HSPS Textiles Pvt. Ltd. v. Sanjeev Kumar Goel & Anr.

1. This appeal, in effect, is directed against the order dated 16.12.2020, passed by the learned District Judge, in OMP (COMM) No. 546/2018. By virtue of the impugned order, the learned District Judge has sustained the award dated 21.07.2016, passed by the learned Arbitrator.

1.1. In terms of the award dated 21.07.2016, the appellant has been directed to pay Rs. 76,992/- to respondent, along with interest. 1.[2] To be noted, the appellant’s petition under Section 34 of the Arbitration and Conciliation Act, 1996 (in short “the 1996 Act”) was dismissed by the learned District judge on the ground that, it was filed beyond the period of limitation.

2. The learned District Judge has noted the following crucial dates and 2021:DHC:2695-DB events in the impugned order.

2.1. The award dated 21.07.2016, which was dispatched by the learned Arbitrator to the appellant by speed post, on 22.7.2016, was returned with the report of refusal, dated 23.7.2016, with an endorsement that, the appellant had not been found at the existing address.

2.2. It is recorded by the learned District Judge [and qua which there is no dispute raised before us] that, the address given on the envelope via which the award was dispatched to the appellant, was the same address, which was given in the appellant’s petition preferred under Section 34 of the 1996 Act filed before the learned District Judge.

2.3. Having regard to this aspect, the learned District Judge concluded that a presumption could be drawn that service was refused by the appellant. In reaching this conclusion, inter alia, reference was made by the learned District Judge to Section 3 of the 1996 Act.

2.4. Furthermore, the learned District Judge also records that, the notice issued by the Executing Court was served on the appellant in November

2017. The appellant, admittedly, filed objections qua the same, which were dismissed on 18.07.2018. The learned District Judge, also observed that, a certified copy of the award dated 21.07.2016, was annexed with the execution petition, and that this fact was noticed by the Executing Court in its order dated 18.07.2018.

2.4. Based on the aforesaid dates and events, the learned District Judge concluded that, the stand taken by the appellant that it received a certified copy of the award only on 21.09.2018, after an application had been filed before the learned Arbitrator, on 13.09.2018, for being furnished a copy of the award, was not tenable.

3. It is not in dispute that, the Section 34 petition, under the 1996 Act, was filed by the appellant only on 27.09.2018, as noticed in paragraph 2 of the impugned order.

4. In our opinion, having regard to the facts [as stated hereinabove], and in particular the fact that, the Section 34 petition was filed way beyond the time, prescribed in sub section (3) of Section 34 of the 1996 Act, there could have been no other outcome, except dismissal of the appellant’s Section 34 petition. [See Union of India vs. Popular Construction Co., (2001) 8 SCC 470]

5. Mr. Deepak Aggarwal, who appears for the appellant, however avers, that the impugned award dated 21.07.2016 is not sustainable for the reason that there was no valid arbitration agreement obtaining between the parties. Mr. Aggarwal, thus, submits that, this aspect of the matter, dehors the issue concerning limitation, ought to have been examined by the learned District Judge.

5.1. Furthermore, Mr. Aggarwal says that, every judicial or quasi-judicial authority is obliged to examine this aspect i.e., whether the arbitral award was founded on a valid arbitration agreement? Mr. Aggarwal says that, the appellant had put forth these arguments before the learned District Judge in the Section 34 petition filed under the 1996 Act.

5.2. We are of the view that, these arguments could have been, perhaps, advanced on behalf of the appellant, before the learned District Judge, had the proceedings under Section 34 of the 1996 Act been triggered within the limitation period stipulated under the 1996 Act. The bar of limitation, provided in a statute, only exemplifies a state repose. In other words, once limitation kicks in, it prevents the litigant from accessing the remedy provided in law. Resultantly, dismissal of an action, on the ground of limitation, is not a reflection on the merits of the case. However, for the Court to embark on a journey to examine the matter on merits, it would have to cross the threshold bar, concerning limitation.

6. Thus, for the forgoing reasons, we are of the view that this appeal merits dismissal as there is no infirmity in the approach adopted by the learned District Judge. It is ordered accordingly. Consequently, pending application shall stand closed.