Y RANGANATHAN Vs. P L N GUPTA
LAWS(MAD)-1985-1-35
HIGH COURT OF MADRAS
Decided on January 19,1985

Y.RANGANATHAN Appellant
VERSUS
P.L.N.GUPTA Respondents





Cited Judgements :-

SUPERINTENDING ENGINEER NATIONAL HIGHWAYS SALEM VS. VCL SOMASUNDARAM [LAWS(MAD)-1992-3-19] [REFERRED TO]


JUDGEMENT

GOKULAKRISHNAN, J. - (1.):-
(2.)THIS appeal arises out of the order passed by K. Shanmukham, J. in Appln. No. 2648 of 1982. In Appln. No. 3902 of 1976, the appellants herein prayed for the appointment of a sole Arbitrator to decide the dispute between the parties relating to the taking of the accounts of the dissolved firm Yelchur and Co., situated at No. 2. Ramakrishna St., Madras 1, and at Madhanapalli. N. S. Ramaswami J. appointed Mr. M. Shamdas, who is a retired District Judge and now practising as Advocate, Madras, as Arbitrator on 24-2-1977 to decide the dispute between the parties relating to the taking of accounts of the dissolved firm 'Yelchur and Co.' with a direction that the Arbitrator while passing the award shall take into consideration as to whether the mediator gave any finding and whether that finding had been accepted by both the parties or not. The Arbitrator, after taking up the proceedings, passed his first order on 12-11-1979 on the direction petition (be) filed by the appellants on 26-11-1978. In and by this application, the appellants sought for the production of five items including the day book and ledger for the years 1972-73, 1975-76 and 1976-77. The Arbitrator directed the respondents herein to produce all the account books called for in the application. The appellants filed another application seeking for the production of the very same documents which they have prayed for in their first application dated 10-8-1977. In this application, the Arbitrator passed the following order on 23-2-1982 :
"I am of the view that no useful purpose is served in giving directions again for the production of the documents predictably with the same sequal. As to whether evidence already on record establishes that the respondents are deliberately suppressing available documents calls for a conclusion on appreciation of evidence, which at this stage is premature. If it is ultimately found that the records are suppressed the respondents will suffer the consequences. It is suggested that once again I should give directions for production of the records and if records called for are not produced within the time fixed, I should myself apply to the High Court to seek suitable directions. Quite apart from other factors involved, I do not see how I can ask for such directions without coming to a conclusion that there is suppression of available evidence on the part of the respondents. I cannot come to any such conclusion at this stage. As I said, if ultimately such conclusion is possible, appropriate consequences will follow determining the award. I therefore do not think any further orders are necessary on this application."
In spite of these orders, those account books were not produced by the respondents and it is the case of the respondents that they are not with them. Setting out all these facts and also stressing the importance of looking into those documents or otherwise, the Arbitrator will not have any material to decide the arbitration proceedings; the appellants prayed for a direction to be issued by this Court to respondents 1 and 2 compelling them to produce all the accounts books already sought for by the Arbitrator by duly fixing a date for such production.
Respondents 1 and 2 filed a counter inter alia alleging that there is no provision of law either under the Arbitration Act or under the High Court Original Side Rules, under which such an application can be filed, that S.31(3) of the Arbitration Act, which is sought to be pressed into service, has no application at all to the facts of the present case, that the said application has no merits, that such type of application are intended to protract the arbitration proceedings and to postpone the payment of huge sum of rupees two lakhs including interest uptodate, which is payable by the appellants to the respondents, and that as such, the application must be dismissed with costs.

The learned single Judge of this Court held that the Court's power under S.31(3) of the Arbitration Act is limited to the remedy that can be sought for under S.31 of the said Act, that it does not enable the Court to pass any order in the matter, which is in the exclusive discretion of the Arbitrator and that so far as S.41 of the Arbitration Act is concerned, it vests this Court with a power to protect the subject matter of arbitration being wasted, damages or alienated. With these observations, the learned Judge dismissed the application. It is as against this order the present appeal has been filed.

(3.)MR. S. V. K. S. Rangaswami lyengar, learned counsel appearing for the appellants, contended that under S.31(3) read with S.41 of the Arbitration Act, the Court has power to give such a direction, that unless such a direction is given, the Arbitrator will not have any material to decide the case, that the respondents are wilfully suppressing those documents, lest they will reveal the true state of affairs, which will not be in favour of the respondents and that directions have to be given by this Court to produce those documents, the noncompliance of which can be construed as contempt of Court.
Mr. R. Krishna Iyer, learned counsel appearing for the respondents, reiterated the contentions of the respondents 1 and 2 to the effect that those documents are not available with them, that the appellants, in order to protract the proceedings, have come forward with such type of applications, that the Arbitrator can form such a opinion as he thinks fit in the arbitration proceedings itself as regards the production of these documents, that the application itself is not maintainable under any of the provisions of the Arbitration Act and that, in any event, the present appeal cannot be sustained under clause 15 of the Letters Patent.



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