2007 (4) TMI 742 - HC - Indian Laws

Summary

Issues involved:
1. Service of notice to the appellant in an arbitration case.
2. Proceedings conducted by the Arbitrator in the absence of the appellant.
3. Applicability of the new Act in the case.
4. Legal obligations of the Arbitrator in case of a party's absence.
5. Setting aside an ex-parte order against the appellant.

Issue 1: Service of notice to the appellant in an arbitration case:
The Trial Court initiated proceedings on 7.1.1993, and the Arbitrator sent a notice through registered AD on 19.5.1993, which was correctly addressed. Despite multiple visits by the postman, the appellant was not available. A second notice was sent on 10.6.1993, with similar unsuccessful attempts to serve the appellant. Eventually, the appellant was served through a publication in a newspaper on July 23, 1993, as he did not appear despite prior notices.

Issue 2: Proceedings conducted by the Arbitrator in the absence of the appellant:
The appellant did not appear before the Arbitrator despite being served with notices. The respondent argued that the appellant intentionally avoided attending the proceedings. The Arbitrator proceeded ex-parte against the appellant due to his non-appearance, leading to the case being decided against him.

Issue 3: Applicability of the new Act in the case:
The respondent contended that the new Act did not apply to the case and cited a previous judgment to support this argument. The court noted that the case fell under the old Act, emphasizing the differences between the old Act and the new Act regarding procedural requirements.

Issue 4: Legal obligations of the Arbitrator in case of a party's absence:
The court referred to a previous judgment and highlighted that under the old Act, an arbitrator should not proceed ex-parte against a party without giving another notice specifying the intention to proceed ex-parte. The court noted the departure from the Civil Procedure Code in the arbitration proceedings and stressed the importance of providing the defaulting party with an opportunity to be heard.

Issue 5: Setting aside an ex-parte order against the appellant:
After considering the arguments from both parties, the court found merit in the appellant's argument regarding the lack of personal service. The court set aside the ex-parte order against the appellant, subject to him furnishing a bank guarantee. The appellant was directed to appear before the Arbitrator and provide the bank guarantee within a month. The Arbitrator was instructed to dispose of the case within one month after receiving the file, without granting any further opportunities or notices to the appellant.

In conclusion, the court allowed the appeal, setting aside the ex-parte order against the appellant and providing specific directions for further proceedings in the arbitration case.