T. M Varghese v. P.O. Varghese

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE THOMAS P. JOSEPH** ## **THURSDAY, THE 28TH DAY OF FEBRUARY 2013/9TH PHALGUNA 1934** ## **OP(C). No. 798 of 2013 (O)** **------------------------AGAINST THE ORDER IN I.A. NOS.2630/2012 & 2631/2012 OP (ARB).815/2011 of II ADDL.DISTRICT COURT, ERNAKULAM** ## **PETITIONER/ PETITONER/ PETITONER:** **-------------------------------------------------------** **T. M VARGHESE, AGED 59 YEARS S/O. LATE T.M MATHEW, 2D PROVIDENCE GROVE PROVIDENCE ROAD, ERNAKULAM, COCHIN 682018** **BY ADVS. SRI. BABU CHERUKARA SRI. P.A. SALIM** ## **RESPONDENT/ RESPONDENT/ RESPONDENT:** **-----------------------------------------------------------------** **P.O. VARGHESE, AGED 62 YEARS S/O. LATE OOMMEN THOMAS, PILLACHIRA HOUSE INDUSTRIAL NAGAR P.O, CHANGANASSERI** **THIS OP (CIVIL) HAVING COME UP FOR ADMISSION ON 28-02-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **OP(C). No. 798 of 2013 (O)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:-** **EXT. P1 TRUE COPY OF THE AWARD DATED 21-05-2011 BY ELISABETH MATHAI IDICULLA ARBITRATOR DISTRICT & SESSIONS JUDGE (RETD)** **EXT. P2 TRUE COPY OF THE PETITION FILED UNDER S.34 OF THE ARBITRATION AND CONCILIATION ACT OP (ARBITRATION) NO 815/2011 DATED 18-042011 BEFORE THE DISTRICT COURT ERNAKULAM** **EXT. P3 TRUE COPY OF THE APPLICATION I.A NO 2631 OF 2012 IN OP (ARBITRATION) NO 815/2011 TO RECEIVE THE WITNESS LIST AND TO ISSUE SUMMONS TO THE WITNESS DATED 24-05-2012** **EXT. P4 TRUE COPY OF THE WITNESS LIST SUBMITTED BY THE COUNSEL FOR THE PETITIONER IN OP (ARBITRATION) NO 815/2011 OF THE DISTRICT ERNAKULAM DATED 24-05-2012** **EXT. P5 TRUE COPY OF THE APPLICATION TO RECEIVE DOCUMENTS DATED 2405-2012 IN IA NO 2630 OF 2012 IN OP (ARBITRATION) NO 815 OF 2011 OF THE DISTRICT COURT, ERNAKULAM** **EXT. P6 TRUE COPY OF THE COMMON ORDER IN IA NOS. 2630/2012 & 2631/2012 IN OP (ARBITRATION) NO 815 OF 2011 OF THE DISTRICT COURT, ERNAKULAM, DATED 23-01-2013** ## **RESPONDENTS' EXHIBITS:- NIL** ## **//TRUE COPY//** ## **P.A. TO JUDGE** sp ## **THOMAS P. JOSEPH, J.** **- - - - - - - - - - - - - - - - - - - - - - - Original Petition (Civil) No. 798 of 2013 - - - - - - - - - - - - - - - - - - - - - - - Dated this the 28[th] day of February, 2013** ## **JUDGMENT** Petitioner suffered an award for payment of certain amount to the respondent and challenged that award under Section 34 of the Arbitration and Conciliation Act, 1996 (for short “the Act”) in the Second Additional District Court, Ernakulam in O.P.(Arbitration) No.815 of 2011. Petitioner filed I.A. Nos.2630 of 2012 & 2631 of 2012 in that court to summon certain documents from the bank and examine the bank Manager as a witness. The applications were resisted by the respondent. Learned Additional District Judge by Ext.P6, common order dated 23.01.2013 has dismissed the said applications holding that question of recording additional evidence in a petition under Section 34 (2) of the Act does not arise. Ext.P6, order is under challenge. 2. Learned counsel for petitioner has contended that summoning of documents and examining witness in a proceeding under Section 34 (2) of the Act is permissible. O P (C) No. 798 of 2013 **-2-** According to the learned counsel, a petition under Section 34 (2) of the Act has to be considered as if it is an appeal against the award as held by the Supreme Court in **Snehadeep Structures Private Limited v. Maharashtra Small Scale Industries Development Corporation Limited [JT 2010 (1) SC 70]** . Learned counsel has also taken me through the decision of a Division Bench of this Court in **Mohammed Mamdouh Matwally Ghali v. Kerala Automobiles Ltd. [2011 (3) KLT 159] (paragraph 31)** . 3. According to the learned counsel, petitioner started the concern as a proprietary concern which later transformed into a partnership with respondent also as a partner. It is the case of petitioner that the entire investment was made by him but the Arbitrator has awarded payment of around Rs.14 lakhs to the respondent. Learned counsel contends that such an award happened to be passed since the Arbitrator was not apprised the real situation by producing necessary documents which were O P (C) No. 798 of 2013 **-3-** relevant for a decision of the question. Learned counsel contends that the question before the Arbitrator was as to the availability of stock at the relevant time. The bank records sought to be summoned and examination of bank manager would show the position of stock of goods in the shop at the relevant time. Hence it is necessary that learned Additional District Judge recorded additional evidence for a fair and just disposal of the original petition under Section 34 of the Act. 4. Learned Additional District Judge has taken the view that it is open to the court dealing with a petition under Section 34 of the Act to record evidence when the case falls under Section 34 (2) (a) and not with respect to matters falling under sub-sec. (b). Learned Additional District Judge has made reference to the decision in Snehadeep Structures Private Limited's case (supra). 5. It is useful to refer to Section 34 of the Act which confers power on the court to set aside an arbitration award. Sub Section (2) states that an arbitral award could O P (C) No. 798 of 2013 **-4-** be set aside by the court only in the circumstances stated in Clauses (a) & (b) of the Act. So far as clause (a) is concerned, it is stated that the applicant has to furnish proof concerning matters coming under sub-clauses (i) to (v). When it comes to clause (b), the expression used is that the court finds that any of the circumstances falling under sub clauses (i) & (ii) of clause (b) arise. 6. True that in Snehadeep Structures Private Limited's case it is observed that an application under Section 34 of the Act has to be treated as if it were an appeal. The Supreme Court observed that there is no quarrel that Section 34 envisages only limited grounds of challenge to an award but there is no reason why that alone should take an application under Section 34 of the Act outside the ambit of an appeal. 7. The decision referred above is only as regards manner of appreciation of various questions raised for a decision under Section 34 of the Act. The decision nowhere says that provisions of Order XLI of the Code of Civil O P (C) No. 798 of 2013 **-5-** Procedure (for short, “the Code”) are made applicable to a proceeding under Section 34 (2) of the Act so that, it is within the power of the court to receive additional evidence either by invoking Rule 27 of Order XLI of the Code or any other provision of the Code. It is difficult to accept the contention of learned counsel that the court while dealing with an application under Section 34 (2) of the Act is entitled to receive additional evidence and decide the matter afresh as if the court is arbitrating the dispute. Arbitration is the function of the Arbitrator. Parties are to adduce their evidence before the Arbitrator and function of the court under Section 34 (2) of the Act is only to decide whether the award could be set aside on the limited grounds mentioned therein. That has to be based on the materials on record adduced before the Arbitrator. The decision of this court relied above only refers to appreciation of facts involved (based on the materials produced before the Arbitrator) and does not in anyway indicate that the court dealing with an application under O P (C) No. 798 of 2013 **-6-** Section 34 (2) of the Act is empowered to receive additional evidence. In this connection, it is useful to refer to the decision in **Commander Works Engineers, Bangalore v. Sarvashri Sreenivasan Foundaries and Engineering Works, Srinivasanagar [AIR 1976 Karnataka 206]** where, dealing with Section 30 of the Arbitration Act 1940, it is held that the trial court was in error in setting aside the award and that non-production of relevant documents by either party, however important those documents may be for decision of dispute by the Arbitrator is not a sufficient ground to set aside the award under Section 30 of the Act. Section 34 of the Act says where, the petitioner could adduce proof. 8. Learned counsel has made a last minute attempt to salvage the situation by contending that sub clause (i) of Clause (a) of sub-section 2 of Section 34 of the Act referring to a party under incapacity would apply to the situation. I am not inclined to accept that contention. “Incapacity” referred to in Section 34 (2) (a) (i) is not the failure of a O P (C) No. 798 of 2013 **==> picture [12 x 8] intentionally omitted <==** party to adduce evidence before the Arbitrator, as in this case. 9. Having gone through the decisions and considered the question, I am not persuaded to think that it is open to any of the parties to adduce additional evidence to support or challenge the award of Arbitrator, in a proceeding under Section 34 (2) of the Act. 10. In that view of the matter, learned Additional District Judge was right in rejecting I.A. Nos. 2630 & 2631 of 2012 I do not find any legal infirmity in the said order calling for interference under Article 227 of the constitution. The original petition fails and accordingly is dismissed. Sd/- **THOMAS P. JOSEPH JUDGE** //True copy// P.A. TO JUDGE shg/