2008 (11) TMI 724 - HC - Indian Laws

Court Upholds Arbitration Award, Dismisses Original Petition

Nagasrinivasulu Versus Galada Finance Limited

The court upheld the arbitration award, dismissing the Original Petition. It found the award valid, based on evidence presented, and rejected the ... - Issues Involved:1. Validity of arbitration award.2. Authority of the claimant to file the arbitration claim.3. Proper service of notice and jurisdiction of the arbitral tribunal.4. Non-production of original Hire Purchase Agreement.5. Ex parte proceedings and setting aside the award.Detailed Analysis:1. Validity of Arbitration Award:The petitioner challenged the arbitration award dated 6.9.2005, which granted the first respondent a sum of Rs. 4,59,206/- with interest at 36% per annum from 10.1.2004 till the date of realization. The Arbitrator also rejected the petitioner's counterclaim of Rs. 4,10,499/-. The petitioners argued that the award was based on an unverified claim and that the interest rate was usurious. The court, however, upheld the award, stating that the petitioners had defaulted on their payments and that the Arbitrator's decision was based on the evidence and documents presented.2. Authority of the Claimant to File the Arbitration Claim:The petitioners contended that Om Prakash Sandu, who filed the Claim Petition, was not authorized to sign the pleadings on behalf of the first respondent. The court found that the first respondent-Company had authorized Om Prakash Sandu under a general power of attorney to sign the Application in all Courts of law for and on behalf of the Company. The original general power of attorney executed on 25th September 2000 was available in the records, and the Arbitrator was satisfied with the authority given to the signatory.3. Proper Service of Notice and Jurisdiction of the Arbitral Tribunal:The petitioners argued that there was improper service of notice and questioned the jurisdiction of the Tribunal. The court noted that the petitioners had participated in the arbitration proceedings without raising any protest regarding jurisdiction. The notice of arbitration and the appointment of the Arbitrator were properly sent and acknowledged, except for one instance where the acknowledgment was not received. The court held that there was no violation of Section 16 of the Arbitration and Conciliation Act, 1996.4. Non-Production of Original Hire Purchase Agreement:The petitioners contended that the original Hire Purchase Agreement was not produced before the Tribunal. The court found that the original agreement was produced before the learned Arbitrator at the time of filing the Claim Petition but was later taken with the permission of the learned Arbitrator for filing before the Criminal Court. The Arbitrator had noted the return of the original, and the court held that the photocopy produced was sufficient, given the circumstances.5. Ex Parte Proceedings and Setting Aside the Award:The petitioners argued that they were set ex parte without notice, which amounted to legal misconduct. The court reviewed the arbitration proceedings and found that the petitioners were given multiple opportunities to appear and participate. The Arbitrator had set the petitioners ex parte only after consistent absences and failure to respond. The court held that the Arbitrator's decision to proceed ex parte was justified and did not constitute legal misconduct.Conclusion:The court dismissed the Original Petition, upholding the arbitration award. The court found that the arbitration proceedings were conducted fairly, the Arbitrator had the authority to make the award, and the petitioners were given ample opportunity to participate in the proceedings. The court rejected the petitioners' claims of legal misconduct and improper procedure.