Karnataka High Court
Maha Rashtra Apex Corporation Ltd vs C K Mohammad on 27 May, 2013
Author: H.G.Ramesh
Bench: H.G.Ramesh
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M.F.A.No.2255/2005
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 27TH DAY OF MAY 2013
BEFORE
THE HON'BLE MR. JUSTICE H.G.RAMESH
MISCELLANEOUS FIRST APPEAL NO. 2255/2005
BETWEEN:
MAHA RASHTRA APEX CORPORATION LTD.
REGD. OFFICE: SYNDICATE HOUSE
MANIPAL - 576 104
REPRESENTED BY SRI. M.VELU
S/O MUNISWAMY ... APPELLANT
(BY SRI N. MAHALINGA BHAT, ADVOCATE)
AND:
1. C.K.MOHAMMAD
S/O KUTTY ALI
SINCE DEAD BY HIS LRs.
1a) FATHIMA W/O C.K.MOHAMMED
1b) SHAREEFA D/O C.K.MOHAMMED
1c) ALIYAN S/O C.K.MOHAMMED
1d) RAHAMATH D/O C.K.MOHAMMED
1e) THAHIRA D/O C.K.MOHAMMED
1f) HASEENA D/O C.K.MOHAMMED
ALL ARE R/AT CHERAKANDATH HOUSE
NARIYANDA VILLAGE, PARANE POST
KODAGU - 571 212.
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M.F.A.No.2255/2005
2. P.M.ABOOBAKER
S/O LATE MOHAMMED KUNHI
POYYAKERA HOUSE
BAVALI VILLAGE
PARANE POST
KODAGU DISTRICT - 571 212
3. K.A.YUSUFF
S/O LATE ABBAS
POYYAKERA HOUSE
BAVALI VILLAGE
PARANE POST
KODAGU DISTRICT - 571 212
4. P.A.MOHAMMED KUNHI
S/O P.M.ABOOBAKER
POYYAKERA HOUSE
BAVALI VILLAGE
PARANE POST
KODAGU DISTRICT - 571 212
5. A.S.N.HEBBAR, ADVOCATE
"IRUVANTHIGE"
ANANTHANAGAR
MANIPAL - 576 104 ...RESPONDENTS
(BY SRI T.NARAYANA SWAMY, ADVOCATE FOR R-2;
R-1 ABATED V/O DTD. 7.6.2010; R-5 IS SERVED;
R-3 & R-4 SERVICE HELD SUFFICIENT V/O DTD.8.7.10;
R1(a-f) SERVICE HELD SUFFICIENT V/O DTD.10.12.10 )
THIS MFA IS FILED U/S 37(1) OF THE ARBITRATION &
CONCILIATION ACT READ WITH SECTION 151 OF CPC AGAINST
THE JUDGMENT AND DECREE DT.18.1.05 PASSED IN
A.S.NO.33/02 ON THE FILE OF THE DISTRICT JUDGE, UDUPI,
ALLOWING THE SUIT FILED UNDER SECTION 34 OF THE
ARBITRATION & CONCILIATION ACT AND SETTING ASIDE THE
AWARD DT.6.11.99 PASSED IN A.P.NO.68/99 ON THE FILE OF
THE ARBITRATOR, HOLDING THAT THE RESPONDENTS 1 TO 3
HEREIN ARE NOT LIABLE TO PAY ANY AMOUNT TO THE
APPELLANT HEREIN.
THIS MFA COMING ON FOR HEARING, THIS DAY, THE
COURT DELIVERED THE FOLLOWING:
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M.F.A.No.2255/2005
JUDGMENT
H.G.RAMESH, J. (Oral):
Heard. This appeal by defendant no.1 is directed against the judgment dated 18.01.2005 passed by the trial court in Arbitration Suit No.33/2002. By the impugned judgment, the trial court has set aside the impugned award dated 06.11.1999 passed by the Arbitrator in A.P.No.68/1999 in its entirety holding that the respondents/plaintiffs are not liable to pay any amount to the appellant herein.
2. The trial Court has set aside the award on the ground that it is opposed to the public policy of India. It is relevant to refer to the following reasoning of the trial court:
"13. The very fact that a sum of Rs.1,01,812/- was received by the 1st defendant on 26-6- 1996 is not disputed. It finds a place in schedule 'C' of the agreement Ex.P2. If this amount of Rs.1,01,812/- is deducted from Rs.4,85,812/- which is actual value of the -4- M.F.A.No.2255/2005 vehicle in question vide Ex.P8, the remaining amount of Rs.3,84,000/- was the amount that was advanced by the 1st defendant to the plaintiff so as to purchase the said vehicle.
14. In the claim statement filed before the Arbitrator and in the notice of reference issued by the 1st defendant to the plaintiffs, it is mentioned that hire had been paid by the plaintiff for the period from 26-6-96 up to 26-6- 1997. Therefore, hire had been paid for a period of 12 months. For 10 months, it was Rs.1,28,400/-. Two more instalments had been paid by the plaintiffs for subsequent two months. Therefore, a total sum of Rs.152,820/- had been paid by the plaintiffs towards the amount so received to purchase the vehicle from the 1st defendant. As and when the amount was paid, interest will have to be adjusted first and then the remaining amount will have to be adjusted towards principal. It is also to be seen that on 27-11-1997 the vehicle was sold for a sum of Rs.2,30,000/-. If we deduct a sum of Rs.1,52,820/- paid till 26-6- 1997 from Rs.3,84,000/- the actual amount that remained was Rs.2,32,000/-. As already -5- M.F.A.No.2255/2005 stated by me, the proper appropriation of the amount paid on different dates upto 26-6-1997 will have to be made. On 26-7-97, a sum of Rs.12,840/- was paid. We will have to see as to what was the interest that was liable to be paid for one month on Rs.3,84,000/-. We have to take interest at the rate of 18% p.a. into consideration since the vehicle in question was availed by the plaintiff for commercial purpose. This was maximum rate of interest granted on different classes of deposits by commercial banks and nationalized banks during 1997. The connected interest for one month on Rs.3,84,000/- at 18% p.a. would be Rs.5,700/-. This will have to be first adjusted out of Rs.12,840/-. Then the remaining amount of Rs.7,140/- will have to be adjusted towards principal. As on 26-7-1997 the balance amount was Rs.2,76,860/- after adjusting Rs.7,140/- towards the principal. Thus principal amount will come down on each month. Therefore, as on the date of sale of vehicle, virtually there was no liability. In this view of the matter, the claim so made by the 1st defendant before the learned Arbitrator and awarded by the 2nd defendant learned -6- M.F.A.No.2255/2005 Arbitrator is not legal and proper. Therefore, interference is called for by this Court and the entire award will have to be set aside. Hence I answer issue Nos.2 and 4 in the affirmative holding that interference is called for by this Court and that the award is opposed to the Public Policy of India and that there was no liability whatsoever to have been paid by the plaintiffs to the 1st defendant."
(Underlining supplied) As stated above, the award of the Arbitrator is set aside by the trial court on the ground that the award is contrary to the Public policy of India. The public policy of India is reflected in the laws in force in the territory of India. The trial court has not stated as to how the award made by the Arbitrator is illegal or how it contravened any law of the land. Accordingly, the impugned judgment is unsustainable in law and the matter requires to be reconsidered by the trial court in accordance with law. Hence, I make the following order:
The impugned judgment is set aside. The matter is remitted to the trial court for reconsideration in -7- M.F.A.No.2255/2005 accordance with law. All contentions of both the parties are kept open.
Appeal disposed of.
Sd/-
JUDGE hkh.