IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
MOUSHUMI BHATTACHARYA, M.G.PRIYADARSINI, JJ.
V. Sreenivas Reddy - Petitioner
Versus
B.L. Rathnamma - Respondent
Civil Revision Petition No. 2401 of 2024
Decided On : 06-09-2024
(A) Arbitration and Conciliation Act, 1996 – Section 27 – Civil Procedure Code, 1908 – Order XVI Rule 10 – Civil Revision Petition (CRP) challenging the Trial Court's order closing the application for summoning witnesses – The Court held that the petitioner's application was misconceived as only the Arbitral Tribunal could initiate such a representation under Section 27(5) – The petitioner's conduct was found to frustrate the arbitration process and was deemed unworthy of equitable relief. (Paras 16, 27, 30)
Facts of the case: The petitioner sought to summon witnesses in arbitration proceedings but the Trial Court closed the application without enforcing their attendance, leading to the CRP.
Findings of Court: The Court found the CRP lacked statutory basis and dismissed it due to the petitioner's conduct undermining the arbitration process.
Issues: Whether the petitioner could file a CRP against the Trial Court's order and the implications of the petitioner's conduct on the arbitration timeline.
Ratio Decidendi: The Court ruled that Section 27(5) restricts the initiation of representation to the Arbitral Tribunal, and the petitioner's actions were contrary to the Supreme Court's directives regarding arbitration timelines.
Result: CRP dismissed.
ORDER :
Moushumi Bhattacharya, J.
The Civil Revision Petition (CRP) arises out of an order dated 02.07.2024 passed by the XXIV Additional Civil Judge, City Civil Court, at Hyderabad (‘Trial Court’) in a petition filed by the petitioner under section 27 of The Arbitration and Conciliation Act, 1996 for the purpose of issuing summons to the witnesses in terms of an order passed by the Arbitral Tribunal on 07.04.2024.
2. The learned Judge disposed of the Arbitration Original Petition (AOP.No.527 of 2024) by directing the office of the Court to re-submit the record to the Arbitral Tribunal. The Learned Judge considered the report of the Bailiff of the District and Sessions Court, Bengaluru Rural District, recording that both the witnesses were called absent on the returnable date despite service of summons. The Court accordingly closed the case by recording that the evidence could not be taken.
3. Learned Senior Counsel appearing for the petitioner (the claimant in the arbitration) submits that the Court should have taken steps under Order XVI Rule 10 of The Code of Civil Procedure, 1908 (CPC) and issued appropriate directions. Counsel submits that the Court was under a bounden duty to secure the presence of the 2 witnesses and render complete justice in the matter which the Court failed to do. Counsel submits that this is a fit case for revision of the order passed by the Trial Court.
4. Learned Senior Counsel appearing for the respondent argues on the maintainability of the CRP as well as on the conduct of the revision petitioner. Counsel submits that the learned Arbitrator was appointed by the Supreme Court and the Supreme Court by its order dated 11.03.2024 extended the time for completion of arbitration till 15.09.2024. Counsel has filed a compilation of documents to show the lack of diligence on the part of the petitioner as also the petitioner’s failure to seek further extension of time for completion of arbitration.
5. We have heard learned counsel appearing for the parties and think it appropriate to first deal with the law relevant to the controversy.
6. The genesis of the present CRP arises out of an order passed by the learned Arbitrator on 07.04.2024 in an Application filed by the petitioner/claimant for approaching the Principal Special Court at Hyderabad to summon 2 witnesses. The Arbitrator allowed the Application and permitted the petitioner to make an application for seeking assistance in taking evidence before the Court under section 27 of the 1996 Act within 10 days from the date of the order. The Arbitrator further directed that the entire proceedings should be completed within 1 month from the date of filing of the Application in view of the time limit fixed by the Supreme Court for completing the Arbitration by 15.09.2024. The petitioner approached the Trial Court under section 27 of the 1996 Act for issuing summons and examination of the 2 witnesses.
7. The subject matter of the CRP is that the Trial Court closed the petitioner’s application and directed for re-submission of the record to the Arbitral Tribunal without enforcing the attendance of the witnesses.
Deconstructing Section 27 of The Arbitration and Conciliation Act, 1996
8. Section 27 of the 1996 Act provides for “Court Assistance in Taking Evidence”. Section 27 contemplates 5 distinct components which are sequential in nature. These are :
(ii) Section 27(2) specifies the contents of the Application as provided under se
The Court clarified that only the Arbitral Tribunal can initiate representation under Section 27(5) of the Arbitration Act, and the petitioner's conduct undermined the arbitration process, leading to....
The court ruled that an ex-parte order is interlocutory and barred from revision under the Commercial Courts Act, but the petitioner retains the right to participate in ongoing proceedings.
Procedural rules must favor justice, allowing parties to present their case despite missed timelines if sufficient cause for absence is shown, per Order IX Rule 7 CPC.
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.
An amendment to introduce a counter claim in arbitration proceedings can be denied if filed after the closure of evidence, balancing the need for justice and procedural efficiency.
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