Claim Petition Without Verification, Writ Not Maintainable Against An Order Dismissal Of Claim : Gujarat High Court

The Single Bench of Justice Vaibhavi D. Nanavati held that once the arbitrator rejects the claims of a party that essentially means a final disclosure of its claims and the order of the arbitrator can be challenged under Section 34 of the A&C Act.

The Court held that on a harmonious reading of Section 2(1)(c) with provisions of Section 25 and 32 of the A&C Act, an order of the tribunal that puts an end to the claim of a party can be directly challenged under the provisions of the Act.

Facts

A dispute arose between the parties in relation to a contract bearing No.B-1/83 of 2012-2013. The Court appointed an arbitrator on the application preferred by the petitioner. The parties filed their claim and counter-claims before the tribunal.

After the completion of the final arguments on behalf of the claimant/petitioner, the respondent raised an objection that the claim statement is not tenable in law as the same is not duly verified and affirmed by the claimant/petitioner. The arguments were concluded on 06.04.2019. Thereafter, the petitioner filed an affirmed and verified claim statement on 08.04.2019 to cure the defect. The arbitral tribunal vide the impugned order dated 24.09.2019 accepted the objection raised by the respondent and consequently, rejected the claims of the petitioner.

Aggrieved by the decision of the tribunal, the petitioner filed the writ petition against the impugned order.

The Contention Of The Parties

The petitioner sought the setting aside of the impugned order on the following grounds:

• By virtue of Section 19 of the A&C Act, the provisions of CPC, 1908 or the Indian Evidence Act, 1872 do not apply to arbitration proceedings.
• The arbitrator completely ignored the corrected claim statement filed by the petitioner on 08.04.2019 which was received by it on 09.04.2019 by email and on 11.04.2019 by the post.
• The defect of not verifying or affirming the claim statement is a curable defect and the petitioner cured the defect before the passing of the impugned order.
• The arbitral tribunal did not give an opportunity to the petitioner to cure the defect in its claim statement.
• The objection raised by the respondent was also not tenable in view of the delay and also because the objection was not fatal to result in the rejection of the claims of the petitioner.

The respondent objected to the maintainability of the writ petition on the following grounds:

• The writ petition is not maintainable in view of an alternative remedy available under Section 34 of the A&C Act.
• The claim statements filed by the petitioner were not verified and there was no affidavit in support of the pleadings, therefore, there were no pleadings in the eye of the law.
• The order was reserved on 06.04.2019, therefore, the claim statement filed by the petitioner on 11.04.2019 were of no consequence.
• The provisions of Order VI Rules 15(4) and 15(A) provide that every pleading in a commercial dispute shall be verified by the affidavit in the manner and form prescribed in this schedule and these provisions are mandatory.

Analysis By The Court

The Court held that the A&C Act is a self-contained act and the interference in arbitration proceedings at any stage is absolutely unwarranted and the remedies as available under the Arbitration Act are the ones that are required to be availed and exhausted by the parties rather than deviating to a writ or any other jurisdiction.

The Court held that by rejecting the claims of the petitioner, the arbitrator has given a final verdict on the claims of the petitioner and it essentially concludes the claims of the petitioner against the respondent.

The Court held that once the arbitrator rejects the claims of a party that essentially means a final disclosure of its claims and the order of the arbitrator can be challenged under Section 34 of the A&C Act.

The Court held that on a harmonious reading of Section 2(1)(c) with provisions of Section 25 and 32 of the A&C Act, an order of the tribunal that puts an end to the claim of a party can be directly challenged under the provisions of the Act.

The Court held that as the petitioner has an alternative remedy under the A&C Act, the writ petition would not be maintainable. However, the Court clarified that it has not assessed the petition on merits and the petitioner is within its right to pursue the remedy under the A&C Act.

Accordingly, the Court dismissed the petition.

Case Title: Pahal Engineers v. The Gujarat Water Supply and Sewerage Board, R/SPECIAL CIVIL APPLICATION NO. 8727 of 2019.

Citation: 2022 LiveLaw (Guj) 220

Counsel for the Petitioner: Mr. Sanjay Mehta and Mr. N R Mehta

Counsel for the Respondents: Mr. DG Chahuhan and Ronak D Chauhan

Click Here To Read/Download Order