Punjab State Industrial Development Corporation Ltd. v. Sunil K. Kansal
2012-10-11
HEMANT GUPTA, RAJIV NARAIN RAINA
body2012
DigiLaw.ai
JUDGMENT Mr. Hemant Gupta, J.: - Challenge in the present revision is to an order passed by learned Additional District Judge on 14.3.2011 (Annexure P-2), whereby in an application filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short the ‘Act’), the learned Court has framed the issues and fixed the case for evidence of the objector relying upon the judgment of learned Single judge of this court reported as Amrik Singh and another v. Vardhan Properties Investment Ltd., 2007 (1) PLR 294. 2. The challenge to the said order is in view of the judgment of Hon’ble Supreme Court reported as Fiza Developers & Inter-Trade P. Ltd. v. AMCI (I) Pvt. Ltd, (2009)17 SCC 796, wherein it has been held that an application under Section 34 of the Act cannot be tried as a regular civil suit and the procedure adopted by the learned Court in framing the issues is not correct. It is argued that calling upon the objector to lead evidence negates the very object of the Act for expeditious conclusion of the disputes with minimal interference by the Courts. 3. When the matter came up for hearing before the learned Single Judge of this Court on 7.5.2012, learned Single Judge expressed reservation with the judgment relied upon by the learned trial Court. In view of the judgment of Hon’ble the Supreme Court in Fiza Developers’ case (supra), the following question was framed for the decision by the Larger Bench: - “Whether issues as contemplated under Order 14 Rule 1 CPC should be framed in application under Section 34 of the Arbitration and Reconciliation Act, 1996, keeping in view of Punjab, Haryana and Union Territory, Chandigarh Arbitration and Conciliation Rules, 2003.? 4. The matter came up for hearing before this Bench on 17.9.2012. After hearing the arguments at some length, it transpired that all the learned counsel appearing before this Bench are in fact canvassing the proposition that the Principal Civil Court of Original Jurisdiction is not obliged to frame issues. Therefore, to examine the counter view, if any, Mr. Arun Palli, learned Senior Counsel was requested to assist this Court as Amicus Curiae. 5. We have heard the arguments addressed by learned counsel for the parties as well arguments advanced by Advocate General, Haryana, Mr. Sidhu, learned Addl. A.G., Punjab, Mr. Kaushal, learned Advocate for Chandigarh Administration.
Therefore, to examine the counter view, if any, Mr. Arun Palli, learned Senior Counsel was requested to assist this Court as Amicus Curiae. 5. We have heard the arguments addressed by learned counsel for the parties as well arguments advanced by Advocate General, Haryana, Mr. Sidhu, learned Addl. A.G., Punjab, Mr. Kaushal, learned Advocate for Chandigarh Administration. The learned Amicus Curaie has assisted this Court in commendable manner. 6. On the basis of the arguments advanced, we find that to answer the question of law framed by learned Single Judge, the following aspects need to be taken into consideration: - 1. The extent of applicability of the Code of Civil Procedure and/or Indian Evidence Act to the Arbitral Tribunal and to the Principal Civil Court of Original Jurisdiction; 2. Whether the Punjab, Haryana and Union Territory, Chandigarh Arbitration and Conciliation Rules, 2003 are inconsistent with Section 19 of the Act which contemplates that the provisions of the Code of Civil Procedure shall not be applicable to the proceedings before the Arbitral Tribunal? 7. To examine the contentions raised, certain statutory provisions from the Arbitration and Conciliation Act, 1996; the Code of Civil Procedure,1908 (for short the ‘Code’) and the Indian Evidence Act 1872, need to be extracted: - “Arbitration and Conciliation Act, 1996 2. (1) In this Part, unless the contest otherwise requires: - (a) to (d) xx xx xx (e) “Court” means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subjectmatter of the arbitration if the same had been the subjectmatter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes; xx xx xx 19. Determination of rules of procedure- (1) The arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872). (2) Subject to this Part, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting its proceedings. (3) Failing any agreement referred to in sub-section (2), the arbitral tribunal may, subject to this Part, conduct the proceedings in the manner it considers appropriate.
(2) Subject to this Part, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting its proceedings. (3) Failing any agreement referred to in sub-section (2), the arbitral tribunal may, subject to this Part, conduct the proceedings in the manner it considers appropriate. (4) The power of the arbitral tribunal under sub-section (3) includes the power to determine the admissibility , relevance, materiality and weight of any evidence. xx xx xx 23. Statements of claim and defence . - (1) Within the period of time agreed upon by the parties or determined by the arbitral tribunal, the claimant shall state the facts supporting his claim, the points at issue and the relief or remedy sought, and the respondent shall state his defence in respect of these particulars, unless the parties have otherwise agreed as to the required elements of those statements. (2) The parties may submit with their statements all documents they consider to be relevant or may add a reference to the documents or other evidence they will submit. (3) Unless otherwise agreed by the parties, either party may amend or supplement his claim or defence during the course of the arbitral proceedings, unless the arbitral tribunal considers it inappropriate to allow the amendment or supplement having regard to the delay in making it. 24. Hearings and written proceedings.- (1) Unless otherwise agreed by the parties, the arbitral tribunal shall decide whether to hold oral hearings for the presentation of evidence or for oral argument, or whether the proceedings shall be conducted on the basis of documents an other materials; Provided that the arbitral tribunal shall hold hearings, at an appropriate stage of the proceedings, on a request by a party, unless the parties have agreed that no oral hearing shall be held. (2) The parties shall be given sufficient advance notice of any hearing and of any meeting of the arbitral tribunal for the purposes of inspection of documents, goods or other property. (3) All statements, documents or other information supplied to, or applications made to, the arbitral tribunal by one party shall be communicated to the other party, and any expert report or evidentiary document on which the arbitral tribunal may rely in making its decision shall be communicated to the parties. xx xx xx 27.
(3) All statements, documents or other information supplied to, or applications made to, the arbitral tribunal by one party shall be communicated to the other party, and any expert report or evidentiary document on which the arbitral tribunal may rely in making its decision shall be communicated to the parties. xx xx xx 27. Court assistance in taking evidence.- (1) The arbitral tribunal, or a party with the approval of the arbitral tribunal, may apply to the Court for assistance in taking evidence. (2) The application shall specify-- (a) the names and addresses of the parties and the arbitrators. (b) the general nature of the claim and the relief sought; (c) the evidence to the obtained, in particular,-- (i) the name and address of any person to be heard as witness or expert witness and a statement of the subjectmatter of the testimony required; (ii) the description of an document to be produced or property to be inspected. xx xx xx 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).
xx xx xx 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 matter 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 Past; 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 of affected by fraud or corruption or was in violation of section 75 or section 81. xx xx xx 82.
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 of affected by fraud or corruption or was in violation of section 75 or section 81. xx xx xx 82. Power of High Court to make rules.- The High court may make rules consistent with this Act as to all proceedings before the court under this Act.” “ Code of Civil Procedure 1908 Section 2: In this Code, unless there is anything repugnant in the subject or context: - xx xx xx (4) “district” means the local limits of the jurisdiction of a principal Civil Court of original jurisdiction (hereinafter called a “district Court”), and includes the local limits of the ordinary original civil jurisdiction of a High Court: xx xx xx Section 107: Powers of Appellate Court: - (1) Subject to such conditions and limitations as may be prescribed, an Appellate Court shall have power: - (a) to determine a case finally; (b) to remand a case; (c) to frame issues and refer them for trial; (d) to take additional evidence or to require such evidence to be taken. (2) Subject as aforesaid, the Appellate Court shall have the same powers and shall perform as nearly as may be the same duties as are conferred and imposed by the Code on Courts of original jurisdiction in respect of suits instituted therein. xx xx xx Order 14 Rule 1: Framing of issues (1) Issues arise when a material proposition of fact or law is affirmed by the one party and denied by the other; (2) Material propositions are those propositions of law or fact which a plaintiff must allege in order to show a right to sue or a defendant must allege in order to constitute his defence. (3) Each material proposition affirmed by one party and denied by the other shall form the subject of a distinct issue. (4) Issues are of two kinds: - (a) issues of fact, (b) issues of law.
(3) Each material proposition affirmed by one party and denied by the other shall form the subject of a distinct issue. (4) Issues are of two kinds: - (a) issues of fact, (b) issues of law. (5) At the first hearing of the suit, the Court shall, after reading the plaint and the written statements, if any, and (after examination under Rule 2 of Order X and after hearing the parties or their pleaders), ascertain upon what material propositions of fact or of law the parties are at variance, and shall thereupon proceed to frame and record the issues on which the right decision of the case appears to depend. (6) Nothing in this rule requires the Court to frame and record issues where the defendant at the first hearing of the suit makes no defence. xx xx xx Evidence Act, 1872 1. This Act may be called the Indian Evidence Act, 1872. It extends to the whole of India [except the State of Jammu and Kashmir] and applies to all judicial proceedings in or before any Court, including Courts-martial, other than Courts-martial convened under the Army Act (44 & 45 Vict., c. 58) the Naval Discipline Act (29 & 30 Vict., c. 109) or the Indian Navy (Discipline) Act, 1934 (34 of 1934) or the Air Force Act (7 Geo. 5, c. 51) but not to affidavits presented to any Court or Officer, nor to proceedings before an arbitrator; and it shall come into force on the first day of September, 1872. xx xx xx 3. Interpretation Clause: - In this Act, the following word and expression is used in the following sense, unless a contrary intention appears from the context: - “Court”. —”Court” includes all Judges and Magistrates, and all persons, except arbitrators, legally authorized to take evidence.” 8. This Court has framed the Punjab, Haryana and Union Territory, Chandigarh Arbitration and Conciliation Rules, 2003 (for short ‘the Rules’) in exercise of the powers conferred under Section 82 of the Act. Such Rules are applicable to the Arbitration and Conciliation proceedings before the competent Court under the Act. Rule 3 defines application, to mean the application made to this Court under the provisions of the Act. Relevant extract from Rules reads as under: - “3.
Such Rules are applicable to the Arbitration and Conciliation proceedings before the competent Court under the Act. Rule 3 defines application, to mean the application made to this Court under the provisions of the Act. Relevant extract from Rules reads as under: - “3. Every application shall be made in writing duly signed and verified in the manner prescribed under Order 6 Rules 14 and 15 of the Code of Civil Procedure and if the Court, so directs, shall be supported by an affidavit. It shall be divided into paragraphs, numbered consecutively, and shall contain the name, description and place of residence of the parties. It shall contain a statement, in concise form: (a) of the material facts constituting cause of action; (b) of facts showing that the Court to which the application is presented has jurisdiction; (c) relief asked for; and (d) names and addresses of the persons likely to be affected by the applications. Provided that where a party, by reason of absence or for any other reason, is unable to sign and verify the same, it may be signed and verified by any person duly authorized by him in this behalf and proved to the satisfaction of the Court to be acquainted with the facts of the case. xx xx xx 6. Deposit:- xx xx xx SCHEDULE xx xx xx (1) Save as otherwise expressly provided in the Act or those Rules the following provision of the Code of Civil Procedure, 1908 (V of 1908) shall apply to the proceedings before a Court in so far as those may be applicable thereto namely: - (i) Sections 28, 31, 35, 35-A, 35-B, 107, 133, 135, 148-A, 149, 151 and 152; and (ii) Order III, V, VI, IX, XIV, XVI to XIX, XXIV & XLI. (2) (a) For the purpose of facilitating the application of the provisions referred to under sub-section (1) the Court may construe them with such alterations, not affecting the substance, as may be necessary or proper to adopt to the matters before it; and (b) The Court may, for sufficient reasons, proceed otherwise than in accordance with the said provisions if it is satisfied that the interests of the parties shall not thereby be prejudiced. 9.
9. In Amrik Singh’s case (supra), learned Single Judge of this Court set aside the order passed by the learned Additional District Judge when the case was adjourned for arguments instead of recording the evidence for the reason that the Rules framed by this Court require leading of evidence on all the applications. Learned Single Judge referred to the judgment of Hon’ble the Supreme Court reported as F.C.I. v. Indian Council for Arbitration, (2003) 3 SCC 564, to hold that as orders under Section 11 of the Act are the judicial orders, therefore, the parties are entitled to lead evidence on the issues already framed. Such judgment was later followed by another Single Bench judgment of this Court reported as M/s B.P.Rice Mills and others v. PUNSUP and others, 2008(3) PLR 85. 10. At this stage, reference may be made to another Single Bench judgment of this Court in Krishan Lal Kacker v. Ram Chander, 2005 (1) PLR 269, whereby an argument so as to adduce evidence in support of the objections filed for execution of the Award was not accepted for the reason that it is not necessary for the Court to frame issues and to provide opportunities to judgment-debtor to lead evidence in support of the objections. 11. Section 24 of the Punjab Courts Act, 1918 (for short the ‘Courts Act’) contemplates that the Court of District Judge shall be deemed to be the District Court or the Principal Civil Court of Original Jurisdiction. The Court of Additional District Judge is deemed to be the District Judge when it exercises jurisdiction in respect of matters entrusted to such Court generally or specifically by the High Court or by the learned District Judge in terms of Section 21 of the Courts Act. 12. At this stage, reference may be made to the background which led to the judgment of Hon’ble the Supreme Court in Fiza Developers’ case (supra). In the aforesaid case, objections under Section 34 of the Act were filed by M/s Fiza Developers & Inter-Trade Pvt. Ltd. The objector file an application before the Court under Order 14 Rule 1 and 3 of the Code to frame issues before such objections are decided. Such application was declined by the Court.
In the aforesaid case, objections under Section 34 of the Act were filed by M/s Fiza Developers & Inter-Trade Pvt. Ltd. The objector file an application before the Court under Order 14 Rule 1 and 3 of the Code to frame issues before such objections are decided. Such application was declined by the Court. The said order was assailed before the learned Single Judge and it was argued that an application under Section 34 of the Act is akin to a civil suit and as all the provisions of the Code apply to such proceedings, therefore, the Court is bound to frame the issues and that the application should not have been brushed aside on the premise that it is not express requirement under the Act or the Rules. On the other hand, on behalf of respondent, an argument was raised that question of framing of the issues on an application under Section 34 of the Act does not arise at all as it is not an adversarial proceeding. It is akin to proceedings in the nature of appeal. The application is for setting aside of an Award passed by an Arbitrator before whom the parties have led their evidence. Such Award can be set aside on one or the other ground enumerated in Section 34 of the Act. 13. After considering the respective objections, learned Single Judge found that if the Court does not frame issues, the orders cannot be characterized as bad in law. The framing of issues was said to be not a mandatory requirement and that application under Section 34 can be disposed of without framing any issues at all. Such judgment was affirmed by the Division Bench of the said Court and later by Hon’ble the Supreme Court in Fiza Developers’ case (supra). 14. Hon’ble the Supreme Court in Fiza Developers’ case (supra) noticed that the object of framing issues is to focus upon the questions on which the evidence is to be led and to indicate the party on whom the burden of proof lies and that framing of issues is not necessary as in every contested regular civil Suit. It was observed that any proceedings which are intended to be summary in nature, issues are not required to be framed.
It was observed that any proceedings which are intended to be summary in nature, issues are not required to be framed. In such proceedings, the Court permits the parties to file affidavits in support of their respective stands and if necessary, permit the cross-examination by the other side before hearing the arguments. It observed “ we hasten to add that when it is said issues are not necessary, it does not mean that evidence is not necessary”. The court delineated the three following reasons to return such finding dealing with the scope of provisions under Section 34 of the Act: - 1. Act is a special enactment under Section 34 of the Act for a special remedy; 2. An arbitral Award can be set aside only on one of the grounds mentioned in Sub Section 2(b) of Section 34 of the Act. 3. Proceedings under Section 34 require to be dealt with expeditiously. 15. The Court later also observed as under: - “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 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.
In other words, an application under section 34 of 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.” 16. The Supreme Court also examined the High Court of Karnataka Arbitration (Proceedings before Courts) Rules 2001. It was held to the following effect while examining Rule 4(b) and 12 of the aforesaid Rules:- “Rule 12 makes it clear that the provisions of Code will be applicable only to the extent considered necessary or appropriate by the court. Thus there is no wholesale or automatic import of all the provisions of the Code, into proceedings under section 34 of the Act, as that will defeat the very purpose and object of the Act. As already noticed, the Code deals with and makes provisions for regular civil suits as well as summary suits and proceedings. Therefore, rule 4(b) cannot be read or understood as making applicable all provisions of the Code, which apply to regular civil suits, to proceedings under section 34. The Rules were made to give effect to the provisions of the Act and should be understood in consonance with the specific provisions and the object of the Act. Conclusions 13. xx xx xx While an applicant in an application under section 34 is interested in getting an order setting aside an award, his opponent is equally interested in ensuring that it is not set aside, but upheld. While an applicant presents his case to the Judge to prove that the award is liable to be set aside, the respondent puts forth his case to refute the claim of the applicant that the award is liable to be set aside. An application under section 34 in that sense is adversarial in nature. But proceedings under section 34 differ from regular civil suits in a significant aspect. In a regular civil suit, in the event of failure to file a defence, it will be lawful for the court to pronounce the judgment on the basis of facts contained in the plaint [Vide Order VIII Rule 5(2) of the Code].
But proceedings under section 34 differ from regular civil suits in a significant aspect. In a regular civil suit, in the event of failure to file a defence, it will be lawful for the court to pronounce the judgment on the basis of facts contained in the plaint [Vide Order VIII Rule 5(2) of the Code]. But in an application under section 34, even if there is no contest, the court cannot on the basis of the averments contained in the application, set aside the award. Whether there is contest or not, the applicant has to prove one of the grounds set out in section 34(2)(a) and (b). Even if the applicant does not rely upon the grounds under clause (b), the Court, on its own initiative, may examine the award to find out whether it is liable to be set aside on either of the two grounds mentioned in section 34(2)(b). It is perhaps in this sense, the High Court has stated that the proceedings may not be adversarial. Be that as it may. 14. 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 Code of Civil Procedure. Applications under section 34 of the Act are summary proceedings with provision for objections by the defendant/respondent, 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 defendant/respondent to place his evidence by affidavit. Where the case so warrants, the court permits cross-examination of the persons swearing to the affidavit. Thereafter, 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.” 17.
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.” 17. After hearing learned counsel appearing for the parties in this case, we are of the opinion that an Arbitral Tribunal is not bound by the Code in terms of Section 19 of the Act and that the parties are free to agree on the procedure to be followed by the Arbitral Tribunal in conducting proceedings before it. In the absence of the agreed procedure, the proceedings before the Arbitral Tribunal are to be governed in terms of the provisions of the Act as Section 23 of the Act deals with the filing of the statement and claim of the defence including the amendment or supplementing the claim or defence. The hearing before the Tribunal is provided for in Section 24 of the Act, whereas Section 27 empowers the Arbitral Tribunal to seek help of a Court for assistance in taking evidence. Therefore, for the purpose of the procedure before the Arbitral Tribunal, it is the agreement between the parties which will regulate the proceeding before the Arbitral Tribunal, and if there is no agreement then in the manner specified in Chapter V of the Act. 18. The evidence to be recorded by the Arbitral Tribunal, as delineated in Chapter V of the Act, is not expected to be in accordance with the provisions of the Indian Evidence Act, 1872 as the provisions of such Act are not applicable to the arbitrators in terms of Section 19 of the Act as well Sections 1 and 3 of the Evidence Act. Therefore, the Arbitral Tribunal can adopt a procedure which is fair, equitable and reasonable as it may consider appropriate. 19. The Arbitral Tribunal has to conduct proceedings firstly in accordance with the agreed procedure and in the absence of any agreement of the parties, in accordance with the provisions of statute and in respect of matters not covered either by agreement or by statute, keeping in view the principles of natural justice, fair play and equity. 20.
19. The Arbitral Tribunal has to conduct proceedings firstly in accordance with the agreed procedure and in the absence of any agreement of the parties, in accordance with the provisions of statute and in respect of matters not covered either by agreement or by statute, keeping in view the principles of natural justice, fair play and equity. 20. Section 82 of the Act empowers the High Court to make Rules consistent with the Act as are applicable to all proceedings before the Court. The question to be examined is whether the Rules framed by this Court are in any way inconsistent with the provisions of the Act. There is no provision in the Act which prescribes the procedure to be adopted by the Court i.e. the Principal Civil Court of Original Jurisdiction. Section 19 of the Act is applicable only in respect of proceedings before the Arbitral Tribunal. Therefore, the Rules have been framed to fill up that area of conduct of proceedings before the Court. The provisions of the Code as are extended by the Rules framed by this court, are the provisions which are for expeditious disposal of the proceedings such as Sections 28, 31, 35, 35-A, 35-B of the Act. Section 133 is a provision for exemption of the specified persons whereas Sections 148-A, 149, 151 and 152 are procedural in nature so as to confer the power to extend time to make up the deficiency of Court fees and to correct the arithmetical mistake and also to have inherent jurisdiction. 21. Section 107 of the Code is the provision which delineates the power of the Appellate Court so as to include to determine a case finally; to remand a case; to frame issues and refer them for trial or to take additional evidence or to require such evidence to be taken. Corresponding to Section 107 of the Code, Order 41 has also been extended which prescribes procedure in appeals. A reading of two provisions would in fact lead to an inference that the power of the Court while entertaining an application under Section 34 is akin to the appellate jurisdiction so as to find out whether the Award is liable to be set aside on any one or more grounds specified in Section 34 of the Act. 22.
A reading of two provisions would in fact lead to an inference that the power of the Court while entertaining an application under Section 34 is akin to the appellate jurisdiction so as to find out whether the Award is liable to be set aside on any one or more grounds specified in Section 34 of the Act. 22. The Court has to examine the questions some of which are purely of fact in exercise of the jurisdiction under Section 34 of the Act. Whereas some of the questions can be mixed questions of law and facts and other being only questions of law. An objector is required to prove the grounds of challenge of an Award in terms of Section 34(2)(a) of the Act. Some of them such as (i) and (iii) can be said to be the questions of fact, whereas the grounds (ii), (iv) and (v) can be said to be mixed questions of law and facts whereas grounds contained in Section 34(2)(b) of the Act are the grounds to set aside the Award on satisfaction of the Court. Such grounds are the questions of law alone. 23. Order XIV of the Code contemplates framing of issues of fact and law. Certain questions of fact may arise before the Court out of evidence recorded and of the proceedings before the Arbitral Tribunal whereas certain other issues may depend upon the facts to be proved before the Court for the first time. If the Court finds that on certain questions of fact or on mixed questions of law and facts, evidence is required, the Court shall permit the parties to furnish the evidence by affidavits and if demanded, permit the executants of such affidavits to be cross examined. 24. Even if the Court finds that framing of the issues is necessary for effective adjudications of the objections, such issues are framed for facilitating the decision on narrowed points of controversy between the parties rather than to permit the parties to lead evidence as in a regular civil suit. The objections cannot be tried as a civil suit as before a Civil Court. The original proceedings are before the Arbitral Tribunal. The Court is expected to decide the objections keeping in view the legislative intent of concluding arbitration proceedings in an expeditious manner and not relegating the parties to lead evidence as is in original proceedings.
The objections cannot be tried as a civil suit as before a Civil Court. The original proceedings are before the Arbitral Tribunal. The Court is expected to decide the objections keeping in view the legislative intent of concluding arbitration proceedings in an expeditious manner and not relegating the parties to lead evidence as is in original proceedings. Therefore, we do not find that the provisions of the Code as are extended to the proceedings before the Court are in any way inconsistent with any of the provisions of the Act. 25. The provisions of the Code extended to the Court are not absolute. The rules framed provide that the provisions of the Court shall apply to the proceedings “in so far as those may be applicable”. Sub Clause 2 of the said rules contemplates that for the purpose of facilitating the application of the provisions referred to under Sub Section 1, “the Court may construe them with such alterations not affecting the substance as may be necessary or appropriate to adopt the methods before it”. Sub Clause (b) of the said provisions further contemplates that the Court shall proceed in the manner that the interest of the parties shall not be prejudiced. Therefore, while extending the Code, the Court has been given sufficient flexibility to apply the provisions of the Code to the extent applicable and warranted in the facts of the case. The rules enjoin the Court to act in the manner which is judicious and at the same time expeditious. 26. The Court of appeal of Singapore in a judgment reported as CRW Joint Operation v. PT Perusahaan Gas Negara (Persero) TBK, (2011) 4 Singapore Law Reports 305, was considering the UNCITRAL Model law of international commercial arbitration as adopted in that country. The provisions are identical in India based on common model law of arbitration. It was held that the Court should not without reason interfere in the arbitral process and that the minimum curial intervention by respecting the finality in the arbitration process is expected. It was held to the following effect: - “ 25. The court’s power to set aside an arbitral award is limited to setting aside based on the grounds provided under Art 34 of the Model Law and 24 of the IAA.
It was held to the following effect: - “ 25. The court’s power to set aside an arbitral award is limited to setting aside based on the grounds provided under Art 34 of the Model Law and 24 of the IAA. As declared by this court in Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd [2007] 3 SLR(R) 86 (“Soh Beng Tee”) at [59], the current legal framework prescribes that the courts should not without good reason interfere in the arbitral process. This policy of minimal curial intervention by respecting finality in the arbitral process acknowledges the primacy which ought to be given to the dispute resolution mechanism that the parties have expressly chosen. 26. However, it has also been said (correctly) that no State will permit a binding arbitral award to be given or enforced within its territory without being able to review the award, or, at least, without allowing the parties an opportunity to address the court if there has been a violation of due process or other irregularities in the arbitral proceedings (see Peter Binder, 318 SINGAPORE LAW REPORTS [2011] 4 SLR International Commercial Arbitration and Conciliation in UNCITRAL Model Law Jurisdictions (Sweet & Maxwell, 3rd Ed, 2010) at para 7- 001).” 27. The Hon’ble Supreme Court in Fiza Developers’ case (supra) has categorically held that the proceedings under Section 34 differ from regular civil suit in a significant aspect. In proceedings under Section 34 of the Act, the Court can examine as to whether the Award is liable to be set aside on the grounds mentioned in Section 34(b) of the Act. The Court also recorded the fact that expeditious alternative binding dispute with minimal Court intervention is envisaged under the Act and that applications under Section 34 of the Act are summary proceedings. 28. The judgment of this Court in Amrik Singh’s case (supra), is not only contrary to the judgment of Hon’ble the Supreme Court in Fiza Developers’ case (supra), but also has failed to notice the jurisdiction of the Court is not of a Court of the first instance. When the Order XIII of the Code is made applicable to the proceedings before the Court, it is only for the production of the documents, if necessary, to prove the questions of fact and/or law.
When the Order XIII of the Code is made applicable to the proceedings before the Court, it is only for the production of the documents, if necessary, to prove the questions of fact and/or law. The applicability or the Order XVI of the Code empowers the Court to summon witnesses, if necessary, but such provision does not mean that it is mandatory for the Court to summon a witness. The availability of the power to summon a witness does not lead to an inference that the court must summon a witness. The jurisdiction to summon a witness has to be exercised by the Court, if a Court finds that the witness is required to be summoned, if any for the purpose of the cross-examination. Therefore, we find that such judgment does not lay down correct law. 29. Similar view has been taken by the High Court of Andhra Pradesh in a judgment reported as Satyam Computer Services Ltd. v. V enture Global Engineering LLC., 2010 (3) Arb. L.R 216. The Rules framed by the Andhra Pradesh High Court are pari materia with the Rules framed by this Court. 30. In view of the above, we answer the question of law framed as follows:- (i) The issues, as required under Order XIV Rule 1 of the Code as in the regular suit, are not required to be mandatorily framed by the Court. However, it is open to the Court to frame questions which may arise for adjudication. (ii) The Court while dealing with the objections under Section 34 of the Act is not bound to grant opportunities to the parties to lead evidence as in the regular civil suit. The jurisdiction of the Court being more akin to the appellate jurisdiction; (iii) The proceedings before the Court under Section 34 of the Act are summary in nature. Even if some questions of fact or mixed questions of law and/or facts are to be decided, the court while permitting the parties to furnish affidavits in evidence, can summon the witness for cross-examination, if desired by the other party. Such procedure is keeping in view the principles of natural justice, fair play and equity. In view of the question of law having been answered, the matter be placed before the learned Single Judge, on 31st October, 2012 for decision according to law.