Madras High Court
Josh Telecom vs M/S Aircel Ltd on 27 September, 2021
CMA Nos.1558 and 1559 of 2017
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 27.09.2021
CORAM:
THE HON'BLE MR. JUSTICE ABDUL QUDDHOSE
CMA Nos.1558 and 1559 of 2017
and CMP No.8239 of 2017
Josh Telecom ... Appellant in both the appeals
vs
1.M/s Aircel Ltd.,
Rep by Authorised Signatory
Mr.Kalyanasundaram,
5th Floor, Spencer Plaza,
No.769, Anna Salai,
Chennai - 600 002.
2. Mrs.R.Jaya Saraswathi .... Respondents in both the appeals
Civil Miscellaneous Appeals filed under Section 37 of the
Arbitration and Conciliation Act, 1996 against the order passed in Interim
Application Nos.1 and 2/III/ACLC/2016-2017 in ARB Case
No.III/ACLC/2016 passed by the Arbitral Tribunal, Chennai.
For Appellant : Ms.Simran Srinivasan
For 1st respondent: Mr.R.Parthasarathy
https://www.mhc.tn.gov.in/judis/
CMA Nos.1558 and 1559 of 2017
COMMON JUDGMENT
(Heard through Video Conference)
These Civil Miscellaneous Appeals have been filed challenging the
dismissal of the interim applications Nos.1 and 2/III/ACLC/2016-2017 in
ARB Case No.III/ACLC/2016 filed by the appellant before the Arbitral
Tribunal.
2. The appellant is the respondent and the first respondent is the
claimant before the Arbitrator. The appellant and the first respondent had
entered into a contract, under which, the appellant was appointed as an
Agent for the first respondent. Since dispute arose between the parties, the
first respondent/claimant has referred the dispute to Arbitration in
accordance with the Arbitration Clause contained in the contract.
3. The appellant filed application Nos.1 and 2/III/ACLC/2016-2017
in ARB Case No.III/ACLC/2016, seeking for the following reliefs:
a) to receive the additional written statement
b) to direct the first respondent/claimant to
produce/furnish the regular books of account
maintained in respect of the appellant, audited balance
sheet and income tax returns submitted for the years
2012-2013, 2013-2014 and 2014-2015.
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CMA Nos.1558 and 1559 of 2017
4. The Application No.1/III/ACLC/2016-17, filed by the appellant,
seeking to receive additional written statement was dismissed and
Application No.2/III/ACLC/2016-17 was partly allowed by directing the
first respondent/claimant to produce the books of accounts maintained for
the years 2012-13, 2013-14 and 2014-15, but rejected the other reliefs,
sought for in the said application.
5. The Arbitral Tribunal, while dismissing the applications on
18.04.2017, has also made an observation that the appellant in their
applications has not mentioned the provision of law, under which, they
have filed the interim applications under the Arbitration and Conciliation
Act, 1996. Aggrieved by the said order dated 18.04.2017, these appeals
have been filed under Section 37 of the Arbitration and Conciliation Act,
1996.
6. Heard the learned counsel for the appellant and the learned
counsel for the first respondent/claimant.
7. The Arbitral Tribunal, while dismissing the Application
No.1/III/ACLC/2016-17, filed by the appellant seeking to receive the
additional written statement, has given the following reasons:
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CMA Nos.1558 and 1559 of 2017
a) No provision of law has been mentioned
by the appellant in the application filed, seeking
to receive the additional written statement.
b) Only to drag on the proceedings, the
appellant has filed the interim application.
c) The appellant's representative has
appeared before the Tribunal on 12.07.2016 along
with his Advocate Mr.Hariharan, who did not file
his vakalat on that date and he sought time to file
vakalat and written statement.
d) The Arbitral Tribunal granted a month's
time to the appellant for filing written statement
and the date was fixed at 12.08.2016. However,
on 12.08.2016, the appellant has sought for
further time through E-mail and further time was
granted to the appellant and the date was fixed on
22.08.2016. Even on 22.08.2016, the written
statement was not filed by the appellant and his
advocate Mr.Hariharan informed the Tribunal that
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CMA Nos.1558 and 1559 of 2017
the written statement has been sent by post.
Therefore, the Arbitrat Tribunal, in order to give
one more opportunity, directed the appellant to
file written statement on or before 26.08.2016.
Finally on 25.08.2016, the written statement was
received by the Arbitral Tribunal.
8. Ample opportunities were granted to the appellant to file written
statement cum counter claim. So the plea of paucity of time and urgency as
a reason for receiving of the additional written statement is not only far
fetched but also lackadaisical.
9. Further, on 20.03.2017, the interim applications were filed by the
appellant and at that time the arbitration matter was posted for cross
examination of the first respondent/claimant's witness
Mr.Kalyanasundaram by the counsel for the appellant. At that point of
time, the appellant has filed the interim applications seeking permission to
receive the additional written statement.
10. In Application No.2/III/ACLC/2016-2017, while partly allowing
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CMA Nos.1558 and 1559 of 2017
the application, seeking for production of regular books of accounts
maintained in respect of the appellant, audited balance sheet, income tax
returns submitted by the first respondent/claimant for the financial years
2012-13, 2013-14 and 2014-15, the Tribunal has given the following
reasons:-
a) The appellant, seeking books of accounts
maintained in respect of the appellant by the first
respondent/claimant is understandable, but the
demand for the audited balance sheet and income tax
returns for three financial years is rather strange in
the light of the fact that the appellant has been one of
the many channel partners that have been associated
with the first respondent/claimant and the area of
operation of the appellant was a small region, which
would comprise only a minuscule part of a fraction
of the business of the first respondent/claimant who
has business across the country.
b) The purpose behind such a peculiar demand and
the impact it is likely to create. Further, the filing of
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CMA Nos.1558 and 1559 of 2017
the application seeking these documents when the
trial has already begun can only be construed as
delaying tactics employed by the appellant.
c) No merit in the demand made by the appellant and
hereby dismisses in part the application in respect of
the demand for the audited balance sheet and income
tax returns for the three financial years 2012-13,
2013-14 and 2014-15 and allows the application in
part with respect to the demand for the books of
accounts maintained by the first respondent/claimant.
The first respondent/claimant is directed to produce
the books of accounts maintained in respect of the
appellant within three days from the date of receipt of
the order.
11. The appellant has challenged the impugned orders on the ground
that non-supplying of documents sought for by the appellant under the
applications before the Tribunal will amount to gross violation of
principles of natural justice. The appellant also challenges the procedure
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CMA Nos.1558 and 1559 of 2017
followed by the Arbitral Tribunal for conduct of the trial.
12. As seen from the applications filed by the appellant in
Application Nos.1 and 2/III/ACLC/2016-2017 in ARB Case
No.III/ACLC/2016, no provision of law has been mentioned, as rightly
pointed out by the Arbitral Tribunal.
13. The Arbitration and Conciliation Act, 1996 is a special
enactment, wherein, in-built mechanism is provided under the said
enactment for filing interim applications. Only if the special enactment
permits any applicant to file interim applications, the application is
maintainable. Whether the present applications can be treated as
applications filed under Section 17 of the Arbitration and Conciliation Act,
1996 is debatable.
14. This Court is not going into the maintainability of the
applications filed by the appellant before the Tribunal. The Tribunal has
given reasons for rejecting the applications filed by the appellant. Insofar
as the application filed by the appellant seeking permission to file the
additional written statement is concerned, after giving the dates of hearing,
the Tribunal has held that the appellant has adopted delaying tactics.
15. Insofar as the application filed by the appellant seeking for
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CMA Nos.1558 and 1559 of 2017
production of certain documents, the Tribunal has held that all the
documents sought for by the appellant are unnecessary excepting for
books of accounts pertaining to the appellant for the years 2012-13, 2013-
14 and 2014-15. The reliefs that have been sought for by the appellant are
discretionary in nature. The only thing is that in these appeals this Court
has to look into whether the discretion has been exercised judiciously or
not.
16. The reasons given by the Arbitral Tribunal cannot be construed
to be injudicious. If at all, the appellant is aggrieved by the interim orders
passed by the Arbitral Tribunal, which is the subject matter of challenge in
these appeals, the only remedy is to challenge the Arbitral Award, in case,
it is passed against them under Section 34 of the Arbitration and
Conciliation Act, 1996.
17. The very purpose of the Arbitration for expeditious disposal of
the disputes between the parties will be defeated if appeals are entertained
when there is no material evidence to show that the Arbitral Tribunal has
not exercised the discretion judiciously. The primary ground raised in
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CMA Nos.1558 and 1559 of 2017
these appeals is that principles of natural justice has been violated by the
Arbitral Tribunal. The same ground can also be raised under Section 34 of
the Arbitration and Conciliation Act, 1996 also.
18. For the foregoing reasons, there is no merit in these appeals.
Accordingly, both the civil miscellaneous appeals are dismissed. No costs.
Consequently, C.M.P.No.8239 of 2017 is also dismissed.
19. However, it is made clear that the appellant is always having the
legal right to raise all the grounds that have been raised in these appeals in
an application filed under Section 34 of the Arbitration and Conciliation
Act, 1996, in case, the appellant is aggrieved by an arbitral award passed
against them by the Arbitral Tribunal in the near future.
27.09.2021
Index: Yes/No
sr/rgi
ABDUL QUDDHOSE, J.
sr/rgi
https://www.mhc.tn.gov.in/judis/
CMA Nos.1558 and 1559 of 2017
To
The Arbitral Tribunal, Chennai
CMA Nos.1558 and 1559 of 2017
27.09.2021
https://www.mhc.tn.gov.in/judis/
