VERY IMPORTANT POINT
An Arbitrator or Arbitral Tribunal under Arbitration and Conciliation Act, 1996 is not a Court within the meaning of Section 195 of Cr.P.C., 1973, as such, question of applicability of Section 340 , Cr.P.C., 1973 in a proceeding before the Arbitrator or Arbitral Tribunal does not and cannot arise.

Headnote:Arbitration and Conciliation Act, 1996-Section 27-Court Assistance in Taking Evidence-Criminal Procedure Code, 1973-Sections 340 r/w Section 195(1)(b)(3)-Procedure in cases mentioned in Section 195 e.g. for punishment of perjury-Meaning of the language if declared by that Act in Section 195(3)-Whether Arbitrator is Court or not?-Held Arbitrator is not a Court within the meaning of Section 195 Cr.P.C.-Effect-As such question of applicability of Section 340 Cr.P.C. in a proceeding before the Arbitrator does not and cannot arise-Appeal dismissed- Case law discussed.
       Held : Baliram s decision (1988(4) SCC 419) has taken into consideration the entire judicial precedent available till the date of the judgment and came to a conclusion upon reliance of the Madhya Pradesh High Court judgment in Puhupram v. State of Madhya Pradesh (1968 MPLJ 629) that the same lays down the correct law. This Court observed:
       "36. ..... The least that is required of a court is the capacity to deliver a definitive judgment , and merely because the procedure adopted by it is of a legal character and it has power to administer an oath will not impart to it the status of a court. That being so, it must be held that a Commission of Inquiry appointed by the appropriate government under Section 3(1) of the Commissions of Inquiry Act is not a court for the purposes of Section 195 of the Code."
       Needless to record here that on a proper appreciation of judgment in Baliram (supra), there cannot be two opinions as the scope and effect of Section 195(3) of Code and we thus record our concurrence with the view expressed by this Court in Baliram: The law thus laid down by the Bench decision of the Calcutta High Court in Sailaja Kanta (AIR 1971 Calcutta 137 ) cannot be said to be good law and thus stands over-ruled even on the basis of the state of law under the 1940 Act (being a repealed statute presently). On the wake of the aforesaid, we are unable to record our concurrence with the submissions made in support of the appeal that the Arbitrator can be termed to be a Court within the meaning of Section 195 of the Cr. Procedure Code, as such question of applicability of Section 340 Cr.P.Code in a proceeding before the Arbitrator does not and cannot arise. The issue thus is answered in the negative. The Appeal therefore, fails and is dismissed. No order as to costs. (Paras 18, 19 & 20)

JUDGMENT

Banerjee, J.-Leave granted.

2. Since the decision in Thawardas s case (Thawardas Pherumal & Anr. v. Union of India1) the issue of identifying the Arbitrator, as a court, did come up for consideration before this Court on more occasions than one. Thwaradas (supra) negatived it with a positive finding that the Arbitrator is not a Court within the meaning of the Code of Civil Procedure. Since then there has however, been sea change of events: the repeal of the earlier statute of Arbitration (Arbitration Act, 1940) and introduction of the new Arbitration Act, 1996 (Arbitration and Conciliation Act, 1996) in the statute book has brought about a major change in the sphere of Arbitration. Based on uncitral model of law on International Commercial Arbitration and Conciliation Rules, the Act is stated to be best suited and to sub-serve the Indian conditions having regard to the economic conditions and the effect of globalisation of trade. Incidentally, the Statements of Objects and Reasons of the Arbitration and Conciliation Act records it to be an act to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards as also to define the law relating to conciliation and for matters connected therewith or incidental thereto. While the earlier enactment of 1940 was to be the most expeditious methodology of adjudication and disposal of disputes through arbitration but practicability of the situation lately produced a rather dismal picture and proved contrary to the normal belief and expectation that arbitration would be an otherwise expeditious method to do so. The uncitral model on the basis of which this Act of 1996 was engrafted in the statute book, in no uncertain terms recognises "party autonomy" philosophy and minimum interference from the Courts. In England also, similar such situation was the felt-need and resultantly in 1996, a similar enactment came into force but neither of the legislations however can be attributed to be an exact copy of the uncitral model though undoubtedly based thereon.

3. Having given a brief introduction to the recent legislation and adverting to the matter in issue presently, it would be worth noting that the issue involved though short but interesting enough to involve a useful debate on the same - Debate, of course, we will avoid, but discussions we will indulge so that the law remains settled once for all on this issue as involved in the matter. The issue being applicability of the provisions of Section 340 Cr. P. Code in a proceeding before the arbitrator - undoubtedly an ingenious effort but let us see as to how far the same succeeds.

4. Before however, embarking on a discussion on the subject issue, a look at the provisions would be best suited at this juncture: The relevant provisions being Sections 340 and 195 sub-section (1)(b) and sub-section (3) of the Code of Criminal Procedure. The provisions read thus:

340: Procedure in cases mentioned in Section 195--

(1) When, upon an application made to it in this behalf or otherwise, any Court is of opinion that it is expedient in the interests of justice that an inquiry should be made into any offence referred to in clause (b) of sub-section (1) of Section 195, which appears to have been committed in or in relation to a proceeding in that Court or, as the case may be, in respect of a document produced or given in evidence in a proceeding in that Court, such Court may, after such preliminary inquiry, if any, as it thinks necessary, -

(a) record a finding to that effect;

(b) make a complaint thereof in writing;

(d) take sufficient security for the appearance of the accused before such Magistrate, or if the alleged offence is non-bailable and the Court thinks it necessary so to do, send the accused in custody to such Magistrate;

Click Here to Read the rest of this document

2001 Supreme(SC) 646

Cases Referred (5)