2014 (9) TMI 1205 - HC - Indian Laws

Permission for adduction of evidence - dismissal of application by District Judge - HELD THAT - The reasoning of the District Judge not permitting the petitioners to file their and witnesses affidavits in proof of the case and extending a corresponding opportunity to the defendants/respondents to place their evidence by affidavit is arbitrary and irrational. The approach of the District Judge in dealing with the I.A. is patently wrong and opposed to the settled principles of law. Petition allowed.

Summary

Issues Involved:
1. Legality of the dismissal of the application filed under Section 151 of CPC by the petitioners.
2. Scope and procedure of proceedings under Section 34 of the Arbitration and Conciliation Act, 1996.
3. Whether the District Judge's approach in dismissing the I.A. was arbitrary and irrational.

Issue-wise Detailed Analysis:

1. Legality of the dismissal of the application filed under Section 151 of CPC by the petitioners:
The petitioners filed an application under Section 151 of CPC to permit adduction of evidence, which was dismissed by the learned I Additional District Judge on 02.06.2010. The main reason for dismissal was that the plaintiffs did not make out sufficient grounds for leading evidence, and the grounds urged could be met with by the records of the arbitration proceedings. The court deemed the application as an attempt to drag on the proceedings and considered it misconceived and liable to be dismissed.

2. Scope and procedure of proceedings under Section 34 of the Arbitration and Conciliation Act, 1996:
Section 34 of the Act provides for recourse to a court against an arbitral award only on specific grounds mentioned in sub-section (2). The proceedings under Section 34 are summary in nature and not full-fledged trials like civil suits. The burden of proof lies on the party challenging the award, and the court's inquiry is limited to the grounds specified in Section 34(2). The Supreme Court in Fiza Developers and Inter-Trade Private Limited vs. AMCI (India) Private Limited and Another emphasized minimal court intervention and prompt disposal of arbitration matters. The court held that framing of issues is not necessary in applications under Section 34, as the statute already specifies the grounds and burden of proof.

3. Whether the District Judge's approach in dismissing the I.A. was arbitrary and irrational:
The High Court found the District Judge's reasoning arbitrary and irrational for not permitting the petitioners to file affidavits of their witnesses and extending a corresponding opportunity to the respondents. The approach was deemed patently wrong and opposed to the settled principles of law as laid down by the Supreme Court. The High Court directed the District Judge to recast the issues in conformity with Section 34 and allow the petitioners to file affidavits of their witnesses, with a corresponding opportunity for the respondents. The court also permitted cross-examination of persons swearing to the affidavits if warranted.

Conclusion:
The writ petitions were allowed, and the impugned order was quashed. The District Judge was directed to recast the issues and permit the filing of affidavits by both parties, with the possibility of cross-examination. The case was to be decided expeditiously by 31.01.2015. No costs were awarded.