GOVIND PRASAD SHARMA & ORS.versusDOON VALLEY OFFICERS COOPERATIVE HOUSING SOCIETY LTD

                     [2017] 7 S.C.R. 653


             GOVIND PRASAD SHARMA & ORS.                               A
                              v.
          DOON VALLEY OFFICERS COOPERATIVE
                 HOUSING SOCIETY LTD
               (Civil Appeal No. 10786of2017)
                                                                       H
                       AUGUST 23, 2017
    [R.F. NARIMAN AND SANJAY KISHAN KAUL, JJ.I
      Arbitration and Conciliation Act, 1996 - ss. 75 and 81 - By
impugned judgment, demarcation report made by a government
agency in the course of conciliation proceedings between the parties C
admitted into evidence - Admissibility of the report challenged -
Held: s. 75 contemplates that both the conciliator and the parties
must keep as confidential all matters relating to conciliation
proceedings - In the instant case, the demarcation report has its
genesis only in the conciliation proceedings - Therefore, it cannot D
be relied upon - Impugned judgment is set aside - However, it will
be open for the respondent to adduce, by way of evidence, any
report that he may obtain from authorities for the purpose of
demarcating property, which may then be introduced by way of
evidence in accordance with law.
                                                                     E
       Disposing of the appeal, the. Court,
      HELD: 1. Reading of Section 75 shows that the object of
the section is sub-served by the expression "relating to'' which
is an expression of extremely wide import. It is clear, therefore,
that both the conciliator and the parties must keep as confidential,
all matters relating to conciliation proceedings. It is of no matter   F
that the instant case does not fall within the four pigeon holes
contained in Section 81, as otherwise, if there are insidious
encroachments on confidentiality, a free and fair settlement may
never be arrived at, thus stultifying the object sought to be
achieved by Part III of the 1996 Act. [Paras 5, 71 [655-H; 656-        G
D,E)
      Renusagar Power Company Limited v. General Electric
      Company (1984) 4 SCC 679: [1985) 1 SCR 432; Ruby
      General Insurance Co. Ltd. v. Pearey Lal Kumar and
      Another 119521 SCR 501 - relied on.
                                                                       H
                              653
654            SUPREME COURT REPORTS                         [2017] 7 S.C.R.


A           Union Carbide Canada Inc. and Dow Chemical Canada
            Inc. v. Bombardier Inc., Bombardier Recreational
            Products Inc. and Allianz Global Risks US Insurance
            Company [2014] 1 SCR 800 - distinguished.
                               Case Law Reference
B            [1985) 1 SCR 432          relied on                 Paras
             [1952) SCR 501            relied on                 Para6
             [2014) 1 SCR 800          distinguished             Para 8

c          CIVILAPPELLATEJURISDICTION: Civil Appeal No. 10786
      of2017.
          From the impugned final Judgment and Order dated 12.12.2014
  . passed by the High Court of Uttarakhand at Nainital in Writ Petition
D No.2664 of2012 (M/S).
            V. Hansaria, Sr. Adv., P.I. Jose, Govind Prasad Sharma, Shashank
      Mishra, Ms. Pooja Mishra, Advs. for the Appellants.
            Hrishikesh Baruah, Pranav Jain, Advs. for the Respondent.
            The Judgment of the Court was delivered by
 E
            R.F. NA~MAN, J. I. Leave granted.
         2. The appellants are before us, against a judgment dated
   12.12.2014, passed by the High Court of Uttarakhand at Nainital, in
   which a demarcation report made by a government agency, in the course
 F of conciliation proceedings between the parties, was sought to be relied
   upon. The Special Judge at Dehradun, specifically referring to Sections
   75 and 81 of the Arbitration and Conciliation Act, 1996, dismissed the
   Revision Petition on 11.12.2012 that was filed against an order dated
   06.12.2010, by which an application by the plaintiff for taking the said
   report as evidence was dismissed. Interfering with the said orders in a
 G Writ Petition filed, the impugned order has allowed the said report to be
   admitted into evidence.
             3. Mr. V. Hansaria, learned Senior Counsel appearing on behalf
      of the appellants, has argued that Section 75 is in very wide terms and
      that parties are to keep confidential all matters relating to conciliation
 H
  GOVIND PRASAD SHARMA v. DOON VALLEY OFFICERS                                   655
 COOPERATIVE HOUSING SOCIETY LTD. [R.F. NARIMAN, J.]

proceedings. He also referred to Section 81 of the Act, and stated that          A
parties cannot rely upon or introduce as evidence in arbitral or judicial
proceedings, proposals made by the conciliator under sub-clause (c) from
which the said report emanated.
         4. Mr. Hrishikesh Baruah, learned counsel appearing on behalf of
  the respondent, has argued that quite clearly none of the sub-clauses in B
  Section 81 would apply. ln any case, according to him, the various sub-
  clauses in Section 81 only reflect the extent of.confidentiality that arises
  out of the earlier sections contained in Part III dealing with Conciliation,
· and that, therefore, the moment the case does not fit into any of the four
  pigeon holes of SectionS l, the report can certainly be admitted into
  evidence and relied upon. He also cited a Canadian Supreme Court C
 judgment, which we will deal with, in support of this proposition.
        5. Sections 75 and 81 of the Arbitration and Conciliation Act, 1996
 read thus:
       "75. Confidentiality.- Notwithstanding anything contained in any          D
       other law for the time being in force,.the conciliator and the parties
       shall keep confidential all matters relating to the conciliation
       proceedings. Confidentiality shall extend also to the settleme.nt
       agreement, except where its disclosure is necessary for purposes
       of implementation and enforcement.
                                                                                 E
       81. Admissibility of evidence in other proceedings.-The parties
       shall not rely on or introduce as evidence in arbitral or ju~icial
       proceedings, whether or not such proceedings relate to the dispute
       that is the subject of the conciliation proceedings,-
       (a) views expressed or suggestions made by the other party in             F
       respect of a possible settlement of the dispute;
       (b) admissions made by the other party in the course of the
       conciliation proceedings;
       (c) proposals made by the conciliator;
       (d} the fact that the other party had indicated his willingness to        G
       accept a proposal for settlement made by the conciliator."
        On a reading of Section 75, it is clear that the object of the section
 is sub-served by the expression "relating to" which is an expression of
 extremely wide import. (See: Renusagar Power Company Limited
                                                                                 H
656             SUPREME COURT REPORTS                            [2017] 7 S.C.R.



A     v. General Electric Company, (1984) 4 SCC 679 at 704). It is clear,
      therefore, that both the conciliator and the parties must keep as
      confidential all matters relating to conciliation proceedings.
              6. The litmus test for determining whether the matter relates to
      conciliation proceedings was laid down by an earlier judgment of this
B     Court. In Ruby General Insurance Co. Ltd. vs. Pearey Lal Kumar
      and Another, [1952] S.C.R. 501, the question to be decided was as to
      whether a dispute or difference arose out of a certain insurance policy.
      This Court laid down that the test for determining whether a dispute or
      difference arose out of the said policy is whether recourse to the contract,
      by which the parties are bound, is necessary for the purpose of
      determining the matter in dispute between them. If it is found that such
      recourse is necessary, then the matter would certainly fall within the
      policy. Following this judgment, and applying it to the facts of this case,
      it is clear that recourse needs to be had to conciliation proceedings as
      the genesis of this demarcation report is only in conciliation proceedings
D     and not otherwise.
              7. This being the case, it is of no matter that the present case does
      not fall within the four pigeon holes contained in Section 81, as otherwise,
      ifthere are insidious encroachments on confidentiality, a free and fair
      settlement may never be arrived at, thus stultifying the object sought to
 E    be achieved by Part III of the 1996 Act.
             8. Mr. Baruah cited before us a judgment of the Supreme Court
      of Canada in Union Carbide Canada Inc. and Dow Chemical Canada
      Inc. vs. Bombardier Inc., Bombardier Recreational Products Inc.
      and Allianz Global Risks US Insurance Company [2014] 1 SCR 800.
 F    He relied, in particular, on a sentence contained in para 36 of the said
      judgment which reads as under:-
             "Moreover, a litigant cannot object to evidence of a fact that is
             independent of and separate from a settlement offer."
             We agree with this .decision. In that a litigant cannot possibly object
 G    to evidence of a fact that is independent of or separate from a settlement
      offer. In the facts of the present case, this case is wholly distinguishable
      and would not apply for the simple reason that the demarcation report
      has its genesis only in the conciliation proceedings, as has been held by
      us above.
 H
 GOVIND PRASAD SHARMA v. DOON VALLEY OFFICERS                                 657
COOPERATIVE HOUSING SOCIETY LTD. [R.F. NARIMAN, J.]

      9. In this view of the matter, we allow the appeal and set aside the A
impugned judgment dated 12.12.2014. However, it will be open for the.
respondent to adduce, by way of evidence, any report that he may obtain
from authorities for the purpose of demarcating property, which may
then be introduced by way of evidence in accordance with law.
       10. The appeal is disposed of accordingly.                             B


Devika Gujral                                           Appeal disposed of.