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1987 DIGILAW 34 (DEL)

DALMIA DAIRY INDUSTRIES LIMITED v. TOP STYLE APPAREL (PRIVATE) LIMITED

1987-01-23

G.C.JAIN

body1987
G. C. Jain ( 1 ) DALMIA Dairy Industries Ltd. New Delhi (the claimant) appointed M/s Top Style Approval Pvt. Ltd. (the objector) as their selling agents by an agreement dated 20 July, 1978. The objector company was wound up by an order of this court dated March 9, 1979 in C. P. 25 of 1979 and the Official Liquidator, Delhi is incharge of the assets and affairs of the said company. ( 2 ) CERTAIN disputes between the parties arising under the said agreement were referred to the sole arbitrator Justice M. S. Joshi (retired) for adjudication by an order of this Court dated July 19, l984 in suit No. 325a/80. The learned arbitrator made and published his award on September 6, 1985. ( 3 ) THE award was filed in the court and notice of the filing of the award was served on the parties. The Official Liquidator on behalf of the objector company filed objections to the award. It was averred that the arbitration proceedings were fixed for July 13, 1985 and were adjourned to August 6, 1985. The claimant was to file an affidavit by way of evidence on the said date. It was required to give a copy of that affidavit to the objector in advance to enable it to file its affidavit in evidence. However a few days before August 6, 1985 Mr. Dilip Vasudevan, counsel for the claimant informed the counsel for the objector that his affidavit was not ready and that he was seeking more time from the arbitrator and in the circumstance the objector need not appear before the Arbitrator on August 6, 1985. On August 5, 1985 Mr. Vasudevan informed the counsel for the objector that the arbitrator had called him over the phone and had told him that he had decided to settle down it Punjab and wanted to plan the future hearings of this arbitration matter. No further intimation was however given to the objector. Later on the objector was informed that the counsel for the claimant had filed an affidavit in evidence and the arbitrator had proceeded ex-parte against the objector and had proceeded to make the award. The objector s counsel then tried to find the address of the learned Arbitrator in Punjab but did not succeed. It was further averred that copy of the affidavit filed by the claimant was never served on the objector. The objector s counsel then tried to find the address of the learned Arbitrator in Punjab but did not succeed. It was further averred that copy of the affidavit filed by the claimant was never served on the objector. The date fixed for August 6,1985 was not fixed for final hearing of the case; the issues were yet to be framed and that in fact no opportunity was afforded to the objector to file its affidavit or to argue the case before the arbitrator and therefore the award was liable to be set aside. ( 4 ) THE claimant resisted the petition and denied the averments. The following issues were framed :- "1. Whether the award is liable to be set aside on the objections of the Official Liquidator ? 2. Relief. " ( 5 ) THE parties to an arbitration proceeding have an absolute right to be heard and to present their evidence before the arbitrator, if they are deprived of this right the court will not hesitate to set aside the award. ( 6 ) A perusal of the arbitration proceedings shows that hearing in this case was fixed for May 20, 1985. Learned arbitrator on that date allowed the claimant to file rejoinder within a fortnight. The parties were directed to adduce their evidence in the from of affidavit and documents on July 12,1985. Mr. Vasudevan, learned counsel for the claimant undertook to furnish copies of the affidavit to be the objector a week before the said date. The case was however not heard on July 12, 1985 and was adjourned to August 5,1985. On this date none appeared on behalf of the objector. The counsel for the claimant informed the learned arbitrator that the objector was under an impression that the hearing was fixed for August 6, 1985 and consequently the case was adjourned to August 6, 1985. The objector did not appear even on August 6, 1985 and was proceeded ex-parte and ultimately the award was made on September 6, 1985, ( 7 ) THE short question which requires consideration is whether there was any justification for the absence of objector on August 6, 1985. The case set up by the objector is that Mr. The objector did not appear even on August 6, 1985 and was proceeded ex-parte and ultimately the award was made on September 6, 1985, ( 7 ) THE short question which requires consideration is whether there was any justification for the absence of objector on August 6, 1985. The case set up by the objector is that Mr. Vasudevan, learned counsel for the claimant had informed the counsel for the objector that the claimant s affidavit was not ready and he was seeking more time and the objector in these circumstances need not appear before the arbitrator. This contention is supported by an affidavit of Mr. S. C. Mittal, the Official Liquidator, Delhi. On behalf of the claimant an affidavit has been filed by Mr. A. D. Aggarwal, General Manager (Finance) and Secretary of the claimant company denying the averments of Mr. Mittal. However 1 am inclined to accept the version of the Official Liquidator. It is for two reasons. First that Mr. Aggarwal had no personal on personal knowledge as to what transpired between Mr. Vasudevan and the counsel for the objector. Secondly there is nothing on the record to show that the copy of the affidavit filed by the claimant before the learned arbitrator on August 6, 1985 had been supplied to the objector as per the undertaking given by Mr. Vasudevan to the learned arbitrator on July 12, 1985. In my view it has been proved that the objector absented on August 6, 1985 because of the representation made to its counsel by the counsel for the claimant that he would be seeking only an adjournment on that date. The claimant in these circumstances cannot be allowed to take advantage of the absence of the objector on August 6, 1985. The award was consequently liable to beset aside. The issue is decided accordingly. ( 8 ) I consequently set aside the award. ( 9 ) LEARNED counsel for the parties agree that the disputes subject matter of the award may be referred to another arbitrator to be appointed by this court. 1 consequently appoint Justice J. D. Jain (retired) a the sole arbitrator to decide the disputes subject matter of the award. As agreed he will proceed from the stage from where the proceedings were before the learned arbitrator on May 20, 1985. His fee is fixed at Rs. 5000. 1 consequently appoint Justice J. D. Jain (retired) a the sole arbitrator to decide the disputes subject matter of the award. As agreed he will proceed from the stage from where the proceedings were before the learned arbitrator on May 20, 1985. His fee is fixed at Rs. 5000. 00 to be paid by the parties in equal share?. Records of the arbitration proceedings would be sent to him. The parties are directed to appear before the learned Arbitrator on February 3, 1987.