# Goldrush Sales &Services Ltd v. The Managing Director U.P. S.R.T.C.&Anr

- **Citation:** (2019) 1 ILRA 665
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-09-13
- **Bench:** Rajan Roy
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/goldrush-sales-services-ltd-v-the-managing-director-u-p-s-r-t-c-anr-44536
- **Pages:** 7

## Headnote

A. Arbitration and Conciliation Act, 1996section 11- In response to the notice
opposite
party
no.2
intimated
the
Applicant
about
appointment
of
an
arbitrator and not by opposite party no.1
as agreed in the arbitration agreement.
Onus to prove receiving-Indian Evidence
Act-section
114-III(f)
and
General
clauses Act-section 27-Opposite party
no.2 assert serving of notice of opposite
party no.1 to the applicant after 7 years.

Held:-Unless delivered, it cannot be treated as
having been communicated. Accordingly, once
the application under Section11had been filed
no such appointment could have been made
and the matter was purely within the domain
of this Court to do so. (Para 9)

B. Arbitration and conciliation Act, 1996Section
3(2)-
until
delivered
no
communication; actual delivery of order
of
appointment
of
arbitrator
is
a
necessary prerequisite specially in terms
of section 3(2) of the Act.

Held:-The term ''delivered' is distinct from the
word ''dispatch'. Delivered means to bring and
handover
something
to
the
addressee.
(Para12) (E-9)

## Text

1 All. Goldrush Sales & Services Ltd. Vs. The Managing Director U.P.S.R.T.C. & Anr.
665

21. Accordingly, this writ petition
lacks merit and is hereby dismissed.

22. However, respondent no.1- IInd
Additional Civil Judge, Junior Division is
directed to proceed to decide the Suit
No.120
of
1999
expeditiously
and
preferably within a period of one year
from the date of production of a certified
copy of this order.
----------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 13.09.2019

BEFORE
THE HON'BLE RAJAN ROY, J.

ARBITRATION APPLICATION NO. 29 of 2012

Goldrush Sales &Services Ltd.
 ...Applicant
Versus
The Managing Director U.P. S.R.T.C.&Anr.
 ...Opposite Parties

Counsel for the Applicant: Shradha
Agarwal, Akash Prasad,Shraddha Agarwal,
Sri Akash Prasad, Sri Amrendra Nath
Tripathi, Sri Prashant Agarwal, Sri Sachin
Garg, Sri Shishir Tiwari.

Counsel for the Opposite Parties:
Sri Mahesh Chandra, Sri Ratnesh Chandra.

A. Arbitration and Conciliation Act, 1996section 11- In response to the notice
opposite
party
no.2
intimated
the
Applicant
about
appointment
of
an
arbitrator and not by opposite party no.1
as agreed in the arbitration agreement.
Onus to prove receiving-Indian Evidence
Act-section
114-III(f)
and
General
clauses Act-section 27-Opposite party
no.2 assert serving of notice of opposite
party no.1 to the applicant after 7 years.

Held:-Unless delivered, it cannot be treated as
having been communicated. Accordingly, once
the application under Section11had been filed
no such appointment could have been made
and the matter was purely within the domain
of this Court to do so. (Para 9)

B. Arbitration and conciliation Act, 1996Section
3(2)-
until
delivered
no
communication; actual delivery of order
of
appointment
of
arbitrator
is
a
necessary prerequisite specially in terms
of section 3(2) of the Act.

Held:-The term ''delivered' is distinct from the
word ''dispatch'. Delivered means to bring and
handover
something
to
the
addressee.
(Para12) (E-9)

(Delivered by Hon'ble Rajan Roy J.)

1. Heard learned counsel for the
parties.

2. This is an application under
Section 11 of the Arbitration and
Conciliation Act, 1996.

3. Before proceeding with the merits
of the matter it is necessary to mention
that in the relief clause cancellation of
appointment/ nomination of Shri Niranjan
Kumar- opposite party no. 3 as Arbitrator
had also been sought. Realizing the
mistake, as, such a relief could not be
sought under Section 11, although the
other part of the relief was admissible, an
application for amendment of the relief
clause was filed which was objected by
the opposite parties on the ground that it
should not be allowed at such a belated
stage. But, considering the nature of the
proceedings and the technicality involved
which does not materially affect the
substantive disposal of the application for
appointment
of
an
Arbitrator,
the
application for amendment is allowed. As,
it does not affect the merits, therefore, no
fresh response is called for consequent to
666 INDIAN LAW REPORTS ALLAHABAD SERIES
the amendment being allowed which is of
a technical nature as the words ''cancel the
appointment/ nomination of Shri Niranjan
Kumar- opposite party no. 3' would stand
deleted and the words ''appoint under
Section 11(6) of the Arbitration and
Conciliation Act, 1996' be substituted in
its place and the words ''be appointed' as
mentioned in the application, would be
deleted.

4. The application under Section 11
of the Arbitration and Conciliation Act,
1996 (hereinafter referred to as ''the Act,
1996') was filed on 08.11.2012. The
agreement and the arbitration clause
contained therein is not in dispute. As per
the arbitration clause any dispute arising
out of or in connection with the
agreement shall be referred to the sole
Arbitration of the Managing Director or
his nominee not below the rank of
General Manager whose decision shall be
binding both on the Contractor and the
U.P.S.R.T.C. subject to the provisions of
the Act, 1996. A dispute arose between
the parties on account of which a notice
was given by the applicant on 29.06.2012
to the opposite parties no. 1 and 2 for
appointment
of
an
Arbitrator.
The
opposite
party
no.1-
the
Managing
Direction, U.P.S.R.T.C., Lucknow is the
party to the agreement with the applicant,
whereas, the opposite party no. 2 is not a
party thereto. In fact the opposite party
no. 2 is another Company in respect of
which the work mentioned in the
agreement was to be performed. In
response to the aforesaid notice the
opposite party no. 2- the Managing
Director,
Lucknow
City
Transport
Services Limited is said to have intimated
the applicant about the appointment of
Shri Niranjan Kumar, Chief General
Manager (Technical), U.P.S.R.T.C. as an
Arbitrator
vide
his
letter
dated
13.07.2012, a copy of the said intimation
is annexed as Annexure No. 4 to the
application. As the intimation was not by
the Managing Director, U.P.S.R.T.C. with
whom the agreement had been entered by
the applicant, therefore, vide letter dated
20.07.2012 the applicant informed the
opposite party no. 2 that copy of letter of
M.D., U.P.S.R.T.C. i.e. opposite party no.
1 had not been received nor made
available
to
it
and
in
fact
such
communication should have come from
the opposite party no. 1. A request for a
copy of the said order was also made.
According to the applicant the alleged
order of the M.D., U.P.S.R.T.C. dated
13.07.2012 appointing an Arbitrator was
never
delivered
to
the
applicant
accordingly this application was filed on
08.11.2012 specifically disclosing the
factum
of
receipt
of
letter
dated
13.07.2012 of the opposite party no. 2 and
the non receipt of any such order of the
opposite party no. 1 appointing an
Arbitrator. This fact is mentioned in Para
18 of the application. The opposite parties
filed counter affidavit and supplementary
counter affidavit stating the intimation of
appointment of the Arbitrator vide letter
of the opposite party no. 2- The Managing
Director,
Lucknow
City
Transport
Services Limited dated 13.07.2012 but no
such assertion was made in the said
counter affidavits that in fact the order of
the Managing Director, U.P.S.R.T.C.
dated 13.07.2012 was also communicated
to the applicant albeit subsequently vide
another letter dated 06.08.2012 of the
opposite party no. 2. It is only vide
affidavit dated 07.02.2019 filed after
almost more than seven years that a
document numbered as SCA-1 dated
13.07.2012 signed by the Managing
Director,
Lucknow
City
Transport
1 All. Goldrush Sales & Services Ltd. Vs. The Managing Director U.P.S.R.T.C. & Anr.
667
Services Limited, Lucknow was annexed,
along with its annexure an order of the M.D.,
U.P.S.R.T.C. dated 13.07.2012, asserting
that the appointment of the Arbitrator was by
the M.D., U.P.S.R.T.C. The letter dated
13.07.2012 signed by the M.D., Lucknow
City Transport Services Limited, Lucknow
in part is the same as was sent to the
applicant, a copy of which is annexed as
Annexure No. 4 to the application but the
said letter contained in Annexure SCA-1 to
the supplementary counter affidavit itself
says that in the original document certain
portions of it were not there by using the
words ''ewy izfr ij ugha'. It is inexplicable as
to why these recitals of endorsement of
copies did not exist on the original which
was sent to the applicant. Furthermore, the
letter contained in Annexure SCA-1 does not
refer to any enclosures, yet the order of the
M.D., U.P.S.R.T.C. dated 13.07.2012 which
does not bear any letter number or reference
but appears to have been passed on a sheet of
paper, has been annexed with it for the first
time i.e. with the affidavit dated 07.02.2019.
The said order is no doubt on the record of
the file of U.P.S.R.T.C. which has been
placed before the Court but it is intriguing as
to why it was not filed earlier and why the
copy of the letter dated 13.07.2012 is not the
same as that of the original. Nevertheless,
even at this stage no proof of service of the
order dated 13.07.2012 was filed by the
opposite parties. It was only when the Court
inquired into the matter further and asked the
opposite parties to produce the records, then,
another supplementary counter affidavit
dated 27.03.2019, wherein a letter of the
M.D., Lucknow City Transport Services
Limited, Lucknow- opposite party no. 2
dated 06.08.2012 was brought on record, in
which it was stated that the order of the
M.D., U.P.S.R.T.C. appointing the Arbitrator
in response to the notice dated 29.06.2012
was served upon the applicant by registered
post
with
acknowledgment
due
on
06.08.2012. In the interregnum another
supplementary
counter
affidavit
dated
08.03.2019 was filed which did not mention
this fact nor contain the documents
subsequently filed with the affidavit dated
27.03.2019. The dispatch register has been
perused by the Court and no doubt there is a
mention of the letter dated 06.08.2012 as
having been dispatched, but the intriguing
aspect still remains as to why this fact was
never brought to the notice of the Court or
the applicant prior to March, 2019.

5. It is not out of place to mention
that after appointment as Arbitrator, Shri
Niranjan Kumar informed the applicant
about the date fixed but the applicant
sought an adjournment on the ground of
pendency of application under Section 11
before this Court. During pendency of this
application as Shri Niranjan Kumar
retired, another officer Shri Atul Bharti
was appointed, but, the proceedings could
not take place on account of pendency of
this application.

6.

Now,
the
applicant
has
consistently filed affidavits denying the
receipt of the order of the M.D.,
U.P.S.R.T.C. dated 13.07.2012 appointing
an Arbitrator as per the agreement entered
into between the applicant and the
U.P.S.R.T.C. The applicant has also
denied the averments made by the
opposite parties in the supplementary
counter
affidavits
including
the
receipt/delivery of any such letter dated
06.08.2012 and the letter of the M.D.,
U.P.S.R.T.C. dated 13.07.2012.

7. It is the contention of Shri N.K.
Seth, learned Senior Counsel for the
applicant that under the Arbitration and
Conciliation Act, 1996 as per Section 3
668 INDIAN LAW REPORTS ALLAHABAD SERIES
which deals with receipt of written
communication and says that any such
communication in respect to Arbitration is
deemed to have been received on the date
it is so delivered, therefore, his contention
was that mere sending of intimation about
appointment
of
Arbitrator
is
not
sufficient. Such intimation, assuming that
it was sent though not admitting it, is
required to be delivered. Unless it is
delivered, it can not be treated as having
been
communicated,
therefore,
his
submission was that prior to filing of the
application under Section 11 there was no
communication
by
the
competent
Authority
which
was
the
M.D.,
U.P.S.R.T.C. of his decision appointing
Shri Niranjan Kumar as Arbitrator.
Accordingly, once the application under
Section 11 had been filed no such
appointment could have been made and
the matter was purely within the domain
of this Court to do so. The submission
was that considering the objective and
requirements
of
impartiality
and
independence of the Arbitrator, the M.D.,
U.P.S.R.T.C.
having
forfeited
his
entitlement to appoint such Arbitrator, the
Court should appoint an independent and
impartial Arbitrator, especially as, inspite
of 9 years neither the Arbitrator had been
appointed nor Arbitration had taken place
on merits. He relied upon the decision of
the Supreme Court reported in 2012 (6)
SCC
384;
S.A.
Bipromasz
Bipron
Trading S.A. Vs. Bharat Electronics Ltd.
and 2011 (4) SCC 616; State of
Maharashtra Vs. Arch Builders.

8. It was his contention that once
that applicant has repeatedly denied on
oath the receipt and delivery of the
alleged communication of the order of the
M.D., U.P.S.R.T.C. dated 13.07.2012 and
the letter of the M.D., Lucknow City
Transport Services Limited, Lucknow
dated 06.08.2012 the presumption under
Section 114 of the Evidence Act as also
Section 27 of the General Clauses Act
stood rebutted and the onus shifted upon
the opposite parties to prove such
receipt/delivery of the communication
referred hereinabove upon the applicant
and as they had failed to do so, therefore,
this Court should proceed to appoint an
Arbitrator.

9. Shri Seth, learned counsel for the
applicant also raised certain issues with
regard to rank of Shri Niranjan Kumar
that he was not of the Rank of General
Manager, hence ineligible to act as an
Arbitrator as per the arbitration clause,
but the Court does not find merit in his
arguments which are belied from the
records.

10. Shri Ratnesh Chandra, learned
counsel for the opposite parties no. 1 and
2 on the other hand submitted that there
was clinching evidence on record to show
that the communication of the decision of
the M.D., U.P.S.R.T.c. appointing Shri
Niranjan Kumar as Arbitrator had been
made to the applicant firstly by the letter
of the M.D., Lucknow City Transport
Services
Limited,
Lucknow
dated
13.07.2012. Secondly, by his letter dated
06.08.2012 along with which the order of
the M.D., U.P.S.R.T.C. was enclosed,
however, on being asked as to why this
fact was not averred in the earlier counter
affidavits and supplementary counter
affidavits, as many as three affidavits
having been filed and was asserted for the
first time in March, 2019, although, the
application had remained pending for
almost 7 years and why the relevant
documents were not brought on record, he
did not have any reply in this regard. This
1 All. Goldrush Sales & Services Ltd. Vs. The Managing Director U.P.S.R.T.C. & Anr.
669
aspect is a matter of inquiry by the
concerned Authorities. On the question of
rank of Shri Niranjan Kumar, Shri
Ratnesh Chandra, learned counsel for the
opposite parties asserted that he was of
the rank of General Manager and the
assertion
to
the
contrary
was
misconceived. Shri Chandra also relied
upon the decision of the Supreme Court
reported in (2004) 10 SCC 504; Union of
India and Anr. Vs. M. P. Gupta.

11. Having heard learned counsel
for the parties and having perused the
records even assuming that any such
communication
dated
06.08.2012
enclosing therewith the order of the M.D.,
U.P.S.R.T.C. dated 13.07.2012 was made
to the applicant, although, there is no
explanation as to why these facts and
documents were not brought on record
earlier although this application has
remained pending before the Court for
almost 7 years, the fact of the matter is
that such sending of the letters would at
best raise a presumption about the fact
that the same were sent, but, as per the
provision contained in Section 3(2) of the
Act, 1996 this is not sufficient in respect
of matters pertaining to Arbitration and
such communication has to be ''delivered'.
Even otherwise, the presumption referred
hereinabove in terms of Section 114-III(f)
of the Indian Evidence Act or in terms of
Section 27 of the General Clause Act is
rebuttable and once the applicant has
stated on oath by way of an affidavit that
it had never received any such letter dated
06.08.2012 or the decision of the M.D.,
U.P.S.R.T.C. dated 13.07.2012, then, the
onus shifted upon the opposite party no. 1
to prove by evidence that in fact it was
served and delivered. It was incumbent
upon the opposite party no. 1 to produce
the postman or ask for his summoning as
he would be the best person to testify as
to whether the aforesaid letters/orders
were served upon the applicant or not or
produce a certificate of service issued by
the postal department. None of these has
been done. As already stated earlier the
factum of letter dated 06.08.2012 along
with letter of the M.D., U.P.S.R.T.C.
dated 13.07.2012 as having been sent to
the applicant itself was asserted as a fact
for the first time in March, 2019 and no
attempt was made to produce the Postman
or to seek his presence through the Court
within reasonable time, even after filing
of such affidavit nor certificate of service
by the postal department was filed. In this
view of the matter, it can not be said that
there is any proof of delivery or service of
the decision of the M.D., U.P.S.R.T.C.
dated 13.07.2012 upon the applicant. The
communication of the order of the M.D.,
Lucknow
City
Transport
Services
Limited, Lucknow dated 13.07.2012 is
not material, as, the said Officer or his
Corporation was not a party to the
agreement in respect of which a dispute
has arisen. The Competent Authority for
appointing the Arbitrator was M.D.,
U.P.S.R.T.C., therefore, it is his decision
which was required to be served/delivered
upon the applicant. The opposite party no.
1 has not been able to prove such
service/delivery of his decision upon the
applicant. Reference may be made in this
regard to a decision of the Supreme Court
reported in (1976) 2 SCC 409; Puwada
Venkateswara
Rao
Vs.
Chidamana
Venkata Ramana wherein it affirmed the
view taken by the Bombay High Court
that the presumption of service had been
repelled by the defendant's statement on
oath that he had not refused service by
registered post as it was never brought to
him and that in this state of evidence
unless the Postman was produced the
670 INDIAN LAW REPORTS ALLAHABAD SERIES
statement of the defendant on oath must
prevail. It was a case of endorsement of
''refusal' to receive made by the postman. In
the case at hand the applicant has refused on
oath the receipt of any such communication
and there is no document not even the
acknowledgment due containing any such
endorsement by the Postman of a refusal by
the applicant. The opposite party no. 1, had
he taken this plea within a reasonable time,
could have obtained a certificate from the
postal department about the service/delivery
upon the applicant, but this has not been
done. There is nothing on record from the
conduct of the applicant which could
establish that it had in fact received and was
served
the
decision
of
the
M.D.,
U.P.S.R.T.C.
The
first
letter
dated
13.07.2012
of
M.D.,
Lucknow
City
Transport Services Limited, Lucknow does
not mention about the said decision having
been enclosed with it and there is no
evidence of it, as already noticed. The copy
of
the
said
letter
filed
with
the
supplementary counter affidavit is not the
same as that which was served upon the
applicant, a fact which is admitted in the
document itself. In the aforesaid decision of
the
Supreme
Court
in
Puwada
Venkateswara
Rao's
case
(supra)
a
decision of the Calcuttta High Court in the
case of Nirmalabala Devi Vs. Provat
Kumar Basu reported in (1948) 52 CWN
659 was also affirmed, which was on
different lines than the Bombay High
Court's decision, however, having affirmed
both the views the Supreme Court held that
they were reconciliable as what the Culcutta
High Court had applied was a rebuttable
presumption which had not been repelled by
any evidence, whereas, in the Bombay High
Court's case the presumptions had been held
to be rebutted by the evidence of defendant
on oath so that it meant that the plaintiff
could not succeed without further evidence.
In this case also the applicant has rebutted
the presumption but the opposite party no. 1
has not led any further evidence to succeed
in his defence and as stated earlier even
after a close examination of evidence on
record there is nothing to establish that the
order of the M.D., U.P.S.R.T.C. dated
13.07.2012
had
been
actually
served/delivered on the applicant, which is a
necessary per-requisite specially in terms of
Section 3(2) of the Act, 1996. Reference
may also be made in this regard to another
decision of the Supreme Court on this issue
reported in (2008) 17 SCC 321; V. N.
Bharat Vs. Delhi Deveopment Authority
and Anr. wherein considering the question
of presumption of service of notice the
Supreme Court held that presumption under
Section 114-III.(f) of the Evidence Act is a
rebuttable presumption and on denial of
receipt of the registered letter from D.D.A.
the Appellant discharged his onus and the
onus reverted back to the respondent to
prove such service by either examining the
postal authorities or obtaining a certificate
from them showing that the registered
article had been delivered to and had been
received by the appellant. In this case also
the onus sifted upon the opposite party no. 1
who has not been able to discharge it.

12. The term ''delivered' is distinct
from the word ''dispatch'. Delivered
means to bring and handover something
to the addressee.

13. The Arbitral proceedings in the
present case having commenced on
29.06.2012
the
provisions
of
the
unamended Act, 1996 would apply.

14. In view of the above, it is held that
there was no service/delivery of the decision
of the M.D., U.P.S.R.T.C. appointing Shri
Niranjan Kumar as Arbitrator prior to filing
1 All. State of U.P. & Ors. Vs. Mohd. Ramjan & Anr.
671
of the application under Section 11 of the
Act, 1996. The application for appointment
of an Arbitrator under Section 11 is
maintainable.

15. The unamended Act, 1996 is
applicable to this case. Considering the
arbitration clause agreed upon by the
parties
the
M.D.,
U.P.S.R.T.C.
is
appointed as an Arbitrator to himself
arbitrate in the matter, as, the applicant
had agreed to his Arbitration as per the
arbitration clause. He shall conclude the
proceedings at the earliest, say, within a
period of one year.

16. The original records comprising
the dispatch register and the file bearing
No. 31LCT/12 shall be returned by the
Bench Secretary to Shri Ratnesh Chandra,
learned counsel for the opposite party no.
1.

17. The application is disposed of.
------
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 02.08.2019

BEFORE
THE HON'BLE MANOJ MISRA, J.
THE HON'BLE SURESH KUMAR GUPTA, J.

SPECIAL APPEAL NO. 622 of 2019

State of U.P. & Ors. ...Appellants
Versus
Mohd. Ramjan & Anr. ...Respondents

Counsel for the Appellants:
Sri Ghanshyam Dwivedi.

Counsel for the Respondents:
Sri Sunil Kumar Srivastava.

A. Pay parity - Under Rules 4 and 8 of
Service Rules, 1991- Single cadre of
instructors. Single grade. No difference
in educational qualification established.
Claim allowed by Single Judge- directing
the state authorities (the appellants
herein) to treat them at par with other
instructors (paras 13 to 16)-Special
Appeal dismissed. (E-8)

(Delivered by Hon'ble Manoj Misra J.)

1. This intra-court appeal has been
filed against the judgment and order dated
12.12.2018 passed by the learned Single
Judge in Writ A No. 5163 of 2003 by which
the writ petition filed by the respondents has
been allowed and a direction has been issued
to the state-authorities (the appellants herein)
to treat the writ petitioners at par with other
Instructors and place them in pay scale of Rs.
5,000-8,000 with all consequential benefits.

2. Before we proceed to address the
arguments raised in this appeal, it would
be apposite for us to have a glimpse of the
facts of the case.

3.

The
writ
petitioners
(the
respondents herein) were appointed as
Instructor
in
Government
Industrial
Training Institute (for short GITI) in the
year 1981 against the post of Wood Work
Instructor. In the year 1989, the GITI was
merged with Industrial Training Institute
(for short ITI) as a consequence whereof
the writ petitioners became employee of
the ITI and they continued to work as
Wood Craft Instructor. Prior to the
merger, both the institutes, that is GITI
and ITI, were under the Director, Training
and Employment, Govt. of U.P., Lucknow
(for short Director Training). Post merger
also the institute (ITI) remained under the
Director
Training.
However,
an
anomalous situation in respect of the pay
scale of the Instructors arose. The writ
petitioners who were from the GITI were