In FAO-1018-2021-PUNJ HC- In proceedings under Section 37 of Arbitration Act, evidence is not to be re-appreciated: P&H HC
Justice Avneesh Jhingan [07-02-2023]

Read Order: M/s Bharti Airtel Ltd. v. M/s. Ghanghas Communications and Another

Monika Rahar

Chandigarh, February 8, 2023: While dealing with an appeal filed against the order dismissing objections under Section 34 of the Arbitration and Conciliation Act, 1996 ('the Act'), the High Court of Punjab and Haryana has held that in proceedings under Section 37 of the Act, the evidence is not to be re-appreciated.

Essentially, in this appeal before the Bench of Justice Avneesh Jhingan, M/s Ghanghas Communications ('the respondent') was a distributor of the appellant-company. The 2008-agreement between the parties provided for dispute resolution through arbitration.

The respondent raised a dispute claiming a sum of Rs. 9,70,000/- along with interest. The amount included a refund of Rs. 6 lakhs, on account of non-supply of material. The arbitrator found the respondent to be entitled to a sum of Rs. 6,50,000/- along with interest @ 18% per annum from the date of award till the date of payment (including security of Rs. 50,000/-).

The respondent, to substantiate its claim of refund of Rs. 6 lakhs filed an affidavit of the proprietor and he appeared as a witness  withstood the cross-examination. It also placed on record, affidavit in form of company transaction which recorded issuance of demand draft. 

The appellant denied the liability and took the defence that the draft of rupees six lakhs was paid by M/s. Tayal Traders. A photocopy of the affidavit of proprietor of M/s. Tayal Traders (Jatinder Tayal) was produced.

The Arbitrator took into consideration that only a photocopy of the affidavit was annexed with the reply and in spite of availing number of opportunities, Jatinder Tayal did not appear to support the affidavit. Further, that the dispute arose in the year 2011 and the affidavit was of the year 2013. 

The arbitrator concluded that claimant was able to prove payment of Rs. 6 lakhs by means of demand draft but no goods were supplied and it was not the case of the appellant that goods were supplied to M/s. Tayal Traders. 

The claim of the respondent for refund of rupees six lakhs along with interest was allowed.

Aggrieved of the award, both the parties filed objections under Section 34 of the Act, which were dismissed. 

The appellant's counsel submitted that the claim of rupees six lakhs was wrongly allowed as the payment was not made by the respondent. It was further argued that a photocopy of the affidavit of Jatinder Tayal was not considered.

After hearing the parties, the Court observed at the very outset that in proceedings under Section 37 of the Act, the evidence is not to be re-appreciated. 

Another aspect of the matter considered by the Court was that the appellant had produced the photocopy of the affidavit and in spite of availing number of opportunities, Jatinder Tayal was not examined to support the affidavit. 

"The evidence on record including the deposition of Manager (Finance) of appellant was duly considered to conclude that respondent had made payment of rupees six lakhs to the appellant by way of demand draft, no material was supplied to the respondent and claim of rupees six lakhs was allowed along with interest", the Bench opined. 

The appeal was thus dismissed.