A Single Judge bench of the Bombay High Court, in a recent
judgment in Montana Developers Private Limited v Aditya
Developers and Ors.1 has explained the role of the Court
in dealing with an application under §27 of the Arbitration
and Conciliation Act 1996 ['Act'] for
issuance of witness summons and production of documents.
In this case, the question before the Court was whether under
§27 of the Act, the Court has the power to determine the
validity of the orders passed by an Arbitral Tribunal, granting
permission to a party to move an Application before the Court,
seeking its assistance in recording evidence. In summary, whether
the Court's powers under §27 were judicial or merely
The Montana Developers Private Limited
['Montana'] and Aditya Developers and
others ['Aditya'] were the Claimant and
Respondents respectively, in the arbitration proceedings. The
evidence of the Montana was closed and the cross examination of
Aditya's witness was being conducted. At this stage, Montana
filed an application before the Arbitrator, seeking permission to
examine more witnesses and production of various documents. Aditya
opposed the said application, but the Arbitrator granted permission
to Montana for filing an application under section §27 of the
Act for issuance of witness summons and production of
In proceedings before the Court, Aditya argued that the
Court's powers under §27 were adjudicatory and it can
examine the merits of the orders passed by the Tribunal allowing
Montana to file an Application under §27. In support of its
case, Aditya relied upon judgments passed by the Delhi High Court,
namely Reliance Polycrete Limited v National Agricultural
Co-operative Marketing Federation of India2.
Montana on the other hand, argued that §27 only provided
for a mechanism through which the Tribunal could record evidence.
The Act provided for no challenge to an order passed by the
Tribunal under §27 and therefore §5 of the Act was an
effective bar against any such challenge.
The Court in its decision allowed the petition under §27
for the following reasons:
The Court noted that in proceedings
under §27 of the Act, the Court could not examine the merits
of the order passed by the Tribunal allowing a party to approach
the Court to assist in recording evidence. The Court agreed with
Montana's contention that §27 of the Act only provided a
mechanism for recording of evidence and no further.
In its judgment, the Court ruled that
even in the case of an ordinary Suit, in an application for
issuance of witness summons or for production of document, the
Respondent was not required to be heard by the Court on merits.
These principles would not change in the context of an Arbitral
Tribunal, particularly when the Tribunal was not bound to follow
the rigour of the Civil Procedure Code 1908 and the Indian Evidence
Act 1872. In the circumstances, Aditya now cannot raise objections
on the merits of the order passed.
The Court further held that §5
of the Act does not permit a challenge to an order passed by the
Arbitral Tribunal under §27 of the Act. Therefore, the
question of challenging the validity of the order passed by the
Tribunal under §27 does not arise. The Court refused to
consider the order of the Delhi High Court in Reliance
Polycrete as it failed to take in to account §5 of
the Act which effectively bars such a challenge. The Court ruled
that such an order could be challenged under §34 of the Act
only, at the time when the final award was being challenged.
The decision of the Bombay High Court is in a long line of cases
where the Court has thwarted attempts to increase judicial
interference in arbitration. The judgment is likely to act as an
effective guideline for Courts while dealing with §27
For further information on this topic please contact Tuli &
The Constitution of India is the supreme law of the land and forms the basis of Indian law and the parliamentary system of government – the Indian judiciary is independent of the executive and legislative branches of government.
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