Madhya Pradesh High Court
Ashok vs M/S Sanghi Brothers (Indore) Ltd. on 27 November, 2018
Equivalent citations: AIRONLINE 2018 MP 1337
~1~
HIGH COURT OF MADHYA PRADESH
W.P. No. 16335/2018
(Ashok Vs. M/s Sanghi Brother (Indore) Ltd.)
Indore, Dated: 27/11/2018
Shri S.R. Bhargav learned senior counsel with Shri
Ashutosh Surana learned counsel for petitioner.
Shri G.S. Agrawal learned counsel for respondents.
Heard finally with consent.
By this writ petition under Article 227 of the Constitution of India petitioner has challenged the order of Additional District Judge Indore dated 27/6/2018 rejecting the petitioner's application to file additional documents in pending objection under Section 34 of the Arbitration and Conciliation Act. The petitioner has also challenged the order dated 12/7/2018 whereby petitioner's prayer for filing the affidavit in evidence has been rejected.
Learned counsel for petitioner submits that the court below has committed an error in rejecting the petitioner's application. He has also submitted that petitioner's application for additional document and evidence by way of affidavit should have been allowed and the court below after granting time to file affidavit by order dated 27/6/18 ought not have denied it by the subsequent order.
As against this learned counsel for respondent has submitted that scope of examining the matter under Section 34 of the Act is limited and no error has been committed by the court below in rejecting the application.
I have heard the learned counsel for the parties and ~2~ perused the record.
The record reflects that against the award dated 7/9/2009 the petitioner has filed the objection under Section 34 of the Arbitration and Conciliation Act, 1996 before the court below. Those objections were filed on 7/12/2009 and on account of repeated applications the objections filed by petitioner the objections are still pending and could not be decided till now even almost 9 years have passed.
Counsel for respondent has raised serous objection that on account of pendency of the objection, he has been deprived of benefit of arbitration award.
The record reflects that the court below had earlier passed the order dated 6/1/2012 rejecting the petitioner's application for framing of issue and also rejecting the prayer granting time to file rejoinder. The said order came to be challenged by the petitioner before this court in WP No. 9699/12 and vide order dated 28/2/2014 this court had dismissed the petition affirming the order of the court below. Subsequently the petitioner had filed the application for taking additional documents on record.
The court below has duly considered the said application vide order dated 27/6/2018 and has taken note of the limited scope of objection under Section 34 of the Act and has noted that permitting the petitioner to file the additional document as prayed would amount to re-appreciating the evidence in reference to those document.
The view which has been taken by the court below does not suffer from any error.
Learned counsel for the petitioner has placed reliance ~3~ upon earlier order of this court dated 28/4/2010 passed in Arbitration Case no. 21/08. But the order reflects that AC was withdrawn by petitioner himself seeking liberty to raise the grounds before the court of Additional District Judge in the pending objection. The petitioner has exercised the liberty and filed the application for additional document. But such an application is required to be decided in accordance with law and granting of liberty does not mean that petitioner's prayer for taking the additional document was allowed by this court.
The petitioner had also filed the application for filing the affidavit in evidence.
Supreme court in the matter of Emkay Global Financial Services Limited Vs. Girdhar Sondhi reported in 2018(9) SCC 49 in paragraph 11 formulated the following question which has been examined:
11. What is meant by the expression "furnishes proof"
in Section 34(2) (a)? In an early Delhi High Court judgment, Sandeep Kumar v. Dr. Ashok Hans,2 a learned Single Judge of the Delhi High Court specifically held that there is no requirement under the provisions of Section 34 for parties to lead evidence. The record of the Arbitrator was held to be sufficient in order to furnish proof of whether the grounds under Section 34 had been made out.
Answering the aforesaid question the Hon'ble Supreme court has affirmed the view of Delhi High court in respect of limited scope of Section 34 and held as under:
21. It will thus be seen that speedy resolution of arbitral disputes has been the reason for enacting the ~4~ 1996 Act, and continues to be the reason for adding amendments to the said Act to strengthen the aforesaid object. Quite obviously, if issues are to be framed and oral evidence taken in a summary proceeding under Section 34, this object will be defeated. It is also on the cards that if Bill No.100 of 2018 is passed, then evidence at the stage of a Section 34 application will be dispensed with altogether. Given the current state of the law, we are of the view that the two early Delhi High Court judgments, cited by us hereinabove, correctly reflect the position in law as to furnishing proof under Section 34(2)(a). So does the Calcutta High Court judgment (supra).We may hasten to add that if the procedure followed by the Punjab and Haryana High Court judgment (supra) is to be adhered to, the time limit of one year would only be observed in most cases in the breach. We therefore overrule the said decision. We are constrained to observe that Fiza Developers (supra) was a step in the right direction as its ultimate ratio is that issues need not be struck at the stage of hearing a Section 34 application, which is a summary procedure. However, this judgment must now be read in the light of the amendment made in Section 34(5) and 34(6). So read, we clarify the legal position by stating that an application for setting aside an arbitral award will not ordinarily require anything beyond the record that was before the Arbitrator. However, if there are matters not contained in such record, and are relevant to the determination of issues arising under Section 34(2)(a), they may be brought to the notice of the Court by way of affidavits filed by both parties. Crossexamination of persons swearing to the affidavits should not be allowed unless absolutely necessary, as the truth will emerge on a reading of the 16 affidavits filed by both parties. We, therefore, set aside the judgment of the Delhi High Court and reinstate that of the learned Additional District Judge dated 22.09.2016. The appeal is accordingly allowed with no order as to costs.
In view of the aforesaid judgment it clear that an ~5~ application for setting aside the arbitral award is required to be examined on the basis of existing record and only if there are matters not contained in such record and are relevant to the determination of the issues arising under Section 34 application they are permitted to be brought to the notice of the Court by way of affidavits filed by the parties and cross-examination of the person swearing to the affidavit is not permissible unless absolutely necessary.
This court also in the matter of Union of India and another Vs. M/s Agrawal Construction Company Ltd. vide order dated 18/1/2017 passed in WP No. 2756/16 taking note of the judgment in the case of Fiza Developers & Inter-Trade P. Ltd. Vs. AMCI (I) Ltd and another reported in 2009 AIR SCW 6395 as also rule 9 of MP Arbitration Rules, 1997, while taking the view that the court considering the objection under section 34 of the Act is vested with jurisdiction to adopt the procedure laid down by the CPC if attending facts of the case justify doing so, has held as under:
In this view of the matter, the Court is not bereft of the jurisdiction to adopt any of the procedure prescribed in CPC as per Rule 9 of 1997 Rules (supra) for deciding application under Section 34(2) of 1996 Act. Which particular procedure prescribed in CPC is to be followed by the Court is for the Court to decide based upon the attending facts and circumstances. The law laid down by the Apex Court in Fiza Developers & Inter-Trade P. Ltd. (surpa) is only to the extent that the Court is not bound by the procedure laid down in CPC and thus has discretion to adopt any of the permissible procedure if occasion arises and if the facts and circumstances prevailing in the proceedings under 34(2) of 1996 Act demands.
It is trite principle of law that merely because a ~6~ different view is possible which the Court-below could have taken in the given facts and circumstances cannot be a good ground to interfere in the limited supervisory jurisdiction of this Court under Article 227 of Constitution especially in the absence of any material to point out transgression of jurisdiction limits set by law. The Apex court decision in the case of Shalini Shyam Shetty Vs. Rajendra Shankar Patil (2010) 8 SCC 329] is worthy of reference.
In the present case counsel for petitioner has failed to point out as to how the affidavit she wants to file are relevant for determination of the issues arising in the pending objection. The court below while rejecting the petitioner's prayer in this regard has duly taken note of the effect of order of this court dated 28/2/2014 passed in WP No.9699/12.
Having regard to the aforesaid, I am of the opinion that the order passed by the court below does not suffer from any patent illegality.
Even otherwise, the scope of interference in exercise of jurisdiction under Article 227 of Constitution of India is limited. The Supreme court in the matter of Shalini Shyam Shetty and another Vs. Rajendra Shankar Patil, reported in (2010) 8 SCC 329 has held that High court in exercise of its power of superintendence cannot interfere to correct mere errors of law or fact or just because another view than the one taken by the tribunals or courts subordinate to it, is a possible view. The High court can exercise this power when there has been a patent perversity in the orders of tribunals and courts subordinate to it or where there has been a gross and manifest failure of justice or the basic principles of natural justice have been flouted.
~7~ Hence I do not find any merit in the present writ petition, is accordingly dismissed.
The record further reflects that case was fixed for final arguments by the court below as far back as on 6/9/2012. But final arguments have not been heard till now. Therefore, the court below is directed to decide it without any further delay.
C.C. as per rules.
(Prakash Shrivastava) Judge BDJ Bhuneshwar Datt 2018.12.01 17:20:15
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