Madhya Pradesh High Court
Omprakash Vaishya Huf Thr vs Shri Ram Deveopers Thr on 3 May, 2017
W.P. No.2732/2017 1
(Omprakash Vaishya Vs. Shri Ram Developers & Ors.)
3.5.2017.
Shri K.S.Tomar, learned senior counsel with Shri
R.V.Sharma, counsel for the petitioner.
Shri N.K.Gupta, learned senior counsel with Shri
S.D.Singh, counsel for respondent No.1.
Petitioner has filed this writ petition assailing the order dated 22.3.2017 passed by the 7th ADJ, Gwalior, whereby an application moved by the petitioner for adducing evidence has been rejected.
Learned counsel for the petitioner submits that the application, which was filed by him, is available on record as Annexure P/4. In the application, it has been clearly mentioned that such application was filed before the Arbitrator, but learned Arbitrator had malafidely dismissed such application, and therefore, learned counsel for the petitioner had filed an application before the learned Court of 7th ADJ before whom an application under Section 34 of the Arbitration and Conciliation Act is pending for setting aside the award dated 17 th November, 2012. In the said application, it is mentioned that learned Arbitrator did not deem it fit to go through the documents which were sought to be taken on record and without reading them declined to take them on record. It is also submitted that to prove all those documents, applicant i.e. petitioner before this Court, would like to summon Tahsildar Gwalior, Branch Manager, Punjab and Sindh Bank, Jayendra Ganj, Gwalior and Secretary, GYMC Club, Sanatan Dharm Mandir Road, Gwalior, and since these witnesses are beyond his authority, therefore, they be summoned through process of the Court.
Learned counsel for the petitioner has placed reliance on the judgment of this Court in the case of State of M.P. & Ors. Vs. W.P. No.2732/2017 2 M/s. Som Datt Builder Pvt. Ltd. as reported in I.L.R. (2014) MP 726 and placing reliance on this judgment, it is submitted that though the High Court declined to interfere in the matter of complaint regarding non-framing of issues by the authority before whom the arbitration award was under challenge, but deprecated the order of not giving an opportunity to the party to lead evidence. It has been held in the case of M/s. Som Datt Builder that in summary proceedings under Arbitration Act issues are not required to be framed. However, the matter was remanded back to decide the application for permission to lead evidence. Petitioner has also placed reliance on the judgment of the Supreme Court in the case of M/s. Cochin Shivyard Ltd. Vs. M/s. Apeejay Shipping Ltd. dated 6th November, 2015 passed in civil appeal No.9187/2015. Learned counsel for the petitioner has drawn attention of this Court to para 19 of the judgment of the Supreme Court and has submitted that even the Supreme Court has held that parties should be permitted to adduce evidence if they are assailing any award. He has read the following paragraph which reads as under :-
"19.......To elaborate, a person urging the ground of legal misconduct has to satisfy the court from the records of the arbitral proceedings that there has been a legal misconduct on the part of the arbitrator as a consequence of which the award gets vitiated. The question of adducing any kind of oral evidence to substantiate the plea or stand or stance does not arise. It has to be shown from the proceedings carried on before the arbitrator and the evidence adduced before the arbitrator. Evidence cannot be adduced in court to substantiate the challenge on the score of legal misconduct. We are not entering upon any discussion pertaining to moral misconduct as that is not the issue in the case at hand. The decision in Fiza Developers and Inter-Trade W.P. No.2732/2017 3 Private Limited (supra) has been rendered by this Court while interpreting Section 34 of the 1996 Act. The context being different, we are not inclined to apply the principles enumerated therein to the objection filed under Section 30 and 33 of the 1940 Act, for the simon pure reason that the authorities are plenty to make it limpid that the issue of legal misconduct on the part of the arbitrator should be manifestly discernible from the record."
Placing reliance on these judgments, learned counsel for the petitioner submits that intention of law makers is apparent that opportunity to adduce evidence should have been afforded to the petitioner and in absence of such opportunity to lead evidence as was denied by the Arbitrator, the Court of ADJ has committed illegality, and therefore, the impugned order deserves to be set aside.
Learned counsel for respondent No.1 on the other hand submits that Court of ADJ has rightly held that petitioner had not filed any of the original documents and was not in a position to bring on record that which document was required for which purpose and what he wants to prove through such document, and therefore, has rightly rejected the application filed by the petitioner. He has also submitted that earlier a writ petition No.4862/2016 was filed by the petitioner assailing the order of ADJ in which the issue was regarding rejection of an application preferred by the petitioner for framing of issues. This Court vide order dated 25.10.16 upheld the order of the trial Court by placing reliance on the judgment of the Supreme Court in the case of Fiza Developers & Inter-Trade P.Ltd. Vs. AMCI (I) Ltd. & Another as reported in 2009 AIR SCW 6395 and had refused to interfere in exercise of its limited supervisory jurisdiction under Article 227 of the Constitution of India.
After hearing the arguments of both the parties and W.P. No.2732/2017 4 perusing the record, this Court is of the opinion that as far as judgment of Supreme Court in the case of Fiza Developers & Inter-Trade P.Ltd. (supra) is concerned, it has categorically decided that under Section 34(2)(a) only five grounds have been set forth to challenge an arbitral award. Two grounds are contained in Section 34(2)(b) which provides that an award may be set aside by the Court on its own initiative if the subject matter of the dispute is not arbitrable or the impugned order is in conflict with the public policy of India. Admittedly, in the present case, two grounds as are provided under Section 34(2)(b) have not been canvassed. As far as the first five grounds set forth in Section 34(2)(a) are concerned, they deal with (i) incapacity of a party; (ii) the arbitration agreement being not valid under the law;
(iii) party making the application was not given proper notice of the appointment of an arbitrator; (iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration; and (v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part. Thus, the petitioner has limited grounds as have been provided under Section 34(2)(a) to challenge the arbitral award. In the case of M/s. Som Datt Builder Pvt. Ltd (supra) this Court was pleased to observe as under :-
"13 Reverting back to para 31 of the judgment of Fiza Developers (supra), it is apt to mention that the Supreme Court, in no uncertain terms, opined that Section 34 of the Act are summary proceedings. The parties may get opportunity to "prove" the existence of any ground under Section 34(2). For this purpose, they may file affidavits of the W.P. No.2732/2017 5 witnesses and in a given case the other side may be permitted to cross-examine the parties on the basis of affidavits."
Thus, it is apparent that even the opportunity to lead evidence has to be limited to prove existence of any ground under Section 34(2) and cannot extend to assail the award on the basis that the learned Arbitrator had refused to take certain documents on record. Section 34(2) deals with the matters pertaining to incapacity of a party, validity of arbitration agreement, appointment of an Arbitrator without proper notice, the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration and as to the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties. To prove these grounds as are mentioned under Section 34(2), petitioner has not made any pleading as is apparent from his application, Annexure P/4. It is apparent that the witnesses have been sought to be called to prove certain documents which were refused to be taken by the Arbitrator on record. Thus, this Court is of the view that the trial Court though may not have given an accurate reason, but has not committed any illegality or arbitrariness in rejecting the application as is contained in Annexure P/4 because in the opinion of this Court allowing that application would have been opening a new front and providing such opportunity which is not contemplated under the provisions of Section 34(2) of the Arbitration and Conciliation act, 1996. Thus, the petition fails and is dismissed.
(Vivek Agarwal) Judge ms/-