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ORDER X CODE OF CIVIL PROCEDURE: ELUCIDATORY OR OBSTRUCTIVE IN KASHMIR

ORDER X CODE OF CIVIL PROCEDURE: ELUCIDATORY OR OBSTRUCTIVE IN KASHMIR

Order X Rule 2 of the Code of Civil Procedures, 1908 which deals with “Examination of Parties” is one of the indigenous provisions of the Code of Civil Procedure, which was even present at the time when the “Code of Civil Procedure” was first introduced as Act no. VIII of 1859. The Act was then passed by the Legislative Council of India and received the assent of the Governor General on 22nd March 1859. Under Act of 1859 was Section 125, which dealt with “Oral Examination of the Parties by Court”. That in last 164 years the provision has made its way from “MAY” to “SHALL”, which was once from the reading of the language appeared to be Discretionary, carrying on now appears to be mandatory.

The intent of the Provision is clear from its bare reading that at the first hearing of the Suit, the Court with a view to elucidating matters in controversy in the Suit, examine orally such of the parties to the suit appearing in person or present in court. The term elucidating means to understand something in a clearer way. In Kanwar Singh Saini v. High Court of Delhi, (2012) 4 SCC 307 The Hon’ble Supreme Court guided on the first date of hearing in the following manner, “The date of “first hearing of a suit” under CPC is ordinarily understood to be the date on which the court proposes to apply its mind to the contentions raised by the parties in their respective pleadings and also to the documents filed by them for the purpose of framing the issues which are to be decided in the suit. “

The Question arises whether the Order X Rule 2 is a procedural requirement which is to be followed by the Civil Courts in every case pending before it or the same is a discretionary power vested with the Courts, to be exercised only in cases where the Parties have taken unclear or ambiguous stand in the pleadings. One school of thought strongly bats that Order X Rule 2 of the C.P.C. cannot be use as a method to compel a party to, depose contrary to the averments contained in the pleadings filed by the Party. The Hon’ble High Court of Delhi in Dr Vimla Menon & Anr Vs. Gopinah Menon held that “A bare reading of Order X of the CPC makes it apparent that the question of whether any of the parties to the suit is required to be orally examined on any aspect relevant to the controversy is essentially a matter of discretion. Where a court feels that, in order to elucidate matters in controversy in the suit, oral examination of one or more of the parties to the suit is necessary, the court is empowered to so order”

The Delhi High Court Order simplifies that such power is discretionary and not mandatory and the same is to be exercised only in those cases where the Court is of the opinion in order to elucidate matters in controversy in the suit, Oral examination of one or more of the parties to the suit is necessary. 

Though the said Order clarifies the position on Order X power being discretionary , but in the same breath poses a far more practical issue, as to whether , in every case , where the Courts list the matter for Statement under Order X Rule 2 , whether the Court has to pass a detailed order, as to on what ground it seeks presence of the parties in person before the Court and whether there exist any ambiguity in the pleadings , and hence the examination of the Parties becomes imperative. 


That the Hon’ble Supreme Court of India in Supreme Court of India in M/S.Kapil Corepacks Pvt.Ltd.&  Vs Harbans Lal, 2010 examined the scope of Rule 2 of Order 10 of the Code of Civil Procedure and the correctness of invoking Section 340 of the Code of Criminal Procedure in regard to answers given by a party in an examination by the court under the rule. The Supreme Court was specifically concerned with the 4 questions and 1st being “What is the scope and ambit of Order 10, Rule 2 of the code?” the Hon’ble Supreme Court held that while Rule 1 enables parties to a court proceeding to admit or deny any counter allegations that may not have been expressly or implicitly admitted or denied in the pleading itself, Rule 2 is concerned with the broader objective of elucidating any particular matter that may be controversial in the suit. 

The court highlighted that the object of oral examination under Rule 2 is not to record evidence, in as much as the statement made under the aforesaid provision is not under oath nor intended to be a substitute for a regular examination under oath. The court further clarified that the purpose of Rule 2 was not to elicit any admissions, which are merely contemplated in the pleadings during examination of a party by the court under Order 10, Rule 1. The court held that the power under Order 10, Rule 2 cannot be converted into a process of selective cross-examination by the court, calling on any party to admit a document, before the party has an opportunity to put forth its case at the trial.

The position of the Court with respect to the satisfaction of the presiding officer should be on application of mind and that the matters cannot be posted for Examination of the Parties under Order X Rule 2 in a cursory manner. This position of law is well settled and the 2 leading Judgments on Order X Rule, one being Manmohan Das v. Mt. Ramdei & Anr. [AIR 1931 PC 175], the Privy Council observed “No doubt under Order 10, Rule 2, any party present in Court may be examined orally by the Court at any stage of the hearing, and the Court may if it thinks fit put in the course of such examination questions suggested by either party. But this power is intended to be used by the Judge only when he finds it necessary to obtain from such party information on any material questions relating to the suit and ought not to be employed so as to supersede the ordinary procedure at trial as prescribed in Order 18.

The use of the said power should not be done and manner that supersedes the trial , the Hon’ble Court in Vasantharoya Koundan & Ors (AIR 1949 Madras 707), held as follows referring to Order 10 Rule 2 of the Code :

“At the outset it must be pointed out that this (Order 10 Rule 2) does not provide for an examination on oath. This provision was intended to be used to elucidate the matters in controversy in suit before the trial began. This is not a provision intended to be used to supersede the usual procedure to be followed at the trial.”

The provision is intended to elucidate what is obscure and vague in the pleadings. In other words, while the purpose of an examination under Rule 1 is to clarify the stand of a party in regard to the allegations made against him in the pleadings of the other party, the purpose of the oral examination under Rule 2 is mainly to elucidate the allegations even in his own pleadings, or any documents filed with the pleadings.

Supreme Court of India in Vikas Aggarwal vs Anubha on 12 April, 2002 held that “We would like to observe that Order X CPC in an enabling provision providing that the court at the first hearing of the suit shall ascertain from each party about their pleadings. It does not in any manner place any bar on the powers of the court to seek clarification from any party in an appropriate case, at any date earlier than one fixed for framing of issues so as to advance the interest of justice.”

It is clear, from a reading of the said passages that, Order X Rule 2 is intended only to elucidate matters in controversy in proceedings and can be pressed into service only where there is a want of clarity in the pleadings. If, therefore, the pleadings of the parties were wanting in clarity then, in order to identify the exact issue in controversy in the suit, the court could justifiably resort to examination under Order X Rule 2 so as to clear the cobwebs.

The CPC provides for procedure for trial of suits. Procedural law is intended to facilitate the process of justice. As to how a procedural law is to be interpreted and which of the provisions are to be considered as directory or mandatory was considered by Hon’ble the Supreme Court in Mahadev Govind Gharge and others v. Special Land Acquisition Officer, (2011) 6 SCC 321, wherein it has been held that “29. Thus, it is an undisputed principle of law that the procedural laws are primarily intended to achieve the ends of justice and, normally, not to shut the doors of justice for the parties at the very threshold…….”. 

The Order X Rule 2 as on date is being used as a delay tactic and an adjournment tactic on account of unavailability of the Parties, the same obstructs the courts from “Framing of Issues” which consequently delays the trial. That many trial courts also, as a matter of practice , soon after completion of pleading, post the matter for examination of parties in a cursory manner, without respecting the intent of the Provision, which ultimately causes inordinate delay in the process of achieving Justice. 

The Article is authored by Viqas Malik and co-authored by Areeba Ahad  who are practising at the J&K High Court and work at “Malik and Romaan Law offices, Srinagar”. The Authors can be reached at Malikandromaan@gmail.com.

Arbitration Challenges in Government Contracts

Arbitration Challenges in Government Contracts

Competitive tendering in the construction, engineering, and logistics sectors of the UT of J&K holds immense importance. These projects not only hold great public importance, but significant public funds are allocated to them. However, beneath the surface of these initiatives lie multifaceted challenges. The root of these challenges often lies in the initial bidding phase, where proposed bidders must adhere to certain Qualifications. With the award of a project to one contractor, challenges and disputes are raised by unsuccessful bidders, often attributing the decision to alleged connivance within the State Department, in the selection process. This situation creates a divergence between initial bidding approximations and the final selection of the winning bidder, leading to conflicts and court litigation between state departments and participating bidders.

On the flip side, once the contract is awarded to a contractor, the state entity holds the authority to assert that the procedures employed by the contractor during contract performance constitute a breach of contract or that the performance of the contractor falls short of the parameters stipulated in the agreement. Factors like force majeure, court interventions, changes in project requirements mid-way or the department’s failure to make partial payments can further complicate the matters. Such situations not only aggravate the challenges faced by both parties but also contribute to a significant extension of the contract timeline. This extended contract timeline, coupled with the challenges of delayed resolution and payments, introduces a ripple effect on project dynamics. The prolonged uncertainty can strain the contractor’s financial stability, impacting their ability to execute the project operations and fulfil contractual obligations. Additionally, the lingering issues, contribute to an atmosphere of apprehension, affecting the overall collaboration between the contracting parties and thus, results in disputes commonly subject to arbitration. 

Arbitration clauses, a common feature in government contracts, introduce their own set of complexities. The inclusion of government-nominated arbitrators, raises legitimate concerns about impartiality. The recourse for challenging such appointments or dealing with unresponsive or overburdened Govt. appointed arbitrators involves a detour through the courts, consuming valuable time and resources. The Supreme Court, while recognizing the well-established principle that appointment is required to be done as per the terms and conditions of the contract, held that if circumstances exist, an independent arbitrator may be appointed as an exception to the general rule if there is reasonable apprehension of bias and impartiality. In cases where the parties cannot mutually agree on an arbitrator, they are compelled to invoke 

Section 11(6) of the Arbitration and Conciliation Act, 1996, for the appointment of an arbitrator through the court, a process that typically extends over several months. This delay, not to mention the subsequent initiation of arbitration proceedings, significantly undermines the purpose of opting for arbitration as a quick and efficient dispute resolution mechanism. Moreover, the courts are engaged in lengthy inquiries into the validity and effect of the arbitration agreement/clauses before referring parties to arbitration, which severely delays the matter. Recent amendments aim to streamline this process; however, in practice, parties can file multiple applications and delay proceedings, both before and after the closure of arbitration proceedings. Even if these applications are ultimately dismissed on merit, the process of filing applications, serving the other side, hearing applications, and seeking an order on these applications is used by the parties to buy time in a judicial system that is significantly overburdened.

In this intricate web of challenges, the importance of robust arbitration mechanisms cannot be overstated. The intervention of the court cannot be eliminated, as those are statutorily enshrined under the Arbitration and Conciliation Act. The comprehensive solution to the array of issues discussed in the article lies in fully embracing and resorting to institutional arbitration. Institutional arbitration not only addresses concerns related to bias, non-performance by contractors, payment-related issues, and delays in government contracts but also introduces a systematic framework. Typically, institutional arbitration has its own rules that govern the procedure that would be followed. The Government of J&K has recently established the Institutional Arbitration Centre, namely the Jammu and Kashmir International 

Arbitration Centre (JKIAC), which could prove beneficial to counter such issues. The advent of institutional arbitration, exemplified by the J&K International Arbitration Centre (JKIAC), brings a structured
approach to dispute resolution. With a diverse panel of experts covering fields such as law, medicine, engineering, information technology, town planning, etc. to assist in the arbitral proceedings, JKIAC may provide a cost-effective alternative to protracted court battles. For dealing with the arbitration proceedings in the Centre, the Jammu and Kashmir International Arbitration Centre (Arbitration Proceedings) Rules, 2020 have been framed by the High Court. Despite these massive developments, most arbitrations in J&K are still conducted on an ad hoc basis. To fully leverage the benefits of institutional arbitration, suggested arbitration clauses in government contracts explicitly mentioning institutions like JKIAC in the following format may prove beneficial:

“Any dispute, difference, or claim arising out of, in connection with, or relating to the present contract or the breach, termination, or invalidity thereof shall be referred and settled under the Jammu & Kashmir International Arbitration Centre (Arbitration Proceedings) Rules, 2020, by one or more arbitrators appointed by its rules”.

In the framework of institutional arbitration, the administration of Arbitration falls under the purview of the Arbitration Institution. The institution’s panel of arbitrators typically comprises experts from various fields and this setup empowers parties to nominate an arbitrator possessing the requisite skills, experience, and expertise for a quick and effective dispute resolution process. The institution retains the right to refuse an appointment, on request, if it deems the nominated Arbitrator lacks the necessary competence or impartiality. Arbitration institutions oversee the entire arbitration process, starting with notifying the defending party about the Claimant’s request for Arbitration and extending the notification of the arbitral award to all involved parties. Institutional arbitration, therefore, offers a structured, impartial, and cost-effective alternative, providing support and expertise throughout the arbitration process. The recent legislative amendments, particularly in 2019, signal a shift towards institutional arbitration as a preferred mode, aiming to expedite resolution and reduce court interference.

In conclusion, achieving effective dispute resolution in J&K government contracts demands equilibrium. Addressing the aforementioned issues necessitates a comprehensive approach, including streamlined dispute resolution mechanisms, timely payments, and a proactive review of compensation policies in situations not attributable to the contractor. At a broader level, a thorough understanding and adherence to contract requirements, project timelines, and payment provisions by the contractors is essential for successful contract execution. Proactive identification of variations, coupled with transparent communication and timely responses from the departments, significantly contribute to the seamless operation of government contracts. The careful construction of arbitration clauses, along with the integration of institutional frameworks such as JKIAC (Jammu and Kashmir International Arbitration Centre), emerges as a key strategy for unlocking smoother and more efficient contract execution and dispute resolution in the dynamic landscape of the UT of J&K.

The authors, Adv. Romaan Muneeb, Partner at “Malik and Romaan Law Offices, Srinagar, J&K,” along with Associate Adv. Areeba Ahad, are lawyers at the J&K High Court. The authors can be reached at malikandromaan@gmail.com

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