Madhya Pradesh High Court
Omprakash Vaishya Huf Thr vs Shri Ram Developers Thr on 25 October, 2016
1 WP 4862/16
Omprakash Vaishya HUF through its Karta Omprakash Vs. Shri Ram
Developers & others
25/10/16
Shri K.S.Tomar, Sr. Advocate with Shri R.V.Sharma, Advocate
for the petitioner.
Shri N.K.Gupta, Sr. Advocate with Shri Ravi Gupta, Advocate
for the respondent No.1.
1. Powers of superintendence under Article 227 of the Constitution of India are invoked to assail the interlocutory order dated 24/6/2016, Annexure-P/1 passed by the Seventh Additional Sessions Judge, Gwalior (M.P.) whereby in a pending proceeding under Section 34 of the Arbitration and Conciliation Act, 1996 (for brevity the 1996 Act), an application preferred by the petitioner/applicant for framing of issues has been dismissed.
2. Pertinently, by the interim order passed on 16/7/2016 in the present case, the proceedings before the court under Section 34 of the Act have been stayed.
3. Learned counsel for the rival parties are heard.
4. It is seen from the impugned order that the court has declined to frame issues on the ground that there is no necessity of framing of any issues in terms of Order 14 of C.P.C., as no evidence is required to be adduced.
5. Learned counsel for the petitioner primarily contends by drawing attention of this court to Madhya Pradesh Arbitration Rules 1997 (hereinafter referred as the Rules 1997) framed by the High Court by invoking section 82 of the 1996 Act, submits that Rule 9 of the Rules 1997 expressly provides that inter alia Order 14 of C.P.C. , shall apply to proceedings before a court under the 1996 Act. Thus, it is submitted that since Order 14 of C.P.C. relates to framing of issues, the Court ought to have framed issues.
6. The issue as to whether the Court is obliged to frame issues in 2 WP 4862/16 Omprakash Vaishya HUF through its Karta Omprakash Vs. Shri Ram Developers & others a proceeding under Section 34 of the 1996 Act is no more res integra in view of the authoritative decision of the Apex court in the case of Fiza Developers & Inter-Trade P. Ltd. Vs. AMCI(I) Ltd. & Another reported in 2009 AIR SCW 6395. The Apex court has held that in view of 1996 Act laying down in mandatory term under Section 34 (1) that recourse to the Court against arbitral award may be made for setting aside the award on the limited grounds set out in sub-sections (2) and (3) and none others. The Apex court held that apart from this five grounds provided in section 34(2)(a) and two grounds provided in section 34(2)(b), there are no other grounds available for assailing the arbitral award before a Court. Thus need to frame issues gets obviated since parties are well aware of the rules of the game which is required to be played within the boundaries prescribed by the seven grounds enumerated in section 34(2) (a) &
(b) of 1996 Act. The relevant extracts of the Apex court decision in the case of Fiza Developers(supra) are reproduced below:-
"10. We may therefore examine the question for consideration, by bearing three factors in mind. The first is that the Act is a special enactment and Section 34 provides for a special remedy. The second is that an arbitration award can be set aside only upon one of the grounds mentioned in sub-section (2) of Section 34 exists. The third is that proceedings under Section 34 requires to be dealt with expeditiously.
11. The scope of enquiry in a proceeding under Section 34 is restricted to consideration whether any one of the grounds mentioned in sub-section (2) of Section 34 exists for setting aside the award. We may approvingly extract the analysis relating to `Grounds of Challenge' from the Law & Practice of Arbitration and Conciliation by Shri O. P. Malhotra [First Edition, Page 768, Para (I) 34-14]:
" Section 5 regulates court intervention in arbitral process. It provides that notwithstanding anything contained in any other law for the time being in force 3 WP 4862/16 Omprakash Vaishya HUF through its Karta Omprakash Vs. Shri Ram Developers & others in India, in matters governed by Part I of this Act, the court will not intervene except where so provided in this Part. Pursuant to this policy, Section 34 imposes certain restrictions on the right of the court to set aside an arbitral award. It provides, in all, seven grounds for setting aside an award. In other words, an arbitral award can be set aside only if one or more of these seven grounds exists. The first five grounds have been set forth in Section 34(2)(a). In order to successfully invoke any of these grounds, a party has to plead and prove the existence of one or more of such grounds. That is to say, the party challenging the award has to discharge the burden of poof by adducing sufficient credible evidence to show the existence of any one of such grounds.
The rest 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 award is in conflict with the public policy of India."
The grounds for setting aside the award are specific. Therefore necessarily a petitioner who files an application will have to plead the facts necessary to make out the ingredients of any of the grounds mentioned in sub-section (2) and prove the same. Therefore, the only question that arises in an application under Section 34 of the Act is whether the award requires to be set aside on any of the specified grounds in sub- section (2) thereof. Sub-section (2) also clearly places the burden of proof on the person who makes the application. Therefore, the question arising for adjudication as also the person on whom the burden of proof is placed is statutorily specified. Therefore, the need for issues is obviated. Framing of issues is necessary only where different types of material propositions of fact or law are affirmed by one party and are denied by the other and it is therefore necessary for the court to identify the issues and specify the party on whom the burden to prove the same lies. When this exercise has already been done by the statute, there is no need for framing the issues. In other words, an application under Section 34 of 4 WP 4862/16 Omprakash Vaishya HUF through its Karta Omprakash Vs. Shri Ram Developers & others the Act is a single issue proceeding, where the very fact that the application has been instituted under that particular provision declares the issue involved. Any further exercise to frame issues will only delay the proceedings. It is thus clear that issues need not be framed in applications under Section 34 of the Act. What is the effect of Rule 4(b) of the Karnataka Rules ?
7. More so, the said view taken by the Apex court has been followed by two single benches of this court in W.P.No. 9699/2012 (Ashok S/o Shri Jethmal Malpani Vs. M/s Sanghi Brothers (Indore) Ltd. & Another decided by order dated 28/2/2014 and W.P.No.17559/2015 (M/s Jabalpur Corridor India Private Limited Vs. M.P. Road Development Corporation decided by order dated 15/12/2015.
8. This court does not see any reason to take a different view than the view taken by the decisions (supra).
9. In view of the above, no case for interference is made for exercise of the limited supervisory jurisdiction by this court under Article 227 of the Constitution of India.
10. Accordingly, the petition fails and is dismissed, sans cost.
(Sheel Nagu) Judge 25/10/16 (Bu)