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allows villa buyer A.R. Krishnamani to place RTI records in award challenge
In a significant ruling on the scope of , the has allowed villa buyer A.R. Krishnamani to place Right to Information replies and official inspection reports before a court hearing his challenge to an arbitral award. Justice Suraj Govindaraj held that while the 2019 amendment restricts challenges under (a) to material on the , the ground under (b) remains open to receiving in exceptional circumstances.
Award Relied on Occupancy Certificate
Krishnamani had entered into sale and construction agreements with for a villa in the House of Hiranandani project at Devanahalli. The builder was required to deliver the villa by . Despite Krishnamani paying 80% of the total consideration by , the construction was allegedly delayed and the built-up area was found to be 490 square feet less than promised.
The sole arbitrator, in an award dated , rejected Krishnamani’s claim for delay compensation by relying on an occupancy certificate dated , said to have been issued by the . Aggrieved, Krishnamani filed a petition under Section 34 of the Act to partially set aside the award on the ground that it was vitiated by and contrary to .
RTI Reveals Questions Over Certificate
During the pendency of the Section 34 proceedings, Krishnamani applied under the and received a reply on , stating that the did not have the alleged occupancy certificate in its records. A subsequent reply of , enclosing an inspection report of the Executive Officer, , dated , indicated that the document purporting to be an occupancy certificate had not been officially issued and did not comply with required regulations.
Krishnamani then filed I.A. No. 2 of 2024 under of the Act seeking to place these two sets of documents on record. The , rejected the application on , holding that after the 2019 amendment to (a), the court could only look at the .
Arguments Over
Before the High Court, senior counsel for Krishnamani argued that the restriction confining the court to the applies only to (a), which deals with grounds like incapacity or improper notice. The ground under (b), he contended, remains untouched by the amendment and allows the court to receive material that came to light only after the award was passed. He relied on the Supreme Court’s decisions in and to support the proposition that subsequently discovered can be brought on record.
Counsel for Lakepoint Builders opposed the petition, arguing that the 2019 amendment made the the sole basis for any Section 34 challenge, regardless of the clause invoked. He submitted that permitting would defeat the object of and convert into a trial. He relied on and to underscore the limited scope of Section 34.
High Court’s Interpretation
Justice Govindaraj held that the 2019 amendment inserted the words “establishes on the basis of the record of the arbitral tribunal” only into (a). Clause (b) was left unamended and begins with “the Court finds that”. Drawing a distinction between the two, the court observed:
“The phrase tying the applicant to the record of the arbitral tribunal appears only in Clause (a). The 2019 amendment placed those words in Clause (a) and nowhere else. Clause (b) was not amended and continues to speak of what the Court 'finds'.”
The court further noted that , by its very nature, often surfaces after the award is passed, and a rigid bar on receiving fresh evidence would render the statutory ground of under ineffective.
“ in the making of an award will very often come to light only after the award, and material establishing it will, in the nature of things, lie outside the ,” the court said.
However, the High Court cautioned that the door for under Clause (b) is narrow. The court laid down five conditions: the ground must genuinely be under Clause (b); the material must have a to the award; it must have been unavailable during the arbitration; its reception must be absolutely necessary to decide the ground; and the opposite party must be given a fair chance to contest it.
A Rare and Exceptional Case
Applying these principles, the court found that Krishnamani had crossed the . The RTI replies directly questioned the genuineness of the occupancy certificate that formed the basis of the arbitrator’s decision to deny delay compensation. The inspection report could not have been part of the as it came into existence afterward.
“The documents sought to be produced are not stray documents having only a remote connection with the dispute… They go directly to the genuineness and existence of the occupancy certificate dated 27.04.2017, which was the very document relied upon in rejecting the petitioner’s claim for compensation,” Justice Govindaraj observed.
The court also rejected the respondent’s objection about the form of the application, noting that does not require an affidavit for such applications.
Court’s Decision
The High Court set aside the impugned order and allowed I.A. No. 2 of 2024, directing the Section 34 court to take the additional documents on record. It clarified that merely taking the documents on record does not mean their contents are proved or that the occupancy certificate was fraudulent. Lakepoint Builders retains the right to contest their authenticity and evidentiary value.
The court also directed the Section 34 court to expedite the disposal of A.P. No. 182/2022, keeping in view the one-year timeline prescribed under .
Justice Govindaraj summed up the position: “A Section 34 Court that receives, in a fit case, a document going to is not converting itself into a Court of appeal and is not . It is doing no more than the statute requires when a Clause (b) ground of is raised.”
The ruling reinforces that the 2019 amendment did not create an on receiving material outside the . For and challenges, the door remains open, but only in rare cases where the evidence could not have been produced earlier and is central to the ground raised.
