Judgment:
Vinod K. Sharma, J.
1. The petitioner by way of present revision petition has challenged the order passed by the learned Additional District Judge, Patiala, dated 21.2.2003 affirming the judgment and decree dated 26.8.2002 passed by the trial Court videwhich award dated 26.7.1993 passed by the Superintending Engineer, Patiala, has been made rule of the Court.
2. The petitioner was awarded a contract for construction of 10 Registrar Flats in New Rajindra Hospital, Patiala, vide agreement No. 26/6/1997-73. The said agreement was terminated on 22.10.1974 on the plea that the work had not been executed by the petitioner within the stipulated period. A decision was taken to invoke clause 2 of the agreement to impose 10% compensation amounting to Rs. 36,200/- based on the estimated cost of the work. Action was also proposed to be taken under clause 3 of the said agreement.
3. After a gap of 19 years clause 25-A of the agreement was invoked and claim of Rs. 1,58,594/- inclusive of interest for the period from 1974 to 1993, was referred for arbitration to the Superintending Engineer, Patiala Circle No. (1) PWD B&R;, Patiala. The reference was entertained by ShriB.D. Gupta, the then Superintending Engineer, and an exparte award dated 26.7.1993 awarding a sum of Rs. 45,126/- was passed against the petitioner and in favour of the Executive Engineer. An application was made on 18th August, 1993 for making the award rule of the Court and on notice the petitioner filed objections under Section 30 read with Section 33 of the Arbitration Act, 1940. The primary ground for setting aside the ex parte award was that the Arbitrator had not issued any notice to the petitioner and, therefore, the award being in violation of the principles of natural justice amounted to misconduct on the part of the Arbitrator. The objections filed by the petitioner were rejected by both the Courts below.
4. It is pertinent to notice here that the learned Additional District Judge, Patiala has been pleased to record a finding qua notice as under:
A perusal of Ex.P-4 further reveals that the contractor has been described as Sh. Ravinder Singh Sodhi, 6, Daljit Colony, Patiala and the name of the work was construction of 10 Nos. Registrar Flats in Rajindra Hospital, Patiala. A notice was issued to the contractor on the said address. The copy of the notice is Ex.P-1. A perusal of the file of the Arbitrator shows that the claim was filed by the Executive Engineer, PWD B&R; Patiala in June, 1993. On 24.6.1996, the XEN was present but no one turned up on behalf of the contractor. The registered notice sent to the contractor was received back unserved. The case was adjourned to 8.7.1993 and the copy of the said order was ordered to be sent to the contractor for information and necessary action. On 9.7.1993, the Arbitrator ordered that since contractor had not turned up in spite of notices sent to him under registered covers, the case was closed for exparte decision. A perusal of the registered covers available on the file reveals that notices were sent to Sh. Ravinder Singh Sodhi at his address. 6, Daljit Colony, Patiala. As per the reports dated 22.7.1993 and 28.7.1993 on the registered covers, they were received back unserved due to incomplete address. As per the report dated 3.7.1993, the addressee had left without address. A perusal of the covers reveals that the notices had been sent to the contractor on the address given by him in the agreement. Thus, the notices sent to the contractor at his address had been received back unserved although the address mentioned on the registered letters was correct. In this situation the Arbitrator had no option but to pass an exparte award. Since the final payment had not been made, the reference had been made within the period of limitation. The Arbitrator had the jurisdiction to entertain the reference as it was made in accordance with clause 25-A of the written agreement between the parties.
The finding recorded above clearly shows that no notice was issued to the petitioner by the Arbitrator.
5. Mr. M.S. Lobana, learned Counsel appearing for the petitioner, contended that the presumption as drawn by the learned Courts below cannot be sustained in the eye of law. The presumption of service can only be drawn in case the registered letter is not received back served or otherwise, which is issued on correct address. However, when the registered letter has been received back unserved, there was no occasion to draw any presumption regarding service as has been drawn by the learned Courts below and it has to be held that the award was passed by the learned Arbitrator without service to the petitioner. In support of his contention, learned Counsel for the petitioner placed reliance on the judgment of this Court in the case of Prem Nath L. Harsaran Dass and Anr. v Om Parkash L. Ram Kishen Dass Aggarwal A.I.R. 1956 Punjab 187 to contend that an award passed ex parte without notice amounts to misconduct on the part of the Arbitrator. Para 5 of the said judgment reads as under:
Assuming for the sake of arguments that Om Parkash did not appear before the arbitrator on the 17th November and that the version given by him to the country is not worthy of belief, even then it seems to me that it was his duty to inform Om Parkash that he intended to proceed with the reference at a specified time and place whether Om Parkash attended or not. If this notice had been issued and if he had failed to secure the attendance of Om Parkash, then and then alone was the arbitrator at liberty to proceed exparte against him (Russell on Arbitration, 15th Edition page 144).
6. The learned Counsel for the petitioner further placed reliance on the judgment of the Hon'ble Supreme Court in the case of Food Corporation of India v. Joginderpal Mohinderpal and Anr. : AIR1989SC1263 , to contend that the Arbitrator must adhere to the principles of natural justice and failure thereto would amount to misconduct.
7. I find force in the contentions raised by the learned Counsel for the petitioner. The Arbitrator, though entitled to proceed exparte, can do so only in cease a party in spite of service does not appear to contest the claim. In the present case, once the registered letter was received back unserved and if there was any doubt in the mind of the Arbitrator regarding the petitioner's attempt to evade service, then it was incumbent on the Arbitrator to have restored to provisions of Order 5 Rule 20 of the Code of Civil Procedure by ordering service by substituted service. In absence thereof, it has to be taken that the award has been passed without notice to the petitioner, and therefore, is in violation of principles of natural justice which amounts to misconduct on the part of the Arbitrator. Therefore, it cannot be sustained in the eye of law.
8. Accordingly, this revision petition is accepted and the judgment and the decree passed by the learned Courts below as well as the award passed by the learned Arbitrator are hereby set aside. However, it will be open to the parties to restart the proceedings in accordance with law.