Section 34 Proceedings Are Summary In Nature; Does Not Permit Additional Evidence To Be Filed Unless Absolutely Necessary: Madras High Court

The Single Bench of Justice M. Sundar further held that the court would not allow any additional document under Section 34 petition if there was nothing that prevented the petitioner from furnishing the same document before the arbitrator.

Facts

The parties entered into a Construction Agreement wherein the petitioner agreed to construct 100 residential apartments for the respondent. Certain disputes arose between the parties which were referred to arbitration. The respondents examined two witnesses and marked 50 exhibits in support of their claims. The petitioner neither led any oral evidence nor marked any exhibits. The arbitrator appointed a civil engineer and examined him as the Tribunal Witness.

The arbitrator allowed the claims of the respondent. Aggrieved by the award the petitioner challenged the award.

The Contention Of The Petitioner

The petitioner challenged the award on the following grounds:

• The tribunal did not consider the preliminary objection of the petitioner
• The arbitrator has gone into an issue that was already concluded.
• Cracks were only normal construction issues and the impugned award makes a mountain out of a molehill.
• The compound wall issue is virtually a non-issue but AT has gone into the same.
• The arbitrator awarded interest that has not been provided for in the contract.

Analysis By The Court

The Court relied on the judgments of the Hon'ble Supreme Court in Canara Nidhi Limited vs M. Shashikala, 2019 SCC OnLine SC 1244 and Fiza Developers and Inter-Trade Private Limited Vs. AMCI (India) Private Limited, (2009) 17 SCC 796 to hold that the challenge proceedings under Section 34 of the A&C Act are summary in nature, therefore, the same shall be decided on the basis of the record that was available with the arbitral tribunal and no additional document shall be permitted to be brought in at that stage unless absolutely necessary.

The Court rejected the argument of the petitioner concerning the first objection on the ground that the petitioner clearly failed to adduce any evidence before the arbitrator to bring home his preliminary objections. Therefore, in absence of any pleadings the tribunal was correct in not deciding the objection raised by the petitioner.

The Court also rejected the argument that the arbitrator decided an issue that was already concluded as the petitioner failed to bring forth any document to demonstrate that the issue was a concluded one.

The Court further held that the petitioner now cannot be permitted to bring on record any additional evidence as nothing prevented the petitioner from furnishing the same document before the tribunal.

As regards the third and fourth objections, the Court held that these are issues concerning the construction of the terms of the contract and purely factual, therefore, the court cannot substitute the findings of the arbitrator.

The Court also rejected the issue of interest as the petitioner did not produce the original agreement before the court to examine it. Consequently, the Court dismissed the petition.

Case Title: M/s.Color Home Developers Pvt. Ltd. v. M/s.Color Castle Owners Society

Case No: Arb.O.P.(Com.Div.)No.157 of 2022.

Coram: Justice. M.Sundar

Date: 05.04.2022

Counsel for the Petitioner: Mr.V.Manohar

Citation: 2022 LiveLaw (Mad) 186

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