Op EdsOP. ED.

“Discourage litigation. Persuade your neighbours to compromise whenever you can. Point out to them how the nominal winner is often a real loser — in fees, expenses, and waste of time. As a peacemaker, the lawyer has a superior opportunity of being a good man. There will still be business enough.1” — Abraham Lincoln

The present statutory regime that regulates arbitration in India is the Arbitration and Conciliation Act, 19962 (“the Act” for brevity). The Act is comprehensive and seeks to protect the interests of the parties; one such provision aimed at safeguarding the interests of the parties before, during and after the commencement of arbitral proceedings is the power to grant interim relief. The Act envisages interim measures under Section 93 and Section 174 of the Act. There is a basic distinction between the two provisions i.e. the forum before which the interim measures can be sought and the stage of proceedings when the application can be moved. Section 9 of the Act stipulates the powers of the court to grant interim relief before or during the arbitral proceedings or after the passing of the arbitral award and also lays down a restriction under clause (3) after the constitution of the Arbitral Tribunal unless such circumstances exist which may render a remedy under Section 17 inefficacious. Section 17 lays down that the parties may apply to the Arbitral Tribunal for interim relief during the arbitral proceedings.

The general principles which are taken into account while granting interim relief are: (i) prima facie case; (ii) balance of convenience in favour of grant of interim relief; and (iii) irreparable injury or loss to the applicant for interim relief. Though, the Arbitral Tribunal is not bound 5 by the Civil Procedure Code, 19086 but the general principles are fairly taken into account while determining the questions.

This raises a question whether the court is restricted in its scope in terms of the provisions of the Civil Procedure Code also whether it is barred from entertaining an application under Section 9 of the Act after the constitution of the Arbitral Tribunal. In Essar House (P) Ltd. v. Arcellor Mittal Nippon Steel India Ltd.7, the Supreme Court has held that the provisions of the Civil Procedure Code are not binding upon Section 9 of the Act and on mere technicality the relief cannot be withheld. In the instant matter, the Bombay High Court allowed the application filed under Section 9 of the Act by Arcellor Mittal Nippon Steel India Limited which directed Essar Services to deposit Rs 47.41 crores with the Prothonotary and Senior Master of the High Court. Essar Services filed an appeal before the Supreme Court challenging the aforesaid order and the Supreme Court categorically held:

48. Section 9 of the Arbitration Act confers wide power on the court to pass orders securing the amount in dispute in arbitration, whether before the commencement of the arbitral proceedings, during the arbitral proceedings or at any time after making of the arbitral award, but before its enforcement in accordance with Section 36 8 of the Arbitration Act. All that the court is required to see is, whether the applicant for interim measure has a good prima facie case, whether the balance of convenience is in favour of interim relief as prayed for being granted and whether the applicant has approached the court with reasonable expedition.

49. If a strong prima facie case is made out and the balance of convenience is in favour of interim relief being granted, the court exercising power under Section 9 of the Arbitration Act should not withhold relief on the mere technicality of absence of averments, incorporating the grounds for attachment before judgment under Order 38 Rule 5 CPC9.

50. Proof of actual attempts to deal with, remove or dispose of the property with a view to defeat or delay the realisation of an impending arbitral award is not imperative for the grant of relief under Section 9 of the Arbitration Act. A strong possibility of diminution of assets would suffice. To assess the balance of convenience, the court is required to examine and weigh the consequences of refusal of interim relief to the applicant for interim relief in case of success in the proceedings, against the consequence of grant of the interim relief to the opponent in case the proceedings should ultimately fail.

The object of Section 9(3) has been laid down by the Supreme Court:

37. … to avoid courts being flooded with Section 9 petitions when an Arbitral Tribunal is constituted for two good reasons —

(i) that the clogged court system ought to be decongested; and

(ii) that an Arbitral Tribunal, once constituted, would be able to grant interim relief in a timely and efficacious manner.10

Different observations upon this question have been made by the High Courts of different States. “Once an Arbitral Tribunal is constituted, an application for interim relief should ordinarily be decided by the Arbitral Tribunal.”11

27. A harmonious reading of Section 9(1) with Section 9(3) of the 1996 Act, as amended by the 2015 Amendment Act12, makes it amply clear that, even after the amendment of the 1996 Act by incorporation of Section 9(3), the Court is not denuded of power to grant interim relief once an Arbitral Tribunal is constituted.13

In Benara Bearings & Pistons Ltd. v. Mahle Engine Components India (P) Ltd.14 a Division Bench of the Delhi High Court held:

24. … We are of the view that Section 9(3) does not operate as an ouster clause insofar as the courts’ powers are concerned. It is a well-known principle that whenever the legislature intends an ouster, it makes it clear.

25. We may also note that there is no provision under the said Act which, even as a transitory measure, requires the court to relegate or transfer a pending Section 9(1) application to the Arbitral Tribunal, the moment an Arbitral Tribunal has been constituted.

The Kerala High Court observed:

8. … Normally, the court shall not entertain an application under Section 9(1) of the Act after the constitution of the Arbitral Tribunal. But the court has the power to entertain an application under Section 9(1) of the Act even after the constitution of the Arbitral Tribunal unless the court finds that in the circumstances of the case the party has got efficacious remedy under Section 17 of the Act15.

The Delhi High Court in Avantha Holdings Ltd. v. Vistra ITCL India Ltd. 16 observed:

45. The court, while exercising its power under Section 9 of the 1996 Act, has to be acutely conscious of the power vested in the arbitrator/Arbitral Tribunal, by Section 17 of the same Act. A reading of Section 9 and Section 17 of the 1996 Act reveals that they are identically worded. The “interim measures ”, which can be ordered by the Arbitral Tribunal, under Section 17, are the very same as those which can be ordered by the court under Section 9. It is for this reason that sub-section (3) of Section 9 proscribes grant of interim measures, by the court, consequent on constitution of the Arbitral Tribunal, save and except where the court finds that circumstances exist, which may not render the remedy, under Section 17, to be efficacious. The court, while exercising jurisdiction under Section 9, even at a pre-arbitration stage, cannot, therefore, usurp the jurisdiction which would, otherwise, be vested in the arbitrator, or the Arbitral Tribunal, yet to be constituted.

In Ajay Singh v. Kal Airways (P) Ltd.17 the Delhi High Court held that wide powers are granted to the court under Section 9 and that the courts cannot be bound littera scripta by the provisions of Orders 38 and 39 18 but must follow the principles underlying.

In Srei Infrastructure Finance Ltd. v. Ravi Udyog (P) Ltd.19 the Calcutta High Court held,

“An application under Section 9 of the Arbitration and Conciliation Act, 1996 for interim relief is not to be judged as per the standards of a plaint in a suit.”

The Act being a special legislation 20 could not be restricted in its scope in terms of the provisions of the Civil Procedure Code. Thus, to bind the powers of the court under any provision of the Act as per the standards laid down in the Civil Procedure Code would not be amenable. The same has been reiterated by a number of judgments of the High Courts and rightly upheld by the Supreme Court in Essar House (P) Ltd. v. Arcellor Mittal Nippon Steel India Ltd.21 This gives wide powers to the courts while exercising authority under Section 9 of the Act. The court is not strictly bound by the provisions of Order 38 Rule 5 while granting relief under Section 9 of the Act and the scope of Section 9 is very broad. It is the court’s discretion to grant a wide range of interim measures which may appear to the court to be just and proper. The discretion has to be exercised in a judicious manner and not arbitrarily.


† Associate Advocate, The Law Desk. Author can be reached at <ayushi@thelawdesk.org>.

1. <https://www.nytimes.com/1991/07/12/opinion/l-persuade-your-neighbors-to-compromise-218791.html>.

2. Arbitration and Conciliation Act, 1996.

3. Arbitration and Conciliation Act, 1996, S. 9.

4. Arbitration and Conciliation Act, 1996, S. 17.

5. Arbitration and Conciliation Act, 1996, S. 19.

6. Civil Procedure Code, 1908.

7. 2022 SCC OnLine SC 1219.

8. Arbitration and Conciliation Act, 1996, S. 36.

9. Civil Procedure Code, 1908, Or. 38 R . 5.

10. Amazon.com NV Investment Holdings LLC v. Future Retail Ltd., (2022) 1 SCC 209.

11. Energo Engg. Projects Ltd. v. TRF Ltd., 2016 SCC OnLine Del 6560, para 34.

12. Arbitration and Conciliation (Amendment) Act, 2015.

13. Energo Engg. Projects Ltd. v. TRF Ltd., 2016 SCC OnLine Del 6560.

14. 2017 SCC OnLine Del 7226.

15. M. Ashraf v. Kasim, V.K., 2018 SCC OnLine Ker 4913.

16. 2020 SCC OnLine Del 1717.

17. 2017 SCC OnLine Del 8934.

18. Civil Procedure Code, 1908, Or. 38 and 39.

19. 2008 SCC OnLine Cal 974.

20. Consolidated Engg. Enterprises v. Irrigation Department, (2008) 7 SCC 169.

21. 2022 SCC OnLine SC 1219.

Case BriefsSupreme Court

   

Supreme Court: In an appeal against the decision of the National Consumer Disputes Redressal Commission (‘NCDRC’), wherein the commission having found a deficiency in service; placed reliance upon the exclusion clause in setting aside the decision of the State Commission while granting a sum of Rs. 7.5 lakhs to the appellant, division bench of M.M. Sundresh* and Surya Kant, JJ. held that non-compliance of Clauses (3) and (4) of the Insurance Regulatory and Development Authority (Protection of Policy Holder's Interests, Regulation 2002) Act (‘IRDA Regulation, 2002’) preceded by unilateral inclusion, and thereafter followed by the execution of the contract, receiving benefits, and repudiation after knowing that it was entered into for the basement, would certainly be an act of unfair trade practice. Thus, the Court set aside the impugned order passed by NCDRC, except to the extent of declining a sum of Rs. 2.5 lakhs towards harassment and mental agony

In the case at hand, the appellant secured a Standard Fire & Special Perils policy from the respondent for cover a shop situated in the basement of the building. However, the exclusion clause of the contract specifies that it does not cover the basement. The shop met with a fire accident for which the appellant made a claim. While arriving at the sum payable, the surveyor did notice the fact that the earlier inspections were made and that the fact that the shop was in a basement was to the knowledge of the insurer. Thus, the claim made was repudiated by respondent taking umbrage under the exclusion clause.

The issue in this case was whether an exclusion clause destroying the very contract entered with knowledge, can be permitted to be used by a party who introduced it, becomes a beneficiary and then to avoid its liability?

The Court said that insurance contracts are adhesion contracts (Standard-Form Contracts), that are prepared by the insurer having a standard format, upon which the consumer has very little option or choice of negotiation. The insurer, being the dominant party, dictates its own terms, leaving it upon the consumer, either to take it or leave it. Thus, such contracts are obviously one-sided, grossly in favour of the insurer due to the weak bargaining power of the consumer. Further, an exclusion clause can never be understood to mean conflicting with the main purpose for which the contract was entered.

The Court said that there is an onerous responsibility on the part of the insurer while dealing with an exclusion clause, as the insurer is statutorily mandated as per Clause 3(ii) of the IRDA Regulation, 2002 to the effect that the insurer and his agent are duty bound to provide all material information in respect of a policy to the insured to enable him to decide on the best cover. Further, Clause 3(iv) mandates that if proposal form is not filled by the insured, a certificate must be incorporated at the end of the said form that all the contents of the form and documents have been fully explained to the insured and made him to understand. Similarly, Clause 4 enjoins a duty upon the insurer to furnish a copy of the proposal form within thirty days of the acceptance, free of charge. Any non-compliance would lead to the conclusion that the offending clause, be it an exclusion clause, cannot be pressed into service by the insurer against the insured as he may not be in knowhow of the same.

The Court took note of Sections 2(i), 10, 17, 18 and 19 of the Contract Act, 1872, and said that when the Court is satisfied that a fraud, or misrepresentation resulted in the execution of the contract through the suppression of the existence of a mutually destructive clause, facilitating a window for the insurer to escape from the liability while drawing benefit from the consumer, the resultant relief will have to be granted.

The Court also took note of the Consumer Protection Act (‘CP Act’), 1986 and said that the object of this Act is to make the Commission as consumer friendly as possible. Further, this Act takes in its sweep all forms of unfair trade practice and gives adequate ammunition to the Court to declare any form of unfair trade practice illegal while granting the appropriate relief. It also referred to the Consumer Protection Act, 2019 and said that, under this Act there exists ample power to declare any terms of the contract as unfair by the State Commission and the National Commission.

The Court said that both NCDRC and the State Commission have held concurrently that respondent was conscious of the fact that the contract was entered into for insuring a shop situated in the basement.

The Court observed that Section 21(A) CP Act, 1986, is not related to Section 96 of the Code of Civil Procedure, 1908. Thus, it held that, even if the impugned order has not considered all the relevant materials which were duly taken note of by the State Commission, once it is proved that there is a deficiency in service and that respondent knowingly entered a contract, notwithstanding the exclusion clause, the consequence would flow out of it.

Further, even as per the common law principle of acquiescence and estoppel, respondent cannot be allowed to take advantage of its own wrong, if any, and it is a conscious waiver of the exclusion clause by respondent.

The Court held that the terms of the contract are unfair, particularly the exclusion clause, and that the respondent has indulged in unfair trade practice. Thus, the decision of the NCDRC was set aside, as the appellant cannot be non-suited only on the ground of mere deficiency in service, without taking note of the fact that it is the duty of the forum to grant the consequential relief by exercising the power under Section 14(d) and 14(f) of the Consumer Protection Act, 1986 that makes it consequential in granting adequate compensation, once it finds deficiency, the existence of unfair terms in the contract and unfair trade practice on the part of the other party.

The Court further cautioned the Insurance companies that, non-compliance of Clause (3) and (4) of the IRDA Regulation, 2002, would take away their right to plead repudiation of the contract by placing reliance upon any of the terms and conditions included thereunder.

[Texco Marketing (P) Ltd. v. TATA AIG General Insurance Co. Ltd., 2022 SCC OnLine SC 1546, decided on 09-11-2022]

*Judgment by: Justice M.M. Sundresh


*Apoorva Goel, Editorial Assistant has reported this brief.

Op EdsOP. ED.

   

“I can imagine no society which does not embody some method of arbitration.”

– Herbert Read

Arbitration is one of the most common methods of dispute resolution which has gained popularity in the recent past in India owing to the plentiful advantages it offers. The Arbitration and Conciliation Act, 19961 (“the Act” for brevity) is the statute which at present regulates arbitration in India and comprehensively lays down the procedure of arbitration. The Act is a special legislation2 and is not bound by the Civil Procedure Code, 19083.

As far as the appointment of arbitrator(s) is concerned, Section 11 of the Act4 stipulates the process of the appointment. Sections 11(5) and (6) provides that on the failure to reach an agreement between the parties, upon the question of appointment or failure to act as required by the agreed procedure, the Court (Supreme Court, High Court or any institution designated by such court) shall make the appointment or take necessary measure.

In a recent case5, the Supreme Court held that the Court can hold a preliminary inquiry to determine whether the dispute is arbitrable or not when an application is made under Sections 11(5) & (6) and an objection to the same is made by the respondent. The Court in the light of Vidya Drolia v. Durga Trading Corpn.6 and Indian Oil Corpn. Ltd. v. NCC Ltd.7 remitted the matter to the High Court to hold preliminary inquiry.

154.4. Rarelyasademurrer the court may interfere at Section 88 or Section 11 stage when it is manifestly and ex facie certain that the arbitration agreement is non-existent, invalid or the disputes are non-arbitrable, though the nature and facet of non-arbitrability would, to some extent, determine the level and nature of judicial scrutiny. The restricted and limited review is to check and protect parties from being forced to arbitrate when the matter is demonstrably “non-arbitrable” and to cut off the deadwood.9

The core of arbitration is a legally binding arbitration agreement. The cornerstone upon which the entire structure of the arbitral process is built is a valid arbitration agreement. The absence of such arbitration agreement calls for the interference of the Court to determine whether the dispute brought is arbitrable or not. However, the extent of judicial intervention in arbitration proceedings has been restricted10 to what has been expressly provided in the Act and the question of non-arbitrability is also to be determined by the Arbitral Tribunal. The legislative mandate and the general rule/principle is that it is the Arbitral Tribunal and not the court which determines the said question. Holding a preliminary inquiry has not been expressly provided in the Act and the same may be construed as being interference by the court, however, the Supreme Court has observed that:

134. Prima facie examination is not full review but a primary first review to weed out manifestly and ex facie non-existent and invalid arbitration agreements and non-arbitrable disputes. The prima facie review at the reference stage is to cut the deadwood and trim off the side branches in straightforward cases where dismissal is barefaced and pellucid and when on the facts and law the litigation must stop at the first stage.11

Preliminary inquiry to determine whether the dispute is arbitrable or not can save the parties from being unnecessarily dragged into arbitration. It has been observed that the courts can review the issue of non-arbitrability and determine whether the dispute was covered by the arbitration clause at the reference stage itself. The courts cannot leave the issue unresolved for the Arbitral Tribunal to review and decide12. The Supreme Court has in the recent judgment13 brought clarity to the question whether the Court can hold preliminary inquiry as to the arbitrability of the dispute by holding that preliminary inquiry can be made when an objection is preferred by the respondent.


* Associate Advocate, The Law Desk. Author can be reached at <ayushi@thelawdesk.org>.

1. Arbitration and Conciliation Act, 1996.

2. Consolidated Engg. Enterprises v. Principal Secy., Irrigation Dept., (2008) 7 SCC 169.

3. Civil Procedure Code, 1908.

4. Arbitration and Conciliation Act, 1996, S. 11.

5. Emaar India Ltd. v. Tarun Aggarwal Projects LLP, 2022 SCC OnLine SC 1328.

6. (2021) 2 SCC 1.

7. 2022 SCC OnLine SC 896.

8. Arbitration and Conciliation Act, 1996, S. 8.

9. VidyaDrolia v. DurgaTrading Corpn., (2021) 2 SCC 1, 121.

10. Arbitration and Conciliation Act, 1996, S. 5.

11. VidyaDrolia v. DurgaTrading Corpn., (2021) 2 SCC 1, 110-111.

12. GarwareWallRopesLtd. v. CoastalMarine Constructions&Engg. Ltd., (2019) 9 SCC 209 and UnitedIndia Insurance Co. Ltd. v. Hyundai Engg. & Construction Co. Ltd., (2018) 17 SCC 607.

13. Emaar India Ltd. v. Tarun Aggarwal Projects LLP, 2022 SCC OnLine SC 1328.

Cases ReportedSupreme Court Cases

   

Arbitration and Conciliation Act, 1996 — S. 31(7) and Ss. 17, 21, 23(3), 24(1), 25, 26, 29 and 85(2)(a) — Party autonomy — Emphasis on, under the 1996 Act: The phrase “unless otherwise agreed by the parties” used in various sections, namely, 17, 21, 23(3), 24(1), 25, 26, 29, 31, 85(2)(a), etc. of the 1996 Act indicates that it is open to the parties to agree otherwise than what the statutory provision in question provides for. So if there is such an agreement between the parties on any aspect so permitted by the 1996 Act, the arbitrator shall be bound by the same. [Delhi Airport Metro Express (P) Ltd. v. DMRC, (2022) 9 SCC 286]

Civil Procedure Code, 1908 — Or. 41 Rr. 1(3), 5 and Or. 27 R. 8-A — Deposit of decretal amount for maintaining appeal: Instead of depositing entire decretal amount State Government directed to deposit Rs 45,00,000. Thus direction of High Court to deposit entire decretal sum along with interest substituted by direction to deposit Rs 45,00,000. [State of W.B. v. Adonis Engineers Coop. Construction Society Ltd., (2022) 9 SCC 319]

Civil Procedure Code, 1908 — S. 11 and Or. 14 Rr. 1 & 2 — Res judicata: Law clarified regarding plea of res judicata, when may be decided as preliminary issue. Plea of res judicata, held, may in an appropriate case be determined as a preliminary issue when: (a) neither a disputed question of fact, nor, (b) a mixed question of fact and law, has to be adjudicated for resolving it, nor, (c) has there been any material alteration in the fact(s) since the decision in the earlier proceedings was rendered, which would require proof of any such new fact(s). [Jamia Masjid v. K.V. Rudrappa, (2022) 9 SCC 225]

Civil Procedure Code, 1908 — S. 25: Transfer petition — Matrimonial disputes: Transfer petition disposed of with order of dissolution of marriage dispensing with 6 month period as stipulated in S. 13-B(2) of the HMA, 1955. [Pooja Bhuneshwar Prasad Sharma v. Ashish Vinaybhai Mishra, (2022) 9 SCC 219]

Constitution of India — Arts. 30 and 29 — Religious, linguistic or cultural minorities — Religious, linguistic or cultural group that is majority in one State, which may be in minority in another State: Issues raised such as whether Parliament and State Legislatures have concurrent powers to legislate on matters pertaining to minority communities and to protect their interest in accordance with constitutional guarantees, or, whether Parliament has exclusive power in this regard, held, will be finalised after Central Government has a wide consultation with State Governments and other Stakeholders. [Ashwini Kumar Upadhyay v. Union of India, (2022) 9 SCC 261]

Criminal Procedure Code, 1973 — S. 439 — Bail — Exercise of discretion under S. 439: Considerations, factors and parameters therefor, principles summarised. [Y v. State of Rajasthan, (2022) 9 SCC 269]

Criminal Procedure Code, 1973 — S. 439 — Bail: Grant of bail without considering gravity of offence and nature of allegations against the respondent-accused, particularly as to the role played by him in the commission of the alleged murder is not justified. Hence, bail quashed. [Nitu Kumar v. Gulveer, (2022) 9 SCC 222]

Insolvency and Bankruptcy Code, 2016 — Ss. 7, 5(7) and 5(8) — Limitation period for initiation of corporate insolvency resolution process (CIRP): Recovery certificate issued by DRT, held, amounts to “financial debt” within the meaning of S. 5(8). Consequently, the holder of the recovery certificate would be a financial creditor within the meaning of S. 5(7). Issuance of a recovery certificate by DRT, held, gives rise to a fresh cause of action to the financial creditor to initiate proceedings under S. 7 IBC within three years from the date of the final judgment and decree, and/or within three years from the date of issuance of the recovery certificate issued by DRT. [Kotak Mahindra Bank Ltd. v. A. Balakrishnan, (2022) 9 SCC 186]

Penal Code, 1860 — S. 302 or S. 304 and S. 34 [S. 300 Exception 4] — Murder or culpable homicide: Applicability of S. 300 Exception 4, held, directly ruled out in view of the nature of incident as stated by the witnesses and with reference to the nature of injuries sustained by the deceased, like multiple incise wounds including that on the left frontal region of the skull as also stab wounds on the left side of the chest. Resultantly, conviction recorded under Ss. 302/34, held, justified. [Pillu v. State of M.P., (2022) 9 SCC 283]

Penal Code, 1860 — S. 302: Sentence/punishment less than imprisonment for life, when accused is convicted for offence punishable under S. 302 is not permissible, as punishment for murder under S. 302 is death or imprisonment for life and fine. Any punishment less than imprisonment for life under S. 302 would be contrary to S. 302. [State of M.P. v. Nandu, (2022) 9 SCC 184]

Penal Code, 1860 — S. 420: Discharge, whether warranted and relevance of bona fides of the accused and intention to cheat, in its determination, explained. [P. Vijay Nataraj v. State, (2022) 9 SCC 280]

Practice and Procedure — Delay/Laches/Limitation — Unexplained delay by Government Department: No sufficient cause of delay, only lethargy on part of Revenue Department is no more acceptable for condoning delay in such an age of computerisation. Such kind of cases have already been categorised by Supreme Court as “certificate cases” filed with only object to obtain a quietus from Supreme Court on ground that nothing could be done because highest Court has dismissed appeal. Such practice and process has already been deprecated by Supreme Court and it was deprecated again. If Government/public authorities suffer losses, it is time when officers concerned responsible for same, bear consequences. Special leave petition dismissed as time-barred with costs to be recovered from officers responsible for delay in filing special leave petition. [Union of India v. Vishnu Aroma Pouching (P) Ltd., (2022) 9 SCC 263]

Practice and Procedure — Delay/Laches/Limitation — Unexplained delay of 502 days by Government Department — “Certificate cases” — No sufficient cause shown: Dismissal of such proceedings as time-barred with direction for recovery of costs/losses suffered by Government from the officials concerned. [State of U.P. v. Sabha Narain, (2022) 9 SCC 266]

Punjab Passengers and Goods Taxation Act, 1952 (16 of 1952) — S. 10 — Exemption from payment of passengers tax in terms of Memo dt. 22-9-1970 issued under — Scope of — Purposive interpretation of “school children”: Exemption granted thereunder to educational institutions carrying “school children” from levy of passengers tax cannot be denied in respect of vehicles used for transportation of students going to educational institutions like colleges and universities. Broad expression “children”, held, obviously, refers to students taking instructions in educational institutions, irrespective of their class or standard or level. [State of Haryana v. Daronacharya College of Engg., (2022) 9 SCC 301]

Wildlife (Protection) Act, 1972 — Ss. 18-A, 29 and 38-O(1)(g) r/w S. 3 of the Environment (Protection) Act, 1986 — Protection to sanctuaries — Wildlife clearance — Doubling of railway line: In this case, Ministry of Railways failed to provide any substantial basis for requirement of doubling railway line by addressing its impact on habitat and damage that it would cause to environment. Therefore, conclusion of CEC upheld, and approval granted by Standing Committee of NBWL for doubling railway line between Castlerock to Kulem, revoked. [T.N. Godavarman Thirumulpad v. Union of India, (2022) 9 SCC 306]

Op EdsOP. ED.

   

Introduction

With the rapid increase in globalisation and liberalisation, international commercial arbitration has gained massive recognition across the world. The establishment of the Arbitration and Conciliation Act, 19961 (hereinafter referred to as “the Act”) aimed to incorporate the virtues of international as well as domestic arbitrations. The Act has been adopted on similar lines as that of the UNCITRAL Model Law2 and makes provisions for both domestic as well as international commercial arbitration.3 Despite significant amendments to the Act, there are still a lot of provisions that require clarity and need to be discussed.

Part I of the Act includes arbitrations that are seated in India i.e. domestic arbitration (between Indian parties) as well as international commercial arbitrations (between an Indian party and a foreign party). Part II of the Act includes arbitrations that are seated outside India.4 Further, the Act includes provisions under which an Indian party and a foreign party can have a foreign seat of arbitration.5 However, there is still no clarity about whether Indian parties can choose a foreign seat of arbitration.

Primarily, an arbitration agreement that includes elements of international commercial arbitration has three types of laws: lex loci contractus or the law governing the substantive contract, lex arbitri or the law governing such agreement, and lex fori or the curial law governing the conduct of the arbitration proceedings.6 As arbitration is a result of an agreement between two or more parties, party autonomy is centric to every arbitration agreement. The principle of party autonomy is when the parties consensually execute the arbitration agreement. The parties are said to be truly “autonomous” when they have the freedom to choose the substantive laws that will govern such an agreement, the composition the Arbitral Tribunal, the place/seat of arbitration, etc.7

This paper will focus on the applicability of the Act vis-à-vis the determination of the seat of arbitration. Further, this paper will discuss the extent to which the parties have autonomy under the Indian arbitration law, despite the prevailing precedents on the applicability of the two Parts of the Act and the supervisory control of the courts over the arbitral proceedings. Lastly, this paper will discuss whether Indian parties have the autonomy to choose a foreign seat of arbitration.

Applicability of the Act vis-à-vis the seat of arbitration

To get a deeper understanding of the applicability of the Act with vis-à-vis the seat of arbitration, it is necessary to look at the following decisions of the Supreme Court. In 2002, a 3-Judge Bench of the Supreme Court in Bhatia International v. Bulk Trading SA8, held that Part I of the Act will apply to international commercial arbitrations, both in and outside India, unless the parties to the agreement, expressly or impliedly, exclude the applicability of any or all provisions of Part I of the Act.9 The rationale behind this decision of the Supreme Court was that Section 2(2) of the Act, although adopted from the UNCITRAL Model Law, omits the word “only”.10 This, according to the Supreme Court, indicated the intention of the legislature to give scope to the international commercial arbitrations, both in and outside India, to be included.11 Following this, the Supreme Court upheld Bhatia principle12 i.e. the principle of express or implied exclusion, in numerous cases like Venture Global Engg. v. Satyam Computer Services Ltd.13, Videocon Industries Ltd. v. Union of India14, Yograj Infrastructure Ltd. v. Ssang Yong Engg. and Construction Co.15, etc.

However, in 2012, in the landmark judgment of BALCO v. Kaiser Aluminium Technical Services Inc.16, a 5-Judge Constitutional Bench of the Supreme Court overruled the Bhatia principle17 as it was deemed extremely erroneous and was derogating from the Indian law.18 The Supreme Court held that the absence of the word “only” in Section 2(2) of the Act, as opposed to Article 1(2) of the Model Law, does not nullify the “territoriality principle” i.e. only the courts of the country where the seat of arbitration is located will have the jurisdiction over such arbitral proceedings.19 Thus, it was held that Parts I and II of the Act are mutually exclusive of each other and only when the seat of arbitration is in India, Part I of the Act will apply to those international commercial arbitrations.20 Although the BALCO21 regime has set the precedent in its favour; it is imperative to note that the decision of BALCO22 only applies to arbitral agreements post 6-9-2012, before which the Bhatia principle23 is applicable. Thus, this has led to the existence of two parallel regimes, thereby, causing chaos in the status of the Indian law on arbitration.

The seat, although not defined in the Act, is the “centre of gravity” or the “central point” of arbitration.24 The seat is also determinative of the applicability of the Act as well as of the “territoriality principle”. Thus, it is imperative to understand the difference between basic terms, such as “seat”, “venue” and “place”. These terms can have a lot of different meanings when used in different contexts. However, in the context of the 1996 Act, while “seat” and “place” have the same meaning, “seat” and “venue” do not.25 In other words, under international commercial arbitration, while the “seat” may be in India, the “venue” can be anywhere in India or outside India without any implication on the applicability of either of the parts.26 Thus, while the “seat” of arbitration is determinative of the applicability of the Act, the “venue” is irrelevant in that regard.

Lastly, it is also imperative to note that Sections 20(2) and (3) gives the parties freedom to choose the seat of arbitration. However, the Supreme Court in BALCO case27 held that the provisions regarding “courts” under Section 2(1)(e) of the Act have to be read along with Section 20 of the Act because the “courts” have supervisory control over the arbitral proceedings.28 This not only creates chaos but also leads to ambiguity on the extent to which a party has the autonomy to choose the seat of arbitration.

Can Indian parties choose a foreign seat?

The correct choice of the seat of arbitration ensures a systematic and efficient proceeding. Most parties prefer to be free with such choices to get an “arbitration-friendly” jurisdiction. By now, it is clear that Part I of the Act includes arbitrations that are seated in India and Part II of the Act includes arbitrations that are seated outside India. It is also clear that the Act includes provisions under which an Indian party and a foreign party can have a foreign seat of arbitration.29 However, there is still no clarity about whether Indian parties can choose a foreign seat of arbitration.

To resolve the ambiguity around the existence of “party autonomy”, it is necessary to look at the ages-long debate over whether Indian parties to a proceeding have the autonomy/freedom to choose a foreign seat, despite the prevailing precedents on the applicability of Parts I and II of the Act. This is because an arbitration agreement is also an autonomous agreement that can be governed by any proper law distinct from lex loci contractus and lex arbitri. Thus, various High Courts in India have attempted to highlight and address the issue.

In Atlas Export Industries v. Kotak & Co.30, although there were not only two Indian parties but also a third foreign party, the Court held that a mere choice of a foreign seat of arbitration cannot by itself nullify an agreement between the parties.31 Following this, in Sasan Power Ltd. v. North American Coal Corpn. (India) (P) Ltd.32, where both parties were companies that were incorporated in India, the Madhya Pradesh High Court had to address whether these Indian parties could choose a foreign seat of arbitration. Here, it was held that two Indian parties have the autonomy/freedom to choose a foreign seat of arbitration.33

Further, various recent judgments support the stance of Atlas Export Industries case34 and Sasan Power case35. In GMR Energy Ltd. v. Doosan Power Systems India (P) Ltd.36, the parties had agreed upon the Singapore International Arbitration Centre (SIAC) as the seat of arbitration. GMR Energy Limited sought a decree of permanent injunction, restraining Doosan from holding the arbitration in Singapore. However, the Delhi High Court rejected this claim and held that Indian parties were free to choose a foreign seat of arbitration.37

Further, in GE Power Conversion India (P) Ltd. v. PASL Wind Solutions (P) Ltd.38, the parties had agreed upon Zurich as the seat of arbitration and the governing laws to be the Swiss law under the arbitration clause in the agreement between them. It was observed that the intention of the parties to choose Zurich as the seat of arbitration was reflected by the said clause. The Gujarat High Court, giving primacy to the party autonomy, held that the Act had no provisions that could restrain Indian parties from freely choosing a foreign seat of arbitration.39

Further, in Dholi Spintex (P) Ltd. v. Louis Dreyfus Co. India (P) Ltd.40, the Delhi High Court held that Indian parties are free to choose a foreign seat of arbitration as long as doing so is not against the principles of justice and morality. Further, it was held that for the autonomy to be granted to the Indian parties, they must ensure that the substantive contract must have a foreign component.41

However, the Bombay High Court in Addhar Mercantile (P) Ltd. v. Shree Jagdamba Agrico Exports (P) Ltd.42 took a contradictory stance. Here, the arbitration clause in the agreement laid that the seat of arbitration will be either India or Singapore, and the laws governing the proceeding will be English laws. It was held that the arbitration can be validly conducted in India because it was provided in the arbitration clause of the agreement.43 Having said that, it is imperative to note that the Court did not hold that the arbitration could not be conducted in Singapore. It was, in fact, held that had the arbitration been conducted in Singapore, the English law would have applied. Thus, whether Indian parties to a proceeding have the autonomy/freedom can choose a foreign seat or not, was not even addressed in this case.44

The decision of the Bombay High Court was based on the decision in TDM Infrastructure (P) Ltd. v. UE Development India (P) Ltd.45 In TDM case46, it was held that it was impermissible for Indian parties to derogate from the Indian law as it was “part of the public policy of India.” Further, it was held that the seat of arbitration was located in India and the proceedings were to be dealt with as per Section 28 of the Act.47 Here, the key issues that the Court had to deal with were whether the petitioner was Indian by nationality and whether the arbitration in question was international commercial arbitration. Section 28 of the Act has nothing to do with the seat of the arbitration, it only addresses the substantive law to be used to resolve a dispute. There were no observations made about whether Indian parties to a proceeding have the autonomy/freedom to choose a foreign seat.48 Thus, it can be seen that the decision of the Bombay High Court in cases like Addhar Mercantile case49 and Sah Petroleums Ltd. v. Seven Islands Shipping Ltd.50 was based on a misinterpretation of the decision in TDM case51.

Section 28 of the Act highlights the intention of the legislature to ensure that Indian parties to an arbitral proceeding do not derogate from the Indian law. However, it is imperative to note that as per Section 2(2) of the Act, being a provision under Part I of the Act, Section 28 of the Act only applies to the arbitrations seated in India. Thus, the decision in TDM case52 has nothing to do with whether the Indian parties can/cannot choose a foreign seat of arbitration, thereby clearing that the Indian parties choosing a foreign seat of arbitration is not against public policy.

Moreover, as shown above, in Addhar Mercantile case53, it was held that had the arbitration been conducted in Singapore, the English law would have applied. It was not held that the arbitration could not have been conducted in Singapore.54 Thus, the Bombay High Court did not hold that Indian parties were not autonomous/free to choose a foreign seat of arbitration, and this question was left unaddressed.

Conclusion

Despite various conflicting decisions, what is imperative is to note that the Act does not explicitly allow/disallow the Indian parties from choosing a foreign seat of arbitration. Further, though the BALCO55 regime has reduced the ambiguity regarding the applicability of Part I of the Act, it has negatively impacted party autonomy by emphasising “supervisory control” of the courts over an arbitral proceeding. Nonetheless, it can be inferred that Indian parties are entitled to choose a foreign seat of arbitration, regardless of whether Part I of the Act will apply to such proceedings or not. However, it has been held that the Indian parties choosing a foreign seat of arbitration will not be entitled to interim reliefs under Section 956 of the Act.57

Even in Union of India v. Reliance Industries Ltd.58, all the parties involved in the dispute were Indian, while the seat of arbitration was London. Neither did the Supreme Court, nor did the parties raise any objections towards the Indian parties choosing a foreign seat of arbitration. Had it been impermissible to do so, the Supreme Court would have objected to it. Although various High Courts have upheld the party autonomy to choose a foreign seat of arbitration, the Supreme Court or the lawmakers must make amendments to the current provisions/precedents to reduce the ambiguity and uplift party autonomy, which is the cornerstone of any arbitral proceeding.59

“Party autonomy”, as a fundamental principle of international commercial arbitration, is not only centric to every arbitration agreement in general terms but is also supported and uplifted by the UNCITRAL Model Law60, the Nigeria Arbitration and Conciliation Act, 200461, the New York Convention, 195862, the International Chamber of Commerce Arbitration Rules, 201263 (popularly known as “the ICC Rules”), etc.64 Thus, it is necessary that the courts give primacy to the agreement between the parties and must only intervene if such an agreement between the parties is inexecutable or fraudulent.

Moreover, the Supreme Court in Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd.65, giving primacy to party autonomy, has held that if the courts decide that the dispute can be resolved through arbitration under Section 8966 of the Civil Procedure Code, 1908, it is mandatory for the parties to consent to such arbitration and cannot be forced to do so.67 Thus, the parties are also autonomous/free to choose whether they want to go through the arbitration at all.68 Thus, it can be concluded that party autonomy is at the core of international commercial arbitration and cannot be overlooked so that the “pro-arbitration” climate can be maintained in India. Nonetheless, the provisions on party autonomy must neither disregard the public policy of the country, nor the principles of justice and morality.


† Law graduate living and working in Delhi. The author can be reached at <paridhijainx@gmail.com>.

1. Arbitration and Conciliation Act, 1996.

2. UNCITRAL Model Law on International Commercial Arbitration, 1985.

3. Malhotra, Indu, Commentary on the Law of Arbitration, Vol. 1, 4th Edn., Wolters Kluwer (2020).

4. Malhotra, Indu, Commentary on the Law of Arbitration, Vol. 1, 4th Edn., (Wolters Kluwer 2020).

5. Mistelis, Loukas, “Seat of Arbitration and Indian Arbitration Law”, (2016) 4 (Issue 2) IJAL 1.

6. Henderson, Alastair, “Lex Arbitri, Procedural Law and the Seat of Arbitration: Unravelling the Laws of the Arbitration Process”, (2014) 26 SAcLJ.

7. Fagbemi, Sunday A., “The Doctrine of Party Autonomy in International Commercial Arbitration: Myth or Reality?”, (2015) 6 Journal of Sustainable Development Law and Policy (Issue 1).

8. (2002) 4 SCC 105.

9. Bhatia International case, (2002) 4 SCC 105.

10. Arbitration and Conciliation Act, 1996, S. 2(2).

11. Hunter, J. Martin, and Ranamit Banerjee, “Bhatia, BALCO and Beyond: One Step Forward, Two Steps Back?”, (2013) 24 NLSI Rev. 1—9.

12. Bhatia International case, (2002) 4 SCC 105.

13. (2008) 4 SCC 190.

14. (2011) 6 SCC 161.

15. (2011) 9 SCC 735.

16. (2012) 9 SCC 552.

17. Bhatia International case, (2002) 4 SCC 105.

18. BALCO case, (2012) 9 SCC 552.

19. K.S., Harisankar, “Supervisory Jurisdiction of Indian Courts in Foreign Seated Arbitration: The Beginning of a New Era or the End of Bhatia Doctrine”, (2013) 3 The Arbitration Brief, pp. 56-64.

20. BALCO case, (2012) 9 SCC 552.

21. BALCO case, (2012) 9 SCC 552.

22. BALCO case, (2012) 9 SCC 552.

23. Bhatia International case, (2002) 4 SCC 105.

24. BALCO case, (2012) 9 SCC 552.

25. BALCO case, (2012) 9 SCC 552.

26. Ramanujan, Adarsh, “The Pragmatics behind ‘Seat', ‘Place' and ‘Venue' in an Arbitration Clause: Is Hardy a Discordant Note?”, (2019) 1 NLUD J Legal Stud 61.

27. (2012) 9 SCC 552.

28. BALCO case, (2012) 9 SCC 552.

29. Mistelis, Loukas, “Seat of Arbitration and Indian Arbitration Law”, (2016) 4 (Issue 2) IJAL 1.

30. (1999) 7 SCC 61.

31. Atlas Export Industries case, (1999) 7 SCC 61.

32. (2016) 10 SCC 813.

33. Sasan Power Ltd. case, (2016) 10 SCC 813.

34. (1999) 7 SCC 61.

35. (2016) 10 SCC 813.

36. 2017 SCC OnLine Del 11625.

37. GMR Energy Ltd. case, 2017 SCC OnLine Del 11625.

38. 2020 SCC OnLine Guj 2432.

39. GE Power Conversion India (P) Ltd. case, 2020 SCC OnLine Guj 2432.

40. 2020 SCC OnLine Del 1476.

41. Dholi Spintex (P) Ltd. case, 2020 SCC OnLine Del 1476.

42. 2015 SCC OnLine Bom 7752.

43. Addhar Mercantile case, 2015 SCC OnLine Bom 7752.

44. Jain, Isha, “The Legal Implications of Indian Parties Resorting to Foreign Arbitration: Decoding the Decision in Addhar”,  (2016) 32 Arbitration International (Issue 4).

45. (2008) 14 SCC 271.

46. TDM Infrastructure (P) Ltd. case, (2008) 14 SCC 271.

47. (2008) 14 SCC 271.

48. Jain, Isha, “The Legal Implications of Indian Parties Resorting to Foreign Arbitration: Decoding the Decision in Addhar”,  (2016) 32 Arbitration International (Issue 4).

49. 2015 SCC OnLine Bom 7752.

50. (2012) SCC OnLine Bom 910.

51. (2008) 14 SCC 271.

52. (2008) 14 SCC 271.

53. 2015 SCC OnLine Bom 7752.

54. 2015 SCC OnLine Bom 7752.

55. (2012) 9 SCC 552.

56. Arbitration and Conciliation Act, 1996, S. 9.

57. GE Power Conversion (P) Ltd. case, 2020 SCC OnLine Guj 2432.

58. Union of India v. Reliance Industries Ltd., (2015) 10 SCC 213.

59. (2015) 10 SCC 213.

60. UNCITRAL Model Law on International Commercial Arbitration, 1985, Art. 19(1).

61. Arbitration and Conciliation Act, 2004 (Nigeria), Ss. 1 and 2.

62. Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (New York Convention), Art. 5(1)(d).

63. International Chamber of Commerce Arbitration Rules, 2012, (as amended in 2017) Art. 21.

64. Fagbemi, Sunday A., “The Doctrine of Party Autonomy in International Commercial Arbitration: Myth or Reality?”, (2015) 6 Journal of Sustainable Development Law and Policy (Issue 1).

65. (2010) 8 SCC 24.

66. Civil Procedure Code, 1908, S. 89.

67. (2010) 8 SCC 24.

68. Sharma, Vasudha, and Pankhuri Agarwal, “Rendering India into an Arbitration Friendly Jurisdiction-Analysis of the Proposed Amendments to the Arbitration and Conciliation Act, 1996”, (2010) 3 NUJS L Rev 529.

SCC Part
Cases ReportedSupreme Court Cases

   

Civil Procedure Code, 1908 — Or. 23 R. 3 — Consent order: All the parties to the consent terms are required to fully comply with the terms of settlement/consent terms and the consent order. One party cannot be permitted to say that that portion of the settlement which is in their favour be executed and/or complied with and not the other terms of the settlement/consent terms/consent order, and then impugn the other party for contempt of court, not having performed (all of) their own obligations under the consent order. [Ashish Seth v. Sumit Mittal, (2022) 8 SCC 724]

Constitution of India — Art. 226 — Writs — Habeas corpus — Death of both parents — Custody of minor: Independent income, younger age and/or bigger family of maternal aunt cannot be sole criteria to tilt balance and deny custody to grandparents when capacity and/or ability of grandparents to take care of their grandson, cannot be doubted. In the facts and circumstances of the case, custody of minor corpus directed to be continued with appellant paternal grandparents. [Swaminathan Kunchu Acharya v. State of Gujarat, (2022) 8 SCC 804]

Education Law — Employment and Service Matters re Educational Institutions — Appointment/Recruitment: Nature of post/appointment, whether purely contractual, or, conditional appointment made dependent on performance of candidate and availability of post and its continued requirement, determined in this case. [Sushil Kumar Tripathi v. Jagadguru Ram Bhadracharya Handicapped University, (2022) 8 SCC 760]

Family and Personal Laws — Family Property, Succession and Inheritance — Intestate Succession and Escheat: When wills were not found proved by three courts below, in such case, transfer of interest in the property concerned shall take place according to the rules of intestate succession. [Aman Sharma v. Umesh, (2022) 8 SCC 798]

Housing and Real Estate — Building/Planning Norms — Illegal/Unauthorised Development/Construction, Real Estate Frauds, Demolition and Lis Pendens — Real estate scams — Unitech Scam: Detailed directions issued regarding appointment of nominee Directors of scamster developer companies and other ancillary and related matters to protect interests of homebuyers. [Bhupinder Singh v. Unitech Ltd., (2022) 8 SCC 749]

Penal Code, 1860 — S. 302 or 304 Pt. II — Murder or culpable homicide — Absence of intention to kill — Effect of: In this case, deceased was assaulted by three accused including appellant (A-2) who attacked deceased with wooden log on his head and pushed him down. The cause of death of the deceased was due to shock and haemorrhage on account of head injuries and due to subdural haematoma on the left frontal parietal region with left frontal intra cerebral haemorrhage, though deceased had also suffered rib injuries. A-1 attacked deceased who was lying on the ground using an iron pipe on his chest and A-3 attacked him with a wooden log on his chest and by giving fist-blow on his chest. High Court while acquitting A-1 and A-3 for offence under Ss. 302/34, convicted the appellant under S. 302, even though it held that the act of appellant was not done intentionally to cause the death of the deceased. Material also indicated that the appellant committed the offending act only with the knowledge that such act was likely to cause death. Resultantly, conviction of appellant altered from S. 302 to one under S. 304 Pt. II and, he sentenced to imprisonment for a term of 10 yrs’ RI. [Krishnamurthy v. State, (2022) 8 SCC 664]

Penal Code, 1860 — Ss. 302 and 376(2)(i) — Child rape and murder — Defect in investigation, such as non-conducting DNA profiling in terms of S. 53-A CrPC — Effect of, if any, and duty of court: Solely on account of defects or shortcomings in investigation an accused is not entitled to get acquitted and, thus, lapse or omission (purposeful or otherwise) to carry out DNA profiling, by itself, cannot be permitted to decide the fate of a trial for the offence of rape especially, when it is combined with the commission of the offence of murder. Even if such a flaw had occurred in the investigation in a given case, the Court has still a duty to consider whether the materials and evidence available on record before it, is enough and cogent to prove the case of the prosecution. Further, in a case which rests on circumstantial evidence, the Court has to consider whether, despite such a lapse, the various links in the chain of circumstances forms a complete chain pointing to the guilt of the accused alone in exclusion of all hypothesis of innocence in his favour. [Veerendra v. State of M.P., (2022) 8 SCC 668]

Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 — S. 24(2) — Acquisition proceedings whether had lapsed under — Quashment of proceedings on ground of non-compliance with S. 5-A of the 1894 Act: Nature of such judgment, held, is in personam and not in rem. Petitioners in this case were purchasers of the acquired land. Original landowners/vendors never filed objections as to acquisition of land. Petitioner purchasers had purchased lands knowing that vendors had not disputed acquisition proceedings. Proceedings thus, held, cannot be declared to have lapsed on ground of parity as judgment quashing proceedings on ground of non-compliance with S. 5-A of the 1894 Act, held, is in personam in nature and not in rem, as the grievances of the challengers of the proceedings that stood quashed, were specific to them. [DDA v. Godfrey Phillips (I) Ltd., (2022) 8 SCC 771]

Service Law — Recruitment Process — Eligibility criteria/conditions — Power of laying down suitability criteria — Competent authority — Violation by Selection Board/Board of Examiners of the criteria laid down under the statutory rules: Suitability criteria must be laid down by rule-making authority and not Selection Board unless specifically authorised. Moreover, there can be no estoppel against law. Where law requires something to be done in particular manner and if it is not done in that manner, it would have no existence in law. [Krishna Rai v. Banaras Hindu University, (2022) 8 SCC 713]

Case BriefsSupreme Court

   

Supreme Court: Principal question before the Division Bench of Ajay Rastogi and C.T. Ravikumar*, JJ., for contemplation was whether the issue of limitation can be determined as a preliminary issue under Order 14, Rule 2(2) of the Civil Procedure Code, 1908 (for short ‘CPC’). The Supreme Court while addressing the series of judgments in the instant case dismissed the appeal filed against the judgment of High Court of Delhi.

The trial court framed a preliminary issue on the question of limitation, evidently, upon forming the opinion that case may be disposed of on an issue of law and that it warrants postponement of settlement of other issues until after that issue has been determined and to deal with the suit in accordance with the decision on that issue. The trial court answered the question of limitation in negative, against which the appellant approached the first appellate court, which also dismissed the said suit on the ground of limitation. Thereupon aggrieved by the judgment of the first appellate court the appellant took up the matter before the High Court, where it concurred with the findings and dismissed the appeal answering the question of law against the appellants. At the outset, it is to be noted that the challenge in this appeal is against concurrent findings by three Courts, as mentioned hereinbefore.

Facts to the extent necessary are that, predecessor-in-interest of the appellants, was the bhumidar of certain extent of agricultural land situated in Delhi. The said property was acquired in lieu of which an alternative residential property was to be allotted to the person entitled. The bhumidar died and the exclusive property was allotted to Dhan Singh and not to the other son Nahar Singh (deceased appellant). Allegedly Dhan Singh produced a ‘Relinquishment Deed’ issued by other legal heirs in his favour, and based on which the allotment was made solely for him. It was the contention of the appellant that the deed was obtained fraudulently. Letter for allotment was presented on 08.03.1991, whereas a suit for declaration by the appellant was filed on 14.06.2000.

Analysis:

a. Issue of Limitation: Appellant contended that Limitation is said to be mixed question of law and facts and the view adopted by the lower courts in regard to Order 14 Rule 2(2) CPC is perverse and for such dismissal Order 7 Rule 11(d) CPC would have been appropriate.

On the other hand, it was the contention of the respondent that for determining the nature of suit declaratory suit and the starting point of limitation as relates a declaratory suit was available in the plaint averments themselves. Further it was contended that despite coming to know about the registered Relinquishment Deed dated 21.10.1985, the predecessor-in-interest of the appellant did not resort to civil remedy to get it set aside.

It was observed by the Supreme Court that provisions of Order 6 Rule 11(d) CPC would apply if the averments in the plaint were given face value and taken to be correct in their entirety appear to be barred by any law. The Supreme Court while relying on the judgment in Nusli Neville Wadia v. Ivory Properties, (2020) 6 SCC 557 and answering that whether the issue of limitation could be determined as a preliminary issue under the said Order of CPC observed that, Order 14 Rule 2(2) makes a departure and the court may decide the question of law as to jurisdiction of the court or a bar created to the suit by any law for the time being in force, such as under the Limitation Act. In a case, question of limitation can be decided based on admitted facts, it can be decided as a preliminary issue under Order 14 Rule 2(2)(b).

The Supreme Court held that “appellants cannot legally have any dispute or grievance in taking their statements in the plaint capable of determining the starting point of limitation for the purpose of application of Order 14, Rule 2(2)(b) of the CPC“. It was further held that, “if the court concerned is of the opinion that limitation could be framed as a preliminary point and it warrants postponement of settlement of other issues till determination of that issue, it may frame the same as a preliminary issue and may deal with the suit only in accordance with the decision on that issue. It cannot be said that such an approach is impermissible in law and in fact, it is perfectly permissible under Order 14, Rule 2(2)(b), CPC and legal in such circumstances”.

b. Application of Article 136 of the Limitation Act, 1968: The Supreme Court observed that the contention related to the applicability of Article 136 was jesuitical. A perusal of Article 136 of the Limitation Act, 1968 would reveal the indubitable position that it applies only when an application for execution of any decree (other than a decree granting a mandatory injunction) or order of any Civil Court is to be filed.

It was observed by the Supreme Court, that the inevitable conclusion can only be that Article 136 got no application in the case on hand, one cannot claim for a larger period of limitation of 12 years. The dismissal of the suit was in accordance with the decision on the said preliminary issue, question of limitation is to be considered not with reference to the validity of the Relinquishment Deed as the genuineness of the deed was never challenged.

Appellants sought declarations and thereby made the nature of the suit declaratory hence, the limitation period of 3 years was rightly calculated by lower courts.

Hence, the orders of the lower courts cannot be said to be perverse or illegal as there can be no doubt with respect to the position that consideration of validity of a relinquishment deed and consideration of the period of limitation. No, interference warranted.

Appeal dismissed.

[Sukhbiri Devi v. Union of India, 2022 SCC OnLine SC 1322, decided on 29-09-2022]

*Judgment by: Justice C.T. Ravikumar


*Aastha Sharma, Editorial Assistant has reported this brief.

Delhi High Court
Case BriefsHigh Courts

   

Delhi High Court: In a case filed by the petitioner challenging dismissal order in relation to an application filed seeking to place on record, certain additional documents which, according to the application, were a necessary and essential part of the suit, but could not be filed with the plaint due to negligence on the part of the plaintiffs, Hari Shankar J. held the petition being devoid of merits and observed that negligence of Counsel cannot constitute reasonable cause, within the meaning of Order XI Rule 1 (5) Civil Procedure Code (CPC); else, the very requirement of adducing reasonable cause for failure to disclose the documents with the plaint would be reduced to a formality.

Factual Background

A commercial suit was instituted by the petitioner Anita Chhabra, before the District Judge (Commercial Court) against the respondent Surender Kumar for recovery of ₹ 66 lakhs along with interest, under the Code of Civil Procedure, 1908 (CPC) as amended by the Commercial Courts Act, 2015 along with a list of the documents on which the petitioner proposed to place reliance, along with copies thereof.

Later, however, an application was filed under Order VII Rule 14 CPC placing on record certain additional documents. This application was dismissed by the Commercial Court on 04-12-2021 and review application came to be dismissed on 08-04-2022. Both these orders are under challenge in the present petition preferred under Article 227 of the Constitution of India.

Impugned Order

Order dated 04-11-2021

The dismissal order was on the grounds:

(i) the documents were not contained in the list of documents filed with the plaint, on which the petitioners sought to place reliance,

(ii) the petitioners were not seeking to contend that the documents were not in their power and possession at the time when plaint was filed and

(iii) the application did not provide any reasonable cause for default, on the part of the petitioners, in filing the said documents with the plaint.

Order dated 08-04-2022

The additional documents like copies of the sale deed etc. that the plaintiffs seek to place on record were of no consequence while adjudicating the present suit along with no reasonable ground was found for delay of the same.

Filing additional documents vis a vis Commercial Suit (Provisions)

The Court noted that an application by a plaintiff, to place on record additional documents in a commercial suit, is required to be filed under Order XI Rule 1 (4) or (5) of CPC and not under the provision filed by the counsel for the plaintiffs.

In Sudhir Kumar v. Vinay Kumar G.B, 2021 SCC OnLine SC 734, the Court held that an application for placing additional documents on record in a commercial suit, even if filed under Order VII Rule 14 of the CPC, could be treated as an application under Order XI Rule 1 (4) or (5) of the CPC, thus, the present application will be treated as an application under Order XI Rule 1 (4) or (5) of the CPC.

In the case of “urgent filing”, Order XI Rule 1 (4) CPC permits additional documents to be filed by the plaintiff within 30 days of filing of the suit, subject to grant of leave by the Court.

Documents, which have not been brought on record either under Order XI Rule 1 or/and 4, i.e., documents which have not been brought on record till the expiry of 30 days from the filing of the suit, may be brought on record under Order XI Rule 1 (5), subject to leave from the Court establishing reasonable cause for non-disclosure of the documents along with the plaint. Thus, the requirement to establish reasonable cause for non-disclosure of documents with the plaint is only under sub rule (5).

Statutory Scheme of Order XI Rules 4 and 5 Of CPC (for commercial disputes)

On the touchstone of Order XI Rule 1(5)

The Court noted that the petition filed by the petitioners in the present case does not contain any such disclosure as to why the two documents that the petitioners desired to bring on record were not filed with the plaint. It is admitted that the documents were in the possession, power and custody of the petitioners even when the plaint was filed. All that is stated in the application is that the documents were not brought on record owing to negligence of the learned Counsel who filed the plaint.

Thus, the Court held that the Commercial Court is perfectly justified in holding that no reasonable cause for failure to file the two additional documents along with the plaint had been shown by the petitioners to exist.

On the touchstone of Order XI Rule 1 (4)

Counsel for plaintiff submitted that the period of limitation of 30 days, envisaged by Order XI Rule 1 (4) stands extended, by operation of the orders passed by the Supreme Court In re: Cognizance for Extension of Limitation, (2022) 3 SCC 117 wherein limitation period was extended for filing appeal, application, petition or other legal proceedings in light of COVID 19 pandemic.

Counsel for defendant submitted that the petitioners would not be entitled to benefit of Order XI Rule 1 (4) because the said provision applies only to “urgent filings”.

Placing reliance on Sudhir Kumar (supra), the Court noted that in commercial suits, the time periods and other formalities stipulated in the Commercial Courts Act are binding and are required to be strictly followed.

Thus, the Court held that the present petition was not instituted as “urgent filing” by the petitioners and benefit under Order XI Rule 1 (4) would not be available to the petitioners in the present case.

Conclusion

The Court further observed that the suit filed by the petitioners was a simple money suit. Neither an application for interlocutory relief was preferred therewith nor any urgency, of any sort, is reflected in the pleadings in the suit. Thus, it is clear that the facts of the case should disclose “urgency” in the filing of the suit, in order to avail the benefit under Order XI Rule 1 (4) CPC.

The Court dismissed the petition on the following grounds:

(i) the additional documents in the present case having not been filed with the plaint as required by Order XI Rule 1 (1),

(ii) the plaint having not been filed as an “urgent filing” as envisaged by Order XI Rule 1 (4), and

(iii) no “sufficient cause” for not filing the documents with the plaint, within the meaning of Order XI Rule 1 (5) having been adduced by the petitioners.

[Anita Chhabra v. Surender Kumar, 2022 SCC OnLine Del 3089, decided on 26-09-2022]


Advocate who appeared in this case:

For petitioner: Ms. Sagarika Wadhwa

For respondent: Mr. Rohit Khurana


*Arunima Bose, Editorial Assistant has put this report together.

Case BriefsSupreme Court

   

Supreme Court: The Division Bench of Indira Banerjee* and A.S. Bopanna, JJ., contemplated the scope of Section 9 of Arbitration and Conciliation Act, 1996 vis-a-vis Order 38 Rule 5 of Civil Procedure Code, 1908 and decided whether High Court erred in not considering the requisites of Order 38, Rule 5 of the CPC for grant of interim relief. The Supreme Court dismissed appeals against the order of Bombay High Court (Division Bench), dismissing the Commercial Arbitration Appeal filed by Essar House Private Limited (hereinafter referred to as Essar House) under Section 37 of Arbitration and Conciliation Act, 1996 (hereinafter referred to as Act), subsequently confirming the order of Single Judge, allowing an application filed by Arcellor Mittal Nippon Steel India Limited (hereinafter referred to as Arcellor), under Section 9 of the Act, wherein the Judge directed Essar House Private and Essar Service to deposit an amount with High Court or, in alternative furnish bank guarantee.

Factual matrix of the case:

The main issue involves Arcellor who took over Essar Steel by order of the Supreme Court. Essar Steel entered into a Business Centre Agreement with Essar House. Essar House entered into a Rental Agreement with Essar Steel, under which certain parts of the building were let out to Essar Steel on leave and license basis, at a monthly rent. In terms of the aforesaid Rental Agreement, Essar Steel was to pay an amount of Rs. 25.80 cr. to Essar House Private as interest free refundable security deposit.

Arcellor as resolution applicant submitted a Resolution Plan in respect of Essar Steel. Essar House Private sent an email to Arcellor asking to vacate the premises.

Arcellor called upon Essar House to refund the interest free security deposited by Essar Steel in lieu of the rental agreement. Essar House Private acknowledged that Essar House had received security deposit from Essar Steel, but contended that Essar House had taken over loan of Rs. 26 crores due from other sister companies of Essar Groups and had adjusted the same against the security deposit kept by Essar Steel with Essar House. The balance amount had allegedly been paid by the Essar House another company, in discharge of debt owed by Essar Steel. There was, therefore, no security deposit left to be refunded by the Essar House Private to the Arcellor.

Arcellor paid Essar Services on behalf of Essar Steel in settlement of its claims/dues. However, Arcellor addressed a legal notice to Essar Services for refund of Rs. 47.41 crores. Arcellor filed an application under Section 9 of the Act, 1996 claiming similar relief.

Contentions:

Appellants emphatically contended that no amount was due from Essar House or from Essar Services to Arcellor. The security deposits of Essar Steel with the appellants had been discharged to liquidate dues of Essar Steel to creditors.

The appellant further argued that, to grant discretionary interim relief under Section 9 the Court would have to satisfy itself that the applicant for interim relief, i.e., Arcellor had a bona fide and strong claim and that Essar House Private and/or Essar Services was about to remove or dispose of whole or part of its property with intent to obstruct or delay the execution. It was contended that while deciding a Section 9 application filed under the provisions of the Arbitration Act, the principles of the CPC are to be strictly followed. It was alleged that the High Court has taken note of the pleadings only for invoking the principles of CPC.

On the other hand, the respondent contended that specific power of securing the amount in dispute, the Courts have been empowered to pass any interim measure of protection, keeping in view the purpose of the proceedings before it. The said provision confers a residuary power on the Court to pass such other interim measures of protection as may appear to be just and convenient.

Observations:

The Supreme Court while taking note of the contentions put forth by the Appellant observed that Section 9 of the Act should not ordinarily be exercised ignoring the basic principles of procedural law as laid down in the CPC, however the technicalities of CPC cannot prevent the Court from securing the ends of justice.

Court further relied on Ajay Singh v. Kal Airways Private Limited, 2017 SCC OnLine Del 8934 and made an observation that many High Courts have also proceeded on the principle that the powers of a Court under Section 9 of the Act are wider than the powers under the provisions of the CPC.

Court while considering the facts of matter before them held that, “Section 9 of the Act confers wide power on the Court to pass orders securing the amount in dispute in arbitration, whether before the commencement of the arbitral proceedings, during the arbitral proceedings or at any time after making of the arbitral award, but before its enforcement in accordance with Section 36 of the Act. All that the Court is required to see is, whether the applicant for interim measure has a good prima facie case, whether the balance of convenience is in favour of interim relief as prayed for being granted and whether the applicant has approached the court with reasonable expedition.”

Court further observed that in the instant matter a strong prima facie case was made out and it would have been unfair if the High Court would have withheld relief on the mere technicality of absence of averments, incorporating the grounds for attachment before judgment under Order 38 Rule 5 of the CPC. It was further held that, “to assess the balance of convenience, the Court is required to examine and weigh the consequences of refusal of interim relief to the applicant for interim relief in case of success in the proceedings, against the consequence of grant of the interim relief to the opponent in case the proceedings should ultimately fail.”

Prima facie, the refundable security deposit was released to Arcellor on the purported ground of a convoluted series of internal arrangements between group companies for diversion of the security deposits towards liquidation of alleged dues of Essar Steel to third parties.

Appeals dismissed.

[Essar House Private Limited v. Arcellor Mittal Nippon Steel India Limited, 2022 SCC OnLine SC 1219, decided on 14-09-2022]

*Judgment by: Indira Banerjee and A.S. Bopanna.


Advocates who appeared in this case:

Mr. Shyam Divan, Advocate, for the Appellant;

Mr. Neeraj Kishan Kaul, Advoctae, for the Respondent.


*Aastha Sharma, Editorial Assistant has reported this brief.

SCC Part
Cases ReportedSupreme Court Cases

   

Civil Procedure Code, 1908 — Or. 7 R. 11(d) and Or. 14 R. 2: Limitation as a ground for rejecting a plaint, when may be adjudicated on, as a preliminary issue, matter referred to a larger Bench. [Saranpal Kaur Anand v. Praduman Singh Chandhok, (2022) 8 SCC 401]

Consumer Protection Act, 2019 — S. 51 — Appeal to National Commission: Pre-deposit of 50% of amount as ordered by State Commission under second proviso to S. 51 is mandatory for entertainment of an appeal by National Commission. The object of the said pre-deposit condition is to avoid frivolous appeals. [Manohar Infrastructure & Constructions (P) Ltd. v. Sanjeev Kumar Sharma, (2022) 8 SCC 474]

Evidence Act, 1872 — S. 27 r/w Ss. 24 to 26 — Recovery evidence: Principles summarised regarding nature of S. 27, scope of admissibility under S. 27 and duty of prosecution and court in the matter. [Jafarudheen v. State of Kerala, (2022) 8 SCC 440]

Insolvency and Bankruptcy Code, 2016 — S. 7 — Admission of petition filed under S. 7 by financial creditor: Discretionary nature of power of NCLT to admit or not admit the petition filed under S. 7 by financial creditor, explained. Law clarified on factors which may be considered by NCLT in exercising this discretionary power. [Vidarbha Industries Power Ltd. v. Axis Bank Ltd., (2022) 8 SCC 352]

Insolvency and Bankruptcy Code, 2016 — Ss. 60(6) and 14 — Limitation period for filing application: Under the IBC, by virtue of the order admitting the application, be it under Ss. 7, 9 or 10, and by imposing moratorium, proceedings as are contemplated in S. 14 would be tabooed, but this does not include an application under S. 11(6) of the A&C Act, 1996 by the corporate debtor or for that matter, any other proceeding by the corporate debtor against another party. However, as far as understanding the meaning of S. 60(6) is concerned, there cannot be the slightest doubt that the period of moratorium is excluded even in the case of a suit or application brought by a corporate debtor viz. in regard to the period of the moratorium. [New Delhi Municipal Council v. Minosha (India) Ltd., (2022) 8 SCC 384]

Kerala Abkari Act, 1902 (1 of 1077 ME) — S. 8(1) r/w Ss. 8(2) and 55(g): In this case of illegal manufacturing of arrack, testimony of police officials was found reliable despite extensive cross-examination by the defence. Hence, claim made by the police that they apprehended the appellant while running from the spot and after taking him back to the spot, they seized the other incriminatory materials under a mahazar, held believable and, thus, conviction was affirmed. [Gopinathan v. State of Kerala, (2022) 8 SCC 486]

Motor Vehicles Act, 1988 — Ss. 166 and 168 — Permanent disability claim: In this case there was enhancement in compensation under heads “future loss of earning” and “attendant charges” by applying multiplier method in case of 100% permanent disability. [Abhimanyu Partap Singh v. Namita Sekhon, (2022) 8 SCC 489]

Service Law — Recruitment Process — Eligibility criteria/conditions: When remand is warranted, explained. Challenge to decisions of Selection Committee not examined by High Court on merits, whether proper, also determined. [Biju K.K. v. Cochin University of Science & Technology, (2022) 8 SCC 349]

Service Law — Termination of Service — Illegal/Invalid/Wrongful termination — Relief: Distinction between re-appointment and reinstatement, explained. [Central Bank of India v. Dragendra Singh Jadon, (2022) 8 SCC 378]

SCC Part
Cases ReportedSupreme Court Cases

   

Civil Procedure Code, 1908 — S. 96, Or. 41 Rr. 31 and 33: Principles summarised regarding powers and duty of first appellate court in deciding an appeal under S. 96 CPC r/w Or. 41 R. 31. Cryptic and cursory approach of High Court as first appellate court is not sustainable. Remand to first appellate court to determine the matter afresh, when unwarranted, explained. [Somakka v. K.P. Basavaraj, (2022) 8 SCC 261]

Court Fees Act, 1870 — S. 7(iv)(d) and provisos thereto — Valuation of court fees: Market value of immovable property involved in litigation might have its relevance depending on nature of relief claimed but, ultimately, valuation of any particular suit has to be decided primarily with reference to relief/reliefs claimed. It remains trite that it is nature of relief claimed in plaint which is decisive of question of suit valuation. As a necessary corollary, market value does not become decisive of suit valuation merely because an immovable property is subject-matter of litigation. [Bharat Bhushan Gupta v. Pratap Narain Verma, (2022) 8 SCC 333]

Criminal Procedure Code, 1973 — S. 145 — Dispute concerning land or water likely to cause breach of peace: In this case, according to the petitioner, findings on title and possession had been recorded in the order passed by the Magistrate on 1-4-2010, and they would prejudice the petitioner in all judicial proceedings. Keeping in mind the mandate contained in S. 145(4) CrPC, held, that the determination of the Magistrate is without reference to merits of the claims of any of the parties. In this case, clarified that the observations recorded by the Magistrate in the order dt. 1-4-2010, will not be treated as a binding determination on the issues pertaining to possession and title. The interests of the petitioner were fully protected by High Court, by relegating the petitioner to seek the redressal of its grievance, before a competent civil court. [Asset Reconstruction Co. (India) Ltd. v. Inspector of Police, (2022) 8 SCC 238]

Environment Law — General Principles of Environmental Law — Polluter Pays Principle and Remedial/Compensatory/Punitive Measures: Owners of demolished flats illegally constructed are not entitled to recover interest from builders/promoters/persons/officers responsible for raising illegal constructions, on principal amount paid by evicted flat owners. [Kerala State Coastal Zone Management Authority v. Maradu Municipality, (2022) 8 SCC 240]

Insolvency and Bankruptcy Code, 2016 — S. 12-A: Grant of withdrawal of CIRP proceedings, after constitution of Committee of Creditors (CoC), in exercise of power under Art. 142 of the Constitution, when warranted, explained. Relevance of settlement between homebuyers-applicants and corporate debtor, and, protection of homebuyers’ interest, also explained. [Amit Katyal v. Meera Ahuja, (2022) 8 SCC 320]

Insolvency and Bankruptcy Code, 2016 — S. 9: Withdrawal of company petition/corporate insolvency resolution process (CIRP) proceedings, before constitution of Committee of Creditors (CoC), upon settlement between the parties, permissible. [Kamal K. Singh v. Dinesh Gupta, (2022) 8 SCC 330]

Maharashtra Control of Organised Crime Act, 1999 (30 of 1999) — S. 23 r/w Ss. 2(1)(d), 2(1)(e), 2(1)(f), 3(1)(ii), 3(2), 3(4) and 18 — Sanction or prior approval for prosecution under MCOCA: Having regard to the stringent provisions of MCOCA, its provisions need to be very strictly interpreted and, thus, the Court has to consider as to whether the basic and threshold requirements, as per combined reading of cls. (d), (e) and (f) of S. 2(1), are fulfilled. If they are not so fulfilled, mere use of the expressions of the statute in the sanction order would be of no effect but, on the other hand, if the requirements are fulfilled, mere want of any expression or word in a particular passage in the sanction order would not take away the substance of the matter. Scope of “organised crime” under MCOCA, explained. [Abhishek v. State of Maharashtra, (2022) 8 SCC 282]

Penal Code, 1860 — S. 302 — Murder trial: In this case, appellant-accused herein after sprinkling chilli powder into eyes of deceased, stabbed him with knife on his chest and abdomen, resulting in grievous injuries to him, leading to his death in hospital. Guilt was established beyond reasonable doubt, hence conviction was confirmed. [Mekala Sivaiah v. State of A.P., (2022) 8 SCC 253]

Penal Code, 1860 — Ss. 409 and 420 r/w S. 120-B — Cheating and misappropriation: Principles summarized regarding interference with conviction in revisional jurisdiction in the case of cheating and misappropriation, when permissible. [Malkeet Singh Gill v. State of Chhattisgarh, (2022) 8 SCC 204]

Registration Act, 1908 — Ss. 32 to 35 — Registration: Three essential steps comprising registration, explained. Proper forum for challenging the same at each step, clarified. [Asset Reconstruction Co. (India) Ltd. v. S.P. Velayutham, (2022) 8 SCC 210]

SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 — Regns. 9 and 10 r/w Regns. 3(b), (c), (d), 4(1) and 4(2)(e), (f), (k) and (r) — Disclosure of investigation report: A quasi-judicial authority has a duty to disclose the material that has been relied upon at the stage of adjudication. Further, an ipse dixit of the authority that it has not relied on certain material would not exempt it of its liability to disclose such material if it is relevant to and has a nexus to the action that is taken by the authority. In all reasonable probability, such material would have influenced the decision reached by the authority. Thus, the actual test is whether the material that is required to be disclosed is relevant for purpose of adjudication; if it is, then the principles of natural justice require its due disclosure. [T. Takano v. SEBI, (2022) 8 SCC 162]

Securities, Markets and Exchanges — Manipulative/Fraudulent, Unfair trade practices and Market abuse — Penalty for engaging in manipulative trades as per the provisions of the SEBI Act and the relevant SEBI Regulations — Quantum of: Penalty by way of bar from trading in proprietary account, for a period of four years not considered as arbitrary, harsh or distinctly disproportionate to the nature of the violation. Relevance of wider consequences of action on the securities market, as opposed to quantum of gain made, explained. [MBL & Co. Ltd. v. SEBI, (2022) 8 SCC 273]

Service Law — Recruitment Process — Eligibility criteria/conditions — All-India Services — Physical fitness: R. 7(a)(vii), Appendix III of the CSE Rules, 2014 envisaging that candidate declared “temporarily unfit” must apply for re-medical examination “ordinarily” not exceeding six months at “maximum”. Here, word “ordinarily” must be conjointly read with word “maximum” during which candidate declared “temporarily unfit” has to approach for re-medical examination from date of uploading of medical examination report on website of Department which indicates outer limit of six months. [Union of India v. K. Rajashekhara Reddy, (2022) 8 SCC 246]

SCC Part
Cases ReportedSupreme Court Cases

   

Arbitration and Conciliation Act, 1996 — Ss. 8, 11, 7, 2(1)(h), 16 and 45 — Non-signatory or non-party to arbitration agreement: Arbitration against, or by non-signatory or non-party to arbitration agreement, when may be invoked, discussed. The scope, ambit and validity of Group of Companies doctrine, explained. Doubting the rulings in Chloro Controls, (2013) 1 SCC 641, and cases following it, matter referred to larger Bench. [Cox & Kings Ltd. v. SAP India (P) Ltd., (2022) 8 SCC 1]

Arbitration and Conciliation Act, 1996 — Ss. 8, 11, 7, 2(1)(h), 16 and 37 — Group of Companies Doctrine: Applicability of Group of Companies Doctrine to make a non-signatory or non-party group company (i.e. a company who has not signed the arbitration agreement) a party to arbitration proceedings, explained. [ONGC Ltd. v. Discovery Enterprises (P) Ltd., (2022) 8 SCC 42]

Civil Procedure Code, 1908 — Or. 23 R. 3 and S. 89 — Consent decree passed in Lok Adalat: Setting aside of consent decree passed in Lok Adalat, on ground that matter was referred to Lok Adalat by trial court cannot be approved for doubting genuineness of consent decree. [Hemantha Kumar v. R. Mahadevaiah, (2022) 8 SCC 140]

Civil Procedure Code, 1908Or. 6 R. 17: Amendment of suit is not permissible when the same changes the nature of suit. [Asian Hotels (North) Ltd. v. Alok Kumar Lodha, (2022) 8 SCC 145]

Constitution of India — Arts. 226 and 227 — Law declared by High Court — Binding effect of: There is primacy of orders of High Court over those of statutory tribunals in case of conflicting orders. Law declared by the High Court in the State is binding on authorities and tribunals under its superintendence and they cannot ignore it. Further, tribunals are subordinate to High Court insofar as the territorial jurisdiction of High Court is concerned. In case of conflicting orders passed by statutory tribunals and the High Court, it is the orders passed by the constitutional courts, which would prevail over the orders passed by the statutory tribunals. [State of A.P. v. Raghu Ramakrishna Raju Kanumuru, (2022) 8 SCC 156]

Protection of Women from Domestic Violence Act, 2005 — Ss. 17(1) & (2) and S. 19 — Nature and scope of right to reside in shared household: Scope of right to reside in the shared household conferred under DV Act and categories of women upon whom the said right is conferred, discussed. Wide and comprehensive scope of “domestic relationship”, explained in detail. [Prabha Tyagi v. Kamlesh Devi, (2022) 8 SCC 90]

Case BriefsSupreme Court

Supreme Court: The 3-judge bench of UU Lalit, S. Ravindra Bhat and Sudhanshu Dhulia*, JJ has held that a counter claim under Order VIII, Rule 6A of the Code of Civil Procedure 1908 (CPC) can be set up only “against the claim of the plaintiffs”.

The Court was dealing with the case relating to declaration and possession on an agricultural land. According to the plaintiffs, the defendant No. 2 was their tenant who had sub-let the land to his son (defendant No.1), without the consent of the plaintiffs/landlords and hence, the two defendants were liable to be evicted and the possession of the land was to be handed over to the plaintiffs.

According to defendant No. 2, one Indraj was the original owner of the property, who had given this land in tenancy to his father. Indraj died in the year 1976 and was succeeded by one Ram Kaur. Meanwhile, the defendant no. 2’s father died in the year 1978 and consequently he and his two other brothers had jointly inherited the tenancy. Thereafter, all the three brothers became tenants under Ram Kaur and they continued to be in possession of the suit property. They denied that they were ever tenant of the plaintiffs.

Defendant No.1 argued that he had no concern with the land in question as he was born in the year 1966 and hence, he was only twelve years of age in the year 1978 when the sub-tenancy is alleged to have been created in his favour, as per the revenue records. He never cultivated the land and the cultivation was done by his father and his two uncles, and the entries made in the revenue record showing him to be a tenant or a sub-tenant are wrong and have been made by the plaintiffs, in collusion with the revenue officials.

In addition to these written statements, the defendant no. 2, while denying the rights of the plaintiffs on the land of which particulars had been given by the plaintiffs, inserted the two plots, setting a counter-claim on them.

The Trial Court and the First Appellate Court while dismissing the plaintiffs’ suit had allowed this claim for without assigning any reasons.

While the Punjab and Haryana High Court upheld the findings of the two Courts on the sub-letting and tenancy and upheld the findings of the lower courts in favour of the defendants as there was no subletting of the land, it also held that the counter claims set up by the defendant could not be decreed since the plaintiffs themselves had not set up any claim whatsoever for these two plots and therefore under provisions of Order VIII, Rule 6A CPC, an independent counter claim having nothing to do with the plaintiffs can never be allowed.

The Supreme Court, in appeal, agreed with this reasoning and observed that since there was no claim of the plaintiffs regarding the two plots in question, the defendants were barred to raise any counter claim on these Killa numbers in view of Order VIII, Rule 6A of the CPC as it has nothing to do with the plaintiffs.

It explained,

“It is true that a counter claim can be made by the defendant, even on a separate or independent cause of action. The Legislature permits the institution of a counter claim, in order to avoid multiplicity of litigation. But then it has certain limitations such as that the counter claim cannot exceed the pecuniary limits of the jurisdiction of the court, and that such counter claim must be instituted before the defendant has delivered his defence or before the time limit for delivering his defence has expired. More importantly, such a counter claim must be against the plaintiff!”

In the present case, the counter claim was not against the plaintiffs. Moreover, the plaintiffs had not claimed any right over the property and the two plots are not even a part of the suit property described in the plaint by the plaintiffs.

Hence, as such a counter claim should have been excluded in terms of Order VIII, Rule 6C of the CPC, the counter claim set up by the defendants was held to be rightly rejected by the High Court.

[Satyender v. Saroj, 2022 SCC OnLine SC 1026, decided on 17.08.2022]


*Judgment by: Justice Sudhansh Dhulia

SCC Part
Cases ReportedSupreme Court Cases

   

Army Act, 1950 — Ss. 125, 126, 69, 3(ii) and 70 — Criminal trial — Concurrent jurisdiction of court martial under Army Act and criminal courts under CrPC: When Designated Officer/Commanding Officer impliedly declined to exercise discretion to conduct trial in court martial. Trial by criminal court under CrPC, held, mandatory. In a case of concurrent jurisdiction, when court martial has impliedly declined to conduct trial, criminal court cannot direct the court martial to do the same. [State of Sikkim v. Jasbir Singh, (2022) 7 SCC 287]

Civil Procedure Code, 1908 — Or. 41 R. 27 — Admissibility of additional evidence in appellate court not adduced in the court of original jurisdiction: Admissibility of additional evidence under Or. 41 R. 27 CPC does not depend upon the relevancy of the issue on hand, or whether the applicant had an opportunity for adducing such evidence at an earlier stage or not, but it depends upon whether or not appellate court requires the evidence sought to be adduced to enable it to pronounce judgment or for any other substantial cause. That is, whether such additional evidence has a direct bearing on pronouncement of the judgment. [Sanjay Kumar Singh v. State of Jharkhand, (2022) 7 SCC 247]

Constitution of India — Arts. 21, 32 and 226 — Constitutional/Public Law Torts/Public Safety — Violation of life and personal liberty: Where life and personal liberty have been violated, absence of any applicable statutory provision(s) for compensation is of no consequence. Right to life guaranteed under Art. 21 is the most sacred right preserved and protected under the Constitution, violation of which is always actionable and there is no necessity of any statutory provision as such for preserving that right. Thus, a writ petition seeking compensation is maintainable. Furthermore, Art. 21 has to be read into all public safety statutes, since prime object of public safety legislation is to protect individual and to compensate him for loss suffered. Duty of care expected from State or its officials functioning under public safety legislation is very high. [Sanjay Gupta v. State of U.P., (2022) 7 SCC 203]

Constitution of India — Arts. 300-A and 226 — Right to property: Deprivation of property can only be permitted when and to the extent it is strictly in compliance with applicable law. Land reserved for public purpose under Town Planning law. Lapse of acquisition due to inaction of executive to acquire land within prescribed statutory time period cannot be interfered with by Court contrary to scheme of the applicable statute. [Laxmikant v. State of Maharashtra, (2022) 7 SCC 252]

Education Law — Professional Colleges/Education — Medical and Dental Colleges — Reservation of seats/Quota/Exemption/Priority in Medical/Dental Institutions: In this case, directions were issued to implement roster point-based reservation for preferential candidates as followed by JIPMER in all AIIMS institutes. However, roster points need not be similar to that of JIPMER. This order directed to be applicable for admission from year 2022. Students Assn. [AIIMS v. AIIMS, (2022) 7 SCC 201]

Insolvency and Bankruptcy Code, 2016 — Ss. 8, 9, 5(20), 5(21), 3(6) and 3(12) — Procurer/purchaser of services/goods from corporate debtor by rendering advance payments to it — Consideration of, as operational creditor: Debt arising from a contract in relation to supply of goods/services by corporate debtor amounts to “operational debt”. [Consolidated Construction Consortium Ltd. v. Hitro Energy Solutions (P) Ltd., (2022) 7 SCC 164]

Land Acquisition Act, 1894 — S. 23 — Compensation awarded in another proceeding: Extent to which compensation awarded in another proceeding may be relied on, all relevant factors and necessity of consideration of it, explained. [LAO v. N. Savitha, (2022) 7 SCC 256]

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 — S. 35 r/w Ss. 13(2), 13(4) and 2(1)(zc) to (zf) — Dues of secured creditor, priority of, over dues of Central Excise Department: Dues of secured creditor over the properties of assessee have priority over dues of Central Excise Department. Prior to insertion of S. 11-E of the Central Excise Act, 1944 there was no provision in the 1944 Act inter alia providing for first charge on the property of the assessee or any person under the 1944 Act. Further, S. 35 of the SARFAESI Act inter alia provides that the provisions of the SARFAESI Act shall have overriding effect on all other laws. Also, even the provisions contained in S. 11-E of the Central Excise Act are subject to the provisions contained in the SARFAESI Act. [Punjab National Bank v. Union of India, (2022) 7 SCC 260]

Punjab and Haryana High Court
Case BriefsHigh Courts

Punjab and Haryana High Court: Alka Sarin, J., dismissed the revision petition filed under Article 227 of the Constitution to set aside the order passed by the Additional Civil Judge vide which the application for appointment was dismissed on the ground that the order refusing appointment does not decide any issue nor does it adjudicate rights of the parties.

Facts:

The plaintiff filed a suit for a permanent injunction to restrain the defendant from interfering in his peaceful possession and cultivation of the suit’s land. During the pendency of the suit, the plaintiff filed an application under Order XXVI Rule 9 of the Civil Code, 1908 for the appointment of a Local Commissioner for bringing on record the existing position of the suit’s property.

The defendant- respondent contested that the application was filed just to delay the proceedings. It was also argued that there was no locus standi and cause of action to file the application.

Hereafter, the application was dismissed and the plaintiff- petitioner sought revision of the said order.

Issue:

Is Revision maintainable against an order dismissing an application for the appointment of a Local Commissioner under Order XXVI Rule 9 of the Code, 1908?

Observation and Analysis:

The Court relied on the judgment of Pritam Singh v. Sunder Lal [1990(2) PLR 191] where it was held that refusing to appoint a Commissioner under Order XXVI Rule 9 of the Code, 1908, has nothing to do with the rights of the parties. It is the discretion of the Court to appoint a Commission, then no right of any party can be said to be prejudiced as such.

The Court held that there is no illegality or irregularity in the order passed by the Additional Civil Judge.

The Court further held that no revision will be maintainable against an order dismissing an application for the appointment of a Local Commissioner as it does not decide any issue nor does it adjudicate any rights of the parties for the purpose of the suit.

[Harchand v. Karambir Singh, 2022 SCC OnLine P&H 1777, decided on 18-07-2022]


Advocates who appeared in this case :

Balraj Gujjar, Advocate, for the Petitioner.

Punjab and Haryana High Court
Case BriefsHigh Courts

Punjab and Haryana High Court: Manjari Nehru Kaul, J., while dealing with a revision petition for setting aside the order passed by the Civil Judge in Execution Petition held that the petitioner was unable to bring any material that showed that other co-owners were not agreeable to take possession.

The petition was filed for setting aside the order dated 23-05-2022 whereby objections under Order 47 read with Section 151 of the Code of Civil Procedure, 1908 preferred by the petitioners were dismissed.

Facts:

The suit land is in the joint ownership of respondents and other co-owners as per the entries recorded in the ownership column of the jamabandi for the year 2012-2013. There has never been any partition of the suit land.

Arguments:

The counsel for the petitioner contended that the impugned order passed by the Civil Judge was a manifest error of law. Further, he contended that since the suit land was jointly owned, the respondents cannot seek possession of land beyond the extent of their respective shares. It was also contended that there was a non-compliance of Order 1 Rule 8 of the Code by the trial Court while passing the decree, where there were a large number of persons involved having common interest in a suit and the respondent did not take permission from Court to act on behalf of others. Hence, the decree cannot be executed.

Issues:

Whether one of the co-owners acting on behalf of others constitute a proceeding that has to follow Order 1 Rule 8 of the Code?

Whether an application under Order 47 read with Section 151 can be entertained where the consent of co-owners has been assumed?

Whether one owner out of the co-owners seek possession of the entire joint land as an agent of the other co-owners?

Observations and Analysis:

The Court relied on India Umbrella Mfg. Co. v. Bhagabandei Agarwalla, (2004) 3 SCC 178 and Mohinder Prasad Jain v. Manohar Lal Jain, (2006) 2 SCC 724 and held that “any one owner out of the co-sharers can seek possession of the entire joint land. Such co-owner would do so on his own behalf, in his own right and as an agent of other co-owners. The consent of the other co-owners would be assumed to have been taken unless it is shown to the contrary that co-owners were not agreeable and despite their disagreement, a suit had still been instituted.”

The Court also noted that the petitioner has failed to bring to the notice any material to substantiate his claim that co-owners were not agreeable to take possession.

The Court observed that the scope of interference in execution proceedings is very limited and the Court could not go behind the decree.

[Siriya v. Tulsi Puri, 2022 SCC OnLine P&H 1872, decided on 21-07-2022]


Advocates who appeared in this case :

Mr. Munish Kumar Garg, Advocate, for the Petitioner.

Madhya Pradesh High Court
Case BriefsHigh Courts

Madhya Pradesh High Court: The Division Bench of Ravi Malimath, CJ. and Vishal Mishra, J. dismissed a second review petition holding that pursuant to the provision under Order XLVII Rule 9 Civil Procedure Code, 1908 (CPC), a review of an order passed in a review petition is not maintainable.

A petition was filed seeking recall of an order passed by the Court in a Miscellaneous Petition. The said petition was dismissed against which a review petition was filed under Order XLVII Rule 1 CPC. The review petition was also dismissed by the Court, against which, the Petitioners filed the instant review petition.

Senior Counsel appearing for the review petitioners contended that gross error had occasioned and hence, the court has jurisdiction to entertain the same. She relied on few judgments and Section 141 of CPC.

Deputy Advocate General objected stating that in terms of Order XLVII Rule 9 of CPC a review of a review is not maintainable.

The Court distinguished the judgments relied on by the petitioner on facts and reiterated Section 141 of CPC holding that if the contention of the petitioner is to be accepted with reference to Section 141 of the Code of Civil Procedure, then all the previous proceedings will be a nullity. The Court further reproduced Order XLVII Rule 9 of the CPC:

“9. Bar of certain applications.- No application to review an order made on an application for a review or a decree or order passed or made on a review shall be entertained.”

The Court dismissing the petition held that clear reading of Order XLVII Rule 9 would bar the second review application.

[Anand Deep Singh v. State of Madhya Pradesh, 2022 SCC OnLine MP 1816, decided on 08-07-2022]


Advocates who appeared in this case :

Mrs Shobha Menon, Sr Adv and Ms Aanchal Saraf, Advocate, for the Petitioner;

Mr Amit Seth, Deputy Advocate General, Advocate, for the Respondent 1;

Mr K.C. Ghildiyal, Sr Adv with Mr Aditya Veer Singh, Advocates, for the Respondent 6 and 16;

Mr Umesh Tripathi, Advocate, for the Respondent 5.


*Suchita Shukla, Editorial Assistant has reported this brief.

Delhi High Court
Case BriefsHigh Courts

   

Delhi High Court: In a case where the Trial Court directed the tenants ‘appellants herein' to pay the defaults in rent, which was due in COVID, the Division Bench of Saurabh Banerjee, and Suresh Kumar Kait, JJ. upheld the same as the tenants willingly chose to retain the possession of the premises and as there was no clause in the Lease Deed giving any suspension, thus, the appellant was bound to pay the monthly charges to the landlord in terms of the clear stipulations contained in the Lease Deed.

Facts

The respondent-landlord had given the said premises on lease to the appellant-tenants to carry out authorized commercial activity like running a spa or any other activity vide a registered Lease Deed dated 18-12-2010 (‘Lease Deed') for a period of 15 years, commencing from 15-05-2010 to 14-05-2025. During the subsistence of the aforesaid Lease Deed, COVID-19 pandemic spread across India and the lockdown prevailed from March, 2020 for the ensuing months, thus resulting in non-payment of rent.

The respondent issued legal notice(s) on 20-04-2020, 11-05-2020 and 28-05-2020 for payment of rent, even offering suspension of payment for 60 days on compassionate grounds which went unanswered. The tenants, however, continued to stay on the premises till termination of the Lease Deed which was was thereby terminated vide notice 07-06-2020. A reply was sent to the landlord denying the liability by taking plea of force majeure as per Clause 14 of the Deed.

Issue

An application under Order XIII A Civil Procedure Code, 1908 (‘CPC') r/w Section 151, CPC read with Section 3 Commercial Courts Act, 2015 ‘Order XIII A application' was filed by the landlord which was decreed in favour of them. Being aggrieved, the appellant challenged the impugned judgement on three basic grounds.

1. The Trial court had overlooked the fact that the premises was ‘unfit to use' alleging thereby that because of the then prevailing lockdown situation during the period in dispute and passing of different circular(s) issued by various Government(s) from time to time the appellant was unable to carry on the activity of running a Spa from the said premises.

2. The Trial Court had wrongly applied the provision of Section 108(e) of the Transfer of Property Act, 1882 even though the parties were admittedly bound by the terms of the Lease Deed executed inter-se and that the Transfer of Property Act, 1882 was not applicable to the facts and circumstances of the case.

3. As there was no commercial use of the premises permissible and/ or possible during the aforesaid period in the dispute before the learned trial court, the respondent was not entitled to rent for the said period.

What is Order XIII A CPC?

The Court noted that the said provision of Order XIII A was introduced in the CPC by way of an amendment in the year 2015 with respect to all kinds of commercial disputes only. The said Order XIII A, CPC is a provision enabling the courts to take up and decide claim(s) in the commercial disputes without recording oral evidence, i.e., without following the ordinary procedure to be adopted and followed in an ordinary suit. Two fundamental grounds which have to be satisfied while deciding an Order XIII A application are that a party has to show that the other party has no real prospect of succeeding in and/ or defending the claim and that there is no other compelling reason as to why the claim should not be disposed of before commencement of trial, i.e., recording of oral evidence.

Observation and Analysis

The Court noted that on a careful analysis, it emerges that the provision of Order XIII A, CPC has been specifically introduced by the Legislature so as to adjudicate and decide the issue(s) at the threshold itself without proceeding to the unnecessary rigors of a prolongated trial and to save time, effort and money by making it more convenient and expeditious for all concerned, be it the court(s) and/ or the parties involved. Furthermore, an Order XIII A application can be allowed, and a court can proceed to pass a summary judgment if a party has a real prospect of succeeding and/ or defending in the claim and there is no real purpose of proceeding to trial, i.e., recording oral evidence.

The Court further noted that the appellant is merely trying to reagitate the same issues in the form of grounds which have all been heard, taken note of and decided by the Trial Court in the impugned judgment, by simply giving a different flavour to them.

The Court observed that there clearly exists a relationship of respondent-landlord and the appellant-tenant and they are bound by terms of Lease Deed. Since the appellant neither chose to exercise his right to terminate the Deed nor chose to vacate the said premises until termination, thus, there is no such clause in the Deed to claim non-payment of rent. Thus, the appellant was well and truly liable to pay the lease rentals as per the Lease Deed along with interest thereon for the period in issue.

On the issue of the premises being unfit for use due to COVID and the then prevailing lockdown, the Court opined that the premises were always fit to use, and the appellant was free to carry on any kind of commercial activity barring running a Spa. The Court premised this on a well settled law that temporary non-use of premises during the lock down period cannot be construed as rendering either the stipulated term of the Lease Deed void or giving any benefit to the tenant to claim suspension of rent on the ground of mere non-use thereof.

Decision

The Court remarking that Section 108(e) of The Transfer of Property Act, 1882 is inapplicable to the facts of the instant case, held, as the appellant willingly chose to retain the possession of the premises and as there was no clause giving any respite to it, the appellant was bound to pay the monthly charges to the respondent in terms of the clear stipulations contained in the Lease Deed.

[Siddhatha Singh v. Ajit Singh Bawa, 2022 SCC OnLine Del 2007, decided on 12-07-2022]


Advocates who appeared in this case :

Mr. Harsh Gokhale, Advocate, for the Appellant.


*Arunima Bose, Editorial Assistant has reported this brief.

Rajasthan High Court
Case BriefsHigh Courts

   

Rajasthan High Court: Dinesh Mehta, J. considered the stamp vendor and Sub Registrar as relevant witnesses in a case where registration of relinquishment deed was challenged, and it was pleaded to summon them as witnesses for ascertaining the claim. The Court stated that ascertaining the relevancy of the proposed witnesses while deciding application under Order XVI Rules 1 and 2 Civil Procedure Code (‘CPC’) is to be prima facie established by the Trial Court.

A suit was instituted declaring the relinquishment deed as null and void wherein the defendant moved an application stating that the stamp vendor – Tulchhiram Sindhi from whom the stamps were purchased and the registering authority – Sub-Registrar, Chunavadh, who registered the contentious document are necessary witnesses may be summoned as witnesses , which was thereby rejected by Additional Civil Judge 1, Sriganganagar. Assailing this, instant writ petition under Article 227 was filed.

Counsel for petitioner Adv. S.K. Shreemali submitted that the plaintiff herself had purchased the stamps and appeared before the Registering Authority, who in discharge of his official duties, had apprised the plaintiff about the relinquishment deed being executed by her and, therefore, their presence as witnesses was imperative in order to substantiate the petitioner’s stand.

Counsel for respondent Adv. Dixit Panwar, submitted that that petitioner’s application is nothing but an attempt to protract the proceedings.

The Court noted that the provisions contained under Order XVI Rule (1) and (2) Civil Procedure Code in unequivocal terms provide that the Court suo moto or on an application, can issue summons to a witness to appear in the Court. Sub-rule (2) of Rule 1 of the Order XVI of the Code enjoins upon the party desirous of getting a summons issued to a witness to state in its application the purpose for which the witness is proposed to be summoned.

The Court observed that on a perusal of subject application it is clear that the petitioner had stated that she herself had purchased the stamp from the stamp vendor – ‘Tulchhiram Sindhi’ and thereafter appeared before the Sub-Registrar, Chunavadh for executing and getting the relinquishment deed registered. Thus, presence of the stamp vendor and Sub-Registrar is necessary in order to ascertain the veracity of petitioner’s stand.

The Court further observed that the Trial Court has not properly considered the mandate contained in Order XVI Rule(s) 1 and 2 CPC and rejected petitioner’s application indicating that the applicant has failed to establish the relevancy of the testimony of these two witnesses. Thus, the applicant may be called upon to show relevance or need of such witness (es) but he/ she cannot be asked to establish or prove such requirement. The requirement has to be determined by the Court.

The Court thus held “the stamp vendor and the then Sub-Registrar are relevant witnesses, who would assist the Court to come to a correct conclusion”

[Gurjant Singh v. Amarjeet Kaur, S.B. Civil Writ Petition No. 13516/2017, decided on 29-06-2022]

*Arunima Bose, Editorial Assistant has reported this brief.

Punjab and Haryana High Court
Case BriefsHigh Courts

Punjab and Haryana High Court: Fateh Deep Singh, J., dismissed a review application on the ground that no mistake or error was found on the records which would be self-evident, and any interpretation put forth by the applicant cannot be considered at this juncture according to Order 47 Rule 1 of Code of Civil Procedure, 1908 (‘CPC’).

Order 47 Rule 1 states that a judgment/ order could be sought only if there is a discovery of new and important matters/ evidence which was not in the knowledge of the applicant even after due diligence and if the same was not produced by the applicant at the time judgment/ decree was passed or there was some mistake or error on the face of record.

The applicant made assailments on merits and interpretation of the evidence over the family settlement dated 15-03-1985, 17-07-1995 and 29-03-1997. The applicant has laid challenge over the documents in question executed between them on merits which is not permissible. Another argument was that self-contradictions and self- defeating stands cannot be taken into consideration.

The respondent relied on Sasi v. Aravindakshan Nair, (2017) 4 SCC 692 and Parsion Devi v. Sumitri Devi, (1997) 8 SCC 715, where the Supreme Court laid down that a review application cannot be disguised as an appeal for getting an incorrect decision reheard and corrected. It was also held that to rectify any patent error on the records, a review has to be filed within the ambit of Order 47 Rule 1 of the Code.

In the present case, the issue was whether an application be made to reheard and correct an erroneous decision outside the ambit of Order 47 Rule 1The Court after perusal of the arguments advanced held that there was no such mistake or error on the face of the record and no merit was found. Hence, the application was dismissed.

[Paramjit Singh v. Gurdial Singh, 2022 SCC OnLine P&H 1637, decided on 05-07-2022]