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Judgment
S. Rajeswaran, J.—These Original petitions have been filed u/s 34 of the Arbitration and Conciliation Act, 1996, hereinafter called ''the Act'', to set aside the award dated 24.9.2001 passed by the 1st respondent in Award Nos. 35 and 34 of 2001 respectively and to pay the cost.
As the parties are one and the same in both the above petitions a common order is being passed to dispose of the same.
The 1st petitioner in both the O.Ps., entered into a Hire Purchase Agreement with the 2nd respondent for purchase of 4 Lorries in O.P.Nos. 235/2003 and 12 lorries in O.P. No. 236/2003. The 2nd petitioner signed the agreements as the guarantor. After certain period of time, the 1st petitioner was not able to pay the instalment amount and therefore the 1st petitioner surrendered all the 16 vehicles on 19.6.2000. The vehicles were disposed of by the 2nd respondent as per the agreed terms and after adjusting the sale proceedings against the outstanding, 2nd respondent claimed a sum of Rs. 14,92,581/- with further interest in O.P. No. 235/2003 and a sum of Rs. 61,82,770/- with further interest in O.P. No. 236/2003 being the balance amount due. 1st respondent was appointed as arbitrator and an award has been passed in Award No. 35/2001 on 24.9.2001 in O.P. No. 235/2003 and another award was passed on 24.9.2001 in Award No. 34/2001 on 24.9.2001. Aggrieved by the same the petitioners filed the above two O.Ps., u/s 34 of the Act, 1996.
The main grounds urged in both the petitions are that no opportunity was given to the petitioners before the arbitrators, no consent was obtained from the petitioners for appointing 1st respondent as the arbitrator, the venue of the arbitration is Mumbai was not accepted to when the entire cause of action arose in Tamil Nadu and the awards are bad for not following the provisions of Section 25 of the Act, 1996.
The 2nd respondent entered appearance through their counsel and filed a counter wherein it is stated that even though enough opportunities were extended to the petitioners, they remained exparte and in such circumstances, it is not open to the petitioners to assail the awards on merits before this Court for the first time u/s 34 of the Act, 1996.
Heard the learned Counsel for the petitioners and the learned Counsel for 2nd respondent. I have also perused the documents filed and the judgments referred to in support of their submissions.
The learned Counsel for the petitioners while reiterating the grounds taken in the petition relied on the decision of the Supreme Court reported in Dharma Prathishthanam Vs. Madhok Construction Pvt. Ltd., to submit that no consent was obtained by 2nd respondent for appointing 1st respondent as arbitrator and therefore the award is to be set aside.
Per contra, the learned Counsel for 2nd respondent submitted that arbitrator has been appointed in consonance with the arbitration clause and in this regard he relied on the decision of the Supreme Court reported in Dharma Prathishthanam Vs. Madhok Construction Pvt. Ltd., to submit that if the arbitration clause does not name an arbitration but provides for manner in which arbitrator is to be appointed, then the parties are bound to act accordingly. He further submitted that u/s 34 of the Act, 1996, the petitioners are not entitled to argue as if it was an appeal and for this purpose, he relied on a decision of this Court reported in Nagarjuna Construction Co. Limited Vs. The General Manager (Lube Expansion Project), Madras Refineries Limited and Another, . The learned Counsel wound up his argument by submitting that the award cannot be set aside and there is no perversity in the award nor it was based on wrong presumption of law and for this proposition, the learned Counsel for 2nd respondent relied on the decision of a Division Bench of this Court reported in 2002 (1) M.L.J. 10 (The Tamil Nadu Water Supply and Drainage Board, Madras v. Satyanarayana Brothers Private Limited, Madras).
I have considered the rival submissions with regard to facts and citations.
It is not in dispute that higher purchase agreements were entered into by the petitioners with 2nd respondent for the purchase of 4 lorries in O.P.Nos. 235/2003 and 12 lorries in O.P. No. 236/2003. A copy of the Hire Purchase agreement dated 9.12.1997 was filed by the learned Counsel for 2nd respondent, in which in Part III Clause 25 it has been specifically stated that all disputes shall be settled by arbitration to be held in Mumbai and shall be referred to sole arbitration of a person to be nominated by the owners, i.e., 1st respondent herein. Clause 25 is extracted below for better appreciation:
All disputes, differences and/or claims arising out of these presents or as to the construction, meaning or effect hereof or as to the rights and liabilities of the parties hereunder shall be settled by arbitration to be held in Mumbai in accordance with the provisions of the Arbitration Act, 1940 or any statutory amendments thereof and shall be referred to the sole arbitration of a person to be nominated by the Owners. In the event of death, refusal, neglect, inability or incapability of the person so appointed to act as an arbitrator, the Owners may appoint a new arbitrator. The award of the arbitrator shall be final and binding on all parties concerned and may be made a Rule of the High Court of Judicature at Mumbai or any other court of competent jurisdiction within the city of Mumbai.
In the light of the above Clause 25, it is not open to the petitioners to contend that the appointment of 1st respondent as arbitrator without their consent is illegal and the award is to be set aside on that score.
In Dharma Prathishthanam Vs. Madhok Construction Pvt. Ltd., , the Supreme Court held that when there is an arbitration agreement naming arbitrator or authority who would appoint an arbitrator, the parties are already ad-idem on real identity of the arbitrator or the authority who would appoint the arbitrator and this will bind the parties and the court. Only in a case where the arbitration agreement neither named the arbitrator nor the authority who would appoint an arbitrator, an arbitrator has to be appointed bilaterally, with the consent of the other parties.
In the case in hand, Clause 25 of the Hire Purchase agreement clearly spelt out that the owners namely, the 2nd respondent would nominate the arbitrator and in such circumstances, the above decision relied on by the learned Counsel for the petitioners is not useful to them.
On the other hand, the decision relied on by the learned Counsel for the 1st respondent Dharma Prathishthanam Vs. Madhok Construction Pvt. Ltd., will support their case as in that decision the Hon''ble Supreme court held that if arbitration clause does not name an arbitrator but provides for manner in which the arbitrator is to be chosen and appointed then the parties are bound to act accordingly. Therefore in view of the Clause 25 of Hire Purchase agreement, naming 2nd respondent to nominate the arbitrator who will hold the proceedings in Mumbai, the petitioners cannot challenge the impugned awards on the ground that no consent was obtained from them for appointing 1st respondent as arbitrator and choosing Mumbai as a venue for arbitration.
The next contention of the petitioners is that no opportunity was given to them to effectively put forward their case.
A perusal of the awards under challenge would reveal that the notices sent to the petitioners by RPAD were returned unserved, but the notices sent by certificate of posting were not returned. However a notice sent on 31.5.2001 fixing the date of hearing on 13.7.2001 was received by the 2nd petitioner, but none appeared on 13.7.2001. Instead, 1st respondent received a letter dated 10.7.2001 sent on behalf of the 2nd petitioner requesting him to adjourn the hearing, followed by a telegram dated 12.7.2001 sent by Mr. Gopalakrishna Raju, the counsel for the petitioners requesting for adjournment. Accordingly the proceedings were adjourned to 3.8.2001. Again notice was sent on 14.7.2001 for the aforesaid hearing dated on 3.8.2001, but the same was also returned. None appeared on behalf of petitioners on 3.8.2001. But again a telegram dated 2.8.2001 was sent by the very same counsel requesting for adjournment. It was again adjourned to 24.8.2001 and the intimation sent for the above said date of hearing on 24.8.2001 was also returned. None on behalf of the petitioners appeared on 24.8.2001. Therefore on 15.9.2001 notice was published in "Dhina Thanthi" for the next hearing to be held on 24.9.2001. Only on that date when none appeared, on behalf of the petitioners, 1st respondent proceeded exparte and passed the award under challenge. In the light of the above facts it cannot be said that no opportunity was extended to the petitioners. In fact, it were the petitioners who were playing hide and seek in not receiving notices and sending telegrams requesting for adjournment. The object of the Act, 1996 itself is speedy remedy and in spite of so many opportunities provided to the petitioners, they did not come forward to participate in the proceedings before 1st respondent. Having chosen not to participate in the proceedings, it is not for the petitioners to contend at this eleventh hour that they were denied sufficient opportunity by 1st respondent.
The other contention of the petitioners is that after setting them exparte, 1st respondent did not proceed with as per the provisions of Section 25 of the Act, 1996 and simply passed the award without application of mind.
I am unable to accept this submission of the learned Counsel for the petitioners also.
A perusal of the award would make it very clear that 1st respondent considered the pleadings, evidence let in by 2nd respondent and other documents and passed a reasoned award. Courts cannot re-appraise the evidence and come to a different conclusion and unless it is established that there is total perversity in the award or the award was passed on the basis of a wrong proposition of law, the award cannot be set aside as held by the Division Bench of this Court reported in 2002 (1) MLJ 10 (cited supra).
It is also a well established principle that the High court cannot substitute its own view in the place of the arbitrators'' view, nor the High Court can examine the matter as a regular appellate court as held by this Court in Nagarjuna Construction Co. Limited Vs. The General Manager (Lube Expansion Project), Madras Refineries Limited and Another, .
I do not find any of the grounds set out in Section 34 of the Act, 1996, and in the absence of any of the grounds enumerated thereon, it is not possible to interfere with the awards under challenge u/s 34 of the Act.
Hence I do not find any merits in the above petitions and consequently both the O.Ps., are dismissed. No costs.