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2015 DIGILAW 507 (GAU)

Jagadish Chandra Das v. Union of India

2015-04-30

HRISHIKESH ROY

body2015
Hrishikesh Roy, J. 1. Heard Mr. G.N. Sahewalla, the learned senior counsel appearing for the petitioner. The respondent Union of India is represented by the learned counsel Mr. K.A. Mazumdar, C.G.C. 2. This matter arise out of an ex-parte arbitration award passed on 9.5.2002 (page-20) against M/s. Annapurna Supply Agency (hereinafter referred to as 'the Firm'), a proprietorial concern, under the ownership of one Vijay Saraf @ Vijay Kumar Saraf. Originally in May, 1986, this farm was conceived as a partnership concern with petitioner Jagadish Chandra Das and Vijay Kumar Saraf, as the two partners. But the unregistered partnership was dissolved within a few months in 1987 and thereafter the firm continued as a proprietorial concern under Vijay Saraf. 3. On 6.8.1987, the contract for handling and conveyance of cement was awarded to the Firm by the Commanding Officer of the 1305 Fractional Task Force (Contract No. 1305 FTF/4/87-88) and the proprietor Vijay Saraf signed the contract as the proprietor of the Firm. 4. However since there was short delivery of cement by the carriage contractor, an Arbitration proceeding was drawn up under Clause 36 of the contract and Col. D. Palit, Commandar, 19 BRTF (GREF), C/O. 99 A.P.O. started the Arbitration proceeding. The Arbitrator issued multiple notices to the Firm but the proprietor was absent and eventually a final notice through press advertisement was also issued against him. As the contractor failed to respond, the Arbitrator considered the claim of the employer and passed an ex-parte award on 9.5.2002 (page-20), whereby Rs. 82,004/- + interest was awarded for the undelivered cement. The relevant portion of the arbitral award is extracted here-in-below for ready reference: "............................... 15. Claim of Union of India. Claim No. 1: Cost of 160.20 MT undelivered quantity of Cement including 3204 Nos. empty cement bags Rs. 82004.00 I award Rs. 82004.00 to the Union of India against Claim No. 1. Claim No. 2: Interest @ 24% per annum compounding annually on claim No. 1 from 20.11.87 to till 09 Apr 97 - Rs. 5,37,515.00 I award interest @ 13.26% per annum simple interest from 20.11.87 to 09.04.97 - Rs. 1,02,066.00 Claim No. 3: Compensation for delay for not completing the work before the date of completion - Rs. 3887.00 I award Rs. Nil to the Union of India against Claim No. 3. Claim No. 4: Cost of Arbitration - Rs. 40,000.00. I award Rs. 1,02,066.00 Claim No. 3: Compensation for delay for not completing the work before the date of completion - Rs. 3887.00 I award Rs. Nil to the Union of India against Claim No. 3. Claim No. 4: Cost of Arbitration - Rs. 40,000.00. I award Rs. Nil to the Union of India against Claim No. 4. Claim of Contractor: Contractor claim due from Department is Nil. So I award Rs. Nil to the contractor. Each party will bear its cost of reference and miscellaneous expenditure. Cost of stamp paper for the Award to the extent of Rs. 120.00 will be borne by the Union of India and any additional cost of stamp paper required before filing the Award in the Court. As witness my hand this 09th day of May 2002. Station: Guwahati (Assam). Sd/- (D. Palit). Colonel, Sole Arbitrator." 5. The present petitioner after dissolution of the partnership was not associated with the Firm or its business and therefore he had no notice of the Arbitration proceeding. Thus he was oblivious of the proceeding and unaware of the ex-parte award passed against the Firm i.e. M/s. Annapurna Supply Agency. But when the award was put to execution by the Decree Holder (D.H.) Union of India through the Money Execution (Arb.) No. 9/2002, the notice dated 20.11.2008 (Annexure-I) was issued not only to Vijay Kumar Saraf but also to the present petitioner from the Court of the learned District Judge, Kamrup, Guwahati. 6. After receiving the notice from the Executing Court, the petitioner filed application, where he stated that he is not the proprietor of the Firm and that he long retired from the partnership business of the firm and was therefore unaware of the contract, the Arbitration proceeding or the award passed against that firm. The applicant referred to the provision of Section 34(3) of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as the 'the Arbitration Act') and contended that the time limit for challenging the award commences from the date of receipt of the arbitral award and in the instant case, despite written request made to the Arbitrator, the applicant was not furnished with the award. With these projections the applicant prayed for dismissal of the execution proceeding against him, as he has no obligation to honour the award passed against the Firm. 7. With these projections the applicant prayed for dismissal of the execution proceeding against him, as he has no obligation to honour the award passed against the Firm. 7. However the Executing Court failed to consider the petitioner's application and by erroneously recording that the petitioner has appeared on behalf of the Judgment Debtor (J.D.) i.e. M/s. Annapurna Supply Agency, issued attachment order for selling the property of the J.D. Therefore the aggrieved petitioner has filed this Revision Petition. 8.1. Mr. G.N. Sahewalla, the learned senior counsel submits that the partnership was dissolved in the year 1987 itself and thereafter the Firm was operating as a proprietorial concern under Vijay Kumar Saraf. In fact the contract was awarded on 6.8.1987 to the proprietorial concern represented by Vijay Saraf. When the arbitration was started against the Firm, no notice of the Arbitration proceeding was ever issued to the petitioner either as a partner or as a proprietor of the Firm. Yet the Executing Court issued notice to the petitioner by wrongly describing him as one of the proprietor of the Firm. 8.2. The senior counsel submits further that the petitioner applied for exonerating him from the burden of the award through his application filed on 2.7.2010, before the Executing Court but ignoring the non-connection of the petitioner with the J.D. i.e. M/s. Annapurna Supply Agency, he was wrongly shown to have appeared on behalf of the J.D. Thus under the impugned order dated 20.8.2010 (Annexure-V), in the Money Execution (Arb.) No. 9/2002, the property of the petitioner is subjected to attachment without any valid cause. 8.3. The petitioner relies on Union of India vs. Tecco Trichy Engineers & Contractors reported in (2005) 4 SCC 239 , to contend that the delivery of the signed award under Section 31(5) of the Arbitration Act is not just a formality but is a matter of substance, since limitation period to challenge the award starts from the date of receipt of the award by the concerned party. As the petitioner is still to be served with the award, Mr. Sahewalla argues that the unserved award even otherwise is not executable against the petitioner, since he was a stranger to the contract and also to the award. 9.1. Representing the Union of India, the learned counsel Mr. As the petitioner is still to be served with the award, Mr. Sahewalla argues that the unserved award even otherwise is not executable against the petitioner, since he was a stranger to the contract and also to the award. 9.1. Representing the Union of India, the learned counsel Mr. K.A. Mazumdar however submits that since the contractor failed to appear in the Arbitration proceeding, the ex-parte award had to be passed by the Arbitrator on 9.5.2002 and therefore there was no occasion for the Arbitrator to determine whether M/s. Annapurna Supply Agency is a proprietorial or partnership concern. 9.2. The respondent's lawyer refers to the letter written on 11.11.2010 by the petitioner Jagadish Chandra Das to the Commander of the 47 BRTF, Lankeswar to project that the petitioner had offered for amicable settlement of the matter arising out of the arbitration award by offering to pay 50% of the awarded amount under Claim No. 1 without being burdened with interest and cost and accordingly Mr. Mazumdar submits that the petitioner having offered to make the settlement can't be considered to be unrelated to the J.D. 10. In the present case, since there was no participation of the contractor in the Arbitration proceeding, there was no occasion for the Arbitrator to unveil the owner of the Firm to whom the carriage contract was awarded. But at the same time, in the work order issued on 6.8.1987, Vijay Saraf signed as the proprietor of the Firm. On the other hand, there is nothing on record to show that the handling contract was awarded to a partnership Firm and that the petitioner is connected with the contract in question. Therefore I feel that the contention made by the petitioner in his application filed before the Executing Court on 2.7.2010 (Annexure-IV) ought to have been appropriately considered by the learned District Judge, Kamrup, Guwahati instead of treating him as a representative of the J.D. 11. The case records disclose that the petitioner repeatedly requested the Arbitrator to furnish him with a copy of the signed award but the same was never provided and eventually he secured a certified copy of the award on 23.3.2009, by applying before the Executing Court. The case records disclose that the petitioner repeatedly requested the Arbitrator to furnish him with a copy of the signed award but the same was never provided and eventually he secured a certified copy of the award on 23.3.2009, by applying before the Executing Court. Therefore there is no legal delivery of the award to the petitioner under Section 31(5) of the Arbitration Act and thus when we apply the ratio of Tecco Trichy Engineers & Contractors (Supra), the limitation period for the petitioner's right to challenge the award under Section 34 of the Arbitration Act is yet to commence against him. 12. At this stage the implication of the petitioner's letter (11.11.2010) for amicable settlement, sent during the pendency of this case deserve consideration. In his letter, the petitioner not only denied that he is the proprietor of the Firm but also reiterated that in the beginning of 1987 he retired from the partnership business carried out under the said firm. The lack of awareness of the Arbitration award was also mentioned in the offer letter. But without prejudice to his contention that he is not liable to honor the award dated 9.5.2002, only to save himself from anxiety in his old age, he made an offer to pay 50% of the principal sum awarded by the Arbitrator. In fact this Court passed interim order on 8.10.2010, by directing the petitioner pledge Rs. 50,000/- in favour of the Registrar General of this Court. 13. On the above deposit, Mr. G.N. Sahewalla, the learned senior counsel submits that the petitioner is an aged person and is anxious to not to burden his children on account of the award dated 9.5.2002 and thus the senior counsel submits that while the D.H. may proceed against Vijay Kumar Saraf to recover the awarded amount, the petitioner is willing to forego the deposited Rs. 50,000/- as a good gesture to protect himself and his children from future litigation on account of the arbitration award, passed against the Firm. 14. In response to the above submission of the petitioner, Mr. K.A. Mazumdar, learned counsel submits that the D.H. must be allowed to pursue the Money Execution (Arb.) No. 9/2002, against the concerned J.D. Therefore he submits that the offer of the petitioner may be accepted without prejudice to the right of the D.H. to proceed against the actual J.D. 15. In response to the above submission of the petitioner, Mr. K.A. Mazumdar, learned counsel submits that the D.H. must be allowed to pursue the Money Execution (Arb.) No. 9/2002, against the concerned J.D. Therefore he submits that the offer of the petitioner may be accepted without prejudice to the right of the D.H. to proceed against the actual J.D. 15. In view of the above facts and circumstances and considering the conciliatory offer made by the petitioner through his letter dated 11.11.2010 and as reiterated by his lawyer in course of this proceeding, the respondent is permitted to withdraw the Rs. 50,000/-, deposited by the petitioner with the Registrar General of this Court. This recovery from the petitioner should not be understood to mean that he is the proprietor of the M/s. Annapurna Supply Agency. The right of the D.H. to recover their dues under the arbitration award dated 9.5.2002 (page-20) will not be extinguished or prejudiced by accepting the petitioner's offered amount. It is ordered accordingly. This case is accordingly disposed of with this order. No cost. 16. The Registry should send a copy of this order to the learned District Judge, Kamrup, Guwahati to carry forward the execution proceeding in accordance with law.