1998 PLP 176 (MLD)

"41. Procedure and powers of Court.

Subject to the provisions of this Act and of rules made thereunder-- (a) the provisions of the Code of Civil Procedure, 1908, shall apply to all proceedings before the Court, and to all appeals, under this Act, and (b) the Court shall have, for the purpose of, and in relation to, arbitration proceedings, the same power of making orders in respect of any of the matters set out in the Second Schedule as it has for the purpose of, and in relation to, any proceedings before the Court: Provided that nothing in clause (b) shall be taken to prejudice any power which may be vested in an arbitrator or umpire for making orders with respect to any of such matters." Section 33 of the Arbitration Act is also reproduced hereunder: "

33. Arbitration agreement or award to be contested by application.

Any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits: Provided that where the Court deems it just and expedient, it may set down the application for hearing on other evidence also, and it may pass such orders for discovery and particulars as it may do in a suit: Provided further drat no application challenging the existence or validity of an award, or for having its effect disminished, shall be entertained by the Court unless the applicant has deposited in the Court the amount which he is required to pay under the award or has furnished security to the satisfaction of the Court for the payment of such sum or the fulfilment of any other obligation by him under the award. 26-A. Award to set out reasons.--(1) The arbitrator or umpire shall state in the award the reasons for the award in sufficient detail to enable the Court to consider, any question of law arising out of the award. (2) Where the award does not state the reasons in sufficient detail, the Court shall remit the award to the arbitrators or unpire and fix the time within which the arbitrator or umpire shall submit the award together with the reasons sufficient detail: Provided that any time so fixed may he extended by subsequent order of the Court. (3) An award remitted under subsection (2) shall become void on the failure of the arbitrator or unpire to submit it in accordance with the direction of the Court. " Section 30 of Arbitration Act:-- "Grounds for setting aside award.

An award shall not be set aside except on one or more of the following grounds, namely:-- (a) that an arbitrator or umpire has mis-conducted himself or the proceedings; (b) that an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under section 35; (c) that an award has been improperly procured or is otherwise invalid.

6. It is admitted fact that on the basis of pleadings of the parties, where complicated questions of fact and law are involved it is the duty of the Court to decide cases on evidence and not merely on affidavits. Reliance is placed on "Lilahdar v. Firm Radha Kashan Ramshaya and others" (AIR 1946 Nagpur 5) and relevant observation on page 8 is re-produced hereunder: 'Another argument of the non-applicants was that ordinarily a case under section 33, Arbitration Act, is to be decided on affidavits and not on evidence. Section 33 of the Act empowers a Court to decide a case on affidavits but it may in appropriate cases, whenever it deems it just and expedient, set down and application for hearing on other evidence and it may pass such orders for discovery and particulars as it may do in a suit. In a case of this magnitude which involves many complicated and contested questions of fact and law the Court will normally decide the case on evidence and not merely on affidavits. In ILR (1941) 2 Calcutta 123 the question involved was of gaming and wagering contract and it was held that it could not be conveniently tried on affidavits and the application under section 33, Arbitration Act, was set down for trial on evidence. The circumstances that a Court may in some cases decide an application under section 33 of the Act on mere affidavits is not sufficient to refuse to interfere in revision with an improper order refusing an amendment when the effect of that order is to deprive a party of placing his case before the Court to enable it to determine the real question in controversy between the parties. "

7. The judgment and. decree show that the trial Court decided the objections of the matter in a summary manner. Keeping in view in the present case of this magnitude which involves many complicated and contested question of law and facts, recently section 26-A, section 30 and section 41 of Arbitration Act. (sic) It is the duty and obligation of the trial Court to frame issues under Order 14 of C.P.C. but the learned trial Court did not frame issues. It is a basic and fundamental principle of law that if no issues are framed at all and the parties are prejudiced, it will be a material irregularity and the parties can, as a matter of right, claim the framing of issues because the framing of issues is one of the most important stage of the trial, for the reasons that under Order 18, Rule 2, C.P.C. the parties are required to prove the issues and not the pleadings generally. Where a matter not pleaded is put in issues tire suit must be decided on the issues as framed. Under Order 20, Rule

5. C.P.C. the Court is bound to give a decision on each issue framed. The Appellate Court is also to decide the appeal on the basis of the issues framed by the trial Court. It is pertinent to mention here the provisions with regard to affidavit relate to the mode of receiving evidence. In "Firms Sant Lal Mahadeo Prasad v. Kedar Nath" (AIR 1935 Allahabad 519), the relevant observation is as under:-- "The Court has not attempted to act in accordance with the provisions of Order 20, rule 5, and that the Court should state its finding or decision with reasons therefore upon each separate issues."

8. In this view of the matter, the learned trial Court violated the mandatory provisions of the Civil Procedure Code which are applicable in the present controversy by virtue of section 41 of the Arbitration Act, therefore, the judgment of the trial Court is not sustainable in the eyes of law.

9. In view of what has been discussed above, I find that the judgment and decree of the trial Court under appeal suffers from legal infirmity and material irregularity; the same is accordingly set aside. The appeal is accepted. The case is remanded to the trial Court to frame issues on the basis of pleadings of the parties and then decide the application in accordance with law, leaving the parties to bear their own costs. A.A./C-8/L Case remanded.