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2018 (4) TMI 678

nce or from the stage of disagreement between the Arbitrators? - Held that: - the word de novo hearing should be given a purposive interpretation and it should be understood as a fresh hearing of the matter on the basis of pleadings, evidence and documents on record. If the party wants to re-examine a witness or objects to the documents admitted, the Umpire is to hear the parties and decide the application in the interest of justice. - If the appellant-Company was serious in its endeavor that it should get an opportunity to get the evidence recorded afresh, an application could easily have been filed before starting the proceedings before the Umpire. It is only from oblique references that the appellant-Company seeks to derive such intent. This aspect is clearly an afterthought which arose during the culmination of the proceedings before the Umpire. - Further, even the sum and substance of the highly belated application dated 29.01.2000 for commencement of proceedings de novo clearly shows that it was not asking for re-hearing/re-recording of the evidence but was actually requesting for review of the order of the two Arbitrators. - From the above, there is no doubt .....

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in terms of the Minutes of the Meeting held on 19.02.1999 and the matter was referred to the Umpire. (e) The appellant-Company moved an application dated 29.01.2000 before the Umpire seeking commencement of de novo proceedings. On 31.01.2000, the said application was dismissed as untenable. Learned Umpire, passed an award dated 21.02.2000, in favour of the respondent-Company to the tune of ₹ 64,65,782/- along with the interest at the rate of 18% (per cent) with effect from 01.11.1991 till the date of realization. (f) Being aggrieved by the Award dated 21.02.2000, the appellant Company filed objections before the High Court under Sections 30 and 33 of the Act which was registered as IA No. 803 of 2001 in CS (OS) No. 795-A/2000. Learned single Judge of the High Court, vide judgment and order dated 17.04.2007, substantially rejected the objections to the Award and made a Rule of the Court with slight modifications. Learned single Judge also observed that the appellant-Company failed to satisfy that there was any serious endeavour for getting the evidence recorded again before the Umpire and waived the right of de novo trial by conduct. (g) Aggrieved by the judgment and order pas .....

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2000 filed for de novo hearing of the matter. 8) Arguing next with respect to damages granted to the respondent-Company, it was contended by learned senior counsel that under the first agreement, goods were to be imported and 5% commission was to be paid. Therefore, to award damages for the goods not processed and not delivered because the same were not imported under the first agreement is untenable. Learned senior counsel finally contended that learned single Judge as well as the Division Bench erred in law and interference by this Court is sought for in the matter. 9) Per contra, learned senior counsel for the respondent-Company strenuously submitted that the application filed by the appellant-Company is misconceived, not maintainable and the relief sought is vague. The application was moved when the hearing before the Umpire had already started and the claimant had concluded his arguments. The very first application for the same was filed on 29.01.2000 in spite of the fact that the first hearing before the Umpire took place on 24.04.1999 which got dismissed by a detailed order categorically recording that the Umpire cannot sit over or review the order of the Arbitrators which w .....

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trators or the Umpire. It is an undeniable fact that on reference of the matter to the Umpire, the Arbitrators become functus officio. The Umpire takes upon himself the exclusive authority of determining the disputes. He takes the place of Arbitrators, as the expression in lieu of the Arbitrators conveys. Unless there is an agreement to the contrary, defining or demarcating the powers of the Umpire, he is expected to discharge the same functions as Arbitrators with all the attendant powers, duties and obligations. 13) Either going by the very nature of functions entrusted to the Umpire or by the provisions of the First Schedule, it is crystal clear that there is no qualitative difference between the Arbitrators and the Umpire with regard to the methodology and modalities to be adopted for reaching a just and fair conclusion. It is trite to say that an Arbitrator is bound to observe the principles of natural justice and conform to the fundamentals of judicial procedure. It is his duty to afford a reasonable opportunity to the parties concerned. However, it would also be illogical to contend that the Umpire has to start de novo ipso facto. The very essence of the law of arbitration i .....

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dispute and the well known position of the parties would go in vain and the Umpire should start again with the same process. An inevitable outcome of the same is that a party is allowed to overcome the lacuna in the evidence already recorded before the previous arbitrators. Further, it would give an unnecessary option to the dishonest litigant to obliterate the evidence already recorded which would have adverse effect on them. Further, the witnesses to be examined afresh is a glaring anomaly that would ensue that the witnesses may not be available or might give a totally different version or a version inconsistent with their previous version, owing to the fact of faded memories. Such an interpretation of the word de novo trial would result in undue hardship to the parties and will defeat the very purpose of the Act and render arbitration ineffective. 15) Hence, firstly, the word de novo hearing should be given a purposive interpretation and it should be understood as a fresh hearing of the matter on the basis of pleadings, evidence and documents on record. If the party wants to re-examine a witness or objects to the documents admitted, the Umpire is to hear the parties and decide t .....

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000 for commencement of proceedings de novo clearly shows that it was not asking for re-hearing/re-recording of the evidence but was actually requesting for review of the order of the two Arbitrators especially for re-examination of Shri K.L. Jain. It is the case of the appellant-Company that the Arbitrators were wrong in permitting production of some other witness, by name, Shri Vijay Gupta instead of Shri K.L Jain. From the above, there is no doubt that the conduct of the appellant-Company amounts to waiver and the application filled on 29.01.2000 is nothing but trying a last armory to turn the case around. The Umpire was right in dismissing the said application. 18) Learned senior counsel for the appellant-Company contended on merits of the case, however, the law is well settled with regard to the scope and ambit of the jurisdiction of the courts to interfere with an arbitration award as has been settled in a catena of judgments of this Court and it would be sufficient to quote Ravindra Kumar Gupta and Company vs. Union of India (2010) 1 SCC 409 wherein it was held as under:- 9. The law with regard to scope and ambit of the jurisdiction of the courts to interfere with an arbitra .....

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