TMI Blog2010 (4) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... ion petition for setting aside the award. Moreover, no prayer was made by the appellant for amendment in the petition under section 34 before the concerned court or at the appellate stage. Thus the grounds of appeal which are now sought to be advanced were not originally raised in the arbitration petition and that the amendment that is sought to be effected is not even to the grounds contained in the application under section 34 but to the memo of appeal. In the circumstances, it cannot be said that discretion exercised by learned Single Judge in refusing to grant leave to appellant to amend the memorandum of arbitration appeal suffers from any illegality. - (CIVIL APPEAL NO. 2928 OF 2010 ARISING OUT OF SLP(C) NO. 3937 OF 2009) - - - Dated:- 1-4-2010 - R.V. RAVEENDRAN AND R.M. LODHA, JJ. Shekhar Naphade, Sanjay V. Kharde, Chinmoy A Khaladkar, Ms. Asha Gopalan Nair, Ms. Shubhangi Tuli for the Appellant. Ashok H. Desai, Bhavesh V. Panjvani, Sameet Parekh, D.P. Mohanty, Ms. Ranjeeta Rohatgi, Rajat Nair for the Respondent . JUDGEMENT R.M. Lodha, J. Leave granted. 2. The question presented in this appeal by special leave is: whether in an appeal under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es (respondent's arbitrator was not appointed before expiry of 30 days from the defect liability and, therefore, the claimant was not entitled to bring claim Nos. 3,4 and 5 to arbitration) and ( v ) res judicata (claim No. 1 was referred to the earlier arbitration panel in the year 1998 and hence the said claim is barred by principles of res judicata ) . 5. The district judge, Ratnagiri, vide order dated 29 June, 2006, rejected the application for setting aside the award dated 26 June, 2003. 6. The appellant aggrieved thereby preferred an appeal under section 37 of 1996 Act on 6 February, 2007, before the High Court of Judicature at Bombay. 7. On 23 June, 2008, appellant made an application before the High Court seeking amendment to the memorandum of arbitration appeal by adding additional grounds, namely, that the arbitral tribunal exceeded jurisdiction in awarding revision of percentage for hidden expenses overheads and profits for further additional items (claim No. 1); that the arbitral tribunal acted beyond the scope of arbitration with regard to extended stay charges (claim No. 2); the arbitral tribunal exceeded jurisdiction and, in fact, committed error of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e terms of the contract, as mandated by section 28 of 1996 Act, in the present case respondent got the relief from the arbitral tribunal beyond the terms of contract and, therefore, in the interest of justice, the amendments sought for by the appellant for addition of grounds in the memorandum of arbitration appeal ought to have been granted. He also contended that decision of the division bench of Bombay High Court in Vastu Invest and Holdings (P) Ltd., Mumbai v. Gujarat Lease Financing Ltd., Mumbai [2001] 2 Arb LR 315 (Bom) does not lay down the correct law. 12. Mr. Ashok Desai, learned senior counsel for the respondent, on the other hand, submitted that recourse to a court against an arbitral award could be made only by way of an application under section 34 for setting aside such award and sub-section (3) thereof stipulates that such an application may not be made after three months have elapsed from the date on which the party making the application has received the arbitral award. Proviso to section 34(3) empowers the court, if satisfied of sufficient cause, to entertain the application for setting aside award within a further period of thirty days but not thereafter. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It says that the court may at any stage of the proceedings allow either party to alter or amend his pleadings in such manner and, on such terms as may be just, and all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties. The matters relating to amendment of pleadings have come up for consideration before courts from time to time. As far back as in 1884 in Clarapede and Company v. Commercial Union Association 37 Weekly Reporter 262, an appeal that came up before Court of Appeal, Brett M.R. stated: "The rule of conduct of the court in such a case is that, however negligent or careless may have been the first omission, and, however late the proposed amendment, the amendment should be allowed if it can be made without injustice to the other side. There is no injustice if the other side can be compensated by costs; but, if the amendment will put them into such a position that they must be injured, it ought not to be made " 16. In Charan Das v. Amir Khan [1920] LR 47 IA 255, Privy Council exposited the legal position that although power of a court to amend the plaint in a suit should not as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applied to this court for amendment of the plaint by raising, in the alternative, a claim for damages for breach of contract for non-delivery of the goods. The application was resisted by the respondents and one of the grounds of resistance was that the period of limitation had expired. We accepted as correct the decision in Charan Das v. Amir Khan [1920] LR 47 IA 255 (PC) which laid down that 'though there was full power to make the amendment, such a power should not as a rule be exercised where the effect was to take away from a defendant a legal right which had accrued to him by lapse of time'; yet there were cases where such considerations were outweighed by the special circumstances of the case. As pointed out in Charan Das v. Amir Khan [1920] LR 47 IA 255 (PC) the power exercised was undoubtedly one within the discretion of the learned judges. All that can be urged is that the discretion was exercised on a wrong principle. We do not think that it was so exercised in the present case. The facts of the present case are very similar to those of the case before Their Lordships of the Privy Council. In the latter, the respondents sued for a declaration of their right of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CPC, makes a provision that the appellant shall not, except by leave of the court, urge or be heard in support of any ground of objection not set forth in the memorandum of appeal; but the appellate court, in deciding the appeal, shall not be confined to the grounds of objections set forth in the memorandum of appeal or taken by leave of the court. Order XLI, rule 3, CPC, provides that where the memorandum of appeal is not drawn up as prescribed, it may be rejected, or be returned to the appellant for the purpose of being amended. 21. The aforesaid provisions in CPC leave no manner of doubt that the appellate court has power to grant leave to amend the memorandum of appeal. As a matter of fact, in Harcharan v. State of Haryana [1982] 3 SCC 408, this court observed that the memorandum of appeal has same position like the plaint in the suit. This court said: " .When an appeal is preferred the memorandum of appeal has the same position like the plaint in a suit because plaintiff is held to the case pleaded in the plaint. In the case of memorandum of appeal same situation obtains in view of order 41, rule 3. The appellant is confined to and also would be held to the memoran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t aside the award on those grounds. There can be no doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under section 30 cannot be considered by the court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award." 23. In Union of India v. Popular Construction Co. [2002] 1 Comp LJ 46 (SC): [2001] 8 SCC 470 this court, while considering the question whether the provisions of section 5 of Limitation Act, 1963 are applicable to an application challenging an award under section 34 of the 1996 Act, held: "12. As far as the language of section 34 of the 1996 Act is concerned, the crucial words are 'but not thereafter' used in the proviso to sub-section (3). In our opinion, this phrase would amount to an express exclusion within the meaning of section 29(2) of the Limitation Act, and would therefore bar the application of section 5 of that Act. Parliament did not need to go further. To hold that the court could entertain an application to set aside the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g shown to the satisfaction of the court." 25. There is no doubt that application for setting aside an arbitral award under section 34 of 1996 Act has to be made within time prescribed under sub-section (3), i.e., within three months and a further period of thirty days on sufficient cause being shown and not thereafter. 25.1 The question is: whether incorporation of additional grounds by way of amendment in the application under section 34 tantamounts to filing a fresh application in all situations and circumstances 25.2 If that were to be treated so, it would follow that no amendment in the application for setting aside the award howsoever material or relevant it may be for consideration by the court can be added nor existing ground amended after the prescribed period of limitation has expired although application for setting aside the arbitral award has been made in time. This is not and could not have been the intention of legislature while enacting section 34. More so, section '2)( b ) enables the court to set aside the arbitral award if it finds that the subject matter of the dispute is not capable of settlement by arbitration under the law for the time being in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sought related to material facts which could not have been allowed after expiry of limitation. Having held so, this court even then went into the merits of objection introduced by way of amendment. In our view, a fine distinction between what is permissible amendment and what may be impermissible, in sound exercise of judicial discretion, must be kept in mind. Every amendment in the application for setting aside an arbitral award cannot be taken as fresh application. 27. In the case of Dhartipakar Madan Lal Agarwal v. Rajiv Gandhi [1987] Supp SCC 939 this court held that a new ground cannot be raised or inserted in an election petition by way of an amendment after the expiry of the period of limitation. It may not be proper to extend the principles enunciated in Dhartipakar Madan Lal Agarwal v. Rajiv Gandhi [1987] Supp SCC 939 in the context of the provisions contained in section 81 of the Representation of the People Act, 1951 to an application seeking amendment to the application under section 34 for setting aside an arbitral award or an appeal under section 37 of 1996 Act for the reasons we have already indicated above. 28. The question then arises, whether in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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