Court directs trial court to decide Section 340 Cr.P.C. application on merits within three months, emphasizing procedural clarity in disputes involving forged documents in Section 9 arbitration petitions.
In a significant ruling on September 16, 2026, the Delhi High Court, presided over by Justice Manmeet Pritam Singh Arora, clarified the jurisdictional ambit concerning allegations of forgery in arbitration-related litigation. The judgment arose from a dispute between Vipsie Hospitalitys Pvt Ltd (Petitioner) and Walianet (Respondent), where the petitioner alleged that the respondent relied on forged and fabricated documents to secure an ex-parte interim order under Section 9 of the Arbitration and Conciliation Act, 1996.
The controversy originated from the respondent's petition under Section 9 seeking interim reliefs based on two crucial letters dated December 18, 2018, and January 15, 2019. The court had granted an interim order restraining the petitioner from creating third-party interests in the disputed property. However, the petitioner contested the genuineness of these letters, filing an application under Section 340 of the Code of Criminal Procedure, 1973, seeking initiation of criminal proceedings for perjury.
Initially, the court hearing the Section 9 petition deferred adjudication on the forgery allegations, directing that the arbitral tribunal should decide the authenticity of the documents. The arbitral tribunal, in its final award dated June 18, 2022, found the letters "highly doubtful and suspect," though it granted monetary relief to the respondent. Subsequently, the petitioner filed a Section 34 petition challenging the arbitral award and simultaneously filed a fresh Section 340 Cr.P.C. application alleging perjury.
The dispute over jurisdiction arose when the petitioner contended that the Section 340 application should be heard by the court competent to hear the original Section 9 petition, not the court hearing the Section 34 challenge. The Delhi High Court, however, rejected this contention, affirming that under Section 42 of the Arbitration and Conciliation Act, 1996, the court hearing the Section 34 petition is the successor court with jurisdiction to hear related applications, including the Section 340 Cr.P.C. application.
The court expressed frustration over the petitioner's attempt to re-litigate jurisdictional issues already settled by the High Court's earlier order dated September 25, 2023, which had directed the Section 340 application be heard alongside the Section 34 petition. The court ordered the concerned trial court to decide the Section 340 application on merits within three months. While objections on the maintainability of the Section 340 relief remain open, the court made it clear that the question of jurisdiction is conclusively settled.
This judgment underscores the procedural clarity and judicial guidance concerning complex arbitration disputes involving allegations of forged documents and perjury. It reaffirms that once arbitration proceedings conclude and an award is challenged under Section 34, the successor court assumes jurisdiction over related criminal applications under Section 340 Cr.P.C. This prevents multiplicity of litigation and ensures that all related issues are adjudicated in a coherent forum.
The parties have been directed to appear before the trial court on September 30, 2026, to proceed with the hearing of the Section 340 application, with no further notices required.
Bottom Line:
Arbitration proceedings, Section 340 Cr.P.C. application alleging use of forged documents in Section 9 proceedings - Where adjudication of perjury issue was earlier deferred till conclusion of arbitration and arbitral award returned findings that documents were doubtful/suspect, application under Section 340 Cr.P.C. was rightly maintainable before Court hearing Section 34 petition under Arbitration and Conciliation Act - Jurisdiction of said Court affirmed and directed to decide application on merits - Objections on merits kept open.
Statutory provision(s):
Arbitration and Conciliation Act, 1996 Sections 9, 34, 42; Criminal Procedure Code, 1973 Section 340
Vipsie Hospitalitys Pvt Ltd v. Walianet, (Delhi) : Law Finder Doc Id # 2983553
