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2013 DIGILAW 596 (GUJ)

Bhatti Automobiles Through Amin Bhatti v. L & T Finance

2013-10-03

JAYANT PATEL, Z.K.SAIYED

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Judgment Jayant Patel, J.—Admit. Mr. Abichandani waives notice for respondent. With the consent of the learned advocates appearing for both the sides, the matter is finally heard. 2. The present appeal is directed against the judgment and order dated 09.04.2013 passed by the learned District Judge in Civil Misc. Application No. 9/13 whereby the application of the appellants under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the “Act”) has been dismissed on the ground of barred by limitation. 3. The short facts of the case are that as per the respondent, the proceedings with the Arbitrator were initiated, whereas, as per the appellants, they had no knowledge about the proceedings and more particularly the award passed therein. In any event, in the proceedings of arbitration, the award was passed by the Arbitrator on 04.10.2010. The appellants preferred application under Section 34 of the Act for setting aside of the exparte award of the Arbitrator being Civil Misc. Application No.9/13 before the learned District Judge. The learned District Judge, at the conclusion of the matter, dismissed the application as being time barred. Under the circumstances, the present appeal before this Court. 4. We have heard Mr. Qureshi for the appellants and Mr. Abichandani for the respondent. We have considered the record produced by learned Counsel appearing for both the sides in support of their respective contentions. 5. The only point to be considered in the present proceeding is whether the learned District Judge was right in concluding that the proceeding before him under Section 34 initiated by the appellants were barred by limitation or not. 6. It appears from the perusal of the reasons recorded by the learned Judge that the learned Judge proceeded on the basis that once the communication was sent by supplying the copy of the award through Regd. A.D. at the address of the appellants and since the communication was properly stamped, as per Section 27 of the General Clauses Act, it is deemed to have been delivered to the appellants and therefore, there is compliance to the provisions of Section 31(5) of the Act. A.D. at the address of the appellants and since the communication was properly stamped, as per Section 27 of the General Clauses Act, it is deemed to have been delivered to the appellants and therefore, there is compliance to the provisions of Section 31(5) of the Act. The learned Judge based on the said finding, considered that the award was passed and the compliance was there of Section 31(5) but the application has been preferred on 28.01.2013 after the period prescribed, therefore, he dismissed the application as barred by the period of 2 years and 3 months. 7. It is an undisputed position that the award has been sent by Regd. A.D. Post. It is also an undisputed position that actually the cover has not been delivered to the appellants but the cover has been received back with the endorsement “left” for appellant no.1 and with the endorsement “not found” for Appellant No. 2. 8. As such, no evidence is led by way of an affidavit of the party or the postman. We would have further considered the matter. However, the learned Counsel appearing for the appellants as well as for respondent pray that if on deposit of suitable amount, the matter is remanded to the learned District Judge to consider the merits of the application under Section 34 and also any interim application therein, if any, their respective clients are agreeable for the same. It may be recorded that Mr. Abichandani has further stated that he has received instruction for such purpose from Mr. Mahendra Gadhiya, authorised officer of the respondent Company. Hence, we leave the matter at that stage and suffice it to state that since there was no reliable evidence available for the delivery of the award passed by the Arbitrator, it would be just and proper to consider the ground as sufficient cause for entertaining the application after the expiry of the period of limitation. 9. On the aspect of deposit of the amount, we find that the fact remains that the award has been passed. The transaction of loan is not disputed. There may be dispute on the question of interest or applicability thereof or may be the dispute on the aspect of penal interest, or may be dispute on other aspects available in law. On the aspect of deposit of the amount, we find that the fact remains that the award has been passed. The transaction of loan is not disputed. There may be dispute on the question of interest or applicability thereof or may be the dispute on the aspect of penal interest, or may be dispute on other aspects available in law. But once the award is passed and thereafter, if unconditionally, the matter is remanded, the practice of allowing the proceeding to go ex parte and thereafter to make the complaint for such proceeding would be encouraged more particularly when the transaction of loan is not disputed. Hence, we find that it would be proper to impose condition upon the appellants to deposit some amount until the matter is considered on merits by the learned District Judge and at that stage, the parties may agitate all the aspect including for the continuation of the interim order or otherwise. 10. Considering the facts and circumstances, we find that the condition to deposit the amount of Rs.10 lakhs deserve to be imposed upon the appellant. Such deposit may be subject to further orders as may be passed by the learned District Judge in such proceedings. 11. In view of the aforesaid observations and discussions, the impugned order passed by the learned District Judge is set aside on the condition that the appellants deposit the amount of Rs. 10 lakhs within three months with the learned District Judge. Upon the deposit so made, it will be open for the respondent to withdraw the said amount with the observation that the deposit and withdrawal shall be subject to further orders which may be passed by the learned District Judge and further that the deposit so made and the withdrawal thereof shall be without prejudice to the rights and contentions of both the sides and shall be subject to the orders as may be passed by the learned District Judge in the main matter. 12. It is observed and directed that upon compliance of the aforesaid condition, the main application under Section 34 of the Act shall stand restored to the file of the learned District Judge. It will be open to the appellants to move any application for interim protection and it will also be open to the respondent to raise the contention as may be available in law. It will be open to the appellants to move any application for interim protection and it will also be open to the respondent to raise the contention as may be available in law. The learned District Judge shall decide the application for interim protection and also the application under Section 34 of the Act on merits treating the same as within the period of limitation. 13. The interim protection granted by this Court shall continue to remain in operation for a period of three months or till the amount is deposited, whichever is earlier. 14. If the aforesaid condition to deposit the amount of Rs. 10 lakhs is not complied with, the order of dismissal of the appeal passed by the learned District Judge shall prevail. 15. Appeal is allowed to the aforesaid extent. Considering the facts and circumstances, no order as to costs.