NIKHILESH MUKHERJEE v. O. N. G. C — 1999 DIGILAW 38 (CAL)

RANAJIT KUMAR MITRA, J. ( 1 ) THE Court: In this application the petitioners had prayed for an order to enable them to urge the grounds set out in paragraph 34 of the petition, in support of their pending application for setting aside an exparte decree dated December 24. 1996. They had also prayed for an order of stay of operation of the decree, and stay of further proceedings in execution of the decree. In the petition it had been alleged, that in an arbitration proceedings between the parties the petitioners in their statement of claim a sum of Rs. 76,51,108. 60, and in its counter statement the respondent had claimed a sum of Rs. 4,12,76,316. 67. After six sittings in the reference it would appear, the arbitrator had made and published two separate awards in respect to the claim and the counter claim. The arbitrator had adopted the procedure, it had ben alleged, in compliance with the court's order dated February 24, 1986, that the arbitrator would be appointed in "both the references". ( 2 ) ACCORDING to the petitioners, on June 30, 1987 they had received a copy of an award, under a covering letter written to the Registrar, Original Side, both dated June 6, 1987 and from that award the petitioners had come to learn that their claim had been rejected. An application to set aside the award was made on behalf of the petitioners before this court, on July 28, 1987. The respondent had filed its affidavit-in-opposition on November 16, 1987, and according to the petitioners it was then that, for the first time the petitioners came to learn that the arbitrator had made a separate award in respect to the counter-claim of the respondent, and had awarded in favour of the respondent a sum of Rs. 1,59,50,139. 39. The petitioners alleged, that no notice under sections 14 (1) or 14 (2) was served on them in respect to the award made in favour of the respondent, and no notice under section 14 (2) was served in respect to the award rejecting their claim. It was alleged in the petition that, "after various proceedings initiated and orders made from time to time by the Hon'ble Court, the petitioners caused a search to be made on 5th August, 1998 and thereafter, of the records of the Hon'ble Court on the advice of their learned counsel. It was alleged in the petition that, "after various proceedings initiated and orders made from time to time by the Hon'ble Court, the petitioners caused a search to be made on 5th August, 1998 and thereafter, of the records of the Hon'ble Court on the advice of their learned counsel. " The petitioners alleged, that on September 30, 1996 the advocates for the respondents, by their clerk had purported to serve on the petitioners, notice under section 14 (2) in respect to the award in favour of the respondent at premises No. 15/1, Strand Road, Calcutta. In the affidavit of service, filed by that clerk, according to the petitioners the name of the person who had allegedly received the notice had not been disclosed, not was there any explanation as to why the notice had not been served at the address of the petitioners as appeared in the cause-title of their Statement of Claim, and consequently service of notice under section 14 (2) was bad. According to the petitioners they had no knowledge of the filing of the award until "only recently upon search of court records," and therefore they may be allowed to rely upon the grounds set out in the petition. ( 3 ) IT would appear from the records, that upon receipt from the arbitrator the award which had been made in favour of the respondent, the Registrar, Calcutta High Court, Original Side, found that the award had not been stamped and under his covering letter dated March 2, 1998 he sent the award to the Collector of Calcutta for adjudication. More than eight years had elapsed. Neither of the parties had taken any step in the matter. By a letter dated May 18, 1996 the advocates for the respondent requested the Collector of Calcutta to intimate them, as to the amount of stamp duty that may be payable on the award to enable them to deposit such amount, and serve the notice under section 14 (2) of the Act. The Collector, by its letter dated June 4, 1996 had informed the advocates for the respondent, that the award could not be traced, and requested to be furnished with a copy of the award for the purpose of adjudication. The Collector, by its letter dated June 4, 1996 had informed the advocates for the respondent, that the award could not be traced, and requested to be furnished with a copy of the award for the purpose of adjudication. An application in those circumstances was made before the court, on behalf of the respondent, with a prayer for a direction on the Collector to reconstruct and/or process the duplicate award. The court made an order dated August 1, 1996 and directed the Collector to process the duplicate award within seven days, and the advocates of the respondents to serve copies of the application on the Collector and also the advocates on record for the petitioners. The advocates for the petitioners accordingly had been served, it was alleged by the respondent, and that they had received a copy of the petition with all annexure, which included a copy of the duplicate-award and a copy of the covering letter both dated June 6, 1987. By an order dated September 6, 1996 the court allowed the copy award to be filled by the advocates for the respondent before the Registrar, Original Side of this court. The petitioners chose not to appear before the court. By an order dated December 24. 1996 judgment-upon-award and a decree was made by the court, and again the petitioners had chosen not to be represented. The respondents instituted execution proceedings, and by orders dated April 2, 1998 and June 17, 1998 the court appointed Receiver with a direction to sell. ( 4 ) IT was contended by counsel for the petitioners that though the notice under section 14 (2) could be served by word of mouth, it was mandatory that it must be served by court, and that the alleged service was, if at all, admittedly by the advocates for the respondent. In support of his contention he cited and relied on the decision reported in AIR (1996) SC 3421. As regards service of the copy of the petition with the award annexed to it, on the advocates for the petitioners by the advocates for the respondent, in compliance with the order dated August 1, 1996, it was submitted by counsel for the petitioners that at that time the advocate on whom service was alleged to have been made were not acting for the petitioners and were not authorised to accept the service on their behalf. The advocate concerned had filed an affidavit, and stated that indeed he had on behalf of the petitioners filed the application for setting aside the award rejecting their claim but that he had "never received any further instruction" from the petitioners, till about 17th May, 1997 when the petitioners had approached him and sought his advice about an exparte decree and judgment upon award dated 24th December, 1996. It was urged by counsel on behalf of the petitioners, that without any indication the arbitrator had abruptly concluded the proceedings, without taking any oral evidence or considering documents material for the purpose of adjudicating the claim of the petitioners. The arbitrator had, therefore, misconduct himself as also the proceedings, he argued, and that the award was perverse. In support of his submissions he cited and relied on decisions reported in 1975 (2) SCC 236 ; 53 CWN 828, and AIR (1987) Delhi 148. According to him, admittedly the award was not stamped and that therefore, any question of knowledge of the filing of the award could only arise after the award had been stamped and filed afresh, and that notice of such filing would necessarily have to be served on the parties by the court. In support of his submissions, he cited and relied on the decisions reported in AIR (1993) SC 2629, and AIR (1993) SC 1245. The order dated August 1, 1996, he submitted was in disregard to the findings of the Supreme Court and was per incurain, as this court had no jurisdiction to make the order and that there was no authority given by the arbitrator to the respondent for filing of the award. He argued, that if an order was a nullity then the factum of the order not being valid could be urged in a collateral proceedings, and he referred to a decision reported in AIR (1954) SC 340. ( 5 ) THE respondent in its affidavit in opposition alleged, that the petition was barred by the laws of limitation and that the principles of resjudicata operated as the claim of the petitioners had already been adjudicated. According to the respondent, the notices under sections 14 (1) and (2) of the Act had been duly served by the respondent and received by the petitioners. According to the respondent, the notices under sections 14 (1) and (2) of the Act had been duly served by the respondent and received by the petitioners. The Custom House the address where the notice had been served and received was the place from where the petitioners were carrying on business, it was alleged by the respondent and strong reliance was placed on the letter head of the document dated June 14, 1983 being annexure "a' to their affidavit. It was argued by counsel for the respondent, that the Supreme Court in its decision reported in AIR (1975) SC 1259 had laid down, that communication of the information that the award had been filed, was sufficient compliance with the requirements of section 14 (2) of the Act; and that the petitioners admittedly had such information, as early as November 1997 from the affidavit of the respondent filed in opposition to the petitioners' setting aside application, and again on August 5, 1996 when their advocate had been served with the copy of the application together with the award annexed to it, in the compliance with the order of this court dated August 1, 1996. In support of his submissions counsel for the respondent cited and relied on decisions reported in AIR (1993) SC 2629; AIR (1988) SC 2054; AIR (1983) Cal. 148; AIR (1976) Cal. 406; AIR (1962) SC 666; AIR (1952) Cal. 227. According to him the petitioners had notice of the factum of the filing of the award; the order allowing the advocates for the respondent to file the award; and of the order directing the Collector of Calcutta to adjudicate the copy-award, but the petitioners had not raised any objection within the period of limitation, and consequently the petitioners were stopped from challenging the orders of the court at this stage, and that they would be deemed to have waived their rights in that respect. The award was a non-speaking award, argued counsel for the respondent, and that the court would not sit in appeal over the award or ascertain whether the arbitrator had considered material documents or what documents had been placed before the arbitrator or should the arbitrator have taken oral evidence. The award was a non-speaking award, argued counsel for the respondent, and that the court would not sit in appeal over the award or ascertain whether the arbitrator had considered material documents or what documents had been placed before the arbitrator or should the arbitrator have taken oral evidence. Advocates for the petitioners, he submitted, had accepted service of the copy of the petition with the award annexed to it on August 5, 1996 and had accordingly affixed his signature in the peon book of the advocates of the respondent, and he relied strongly on the corresponding annexure to the affidavit in opposition. ( 6 ) SEVERAL applications had been made by the petitioners in this matter which were pending in this court. It was the choice of the petitioners to have this application heard and disposed of. At the very outset, counsel for the petitioners made it clear that the grounds as set out in paragraph 34 of the petition, were sought to be urged in the setting aside application by the petitioner of the award which had been made in favour of the respondent. That the award was a non-speaking award, was admitted by the parties. It was therefore clear, that this court would not sit in appeal over the conclusions of the arbitrator or re-examine and reappraise the evidence which had been considered by the arbitrator. It appeared to me throughout the conduct of this application that less stress was sought to be given as to the efficacy of the grounds being sought to be urged by the petitioners. Elaborate submissions were however, made as to why the award ought to be set aside and the decree stayed. A prayer to stay the decree at this stage, would necessarily require the court to look into the status of the decree. In other words, had the decree become final. If the answer was in the negative, court must then consider allowing the petitioners to urge the grounds and the other ancillary prayers. Very little would remain, to be adjudicated in the event it was found that the decree had become final and the period of limitation was over. In other words, had the decree become final. If the answer was in the negative, court must then consider allowing the petitioners to urge the grounds and the other ancillary prayers. Very little would remain, to be adjudicated in the event it was found that the decree had become final and the period of limitation was over. ( 7 ) IT was settled law, that where a decree was made after giving due notice to the parties of the filing of the award, and allowing the statutory period for applying to set aside the award to expire, the decree would become final. Judicial opinion on the topic was unanimous, that under section 17 of the Act, a judgment must be pronounced and a decree must follow where the conditions of sections 14 and 17 of the Act had been complied with. The decree, in those circumstances, even though pronounced in the absence of the parties, the Supreme Court has held, cannot be referred to as an exparte decree. ( 8 ) ON June 30, 1987, according to the petitioners, they had received the covering letter dated June 6, 1987, written by the arbitrator to the Registrar, Original Side and also a copy of the award rejecting their claim. The text of the covering letter would appear to be:"i have made and published my award in the above matter on 6th June 1987. I am sending herewith the original Award and also documents and papers submitted to me by the parties in the course of Arbitration proceedings. " ( 9 ) AT the end of the enclosed award, also dated June 6, 1987, rejecting the claim of the petitioners, the arbitrator had also written. "as I am passing separate Award in respect of Respondent Oil and National Gas Commission's claim, I do not pass any Award for counter claim in these proceedings. " ( 10 ) ASSUMING the petitioners had neither received the forwarding letter, nor the award, which had been separately made, in respect to the claim of the respondent, the obvious question that would surely arise would be that were the petitioners not put on enquiry? It was an admitted position that the petitioners had filed a setting aside application in respect to the award rejecting their claim on July 28, 1987. It was an admitted position that the petitioners had filed a setting aside application in respect to the award rejecting their claim on July 28, 1987. and in the affidavit in opposition, the respondent had stated that the arbitrator had made a separate award in respect to their counter-claim. Indeed, there was no scope for sustaining the allegation by the petitioners, that section 14 (1) had not been complied with by the arbitrator, or that there was an infringement of the provisions contained in Rule 3 of the Rules of the Original Side of this court. The petitioners had the right to urge such allegations and make an application to set aside the award after the petitioners had come to learn that a separate award had been made in respect to the counter-claim of the respondents. The petitioners had taken no action in the matter and chose to remain silent. ( 11 ) THE period of limitation of thirty days, for filing objection to set aside an award commenced from the date of service of the notice under section 14 (2), and service must be issued by the court and served upon the parties. Such notice however, need not be in writing and could be in the form of an intimation or communication. In the decision reported in AIR (1996) SC 3421 Their Lordships were of the view "it is the substances and not the form of the notice which is relevant and once it is established that a notice or communication or information of the filing of the award has been issued by the court and served on the party concerned, the statutory requirements of section 14 (2) of the Act would stand satisfied. " The facts of the case before this court depicted, that such notice had been issued by the court by the order dated August 1, 1996, and a copy of which admittedly had been served upon and received by M/s. Das and Bhar advocates for the petitioners by signing the peon book of the advocates for the respondent. A xerox of the relevant page of the peon book, recording the receipt and the signature, has been annexed to the affidavit filed by the respondents. A xerox of the relevant page of the peon book, recording the receipt and the signature, has been annexed to the affidavit filed by the respondents. At all material times M/s. Das and Bhar were and still are the advocate on record for the petitioners, as would appear from the pleadings of the petitioners and also the affidavit of their advocate, yet it was seriously contended that M/s. Das and Bhar had no authority to accept the service of notice in respect to that particular application, which related to the award in favour of the respondent. An affidavit had been filed by, one Dipendra Kumar Bhar, "an advocate carrying on profession under the name and style of M/s. Das and Bhar". It appeared in the affidavit that he had on behalf of the petitioners filed the setting aside application in respect to the award rejecting the claim of the petitioners, and without denying the receipt of the copy of the petition and the enclosed award he stated that, "since A. P. No. 108 of 1996 was separate and independent proceeding relating to a different matter other than the then pending application for setting aside of Nil award, I took no note of the said alleged service nor did I inform or communicate anything there about to the respondent herein. " Apart from the fact that in his affidavit, he had admitted that at the material time he had been acting on behalf of the petitioners and that he had filed the setting aside application, and that he was aware from the affidavit in opposition of the respondent that the arbitrator had made two awards in the same reference, he had failed to indicate as to why he had signed the peon-book and accepted the service. There was nothing to prevent him from refusing to accept or returning the petition to the advocate for the respondent. The contents of the affidavit were wholly unreliable and are disregarded by this court. The episode disclosed a pathetic instance of wrongful and blatant collusion between advocate and client with intent to mislead the court malafide, by concocting a story quite fictituous. The conduct of the advocate is reprehensible and unworthy of the noble profession he had claimed to be pursuing. The episode disclosed a pathetic instance of wrongful and blatant collusion between advocate and client with intent to mislead the court malafide, by concocting a story quite fictituous. The conduct of the advocate is reprehensible and unworthy of the noble profession he had claimed to be pursuing. After maintaining silence for more than eight years, why on August 5, 1998 the petitioners had found it necessary to consult their counsel and on his advice caused a search to be made into the records of this court or why the receiving clerk at the Custom House had accepted service of the notice by putting his signature on the business-seal of the petitioners remained unexplained before this court. The court by its order dated September 6, 1996 had authorised the advocates for the respondent to file the award before the Registrar, Original Side. I would therefore, be inclined to hold that there were no irregularities as regards compliance with section 14 (1) or (2) of the Act. ( 12 ) IN the circumstances I would shortly deal with some of the decisions which had been before the court by counsel for the petitioners. In the decision reported in 1975 (2) SCC 236 , it would appear that the award was a speaking award, and Their Lordships had held the finding of the arbitrator rationally inconsistent and that the award therefore suffered from a "manifest error apparent ex-facie". The Hon'ble Judges in the appeal court in their decision reported in 53 CWN 828, were of the view that, "to allow the arbitrators to award such damages would be to legalise an act which has been declared to be an offence under the relevant statute and cannot possibly be permitted by a court of law. " In the decision reported in AIR (1987) Delhi 148, the court had found that the decision of the arbitrator on two separate issues were contradictory, which was the result of non-application of mind to the facts and matters placed before the arbitrator and such an award could not be permitted to be sustained in law. Therefore, in my view, the decisions which had been placed before the court on behalf of the petitioners were of no relevance to the facts of this case. Therefore, in my view, the decisions which had been placed before the court on behalf of the petitioners were of no relevance to the facts of this case. ( 13 ) IN those circumstances, I am inclined to hold that there was no irregularity as regards compliance with the provisions contained in section 14 (1) and (2) of the Act. By his covering letter dated June 6, 1986, the arbitrator had made and published his award; duly intimated the parties, and had sent the award in original to the Registrar, Original Side of this court with all papers and documents which had been placed before him in the course of the proceedings. The petitioners were not able to indicate to any particular document, which had been proved before the arbitrator and had not been marked and not made over to the court. The petitioners admittedly had notice that a separate award had been made on June 30, 1987 and again on November 16, 1987 and yet they had made no enquiry nor took any step in that regard. In pursuance of the order of the court dated, August 1, 1996 notice had been duly served on and accepted by the advocates for the petitioners and therefore the petitioners had in law received such notice. The order dated September 6, 1996 could not in the circumstances be referred to as an exparte order. The petitioners chose not to appear in court. There was no material before this court to establish the allegations that the award was perverse or that the arbitrator had misconduct either in person or in law. Such contentions of the petitioner were not acceptable to this court. The petitioners had knowledge since June 1987 that the arbitrator had made and published the award and that in due compliance with the order of this court, dated August 5, 1996 notice had been served and accepted by their advocates. It would be my considered view therefore that the petitioners had for reasons best known them waived their right to challenge the decree which had been made on December 24, 1996, when they chose to stay away from court on September 6, 1996, and also on the date when the decree was made. It would be my considered view therefore that the petitioners had for reasons best known them waived their right to challenge the decree which had been made on December 24, 1996, when they chose to stay away from court on September 6, 1996, and also on the date when the decree was made. The decree had become final, well before the petitioners had made their application and the application of the petitioners when it was made stood barred by the laws of limitation. It would appear to me that this application was made by the petitioners with malafide intent, to obtain a scope to resort to fresh litigation and delay or if possible totally avoid making payment in terms of the decree. ( 14 ) FOR those reasons this application is dismissed. The petitioners shall pay costs of this application assessed at 100 GM. ( 15 ) THE other four applications appearing in the cause list which were heard analogously at the request of the parties are accordingly disposed of by this order and judgment. The Registrar, appellate side shall be at liberty to release the bank guarantee in favour of the respondent. All interim offers which may have been made in these applications shall stand vacated. Stay of operation of this order was prayed for by advocate for the petitioners and such prayer was rejected. Application dismissed.