MULCHAND B JAIN Vs. INDUS IND BANK LTD

JUDGEMENT

(1.) This petition is filed under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the award passed by the Sole Arbitrator dated 5.3.2005, directing the petitioner herein, who was the second respondent before the Arbitrator to pay jointly with the first respondent therein an amount of Rs. 1,80,719/- apart from the arbitration fees.

(2.) The award which came to be passed exparte against the petitioner and another is challenged by the petitioner, who is the guarantor under the agreement mainly on the ground that (i) there is no notice of appointment of arbitrator and the award itself is silent about such notice and communication to the petitioner; (ii) the petitioner has not signed as guarantor under the original contract in respect of which the petitioner was never involved; (iii) the petitioner shifted his place to Mangaon even in 1989 and while so, in the arbitration proceedings which started in the year 2002, the old address was stated; and (iv) the signature of the petitioner in the alleged contract and some of the signatures put up by him before the authorities like, Income-tax Department would show that on the face of it, the petitioner cannot be termed as a party to the original contract as guarantor. Therefore, it is the submission of the learned Counsel for the petitioner that the award on the face of it is liable to be set aside since the same is in violation of Section 21 of the Arbitration and Conciliation Act, 1996 (in short, "the Act") apart from Section 34(2)(iii) of the said Act. It is his contention that even the arbitration award duly signed by the Arbitrator has not been served on the petitioner and therefore, the award is liable to be set aside under Section 31(5) of the Act.

(3.) On the other hand, it is the contention of the learned Counsel for the first respondent, who is the claimant before the Arbitrator, that in fact, the first respondent terminated the contract and appointed the Arbitrator as per the terms of contract. His contention is that notice was sent by the arbitrator. It is also his contention that even if it is found that there has been some defect on the part of the Arbitrator in following certain provisions, the Original Petition can be directed to be kept pending and the matter can be referred to the Arbitrator once again under Section 34(4) of the Act.