2012 (12) TMI 827 - SC - Companies Law

The expression party Delivery of copy of copy of Award to the party - Arbitration and Conciliation Act 1996 - Section 31(5) and Section 34(3) held that - . It is one thing for an Advocate to act and plead on behalf of a party in a proceeding and it is another for an Advocate to act as the party himself. The expression party as defined in Section 2(h) of the 1996 Act clearly indicates a person who is a party to an arbitration agreement. The said definition is not qualified in any way so as to include the agent of the party to such agreement. Any reference therefore made in Section 31(5) and Section 34(2) of the 1996 Act can only mean the party himself and not his or her agent or Advocate empowered to act on the basis of a Vakalatnama. In such circumstances proper compliance with Section 31(5) would mean delivery of a signed copy of the Arbitral Award on the party himself and not on his Advocate which gives the party concerned the right to proceed under Section 34(3) of the aforesaid Act. In the instant case since a signed copy of the Award had not been delivered to the party itself and the party obtained the same on 15th December 2004 and the Petition under Section 34 of the Act was filed on 3rd February 2005 it has to be held that the said petition was filed within the stipulated period of three months as contemplated under Section 34(3) of the aforesaid Act. Consequently the objection taken on behalf of the Petitioner herein cannot be sustained and in our view was rightly rejected by the Division Bench of the Delhi High Court.

Summary

Issues Involved:
1. Whether the service of an Arbitral Award on the agent of a party amounts to service on the party itself under Section 31(5) and Section 34(3) of the Arbitration and Conciliation Act, 1996.

Detailed Analysis:

1. Service of Arbitral Award:
The primary issue in this case is whether the service of an Arbitral Award on the agent or counsel of a party constitutes service on the party itself, as per Section 31(5) and Section 34(3) of the Arbitration and Conciliation Act, 1996. The Petitioner, a Committee of Managing Landlords, contended that the service of the Award on the Respondent's counsel on 13th May 2004 was valid, and thus, the Respondent's application to set aside the Award filed on 3rd February 2005 was time-barred. However, the Division Bench of the Delhi High Court held that for compliance with Section 31(5), the Award must be delivered to the party itself, not merely to its counsel.

2. Interpretation of "Party":
The Supreme Court examined the definition of "party" under Section 2(h) of the 1996 Act, which refers to a party to the arbitration agreement. The Court emphasized that the term "party" is not qualified to include the agent or counsel of the party. The Court referred to the judgment in Tecco Trechy Engineers's case, which clarified that service on a party must be construed to mean service on a person directly connected with and involved in the proceedings.

3. Previous Judgments and Legal Precedents:
The Court considered several precedents, including Nilakantha Sidramappa Ningshetti vs. Kashinath Somanna Ningashetti and East India Hotels Ltd. Vs. Agra Development Authority, which dealt with the service of notices on pleaders. However, the Court distinguished these cases on the grounds that they were decided under the Arbitration Act, 1940, which did not have a provision similar to Section 31(5) of the 1996 Act. The Court also referred to the decision in Pushpa Devi Bhagat's case, which held that the authority given to an Advocate by a Vakalatnama ends once the proceedings before the Arbitrator conclude.

4. Compliance with Section 31(5):
The Court concluded that proper compliance with Section 31(5) requires the delivery of a signed copy of the Arbitral Award to the party itself, not to its counsel or agent. The Court held that the service of the Award on the Respondent's counsel did not amount to compliance with Section 31(5). Consequently, the Respondent's application to set aside the Award, filed on 3rd February 2005, was within the stipulated period of three months from the date the party itself received the signed copy of the Award on 15th December 2004.

Conclusion:
The Supreme Court upheld the decision of the Division Bench of the Delhi High Court, dismissing the Special Leave Petition. The Court emphasized that the service of the Arbitral Award must be made directly to the party involved, as defined under Section 2(h) of the 1996 Act, to comply with Section 31(5). The Petitioner's objection was rejected, and the Respondent's application to set aside the Award was deemed timely filed. The Special Leave Petition was dismissed with no order as to costs.