Introduction

Order VI Rule 17 of Code of Civil Procedure, 1908 ("the Code") provides that the Court may, at any stage of the proceedings, allow either party to alter or amend its pleadings if the same is necessary to determine the real questions in controversy between the parties.

However, the proviso to Order VI Rule 17 of the Code prevents an application for amendment of pleadings from being allowed after the trial has commenced, unless the Court concludes that despite due diligence, the party could not have raised the issue before the commencement of the trial.

The proviso, to an extent, curtails absolute discretion to allow amendment at any stage. It is couched in a mandatory form. The court's jurisdiction to allow application for amendment is taken away unless the parties establish that it could not have raised the issue before the commencement of the trial despite due diligence.

However, it cannot be denied that the aforesaid provision is one of the most misused provisions of the Code which drag the proceedings and cause a delay in the disposal of the cases. Therefore, in the year 1999, to avoid delay and to ensure expeditious disposal of the civil suits, on the recommendation of Justice Malimath Committee, Rule 17 from Order VI of the Code was deleted.

However, later in the year 2002, because of public uproar, Rule 17 of Order VI was restored with the insertion of the aforesaid embargo to curtail the absolute discretion of the Court to allow the amendment at any stage.

Based on the above, it is evident that the proviso appended to Order VI Rule 17 of the Code restricts the power of the Court by putting an embargo i.e., (before the commencement of the trial) on the exercise of its discretion to allow amendment at any stage.

Amendment of pleadings in the Arbitration and Conciliation Act, 1996 ("the Arbitration Act")

The provision for amendment of pleadings is widely used in Arbitration Proceedings and applications for amendment before the Arbitral Tribunal is not uncommon. However, in Arbitration Proceeding, the rules of procedure to be followed by an Arbitral Tribunal are flexible and can be agreed upon by the parties as provided under Section 19 of the Arbitration Act which reads as hereunder.

"19. Determination of Rules of procedure - (1) The arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872)."

Further, the Hon'ble Supreme Court of India in Srei Infrastructure Finance Ltd. v. TUFF Drilling Pvt. Ltd1, held that Section 19 (1) of the Arbitration and Conciliation Act, 1996 ("the Arbitration Act"), provides that the Arbitral Tribunal shall not be bound by the Code of Civil Procedure, 1908, but the said subsection does not prohibit the arbitral Tribunal from drawing sustenance from the fundamental principles underlined in the Civil Procedure Code, 1908".

Thus, in light of the aforesaid judgment of the Hon'ble Supreme Court and the provision of the Arbitration Act, the Arbitral Tribunal is not bound to follow the provisions of Order 6 Rule 17 of the Code while considering an application for amendment of pleadings. Rather, the Arbitral Tribunal has to follow the provisions of the Arbitration Act relating to the amendment of pleadings as provided under Section 23(3) of the Arbitration Act.

Section 23 (3) of the Arbitration Act, provides that unless otherwise agreed by the parties, either party may amend or supplement its claim or defence during the course of the arbitral proceedings unless the arbitral Tribunal considers it inappropriate to allow the amendment or supplement having regard to the delay in making it.

No doubt, the Arbitral Tribunal has the jurisdiction to deal with and grant amendment of a statement of claim, counterclaim, counterstatement and other pleadings before the Tribunal.

However, that does not mean that in every case where such an application has been moved before the termination of the proceedings, the Tribunal is bound to grant the amendment. It would depend on the facts of each case as to whether, or not, the amendment should be allowed by the Tribunal.2

Pertinently, Section 23(3) of the Arbitration Act, itself provides that application for amendment may be refused, if there is a delay in making it. The Delhi High Court in the case of Bharat Aluminium Company Ltd. v. National Thermal Power Corporation3 held that "the Legislature has used the words "having regard to the delay in making it", which means such delay which is unjustified and not sufficiently explained.

It is important to highlight here that the words used in Section 23(3) of the Arbitration Act that ".... unless the tribunal considers it inappropriate to allow ... having regard to the delay in making it", does not mean that delay is the sole ground for rejection of the application for amendment of the pleadings. Pertinently, Section 23(3) of the Arbitration Act does not limit the Arbitrator from taking into account other factors for rejecting an application for amendment of pleading although delay remains the foremost among such considerations.4

The Hon'ble Bombay High Court, in the case of Patel Engineering Co. Ltd. v. B.T. Patil and Sons Belgaum (Construction) Pvt. Ltd.,5 interpreted Section 23 of the Arbitration Act and held that "though the said provision permits the amendment of the statement of claim and defence, the said provision would not permit the learned arbitrator to travel beyond the scope of reference or permit the amendment of the claim and to seek adjudication without following mandatory procedure prescribed in the arbitration agreement required to be followed for referring the dispute to arbitration.

Conclusion

As explained above, the proviso appended to Order VI Rule 17 of the Code, restricts the power of the Court by putting an embargo on the exercise of its discretion to allow amendment at any stage and prevent the Court from allowing an application for amendment of pleadings after the commencement of the trial.

However, no such restrictions exist in the Arbitration Act on the Arbitral Tribunal in the exercise of its absolute discretion to allow application for amendment of pleading at any stage including after the commencement of the trial.

To curtail the absolute discretion of the Arbitral Tribunal to allow amendment of pleading at any stage including after the commencement of the trial and to reduce delay in disposal of the Arbitral Proceeding, it is important to incorporate an embargo in the Arbitration Act, similar to an embargo that exists in Order VI Rule 17 of the Code.

Pertinently, mere rejection of the application for amendment of pleading on the ground of it being made belatedly or being made after the commencement of the trial does not lead to denial of the rights of the parties, it only means that such additional rights cannot form part of the ongoing arbitral proceedings and it will always be open for the parties to raise such issues in other appropriate proceedings.

Footnotes

1 Srei Infrastructure Finance Ltd. v. TUFF Drilling Pvt. Ltd, 2018 (11) SCC 470

2 Bharat Aluminium Company Ltd. v. National Thermal Power Corporation, Arb. P. 66/2014, Delhi High Court

3 Bharat Aluminium Company Ltd. v. National Thermal Power Corporation, Arb. P. 66/2014, Delhi High Court

4 Lindsay International Private Limited v IFGL Refractories Limited, I.A. No. G.A. 1 of 2021 in A.P. 33 Of 2021, High Court of Calcutta.

5 Patel Engineering Co. Ltd. v. B.T. Patil and Sons Belgaum (Construction) Pvt. Ltd.2016(3) ARBLR 162(Bom)

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