Karnataka High Court Allows Villa Buyer To Place RTI Records In Award Challenge Over Occupancy Certificate

The Karnataka High Court on 25 August partly allowed villa buyer A.R. Krishnamani's petition and set aside an order of the Bengaluru Additional City Civil and Sessions Judge refusing to take on record Right to Information (RTI) replies and other official documents concerning a disputed occupancy certificate.

Justice Suraj Govindaraj held that a party challenging an arbitral award on the ground of fraud can produce additional evidence before a Court exercising jurisdiction under Section 34 of the Arbitration and Conciliation Act, 1996 only in rare and exceptional circumstances where such material is necessary to decide the fraud allegation. The Bench observed:

“A party challenging an award on the ground of fraud has no right, as a matter of course, to produce additional evidence before the Section 34 Court. Such permission may be granted only in a rare and exceptional case, where the conditions set out above are satisfied and where the reception of the material is absolutely necessary to decide the clause (b) ground, with a corresponding opportunity to the other side to meet it.”

The dispute arose from sale and construction agreements between Krishnamani and Lakepoint Builders Pvt. Ltd. for a residential villa. The developer was required to complete construction by December 2015.

Krishnamani alleged that despite paying 80% of the purchase consideration by March 2014, the construction was delayed and the villa's built-up area was 490 square feet less than agreed.

The arbitrator rejected Krishnamani's claim for delay compensation in an award dated 12 October 2021, relying on an occupancy certificate dated 27 April 2017, stated to have been issued by the Anneshwara Gram Panchayat. Krishnamani subsequently sought information under the Right to Information Act, 2005. In a response dated 14 February 2022, the authorities stated that the requested information concerning the occupancy certificate was not available in the Panchayat's records.

A further reply dated 7 December 2023 referred to a 15 May 2023 inspection report, which indicated that the document relied upon as the occupancy certificate had not been issued according to the Panchayat's records.

Krishnamani had challenged the arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996 on 23 August 2022, seeking its partial setting aside on the ground that it was against India's public policy and vitiated by fraud. He later sought to place the RTI material and related official documents before the Section 34 Court.

The Bengaluru Additional City Civil and Sessions Judge rejected the request on 16 September 2025, holding that following the 2019 amendment to the Arbitration and Conciliation Act, 1996, the Court could consider only material forming part of the arbitral record.

The amendment to Section 34(2)(a) replaced the words “furnishes proof” with “establishes on the basis of the record of the arbitral tribunal”, thereby restricting challenges under that provision to material placed before the arbitral tribunal.

Krishnamani then approached the High Court under Article 227 of the Constitution. He argued that the requirement that a challenge be established from the arbitral record applies to Section 34(2)(a), whereas his fraud challenge fell under Section 34(2)(b).

Lakepoint Builders opposed the petition, arguing that additional evidence cannot be introduced routinely in Section 34 proceedings and that allowing parties to improve their cases after arbitration would undermine the summary and final nature of arbitral proceedings.

The High Court held that the 2019 amendment did not impose an absolute bar on receiving additional material under Section 34(2)(b). However, such material can be received only in rare and exceptional cases where it is necessary to decide the ground raised.

The Bench found the requirement satisfied in the present case as the documents were directly connected with the occupancy certificate relied upon in the arbitral award and the allegation of fraud. It therefore set aside the 16 September 2025 order and directed that the documents be taken on record, without expressing any finding on the alleged fraud.

It further held that receiving material relating to fraud in such circumstances does not convert a Section 34 Court into an appellate court. It held:

“A Section 34 Court that receives, in a fit case, a document going to fraud is not converting itself into a Court of appeal and is not reappreciating the arbitrator's evidence. It is doing no more than the statute requires when a Clause (b) ground of fraud is raised. The safeguard against abuse lies not in a blanket refusal to look at anything outside the record, but in the strict application of the above”.

Accordingly, the High Court directed the Section 34 Court to take the RTI replies and related official documents on record and proceed with the challenge expeditiously. It left Lakepoint Builders free to contest their authenticity, admissibility and evidentiary value.

Appearances for petitioner (A.R. Krishnamani): Advocate Pradeep Nayak.

Appearances for respondent (Lakepoint Builders Pvt. Ltd.): Advocate Nishanth A.V.