Allahabad High Court
Amit Mohan Mittal vs Atul Kumar Gupta And Others on 29 April, 2013
HIGH COURT OF JUDICATURE AT ALLAHABAD Court No. - 24 Reserved AFR Case :- WRIT -C No. - 35038 of 2012 Petitioner :- Amit Mohan Mittal Respondent :- Atul Kumar Gupta & Others Petitioner Counsel :- Siddharth Respondent Counsel :- CS.C. Nipun Singh Hon'ble Ram Surat Ram (Maurya),J.
1. Heard Sri Siddharth, counsel for the petitioner and Sri Amit Kumar Singh, holding brief of Sri Nipun Singh for the respondents.
2. The writ petition has been filed for quashing the order of District Judge, Meerut dated 29.05.2012, rejecting the Application (37-C/2) of the petitioner for summoning the persons for cross examination, whose affidavits have been filed by respondent-1 in support of his objection, in Arbitration Case No. 32 of 2010, under Section 34 of the Arbitration and Conciliation, Act, 1996 (hereinafter referred to as the Act).
3. Atul Kumar Gupta and Smt. Seema Gupta (respondents-1 and 2) are owners of the building, bearing Cantonment No. 182-A, Dayanand Path, Abu Lane, Meerut Cantt. The said building was let out to Amit Mohan Bansal (the petitioner) through the rent deed dated 10.04.2007 for a period of 11 months, on the monthly rent of Rs. 1,00,000/- with right to renewal for another nine times for the period of 11 months each. At the time of execution of the rent deed, Rs. 3,50,000/- was given to the lessors by way of refundable security. In this rent deed, Mukesh Kumar Garg (respondent-3), who is brother of Smt. Seema Gupta (respondent-2), was the witness. The rent deed dated 10.04.2007 contained a clause for arbitration, of any dispute between the parties in relation to this lease. One Amit Bansal son of Sri Satyendra Kumar Gupta was appointed as the sole arbitrator, who was authorized to give award according to the provisions of the Act.
4. It is alleged by the petitioner that in continuation of the tenancy, another deed dated 1/10.04.2008 was executed, in which, respondents-1 and 2 by playing fraud upon the petitioner, changed the sole arbitrator and in place of Amit Bansal son of Sri Satyendra Kumar Gupta, Mukesh Kumar Garg (respondent-3), who is the brother of Smt. Seema Gupta (respondent-2) and brother-in-law of Atul Kumar Gupta (respondent-1) was made sole arbitrator. Respondents-1 and 2 unilaterally referred the alleged dispute to sole arbitrator Mukesh Kumar Garg (respondent-3) on 18.01.2010 without any knowledge to the petitioner. The sole arbitrator without giving any notice or opportunity of hearing passed the impugned award dated 14.04.2010 for ejectment of the petitioner from the premises in dispute and to pay Rs. 4,00,000/ per month as mesne profit + Rs. 36,000/- + Rs. 10,000/- +Rs. 10,000/- + Rs. 15825/- as costs. The petitioner filed an application under Section 34 of the Act (registered as Arbitration Case No. 32 of 2010) before the District Judge, Meerut for setting aside the aforesaid award, mainly on the grounds that by playing fraud upon the petitioner, the sole arbitrator was changed by the respondents, in deed dated 1/10.04.2008; Dispute has been unilaterally referred by respondents-1 and 2 without any notice to the petitioner; Sole arbitrator has not given any notice/opportunity of hearing to the petitioner before passing the award and; Sole arbitrator being brother of Smt. Seema Gupta (respondent-2) and brother-in-law of Atul Kumar Gupta (respondent-1) was biased and passed the award in illegal manner.
5. Respondents-1 and 2 filed their objection in the aforesaid case on 15.10.2010. In support of the objection, they filed the affidavits of Atul Kumar Gupta (respondent-1) and Amit Bansal son of Sri Satyendra Kumar Gupta, who was sole arbitrator in the deed dated 10.04.2007, in which, it has been stated that Amit Mohan Mittal and Atul Kumar Gupta both approached Amit Bansal for acting as sole arbitrator in April, 2007, at that time, he had given his consent for being appointed as the sole arbitrator but when they approached in March, 2008, then he had refused to become the sole arbitrator. Then, with the consent of the parties, Mukesh Kumar Garg was appointed as the sole arbitrator and no fraud was played upon the petitioner at the time of execution of the deed dated 1/10.04.2008. The dispute was referred to the sole arbitrator on 18.01.2010 in the knowledge of the petitioner and the sole arbitrator issued notices dated 19.01.2010 and 23.01.2010 through registered post to the petitioner. The notices were served upon the petitioner on 27.01.2010 but he deliberately did not appear before the sole arbitrator as such the award dated 14.04.2010 was passed after hearing respondents-1 and 2 and considering their evidence. Allegations in respect of fraud being committed in execution of the deed dated 1/10.04.2008, malafide on the part of sole arbitrator and no opportunity of hearing was provided, have been denied.
6. The petitioner filed Rejoinder Affidavit and denied the contents of the affidavits of Atul Kumar Gupta and Amit Bansal. Then Atul Kumar Gupta filed rebuttal affidavit. The petitioner, then moved an application (37-C/2) on 13.12.2011 for summoning of Atul Kumar Gupta and Amit Bansal for cross examination. The application was contested by respondents-1 and 2 on the ground that there is no provision under the Act for cross examination. The affidavits of Atul Kumar Gupta and Amit Bansal are not evidence but merely an affidavits. The application was heard by District Judge Meerut, who by the impugned order dated 29.05.2012, rejected the application on the ground that the petitioner had filed rejoinder affidavit and denied the allegations made by Atul Kumar Gupta and Amit Bansal in their affidavits as such there is no sufficient reason for summoning Atul Kumar Gupta and Amit Bansal for cross examination. Order dated 29.05.2012 has been challenged in this writ petition on the grounds that affidavits of Atul Kumar Gupta and Amit Bansal were filed by way of evidence in support of the objection, filed by respondents-1 and 2 as such in order to clarifying their statements made in the affidavits, the petitioner would have been given opportunity of cross examination. Order 19 Rule 1 CPC authorizes the Court to take affidavit of the witness. Proviso to Rule 1 of Order 19 CPC authorizes the Court to direct a witness to appear for cross examination, if a party bonafide desire for the same. Intricate questions relating to fraud being committed have been raised by the petitioner. In the circumstances cross examination was necessary but the Court below has illegally rejected the application of the petitioner without application of mind.
7. The respondents have put appearance in the writ petition but did not file any Counter Affidavit. The counsel for the respondents submitted that all the documents necessary for disposal of the writ petition, have been filed by the petitioner in the writ petition and the issues raised in the writ petition are legal issues relating to applicability of Code of Civil Procedure to the proceedings under Section 34 of the Act, which can be decided without counter affidavit. Hearing of the arbitration case before the Court below has been expedited by the order of this Court dated 07.05.2012, as such the writ petition be heard and decided finally, in order to avoid any delay in hearing of the case. Accordingly with the consent of the parties the final arguments in the writ petition was heard.
8. The first question arises as to whether the provisions of Code of Civil Procedure (CPC) are applicable to the proceedings under Section 34 of the Act. The counsel for petitioners submitted that Section 34 of the Act provides a remedy to the aggrieved person for filing an application before the Principal Civil Court for setting aside the arbital award. The proceedings before the arbitrator are governed by the provisions of the Act. However, the Act does not provide the procedure to be followed by the Principal Civil Court. In the absence of any provision under the Act, proceedings before the Principal Civil Court would be governed by the provisions of CPC. By virtue of Section 141 CPC, procedures of CPC as provided for the suit are applied to all miscellaneous proceedings. As the Act provides a remedy for filing the application for setting aside the award as such proceeding under Section 34 of the Act is a miscellaneous proceeding within the meaning of Section 141 CPC and the provisions of CPC are fully applicable. In reply to the aforesaid arguments counsel for the respondents submitted that the Act provides a speedy remedy before an alternative dispute resolving forum of arbitration, in which the parties have right to choose their own procedure. By virtue of Section 41 of the Arbitration Act, 1940, provisions of CPC was made applicable but in the Act the provisions of CPC are not applied, which is a cautious deviation of the legislature, in order to achieve the speedy remedy. Accordingly provisions of CPC are not applicable to any proceeding of the arbitration either before the Arbitrator or before the Court.
9. I have considered the arguments of the counsel for the parties and examined the record. Section 141 CPC provides that the procedure provided in this Code in regard to suits shall be followed, as far as it can be made applicable, in all proceedings in any Court of civil jurisdiction. The arbitration case under Section 34 of the Act is the proceeding in the Court of civil jurisdiction as such provisions of the Code in regards to the suit shall be followed, as far as, it can be made applicable. Otherwise also it is well settled that proceedings in the Court are governed by the procedure of the Court.
10. A Bench of seven Hon'ble Judges of Supreme Court in SBP & Co. v. Patel Engg. Ltd., (2005) 8 SCC 618, held as follows:
"Surely, when a matter is entrusted to a civil court in the ordinary hierarchy of courts without anything more, the procedure of that court would govern the adjudication." (paragraph-19) "In our dispensation of justice, especially in respect of matters entrusted to the ordinary hierarchy of courts or judicial authorities, the duty would normally be performed by a judicial authority according to the normal procedure of that court or of that authority." (paragraph-42)
11. Supreme Court again in Arvind Constructions Co. (P) Ltd. v. Kalinga Mining Corporation, (2007) 6 SCC 798, held as follows:
"There is also the principle that when a power is conferred under a special statute and it is conferred on an ordinary court of the land, without laying down any special condition for exercise of that power, the general rules of procedure of that court would apply." (paragraph-15)
12. In order to appreciate the remedy provided under Section 34, relevant portion of Section 34 of the Act are quoted below:-
34. Application for setting aside arbitral award.--(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3).
(2) An arbitral award may be set aside by the Court only if--
(a) the party making the application furnishes proof that--
(i) a party was under some incapacity; or
(ii) The arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(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; or
(b) the Court finds that--
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
Explanation.--Without prejudice to the generality of sub-clause (ii), it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81.
13. Thus Section 34 of the Act provides a remedy to the aggrieved person to move an application for setting aside the arbital award on the grounds specified in Section 34 (2) (a), which requires for furnishing the proof. The words "proved", "disproved" and "not proved" are defined under the Evidence Act, 1872. Part II of the Evidence Act deals on proof. Section 59 requires that all facts except contents of documents may be proved by oral evidence. By Act No. 22 of 2002, Order 18 Rule 4 CPC has been amended and for examination-in-chief, an affidavit of the witness has been permitted to be filed. Then cross-examination and re-examination has been provided. Under Order 19 CPC, the Court is authorized to take affidavit of any witness for the sufficient reasons. If the other side bonafide desires for cross examination of that witness then the Court may direct the witness to appear for cross examination. Thus for permitting the evidence by way of an affidavit of the witness the Court is required to record reasons under Order 19 Rule 1 CPC. Otherwise the normal procedure for statements of the witnesses has been provided under Order 18 Rule 4 CPC.
14. Purpose of cross-examination has been considered by the Bench of six Hon'ble Judges of the Supreme Court in Tahsildar Singh v. State of U.P., 1959 Supp (2) SCR 875 in which it is held as follows:-
"The purpose of cross-examination is to test the veracity of the statement made by a witness in his examination-in-chief as also to impeach his credit. Not only is it the right of the accused to shake the credit of a witness, but it is also the duty of the court trying an accused to satisfy itself that the witnesses are reliable. It would be dangerous to lay down any hard and fast rule."
15. Supreme Court again in Modula India v. Kamakshya Singh Deo, (1988) 4 SCC 619, held as s follows-:
"It is a well-established proposition that no oral testimony can be considered satisfactory or valid unless it is tested by cross-examination. The mere statement of the plaintiff's witnesses cannot constitute the plaintiff's evidence in the case unless and until it is tested by cross-examination. The right of the defence to cross-examine the plaintiff's witnesses can, therefore, be looked upon not as a part of its own strategy of defence but rather as a requirement without which the plaintiff's evidence cannot be acted upon. Looked at from this point of view it should be possible to take the view that, though the defence of the tenant has been struck out, there is nothing in law to preclude him from demonstrating to the court that the plaintiff's witnesses are not speaking the truth or that the evidence put forward by the plaintiff is not sufficient to fulfill the terms of the statute."
16. A Constitution Bench of the Supreme Court again in Kartar Singh v. State of Punjab, (1994) 3 SCC 569, held as follows:
"It is the jurisprudence of law that cross-examination is an acid-test of the truthfulness of the statement made by a witness on oath in examination-in-chief, the objects of which are:
(1) to destroy or weaken the evidentiary value of the witness of his adversary; (2) to elicit facts in favour of the cross-examining lawyer's client from the mouth of the witness of the adversary party; (3) to show that the witness is unworthy of belief by impeaching the credit of the said witness;
and the questions to be addressed in the course of cross-examination are to test his veracity; to discover who he is and what is his position in life; and to shake his credit by injuring his character."
17. The question whether the Civil Court is required to follow detail procedure of the suit or the Application under Section 34 of the Act is required to be decided in a summary manner, came for consideration before the Supreme Court in Fiza Developers and Inter-Trade Private Limited v. AMCI (India) Private Limited, (2009) 17 SCC 796. This case was from Karnataka, where in exercise of powers under Section 81 of the Act, High Court has framed The High Court of Karnataka Arbitration (Proceedings before the Courts) Rules, 2001 and provision of CPC have been applied in the proceedings under Section 34 of the Act. Supreme Court held as follows:
"30. Having regard to the object of the Act, that is, providing an expeditious alternative binding dispute resolution process with minimal court intervention, it is difficult to envisage proceedings under Section 34 of the Act as full-fledged regular civil suits under the Code of Civil Procedure.
31. Applications under Section 34 of the Act are summary proceedings with provision for objections by the respondent-defendant, followed by an opportunity to the applicant to "prove" the existence of any ground under Section 34(2). The applicant is permitted to file affidavits of his witnesses in proof. A corresponding opportunity is given to the respondent-defendant to place his evidence by affidavit. Where the case so warrants, the court permits cross-examination of the persons swearing to the affidavit. Thereafter, the court hears arguments and/or receives written submissions and decides the matter. This is of course the routine procedure. The court may vary the said procedure, depending upon the facts of any particular case or the local rules. What is however clear is that framing of issues as contemplated under Rule 1 of Order 14 of the Code is not an integral part of the process of a proceedings under Section 34 of the Act."
18.Thus from the aforesaid discussions, it is clear that the applications under Section 34 of the Act are proceedings before the Civil Court within the meaning of Section 141 CPC. The provisions of CPC as provided for the suit are as afar as possible applicable to the proceedings under Section 34 of the Act by virtue of Section 141 CPC. The applications under Section 34 of the Act is to be decided following the summary procedure. In order to get the relief, the applicant has to "prove" the existence of the grounds as enumerated under Section 34(2) of the Act. The Evidence Act provides the procedures for proving the facts. Section 59 of the Evidence Act specifically requires that all the facts except contents of documents may be proved by oral evidence. Order 18 Rule 4 CPC provides a procedure for recording oral evidence. Order 19 Rule 1 CPC is an exception of Order 18 Rule 4 CPC, wherein the Court for sufficient reason permit the parties to give evidence on affidavit. In this case, the parties have already filed affidavits of their witnesses for prove/disprove their cases. When the parties want to cross examine the witnesses, the court may permit cross-examination of the persons swearing to the affidavit. Purpose and importance of cross-examination has been equally applied in civil as well as in criminal proceedings both. In case, the witness does not produce himself for cross-examination, then his evidence is rendered inadmissible under the law.
19.The Court below has rejected the application for cross examination on the ground that petitioner has already filed his rejoinder affidavit as such there is no sufficient reason for cross-examination. This is no reason under the law. As stated above, the cross-examination is an acid-test of the truthfulness of the statement made by a witness. The objection of the respondents that affidavits are not evidence but merely an affidavit is not liable to be accepted.
20. In the result the writ petition succeeds and is allowed. The order of District Judge, Meerut dated 29.05.2012, rejecting the Application (37-C/2) of the petitioner for summoning the persons for cross examination, whose affidavits have been filed by respondent-1, is set aside. The application (37-C/2) is allowed. The petitioner may be directed to deposit the expenses of the witness sought to be summoned as assessed by the Court below on the next date fixed in the case.
Order Date :- 29.4.2013 mt