Court Hearing Section 34 Petition Must Decide Section 340 Application Regarding Documents Filed in Earlier Section 9 Proceedings

Facts

Walianet had filed OMP(I)(COMM) 7/2019 under Section 9 of the Arbitration and Conciliation Act, 1996, relying on letters dated 18.12.2018 and 15.01.2019 to obtain an ad-interim order restraining Vipsie Hospitalitys Pvt. Ltd. from creating third-party rights in the subject premises.

Source reference: pp. 2–3; paras. 2.1–2.2

Vipsie alleged that the letters were forged and filed an application under Section 340 Cr.P.C. on 23.02.2019.

Source reference: pp. 3–4; paras. 2.3–2.7

After the matter was referred to arbitration, the Section 340 application was not decided on merits; the issue of authenticity was left to the arbitral tribunal.

Source reference: pp. 3–4; paras. 2.3–2.7

The arbitral tribunal’s award dated 18.06.2022 found the authenticity of both letters to be highly doubtful and suspect.

Source reference: p. 4; para. 2.8

Vipsie subsequently filed OMP(COMM) 24/2023 under Section 34 of the Arbitration and Conciliation Act and, along with it, filed a fresh Section 340 Cr.P.C. application dated 18.03.2023.

Source reference: p. 5; paras. 2.9–2.11

OMP(COMM) 24/2023 was dismissed as time-barred on 08.07.2023, but the Section 340 application was not adjudicated despite arguments having been heard.

Source reference: p. 5; paras. 2.9–2.11

By order dated 25.09.2023, the High Court directed the Court hearing OMP(COMM) 24/2023 to decide the Section 340 application.

Source reference: pp. 5–6; paras. 3–5

Thereafter, Vipsie questioned that Court’s jurisdiction, contending that the application ought to be heard by the successor Court exercising jurisdiction over OMP(I)(COMM) 7/2019.

Source reference: pp. 5–6; paras. 3–5

Issues

Whether the Section 340 Cr.P.C. application dated 18.03.2023 was maintainable before, and required to be adjudicated by, the Court hearing OMP(COMM) 24/2023 rather than by the Court that had earlier dealt with OMP(I)(COMM) 7/2019.

Source reference: pp. 6–8; paras. 6–9

Whether the concerned Court could be directed to decide the Section 340 Cr.P.C. application on merits, while leaving objections regarding the substantive maintainability of the relief open.

Source reference: pp. 7–9; paras. 7.3, 7.4, 10–11

Law Applied

The Court applied Section 151 CPC in considering the procedural request concerning the proper forum.

Source reference: p. 7; paras. 7.1–7.2

It relied on Sections 42 and 2(e)(i) of the Arbitration and Conciliation Act, 1996, under which the designated “Court” and the Court in which the relevant arbitration-related proceedings are instituted determine the jurisdictional forum for subsequent applications.

Source reference: p. 7; paras. 7.1–7.2

The Court also relied on its earlier orders dated 15.11.2019 and 10.06.2020, which had deferred consideration of the Section 340 Cr.P.C. proceedings until the arbitral tribunal determined the authenticity of the disputed documents.

Source reference: pp. 3–4, 8; paras. 2.5–2.7, 9

The respondent’s reliance on Iqbal Singh Marwah v. Meenakshi Marwah, (2005) 4 SCC 370, concerning the maintainability of proceedings against the respondent’s authorised representative, was expressly kept open and was not decided in the present order.

Source reference: p. 8; paras. 7.3, 11

Reasoning

The High Court held that the earlier Section 340 Cr.P.C. application had not been dismissed on merits; its consideration had merely been deferred pending a finding on the authenticity of the disputed letters.

Source reference: pp. 3–4; paras. 2.5–2.7

That condition was subsequently satisfied when the arbitral tribunal found the letters to be suspect and doubtful in its award dated 18.06.2022.

Source reference: p. 4; para. 2.8

Since the High Court had already directed the Court hearing OMP(COMM) 24/2023 to adjudicate the application, and since that Court was the jurisdictional successor in the arbitration-related proceedings under Sections 42 and 2(e)(i) of the Arbitration and Conciliation Act, the petitioner’s subsequent objection to the forum was rejected.

Source reference: pp. 6–8; paras. 6–9

The Court clarified that the question of forum was finally settled, but objections concerning whether proceedings under Section 340 Cr.P.C. could actually be initiated, including the objection based on Iqbal Singh Marwah, remained available before the concerned Court.

Source reference: pp. 7–9; paras. 7.3, 7.4, 10–11

Holding

The High Court held that the Court hearing OMP(COMM) 24/2023 had jurisdiction to hear and decide the Section 340 Cr.P.C. application dated 18.03.2023.

It directed that Court to adjudicate the application on merits within three months.

Source reference: p. 9; para. 10

The parties were directed to appear before the Trial Court on 30.09.2026, without requiring any further notice.

Source reference: p. 9; para. 12

The respondent remained entitled to raise all objections concerning the substantive maintainability of the Section 340 relief, including those arising from Iqbal Singh Marwah, but neither party could dispute the jurisdiction of the designated Court or seek a change of forum.

Source reference: p. 9; para. 11

The application was accordingly disposed of.

Source reference: p. 9; para. 13