Case BriefsSupreme Court

Supreme Court: The bench of KM Joseph* and PS Narsimha, JJ has reiterated the test laid down for invoking the power under Section 319 CrPC and has held that only when strong and cogent evidence occurs against a person from the evidence the power under Section 319[1] CrPC should be exercised. The power cannot be exercised in a casual and cavalier manner.

The Court took note of the test laid down in Hardeep Singh v. State of Punjab, (2014) 3 SCC 92, wherein it was held that though only a prima facie case is to be established from the evidence led before the court, not necessarily tested on the anvil of cross-examination, it requires much stronger evidence than mere probability of his complicity. The test that has to be applied is one which is more than prima facie case as exercised at the time of framing of charge, but short of satisfaction to an extent that the evidence, if goes unrebutted, would lead to conviction. In the absence of such satisfaction, the court should refrain from exercising power under Section 319 Cr.P.C.

It was further explained that in Section 319 Cr.P.C. the purpose of providing if ‘it appears from the evidence that any person not being the accused has committed any offence’ is clear from the words “for which such person could be tried together with the accused.” The words used are not ‘for which such person could be convicted’. There is, therefore, no scope for the court acting under Section 319 Cr.P.C. to form any opinion as to the guilt of the accused.

“105. Power under Section 319 Cr.P.C. is a discretionary and an extraordinary power. It is to be exercised sparingly and only in those cases where the circumstances of the case so warrant. It is not to be exercised because the Magistrate or the Sessions Judge is of the opinion that some other person may also be guilty of committing that offence. Only where strong and cogent evidence occurs against a person from the evidence led before the court that such power should be exercised and not in a casual and cavalier manner.”

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[Ramesh Chandra Srivastava v. State of UP, 2021 SCC OnLine SC 741, decided on 13.09.2021]

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For appellant: Advocate Gaurav Srivastava,

For State: Advocate Adarsh Upadhyay,

For respondent 2: Advocate Sansriti Pathak


[1] 319. Power to proceed against other persons appearing to be guilty of offence.—(1) Where, in the course of any inquiry into, or trial of, an offence, it appears from the evidence that any person not being the accused has committed any offence for which such person could be tried together with the accused, the Court may proceed against such person for the offence which he appears to have committed.

(2) Where such person is not attending the Court, he may be arrested or summoned, as the circumstances of the case may require, for the purpose aforesaid.

(3) Any person attending the Court, although not under arrest or upon a summons, may be detained by such Court for the purpose of the inquiry into, or trial of, the offence which he appears to have committed.

(4) Where the Court proceeds against any person under sub-section (1) then—

(a) the proceedings in respect of such person shall be commenced afresh, and the witnesses re-heard;

(b) subject to the provisions of clause (a), the case may proceed as if such person had been an accused person when the Court took cognizance of the offence upon which the inquiry or trial was commenced.


*Judgment by: Justice KM Joseph

Know Thy Judge| Justice K.M. Joseph

Advani & Co.Experts Corner

 

Introduction

 

The seminal judgment of the 3-Judge Bench of the Supreme Court of India in Vidya Drolia v. Durga Trading Corpn.[1] (Vidya Drolia) has been instrumental in settling many controversies that have existed in Indian arbitral jurisprudence since the commencement of the Arbitration and Conciliation Act, 1996 (the Act). The judgment of the Supreme Court has addressed multiple issues concerning the interpretation of the various facets of the arbitration agreement that have time and time again been obscured by obsolete and conflicting jurisprudence. The Court found it appropriate to recalibrate the Indian position of arbitrability and therefore has holistically articulated the fourfold test to determine subject-matter arbitrability supplementing the rights test laid down in Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd.[2](Booz Allen). The Court has also held the ratio in Booz Allen as per incuriam with regard to the arbitrability of the tenancy disputes governed by the Transfer of Property Act, 1882. The judgment has also laid emphasis on the scope of judicial interference when the courts are seized of an application made under Sections 8 and 11 of the Act. The Court while delivering its opinion in this regard has conclusively outlined the scope of judicial inquiry that is to be conducted to determine the existence and validity of the arbitration agreement. The Court in its reasoning has extensively relied on the 246th Report of the Law Commission of India and has noted the importance of giving effect to the intention of the legislature that is evident from the series of amendments made to the Act in recent years. The opinion of the Supreme Court pertaining to the scope of judicial inquiry at the time of deciding an application under Sections 8 and 11 and the appealability of the orders under the provisions of the Act is within the purview of the present article.

 

The Prima Facie Test

 

The Supreme Court laid extensive reliance on its earlier decisions while simultaneously noting the lack of their precedential value in the light of the legislative amendments made to the Act in recent years. The Court has propounded a prima facie test in order to determine the existence of an arbitration agreement by holding that the courts must refer parties to arbitration unless they find that prima facie no valid arbitration agreement exists. The Court has reiterated that this prima facie examination is only to weed out ex facie non-existent arbitration agreements, invalid arbitration agreements and that on rare occasions the courts could consider non-arbitrability contentions. It must also be kept in the mind that the Court’s findings must be based on and limited to a summary presentation of documents rather an extensive appreciation of evidence.

 

The Court has also reiterated the importance of strictly adhering to the words in the erstwhile Section 11(6-A) of the Act and has also stated that its omission in 2019 has not changed the restrictive examination of the courts at the referral stage. Augmenting its ratio, the Court also placed reliance by elucidating the rationales of the sacrosanct doctrines of separability and kompetenz-kompetenz that give primacy to the Arbitral Tribunal to determine all questions pertaining to the validity and existence of the arbitration agreement. The Court also departed from its earlier position and has held that arbitrability is for the arbitrator to decide in accordance with the power enshrined in Section 16 of the Act. The Court has held while the principle of kompetenz-kompetenz gives the Arbitral Tribunal primacy to decide issues of non-arbitrability, they still have the final word as the courts can take a second look when deciding an application for setting aside under Section 34 of the Act. Finally, the Court in Vidya Drolia[3] has held that the scope of judicial inquiry at the time of deciding applications under Sections 8 and 11 is identical and the said sections are complementary in nature.

 

It is interesting to note, that although the Supreme Court has confined its inquiry to ascertain prima facie whether a valid arbitration agreement exists to compel parties to arbitrate, it has distinguished validity and existence as two separate corollaries to assess the enforceability of an agreement in law. It is true that many jurisdictions recognise the dichotomy between the formal and substantive validity of the arbitration agreements, it is in my opinion that the assessment of the substantive validity in terms of the requirements under the Contract Act, 1872 would not be feasible on a summary perusal of documents and would in fact require an extensive appreciation of evidentiary proceedings. The Court has pre-empted such a situation and has therefore held that when the Court cannot come to a conclusion on the validity of the arbitration agreement applying the prima facie test, it must stop any further inquiry and must refer the parties to arbitration. The judgment of the Court in Vidya Drolia[4] has summed up this approach as “when in doubt, do refer”.

 

It is also pertinent to note that this opinion of the Court in Vidya Drolia[5] is based on the findings of the another decision of the Supreme Court in Garware Wall Ropes Ltd. v. Coastal Marine Constructions and Engg. Ltd.[6] (Garware). However, a coordinate Bench of the Supreme Court in N.N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd.[7] has expressed dissent with the opinion of the Court in Garware[8] that was affirmed in Vidya Drolia[9] and has accordingly referred the question to a Constitution Bench. Therefore, until this question is settled by the Constitution Bench the opinion of the Court regarding the dichotomy of existence and validity of the arbitration agreement in Vidya Drolia[10] is of uncertain precedential value.

 

Appealability and Conclusion

 

After analysing the above proposition, it is clear that the Supreme Court in Vidya Drolia[11] has vehemently laid down that the scope of judicial inquiry under Sections 8 and 11 of the Act is identical and extremely restrictive. Although the Court has brought the ambit of inquiry under Sections 8 and 11 at par by reading the prima facie test into both provisions, it has erred by failing to take cognizance of an inconsistency between the said sections with regard to the appealability of orders passed under these sections. From a conjoint reading of Section 8(1) with Section 37(1)(a) and Sections 11(6) and (6-A) with Section 11(7) of the Act it appears that an anomaly has arisen. It will be seen that an order passed under Section 8 that refuses to refer parties to arbitration is appealable under Section 37(1)(a), whereas a similar order passed under Section 11(6) read with Section 11(6-A) whether referring the parties or refusing to refer parties to arbitration is barred from an appeal by virtue of the strict rule in Section 11(7).

 

It is needless to say that this outcome is undesirable and is contrary to the true spirit of the ratio laid down by the Court in Vidya Drolia[12]. The legislature has followed the recommendations of the Law Commission of India and has carried out amendments to the Act but has not brought about the desired consistency between Sections 11(7) and37 of the Act. It is my opinion that such a lacuna could be used by recalcitrant parties, as they are likely to resort to dilatory tactics by filing mala fide Section 11 applications. Through this medium, these parties would attack the existence and validity of the arbitration agreement and would therefore pray for an order refusing to refer the parties to arbitration. By virtue of Section 11(7) of the Act that order would not be appealable. Such an outcome defeats the legislature’s policy to promote arbitration as the preferred method for dispute resolution arising from commercial contracts and is evidently not in conformity with the due process of law.

 

However, the Supreme Court in a recent judgment in Pravin Electricals (P) Ltd. v. Galaxy Infra and Engg. (P) Ltd.[13] (Pravin Electricals) has noted this inconsistency and has expressed its concern in relation to what has been laid down in Vidya Drolia[14]. The Court in Pravin Electricals[15] has invited the attention of the legislature to this conundrum by making an observation stating that Parliament might need to have relook at Sections 11(7) and 37 in order to bring the orders passed under Sections 8 and 11 at par on appealability. Therefore, until the legislature steps in and fixes this loophole the uncertainty will prevail.

 


† Hiroo Advani, Senior Managing Partner at Advani & Co.

†† Manav Nagpal, Associate at Advani & Co.

 

[1] (2021) 2 SCC 1.

[2] (2011) 5 SCC 532.

[3] (2021) 2 SCC 1.

[4] Ibid.

[5] Ibid.

[6] (2019) 9 SCC 209.

[7] 2021 SCC OnLine SC 13.

[8] (2019) 9 SCC 209.

[9] (2021) 2 SCC 1.

[10] Ibid.

[11] Ibid.

[12] Ibid.

[13] 2021 SCC OnLine SC 190.

[14] (2021) 2 SCC 1.

[15] 2021 SCC OnLine SC 190.

Case BriefsHigh Courts

Gujarat High Court: A Division Bench comprising of Anant S. Dave and Biren Vaishnav, JJ., allowed a regular bail application along with the order of the suspension of the sentence.

The present application was preferred under Section 389 CrPC for the suspension of sentence and grant of bail for the offences punishable under Sections 302, 307, 324, 452, 118 and 114 IPC including a sentence for rigorous imprisonment for life with fine.

It was contended that both the petitioners who were convicts, were only seen abusing, instigating and giving fist blows, none of which constituted towards the injury conferred on the deceased or the injured person by any weapon of assault. Also, the witnesses present confirmed the same. Further, one of the cross-complainants was herself convicted under Section 323 of IPC and thus this version of the alleged allegation cannot be taken into consideration on the account of being untrustworthy. Hence the two incidences that took place on the same date and the nature of quarrel presuppose the involvement of both the parties.

The Court was of the view that the nature of testimonies implicated the petitioners for a limited role and prima facie, no clear or specific role of both the petitioners could be surfaced on record. Accordingly, the court deemed it just and proper to consider their case for suspension of sentence and grant of regular bail as prayed for and allowed the petition. [Kavlaben v. State of Gujarat, 2018 SCC OnLine Guj 1396, order dated 14-09-2018]

Case BriefsHigh Courts

Uttaranchal High Court: A Single Judge Bench comprising of V.K. Bisht, J. dismissed a writ petition that sought interference with the investigation in a criminal case.

The petitioners were accused of cow slaughtering. It was alleged that on receiving information about the slaughtering of cow, the patrolling team reached village Harjoli and found that the petitioners were indulged in the said activity. The petitioners managed to escape; however, equipments meant for slaughtering, weighing machine and cow beef (approx. 350 kg) was found from the spot. A criminal case was registered against the petitioners for offences punishable under Sections 3, 5, and 11 of Uttarakhand Protection of Cow Progeny Act, 2007. The petitioners filed the instant petition praying to quash the impugned FIR.

On consideration of the record, the High Court held that relief, as prayed for by the appellant, could not be granted. The Court relied on the Supreme Court decision in State of W.B. v. Swapna Kumar, (1982) 1 SCC 561, to hold that if the FIR discloses a prima facie commission of an offence, the Court will not normally interfere with the investigation, as doing so would be to trench upon the lawful power of the police to investigate into a congnizable offence. From, the perusal of the FIR, the High Court held that it discloses prima facie commission of offence. Therefore, the Court held that it was not a case where relief could have been provided to the petitioner. Accordingly, the petition was dismissed. [Kala v. State of Uttarakhand,2018 SCC OnLine Utt 547, dated 18-6-2018]