Debatable Whether Trial Had Commenced: Madhya Pradesh High Court Allows Amendment Of Written Statement & Filing Of Additional Documents In Arbitration Matter
The Madhya Pradesh High Court set aside the Order by the Sole Arbitrator which rejected the application of the Petitioner under Order 8 Rule 1-A of the CPC and Order 6 Rule 17 of the CPC.
The Madhya Pradesh High Court, while allowing the amendment of the written statement and the filing of additional documents in an arbitration matter, observed that it was debatable whether the trial had commenced and found that no grave prejudice was caused to the claimants by the delay.
The Court set aside the Order by the Sole Arbitrator which rejected the application of the Petitioner under Order 8 Rule 1-A of the CPC and Order 6 Rule 17 of the CPC. The Court held that “the rejection of applications under Order 8 Rule 1-A of CPC and under Order 6 Rule 17 CPC for taking additional documents on record and consequential amendment in the written statement would amount to failure of justice and may also lead to multiplicity of proceedings at later stage.”
A Division Bench of Chief Justice Suresh Kumar Kait and Justice Vivek Jain held, “In view of the above we have no hesitation in holding that technically though it may be debatable that there was commencement of trial but since the applications for amendment and for taking additional documents on record were filed on the same date which was the date of submission of affidavit evidence by the claimants, it cannot be said to be the case where some grave prejudice could be caused to the claimants by delay.”
Advocate Swapnil Ganguly appeared for the Petitioner, while Advocate Utkarsh Agrawal represented the Respondents.
Brief Facts
The Petitioner contended that the Agreement, which was necessary for adjudication, was suppressed by the Respondents. It was argued that the document directly related to the contractual dispute concerning shareholding agreements and financial transactions between the parties.
The Petitioner submitted that the rejection of the Application by the Sole Arbitrator would lead to multiplicity of proceedings and affect the fair adjudication of claims.
Per contra, the Respondents argued that the Writ Petition was not maintainable in view of the bar contained in Section 5 of the Arbitration and Conciliation Act, 1996 (the Act) that bars judicial intervention during the course of arbitral proceedings
Court’s Reasoning
The High Court noted, “It is a different matter whether upon consideration of such agreement, any positive or negative impact on the claims of rival parties would be made or not but it cannot be said at this stage, that once the disputes between the parties relate to period from 2007-08 till 2017-18 then an agreement between the same parties and valid in some of that period in the matter of supply of mid-day meals is alien to the disputes and claims between the parties.”
If such an agreement was considered by the Arbitrator, the Bench stated that “it would be only in the interest of both the parties because subsequent objections and challenges to the arbitral award would be avoided and multiplicity of proceedings would be avoided.”
The Court referred to the Supreme Court’s decision in Life Insurance Corporation v. Sanjeev Builders (2022), wherein it was held that “amendment has to be construed liberally once it is to avoid multiplicity of proceedings and when it is necessary to adjudicate on the main issue to controversy, it may be allowed and delay alone is not sufficient to discard amendment if it is relevant to the controversy.”
Consequently, the Court held, “Therefore, it is a case that where submission of affidavits by the claimant before the Tribunal, and the applications for production of documents under Order 8 Rule 1-A and application under Order 6 Rule 17 of CPC, all were filed before the Arbitration Tribunal on the same date. Therefore, it cannot be said that by allowing of the questioned amendment, the position of the parties would be irretrievably altered or prejudiced.”
Accordingly, the High Court allowed the Petition.
Cause Title: Madhya Pradesh State Agro Industries Development Corporation Limited v. M/S Murliwala Agrotech Private Limited & Ors. (WRIT PETITION No. 9629 of 2023)
Appearance:
Petitioner: Advocates Swapnil Ganguly and Arjun Bajpai
Respondents: Advocate Utkarsh Agrawal
