Delhi High Court
Reliance Commercial Finance Limited vs Taraashna Financial Services Limited on 1 October, 2024
Author: Dinesh Kumar Sharma
Bench: Dinesh Kumar Sharma
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
RESERVED ON -16.08.2024.
% PRONOUNCED ON - 01.10.2024.
+ O.M.P. (COMM) 276/2023, I.A. 14020/2023, I.A. 14021/2023, I.A.
14022/2023
RELIANCE COMMERCIAL FINANCE LIMITED .....Petitioner
Through: Mr. Jayant Mehta, Sr. Adv. with Mr.
Aditya Panda, Mr. Akshay Sinha,
Advs.
versus
TARAASHNA FINANCIAL SERVICES LIMITED .....Respondent
Through: Mr. Manik Dogra, Mr. Viral Mehta,
Mr. Shahezad Kazi, Ms. Ishita
Mathur, Mr. Dhruv Pande, Advs.
S. No Particulars Para Nos.
A. Brief facts 1-17
B. Submissions of Petitioner 18-26
C. Submissions of Respondent 27-31
D. Finding and Analysis 32-51
CORAM:
HON'BLE MR. JUSTICE DINESH KUMAR SHARMA
JUDGMENT
O.M.P. (COMM) 276/2023 Page 1 of 29
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DINESH KUMAR SHARMA,J :
A. BRIEF FACTS
1. The present petition has been filed under Section 34 of the Arbitration
and Conciliation Act “A&C Act” challenging an arbitral award dated
17.01.2023 (“the Impugned Award”) passed by the learned Arbitrator.
2. Initially, the petitioner’s case was that the impugned award was
received from the learned Arbitrator on 05.02.2023, However,
subsequently the petitioner stated that the Award was received on
06.02.2023 along with the petition applications for condonation of
delay was filed bearing I.A. 14020/2023 & I.A. 14022/2023 in O.M.P.
(COMM) 276/2023 stating therein that the period of 03 months from
05.02.2023,the limitation for filing the petition expired on 06.05.2023
taking into account the period of 03 months as provided in the law.
However, it has been submitted that there is a minor delay of 30 days
on the part of petitioner in filing the arbitration petition. The petitioner
stated that the relief sought in the arbitration proceedings pertains to a
transaction that commenced in the year 2015 and the events that
transpired subsequent thereto. It has been submitted that the documents
and events referred to in the arbitration therefore, span a period of
approximately 8 years. The transaction was also stated to be highly
complex.
3. The petitioner submitted that upon receipt of the Impugned Award, the
Petitioner’s internal legal team went through the same and sought to
collate information for the purpose of preparing and finalising the
Arbitration Petition to challenge the Impugned Award. It has also been
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submitted that several of the Petitioner’s personnel who were familiar
with the subject transaction and who directly dealt with the Respondent
were no longer employed with the Petitioner on account of the high
attrition faced by the Petitioner in recent times. It was submitted that
therefore Petitioner’s legal team for the purpose of preparing the
Petition, required to collate documents and brief counsel pertaining to
the subject transaction without the assistance of the said personnel. It
was also submitted that the Petitioner’s legal team is situated in
Mumbai and the Petitioner’s management has recently changed.
4. The petitioner submitted that therefore these circumstances led to the
delay. The delay was stated to be wholly unintentional and constitute
“Sufficient cause” within the meaning of the term used in the proviso
to Section 34(3) of the Arbitration and Conciliation Act.
5. An application bearing I.A. 14022/2023 was also filed for the purpose
of delay in refilling the arbitration petition. It was submitted the present
O.M.P. was uploaded vide Diary No. E-1078242/2023 on 05.06.2023
during the summer vacation. The Registry of this court on 30.06.2023
after scrutiny of the petition, marked the defects which were then
communicated to the Advocate of the Petitioner on his email at 2.06
P.M. The petitioner after curing defects which were pointed out on
30.06.2023, re-filed the petition on 05.07.2023 at 03:01 PM. The
defects were again noted and communicated to the advocate of the
petition on 06.07.2023 at 05:17:31 PM. After curing the defects the
petition was re-filed on 12.07.2023 at 04:46 PM. The Registry again
marked some defects which were communicated on 13.07.2023 at
5:06:23 PM. The petitioner after curing the defects re-filed the petition
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on 15.07.2023 at 01:08 PM. The Registry, after scrutiny re-filed the
petition, again registry marked some defects, which were
communicated on 15.07.2023 at 05:16 PM and the petition was re-filed
on 19.07.2023 at 12:20 PM. The petition was again found having some
defects on 24.07.2023 which were duly cured. It has been submitted
that there is a delay of 14 days in re-filing the petition which is
bonafide and therefore may be condoned.
6. The petition was taken up by this court on 01.08.2023 and the same
was ordered to be taken on 02.08.2023 at the request off the petitioner.
On 02.08.2023 the averment of the petitioner that the award was
received on 05.02.2023 was contradicted on behalf of the respondent
saying that actually award was deemed to have been received on
19.01.2023. Learned counsel for the petitioner sought a period of one
week to place on record the documents to prove date of receipt of the
award. Petitioner was directed to file an affidavit of a senior official of
the Petitioner. Petitioner also filed a note showing the computation on
the premises that the award was received on 05.02.2023.
7. Mr. Pradeep Kumar Mandal, Manager-Legal filed an affidavit dated
28.08.2023 interms of order dated 02.08.2023. In the affidavit Mr.
Pradeep Kumar Mandal stated that on 16.01.2023 learned Arbitrator
listed the arbitration for pronouncement of award on 17.01.2023 and
intimated that a copy of the award will be sent to both the parties by
registered post. The petitioner on not having received the award
addressed an email dated 30.01.2023 to the learned Arbitrator
intimating non-receipt of the award and the petitioner requested the
learned Arbitrator to send the hard copy of the arbitral award dated
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17.01.2023 in the captioned matter to the address of the respondent
mentioned herein below:
“Address:
Reliance Commercial Finance Limited
Kamala Mills, Trade One Building ‘D’ Wing. 4th Floor,
Kamala Mills Compound, Senapati Bapat Marg,
Lower Pare/, Mumbai – 400013.”
8. The respondent stated that the petitioner received the hard copy of the
award on 06.02.2023 at the aforementioned address. It was stated that
as per standard protocol of the Company, on receipt of the said Courier,
certain details i.e. the date of receipt, name of recipient, the department
of the recipient, name alongwith address of the sender, name of the
person receiving the Courier alongwith his signature, name of the
Courier agency (DTDC) and tracking number (Zl2701850) alongwith
remarks by the concerned department of the Petitioner were entered
into the Inward Courier Register of the Petitioner. The copy of the
relevant page of the Register was filed along with the affidavit.
9. The deponent further stated that subsequently, on verification from the
office of the learned Arbitrator, it was learnt by the Petitioner that the
learned Arbitrator had sent a copy of the Award via India Post (Article
No. ED28335I5381N) to the erstwhile address of the Petitioner i.e.
Reliance Centre, 6th Floor, South Wing, Near Prabhat Colony,
Santacruz(East), Mumbai – 400055. The respondent stated that this
office was vacated by the petitioner on 04.10.2020. The copy of the
India Post receipt was also filed along with the affidavit as Annexure-4.
10. The respondent stated that as the consignments sent by the learned
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Arbitrator could not be tracked on the websites of DTDC and India
Post, the Petitioner has addressed separate emails to the Customer
Support of both DTDC and India Post on 10.08.2023 requesting for the
date of delivery/status of the said consignments. Copy of the status
page of consignment sent through DTDC was filed as Annexure-5. The
Customer Support of DTDC vide email dated 11.08.2023 informed the
petitioner that as per the Company’s SOP, Data beyond 3 (three)
months’ are removed from their system. Copy of DTDC’s email dated I
1.08.2023 along with the Petitioner’s email dated 10.08.2023 was filed
as Annexure-6.
11. The deponent stated that on pursuing with the Customer Support of
India Post, the tracking details/status were finally shared by India Post
with the Petitioner on 17.08.2023. It was stated that from the tracking
details, it can be, inter alia, seen that the consignment, bearing Article
No.ED28335I538IN, booked by the learned Arbitrator on 17.01.2023,
was returned from India Post’s Santacruz(East) Sub Office on
04.02.2023 and received at the New Delhi National Sorting Hub on
07.02.2023, thereby clearly indicating that the said consignment was
never delivered to the Petitioner. The copy of the correspondence with
India Post along-with the Tracking details/status are annexed herewith
and marked as Annexure-7.
12. The deponent stated that the copy of the Arbitral Award dated
17.01.2023 was received by the Petitioner only on 06.02.2023, which
can be ascertained from the entry at SI. No. 6309 of the Inward Courier
Register maintained by the Petitioner.
13. The respondent in its reply stated that the petitioner is taking
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contradictory stand as in the affidavit it was stated that the award was
received on 06.02.2023 which is in contradiction with the earlier
statement of the date of receipt of award mentioned in the petition and
the application for condonation of delay. It was stated that in the
application the petitioner has specifically stated that the award was
received on 05.02.2023. The respondent stated that in the statement of
truth which has been filed by the petitioner along with the petition and
the application for condonation of delay, the petitioner has stated and
verified that the statements made in the application for condonation of
delay are true and the statements made in the application for
condonation of delay are true and no false statement has been made.
14. The respondent stated that only after noting the Respondent’s
submissions on limitation at the hearings held on 02.08.2023 and
18.08.2023, the Petitioner realized that its original statement on the
date of receipt of the Award would be fatal to its case and hence
conveniently deviated from its original factual statement in the
Affidavit. The respondent submitted that the petitioner has nowhere
explained regarding such different date of receipt of the Award (i.e.,
05.02.2023) in the application for condonation of delay and 06.02.2023
in the affidavit. The respondent submitted that the date of receipt of
Award is a matter of fact and the Petitioner cannot change the same to
overcome the statutory period of limitation. It has also been submitted
that the petitioner has committed the offence of perjury and criminal
offence by filing a false affidavit.
15. The respondent stated that affidavit dated 28.08.2023 filed by
Petitioner is liable to be rejected out rightly as it contradicts the earlier
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position taken by the petitioner in the application for condonation of
delay and the statement made by the Petitioner’s counsel on
02.08.2023. It was submitted that by taking the date of receipt of award
as 05.02.2023 the present petition is beyond the period of limitation.
The respondent further submitted that in fact the petitioner was already
in possession of a soft copy of the award prior to sending an email to
the learned Arbitrator on 30.01.2023 and therefore the request was only
made for a “hard copy” of the award. The respondent submitted that
there is no statutory requirement of a hard copy to be delivered to the
parties and the limitation starts from the date of from the date of receipt
of award or acquisition of knowledge award.
16. It was stated that in any case, the petitioner had received a hard copy of
the award on 01.02.2023 from the Respondent’s Counsel, which was
sent with a demand letter by the Respondent’s counsel on 31.01.2023
enclosing a copy of the Award. Respondent stated that such demand
letter was sent at both the addresses of the petitioner i.e., at Lower
Parel Office and Santacruz Office. The respondent submitted that
delivery of the award to the petitioner by the Arbitrator at its last
known address constitutes deem service of the award. The respondent
submitted that at no stage in the arbitration proceedings while filing the
pleading or the hearing, the Petitioner informed the Tribunal that it had
vacated the Santacruz Office and shifted to Lower Parel Office. The
respondent stated that even on 16.01.2023 when the learned Arbitrator
informed that the award shall be sent by the registered post the
petitioner did not inform about the shifting of office from Santacruz to
Lower Parel.
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17. The respondent stated that Section 3(1)(b) of the Arbitration Act
provides that “a written communication is deemed to have been
received if it is sent to the addressee’s last known place of business,
habitual residence or mailing address by registered letter or by any
other means which provides a record of the attempt to deliver.” The
respondent also submitted that Section 27 of the General Clauses Act,
1897, as amended (“General Clauses Act”) provides for “meaning of
service by post”. The respondent submitted that it is a settled
proposition that the cumulative effect of Section 3 of the Arbitration
Act and Section 27 of the General Clauses Act is that a communication
would be deemed to have been delivered when the tribunal properly
addressed it to a party at the last known address, and service would be
deemed to have been effected at the time when the post would have
been delivered in the ordinary course. It was stated that it is irrelevant
if such post is returned unclaimed or has not been returned by the
postal authority. Reliance has been placed upon Tata Capital
Financial Services v. A.G.Aerovision Electronics Pvt. Ltd. &ors. 2018
SCC OnLine Del 6663andFrancisco A. D’Souza and another v. L & T
Finance Limited Mumbai 2015(5) Mh.L.J.The averments made in the
affidavit were denied by the respondent.
B. SUBMISSIONS OF PETITIONER
18. Sh. Jayant Mehta learned senior counsel for the petitioner submitted
that the present petition has been filed within the statutory period as
prescribed under Proviso to Section 34(3) of the Arbitration and
Conciliation Act, 1996 and has also been re-filed within the time
prescribed. Learned senior counsel submitted that after the petitioner
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did not receive the soft or hard copy of the award, the petitioner’s
advocate vide email dated 30.01.2023 requested the Arbitrator for the
hard copy of the Award. Learned senior counsel submitted that the
request for the “hard copy” of the Award was made as the Arbitrator
had clearly indicated that he would be sending a copy of the Award by
registered post. It was submitted that therefore it cannot be assumed
that the Arbitrator had sent a soft of the Award to the Petitioner solely
on the basis of the Petitioner requesting for the hard copy of the Award.
19. Sh. Jayant Mehta learned senior counsel for the petitioner submitted
that the Petitioner received the hard copy of the Award from the
Arbitrator on 06.02.2023 by DTDC at Lower Parel, Mumbai office of
the petitioner. Learned counsel submitted that as per standard protocol
of the Company the particulars were entered into the Inward Courier
Register of the Petitioner. Learned senior counsel further submitted that
on verification from the office of the Arbitrator it was learnt that a copy
of the Award was sent via India Post to the erstwhile address of the
Petitioner i.e., Santacruz Office. However, the Petitioner had vacated
the said office on 04.10.2020. Learned senior counsel further submitted
that the petitioner made the enquiry from the Customer Support of
DTDC. However, it was learned that as per their SOP the data is
removed beyond 03 months from their system. Similarly, after enquiry
made from India Post it was transpired that the consignment booked by
the Arbitrator on 17.01.2023 to Santacruz Office was returned from
India Post’s Santacruz(East) Sub Office on 04.02.2023, and was
received at the New Delhi National Sorting Hub on 07.02.2023.
Learned senior counsel submitted that therefore the said consignment
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was never delivered to the Petitioner.
20. Learned senior counsel submitted that the petitioner in its Petition as
well as in its Application for Condonation of Delay, inadvertently
mentioned that the Petitioner received the Impugned Award from the
Arbitrator on 05.02.2023 and this was rectified after being granted
liberty by this Court in its affidavit dated 28.08.2023. Learned senior
counsel submitted that even assuming that the Award was delivered to
the Petitioner on 05.02.2023 the date of receipt of Award as per Section
34(3) of the Act would be presumed to be 06.02.2023 owing to the fact
that 05.02.2023 was a Sunday, a non-working day. In this regard,
reliance was placed upon State of Himachal Pradesh &Anr. v
Himachal Techno Engineers & Anr. (2010) 12 SCC 210.
21. Learned senior counsel submitted that in State of Himachal Pradesh &
Anr. v Himachal Techno Engineers & Anr. (Supra) it was inter alia
held that when the award is delivered or deposited or left in the office
of a party on a non-working day, the date of such physical delivery is
not the date of “receipt” of the award by that party. It was further inter
alia held that the fact that the beldar or a watchman was present on a
holiday or non-working day and had received the copy of the award
cannot be considered as “receipt of the award” by the party concerned,
for the purposes of Section 31(5) of the Act. The Apex Court held that
necessarily the date of receipt will have to be the next working day.
22. Learned senior counsel further submitted that the delivery of the
Arbitral Award has to be made by the Arbitral Tribunal and for the
delivery to be effective, it has to be “received” by the party. Reliance
has been placed upon Union of India v TeccoTrichy Engineers &
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Contractors (2005) 4 SCC 239. Learned senior counsel submitted that
inTeccoTrichy Engineers & Contractors (Supra) it was inter alia held
that the delivery of an arbitral award under sub-section (5) of Section
31 is not a matter of mere formality. It was further inter alia held that
the delivery of arbitral award to the party, to be effective, has to be
“received” by the party. The Apex Court inter alia held that as the
delivery of the copy of award has the effect of conferring certain rights
on the party as provided under Section 33(1) of the Arbitration and
Conciliation Act as also bringing to an end the right to exercise those
rights on expiry of the prescribed period of limitation which would be
calculated from that date, the delivery of the copy of award by the
Tribunal and the receipt thereof by each party constitutes an important
stage in the arbitral proceedings.
23. Learned senior counsel further submitted that in State of Maharashtra
and Ors v. Ark Builders Pvt. Ltd. (2011) 4 SCC 616, the Court while
following TeccoTrichy Engineers & Contractors (supra), has inter alia
held that “period of limitation prescribed under Section 34(3) of the
Act would start running only from the date a signed copy of the award
is delivered to/received by the party making the application for setting
it aside under Section 34(1) of the Act”. Learned senior counsel
submitted that the Apex Court held that even if the party appears to be
deriving undue advantage due to the omission of the arbitrator to give
them a signed copy of the Award, it will not change the legal position.
24. Sh. Jayant Mehta, learned senior counsel for the petitioner submitted
that the attempted service of the Award by the Arbitral Tribunal on the
Petitioner’s erstwhile address would not constitute deemed service of
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the Award under Section 3 of the Act, as it can be clearly seen from the
tracking details of India Post Article No. ED283351538IN that the
consignment was never delivered to the said address and was in fact
returned back to the Arbitrator. Learned senior counsel submitted that
there is no evidence or proof of there being any “reasonable enquiry”
made by the Arbitrator so as to satisfy the conditions for deemed
delivery under Section 3(1)(b) of the Act. Learned counsel submitted
that Section 3(2) deems the receipt of the communication on the day it
is so delivered and in the absence of delivery, there cannot be any such
presumption.
25. Learned senior counsel submitted that it was never the intention of the
Petitioner to withhold its updated address from the Arbitrator as the
Petitioner and its witnesses had provided the company’s updated
address in their Affidavit in lieu of Examination in Chief of the
witnesses and the Rejoinder filed before the Tribunal. Learned senior
counsel submitted that the delay in filing the instant Petition was
wholly unintentional and was occasioned due to the fact that the subject
matter of the Arbitration proceedings pertained to transactions
spanning approximately 8 years commencing from 2015 and the
process of collating information and documents was significantly time
intensive. Learned counsel submitted that the award was received by
the Petitioner from the Arbitrator on 06.02.2023 i.e. date on which the
Petitioner received the Award from the Arbitrator, and the present
petition has been filed on 05.06.2023 i.e., within the statutory period as
prescribed under Section 34(3) of the Act.
26. Learned senior counsel submitted that after the petition was filed, the
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defects were marked by the Registry which were rectified. It has been
submitted that therefore the delay in filing and re-filing of the petition
may be condoned.
C. SUBMISSIONS OF RESPONDENT
27. Sh. Manik Dogra, learned counsel for the respondent submitted that
since beginning the petitioner had given its Santacruz Office address in
the arbitration proceedings and only after the award was passed, the
petitioner for the first time in it’s email dated 30.01.2023 disclosed that
it had vacated Santacruz Office on 04.10.2020. Learned counsel
submitted that on 04.10.2020 when the petitioner stated to have vacated
the Santacruz Office the arbitration proceedings were at a nascent stage
and the Petitioner had not even filed its statement of defence. Learned
counsel submitted that the petitioner did not disclose it its statement of
defence and counterclaim dated 21.11.2020 and in the affidavit filed
along with the statement of defence and counterclaim mentions the
Santacruz Office postal code as the Petitioner’s address.
28. Learned counsel submitted that at no stage during the arbitration
proceedings did the Petitioner notify the Tribunal that it had shifted
from the Santacruz Office to a new location. Learned counsel
submitted that even in the rejoinder dated 24.04.2021 and affidavit of
admission and denial dated 18.05.2021 the Santacruz Office was
mentioned as the Petitioner’s registered office address. Learned counsel
submitted that even on 16.01.2023 when the learned Arbitrator notified
the matter for pronouncement of award on 17.01.2023 and indicated
that same will be sent by registered post, the petitioner did not inform
about the change of the address.
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29. Learned counsel submitted that the award was duly sent by the learned
Arbitrator in accordance with Section 3 of the Arbitration Act and
Section 27 of the General Clauses Act and therefore the award which is
being undisputedly sent by the learned Arbitrator at Santacruz Office is
deemed to have been served upon the petitioner. Learned counsel
submits that after copy of the award being sent by the learned
Arbitrator at Santacruz Office there is sufficient compliance of Section
31(5) of the Arbitration and Conciliation Act.
30. Learned counsel for the respondent submitted that even assuming
without admitting that the petitioner received the award on 05.02.2023,
it is still barred by limitation. Learned counsel submitted that
presuming that the award was received on 05.02.2023, the period of 03
months under Section 34(3) would start on 06.02.2023 and would
expire on 05.05.2023. Learned counsel submitted that thereafter the
period of 30 days under the proviso to Section 34(3) would expire on
04.06.2023 and the present petition has been filed on 05.06.2023.
Learned counsel submits that as per Section 34(3) there is no
jurisdiction with court to condone any delay beyond 03 months as
provided under Section 34(3) and 30 days as provided under the
proviso.
31. Learned counsel submitted that the petitioner’s act of filing a false
affidavit constitutes perjury. Learned counsel also submitted that in fact
the copy of the award had already been received on 01.02.2023. In
support of his contention the respondent has relied upon Logic Eastern
India Pvt Ltd vs KEC International Limited (Cables SBU) 2018 SCC
OnLine Bom 916.
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D. FINDING & ANALYSIS
32. Before proceeding further, it is necessary to advert to the relevant
provisions of the Arbitration and Conciliation Act, 1986. Section 34
Sub-Section 3 provides as under:
“An application for setting aside may not be made
after three months have elapsed from the date on which the
party making that application had received the arbitral
award or, if a request had been made under section 33,
from the date on which that request had been disposed of by
the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was
prevented by sufficient cause from making the application
within the said period of three months it may entertain the
application within a further period of thirty days, but not
thereafter.”
33. It is also necessary to refer to Section 3 of the Arbitration and
Conciliation Act which provides as under:
“3. Receipt of written communications.
(1) Unless otherwise agreed by the parties,
(a) any written communication is deemed to have been
received if it is delivered to the addressee personally or
at his place of business, habitual residence or mailing
address, and
(b) if none of the places referred to in clause (a) can be
found after making a reasonable inquiry, a written
communication is deemed to have been received if it is
sent to the addressees last known place of business,
habitual residence or mailing address by registered
letter or by any other means which provides a record
of the attempt to deliver it.
(2) The communication is deemed to have been received on
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the day it is so delivered.
(3) This section does not apply to written communications in
respect of proceedings of any judicial authority.”
34. Part 3 of the Limitation Act, 1963 provides about Computation of
Period of Limitation. Section 12 Sub-section 1 provides that while
computing the period of limitation for any suit, appeal or application,
the day from which such period is to be reckoned, shall be excluded.
35. It is pertinent to mention that the petitioner in the list of dates and
events filed along with the petition stated 05.02.2023 as date of receipt
of impugned award from the learned Arbitrator. Similarly, in para 9 of
the petition also the petitioner stated that the copy of the impugned
award was received from the learned Arbitrator by the petitioner on
05.02.2023. In the statement of truth filed along with the petition, it
was stated that there was no false statement or concealment of material
fact, document on record and information has been included which is
according to the deponent relevant for the present petition under
Section 34.
36. It is also relevant to mention here that in the application for
condonation of delay also in para 5 it was stated that the impugned
award was received on 05.02.2023. The application was also
accompanied with statement of truth under first schedule Order VI
Rule 15(A). It is also pertinent to mention here that on 02.08.2023 the
date of receipt of the award was mentioned as 05.02.2023. For the first
time the date of receipts as 06.02.2023 was mentioned in para 4 of the
affidavit of Mr. Pradeep Kumar Mandal. It is also pertinent to note that
on 02.08.2023 the petitioner had handed over a note on limitation
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which reads as under:
“The Award was received by the Petitioner on 05-02-2023.
For the purpose of calculating the 3 months period, the said
date shall have to be excluded as per Section 12(1) of the
Limitation Act, 1963 and Section 9 of the General Clauses
Act, 1897. Consequently, three months should be calculated
from 06-02-2023 and would expire on 05-05-2023. Thirty
days from 05-05-2023 under the proviso should be
calculated from 06-05-2023 and would expire on 05-06-
2023.
The said computation is consistent with the judgments of the
Hon’ble Supreme Court, more particularly in the State of
Himachal Pradesh and Another vs. Himanchal Techno
Engineer and Another (2010) 12 SCC 210, which interalia
holds that:
“…………..
17. In Dodds v. Walker the House of Lords held that in
calculating the period of a month or a specified
number of months that had elapsed after the
occurrence of a specified event, such as the giving of a
notice, the general rule is that the period ends on the
corresponding date in the appropriate subsequent
month irrespective of whether some months are longer
than others. To the same effect is the decision of this
Court in Bibi Salma Khatoon v. State of Bihar.
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18. Therefore when the period prescribed is three
months (as contrasted from 90 days) from a specified
date, the said period would expire in the third month
on the date corresponding to the date upon which the
period starts. As a result, depending upon the months,
it may mean 90 days or 91 days or 92 days or 89
days.”
19. As the award was received by the Executive
Engineer on 12-11-2007, for the purpose of calculating
the three months period, the said date shall have to be
excluded having regard to Section 12(1) of the
Limitation Act, 1963 and Section 9 of the General
Clauses Act, 1897, Consequently, the three months
should be calculated from 13-11-2007 and would
expire on 12-2-2008. Thirty days from 12-2-2008
under the proviso should be calculated from 13-2-2008
and, having regard to the number of days in February,
would expire on 13-3-2008.
…………”
37. Thus, taking into account the petitioner’s note on limitation if the date
of receipt of the award is taken as 05.02.2023 as stated by the petitioner
in its list of date, petition and the application for condonation of delay,
the limitation period of 03 months expired on 05.05.2023 and 30 days
thereafter as provided in proviso to Section 34(3) would expire on
04.06.2023.
38. The petitioner in the present case has consistently taken the plea in the
list of dates, petition under Section 34 of the Arbitration and
Conciliation Act and in the note filed on 02.08.2023 that the award was
received by the petitioner on 05.02.2023. Only in the affidavit filed
pursuant to the direction of the Court on 02.08.2023, the date of receipt
of the award was taken as 06.02.2023. The petitioner in this regard has
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relied upon the Inward Register maintained by the petitioner company.
39. I consider that the petitioner cannot be allowed to blow hot and cold in
the same breath. The Inward Courier Register of the petitioner’s
company, the copy of which is being filed along with the affidavit also
cannot come to the rescue of the petitioner as it is a self-serving
document. The date of service of the award on the petitioner has to be
taken as 05.02.2023 and if 05.02.2023 is taken into account the
limitation would start on 06.02.2023 and three months would expire on
05.05.2023. The 30 days as provided under the proviso would expire
on 04.06.2023.
40. The Court has also taken into account the fact that 05.02.2023 was
holiday. In any case, the limitation has been taken running from
06.02.2023. Thus, the petition is barred by limitation.
41. The Court has also considered another argument of the petitioner that
the office of the petitioner was shifted from Santacruz to Lower Parel
and the award was sent at Santacruz Office. The Court is of the
considered opinion that this argument is also noted to be rejected only.
It is not the petitioner’s case that the award was not sent to the
Santacruz Office by the learned Arbitrator by the registered post. There
is no material/document on the record to show that the learned
Arbitrator was informed about the change of address from Santacruz
Office to Lower Parel.
42. In Logic Eastern India Pvt. Ltd. v. KEC International Limited
(Cables SBU) 2018 SCC OnLine Bom 916 in Para 21 & 22, it was
inter alia held as under:
“21. It is also not the appellant’s case that the change of
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address, if any, namely an address different from the
address as appearing in the agreement or the address
already known to the respondent and for that matter even
the registered address, was at any point of time informed to
the respondent. We are not impressed with the case of the
appellant that in view of the change in address of the
appellant, the service of the award on the addresses as
incorporated in the letter dated 10 December 2012 ought to
be considered as invalid.
22. In the circumstances, considering the provisions of sub-
clause (b) of section 3 (1) of the Act read with provisions of
Section 31(5). we are of the clear opinion that when the
learned arbitrator had forwarded the award at the last
known address of the appellant namely B-2, Sector-31,
Noida 201 301 and the same being returned by the postal
authority with the said remarks as noted above, it is
required to be held as an appropriate and lawful delivery of
the award on the appellant, on the day, the same was
attempted to be delivered namely on 17 December 2012 and
18 December 2012 respectively as clearly seen from the
postal remark on page Nos. 558 and 559 of the paper book.
The appellant has no material by which the appellant can
rebut the presumption of the deemed delivery of the award
as noted above.
23. We may also refer to the provisions of Section 27 of the
General Clauses Act, 1897 which provides for “Meaning of
service by post”, which in our opinion is applicable when
we consider the issue of “delivery of the award” under
Section 31(5) read with Section 3 of the Act. Section 27 of
the General Clauses Act, 1897 reads. thus:-
“27 Meaning of service by post. Where any [Central Act] or
Regulation made after the commencement of this Act
authorizes or requires any document to be served by post,
whether the expression “serve” or either of the expressions
“give” or “send” or any other expression is used, then,
unless a different intention appears, the service shall beO.M.P. (COMM) 276/2023 Page 21 of 29
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deemed to be effected by properly addressing, pre- paying
and posting by registered post, a letter containing the
document, and, unless the contrary is proved, to have been
effected at the time at which the letter would be delivered in
the ordinary course of post.”
(emphasis supplied.)
24. Section 31(5) uses the expression “delivered” and thus,
would squarely fall within the connotation “or any other
expression is used” as provided under Section 27 of the
General Clauses Act. The cumulative effect of Section 3 of
the Act read with Section 27 of the General Clauses Act
would be that the communication and/or the award in the
present case would be deemed to have been delivered when
the learned Arbitrator properly addressed the same to the
appellant on the known addresses, and on pre-paying and
posting by registered post the envelop containing a covering
letter and the award. The services would be deemed to be
effected at the time at which the said envelop was being
delivered in the ordinary course of post, as Section 27 of the
General Clauses Act would provide. As noted the
consequence and effect of Section 27 of the General Clauses
Act qua the delivery of the award on the appellant is further
amplified by the clear provisions of sub-clause (b) of
Section 3(1) of the Act.
25. If we are to accept the submissions as urged on behalf of
the appellant, then, the consequence would be to render, the
provisions of not only Section 3 of the Act which is a Special
Act but also the provisions of Section 27 of the General
Clauses Act, nugatory. We need to bear in mind that the
duty of the Court when confronted with such pleas as raised
by the appellant would be to safeguard the intention of the
legislature behind Section 3 of the Act read with the
provisions of Section 27 of the General Clauses Act in its
applicability to Section 31(5) of the Act, namely to maintain
the salutary efficacy of arbitral procedure which cannot be
left to be frustrated.
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26. We may also refer to the provisions of Order XXIX of
the Code of Civil Procedure which concerns “Suits by or
against Corporations”. Rule (2) of Order XXIX provides for
‘Service on Corporation’ in the following terms:-
“2. Service on corporation.- Subject to any statutory
provision regulating
service of process, where the suit is against a corporation,
the summons may be served-
(a) on the secretary, or on any director, or other principal
officer of the corporation, or
(b) by leaving it or sending it by post addressed to the
corporation at the registered office, or if there is no
registered office then at the place where the corporation
carries on business.
(emphasis supplied)
27. Thus, for the purpose of sub-rule (2) ‘service on
corporation’ would be recognized as a good service by
leaving it or sending it by post addressed to the corporation
at the registered office, or when there is no registered office
then at the place where the corporation carries on business.
28. We also refer to the provisions of Section 114 of the
Evidence Act which enables the Court to presume the
existence of certain facts which the Court thinks likely to
have happened regard being had to the common course of
natural events, human conduct and public and private
business, in relation to the facts of the particular case.
Consequently, the Court can presume that the common
course of business has been followed in particular cases.
Applying the test to the communication sent by post, as
prescribed under Section 114 of the Evidence Act, the Court
can draw a presumption that in the common course of
natural events, in public and private business, the
communication has been delivered at the address of the
addressee. There is no material whatsoever, on the basis of
which it can be held that the presumption of deemed
delivery of the award was rebutted by the appellant.”
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43. Thus the Bombay High Court after taking into account Section 3 of the
Arbitration and Conciliation Act inter alia held that sub-clause (b) of
Section 3(1) would become applicable to the written communication of
the learned arbitrator dated 10.12.2012, as the learned arbitrator
forwarded the award by registered post to the appellant, at the last two
known places of business or mailing address of the appellant and
therefore there was an attempt to deliver the said communication. The
court inter alia held that in this situation, sub-clause (b) of Section 3(1)
of the Act would come into play which provides that a written
communication is deemed to have been delivered.
44. In Tata Capital Financial Services v. Ag. Aerovision Electronics Pvt.
Ltd. &Ors.(Supra) the co-ordinate bench of this court after relying
upon the earlier judgment of Shabnam Gulati v. ReligareFinvest Pvt.
Ltd., in FAO (OS) 338/2016 in context of Section 3(1) has inter alia
held that the service deemed to have been affected if it is sent to the
addresses last known place of habitual residence. It was further inter
alia held that this is a deeming provision in the Act, which is a special
legislation and would, therefore, override the general law of service as
contained in the Code of Civil Procedure.
45. In A.G. Aerovision Electronics Pvt. Ltd. and Others v. Tata Capital
Financial Services Ltd. 2018 SCC OnLine Del 10825 inter alia held
that unclaimed service amounts to good service and should be treated
as deemed service of the arbitral award, if it is demonstrated that the
signed copy of the award had been dispatched by the learned Arbitrator
at the correct addresses of the parties. In Simplex Infrastructure
Limited v. Union Of India (2019) 2 SCC 455 it was inter alia held that
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a plain reading of sub-section (3) along with the proviso to Section 34
shows that the application for setting aside the award on the grounds
mentioned in sub-section (2) of S. 34 could be made within three
months and the period can only be extended for a further period of
thirty days on showing sufficient cause and not thereafter. It was held
that the extension cannot be beyond thirty days even it is pleaded that
the delay was caused due to inevitable administrative difficulties of
obtaining directions from higher officials. The Apex Court inter alia
held that the administrative difficulties would not be a valid reason to
condone a delay and beyond the statutory prescribed period under
Section 34.
46. The judgments cited by the learned counsel for the petitioner in Union
of India v. Tecco Trichy Engineers and Contractors (Supra) can be
respectfully distinguished on the facts and circumstances of the case. In
that case the service of the arbitral award was made on the General
Manager by way of receipt in his Inward Register and the same was
held to be not sufficient notice so as to activate the department to take
appropriate steps in respect and in regard to the award passed by the
arbitrator to constitute the starting point of limitation for the purpose of
Section 34(3) of the Act. The facts in the present case are clearly
distinguishable from the facts of the Union of India v. Tecco Trichy
Engineers and Contractors (Supra).
47. In Logic Eastern India Pvt Ltd (Supra) cited with approval the
judgment of the Hon’ble Supreme Court in Madan and Co. v. Wazir
Jaivir Chand 1989 AIR 630, wherein it was inter alia held as under:
“34. The respondent’s would be justified in relying on the
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decision of the Supreme Court in Madan & Co. v. Wazir
Chand (supra) wherein the Court was considering the issue
‘whether notice sent by the respondent therein by registered
post was said to have been served on the petitioner.’ The
evidence on record indicated that the petitioner had gone
away from the premises without intimating landlord or
neighbours of his correct address. The Supreme Court in the
context held that dispatch of notice by registered post AD
was sufficient compliance for landlord for eviction of the
tenant. In the said context, the Supreme Court in paragraph
5 has observed thus:-
“5…….. The difficulty is where the postman calls at the
address mentioned and is unable to contact the addressee or
a person authorised to receive the letter. All that he can
then do is to return it to the sender. The Indian Post Office
Rules do not prescribe any detailed procedure regarding the
delivery of such registered letters. When the postman is
unable to deliver it on his first visit, the general practice is
for the postman to attempt to deliver it on the next one or
two days also before returning it to the sender. However, he
has neither the power nor the time to make enquiries
regarding the whereabouts of the addressee; he is not
expected to detain the letter until the addressee chooses to
return and accept it; and he is not authorised to affix the
letter on the premises because of the assessee’s absence. His
responsibilities cannot, therefore, be equated to those of a
process server entrusted with the responsibilities of serving
the summons of a Court under Order V of the C.P.C. The
statutory provision has to be interpreted in the context of
this difficulty and in the light of the very limited role that the
post office can play in such a task. If we interpret the
provision as requiring that the letter must have been
actually delivered to the addressee, we would be virtually
rendering it a dead letter. The letter cannot be served
where, as in this case, the tenant is away from the premises
for some considerable time. Also, an addressee can easily
avoid receiving the letter addressed to him without
specifically refusing to receive it. He can so manipulateO.M.P. (COMM) 276/2023 Page 26 of 29
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matters that it gets returned to the sender with vague
endorsements such as “not found”, “not in station”,
“addressee has left” and so on. It is suggested that a
landlord, knowing that the tenant is away from station for
some reasons, could go through the motions of posting a
letter to him which he knows will not be served. Such a
possibility cannot be excluded. But, as against this, if a
registered letter addressed to a person at his residential
address does not get served in the normal PG NO 990
course and is returned, it can only be attributed to the
addressee’s own conduct. If he is staying in the premises,
there is no reason why it should not be served on him. If he
is compelled to be away for some time, all that he has to do
is to leave necessary instructions with the postal authorities
either to detain the letters addressed to him for some time
until he returns or to forward them to the address where he
has B gone or to deliver them to some other person
authorised by him. In this situation, we have to choose the
more reasonable, effective, equitable and practical
interpretation and that would be to read the words “served”
as “sent by post”, correctly and properly addressed to the
tenant, and the word “receipt” as the tender of the letter by
the postal peon at the address mentioned in the letter. No
other interpretation, we think, will fit the situation as it is
simply not possible for a landlord to ensure that a
registered letter sent by him gets served on, or is received
by, the tenant.”
48. In Logic Eastern India Pvt Ltd (Supra),the case of N. Parameswaran
Unni v. G. Kannan(2017) 5 SCC 737of the Apex Court was cited
wherein the Apex Court in examining the provisions of Section 27 of
the General Clauses Act read with Section 114 of the Evidence Act,
held that when a notice is sent by registered post and is returned with
postal endorsement “refused” or “not available in the house” or “house
locked” or “shop closed” or “addressee not in station”, due service is
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required to be presumed.
49. In Apex Encon Projects v. L&T Finance Ltd. Laws(BOM)-2015-11-
53, while referring to the judgments in Union of India v. Tecco Trichy
Engineers and Contractors(Supra), The State of Maharashtra v. Ark
Builders Pvt. Ltd. (supra), Benarsi Krishan Committee v. Karmyogi
Shelters Pvt. Ltd. (supra), while considering the issue as to whether the
arbitral award was served within the meaning of the provisions of
Section 31(5) of the Act and the provisions of Section 27 of the
General Clauses Act, inter alia held that the packets sent by registered
post were properly addressed to the corporate office of the appellants
and the presumption would be if it is properly addressed and sent by
registered post after pre-payment upon the correct address of the
addressee, the award was served properly as per the provisions of
Section 3(1)(a) read with Section 27 of the General Causes Act. It was
inter alia held as under:
“8. The communication made to the appellants at his place
of business, therefore, is sufficient for proving receipt of
written communication. The learned Single Judge
therefore relying on Section 51 of the Companies Act, 1956
and 3(1) (a) of the Arbitration and Concilliation Act has,
in our view, correctly held that the award was served
properly as per the provision of law and therefore, since it
was duly served at the registered office, it was deemed to
be served upon the Corporate Office.
10. The learned Single Judge, therefore, in our view, has
rightly recorded a finding of fact that the packets sent by
registered post are properly addressed to the corporate
office of the appellants. A perusal of the said provisions
reveals that a presumption is raised about proper service if
it is properly addressed and sent by registered post afterO.M.P. (COMM) 276/2023 Page 28 of 29
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pre-payment upon the correct address of the addressee.”
50. It is not the case of the petitioner that the award was not sent by the
learned Arbitrator at the last known available address of the petitioner.
The petitioner himself has placed the document on the record that the
packet sent to the address was returned back. The plea of the petitioner
that since it was returned back and not actually “received” by the
petitioner, the award is not delivered to the petitioner in terms of the
provisions of Arbitration and Conciliation Act. This Court is of
considered opinion that this argument of the petitioner if accepted, will
make the Section 3 of the Arbitration and Conciliation Act and Section
27 of the General Clauses Act redundant. The Arbitration Act provides
a strict regime for making the challenge to the award. The Court in it’s
limited jurisdiction cannot dilute such regime by accepting flimsily and
unsubstantiated pleas. Learned Arbitrator had duly sent the Award by
registered post at the last known address of the petitioner. There is
nothing on record to suggest that the change of address was notified to
the learned Arbitrator. Thus both the submissions of the petitioner are
rejected.
51. In view of the fact and circumstances the petition has been filed beyond
limitation and, therefore, the present petition along with pending
application(s) stands dismissed.
DINESH KUMAR SHARMA, J
OCTOBER 1, 2024/AR/NA
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