AVCO TRADERS PVT. LTD. AND ORS. v. SANDEEP ENTERPRISES

1. This first appeal is filed under Section 37 of the Arbitration and Conciliation Act, 1996 impugning the judgment dated 12.10.2012 of the court below dismissing the objections filed by the appellants herein under Section 34 of the Act. Objections were filed against the Award dated 13.5.2008 by which the claim petition filed by the respondent herein with respect to supply of cloth was decreed for an amount of Rs. 1,69,080/- along with interest @ 15% per annum from 1.3.2007 till the actual date of recovery of the amount. 2014:DHC:1315

2. The arbitrator, as also the impugned judgment, records that appellants in the guise of trying to compromise took three adjournments but ultimately failed to appear, and which has been considered as a strategy to unnecessarily delay the case. After the right to contest of the appellants herein, the respondents in the arbitration proceedings, were closed, the respondent herein/claimant in the arbitration proceedings led evidence by producing the bill books and the bill files. The goods receipts/lorry receipts by which goods were dispatched by Amritsar Transport Company to the appellants were also filed. Similarly, the arbitrator notes that on the bills issued there were signatures of the appellants. The respondent herein/claimant also produced the relevant ledgers of the years 2006-2007 and 2007-2008. Considering the entire evidence the claim of the respondent was allowed and Award was passed as stated above.

3. Counsel for the appellants argued before this Court that the claim petition is misconceived because really only a reference was sought for before the arbitrator of disputes and which is said to be clear from the claim petition which is annexed at page 113 of this paper book. No doubt, the claim petition is not in detail, however, considering that there is no specific format of a claim petition and that the respondent/claimant has otherwise proved the claim by means of filing the bills, challans, goods receipts and the ledgers, the respondent was rightly held entitled to amount due on account of sale of cloth, I do not find any illegality in the Award on the ground of vagueness which is found in the claim petition. It also bears note that the appellant no.1 has all along known that the claim amount is only towards sale to it of goods/cloth and there is no surprise upon the appellants by any alleged vagueness in the claim petition.

4. In my opinion, entire object of arbitration is defeated if parties are allowed to implement strategy to delay the process, and this is more so when small claims of small traders are concerned. No doubt, three adjournments are not too many, but, they are not less either for the arbitrator to thereafter close the case of the appellants herein. May be two views are possible on the order of closing the right of appellants to contest, but, a Court which hears objections under Section 34 of the Act will not interfere merely because two views are possible. And, if the original court cannot interfere in an Award with respect to such objections under Section 34, this Court in first appeal has further restricted jurisdiction with respect to challenge to a judgment dismissing objections against an Award in the facts such as in the present case.

5. I may state that during the course of the hearing I put it to the counsel for the appellants that if the appellants are interested in resolving the issue, I can consider the aspect of reduction of pendente lite and future interests to 9% per annum, but, the counsel for the appellants says that he has no instructions in this behalf.

6. While disposing off the appeal I accept the objection that there should not be an Award against the Directors of the appellant no. 1-company inasmuch as there is no record before the arbitrator that appellant nos. 2 to 5 herein are personally liable for the liability of the appellant no. 1. Therefore, I hold that the Award against the appellant nos. 2 to 5 is set aside, and who are the respondent nos. 2 to 5 in the arbitration proceedings.

7. In view of the above, except to the extent of accepting the appeal by deleting the names of the appellant nos. 2 to 5 from the Award because they do not have liability as fastened upon them by the Award, the appeal is dismissed. The amount deposited in this Court by the appellants along with accrued interest thereon be released to the respondent in appropriate satisfaction of the claim due under the Award to the appellant no.1. MARCH 10, 2014 VALMIKI J. MEHTA, J godara