Karnataka High Court

M/S. Amalagiris vs M/S. Mspl Ltd on 23 February, 2024

Author: K.Somashekar

Bench: K.Somashekar

                                                    -1-
                                                           NC: 2024:KHC:7734-DB
                                                           WP No. 2736 of 2024




                        IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                           DATED THIS THE 23RD DAY OF FEBRUARY, 2024

                                              PRESENT
                             THE HON'BLE MR JUSTICE K.SOMASHEKAR
                                                AND
                             THE HON'BLE MR JUSTICE UMESH M ADIGA
                            WRIT PETITION NO. 2736 OF 2024 (GM-RES)
                   BETWEEN:

                   1.   M/S. AMALAGIRIS
                        PARTNERSHIP FIRM,
                        HAVING ITS REGISTERED OFFICE AT
                        4TH STREET, CHAUDHARY NAGAR,
                        VALSARAVAKKAM,
                        CHENNAI - 600 087,
                        ALSO HAVING ITS OFFICE AT 2ND FLOOR,
                        S 14/15, ALFRAN PLAZA,
                        M.G. ROAD, PANJIM,
                        GOA - 403 001.

                        REPRESENTED THROUGH ITS PARTNER,
                        PHILIP JACOB.

                   2.   MR. PHILIP. J
Digitally signed        S/O. MR. JACOB,
by D HEMA               AGED ABOUT MAJOR,
Location:               MANAGING PARTNER OF
HIGH COURT              M/S. AMALAGIRIS,
OF                      CHETHIPUZHA HOUSE,
KARNATAKA               AMALAGIRI P.O.,
                        KOTTAYAM,
                        KERALA - 686 104.
                                                                  ...PETITIONERS
                   (BY SHRI. AJAY J.N., ADVOCATE)
                             -2-
                                      NC: 2024:KHC:7734-DB
                                      WP No. 2736 of 2024




AND:

1.   M/S. MSPL LTD.,
     A COMPANY INCORPORATED UNDER THE PROVISIONS OF
     THE COMPANIES ACT,
     1956 HAVING ITS REGISTERED OFFICE AT NO. 117,
     BALDOTA BHAVAN,
     MAHARSHI KARVE ROAD,
     MUMBAI - 400 020,

     AND ITS CORPORATE OFFICE AT BALDOTA ENCLAVE
     ABHERAJ BALDOTA ROAD
     HOSPET-583 203,
     BELLARY DISTRICT.

     REPRESENTED THROUGH ITS
     MANAGING DIRECTOR.
                                               ...RESPONDENT
(BY SHRI. GANAPATI HEGDE, SENIOR COUNSEL FOR
 M/S. MARSHA, ADVOCATE/CR1)

     THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE
CONSTITUTION OF INDIA PRAYING TO a)ISSUE A WRIT OF
CERTIORARI QUASHING THE IMPUGNED ORDER AT ANNEXURE-A,
DATED 16.01.2024 PASSED BY THE LEARNED ARBITRAL TRIBUNAL
IN THE ARBITRAL PROCEEDINGS ARISING OUT OF CMP
NO.100001/2016 AND CONSEQUENTLY, b)ISSUE AN APPROPRIATE
WRIT, ISSUING A DIRECTION AND MAKING A REFERENCE TO THE
STATE FORENSIC SCIENCE LABORATORY, MADIWALA FOR THE
PURPOSE EXAMINING THE GENUINENESS OF THE SIGNATURE IN
LETTER DATED 04.01.2013 AT EX.P80 IN THE ARBITRAL
PROCEEDINGS ARISING OUT OF CMP NO.100001/2016 AS PRAYED
FOR IN THE APPLICATION DATED 08.08.2022 AT ANNEXURE-G1
c)PASS ANY OTHER SUCH ORDERS AS THIS HONBLE COURT DEEMS
FIT AND PROPER IN THE FACTS AND CIRCUMSTANCES OF THE
PRESENT CASE.

     THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED
ON 2ND FEBRUARY 2024, COMING ON FOR PRONOUNCEMENT OF
ORDERS, THIS DAY, UMESH M ADIGA J, PASSED THE FOLLOWING:
                              -3-
                                       NC: 2024:KHC:7734-DB
                                       WP No. 2736 of 2024




                          ORDER

This Petition is directed against the order passed by

the learned Arbitrator who is appointed as per the orders

passed by this Court in Civil Miscellaneous Petition

No.100001 of 2016 rejecting the application filed by the

petitioner under Order XXVI Rule 10(A) of CPC read with

Section 26 of the Arbitration and Conciliation Act, 1996

(for short, hereinafter referred to as 'A & C Act') vide

impugned order dated 16.01.2024.

2. The first petitioner is a Partnership Firm and

second petitioner is partner of the said firm. The said firm

dealing in the business of supply and export of iron ore.

The Respondent-Company used to place purchase orders

for purchase of iron ore from the petitioners.

3. The respondent filed their claim statement

claiming an amount of Rs.97,00,34,402/- along with

interest at the rate of 24% p.a. from the date of invoking

arbitration, relying on the letter dated 04.01.2013. It

appears dispute arose between the parties regarding the

NC: 2024:KHC:7734-DB

purchase orders. Hence, arbitration clause was invoked by

the respondent by filing a petition under Section 11 of the

A & C Act. This Court by order dated 07.02.2020 in

C.M.P.No.100001 of 2016 has appointed Arbitrator to

resolve the dispute.

4. It appears, petitioner herein has disputed the

letter dated 04.01.2013, which is one of the document

relied on by the plaintiff in arbitration proceedings and it is

also contended that the said document is concocted and

forged by the plaintiff. During trial before the Arbitrator,

petitioner has filed application under Order XXVI Rule

10(A) of CPC read with Section 26 of the A & C Act dated

08.08.2022. The said application was enclosed with an

affidavit sworn to by Respondent No.2/petitioner herein

before the Arbitrator contending that Ex.P80 is a purported

letter allegedly signed and sent by petitioner herein, on

behalf of the firm to the claimants on 04.01.2013. They

also contended that it is a forged and fabricated

document; veracity and genuineness of the said letter is

NC: 2024:KHC:7734-DB

denied by the petitioners herein. Even signature on the

said document is also disputed. Petitioner No.2 herein has

not signed on the said document and it does not bear

signature of petitioner No.2.

To disprove the contention of the respondent herein

and to prove the contentions of the petitioner that it was a

forged document, referring Ex.P80 to handwriting expert,

to ascertain genuineness of the said document is very

much required. Signature of petitioner No.2 herein could

be compared with Ex.P80, so that the Arbitral Tribunal

could arrive at a just conclusion. Hence prayed to refer the

document to expert.

5. The learned Arbitrator by the order dated

13.09.2022 has ordered that the said application to be

considered in due course after completion of evidence of

both the parties and after conclusion of the oral evidence

of the respondents, the said application was considered by

the learned Arbitrator and by the impugned orders dated

NC: 2024:KHC:7734-DB

16.01.2024 rejected the said application. The same is

challenged in the present petition.

6. We have heard the arguments of the learned

advocate for the petitioner and the learned Senior

Advocate appearing for the respondents. The learned

advocate for petitioner would submit that respondents

have filed a claim petition before the Arbitrator and they

relied on Ex.P80, which is a disputed letter, said to be

written and signed by petitioner No.2. The said document

is seriously disputed by the petitioner and it is the specific

contention of the petitioner that the signature of the

second petitioner is forged. Therefore, to prove the

defence of the petitioner, it is just and necessary to refer

the said document for expert opinion. If it is referred,

then, it would help the Arbitral Tribunal to arrive at just

conclusion. Without expert opinion, the learned Arbitrator

even may not be able to decide the issue between the

parties. However, the learned Arbitrator without assigning

the just reasons, has rejected the said application under

NC: 2024:KHC:7734-DB

Section 26 of the A & C Act. The Arbitral Tribunal has

jurisdiction to consider such application and pass suitable

orders. Though the burden is not on the petitioner, still he

intended to show to the Tribunal that said document is

forged one and to show his bonafide, he filed the

application. However, it was not considered by the

learned Arbitrator in right perspective.

7. The learned advocate for the petitioner further

submits that the Hon'ble Supreme Court in the following

judgments held that if an application is rejected by the

Arbitrator, then, it can be challenged under Article 227 of

the Constitution of India before the High Court. The

judgments relied on by the learned advocate for the

petitioner are as under:

i) (2020) 17 SCC 93 (Punjab State Power Corporation Limited Vs. Emta Coal Limited and another);

ii) (2020)15 SCC 706 (Deep Industries Limited Vs. Oil and Natural Gas Corporation Limited and another) and

iii) 2022 SCC OnLine Del 1377 (Union of India Vs. Delhi State Consumer Co-operative Federation Limited).

NC: 2024:KHC:7734-DB

The learned counsel for the petitioner has further

submitted that the Writ Court has jurisdiction under Article

226 and 227 of the Constitution of India to consider the

orders passed by an Arbitrator and pass appropriate

orders. Therefore, prayed to consider the same and set

aside the impugned order and allow the said application.

8. The learned Senior Counsel for the respondent

would submit that the writ petition is not at all

maintainable against orders passed by the Arbitrator on

the interim application. The Constitutional Bench of the

Hon'ble Supreme Court in the case of SBP & CO. Vs.

Patel Engineering Ltd. and another 1 held that under

Article 227 of the Constitution of India, the Hon'ble High

Court shall not consider the said petition filed under the

Article 227 of the Constitution of India. The said law is

also followed by the Co-ordinate Bench of this Court in the

case of Radiant Infosystems Limited, Vs. The Karnataka State Road

Transport Corporation Limited represented by its Managing

(2005) 8 SCC 618

NC: 2024:KHC:7734-DB

Director)2 and also in the case of (Associated Constructions,

Rajamundry, Andhra Pradesh Vs. Dolomite Berhad A.L.S. Limited

(JV), Banjara Hills, Hyderabad 3. In view of the law laid down in

the above said judgments, the above writ petition is not

maintainable challenging the orders passed by the

Arbitrator.

9. The learned Senior Counsel would further

submit that the said application is filed with an intention

to protract litigation. As per the provisions of the A & C

Act, arbitration proceedings shall be completed within a

period of one year and it could be extended for a period of

six months and thereafter, with the intervention of the

Civil Court, it could be extended for another six months.

In all, it should be completed within a period of two years.

However, in this case, due to non co-operation of the

petitioner, the arbitration proceedings is not completed

even after lapse of 2½ years. Only to cause further delay

in the disposal of the case, this application is filed so that

ILR 2018 Kar 4873

2015 SCC Online Kar 8805

- 10 -

NC: 2024:KHC:7734-DB

automatically the matter could be adjourned till the receipt

of the opinion of the expert.

10. The learned Senior Counsel for the respondent

would further submit that burden is on the respondent to

prove that Ex.P80 was signed by Respondent

No.2/Petitioner No.2 herein. There was no need for the

petitioner to file such an application. It clearly indicates

that the intention of the petitioner is not bonafide.

Moreover, the opinion of the expert is not a conclusive

proof and by oral and documentary evidence, the

concerned party shall prove that such a document was

executed by petitioner No.2. With the same observation,

the learned Arbitrator has rejected the application.

However, the petitioners are not satisfied by the said

orders and only with an intention to protract to litigation,

this writ petition is filed and therefore, prayed to reject the

writ petition. The learned Senior Counsel would further

submit that this application is filed only with an intention

to collect the evidence, which is not permissible in law.

- 11 -

NC: 2024:KHC:7734-DB

11. The following questions arise for our

consideration:

i) Whether the impugned order passed by the Arbitrator rejecting the application filed by the petitioners under Order XXIV Rule 10A of CPC is justifiable?

ii) What Order?

12. This application under XXVI Rule 10A of CPC is

filed by petitioners before the Arbitrator. Copy of the said

application is produced at Annexure-G1. It is supported

by affidavit filed by petitioner No.2 wherein it is contended

that Ex.P80 is purported letter alleged signed and sent by

petitioner No.1/Firm to the claimant on 04.01.2013. The

said letter is not genuine one and it is forged and

fabricated. Petitioners have denied the same in the written

statement and also in the statement of objections. To

prove their contentions, signatures founds on Ex.P80 to be

compared with undisputed signature of Respondent No.2

found on the other documents available before the

Arbitrator. It would help the Arbitrator to come to the

- 12 -

NC: 2024:KHC:7734-DB

right conclusion. Therefore, prayed for appointment of the

handwriting expert to compare and ascertain the

genuineness of the signature e on Ex.P80.

13. Respondent has made claim of

Rs.97,00,34,402/- contending that the claimant has placed

purchase orders with the petitioner herein for supply of the

ore. However, petitioners herein failed to supply the full

quantity of goods as per the purchase orders. The

petitioner also did not make any payment towards various

charges that were incurred by the claimant, which ought

to be incurred and borne by the petitioners herein as

agreed under the terms and conditions. In view of the

above said contention also and other contentions, the

respondents are liable to pay an amount of

Rs.97,00,34,402/-. Along with other materials, respondent

has also relied on a disputed document.

14. The petitioners in their written statement,

denied the contention of claimant and also denied

execution of certain documents. On that basis, the

- 13 -

NC: 2024:KHC:7734-DB

learned Arbitrator has framed necessary issues for

determination. The issues framed by the learned

Arbitrator is at Annexure-F. Out of them, issue No.11 is

pertaining to a disputed document contending that letter

of the respondent dated 04.01.2013 (Document No.13

relied upon by the claimant is a genuine document? The

learned Arbitrator vide order dated 13.09.2022 produced

at Annexure-H, vide separate order passed on the

application, it is ordered to be kept pending for considering

the same after the conclusion of the oral evidence of the

respondents. Thereafter, by the impugned order dated

16.01.2024, the learned Arbitrator has rejected the said

application by assigning the reasons. The learned

Arbitrator has held in the impugned order that in view of

the facts and circumstances of the case and also for the

reasons assigned in the order, there is no just and

sufficient reason to refer Ex.P80 to the handwriting expert

and the learned Arbitrator has also opined as under:

"nothing comes in the way of the learned counsel for the respondents in submitting the arguments about the

- 14 -

NC: 2024:KHC:7734-DB

probabilities with regard to the various circumstances under which the 9 cheques stated to have been issued by the Respondent No.2 in favour of the claimant, particularly keeping in mind, the contents of Ex.P80 and the quantum of the claim made by the claimant in the claim statement".

15. The learned Arbitrator ahs assigned valid

reasons for rejection of the application. It is pertinent to

note that in the issues framed by the learned Arbitrator

pertaining to Ex.P80 is burden lies on the claimant to

prove that the said document was executed and sent by

petitioners herein. However, the claimant has not applied

for appointment of a Commissioner to compare the

signatures on Ex.P80. There is no burden on the

petitioners herein, to prove the said document. Under

these circumstances, referring the disputed document for

expert opinion is unwarranted. It indicates that the

application is not bonafide.

16. It is settled law that expert opinion is not

conclusive proof. It may assist the Court in arriving at a

certain conclusion and only on the basis of expert opinion,

- 15 -

NC: 2024:KHC:7734-DB

the Court cannot give any finding in respect fo a disputed

point. Petitioners herein must have lead evidence on their

behalf to disprove Ex.P80. When that is the case, where is

the question of referring disputed document to the

handwriting expert. It indicates that the application is filed

to protract the litigation. It is said that Arbitration

proceedings is pending for last 2½ years. But the

arbitration proceedings is not concluded because of delay

tactics played by the petitioner herein. Therefore,

referring Ex.P80 to the handwriting expert for expert

opinion may cause further delay in disposal of the case.

The report may not be of much assistance to the defence

of the respondents and hence, it is not necessary for

referring the said disputed document to handwriting

expert, for his opinion.

17. The learned advocate for the petitioner has

submitted that under Section 26 of the A & C Act,

Arbitrator can appoint/take expert opinion in respect of

any issues pending before him between the parties. It is

- 16 -

NC: 2024:KHC:7734-DB

pertinent to note that in such an event, both the p arties

should consent for the same. But in this case,

respondents have seriously opposed the said application.

Under such circumstances, question of agreement between

both the parties for appointment of expert to give opinion

does not arise.

18. Section 26 of the A & C Act reads as under:

26. Expert appointment by arbitral tribunal:

(1) Unless otherwise agreed by the parties, the arbitral tribunal may-

(a)appoint one or more experts to report to it on specific issues to be determined by the arbitral tribunal, and

(b)require a party to give the expert any relevant information or to produce, or to provide access to, any relevant documents, goods or other property for his inspection.

(2) Unless otherwise agreed by the parties, if a party so requests or if the arbitral tribunal considers it necessary, the expert shall, after delivery of his written or oral report, participate in an oral hearing where the parties have the opportunity to put questions to him and to present expert witnesses in order to testify on the points at issue.

(3) Unless otherwise agreed by the parties, the expert shall, on the request of a party, make available to that party for examination all documents, goods or other property

- 17 -

NC: 2024:KHC:7734-DB

in the possession of the expert with which he was provided in order to prepare his report.

On plain reading of the above said Section, it is clear

that an expert opinion could be obtained, if Arbitrator

wants or with the consent of both the parties to the

arbitration proceedings, the learned Arbitrator can obtain

the expert opinion for deciding the issues between the

parties. In this case, it not desired by the learned

Arbitrator to have an expert opinion to decide the real

dispute between the parties. Both the parties have also

not agreed for obtaining the expert opinion in respect of

the writings or signatures on Ex.P80. Therefore, Section

26 of the A & C Act also do not help the petitioner to

persuade this writ petition.

19. The contentions of both the parties regarding

maintainability of the writ petition:

The learned counsel for the petitioner has relied on

the following judgments:

- 18 -

NC: 2024:KHC:7734-DB

i) Deep Industries Limited Vs. Oil and Natural Gas Corporation Limited and another (2020) 15 SCC 706;

ii) Punjab State Power Corporation Limited Vs. Emta Coal Limited and anothers (2020) 15 SCC 706; and

iii) 2022 SCC OnLine Del 1377

The learned counsel for Respondent No.1 has relied

on a judgment in the case of (SBP & Co., Vs. Patel Engineering

Limited)4 wherein at paragraph No.45, it is held as under:

44. It is seen that some High Courts have proceeded on the basis that any order passed by an arbitral tribunal during arbitration, would be capable of being challenged under Article 226 or 227 of the Constitution of India. We see no warrant for such an approach. Section 37 makes certain orders of the arbitral tribunal appealable. Under Section 34, the aggrieved party has an avenue for ventilating his grievances against the award including any in-between orders that might have been passed by the arbitral tribunal acting under Section 16 of the Act. The party aggrieved by any order of the arbitral tribunal, unless has a right of appeal under Section 37 of the Act, has to wait until the award is passed by the Tribunal. This appears to be the scheme of the Act. The arbitral tribunal is after all, the creature of a contract between the parties, the arbitration agreement, even though if the occasion arises, the Chief Justice may constitute it based on the contract between the parties. But that would not alter the status of the arbitral tribunal. It will still be a forum chosen by the parties by agreement. We, therefore,

(2005)8 SCC 618

- 19 -

NC: 2024:KHC:7734-DB

disapprove of the stand adopted by some of the High Courts that any order passed by the arbitral tribunal is capable of being corrected by the High Court under Article 226 or 227 of the Constitution of India. Such an intervention by the High Courts is not permissible.

Relying on the above said judgment, the Co-ordinate

Bench of this Court in the case of Mr.K.Satish Kumar Vs.

M/s.Rohan Associates5 held that interim application cannot be

challenged in the writ proceeding under Articles 226 and

227 of the Constitution of India.

The learned counsel for the petitioner has relied on

the following judgments:

i) Deep Industries Limited Vs. Oil and Natural Gas Corporation Limited and another (2020) 15 SCC 706;

ii) Punjab State Power Corporation Limited Vs. Emta Coal Limited and anothers (2020) 15 SCC 706; and

iii) 2022 SCC OnLine Del 1377

In all the above cases, it is held that in extremely

exceptional circumstances, when there is lack of

jurisdiction or order passed by the Arbitrator is perverse,

W.P.No.37175 of 2013 (GM-RES) dated 23.01.2014