Based upon Justice B.N. Srikrishna Committee’s report,
Section 34 of the Principal Act has been amended by
Arbitration and Conciliation (Amendment) Act, 2019 as under:-
“7. Amendment of Section 34.—In Section 34 of the principal
Act, in sub-section (2), in clause (a), for the words “furnishes
proof that”, the words “establishes on the basis of the record
of the Arbitral Tribunal that” shall be substituted.”
17. After referring to Justice B.N. Srikrishna Committee’s
report and other judgments and observing that the decision in
Fiza Developers must be read in the light of the amendment
made in Section 34(5) and Section 34(6) of the Act and
amendment to Section 34 of the Arbitration Act, 1996, in Emkay
Global Financial Services Limited v. Girdhar Sondhi (2018) 9
SCC 49, it was held as under:-
“21. It will thus be seen that speedy resolution of arbitral
disputes has been the reason for enacting the 1996 Act, and
continues to be the reason for adding amendments to the said
Act to strengthen the aforesaid object. Quite obviously, if issues
are to be framed and oral evidence taken in a summary
proceeding under Section 34, this object will be defeated. It is
also on the cards that if Bill No. 100 of 2018 is passed, then
evidence at the stage of a Section 34 application will be
dispensed with altogether. Given the current state of the law, we
are of the view that the two early Delhi High Court judgments in
Sandeep Kumar v. Ashok Hans 2004 SCC OnLine Del 106, Sial
Bioenergie v. SBEC Systems 2004 SCC OnLine Del 863, cited
by us hereinabove, correctly reflect the position in law as to
furnishing proof under Section 34(2)(a). So does the Calcutta
High Court judgment in WEB Techniques and Net Solutions (P)
Ltd. v. Gati Ltd. 2012 SCC OnLine Cal 4271. We may hasten to
add that if the procedure followed by the Punjab and Haryana
High Court judgment in Punjab SIDC Ltd. v. Sunil K. Kansal 2012
SCC Online P&H 19641 is to be adhered to, the time-limit of one
year would only be observed in most cases in the breach. We
therefore overrule the said decision. We are constrained to
observe that Fiza Developers was a step in the right direction as
its ultimate ratio is that issues need not be struck at the stage of
hearing a Section 34 application, which is a summary procedure.
However, this judgment must now be read in the light of the
amendment made in Sections 34(5) and 34(6). So read, we
clarify the legal position by stating that an application for setting
aside an arbitral award will not ordinarily require anything beyond
the record that was before the arbitrator. However, if there are
matters not contained in such record, and are relevant to the
determination of issues arising under Section 34(2)( a ), they may
be brought to the notice of the Court by way of affidavits filed by
both parties. Cross-examination of persons swearing to the
affidavits should not be allowed unless absolutely necessary, as
the truth will emerge on a reading of the affidavits filed by both
parties. We, therefore, set aside the judgment in Girdhar Sondhi
v. Emkay Global Financial Services Ltd. 2017 SCC OnLine Del
12758 of the Delhi High Court and reinstate that of the learned
Additional District Judge dated 22-9-2016. The appeal is
accordingly allowed with no order as to costs.”
The legal position is thus clarified that Section 34 application
will not ordinarily require anything beyond the record that was
before the arbitrator and that cross-examination of persons
swearing in to the affidavits should not be allowed unless
absolutely necessary.
18. The question falling for consideration is whether the
present case is such an exceptional circumstance that it was
necessary to grant opportunity to respondent Nos.1 and 2 to file
affidavits and to cross-examine the witnesses is made out. The
affidavit filed by the respondents along with application filed
under Section 151 CPC does not indicate as to what point the
first respondent intends to adduce except stating that the first
respondent intends to adduce additional evidence relating to
the subject of dispute. The affidavit does not disclose specific
documents or evidence required to be produced except stating
that the first respondent intends to adduce additional evidence
or otherwise the first respondent will be subjected to hardship in
the arbitration suit filed by her under Section 34 of the Act. As
rightly contended by the learned counsel appearing for the
appellant that there are no specific averments in the affidavit as
to the necessity and relevance of the additional evidence
sought to be adduced.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 7544-7545 OF 2019
M/S. CANARA NIDHI LIMITED Vs M. SHASHIKALA A
R. BANUMATHI, J.
Dated:September 23, 2019