CASE TITLE:
M/s Alpine Housing Development Corporation Pvt. Ltd. V. Ashok S. Dhariwal and Others
DATE OF ORDER:
19 January 2023
JUDGE(S):
Justice MR Shah
Justice CT Ravikumar
SUBJECT
The Apex Court, in the present case, held the in an exceptional case being made out and if it is brought to the court’s attention that on the matters not containing the record of the arbitrator certain things are relevant for determining the issues arising under section 34(2)(a), then the party who has assailed the award on the grounds set out in section 34(2)(a) can be permitted to file affidavit in the form of evidence. The Court however also opined that the same shall not be allowed ‘unless absolutely necessary.’
BRIEF FACTS OF THE CASE
- An ex-parte arbitral award was passed by the arbitration tribunal.
- The respondent filed objection to the impugned award and sought to adduce additional evidence by filing an application u/s 34 of the Arbitration Act.
- The application was rejected by the Trial Court but was allowed by the High Court.
- The order of the High Court is under appeal in the present case.
ARGUMENTS ADVANCED BY THE APPELLANT
- It is argued by the learned counsel for the appellant that the order by the Hugh Court allowing the respondent to adduce additional evidence is against the object and purpose of amending section 34(2)(a) of the Act by which the word ‘furnishes proof’ proof” has been substituted with the expression “establish on the basis of record of the arbitral tribunal.
- That provision of section 34(2)(a) post amendment is applicable to the present case.
- That even if it is assumed that sec 34(2)(a) pre amendment is applicable to the present case the award on the grounds enumerated under section 34(2) (b) of the Act, the expression “furnish proof” in section 34(2)(a) cannot apply to section 34(2)(b).
- That adducing of evidences can be allowed only in exceptional circumstances
ARGUMENTS ADVANCED BY THE RESPONDENT
- The learned counsel for the respondent submitted that the award was passed ex-parte while the respondent had filed an application challenging the high fees and bias before the tribunal.
- It was also brought to the attention of the learned Court that the application by the respondent for amalgamation of khatas were rejected twice. It was the appellant’s responsibility to apply for the same. Thus, in the respondent’s view, the enforcement of the award is against public policy.
- That the provision of section 34(2)(a) prior to the amendment shall be applicable.
LEGAL ISSUE
- Whether the applicant can be permitted to adduce evidence to support the ground relating to Public Policy in an application filed under Section 34 of the Arbitration & Conciliation Act, 1996?
ANALYSIS BY THE COURT
- While adjudicating upon the matter, the Court observed that both the commencement of the arbitration proceeding and the passing of the award was done before amendment to section 34(2)(a).
- As such, in the opinion of the Court, provision of section 34(2)(a) prior to amendment shall be applicable. The Court gave substantial changes post amendment as the justification for preferring this view.
- The learned Court then reiterated the view taken by it in Fiza Developers and Inter-trade Private Limited v. AMCI Pvt.. Ltd. & Another [(2019) 17 SCC 796]. The decision of Fiza Developers was then taken for consideration in Canara Nidhi Ltd. V. M. Shashikala[(2019) 9 SCC 462].
- The ratio that flows from the above cases is that an award can be set aside only in the grounds as laid down in section 34(2)(a) and 34(2)(b) and an application for setting aside the award would not ordinarily require anything beyond the record that was with the arbitrator. But, if such record does not contain such matter as would be relevant for determining the issue under section 34(2)(a), they may be brought to the notice of the Court by way of affidavits filed by both the parties’ the cross-examination of the persons swearing in to the affidavits should not be allowed unless absolutely necessary.
CONCLUSION
Observing the question of whether an exceptional case has been made out by the respondent in the present case,, the Court concluded that the affidavit discloses specific document and the evidence required to be produced. They seek to produce in evidence the communication from the appropriate authority by which the application for amalgamation of the plots is rejected. The learned Court opined that, a strong exceptional case is made out by the respondents to permit them to file affidavits/adduce additional evidence.
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