WHETHER A WRIT PETITION IS MAINTAINABLE AGAINST ORDER OF NATIONAL COMMISSION (NCDRC)

 

Whether a writ petition is maintainable against order of National Commission (NCDRC)

         In reference to Section 58(1)(a)(iii) of CPA 2019

The Consumer Protection Act 2019( In short CPA) as it evolved from the Consumer Protection Act 1986, over the years is a comprehensive Act containing the mode and manner of redressal of consumer complaints, appeals, revisions, reviews and/or execution cases. The final order passed by the National Commission for Consumer Disputes is appealable before Supreme Court under section 67 of the Consumer Protection Act (CPA) 2019.

At the very outset, the provision of appeal against the order of NCDRC as contained in section 67 may be reproduced herein:

Section 67: Appeal Against Order of National Commission.

^*67. Any person, aggrieved by an order made by the National Commission in exercise of its powers conferred by sub-clause (i) or (ii) of clause (a) of sub-section (1) of section 58, may prefer an appeal against such order to the Supreme Court within a period of thirty days from the date of the order:

Provided that the Supreme Court may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period:

Provided further that no appeal by a person who is required to pay any amount in terms of an order of the National Commission shall be entertained by the Supreme Court unless that person has deposited fifty per cent. of that amount in the manner as may be prescribed.

 

Contextually, it is also necessary to reproduce section 58 of CPA so as to further deliberate in the aspect. The Section 58 of CPA is reproduced as under:

Section 58: Jurisdiction of National Commission.

58. (1) Subject to the other provisions of this Act, the National Commission shall have jurisdiction—

(a) to entertain—

(i) complaints where the value of the goods or services paid as consideration exceeds rupees ten crore:

Provided that where the Central Government deems it necessary so to do, it may prescribe such other value, as it deems fit;

(ii) complaints against unfair contracts, where the value of goods or services paid as consideration exceeds ten crore rupees;

(iii) appeals against the orders of any State Commission;^#(iv) appeals against the orders of the Central Authority; and

(b) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State Commission where it appears to the National Commission that such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity.

(2) The jurisdiction, powers and authority of the National Commission may be exercised by Benches thereof and a Bench may be constituted by the President with one or more members as he may deem fit:

Provided that the senior-most member of the Bench shall preside over the Bench.

(3) Where the members of a Bench differ in opinion on any point, the points shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ, and make a reference to the President who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more of the other members and such point or points shall be decided according to the opinion of the majority of the members who have heard the case, including those who first heard it:

Provided that the President or the other member, as the case may be, shall give opinion on the point or points so referred within a period of two months from the date of such reference.

From the bare perusal of Section 67 of the CPA 2019 it is apparent that the appeal before the Supreme Court is provided for only in respect of order of National Commission in terms of sub-clause (i) &(ii) of clause (a) of Section 58(1) of CPA, 2019. What is clear that as regards sub clause (iii) of Section 58(1)(a) no appeal is provided for. In such a situation, what shall be the remedy, if the order is passed by National Commission u/s 58(1)(a)(iii) of CPC 2019?

The short question which is posed for the consideration of the Supreme Court in a matter Ibrat Faizan vs Omaxe Buildhome Pvt. Ltd in a CIVIL APPEAL NO. 3072 OF 2022 was as under:

 “whether, against the order passed by the National Commission in an appeal under Section 58 (1) (a)(iii)  of the 2019 Act, a writ petition before the concerned High Court under Article 227 the Constitution of India would be maintainable?”

The Supreme Court has answered the situation as referred to above, in a matter captioned as Ibrat Faizan vs Omaxe Buildhome Pvt. Ltd (Supra). In the aforesaid case , the order passed by a ld Single Judge of High Court was impugned whereby, the learned Single Judge of the High Court had answered the question of jurisdiction and held that against the order passed by the National Commission in First appeal No. 250/2021, a writ petition would be maintainable under Article 227 of the Constitution of India. The writ petition was allowed. The Special leave Petition was thus preferred, as the petitioner was aggrieved and dissatisfied with the order passed by the High Court holding that against the order passed by the National Commission passed in an appeal under Section 58 (1)(a)(iii) of the Consumer Protection Act, 2019, a writ petition under Article 227 of the Constitution of India would be maintainable. The original respondent before the High Court had preferred the appeal before this Court.

CONTENTIONS OF Appellant

(i)          Against the order passed by the National Commission, an appeal provided under Section 27A (1) (c) of the Consumer Protection Act, 1986, would be maintainable and without exhausting the said remedy, the High Court ought not to have entertained the writ petition under Article 227  of the Constitution of India, which was against the order passed by the National Commission in First Appeal.

(ii)        In the alternative, it was contended that assuming that the writ petition under Article 227 of the Constitution of India against the order passed by the National Commission, impugned before the High Court, was maintainable, then too, as even then, in the limited jurisdiction available under Article 227 of the Constitution of India, the High Court ought not to have stayed the order passed by the National Commission passed in first appeal.

                                        CONTENTIONS OF RESPONDENT

(i)          As the appeal before the National Commission was under Section 58 (1)(a)(iii) of the 2019 Act, there is no further appeal provided against the order of the National Commission, as provided to the Supreme Court under Section 67of the 2019 Act, against the order passed by the National Commission under Section 58 (1)(a)(iii) of the 2019 Act. Hence, a writ petition under Article 227 of the Constitution of India would be maintainable. 

(ii)        Reliance was placed on the decision of Supreme Court in the case of Associated Cement Companies Limited Vs PN Sharma, AIR 1965 SC 1595 (paras 44 & 45), and the subsequent decision of Supreme Court in the case of L. Chandra Kumar Vs Union of India (1997) 3 SCC 261.

(iii)          The High Court has rightly observed and held that against the judgment and order passed by the National Commission, impugned before the High Court, a writ petition under Article 227 of the Constitution of India would be maintainable.

ANALYSIS BY SUPREME COURT

Whether the National Commission can be said to be a “tribunal” for the purpose of exercise of powers under Article 227 of the Constitution of India by the High Court is concerned, has been considered by a Constitution Bench of the Supreme  Court in the case of Associated Cement Companies Limited (supra), which is required to be referred to. In paragraphs 44 and 45, it is observed and held as under:

“44. An authority other than a court may be vested by statute with judicial power in widely different circumstances, which it would be impossible and indeed inadvisable to attempt to define exhaustively. The proper thing is to examine each case as it arises, and to ascertain whether the powers vested in the authority can be truly described as judicial functions or judicial powers of the State. For the purpose of this case, it is sufficient to say that any outside authority empowered by the State to determine conclusively the rights of two or more contending parties with regard to any matter in controversy between them satisfies the test of an authority vested with the judicial powers of the State and may be regarded as a tribunal within the meaning of Article 136 . Such a power of adjudication implies that the authority must act judicially and must determine the dispute by ascertainment of the relevant facts on the materials before it and by application of the relevant law to those facts. 

CONSTITUTION Bench OF SUPREME COURT

This test of a tribunal in a constitution bench judgment  reported as L. Chandra Kumar (supra) , the Supreme Court had the occasion to deal with the jurisdiction of the High Courts under Articles 226/227 of the Constitution of India in respect of powers of judicial review, it was observed and held in para 90 as under:

“90. We may first address the issue of exclusion of the power of judicial review of the High Courts. We have already held that in respect of the power of judicial review, the jurisdiction of the High Courts under Articles 226/227 cannot wholly be excluded. It has been contended before us that the Tribunals should not be allowed to adjudicate upon matters where the vires of legislations is questioned, and that they should restrict themselves to handling matters where constitutional issues are not raised. We cannot bring ourselves to agree to this proposition as that may result in splitting up proceedings and may cause avoidable delay. If such a view were to be adopted, it would be open for litigants to raise constitutional issues, many of which may be quite frivolous, to directly approach the High Courts and thus subvert the jurisdiction of the Tribunals. Moreover, even in these special branches of law, some areas do involve the consideration of constitutional questions on a regular basis; for instance, in service law matters, a large majority of cases involve an interpretation of Article 14, 15 and 16 of the Constitution. To hold that the Tribunals have no power to handle matters involving constitutional issues would not serve the purpose for which they were constituted. On the other hand, to hold that all such decisions will be subject to the jurisdiction of the High Courts under Articles 226/227 of the Constitution before a Division Bench of the High Court within whose territorial jurisdiction the Tribunal concerned falls will serve two purposes. While saving the power of judicial review of legislative action vested in the High Courts under Articles 226/227 of the Constitution, it will ensure that frivolous claims are filtered out through the process of adjudication in the Tribunal. The High Court will also have the benefit of a reasoned decision on merits which will be of use to it in finally deciding the matter.” That thereafter, it is observed and held that against the order passed by the tribunal, the aggrieved party may approach the concerned High Court under Article 227 of the Constitution of India”.

The Supreme Court has held in Ibrat Faizan vs Omaxe Buildhome Pvt. Ltd (Supra) that so far as the remedy which may be available under Article 136 of the Constitution of India is concerned, it cannot be disputed that the remedy by way of an appeal by special leave under Article 136 of the Constitution of India may be too expensive and as observed in the case of L Chanra Kumar (Supra), the said remedy can be said to be inaccessible for it to be real and effective. Therefore, when the remedy under Article 227 of the Constitution of India before the concerned High Court is provided, in that case, it would be in furtherance of the right of access to justice of the aggrieved party, may be a complainant, to approach the concerned High Court at a lower cost, rather than a Special Leave to Appeal under Article of the Constitution. Therefore, in the present case, the High Court has not committed any error in entertaining the writ petition under Article 227 of the Constitution of India against the order passed by the National Commission which has been passed in an appeal under Section 58(1)(a) (iii) of the 2019 Act. However, while exercising the powers under Article 227  of the Constitution of India, the High Court may subjects itself to the rigour of Article 227 of the Constitution and the High Court has to exercise the jurisdiction under Article 227 within the parameters within which such jurisdiction is required to be exercised. The scope and ambit of jurisdiction of Article 227 of the Constitution has been explained by Supreme Court in the case of Estralla Rubber Vs Dass Estate (P) Ltd, (2001) 8 SCC 97, which has been consistently followed by the Supreme Court in the case of Garment Craft Vs Prakash Chand Goel, 2022 SCC Online SC 29. Therefore, while exercising the powers under Article 227 of the Constitution, the High Court has to act within the parameters to exercise the powers under Article 227 of the Constitution. It goes without saying that even while considering the grant of interim stay/relief in a writ petition under Article 227 of the Constitution of India, the High Court has to bear in mind the limited jurisdiction of superintendence under Article 227 of the Constitution. Therefore, while granting any interim stay/relief in a writ petition under Article 227 of the Constitution against an order passed by the National Commission, the same shall always be subject to the rigour of the powers to be exercised under Article of the Constitution of India.

Therefore, it is held that a writ petition under Article 227 of the Constitution of India before the concerned High Court against the order passed by the National Commission in an appeal under Section 58(1)(a)(iii) of the 2019 Act shall be maintainable and necessary orders could be passed by the High Court.

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Anil K Khaware

Founder & Senior Associate

Societylawandjustice.com

 

 

EVIDENTIARY VALUE OF A PARTIALLY CROSS EXAMINED WITNESS

 

Evidentiary value of a partially cross examined witness

 

The examination of witness and their cross examination before courts of law has always been considered as a quintessential elements of justice system. In order to unravel truth or to prove a case, testimony of witness/es shall have to be appreciated in the touchstone of law and their examination in chief and cross examination should be seen in that perspective. In fact, by virtue of cross examination of witnesses, the contesting party can prove or assail the case set out by the rival parties, as the case may be. The evidence in a case therefore attains paramount significance.

However, what if the evidence affidavit is filed and tendered by a witness, but the witnesses were not cross examined, or, the witnesses were only partially cross examined in one or two times, but the cross examination remained inconclusive. Whether the evidentiary value of even partially cross examined witness shall have no relevance, unless , it is concluded.? The discussion herein relates to the aforesaid aspect.  

The Madras High Court in G.Balaji vs Saravanasamy in CRP (PD) 2182 of 2019 relied upon the following judgments of the said high court in a case reported as MANU/TN/3189/2010 and CRP(PD) (MD) No.1132 of 217 in Rajendra Vs Swaminathan  and Antony Matilda Vs Vairamuthu C.R.P.(PD) (MD) No.1132/2017 it is held that, when the opponent was not given the opportunity to cross examine the proof witness or when the witness avoids cross examination, the evidence of such witness shall not remain on record and if the plaintiff/witness  on several occasions absented himself for cross examination and failed in to subject himself for cross-examination, then his evidence shall not be retained on record and shall be eschewed, otherwise the spirit of adversarial system of law will become meaningless.

The another dimension, in such a situation could also be that as long as the witness was elaborately cross examined on one or two occasions, it may not be necessary to eschew the entire evidence. It's probative value can be looked into at the time of final hearing. The reference in this regard could be have in AIR 1999 SC 1441, in Vidhyadhar Vs Manikrao 2009(4) TLNJ 217 (Civil), D.F.Philips vs. Damayanthi Kailasam and Others; 2016 (4) CTC 158, Thomas and another vs. Thiyagarajan; 2018 (3) TLNJ 717 (Civil).

In Vidhyadhar (Supra) it  is held that:

“16. Where a party to the suit does not appear into the witness box and states his own case on oath and does not offer himself to be cross examined by the other side, a presumption would arise that the case set up by him is not correct as has been held in a series of decisions passed by various High Courts and the Privy Council beginning from the decision in Sardar Gurubakhsh Singh Vs Gurdial singh & Anr. This was followed by the Lahore High Court in Kirpa Singh v. Ajaipal Singh and Ors. AIR (1930) Lahore 1 and the Bombay High Court in Martand Pandharinath Chaudhary Vs Radhabai in Krishnarao Deshmukh AIR (1931) Bombay 97. The Madhya Pradesh High Court in Gulla Kharagjit Carpenter Vs Narsingh Nandkishore Rawat also followed the Privy Council decision in Sardar Gurubakhsh Singh  case (supra). The Allahabad High Court in Arjun Singh Vs Virender Nath & Anr held that if a party abstains from entering the witness box, it would give rise to an inference adverse against him. Similarly, a Division Bench of the Punjab & Haryana High Court in Bhagwan Das Vs Bishan Chand & Ors , drew a presumption under Section 114 of the Evidence Act against a party who did not enter into the witness box.”

The Madras  High Court in D.F.Philips (Supra) had observed as follows:

“26. In ordinary circumstances, evidence not tested by cross examination has no probative value. There should be an opportunity to the opposite party to cross examine the witness. Things would be different in case the opportunity to cross examine was not availed of by the opposite party. Evidence of a witness given in chief without subjecting such evidence for cross examination on account of death of the witness is also permissible. However, its probative value would be very little.

27. Similarly, question would arise as in the subject case, about the evidence receded inconclusive. The evidence recorded in cases where cross examination was not done completely cannot be discarded altogether. It all depends upon case to case and no uniform rule of general application could be made in such matters. In cases wherein cross examination was practically completed and the witness was not in a position to subject himself for further cross examination on account of illness or otherwise, or on account of other justifiable reasons, the probative value of such evidence has to be considered by the Court. Section 33 of the Evidence Act permits the evidence given by a witness in a judicial proceeding or a later stage of the very same judicial proceeding, the truth of the facts which was elicited during such examination, when the witness was dead or cannot be found or was incapable of giving evidence or in case the witness was kept out of the way by the adverse party. However, the proviso to the said Section also provides that the adverse party in the first proceeding must have the right and opportunity to cross examine him so as to use the evidence so tendered in the subsequent proceeding or in later stage of the same proceeding. Therefore, everything depends upon the peculiar facts of the said case. If the failure to face the further cross examination was involuntary, it stands in a different footing.

28. There is no provision for eschewing the incomplete evidence of a witness. The evidentiary value or probative value of such evidence is a matter to be considered by the trail Court, Situations would arise where on account of the less favourable answers given in the initial stage of cross examination, the witness may avoid the box on subsequent occasions. In such circumstances, the trail Court is justified in forming an opinion about the probative value of such evidence in the peculiar factual background. In all cases where there was no deliberate attempt on the part of the witness to avoid cross examination, evidence would be admissible but its probative value is a matter to be decided by the trail Court. Merely by avoiding further cross examination, it cannot be said that the entire evidence has to be eschewed from consideration. It is always possible for the Court to examine all the surrounding circumstances leading to the avoidance of further cross examination and to come to a definite conclusion as to whether it was deliberate act on the part of the witness.”

Keeping in view the aspects as elucidated above in G Balaji (Supra) it is held as under:

9. All the above cases pertain to incomplete evidence of a defendant's witness. Naturally, the defendant puts down his defense by way of written statement either denying averments made in the plaint as a whole or admitting to certain facts generally or specifically. He lets in evidence to disprove the case projected by the plaintiff and the evidentiary value of the plaint documents. When he underwent cross examination to a considerable extent, but http://www.judis.nic.in could not complete the same due to certain unavoidable circumstances, Courts cannot reject entire evidence, but shall take into consideration its probative value, while deciding the case, more so, when the plaintiff evades or avoids and deliberately delays completion of evidence. On the other hand, a case projected by the plaintiff, shall be based on introduction of facts through plaint averments, supported by oral and documentary evidence. It can be controverted only through cross examination and the veracity of the evidence can be tested by other side. Plaintiff being Dominus litis spearheads the litigation. Onus is more on him to prove the case, unless the burden is shifted to opposite side. In that process he must be ready and prepared and show that he is always available and willing to complete the evidence. In spite of his readiness, if it is shown that the cross examination was avoided or delayed at the instance of the opposite party, in such circumstances, probative value of the available evidence would be taken into consideration”.

11. In any suit, subject to exceptions, Plaintiff being the Dominus litis is bound to prove his case, as observed supra. Particularly in a suit for injunction, http://www.judis.nic.in material evidence, major portion of which, in all probabilities, fall within the personal knowledge of the plaintiff, which plays a predominant role. All other witnesses would corroborate the case of the plaintiff. The evidence of the Plaintiff, as such is very crucial to prove his case. Such evidence shall be complete and it becomes complete only upon completion of cross examination by other side. Holding the precedents and the ratio at the back of the mind, the conduct of the Plaintiff, if seen, admittedly, the materials placed before the court shows that the suit was restored on file after it having been dismissed for default. After having filed the proof affidavit, the Plaintiff had taken his own time to mark the documents. He absented himself for three hearings before marking Exhibits A1- A6 and had taken time to mark further documents, but could not do so, for want of his appearance before the court for three consecutive hearings. An endorsement was by the counsel on his behalf and in his absence that no further marking of documents. The matter was posted for Cross Examination on 03.07.2018 and adjourned due to his non appearance to 06.07.2018 and he was cross examined in part. Again he was absent for three consecutive hearings and cross examined further on 07.09.2018 in part and the matter was adjourned for further cross examination. Again he absented himself for eight consecutive hearings viz., 19.09.2018, 03.10.2018, 09.10.2018, 31.10.2018, 08.11.2018, 21.11.2018 and 04.12.2018. Since he did not appear http://www.judis.nic.in PW1 evidence was closed. It is pertinent to note that on all hearings counsel for both sides were present and participated in proceedings.

What emerges therefore is that the conduct of the Plaintiff is to be seen i.e if plaintiff , after having filed the proof affidavit and after having marked the documents, remained absent for cross examination that may amount to denial of opportunity to the opponent to disprove the claim and render the evidence as complete one. Incomplete evidence of a witness who has failed to subject himself for cross examination shall not be retained on record. Even though there is no provision to eschew the evidence, the evidence of the Plaintiff not tested by cross examination on account of his non appearance, does not even have the probative value, if the incompleteness is attributable to the Plaintiff himself. The evidence can be used at the later stage of the proceeding as well, since, as per Section 33 of Evidence Act entails the evidence to be completed in the eyes of law. Thus, if a witness is allowed to avoid the witness box for cross examination after letting in evidence in chief examination his evidence cannot be retained on record and does not merit consideration, as it will run against the spirit of adversarial system of law.

Thus, the basic rule is that once a witness has examined himself and tendered evidence affidavit without having been cross examined, the evidence cannot be considered, since, the witness has not subjected himself for cross examination, Even when a witness was cross examined at several occasion, but the witness failed to conclude the cross examination, then too such evidence may be eschewed, since, the cross examination could not be completed and therefore, the such evidence cannot have probative value or evidentiary value. However, if the cross examinations are held substantively and the non examination of witness cannot be attributed on him and if it emerges that the other party was instrumental in causing delay, then, the court may still consider the evidence as relevant, since, the witness or any such party who seeks to examine such witnesses cannot be blamed and therefore, the evidence cannot be discarded altogether. The Court in such a situation may take a decision based on the facts and circumstances of the case.

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                                  Anil K Khaware

Founder & Senior Associate

Societylawandjustice.com 

 

 

COURTS CAN MODIFY ARBITRAL AWARD U/S 34 OF A & C ACT: SUPREME COURT

 

Courts can modify Arbitral Award u/s 34 of A & C Act: Supreme Court

 

The parameter of objections to arbitral award and the prescription of setting aside of arbitral award is stipulated under Section 34 of Arbitration & Conciliation Act 1996 ( As amended and up to date). The limited grounds of objection is to arbitral award is there in the aforesaid provisions. The award on the above premise therefore could have been upheld or set aside. However, on issue that have raised concern now as regards the fact that whether the award can be modified by the court or not? The above aspect stands adjudicated now by a Five (5) Judge Constitution bench in a matter captioned as GAYATRI BALASAMY Vs M/S. ISG NOVASOFT TECHNOLOGIES LIMITED  (Arising out of S.L.P.(C) Nos.15336-15337 of 2021) and decided by Supreme Court on 30.04.2025..The judgment is rendered by majority of 4:1 and hon’ble CJI.(SANJIV KHANNA), , hon’ble Justice (B.R. GAVAI), hon’ble Justice (SANJAY KUMAR and hon’ble justice (AUGUSTINE GEORGE MASIH) are the majority judges.

 

To put it in perspective, a three-Judge Bench of the Supreme Court vide order dated 20th February 2024, had  directed that the Special Leave Petitions in Gayatri Balasamy v. ISG Novasoft Technologies Limited 2024 SCC OnLine SC 1681  be placed before the Chief Justice of India for an appropriate order. The matter was to be examined to determine the need to refer the following questions of law to a larger Bench:

“1. Whether the powers of the Court under Sections 34 and 37 of the Arbitration and Conciliation Act 1996 will include the power to modify an arbitral award?

2. If the power to modify the award is available, whether such power can be exercised only where the award is severable, and a part thereof can be modified?

3. Whether the power to set aside an award under Section 34 of the Act, being a larger power, will include the power to modify an arbitral award and if so, to what extent?

4. Whether the power to modify an award can be read into the power to set aside an award under Section 34 of the Act?

5. Whether the judgment of the Supreme Court in Project Director NHAI vs. M. Hakeem, (2021) 9 SCC 1.  followed in Larsen Air Conditioning and Refrigeration Company vs. Union of India (2023) 15 SCC 472  and SV Samudram vs. State of Karnataka, (2024) 3 SCC 623 laid down the correct law, as other benches of two Judges (in Vedanta Limited vs. Shenzden Shandong Nuclear Power Construction Company Limited, (2019) 11 SSC 465,  Oriental Structural Engineers Pvt. Ltd. vs. State of Kerala, (2021) 6 SCC 150  and M.P. Power Generation Co. Ltd. vs. Ansaldo Energia Spa) (2018) 16 SCC 661  and three Judges (in J.C. Budhraja vs. Chairman, Orissa Mining Corporation Ltd. (2008) 2 SCC 444 , Tata Hydroelectric Power Supply Co. Ltd. vs. Union of( India (2003) 4 SCC 172 and Shakti Nath vs. Alpha Tiger Cyprus Investment Ltd (2020) 11 SCC 685..

 

As in above cases Supreme Court had either modified or accepted the modification in the award, hence, the final adjudication by the Constitution Bench on it was felt necessary.

 

According to the Supreme Court, The fulcrum of the legal controversy rested on the following question(s)::

 

Are Indian courts jurisdictionally empowered to modify an arbitral award? If so, to what extent?

 

The situation arose owing to the fact that as per the Arbitration and Conciliation Act, 1996, the Courts are not expressly empowered to modify or vary an arbitral award. Section 34 of the 1996 Act only confers upon courts the power to set aside an award. Though, the Supreme Court , earlier have, still, on several instances had to modify arbitral awards, with a view to  seeking to minimize protracted litigation and foster the ends of justice. Conve5rsely, since, some judgments have reflected that Indian courts cannot modify awards, due to the narrowly defined scope of Section 34. As such, due to, divergent and contrasting judicial opinions existing, this was incumbent upon the Constitution bench to adjudicate on the issue.

The Supreme Court had also noted that Section 34 is modelled on the UNCITRAL Model Law on International Commercial Arbitration, 1985,27 which does not allow courts to modify awards. Unlike the broader powers available under the 1940 Act, the court’s powers under the 1996 Act are narrower. Thus, it was generally felt that  allowing modification under Section 34 would go against the legal framework, as only the legislature has the power to change the law and any expansion of Section 34’s powers to include modification would require a legislative amendment.

The opposition to the power of courts to modify the award hinged on the Model Law as it was the result of a collective effort by several countries to establish a uniform and cohesive legal framework. If courts had such power, it could result in a situation where a court order or decree replaces the arbitral award, which in arbitration jurisprudence is unacceptable. It may carry international repercussions when awards are sought to be enforced under foreign conventions.

Further, the above school of thought also believed that doctrine of merger does not apply to court modifications of an arbitral award. The nature and scope of the power of a court, being distinct from an arbitral tribunal. It was thus canvassed that  the modifications will not merge with the arbitral award. In simpler words, any modification or variation made by the court to the arbitral award would not be subsumed into the arbitral award.

The Constitution bench (majority) has held in Para 33 and Para 34 as under:

33.We hold that the power conferred under the proviso to Section 34(2)(a)(iv) is clarificatory in nature. The authority to sever the “invalid” portion of an arbitral award from the “valid” portion, while remaining within the narrow confines of Section 34, is inherent in the court’s jurisdiction when setting aside an award.

 

34. To this extent, the doctrine of omne majus continet in se minus—the greater power includes the lesser—applies squarely. The authority to set aside an arbitral award necessarily encompasses the power to set it aside in part, rather than in its entirety. This interpretation is practical and pragmatic. It would be incongruous to hold that power to set aside would only mean power to set aside the award in its entirety and not in part. A contrary interpretation would not only be inconsistent with the statutory framework but may also result in valid determinations being unnecessarily nullified.”

 

The Constitution Bench of the Supreme Court while emphasizing on the power of courts for modifying the award has held in para 42 as under:

42.    Given this background, if we were to decide that courts can only set aside and not modify awards, then the parties would be compelled to undergo an extra round of arbitration, adding to the previous four stages: the initial arbitration, Section 34 (setting aside proceedings), Section 37 (appeal proceedings), and Article 136 (SLP proceedings). In effect, this interpretation would force the parties into a new arbitration process merely to affirm a decision that could easily be arrived at by the court. This would render the arbitration process more cumbersome than even traditional litigation.”

 

The Supreme Court has noted in para 44 of the judgment as under:

 

“44.We are of the opinion that modification represents a more limited, nuanced power in comparison to the annulment of an award, as the latter entails a more severe consequence of the award being voided in toto. Read in this manner, the limited and restricted power of severing an award implies a power of the court to vary or modify the award. It will be wrong to argue that silence in the 1996 Act, as projected, should be read as a complete prohibition”.

 

The Constitution Bench of the Supreme Court, on the basis of the detailed discussion and as narrated above in nutshell has thus answered the reference in its conclusion in the following manner:

 

It is held that: the Court has a limited power under Sections 34 and 37 of the 1996 Act to modify the arbitral award. This limited power may be exercised under the following circumstances:

I.           when the award is severable, by severing the “invalid” portion from the “valid” portion of the award;

II.     by correcting any clerical, computational or typographical errors which appear erroneous on the face of the record,

III.    post award interest may be modified in some circumstances and/or

IV.    Article 142 of the Constitution applies, albeit, the power must be exercised with great care and caution and within the limits of the constitutional power.

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                                            Anil K Khaware

Founder & Senior Associate

Societylawandjustice.com

SUMMONING OF ACCUSED BY A MAGISTRATE EVEN AFTER CLOSURE REPORT

 

SUMMONING OF ACCUSED BY A MAGISTRATE EVEN AFTER CLOSURE REPORT

 

In a F.I.R case, in case, after investigation, prima facie offence against the accused is made out, a charge sheet containing the details of allegations along with documents in support thereof is submitted before appropriate court of jurisdiction for the prosecution of the case. However, in case, the offence, according to the Investigating Officer is not made out, then, a closure report used to be filed by the Police before the Courts of appropriate jurisdiction, for seeking closure of the case. The Courts, in such cases, after notifying the complainant shall have the option to accept the closure report, or reject it. The Court shall also have the option of summoning the accused, if it in the opinion of the case, sufficient evidence is there in the charge sheet, despite contrary report from the police. The Court may in the alternative also direct police to conduct further investigation and thereafter file a report. Therefore, it is evident that there are several options before the Court, when faced with the situation as narrated above.

The aforesaid situation however is not comprehensive. Some time the Investigating Officer does not file a closure report and the proposed accused  are named in column 12 i.e the accused are , though, suspected of committing offence, but for want of sufficient evidence, the accused are not proposed to be sent for trial. Ironically, when closure report is not filed, and names of accused figured in column 12, the Court remains uncertain as to how to deal with the situation?  Whether Court shall have the option of calling upon the police for further investigation, as that option undoubtedly remains, the moot point, however is, as to whether the Court can issue summons to the accused despite they are named in column 12 of Charge Sheet? The situation is made complex further, if the Court summons the accused, despite their names in column no.12 and when no reasons are ascribed for the summoning. It is no res integra, that the Court may issue summon even to the accused whose names are there in Column 12, but, whether, the same can be done without assigning any reason shall be the essence of the present discussion.  Moreover, if the summons in the context as aforesaid is issued, without assigning any reasons, what shall have the effect of such summoning and/or remedy to the accused?

A recent judgment by Dharmveer vs State Of U.P & Another in a CRIMINAL REVISION No. - 1909 of 2023  rendered on 6 the May, 2024 is a pointer. Relying on S. Mohammed Ispahan Vs Yogendra Chandak & Ors , (2017) 16 SCC 226, In para 35 it is held as under:

“35. It needs to be highlighted that when a person is named in the FIR by the complainant, but police, after investigation, finds no role of that particular person and files the charge-sheet without implicating him, the Court is not powerless, and at the stage of summoning, if the trial court finds that a particular person should be summoned as accused, even though not named in the charge-sheet, it can do so. At that stage, chance is given to the complainant also to file a protest petition urging upon the trial court to summon other persons as well who were named in the FIR but not implicated in the charge-sheet. Once that stage has gone, the Court is still not powerless by virtue of Section 319of  C.rPC. However, this section gets triggered when during the trial some evidence surfaces against the proposed accused”.

It is held by Supreme Court that the fact that the fact that names of the appellants were mentioned in the FIR and even in the statement of witnesses recorded under Section 161 Cr.PC these appellants were named and such statements under Section 161 Cr.PC would constitute "documents" and thus, in this context, the High Court has observed that "evidence" within the meaning of Section 319 Cr.PC would include the aforesaid statements and, therefore, the appellants could be summoned was held to be incorrect. According to Supreme Court, the aforesaid reasons given by the High Court do not stand the judicial scrutiny. The High Court has not dealt with the subject-matter properly and even in the absence of strong and cogent evidence against the appellant, it has set aside the order of the Chief Metropolitan Magistrate and exercised its discretion in summoning the appellants as accused persons. It is held as under:

“…No doubt, at one place the Constitution Bench observed in Hardeep Singh case [Hardeep Singh v.State of Punjab, (2014) 3 SCC 92 : (2014) 2 SCC (Cri) 86] that the word "evidence" has to be understood in its wider sense, both at the stage of trial and even at the stage of inquiry. In para 105 of the judgment, however, it is observed that "only where strong and cogent evidence occurs against a person from the evidence led before the court that such power should be exercised and not in a casual and cavalier manner". This sentence gives an impression that only that evidence which has been led before the Court is to be seen and not the evidence which was collected at the stage of inquiry. However there is no contradiction between the two observations as the Court also clarified that the "evidence", on the basis of which an accused is to be summoned to face the trial in an ongoing case, has to be the material that is brought before the Court during trial. The material/evidence collected by the investigating officer at the stage of inquiry can only be utilised for corroboration and to support the evidence recorded by the Court to invoke the power under Section 319  Cr.PC”.

It is further held as under:

35. It needs to be highlighted that when a person is named in the FIR by the complainant, but police, after investigation, finds no role of that particular person and files the charge-sheet without implicating him, the Court is not powerless, and at the stage of summoning, if the trial court finds that a particular person should be summoned as accused, even though not named in the charge-sheet, it can do so. At that stage, chance is given to the complainant also to file a protest petition urging upon the trial court to summon other persons as well who were named in the FIR but not implicated in the charge-sheet. Once that stage has gone, the Court is still not powerless by virtue of Section 319 Cr.PC. However, this section gets triggered when during the trial some evidence surfaces against the proposed accused.

In Hardeep Singh (Supra) Five (5) Judge Constitution bench has held as under:

106. Thus, we hold that though only a prima facie case is to be established from the evidence led before the court, not necessarily tested on the anvil of cross-examination, it requires much stronger evidence than mere probability of his complicity. The test that has to be applied is one which is more than prima facie case as exercised at the time of framing of charge, but short of satisfaction to an extent that the evidence, if goes un-rebutted, would lead to conviction. In the absence of such satisfaction, the court should refrain from exercising power under Section 319 Cr.PC."

In the light of above, Allahabad High Court in Dharamveer (Supra) has held as under:

92. In view of above, this Court finds that the law regarding summoning of a prospective accused that stands crystallized by the Five Judges Bench judgment of the Supreme Court in Hardeep Singh (Supra), Brijendra Singh & Ors  Vs State of Rajsthan  (2017) 7 SCC 706 and S. Mohammed Ispahani  (Supra), is not satisfied in the present case. As per the law laid down by  the Apex Court in the case of Brijendra Singh (Supra) and S Mohammed Ishpahani (Supra) a prospective accused can be summoned in exercise of jurisdiction under Section 319  Cr.P.C. on the following parameters:

(A)    A prospective accused can be summoned on the statement-in-chief of one prosecution witness,

(B)    Irrespective of above, the Court dealing with an application under Section 319 Cr.P.C. must consider the plethora of evidence, which has emerged during the course of investigation as it is an important material to conclude the complicity/innocence of a prospective accused,

(C)    The Court should draw a parallel in between the statement of the prosecution witness examined up to that stage as recorded under Section 161 Cr.P.C. as well as his deposition before Court below to find out whether something new has emerged in the deposition of a prosecution witness from what was stated by him in his statement under Section 161 Cr.P.C,

(D)    A prospective accused cannot be summoned merely on the basis of his complicity in the crime in question, only if an inference of guilt of the prospective accused can be inferred as per the evidence up tho this stage,

(E)    The power under Section 319 Cr.P.C. is an extra-ordinary power which must be exercised sparingly. Furthermore, Court should exercise it's jurisdiction under Section 319 diligently and not in a "casual and cavalier" fashion,

(F)     Only when some strong and cogent evidence has emerged against a prospective accused rather than his mere complicity in the crime in question can a prospective accused be summoned and

(G)    The Court can summon a prospective accused only when on the basis of material on record, it can record the same degree of satisfaction as observed in paragraph 106 of the judgment in Hardeep Singh (Supra).

That on the basis of aforesaid judicial precedents, what is crystal clear is that a Magistrate, in spite of filing of closure report shall be entitled to apply his mind on the basis of record and if it appears to the Magistrate that summons could be issued to the accused persons, on the basis of material on record, the same can be done. However, the reason has to be given for such summoning order, more so, in the backdrop of closure report and why the magistrate is not agreeable with the Police Report. This is over and above, other options that a Magistrate can avail of i.e for seeking further investigation or accepting closure report as the case may be. What is worth mentioning in the context is that statement u/s 161 of Cr.P.C will have to be tested on the basis of deposition before Court and additional facts which may not be part of record may come out in the deposition. When on the basis of deposition of witnesses during trial, if some other evidences crops up, then, new accused may have to be summoned as per the principles of section 319 of Cr.P.C. Thus, the police report needs meticulous scrutiny and application of mind shall be necessary. The constitution bench judgment of Supreme Court has settled the position to the effect that there is no embargo in summoning the accused persons, irrespective of fact that the accused persons in a final report are shown in column 12 and/or closure report is filed. It is also not ambiguous that since summoning of accused in a criminal matter has vast ramification, therefore, such order of summoning should not be issued mechanically and should reflect application of mind and on the basis of prima facie evidence only accused should be summoned.

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                          Anil K Khaware

                 Founder & Senior Associate

                 Societylawandjustice.com