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2015 DIGILAW 663 (CAL)

ABDUL HAMID v. MAGMA FINCORP LTD.

2015-08-07

SANJIB BANERJEE

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JUDGMENT SANJIB BANERJEE The Court : No ground is urged on the merits of the arbitral award in the challenge under Section 34 of the Arbitration and Conciliation Act, 1996 to the award of May 12, 2015. The only two grounds cited are that no reasonable opportunity was afforded to the petitioners to participate in the arbitral reference and that the arbitrator ignored that some orders were passed in proceedings instituted by the petitioners before a Consumer Disputes Redressal Forum. The averments in the petition are of relevance in the context. At paragraph 19 thereof, it is pleaded that on November 3, 2014, the respondent issued “a purported notice invoking the arbitration clause…” At paragraph 20 thereof, it is stated that on December 20, 2014, the respondent issued a letter to “one Sandip Ghosh, Advocate for appointment of arbitrator.” At paragraph 21 of the petition, it is stated that the arbitrator issued a notice to the petitioners on January 27, 2015 requiring the petitioners to file their counter-statement by February 18, 2015. However, it is pleaded at paragraph 22 of the petition that the notice of January 27, 2015 “did not reach the petitioners within the said time and in fact the petitioners had been served with the notice on 27th February 2015,…” There is no attempt to bring the original envelope in which the notice of January 27, 2015 issued by the arbitrator may have been served on the petitioners. There is only a bald assertion of the petitioners that a notice dated January 27, 2015 reached the petitioners on February 27, 2015 without any attempt at producing any evidence in support of such assertion. Paragraph 23 of the petition should be seen in the petitioners’ words:- “23. Again on or about by a notice dated 23rd February, 2015 issued by the Arbitrator fixed the next date of the arbitration on 9th March 2015 at 11:30 a.m. which could not be attended by the Advocate appointed by the petitioners due to prior engagements as the said date was a Monday when the Advocate for the petitioner was engaged in matters of the court at the said time.” It is also necessary to see paragraphs 24 and 25 of the petition in the context of the steps taken by the petitioners thereafter. “24. “24. The advocate for the petitioners had issued a notice dated 10th March 2015 indicating the circumstances and the events due to which the petitioners could not be duly represented. Neither the petitioners nor the Advocate appearing on behalf of the petitioners could contact the Learned Arbitrator at the given address as the said address would be either closed or the Learned Arbitrator would not be present and none could give any information as to his whereabouts nor could inform the Learned Arbitrator to adjourn the matter and keep the hearing on any other date and time by telephonic means as the letterhead of the Learned Arbitrator does not provide such information. “25. Despite the letter dated 10th March 2015 issued by the Advocate appearing on behalf of the petitioners, the Arbitrator had given no opportunity to the petitioners to be represented and passed the impugned order dated 12th March 2015 without any notice thereto. Photo copies of the notice dated 20th December, 2014 whereby Mr. Sandip Ghosh has been appointed as Arbitrator along with the application regarding the statement of claim and the notices issued by the Arbitrator dated 27th January 2015 and 23rd February 2015 and the letter issued by the Advocate for the petitioners dated 10th March 2015 are annexed and collectively marked with the letter “I”.” It is evident that the petitioners were aware of the reference since the petitioners claim to be aware of the notice of invocation and the appointment of the arbitrator by the finance company. There is no credible explanation as to why the petitioners did not cause their counter-statement to be filed within the time permitted by the arbitrator, particularly, since it cannot be accepted in the absence of any evidence that the letter of January 27, 2015 was received by the petitioners only on February 27, 2015. In any event, it is admitted in the petition that the subsequent notice of February 23, 2015 by which the arbitrator convened a meeting on March 9, 2015 was duly received by the petitioners but the petitioners chose not to attend the same for some excuse which is unacceptable as a ground for failing to attend the reference. It is also not evident from paragraph 24 or paragraph 25 of the petition as to who the petitioners addressed the notice of March 10, 2015 to. It is also not evident from paragraph 24 or paragraph 25 of the petition as to who the petitioners addressed the notice of March 10, 2015 to. A copy of the relevant notice appears as Annexure-I to the petition and there is no proof of receipt of such notice by either the finance company or by the arbitrator. In any event, the excuses in the letter of March 10, 2015 for the petitioners not being represented in the reference are not worthy of acceptance. There is no dispute that the agreement between the parties contained an arbitration clause and that the finance company was entitled to refer the disputes that had arisen between the parties consequent upon the failure of the petitioners to make payments in terms of the finance agreement, to a reference. The petitioners accept in the petition that a notice of invocation was duly sent and that notices of the reference and the hearings thereat were also issued to the petitioners. The petitioners chose not to attend the second hearing, even though the excuse for not filing the counter-statement as indicated in the petition is specious. The petitioners may have been under the mistaken apprehension that merely because they had approached the Consumer Forum, the arbitrator would be rendered functus officio. The petitioners cannot even demonstrate why the order that may have been passed by the Consumer Forum should have stopped the arbitrator from proceeding with the reference or would otherwise negate the effect of the award. The substance of the award has not been questioned on merits as recorded earlier. Since it is evident that the petitioners were aware of the reference and of the directions issued by the arbitrator but chose not to participate thereat, there does not appear to be any grounds for setting aside the impugned award. AP No. 972 of 2015 is dismissed, but without any order as to costs. Urgent certified website copies of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.