Swiss Singapore India Pvt. Ltd. v. Belseri Tea Co. (India) Pvt. Ltd.
2023-05-18
SABYASACHI BHATTACHARYYA
body2023
DigiLaw.ai
JUDGMENT : 1. The present applicant was the respondent in a proceeding under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as, “the 1996 Act”), which was disposed of on February 16, 2023 by appointing an Arbitrator to resolve the dispute between the parties. It was recorded in the said order that in spite of service of notice the respondent had not entered appearance. 2. Learned counsel appearing for the present applicant submits that notice of the application under Section 11 and/or the invocation under Section 21 of the 1996 Act had not been served at the proper address of the applicant. 3. It is argued that as per the Share Purchase Agreement between the parties dated April 30, 2021, the current Directors would have no further liability after the takeover date, that is, April 30, 2021 in excess of the amount of Rs.12,58,79,538/-. In the said Agreement, there was no mention of the present claims being made against the applicant-Company after the takeover. 4. Learned counsel, on such score, places reliance on Clause 4.1 of the Share Purchase Agreement. 5. It is contended by the petitioner that the present respondent (petitioner in the application under Section 11) consistently served communications at a wrong address of the applicant-Company. In fact, even the invocation under Section 21 was made at the previous address of the Company, despite the address of the Company having changed in the records of the Registrar of Companies prior thereto. 6. Learned counsel places reliance on the Minutes of the Second Sitting of the Arbitrator dated April 18, 2023, appointed by the order sought to be recalled, where it was mentioned that the Arbitral Tribunal had forwarded the Minutes of the First Sitting dated March 27, 2023 to the respondent at the address being Room No.206-7, 7 Grant “Road”, 2nd Floor, Kolkata-700 012 which returned with the postal endorsement ‘no such person in this address’. It is argued that the changed address of the Company after the takeover is not at ‘Grant Road’ but ‘Grant Lane’. 7. In the same Minutes, it was recorded that the notice dated March 27, 2023 had also been sent to the previous address of the applicant-Company which returned with the postal endorsement ‘left’. The notice sent to another address of the Company returned with the postal endorsement ‘no such Company in this address’.
7. In the same Minutes, it was recorded that the notice dated March 27, 2023 had also been sent to the previous address of the applicant-Company which returned with the postal endorsement ‘left’. The notice sent to another address of the Company returned with the postal endorsement ‘no such Company in this address’. It is submitted that the address of the Company was changed much prior to the filing of the application under Section 11. However, the old address of the Company was mentioned in the said application and notice sought to be served at the same, which resulted in service not being effected on the present applicant. 8. Leaned counsel places reliance on the second paragraph of the reply dated March 14, 2022 given by the present applicant-Company where the principal place of business and corporate office had been indicated. 9. In paragraph no.2, it was mentioned that the legal notice dated February 28, 2022, which was the premise of the invocation of arbitration, was sent to the applicant-Company by the employee of the erstwhile management of the Company through courier on March 9, 2022. Such statement itself, it is argued, indicated that the address of the Company had changed. 10. However, the present respondent (petitioner in the Section 11 application) continued to serve notices on the erstwhile employee of the Company at his personal office address and not at the address of the Company. Hence, it is submitted, the entire bunch of correspondence made by the present respondent was served at wrong addresses and the application under Section 11 had also been filed by suppressing the correct address. 11. Learned counsel for the petitioner places reliance on Section 12, sub-sections (2) and (4) of the Companies Act, 2013 (for short, “the 2013 Act”) which pertain to change of registered office of the Company. Reliance is also placed on Rules 25 and 27 of the Companies (Incorporation) Rules, 2014 (in brief, “the 2014 Rules”). In the said provisions, it is argued, the provisions for intimation of change of address have been stipulated. Such provisions were fully complied with by the applicant-Company after the takeover. As such, it is argued that the Company need not have further intimated the change of address to each and every creditor. 12.
In the said provisions, it is argued, the provisions for intimation of change of address have been stipulated. Such provisions were fully complied with by the applicant-Company after the takeover. As such, it is argued that the Company need not have further intimated the change of address to each and every creditor. 12. Learned counsel places reliance on Section 3(1)(b) of the 1996 Act which stipulates that if none of the places referred to in Clause (a), that is, the place of business, habitual residence or mailing address of the addressee, can be found after making a reasonable inquiry, a written communication is deemed to have been received if it is sent to the addressee’s last known place of business, habitual residence or mailing address by registered letter or by any other means which provides a record of the attempt to deliver it. 13. In the present case, the respondent herein failed to undertake such reasonable inquiry which would have revealed the change of address of the applicant-Company. The intimation to the Registrar of Companies within the contemplations of Section 12 of the 1996 Act and Rules 25 and 27 of the 2014 Rules is sufficient public notice of such change of address, it is argued. 14. In view of contravention of Section 3(1)(b) of the 1996 Act, the entire invocation and subsequent application under Section 11, it is argued, were vitiated in law. 15. Whereas the invocation under Section 21 took place on September 29, 2022, the change of address had taken place much prior thereto. 16. In controverting the arguments of the petitioner, learned counsel for the present respondent (petitioner in the Section 11 application) argues that the change of address was uploaded only in October, 2022. It is contended that the contract between the parties was entered into on March 11, 2021, which contained the arbitration clause pursuant to which the matter had been referred to arbitration. 17. It is submitted that there was sufficient compliance of Section 3(1)(b) of the 1996 Act, since there was no occasion whatsoever for the respondent to search the records for a change of address of the Company. All along previously, the correspondence was made at the previous addresses of the applicant-Company.
17. It is submitted that there was sufficient compliance of Section 3(1)(b) of the 1996 Act, since there was no occasion whatsoever for the respondent to search the records for a change of address of the Company. All along previously, the correspondence was made at the previous addresses of the applicant-Company. The first occasion of non-service was when the Minutes of the first sitting of the Arbitrator, much after the appointment of Arbitrator, could not be served property at the said address. 18. It is pointed out that the service of the invocation was duly received and, as such, it cannot be said that the service was faulty. From the perspective of the respondent, the service was effected at the last-known address of the Company. As such, the argument of the applicant regarding non-service of notice at the proper address is erroneous. 19. From the annexures and the pleadings in the present application and the application under Section 11, it is seen that the co-ordinate Bench (presided by the then Chief Justice), in its order under recall dated February 16, 2023, had clearly observed that in spite of the service of notice, the present applicant (respondent therein) had not entered appearance and therefore, the averments made by the present respondent remained uncontroverted. On such premise, the order of appointment of Arbitrator was passed. A scrutiny of the records of the parent proceeding under Section 11 also reveals that due affidavit-of-service showing good service was kept on record. 20. From the records, it can be seen that only when an attempt was made to communicate the Minutes of the first sitting of the Arbitrator to the present applicant, it was discovered that the applicant was not available at the said address. 21. There is nothing on record to indicate any reason for the present respondent to have enquired regarding the change of address of the Company. Even if it is assumed that the change of address was duly intimated to the Registrar of Companies in time, the same does not give rise to the assumption that the said intimation was uploaded on the relevant website by the Registrar of Companies immediately thereafter. In fact, there was no occasion for the present respondent to make such enquiry in the first place, having no reason to apprehend such alteration of address. 22.
In fact, there was no occasion for the present respondent to make such enquiry in the first place, having no reason to apprehend such alteration of address. 22. In all the documents throughout, the respondent herein had mentioned the address of the applicant-Company as its last-known address which could not be faulted per se. 23. Although in the reply of the applicant dated March 14, 2022 it was indicated that the notice dated February 28, 2022 was served to the applicant-Company by an employee of the erstwhile management through courier, the said statement, in the absence of anything else, could not sufficce to indicate that the address of the Company had changed. 24. In any event, the law casts a presumption of correctness on judicial and official Acts. Hence, there is nothing on record to assume that the finding in the order dated February 16, 2023, as regards the present applicant abstaining from appearance despite service, was erroneous. 25. The other arguments advanced by the applicant pertain to the merits of the dispute. Learned counsel for the petitioner has made submissions to indicate that even prior communications of demand, etc., were made by the present respondent had a wrong address of the applicant-Company. However, such issue can only be raised before the Arbitrator. 26. In the absence of any palpable error apparent on the face of the order under recall, there is no occasion for this Court to sit in judgment over the order of a co-ordinate Bench under Section 11 of the 1996 Act. 27. By the said order, an Arbitrator was duly appointed, who has already assumed charge and held several sittings, of which the present applicant is well aware. 28. In the absence of any ineligibility of the Arbitrator within the contemplation of the 1996 Act being pleaded or proved, there is no reason why the order dated February 16, 2023 passed in AP No.49 of 2023 should be recalled. 29. Accordingly, GA No.1 of 2023 is dismissed on contest without any order as to costs. The order dated February 16, 2023 appointing an Arbitrator passed in AP No.49 of 2023 is hereby affirmed. 30. Urgent certified copies of this order shall be supplied to the parties applying for the same, upon due compliance of all requisite formalities.