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REPORTABL E

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

SPECIAL     LEAVE     PETITION     (CIVIL)No.23860     of     2010   

BENARSI KRISHNA COMMITTEE & ORS. … PETITIONERS  Vs.

KARMYOGI SHELTERS PVT. LTD. … RESPONDENT

J     U     D     G     M     E     N     T   

ALTAMAS     KABIR,     J.      

1.  In this Special Leave Petition, a question has  

been raised as to whether the service of an  

Arbitral Award on the agent of a party amounts to  

service on the party itself, having regard to the

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provisions of Section 31(5) and Section 34(3) of  

the Arbitration and Conciliation Act, 1996,  

hereinafter referred to as “the 1996 Act”.   

2. The Petitioner is a Committee of Managing  

Landlords, who are co-owners of the Benarsi Krishna  

Estate at the Moti Cinema compound, Chandni Chowk,  

Delhi.  The property apparently belongs to the  

Khanna family and the Seth family.   The Respondent  

No.1 is a Private Limited Company incorporated  

under the Companies Act, 1956, and is an estate  

developer and builder of both residential and  

commercial properties.  The Petitioner Committee  

entered into a Collaboration Agreement dated 16th  

November, 1990, by which the Respondent agreed to  

convert the Moti Cinema compound into a commercial  

complex.  Subsequently, the agreement was amended  

on 2nd May, 1991, by which certain changes were  

introduced with regard to the scheme of payment.  

Inasmuch as disputes arose between the parties over  

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the working of the agreement, the Respondent filed  

an application under Section 11 of the 1996 Act for  

appointment of an Arbitrator and by an order dated  

14th May, 2001, the Delhi High Court appointed  

Justice K. Ramamoorthy, a retired Judge of the said  

Court, as the Sole Arbitrator.  After considering  

the materials brought on record, the learned  

Arbitrator passed his Award upon holding that the  

Respondent had committed breach of the terms of the  

Collaboration Agreement and directed the Petitioner  

to refund the sum of Rs.41 lakhs which had been  

received from the Respondent, within three months  

from the date of the Award and in default of  

payment within the said period, the amount would  

carry interest @ 12% per annum from the date of the  

Award till the date of payment.  

3. As will appear from the records, copies of the  

Award, duly signed by the learned Arbitrator, were  

received by the counsel for the respective parties.  

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As far as the Respondent is concerned, the  

endorsement shows that the copy of the Award was  

received by its counsel on 13th May, 2004.  However,  

no application for setting aside the Award was  

filed by the Respondent within the period of three  

months from the date of receipt of the Award, as  

provided under Section 34(3) of the 1996 Act.   

4. On 3rd February, 2005, the Respondent filed a  

Petition, being O.M.P. No.51 of 2005, under Section  

34 of the 1996 Act, to set aside the Award of the  

learned Arbitrator. According to the Petitioner,  

the said petition was filed after a delay of more  

than 9 months from the date of the receipt of the  

Award.  The said objection of the Petitioner was  

considered by the learned Single Judge of the High  

Court who by his order dated 28th August, 2009,  

dismissed the Respondent’s petition on the ground  

that the same was time barred.  The learned Single  

Judge accepted the contention of the Petitioner  

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that the expression “party”  used in Section 31(5)  

of the 1996 Act, would also include the agent of  

the party.   

5. The matter was carried to the Division Bench of  

the High Court by the Respondent on 5th October,  

2009, by way of F.A.O. (OS) No.578 of 2009.  

Accepting the case of the Respondent that service  

of the Award had not been properly effected, the  

Division Bench remanded the matter to the Single  

Judge to decide the objections on the Award on  

merits, upon holding that for compliance with the  

provisions of Section 31(5) of the 1996 Act, a copy  

of the Award had to be delivered to the party  

itself and service on its counsel did not amount to  

service within the meaning of Section 31(5) of the  

aforesaid Act. The Special Leave Petition has been  

filed against the said judgment and order of the  

Division Bench of the Delhi High Court.  

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6. In arriving at its decision which has been  

impugned in these proceedings, the Division Bench  

of the Delhi High Court referred to its own  

judgment in National     Projects     Constructions    

Corporation     Limited   Vs. Bundela     Bandhu    

Constgructions     Company   [AIR 2007 Delhi 202] and a  

decision of this Court in Union     of     India   Vs. Tecco  

Trechy     Engineers     &     Contractors   [(2005) 4 SCC 239],  

which had considered the decision of the Delhi High  

Court in Bundela     Bandhu  ’  s case (supra).  The  

Division Bench also referred to the decision of the  

Privy Council in the celebrated case of Nazir     Ahmed    

Vs. King     Emperor   [(AIR 1936 PC 253], wherein it was  

categorically laid down that if an action is  

required to be taken in a particular manner, it had  

to be taken in that manner only or not at all.  

While observing that all the aforesaid  

controversies could have been avoided if the Award  

had been served on the party directly, the Division  

Bench also observed that in view of Section 2(h) of  

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the 1996 Act, there was no justifiable reason to  

depart from the precise definition of the  

expression “party”  which means a party to the  

arbitration agreement.   

7. Appearing in support of the Special Leave  

Petition, Mr. Ranjit Kumar, learned Senior  

Advocate, reiterated the submissions which had been  

made before the High Court.  Learned senior counsel  

reiterated that after the Award had been passed on  

12th May, 2004, a copy of the same, duly signed by  

the Arbitrator, was received by counsel for the  

Respondent on 13th May, 2004, while the Petition  

under Section 34 was filed only on 3rd February,  

2005, well beyond the period of 3 months prescribed  

in Section 34(3) of the 1996 Act and also beyond  

the further period of 3 months as indicated in the  

proviso thereto.  Since the question for decision  

in the Special Leave Petition largely depends on  

the interpretation of Sub-section (3) of Section 34  

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and the proviso thereto, the same is extracted  

hereinbelow for purposes of reference :-

“34. Application for setting aside arbitral  award. - (1)  ……………………………………………………………………

(2) ………………………………………………………………………  

(3) An application for setting aside may not be  made after three months have elapsed from the  date on which the party making that application  had received the arbitral award or, if a  request had been made under section 33, from  the date on which that request had been  disposed of by the arbitral tribunal:  

Provided that if the Court is satisfied that  the applicant was prevented by sufficient cause  from making the application within the said  period of three months it may entertain the  application within a further period of thirty  days, but not thereafter. “

8. Mr. Ranjit Kumar urged that service of the  

Award on the Advocate for the party was sufficient  

compliance of the provisions of Section 34(3) of  

the 1996 Act, as had been held by a Four-Judge  

Bench of this Court in Nilakantha     Sidramappa    

Ningshetti vs. Kashinath     Somanna     Ningashetti   [1962  

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(2) SCR 551], which was later followed in East  

India     Hotels     Ltd.   Vs. Agra     Development     Authority    

[(2001) 4 SCC 175]. Mr. Ranjit Kumar submitted that  

in Nilakantha     Sidramappa     Ningshetti  ’s case (supra)  

this Court held that intimation to the pleaders of  

the parties amounted to service of the notice on  

the parties about the filing of the Award.  

9. Mr. Ranjit Kumar also referred to the decision  

of this Court in State     of     Maharashtra   Vs. ARK  

Builders     Pvt.     Ltd.  [(2011) 4 SCC 616], in which this  

Court, following its earlier decision in Tecco  

Trechy     Engineers  ’s case (supra), held that Section  

31(5) of the 1996 Act contemplates not merely the  

delivery of any kind of copy of the Award, but a  

copy of the Award which had been duly signed by the  

Members of the Arbitral Tribunal.  Learned counsel  

pointed out that in the said decision, the Hon’ble  

Judges had taken note of the fact that an attempt  

was being made to derive undue advantage of an  

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omission on the part of the learned Arbitrator to  

supply them with a signed copy of the Award, but  

ultimately held that the same would not change the  

legal position and it would be wrong to tailor the  

law according to the facts of a particular case.  

10. As an additional ground, Mr. Ranjit Kumar  

referred to the use of the words “signed by  

parties”  under Order 23 Rule 3 read with Order 3  

Rule 1 of the Code of Civil Procedure, which  

provide that any appearance, application or act in  

or to any Court, required or authorized by law to  

be made or done by a party in such Court, may,  

except where otherwise expressly provided by any  

law for the time being in force, be made or done by  

the party in person, or by his recognized agent, or  

by a pleader appearing, applying or acting, as the  

case may be, on his behalf.  Mr. Ranjit Kumar  

contended that on the strength of the Vakalatnama  

executed by the party in favour of his  

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Advocate/agent, service of notice effected on the  

Advocate holding such Vakalatnama amounted to  

service of the notice on the party himself, as was  

held in the case of Pushpa     Devi     Bhagat   Vs. Rajinder  

Singh     &     Ors.   [(2006) 5 SCC 566].

11. A similar view had been expressed by this Court  

in Byram     Pestonji     Gariwala   Vs. Union     Bank     of     India    

&     Ors.  [(1992) 1 SCC 31], whereby this Court held  

that the expression “signed by parties”  would  

include “signed by his pleader”.  Mr. Ranjit Kumar  

submitted that once a Vakalatnama had been executed  

by a party in favour of his Advocate, the said  

Advocate was competent to do such acts as could be  

done by the party himself.  Accordingly, the  

Division Bench of the Delhi High Court had in the  

teeth of the aforesaid decisions erred in holding  

that service of the signed copy of the Award by the  

learned Arbitrator on the Respondent’s counsel, did  

not amount to compliance of the provisions of  

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Section 31(5) of the 1996 Act, which specifically  

enjoined that the copy was to be delivered to each  

party.

12. Countering the submissions made by Mr. Ranjit  

Kumar, Mr. K.V. Viswanathan, learned Senior  

Advocate, firstly urged that once hearing before  

the learned Arbitrator had been concluded and an  

Award had been passed by him, the power given to an  

Advocate by the Vakalatnama executed in his favour,  

came to an end and the learned Advocate was no  

longer entitled to act on the strength thereof.  

Accordingly, service on the said Advocate would not  

amount to service even on an agent of the party,  

even if Mr. Ranjit Kumar’s submissions were to be  

accepted.  Mr. Viswanathan, however, contended that  

service on the learned Advocate of the party cannot  

be treated as service of the Award on the party  

itself, as had been very clearly held in the very  

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same decision referred to by Mr. Ranjit Kumar in  

Pushpa     Devi     Bhagat  ’s case (supra).

13. Referring to the decision of the Three-Judge  

Bench of this Court in Tecco     Trechy     Engineers  ’s  

case (supra), Mr. Viswanathan submitted that the  

decision rendered therein completely covered the  

issue raised in this Special Leave Petition.  

Learned counsel submitted that on a construction of  

Sub-Section (3) of Section 34 of the 1996 Act, the  

learned Judges had held that “service on a party”  

as defined in Section 2(h) read with Section 34(3)  

of the 1996 Act, had to be construed to be a person  

directly connected with and involved in the  

proceedings and who is in control of the  

proceedings before the Arbitrator, as he would be  

the best person to understand and appreciate the  

Arbitral Award and to take a decision as to whether  

an application under Section 34 was required to be  

moved.  

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14. As to the decision in Pushpa     Devi     Bhagat  ’s case  

(supra), Mr. Viswanathan submitted that the same  

was rendered on a completely different set of facts  

which could have no application to the facts of  

this case.  Mr. Viswanathan submitted that no  

interference was called for with the decision of  

the Division Bench of the High Court impugned in  

the Special Leave Petition, which was liable to be  

dismissed.  

15. Having taken note of the submissions advanced  

on behalf of the respective parties and having  

particular regard to the expression “party”  as  

defined in Section 2(h) of the 1996 Act read with  

the provisions of Sections 31(5) and 34(3) of the  

1996 Act, we are not inclined to interfere with the  

decision of the Division Bench of the Delhi High  

Court impugned in these proceedings. The expression  

“party”  has been amply dealt with in Tecco     Trechy    

Engineers’s  case  (supra)  and  also in ARK  

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Builders     Pvt.     Ltd.  ’s case (supra), referred to  

hereinabove.   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.  

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16. The view taken in Pushpa     Devi     Bhagat  ’s case  

(supra) is in relation to the authority given to an  

Advocate to act on behalf of a party to a  

proceeding in the proceedings itself, which cannot  

stand satisfied where a provision such as Section  

31(5) of the 1996 Act is concerned.  The said  

provision clearly indicates that a signed copy of  

the Award has to be delivered to the party.  

Accordingly, when a copy of the signed Award is not  

delivered to the party himself, it would not amount  

to compliance with the provisions of Section 31(5)  

of the Act.  The other decision cited by Mr. Ranjit  

Kumar in Nilakantha     Sidramappa     Ningshetti  ’s case  

(supra) was rendered under the provisions of the  

Arbitration Act, 1940, which did not have a  

provision similar to the provisions of Section  

31(5) of the 1996 Act.  The said decision would,  

therefore, not be applicable to the facts of this  

case also.  

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17. 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.   

18. Consequently, the Special Leave Petition must  

fail and is dismissed.

19. There will, however, be no order as to costs.  

………………………………………………………J.    (ALTAMAS KABIR)

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………………………………………………………J.    (J. CHELAMESWAR)

New Delhi Dated: 21.09.2012.  

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