Ashapura Developers vs Aditya Birla Retail Ltd.

R.S. Dalvi, J.—The petitioner has filed the above petition u/s 34 of the Arbitration and Conciliation Act, 1996 (the Act) on 5th August, 2013 within the period of limitation set out in Section 34(3) of the Act. This Chamber Summons has been sought to be taken out in July, 2014 after the period of limitation set out in the above sub-section has long expired. It has to be seen whether it can be allowed.

It is settled law that all amendments sought in a petition u/s 34 are not per se only rejectable. Certain amendments can be allowed despite the period of limitation having expired. The principle upon which the amendments have to be allowed are stated in the case of State of Maharashtra Vs. Hindustan Construction Company Ltd.,

A fresh claim made by the proposed amendment which would otherwise be barred cannot be allowed by way of an amendment (para 25).

An independent ground amounting to a fresh application for setting aside the arbitral award also cannot be allowed upholding the finding of the Division Bench in the case of Vastu Invest and Holdings Pvt. Ltd. Vs. Gujarat Lease Financing Ltd.,

Material facts cannot be allowed to be added after the period of limitation but material particulars (of a fact already mentioned in the petition) can be allowed (para 26).

It has to be seen whether in this case an independent ground of challenge has been made out or whether an amplification of the ground already taken is made.

Ground A in the petition is that the finding of the Arbitral Tribunal that the leave and licence agreement is illegal has no legal basis, is perverse and against the public policy of India. Six reasons for that ground are set out. The reasons show that neither the consideration nor the object was unlawful to make the agreement unlawful, that the agreement would not become unlawful because certain fire escape passage was included in the licenced premises, use of premises as office was not prohibited, the presumption of law was in favour of legality of contracts, the issue of illegality raised by the respondent was an afterthought.

The finding of the illegality of the leave and licence agreement is, therefore, upon the question of facts enumerated above.

Ground B is distinct and need not be considered.

Ground AA is that the Arbitral Tribunal has not followed the mandate of Indian law and the award was, therefore, opposed to public policy. No elaboration of the ground of not following the Indian law is made.

Ground BB is that the impugned award is perverse, contrary to law and against the public policy. The ground does not amplify how it is contrary to law or against the public policy.

The petitioner seeks to contend by way of an amendment the ground of the bar of inherent jurisdiction of the Tribunal u/s 41 of the Bombay Presidency Small Cause Courts Act, 1882. The petitioner has stated in the ground that the question of inherent jurisdiction as a question of law was non derogable and hence non waivable. It was argued that it was not capable of settlement by arbitration.

The ground relating to the lack of jurisdiction is an independent ground which has not been taken in the petition under any of the aforesaid major grounds. It would have to be seen whether in the ground that the award was contrary to law and opposed to public policy would be the ground under which the aforesaid ground of lack of inherent jurisdiction can be encompassed.

In the case of Vastu Finvest (supra) also the arbitration concerned a leave and licence agreement. The petitioner contended that the award was challenged u/s 34(2)(a)(ii), Section 34(2)(b)(i) & (ii). The ground that the agreement in the petition was infact a leave and licence agreement under which the petitioner had become a tenant under the provision contained in Section 5(11) of the Bombay Rents, Hotel & Lodging House Rates Control Act, 1947 and consequently the challenge to the jurisdiction of the Arbitrator was upon the ground that it fell within the exclusive jurisdiction of the Small Causes Court. The only ground in the petition relating to public policy was, as in this petition, a bare ground stating that the impugned award was in conflict with public policy and public interest. The contention of the petition was that even though there was no mention of the lack of the Arbitrator''s inherent jurisdiction before and during the arbitration proceeding in application u/s 11 or 16 it could be raised at any time even at the time of the execution of an award and hence the amendment should be allowed. It was held that the ground of jurisdiction was an independent ground of attack on the award and consequently could not be allowed by way of amendment. Considering this case it has been held in the case of M/s. Hindustan Construction (supra) that any independent ground of challenge could not be allowed by way of amendment.

This stands to reason as it would nullify the entire specific period of limitation legislated u/s 34(2) of the Act if upon a mere statement that any award was contrary to law or against the public policy the petitioner is allowed to raise independent grounds hitherto not taken.

In view of the distinction made in the case of M/s. Hindustan Construction (supra) that only certain kinds of amendments can be allowed and not others as in suits, it would be the duty of the Court to see which amendment and to which extent can be allowed upon the grounds already raised as set out above. This, not being one such ground and is seen to be a wholly independent ground just as the one taken in the case of Vastu Finvest (supra), cannot be allowed to be raised by way of an amendment, the argument that the objections as to the inherent jurisdiction of an adjudicating authority can be raised at any time, even at the time of the execution of the award notwithstanding.

Hence the Chamber Summons is dismissed.