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2024 Supreme(Online)(Kar) 37703
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF JULY, 2024 PRESENT THE HON'BLE MRS JUSTICE ANU SIVARAMAN AND THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE COMMERCIAL APPEAL NO. 153 OF 2024 BETWEEN:
UNION OF INDIA, REPRESENTED BY P.D. (P&A), ATVP, MINISTRY OF DEFENCE, "AKANKSHA", DEVELOPMENT ENCLAVE, RAO TULA RAM MARG, NEW DELHI - 110 010.
…APPELLANT (BY SRI K. ARAVIND KAMATH, ASG A/W SRI. CHANDRA CHUD A., CGSC.)
AND:
1. SRI. P.N.SHIVA PRASAD, S/O LATE P.S. NANJAPPA, AGED ABOUT 72 YEARS, CMD OF M/S SHAKTHI RUBBER PRODUCTS PVT. LTD., SHIVBAGH, KADAKOLA P.O., MYSURU - 571311.
2. ARBITRAL TRIBUNAL, COMPRISING OF SOLE ARBITRATOR, SMT. H.S.KAMALA, RETD., DISTRICT JUDGE, ARBITRATION & CONCILIATION CENTRE, NO.49, EAST WING, 3RD FLOOR, KHANIJA BHAVAN, RACE COURSE ROAD, BENGALURU - 560 001.
…RESPONDENTS (BY SRI. S.RUPESH KUMAR, ADV. FOR C/R-1, V/O DATED 01.07.2024 NOTICE TO R2 IS DISPENSED WITH.)
THIS COMMERCIAL APPEAL IS FILED UNDER SECTION
13(1A) OF COMMERCIAL COURTS ACT 2015 R/W SECTION 37(1)(c) OF THE ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDER DATED 21.02.2024 IN COM A.P.NO.36/2023 PASSED BY THE HON'BLE LXXXIX ADDITIONAL CITY CIVIL AND SESSIONS JUDGE AT BENGALURU (CCH 90) COMMERCIAL COURT CONFIRMING THE AWARD PASSED BY THE LEARNED ARBITRAL TRIBUNAL DATED 17/11/2020 IN A.C.NO.58/2020 ETC.
THIS APPEAL BEING HEARD AND RESERVED ON 10TH JULY, 2024 AND COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT PROUNCED THE FOLLOWING:
CAV JUDGMENT
(PER: HON'BLE MR JUSTICE ANANT RAMANATH HEGDE)
This appeal is under Section 37 of the Arbitration and Conciliation Act, 1996 (Hereinafter referred to as the 'Act of 1996' for short).
2. The existence of the arbitration agreement is not in dispute. The appellant was the respondent before the arbitrator. Respondent No.1 made a claim before the Arbitral Tribunal for recovery of certain amount under different heads. The Arbitral Tribunal has allowed the claim in part and held that the claimant is entitled to Rs.1,81,98,786/- along with interest @ 6% p.a. from the date of the petition till payment. Claim under certain heads are rejected.
3. The claimant has accepted the award and has not questioned the same. The respondent before the arbitrator has questioned the award by filing Section 34 application.
Said application is rejected.
4. The appellant before this Court has also filed an application under Order XLI Rule 27 of the Code of Civil Procedure seeking leave of the Court to produce additional documents. The respondents have orally objected to the said application.
5. The appeal is primarily on the premise that fair opportunity of hearing was denied to the appellant. It is further urged that on account of Covid-19 pandemic related restrictions, the appellant could not participate in the proceeding before the Tribunal and decision rendered by the arbitrator without giving sufficient opportunity to the appellant which comes within the mischief of Section 34(2)(a)(iii) of the Act of 1996. It is also the case of the appellant that the appellant intended to produce documentary evidence in support of the defence however, same could not be done on account of Covid-19 pandemic related restrictions and the appellant is seeking the leave of the Court to produce certain documents.
6. Learned counsel appearing for the 1st respondent would contend that the appellant, despite sufficient opportunity being granted did not appear before the Tribunal to contest the matter. Though there were few restrictions relating to Covid 19 pandemic, the appellant could have certainly appeared before the Tribunal either through video conference or physically to defend the case which the appellant failed to do. It is also submitted that the documents now sought to be produced were not produced in Section 34 proceeding and in an appeal under Section 37, the appellant cannot be permitted to contest the matter on the basis of additional documents.
7. This Court has considered the contentions raised at the bar.
8. It is not in dispute that the arbitrator was appointed on 18.06.2019. On 12.03.2020, the Arbitral Tribunal issued notice on the claim petition to the respondent. Admittedly, from 23.03.2020, lockdown was imposed throughout India on account of Covid-19 pandemic.
9. It is claimed that the appellant from its head quarters in New Delhi had sent fax messages to the Arbitration Centre seeking extension of time on account of unprecedented Covid-19 situation. It is further stated that though the matter was adjourned on few occasions, later despite Covid-19 pandemic situation, the arbitrator proceeded to hear the matter on merits. It is further stated that on 29.09.2020, the appellant appeared through online and submitted that the appellant has already filed statement of objections and sought time to deposit the appellant's share of arbitration fees. On 05.10.2020, the arbitrator has discarded the defence filed by the appellant on the premise that the arbitration fees were not deposited within the time stipulated. On
08.10.2020, the claimant has led evidence and 15 documents were marked. On 16.10.2020, the arbitrator has proceeded to record that the evidence of the appellant is closed and the matter is reserved for passing award.
The award came to be passed on 17.11.2020.
10. The aforementioned facts are not in dispute. It is to be noticed that except the date on which the arbitrator issued notice (12.3.2020), the rest of the proceedings before the Arbitral Tr
