- (1.) Leave granted.
(2.) These appeals arise out of the following facts : On 7th June, 1995 a partnership deed was executed between Subhash Chander Aneja, since deceased, his son Amit Aneja and the appellant Kailash Rani Dang, a cousin of Subhash Chander Aneja, aforesaid with regard to the running of Alka Cinema, situated at P-2, Sector-15 NOIDA. The shares in the partnership were also delineated therein. On 21st July, 1998, a family arrangement was entered into between Subhash Chander and Kailash Rani, in which it was agreed that the latter would get 50% of the earnings from the Cinema Hall as well as from the commercial exploitation of the adjoining plot, whereas 50% would go to the former. This agreement also contained an arbitration clause whereby all disputes and differences would be referred to the sole arbitration of Shri Hans Raj Dang and on his non-availability, to the sole arbitration of Dr. Amar Nath Kumar. Disputes having arisen, Kailash Rani vide her letter dated 2nd July, 1999, invoked the arbitration clause in the family arrangement by writing to Shri Hans Raj Dang requesting him to act as the arbitrator. Shri Hans Raj Dang, however, vide his letter dated 7th July, 1999 informed Kailash Rani that he would not be able to act as such because of ill-health. Copies of these letters were sent to the respondent-Subhash Chander as well. Kailash Rani, in these circumstances, wrote a letter dated 12th July, 1999 to the alternate Arbitrator Dr. Amar Nath Kumar requesting him to act as the arbitrator and also informing him that though the cinema hall was bringing an income of Rs. 2.5 lacs per month, she had not been paid a single penny on that account. Dr. Amar Nath Kumar accordingly wrote a letter dated 17th July, 1999 to Kailash Rani calling upon her to file her statement of claim before 25th July, 1999 and to send a copy thereof to Subhash Chander, through registered post. He also called upon Subhash Chander to file his reply to the statement of claim by 2nd August, 1999 and fixed 11.00 A.M. on 8th August, 1999 as the date and time of the hearing at a specified venue at Ghaziabad. On 23rd July, 1999, Kailash Rani dispatched her statement of claim by registered post to the Arbitrator as well as to Subhash Chander. The receipt of this statement was acknowledged by Subhash Chander by his communication on 29th July, 1999 addressed to Kailash Rani wherein he asked for the supply of certain documents, failing which it would not be possible for him to file a reply to the statement of claim. Kailash Rani, vide her letter dated 2nd August 1999, replied reminding Subhash Chander that the documents he was seeking were already in his possession as he was one of the executants thereto, but that in any case the copies could be taken from the arbitrator during the course of hearing on 8th August, 1999. Subhash Chander nevertheless, through his Advocates, M/s. Sen and Sen addressed a communication dated 7th August, 1999 to the arbitrator denying the execution of any family arrangement dated 21st July, 1998 and again asking for the supply of the documents referred to in the statement of claim, and further, that the arbitration proceedings be deferred till all the documents were in fact supplied. As a follow up to the communication from his Advocates, Subhash Chander did not appear before the Arbitrator on 8th August, 1999. The Arbitrator, accordingly, addressed a letter to him pointing out that his non-appearance justified the initiation of ex parte proceedings but another opportunity was being afforded to him and further that Kailash Rani had undertaken to supply copies of all documents relied upon by her on the next date of hearing in his presence. The hearing was also fixed at 11.00 A.M. on 25th August, 1999. Subhash Chander however did not appear before the Arbitrator on 25th August, 1999 as well and after waiting till 2.00 P.M. on that date the Arbitrator ordered ex-parte proceedings and thereafter passed an ex-parte Award against him. A copy of the Award was sent by the Arbitrator to both parties through speed post; the copy of the Award being addressed to Subhash Chander at his business address, Alka Cinema, P-2, Sector -15, NOIDA. The Postman visited the cinema premises on 30th August, 1999 but Subhash Chander was not present. The Postman went to the address again the next day but Subhash Chander refused to receive the registered envelope, though the name of the sendor Dr. Amar Nath Kumar, the Arbitrator stood written thereon. The Postman accordingly returned the envelope to the sender with an endorsement of refusal dated 31st August 1999. Kailash Rani thereafter (on 7th April, 2000) filed an Application in the Court of the District Judge, Gautam Budh Nagar for the execution of the Award. Subhash Chander at this stage filed an Application under Order 21 Rule 26 of the Code of Civil Procedure in the Executing Court seeking a stay of the execution proceedings, and denying any knowledge of the passing of the Award dated 25th August, 1999 and also, inter alia, pleading that though he had not appeared before the Arbitrator on 25th August, 1999, one Mishra, his Manager, had done so on his behalf, who, after having waited for an hour, had found neither the appellant nor the Arbitrator present, on which he had gone away and that this fact had been communicated to the Arbitrator by Registered post on 6th September, 1999. He also filed an application dated 28th November, 2000 under section 34 of The Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act") praying that the ex-parte Award dated 25th August, 1999 be set aside emphasizing therein that he had received a copy of the Award only on 7th October, 2000 during the course of the execution proceedings. Subhash Chander expired on 29th November, 2000 and is now represented by his L.Rs including respondent No. 1 Rakesh Bala Aneja, his widow. Kailash Rani, in response to the aforesaid objection petition, filed a reply pleading that it was time barred and raising several objections on merits as well. The District Judge - the Executing Court, thereafter, called upon the parties to produce their evidence. The statement of the Postman Dharam Pal, who had tendered the envelope on 30th and 31st August, 1999 which Subhash Chander had refused to accept was recorded. The Court accordingly concluded that as Subhash Chander had refused to accept the notice from the Postman he was deemed to have been served and as such the application under section 34 was clearly beyond time as the maximum time permissible for such an application was 90 days. The objection petition was, thus, dismissed. Rakesh Bala filed a Revision Petition in the Allahabad High Court which set aside the order of the Executing Court vide the impugned judgment dated 13th November 2006, which to us, suffers from some basic contradictions. This is what the Court had to say : "It is true that in usual course if the entry of refusal of service of the award is made by the Postman it is to be accepted by the Court as correct. In this view of the matter the present objections are to be found presented after the expiry of the limitation period provided for the purpose. The service of award upon a party who is definitely aggrieved by the same is not a matter to be viewed very lightly. The service is not a mere formality and it is a matter of substance. The termination of an arbitral proceedings are always subject to certain conditions and it is also subject to provisions of sections 33 and 34 of the Act. In fact the delivery of award to a party has to be effective after the same has been received by the said party. This delivery actually has the effect of conferring 'certain rights upon the parties as also bringing to an end the right to exercise those rights on expiry of the period of limitation'. Therefore, the delivery of the copy of the award made is something which is very substantial for the parties. The mere entry of refusal of acceptance by the Postman upon the registered envelope should not be given so much importance as to shut the entire available avenues for the redressal of his- grievance of a party which has been quite adversely affected by it." In support of its observations the High Court relied on the judgment of this Court in Union of India vs. Tecco Trichy Engineers and Contractors, 2005 4 SCC 239. It was accordingly held that the date of receipt of the Award by Subhash Chander would be deemed to be 11th October, 2000 and as such the application under section 34 of the Act was within time. Kailash Rani filed a review application against the judgment dated 13th November, 2006 but it too was dismissed on 7th August, 2007. Faced with this situation, Kailash Rani is before us in the present appeals, both against the orders dated 13th November, 2006 and 7th August, 2007.
(3.) Mr. Arun Jaitley, the learned senior counsel for the appellant has raised several arguments during the course of hearing. He has first pointed out that Subhash Chander, the deceased respondent, had always adopted an indifferent attitude towards the arbitration proceedings inasmuch that though he had knowledge of the proceedings he had deliberately stayed away on the 25th August, 1999 when he, as per his own statement, had not appeared before the Arbitrator but had sent his Manager Mishra instead, though even his alleged appearance was an afterthought. He has also pointed out that Subhash Chander in his objection petition had denied the execution of the family arrangement dated 21st July, 1998 though the execution of the partnership deed which was, in fact, the parent document executed on 7th June, 1995 had not been denied and this too, and the fact that the appellant Kailash Rani though entitled to 50% of the income from the cinema had not received even a penny on that account, was the reason for his recalcitrant attitude. He has pleaded that it is in this background that the matter would have to be examined even with regard to the receipt of a copy of the award by him on 31 st August, 1999, as held by the executing Court or on the 11th of October, 2000 as observed by the High Court. In this connection, Mr. Jaitley has then brought to our notice the statement of Dharam Pal PW1, the postman who deposed that he had visited Alka Cinema on the 30th August, 1999 and after finding Shri Aneja absent he had again visited the next day but the latter had refused to accept the envelope on which he had made an endorsement to that effect and returned the unsealed envelope to the sender. Reliance has also been placed on section 3 of the Act which talks about the receipt of written communications, to support the argument that as the envelope had been addressed to the very address, which was the subject-matter of the business and the partnership, it was deemed to have been served. Mr. Jaitley has also distinguished the judgment of this Court in Tecco Tricky Engineers (supra) and submitted that it had no applicability to the facts of the present matter.;