[REPORTABLE]

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOs 7257-7258  OF 2008 (Arising out of SLP© Nos.1957-1958 of 2008

Kailash Rani Dang ….. Appellant

Versus

Rakesh Bala Aneja & Anr. ….. Respondents

 J U D G M E N T  

HARJIT SINGH BEDI, J.

1. Leave granted.

2.  These  appeals  arise  out  of  the following facts:   On 7th

June,  1995  a  partnership  deed  was  executed  between

Subhash Chander Aneja, since deceased, his son Amit Aneja

and the appellant Kailash Rani Dang,  a cousin of  Subhash

Chander Aneja, aforesaid with regard to  the running of Alka

Cinema, situated at P-2, Sector-15 NOIDA.  The shares in the

partnership were also delineated therein.  On 21st July, 1998,

a  family  arrangement  was  entered  into  between  Subhash

Chander and Kailash Rani, in which it was agreed that the

latter would get 50% of the earnings from the Cinema Hall as

well as from the commercial exploitation of the adjoining plot,

whereas 50% would go to the former.   This agreement also

contained  an  arbitration  clause  whereby  all  disputes  and

differences  would  be  referred to  the  sole  arbitration  of  Shri

Hans  Raj  Dang  and  on  his  non-availability,  to  the  sole

arbitration of Dr. Amar Nath Kumar.  Disputes having arisen,

Kailash Rani vide her letter dated 2nd July, 1999, invoked the

arbitration clause in the family arrangement by writing to Shri

Hans Raj Dang requesting him to act as the arbitrator.  Shri

Hans Raj Dang, however, vide his letter dated 7th July, 1999

informed Kailash Rani  that he would  not  be  able  to act as

such because of ill-health.  Copies of these letters were sent to

the respondent Subhash Chander as well.  Kailash Rani, in

these circumstances, wrote a letter dated 12th July, 1999 to

the alternate Arbitrator Dr. Amar Nath Kumar requesting him

to act as the arbitrator and also informing him that though the

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cinema hall was bringing an income of Rs. 2.5 lacs per month,

she had not been paid a single penny on that account.  Dr.

Amar Nath Kumar accordingly wrote a letter dated 17th July,

1999 to Kailash Rani calling upon her to file her statement of

claim before  25th July,  1999 and to send a copy thereof  to

Subhash  Chander,  through registered  post.   He  also  called

upon Subhash Chander to file his reply to the statement of

claim by 2nd August 1999 and fixed 11.00 A.M. on 8th August,

1999 as the date and time of the hearing at a specified venue

at Ghaziabad.  On 23rd July, 1999, Kailash Rani dispatched

her statement of claim by registered post to the Arbitrator as

well as to Subhash Chander.  The receipt of this statement

was  acknowledged  by  Subhash  Chander  by  his

communication on 29th July, 1999 addressed to Kailash Rani

wherein he asked for the supply of certain documents, failing

which it would not be possible for him to file a reply to the

statement  of  claim.   Kailash Rani,  vide  her  letter  dated 2nd

August  1999,  replied  reminding  Subhash  Chander  that  the

documents he was seeking were already in his possession as

he was one of the executants thereto, but that in any case the

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copies could be taken from the arbitrator during the course of

hearing on 8th August, 1999.  Subhash Chander nevertheless,

through  his  Advocates,  M/s.  Sen  &  Sen  addressed  a

communication  dated  7th August,  1999  to  the  arbitrator

denying  the  execution  of  any  family  arrangement  dated

21st  July,  1998  and  again  asking  for  the  supply  of  the

documents referred to in the statement of claim, and further,

that  the  arbitration  proceedings  be  deferred  till  all  the

documents  were  in  fact  supplied.   As  a  follow  up  to  the

communication from his Advocates, Subhash Chander did not

appear  before  the  Arbitrator  on  8th August,  1999.  The

Arbitrator, accordingly, addressed a letter to him pointing out

that  his  non-appearance  justified  the  initiation  of  ex-parte

proceedings  but  another  opportunity  was  being  afforded  to

him and further that Kailash Rani had undertaken to supply

copies of all documents relied upon by her on the next date of

hearing in his presence.  The hearing was also fixed at 11.00

A.M. on 25th August, 1999. Subhash Chander however did not

appear before the Arbitrator on 25th August, 1999 as well and

after waiting till 2.00 P.M. on that date the Arbitrator ordered

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ex-parte proceedings and thereafter passed an ex-parte Award

against him.  A copy of the Award was sent by the Arbitrator

to both  parties through speed post;  the copy of the Award

being addressed to Subhash Chander at his business address,

Alka Cinema, P-2, Sector -15, NOIDA.   The Postman visited

the  cinema  premises  on  30th August,  1999  but  Subhash

Chander was not present.  The Postman went to the address

again the next day but Subhash Chander refused to receive

the registered envelope,  though the name of  the sendor Dr.

Amar Nath Kumar, the Arbitrator stood written thereon.  The

Postman accordingly returned the envelope to the sender with

an endorsement of refusal dated 31st August 1999.  Kailash

Rani thereafter (on 7th April, 2000) filed an Application in the

Court  of  the  District  Judge,  Gautam  Budh  Nagar  for  the

execution of the Award.  Subhash Chander at this stage filed

an Application under Order 21 Rule 26 of the Code of Civil

Procedure  in  the  Executing  Court  seeking  a  stay  of  the

execution  proceedings,  and  denying  any  knowledge  of  the

passing of the Award dated 25th August, 1999 and also, inter

alia,  pleading  that  though he  had  not  appeared  before  the

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Arbitrator on 25th August, 1999, one Mishra, his Manager, had

done so on his behalf, who, after having waited for an hour,

had found neither the appellant nor the Arbitrator present, on

which  he  had  gone  away  and  that  this  fact  had  been

communicated  to  the  Arbitrator  by  Registered  post  on

6th September,  1999.   He  also  filed  an  application  dated

28th November 2000 under Section 34 of The Arbitration and

Conciliation  Act,  1996  (hereinafter  referred  to  as  “the  Act”)

praying that the ex-parte Award dated 25th August, 1999 be

set aside emphasizing therein that he had received a copy of

the Award only on 7th October, 2000 during the course of the

execution  proceedings.   Subhash  Chander  expired  on  29th

November 2000 and is now represented by his L.Rs including

respondent  No.  1  Rakesh  Bala  Aneja,  his  widow.   Kailash

Rani,  in response  to the aforesaid objection petition, filed a

reply  pleading  that  it  was  time  barred  and  raising  several

objections  on  merits  as  well.   The  District  Judge  –  the

Executing  Court,  thereafter,  called  upon  the  parties  to

produce  their  evidence.    The  statement  of  the  Postman

Dharam Pal, who had tendered the envelope on 30th and 31st

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August, 1999 which Subhash Chander had refused to accept

was  recorded.     The  Court  accordingly  concluded  that  as

Subhash Chander had refused to accept the notice from the

Postman he was deemed to have been served and as such the

application under Section 34 was clearly beyond time as the

maximum time  permissible  for  such an application  was 90

days. The objection petition was, thus, dismissed.    Rakesh

Bala  filed  a  Revision  Petition  in  the  Allahabad  High  Court

which set  aside   the order  of  the Executing Court  vide  the

impugned judgment dated 13th November 2006, which to us,

suffers  from  some  basic  contradictions.   This  is  what  the

Court had to say:

“It is true that in usual course if the  entry  of  refusal  of  service  of  the award is made by the Postman it is to be accepted by the Court as correct. In this view of the matter the present objections  are  to  be  found  presented after the expiry of the limitation period provided for the purpose.  The service of award upon a party who is definitely aggrieved by the same is not a matter to be viewed very lightly.  The service is  not  a  mere  formality  and  it  is  a matter  of  substance.  The  termination of  an arbitral  proceedings are  always subject to certain conditions and it is

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also subject to provisions of Section 33 & 34 of the Act.  In fact the delivery of award  to  a  party  has  to  be  effective after  the  same  has  been  received  by the said party.  This delivery actually has  the  effect  of  conferring  ‘certain rights  upon  the  parties  as  also bringing to an end the right to exercise those rights on expiry of the period of limitation’.  Therefore,  the  delivery  of the  copy  of  the  award  made  is something  which  is  very  substantial for  the  parties.   The  mere  entry  of refusal of acceptance by the Postman upon  the  registered  envelope  should not be given so much importance as to shut  the  entire  available  avenues  for the  redressal  of  his  grievance  of  a party which has been quite  adversely effected by it.”

In  support  its  observations  the  High  Court  relied  on  the

judgment of this Court in  Union of India vs. Tecco Trichy

Engineers  and  Contractors (2005)  4  SCC  239.   It  was

accordingly  held  that  the  date  of  receipt  of  the  Award  by

Subhash Chander would be deemed to be 11th October 2000

and as such the application under Section 34 of the Act was

within time. Kailash Rani filed a review application against the

judgment dated 13th November, 2006 but it too was dismissed

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on 7th August 2007.  Faced with this situation, Kailash Rani is

before  us  in  the  present  appeals,  both  against  the  orders

dated 13th November 2006 and 7th August 2007.

3. Mr.  Arun  Jaitley,  the  learned  senior  counsel  for  the

appellant has raised several arguments during the course of

hearing.  He has first pointed out that Subhash Chander, the

deceased  respondent,  had  always  adopted  an  indifferent

attitude  towards  the  arbitration  proceedings  inasmuch  that

though  he  had  knowledge  of  the  proceedings  he  had

deliberately stayed away on the 25th August 1999 when he, as

per his own statement, had not appeared before the Arbitrator

but had sent his Manager  Mishra instead,  though even his

alleged appearance was an afterthought.  He has also pointed

out  that  Subhash  Chander  in  his  objection  petition  had

denied  the  execution  of  the  family  arrangement  dated  21st

July 1998 though the execution of the partnership deed which

was, in fact, the parent document executed on 7th June 1995

had  not  been  denied  and  this  too,  and  the  fact  that  the

appellant Kailash Rani though entitled to 50% of the income

from  the  cinema  had  not  received  even  a  penny  on  that

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account, was the reason for his recalcitrant attitude.  He has

pleaded that it is in this background that the matter would

have to be examined even with regard to the receipt of a copy

of  the  award  by  him on 31st August  1999,  as  held  by  the

executing court or on the 11th of October 2000 as observed by

the  High  Court.   In  this  connection,  Mr.  Jaitley  has  then

brought to our notice the statement of Dharam Pal PW1, the

postman who deposed that he had visited Alka Cinema on the

30th August 1999 and after finding Shri Aneja absent he had

again visited the next day but the latter had refused to accept

the envelope on which he had made an endorsement to that

effect  and  returned  the  unsealed  envelope  to  the  sender.

Reliance has also been placed on Section 3 of the Act which

talks about the receipt of written communications, to support

the argument that as the envelope had been addressed to the

very address, which was the subject matter of the business

and the partnership, it was deemed to have been served.  Mr.

Jaitley has also distinguished the judgment of this Court in

Tecco Trichy Engineers (supra) and submitted that it had no

applicability to the facts of the present matter.

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 4. Mr.  Ranjeet  Kumar, the learned senior counsel  for the

respondent  has,  however,  pointed  out that the  execution of

the family arrangement dated 7th June 1995 had been denied

by him and as the service of the award was a matter of great

moment and with deep ramifications for him and his family,

there was no reason as to why he would not have filed his

objections  had he  been  served  on the  30th August  1999 or

31st August  1999,  as  alleged.   He  has  also  pleaded  that

Subhash  Chander  had  asked  for  several  documents  by  his

communication  dated  29th June  1999  and the  request  had

been  reiterated  on  7th August  1999,  and  as  the  said

documents had not been supplied,  he had advisedly  stayed

away  from  the  arbitration  proceedings.  It  has  also  been

submitted that as per the family arrangement dated 21st July

1998, the sole learned arbitrator was Shri Hans Raj Dang and

in his absence Dr. Amar Nath Kumar and that there was no

evidence  to  show  that  the  former  had,  at  any  stage,  been

approached to assume the role of arbitrator and as such the

very  initiation  of  proceedings  before  the  latter  was  not  in

order.   He  has  also  pleaded  that  in  any  case  the

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presumptions, if any, raised on account of Section 3 of the Act

had been dispelled by the certificate dated 26th August 2003

issued by the Manager of Hotel Shakti, Allahabad to the effect

that Subhash Chander Aneja had checked into the hotel  at

8.10 a.m. on                30th August 1999 and had checked out

on the 31st of August 1999 at 8.35 p.m. to submit that on both

dates when the postman had allegedly visited the premises of

Alka Cinema in Noida, Subhash Chander Aneja had been in

Lucknow and the postman’s statement  was, thus, a complete

lie.  Mr. Ranjeet Kumar has placed reliance on Tecco Trichy

Engineers  (supra) and,  in  addition,  on  Oil  &  Natural  Gas

Corporation Ltd. Vs. Saw Pipes Ltd.  (2003) 5 SCC 705  in

support of his submissions.    

5. We have heard the learned counsel for the parties and

gone through the record.  We reproduce herein-under Section

3 of the Act:

“Sec.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

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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 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 it.

(2) The communications is deemed  to have been  received  on  the  day  it  is  so delivered.

(3) This  section  does  not  apply  to  written communication in respect of proceedings of any judicial authority.”

6. A bare perusal of the aforesaid provisions would reveal

that if a written communication is delivered to the addressee

personally at his place of business, it shall be deemed to have

been received by him on the day it was delivered.  Admittedly,

a copy of the award had been sent to Subhash Chander at the

Alka Cinema which was, in fact, the property which was the

subject  matter  of  the  partnership  business  between  the

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parties.  In  this  view  of  the  matter,  the  statement  of  the

postman Dharam Pal becomes extremely relevant wherein he

deposed that on the 30th August 1999, Subhash Chander  had

not been present in the cinema premises and that on the next

day he had refused to receive the communication even when

tendered to him which fact had been endorsed by him on the

envelope  which  had  then  been  returned  to  the  sender.

We are, thus, of the opinion that by virtue of sub-clause (a) of

Section 3 (1) read with Section 3(3), a presumption that the

document had indeed been delivered is writ large on the facts

of  the  case.   Mr.  Ranjeet  Kumar  has,  however,  drawn our

attention to the certificate issued by Hotel  Shakti.   We find

that this document is dated 26th August 2003 that is about

four years after the event.  Moreover, it is significant that in

the  objections  filed  in  the  executing  court,  no  reference

whatsoever had been made to this communication and, even

more  significantly,  it  had  been  produced  in  the  Executing

Court  for the first time during the course of arguments. We

are,  therefore,  of  the  opinion  that  this  document  is  an

afterthought and created with the object of strengthening the

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submission that the copy of the award could not have been

delivered to Subhash Chander as he had been absent from the

cinema on the two crucial dates.   

7.    Mr.  Ranjeet  Kumar’s  reliance  on  Tecco  Trichy

Engineers  case  (supra) to  our  mind  is  tenuous.   In  this

matter,  the  Southern  Railways  had  entered  into  a  contract

and  a  dispute  having  arisen,  the  matter  was  referred  to

arbitration.           The Tribunal gave its award on the 10th

March 2001/11th March 2001 and a copy of the award was

delivered  in  the  office  of  the  General  Manager,  Southern

Railway on 12th March 2001 and an acknowledgement of its

receipt was given by some clerk.  On 10th July 2001, the Chief

Engineer  presented  an  application  for  setting  aside  of  the

award and also an application for condonation of delay under

Section 34(3) of the Act.  The application for condonation of

delay  was  contested  by  the  contractor  as  being  beyond

limitation.  The objection found favour with the learned Single

Judge of the High Court who rejected the application holding

it as barred by limitation.  This decision was upheld by the

Division Bench leading to the filing of an appeal in this Court.

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This Court set aside the aforesaid judgment and while doing

so observed  that  the  Ministry  of  Railways  was a  very  large

conglomerate with several divisions and sub-divisions headed

by senior officers and the General Manager being at the apex

of the administration of the division was responsible for laying

down the policy and taking broad strategic decisions and was

not involved in the day-to-day management and operations of

the different departments and that it was only departmental

head,  who was directly  connected with a particular  dispute

who would know what the matter was about.  This is what the

Court had to say:

7. It is well known that the Ministry of  Railways  has  a  very  large  area  of operation  covering  several  divisions, having  different  divisional  heads  and various departments within the division, having  their  own  departmental  heads. The General Manager of the Railways is at the very apex of the division with the responsibility  of  taking  strategic decisions,  laying  down  policies  of  the organisation,  giving  administrative instructions and issuing guidelines in the organisation. He is from elite managerial cadre which runs the entire organisation of his division with different departments, having different departmental heads. The day-to-day  management  and  operations

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of  different  departments  rests  with different  departmental  heads.  The departmental  head is directly  connected and  concerned  with  the  departmental functioning  and  is  alone  expected  to know the progress of the matter pending before  the  Arbitral  Tribunal  concerning his  department.  He  is  the  person  who knows  exactly  where  the  shoe  pinches, whether the arbitral award is adverse to the  department’s  interest.  The departmental head would naturally be in a position to know whether the arbitrator  

has  committed  a  mistake  in understanding  the  department’s  line  of submissions and the grounds available to challenge the award. He is aware of the factual  aspect  of  the  case  and also  the factual and legal aspects of the questions involved in the arbitration proceedings. It is also a known fact and the Court can take  judicial  notice  of  it  that  there  are several  arbitration  proceedings  pending consideration  concerning  affairs  of  the Railways before arbitration. The General Manager, with executive workload of the entire  division  cannot  be  expected  to know all the niceties of the case pending before  the  Arbitral  Tribunal  or  for  that matter  the  arbitral  award  itself  and  to take a decision as to whether the arbitral award deserves challenge, without proper assistance of the departmental head.  

9.  In  the  context  of  a  huge organisation like  the Railways,  the copy of  the  award has to  be  received  by the person  who  has  knowledge  of  the

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proceedings and who would be the best person to understand and appreciate the arbitral award and also to take a decision in  the  matter  of  moving  an  application under sub-section (1) or (5) of Section 33 or under sub-section (1) of Section 34.

10.  In  the  present  case,  the  Chief Engineer  had  signed  the  agreement  on behalf of the Union of India entered into with  the  respondent.  In  the  arbitral proceedings  the  Chief  Engineer represented  the  Union of  India  and the notices,  during  proceedings  of  the arbitration,  were  served  on  the  Chief Engineer. Even the arbitral award clearly mentions  that  the  Union  of  India  is represented  by  the  Deputy  Chief Engineer/Gauge  Conversion,  Chennai. The Chief Engineer is directly concerned with  the  arbitration,  as  the  subject- matter  of  arbitration  relates  to  the department of the Chief Engineer and he has  direct  knowledge  of  the  arbitral proceedings  and  the  question  involved before  the  arbitrator.  The  General Manager  of  the  Railways  has  only referred  the  matter  for  arbitration  as required  under  the  contract.  He  cannot be  said  to  be  aware  of  the  question involved in the arbitration nor the factual aspect in detail, on the basis of which the Arbitral  Tribunal  had decided  the  issue before it,  unless they are all  brought to his notice by the officer dealing with that arbitration and who is in charge of those proceedings.  Therefore,  in  our  opinion, service  of  the  arbitral  award  on  the General Manager by way of receipt in his

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inwards  office  cannot  be  taken  to  be sufficient  notice  so  as  to  activate  the department to take appropriate steps in respect  of  and  in  regard  to  the  award passed  by  the  arbitrators  to  constitute the  starting  point  of  limitation  for  the purposes of Section 34(3) of the Act. The service of notice on the Chief Engineer on 19-3-2001 would be the starting point of limitation to challenge the award in the Court.

11.  We  cannot  be  oblivious  of  the fact  of  impersonal  approach  in  the government  departments  and organisations  like  Railways.  In  the  very nature  of  the  working  of  government departments  a  decision  is  not  taken unless  the  papers  have  reached  the person concerned and then an approval, if required, of the competent authority or official above has been obtained. All this could  not  have  taken  place  unless  the Chief  Engineer had received the copy of the award when only the delivery of the award within the meaning of sub-section (5) of Section 31 shall be deemed to have taken place.

As would be evident, no analogy between the case before us

and the above cited case exists.  The second judgment relied

upon  by  Mr.  Ranjeet  Kumar  i.e.  Oil  &  Natural  Gas

Corporation  Ltd.  Vs.  Saw  Pipes  Ltd. (2003)  5  SCC  705

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deals  with the  general  policy  pertaining  to  certain  kinds  of

arbitration  agreements  and  has  nothing  to  do  with  the

question posed before us.  We, therefore, find that Mr. Ranjeet

Kumar’s arguments based on these two cases are misplaced.

8. A discussion on this aspect would be incomplete without

a reference to the obstructionist attitude of Subhash Chander

during  the  course  of  the  arbitration  proceedings.    It  is

significant  that  though  the  execution  of  the  family

arrangement has been denied, the fact of the partnership deed

qua Alka Cinema has not been denied.  It is also clear  that

the cinema was under  the complete  and effective  control  of

Subhash Chander and is now under the control of his legal

representatives  and  that  nothing  has  been  paid  to  Kailash

Rani on account of the income of the partnership.  It has been

submitted by Mr. Ranjeet Kumar that Subhash Chander had

not appeared before the arbitrator as the documents referred

to in the statement  of  claim had not been supplied  despite

several  requests.   Some facts,  however,  bear  re-capitulation

and  they  would  be  best  put  as  in  the  award  wherein  the

arbitrator observed as under:

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“In  pursuance  of  the  Arbitration Clause,  Smt.  Kailash  Rani  Dang,  since she  was  aggrieved  by  the  acts  and omissions of Shri S.C. Aneja referred the matter to the Arbitration of Shri Hans Raj Dang who refused to arbitrate due to his illness  and  other  personal  reasons  by means of his letter dated 7.7.1999.

Accordingly,  Smt.  Kailash  Rani Dang,  referred  the  matter  to  my arbitration  by  means  of  letter  dated 12.7.99.

I,  there  upon  entered  into  the reference  and  by  means  of  letter  dated 17.7.99  called  upon  Smt.  Kailash  Rani Dang  to  send  or  to  file  a  detailed statement of her claims before me latest by  25.7.99  and  send  a  copy  thereof  to Shri  S.C.Aneja  through  registered  post. Shri  S.C.Aneja  was  also  called  upon  to send or file the reply of statement of the claim by 2.8.99. I also fixed 8.8.99 as the date of hearing at 11 A.M. at the following address:

KH-219, New Kavi Nagar, Ghaziabad (U.P.).

Smt.  Kailash  Rani  Dang  filed  her statement  of  claim  in  time  and  sent  a copy  thereof  to  Shri  S.C.Aneja  by registered post.

However,  Shri  S.C.Aneja  did  not send any reply to the statement of claim. By  means  of  letter  dated  29.7.99 addressed  to  Smt.  Kailash  Rani  Dang along  with  copy  endorsed  to  me,  Shri

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S.C. Aneja acknowledged the receipts of the  letters  regarding  statement  of  claim etc.,  but  requested  Smt.  Kailash  Rani Dang to send him the Photostat certified copies of the family arrangement and the partnership deed to him as well as to his wife.

Later  on  by  means  of  letter  dated 7.8.99  M/s.  Sen  &  Sen  Advocates  on behalf of their client S.C.Aneja requested to  supply  the  documents  to  their  client while  acknowledging  8th Aug.99  as  the date of hearing and requested to refer the arbitration proceeding till the documents are received by their client.

It will not be out of place to mention here that by means of letter dated 2.8.99 sent  through  speed  post  addressed  to Shri S.C.Aneja and copy endorsed to me, Smt.  Kailash  Rani  Dang  informed  that the documents shall be produced before the Arbitrator and that Shri S.C. Aneja is free  to  inspect  and get  the  copies  from Dr.Amar  Nath  Kumar  on  that  date  i.e. 8.8.99 accordingly.

Inspite  of the full information and knowledge  about  the  date  fixed  hearing i.e.  8.8.99  Shri  S.C.Aneja  remained absent on the date and did not appear to participate in the proceeding or to obtain copies  of  the  documents  Smt.  Kailash Rani  Dang  remained  present  on  that date,  I  also  waited  upto  2  p.m.,  but  in vain.

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To give one more opportunity to Shri S.C.  Aneja  I  fixed  another  date  i.e. 25.8.99  as  the  next  date  of   hearing specially  mentioning  therein  that  Smt. Kailash Rani Dang has offered to supply to  Shri  S.C.Aneja  copies  of  the documents  relied  upon  by  her  on  the next  date  of  hearing  i.e.  25.8.99  in  my presence as Arbitrator. By means of letter dated  8.8.99  sent  through  Speed  Post. And I  also  fixed  the following Venue as the  place  of  hearing  at  11  a.m.  on 25.8.99:-

14, Old Navyug Market, Ghaziabad (U.P.).

A  copy  of  the  said  letter  was  also sent  to  Sen  &  Sen  Advocates  and Consultants,  B-12,  Nizamuddin  West, New Delhi  with  reference  to  their  letter dated 7.8.99.

On 25.8.99 Smt. Kailash Rani Dang appeared  and  filed  the  following documents in support of her claim:

1. Partnership  deed  in  original  dated 7.6.1995.

2. Family  arrangement  in  original dated 21.7.1998

3. Copy  of  affidavit  filed  by  Shri S.C.Aneja in the High Court.

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4. Copy  of  letter  of  reference  dated 2.7.99 to Shri Hans Raj Dang.

5. Copy of letter of Shri Hans Raj Dang dated 7.7.99 expressing his inability to arbitrate.

I waited upto 2 p.m. on 25.8.99 for Shri  S.C.Aneja  to  appear  but  nobody appeared  on  his  behalf.   Thus,  it  is established  that  Shri  S.C.Aneja  only wanted to delay the proceedings and he deliberately  absented  himself  in  the hearing and accordingly,  I  was left  with no option but  to proceed/continue  with the  arbitration  proceedings  in  his absence.”

Nothing  more  needs  be  said  about  Subhash  Chander’s

conduct  in  the  face  of  these  serious  indictments  by  the

arbitrator.

9.In  view  of  the  above  observations,  and  the  fact  that  no

misconduct has been alleged against the arbitrator, we must

take  it  as proved  that  Subhash Chander  had deliberately

stayed  away  from the  arbitration  proceedings  in  order  to

frustrate and delay the claim of Kailash Rani.

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10. Mr. Ranjeet Kumar, as already indicated above, has also

challenged the very appointment of the arbitrator and has

referred  us  to  the  family  arrangement  under  which  Shri

Hans Raj Dang had been named as the sole arbitrator and

on his refusal Dr. Amar Nath Kumar, to suggest that as no

request had been made to Shri Hans Raj Dang and as there

was no refusal on his part, the appointment of the alternate

arbitrator was not justified. This matter has been dealt with

by the arbitrator in his award, but we have re-examined the

matter ourselves. We find from the record that Kailash Rani

had addressed a letter dated 2nd July 1999 to Shri Hans Raj

Dang to arbitrate in the dispute and, he had, by his letter

dated  7th July  1999,  refused  to  accede  to  the  request

because of ill health and that a copy of this letter had also

been  endorsed  to  Subhash  Chander.   Faced  with  this

situation,  Kailash Rani  had  written  letter  dated  12th July

1999  requesting  Dr.  Amar  Nath  Kumar  to  act  as  the

arbitrator  which  request  had  been  accepted.    The  facts

stated above have not been denied by Subhash Chander at

any stage.   It must, therefore, be taken that the aforesaid

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communications  had  indeed  been  exchanged.   Moreover,

even assuming that the family arrangement dated 21st July

1998 had not been executed and a dispute on facts had to

be raised, Subhash Chander ought to have done so before

the  arbitrator  and  a  boycott  of  the  proceedings  was

unjustified.  We, therefore, find no flaw whatsoever in the

conduct of the arbitration proceedings by Shri Amar Nath

Kumar.

11. The judgment of the High Court cannot, to our mind, be

sustained.   We, accordingly, allow Civil  Appeal No. 7258 of

2008  arising  out  of  SLP© No.  1958  of  2008,  set  aside  the

judgment of the High Court and restore that of the Executing

Court dated 31st October 2006.  Civil Appeal No. 7257 of 2008

arising out of SLP© No. 1957 of 2008 is rendered infructuous.

There will be no order as to costs.

……………………………J. (DALVEER BHANDARI)

…………………………….J. (HARJIT SINGH BEDI)

New Delhi, Dated:  December 12,  2008

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