Full Text
:t N THE HIGH COURT OF DELTII AT NEW DELHI
Order Delivered on: April I0 , 2013 o.M.P.29612012
SATYAWATI SHARMA ..... Petitioner
Through Mr.Rohit Gandhi, Adv. with
Mr.Mayank Mehandru, Adv.
Through Mr.Satish Shann4 Adv. with
Mr.Pawan Upadhyay, Adv.
+ ARB.P. 13612012
SATYAWATI SHARMA ..... Petitioner
Through Mr.Rohit Gandhi, Adv. with
Mr'.Mayank Mehandru, Adv.
Through Mr.Satish Shann4 Adv. with
Mr.Pawan Upadhyay, Adv.
MANMOHAN SINGH. J. (Oral)
JUDGMENT
1. Srnt.Satyawati Shanna has filed two petitions; one under Section 9 of the Arbin'ation and Conciliation Act,1996 seeking interirn order and second under Section 11 of the Arbitration and Conciliation Act. 1996 for an o/o:c f0 OA'IP No. 2 9 6/ 20 I 2 & Arb.P.No. I 3 6/2 0 I 2 Page 1 of14 2013:DHC:8063 )t appoinflrent of an Arbitrator.
2. By this conunon order I propose to decide both the petitions as the facts are common.
3. Brief facts leading to the filing of the present petitions are that the petitioner had invested her savings for pwchasing cornrnercial space/restaurant area admeasuring 3200 sq. ft. on the second floor in Saurabh Multiplex in the building at Khasra Nos.1375,1377,1378, 1383 and 1384 village Pasond[4] 'B' Bloclg Shalimar Garden Extn. II, Sahibabad, Ghaziabad, U.P., frorn the respondent IWs. Yash Promoters & Builders Pvt. Ltd. by agreernent dated 15tl'July, 2005 for total sale consideration of T15 lac. The entire payment was rnade in instalhnents before I't June, 2006.
4. The case of the petitioner is that on various occasions the petitioner approached the respondent for execution and regisfi'ation of the sale deed but the respondent delayed the siurre on the one pretext or the other and never applied for obtaining permission as requiled for execution/registration of the sale deed. Rather the respondent dernanded additional money from the petitioner with malafide intention. It is the adrnitted position that at the tirne of purchase of the propefty a restaurant was being run by the tenant, who subsequently has entered into business understanding with the petitioner and is now sharing profits with the petitioner instead of rent.
5. It is stated that it is the obligation of the respondent to register the sale deed in favour of the petitioner. However, the respondent failed to act upon the sarne despite of legal notice issued by the petitioner. Not only that, the respondent also started tlu'eatening the petitioner from stopping essential facilities like water, electricity, power backup and other coilrlnon maintenance services in the said property. V il Otr'IP No. 29 6/ 20 I 2 & Arb.P.No. I 3 6/20 I 2 ( l2-
6. Despite of the agrcernent. dated 15tr' July, 2005 which contains an arbitration clause i.e. the procedure for resolution of dispute,. It is also stated that the respondent has started harassing the petitioner in order to interrupt her business activities. Both petitions were filed before this Courl on 28tr' March, 2012. The petitioner has prayed that an independent arbitrator be appointed.
7. As far as interirn order ah'eady granted is concerned, counsel for the respondent has no objection if the salne rnay continue till it is vacated or rnodified by the arbitrator. The only objection of the respondent is for an appointrnent of independent arbitrator as prayed in the petition. The sole argurnent of the respondent to the prayer is that no valid notice for invocation of the arbination clause has been issued by the petitioner which is rnandatory. The second argurnent is that in the absence of legal notice, an agreed procedure in the arbin'ation clause has to be applied in view of rnutual consent of the parties whereby the respondent shall have the right to appoint an A.rbitator to settle the dispute, therefore, the Court otherwise has no jurisdiction to appoint independent sole A"r'bitrator, thus, the petition is not maintainable.
8. Adrnitted position is that there is a valid agreernent between the parties. Agreement dated 15th July, 2005 contains the albin'ation clause i.e. clause 23, which reads as under: "In case of any dispute touching the Shop(s)/Cornmercial space, the builder shall have the right to appoint an arbin'ator to settle the dispute. The decision by the arbitrator so appointed shall be binding upon both the parties i.e. builder and buyer. In any case, only a cornpetent court of law in Delhi shall have exclusive jurisdiction to settle any dispute, subject to aforesaid arbitration provision. " C Otr'IP No. 296/ 20 I 2 & Arb.P.No. I 3 6i20 I 2 Page 3 of14 l[3] !t
9. The petitioner has placed on record copy of notice dated l2th Decetnber, 2011 issued to the respondent for initiation of arbitrafion proceedings. The said notice was sent by speed post by Mr.Mayank Mahendru, Advocate on behalf of the petitioner. He has also filed his affidavit in which he has stated that notice was sent to the respondent at its registered office at A-7/6, Krishna Nug*, Delhi-l10051 through lndian Post office Speed Post Service and the same has not been rcceived back. As per petitioner, it is deemed to be served upon the respondent. The petitioner has also produced the original letter dated 28d' February,20L[3] issued by the Deputy Manager, Speed Post Cente, New Delhi, who has infonned that the delivery record pertinent to the said period has ah'eady been weeded out as the records of the Speed Post are kept preserved for a period of six months only.
10. On the other hand, argument of the learned counsel for the respondent is that the said notice sent by the petitioner has not been received by the respondent and in the absence thereof no order as sought should be passed.
11. Thus, it is clear that in case one party has rnade dernand for an appoinnnent, the right of opposite party is not forfeited and it continues. It will only cease when party who rnade the dernand will file application under Section 11 of the Act seeking appointnent so, let this Court now consider the objection of the respondent that the petitioner's alleged notice has not been received by the respondent. In Datar Switchgears v. Tata Finance Ltd., (2000) S SCC 151, the Suprerne Court has held as under: *19,.....so far as Section 11(6) is concerned, if one OMP No.296/20 I 2 & Arb.P.No. I 3 6/20 I 2 /Y parry demands the opposite parfy to appoint an arbitator. and the opposite party does not make an appointnent within 30 days of the demand the right to appoinhnent does not get automatically forfeited after expiry of 30 days. If the opposite pa4y makes an appoinnnent even after 30 days of the dernand but before the fu.st party has moved the court under section r 1 that would be sufficient. In other words, in cases arising under Section 11(6), if the opposite party has not rnade an appoinf,nent within 30 days of dernand, the right to make appoinnnent is not forfeited but continues, but an appoinhnent has to be made before the former files application under Section 11 seeking appointrnent of an arbitrator. onlv 1l it. 12. Let rne fust discuss the objection raised by the respondent with regard to procedure stipulated in clause 23 of the Agreement.
13. Thus, incase the notice issued by the petitioner is served upon the respondent and no steps were taken as per Clause 23, the petitioner's prayer is liable to be allowed in view of settled law on this aspect.
14. Wirh petitioner regard has not to contoversy raised that the notice issued by the been received, it is also settled law with regard to {r, i->/ presurnption of service of notice. i) rn suresh chand Agarwal ancl Anr. v. Mahesh Kumar Agarwal and Anr.,Z0I[2] (8) ADJ ZI[3], itwas observed: "..-The chief Justice has to decide whether the applicant has satisfied the conditions for appointing uo r.binuto, under Section l l(6) of the Act. For the purpose of taking a decision on these aspects, the chief Justice can eithei proceed on the basis of affidavits and the documents produced or take such evidence or get such evidence recorded, as rnay be necessary. we think that adoption of this procedure in the context of the Act would best Ol[P No. 2 9 6/20 I 2 & Arb.P.No. I 3 6/20 I 2 ){ serve the purpose sought to be achieved by the Act of expediting the process of arbitration, without too many approaches to the Court at various stages of the proceedings before the albitral tribunal. The petitioners before rnaking the present application have duly invoked the arbitation clause vide notice dated 15.10.2008 requesting for resolving the dispute arnicably or in the alternate to appoint an arbitrator. The aforesaid notice was sent to the respondents by qpeed post which has not been returned undelivered. Therefore, the presurrption of due service by post as provided under Section 27 of the General Clauses Act, would apply as no concrete rnaterial has been brought on record to prove 7 that it was not served or that it was not sent to the respondents at their conect addresses...." ii) In Budhiraja Mining & Constructions Ltd. v. Ircon International Ltd. & Anr.,2012 (I30) Dzu 116, it was obseryed:
Otr,IP No.296/201 2 & Arb.P.No.l 36/201 2 t[6] { course of business it would reach its intended destination. We exhact the relevant portion as under: "If a letter properly directed, containing notice to quit, is proved to have been put into the post office, it is presurned that the letter reached its destination at the proper time according to the regular coru'se of business of the post officg and was received by the pelson to whorn it was addressed. That presurnption would appear to their Lordships to apply with still greater force to letters which the sender has taken the precaution to register, and is not rebutted but stengthened by the fact that a receipt for the letter is produced signed on behalf of the addressee by some person other than the addressee himself." L[7]. It is not in dispute in the present case that letter was properly addressed to the arbin'ator. It is posted, as per the UPC receipt, and thus, it will be presumed that the letter reached the destination at a proper time according to the regular course of business of the post office. No doubt in case of a registered letter the presumption would apply with greater force as observed aforesaid. This principle gontinues to be followed till date including in the recent judgrnent in Samriti Devi & Axr. vs Sampurna Si"gh & tur. AIR 201 I SC 773.
18. There are pronouncements of this court also dealing with the issue of presurnption of service under Section 114, illustration (f) of the Evidence Act read with Section 27 of the General Clause AcL 1897. ln Ram Murti vs FAO(OS)Nos. 44912007 & 45112007 Bhola Nath & Aff. 22 (1982) DLT 426, it has been observed that such a presumption would arise but would be rebuttable. The learned Single Judge of this court observed that "ttle presurnption under the said two provisions is rebuttable but in the absence of proof to the O\IP No.296/20 I 2 & Arb.P.No. I 36/20 I 2 )-l \j cont'ary the presumptiorL of proper service or effective service on the addressee, would alise." To the sarne fact are the observations made in Madan Lal Seth vs Amar Singh Bhalla 18 (1980) DW 427 and Om Prakash bahal vs A.K. shroff AIR 1973 Del.39.
19. We rnay also refer to the provisions of Section 16 of the Evidence Act with its illustrations which read as under:
question whether a particular letter reached the addressee. The fact of it being posted in due coulse and was not returned is a relevant fact... 2I. Learned counsel for the respondent sought to draw strength frorn the provisions of Section 3 of the said Act to contend that what has been sent ought to have been OA,IP No. 2 9 6/20 I 2 & Arb.P.No. I 3 6/20 I 2 Page I of 14 )a I \-, \] receivod by the arbitrator. Section 3 of the said Act reads as under:
sent to the addressee's last known place of business, habitual residence or rnailing address by registered letter or by any other lneans which provides a record of the atternpt to deliver it (2) The communication is deemed to have been received on the day it is so delivered. (3) This section does not apply to written cornmunication in respect of proceedings of any judicial authority."
22. Ir our view, all that section 3 of the said Act states, is that, the written comrnunication is deemed to have been received, if: (i) it is delivered to the addressee personally; or (ii) delivered at the place of business of the addressee; or (iii) delivered at the habitual residence of the addressee; or (iv) delivered at the rnailing address of the addressee. It does not deal with the issue of presumption as to service once the document is put through the post in the nonnal course and that too under UPC, which is a acknowledgement of docurnent being put into post. Section 3 of the Act does not exclude delivery through post." Ot:lP No. 296/20 I 2 & Arb.P.No. I 3 6/20 I 2 ? \ iiD In Food Corporation of India v. Shri Sukhdev Singh, (1999) 121 PLR 565,itwas observed: ".....This letter has been sent by registered post to the defendant. Exhibit AW 2/l is the postal-receipt showing that a registered letter had been sent to the respondent on 7.3.1978. When the letter of acceptance was sent by registered post a presumption arisen both under Section 114 of the Evidence Act and also under Section 27 of the General Clauses Act. It is no doubt true that the said presumption is rebuttal one. The burden of showing that the respondent has not received the acceptance leffer lies on the respondent. It is for him to show by cogent evidence that he has not received the sarne. There is no rnaterial on record to show that the letter has not been posted or has not been received by the respondent. The reasoning given by the Additional Disf,ict Judge discarding the notice Exhibit AW 213 and the postal receipt AW 2lI, are not in rny view, correct. It is not necessary to examine any ofEcial of the Regional office and once it is proved that the letter of communication was sent by registered post, the presumption is that it has been received by the respondent. iv) In New Globe Transport Corporation v. Magma Shrachi Finance Ltd., AIR2}II Cal72, rt was observed:..The learaed Arbinator sent the award in an envelop by register post with acknowledgment due card on 8th August, 2008 which returned with postal endorsernent 'Not Clairned'. The envelop is sufficient$ stamped. The petitioner is receiving letters and correspondences at the said addless and it was not case of the petitioner that the ofiice was closed or for any other reason the envelop was not received by their office. Subsequent leffers and conespondences all were received from the sarne address. Accordingly there should not be \J OI,IP No. 2 9 6/20 I 2 & Arb.P.No. I 3 6/20 I 2 Page l0 of 14 i 7n any doubt to presume that the envelop which was sent at the office of the petitioner, was in fact tendered by the postnan at the salne address but the sarne has not been accepted. ".....I[1] was observed that though Section 138 of the Act does not requile that the notice should be given only by "post", yet in a case where the sender has dispatched the notice by post with correct address written on iq the principle incoqporated in Section 27 of the General Clauses Act, 1897 (for short "the GC Act") could profitably be irnported in such a case. It was held that in this situation service of notice is deerned to have been effected on the sendee unless he proves that it was not really served and that he was not responsible for such non-service. " "In Palagraph B of (C.C. Alavi Haji versus Palapetfy Muhammed and Another) (Supra) it was held that the onus of the sendee to prove that the envelop was not really served and that he was not responsible for such non-service...." v) In U.P. State Industrial Development Corpn. Ltd. and Anr. D.S. Mathur,2}I} 4 AWC 3708, it was observed: "Whenever service has to be effected of a cornmunication it shall be deemed to be effected if it is properly addressed, prepaid and posted. Unless a contrary is proved it will deerned to have been effected in the 'ordinary course of post. In the present case, there is no allegation of refusal or denial of issuing the letters. When the presurnption of service is rebuttable the same requires to be rebutted by leading evidence. The presumption under Section 114(0 of the Evidence Act arise on proof of the fact of posting the letter in the ordinary post and the presumption under Section 27 of the General Clauses Act../ OA,I P No. 29 6/ 20 I 2 & Arb.P.No. I 3 6/2 0 I 2 Page 11 of14,:t\ is with regard to the letter sent tluough registered post. It is settled law that the presurnption can be rebutted by adducing evidence but the burden of proof is on the person who wants to rebut the presumption.....if the Corporation dispatched the letters/notices at the last address of the allottee or last known addless its service would be presurned and the Corporation cannot be placed on at a disadvantage if the G.P.O., Ghaziabad failed to deliver the letters/cornmunication at the changed address of the allottee. Moreover this address was none other than the postal address of the plot in question where the notices were sent. \*i Under these circumstances it has to be held that the Corporation had sent the letters and notices by post at the address of the allottee given in the lease deed, as also on the address provided by hirn to the poshnaster G.P.O., Ghaziabad for communication of all his mail and at the London address of the allottee which was the last known address. There is no plea that the Corporation did not issue the letters/notices by post nor the presumption of service has been rebutted by urry evidence...." vi) In Synergy Ispat Private Ltd. v. Orissa Manganese and Minerals Limited, MANU/WB1075312012, it Was observed: "The respondent has also relied on several judgrnents. A decision reported at MANU/SC/0313/1988: (1989) 1 SCC 264 (Aladan and Co. v. Wazir Jaivir Chand) has been referred to for the proposition that the presumption under Section 27 of the General Clauses Act would fall into place once a postal article is dispatched by registered post and the mere denial of the receipt thereof would be inadequate rebuttal of the presurnption...."
15. Mere denial of receipt of notice is not denial in the eyes of law. In OA,I P No. 2 9 6/ 20 I 2 & Arb.P.No. I 3 6/20 I 2 Hill Elliott observed: \J
16. In view of the above referred decisions, it is cleal that there is a presurnption in favour of the petitioner for sending notice to the respondent and the respondent ought to have received the same. There is a presumption in favour of the petitioner that the notice is deemed to have been served and thus, there is a valid initiation of arbitration proceedings. As no reply to the said notice was sent by the respondent within 30 days, the petitioner therefore was entitled to file the petition under Section 11(6) of the Act for the purpose of appoinflnent of independent arbitrator. Thus, the prayer ?U & Co. Ltd. v. Bltupinder Singh,20II (I[2]) DRJ 438, it was "15.....There is no dispute about the proposition of law that the presumption of service of notice under Section 27 of the General Clauses Act is a rebuttable presumption. However, the facts of each case have to be seen to reach the conclusion whether any rebuttal is forttrcoming frorn the party who is deerned to have been served. We have already referred to hereinbefore as to how the notice terminating the tenancy was sent to Hill Elliott. A perusal of the relevant paragraphs of the written statement filed by Hill Elliott would show that it had simply denied the receipt/service of notice. The circumstances under which the notice dated 9.08.2008 was not received by Hill Elliott were not stated either in para 7 of the Preliminary Objections of the written statement or in reply to Para 5 of the Plaint. Hill Elliott has not stated that the premises during the period the notice is purported to have been served were lying locked; that no responsible person of Hill Elliott was present in the premises during this tirne or there was any other reason by which the nonnal course of business of service of notice was prevented. Thus, the denial of service of notice shall be treated as a vague denial and thus deemed to have been admitted." OA,IP No. 2 9 6/20 I 2 & Arb.P.No. I 3 6/20 I 2 J \J made in the petition is allowed as the respondent had forfeited its right appoint the arbitrator after the exprry of statutory period. I[7]. Both the petitions are disposed of with the following directions: a) Mr. Alakh Kutnar, Advocate (Mobile No. 9811063763) is appointed as sole independent Arbitrator to adjudicate the dispute between the parties. b) Arbitration proceedings are to be conducted under the aegis of Delhi High Court Arbitration Centre and its rules and the fee shall also be paid to the sole arbitrator as per rules thereof. The Arbin'ator appointed by the Delhi High Court Arbination Centre shall give prior notice before commencing the proceedings.
18. As agreed by the parties, interirn order granted on 28tl' March, 2OI[2] shall continue till the salne is vacated or rnodifi.ed by the sole arbitrator.
19. A copy of the order be sent to Delhi High Cout Albitration Cente. Dasti. ilfinnnorhtnQcg) 1 JUDGE APRIL 10,2013 OA,IP No. 2 9 6/20 I 2 & Arb.P.No. I 3 6/2 0 I 2 Page 14 of14