Harish Chander Vs. M/S. Gambit Leasing and Finance (Pvt.) Ltd. and anr. - Court Judgment

SooperKanoon Citationsooperkanoon.com/1128113
CourtDelhi High Court
Decided OnFeb-19-2014
JudgeVALMIKI J. MEHTA
AppellantHarish Chander
RespondentM/S. Gambit Leasing and Finance (Pvt.) Ltd. and anr.
Excerpt:
* in the high court of delhi at new delhi + fao no.322/2010 19th february, 2014 % harish chander through: ..... appellant mr. n.l. bareja, advocate. versus m/s. gambit leasing & finance (pvt.) ltd. & anr. ..... respondents through: ms. neha, advocate for respondent no.1. coram: hon’ble mr. justice valmiki j.mehta to be referred to the reporter or not?. valmiki j.mehta, j (oral) 1. this first appeal is filed under section 37 of the arbitration & conciliation act, 1996 (hereinafter referred to as ‘the act’) impugning the judgment of the court below dated 4.5.2010 which dismissed the objections under section 34 of the act on the ground that the same are barred by limitation.2. taking that the objections were within time the next issue which arises is that whether the appellant/objector are entitled to succeed on merits for setting aside of the award dated 13.8.2007 which has decreed the claim of the respondent no.1/finance company against the principal borrower one sh. pappu and against the appellant as the co-guarantor. by the award, an amount of rs.63,184/- has been decreed jointly and severely against the principal borrower and the guarantors.3. counsel for the appellant argues that the appellant was never served in the arbitration proceedings and therefore the exparte award is bound to be set aside. in order to verify this aspect, i examined the arbitration record and i find that the appellant was served not once but twice by registered post ad. firstly he was served for 19.3.2007 and for the second time he was served for 16.4.2007. there is no dispute that the registered ad cards were sent to the correct official address of the appellant who was working in the dtc depot at rohini. counsel for the appellant, on a query from the court, does not dispute that the appellant was serving at the rohini depot of dtc in march and april, 2007 when the registered covers were sent, however, he disputes the signatures on the two ad cards as not being that of the appellant.4. in my opinion, once there are requisite ad cards showing due service upon the appellant, not once but twice in the arbitration proceedings, and that too at the official address where the appellant was posted, i am of the opinion that the appellant would have been served through any person in the department and who would have given the notices to the appellant. order 5 rule 27 of code of civil procedure, 1908 (cpc) states that where a person is a public officer or an officer of a local authority the summons can be sent for service to the head of the office in which the employee is posted. accordingly, applying the letter and spirit of order 5 rule 27 cpc to the present case it is held that the appellant was served in the arbitration proceedings. once appellant was served in the arbitration proceedings, and he failed to appear, then no issues of merits can be urged before this court as was sought to be done on behalf of the appellant inasmuch as issues of merits had to be decided by the arbitrator provided the appellant appeared before the arbitrator, filed his pleadings and thereafter established his defence. this has not been done and therefore there is no reason for setting aside of the award passed against the appellant as the co-guarantor.5. at the request of the counsel for the appellant it is noted that the appellant, in accordance with law, to the extent he has paid the amount for the principal borrower to the finance-company, he can recover the amount paid to the finance-company with interest from the principal borrower.6. in view of the above, the appeal is dismissed, leaving the parties to bear their own costs. february19 2014 ne fao no.322/2010
Judgment:

* IN THE HIGH COURT OF DELHI AT NEW DELHI + FAO No.322/2010 19th February, 2014 % HARISH CHANDER Through: ..... Appellant Mr. N.L. Bareja, Advocate. Versus M/S. GAMBIT LEASING & FINANCE (PVT.) LTD. & ANR. ..... Respondents Through: Ms. Neha, Advocate for respondent No.1. CORAM: HON’BLE MR. JUSTICE VALMIKI J.MEHTA To be referred to the Reporter or not?. VALMIKI J.

MEHTA, J (ORAL) 1. This first appeal is filed under Section 37 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as ‘the Act’) impugning the judgment of the court below dated 4.5.2010 which dismissed the objections under Section 34 of the Act on the ground that the same are barred by limitation.

2. Taking that the objections were within time the next issue which arises is that whether the appellant/objector are entitled to succeed on merits for setting aside of the Award dated 13.8.2007 which has decreed the claim of the respondent no.1/finance company against the principal borrower one Sh. Pappu and against the appellant as the co-guarantor. By the Award, an amount of Rs.63,184/- has been decreed jointly and severely against the principal borrower and the guarantors.

3. Counsel for the appellant argues that the appellant was never served in the arbitration proceedings and therefore the exparte Award is bound to be set aside. In order to verify this aspect, I examined the arbitration record and I find that the appellant was served not once but twice by registered post AD. Firstly he was served for 19.3.2007 and for the second time he was served for 16.4.2007. There is no dispute that the registered AD cards were sent to the correct official address of the appellant who was working in the DTC depot at Rohini. Counsel for the appellant, on a query from the Court, does not dispute that the appellant was serving at the Rohini depot of DTC in March and April, 2007 when the registered covers were sent, however, he disputes the signatures on the two AD cards as not being that of the appellant.

4. In my opinion, once there are requisite AD cards showing due service upon the appellant, not once but twice in the arbitration proceedings, and that too at the official address where the appellant was posted, I am of the opinion that the appellant would have been served through any person in the department and who would have given the notices to the appellant. Order 5 Rule 27 of Code of Civil Procedure, 1908 (CPC) states that where a person is a public officer or an officer of a local authority the summons can be sent for service to the head of the office in which the employee is posted. Accordingly, applying the letter and spirit of Order 5 Rule 27 CPC to the present case it is held that the appellant was served in the arbitration proceedings. Once appellant was served in the arbitration proceedings, and he failed to appear, then no issues of merits can be urged before this Court as was sought to be done on behalf of the appellant inasmuch as issues of merits had to be decided by the arbitrator provided the appellant appeared before the arbitrator, filed his pleadings and thereafter established his defence. This has not been done and therefore there is no reason for setting aside of the Award passed against the appellant as the co-guarantor.

5. At the request of the counsel for the appellant it is noted that the appellant, in accordance with law, to the extent he has paid the amount for the principal borrower to the finance-company, he can recover the amount paid to the finance-company with interest from the principal borrower.

6. In view of the above, the appeal is dismissed, leaving the parties to bear their own costs. FEBRUARY19 2014 Ne FAO No.322/2010