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Tuesday, September 24, 2013

Production of Documents for inspection can be filed under sec. 27 of Arbitration and conciliation Act = scope of Section 27, and the circumstances in which the Arbitral Tribunal or a party before the Arbitral Tribunal can apply to the court for assistance in taking evidence.= a notice to the advocate on record of the appellant on 17.3.2007, calling upon them to give inspection and to produce the following documents before the learned Arbitrator:- (a) All sales tax returns filed by the appellant with the sales tax authorities for the assessment years 1995-1996 to 2001-2002. (b) All sales tax assessment orders passed with regard to the appellant for the above-mentioned period, and all appellate orders, if any passed in any appellate proceedings arising out of the same. (c) The objection, if any, filed by the appellants against the Notice in Form 40, and proposed order at pages 123 & 124 of Volume VI of the documents filed in the arbitration, the order, if any, passed thereon, and the appellate proceedings, if any, therein. (d) The letter dated 26th May 2000 mentioned in the letter at page 32 of Volume III of the documents filed in the arbitration.- The advocate of the appellant vide his reply dated 21.3.2008, protested and objected to the production of these documents, since according to the appellant the same were being sought at a late stage when the proceeding had reached the stage of cross-examination of the witnesses of the respondent No.1. - Inasmuch as the appellant declined to give inspection / and produce the document as sought for, the respondent No. 1 made an application on 26.3.2007 before the learned Arbitrator, and in paragraph No. 5 thereof, sought a direction to produce the documents mentioned at Sl. Nos.(a) to (c) in the notice dated 17.3.2007. The learned Arbitrator by her order dated 27.3.2007 allowed the application only to the extent of the assessment orders relating to the period 1995-1996 to 2001-2002 and the appellate orders mentioned in paragraph 5(b). The prayer for producing the sales tax returns mentioned in paragraph 5(a) was not entertained. Similarly, the prayer to produce the documents as sought in paragraph 5(c) was not entertained. = It is a settled principle of law that the words used in a statute are to be read as they are used, to the extent possible, to ascertain the meaning thereof. Both these provisions contained a bar only against the Government officers from producing the documents mentioned therein. There is no bar therein against a party to produce any such document. In Tulsiram Sanganaria and Another v. Srimati Anni Rai and Ors. reported in 1971 (1) SCC 284, a bench of three Judges of this Court interpreted an identical provision in Section 54(1) of the Income Tax Act, 1922, and held that the said provision created a bar on the production of the documents mentioned therein by the officials and other servants of the Income Tax Department, and made it obligatory on them to treat as confidential the records and documents mentioned therein, but the assessee or his representative-in-interest could produce assessment orders as evidence, and such evidence was admissible. Thus, if a claim is to be decided on the basis of an order of assessment, the claimant as well cannot be denied the right to seek a direction to the party concerned to produce the assessment order. It is this very prayer which has been allowed by the earlier order dated 27.3.2007 passed by the then Arbitrator, and also by the subsequent order dated 16.9.2011 passed by the Arbitral Tribunal, and in our view rightly so. There is no substance in the second objection as well. 25. There is one more aspect which we must note, i.e., when the first respondent made an application for production of the assessment orders, the defence taken by the appellant in their affidavit dated 16.9.2011 was that those documents were confidential documents, and could not be directed to be produced. It was not stated at that time that the said documents were not available. It is ten months thereafter, that when the second affidavit was filed in the High Court, that the respondent for the first time contended that the said documents were not available. This was clearly an after thought, and this attitude of the Respondent in a way justified the earlier order permitting an application under Section 27 passed by the Arbitral Tribunal. The Assistant Commissioner of Sales Tax of the concerned area was also joined as respondent so that he could be directed to produce the required documents. However, he reported that those documents were old records, and were destroyed. The learned Single Judge did not pass any order against the respondent No.2 to produce the documents, as sought. However, the learned Single Judge rightly allowed the petition as against the appellant in terms of prayer clause ‘A’, directing the appellant to produce the documents which were sought by the respondent no. 1. 26. In the circumstances, there is no merit in the appeal. The appeal is, therefore, dismissed.

       published in http://judis.nic.in/supremecourt/imgst.aspx?filename=40827
                                                           REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                        CIVIL APPEAL NO. 8426 OF 2013
         (@ out of  SPECIAL LEAVE PETITION (CIVIL) NO. 28418/2012 )


Delta Distilleries Limited                         …   Petitioner

                                    Versus

United Spirits Limited & Anr.                            …   Respondents

                             J U D G  E M E N T


H.L. Gokhale J.

            Leave Granted.

2.          This appeal by Special Leave seeks  to  challenge  the  judgment
and order dated 20.7.2012 rendered by a Single Judge of  Bombay  High  Court
allowing Arbitration Petition No.838 of 2011 filed by  the  respondent  No.1
herein. The said petition sought to invoke the powers  of  the  court  under
Section 27 of the Arbitration  and  Conciliation  Act,  1996  (herein  after
referred to as the Act of 1996), which provides for  seeking  assistance  of
the court  in  taking  evidence.   The  said  petition  had  been  moved  in
pursuance of the order dated 16.9.2011 passed by  a  three  member  Arbitral
Tribunal permitting the respondent No.1 to file  such  an  application.  The
learned Single Judge allowed the said petition,  and  thereby  directed  the
appellant to produce the documents as sought by the respondent  No.1  before
the Arbitral Tribunal.  This appeal has  been  filed  by  Special  Leave  to
challenge the said judgment and order. The appeal raises the  question  with
respect to the 
scope of Section 27,  and  the  circumstances  in  which  the
Arbitral Tribunal or a party before the Arbitral Tribunal can apply  to  the court for assistance in taking evidence.
Facts leading to this appeal are this wise:-

3.          The respondent No.1 herein  is  a  company  which  owns  certain
brands of Indian Made Foreign Liquor (IMFL).  
The  appellant  is  a  company
carrying  on  the  business  of  distilling  and  bottling  of  IMFL.    
The
predecessor of the respondent  No.1  entered  into  an  agreement  with  the
appellant on 25.3.1997, under which the appellant agreed to manufacture  and
supply to the respondent No.1, IMFL of such brands and  quantity,  as  would
be specified from time  to  time  on  the  terms  and  conditions  contained
therein.
Under the said agreement, the contract price  at  which  the  IMFL
was to be sold by the appellant to the respondent  No.1,  was  exclusive  of
sales tax and other taxes, and the respondent No.1 was required to bear  the
same.
4.          It appears that sometimes in 2001-2002, certain  disputes  arose
between  the  parties.   A  major  dispute  between  them  related  to   the
outstanding amount payable at the foot of the running account between  them.
The respondent No.1 claimed that amongst others,  amounts  to  the  tune  of
Rs.1,22,30,692 and Rs.70,23,107.52 were due and payable  to  the  respondent
No.1, whereas the appellant maintained that an amount  of  Rs.39,37,993  was
payable to the appellant. 
According to the first respondent,  the  appellant
had obtained from the Sales Tax Department set-off/refund on the  sales  tax
paid on packaging material, and such set-off/refund operated to  reduce  the
sales tax liability of the appellant, which was ultimately  being  borne  by
the respondent No.1.  
The respondent No.1 therefore,  claimed  that  it  was
entitled to the benefit of the said set-off/refund, and accordingly  debited
the appellant for the amount of set-off/refund.
5.          It was the case  of  the  first  respondent  that  although  the
appellant had accounted for some of these entries in its  accounts,  it  did
not account for a major portion of the same.
Clause  14  of  the  agreement
between the parties provided that  any  dispute  or  difference arising  or relating to or connected with the said agreement,  was to  be  referred  to arbitration.  
The above dispute was, therefore, referred to the  Arbitration
of Hon’ble Mr. Justice  D.M.  Rege,  former  Judge  of  Bombay  High  Court.
However, the Learned  Judge  resigned  as  arbitrator,  and  thereafter  the
proceedings were continued before another arbitrator  Hon’ble  Mrs.  Justice
Sujata Manohar, former Judge of the Supreme Court of India.
6.          Thereafter, the advocates of the respondent No.1 gave  a  notice
to the advocate on record of the appellant on 17.3.2007, calling  upon  them
to give inspection  and  to  produce  the  following  documents  before  the
learned Arbitrator:-
(a)   All sales tax returns filed  by  the  appellant  with  the  sales  tax
authorities for the assessment years 1995-1996 to 2001-2002.
(b)   All sales tax assessment orders passed with regard  to  the  appellant
for the above-mentioned period, and all appellate orders, if any  passed  in
any appellate proceedings arising out of the same.
(c)   The objection, if any, filed by the appellants against the  Notice  in
Form 40, and proposed order  at  pages  123  &  124  of  Volume  VI  of  the
documents filed in the arbitration, the order, if any, passed  thereon,  and
the appellate proceedings, if any, therein.
(d)   The letter dated 26th May 2000 mentioned in the letter at page  32  of
Volume III of the documents filed in the arbitration.
7.          The advocate of the appellant vide his  reply  dated  21.3.2008,
protested  and  objected  to  the  production  of  these  documents,   since
according to the appellant the same were being sought at a late  stage  when
the proceeding had reached the stage of cross-examination of  the  witnesses
of the respondent No.1. 
 In paragraph 3 of this reply the  learned  advocate
stated as follows:-
                 “3. As regards the inspection of documents sought  by  your
           clients, my clients repeat that your clients are not entitled to
           inspection of any documents  at  this  belated  stage.   In  any
           event, my clients are  not  relying  on  any  of  the  documents
           referred to in paragraphs (a), (b) and (c) of your  letter.   As
           regards the documents referred  to  in  paragraph  (d)  of  your
           letter, the said  document  is  already  on  record  before  the
           Hon’ble Arbitrator and hence a copy  of  the  said  document  is
           already available with you.”

8.          Inasmuch as the appellant declined  to  give  inspection  /  and
produce  the  document  as  sought  for,  the  respondent  No.  1  made   an
application on 26.3.2007 before the learned  Arbitrator,  and  in  paragraph
No. 5 thereof, sought a direction to produce the documents mentioned at  Sl.
Nos.(a) to (c) in the notice dated 17.3.2007.  
The  learned  Arbitrator  by
her order dated 27.3.2007 allowed the application only to the extent of  the
assessment orders relating to the period  1995-1996  to  2001-2002  and  the
appellate orders mentioned in paragraph 5(b). 
The prayer for  producing  the
sales  tax  returns  mentioned  in  paragraph  5(a)  was  not   entertained.
Similarly, the prayer to produce the documents as sought in  paragraph  5(c)
was not entertained.  
The learned Arbitrator held  in  paragraph  4  of  her
order as follows:-
                 “4.   …. The documents in paragraphs 5 (a) and 5 (b) relate
           to Sales Tax Returns filed by  the  Respondents  for  Assessment
           Years 1995-1996 till 2001-2002 and Sales Tax  Assessment  Orders
           passed in respect of the Respondents for this  period  including
           any Appellate Orders.  One of the claims made by  the  Claimants
           in these proceedings against  the  Respondents  related  to  the
           benefit of any sales tax set-off granted to the  Respondents  in
           connection with the goods in question which,  according  to  the
           Claimants, should accrue to their benefit.  Therefore, Sales Tax
           Assessment Orders relating to the period in  dispute  passed  in
           respect of the Respondents  are  relevant  for  the  purpose  of
           determination of  this  aspect  of  the  dispute.   Mr.  Savant,
           learned counsel for the Respondents  has  contended  that  these
           Sales Tax Assessments are not relevant because in any case,  the
           Claimants have quantified the set-off which they  are  claiming,
           and hence, it is not necessary to look at Sales Tax  Assessments
           to   ascertain   the   quantum   of   set-off.    However,   the
           quantification is done by the Claimants on the theoretical basis
           that full set-off must have been granted to the Respondents  and
           hence, 75% of the value of the set-off until May  2000  and  the
           full value of such set-off thereafter should  be  considered  as
           having accrued for the benefit of the Claimants. A  hypothetical
           calculation on such basis should not be resorted to when  actual
           Sales Tax Assessments are available which show  the  quantum  of
           set-off allowed.  This is in the interest of both  the  parties.
           Hence, the argument of Mr. Savant cannot be accepted.”

9.          The appellants were  dissatisfied  with  the  order  passed.  In
their subsequent correspondence they made certain  allegations  against  the
learned Arbitrator, who therefore, resigned from the said  proceeding.   The
parties therefore,  appointed  an  Arbitral  Tribunal  consisting  of  three
Judges, Hon’ble Mr. Justice M. Jagannadha  Rao  (Presiding  Arbitrator)  and
Hon’ble Mr. Justice S.N. Variava (both former Judges of  the  Supreme  Court
of India), and Hon’ble Mr. Justice M.S. Rane (Former Judge  of  Bombay  High
Court).   On reconstitution of the Arbitral  Tribunal  the  respondent  No.1
pointed out that the order passed by the earlier Arbitrator dated  27.3.2007
had not been complied  with.   The  Tribunal,  therefore,  called  upon  the
appellant to state their position on an affidavit.  Thereupon  the  Chairman
of the appellant  filed  an  affidavit  before  the  Tribunal  on  16.9.2011
stating that the appellant  would  not  produce  the  sales  tax  assessment
orders.  In paragraph 3 of his affidavit he specifically stated as follows:-

                  “3.  I humbly and most  respectfully  submit  before  this
           Hon’ble Tribunal that, Sales Tax Returns are the documents which
           are highly confidential and hence the  same  cannot  be  subject
           matter to be produced before this  Hon’ble  Tribunal  especially
           when, sales tax set off is already quantified by  the  Claimants
           and the same is forming a part of their  claim  in  the  present
           arbitration proceedings.  I say that, it  is  not  necessary  to
           inspect the  said  sales  tax  assessment  orders  in  order  to
           ascertain the quantum of set off.  I say  that,  the  Claimants’
           demand of sales tax set off to an extent of  75%  and  somewhere
           also 100% is completely vague and arbitrary and that the same is
           completely  de  hors  the  contents  of  the   agreement   dated
           25.03.1997.  I therefore say that, disclosure of any such  sales
           tax assessment orders shall be  completely  detrimental  to  the
           rights and interest of the Respondent Company.”
10.         In view of this affidavit of the Chairman of the appellant,  the
Tribunal noted that the party in possession of the concerned  documents  was
refusing to produce them, even though it had been directed to  do  so.   The
Tribunal vide its order dated 16.9.2011, held that the earlier  order  dated
27.3.2007 passed by the previous arbitrator could not be reviewed,  nor  did
the Tribunal have any jurisdiction  to  do  so.   The  Tribunal,  therefore,
permitted the respondent No.1 to apply to the court under Section 27 of  the
Act of 1996, and to seek production of the sales tax  assessment  order  for
the period  1995-1996  to  2001-2002,  including  any  appellate  orders  in
support thereof.
The Tribunal observed as follows:-
                 “7.……One would have expected the  Respondent  to  obey  the
           directions  of  this  Tribunal  and  produce  the   above   said
           documents.  However, in as much as they have not  been  produced
           for more than four years and now there is categorical  statement
           by the Chairman of the Respondent Company  that  they  will  not
           produce these documents, the Tribunal is compelled  to  exercise
           the powers under Section 27 of the Act and grant  permission  to
           the Claimant to  apply  to  the  Court  for  production  of  the
           documents   from   the   Respondent   and/or   the   Sales   Tax
           Authorities……”

11.         Pursuant to the said permission granted  by  the  Tribunal,  the
respondent No.1 filed the Arbitration Petition before the  Single  Judge  of
Bombay High Court invoking the powers of the Court under Section 27  of  the
Act of 1996, to seek a direction to the appellants to  produce  the  earlier
mentioned  assessment   orders   and   appellate   orders.   The   Assistant
Commissioner of Sales Tax, Pune was  joined  as  respondent  No.  2,  and  a
direction to produce those documents from his records was  as  well  sought.
The appellant herein, opposed the said Arbitration Petition.   Now  for  the
first time, in paragraphs 5 and 6 of the  reply  the  appellants  stated  as
follows:-
                 “5. The Petitioner’s demand pertains  to  records  for  the
           period 1995-1996 to 2001-02.  I say and submit  that  these  are
           very  old  records.   The  same  are  not  available  with   the
           Respondent No. 1.  I say and submit that Respondent No. 1 is not
           able to trace these old records.  I say that in fact when I made
           my Affidavit dated 16th September,  2011,  I  had  in  fact  not
           searched the Company’s records to ascertain  whether  the  sales
           tax  orders  were  in  fact  available  with  it.   I  say  that
           accordingly I had made the said Affidavit dated 16th  September,
           2011 opposing the disclosure on the grounds stated  therein.   I
           say that during the pendency of the  present  petition,  I  have
           checked in order to ascertain whether these records were in fact
           available with the Company and have discovered that they  cannot
           be traced.”


                 6. Without prejudice to the aforesaid, I further  say  that
           the information that is being requested for by the petitioner is
           confidential and accordingly the same ought not be disclosed.”
12.         The learned Single Judge thereupon heard the  parties.   It  was
submitted on behalf of the appellant before the Learned Single  Judge,  that
the provisions of Section 27 of the Act of 1996 were  analogous  to  Section
43 of the Arbitration Act, 1940.  A judgment of the Delhi High Court in  the
case of Union of India v. Bhatia Tanning Industries  reported  in  AIR  1986
Delhi 195, on the said Section 43 was relied upon to submit  that  the  said
section applies only to calling witnesses, and not for giving any  direction
to the parties.  It was further submitted that at the  highest,  an  adverse
inference may be drawn against the appellant under  Order  21,  Rule  11  of
Code of Civil Procedure (hereinafter referred as CPC).   Reliance  was  also
placed on the provision of Section 71 of Maharashtra Value  Added  Tax  Act,
2002 (hereinafter referred as the Maharashtra Act)  which  is  pari  materia
with Section 64 of the Bombay Sales Tax Act,  1959,  and  it  was  contended
that the assessment orders were confidential, and could not be  directed  to
be produced. The Assistant Commissioner of  Sales  Tax  who  was  respondent
No.2 to the Writ Petition (and who  is  respondent  No.  2  to  this  appeal
also), submitted that  the  old  record  of  the  relevant  period  was  not
available with the Sales Tax Department, and was already destroyed.  In  any
case it was submitted that in view of the above referred Section 71, such  a
direction could not be issued.
13.         The learned Judge repelled all these arguments.   He  held  that
the appellant was misreading the judgment of Delhi High Court, and  that  it
could not be anybody’s case  that  a  party  in  a  proceeding  can  not  be
examined as a witness.  With respect to Section 71 of the  Maharashtra  Act,
the learned Judge held that it barred only the production of statements  and
returns, and it was not applicable to the assessment  orders.   The  learned
Judge also noted that in the earlier affidavit filed  before  the  Tribunal,
the appellant had not taken any such plea that the  assessment  orders  were
not available, but within ten months thereafter in another affidavit  before
the High Court it was being contended  that  the  said  documents  were  not
traceable.  The learned Judge therefore, allowed the said petition  invoking
Section 27 of the Act of 1996, and directed the appellant herein to  produce
the documents sought for. Being aggrieved by this  judgment  and  order  the
present SLP has been filed.
14.         We have heard Mr. Ravindra Srivastava,  learned  senior  counsel
in support of this appeal,  and  Mr.  Chander  Uday  Singh,  learned  senior
counsel  for  the  respondent  no.  1.   Respondent  no.  2  is  a  proforma
respondent. The challenge in this appeal  is  principally  on  two  grounds.
Firstly, that the type of order which was sought under  Section  27  of  the
Act of 1996, against the appellant was not  within  the  competence  of  the
court, and at the  highest  the  Arbitral  Tribunal  should  have  drawn  an
adverse inference against the appellant under Order 11 and Rule  21  of  CPC
for non-production of the documents, the production of which was  sought  by
the respondent no.1.  The  second  challenge  was  that  in  any  case,  the
documents which were sought were confidential documents, and in view of  the
provision contained in Section 71 of the Maharashtra Value Added  Tax  2002,
and the order compelling the appellant to produce such documents  could  not
have been passed.
15.         As far as  the  first  ground  of  challenge  is  concerned,  as
pointed out earlier, reliance was placed by the  respondent  no.  1  on  the
judgment of  a  Division  Bench  of  Delhi  High  Court  in  Bhatia  Tanning
Industries (supra). Now, what had happened  in  this  matter  was  that  the
respondent/industries were to supply certain material to the appellant,  and
since the respondent  had  committed  default  in  making  the  supply,  the
appellant had raised a claim on account of risk purchase which was  referred
to  arbitration.   The  arbitrator  sent  notices  to  the  address  of  the
respondents on record twice, and on both occasions  the  registered  notices
were  returned  to  the  arbitrator  stating  that  the  addressee  was  not
available.  It was in these circumstances that the arbitrator  ordered  that
there shall be a publication of the notice  in  a  newspaper.   That  having
being done, nobody appeared for the  respondent  thereafter  also,  and  the
arbitrator made an ex-parte award.  After the award was filed in court,  and
notice was sent  to  the  respondent,  an  objection  was  raised  that  the
arbitrator had no power to order service by  means  of  publication  in  the
newspaper.  The learned Single Judge who heard the  matter,  set  aside  the
award on the ground that the arbitrator should have gone to the court  under
Section 43 of the Arbitration  Act,  1940  (Act  of  1940  for  short),  and
obtained an order from the Court for service by publication  which  had  not
been done.
16.         This order was challenged in appeal, and  a  Division  Bench  of
the High Court allowed the said appeal.  The Division Bench  held  that  the
there are two separate sections in the Act of  1940.   One  was  Section  42
which provided service of notice by a party or  arbitrator,  and  the  other
was Section 43.  Section 43 of the Act of 1940 reads as follows:-
                 “43. Power of  Court  to  issue  processes  for  appearance
           before arbitrator – (1) The Court shall issue the same processes
           to the parties and  witnesses  whom  the  arbitrator  or  umpire
           desires to examine as the Court may issue in suits tried  before
           it.

                 (2)   Person failing to  attend  in  accordance  with  such
           process, or making any other default, or refusing to give  their
           evidence, or guilty of any contempt to the arbitrator or  umpire
           during the investigation of the reference, shall be  subject  to
           the like disadvantages, penalties and punishments  by  order  of
           the Court on the representation of the arbitrator or  umpire  as
           they would incur for the like offences in suits tried before the
           Court


                 (3)   In this section the expression  “processes”  includes
           summonses and commissions for the examination of  witnesses  and
           summonses to produce documents.”

The Division Bench in paragraph 9 of its  judgment  noted  that  Section  42
provides for the service of a notice by the arbitrator on a party before  he
proceeds to hear the case.  On the other hand in  paragraph  11,  the  court
held that Section 43 is confined to cases where a person,  whether  a  party
or  a  third  person,  is  required  to  appear  as  a  witness  before  the
arbitrator. Such witnesses whom the arbitrator or umpire desires to  examine
may be summoned
through court.
17.         We, therefore, fail to see as to how this judgment  can  advance
the submission of the appellant, though it was contended that Section 27  of
the Act of 1996 is similar to Section 43 of the Act of 1940.  On  the  other
hand, as stated above, the Division  Bench  judgment  of  Delhi  High  Court
clearly lays down that Section  43  of  the  pre-cursor  Act  permitted  the
arbitrator to call a third person as well as a party as a witness,  and  the
section was not confined only to calling third persons as witnesses.
18.         It was  contended  on  behalf  of  the  appellant  that  whereas
Section 43 used the phrase “parties  and  witnesses”,  Section  27  did  not
contain such a phrase, and it speaks of calling ‘any person’ as  a  witness.
Section 27(2) (c) does  provide  that  an  application  under  this  section
seeking assistance of the court shall specify the name and  address  of  any
person to be heard as a witness or as an expert  witness.   As  far  as  the
appearance of a party  in  pursuance  to  a  notice  of  the  arbitrator  is
concerned, there is a specific provision for  proceeding  in  the  event  of
default of a party under Section 25.
We may refer to Sections 25 and 27  in this behalf which read as follows:-

                 “25. Default of a party.- Unless otherwise  agreed  by  the
           parties, where, without showing sufficient cause,----


                 (a) the claimant fails  to  communicate  his  statement  of
           claim in accordance with sub-section  (1)  of  section  23,  the
           arbitral tribunal shall terminate the proceedings;


                 (b) the respondent fails to communicate  his  statement  of
           defence in accordance with sub-section (1) of  section  23,  the
           arbitral  tribunal  shall  continue  the   proceedings   without
           treating  that  failure  in  itself  as  an  admission  of   the
           allegations by the claimant.


                 (c) a party fails to  appear  at  an  oral  hearing  or  to
           produce documentary evidence, the arbitral tribunal may continue
           the proceedings and make the  arbitral  award  on  the  evidence
           before it.”


                 “27.Court assistance in taking evidence.- (1) The  arbitral
           tribunal, or a party with the approval of the arbitral tribunal,
           may apply to the Court for assistance in taking evidence.


                 (2) The application shall specify----


                 (a)  the  names  and  addresses  of  the  parties  and  the
           arbitrators.


                 (b) the general nature of the claim and the relief sought;


                 (c) the evidence to the obtained, in particular,----


                 (i) the name and address of  any  person  to  be  heard  as
                 witness or expert witness and a statement of  the  subject-
                 matter of the testimony required;


                 (ii) the description of any  document  to  be  produced  or
                 property to be inspected.


                 (3) The Court may, within its competence and  according  to
           its rules on taking evidence, execute the  request  or  ordering
           that the evidence be provided directly to the arbitral tribunal.




                 (4) The Court may, while making or order under  sub-section
           (3), issue the same processes to witnesses as it  may  issue  in
           suits tried before it.


                 (5) Persons failing  to  attend  in  accordance  with  such
           process, or making any other default, or refusing to give  their
           evidence, or guilty of any contempt  to  the  arbitral  tribunal
           during the conduct of arbitral proceedings, shall be subject  to
           the like disadvantages, penalties and punishments  by  order  of
           the Court on the representation of the arbitral tribunal as they
           would incur for the like offences  is  suits  tried  before  the
           Court.


                 (6) In this section  the  expression  "Processes"  includes
           summonses and commissions for the examination of  witnesses  and
           summonses to produce documents.”


19.         As seen from these two sections, Section 25  (c)  provides  that
in the event a party fails to appear  at  an  oral  hearing  or  to  produce
documentary evidence, the arbitral tribunal may  continue  the  proceedings,
and make the arbitral award on the evidence before it.   This  evidence  can
be sought either from any third person or from a  party  to  the  proceeding
itself.  The substitution  of  the  phrase  “parties  and  witnesses”  under
Section 43 of the earlier act by the phrase ‘any  person’  cannot  make  any
difference, or cannot be read to whittle down the  powers  of  the  Arbitral
Tribunal to seek assistance from the court  where  any  person  who  is  not
cooperating with the Arbitral Tribunal or where  any  evidence  is  required
from any person, be it a party to  the  proceedings  or  others.  It  is  an
enabling provision, and it has to be read as such.  The  term  ‘any  person’
appearing under Section 27 (2) (c) is wide enough to cover  not  merely  the
witnesses, but also the parties to the proceeding. It is  undoubtedly  clear
that if a party fails to appear before the Arbitral Tribunal,  the  Tribunal
can proceed ex-parte, as provided under Section 25 (c).  At the  same  time,
it cannot be ignored that the Tribunal is required to make an award  on  the
merits of the claim placed before it.  For that  purpose,  if  any  evidence
becomes necessary,  the  Tribunal  ought  to  have  the  power  to  get  the
evidence, and it is for this purpose only that  this  enabling  section  has
been provided.


20.         The counsel for the appellant tried to  take  advantage  of  the
first sentence of paragraph 12 of the  Delhi  High  Court  judgment,   which
reads as follows:-

                 “(12) Section 43 has no application where the party  to  an
           arbitration agreement has to be summoned for  appearance  before
           the arbitrator so that he may participate in the proceedings and
           state his defense.”

We must however note, what the Division Bench has stated thereafter, in  the
very paragraph which is to the following effect.


                 “The learned  judge  seems  to  have  been  misled  by  the
           expression 'parties' appearing in section 43. The word 'parties'
           is used in the sense where the party itself  is  desired  to  be
           examined  as  a  witness  by  the  arbitrator  or  umpire.   The
           expression 'witnesses' used along with the word 'parties'  makes
           the meaning of the legislature abundantly clear.  The  principle
           of  construction  is  that  words  of  the  same  feather  flock
           together.”

As can be seen from the paragraph, the paragraph itself  says  that  Section
43 has no application for summoning a party to appear to participate in  the
proceeding.  It is meant for securing the presence of third persons as  well
as parties as witnesses.  This position cannot be said to be altered due  to
the absence of these words and use of the words ‘any person’ in  Section  27
of the Act of 1996.
21.         It was  contended  that  if  the  necessary  documents  are  not
produced, at the highest an adverse  inference  may  be  drawn  against  the
appellant.   That  is  a  power,  of  course  available  with  the  Arbitral
Tribunal, and if necessary the same can be used.  However,  as  observed  by
the learned Arbitrator in her order dated 27.3.2007,  the  documents  sought
in the present matter were required to arrive at the decision on  the  claim
of the respondent no. 1, since, the quantification in support of  the  claim
had  been  done  by  the  respondent  no.  1  on  a  theoretical  basis.   A
hypothetical calculation should not be resorted to  when  actual  Sales  Tax
Assessments are available, which would show as to  whether  the  quantum  of
set-off allowed and claimed was in fact justified.
22.         In the  circumstances,  there  is  no  substance  in  the  first
objection viz. an order passed by the earlier  Arbitrator  dated  27.3.2007,
and the subsequent enabling order passed  by  the  Arbitral  Tribunal  dated
16.9.2011 permitting the respondent to apply  under  Section  27  could  not
have been passed.

23.         The  second  objection  was  that  the  assessment  orders  were
confidential documents, and Section 71 of the Maharashtra Value  Added  Tax,
2002 and its pre-cursor Section 64 of the Bombay  Sales  Tax  Act,  did  not
permit production of these documents, and a direction as  sought  could  not
have been granted.  
Since, these two  sections  are  invoked,  the  relevant
part of both the sections are quoted below.


                 “Section  71  (1)  –  All  particulars  contained  in   any
           statement  made,  return  furnished  or  accounts  or  documents
           produced in accordance with  this  Act,  or  in  any  record  of
           evidence given in the course of any proceedings under  this  Act
           (other than proceeding before a Criminal Court) or in any record
           of any assessment proceeding, or any proceeding relating to  the
           recovery of a demand, prepared for  the  purposes  of  this  Act
           shall, save as  provided  in  sub-section  (3),  be  treated  as
           confidential; and  notwithstanding  anything  contained  in  the
           Indian Evidence Act, 1872 (1 of 1872), no court  shall  save  as
           aforesaid, be entitled to require any servant of the  Government
           to produce  before  it  any  such  statement,  return,  account,
           document or record or any part thereof,  or  to  given  evidence
           before it in respect thereof.”


                 “Section  64  (1)  –  All  particulars  contained  in   any
           statement  made,  return  furnished  or  accounts  or  documents
           produced in accordance with  this  Act,  or  in  any  record  of
           evidence given in the course of any proceedings under  this  Act
           (other than proceeding before a Criminal Court) or in any record
           of any assessment proceeding, or any proceeding relating to  the
           recovery of a demand, prepared for  the  purposes  of  this  Act
           shall, save as  provided  in  sub-section  (3),  be  treated  as
           confidential; and  notwithstanding  anything  contained  in  the
           Indian Evidence Act, 1872 (1 of 1872), no court  shall  save  as
           aforesaid, be entitled to require any servant of the  Government
           to produce  before  it  any  such  statement,  return,  account,
           document or record or any part thereof,  or  to  given  evidence
           before it in respect thereof.”

24.         If we look at the words used in these two  sections,  they  very
clearly state that particulars contained in any return or statement made  by
a party, or document produced  along  therewith  are  confidential,  and  no
court shall pass any order requiring the Government or a Government  servant
to produce any  such  statement,  document  or  return.
 It  is  a  settled
principle of law that the words used in a statute are to  be  read  as  they
are used, to the extent possible, to ascertain  the  meaning  thereof.  Both
these provisions contained a bar only against the Government  officers  from
producing the documents mentioned therein.  There is no bar therein  against
a party to produce any such document.  In Tulsiram  Sanganaria  and  Another
v. Srimati Anni Rai and Ors. reported in 1971 (1) SCC 284, 
a bench of  three
Judges of this Court interpreted an identical provision in Section 54(1)  of
the Income Tax Act, 1922, and held that the said provision created a bar  on
the production of the documents  mentioned  therein  by  the  officials  and
other servants of the Income Tax Department, and made it obligatory on  them
to treat as confidential the records and documents  mentioned  therein,  but
the assessee or  his  representative-in-interest  could  produce assessment orders as evidence, and such evidence was admissible.
Thus, if a  claim  is
to be decided on the basis of an order of assessment, the claimant as  well cannot be denied the right to seek a direction to  the 
party  concerned  to produce the assessment order.  
It  is  this  very  prayer  which  has  been
allowed by the earlier order dated 27.3.2007 passed by the then Arbitrator, and also by the subsequent order dated  16.9.2011 passed  by  the  Arbitral Tribunal, and in our view rightly so. There is no substance in  the  second objection as well.
25.         There is one more aspect which we  must  note,  i.e.,  when  the
first respondent made  an  application  for  production  of  the  assessment
orders, the  defence  taken  by  the  appellant  in  their  affidavit  dated
16.9.2011 was that those documents were confidential  documents,  and  could
not be directed to be produced.  It was not stated at  that  time  that  the
said documents were not available.  
It is ten months thereafter,  that  when
the second affidavit was filed in the High Court, that  the  respondent  for
the first time contended that the said documents were not  available.  
This was clearly an after thought, and this attitude of the Respondent in  a  way
justified the earlier order  permitting  an  application  under  Section  27
passed by the Arbitral Tribunal.
The Assistant Commissioner  of  Sales  Tax
of the concerned area was also joined as respondent  so  that  he  could  be
directed to produce the required documents. 
However, he reported that  those
documents were old records, and were destroyed.
The  learned  Single  Judge
did  not  pass  any  order  against  the  respondent  No.2  to  produce  the
documents, as sought.
However, the learned  Single  Judge  rightly  allowed
the petition as against  the  appellant  in  terms  of  prayer  clause  ‘A’,
directing the appellant to produce the documents which were  sought  by  the
respondent no. 1.
26.         In the circumstances, there is no  merit  in  the  appeal.   
The appeal is, therefore, dismissed.

                                              …………..……………………..J.
                                       [ A.K. Patnaik]

                                                         ……………………………..J.
                                       [ H.L. Gokhale  ]
New Delhi
Dated : September 23, 2013























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