The Rajasthan High Court clarifies that Section 34(4) of the Arbitration Act cannot be used to reopen the merits of an arbitral award, emphasizing its limited scope.
New Delhi, India Jul 16, 2026 ALN: Jaipur: The Rajasthan High Court has held that an application under Section 34(4) of the Arbitration and Conciliation Act, 1996 cannot be used to reopen the merits of an arbitral award, ruling that the provision is confined to curing a defect capable of elimination by the arbitral tribunal and does not permit re-adjudication of concluded issues.
A division bench of Justice Arun Monga and Justice Maneesh Sharma was hearing an appeal against a Commercial Court, Jaipur order that had dismissed the appellants’ Section 34(4) application for want of jurisdiction — a view the High Court found erroneous, even as it went on to dismiss the application on merits.
The Court explained the limited scope of the remedy:
“Section 34(4) is a limited remedy. Its object is to enable the arbitral tribunal to resume proceedings, or take such other action, as would eliminate a curable ground for setting aside the award, for instance, by supplying reasons on an issue already decided or by curing a procedural defect. It is not a vehicle for reopening the merits of the award or for inviting the learned Arbitrator to re-adjudicate concluded issues.”
The appeal arose out of a dispute over an agreement to sell dated Dec 23, 1995, under which the appellants — members of the Pujara family, residents of M.I. Road, Jaipur — had agreed to sell a plot to the respondent, M/s Elenees Housing and Construction Ltd., for a total consideration of about Rs 3.5 crore. The respondent invoked the arbitration clause in the agreement, while the appellants contended that it stood terminated by a subsequent agreement dated Nov 16, 1999, under which about Rs 13 lakh already paid by the respondent had been settled, and further argued that the respondent had never shown readiness and willingness to perform its part of the contract.
By an award dated Dec 30, 2015, the arbitrator allowed the respondent’s claim and directed it to pay about Rs 10 crore, over and above the Rs 13 lakh already paid, within three months — upon which the appellants were to execute and register the sale deed and hand over possession. The appellants challenged the award under Section 34 of the Act before the Commercial Court No. 4, Jaipur Metropolitan-II, where the proceedings remain pending.
During the pendency of that challenge, the appellants moved a separate application under Section 34(4), seeking resumption of the arbitral proceedings on the ground that subsequent orders and decrees passed by other courts and the Debt Recovery Tribunal had a bearing on the performance of the agreement. The Commercial Court dismissed this application on May 19, 2023, holding that it lacked jurisdiction to entertain it — a finding that led to the present appeal.
At the outset, the High Court agreed with the appellants that the Commercial Court had erred in law. A plain reading of Section 34(4), the bench noted, shows that the court seized of a Section 34 petition is fully empowered to entertain such an application and decide it on its own merits, either allowing or declining it — not to dismiss it summarily for want of jurisdiction. To that limited extent, the impugned order was set aside. Rather than remand the matter, the bench invoked its powers under Section 37 read with Section 34(4) to decide the application itself, so as to avoid prolonging the proceedings.
On merits, however, the Court found that the application did not attract any of the contours envisaged under Section 34(4). The grounds raised by the appellants included that the respondent’s application under Section 9 of the Act, filed on Mar 27, 2004, was beyond the three-year limitation period reckoned from either the 1995 agreement or its termination; that the award was contrary to public policy since the arbitrator had granted specific performance without any material showing the respondent’s readiness and willingness under Clause 2 and Clause 6 of the agreement; that the arbitrator had wrongly treated the original termination agreement as forged while discounting the report of handwriting expert Ms. Renu in favour of a less reliable one; and that the consideration payable, which the appellants said had escalated under Clause 3 to about Rs 425 crore, had been fixed by the arbitrator at about Rs 10 crore without any stated basis or government valuation.
The appellants also pointed to the hardship caused by the respondent’s non-payment, which they said had left them unable to service bank loans and had triggered recovery and auction proceedings before The Rajasthan Urban Co-operative Bank (settled for about Rs 10.80 lakh), UCO Bank before the Debt Recovery Tribunal (compromised at about Rs 63.31 lakh in April 2009), Bank of India (about Rs 41.80 lakh paid around July 2009), and The Urban Co-operative Bank, Sudarshanpura (settled for about Rs 6.50 lakh in March 2000) — circumstances they said the arbitrator had failed to consider despite these having been pleaded before him.
Weighing these grounds, the Court held that each of them — limitation, readiness and willingness, the termination agreement and expert evidence, adequacy of consideration, and the quality of reasoning — went to the merits and validity of the award itself, and had, by the appellants’ own admission, already been pleaded before and considered or disregarded by the arbitrator. There was, the bench held, no undecided issue or curable defect that could be remitted under Section 34(4); what the appellants were, in substance, seeking was a re-adjudication of the award on merits, which the provision does not permit.
The application under Section 34(4) was accordingly dismissed as devoid of merit. The Court clarified, however, that the appellants remain at liberty to raise all of these objections — including those pleaded in the dismissed application — in the pending Section 34 proceedings, and that its order should not be read as any expression of opinion on the merits of those objections, which will be decided by the Commercial Court uninfluenced by this order.
Title: Govind Pujara & Ors. v M/s Elenees Housing and Construction Ltd. & Ors.
Case No.: D.B. Civil Miscellaneous Appeal No. 2324/2023
Citation: [2026:RJ-JP:25824-DB]
Counsel for appellants: Mr. Parteek Kasliwal, Ms. Priyanka Tiwari, Ms. Vidushi Singh
Counsel for respondents: Mr. Sandeep Pathak, Mr. Utkarsh Mehta, Mr. Ashok Kumar Sharma, Mr. Parneet Kaur
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