Energy Infrastructure (India) Limited vs S. Bhagwan Enterprises and Another

Alok Singh, J.—Present petition is filed challenging orders dated 17.4.2010 and 23.8.2010 (Annexures P-1 and P-3) passed by District Judge, Rewari and Addl. District Judge, Rewari.

The only grievance of the Petitioner is that in a proceeding u/s 34 of the Arbitration and Conciliation Act, 1996 full fledged regular civil trial is not required and an application u/s 34 of the Act can be decided as a summary proceedings without formulating any issue. Hence, learned Addl. District Judge has committed jurisdictional error while framing the issues.

Learned Counsel for the Respondents states that in view of the judgment of the Apex Court in the matter of Fiza Developers and Inter-Trade P. Ltd. v. AMCI (I) Pvt. Ltd. and Anr. Civil Appeal No. 5139 of 2009 issues could not be framed as required under Order 14 Rule 1 Code of Civil Procedure.

Hon''ble Apex Court in the matter of Fiza Developers and Inter-Trade P. Ltd. (supra) in paragraphs No. 13 and 14 has held as under:

Before concluding, there is a need to clarify the observation by the High Court that a proceeding u/s 34 may not be in the nature of adversarial proceedings. In an adversarial process, each party to a dispute presents its case to the neutral adjudicator seeking to demonstrate the correctness of his own case and the wrongness of the other. [See: P. Ramanatha Iyer''s Advanced Law Lexicon, Third Edition, Vol. I, Page 152]. While an applicant in an application u/s 34 is interested in getting an order setting aside an award, his opponent is equally interested in ensuring that it is not set aside, but upheld. While an applicant presents his case to the Judge to prove that the award is liable to be set aside, the Respondent puts forth his case to refute the claim of the applicant that the award is liable to be set aside. An application u/s 34 in that sense is adversarial in nature. But proceedings u/s 34 differ from regular civil suits in a significant aspect. In a regular civil suit, in the event of failure to file a defence, it will be lawful for the court to pronounce the judgment on the basis of facts contained in the plaint [Vide Order VIII Rule 5(2) of the Code]. But in an application u/s 34, even if there is no contest, the court cannot on the basis of the averments contained in the application, set aside the award. Whether there is contest or not, the applicant has to prove one of the grounds set out in Section 34(2)(a) and (b). 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.

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 u/s 34 of the Act as full-fledged regular civil suits under Code of Civil Procedure. Applications u/s 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 u/s 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 written submissions and decides the matter. This is of course the routine procedure. The Court may vary the said procedure, depending upon the facts of any particular case or the local rules. What is however 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 u/s 34 of the Act.

In view of the judgment of the Apex Court in the matter of Fiza Developers and Inter-Trade P. Ltd. (supra), present petition can be disposed of with direction to learned trial Court to decide the case as per the dictum of the Apex Court.

Petition stands disposed of.