Order VI Rule 17 For Amendment Of Pleadings Do Not Apply To Section 34 Petitions Under Arbitration Act: Madras High Court: Bharat Heavy Electricals Ltd Vs Sudhir Cranes Pvt Ltd

DATE OF JUDGMENT:

4th February 2022

JUDGES:

Justice S.S.Sundar, J.

PARTIES:

Appellant/Petitioner: Bharat Heavy Electricals Ltd.

Respondent: Sudhir Cranes Pvt. Ltd.

SUBJECT

In the present case, a Civil Revision Petition was filed in the Supreme Court of India against the order of the lower court which accepted the amendments to the application of the respondents in contradiction to the provisions of Rule 17 of Order VI of the Code of Civil procedure 1908.

OVERVIEW

1. The facts of the matter are such that the petitioner and the respondent entered into a contract on 08.12.2011 according to which respondent was to supply 10-tonne mobile cranes/ on a tonnage basis for material handling at the rate of Rs.44/- per ton to the petitioner. However, a dispute arose regarding the terms of the contract when the time of the contract was about to be completed.
2. Thereafter, the respondent raised a dispute before the Arbitral Tribunal. The respondent claimed Rs. 2,13,51,346.19/-, while the petitioner made a counterclaim of Rs.3,31,36,000/-. However, the Arbitral Tribunal by an award dated 09.04.2015 rejected the claims of both the parties. Aggrieved by the award, the petitioner as well the respondent filed an independent application under Section 34 of the Arbitration and Conciliation Act, 1996 before the II Additional District Judge at Ranipet, Vellore District.
3. However, the respondent after presenting the petition filed I.A.No.1 of 2019 sought permission to amend the arbitration petition filed under Section 34 of the Act. The lower court allowed the application filed by the respondent and therefore, the petitioner has preferred the above Civil Revision Petition.
4. The learned counsel for the petitioner argued that the amendments were made to introduce additional grounds in the cause title and the same can’t be permitted Rule 17 of Order VI of the C.P.C. as the deletion and inclusion of substantial pleading and grounds, which are not raised at the time of filing the application. Reliance was placed on the judgment in the case of State of Maharashtra Vs. Hindustan Construction Company Limited 2010 4 SCC 518 where the Supreme Court denied an application for amendment of the petition filed under Section 34 of the Act to set aside the award.

LEGAL PROVISIONS

Code of Civil Procedure, 1908

Order VI Rule 17- No application for amendment is to be allowed after the trial has commenced.

Arbitration and Conciliation Act, 1996

Section 34- Application for setting aside arbitral award.

ISSUES

Whether the new grounds introduced by the amendment would change the character of the petition originally filed under Section 34 of the Act?

JUDGMENT

1. Referring to the terms of the amended petition the Supreme Court noted that the additions made only seek to amplify the grounds which were already in existence. The Court declared that none of the additional grounds were outside the scope of the original Arbitral proceeding or without the factual background. None of the additional ground changed the nature of the application filed under Section 34.
2. The Court held that the governing principles which have to be applied while considering an application under Order VI Rule 17 cannot be applied when a person seeks an amendment of the application filed under Section 34 of the Act. The Court in such cases has to use the power of discretion and they can’t refuse to entertain an amended petition unless the court has reasons to believe that the amendments proposed weren’t legitimate or that the amendment could take away the right accrued to the other party.
3. The Apex Court further held that when both sides have challenged the Arbitral award on various grounds, the amendments are necessary and not for enlarging the scope of arbitral proceedings.
4. The Court, therefore, dismissed the revision petition and directed the lower court to dispose of the matter within three months.

CONCLUSION

Amendments to the point are a very general principle that has been interpreted by the Court from time to time. Sometimes, the nature of proceedings mandates such amendments, for e.g. applications against the arbitral awards. This places an onus on the Court to interpret the provisions of the Code of Civil Procedure to ensure a swift and smooth trial.

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