HDFC Bank Limited vs Ran Singh and another

M.M.S. Bedi, J.—Vide impugned order dated 27.10.2010, the Court exercising powers u/s 34 of the Arbitration and Conciliation Act, 1996 (hereinafter to be referred as Act) has framed the following issues:-

Whether the award dated 23.02.2010 passed by the respondent No. 4 is liable to be set aside on the grounds mentioned in the application? OPP

Whether the objections are not maintainable? OPR

Whether this Court has no jurisdiction to try this objection petition? OPR

Relief.

Learned Counsel for the petitioner vehemently contended that the power u/s 24 of the Act is to be exercised to set aside an award only within the parameters of Section 34, but by framing issues, the scope of adjudication has been widened causing prejudice to the petitioner. It has also been argued that the Court is not required to frame issues in proceeding u/s 34 of the Act.

I have heard learned Counsel for the petitioner and carefully gone through the issues.

The issues framed are meant only to provide guidelines for adjudication of the matter and the objective of framing the issues is that any substantial point raised may not be ignored. It is the discretion of a Court to formulate the points for determination for effective adjudication of a matter. The contention of learned Counsel for the petitioner that the scope of Section 24 of the Act has been widened by permitting the Court to set aside an award appears to be without any force as this Court is of the opinion that the framing of abovesaid issues will not enlarge the scope of interference of the Court to take the controversy beyond the ambit of the parameters laid down in Section 34 of the Act. Section 34 of the Act reads as follows:-

Application for setting aside arbitral award.- (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and subsection (3).

(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 decisions 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 not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or

(b) the Court finds that------

(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or

(ii) the arbitral award is in conflict with the public policy of India.

Explanation.---Without prejudice to the generality of sub-clause (ii), it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81.

(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award, or, if a request had been made u/s 33, from the date on which that request had been disposed of by the arbitral tribunal: Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.

(4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.

The apprehension of learned Counsel for the petitioner that the trial Court will be able to go beyond the abovesaid grounds of interference is misconceived. The petition is dismissed expecting that the Court will limit the adjudication within the parameters of Section 34of the Act while deciding the abovesaid issues.