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Judgment
Anoop V. Mohta, J.—Heard finally.
Respondent No. 2 entered into a Loan cum Hypothecation Agreement and advanced a loan of Rs. 41,55,000/- to respondent No. 1 (the borrower) for purchasing five trucks. Respondent No. 3, a Guarantor and wife of Respondent No. 2 mortgaged her property. The petitioner (second Guarantor) stood Guarantor for the said loan. As full amount could not recovered, the arbitration clause was invoked. The Arbitral Tribunal was constituted. All respondents participated and appeared before the Tribunal except the petitioner. The Award is passed against the petitioner and Respondents 2 and 3 in favour of Respondent No. 1.
The petitioner/second Guarantor only has invoked this petition u/s 34 of the Arbitration and Conciliation Act, 1996 (for short, the Act) on 30.06.2009. The Award is dated 15.11.2007.
The notice to the petitioner was not served and/or at least there is nothing on record about the service, though it was sent on the address available on the record i.e. the last known place of business/residence. The Award is against all the parties i.e. the borrower and two Guarantors and made all liable jointly. The fact remains the borrower and Guarantor No. 2 appeared and contested the proceedings throughout. Admittedly, the petition is not filed by the basic borrower and other Guarantor. The award became final and binding and enforceable against them.
Section 3 of the Act provides the procedure of communication, which reads thus:
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 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 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.
The basic contract between the parties was of Loan-cum-Hypothecation Agreement. The fact remained that the principal borrower failed to make the payment though agreed. There is no dispute with regard to the merits of the matter and as in the present case, the principal borrower and other guarantors did not even challenge the Award. Therefore, the challenge, at the instance of one of the guarantor at this late stage is unacceptable, apart from the delay, in view of service as contemplated u/s 3 of the Act.
The party, who deliberately avoids to participate in the arbitration proceedings by one pretext or the other and, now raising this objection about non service, in my view, is nothing but a full attempt to delay the execution in all respects. The principle of natural justice though invoked for want of service as stated cannot be extended in a case like this, where the principal borrower and one of the guarantor have fully accepted the Award in all respect and not raised any objection within the prescribed time, now cannot be permitted to be raised through only one borrower. The principal borrower as defaulted/failed to make payment, the Award has attained finality. I see there is no case made out to grant any relief and to interfere with the well reasoned Award at the instance of the petitioner.
The Award is dated 15.11.2007. The Award was passed in Mumbai. The petitioner received the show cause notice from the executing District Court, Gulbarga, Karnataka some time in June 2009. Respondent No. 1 filed execution petition to enforce the Award u/s 36, as the Award has attained finality, as per Section 35 of the Act. Order XXI of the CPC is applicable to the enforcement of a decree applies to the enforcement of an Award. The petitioner, Respondents 2 and 3, the borrower and other Guarantor all have resident and business at Chincholi, Dist. Gulbarga, Karnataka. Therefore, got transferred the Execution at Gulbarga Court, Karnataka. The petitioner received the court notice on the same address, as mentioned and recorded in the Award. The whole attempt now to frustrate the Award by raising such challenge, to support the borrower at Mumbai, beyond the limitation as contemplated u/s 34(3) of the Act is impermissible.
There is no perversity and/or any illegality in view of above. The Award is enforceable as per Section 36 of the Act and executable against the principal borrower, second guarantor (wife) and lastly against the petitioner also.
The Petition is dismissed. No costs.