M/S. Reliance Polycrete Ltd. vs National Agricultural ...
2008 Latest Caselaw 1113 Del

     *      IN THE HIGH COURT OF DELHI AT NEW DELHI

+                      OMP 364/2008
                                                          Reserved on July 21, 2008
                                                     Date of Decision: July 23, 2008



M/s. Reliance Polycrete Ltd.,                                      ..... Petitioner
                                             Through Ms. Guneeta Pahwa, Advocate
                       versus

National Agricultural Co-Operative Marketing
Federation of India (NAFED)                                   ..... Respondent

Through Mr. A.K.Thakur, with R.K. Mishra & Mr. Bharat Gupta, Advocates

CORAM:

Mr. Justice S. Ravindra Bhat

1.       Whether reporters of local papers may be
         allowed to see the judgment?                       Yes.
2.       To be referred to the Reporter or not?             Yes.
3.       Whether the judgment should be reported
         in the Digest?                                      Yes.


Mr. Justice S. Ravindra Bhat:
1.   The Petitioner here claims an order under Section    27 of the Arbitration and

Conciliation Act, 1996 (hereinafter called the "Act") for issuance of summons to

named witnesses whose particulars are detailed in Para 6. The witnesses mentioned in

Para 6(a) to (j) are residents of Macau, Hongkong, Singapore and different cities in

China. The other persons mentioned in Para 6(k) to (q) are residents of India. Briefly

the facts are that the Petitioner, an incorporated Company sought adjudication of its

disputes through arbitration, according to the agreed dispute resolving mechanism

which forms part of the contract with the respondent. The petitioner engages itself in

the export of Iron Ore Fines; the Respondent, a Multi-State Cooperative Society

agreed to finance the petitioner's operations asked for securities in that regard. It is

claimed that the respondent assured to extend the financial facilities to the tune of

Rs.80 crores. The Petitioner alleges that the Respondents failed to release payments

against Letters of Credit issued by six overseas financial institutions which led to the

revocation of those credits. The petitioner alleges that it had entered into transactions

with such institutions, leading to issuance of Letter of Credit.

2. The arbitration held under the aegis of the Indian Council of Arbitration, is

under way. During the course of arbitral proceedings the petitioner applied to the

Tribunal for summoning witnesses, many of whom are not residing in India. The

arbitral tribunal, in its proceeding held on 12.5.2008 considered the request and ruled

that the petitioner-claimant was able to establish relevance of such foreign witnesses

i.e. foreign buyers. Since it did not possess power to summon such witnesses, the

petitioner was asked to seek recourse to Section 27 of the Act.

3. It is contended by Ms. Guneeta Pahwa, learned counsel that this Court has the

power and jurisdiction to issue summons to those cited as witnesses in Para 6

including the foreign witnesses. Learned counsel relied upon on provisions of Order

16 Rule 19 Civil Procedure Code (CPC) in this regard and stated that since the

arbitral tribunal had ruled on relevance of these witnesses the Court should summon

them. She also relied upon Section 77 and Order 26 Rule 4 CPC to say that if for

some reason the Court feels inhibited in issuing summons to such foreign witnesses, a

letter of request can be issued. Reliance was also placed on provisions of Part (d)

Chapter 10 of the Delhi High Court Rules.

4. Learned counsel placed reliance on the judgments reported as Ramasyee

Agro-Industries Limited Vs. The India Sugar Refineries Limited, AIR 1983 Mad 194;

Indra Mehendirata Vs. Raj Mohini and others, 76(1998) DLT 384, Filmistan Private

Ltd., Bombay Vs. Bhagwandas Santprakash and Anr., AIR 1971 SC 61 and the

decision of the Bombay High Court in Liverpool and London Steamship Protection

and Indemnity Association Ltd. Vs. m.v."Sea Succeess I" and Anr. 2005(3)Mah LJ

1050.

5. Mr. Thakur, learned counsel appearing for the respondents, opposed the

request and submitted that this court does not have jurisdiction to issue summons to

foreign witnesses, in view of other provisions of Order 16 CPC, as it does not have

the power to enforce their attendance. As far as the question of issuing summons is

concerned, counsel argued that such a request has not been made, and that granting it

would gravely prejudice the respondent, since it would be placed at a disadvantage,

being unable to subject such foreign witnesses to cross examination, if a letter of

request were to be issued. He relied on the decision of the Bombay High Court,

reported as I.C. Corporation Vs. Daewoo Corporation and Ors. AIR 1990 Bom. 152.

6. Before analyzing the rival contentions, it is necessary to notice the relevant

provisions of law. Order 16, Rule 19 reads as follows:

"NO WITNESS TO BE ORDERED TO ATTEND IN PERSON UNLESS RESIDENT WITHIN CERTAIN LIMITS. No one shall be ordered to attend in person to give evidence unless he resides -

(a) within the local limits of the Court's ordinary original jurisdiction, or

(b) without such limits but at a place less than one hundred or (where there is railway or steamer communication or other established public conveyance for five-sixths of the distance between the place where he resides and the place where the Court is situate) less than [five hundred kilometers] distance from the Court-house :

Provided that where transport by air is available between the two places mentioned in this rule and the witness is paid the fare by air, he may be ordered to attend in person."

Order 16, Rule 10 deals with situations where a witness fails to comply with the summons issued by court; it provides for

the mode of enforcement of attendance and reads as follows: "10 PROCEDURE WHERE WITNESS FAILS TO COMPLY WITH SUMMONS.

(1) Where a person, to whom a summons has been issued either to attend to give evidence or to produce a document, fails to attend or to produce the document in compliance with such summons, the Court -

(a) shall, if the certificate of the serving officer has not been verified by affidavit, or if service of the summons has been effected by a party or his agent, or

(b) may, if the certificate of the serving officer has been so verified, examine on oath the serving officer or the party or his agent, as the case may be, who has affected service, or cause him to be so examined by any Court, touching the service or non-service of the summons. 145 ]

(2) Where the Court sees reasons to believe that such evidence or production is material, and that such person has, without lawful excuse, failed to attend or produce the document in compliance with such summons or has intentionally avoided service, it may issue a proclamation requiring him to attend to give evidence or to produce the document at a time and place to be named therein; and a copy of such proclamation shall be affixed on the outer door or other conspicuous part of the house in which he ordinarily resides.

(3) In lieu of or at the time of issuing such proclamation, or at any time afterwards, the Court may in its discretion, issue a warrant, either with or without bail, for the arrest of such person, and may make an order for the attachment of his property to such amount as it thinks fit, not exceeding the amount of the costs of attachment and of any fine which may be imposed under Rule 12 :

Provided that no Court of Small Causes shall make an order for the attachment of immovable property."

7. Section 77, the substantive provision relating to issuance of commission for

examination of foreign witnesses, reads as follows:

"77. LETTER OF REQUEST.

In lieu of issuing a commission the Court may issue a letter of request to examine a witness residing at any place not within India."

8. Order 26, Rule 4, which deals with requests to foreign courts, for examination

of witnesses by commission, reads as follows:

"COMMISSION OR REQUEST TO EXAMINE WITNESS NOT WITHIN INDIA.

Where any Court to which application is made for the issue of a commission for the examination of a person residing at any place not within India is satisfied that the evidence of such person is necessary, the court may issue such commission or a letter of request."

9. The judgment of the Supreme Court in Filmistan no doubt indicates that a

letter of request can be issued to any person; not even a court, for the purpose of

examination of witnesses. The court declared that the amplitude of that power is not

constrained by the existence of any reciprocal treaty or arrangement with the host

country. Ramasyee Agro- Industries Limited, undoubtedly supports the point of

view canvassed by the petitioner in this case, as far as issuance of summons is

concerned; the court need not feel inhibited that the witness resides more than 500

kilometers away from Delhi. The question however, is whether such jurisdiction is

available here. The decision in Indra Mehendirata in the opinion of the court, is not

an authority on the issue; the court indeed implicitly accepted the position that if the

witness resides beyond the territorial limit mentioned in Order 16, Rule 19, there

would be no power to issue summons. There, an important factual difference existed;

the party to the litigation had to be examined. In such a case, recourse to the power

to issue letter of request or for commission, may be warranted.

10. I.C. Corporation's case in the opinion of this court, is apt for a decision on

the issue at hand. The Bombay High Court examined the relative position, as well as

advantages and disadvantages of issuing commission under Order 26, Rule 4. It

ruled, and in the view of this court, correctly, that Order 16, Rule 19 has no

application to witnesses residing outside India. If one may add to that reasoning, the

power of a court is fortified by its jurisdiction to enforce its orders, through suitable

action, spelt out in Rule 10, for enforcement, by way of attachment of the witnesses'

properties. If a foreign witness defies the summons of court, obviously the provision

of Rule 10, Order 16 cannot have any application. The Bombay High Court went on

to outline the relative factors which the court should consider while exercising

discretion, in granting or refusing the request for an order to examine foreign

witnesses on commission. One dominant factor is that the opponent, in the main

litigation before the court, would be deprived of the benefit of cross examination of

the witness.

11. In this case, the arbitrators no doubt ruled that the witnesses, including the

foreign witnesses are relevant to the petitioner's case. However, as the preceding

discussion would reveal, the court is bereft of any power to issue process to such

foreign witnesses. As far as issuance of commission to examine witnesses is

concerned, aside from any logistical difficulties which may arise, since all these

witnesses are living in different locales, it is also unclear as to how the attendance of

such witnesses to answer summons of the commissioner or depose before him, can

be obtained. The petitioner has not indicated any court, or authority, who is

empowered to take necessary steps; even these witnesses have not apparently

bothered to answer to the requests made till now. Most importantly, the grant of the

petitioner's request would mean that the respondent is completely shut out from the

opportunity of cross examining such witnesses, and would be confronted with

evidence on behalf of the petitioner, of two classes- one set, who are available for

cross examination, and another, who are not. That is hardly conducive to equal

justice and fairplay.

12. In view of the above discussion, the petition has to fail so far as it concerns the

request for issuing summons to foreign witnesses is concerned. However, as far as it

relates to witnesses living within jurisdiction of the court, indicated in Paras 6 (k) to

(q), the petition has to be allowed. The addresses of all these witnesses has not been

indicated. Therefore, parties are directed to appear before the Joint Registrar and

disclose the addresses of those witnesses whose particulars are not furnished. In case

any of them resides outside Delhi, the petitioner shall ensure that air fare and

incidental expenses to ensure their attendance is borne in that regard. The petitioner

shall also ascertain the convenient dates for summoning of such witnesses from the

Arbitrators, to avoid unnecessary costs. After these particulars are furnished, the

Registry shall, upon deposit of process fee, issue summons, returnable on a fixed date

and specified (as indicated in terms of these directions) before the arbitrators. The

parties shall appear before the Joint Registrar, on 1st August, 2008, to give effect to

these directions.

13. The petition is partly allowed, but in the above terms. In the circumstances of

the case, the parties shall bear their own costs.

July 23, 2008                                                 (S. RAVINDRA BHAT)
                                                                    JUDGE