A.Rama Goud v. M/s.Lakshmi General Finance Limited & Ors.

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 9-9-2009CORAMTHE HONOURABLE MR.JUSTICE M.CHOCKALINGAMANDTHE HONOURABLE MR.JUSTICE R.SUBBIAHOSA Nos.250 to 253 of 2009andMP Nos.1, 1 and 1 of 2009A.Rama Goud.. Appellant in all appealsvs1.M/s.Lakshmi General Finance Limited No.47, Whites Road Chennai 600 014.2.G.Panduranga Goud2.Subbaraya Somasundaram.. Respondents in all appealsOriginal side appeals preferred under Order XXXVI Rule 9 of theOriginal Side Rules, Clause 15 of the Letters Patent read withSection 37 of the Arbitration and Conciliation Act, 1996, against theorder of this Court made in Tr.O.P.Nos.432, 441, 442 and 443 of 2006dated 13.8.2007.For Appellant: Mr.K.MuthukumaraswamyFor Respondents: Mrs.Radhika Krishnan for M/s.Sarvabhauman Associates for R1COMMON JUDGMENT(Judgment of the Court was delivered by M.CHOCKALINGAM, J.)All these appeals challenge a common order of the learned SingleJudge of this Court made in Tr.O.P.Nos.432, 441, 442 and 443 of 2006whereby all those petitions seeking to set aside the arbitral awardsdated 30.4.1999, made by the third respondent arbitrator, weredismissed.2.The impugned order came to be passed under the followingcircumstances:(a) The appellant/petitioner entered into separate hire purchaseagreements dated 4.2.1995, with the first respondent in respect of1994 Model Mitshibushi Canter vehicles, and the second respondentstood as guarantor. The petitioner agreed to repay the entire amountin 36 monthly instalments in each case. In view of the default https://hcservices.ecourts.gov.in/hcservices/ committed in making the instalment payments as agreed upon, the firstrespondent took possession of the vehicles and sold the same, and thesale proceeds were given credit to the accounts of the appellant.Demands were made for the balance. Since the demand was not met, thefirst respondent referred the matter for arbitration on 13.3.1998, inrespect of arbitration case Nos.23 and 24/98 and on 12.8.1998 inrespect of arbitration case Nos.72 and 73/98. (b) After the matter was referred to arbitration, the arbitraltribunal sent notices to the parties to appear before the arbitratoron 17.4.1998, in respect of arbitration case Nos.23 and 24/98. But,the appellant and his guarantor namely the second respondent, did notturn up. Hence the first respondent made the claim statement on14.8.1998, and copies of those statements were sent to the appellantand the second respondent along with the notices for their appearanceon 11.9.1998. The appellant received the notice; but, the noticesent to the second respondent was returned as not claimed. Then thearbitral tribunal directed the claimant to take steps to serve thesame on the appellant and the second respondent by way of substitutedservice by publication in Andhra Prabha circulated in Hyderabad forthe hearing namely 9.10.1998. Despite publication, they did notappear. Hence on 9.10.1998, the arbitral tribunal set theappellant/petitioner and the second respondent ex-parte and proceededfurther. (c) Insofar as arbitration case 72 and 73/98, notices were issuedto the parties for their appearance on 18.9.1998 but returnedunserved with an endorsement "not claimed". On 23.10.1998, claimstatements were filed in both the cases. Notices along with theclaim statements were sent to the appellant and the second respondentrequesting them to appear on 20.11.1998, for filing their objections.The appellant received notice; but the notice sent to the secondrespondent was returned as not claimed. Pursuant to the order forsubstituted service to be effected in Andhra Prabha by fixing thedate for appearance of the appellant and the second respondent on18.12.1998, publication was effected; but, the parties did notappear. (d) Under the above stated circumstances, the arbitral tribunalexamined P.W.1 in all the cases and marked exhibits. On scrutiny ofthe evidence both oral and documentary, the arbitral tribunal passedseparate awards to the effect that insofar as the arbitral case23/98, the appellant and the second respondent were directed to payto the claimant Rs.1,27,958/- with future interest at 18% per annumfrom 9.2.1996 till the date of full realisation. As far as arbitralcase 24/98 is concerned, the appellant and the second respondent aredirected to make payment of Rs.1,13,967/- with future interest at 18%per annum from 29.2.1996 till date of realisation. Insofar asarbitral case 72/98, the appellant and the second respondent have topay Rs.1,76,765/- with future interest at 18% per annum from11.6.1996 till realisation. As far as arbitral case 73/98 wasconcerned, the appellant and the second respondent were directed topay Rs.1,27,958/- with future interest at 18% per annum from 9.2.1996till realisation. https://hcservices.ecourts.gov.in/hcservices/ (e) When the above OPs to set aside the awards were presentedbefore the Registry, they were returned for presentation before theappropriate Court. Thereupon, the OPs were presented before the CityCivil Court on 21.3.2002 and subsequently transferred to this Court. (f) When the OPs were taken up for enquiry by this Court, therespondents urged that all the OPs were barred by limitation. Then,there was a direction to the arbitrator for the purpose of productionof records of the arbitral tribunal before this Court so that theCourt could verify whether the original petitions were filed in timewith reference to the date of service of the awards. On perusal ofthe entire records produced by the arbitrator, it was found thatthere have been acknowledgement cards and also the returned coverswith proper endorsements. It was represented to the Court that therewas scope for settlement, and hence the Court adjourned the matter to25.7.2007 and report if settled. But, the talks of settlement did notfructify, and hence the matter was taken up for enquiry. It wascontended by the first respondent's side that all the OPs werehopelessly barred by time. Under the circumstances, the Court tookthe said question for consideration and found that all the OPschallenging the awards were made beyond time and hopelessly barred bylimitation and dismissed the petitions. Hence these appeals havearisen.3.The only question that would arise for consideration is whetherthe OPs filed seeking to set aside the awards dated 30.4.1999, werebared by limitation?4.What was all contended before the learned Single Judge andequally here also by the appellant's side is that he received thenotices from the Court of V Additional Chief Judge, City Civil Court,Hyderabad, in EP Nos.5, 6, 7 and 8 of 2001; that on enquiry, he cameto know that those execution petitions were filed on the basis of thearbitral awards dated 30.4.1999, made by the third respondent in theabove arbitral cases 23, 24, 72 and 73 of 1998 respectively; thatthereafter, he sent a letter to the arbitrator on 29.9.2001,informing him that he has not received the copies of the arbitralawards and requested that he should be furnished with copies of thesame; that the arbitral awards copies were served upon him on16.10.2001; and that he filed OPs on 17.1.2002, on the reopening ofthe Court after Christmas holidays. It was his further case thatthough the arbitral awards were passed on 30.4.1999, they were servedupon him only on 16.10.2001; that thereafter, he has filed thepetitions after Christmas holidays on 17.1.2002, and thus all the OPswere in time. 5.Contrary to the above, it was contended by the learned Counselfor the first respondent that the petitions were hopelessly barred bylimitation, and hence the order of the learned Single Judge has gotto be sustained.6.The Court paid its anxious consideration on the submissionsmade.7.Under the aforesaid circumstances, invoking the arbitralclause, the first respondent made its claims against the appellant in https://hcservices.ecourts.gov.in/hcservices/ arbitral case, 23, 24, 72 and 73 of 1998, and the arbitral awardswere made on 30.4.1999. In short, the case of the appellant was thathe came to know about the passing of the awards only on service ofthe notice in E.P.Nos.5, 6, 7 and 8 of 2001 on the file of the VAdditional Chief Judge, City Civil Court, Hyderabad, and thereafter,he made an enquiry, and on coming to know about the arbitralproceedings, he sent a communication to the arbitrator on 29.9.2001requesting him to send copies of the awards, and they were served onhim only on 16.10.2001, and on 17.1.2002, immediately after theChristmas holidays were over, he filed the petitions, and thus it waswithin 3 months from the date of service of the awards in questionand thus it was in time. On the contrary, it was contended by thefirst respondent's side that the averment that the arbitral awardswere served upon him only on 16.10.2001 was false; that the servicewas effected even on 6.5.1999 itself; that the petitions to set asidethe awards were not filed within 3 months, but made only on17.1.2002, and thus it was barred by time. In such circumstances, ithas become necessary to decide whether there was service of theawards on the appellant as contemplated under the provisions of theArbitration and Conciliation Act. Section 3 of the Arbitration andConciliation Act reads as follows:"3.Receipt of written communications:- (1) Unless otherwiseagreed by the parties,-(a) any written communication is deemed to have beenreceived if it is delivered to the addressee personally orat his place of business, habitual residence or mailingaddress, and(b) if none of the places referred to in clause (a) can befound after making a reasonable inquiry, a writtencommunication is deemed to have been received if it is sentto the addressee's last known place of business, habitualresidence or mailing address by registered letter or by anyother means which provides a record of the attempt todeliver it.(2)The communication is deemed to have been received on theday it is so delivered.(3)This section does not apply to written communication inrespect of proceedings of any judicial authority."8.From the very reading of the above, it would be quite clearthat any written communication is deemed to have been received if itis delivered to the addressee personally or at his place of business,habitual residence or mailing address, while Sub-clause (b) providesthat after making a reasonable enquiry, if none of the placesreferred to in Sub-clause (a) could be found, a written communicationif sent to the addressee's last known place of business, habitualresidence or mailing address by registered letter or by any othermeans which provided a record of attempt to deliver it, should bedeemed to have been received. In the instant case, the learnedSingle Judge on perusal of the materials and records produced by thearbitrator has pointed out that the arbitral awards were sent to theappellant/petitioner to the address given in the agreement namely102, LIC Quarters, Domelguda, Hyderabad, A.P. Both the cover and theacknowledgement bore the postal seal of Besant Nagar Post Office,Chennai, dated 3.5.1999, and on the other side of the cover there was https://hcservices.ecourts.gov.in/hcservices/ a postal seal of Gandhi Nagar Post Office of Hyderabad with the date5.5.1999. An endorsement of the postal authorities on 6.5.1999 as"addressee left" is also seen, and the RPAD covers were returned tothe arbitral tribunal. Equally, the awards were also sent to thesecond respondent by RPAD; but it was returned to the arbitraltribunal. As found in Sub-clause (b), this mode of service is onecontemplated in Sec.3(1)(b) of the Act. Thus, the awards were sent byregistered post to the appellant's last known place of business. Atthis juncture, the decision relied on by the learned Counsel for thefirst respondent and reported in 2009(1) R.A.J. 458(SC) (KAILASH RANIDANG V. RAKESH BALA ANEJA AND ANOTHER) is squarely applicable to thepresent facts of the case.9.It is pertinent to point out that originally the notices weresent to the appellant immediately after the initiation of thearbitral proceedings only to the said address. The appellant hasalso received the same; but the second respondent has returned it asnot claimed. This would indicate that the appellant was residing inthe said address only. Hence it has to be held that there was aproper service of the awards on him. In such circumstances, thecontention put forth by the appellant's side that he came to knowabout the arbitral proceedings only on the service of notice in theEP proceedings pending on the file of the V Additional Chief Judge,City Civil Court, Hyderabad, and thereafter, he sent a communicationto the arbitrator requesting for sending copies of the awards, and hegot the copies only on 16.10.2001, and then he filed the petitionswithin a period of three months cannot be countenanced. Thereforethe contentions put forth by the appellant's side have got to berejected as meritless and accordingly, they are rejected. The orderof the learned Single Judge does not require any disturbance in thehands of this Court. 10.In the result, these original side appeals are dismissedconfirming the order of the learned Single Judge. The parties willbear their own costs. Consequently, connected MPs are also dismissed. Sd/Asst.Registrar/true copy/Sub Asst.RegistrarnsvToThe Sub Assistant Registrar,Original Side,High Court, Madras.4 ccs To Mr.V.Sanjeevi, Advocate, SR.45599OSA Nos.250 to 253 of 2009KS(CO)SRA(22/9/2009)