F.A.O No.2885 of 2008 1
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH.
F.A.O No.2885 of 2008
Date of Decision: 12.11.2009
M/s Puneet Construction Company
....Appellant
Versus
Union of India
...Respondent
CORAM : Hon'ble Ms. Justice Nirmaljit Kaur
Present:- Mr. Vipin Mahajan, Advocate
for the appellant.
Mr. Ram Chander, Advocate
for the respondent.
*****
1. Whether Reporters of Local Newspapers may be
allowed to see the judgment ?
2. To be referred to the Reporters or not ?
3. Whether the judgment should be reported in the
Digest ?
**
NIRMALJIT KAUR, J.
This is an appeal against the Order dated 10-05-2008 passed
by the District Judge, Gurdaspur, vide which, the objection petition under
Section 34 of the Arbitration and Conciliation Act, 1996, moved by the
appellant for setting aside the arbitral award dated 29-05-2003, was
rejected.
Learned counsel for the appellant submitted that the Arbitrator
vide ex-parte award dated 29-05-2003, awarded an amount of
Rs.2,64,815/- in favour of the respondent and against the appellant.
While dismissing the petition, the District Judge, Gurdaspur,
F.A.O No.2885 of 2008 2
held the following issues against the appellant :-
1. Whether there are sufficient grounds to set aside the
award dated 29-05-2003 as alleged the application?
OPP
2. Whether the application is within time? OPP
Thereby, holding that the appellant had due notice and did not
appear inspite of notice. Secondly, the same was time barred.
While challenging the said impugned order and award, learned
counsel for the appellant has raised two fold arguments. Firstly, The
appellant step into the witness box as AW/1 and specifically stated on oath
that he was not served with any notice by the Arbitrator to appear before
him for arbitration proceedings. He was cross examined, but nothing
favourable to the respondent came up in the cross examination. The
respondent, in support of their claim, produced one witness, namely,
Subedar Major Balwinder Singh, who stated that award was not passed in
his presence. No postal receipt in support of sending registered letter to
the appellant was produced before the District Judge. Therefore, the
District Judge gravely erred in reaching to the conclusion that the appellant
was served with the notice.
Secondly, the appellant appeared for the first time in
pursuance of the summon, issued by the District Judge and received on
29-11-2003 to appear on 20-12-2003. The objection application was filed
on 17-01-2004, within a period of 30 days, as required under Section 34(3)
of the Arbitration and Conciliation Act, 1996. The District Judge erred in
holding that the appellant was served on 29-11-2003 and therefore, 30
days’ period is to be counted from that date. Whereas, on 29-11-2003, the
appellant was only served to appear before the District Judge on
20-12-2003. When the appellant appeared on 20-12-2003, he came to
know about the ex-parte arbitration award. If 30 days’ period is to be
F.A.O No.2885 of 2008 3
counted from 20-12-2003, the application is within the time. Prior to
20-12-2003, the appellant was not aware about the ex-parte arbitration
award. Therefore, the findings of the District Judge, Gurdaspur, on issue
No.2 are liable to be set aside.
Learned counsel for the respondent, on the other hand,
submitted that the appellant, while appearing as AW-1, has admitted that
he has been residing at the address given in his affidavit, Ex. A.1 and was
present at that address through-out the year 2002-2003 and that being so,
a presumption of service of various registered notices upon him arises in
terms of Section 27 of the General Clauses Act, 1897. That being so, the
contention that the appellant was not served during arbitration
proceedings, is liable to be rejected. Secondly, that no application for
condonation of delay, having been filed, the petition cannot be said to be
within time. Moreover, no question was put to RW-1 Subedar Major
Balwinder Singh, with respect to the receipt of letters, having been sent
under registered cover. As such, it cannot be said that the registered letters
were not issued just because no receipt was produced.
Learned counsel for the parties were heard at length.
The main issue, involved in the present case is, as to whether,
the respondent can take advantage of Section 27 of the General Clauses
Act, 1897. The said Section reads as under :-
“Where any Central Act or Regulation made
after the commencement of this Act authorizes or
requires any document to be served by post, where
the expression “serve” or either of the expressions
“give” or “send” or any other expression is used, then,
unless a different intention appears, the service shall
be deemed to be effected by properly addressing, pre-
paying and posting by registered post, a letter
containing the document, and, unless the contrary is
proved, to have been effected at the time at which the
F.A.O No.2885 of 2008 4letter would be delivered in the ordinary course of
post.”
From the facts and the records, it transpires that letters dated
30-11-2002, 09-01-2003, 20-01-2003, 04-02-2003, 19-02-2003,
05-04-2003 and 05-05-2003 and other similar letters were addressed to
M/s Puneet Construction Company, Onkar Nagar, near Gurudwara, Police
Line, Gurdaspur (Punjab) and it was duly mentioned in these letters that
the same were being sent under registered cover. However, there is no
such receipt of despatch has been pointed out from the record of the case.
Thus, the admission of the appellant AW-1 that he was residing on the
given address i.e. Onkar Nagar, near Gurudwara, Police Line, Gurdaspur
(Punjab), will not cover the case under Section 27 of the General Clauses
Act, 1897. A careful reading of Section 27 of the General Clauses Act,
1897, says that there has to be a prove of the fact that the said registered
letter was posted on the address. Unless and until, the prove of the
despatch of the letter to the particular address is not brought on the record,
it cannot be said that the service has been effected.
Learned counsel for the respondent, however, stated that
RW-1 Subedar Major Balwinder Singh, had appeared along with the record
and he had duly filed his affidavit. In his affidavit, he has stated as follows:-
” The applicant did not turn up, nor submitted
any claim/pleading in defence before the Arbitrator.
Thereafter fresh registered letter was issued to the
applicant vide letter No.P/BKG/Arb/GSR-13/9/E8 dated
19 Feb 2003 to submit pleading in defence by
28.2.2003 but the applicant did not respond. Again
Registered letter No.P/BKG/Arb/GSR-13/10 dated 05
April 2003 was issued to the applicant to submit
pleading in defence by 15 April 2003 otherwise the
case will proceed exparte. But the applicant did not
care to submit any reply/defence.”
Reliance has been placed on the judgment of Hon’ble the
F.A.O No.2885 of 2008 5
Apex Court, rendered in the case of M/s Green View Radio Service vs.
Laxmibai Ramji & another 1991 Civil Court Cases 314. In that case, the
statement of appellant that he had not received the registered post, was
disbelieved. It was otherwise observed that the presumption of the service
of notice arises when the acknowledgment is received, showing its receipt.
However, the said presumption can be rebutted by the addressee by
appearing as a witness and stating that he never received such letter. If his
testimony is accepted then the burden shifts on the plaintiff who wants to
rely on such presumption to prove by oral or documentary evidence to
prove the service of such letters on the addressee and accordingly, it was
held in para 3 of the same as under :-
“3. In this connection, we may also point out
that the provisions of Section 106 of the Transfer of
Property Act require that notice to quit has to be sent
either by post to the party or be tendered or delivered
personally to such party or to one of his family members
or servants at his residence or if such tenant or delivery
is not practicable, affixed to a conspicuous part of the
property. The service is complete when the notice is sent
by post. In the present case as pointed out earlier, the
notice was sent by the plaintiff’s advocate by registered
post acknowledgment due. The acknowledgment signed
by the party was received by the advocate of the plaintiff.
Thus, in our view the presumption of service of a letter
sent by registered post can be rebutted by the
addressee by appearing as witness and stating that he
never received such letter. If the acknowledgment due
receipt contains the signatures of the addressee himself
and the addressee as a witness states that the never
received such letter and the acknowledgment due does
not bear his signature and such statement of the
addressee is believed then it would be a sufficient
rebuttal of the presumption drawn against him. The
burden would than shift on the plaintiff who wants to rely
on such presumption to satisfy the Court by leading oral
F.A.O No.2885 of 2008 6or documentary evidence to prove the service of such
letter on the addressee. This rebuttal by the defendant of
the presumption drawn against him would of course
depend on the veracity of his statement. The Court in the
facts and circumstances of a case may not consider
such denial by the defendant as truthful and in that case
such denial alone would not be sufficient. But if there is
nothing to disbelieve the statement of the defendant then
it would be sufficient rebuttal of the presumption of
service of such letter or notice sent to him by registered
post.”
In the present case, there is nothing to show that the
registered letters were dispatched or whether they were received or not.
No receipt with respect to its dispatch or acknowledgment received,
showing its receipt, has been placed on record. The appellant duly
appeared as AW-1 and put forth his testimony that he had not received any
such letter. Thus, thereafter, it was upon the respondent to prove the
service of such letter on the addressee. No postal receipt in support of
sending the registered letter to the appellant was produced. No postal
receipt is found to be attached in support of the registered letters. When no
postal receipts were produced, the presumption of delivery cannot be
raised. There is no acknowledgment. Section 27 of the General Clauses
Act, 1897, may come into play if acknowledgment was sent along with the
registered letter, if any. In the present case, it is apparent that there was no
acknowledgment card attached. Hence, the question of its having been
received back with due acknowledgment does not arise. In such a
situation, there is no service as per Section 27 of the General Clauses Act,
1897.
The learned counsel for the respondent, however, submitted
that the appellant did not put any question to the witness RW-1 with
respect to the receipt of these letters. However, I do not find any merit in
F.A.O No.2885 of 2008 7
the argument so raised by learned counsel for the respondent, as much as,
in case, the respondents were in possession of the receipt, then the same
was best evidence to produce that the Registered letters had been duly
received by the appellant and they were duly served. Not having produced
the receipts on record invites adverse inference against the respondent.
Even the affidavit submitted by RW-1 Subedar Major Balwinder Singh,
which is relied upon by the respondent, is silent and not a word has been
mentioned about the receipt of these registered letters. Even otherwise,
there is no reason as to why the appellant should not have appeared to
contest the claim, in case, they had been duly served. It is obvious that
they had no knowledge of the appointment of the Arbitrator or the award till
29-11-2003 i.e. the date, when the summons for the execution of the award
were received.
Thus, the findings recorded by the District Judge, Gurdaspur,
that the appellant did not appear before the Arbitrator, inspite of the
knowledge that the Arbitrator had been appointed, cannot be sustained
and the same is, accordingly, set aside. Once, it is held that the appellant
was not served and nor did, he receive the letters or the award, it
transpires that the appellant learnt about the award and the execution
proceedings for the first time on 29-11-2003. It is not denied that the
appellant had received the summons of the execution proceedings on 29-
11-2003 for 20-12-2003. Thus, taking 29-11-2003, as the date of the
knowledge of the award, the petition filed on 17-01-2004 is well within the
limitation period, as prescribed under Section 34(3) of the Arbitration and
Conciliation Act, 1996, which is as under :-
“34(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
F.A.O No.2885 of 2008 8request had been disposed of by the Arbitral
Tribunal:
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.”
Three months’ period from 29-11-2003, when he first learnt
about the award, expired on 28-02-2004. The petition was filed on
17-01-2004. Thus, the same would be within the limitation. Thus, the
following conclusion by the District Judge, while holding the same to be
time barred, is contradictory, which is as follows :-
” XXX XXX XXX
25. Though it is neither here or there that the
petitioner was not aware of making of the Award of
May 29, 2003 but even if the plea that petitioner came
to know of passing of the award during pendency of
the execution proceedings is accepted to be correct,
though arguendo, it transpires that the petitioner was
served in the execution proceedings on 29-11-2003
and even if the explanation was found to be valid for
not presenting the petition within period prescribed by
sub-section (3) of Section 34 of the Arbitration and
Conciliation Act, 1996, it has been laid down that even
if Court is satisfied that the petitioner was prevented by
sufficient cause from making petition within three
months, petition filed beyond 30 days of the expiry of
those three months, cannot be entertained. Thus,
petition filed on 17-01-2004, cannot be said to be
within time by any stretch of imagination, the date of
award being May 29,2003.
The limitation cannot be taken from the date of the award but
from the receipt of the award. The award was never received by the
appellant. He came to know about the award of the execution proceedings
for the first time on 29-11-2003, when he was served to the execution
F.A.O No.2885 of 2008 9
proceedings. Thus, the limitation has to be counted from this date. Thus,
the conclusion of the District Judge, Gurdaspur that the petition filed on
17-01-2004, is not within time, cannot be accepted, by any stretch of
imagination.
Under Seciton 34(2)(iii) of the Arbitration and Conciliation Act,
1996, the award can be set aside, in case, 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.
The award, as already held above, is ex parte and passed without proper
notice to the appellant. The Objection Petition under Section 34 of the
Arbitration and Conciliation Act, 1996 was also well within limitation.
In view of the above, the Order dated 10-05-2008 passed by
the District Judge, Gurdaspur, is set aside. However, the parties are at
liberty to proceed afresh, in accordance with law.
The appeal is allowed in the above terms.
(NIRMALJIT KAUR)
12.11.2009 JUDGE
gurpreet