Sri Shankar Rep. by GPA Holder Mr. Muraleedharan P Nair vs A.T. and S.PVT. Ltd. and Sri C Nagesh Advocate and Sole Artibrator Mysore Bar Association Las Courts Premises Chamarajapuram, Mysore

B.S. Patil

In this writ petition, petitioner is calling in question the order dated 16.08.2011 passed by the learned District Judge, Mysore, thereby dismissing the application filed seeking permission to adduce evidence in Arbitration Suit No. 1/2010.

Arbitration Suit No. 1/2010 is instituted u/s 34 of the Arbitration & Conciliation Act, 1996 (for short, ''the Act'') seeking to set aside the arbitral award dated 22.01.2010 passed by the Arbitrator in Arbitration Case No. 1/2008.

Petitioner intended to lead evidence to prove that the award passed by the Arbitrator was biased and was liable to be set aside. This was objected to by the respondent herein. The Court below has dismissed the application holding that the request made by the petitioner was to lead evidence with regard to the conduct of the Arbitrator in refusing to hold the arbitration proceedings by changing the venue, therefore, the same cannot be accepted as the pleadings in the Arbitration Suit filed u/s 34 of the Act did not disclose any foundation for the allegation of bias.

Learned counsel appearing for the petitioner invites the attention of the Court to the grounds urged in Arbitration Suit No. 1/2010 whereunder he has contended that the Arbitrator drifted away from the role of Arbitrator, practically functioning as a party involving himself in the dispute by and between the parties''. It is this aspect of the matter, counsel submits, that the petitioner intended to place on record by adducing evidence consistent with what has been pleaded, therefore, the Court below was not right and justified in rejecting the application filed to lead evidence. In support of this contention, he has placed reliance on the judgment of the Apex Court in the case of Fiza Developers & Inter-Trade P. Ltd. Vs. Amci (I) Pvt. Ltd. & Another - 2009 (12) JT 519.

Learned counsel for the respondent submits that no case was made out before the Court below for leading evidence and having regard to the nature of the proceedings initiated u/s 34 of the Act and in the absence of any foundation laid in the pleadings to lead evidence regarding bias against the Arbitrator, the Court below was right and justified in passing the impugned order.

Having heard the learned counsel for the parties and on careful perusal of the pleadings and the impugned order. I find that the petitioner has indeed taken up a contention in the proceedings instituted u/s 34 of the Act contending that the Arbitrator had in fact undertaken the role of an adversary by involving himself in the dispute between the parties. This is a serious allegation made against the Arbitrator. If the party wants to substantiate the same by leading evidence, the same cannot be denied. In fact, in the judgment referred to supra by the learned counsel for the petitioner, it is stated that though the proceedings u/s 34 are not in the nature of adversarial proceedings, the applicant who has approached the Court invoking Section 34 of the Act had to prove one of the grounds set out in Section 34(2)(a) and (b) and even if the applicant does not rely upon the grounds under clause (b), the Court, on its own initiative, may examine the award to find out whether it is liable to be set aside on either of the two grounds mentioned in Section 34(2)(b). It is further stated in paragraph-14 that in such proceedings, the applicant is permitted to file affidavit of his witnesses in proof of his case and a correspondent opportunity is to be given to the defendant/respondent to place his evidence by affidavit.

In the instant case, having regard to the grounds urged in the Arbitration Suit filed u/s 34 of the Act regarding the role of the Arbitrator, if the petitioner is not provided with an opportunity, then he will be deprived of a fair and reasonable opportunity to establish his case. It cannot be said that such allegation does not fall within the ambit of Section 34(2) of the Act. Therefore, the Court below was not right and justified in rejecting the application on the ground that no foundation was laid in the pleadings to allow the application.

Hence the impugned order is set aside. The application filed by the petitioner is allowed. Petitioner is permitted to lead evidence in support of the plea that he has taken in respect of the Arbitrator in the application. Apprehension of the respondent that the petitioner is infeading to drag on the proceedings can be addressed by directing the Court below to dispose of the proceedings as expeditiously as possible at any rate within a period of six months from the date of receipt of a copy of this order. Writ Petition is accordingly allowed.