R K TEXTILES Vs. SULABH TEXTILES PRIVATE LIMITED

JUDGEMENT

(1.) THE respondents Sulabh Textiles Pvt. Ltd. have taken out this Chamber Summons and prayed for a declaration that the Arbitral Award dated 6-9-2000 passed in Arbitration Case No. A/152/1998-99 on the file of Hindustan Chamber of Commerce ("h. C. C. " for short) is without jurisdiction, illegal, null and void and not enforceable against the respondents. They have further prayed for quashing and setting aside the Execution Application taken out by the applicants R. K. Textiles and for raising attachment issued by this Court under the two warrants of attachment dated 21-4-2001 on the respondents properties. A few relevant facts are necessary for proper appreciation of the prayers made by the respondents.

(2.) THE respondents carry on business of manufacturing of blended fabrics and they are not the members of H. C. C. The applicants are cloth merchants and they are the members of H. C. C. It appears that sometime in July or August 1997 the respondents had placed an oral order for purchase of certain cloth. It further appears that at the time of taking delivery of cloth, the respondents found the same defective and less in quantity and hence there arose disputes between the parties. The applicants referred the matter to the H. C. C. with a request to enforce their claim for damages. The H. C. C. referred the letter of the applicants to the respondents and asked them to settle the claim. The respondents disputed the claim made by the applicants and refused to pay any amount claimed by the applicants. Consequently, on 2-2-1999, the respondents lodged their claim with the H. C. C. with a request for referring the matter to the arbitrator as per the Arbitration Rules of the H. C. C. According to the respondents they pointed out that they were not the members of the H. C. C. and that there was no arbitration agreement with the applicants and that, therefore, the arbitration rules of the H. C. C. were not applicable. However, the H. C. C. persisted and appointed arbitrator on behalf of the respondents without their consent. The respondents, therefore appeared before the arbitrators under protest and submitted that they had no jurisdiction to arbitrate. The respondents also filed a written statement and counter claim. According to the respondents the arbitrators wrongly assumed jurisdiction and purported to make an Award which was not served upon the respondents either by the arbitrators or by the H. C. C. Thereafter, on 14-5-2000, the respondents filed Arbitration Petition No. 349/2001 under section 34 of the Arbitration and Conciliation Act, 1996 (For short, "act 1996" ).

(3.) IN the meantime, the applicants had taken out Execution proceedings and attached the Office, factory premises, stock, machinery etc. belonging to the respondents. The respondents claim that on 9-5-2001, they discovered the said Award passed in favour of the applicants as well as the Execution Application taken out by the applicants to execute the said Award which was for a sum of Rs. 1,28,345. 10 ps. with interest thereon @ Rs. 1. 75% p. m. The respondents filed an application under section 34 of the Act, 1996 for setting aside the said Award. It appears that there was a delay in filing the application and, therefore, an application was filed by the respondents for condonation of delay but the same came to be rejected as according to the learned Single Judge, there was no compliance of section 34. While dismissing the application for condonation of delay, the learned Judge proceeded to observe, "however, it is made clear that if in law the petitioner is entitled to contend that the Award is nullity it is always open to the petitioner in proceedings in execution to raise the said contention and it is for the executing Court to decide whether the petitioner could be allowed to raise the said objections at the stage of execution of the Award as a decree. It is on the basis of these observations that the respondents have taken out this Chamber Summons and prayed for the abovementioned reliefs.