B.R. Gavai, J.@mdashAn important question as to whether this Court can exercise its powers u/s 27 of the Arbitration and Conciliation Act, 1996 for implementation of the Orders passed by the learned Arbitrators, which are not being complied with by the parties, arises for consideration before this Court. The facts in brief necessary for adjudication of the present Petition are as under:
i. It appears that there was an agreement between the Petitioner and the Respondent No. 1 for bottling the product of the Plaintiff. However, there arose a dispute between the parties i.e. the Plaintiff and Defendant No. 1 and, as per the agreement between the parties the dispute was referred to the Arbitration. The arbitration proceedings commenced in the year 2002. There has been a change of the Arbitrators for some reasons, with respect to which there are allegations and counter allegations. However, for the purpose of adjudication of the present matter, the reference to those allegations would not be necessary and, therefore, I do not think it is necessary to go into them.
ii. During the pendency of the proceedings, the Applicant/ Petitioner had made an Application before the learned Arbitrator for direction to the Respondents for production of the certain documents, namely, Sales Tax Returns and Assessment Orders for the years 1995-96 to 2001-2002. The learned Arbitrator, Her Ladyship Hon''ble Smt. Justice Sujata Manohar (Retd.), vide order dated 27th March, 2007 though had rejected the Application filed by the present Petitioner for direction to produce the Returns, had allowed the Application with direction to the Respondent to produce the Assessment Orders. However, it appears that the said presiding officer has resigned and subsequently the matter came up for arbitration before the Arbitral Tribunal consisting of three Hon''ble Members, who are retired Hon''ble Judges, two of the Apex Court and one of this Court. It appears that since the directions as given vide order dated 27th March, 2007 were not complied with, an Affidavit was directed to be filed by the Arbitral Tribunal and accordingly an Affidavit was filed by the Respondent No. 1 on 16th September, 2011, thereby giving reasons as to why the order passed earlier by the learned Arbitrator was not complied with. As such an order came to be passed on 16th September, 2011 by the learned Arbitral Tribunal, thereby permitting the Claimants to apply to the Court to seek production of Sales Tax Assessment Orders for the period 1995-96 to 2001-2002 including Appellate Orders, if any. That is how the present matter has reached this Court.
2. Shri Shiraz Rustomjee, learned senior counsel appearing on behalf of the Petitioner submits that the provisions of Section 27 of the Arbitration and Conciliation Act, 1996 (hereinafter referred as "the Act" for short) are aimed at providing assistance to the Court for effective adjudication in the arbitration proceedings. He submits that the Court has ample powers u/s 27 of the Act to direct a party or a witness to either give evidence before the Arbitral Tribunal or to produce documents before the Arbitral Tribunal. He submits that the conduct of the Respondent is such which amounts to defying the orders passed by the Arbitral Tribunal. He further submits that not only that but the Respondent has now come with a totally contrary stand than the one which was taken by him before the Arbitral Tribunal. He submits that though it was never a case of the Respondent that the Assessment Orders were not available with it, but now in an Affidavit filed in the present proceedings a stand is taken that the Assessment Orders are not available with the Respondent. He, therefore, submits that this is a fit case wherein this Court should not only exercise the powers under sub-section 3 of Section 27 of the Act read with Rule 14 of Order 11 of the Code to issue directions to the Respondents to produce the documents as directed by the learned Tribunal but also invoke the powers under sub-section 5 of Section 27 of initiating contempt proceedings against the Respondents for having committed a contempt of the Arbitral Tribunal.
3. Shri Zal Andhyarujina, the learned counsel appearing on behalf of the Respondent No. 1 vehemently opposed the petition. He submits that the present Petition is not tenable before this Court. It is submitted that the powers of this Court to issue summons u/s 27 of the Act are restricted only to a witness and not to the party who is not a witness. The learned counsel submits that the provisions of Section 43 of the Arbitration Act, 1940 are analogous with the provisions of Section 27 of the Arbitration & Conciliation Act, 1996. The learned counsel relied on the Judgment of the Division Bench of the Delhi High Court in the case of
4. Smt. Geeta Shastri, learned Assistant Government Pleader also supports the submission of Shri Zal Andhyarujina, learned counsel for the Respondent No. 1, that direction cannot be issued to Respondent No. 2 for production of the documents as there is a specific bar in view of the provisions of Section 71 of the Maharashtra Value Added Tax. She submits that she has received a communication from the Sales Tax Authority that on the basis of the Government Policy, the old record are already destroyed and the record of the Assessments Orders for the relevant years would not be available.
5. I will first deal with the question regarding tenability of the present proceedings before this court. It will be relevant to refer to Section 27 of the Arbitration and Conciliation Act, 1996 which read thus:
27. Court assistance in taking evidence.- (1) The arbitral tribunal, or a party with the approval of the arbitral tribunal, may apply to the Court for assistance in taking evidence.
(2) The application shall specify-
(a) the names and addresses of the parties and the arbitrators.
(b) the general nature of the claim and the relief sought;
(c) the evidence to the obtained, in particular,-
(i) the name and address of any person to be heard as witness or expert witness and a statement of the subject-matter of the testimony required;
(ii) the description of an document to be produced or property to be inspected.
(3) The Court may, within its competence and according to its rules on taking evidence, execute the request or ordering that the evidence be provided directly to the arbitral tribunal.
(4) The Court may, while making or order under sub-section (3), issue the same processes to witnesses as it may issue in suits tried before it.
(5) Persons failing to attend in accordance with such process, or making any other fault, or refusing to give their evidence, or guilty of any contempt to the arbitral tribunal during the conduct of arbitral proceedings, shall be subject to the like disadvantages, penalties and punishments by order of the Court on the representation of the arbitral tribunal as they would incur for the like offences is suits tried before the Court.
(6) In this section the expression "Processes" includes summonses and commissions for the examination of witnesses and summonses to produce documents.
The heading of the said section itself shows that the provision is headed as "Court assistance in taking evidence". It will also be relevant to refer to Section 43 of the Arbitration Act, 1940. It is not in dispute that the provisions of sub-section (1) of Section 43 of the old Act are analogous with the provisions of sub-section (3) of Section 27 of the new Act and that the provisions of sub-section (2) of the old Act are analogous with the provisions of sub-section 5 of the new Act. The provisions of sub-section 3 of the old Act are analogous with the provisions of sub-section (6) of Section 27 of the new Act.
6. The provisions of Section 43 of the old Act have been interpreted by the Division Bench of the Delhi High Court in the Judgment of the Union of India vs. M/s.Bhatia Tanning Industries (cited supra). It will be relevant to refer to paragraph 12 of the said Judgment which reads thus:
12. Section 43 has no application where the party to an arbitration agreement has to be summoned for appearance before the arbitrator so that he may participate in the proceedings and state his defense. The learned judge seems to have been misled by the expression ''parties'' appearing in section 43. The word ''parties'' is used in the sense where the party itself is desired to be examined as a'' witness by the arbitrator or umpire. The expression ''witnesses'' used along with the word ''parties'' makes the meaning of the legislature abundantly clear. The principle of construction is that words of the same feather flock together.
Perusal of the said paragraph clearly reveals that the Division Bench has taken a view that Section 43 has no application where the party to an arbitration agreement has to be summoned for appearance before the Arbitrator for its participation in the proceedings and state his defence. The Division Bench has in unequivocal terms held that the word "parties" used in Section 43 is used in the sense where the party itself is desired to be examined as a witness by the Arbitrator or by the umpire. It cannot be anybody''s case that a party in a proceedings cannot be examined as a witness. In that view of the matter, I find that the aforesaid Judgment of the Delhi High Court rather than supporting the case of the Respondents, will support the case of the Petitioner. Therefore, I am not inclined to accept the contention of the Respondents in so far as maintainability of the present proceedings are concerned.
7. The next issue is regarding the provisions of Section 71 of the Maharashtra Value Added Tax Act, 2002 which is analogous with Section 64 of the old Sales Tax Act. It will not be necessary for this Court to decide as to which Act would be applicable to the facts of the present case in as much as the provisions of both the Acts are totally analogous. Sub-section 1 of both the Sections reads thus:
Sub-section (1) of S. 71 : All particulars contained in any statement made, return furnished or accounts or documents produced in accordance with this Act, or in any record of evidence given in the course of any proceedings under this Act (other than proceeding before a Criminal Court) or in any record of any assessment proceeding, or any proceeding relating to the recovery of a demand, prepared for the purposes of this Act shall, save as provided in subsection (3), be treated as confidential; and notwithstanding anything contained in the Indian Evidence Act, 1872 (1 of 1872), no court shall save as aforesaid, be entitled to required any servant of the Government to produce before it any such statement, return, account, document or record or any part thereof, or to give evidence before it in respect thereof.
Sub-section (1) of S.64 : All particulars contained in any statement made, return furnished or accounts or documents produced in accordance with this Act, or in any record of evidence given in the course of any proceedings under this Act (other than proceeding before a Criminal Court) [or in any record of any assessment proceeding, or any proceeding relating to the recovery of a demand, prepared for the purposes of this Act,] shall, save as provided in sub-section (3), be treated as confidential; and notwithstanding anything contained in the Indian Evidence Act, 1872 (1 of 1872), no court shall save as aforesaid, be entitled to require to any servant of the Government to produce before it any such statement, return, account, document or record or any part thereof, or to give evidence before it in respect thereof.
The words used in the Statute are required to be given a plain meaning. Both the sections provided that all particulars contained in any statement made, return, furnished or accounts or documents produced in accordance with this Act, or in any record of evidence given in the course of any proceedings under this Act or in any record of any assessment proceeding etc., shall, save as provided in sub-section (3), be treated as confidential and further provide that notwithstanding anything contained in the Act, no Court shall require any servant of the Government to produce before it any such statement, return etc. or to give evidence in respect thereof.
8. The plain reading of the sections, therefore, would be, if any statement made, return furnished or accounts or documents produced in accordance with this Act, or in any record of evidence given in the course of the proceedings mentioned in the said sections the same would be required to be treated as confidential. However, upon plain reading of the sections, I am not inclined to accept the contention that the confidentiality would also be applicable to the Assessment Orders passed in the the proceedings enumerated in the said sections. In any event, perusal of the said section would reveal that the bar requiring to produce the statement, return etc. or to give evidence before the Court is in respect of only a servant of government. There is no prohibition directing a private party to produce such statement, return etc. or to give evidence.
9. The arbitration proceedings have gained its importance in the recent past as an Alternative Dispute Redressal Forum and specially in a commercial litigation, taking into consideration the huge pendency of the matters in this court and the delay in disposal of the matters. It is one of the well recognized forum available as an alternative dispute redressal system. The arbitration proceedings are intended to lessen the burden of the courts which are already heavily burdened. The aim of the arbitration proceeding is to effectively and completely adjudicate all the disputes between the parties within a reasonable time which is not possible, if the parties are required to litigate in this court for decades together.
10. Section 27 of the Act has specifically provides for enabling the Arbitral Tribunal to get evidence in the matter with the assistance of the court which otherwise is not entitled in view of inapplicability of the provisions of CPC. It is, thus, clear that when a party or a witness who has been directed to give evidence or to produce a document before the arbitral proceedings has refused to do so, either the Arbitral Tribunal itself or a party with the approval of the Arbitral Tribunal is entitled to apply to the Court for assistance in taking evidence. Sub-section (3) of Section 27 of the Act empoweres the Court, according to its rules on taking evidence to execute the request by ordering that the evidence would be provided directly to the Arbitral Tribunal. The very purpose of the said provisions is to give assistance to the Arbitral Tribunal to place on record the evidence which the Arbitral Tribunal finds necessary for complete and effective adjudication of the dispute between the parties. Since the Arbitral Tribunal is not in a position to compel a party or a witness to give evidence before it or to produce a document before it, Section 27 of the Act has been brought on the Statute, so that it provides aid to the Arbitral Tribunal in producing evidence if it finds necessary.
11. If the contention urged by the Respondents is accepted, the provisions of Section 27 would be redundant and the very purpose for which it was enacted would be frustrated. A party which has been directed by the Tribunal to do something cannot be permitted to run away from the direction issued by the learned Arbitral Tribunal, if the Court finds that for effective and complete adjudication in the arbitral proceedings it is necessary to do so.
12. The facts in the present case are glaring. As way back as on 27th March, 2007 the learned Tribunal has directed the Respondents to produce for inspection of the Claimants all Sales Tax Assessment Orders relating to the period 1995-1996 to 2001-2002 including any appellate orders on or before 15th June, 2007. The said order has been passed by the learned Tribunal after considering the objections on behalf of the Respondents which objections have been reiterated in the subsequent Affidavit and even today. The objection that is raised is that inasmuch as the petitioner claimant itself has given details regarding set-off it is not necessary to direct the respondents to produce the assessment orders. However, this objection has been specifically turned down by the Arbitral Tribunal by its order dated 27th March, 2007. It appears that since the Respondents even after four years have not complied with the directions, the learned Tribunal which was then consisting of three Honourable Members had directed the Respondents to file the Affidavit�in-Reply by its order dated 15th September, 2011. Accordingly, an Affidavit has been filed on 16th September, 2011. Relevant part of the paragraph 1 of the said Affidavit reads thus :
I am filing this present affidavit for the limited purpose of setting out the reasons for not disclosing the sales tax assessment orders for the aforesaid period as per the directions of her ladyship Hon''ble Justice Sujata Manohar.
In paragraph 3 of the said Affidavit, the Deponent who is Chairman of the Respondent Company states that the documents which are directed to be submitted by the Tribunal are highly confidential and the same cannot be produced before the Tribunal especially when the sales tax set-off has already been quantified by the Claimants and the same is forming a part of their claim in the arbitration proceedings. In paragraph 4, the Deponent states that the Hon''ble Tribunal should not be pleased to issue any directions to the Respondents to disclose any sales tax assessment orders.
13. Paragraph 5 of the said Affidavit makes an interesting reading which reads thus:
I, therefore, say in view of whatever stated by me in the affidavit, the Respondents will not produce the Sales Tax Assessment orders as per order dated 27.03.2007 of this Hon''ble Tribunal.
It is to be noted that initially when the said Affidavit was typed the words that were typed were "do not wish to". However, the same words are struck off and there the words "will not" have been written in hand. It appears that the words which were used earlier depicting a sober attitude have been changed to depict an adamant attitude by stating that
"the respondents will not produce the Sales Tax Assessment orders as per order dated 27.03.2007". In this background the learned Tribunal has passed the aforesaid order. The learned Arbitral Tribunal has expressed its helplessness in paragraph 7 of its order dated 16.09.2011. Though in the present Affidavit filed before this Court, the Respondent has taken a stand that the Assessment Orders are not available with the Respondent No. 1, I am of the considered view that this stand is taken as an after thought in as much as nowhere at earlier stage the Respondent has taken a stand that the Assessment Orders are not available with it. It is to be noted that there is a gap of only 10 months in the Affidavit which is filed before the Tribunal i.e. on 16th September, 2011 and the Affidavit filed before this Court i.e. on 09th July, 2012. It is difficult to accept the contention of Shri Zal Andhyarujina, learned counsel for the Respondent No. 1 that the documents which were available as late as on 16th September, 2011 have vanished within a period of 10 months.
14. At the cost of repetition I reiterate that the powers vested with the Court under the provisions of Section 27 of the Act, are required to be exercised by this Court so as to enable the Arbitral Tribunal to effectively and completely decide the matters before it. Any other interpretation, in my considered view, would rather make the provisions of Section 27 redundant and would frustrate the very purpose of the Arbitration. In that view of the matter, in ordinary course this Court would have passed the order directing the Respondent No. 2 to produce the Assessment Orders on the failure of the Respondent No. 1 to produce the same. However, since the learned AGP categorically stated that the record is not available with the Respondent No. 2, as such a direction cannot be issued as against the Respondent No. 2.
15. In the result the Petition is allowed. Rule is therefore, made absolute in terms of prayer clause (a) of the Petition. The Respondent shall comply with the orders passed by this Court on the next date before the Arbitrator.
16. At this stage, learned counsel for the Respondent seeks stay of this order so as to challenge the same before the appropriate forum. Taking into consideration that the present Petition is pending for almost one year, I am inclined to stay the order for a period of two weeks from today.
