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of <h1>Court quashes amendment converting arbitration to recovery suit, citing procedural rules and prejudice.</h1> <h3>P.A. Ahammed Ibrahim Versus The Food Corporation of India</h3> The appeal was allowed, quashing the High Court's order permitting the respondent to amend the application under Section 20 of the Arbitration Act to ... - Issues:1. Amendment of application under Section 20 of the Arbitration Act to convert it into a suit for recovery of money.2. Jurisdiction of the court to allow such an amendment.3. Interpretation of Section 20 of the Arbitration Act.4. Application of Order VI Rule 17 of the Civil Procedure Code.5. Consideration of limitation period for the claim.6. Invocation of inherent jurisdiction under Section 151 of the CPC.Analysis:1. The judgment deals with the issue of allowing the respondent to amend the application under Section 20 of the Arbitration Act to convert it into a suit for recovery of money. The High Court granted permission for this amendment, which was challenged in the appeal. The appellant argued that the amendment would change the nature of the suit and introduce a new cause of action inconsistent with the original application.2. The court analyzed the jurisdiction of the High Court to allow such an amendment. The appellant contended that the amendment would prejudice their case as the claim was allegedly barred by the limitation period. The High Court justified its decision by invoking inherent jurisdiction under Section 151 of the CPC in the interest of justice.3. Interpretation of Section 20 of the Arbitration Act was crucial in this case. The court highlighted that the application under this section is a stage prior to the institution of a suit and is not equivalent to a plaint under the CPC. The procedure for deciding such an application differs from deciding a suit, as the final order is either to refer the matter to arbitration or reject the application without passing a decree.4. The application of Order VI Rule 17 of the CPC was also discussed. The court emphasized that before applying this rule, there must be the institution of a suit. An application under different statutes cannot be treated as a suit or plaint unless specified in the respective Act. The proposed amendment would introduce a new cause of action and change the nature of the original application.5. The consideration of the limitation period for the claim was crucial. The appellant argued that the claim for recovery of the amount was time-barred, as the cause of action arose in 1975, while the amendment application was filed in 1986. This raised concerns about the validity of the claim and the impact of the amendment on the limitation issue.6. Finally, the judgment concluded that the appeal was allowed, quashing the High Court's order and restoring the trial court's decision. The court emphasized that invoking inherent jurisdiction under Section 151 of the CPC in such cases would nullify the prescribed procedural rules, and the amendment sought would cause prejudice to the appellant's case.
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