Tinabhai Bhikhabhai Rathod & Ors. v. Mahindra & Mahindra Financial Services Ltd

Judgment

1. By the above Notice of Motion, the Petitioners seek condonation of delay in filing the abovementioned Arbitration Petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’).

2. The learned Arbitrator has passed his Award on 28th February, 2011. The above Arbitration Petition is filed on 2nd/4th January,

2012. According to the Petitioners, they have received the Award only on NMS 933 of 2012 15th November, 2011 i.e. when the Respondents sought to execute the Award, and consequent thereto the Petitioners received summons from the District Court at Bhavnagar. The Petitioners have submitted that there is a delay of 35 days in filing the above Arbitration Petition.

3. The Respondent No.1 has filed two Affidavits being Affidavit- in-Reply to the Notice of Motion and the Affidavit-in-Reply to the Petition, both dated 13th June, 2012. The Respondent No.1 has also filed an Additional Affidavit dated 30th June, 2012. The Respondent No.1 has denied that there has been a delay of 35 days in filing the Arbitration Petition, as alleged by the Petitioners. It is submitted on behalf of the Respondent No.1 that after the Award was passed on 28 th February, 2011, the learned Arbitrator forwarded a copy of his signed award to the Petitioners by Registered Post AD on 15th March, 2011. On the envelopes containing copies of the Award, the word 'AWARD' in bold letters was affixed by using a rubber stamp. However, the Petitioners refused to accept a copy of the said Award on 23rd March, 2011 because of which the said packets were returned to the learned Arbitrator with the postal remark (in Gujarati) “Levani Na Pade Che” (refused to accept). It is therefore submitted by the Respondent No.1. that refusal of service is good service in law and the said Award is deemed to have been served on the NMS 933 of 2012 Petitioners on 23rd March, 2011. The Petition which is filed on 2nd - 4th January, 2012 therefore suffers from delay of about 197 days. The Petition is therefore hopelessly time barred and since the provisions of Section 34(3) of the Act, has the effect of excluding Section 5 of the Limitation Act, 1963, the said delay cannot be condoned by this Court.

4. It is also pointed out by the learned Advocate appearing for the Respondent No.1 from the aforestated Affidavits filed by the Respondent No.1, that since inception, the Petitioners have refused to accept service of any documents forwarded to them by the Respondent No.1 and/or the Arbitrator and all the packets containing the documents forwarded to the Petitioners have always been returned with the remark “Levani Na Pade Che”.

5. The learned Advocate appearing for the Respondents has pointed out that on 17th August, 2009, a demand notice was sent by Registered Post AD by the Respondent No.1 at the address of the Petitioners as shown in the cause title mentioned above. On 21st August, 2009, the Petitioner refused to accept the demand notice. Hence, the notice was returned to the Respondent No.1 with the postal remark (in Gujarati) “Levani Na Pade Che”.

6. Again on 12th September, 2009, the Advocate for the NMS 933 of 2012 Respondent No.1 sent a notice by Registered Post AD to the Petitioners invoking the arbitration clause and informing the Petitioners about the appointment of arbitrator. Since the Petitioners refused to accept the said notice, the same was returned on 17th September, 2009 to the Advocate for Respondent No.1 for the reason “Levani Na Pade Che”.

7. Similarly, the letter of the learned Arbitrator dated 1st October, 2009 informing the Petitioners about the initiation of arbitration

proceedings and the first date of hearing, as also the statement of claim which was forwarded to the Petitioners by Registered post on 14th November, 2009 have both been returned with the remarks “Levani Na Pade Che”.

8. The learned Advocate for Respondent No.1 therefore, submitted that the question of condonation of delay of about 197 days in filing the Arbitration Petition under Section 34 of the Act does not arise, and the above Notice of Motion and the Arbitration Petition deserve to be dismissed.

9. On 26th June, 2012, this Court inquired from the learned Advocate appearing for the Petitioners as to why the Petitioners refused to accept the service of the letters/notices/proceedings/Award forwarded to them from time to time by the Respondent No.1 and/or their Advocate NMS 933 of 2012 and/or the learned Arbitrator. The learned Advocate appearing for the Petitioners informed the Court that the Petitioners refused to accept the service of documents including the Award, because according to them, no amount was due and payable by them to Respondent No.1. In view thereof, this Court asked the learned Advocate appearing for the Petitioners to keep one of the Petitioners - Mr.Gopal Rathod present on the next date of hearing, interaila to explore the possibility of an amicable settlement between the parties. On 3rd July, 2012, the above matters were mentioned before this Court at around 5.00 p.m. The Petitioners present in Court were of the view that no amounts were due and payable by them to the Respondent No.1 and therefore, the attempt to amicably settle the matter could not be taken any further and the matters were adjourned to 4th July, 2012 for arguments.

10. The Petitioners have filed Affidavits in Rejoinder wherein they have not specifically denied or disputed the fact that they have refused to accept service of the Award on 23rd March, 2011.

11. Today, the learned Advocate for the Petitioners has vehemently argued that unless a signed copy of the Award is actually served on and received by the Petitioners, the time for filing the arbitration petition challenging the said award cannot commence. It is submitted NMS 933 of 2012 that a signed copy of the Award was received by the Petitioners only on 15th November, 2011 and therefore, the Petitioners are entitled to seek condonation of delay in filing the above petitions under Section 34(3) of the Act and the proviso thereto. The learned Advocate for the Petitioners relied on the decisions of the Hon'ble Supreme Court in the case of State of Maharashtra and Ors. V/s. ARK Builders Private Limited1 and in the case of Union of India V/s. Tecco Trichy Engineers and Contractors 2 , wherein the Hon'ble Supreme Court has held that the delivery of arbitral award to the party, to be effective has to be “received” by the party and that the award “received” by the party should be a signed copy of the award.

12. The learned Advocate appearing for the Petitioners has also submitted that Petitioners have filed the execution proceedings before the Court of Principal District Judge, Bhavnagar, which Court has no jurisdiction. It is therefore, submitted that the period during which the proceedings were initiated before the Court having no jurisdiction, needs to be excluded under Section 14 of the Limitation Act, 1963 and therefore, even on this ground, the Notice of Motion taken out by the Petitioners needs to be allowed. In support of this contention, the learned Advocate appearing for the Petitioners has relied upon the decisions of the Hon'ble