Gujarat High Court
Ajay S. Patel, Engineers Contractors ... vs State Of Gujarat And Anr. on 22 December, 2006
Equivalent citations: AIR2007GUJ150, AIR 2007 GUJARAT 150, 2007 (5) AKAR (NOC) 649 (GUJ.) = AIR 2007 GUJARAT 150, 2007 AIHC (NOC) 459 (GUJ.) = AIR 2007 GUJARAT 150
Author: M.S. Shah
Bench: M.S. Shah
JUDGMENT
1. This is an application for review of the judgment and order dated 6-10-2005 in First Appeal No. 413 of 2000 by which this Court allowed the appeal of the State Government and the Executive Engineer and set aside the judgment and decree dated 30-10-1999 of the learned Civil Judge (S.D.), Bharuch in Special Civil Suit No. 253 of 1992 on the ground that the jurisdiction of the Civil Court was already excluded by the provisions of the Gujarat Public Works Contracts Disputes Arbitration Tribunal Ordinance, 1991.
2. The present petitioner is partnership firm of Engineers, Contractors and Consultants. The Executive Engineer, Roads and Buildings Division, Bharuch had invited tenders for the work of constructing an office-cum-laboratory building for Fishery Department at Bharuch and the tender submitted by the petitioner herein was accepted. As per the agreement between the petitioner and the Executive Engineer, the project of construction for Rs. 15,61,107/- was entrusted to the petitioner. The project was to commence from 1-10-1990 and was to be completed within a period of 12 months. On account of the disputes between the parties, the Executive Engineer terminated the contract by letter dated 28-2-1992 and the petitioner thereupon filed Special Civil Suit No. 253 of 1992 in the Court of learned Civil Judge (Senior Division) at Bharuch claiming damages to the tune of Rs. 6,91,987/-. There is no dispute about the fact that the suit in question was filed on 17-9-1992 and that the relief prayed for in the suit were for recovery of damages on the ground of illegal termination of the contrail. The prayers were as under:
15. (a) pass a decree of Rs. 6,91,987/-in favour of the plaintiff and against the defendants.
(b) award interest at the rate of 18% p.a. from the date of suit till the realization of the decretal amount from the defendants.
(c) award costs of this suit from the defendants.
2.1 The State of Gujarat and the Executive Engineer filed their written statement and contested the suit without raising any dispute about the jurisdiction of the Civil Court to entertain and try the suit Ultimately, by Judgment and decree dated 30-11-1999, the Civil Court directed the defendants (the respondents herein) to pay a sum of Rs. 5,31,959/- with simple interest at the rate of 15% per annum, from the date of filing of the suit till realization and also to release the security deposits in favour of the petitioner.
3. Being aggrieved and dissatisfied by the above judgment and decree, the State of Gujarat and the Executive Engineer filed First Appeal No. 413 of 2000. The appeal was admitted for final hearing and when reached final hearing on 6-10-2005. it was contended on behalf of the appellants i.e. the State of Gujarat and the Executive Engineer (opponents herein), inter alia, that the decree was a nullity because on 30-11-1999. the Civil Court had no jurisdiction to try the suit. Reliance was placed upon the provisions of the Gujarat Public Works Contracts Disputes Arbitration Tribunal Ordinance, 1991 which was promulgated on 5-12-1991 and the Gujarat Public Works Contracts Arbitiation Tribunal Act, 1992 which received the assent of the President on 23-3-1992 and Sub-section (1) of the Act was deemed to have come into force on 5-12-1991 i.e. the date of promulgation of the Ordinance. The other provisions of the Act were to come into force on such date as the State Government may, by notification in the Official Gazette, appoint. The other provisions came into force on 11-1994. Relying on the provisions of Section 13 of the Act, this Court held that the Civil Court had no jurisdiction to deal with or decide any question which the Arbitration Tribunal established under the Act was empowered to deal with and decide under the provisions of the Act. This Court accepted the contention urged on behalf of the State Government and held that on the date of the decree i.e. 30-11-1999, the Civil Court had no Jurisdiction to try or decide the suit involving any matter relating to a works contract or any question which the Tribunal is empowered to deal with and, therefore, the decree passed in favour of the petitioner and against the appellants was a nullity. On this short ground, this Court allowed the appeal and set aside the judgment and decree under challenge. This Court, however, clarified that the petitioner herein (original plaintiff) shall be entitled to approach the Arbitration Tribunal with necessary application for condonation of delay.
4. The present review application has been filed on the ground that there was an error apparent on the face of the record in as much as the provisions of the Ordinance or the provisions of the Act did not exclude the jurisdiction of the Civil Court to try and decide the suits pending on 1-1-1994. It is submitted that it was only in respect of suits filed on or after 1-1-1994 that the Civil Court would have no jurisdiction but since the suit in the instant case was filed on 18-9-1992 for recovering damages and not under the provisions of the Arbitration Act or in relation to any arbitral proceedings, the Civil Court continued to have jurisdiction because there was no provision in the Ordinance or in the Act for transfer of any suit pending before the Civil Court on the date of coming into force of the Act which was 1-1-1994. It was also submitted that the defendants had never filed any application raising objection to Jurisdiction of the Civil Court. Reliance is also placed on the decisions of this Court holding that the jurisdiction of the Civil Court was not excluded in respect of suits filed prior to 1-1-1994. It is also contended that when some such suits filed before the Civil Courts prior to 1-1-1994 were transferred to the Arbitration Tribunal, the Tribunal itself rendered decisions on 15-7-1996 and 27-2-1997 that the Arbitration Tribunal had no jurisdiction to entertain and try such suits which were already filed before the Civil Court prior to 1-1-1994 and the arbitration references were accordingly returned for being presented to the appropriate Court i.e. the Civil Court.
5. On the other hand, Mr. Jashwant K. Shah, learned ACP appearing for the respondents has opposed the application and submitted that the Civil Court ceased to have jurisdiction to try and decide any civil suit which the Arbitration Tribunal had jurisdiction to decide. Relying on the provisions of Section 21 of the Act, it is contended that the Civil Court could not have decided the suit on 30-11-1999 as the provisions of the Act had already come into force and the Arbitration Tribunal was functioning. Strong reliance is placed on the decision of the Apex Court in Sudhir G. Angur v. M. Sanjeev in support of the proposition that all procedural laws are retrospective unless the legislature has expressly stated to the contrary and that the procedural laws in force must be applied at the date when the suit or proceeding comes up for trial or disposal.
6. Having heard the learned advocates for the parties, we find considerable substance in the submissions of Mr. Bharat Patel for the petitioner. The Ordinance was promulgated on 5-12-1991. Section 1 of the Ordinance read as under:
1. Short title, extent and commencement.-- (1) This Ordinance may be called the Gujarat Public Works Contracts Disputes Arbitration Tribunal Ordinance, 1991.
(2) It extends to the whole of the State of Gujarat.
(3) This section shall come into force at once and the remaining provisions of this Ordinance shall come into force on such date as the State Government may, by notification in the Official Gazette, appoint.
6.1 It is an admitted position that no notification was issued under Sub-section (3) of Section 1 of the Ordinance bringing in force any other provisions of the Ordinance. The provisions of Section 1 of the Act read as under:
1. Short title, extent and commencement.-- (1) This Act may be called the Gujarat Public Works Contracts Disputes Arbitration Tribunal Act, 1992.
(2) It extends to the whole of the State of Gujarat.
(3) This section shall be deemed to have come into force on the 5th December, 1991 and the remaining provisions of this Act shall come into force on such date as the State Government may, by notification in the Official Gazette, appoint.
7. The Act received the assent of the President on 23-3-1992 and while the provisions of Section 1 of the Act came into force with effect from 5-12-1991, the other provisions of the Act came into force for the first time only upon issuance of the notification dated 10-12-1993 with effect from 1-1-1994 which notification was issued under Sub-section (3) of Section 1 of the Act.
8. The relevant provisions of the Act are Sections 8, 13 and 21 which read as under:
8. Reference to Tribunal and making of award:-- (1) Where any dispute arises between the parties to the works contract, either party shall, irrespective of whether such works contract contains an arbitration clause or not, refer, within one year from the date when the dispute has arisen, such dispute in writing to the Tribunal for arbitration in such form and accompanied by such documents or other evidence and by such fees, as may be prescribed.
(2) On receipt of a reference under Sub-section (1), the Tribunal may, if satisfied after such inquiry as it may deem fit to make, that the requirements under this Act in relation to the reference are complied with, admit such reference and where the Tribunal is not so satisfied, it may reject the reference summarily.
(3) to (6)...
13. Bar of jurisdiction of Courts:-- (1) Save as otherwise provided by Section 12, no Civil Court shall have jurisdiction to deal with or decide any question which the Tribunal is empowered to deal with and decide by or under this Act and no injunction shall be granted by any Civil Court in respect of any action taken or to be taken in pursuance of any power by or under this Act.
(2) No award or interim award or order made or proceedings taken under this Act by the Tribunal shall be called in question in any Civil Court.
21. Arbitration Act to cease to apply :--The provisions of the Arbitration Act, shall in so far as they are inconsistent with the provisions of this Act cease to apply to any dispute arising from a works contract and all arbitration proceedings in relation to such dispute before an arbitrator, umpire, Court or authority shall stand transferred to the Tribunal.
9. After referring to the above provisions, this Court held that in view of the above provisions of the Act, the Civil Court did not have the jurisdiction to decide the suit after coming into force of the Act. The submission on behalf of the respondent plaintiff was rejected in the following terms:
12. A faint attempt was made by the respondent plaintiff to submit that as the Act came into force on 1st January 1994, and much before that the suit was filed in September 1992, the suit would not be hit by the bar contained in Section 13. In our opinion, this argument cannot be allowed to stand because the Ordinance of 1991 was effective with effect from 5th December, 1991 and under Section 1(3), the Act is deemed to be in force since 5th December, 1991. If the Ordinance remained in force for all the said period and ultimately, the Ordinance was repealed with effect from 1st January, 1994, then no suit could be instituted before the Civil Court as the Civil Court had already lost its jurisdiction.
14. As there is a statutory bar in relation to dealing and deciding the question relating to a work contract or the questions, which under the Act, can be decided by the Tribunal constituted under the Arbitration Tribunal Act, in our considered opinion, the trial Court had no jurisdiction either to proceed with the matter or decide the issue raised before it.
10. The Ordinance was published on 5th December, 1991 and thereafter the Act came into force only on 23rd March, 1992 while the suit was filed on 17th September, 1992. Sub-section (3) of Section 1 of the Act provided that other provisions of the Act shall come into force on such date as the State Government may, by Notification in the Official Gazette, appoint. For that purpose, the State Government has issued a Notification dated 10th December, 1993 under Sections 1, 2 and 3 of the Arbitration Tribunal Act, 1992 and by the said notification, the Government fixed the date with effect from 1st January, 1994 and the Tribunal to be called as "Gujarat Public Works Contracts Disputes Arbitration Tribunal" to exercise the jurisdiction, powers and authority conferred on it by or under this Ordinance. Therefore, Section 13 came into force only from 1st January, 1994 whereas the present suit had been filed on 17th September, 1992 and therefore, the suit was not hit by Sections 13 and 21 of the Act and the Civil Court did not lose its jurisdiction to try and decide the suit pending on 1-1-1994.
11. We may refer to the provisions of Section 9 of the Code of Civil Procedure.
11.1 Under this Section, the Courts shall subject to the provisions have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred. Commentary on the Code of Civil Procedure by Hon'ble Mr. Justice C.K. Thakker (Judge, Supreme Court of India), particularly page 51 (3, Nature and Scope), reads as under:
The fundamental principle of English Law that wherever there is a right, there is a remedy (ubi jus ibi remedium) has been adopted in the Indian Legal System also. In fact, right and remedy are but the two sides of the same coin and they cannot be dissociated from each other. Accordingly, a litigant having a grievance of a civil nature has a right to institute a civil suit in a competent Court unless its cognizance is either expressly or impliedly barred by any statute. Section 9 of the Code empowers civil Courts to try all suits if (i) they are of a civil nature; and (ii) their cognisance is not barred (a) either expressly; or (b) impliedly.
12. In dealing with the question whether Civil Courts' jurisdiction to entertain a suit is barred or not, it is necessary to bear in mind the fact that there is a general presumption that there must be a remedy in the ordinary civil Courts. This ratio has been laid down by the Hon'ble Apex Court in the case of Firm of Illuri Subbayya Chetty and Sons v. State of Andhra Pradesh .
12.1 It is no doubt true that in this case. Section 13 would make it clear that save as otherwise provided by Section no Civil Court shall have jurisdiction to deal with or decide any question, which the Tribunal is empowered to deal with and decide under the provisions of the Act. But, the provisions of the Act came into force on 1st January, 1994 and the suit was filed prior thereto -- 17th September, 1992. Therefore, the bar enacted by Section 13 of the Act was not applicable in the present case.
13. While deciding the question whether the Civil Court can entertain a suit or not, it is necessary to bear in mind the principle that there must be a remedy in the ordinary civil Courts to a citizen claiming that an amount has been recovered from him illegally and that such a remedy can be held to be barred only on very clear and unmistakable indications to the contrary. The exclusion of the civil Courts to entertain civil causes will not be assumed unless the relevant statute contains an express provision to that effect, or leads to a necessary and inevitable implication of that nature.
14. Similar principle and interpretation has been provided in 'Principles of Statutory Interpretation' (Tenth Edition-2006) by former Chief Justice G.P. Singh, M.P. High Court (Chapter-9) p. 681-684).
(a) Exclusion must be explicitly expressed or clearly implied:
14.1 There is a strong presumption that civil Courts have jurisdiction to decide all questions of civil nature. The exclusion of jurisdiction of civil Courts is therefore not to be readily inferred and such exclusion must either by 'explicitly expressed or clearly implied'. 'It is a principle by no means of to be whittled down' and has been referred to as a 'fundamental rule'. As a necessary corollary of this rule provisions excluding jurisdiction of civil Courts and provisions conferring jurisdiction on authorities and tribunals other than civil Courts are strictly construed. The existence of jurisdiction in civil Courts to decide questions of civil nature being the general rule and exclusion being an exception, the burden of proof to show that jurisdiction is excluded in any particular case is on the party raising such a contention. The rule that the exclusion of jurisdiction of civil Courts is not to be readily inferred is based on the theory that civil Courts are Courts of general jurisdiction and the people have a right, unless expressly or impliedly debarred, to insist for free access to the Courts of general jurisdiction of the State. Indeed, the principle is not limited to civil Courts alone, but applies to all Courts of general jurisdiction including criminal Courts. The rule as stated above relating to strict construction of provisions excluding jurisdiction of Courts of general jurisdiction was recently expressly approved by the Supreme Court.
15. In view of the above, the following principles emerge relating to jurisdiction of a civil Court:
(1) A Civil Court has jurisdiction to try all suits of a civil nature unless their cognizance is barred either expressly or impliedly.
(2) Every Court has inherent power to decide the question of its own jurisdiction.
(3) Jurisdiction of a Court depends upon the averments made in the plaint and not upon the defence in the written statement.
(4) For deciding Jurisdiction of a Court, substance of the matter and not the form is important.
(5) Every presumption should be made in favour of jurisdiction of a civil Court.
(6) A statue ousting jurisdiction of a Court must be strictly construed.
16. In view of the aforesaid discussion, we have no hesitation in holding that there is error of law apparent on the Judgment under review. The present suit filed by the original plaintiff on 17th Sept. 1992 was maintainable because the bar under Section 13 of the Act was not applicable to the suits pending on 1-1-1994 when the Act came into force.
17. An identical question arose before the Full Bench of the Madras High Court in Periathambi Goundan v. District Revenue Officer wherein the Tamilnadu Agricultural Land Record of Tenancy Rights Act (the Act) came into force on 27-11-1972. Section 16A of the said Act read as under:
16-A. Bar of jurisdiction of civil Courts No Civil Court shall have jurisdiction in respect of any matter which the record officers, the District Collector or other officer or authority empowered by or under this Act has to determine and no injunction shall be granted by any Court in respect of any action taken or to be taken by such officer or authority in pursuance of any power conferred by or under this Act.
17.1 The suit was filed prior to the date of coming into force of the Act. The question posed before the Full Bench of the Madras High Court was that when the suit was pending on the date of coming into force of the Act, whether the Civil Court had Jurisdiction to try and decide the suit pending on the date of coming into force of the Act or whether the Civil Court ceased to have jurisdiction on account of the provisions of Section 16A of the Act quoted hereinabove. The Full Bench was pleased to hold as under:
The language of Section 16-A neither expressly nor by necessary implication takes away that jurisdiction (jurisdiction to determine whether a particular, person was a cultivating tenant or not). If the Intention of the Legislature was that Section 16-A should apply even to suits instituted before its introduction, it would have provided for as to what should happen to those suits. Once a suit is competently instituted in a civil Court, that suit must terminate in one of the methods known to law, namely, either it is dismissed or it its decreed, and cannot be left in the air. If it was the intention of the Legislature that the moment Section 16-A came into force, even pending suits in respect of matter covered by Section 16-A should not be proceeded with, the Legislature would have provided for the abatement of those suits or the dismissal of those suits or transfer of the matter covered by those suits to the appropriate authority under the Act. The Legislature not having made any such provision, it is indisputably clear that Section 16-A was not Intended to and could not affect any suit instituted prior to its introduction, even when the suit was in respect of a matter covered by Section 16-A. 17.2 The Court further held in para 29 as under:
a suit which has been instituted prior to the coming into force of Section 16-A of the Act will have to run its natural and normal course prescribed by law without in any way being affected by the provisions contained in Section 16-A of the Act, because there is nothing in Section 16-A expressly or by necessary implication taking away the jurisdiction of the Civil Court validly and competently assumed in the first instance. Consequently even if a decree had not been passed in a suit at the time when Section 16-A came into force, the fact that Section 16-A came into force during the pendency of the suit will not prevent the Court from exercising its jurisdiction lawfully and validly invoked and the same principle will apply to the further course of the suit in the form of appeal or revision.
18. For coming to this conclusion, the Madras High Court also relied on the decision of the Apex Court in Dewaji v. Ganpatlal in the following terms:
33. In Dewaji v. Ganpatlal , the landowner filed a suit against the tenant for recovery of possession with damages and mesne profits. The suit was filed on 17-9-1951. Pending that, the Berar Regulation of Agricultural Leases Act, 1961, was amended introducing three Sections 16, 16-A and 16-B, Relying on these provisions the tenant contended that the determination of the question whether a person is a tenant or not was a matter entirely within the jurisdiction of the Revenue Court and the jurisdiction of the Civil Court has been ousted. The Additional District Judge, who heard the suit, held that the amending Act did not affect the pending proceedings. Though the learned single Judge reversed the decision of the trial Court, the Division Bench of the High Court of Bombay held that there was no bar for proceeding with the pending suit. The Supreme Court upheld that view by pointing oat that if the Legislature intended to oust the jurisdiction of Civil Courts, it must say so expressly or by necessary implication and that there were no words in Sections 16, 16-A and 16-B which could lead to the necessary inference that those provisions were intended to apply to appeals pending when the 1953 Act came into force.
19. As regards the decision of the Apex Court in Sudhir G Angur v. M. Sanjeev the observations made in para 11 of the judgment are required to be read in the context of the controversy before the Apex Court where a civil suit was filed before the Principal Civil Judge, Bangalore under Section 92 of the Code of Civil Procedure raising certain disputes amongst the trustees. The allegations of mismanagement by the trustees were also made and the removal of the appellants as trustees was also prayed for and a prayer was also made for cancellation of a lease of the trust properties. Under Section 92 of the Code of Civil Procedure, the suit can only be filed by the Advocate General or by two or more persons having an interest in the trust after having obtained the leave of the Court. The defendants opposed grant of leave, but their submissions were not accepted and the Court granted leave on 10-11-1999. The revision filed by the appellants (defendants) was dismissed on 11-2-2000. While contesting the grant of leave the appellants (defendants) did not contend that a suit under Section 92 was not maintainable in view of the provisions of the Mysore Religious and Charitable Institutions Act, 1927. After the revision was dismissed, the appellants applied for rejection of the plaint under Order 7, Rule 11. CPC on the ground that by virtue of Section 40 of the Act, the suit was not maintainable. The trial Court dismissed the application and the revision was also dismissed by the High Court of Karnataka. In the appeal filed by the defendants, the Apex Court held that only the Muzral Officer under the Mysore Act had power to make summary inquiries, but such summary inquiries do not bar jurisdiction of the civil Courts. The Court held that serious allegations made in the suit can never be inquired into in a summary manner and that they were the matters which could only be gone into by a Court. The Court further gave the following reasons:
Even otherwise, Section 40-A of the Mysore Act categorically provides that a suit under Section 92 of the Code of Civil Procedure, 1911 is not barred, even though an order may have been passed by the Muzrai Officer or by the Government. If a suit is not barred after an order is passed, then it obviously follows that the suit under Section 92, CPC will not be barred when no such order has been passed. Section 40-A refers to Section 92 of the Code of Civil Procedure, 1911 which was not pari materia with Section 92 of CPC 1908.
19.1 The Court also held that even otherwise leave to file the suit was granted after bearing the parties and that an application for rejection of the plaint should have been made prior to the leave haying been granted or at the time when the appellants opposed grant of leave. Having lost in their opposition to the grant of leave, it was not open to the appellants to then apply for rejection of the plaint under Order 7, Rule 11, CPC.
20. In the instant case, it is an admitted fact that the defendants i.e. the State of Gujarat and the Executive Engineer never made any application for rejecting the plaint on the ground that the Civil Court had no jurisdiction. No such plea was raised in the written statement or even at the time of arguments before the Civil Court. In view of the above factual background and also in view of the legal position as discussed hereinabove, we are of the view that the Civil Court did not lose its jurisdiction upon coming into force of the Act with effect from 1-1-1994.
21. For the reasons given in the decisions of the Full Bench of the Madras High Court (supra) and in Dewaji v. Ganpatlal which commend to us. It is clear that the jurisdiction of the Civil Court to try and decide the suit for recovery of damages against the defendants i.e. the State of Gujarat and the Executive Engineer for the alleged illegality of termination of the contract very much continued to remain with the Civil Court and the provisions of Section 21 of the Act only excluded the jurisdiction of the Civil Court only in respect of arbitral proceedings.
22. A learned single Judge of this Court in the judgment dated 4-4-1998 in Civil Revision Application No. 1286 of 1996 and another learned single Judge of this Court in Vinodbhai Mohanbhai Vekaria v. State of Gujarat have also taken this view. We may also note that the Gujarat Public Works Contracts Disputes Arbitration Tribunal had also taken similar view in its decisions.
22.1 In State of Gujarat v. Jamnadas Babulal Joisar of Jamnagar 1998 Arbitration Weekly Law Journal 21 decided on 27-2-1997, the Tribunal dealt with a similar controversy and held as under:
Even under Section 21 of the Tribunal Act, the Tribunal has no jurisdiction to entertain or decide any dispute relating to a works contract which is agitated in a civil suit and in respect of which no arbitration proceeding was pending on 1-1-1994. Obviously, therefore, a Civil Court will have jurisdiction under Section 9 of Code of Civil Procedure, to try and decide all disputes relating to any type of contract including a works contract which was pending in the Civil Court on 1-1-1994 but in respect of which no arbitration proceeding had been commenced before 1-1-1994. Section 13 of the Tribunal Act has, therefore, to be read not in isolation but in context of Sections 8 and 21 of the Tribunal Act in order to understand its full implications. Exclusion of jurisdiction of Civil Courts is not to be readily inferred.
23. In view of this settled legal position in this State, when the civil suits instituted prior to 1-1-1994 have been tried and decided by the Civil Courts and this Court as well as the Tribunal have taken a consistent view that Civil Court continued to have jurisdiction to try and decide civil suits instituted prior to 1-1-1994 and pending before the Civil Court as on 1-1-1994, which were not in the nature of arbitration proceedings, we are of the view that the judgment and order dated 6-10-2005 in First Appeal No. 413 of 2000 is required to be recalled.
24. The application is accordingly allowed. We accordingly recall the judgment and order dated 6-10-2005 in First Appeal No. 413 of 2000. First Appeal No. 413 of 2000 is restored to the file. The appeal shall now be placed for final hearing before the appropriate Bench.
25. It is clarified that the interim relief which was operating during pendency of the First Appeal shall continue to operate till the appeal is heard by the appropriate Bench.
Rule is made absolute with no order as to costs.