RESEARCH ON ARBITRATION PROCEEDING BELATED

SUBMISSION OF EVIDENCE:

Order 7, Rule 14 (3): As per the Code of Civil Procedure, 1908, a document which ought to be
produced in court by the plaintiff when the plaint is presented, or to be entered in the list to be
added or annexed to the plaint but is not produced or entered accordingly, shall not, without the
leave of Court, be received in evidence on his behalf at the hearing of the suit. Thus, no
additional evidence can be presented at such a stage where substantial part of the proceedings
have already been conducted.

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Court: Delhi High Court

Case: Polyflor Limited Vs. A.N. Goenka and Ors. MANU/DE/0943/2016

The Delhi High Court has stated- "To grant leave to and permit the plaintiff to file and lead in
evidence additional documents at this stage would mean that the defendants would be put to
serious prejudice. The defendants have not had the occasion to deal with the said documents.
Had the documents now sought to be produced, been produced at the relevant time, i.e. at the
stage of filing of the suit, or at least at the time when the issues were framed, the defendants
would have had the occasion to deal with the same by making appropriate pleadings and filing
their own documents to counter the reliance placed by the plaintiff on the documents in
question."

The court further stated: In my view, these circumstances clearly show that the conditions
necessary before leave of the Court can be granted have not been satisfied. It cannot be said
that the plaintiff was not aware of the documents earlier, or that the same could not be produced
in spite of due diligence on the part of the plaintiff. All the material now sought to be
introduced, was well within the knowledge of the plaintiff at least in the year 2003. As the
plaintiff was not diligent enough at that point of time, this Court is left with no alternative but
to reject its request."

The defendant relied on the below judgement : In Gold Rock World Trade Ltd vs Veejay
Lakshmi Engineering Works. a similar application under Order VII Rule 14 had been moved
before the Court for production of additional documents and for filing an additional affidavit.
The stage in the said suit was more or less the same, namely that the plaintiff had led its
evidence in the affirmative and closed the same. The application had been filed prior to the
defendants' witnesses filing their affidavits by way of evidence towards examination-in-chief.
The learned Single Judge rejected the application of the plaintiff. While doing so, the learned
Single Judge observed:

"3. ... ... ... A plain reading of Order 7 Rule 14 (3) makes it clear that a document which ought
to be produced in Court by the plaintiff when the plaint is presented, or to be entered in the list
to be added or annexed to the plaint but is not produced or entered accordingly, shall not,
without the leave of the Court, be received in evidence on his behalf at the hearing of the suit.
The learned counsel for the plaintiff submits that leave of the Court ought to be granted to the
plaintiff for producing the additional documents referred to in the application under Order 7
Rule 14 and as also for calling the witness for producing the documents mentioned in the other
application. The learned counsel for the plaintiff referred to the decision of the Supreme Court
in the case of Salem Advocate Bar Association, Tamil Nadu v. Union of India: (2005) 6 SCC
344. With reference to paragraph 13 thereof, the learned counsel submitted that the Court may
permit leading of such evidence even at a later stage subject to any terms that may be imposed
upon by the Court which may be just and proper.

4. I have heard counsel for the parties. The Supreme Court decision in Salem Advocate Bar
Association (supra) was in the context of additional evidence. By virtue of the 1976
amendment, Rule 17-A had been introduced in Order 18. The said Rule 17-A granted discretion
to the Court to permit production of evidence not previously known or which could not be
produced despite due diligence. Rule 17-A of Order 18 was deleted by the Code of Civil
Procedure (Amendment) Act, 1999 which took effect on 1.7.2002. While considering the effect
of this deletion the Supreme Court observed:-
"13. In Salem Advocate Bar Assn. (I) v. Union of India, (2003) 1 SCC 49, it has been
clarified that on deletion of Order 18 Rule 17- A which provided for leading of additional
evidence, the law existing before the introduction of the amendment i.e. 1-7- 2002, would stand
restored. The Rule was deleted by Amendment Act of 2002. Even before insertion of Order 18
Rule 17-A, the court had inbuilt power to permit parties to produce evidence not known to
them earlier or which could not be produced in spite of due diligence. Order 18 Rule 17-A did
not create any new right but only clarified the position. Therefore, deletion of Order 18 Rule
17- A does not disentitle production of evidence at a later stage. On a party satisfying the court
that after exercise of due diligence that evidence was not within his knowledge or could not be
produced at the time the party was leading evidence, the court may permit leading of such
evidence at a later stage on such terms as may appear to be just."

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Shri Ramanand Vs. Delhi Development Authority & Anr. 2016 SCC Online Del 4925 at
para 11: The above observation makes it clear that allowing the plaintiff to produce additional
documents, which were not produced earlier, at a later stage of the proceedings, would cast a
prejudice on the defendant. If there is no justifiable reason for not filing the said documents at
an earlier stage of proceedings, it indicates the casual approach of the party doing so and the
progress of the case cannot be stopped on this account. Hence, if the issues have been framed
and the evidence of the petitioner has already commenced, the belated filing of the documents
as evidence would prejudice the Respondent.
The Division Bench of Allahabad High Court in the case of Banwari Lal vs. Jagannath
Prasad and Anr.16 in paragraph 6 as under:

"6. It is a well-established principle of law that an arbitrator ought not to hear or receive
evidence from one side in the absence of the other side without giving the side affected by such
evidence, the opportunity of meeting and answering it.

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Based on the Principles of Natural Justice;

Court: Madras High Court

Case: Soceite Aninmina Lucchesse Oil Vs. Gorakhram Gokalchand AIR 1964 Mad 532,
Id.

At para 15, the Madras High Court has held that the Arbitrators are bound to come together and
act judicially, conforming to principles of natural justice. They must not merely act judicially,
but should not consider themselves as the agents or advocates of the party who appoints them.
Once nominated, they ought to perform their duty of deciding impartially between parties.

“15. As will be clear from a passage in Russell on Arbitration 18th Edn. page 136, such Joint
arbitrators must not merely act Judicially, but should not consider themselves as the agents or
advocates of the party who appoints them When once nominated, they ought to perform the
duty of deciding impartially between the parties. In " very similar case on the facts, C. S. No
255 of 1981, where actually the facts were far stronger in support of the inference that there
was some conformity to arbitral procedure, the learned Judge of this Court who tried the suit
(Rajagopala Aiyangar, J.) held that the parties were not apprised by the arbitrators, in that
capacity, but that the arbitrators merely proceeded to obtain instructions virtually as agents of
concerned parties, and that the award was vitiated by this misconduct.
In Halsbury's Laws of England, 3rd Edn. Vol. 2, page 34, it is made abundantly clear that the
arbitrators must act together, must appoint times and places of meeting, and give due notice
thereof to the parties. Where a reference is to more than one arbitrator, they should all concur in
appointing such times and places, and in doing all other acts in the course of the reference.
There can be no doubt whatever that the arbitrators must function together, give notice to
parties and opportunities for representation after they have commenced to function together,
and that, if they fail to do so, the arbitral procedure is void, as not conforming to principles of
natural justice. Nothing can be done, as a matter of arbitration, to the detriment of a party, ex
parte, however much he might have bound himself previously. For a clear instance of this
principle, see Andrews v Mitchell, 1905 AC 78. Even where a party had notice, but failed to
attend before the arbitrator, the award was set aside where reasonable excuse for
nonappearance was shown: See Gladwin v. Chilcote. (1841) 01 RR 825. In the present matter,
the facts are so heavily in favour of the defendant-respondent on this vital aspect, that ft is
adequate to set them forth here quite briefly

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Court: Andhra Pradesh High Court

Case: Hindustan Shipyard Limited Vs. Essar Oil Limited and Ors. 2005 (1) ALT 264

The Andhra Pradesh High Court has categorically stated that parties are free to agree on the
procedure to be followed by the Arbitral Tribunal. When such procedure is not fixed, the
Arbitral Tribunal has to follow the statutory procedure; it means it has to weigh the entire
evidence on record properly and that it has to come to a just conclusion within the parameters
of the dispute. It has been held that the principles of natural justice, fair play, equal opportunity
to both the parties and to pass order, interim or final, based upon the material/ evidence placed
by the parties on the record and after due analysis and/or appreciation of the same by giving
proper and correct interpretation to the terms of the contract, subject to the provisions of law,
just cannot be overlooked. (Id. At para 9)

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Case: Sahyadri Earthmovers Vs. L and T Finance Limited and Ors. (2011) 4 MhLJ 200

Para 7 : It has been further held that parties, by consent, may adopt their own procedure for
conducting arbitration. An Arbitral Tribunal is not a Court. Any lacuna in procedure does not
vitiate the Award, unless it is in breach of principle of natural justice, equity or fair play for the
aggrieved parties.

Court: Bombay High Court

Case: Vinayak Vishnu Sahasrabudhe v. B.G. Gadre and Ors. (AIR 1959 Bom 39)

It has been reiterated by the Bombay High Court in hat though the Arbitration Act does not
provide for the procedure to be followed by the arbitrators, even so, the Arbitrators are bound
to apply the principles of natural justice

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Court: Bombay High Court

Case: Pradyuman Kumar Sharma and Ors. Vs. Jaysagar M. Sancheti and Ors. 2013 (5)
MhLJ 86

In, the Bombay High Court has clearly laid down the law in regard to admissibility of
additional evidence in paragraph 32 as under:

“32……In my view, though arbitrator is not bound by the provisions of Code of Civil
Procedure or Evidence Act, principles of Evidence Act and Code of Civil Procedure are
applicable even to arbitration proceedings. A document which is disputed by a party and if not
proved, cannot be considered even by the arbitrator to be on record or as a piece of evidence.
Taking into consideration an unproved document by an arbitrator, on the contrary would be in
violation of principles of natural justice. In my view, arbitrator was not bound to refer the
alleged document to an expert witness suo moto.

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Court: Delhi High Court

Case: Delhi Development Authority Vs. Krishna Construction Co. 183 (2011) DLT 331
(DB)

The Court held that , you cannot win battles by springing surprises. It means that the Arbitrator
is free to call for additional evidence at a belated stage of the arbitral proceedings as long as it
does not cause prejudice to the other party. It would be unfair if parties are permitted to plead
and proof at variance. If permission to lead evidence is ordinarily allowed, it will be impossible
to conclude the hearing of any arbitral proceedings.

“19. The principle that there cannot be any variance between pleading and proof is not to be
expressly found in any provision of the Code of Civil Procedure but has been evolved by
Courts with reference to Order 6 Rule 2 and Rule 4 thereof as a general principle of law: You
cannot win battles by springing surprises. Pleadings of parties are intended to focus the issues
on which the parties seek a decision. It would be unjust if parties are permitted to plead and
proof at variance. This principle would apply to pleadings and decisions before any Fora where
civil disputes are adjudicated.”

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