IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 06TH DAY OF JANUARY, 2021
BEFORE
THE HON' BLE MR.JUSTICE R. DEVDAS
WRIT PETITION NO.45918 OF 2015 (GM-RES)
BETWEEN
BANGALORE WATER SUPPLY AND
SEWERAGE BOARD,
CAUVERY DIVISION
5TH FLOOR, CAUVERY BHAVAN,
K.G.ROAD, BANGALORE - 560 009.
REPRESENTED BY ITS
CHIEF ENGINEER (K)
SRI V MAHESH
...PETITIONER
(BY SRI VENKATESH S ARBATTI, ADVOCATE)
AND
1. LARSEN & TURBO LIMITED ENGINEERING
CONSTRUCTION AND CONTRACTS
DIVISION, I AND II FLOOR, NO.19,
KUMARA KRUPA ROAD
BANGALORE - 560 001.
REPRESENTED BY ITS
REGIONAL MANAGER
AND AUTHORIZED SIGNATORY
SRI K.N.NAGENDRA
2
2. SRI S M PANCHAGATTI
PRESIDING ARBITRATOR
SAMANTH CONSULTANCY
NO. 11, 14TH CROSS,
SAMPIGE ROAD, MALLESWARAM,
BANGALORE - 560 003.
3. HON'BLE MR. JUSTICE B.K.SOMASHEKARA (RETD)
ARBITRATOR
NO. 175, BRINDAVANA
3RD 'E' CROSS,
II BLOCK, III STAGE,
BASAVESHWARANAGAR
BANGALORE - 560 079.
4. SRI B N RAMADAS, IAS (RED)
ARBITRATOR
GNG HOUSE, K-48,
ANNA NAGAR (EAST)
CHENNAI - 600 102.
...RESPONDENTS
(BY SRI R V S NAIK, SENIOR COUNSEL A/W
MISS RASHMI SUBRAMANYA, ADVOCATE FOR R1
NOTICE TO R2 TO R4 ARE DISPENSED WITH)
THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE
CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER
DTD.25.11.2014 [ANNEXURE-E] ON I.A. PASSED BY THE VI
ADDITIONAL CITY CIVIL & SESSIONS JUDGE AT BANGALORE IN
A.S.NO.125/2006 AND ETC.
THIS WRIT PETITION IS COMING ON FOR PRELIMINARY
HEARING IN 'B' GROUP THIS DAY, THE COURT MADE THE
FOLLOWING:
3
ORDER
R. DEVDAS J., (ORAL):
The petitioner which is a statutory body had engaged the services of the respondent No.1 company as a contractor to undertake some of its works in the year 1998. After the execution of the works since there was a dispute regarding the payment to be made to the respondent No.1 company, the respondent No.1 company raised a dispute before the Arbitral Tribunal. The Arbitral Tribunal passed an award partly allowing the claims of respondent No.1 company directing the petitioner to pay Rs.3,66,97,641/-. Aggrieved by the same, the petitioner challenged the Award under Section 34 of the Arbitration and Conciliation Act 1996 in A.S.No.125/2006, before the City Civil Judge at Bangalore.
2. The petitioner filed I.A.No.3 seeking permission to lead evidence under Rule 4(b) of the High Court of Karnataka Arbitration (Proceedings Before the Courts) Rules, 2001 r/w Section 151 of Code of Civil Procedure, 1908. The said interlocutory application was dismissed by order dated 25.11.2014. It is the contention of the petitioner that in view of the observations made in the order 4 dated 25.11.2014, the petitioner was led to believe that it was permissible for the petitioner to file an affidavit in support of the grounds raised by the petitioner in the plaint. Consequently, the petitioner filed a memo dated 07.01.2015 along with an affidavit of its representative in support of the grounds raised in the plaint. By order dated 29.08.2015 the learned City Civil Judge dismissed the memo and rejected the affidavit filed along with the memo. Consequently, this writ petition is filed calling in question the order dated 25.11.2014 passed by the learned City Civil Judge on I.A.No.3 and order dated 29.08.2015 on the memo dated 07.01.2015.
3. Learned Senior Counsel representing the respondent No.1 has taken this Court through the decisions of the Hon'ble Supreme Court in the case of FIZA DEVELOPERS AND INTER- TRADE PRIVATE LIMITED. /vs./ AMCI (INDIA)PRVATE LIMITED & ANOTHER, reported in (2009) 17 SCC 796, EMKAY GLOBAL FINANCIAL SERVICES LIMITED /VS./ GIRDHAR SONDHI reported in (2018) 9 SCC 49 AND CANARA NIDHI LIMITED /VS./ M.SHASHIKALA AND OTHERS REPORTED IN 5 (2019) 9 SCC 462 to contend that Section 34 of the Act has fallen into consideration at the hands of the Apex Court and in the case of Fiza Developers, the Hon'ble Supreme Court has clearly held that application under Section 34 of the Act are summary proceedings with provision for objections by the respondent-defendant, followed by an opportunity to the applicant to "prove" the existence of any ground under Section 34(2). It has been held that the applicant is permitted to file an affidavit of his witnesses in proof. A corresponding opportunity is given to the petitioner-defendant to place his evidence by affidavit. Where the case so warrants, the court permits cross-examination of the persons swearing to the affidavit. Thereafter, the court hears the arguments and/or receives written submissions and shall decide the matter. It has been made clear that framing of issues as contemplated under Rule 1 Order 14 of the Code is not an integral part of the process of a proceedings under Section 34 of the Act.
4. Learned Senior Counsel submits that the decision in Fiza Developers and Inter-trade Private Limited has been followed in Emkay Global Financial Services Limited case. However, 6 the subsequent amendment brought to Section 34 of the Act also fell for consideration in the case of Emkay Global Financial Services Limited. The learned Senior Counsel submits that on consideration of the expression "furnishes proof" in Section 34(2) and the later amendment brought to the said expression replaced by the words "establishes on the basis of the record of the Arbitral Tribunal" also was considered and the Hon'ble Apex Court has clearly held that speedy resolution of the arbitral disputes has been the reason for enacting the 1996 Act, and continues to be the reason for adding amendments to the said Act to strengthen the aforesaid object. It was therefore held that if issues are to be framed and oral evidence taken in a summary proceeding under Section 34, this object will be defeated. It was also noticed that if Bill No.100 of 2018 is passed, then evidence at the stage of a Section 34 application will be dispensed with altogether. The Apex Court has given its seal of approval to the two early judgments of the Delhi High Court in the case of Sandeep Kumar /vs./ Ashok Hans reported in 2004 SCC Online Del 106 and Sial Bioenergic /vs./ SBEC Systems reported in (2004) SCC Online Del 863; AIR 2004 Delhi 1995 by holding that two judgments correctly reflect the position in law as to furnishing 7 proof under Section 34(2)(a). The Apex Court went on to observe that Fiza Developers was a step in the right direction as its ultimate ratio is that issues need not be struck at the stage of hearing a Section 34 application, which is a summary procedure. Ultimately on considering Section 34(5) and 34(6), it was clarified that the legal position would be that application for setting aside an arbitral award will not ordinarily require anything beyond the record that was before the arbitrator. However, if there are matters not contained in such record, and are relevant to the determination of issues arising under Section 34(2)(a), they may be brought to the notice of the Court by way of affidavits filed by both parties. It was also clarified that cross-examination of persons swearing to the affidavits should not be allowed unless absolutely necessary, as the truth will emerge on a reading of the affidavits filed by both the parties.
5. Learned counsel for the petitioner submits that going by the decision cited by the learned Senior Counsel, it is clear that there is provision for filing of an affidavit in support of the grounds raised in the application. Therefore, the learned counsel for the 8 petitioner submits that it would suffice if this Court were to direct the learned City Civil Judge that affidavit filed along with the memo dated 07.01.2015 may be considered as an affidavit as permitted by the Hon'ble supreme Court in terms of Section 34(2) of the Act. The learned counsel hastens to add that the petitioner will not press for leading of evidence in support of the affidavit.
6. Learned Senior Counsel appearing for the respondent No.1 would submit that the affidavit contains nothing but the very same averments made in the application/plaint by the petitioners herein. It is therefore submitted that there is no reason for the petitioner to harp upon filing an affidavit which is nothing but reiteration of the contents of the plaint.
7. Having heard the learned counsels and on perusing the petition papers, this Court finds that the submission made by the learned counsel for the petitioner is reasonable. Even according to the learned Senior Counsel the affidavit filed along with memo dated 07.01.2015 which is nothing but reiteration of the contents of the plaint filed by the petitioner herein. Therefore, there is no harm in taking the affidavit on record. The City Civil Judge may consider 9 the affidavit along with the plaint and the available records which has been secured from the Arbitral Tribunal. Needless to observe that if the respondent No.1 herein intends to file a counter affidavit as permissible in terms of the decision of the Hon'ble Apex Court, the respondent No.1 may do so. The counter affidavit may be filed within a period of four weeks from today.
8. In view of the above, the writ petition is partly allowed. The memo dated 07.01.2015 filed along with affidavit dated 03.01.2015 may be taken on record by the learned City Civil Judge while considering the application made by the petitioner under Section 34 of the Act in A.S.No.125/2006. It is informed that consequent to the case being transferred to the Commercial Court a different number has been assigned to A.S.No.125/2006 and therefore the direction issued herein shall apply to the case which is now pending before the Commercial Court.
9. The application under Section 34 was filed in the year 2006. Therefore, it would be necessary to give directions to the Commercial Court which is now seized of the matter to hear and dispose of the application as expeditiously as possible. Since this 10 Court has permitted the respondent No.1 to file a counter affidavit to the affidavit filed by the petitioner herein within a period of four weeks from today, an endeavour should be made by the Commercial Court to dispose of the matter within a period of three months from the date on which the counter affidavit would be filed by the respondent No.1 herein.
Ordered accordingly.
Sd/-
JUDGE KLY/