date on which the party
received the arbitral award. As per the proviso to Sub section 3 , it is
apparent that the statute has provided that the Court can at the maximum
condone the delay of 30 days after the expiry of original period of three
months if sufficient cause for not making such an application within the
period prescribed is shown. The court cannot condone the delay beyond
the period of 30 days. Thus, the statute, while making the provision,
13 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 14
enabled the court to condone the delay but restricted its outer limit to 30
days from the date of expiry of the original period of three months.
However, the three months period would begin to run only from the date
the signed copy of the arbitral award was received by the party. Receipt
of copy of the arbitral award by the party means a signed copy of the
award.
Section 32 of the Act provides for termination of Arbitral
proceedings which essentially means the termination in accordance with
Section 31, which would include delivery of a signed copy of the award
to each party. In a recent judgment passed by the Hon’ble Supreme
Court in Dakshin Haryana Bijli Vitran Nigam Limited vs. M/s
Navigant Technologies Pvt Ltd. (2021) SCC online (SC) 157, their
Lordships held that the termination would take place only when there is
a complete compliance of Section 31 of the Act which would include the
delivery of a signed copy of the award to each party.
Thus, it is mandatory for the sole Arbitrator or the Arbitral
Tribunal to ensure that a signed copy of the award is delivered to each
party so that the limitation as provided under Section 34 begins to run.
In the absence of delivery of a signed copy of the award to each party,
the limitation of three months does not begin to run. Therefore, the
Arbitrators must make an arrangement for the delivery of the signed
copy to each party.
Now, the next issue which needs discussion is what can be
the possible modes of delivery of a copy? One method is to call the
parties on the date of pronouncement of the award and deliver them
14 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 15
signed copies there and then and make endorsement to this effect on the
original copy of the award with signatures of the parties. However,
sometimes, it may not be possible. The Arbitrator can always insist
upon the fact that each of the parties to the arbitration be represented on
the date on which the award is pronounced. In the case of large
organizations, the Arbitrator can insist that an authorized representative,
who is especially empowered/authorized to receive a signed copy of the
award be present. An alternative method can be to ensure that the copies
of the award are remitted to each of the party through speed post or
registered post with acknowledgement due so that the copy is delivered
to the party. The Arbitrator can also send an additional copy on the
email of the party as also by delivering it to the counsels representing
them. If a signed copy of the award is handed over to the parties on the
date of pronouncement, such disputes can be easily avoided.
At this stage, it is important to notice that Hon’ble Supreme
Court in various judgments while interpreting Section 31 has held that
delivery of a signed copy to the party is not a mere formality. The Court
while interpreting the phrase “a signed copy shall be delivered to each
party” has held that the delivery of a signed copy is not only mandatory
but it has to be delivered to a responsible officer representing the party.
If the party is a large organization, then the delivery of copy to the
counsel or clerk has been found to be not sufficient. In this regard,
reliance can be placed on the judgment in Union of India vs. Tecco
Trichy Engineers and Contractors (2005) 4 SCC 239 where in para 8
and 12, the Hon’ble Supreme Court has held as under:-
15 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 16
“8. The delivery of an arbitral award
under sub-section (5) of Section 31 is not a matter of
mere formality. It is a matter of substance. It is only
after the stage under Section 31 has passed that the
stage of termination of arbitral proceedings within the
meaning of Section 32 of the Act arises. The delivery
of arbitral award to the party, to be effective, has to
be “received” by the party. This delivery by the
Arbitral Tribunal and receipt by the party of the
award sets in motion several periods of limitation
such as an application for correction and
interpretation of an award within 30 days under
Section 33(1), an application for making an additional
award under Section 33(4) and an application for
setting aside an award under Section 34(3) and so on.
As this delivery of the copy of award has the effect of
conferring certain rights on the party as also bringing
to an end the right to exercise those rights on expiry
of the prescribed period of limitation which would be
calculated from that date, the delivery of the copy of
award by the Tribunal and the receipt thereof by each
party constitutes an important stage in the arbitral
proceedings.
xxx
12. The learned Single Judge of the High
16 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 17
Court as also the Division Bench have erred in
holding the application under Section 34 filed on
behalf of the appellant as having been filed beyond a
period of 3 months and 30 days within the meaning of
sub-section (3) of Section 34. There was a delay of 27
days only and not of 34 days as held by the High
Court. In the facts and circumstances of the case, the
delay in filing the application deserves to be
condoned and the application under sub-section (1) of
Section 34 of the Act filed on behalf of the appellant
deserves to be heard and decided on merits.”
Next judgment is in State of Maharashtra and others vs.
ARK Builders Pvt. Ltd. (2011) 4 SCC 616. Relevant discussion is in
paras 17 and 18, which are extracted as under:-
“17. In light of the discussions made
above we find the impugned order of the Bombay
High Court unsustainable. The High Court was
clearly in error not correctly following the decision of
this Court in Tecco Trichy Engineers &
Contractors [(2005) 4 SCC 239] and in taking a
contrary view. The High Court overlooked that what
Section 31(5) contemplates is not merely the delivery
of any kind of a copy of the award but a copy of the
award that is duly signed by the members of the
Arbitral Tribunal.
17 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 18
18. In the facts of the case the appellants
would appear to be deriving undue advantage due to
the omission of the arbitrator to give them a signed
copy of the award coupled with the supply of a copy
of the award to them by the respondent claimant but
that would not change the legal position and it would
be wrong to tailor the law according to the facts of a
particular case.”
Next judgment on the subject is in Banarsi Krishan
Committee and Ors vs. Karamyogi Settlers Pvt. Ltd. (2012) 9 SCC
496 and relevant paras are 15 to 17, which are extracted as under:-
“15. Having taken note of the
submissions advanced on behalf of the respective
parties and having particular regard to the expression
“party” as defined in Section 2(1)(h) of the 1996 Act
read with the provisions of Sections 31(5) and 34(3)
of the 1996 Act, we are not inclined to interfere with
the decision [Karmyogi Shelters (P) Ltd. v. Benarsi
Krishna Committee, AIR 2010 Del 156] of the
Division Bench of the Delhi High Court impugned in
these proceedings. The expression “party” has been
amply dealt with in Tecco Trichy Engineers
case [(2005) 4 SCC 239] and also in ARK Builders
(P) Ltd. case [(2011) 4 SCC 616 : (2011) 2 SCC
(Civ) 413] , referred to hereinabove. It is one thing for
18 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 19
an advocate to act and plead on behalf of a party in a
proceeding and it is another for an advocate to act as
the party himself. The expression “party”, as defined
in Section 2(1)(h) of the 1996 Act, clearly indicates a
person who is a party to an arbitration agreement. The
said definition is not qualified in any way so as to
include the agent of the party to such agreement. Any
reference, therefore, made in Section 31(5) and
Section 34(2) of the 1996 Act can only mean the
party himself and not his or her agent, or advocate
empowered to act on the basis of a vakalatnama. In
such circumstances, proper compliance with Section
31(5) would mean delivery of a signed copy of the
arbitral award on the party himself and not on his
advocate, which gives the party concerned the right to
proceed under Section 34(3) of the aforesaid Act.
16. The view taken in Pushpa Devi
Bhagat case [(2006) 5 SCC 566] is in relation to the
authority given to an advocate to act on behalf of a
party to a proceeding in the proceedings itself, which
cannot stand satisfied where a provision such as
Section 31(5) of the 1996 Act is concerned. The said
provision clearly indicates that a signed copy of the
award has to be delivered to the party. Accordingly,
when a copy of the signed award is not delivered to
19 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 20
the party himself, it would not amount to compliance
with the provisions of Section 31(5) of the Act. The
other decision cited by Mr Ranjit Kumar in Nilkantha
Sidramappa Ningashetti case [AIR 1962 SC 666 :
(1962) 2 SCR 551] was rendered under the provisions
of the Arbitration Act, 1940, which did not have a
provision similar to the provisions of Section 31(5) of
the 1996 Act. The said decision would, therefore, not
be applicable to the facts of this case also.
17. In the instant case, since a signed copy of the
award had not been delivered to the party itself and
the party obtained the same on 15-12-2004, and the
petition under Section 34 of the Act was filed on 3-2-
2005, it has to be held that the said petition was filed
within the stipulated period of three months as
contemplated under Section 34(3) of the aforesaid
Act. Consequently, the objection taken on behalf of
the petitioner herein cannot be sustained and, in our
view, was rightly rejected by the Division Bench of
the Delhi High Court.”
Thus, it is by now settled that the delivery of a signed copy
to each party is necessary/sine qua non to begin the running of the period
of limitation as provided under Section 34 (3) of the Act. In this case,
there is no material on record to prove that a signed copy of the award
was delivered. Learned Additional District Judge has dismissed the
20 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 21
application on the ground that the appellant did not produce the copy
allegedly received by him on 19.12.2018. The question in the present
case is not that the appellant has produced the copy or not. The question
is whether a signed copy was delivered to the appellant or not and if
delivered, the date whereof.? On a careful perusal of the record of the
Additional District Judge, it is apparent that a photocopy of the award
was produced by the appellant along with the objection petition filed
under Section 34. The Additional District Judge did not requisition the
record of the Learned Arbitrator, although an application was filed by
the appellant. On a careful perusal of the copy of the award, it is
apparent that it is a photocopy of the copy of the award which has been
attested to be a true copy signed by the Arbitrator. There are two
endorsements on the aforesaid copy of the award. First is on
29.09.2018. It has been written that someone has received the copy of
the award. One cannot make out who has signed the same, however, in
the facts of the case, when learned counsel representing the respondent
admits that he had received the copy on 29.09.2018, it is safe to assume
that he has put his initials. The second endorsement is to the effect that
the file has been received. Again, the court is unable to make out who
has initialed it. It is not the case of the respondent that these initials
belong to the officer representing the appellant. It is the case of the
respondent that the Learned Arbitrator has given him a copy of the
award in an envelope at Faridabad which he later on remitted to the
appellant through speed post from Panipat. Thus, it is not safe to assume
that the Arbitrator had remitted the signed copy of the award,
21 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 22
particularly, when there is no material to prove that the alleged copy of
the award in the envelope was a signed copy and secondly, the same
envelope was sent through speed post, particularly, when it remained in
the custody of the counsel representing the respondent. In the
considered view of the Court, the Arbitrator committed a grave error in
handing over the envelope to the counsel for the opposite party to remit
the same to the appellant. In fact, the requirement is that the learned
Arbitrator or his office should remit the signed copy of the award. Still
further, there is no material to prove that the copy sent was a signed
copy.
In these circumstances, once the respondents have not filed
any reply to the application seeking condonation of delay and the
assertions made therein have not been rebutted, then this Court is left
with no other choice but to accept the correctness of the assertions made
in the application.
Learned Additional District Judge has decided the
application while being oblivious of the statutory requirement that the
Arbitrator is required to remit a signed copy to the party. Still further,
learned Additional District Judge also erred in observing that from the
perusal of the photocopy of the award enclosed with the objection
petition, it is nowhere disclosed that the copy was received on
19.12.2018. As noticed above, the appellant while filing objection
petition disclosed that the copy of the award was received from the sole
arbitrator on 19.12.2018. It was never the case of the appellant that the
certified copy or the signed copy has been delivered to it or a certified
22 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 23
copy has been obtained from the Council. In the absence of a counter or
any material to the contrary, the court erred in not accepting the plea of
the appellant.
Learned Additional District Judge has also erred in
observing that since the appellant has pleaded that it inquired about the
award after the expiry of two months, then it must be assumed that they
came to know of the award in November, 2018. The Additional District
Judge obviously overlooked the requirement of sub section 5 of Section
31. Learned Additional District Judge further erred in doubting the
appellant on the ground that a copy of the award could only be obtained
from the council, however, the same has not been produced. It may be
noted here that it is not the case of the appellant that they obtained a
copy of the award from the council. What has been pleaded is that the
counsel representing the appellant enquired from the learned sole
Arbitrator regarding the award and thereafter, once he was informed that
the award stands pronounced on 27.09.2018, the counsel immediately
collected the copy of the award on 19.12.2018 from the learned sole
Arbitrator.
There is yet another perspective which needs some
deliberation. It has been noticed that the petition under Section 34
alongwith an application for condonation of delay has been filed on
18.04.2019. For a period of approximately 11 months, the courts were
functioning normally before they had to start working in a restrictive
manner due to COVID-19 pandemic. However, the court of learned
Additional District Judge did not even consider the application for
23 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 24
condonation of delay for a long time. In these matters, once there is a
statutory mandate to conclude the arbitration proceedings within a period
of 12 months then the time is the essence of these proceedings.
Therefore, the courts should be sensitive about the time and should not
take such cases in a causal manner.
Although, learned Additional District Judge has not
considered the application for condonation of delay for a period of 30
days after the expiry of the limitation which is the upper limit for
condoning the delay, however, since the respondents have not filed any
reply and a period of nearly 2 and a half years have elapsed from the
date the award was pronounced, no further delay in disposal of the
petition under Section 34 is acceptable. The Court must always bear in
its mind that ‘justice delayed is justice denied’. Moreover, substantive
justice must always be kept above technical errors, especially, when they
are bona fide and carry a sufficient cause. Hence, the delay of 30 days in
filing the petition is condoned. Learned Additional District Judge is
directed to decide the objection petition under Section 34 within two
months, from the date of receipt of copy of this order, positively. The
parties through their counsels are directed to appear before the learned
Additional District Judge on 09.04.2021.
Epilogue
Before parting, it is necessary to sensitize different
organizations which are normally part of the Arbitration. Therefore, let
the Registrar (Judicial) circulate a copy of this order to the respective
Presiding Judges of the various Sessions Divisions in the State of
24 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
FAO-150-2021(O&M) 25
Punjab, Haryana and the U.T. of Chandigarh as also to ‘the Council’ of
both the States and the UT, Chandigarh. Let a copy of this judgment
also be sent to the respective Chief Secretaries of both the States for
getting further information and taking necessary action.
01.04.2021 (ANIL KSHETARPAL)
rekha JUDGE
Whether speaking/reasoned Yes /No
Whether Reportable Yes / No
25 of 25
::: Downloaded on – 04-06-2021 12:54:07 :::
Comments