TAIPACK LIMITED Vs. RAM KISHORE AND SONS

JUDGEMENT

(1.) I have heard this petition, which is filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short `the Act') challenging the award dated 16th April, 2003 passed by the arbitrator, without the assistance of the respondent No1. Notice was duly served upon the respondents and the respondent No.1 appeared through counsel. Time was taken to file the reply. On 5th August, 2004, counsel for the respondent No.1 stated that the reply was filed on 5th April, 2004 Since it was not on record, learned counsel was directed to take the steps for bringing the reply on record. When the matter came up for hearing on 10th November, 2004, position was same. Learned counsel for the respondent No.1 was directed to supply the particulars regarding filing of the reply i.e. date and diary number. Needful was not done. When the matter came up for hearing on 22nd February, 2005 it was found that the reply is still not on record for want of particulars given by the respondent No.1. Cost of Rs.5,000/- was imposed and the respondent No.1 was directed to take steps to get the reply placed on record. The counsel for the respondent No.1 did not contact the registry for this purpose. Cost was also not paid. Curiously, on the next date, i.e. 22nd July, 2005 nobody even appeared on behalf of the respondent No.1. The matter was adjourned to 25th November, 2005 since arbitration record was not received. On 25th November, 2005 also nobody appeared on behalf of the respondent No.1 though in the meantime arbitration record was received in this court. Therefore, the court was left with no alternative but to hear the counsel for the petitioners without any reply of the respondent No.1 on record or counsel for respondent No.1 advancing arguments on this behalf. While reserving the orders, another opportunity was given to the parties to file the written submissions. Whereas the petitioners have filed the written submission, the respondent No.1 has failed to to even do that.

(2.) To state the facts in brief, the respondent No.1 has been supplying the goods to the petitioners from time to time. According to the petitioners, last supply was made on 12th September, 1996. However, after a delay of almost two and half years, notice of demand dated 3rd February, 1999 was sent by the respondent No.1 to the petitioners calling upon the petitioners to pay the outstanding amount of Rs.13,68,076/- besides interest of Rs.11,41,221/- thereon which was calculated at the rate of 24 per cent per annum and sales tax liability of Rs.7,05,584/- was also demanded. The petitioners supplied C Forms on 12th October, 1999. Thereafter, the respondent No.1 approached the Paper Merchant Association (Regd.), Chawri Bazar, Delhi for arbitration of the disputes on the ground that the respondent No.1's payments were released by the petitioners. Claim of Rs.86,35,664/- was preferred. The respondent No.1 stated that it was a regular member of the Paper Merchant Association and the petitioners herein had agreed to the terms and conditions printed on the bills as per which, in the event of disputes, it could be settled through the means of arbitration by the Paper Merchant Association. The Association appointed Mr.Krishan Lal Aneja as the arbitrator and the case was registered as 2001-002/09. Notice was sent to the petitioners. The petitioners filed reply raising the objection to the jurisdiction of the arbitral tribunal on the ground that there was no valid binding arbitration agreement between the parties. It was also submitted that the claim was time barred; it was not maintainable as same was not filed by a proper legal entity; the respondent No.1 herein never invoked alleged arbitration clause and the petitioners had been declared a sick industrial company under Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as `SICA') and, therefore, proceedings were to be stayed under Section 22 of SICA. On merits also, the claim of the respondent No.1 herein was disputed and counter claim of Rs. 25,635.08 paise with interest was preferred. The respondent No.1 herein filed rejoinder thereto.

(3.) It is mentioned that one of the dates of hearings was 8th March, 2003 at 4.30PM. The petitioner's director Mr.Pramod Chawla and his counsel reached there but were made to wait outside the office of arbitrator. When they were not called inside for almost 20 minutes and they made enquiries they learned that the petitioners were already proceeded ex parte at 4.20PM. On the same day, the petitioners sent letter through their counsel and request was made for informing the next date of hearing. However, no reply was received. Reminders dated 27th March, 2993 and 31st May, 2003 were also sent by the registered post as well as courier requesting the arbitrator to inform the next date of hearing. No reply was received to the said reminders as well and on 8th June, 2003 to their utter surprise the petitioners received an ex-parte award dated 16th April, 2003. In these circumstances, in the present petition the award is impugned primarily on the following grounds: (a) The arbitrator has failed to give fair and sufficient opportunity of hearing to the petitioner. (b) There does not exist any arbitration agreement between the parties. (c) The claim of the respondent No.1 is barred by limitation. (d) The award of the arbitrator is in conflict with the public policy of India. (e) The arbitrator has failed to decide the counter claim of the petitioner.