MOTI MAHAL THEATRES LTD Vs. SETH BABU LAL CHOKHANI
HIGH COURT OF PUNJAB AND HARYANA
MOTI MAHAL THEATRES LTD.
SETH BABU LAL CHOKHANI
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Dulat, J. -
(1.) AN award made without the intervention of a Court was taken to Court under Section 14, Arbitration Act. Several objections to the award were raise by one of the parties and these included allegations of judicial misconduct on the part of the arbitrators. The objecting party wished to produce evidence in the form of oral testimony to support these objections. The Court disallowed this request holding that the matter could be decided on affidavits as required by Section 33, Arbitration Act. Oral evidence having thus been excluded, the matter was considered on the basis of the affidavits filed by the parties and the Court held that the objections were unfounded and thereupon directed the award to be filed and a decree made on its basis. The' objecting party has appealed.
(2.) TWO questions arise for consideration: (1) whether the proceedings were under Section 33 of the Act and the procedure mentioned in it was to be followed and (2) whether in the circumstances the Court was justified in exercising its discretion against the production of any evidence over and above the affidavits.
The first matter raises an important question of law and after hearing learned counsel appearing before me, I find that the matter is not covered by any decided case. It is admitted that prior to the Arbitration Act, 1940 similar proceedings taken under Schdule II, Civil P. C., were usually treated as a suit and evidence of witnesses was usually allowed. It is therefore for consideration whether the Arbitration Act has made a deliberate departure from the previous practice. There are I find weighty considerations on both sides and considering that the matter has to be decided as one of first impression it is in my opinion proper that it should be decided ~ more authoritatively than can be done by me sitting alone. I would, therefore, subject to the orders of my Lord the Chief Justice, refer this appeal for decision to a Division Bench. Let the papers be laid before the Chief Justice.
This appeal has arisen out of an application made by the respondent for the filing of an award under Section 14, Indian Arbitration Act of 1948. The appellant before us tools objection, to the award on various grounds alleging inter alia that there was no valid reference to the arbitrators and that the arbitrators had been guilty is misconduct. The trial Court ordered the parties to file affidavits in support of their respective contentions and also gave a direction to the effect that if any party wished to produce other evidence in the form of witnesses he should seek the permission of the Court in this respect. The appellant did in fact make an application asking for permission to summon his witnesses but this prayer was rejected. Thereupon, the Court proceeded to consider the evidence before it and pronounced judgment. The award was accepted and a decree was passed on the basis of it. An appeal was brought to this Court and Dulat J. in the first instance heard the appeal. He took the view that two important questions of law arose and that the matter should therefore be considered by a larger Bench The questions of law in his own words are these;
"1. Whether the proceedings were under S. 33 of the Act and the procedure mentioned in it was to be followed? and (2) Whether in the circumstances, the Court was Justified in exercising its discretion against the production of any evidence over and above the affidavits?"
The first question raises a point of some complexity and as at present advised I am reluctant to express my views categorically on the matter, all the more so since this appeal can be disposed of on the second point raised, namely that in this particular case the Court should have allow- ed the parties an opportunity of producing evidence to support their case.
(3.) HOWEVER, as the point has been argued at considerable length before us, I should like to indicate briefly my personal leaning in the matter. It seems to me from the framework of the Arbitration Act that Sections 14 to 17 are intended to provide for cases where one of the parties to the arbitration or the arbitrators themselves move the Court with the object of having the award filed In Court. The Court gives notice to both the parties after the award is filed and the parties are given an opportunity of putting forward their objections. These objections are then considered and decided. In the ultimate result, the Court may either pass judgment in accord-Mice with the terms of the award or may decline to do so (section 17). Section 33 on the other hand is intended to deal with those cases in which a party wishes to seek a declaration from a Court regarding the existence or validity of the arbitration agreement or the award. The object of Section 33 is not to have a decree passed on the basis of the award but to have a declaration that the agreement is non-existent or the award Is non-existent or for some other reason the award is not valid. In such cases, the Court has been given the right to determine the question in a summary way upon affidavits. It seems to me that Sections 14 to ' 17 are not intended to deal with cases of this type and that the procedure which should be adopted by the courts in determining the questions whether an award should be filed and a judgment should follow upon It or not are to be dealt with in the ordinary way in which suits are dealt with under the provisions of Civil P. C. (Sic). Were this not so, there would be no object in enacting Section 41 which makes the provisions of the Code of Civil Procedure applicable to arbitration proceedings before the Court. Further, in my view although Section 30 may over-lap Section 33 in the sense that an order under Section 33 may be passed for the reasons given under Section 30, it does not mean that Section 30 cannot be called into assistance for the purposes of Sections 14 to 17. In my view, Section 30 applies equally well to both types of cases, namely cases where an application is made under Section 14, and cases where an application is made under Section 33. If Section 33 were to be taken as being the only section which deals with the procedure under the Arbitration Act. Then it must of necessity follow that in no case whatsoever can a party claim as of right to examine oral evidence or cross-examine the witnesses produced by the other party-- a result which seems to me not only harsh but absurd,
However, I do not wish to hold that whenever an application is made under Section 14, it will never fall under Section 33. It is conceivable that there may be such cases. For the purposes of the present case, it is sufficient to observe that the appellant before us raised a large number of objections which he headed as (a) to (n) in his list of objections and some of these objections involved points of fact which ought to have been scrutinized and determined with a little more circumspection. In me view, in this case, the Court should have given an opportunity to the parties to produce their oral evidence before deciding the questions whether the award was a valid award and whether a judgment in its terms should follow.;
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