Karnataka High Court
M/S. Amalagiris vs M/S. Mspl Ltd on 23 February, 2024
Author: K.Somashekar
Bench: K.Somashekar
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NC: 2024:KHC:7734-DB
WP No. 2736 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 23RD DAY OF FEBRUARY, 2024
PRESENT
THE HON'BLE MR JUSTICE K.SOMASHEKAR
AND
THE HON'BLE MR JUSTICE UMESH M ADIGA
WRIT PETITION NO. 2736 OF 2024 (GM-RES)
BETWEEN:
1. M/S. AMALAGIRIS
PARTNERSHIP FIRM,
HAVING ITS REGISTERED OFFICE AT
4TH STREET, CHAUDHARY NAGAR,
VALSARAVAKKAM,
CHENNAI - 600 087,
ALSO HAVING ITS OFFICE AT 2ND FLOOR,
S 14/15, ALFRAN PLAZA,
M.G. ROAD, PANJIM,
GOA - 403 001.
REPRESENTED THROUGH ITS PARTNER,
PHILIP JACOB.
2. MR. PHILIP. J
Digitally signed S/O. MR. JACOB,
by D HEMA AGED ABOUT MAJOR,
Location: MANAGING PARTNER OF
HIGH COURT M/S. AMALAGIRIS,
OF CHETHIPUZHA HOUSE,
KARNATAKA AMALAGIRI P.O.,
KOTTAYAM,
KERALA - 686 104.
...PETITIONERS
(BY SHRI. AJAY J.N., ADVOCATE)
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NC: 2024:KHC:7734-DB
WP No. 2736 of 2024
AND:
1. M/S. MSPL LTD.,
A COMPANY INCORPORATED UNDER THE PROVISIONS OF
THE COMPANIES ACT,
1956 HAVING ITS REGISTERED OFFICE AT NO. 117,
BALDOTA BHAVAN,
MAHARSHI KARVE ROAD,
MUMBAI - 400 020,
AND ITS CORPORATE OFFICE AT BALDOTA ENCLAVE
ABHERAJ BALDOTA ROAD
HOSPET-583 203,
BELLARY DISTRICT.
REPRESENTED THROUGH ITS
MANAGING DIRECTOR.
...RESPONDENT
(BY SHRI. GANAPATI HEGDE, SENIOR COUNSEL FOR
M/S. MARSHA, ADVOCATE/CR1)
THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE
CONSTITUTION OF INDIA PRAYING TO a)ISSUE A WRIT OF
CERTIORARI QUASHING THE IMPUGNED ORDER AT ANNEXURE-A,
DATED 16.01.2024 PASSED BY THE LEARNED ARBITRAL TRIBUNAL
IN THE ARBITRAL PROCEEDINGS ARISING OUT OF CMP
NO.100001/2016 AND CONSEQUENTLY, b)ISSUE AN APPROPRIATE
WRIT, ISSUING A DIRECTION AND MAKING A REFERENCE TO THE
STATE FORENSIC SCIENCE LABORATORY, MADIWALA FOR THE
PURPOSE EXAMINING THE GENUINENESS OF THE SIGNATURE IN
LETTER DATED 04.01.2013 AT EX.P80 IN THE ARBITRAL
PROCEEDINGS ARISING OUT OF CMP NO.100001/2016 AS PRAYED
FOR IN THE APPLICATION DATED 08.08.2022 AT ANNEXURE-G1
c)PASS ANY OTHER SUCH ORDERS AS THIS HONBLE COURT DEEMS
FIT AND PROPER IN THE FACTS AND CIRCUMSTANCES OF THE
PRESENT CASE.
THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED
ON 2ND FEBRUARY 2024, COMING ON FOR PRONOUNCEMENT OF
ORDERS, THIS DAY, UMESH M ADIGA J, PASSED THE FOLLOWING:
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NC: 2024:KHC:7734-DB
WP No. 2736 of 2024
ORDER
This Petition is directed against the order passed by the learned Arbitrator who is appointed as per the orders passed by this Court in Civil Miscellaneous Petition No.100001 of 2016 rejecting the application filed by the petitioner under Order XXVI Rule 10(A) of CPC read with Section 26 of the Arbitration and Conciliation Act, 1996 (for short, hereinafter referred to as 'A & C Act') vide impugned order dated 16.01.2024.
2. The first petitioner is a Partnership Firm and second petitioner is partner of the said firm. The said firm dealing in the business of supply and export of iron ore. The Respondent-Company used to place purchase orders for purchase of iron ore from the petitioners.
3. The respondent filed their claim statement claiming an amount of Rs.97,00,34,402/- along with interest at the rate of 24% p.a. from the date of invoking arbitration, relying on the letter dated 04.01.2013. It appears dispute arose between the parties regarding the -4- NC: 2024:KHC:7734-DB WP No. 2736 of 2024 purchase orders. Hence, arbitration clause was invoked by the respondent by filing a petition under Section 11 of the A & C Act. This Court by order dated 07.02.2020 in C.M.P.No.100001 of 2016 has appointed Arbitrator to resolve the dispute.
4. It appears, petitioner herein has disputed the letter dated 04.01.2013, which is one of the document relied on by the plaintiff in arbitration proceedings and it is also contended that the said document is concocted and forged by the plaintiff. During trial before the Arbitrator, petitioner has filed application under Order XXVI Rule 10(A) of CPC read with Section 26 of the A & C Act dated 08.08.2022. The said application was enclosed with an affidavit sworn to by Respondent No.2/petitioner herein before the Arbitrator contending that Ex.P80 is a purported letter allegedly signed and sent by petitioner herein, on behalf of the firm to the claimants on 04.01.2013. They also contended that it is a forged and fabricated document; veracity and genuineness of the said letter is -5- NC: 2024:KHC:7734-DB WP No. 2736 of 2024 denied by the petitioners herein. Even signature on the said document is also disputed. Petitioner No.2 herein has not signed on the said document and it does not bear signature of petitioner No.2.
To disprove the contention of the respondent herein and to prove the contentions of the petitioner that it was a forged document, referring Ex.P80 to handwriting expert, to ascertain genuineness of the said document is very much required. Signature of petitioner No.2 herein could be compared with Ex.P80, so that the Arbitral Tribunal could arrive at a just conclusion. Hence prayed to refer the document to expert.
5. The learned Arbitrator by the order dated 13.09.2022 has ordered that the said application to be considered in due course after completion of evidence of both the parties and after conclusion of the oral evidence of the respondents, the said application was considered by the learned Arbitrator and by the impugned orders dated -6- NC: 2024:KHC:7734-DB WP No. 2736 of 2024 16.01.2024 rejected the said application. The same is challenged in the present petition.
6. We have heard the arguments of the learned advocate for the petitioner and the learned Senior Advocate appearing for the respondents. The learned advocate for petitioner would submit that respondents have filed a claim petition before the Arbitrator and they relied on Ex.P80, which is a disputed letter, said to be written and signed by petitioner No.2. The said document is seriously disputed by the petitioner and it is the specific contention of the petitioner that the signature of the second petitioner is forged. Therefore, to prove the defence of the petitioner, it is just and necessary to refer the said document for expert opinion. If it is referred, then, it would help the Arbitral Tribunal to arrive at just conclusion. Without expert opinion, the learned Arbitrator even may not be able to decide the issue between the parties. However, the learned Arbitrator without assigning the just reasons, has rejected the said application under -7- NC: 2024:KHC:7734-DB WP No. 2736 of 2024 Section 26 of the A & C Act. The Arbitral Tribunal has jurisdiction to consider such application and pass suitable orders. Though the burden is not on the petitioner, still he intended to show to the Tribunal that said document is forged one and to show his bonafide, he filed the application. However, it was not considered by the learned Arbitrator in right perspective.
7. The learned advocate for the petitioner further submits that the Hon'ble Supreme Court in the following judgments held that if an application is rejected by the Arbitrator, then, it can be challenged under Article 227 of the Constitution of India before the High Court. The judgments relied on by the learned advocate for the petitioner are as under:
i) (2020) 17 SCC 93 (Punjab State Power Corporation Limited Vs. Emta Coal Limited and another);
ii) (2020)15 SCC 706 (Deep Industries Limited Vs. Oil and Natural Gas Corporation Limited and another) and
iii) 2022 SCC OnLine Del 1377 (Union of India Vs. Delhi State Consumer Co-operative Federation Limited). -8-
NC: 2024:KHC:7734-DB WP No. 2736 of 2024 The learned counsel for the petitioner has further submitted that the Writ Court has jurisdiction under Article 226 and 227 of the Constitution of India to consider the orders passed by an Arbitrator and pass appropriate orders. Therefore, prayed to consider the same and set aside the impugned order and allow the said application.
8. The learned Senior Counsel for the respondent would submit that the writ petition is not at all maintainable against orders passed by the Arbitrator on the interim application. The Constitutional Bench of the Hon'ble Supreme Court in the case of SBP & CO. Vs. Patel Engineering Ltd. and another 1 held that under Article 227 of the Constitution of India, the Hon'ble High Court shall not consider the said petition filed under the Article 227 of the Constitution of India. The said law is also followed by the Co-ordinate Bench of this Court in the case of Radiant Infosystems Limited, Vs. The Karnataka State Road Transport Corporation Limited represented by its Managing 1 (2005) 8 SCC 618 -9- NC: 2024:KHC:7734-DB WP No. 2736 of 2024 Director)2 and also in the case of (Associated Constructions, Rajamundry, Andhra Pradesh Vs. Dolomite Berhad A.L.S. Limited (JV), Banjara Hills, Hyderabad 3. In view of the law laid down in the above said judgments, the above writ petition is not maintainable challenging the orders passed by the Arbitrator.
9. The learned Senior Counsel would further submit that the said application is filed with an intention to protract litigation. As per the provisions of the A & C Act, arbitration proceedings shall be completed within a period of one year and it could be extended for a period of six months and thereafter, with the intervention of the Civil Court, it could be extended for another six months. In all, it should be completed within a period of two years. However, in this case, due to non co-operation of the petitioner, the arbitration proceedings is not completed even after lapse of 2½ years. Only to cause further delay in the disposal of the case, this application is filed so that 2 ILR 2018 Kar 4873 3 2015 SCC Online Kar 8805
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NC: 2024:KHC:7734-DB WP No. 2736 of 2024 automatically the matter could be adjourned till the receipt of the opinion of the expert.
10. The learned Senior Counsel for the respondent would further submit that burden is on the respondent to prove that Ex.P80 was signed by Respondent No.2/Petitioner No.2 herein. There was no need for the petitioner to file such an application. It clearly indicates that the intention of the petitioner is not bonafide. Moreover, the opinion of the expert is not a conclusive proof and by oral and documentary evidence, the concerned party shall prove that such a document was executed by petitioner No.2. With the same observation, the learned Arbitrator has rejected the application. However, the petitioners are not satisfied by the said orders and only with an intention to protract to litigation, this writ petition is filed and therefore, prayed to reject the writ petition. The learned Senior Counsel would further submit that this application is filed only with an intention to collect the evidence, which is not permissible in law.
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11. The following questions arise for our consideration:
i) Whether the impugned order passed by the Arbitrator rejecting the application filed by the petitioners under Order XXIV Rule 10A of CPC is justifiable?
ii) What Order?
12. This application under XXVI Rule 10A of CPC is filed by petitioners before the Arbitrator. Copy of the said application is produced at Annexure-G1. It is supported by affidavit filed by petitioner No.2 wherein it is contended that Ex.P80 is purported letter alleged signed and sent by petitioner No.1/Firm to the claimant on 04.01.2013. The said letter is not genuine one and it is forged and fabricated. Petitioners have denied the same in the written statement and also in the statement of objections. To prove their contentions, signatures founds on Ex.P80 to be compared with undisputed signature of Respondent No.2 found on the other documents available before the Arbitrator. It would help the Arbitrator to come to the
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NC: 2024:KHC:7734-DB WP No. 2736 of 2024 right conclusion. Therefore, prayed for appointment of the handwriting expert to compare and ascertain the genuineness of the signature e on Ex.P80.
13. Respondent has made claim of Rs.97,00,34,402/- contending that the claimant has placed purchase orders with the petitioner herein for supply of the ore. However, petitioners herein failed to supply the full quantity of goods as per the purchase orders. The petitioner also did not make any payment towards various charges that were incurred by the claimant, which ought to be incurred and borne by the petitioners herein as agreed under the terms and conditions. In view of the above said contention also and other contentions, the respondents are liable to pay an amount of Rs.97,00,34,402/-. Along with other materials, respondent has also relied on a disputed document.
14. The petitioners in their written statement, denied the contention of claimant and also denied execution of certain documents. On that basis, the
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NC: 2024:KHC:7734-DB WP No. 2736 of 2024 learned Arbitrator has framed necessary issues for determination. The issues framed by the learned Arbitrator is at Annexure-F. Out of them, issue No.11 is pertaining to a disputed document contending that letter of the respondent dated 04.01.2013 (Document No.13 relied upon by the claimant is a genuine document? The learned Arbitrator vide order dated 13.09.2022 produced at Annexure-H, vide separate order passed on the application, it is ordered to be kept pending for considering the same after the conclusion of the oral evidence of the respondents. Thereafter, by the impugned order dated 16.01.2024, the learned Arbitrator has rejected the said application by assigning the reasons. The learned Arbitrator has held in the impugned order that in view of the facts and circumstances of the case and also for the reasons assigned in the order, there is no just and sufficient reason to refer Ex.P80 to the handwriting expert and the learned Arbitrator has also opined as under:
"nothing comes in the way of the learned counsel for the respondents in submitting the arguments about the
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NC: 2024:KHC:7734-DB WP No. 2736 of 2024 probabilities with regard to the various circumstances under which the 9 cheques stated to have been issued by the Respondent No.2 in favour of the claimant, particularly keeping in mind, the contents of Ex.P80 and the quantum of the claim made by the claimant in the claim statement".
15. The learned Arbitrator ahs assigned valid reasons for rejection of the application. It is pertinent to note that in the issues framed by the learned Arbitrator pertaining to Ex.P80 is burden lies on the claimant to prove that the said document was executed and sent by petitioners herein. However, the claimant has not applied for appointment of a Commissioner to compare the signatures on Ex.P80. There is no burden on the petitioners herein, to prove the said document. Under these circumstances, referring the disputed document for expert opinion is unwarranted. It indicates that the application is not bonafide.
16. It is settled law that expert opinion is not conclusive proof. It may assist the Court in arriving at a certain conclusion and only on the basis of expert opinion,
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NC: 2024:KHC:7734-DB WP No. 2736 of 2024 the Court cannot give any finding in respect fo a disputed point. Petitioners herein must have lead evidence on their behalf to disprove Ex.P80. When that is the case, where is the question of referring disputed document to the handwriting expert. It indicates that the application is filed to protract the litigation. It is said that Arbitration proceedings is pending for last 2½ years. But the arbitration proceedings is not concluded because of delay tactics played by the petitioner herein. Therefore, referring Ex.P80 to the handwriting expert for expert opinion may cause further delay in disposal of the case. The report may not be of much assistance to the defence of the respondents and hence, it is not necessary for referring the said disputed document to handwriting expert, for his opinion.
17. The learned advocate for the petitioner has submitted that under Section 26 of the A & C Act, Arbitrator can appoint/take expert opinion in respect of any issues pending before him between the parties. It is
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NC: 2024:KHC:7734-DB WP No. 2736 of 2024 pertinent to note that in such an event, both the p arties should consent for the same. But in this case, respondents have seriously opposed the said application. Under such circumstances, question of agreement between both the parties for appointment of expert to give opinion does not arise.
18. Section 26 of the A & C Act reads as under:
26. Expert appointment by arbitral tribunal:
(1) Unless otherwise agreed by the parties, the arbitral tribunal may-
(a)appoint one or more experts to report to it on specific issues to be determined by the arbitral tribunal, and
(b)require a party to give the expert any relevant information or to produce, or to provide access to, any relevant documents, goods or other property for his inspection.
(2) Unless otherwise agreed by the parties, if a party so requests or if the arbitral tribunal considers it necessary, the expert shall, after delivery of his written or oral report, participate in an oral hearing where the parties have the opportunity to put questions to him and to present expert witnesses in order to testify on the points at issue.
(3) Unless otherwise agreed by the parties, the expert shall, on the request of a party, make available to that party for examination all documents, goods or other property
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NC: 2024:KHC:7734-DB WP No. 2736 of 2024 in the possession of the expert with which he was provided in order to prepare his report.
On plain reading of the above said Section, it is clear that an expert opinion could be obtained, if Arbitrator wants or with the consent of both the parties to the arbitration proceedings, the learned Arbitrator can obtain the expert opinion for deciding the issues between the parties. In this case, it not desired by the learned Arbitrator to have an expert opinion to decide the real dispute between the parties. Both the parties have also not agreed for obtaining the expert opinion in respect of the writings or signatures on Ex.P80. Therefore, Section 26 of the A & C Act also do not help the petitioner to persuade this writ petition.
19. The contentions of both the parties regarding maintainability of the writ petition:
The learned counsel for the petitioner has relied on the following judgments:
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i) Deep Industries Limited Vs. Oil and Natural Gas Corporation Limited and another (2020) 15 SCC 706;
ii) Punjab State Power Corporation Limited Vs. Emta Coal Limited and anothers (2020) 15 SCC 706; and
iii) 2022 SCC OnLine Del 1377 The learned counsel for Respondent No.1 has relied on a judgment in the case of (SBP & Co., Vs. Patel Engineering Limited)4 wherein at paragraph No.45, it is held as under:
44. It is seen that some High Courts have proceeded on the basis that any order passed by an arbitral tribunal during arbitration, would be capable of being challenged under Article 226 or 227 of the Constitution of India. We see no warrant for such an approach. Section 37 makes certain orders of the arbitral tribunal appealable. Under Section 34, the aggrieved party has an avenue for ventilating his grievances against the award including any in-between orders that might have been passed by the arbitral tribunal acting under Section 16 of the Act. The party aggrieved by any order of the arbitral tribunal, unless has a right of appeal under Section 37 of the Act, has to wait until the award is passed by the Tribunal. This appears to be the scheme of the Act. The arbitral tribunal is after all, the creature of a contract between the parties, the arbitration agreement, even though if the occasion arises, the Chief Justice may constitute it based on the contract between the parties. But that would not alter the status of the arbitral tribunal. It will still be a forum chosen by the parties by agreement. We, therefore, 4 (2005)8 SCC 618
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NC: 2024:KHC:7734-DB WP No. 2736 of 2024 disapprove of the stand adopted by some of the High Courts that any order passed by the arbitral tribunal is capable of being corrected by the High Court under Article 226 or 227 of the Constitution of India. Such an intervention by the High Courts is not permissible.
Relying on the above said judgment, the Co-ordinate Bench of this Court in the case of Mr.K.Satish Kumar Vs. M/s.Rohan Associates5 held that interim application cannot be challenged in the writ proceeding under Articles 226 and 227 of the Constitution of India.
The learned counsel for the petitioner has relied on the following judgments:
i) Deep Industries Limited Vs. Oil and Natural Gas Corporation Limited and another (2020) 15 SCC 706;
ii) Punjab State Power Corporation Limited Vs. Emta Coal Limited and anothers (2020) 15 SCC 706; and
iii) 2022 SCC OnLine Del 1377 In all the above cases, it is held that in extremely exceptional circumstances, when there is lack of jurisdiction or order passed by the Arbitrator is perverse, 5 W.P.No.37175 of 2013 (GM-RES) dated 23.01.2014
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NC: 2024:KHC:7734-DB WP No. 2736 of 2024 then the only possible conclusion is that there is a lack of inherent jurisdiction under Article 227 of the Indian Constitution, the Court can intervene in the orders passed by the Arbitrator.
In the civil lis, there is no need to refer the disputed documents for expert opinion, to prove the execution of documents, in all such cases. Depending upon facts and circumstances an expert could be appointed to give opinion. Without expressing any opinion, in this case claim petitioner has not contended that in his presence Ex.P.80 was executed. Hence, execution of said document shall be proved or disproved on other circumstances, as observed by the learned Arbitrator. There is no absurdity or illegality in the said findings.
21. The learned Arbitrator has considered the contentions of both the parties and looking to the facts and circumstances of the case, found it that for deciding the issues between the parties, there is no need of expert
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NC: 2024:KHC:7734-DB WP No. 2736 of 2024 opinion regarding Ex.P80 and hence, rejected the said application. The said orders are not perverse, arbitrary and illegal. Hence, writ petition is devoid of merits, needs to be dismissed. Accordingly, we answer Point No.1 in the 'negative' and pass the following:
ORDER The Writ Petition is dismissed.
Sd/-
JUDGE Sd/-
JUDGE DH List No.: 1 Sl No.: 20