Calcutta High Court: In a petition filed by the petitioners seeking to set aside an award dated 30-12-2017, a single-judge bench comprising of Moushumi Bhattacharya,* J., rejected the respondent’s preliminary objection of petition being time-barred and held that there is insufficient material to prove the delivery of a signed copy of the award to the petitioner. The Court held that the balance of convenience favors the petitioner, who will have the opportunity to argue for setting aside the award and the respondent can continue enforcement proceedings until the petitioner takes appropriate measures to stay the award.
Brief Facts
The primary issue in the instant matter is the maintainability of the arbitration petition filed by the petitioners seeking to set aside an award dated 30-12-2017. The respondent contended that the petition is time-barred under section 34(3) of the Arbitration and Conciliation Act, 1996 (the Act).
Parties’ Contentions
The respondent objected to the maintainability of the arbitration petition, citing it as time-barred under Section 34(3) of the Act. It was argued that the petition, filed on 11-10-2023, is barred by law as the 90-day period expired on 16-04-2018, and the additional 30 days expired on 16-05-2018. The respondent asserted that documents and communications sent to the petitioner’s address establish a presumption of deemed service under Section 3 of the Act, read with Section 27 of the General Clauses Act, 1897, and Section 114 of the Evidence Act, 1872.
The petitioners claimed that they learned of the ex parte award only upon receiving the application for execution of the award in January 2023 and they did not receive any signed copy of the award to date. The petitioners argued that Section 31(5) of the Act mandates delivery of a signed copy of the arbitral award to each party, and since this has not been complied with, the limitation period under Section 34(3) has not started.
Legal Considerations
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Section 31(5) of the Act requires the delivery of a signed copy of the arbitral award to each party.
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Section 3 of the Act outlines the presumption of “receipt of written communications” and specifies conditions for deeming fiction.
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The Act is considered a complete code, and its provisions take precedence over the General Clauses Act.
Court’s Assessment
While stating that usage of the term “shall,” indicates its mandatory nature, the Court emphasised on the mandatory nature of delivering a signed copy of the award under Section 31(5) of the Act. The Court observed that Section 3 of the Act outlines the presumption of receipt of written communications, requiring exhaustion of the modes provided before resorting to the deeming fiction.
The Court rejected the respondent’s reliance on Section 27 of the General Clauses Act, stating that the Act is a specific and complete code. The Court emphasised that the delivery of a signed copy of the award initiates the limitation period under section 34, citing Union of India v. Tecco Trichy Engineers & Contractors.
The Court highlighted that Section 31(5) cannot be tailored to suit specific facts, and compliance is not a mere formality but a substantive requirement. The Court observed that the onus is on the award-holder to present irrefutable evidence of delivery under Section 31(5) and the deeming fiction under Section 3.
The Court noted that the petitioner’s address remaining the same is insufficient evidence of delivery. The Court found that the respondent’s postal receipts are insufficient to prove deemed delivery under Section 3(1)(b). The Court held that, in the absence of compelling evidence, the preliminary objection is decided in favor of the petitioner.
Court’s Decision:
The preliminary objection is decided in favor of the petitioner. The present petitions are listed for further consideration on 15-01-2024 or upon the parties mentioning the matter for listing, whichever is earlier. The respondent is allowed to continue with enforcement proceedings until the petitioner takes appropriate measures to stay the award.
[Ashok Kumar Chaudhary v. Kotak Mahindra Bank Ltd., 2023 SCC OnLine Cal 5474, order dated 22-12-2023]
*Judgment by Justice Moushumi Bhattacharya
Advocates who appeared in this case :
Mr. Debraj Sahu, Ms. Sormi Dutta, Counsel for the Petitioner
Mr. Ritoban Sarkar, Ms. Shreyashee Saha, Mr. Himanshu Bhawsinghka, Counsel for the Respondent
Buy Arbitration and Conciliation Act, 1996 HERE
