2013 Supreme(Raj) 713
RAJASTHAN HIGH COURT AT JAIPUR BENCH
Mohammad Rafiq, J.
Rajasthan Rajya Path Parivahan Nigam - Appellant
Versus
Additional District Judge No.5, Jaipur Mahanagar and others - Respondent
S.B. Civil Writ Petition No. 568 of 2013 with Stay Application No. 469 of 2013.
Decided On : 29-01-2013
For the Petitioner RSRTC:S.K. Bhattacharya, Senior counsel, with Satish Chandra Mittal, Advocate.
For the Respondents:Ajeet Kumar Sharma, Senior counsel, with V.K. Sharma and Rachit Sharma, Advocates.
The court has the discretion to allow amendments to objections in a petition under Section 34 of the Arbitration and Conciliation Act, 1996, if such amendments are necessary for determining the real question in controversy and do not cause grave prejudice or injustice to the other party.
Headnote:
ARBITRATION - AMENDMENT OF OBJECTIONS - SECTION 34 OF THE ARBITRATION AND CONCILIATION ACT, 1996 - COURT'S DISCRETION - RELEVANT CONSIDERATIONS - AMENDMENT ALLOWED FOR OBJECTIONS RAISED BEFORE ARBITRATOR AND HAVING BEARING ON DISPUTE - COSTS AWARDED TO COMPENSATE FOR INCONVENIENCE CAUSED TO RESPONDENT.
Fact of the Case:
Petitioner Rajasthan Rajya Path Parivahan Nigam challenged the order of the Additional District Judge dismissing its application to amend its objections in a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996. The amendments sought to incorporate objections regarding the existence of a concluded contract, the arbitrator's failure to decide a counterclaim, and adverse inferences drawn against the petitioner. The respondent argued that the amendments were belated and would cause prejudice.
Finding of the Court:
The court held that the amendment regarding the existence of a concluded contract was necessary to determine the real question in controversy, as directed by the Supreme Court. The amendment regarding adverse inferences was also relevant to the dispute, considering the large liability involved. However, the amendment regarding the counterclaim was not allowed as it was not raised before the arbitrator. The court exercised its discretion to allow the amendments, considering that the respondent could be compensated for any inconvenience caused by awarding costs.
Issues: 1. Whether the court can allow amendments to objections in a petition under Section 34 of the Arbitration and Conciliation Act, 1996. 2. What factors should the court consider in exercising its discretion to allow or disallow amendments. 3. Whether the amendments sought by the petitioner were necessary and relevant to the dispute.
Ratio Decidendi: 1. The court has the discretion to allow amendments to objections in a petition under Section 34 of the Arbitration and Conciliation Act, 1996, if such amendments are necessary for determining the real question in controversy and do not cause grave prejudice or injustice to the other party. 2. In exercising its discretion, the court should consider factors such as the stage of the proceedings, the nature of the amendments, the reasons for the delay in seeking the amendments, and the potential prejudice to the other party. 3. Amendments that are necessary to determine the real question in controversy and have a bearing on the dispute should be allowed, even if they are sought at a late stage. However, amendments that are not relevant to the dispute or would cause grave prejudice to the other party should not be allowed.
Final Decision: The court allowed the petitioner to incorporate the amendments regarding the existence of a concluded contract and adverse inferences, subject to payment of costs to the respondent. The amendment regarding the counterclaim was not allowed.
JUDGMENT
1. - This writ petition has been filed by petitioner Rajasthan Rajya Path Parivahan Nigam assailing the order passed by Additional District Judge No.5, Jaipur Metropolitan, Jaipur dated 15.12.2012 by which the petitioner's application filed under Order 6, Rule 17 read with Section 151 of the Civil Procedure Code seeking to incorporate by way of amendment three new objections in the petition filed under Section 34 of the Arbitration and Conciliation Act, 1996, has been dismissed.
2. Facts leading to present writ petition are that a notice-inviting-tender was issued by petitioner on 27.01.2005 for appointment of sole licensee for transportation of domestic articles/small commercial goods from one place to another through its fleet of 4000 buses. Respondent no.3 - M/s. Bhagwati Enterprises submitted its tender in prescribed tender form along-with relevant documents. Petitioner sent a letter dated 31.01.2005 to the respondent no.3 to accept its offer requiring it to deposit a sum of Rs. 6,66,786/- towards security amount and bank guarantee of Rs. 40,00,716/-, in accordance with the conditions no.4 and 18 of the notice inviting tender so that the agreement can be executed. The respondent no.3 though deposited the security money and bank guarantee with the petitioner but vide its letter dated 19.03.2005 conveyed that they have yet not received agreement terms, enabling them to execute it and initiate energizing the centers by providing aforesaid services immediately on allotment of office premises to them at the bus stands. The respondent no.3 sent another letter dated 23.03.2005 requesting the Petitioner to delete condition nos.29 and 30 from the prescribed proforma of agreement. The respondent no.3 purchased non-judicial stamp of Rs. 100/- at Indore and got the agreement in prescribed proforma typed on it and signed the same on 28.03.2005. According to petitioner, it was also signed by two persons of Indore at Indore. The agreement was sent to the petitioner for needful and same was signed by the Chairman of the petitioner-Corporation on 29.03.2005. It is alleged by the petitioner that when the file containing the agreement was received back in the office of the Chairman after his signatures by the Financial Adviser, who too was required to sign the same along-with the Executive Director (Administration) as witness, they noticed that a hand written note reading "valid goods permit is prerequisite and clause nos. 29 and 30 are not acceptable" was interpolated on page no.7 of the agreement of the agreement by respondent no.3 surreptitiously, which note was not there when the Chairman-cum-Managing Director of the Corporation signed the agreement. The Financial Adviser convened a meeting on 31.03.2005 with the Executive Director (Administration) and Executive Manager (Advertisement). The Proprietor of the respondent no.3 firm also participated. He was confronted with the hand written note on page no.7 of the agreement and required to submit fresh agreement in the prescribed proforma as the note was in contradiction to clauses no.29 and 30 typed on page 6 of the agreement. However he was unwilling to withdraw it and wanted to execute the agreement only as per those terms and conditions. A letter dated 01.04.2005 was therefore sent by the petitioner to the respondent no.3 for submitting fresh agreement in the prescribed proforma within five days, followed by letters dated 05.04.2005 and 06.04.2005 to the same effect.
3. That it was thereafter that when the respondents failed to sent fresh agreement in the prescribed proforma, Petitioner, vide its letter dated 16.04.2005 cancelled the letter and later on forfeited the earnest money and security deposit by order dated 22.02.2005. Respondent requested the petitioner by his letter dated 03.05.2005 for appointment of an Arbitrator out of the panel suggested by them for adjudicating the dispute. The reply was sent by the Petitioner to respondent no.3 on 24.05.2005 contending that in cl
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