BENARSI KRISHNA COMMITTEE AND ORS.versusKARMYOGI SHELTERS PVT. LTD.

                    [2012] 7 S.C.R. 1175


       BENARSI KRISHNA COMMITTEE AND ORS.                           A
                               V.
            KARMYOGI SHELTERS PVT. LTD.
     (Special Leave Petition (civil) No. 23860 of 2010)

                   SEPTEMBER 21, 2012
                                                                    B
    [ALTAMAS KABIR AND J. CHELAMESWAR, JJ.]

    ARBITRATION AND CONCILIATION ACT, 1996:

     ss.2(h), 31(5) and 34 - Delivery of copy of arbitral award     c
to 'party' - Held: The expression ''party''. as defined in s.2(h)
clearly indicates a person who is a party to an arbitration
agreement and is not qualified in any way so as to include
the agent of the party to such agreement - Therefore, proper
compliance with s.31 (5) would mean delivery of a signed copy       0
of Arbitral Award on the party himself and not on his Advocate,
which gives the party concerned the right to proceed u/s 34(3)
of the Act.

    An award was made on 12.5.2004 by the arbitrator
appointed u/s 11 of the Arbitration and Conciliation Act,           E
1996. The copy of the award duly signed by the arbitrator
was received by the counsel for the respondent on
14.5.2004. The respondent filed a petition u/s 34 of the
1996 Act for setting aside the award. The petitioner
objected that the petition was filed after a delay of more          F
than 9 months from the date of receipt of the award. The
Single Judge of the High Court dismissed the petition as
time barred. However, the Division Bench of the High
Court remanded the matter to the Single Judge to decide
the objections on the award on merits holding that a                G
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 s.31 (5) of the Act.

                              1175                                  H



                                              f
    1176    SUPREME COURT REPORTS                [2012] 7 S.C.R.


A        In the instant petition, the question for consideration
    before the Court was: "whether the service of an Arbitral
    Award on the agent of a party amounts to service on the
    party itself, having regard to the provisions of s. 31(5) and
    s. 34(3) of the Arbitration and Conciliation Act, 1996."
B
        Dismissing the petition, the Court

       HELD: 1.1 The expression "party" has been amply
  dealt with in Tecco Trechy Engineers's* case and also in
  ARK Builders Pvt. Ltd.'s case. The expression "party", as
C defined in s.2(h) of the Arbitration and Conciliation Act,
  1996, 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 s.31 (5) and
D s.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 s.31(5) would mean delivery of a
  signed copy of the Arbitral Award on the party himself
E and not on his Advocate, which gives the party
  concerned the right to proceed u/s 34(3) of the Act. [para
  15) [1184-D-G]

        Union of India Vs. Tecco Trechy Engineers & Contractors
    2005 (2) SCR 983 = (2005) 4 SCC 239; State of Maharashtra
F   Vs. ARK Builders Pvt. Ltd. 2011 (4) SCR 432 = (2011) 4 SCC
    616 - relied on.

      Pushpa Devi Bhagat Vs. Rajinder Singh & Ors. 2006 (3)
  Suppl. SCR 370 = (2006) 5 SCC 566; and Byram Pestonji
G Gariwala Vs. Union Bank of India & Ors. 1991(1) Suppl. SCR
  187 = (1992) 1 sec 31- distinguished.

        National Projects Constructions Corporation Limited Vs.
    Bunde/a Bandhu Constgructions Company AIR 2007 Delhi
H 202- referred to.
   BENARSI KRISHNA COMMITTEE v. KARMYOGI                 1177
             SHELTERS PVT. LTD.

     Nazir Ahmed Vs. King Emperor AIR 1936 PC 253-               A
referred to.

     1.2 Section 31 (5) of the 1996 Act 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
                                                                 8
not delivered to the party himself, it would not amount to
compliance with the provisions of s.31 (5) of the Act. [para
16] [1185-A-B]

    Nilakantha Sidramappa Ningshetti vs. Kashinath
Somanna Ningashetti 1962 (2) SCR 551; and East India             C
Hotels Ltd. Vs. Agra Development Authority 2001 (2) SCR
582 = (2001) 4 sec 175- held inapplicable

     1.3 In the instant case, since a signed copy of the
Award had not been delivered to the party itself and the         0
party obtained the same on 15.12.2004, and the petition
u/s 34 of the Act was filed on 3.2.2005, it has to be held
that the said petition was filed within the stipulated period
of three months as contemplated u/s 34(3) of the Act. [para
17] [1185-0-E]
                                                                 E
                     Case Law Reference:
    AIR 2007 Delhi 202          referred to         para 6
    2005 (2) SCR 983            relied on           para 6
                                                                 F
    AIR 1936 PC 253             referred to         para 6
    1962 (2) SCR 551            held inapplicable para 8
    2001 (2) SCR 582            held inapplicable para 8
    2011 (4) SCR 432            referred to         para 9       G

    2006 (3) Suppl. SCR 370 distinguished           para 10
    1991 (1) Suppl. SCR 187 distinguished           para 10

                                                                 H
    1178    SUPREME COURT REPORTS                  [2012] 7 S.C.R.


A         CIVIL APPELLATE JURISDICTION : Special Leave
    Petition (Civil) No. 23860 of 2010.

        From the Judgment and Order dated 04.05.2010 of the
    High Court of Delhi at New Delhi in FAO (OS) No. 578 of 2009.
B
       Ranjeet Kumar, N.N. Aggarwal, Ashish Mohan, Rohit
    Gandhi, Liz Mathew for the Petitioners.

      K.V. Viswanathan, C.S. Rajan, Ashwath Sitaraman,
C Abhishek Kaushik, Mehul M. Gupta, Rukhsana Choudhury, P.
  Rajesh, Rutwik Panda for the Respondent.

        The Judgment of the Court was delivered by

       ALTAMAS KABIR, J. 1. In this Special Leave Petition, a
D 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 provisions of Section 31 (5)
  and Section 34(3) of the Arffitration and Conciliation Act, 1996,
  hereinafter referred to as "the 1996 Act".
E
       2. The Petitioner is a Committee of Managing Landlords,
  who are co-owners of the Benarsi Krishna Estate at the Moti
  Cinema c;ompound, Chandni Chowk, Delhi. The property
  apparently belongs to the Khanna family and the Seth family.
F 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
G 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 the working of the
H agreement, the Respondent filed an application under Section
   BENARSI KRISHNA COMMITTEE v. KARMYOGI                   1179
    SHELTERS PVT. LTD. [ALTAMAS KABIR, J.]

11 of the 1996 Act for appointment of an Arbitrator and by an       A
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        B
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           c
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. As far as the Respondent
is concerned, the endorsement shows that the copy of the            D
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.                                                    E

     4. On 3rd February, 2005, the Respondent filed a Petition,
being O.M.P. No.51 of2005, 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   F
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 that the            G
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             H
    1180    SUPREME COURT REPORTS                 (2012] 7 S.C.R.


A F.A.O. (OS) No.578 of 2009. Accepting the case of the
  Respondent that service of the Award had not been properfy
  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)
B 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
C Court.

        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. Bunde/a Bandhu Constgructions
D Company [AIR 2007 Delhi 202] and a decision of this Court
  in Union of India Vs. Tecco Trechy Engineers & Contractors
  [(2005) 4 sec 239], which had considered the decision of the
  Delhi High Court in Bunde/a Bandhu's case (supra). The
  Division Bench also referred to the decision of the Privy Council
E 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
F Award had been served on the party directly, the Division Bench
  also observed that in view of Section 2(h) of 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.
G       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
H
   BENARSI KRISHNA COMMITTEE v. KARMYOGI                     1181
    SHELTERS PVT. LTD. [ALTAMAS KABIR, J.]

by the Arbitrator, was received by counsel for the Respondent        A
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      s
Leave Petition largely depends on the interpretation of Sub-
section (3) of Section 34 and the proviso thereto, the same is
extracted hereinbelow for purposes of reference :-

    "34. Application for setting aside arbitral award. -
                                                                     c
    (1) ............................................ .

    (2) ........................................... ..

    (3) An application for setting aside may not be made after
    three months have elapsed from the date on which the
                                                                     0
    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:
                                                                     E
    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
    therede~··                                                       F

     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 (2) SCR           G
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
                                                                     H
    1182    SUPREME COURT REPORTS                  [2012] 7 S.C.R.


A   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.
B 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
C decision, the Hon'ble Judges had taken note of the fact that an
  attempt was being made to derive undue advantage of an
  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
D 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,
E 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
F 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
  Advocate/agent, service of notice effected on the Advocate
  holding such Vakalatnama amounted to service of the notice
G 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
H expression "signed by parties" would include "signed by his
   BENARSI KRISHNA COMMITTEE v. KARMYOGI                   1183
    SHELTERS PVT. LTD. [ALTAMAS KABIR, J.]

pleader". Mr. Ranjit Kumar submitted that once a Vakalatnama       A
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      B
by the learned Arbitrator on the Respondent's counsel, did not
amount to compliance of the provisions of 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             C
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             D
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        E
treated as service of the Award on the party itself, as had been
very clearly held in the very 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    F
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    G
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
                                                                   H
    1184    SUPREME COURT REPORTS                  [2012] 7 S.C.R.


A   understand and appreciate the Arbitral Award and to take a
    decision as to whether an application under Section 34 was
    required to be moved.

       14. As to the decision in Pushpa Devi Bhagat's case
B (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.
c
        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
D 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
  Builders Pvt. Ltd. 's case (supra), referred to hereinabove. It is
E 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
F 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
G 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.

        16. The view taken in Pushpa Devi Bhagat's case (supra)
H is in relation to the authority given to an Advocate to act on
   BENARSI KRISHNA COMMITTEE v. KARMYOGI                   1185
    SHELTERS PVT. LTD. [ALTAMAS KABIR, J.]

behalf of a party to a proceeding in the proceedings itself,        A
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          B
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   c
Act. The said decision would, therefore, not be applicable to
the facts of this case also.

     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             D
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     E
view, was rightly rejected by the Division Bench of the Delhi
High Court.

     18. Consequently, the Special Leave Petition must fail and
is dismissed.                                                       F
       19. There will, however, be no order as to costs.

R.P.                                           SLP dismissed.