Amendment To Bring Additional Grounds U/S 34 Of A&C Act Is Maintainable If Objections Are Not Beyond Judicial Scrutiny Of Court: Delhi HC
The Delhi Excessive Court docket bench of Justice Manoj Kumar Ohri whereas listening to modification petition filed u/s 34 of the A&C Act noticed that the omission to plead a floor of problem within the authentic Part 34 petition pertaining to non-adherence to the obligatory process of Part 29A wouldn’t oust the jurisdiction of the Part 34 Court docket to scrutinize the identical. The Court docket held that the amendments sought within the current software fall throughout the exceptions carved out by the Supreme Court docket in State of Maharashtra v. Hindustan Development.
Factual Matrix:
A Civil Works Contract Settlement (“CWC)” dated 06.12.2010, executed between the events for the development work of 6 towers and a non-tower space comprising 336 dwelling models to be undertaken by the respondent/claimant at Raheja Sampada, Gurgaon, Haryana. Earlier than the Arbitral Tribunal, the respondent/claimant filed 10 claims, and thereafter filed three extra claims amounting to ₹2.20 crores. The petitioner, vide its Assertion of Defence, disputed the claims and filed six counter-claims. The Court docket appointed Mr. Prem Kumar because the Sole Arbitrator vide order dated 14/02/2019, who later recused attributable to unwell well being. The Court docket vide order dated 03/11/2022 appointed Retd. Justice Jayant Nath because the Sole Arbitrator, and the proceedings recommenced from the stage of ultimate arguments from 29/11/2022. The Sole Arbitral handed the impugned award on 29/04/2024.
The Arbitral Tribunal allowed the Claims Nos. A, B, C & J and partly allowed Declare Nos. D and E. Additional, all the extra claims the respondent/claimant filed had been additionally allowed. In essence, the Arbitral Tribunal handed the impugned award in favour of the respondent, awarding a complete sum of ₹10.22 crores together with easy curiosity at 8% p.a. The petitioner initiated proceedings u/s 34 of the A&C Act on 26/07/2024. The current petition is filed to position extra grounds and paperwork on document.
Submissions:
The counsel for the petitioner made the next submissions:
- The current software was pursuant to the order dated 21/10/2024, whereby the petitioner had sought go away of the Court docket to file an acceptable modification software. Moreover, the grounds for the shortage of inherent jurisdiction on account of the Arbitral Tribunal being functus officio on the passing of the award will be taken at any stage of the proceedings.
- Part 34 of the A&C Act allows the Court docket to permit an modification when the peculiar circumstances so warrant within the curiosity of justice. This creates an exception to the rule of limitation, which isn’t absolute in nature.
- As no software for extension of the Arbitral Tribunal’s mandate was most well-liked earlier than the passing of the award, the Arbitral Tribunal grew to become functus officio after 26/08/2023. The impugned award was handed on 26/07/2024, which was past the statutory interval; this facet goes to the crux of the matter and should be allowed to be pleaded whereas assailing the impugned award.
The counsel for the respondent made the next submissions:
- Firstly, the petition is barred by limitation because the modification to the Part 34 petition can’t be filed after the expiry of the statutory limitation interval of three months plus the 30-day grace interval as offered u/s 34(3) of the A&C Act. Reliance was positioned on Vastu Make investments & Holdings Pvt. Ltd. v. Gujarat Lease Financing Ltd., Mumbai, to submit that the current software will not be maintainable and is time-barred.
- Secondly, the extra grounds sought to be introduced on document had been by no means pleaded earlier than the Arbitral Tribunal or within the authentic Part 34 petition. The try to introduce new grounds would end in presenting a brand new case past the contours of the unique proceedings. Reliance was positioned on State of Maharashtra v. Hindustan Development and New Delhi Municipal Council v. Décor India Pvt Ltd.
- The Court docket has the facility to lengthen the Arbitral Tribunal’s mandate even after the expiry of the interval prescribed u/s Part 29A(1) learn with Part 29A(3).
Evaluation of the Court docket:
The bench noticed that the Supreme Court docket in State of Maharashtra v. Hindustan Development has offered a small window for doable amendments to the Part 34 petitions, however the limitation interval. An modification to a Part 34 petition is legally tenable offered the unique submitting was throughout the prescribed limitation interval as offered u/s 34 of the A&C Act. The Supreme Court docket clarified in Hindustan Development that if the modification is meant to rectify a non-est submitting, the identical wouldn’t be permissible. The bench held:
“In Hindustan Development (Supra), the Supreme Court docket has indicated that if the foundational pleadings for a floor sought to be amended do exist within the authentic petition, the grounds primarily based on such pleadings will be included by means of modification.”
The bench additional noticed that the modification sought within the current petition, when examined on the yardstick laid down in Hindustan Development, is evident that the extra grounds raised are authorized in nature, that are supported by the foundational info pleaded within the Part 34 petition. The Arbitral Tribunal’s jurisdictional competence to proceed with the arbitral continuing after the expiration of the statutory interval enshrined u/s 29A of the A&C Act is a authorized query which the Part 34 Court docket would have enquired into. The failure to lift an objection within the authentic Part 34 petition pertaining to the failure to stick to the obligatory process u/s 29A for extension of the Arbitral Tribunal’s mandate wouldn’t oust the Part 34 Court docket from inspecting whether or not the Arbitral Tribunal was functus officio on the passing of the award.
Lastly, the Court docket held that the omission to plead a floor of problem within the authentic Part 34 petition, filed throughout the limitation interval, wouldn’t put the objection past the judicial scrutiny of the Part 34 Court docket. Subsequently, the modification sought within the current software falls throughout the exceptions carved out in Hindustan Development.
Case Identify: Raheja Builders Restricted v. Ahluwalia Contractors India Ltd
Case Title: COMMERCIAL ARBITRATION APPLICATION NO.28 OF 2017
Counsel for the Applicant: Mr. Rajshekhar Rao, Senior Advocate with Ms. Manmeet Kaur, Mr.Gurtejpal Singh, Ms.Aashna Chawla, Ms. Aashna Arora, Ms. Suditi and Mr. Debarshi Roy, Advocates
Counsel for the Respondent: Mr. Shashank Garg, Senior Advocate with Ms. Nishtha Jain, Advocates
