10 Feb 2022 10:30 AM GMT
The Madras High Court recently ruled that if the new grounds introduced by amendment do not change the character of the petition originally filed for setting aside the arbitration award under Section 34 of the Arbitration Act, the application for amendment in trial court can be allowed by the Court in its discretionary powers. However, principles of Order VI Rule 17 of Civil Procedure...
The Madras High Court recently ruled that if the new grounds introduced by amendment do not change the character of the petition originally filed for setting aside the arbitration award under Section 34 of the Arbitration Act, the application for amendment in trial court can be allowed by the Court in its discretionary powers. However, principles of Order VI Rule 17 of Civil Procedure Code do not apply to application of amendment under Section 34 of the Arbitration Act.
The revision petitioner entered into a contract with respondent to supply ten tonne mobile cranes for material handling at the rate of Rs. 44/- per ton. Disputes arose at the time when the contract was about to be completed.
The respondent raised a dispute before the sole Arbitrator. There were claims and counter-claims running in crores. The Arbitral Tribunal passed an award rejecting the claims of the respondent and the counter claim of petitioner.
Aggrieved by the award of the Arbitral Tribunal, the revision petitioner and the respondent filed independent application under Section 34 of the Arbitration and Conciliation Act, 1996. After the presentation of Arbitration Original Petitions (AROP) filed before the same court, the respondent filed an Interlocutory Application seeking permission to amend the arbitration petition.
The revision petitioner opposed the application on the ground that such amendments introducing new facts or pleading is not permissible. However, the lower Court allowed the application filed by the respondent and therefore, the revision petitioner has filed the Civil Revision Petition.
Whether the lower Court has power to entertain an application for amendment under Order VI Rule 17 of CPC in an arbitration petition of setting aside the award under Section 34 of Arbitration Act.
Consideration of Court
Mr. V. Karthik, Senior Counsel for Revision Petitioner contended that the respondent tried to introduce new grounds based on new facts by way of amendment but only errors in figures or typographical mistakes can be corrected by way of amendment. Furthermore, the provisions of Civil Procedure Code would not apply to proceedings either before Arbitrator or before lower Court when the petition is filed under Section 34 of the Act and therefore Order VI Rule 17 which deals with amendment of pleadings shall not apply.
The counsel for revision petitioner relied on a decision of Prakash Industries Limited Vs. Bengal Energy Limited and Another (2020) which referred to several Supreme Court judgments in which the Single judge of Calcutta High Court rejected an application filed for amendment on the grounds by applying the test whether proposed grounds would necessitate filing of a fresh application for setting aside the award. It was held that when the new grounds do not have a foundation or basis in the application already filed, the applicant before the Court cannot contend that the amendment is just an amplification of existing grounds.
The counsel for the respondent cited several judgments of Supreme Court relating to amendment of pleadings as contemplated under Order VI Rule 17 of the CPC and a few judgments recognized the application when the question arose in relation to amendment of memorandum of application filed under Section 34 of the Arbitration Act.
The court noted that the question for consideration is whether the application for amendment is just to amplify the grounds which are already in existence or the object of amendment is to introduce additional grounds for which there is no foundation in the existing application filed under Section 34 of the Act.
Justice S.S. Sundar analyzed the pleadings and noted that no new ground is added which is either outside the scope of the original Arbitral proceedings or without the factual background. The Court was unable to find any new ground for which no foundation is laid in the application for setting aside the award under Section 34.
In regard to application of principles of Order VI Rule 17 CPC to an amendment application under Section 34 of Arbitration Act, the court ruled that it cannot be applied. But the court was of the view that some amount of discretion in the matter of amendment is still available with the Court and the Court cannot refuse unless the Court has reasons to believe that the amendment proposed are not legitimate or that the amendment is likely to take away the right accrued to the other side.
The Civil Revision was dismissed and allowed the amendments. The lower court was directed to dispose both Original Petitions as expeditiously as possible.
Cause Title: Bharat Heavy Electricals Ltd. v. Sudhir Cranes Pvt. Ltd.
Citation: 2022 LiveLaw (Mad) 55
Click Here To Read/Download Order