TMI Blog2009 (7) TMI 795X X X X Extracts X X X X X X X X Extracts X X X X ..... clear is that framing of issues as contemplated under rule 1 of order 14 of the Code is not an integral part of the process of a proceedings under section 34 of the Act. No reason to interfere with the impugned order of the High Court - CIVIL APPEAL NO. 5139 OF 2009 - - - Dated:- 27-7-2009 - RV RAVEENDRAN AND B SUDERSHAN REDDY, JJ PP Rao,, C Paramasivam, P Ramesh, R Aneesha and Rakesh K Sharma for the Appellant. P.V. Shetty, GN Reddy and Vijay Kumar for the Respondent. ORDER Raveendran, J The respondent has entered appearance through caveat. Leave granted. Heard the learned counsel. 2. Certain disputes between respondent and appellant were referred to arbitration. The arbitrator made art award dated 14th September, 2005 directing the appellant to pay to the first respondent, a sum of Rs.57.6 crore with interest. The appellant filed an application under section 34 of the Arbitration and Conciliation Act, 1996 ('the Act ) before the city civil court, Bangalore for setting aside the said award. The respondent filed its written statement, resisting the claim. The appellant made an application under order XIV, rules 1 and 3 of Code of Civil Proced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ues were not required to be framed. 6. The question that, therefore, arises for consideration is whether 'issues' as contemplated under order 14, rule 1 of the Code should be framed in applications under section 34 of the Act. Need for framing issues 7. The object of issues is to focus upon the questions on which evidence has to be led and to indicate the party on whom the burden of proof lies. Rule 1 of order 14 of the Code dealing with framing of issues is extracted below : "1. Framing of issues. - (1) Issues arise when a material proposition of fact or law is affirmed by the one party and denied by the other. (2) Material propositions are those propositions of law or fact which a plaintiff must allege in order to show a right to sue or a defendant must allege in order to constitute his defence. (3) Each material proposition affirmed by one party and denied by the other shall form the subject of a distinct issue. (4) Issues are of two kinds - ( a ) issues of fact, and ( b ) issues of law. (5) At the first hearing of the suit, the court shall, after reading the plaint and the written statements, if any, and after examination under rule 2 of order X and afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in accordance with sub-sections (2) and (3). Relevant portion of sub-section (2) of section 34 is extracted below : "(2) An arbitral award may be set aside by the court only if - ( a )the party making the application furnishes proof that - ( i )a party was under some incapacity ; or ( ii )the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force ; or ( iii )the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case ; or ( iv )the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration : Provided that, if the decision on matters submitted to arbitration can be separated from those not so submitted, . only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside ; or ( v )the composition of the arbitral tribunal or the arbitral procedure was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act is a special enactment and section 34 provides for a special remedy. The second is that an arbitration award can be set aside only upon one of the grounds mentioned in sub-section (2) of section 34 exists. The third is that proceedings under section 34 requires to be dealt with expeditiously. 11. The scope of enquiry in a proceeding under section 34 is restricted to consideration whether any one of the grounds mentioned in sub-section (2) of section 34 exists for setting aside the award. We may approvingly extract the analysis relating to 'Grounds of Challenge' from the Law Practice of Arbitration and Conciliation by Shri O P Malhotra [1st edn., p. 768, Para (I) 34-14] : "Section 5 regulates court intervention in arbitral process. It provides that notwithstanding anything contained in any other law for the time being in force in India, in matters governed by Part I of this Act, the court will not intervene except where so provided in this Part. Pursuant to this policy, section 34 imposes certain restrictions on the right of the court to set aside an arbitral award. It provides, in all, seven grounds for setting aside an award. In other words, an arbitral award can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant deals with "contents of application" and clause ( b ) which is relevant is extracted below : "(b) Application under section 14 or section 34 shall be registered as an arbitration suit, the applicant being treated as the plaintiff and the parties to the award other than the applicant being treated as defendants and the proceedings thereafter shall be continued as in the case of a suit and all the provisions of the Code of Civil Procedure Code, 1908, shall apply to such proceeding insofar as they could be made applicable." 12.1 It is no doubt true that the rule requires that an application under section 34 should be registered as an 'arbitration suit' and that the proceedings shall be conducted as in the case of a suit and all provisions of Code which apply to such proceedings in so far as they could be made applicable. Rule 4 will have to read with rule 12 which deals with "Applicability of the Code of Civil Procedure, 1908". It reads as under : "Subject to what is provided for in the Arbitration and Conciliation Act and these Rules, the provisions of the Code of Civil Procedure and Karnataka Civil Rules of Practice may be applied to the proceedings under the Act to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). Even if the applicant does not rely upon the grounds under clause ( b ), the court, on its own initiative, may examine the award to find out whether it is liable to be set aside on either of the two grounds mentioned in section 34(2)( b ). It is perhaps in this sense, the High Court has stated that the proceedings may not be adversarial. Be that as it may. 14. Having regard to the object of the Act, that is providing an expeditious alternative binding dispute resolution process with minimal court intervention, it is difficult to envisage proceedings under section 34 of the Act as full-fledged regular civil suits under Code. Applications under section 34 of the Act are summary proceedings with provision for objections by the defendant/respondent, followed by an opportunity to the applicant to 'prove' the existence of any ground under section 34(2). The applicant is permitted to file affidavits of his witnesses in proof. A corresponding opportunity is given to the defendant/respondent to place his evidence by affidavit. Where the case so warrants, the court permits cross-examination of the persons swearing to the affidavit. Thereafter, court hears arguments and/or receives ..... X X X X Extracts X X X X X X X X Extracts X X X X
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