M/S Pioneer Industries Ltd. v. Government of National Capital

1. Vide the present petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the 2014:DHC:3906 Act’), the petitioner has challenged the award dated 22.04.2014, vide which the learned arbitrator has held that no case had been made out against the respondent and the claim was dismissed.

2. The main contention of the petitioner in the present petition is that the learned arbitrator has failed to follow the principles of natural justice and therefore the award is non est. It is submitted that the notices purported to have been issued by learned arbitrator on 22.3.2014 and 19.4.2014 were never received by the petitioner. It is further submitted that learned arbitrator has disregarded the order of the hon’ble High Court dated 23.11.2012 in Globus Spirits limited versus Government of NCT of Delhi and Others which was an order in rem wherein it was directed that till further orders only 15 paisa per excise security seal should be charged by the respondents instead of 37 paisa per excise security seal, as demanded. On these facts, it is submitted that award is liable to be set aside.

3. I have heard learned counsel for the parties and have gone through the record.

4. From the award it is clear that the petitioner had not presented any claim before the learned arbitrator. He had also not filed any affidavit or any document to substantiate his claim. It was in the light of these facts that the learned arbitrator reached to the conclusion that no case is made out against the respondent. It is settled law that an award can be challenged on the ground mentioned in Section 34 of the Act. No contention has been raised by the petitioner that the award is in contravention of the public policy or that he was under some incapacity, therefore, could attend the arbitration proceedings. It is also not the case of the petitioner that the award is not valid under any substantive law of the land. His only contention is that he was not given proper notice of the arbitral proceedings. His contention is that he did not receive notices dated 22.3.2014 and 19.4.2014 allegedly issued by the learned arbitrator.

5. Rule 19 (1) of the Act clearly states that arbitral tribunal shall not be bound by the Code of Civil Procedure or Indian Evidence Act.

6. Chapter V of the Act deals with the procedure to be followed by the Arbitrator in the arbitral proceedings. Section 23 of the Act which read:

23. Statement of claim and defence.— (1) Within the period of time agreed upon by the parties or determined by the arbitral tribunal, the claimant shall state the facts supporting his claim, the points at issue and the relief or remedy sought, and the respondent shall state his defence in respect of these particulars, unless the parties have otherwise agreed as to the required elements of those statements. (2) The parties may submit with their statements all documents they consider to be relevant or may add a reference to the documents or other evidence they will submit.

7. Section 23 of the Act requires that a statement of claim stating all the points in issue and the relief sought, along with all the relevant documents be presented before the arbitrator.

8. It is apparent from the award that initially none attended the proceedings on behalf of the petitioner despite service of notice. On reminder notice to petitioner one Avtar Singh, Attorney (although no document filed) appeared on 26.10.2013 and he sought time to file statement of claim. Thereafter on 10.1.2014, Avtar Singh appeared and filed the alleged statement of claim. The learned arbitrator found that it was just a copy of letter dated 7.11.2013 addressed to Deputy Commissioner (Excise) unsupported by affidavit. The learned arbitrator advised the petitioner to file claim statement in proper format duly supported by affidavit. Thereafter the petitioner neither filed any claim statement nor affidavit and also stopped attending the proceedings. None attended the proceedings on date fixed i.e. 1.2.2014 on behalf of the petitioner. The learned arbitrator took the pain to sent notices to the known addresses of Avtar Singh, Attorney of petitioner for 22.3.2014 and 19.4.2014.

9. It, therefore, cannot be said that the learned arbitrator has acted in haste or did not give sufficient opportunities to the petitioner to file his claim or his documents. The petitioner has not stated any reason in his petition which prevented him from presenting his statement of claim, affidavit or documents before the learned arbitrator. No explanation has come from petitioner for abandoning the arbitral proceedings, by not attending it on the date fixed.

10. Section 25 of the Act empowers the learned arbitrator either to terminate the proceedings on account of failure by the claimant to file his statement of claim in accordance with sub Section (1) of Section 23 or on its discretion continue with the proceedings and make the arbitral award on the basis of evidences before it even where a party fails to attend the hearing or produce any evidence. It is clear that the petitioner, despite directions and taking time, did not file his statement of claim supported by an affidavit. The petitioner only filed copy of a letter addressing the respondent. It is thus a case, where the petitioner failed to file a proper claim statement duly supported by affidavit and where he has not come up with any explanation at all for this act. Under Section 19 of the Act the arbitrator is given power to conduct its proceedings in the manner it considers appropriate. The learned arbitrator, before passing of the award, had issued two letters to petitioner, in the name of its attorney, at all the known addressed of the attorney.

11. It, therefore, is clear that the learned arbitrator has duly followed the prescribed procedure. It is also apparent that the learned arbitrator had given ample opportunities to the petitioner to present his claim and documents. The arbitral award does not suffer with any infirmity. It is also not in violation of any substantive law. There is also no error apparent on face of award and it is also not against any public policy. There are no grounds to interfere with the award.

12. The petition has no merit. The petition and pending application are hereby dismissed.

DEEPA SHARMA (JUDGE) AUGUST 14, 2014 rb