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2023 Supreme(Mad) 2726

IN THE HIGH COURT OF JUDICATURE AT MADRAS
ABDUL QUDDHOSE, J.
Indusind Bank Limited, Chennai – Appellant
Versus
MLR Auto Limited, Telengana – Respondent
A. Nos. 1662 & 3486 of 2023
Decided On : 31-08-2023

The Court emphasized that the role under Section 27 of the Arbitration and Conciliation Act is not adjudicatory, but only to grant formal approval of the Arbitrator's order.

Headnote:

Arbitration and Conciliation Act - Summoning of Witnesses and Extension of Time - Section 27, Section 29A

Fact of the Case:

The case involved a dispute between the applicant and the respondent arising from three Memorandum of Understandings. The applicant claimed breach of the agreements by the respondent, while the respondent disputed the claim. The Arbitrator allowed the applicant to examine additional witnesses and produce documents, which was objected to by the respondent. The applicant sought approval of the Arbitrator's order and an extension of time for making an Award.

Finding of the Court:

The Court found that the Arbitrator's decision to allow the examination of additional witnesses and production of documents was valid and not an adjudicatory role. The Court approved the Arbitrator's order and granted an extension of six months for the Arbitrator to pronounce an Award.

Issues: The main issue was the validity of the applicant's request to examine additional witnesses and produce documents, which was objected to by the respondent. Another issue was the extension of time for making an Award.

Ratio Decidendi: The Court held that the role under Section 27 of the Arbitration and Conciliation Act is not adjudicatory, but only to grant formal approval of the Arbitrator's order. The rights of the respondent were not curtailed, and the Court was satisfied with the Arbitrator's decision.

Final Decision: The Court issued summons to the witnesses to appear before the Arbitrator and granted an extension of six months for the Arbitrator to pronounce an Award.

JUDGMENT

1. A.No.1662 of 2023 has been filed under Section 27 of the Arbitration and Conciliation Act, 1996 seeking to summon the persons 1 to 3 to produce the documents morefully described in the schedule to the judges summons, pursuant to the order dated 21.01.2023 passed by the Arbitrator.

A.No.3486 of 2023 has been filed under Section 29A of the Arbitration and Conciliation Act, 1996 seeking extension of time period for making an Award for a further period of six months.

2. By the order of the Arbitrator dated 21.01.2023 passed under Section 27 of the Arbitration and Conciliation Act, 1996, the Arbitrator has allowed the request of the applicant to examine three witnesses and for production of documents. There is a dispute between the applicant and the respondent arising out of three Memorandum of Understandings dated 25.07.2016, 25.07.2017 and 25.07.2018. There is an Arbitration Clause available in all the three Agreements. Pursuant to orders passed by this Court under Section 11 of the Arbitration and Conciliation Act 1996, the Sole Arbitrator, who is presently adjudicating the dispute between the parties, was appointed as an Arbitrator. Pleadings are complete before the Arbitrator and the examination of the witnesses on the side of the applicant has also been commenced. The applicant herein is the claimant in the Arbitration and the respondent herein is the respondent in the Arbitration. The respondent is a Manufacturer of auto rickshaws. Under the aforesaid agreements, which are the subject matter of dispute, the respondent had agreed to buyback the auto rickshaws from the applicant whenever the borrower committed default and the default period should not exceed more than 20 equated monthly instalments. The applicant has made a claim against the respondent claiming that the respondent has committed breach of the three Memorandum of Understandings referred to supra. However, the same is disputed by the respondent. As seen from the counter statement filed by the respondent before the Arbitrator, issues were also framed by the Arbitrator and the Trial in the Arbitration has been commenced and the applicant has also examined three witnesses.

3. In view of the dispute raised by the respondent, the applicant had made a request to the Arbitrator as per the provisions of Section 27 of the Arbitration and Conciliation Act, 1996 seeking to examine three more witnesses, who according to them are independent witnesses and also for production of certain documents by the said three witnesses. The same was objected to by the respondent in the Arbitration by filing a counter to the application filed by the applicant under Section 27 of the Arbitration and Conciliation Act, 1996. However, the objections raised by the respondent was overruled by the Arbitrator by passing the order dated 21.01.2023 by allowing the application filed by the applicant under Section 27 of the Arbitration and Conciliation Act, 1996 as prayed for. However, liberty was granted by the Arbitrator for the respondent to raise all objections available to them under law with regard to the examination of the fresh witnesses and production of all documents by the fresh witnesses in the main Arbitration. The applicant has now filed these applications seeking approval of the Arbitrator''s order dated 21.01.2023 as per the provisions of Section 27 of the Arbitration and Conciliation Act, 1996 and extension of time period for making an Award for a further period of six months.

4. A serious objection has been raised by the learned counsel for the respondent for entertaining these applications. He would submit that in the claim statement filed by the applicant, there is no prayer sought for by the applicant with regard to the alleged payments made by the respondent to the customers of the applicant. Without there being a prayer, the present applications filed before the Arbitrator seeking for examination of additional witnesses and for production of documents are not maintainable

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