Delhi District Court
Rubal Sharma And Anr vs Shri Ram Transport Finance Company … on 28 July, 2025
DLCT010002922024
IN THE COURT OF SH. M. K. NAGPAL, DISTRICT
JUDGE (COMMERCIAL COURT)-13, CENTRAL
DISTRICT, TIS HAZARI COURTS, DELHI
OMP (COMM) No. :- 5/2024
CNR No. - DLCT01-000292-2024
IN THE MATTER OF :-
1. Sh. Rubal Sharma
S/o Sh. G.D. Sharma
R/o C-220, Third Floor, Pocket-3,
DDA Flats, Binda Pur, New Delhi-110059.
2. Sh. Pradeep Vashisth
S/o Sh. Bhoo Dutt Sharma
R/o 157-A, Q-Extension, Uttam Vihar,
Uttam Nagar, New Delhi.
... Petitioners
Vs.
Shriram Transport Finance Company Limited
G-2, S-4/60, 2nd Floor, New Mahabir Nagar,
Opposite Janakpuri East Metro Pillar No. 551,
West Delhi-110018.
....Respondent
ORDER
28.07.2025
1. This petition has been filed by petitioners under the
provisions of Section 34 of the Arbitration and Conciliation Act,
1996 (hereinafter referred to as the ‘Act’), challenging the ex-
parte arbitral award dated 08.09.2022 (hereinafter referred to as
the ‘impugned award’) passed by a Sole Arbitrator appointed by
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respondent herein and adjudicating upon the disputes that arose
between parties to this petition in arbitration case bearing No.
ARB/JP/48/19 titled as ‘Shriram Transport Finance Company
Ltd. Vs. Rubal Sharma & Another.’
CASE OF THE PETITIONERS AS PER PETITION
2. It has been averred by petitioners in petition that the
petitioner No.1 had booked a vehicle make Totoya Etios-P with
Galaxy Toyata, Najafgarh Road, Moti Nagar, Delhi and deposited
the advance earnest money of Rs. 50,000/- through a cheque and
thereafter, he purchased the said vehicle from above showroom
on 20.05.2016 for an amount of Rs. 6,42,430/-. It has also been
averred by petitioners that the said vehicle was got financed by
petitioners from respondent vide Loan Agreement No.
JANKP0605180001 dated 19.05.2016 and the loan amount was
agreed to be repaid to respondent in 47 Equated Monthly
Installments (EMIs) of Rs. 17,600/- each and petitioner No.1 had
also deposited an amount of Rs. 90,804/- on account of
insurance premium and life protector/GLTI etc. with respondent
vide receipt dated 17.05.2016 and the said amount was agreed to
be adjusted in total loan amount.
3. It is the case of petitioners that due to non-payment of
some of the EMIs, the respondent extended threats to petitioner
No. 1 that they will forcefully take possession of the above
vehicle and will not handover the same to him. It has been
averred that on 22.03.2018, the respondent had cleverly and with
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a dishonest intention called the petitioner No.1 to its office at
Janakpuri and had obtained his signatures on some blank papers/
forms and he was asked to deposit EMIs with an amount of Rs.
19,257/- and after arranging a sum of Rs. 22,000/-, he had
deposited the same with respondent.
4. It is further the case of petitioners that since petitioner
No.1 could not deposit any amount subsequently, the employees
of respondent had stated that petitioners had entered into a fresh
loan agreement with respondent for a sum Rs. 6,35,000/- vide
agreement No. JANKP0803210003 dated 22.03.2018 in respect
to the vehicle No. DLIRTA-8400 with respondent for a sum of
Rs. 9,09,642/- and though lateron, the petitioner No.1 requested
the respondent to put the petitioners on earlier loan agreement,
but respondent did not listen or pay any heed to the said request.
It has also been averred that thereafter, due to certain unavoidable
circumstances, some of the EMIs could not be paid by petitioner
No.1 and therefore, the respondent had seized the said vehicle
from him at gunpoint and sold it at a price of Rs. 1,75,000/- and
had still raised an illegal demand for an amount of Rs. 7,65,608/-
from them as on 21.10.2019 with delayed payment charges @
36% pa, despite adjustment of the above sale proceeds of vehicle.
It has also been averred that the petitioner No.1 was compelled
by respondent to sign on some blank papers and printing receipts
against his wish, will and consent, but due to constant fear he
could not take any legal action against the respondent.
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5. It has further been averred by petitioners that thereafter,
without issuing any notice to them for appointment of an
arbitrator, the respondent had appointed a Sole Arbitrator in the
case and had filed a statement of claim for an amount of Rs.
7,65,608/- before the Ld. Arbitrator with exorbitant interest @
36% pa and the Ld. Arbitrator had passed impugned award dated
08.09.2022 in favour of respondent company for recovery of a
sum of Rs. 7,65,608/- from petitioners with interest @ 12% pa
w.e.f. 21.10.2019. It is the case of petitioners that since the said
award has been passed ex-parte by a Ld. Sole Arbitrator
appointed by respondent and the Ld. Arbitrator was appointed
without issuance of any notices to them and he also failed to
ensure their participation in arbitration proceedings, the said
award is unsustainable in eyes of law and is liable to be set aside
on the grounds mentioned in petition.
GROUNDS OF CHALLENGE TO THE IMPUGNED
AWARD
6. The petitioners have challenged the impugned award dated
08.09.2022 passed by Ld. Sole Arbitrator mainly on following
grounds:-
a) That the impugned award is against the settled
principles of law of the land;
b) That the impugned award is liable to be quashed as the
respondent had concealed the vital information regarding
the execution and existence of previous hypothecation
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DLCT010002922024agreement dated 19.05.2016 between parties with regard to
the same vehicle and had played fraud upon petitioners by
getting executed a fresh loan agreement dated 22.03.2018
from them;
c) That the Ld. Arbitrator failed to appreciate and take note
of the fact that above loan agreement dated 22.03.2018
was an unregistered agreement and in terms of provisions
contained in Section 35 of the Stamp Act, it was invalid
and unenforceable in law being insufficiently stamped;
d) That the impugned award has been passed by Ld. Sole
Arbitrator ex-parte and without ensuring the service of
notices upon petitioners and giving them a reasonable
opportunity to present their case, as required in terms of
judgment of the Hon’ble High Court in case M/S
Radharamana Capital Services Vs. M/S Paypee Capital
Services Ltd.;
e) That the Ld. Arbitrator failed to pronounce the award
within the given period of 12 months provided by Section
29A (1) of the above said Act;
f) That the appointment of Ld. Arbitrator itself was against
the provisions of law/Act in view of the unsigned letter
dated 23.11.2019 and thus, the arbitration proceedings
initiated by him were totally against law as his
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DLCT010002922024appointment was not valid as per law of the land and
hence, the award pronounced by him is liable to be
quashed/set aside;
g) That the findings arrived at by Ld. Arbitrator are
erroneous on facts as well as in law and the same are also
without any legal evidence, justification, lawful ground,
reasonable and probable cause and excuse and contrary to
the principles of natural justice, equity, good consciousness
and fair play;
h) That Ld. Arbitrator failed to appreciate the record
available before him and had allowed delayed payment
interest, though as per Article 2(e) of the loan agreement
no such penal interest was agreed upon by the parties; and
i) That the Ld. Arbitrator also failed to appreciate the
documents and material placed before him and arrived
upon wrong findings and had wrongly allowed the claim of
respondent.
CASE OF RESPONDENT IN REPLY
7. Notice of the petition was duly served upon respondent
company and it has even filed its reply to this petition denying
most of the averments made by petitioners in petition, except the
advancement of a loan amount of Rs. 6,35,000/- by it to
petitioner No.1 vide loan-cum-hypothecation agreement dated
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22.03.2018, upon a guarantee furnished by petitioner No.2, for
purchase of the above said vehicle and the undertaking given by
petitioners to repay the aggregate loan amount of Rs. 9,09,642/-
in 47 EMIs. However, it is the case of respondent that since
petitioners failed to adhere to the terms of above hypothecation
agreement and to repay the outstanding loan amount with interest
in terms of the said agreement, and also despite repeated
requests, demands and the service of a legal notice, the
respondent was left with no option but to appoint an arbitrator in
terms of an arbitration clause contained in the said agreement and
ultimately, the above arbitration award dated 08.09.2022 came to
be passed in its favour by the Ld. Arbitrator.
8. The respondent company has defended the impugned
award on grounds that the Ld. Arbitrator has rightly passed it
after considering each and every fact and document available
before him; that there was no concealment of facts made by
respondent before the Ld. Arbitrator and that the Ld. Arbitrator
made his best efforts to make petitioners join the arbitral
proceedings and had even sent notices to them at their available
addresses for joining it, but he could not succeed in securing their
presence and hence, had to proceed ex-parte against them in
accordance with law and thus, the Ld. Arbitrator was justified in
announcing the above said award. It is also the submission of
respondent that a copy of the said award was duly sent to
petitioners, but they still failed to make any payment of the
awarded amount to it and instead of complying with the terms of
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award, the petitioners have filed this false and frivolous petition,
though they do not dispute the disbursement of above loan
amount and the claim of answering respondent.
9. Further and besides above, the respondent has also pleaded
that present petition filed by petitioners is hopelessly barred by
time as a copy of the impugned award was immediately sent to
them and they were required to challenge the said award within
the given period of 3 months or within a maximum period of 120
days, whereas they had filed a petition under Section 34 of the
above said Act earlier only in the month of July, 2023 and they
even failed to file any application for condonation of delay in
filing the said petition. It is also the submission of respondent
that the petitioners have failed to explain the said delay in filing
of above petition and each and every days’ delay is required to be
explained. It is further the submission of Ld. Counsel for
respondent that after the expiry of above 120 days, the court has
no powers to condone delay in filing of a petition under Section
34 of the said Act. The respondent has also referred to the
judgment dated 05.10.2001 of the Hon’ble Supreme Court in
case Union of India Vs. Popular Construction Co., Appeal
(Civil) No. 6997/2001 and judgment dated 20.08.2008 in case
Union of India Vs. M/S Mittal Steels, FAO No. 241/2008 and
that dated 04.04.2016 in case Ahluwalia Contracts (India)
Ltd. Vs. Housing & Urban Department, OMP No. 1122 &
I.A. No. 18319/2013 of the Hon’ble High Court.
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10. It is necessary to mention here that before filing of this
petition, the petitioners had also earlier filed one similar petition
bearing No. 52/2023 at Dwarka Courts and the same was
assigned for disposal to the court of Ld. District Judge
(Commercial Court)-02, Dwarka Courts and was registered as
OMP (Comm) No. 52/2023. The said petition is stated to have
been filed on 05.08.2023 and it was subsequently permitted to be
returned back to petitioners for filing the same before an
appropriate court having jurisdiction in the matter, vide order
dated 19.12.2023 passed on an application under Order 7 Rule 10
CPC filed by the petitioners. The said application was filed as it
was pleaded by respondent company in the above petition that
the courts at Dwarka had no territorial jurisdiction to try the said
petition and thereafter, the present petition has been filed by
petitioners before this court on 08.01.2024.
11. It is also necessary to mention here that one application
seeking execution of the impugned award and bearing No.
63/2023 filed by respondent herein against the petitioners is also
pending before the court of Ld. District Judge (Commercial
Court)-01, Dwarka Courts and the proceedings in said petition
were earlier stayed by Ld. Predecessor of this court.
12. It also necessary of mention here that after filing of reply
by respondent company to this petition, an application under
Section 151 CPC came to be filed on behalf of petitioners
seeking directions to the respondent to produce certain
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documents i.e. a copy of the previous loan-cum-hypothecation
agreement dated 19.05.2016 stated to have been executed
between them and also copies of the insurance policy and
statement of loan account of petitioners for the financial year in
which the said vehicle was re-sold by respondent and this
application was filed in order to find out if the said vehicle was
sold at the market price or not. This application was allowed by
the court vide order dated 08.04.2024 and the requisite
documents were subsequently provided by respondent company
to petitioners before filing of their rejoinder.
13. Further, it is also a matter of record that earlier on an
application dated 13.01.2025 filed by petitioners, an affidavit of
authorized representative of respondent company was also taken
on record of the court regarding the number of other cases in
which the Ld. Sole Arbitrator of this case had been appointed as
an arbitrator by the respondent for resolution of their disputes
arising from similar agreements executed with the other or third
parties and it was disclosed in said affidavit that the Ld.
Arbitrator had acted as such in total 102 other matters during the
years from 2019 to 2022.
REJOINDER OF PETITIONERS
14. The rejoinder filed by petitioners contained reiteration of
their case and the grounds of challenge to the impugned award.
Apart of the same, petitioners have also questioned the sale price
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of hypothecated vehicle and the genuineness of sale process in
their rejoinder.
15. I have heard the arguments advanced by Sh. Vikram
Panwar, Ld. Counsel for petitioners and Sh. Manoj Kumar, Ld.
Counsel for respondents. The case record, including written
submissions filed by petitioners as well as the original arbitral
record, has also been perused.
16. In the written submissions filed by petitioners, it is also
found specifically submitted by them that the impugned award is
liable to be quashed and set aside for violation of provisions of
Section 21 and Section 34(2) (iii) of the above said Act as no
notice of invocation of arbitral clause by respondent and even no
notice by Ld. Arbitrator for joining the arbitration proceedings
was given to them. Further, the same is also found to have been
challenged on ground of violation of provisions of Section 12 of
the said Act while submitting that Ld. Sole Arbitrator failed to
furnish the requisite disclosure or declaration in terms of the said
Section and it has further been submitted that the Ld. Arbitrator
was appointed unilaterally and he was biased and hence, the
award pronounced by him is illegal. In support of the above
submissions, Ld. Counsel for petitioners has also relied upon
various judgments in cases of Alupro Building Systems Pvt.
Ltd. Vs. Ozone Overseas Pvt. Ltd., 2017 SCC Online Del
7228; Perkins Eastman Architects DPC Vs. HSCC (India)
Ltd., (2020) 20 SCC 760; order of the Hon’ble High Court in
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FAO (Comm) 60/2021 in case Ram Kumar & Anr. Vs.
Shriram Transport Finance Col. Ltd.; order dated 13.10.2022
of the Hon’ble High Court in FAO (Comm) 179/2021 in case
Shriram Transport Finance Co. Ltd. Vs. Shri Narender
Singh; order dated 07.10.2023 of the Hon’ble High Court of
Gujarat in R/Special Civil Application No. 728/2023 in case
M/S Rich and Royal through its proprietor Mr. Ravindrabhai
Rameshbhai Gamit Vs. Authorized Officer, Hinduja Leyland
Finance Ltd.; and order of the Hon’ble High Court of
Judicature for Rajasthan Bench at Jaipur in case M/S
Atlanta Ltd. Vs. Govt. of India.
17. As it emerges out from above discussion, the award
impugned in this petition has been passed by Ld. Sole Arbitrator
appointed by the respondent company herein unilaterally and
besides challenging the said award on this ground and on merits,
the petitioners have also challenged it on various other legal
grounds pertaining to violation of the provisions contained in
Section 12 and 21 of the said Act and the award has been sought
to be declared illegal and to be quashed on various legal grounds
and as per the mandate contained in Section 34 of the said Act.
18. However, as also discussed above, a specific objection
regarding maintainability of this petition has been raised by
respondent company on ground that this petition is hopelessly
barred by limitation and it has not been filed within the time
period as provided by Section 34 (3) of the said Act.
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19. It is well settled that the preliminary objections raised on
certain grounds like limitation or territorial and pecuniary
jurisdiction of the court etc. are required to be decided first and
before the court can consider or appreciate the pleadings or rival
contentions of parties to be made on merits in a particular case. It
is so because the above legal objections or issues go to the root of
case and if at a later stage, the court finds or comes to a
conclusion that the claim raised before it by a party or petitioner
is barred by the law of limitation or the court has no jurisdiction
to entertain it for any such reason, then the findings arrived at or
the judgment or decision of the court to be pronounced on merits
shall stand rendered to be an illegality. Reference on this aspect
can be made to a judgment of the Hon’ble Supreme Court in case
of Asma Lateef And Anr. Vs. Shabbir Ahmad And Ors.,
(2024) 4 Supreme Court Cases 696 and the relevant
observations made by their lordship are as under:-
46. The essence really is that a court must not only have the
jurisdiction in respect of the subject matter of dispute for the purpose
of entertaining and trying the claim but also the jurisdiction to grant
relief that is sought for. Once it is conceded that the jurisdiction on
both counts is available, it is immaterial if jurisdiction is exercised
erroneously. An erroneous decision cannot be labelled as having been
passed ‘without jurisdiction’. It is, therefore, imperative that the
distinction between a decision lacking in inherent jurisdiction and a
decision which suffers from an error committed in the exercise of
jurisdiction is borne in mind.
47. Moving on to decisions of not too distant an origin, we notice that
this Court in Rafique Bibi v. Sayed Waliuddin16 whilst relying on
(2004) 1 SCC 287 Vasudev Dhanjibhai Modi (supra), has made
valuable observations as to the circumstances where an order passed
could be regarded as a nullity. The relevant observations made inOMP (COMM) No. :- 5/2024 13/27
DLCT010002922024Rafique Bibi (supra) read thus:
“6. What is ‘void’ has to be clearly understood. A decree can be
said to be without jurisdiction, and hence a nullity, if the court
passing the decree has usurped a jurisdiction which it did not
have; a mere wrong exercise of jurisdiction does not result in a
nullity. The lack of jurisdiction in the court passing the decree
must be patent on its face in order to enable the executing court
to take cognizance of such a nullity based on want of
jurisdiction, else the normal rule that an executing court cannot
go behind the decree must prevail.
7. Two things must be clearly borne in mind. Firstly, ‘the court
will invalidate an order only if the right remedy is sought by the
right person in the right proceedings and circumstances. The
order may be ‘a nullity’ and ‘void’ but these terms have no
absolute sense: their meaning is relative, depending upon the
court’s willingness to grant relief in any particular situation. If
this principle of illegal relativity is borne in mind, the law can be
made to operate justly and reasonably in cases where the
doctrine of ultra vires, rigidly applied, would produce
unacceptable results.”
8. A distinction exists between a decree passed by a court having
no jurisdiction and consequently being a nullity and not
executable and a decree of the court which is merely illegal or
not passed in accordance with the procedure laid down by law. A
decree suffering from illegality or irregularity of procedure,
cannot be termed in executable by the executing court; the
remedy of a person aggrieved by such a decree is to have it set
aside in a duly constituted legal proceedings or by a superior
court failing which he must obey the command of the decree. A
decree passed by a court of competent jurisdiction cannot be
denuded of its efficacy by any collateral attack or in incidental
proceedings.”
48. Also, a reading of Rafique Bibi (supra) makes it clear that the lack
of jurisdiction must be patent on the face of the decree to enable an
executing court to conclude that the decree was a nullity. Hence, it is
clear that all irregular or wrong decrees would not necessarily be void.
An erroneous or illegal decision, which was not void, could not be
objected in execution or incidental proceedings. This dictum was also
affirmed by a Bench of 3 (three) Hon’ble Judges of this Court in
Balvant N. Viswamitra v. Yadav Sadashiv Mule.
49. What follows from a conspectus of all the aforesaid decisions is
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that jurisdiction is the entitlement of the civil court to embark upon an
enquiry as to whether the cause has been brought before it by the
plaintiff in a manner prescribed by law and also whether a good case
for grant of relief claimed been set up by him. As and when such
entitlement is established, any subsequent error till delivery of
judgment could be regarded as an error within the jurisdiction. The
enquiry as to whether the civil court is entitled to entertain and try a
suit has to be made by it keeping in mind the provision in section 9,
CPC and the relevant enactment which, according to the objector, bars
a suit. Needless to observe, the question of jurisdiction has to be
determined at the commencement and not at the conclusion of the
enquiry.
(emphasis supplied)
20. Coming back to present case, the factual position which
emerges out from pleadings of parties and submissions made by
their respective Counsels on this aspect is that the impugned
award of this case has been passed by the Ld. Sole Arbitrator on
08.09.2022 and the present petition under Section 34 of the
above said Act has been filed by petitioners on 08.01.2024.
However, it is also an admitted fact brought on record by the
parties that prior to filing of this petition, the petitioners had filed
a similar petition, bearing OMP No. 52/23, at Dwarka Courts on
05.08.2023 and the same was returned back to petitioners on
19.12.2023 on an objection on the ground of territorial
jurisdiction with liberty to file it before the appropriate court, as
also discussed above.
21. Section 34 (3) of the above said Act provides that an
application for setting aside of an arbitral award may not be made
after 3 months have elapsed from the date on which the party
making the said application had received the arbitral award or, if
a request has been made under Section 33, then from the date on
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which that request has been disposed of by the Arbitral Tribunal.
Section 33 of the Act relates to proceedings, if any, to be carried
out with regard to request of parties for correction and
interpretation etc. of an arbitral award. Since the said Section 33
has got no applicability in present case, the above period of 3
months provided by Section 34 (3) of the Act for filing a petition
by petitioners herein for setting aside of the impugned award of
this case has to be counted from the date on which they had
received a copy of the said award. Further, in terms of proviso to
this sub-section (3) of Section 34 of the Act, the court is
empowered to entertain such a petition within a further period of
30 days, but not thereafter, but in such a case the petitioners have
to satisfy the court that they were prevented by some sufficient
cause from filing the said petition.
22. It is necessary to mention here that when this court had
fixed the matter for consideration/orders, after hearing the rival
submissions made by Ld. Counsels for parties on merits of this
petition, an application under Section 5 of the Limitation Act,
1963 r/w Section 151 CPC came to be filed on behalf of
petitioners seeking condonation of a delay of 4 days in filing
their objections or the above previous petition under Section 34
of the Act against the impugned award. As per submissions made
on behalf of petitioners in the said application, as well as in the
main petition, they had received a copy of the impugned award
only during the course of above execution proceedings, after they
had put in their appearance before the concerned executing court
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on 21.04.2023. A copy of the said order dated 21.04.2023 is also
found annexed by petitioners with the present petition, which
contains a direction to the DH/respondent herein to supply the
complete set of execution petition to Ld. Counsel for JDs i.e.
petitioners herein within 3 days. However, it is the submission of
petitioners that they had actually received the copy of impugned
award and other documents in terms of the said order only on
13.05.2023 and it is also found recorded in the above application
of petitioners filed for condonation of delay that they had even
received certified copies of the entire record from the office of
Ld. Arbitrator on 03.05.2023. Hence, it is the submission of
petitioners that while calculating the limitation period from this
date of 03.05.2023, the present petition was to be filed by them
within the given period of 3 months. It is also their submission
that since their Counsel was not familiar with the process of e-
filing, the petition could actually be filed before the Dwarka
Courts on 05.08.2023 i.e. with a delay of 4 days and the hard
copy of petition presented earlier for filing was not accepted by
the Facilitation Centre of Dwarka Courts. It is further the
submission of petitioners that they have been able to show a
sufficient cause for the above delay and it is required to be
condoned in view of judgments of the Hon’ble Supreme Court in
matters of N. Balakrishnan Vs. M. Krishmlmurthy (1998) 7
SCC 123, State of Nagaland Vs. Lipokao (2005) 3 SCC 752
and Collector Land Acquisition Vs. Mst. Katiji 167 ITR 471
(SC) as the rules of limitation are not meant to destroy the rights
of parties and they are meant to ensure justice.
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23. Per contra, it is the contention of Ld. Counsel for
respondent company that the limitation period in this case is not
to be counted from the above date 03.05.2023, but the same is
actually to be counted from an earlier date when a copy of the
impugned award was got delivered to petitioners by the Ld. Sole
Arbitrator and Ld. Counsel for respondent has also referred to
and shown to the court two original postal receipts of date
19.09.2022 contained in the file of arbitral record, copies of
which have even been filed with this petition by the petitioners
themselves. These postal receipts are in respect to dispatch of the
arbitral award by Ld. Sole Arbitrator at the given addresses of
petitioners through speed post and it is the submission of Ld.
Counsel that the said postal process in normal course should have
been received by petitioners in a day or two as they both are the
local residents of Delhi and hence, in view of the same, even the
above earlier petition filed by them on 05.08.2023 was
apparently time barred as the given period of 3 months and also
the extended period of 30 days available for condonation of delay
in discretion of the court stood expired long back in the month of
January, 2023 itself and the said petition was filed after a delay of
around 7 months.
24. As argued above and as found on perusal of the original
arbitration record, a copy of the impugned award dated
08.09.2022 is shown to have been sent to petitioners herein
through speed post on 19.09.2022 and the original postal receipts
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to this effect are found contained in said record and it has been
apparently sent as per the mandate contained in Section 31 (5) of
the said Act, which makes it necessary for an arbitrator to deliver
a signed copy of the award to each of the parties. Though it is the
case of petitioners that they did not receive any copy of the
award from Ld. Sole Arbitrator and they came to know about
existence of the said award for the first time only during the
course of pendency of above execution proceedings initiated
against them by respondent, but it has been vehemently argued
by Ld. Counsel for respondent that in terms of the provisions
contained in Section 3 of the said Act, this court should presume
and hold that the above process was duly delivered at the given
addresses of petitioners through the said mode within a day or
two or within a reasonable time.
25. The provisions of Section 3 of the Arbitration and
Conciliation Act, 1996 are being produced herein below for a
better understanding of the above contention of Ld. Counsel for
respondent:-
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.
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(2) The communication is deemed to have been received on the
day it is so delivered.
(3) This section does not apply to written communications in
respect of proceedings of any judicial authority.
26. Since the above postal process sent through a registered
and speed mode is not shown to have been actually received by
or delivered to the petitioners personally as per Clause (a) of
Section 3 (1) of the said Act, in light of provisions contained in
Clause (b) thereof as well as sub-section (2) of this Section, the
same is deemed to have been received by and delivered to them,
if it was sent to them at their last known place of business or
residential addresses etc. It has been observed on a perusal of the
arbitration record and the file of this petition that the above
process by Ld. Sole Arbitrator was sent at the same addresses of
petitioners and not at any other addresses and hence, as per the
provisions contained in above Clause (b) of Section 3 (1) as well
as sub-section (2) of the said Section, the court has to presume a
deemed delivery of the said process carrying a copy of the
impugned award upon petitioners at their said addresses. It has
also not been submitted or even argued on behalf of petitioners
that their given addresses as appearing in the arbitral award are
not correct and hence, simply because the notices sent to them by
Ld. Sole Arbitrator at the said addresses are shown to have been
received back undelivered on some subsequent occasions, it
cannot be said that they were not existing at the said addresses at
the time when the above speed post process carrying a copy of
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the award was or might have tendered for service or delivery at
these addresses.
27. Moreover, the postal tracking report available in arbitral
record also reflects that on one such occasion, the petitioner no. 2
herein was duly served with notice of the arbitration proceedings
on date 21.10.2021 through his mother namely Ms. Manju and in
view of the said report, the contrary reports regarding non-
delivery of the postal process at the same address of petitioner
no. 2, or even at the given address of petitioner no. 1,
subsequently may be manipulated reports and this inference is
strengthened even from the fact that the petitioners themselves
have given the same addresses in this petition later on.
28. Now, the next question for consideration of this court is as
to when or on which date the above speed post process should be
taken to have been delivered at the given addresses of petitioners.
Since Section 3 of the above Act is silent on this aspect, the
provisions of Section 27 of the General Clauses Act can be
helpful in this regard and this Section lays down that if a postal
process is properly addressed, prepaid and posted through a
registered mode, then its service shall be deemed to have been
effected upon the addressee at the time at which the said process
would be delivered to him in the ordinary course of post, unless
the contrary is proved. As stated above, the above award was sent
through a registered and speed post mode and the same was also
prepaid and properly addressed and since the process was
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dispatched for local addresses of petitioners in Delhi, in normal
or ordinary course of post the same should have been delivered in
2/3 days or at the most within a week.
29. However, in terms of decision of the Hon’ble Supreme
Court in case Subodh S. Salaskar Vs. Jay Prakash M. Shah
and Anr. in Crl. Appeal No. 1190/2008, arising out of SLP
(Crl) No. 541/2008 and to be on a safer side, such process at the
most can be deemed to have been served upon addressee within a
period of 30 days from the date of issuance thereof. The relevant
observations made by their lordships in this regard are being
reproduced as under:-
23. The complaint petition admittedly was filed on 20.04.2001. The
notice having been sent on 17.01.2001, if the presumption of service
of notice within a reasonable time is raised, it should be deemed to
have been served at best within a period of thirty days from the date of
issuance thereof, i.e., 16.02.2001. The accused was required to make
payment in terms of the said notice within fifteen days thereafter, i.e.,
on or about 2.03.2001. The complaint petition, therefore, should have
been filed by 2.04.2001.
(emphasis supplied)
30. Coming back to the facts of present case and while
applying the prepositions of law laid down by the Hon’ble
Supreme Court in case of Subodh S. Salaskar (supra), the
above speed post process carrying the impugned award can be
deemed to have been served upon petitioners at the most by
19.10.2022. However, the above previous petition under Section
34 of the said Act was admittedly filed by petitioners before the
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courts at Dwarka on 05.08.2023. The prescribed period of 3
months in terms of Section 34 (3) of the said Act for filing of the
said petition expired on 18.01.2023 and even the further period
of 30 days which the court could have extended in terms of
proviso to this Section for filing of the said petition expired on
17.02.2023. Hence, the above previous petition bearing OMP No.
52/23 was filed by petitioners after a delay of more than five and
half months and the same was apparently time barred. Since the
earlier petition was returned back for its presentation before the
appropriate court of jurisdiction, this petition has to be treated as
the same petition presented before this court afresh as per law
and not a fresh petition.
31. Now coming to the question of condonation of delay in
filing the above previous petition, it is clear from above
discussion that the Ld. Counsel for petitioners has filed an
application under Section 5 of the Limitation Act, 1963 seeking
condonation of a delay of around 4 days in filing the said petition
and this delay has been calculated by him while taking the date
of service of impugned award upon petitioners on 13.05.2023, in
terms of directions given in the order dated 21.04.2023 passed by
the Ld. executing court. However, the above claim of petitioners
regarding service of copy of the impugned award upon them on
13.05.2023 has been rejected by this court, as already discussed,
and a copy of the said award has been deemed to have been
delivered to them by post, at the most, on or by 19.10.2022 and
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thus, there is found to be a delay of more than five and half
months in filing of the said petition.
32. It is crystal clear on a bare perusal of the provisions
contained in Section 34 (3) of the above said Act, as well as the
proviso added thereto, that the above period of 3 months and 30
days from the date of receiving of a copy of an arbitral award is
the maximum period during which an award can be challenged
by a party and it cannot be challenged thereafter. It is also now
well settled that this court has no powers under the above Section
or even under provisions of the Limitation Act, 1963 to grant any
further time to a party to challenge the said award or to extend
the above limitation period prescribed by the Arbitration Act as
the proviso of Section 34 (3) thereof uses the words “but not
thereafter”. Ld. Counsel for respondent has rightly referred to
and relied upon the judgment of the Hon’ble Supreme Court in
case Popular Construction Co (supra) on this aspect, wherein
their lordships have made the following observations:-
4. As for as the language of Section 34 of the 1996 Act is concerned,
the crucial words are ‘but not thereafter’ used in the proviso to sub-
section (3). In our opinion, this phrase would amount to an express
exclusion within the meaning of Section 29(2) of the Limitation Act,
and would therefore bar the application of Section 5 of that Act.
Parliament did not need to go further. To hold that the Court could
entertain an application to set aside the Award beyond the extended
period under the proviso, would render the phrase ‘but not thereafter’
wholly otiose. No principle of interpretation would justify such a
result.
(emphasis supplied)
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33. Reference on this aspect can also be made to the judgment
of the Hon’ble Supreme Court in case Assam Urban Water
Supply & Sew. Board Vs. M/s Subash Projects & Marketing
Ltd., 2012 Latest CaseLaw 57 SC, wherein their lordships have
made the following observations:-
7. Section 34 (3) of the 1996 Act provides that an application for
setting aside an award may be made within three months of the receipt
of the arbitral award. The proviso that follows sub-section (3) of
Section 34 provides that on sufficient cause being shown, the court
may entertain the application for setting aside the award after the
period of three months and within a further period of 30 days but not
thereafter.
(emphasis supplied)
34. Again, in case of M/s Simplex Infrastructure Ltd. Vs.
Union of India, 2018 Latest CaseLaw 907 SC also, the Hon’ble
Supreme Court has reiterated the above legal position in
following words:-
8. Section 34 of the Arbitration and Conciliation Act, 1996 provides
thus:
“34. Application for setting aside arbitral award.– (1)
Recourse to a Court against an arbitral award may be made
only by an application for setting aside such award in
accordance with sub-section (2) and sub-section (3)… (3)
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.” Section 34 provides that recourse to a court
against an arbitral award may be made only by an
application for setting aside such award “in accordanceOMP (COMM) No. :- 5/2024 25/27
DLCT010002922024with” sub-section (2) and sub-section (3). Sub-section (2)
relates to the grounds for setting aside an award. An
application filed beyond the period mentioned in sub-
section 3 of Section 34, would not be an application “in
accordance with” that sub-section. By virtue of Section 34
(3), recourse to the court against an arbitral award cannot
be beyond the period prescribed. Sub-section (3) of Section
34, read with the proviso, makes it abundantly clear that
the application for setting aside the award on one of the
grounds mentioned in sub-section (2) will have to be made
within a period of three months from the date on which the
party making that application receives the arbitral award.
The proviso allows this period to be further extended by
another period of thirty days on sufficient cause being
shown by the party for filing an application. The intent of
the legislature is evinced by the use of the words “but not
thereafter” in the proviso. These words make it abundantly
clear that as far as the limitation for filing an application
for setting aside an arbitral award is concerned, the
statutory period prescribed is three months which is
extendable by another period of upto thirty days (and no
more) subject to the satisfaction of the court that sufficient
reasons were provided for the delay.
(emphasis supplied)
35. Further, even in the case of Bhimashankar Sahakar
Sakkare Karkhane Niyamita Vs. Walchandnagar Industries
Ltd. (WIL), 2023 Latest Caselaw 303 SC, following
observations came to be made by the Hon’ble Supreme Court:-
2.1 That, an arbitral award was passed against the appellant
under the provisions of the Arbitration Act on 24.08.2016. As
per Section 34(3) of the Arbitration Act, 90 days are prescribed
for preferring an application under Section 34 of the Arbitration
Act against the arbitral award. However, the said period was
extendable by a further period of 30 days in terms of the proviso
to Section 34 (3) of the Act, 2016. In the present case, the period
of 90 days prescribed under Section 34 (3) of the Arbitration Act
expired on 24.11.2016. The appellant was entitled to a further
extended period of 30 days from 23.11.2016 onwards in terms of
the proviso to Section 34 (3) which was upto 24.12.2016.
(emphasis supplied)
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36. Hence, in view of the above factual and legal discussion,
this petition filed by petitioners under the provisions of Section
34 of the above Arbitration and Conciliation Act, 1996, which
has been filed or presented in continuity of the previous petition
bearing No. 52/2023, challenging the validity of impugned award
dated 08.09.2022 pronounced by the Ld. Sole Arbitrator
appointed in this case by respondent herein is held to be barred
by limitation and is dismissed as such. Since the petition is held
barred by law and is being dismissed on the point of limitation,
this court cannot embark on a journey to adjudicate upon merits
of the case or the grounds on which the petitioners have
challenged the impugned award.
37. Parties are left to bear their own costs. File be consigned to
Record Room, after due compliance.
Digitally signed
by M K
MK NAGPAL
Announced in the open court NAGPAL Date:
2025.07.28
Dated: 28.07.2025 17:05:31 +0530
(M. K. Nagpal)
District Judge, Commercial Court-13
Central District, Tis Hazari Courts,
Delhi/28.07.2025
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