Anoop V. Mohta, J.@mdashThe Petitioner, who was also one of the signatories to the Loan Transaction/document signed and executed along with Respondents 2 and 3 with Respondent No.1, has challenged the impugned Award solely on the ground that there was no opportunity given by the Arbitrator before passing the Award, for want of service/delivery of the notices/communication as contemplated u/s 3 of the Arbitration and Conciliation Act, 1996 (for short, the Arbitration Act).
2. The relevant paragraph of the Award is as under :
I entered upon the reference vide my letter dated 28.01.2008 directing the parties to appear before me on 29.02.2008. The counsel for the Claimant Company appeared before me and filed its Statement of Claim alongwith documents. As none appeared on behalf of the Respondents, another Notice dated 07.04.2008, was issued to the Respondents vide Registered A.D. Post. However, despite the service of the said notices, none appeared on behalf of the Respondents. It was specifically averred on behalf of the Claimant Company that the notices were being sent on the last known address(s) of the Respondents. The Respondents were thus proceeded against exparte on 03.05.2008.
3. Admittedly the Award is passed exparte against the Petitioner as well as Respondents 2 and 3.
4. The Arbitrator has also relied upon the fact that the notices issued to the Respondents vide registered post A.D. However, there is no mention about delivery and/or receipt of the said notices so sent. There are no documents placed on record of the Arbitrator to justify that the notices were duly delivered on the address given.
5. Section 3 also contemplates that the notice forwarded/issued must be delivered to the addressee. Even otherwise, the delivery/communication of the notice of any kind goes to the root of the matter when we talk about the principle of natural justice.
6. Having accepted to settle the matter through arbitration proceedings and accordingly Respondent No.1 invoked the arbitration clause and appointed an Arbitrator, in my view, the basic requirement is that the Arbitrator must see that the notice/notices of the arbitration are duly delivered/served. Issuance of notice and/or sending of notice even by the Arbitrator is not sufficient compliance unless there is sufficient material on record to justify the fact of delivery of the notice. In reply filed by Respondent No.1, it is stated as under, "I say that the demand notice dated 31st December, 2007, was sent to the parties, by Speed Post calling upon the Petitioner and Respondent Nos. 2 and 3 to clear the outstanding dues amounting to Rs.34,10,325.89 within 10 days of the receipt of the said notice. I say the said Notice was sent to both the address mentioned in the Demand Notice. I say that the Respondent No.1 neither received the AD Card nor the returned packet of the Notice sent. Hence the copy of the Postal Receipt is marked as an exhibit for the reference of this Hon''ble Court. I say that the copy of the said notice and postal receipts are marked as Exhibit." A".
7. Therefore, the submission that the notices were issued and as recorded by the Arbitrator, that itself is sufficient to proceed with the arbitration as it falls within the ambit and presumption as contemplated u/s 27 of the General Clauses Act. The concept presumption itself means it is subject to rebuttal. As recorded even by the Arbitrator, that the notices were issued but there is no observation whatsoever to show that the notices were duly received and/or delivered. Therefore a case is made out by the petitioner to interfere with the Award solely on the ground of non delivery of notices, which is mandatory before proceeding further in the arbitration proceedings.
8. The party in such cases, considering the arbitration proceedings in no way in a position to deal with this objection and/or point out why the Award is exparte, except by challenging the same in the Petition u/s 34 of the Arbitration Act.
9. Section 34 nowhere contemplates any such situation to go into the details of facts which are in dispute, and in the present case, definitely with regard to the service/delivery of the notice. The Court, u/s 34 Petition, cannot therefore decide this issue for the first time as this goes to the root of the matter so far as the Petitioner is concerned.
10. There is an additional factor in the matter which also require certain adjudication of facts. The Petitioner has averred that she never stayed with the other Respondents after the family disputes, in the premises in question. Respondent No.1 principally is right in sending the notices at the address mentioned in the agreement as contemplated u/s 3 of the Arbitration Act, but the fact that the Petitioner was not staying on the given address even prior to signing of this document just cannot be overlooked, apart from proof of delivery of notice as discussed above.
11. There are receipts/documents on record which show that the Petitioner''s address was other than the address so mentioned in the document. The same is the address of the property for which the loan was taken.
12. The circumstances therefore mentioned and/or averred in the Petition goes to show that she was definitely not residing at the relevant time at the address mentioned in the document though she was paying regularly the installment of the property in question to Respondent No.1. It is not the case that the Petitioner for the first time communicated her residential address. The documents/receipts show her address i.e. Legacy Apartment, Flat No.101/102, TPS IV, Third Road, Bandra (West), Mumbai. Therefore, to say that the Petitioner is trying to avoid the arbitration proceeding and raising such plea for the first time and/or brining these grounds to challenge the exparte Award is unacceptable. Any way, fact remains that the Award is exparte against the Petitioner also.
13. In the interest of justice and considering the fact that the Petitioner unable to appear before the Tribunal to place her case/defence and the Arbitrator is also under obligation to give equal opportunity to both the parties, without observing anything on the contrary, I am inclined to set aside this Award solely on this ground.
14. The submission of learned counsel appearing for Respondent No.2 that the Petitioner was staying abroad itself means that notices were never served/delivered. The finding of Arbitrator is therefore incorrect. The Arbitrator cannot deny the substantial right to defend the money claim on such presumption of service of notice.
15. Resultantly, the impugned Award is set aside. The matter is remitted back for fresh hearing by giving full opportunity to all the parties. The Arbitrator to dispose of the Petition preferably within six months from the date of the receipt of this order.
16. The Petition is accordingly allowed in the above terms. There shall be no order as to costs.
