AI Drafter 
TaxTMI 
TaxTMI 
2009 (7) TMI 795
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.... ('Code') read with rule 4(b) of the High Court of Karnataka Arbitration (Proceedings before the Courts) Rules, 2001 ('Rule') requesting the court to frame issues in the matter. The civil court rejected the application by an order dated 12th September, 2006. 3. The petitioner's writ petition challenging the said order was dismissed on 12th September, 2008. The learned Single Judge was of the view that applications under section 34 were not necessarily in the nature of a adversarial proceeding where a dispute between two parties requires adjudication by the court; that there is a legal presumption in favour of the award being valid ; and that whether the opposite party joins issue or not, the person challenging the award has to make out one of the grounds enumerated under section 34(2) of the Act. Therefore, he held that there is no need for the court to frame issues, as is done in a civil suit. The writ appeal filed by the petitioner was dismissed by the impugned order, affirming the decision of the learned Single Judge. Feeling aggrieved, the appellant has filed this appeal by special leave. 4. Sri P.P. Rao, learned senior counsel for the appellant, submitted that section 34....
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....rties or their pleaders, ascertain upon what material propositions of fact or of law the parties are at variance, and shall thereupon proceed to frame and record the issues on which the right decision of the case appears to depend. (6) Nothing in this rule requires the court to frame and record issues where the defendant at the first hearing of the suit makes no defence." 7.1 In Makhan Lal Bangal v. Manas Bhunia [2001] 2 SCC 652, this court held that the issues are important as they determine the scope of a trial by laying down the path for the trial to proceed, free from diversions and departures. This court observed : "The evidence shall be confined to issues and the pleadings. No evidence on controversies not covered by issues and the pleadings, shall normally be admitted, for each party leads evidence in support of issues the burden of proving which lies on him. The object of an issue is to tie down the evidence and arguments and decision to a particular question so that there may be no doubt on what the dispute is. The judgment, then proceeding issue-wise would be able to tell precisely how the dispute was decided." 7.2 There is no doubt that framing of issues is n....
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....greement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part ; or (b) the court finds that - (i)the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or (ii)the arbitral award is in conflict with the public policy of India...." 8.1 Sub-section (3) makes it clear that an application for setting aside the award has to be made within three months (extendable by not more than thirty days). 9. The scheme and provisions of the Act disclose two significant aspects relating to courts vis-a-vis arbitration. The first is that there should be minimal interference by courts in matters relating to arbitration. Second is the sense of urgency shown with reference to arbitration matters brought to court, requiring promptness in disposal. Section 5 of the Act provides that notwithstanding anything contained in any other law for the time being in, force, in matters governed by Part I of the Act, no judicial authority shall intervene except where so provided in the Act. Section 34 of the ....
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....even grounds exists. The first five grounds have been set forth in section 34(2)(a). In order to successfully invoke any of these grounds, a party has to plead and prove the existence of one or more of such grounds. That is to say, the party challenging the award has to discharge the burden of poof by adducing sufficient credible evidence to show the existence of any one of such grounds. The rest two grounds are contained in section 34(2)(b) which provides that an award may be set aside by the court on its own initiative if the subject matter of the dispute is not arbitrable or the impugned award is in conflict with the public policy of India." 11.1 The grounds for setting aside the award are specific. Therefore, necessarily a petitioner who files an application will have to plead the facts necessary to make out the ingredients of any of the grounds mentioned in sub-section (2) and prove the same. Therefore, the only question that arises in an application under section 34 of the Act is whether the award requires to be set aside on any of the specified grounds in sub-section (2) thereof. Sub-section (2) also clearly places the burden of proof on the person who makes the applic....
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....t of Judicial Authority." 12.2 Rule 12 makes it clear that the provisions of Code will be applicable only to the extent considered necessary or appropriate by the court. Thus, there is no wholesale or automatic import of all the provisions of the Code, into proceedings under section 34 of the Act, as that will defeat the very purpose and object of the Act. As already noticed, the Code deals with and makes provisions for regular civil suits as well as summary suits and proceedings. Therefore, rule 4(b) cannot be read or understood as making applicable all provisions of the Code, which apply to regular civil suits, to proceedings under section 34. The Rules were made to give effect to the provisions of the Act and should be understood in consonance with the specific provisions and the object of the Act. Conclusions 13. Before ;concluding, there is a need to clarify the observation by the High Court that a proceeding under section 34 may not be in the nature of adversarial proceedings. In an adversarial process, each party to a dispute presents its case to the neutral adjudicator seeking to demonstrate the correctness of his own case and the wrongness of the other - see P Ram....