Delhi District Court
National Highway Authority Of India vs Sh. O. P. Chopra on 7 December, 2012
ID NO. 02401C0598582010
IN THE COURT OF SHRI PANKAJ GUPTA: ADDL. DISTRICT
JUDGE (CENTRAL07): TIS HAZARI COURT: DELHI
Suit No.188/2002
National Highway Authority of India ...........Petitioner
versus
Sh. O. P. Chopra .........Respondent
O R D E R :
1. By this order, I shall dispose of the application moved by the defendant under order 7 Rule 11 of Code of Civil Procedure, 1908 (CPC).
2. The plaintiff filed the reply to the application and prayed that it may be dismissed.
3. I have heard Ld. Counsels for the parties and have perused the material available on record.
4. Brief facts relevant for disposal of the present application are that the plaintiff filed the suit for damage against the defendant and stated that the disputes arose between the plaintiff and M/s. Bhageeratha Engineer Ltd. (BEL) and were referred for the arbitration under the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act). The Arbitral Tribunal (AT) was comprised of three arbitrators including the defendant as 1/15 National Highway Authority vs. O P Chopra the coarbitrator. The arbitration proceedings were conducted and the parties participated therein. Just before making the award, the defendant resigned from the AT. The said act of the defendant derailed the arbitration proceedings and also resulted in loss of time and money to the plaintiff. Therefore, vide the present suit, the plaintiff claimed the damages of Rs. 8,69,000/ on account of the fee paid to the arbitrators and the expenses incurred in the arbitration proceedings. The defendant filed the written statement and prayed for dismissal of the suit. Subsequently, the defendant moved the present application and prayed that the plaint may be rejected.
5. Admittedly, the disputes arose between the plaintiff and BEL and were referred for the arbitration under the Act; the AT comprised of three arbitrator, was constituted; the defendant was the coarbitrator therein; the arbitration proceedings were conducted and the parties participated therein; on 20.07.2007, the defendant resigned as coarbitrator from the AT; and the remaining two arbitrators made the award by majority on 28.07.2007.
6. Counsel for the defendant pleaded that the function of the AT was quasi judicial in nature and the defendant was the coarbitrator, being so, he cannot be held liable for refund of the fee paid to the AT and/or to him. She also pleaded that during the arbitral proceedings, the plaintiff made an application under section 12 of the Act for challenging the appointment of the defendant as coarbitrator. The said application was dismissed by the AT. After concluding the arbitration proceedings, the award was made by majority on 28.07.2007. Counsel for the defendant also pleaded that on the one hand, the plaintiff defended the award challenged by BEL before the 2/15 National Highway Authority vs. O P Chopra Hon'ble High Court and on other hand it has filed the present suit. As such, the said award has become final qua the plaintiff. Therefore, the plaint does not disclose any cause of action against the defendant. On the other hand, counsel for the plaintiff pleaded that while disposing the present application only the averments made in the plaint are to be considered; and in the present case, the plaint discloses the cause of action.
7. Admittedly, the AT made the award on 28.07.2007. However, in the entire plaint, the plaintiff has not disclosed the facts of making the award dated 28.07.2007 and its challenge by BEL and its stand to accept the same before the Hon'ble Delhi High Court. Even in para 18 of the plaint relating to cause of action, the plaintiff mentioned various dates prior to 28.07.2007 and thereafter, but it remained silent regarding the award dated 28.07.2007. In the said background, counsel for the plaintiff pleaded that only the averments made in the plaint should be considered for deciding the present application. As such, the main contention raised vide the said plea is that since the plaintiff has not made the plea of making of the award in the plaint, hence, the said plea should not be considered while disposing of the present application. The said plea of the plaintiff is out rightly liable to be rejected firstly because as discussed herein below, the plaintiff has deliberately concealed the fact of making the award and therefore, if the said plea is accepted the same shall amount to allowing the plaintiff to take the advantage of its own wrongs. Secondly, the award was made in the quasi judicial proceedings and the court can take judicial notice of the same. Thirdly, in para 8 of the replication, the plaintiff admitted that the award was made on 28.07.2007. The plaintiff also admitted the said fact in reply to the present application. In view thereof, this court can take into 3/15 National Highway Authority vs. O P Chopra consideration the said facts while disposing the present application.
8. The very first question arises as to whether the plaint discloses a cause of action in favour of the plaintiff and against the defendant. Present suit of the plaintiff is based upon the plea that due to resignation of the defendant as coarbitrator from the AT, the arbitration proceedings got derailed due to which the plaintiff suffered mental harassment and loss of time and money. As such, according to the plaintiff, the award could not made by the AT due to resignation of the defendant and the same resulted in loss of time, loss of money and mental harassment to it.
9. The plaintiff instituted the present suit on 06.10.2008. Admittedly, BEL challenged the award before the Hon'ble High Court in OMP no. 624/2007. The question arises as to whether the said petition filed by BEL was already pending before the Hon'ble High Court when the present suit was instituted before this court; and if yes, what was the stand of the plaintiff in those proceedings. Once a query was raised to this effect upon the counsel for the plaintiff, he pleaded that the present suit was instituted by the plaintiff prior to filing of the petition by BEL before the Hon'ble High Court. During the proceedings, the plaintiff filed the copy of the order dated 16.10.2012 passed by the Hon'ble High Court in EFA (OS) 35/2012 titled as "National Highway Authority of India vs. Bhageerath Engineering Ltd." which was the upshot of the arbitration proceedings. The plaintiff also relied upon the arbitration proceedings dated 07.08.2008 conducted in case titled as "M/s. NCCKNR (JV) vs. National Highway Authority of India" which reveals that in those proceedings also, the plaintiff herein/the respondent therein moved an application under Order 12 of the Act to challenge the appointment 4/15 National Highway Authority vs. O P Chopra of the coarbitrator in those proceedings i.e. defendant herein. On the said day, the said application was dismissed. While deciding the said application, the arbitral tribunal therein specifically observed the proceedings conducted in the arbitration proceedings subject matter of the present suit. In para 43.52 of the said order, the arbitral tribunal relied upon para 13 of the reply filed by the plaintiff herein/the respondent therein filed before the Hon'ble High Court in OMP No.624/2007. It reveals that the date when the present suit was instituted by the plaintiff, the petition filed by BEL was already pending before the Hon'ble High Court. As such, counsel for the plaintiff made a wrong submission to this effect before this court to mislead the court. So far as the stand of the plaintiff in the proceeding in OMP no. 624/2007 is concerned, para 13 of the reply is reproduced herein :
"13. In view of the aforesaid facts it is clear that Sh. O.P. Chopra, CoArbitrator actively participated in the arbitral proceedings till the last hearing held by Arbitral Tribunal and also signed the minutes of all the hearing. He resigned from the Tribunal just before publication of award. Therefore, in view of the aforesaid premises it is respectfully submitted that the impugned award is a Majority Award signed by two Members of the Tribunal under section 31 (2) of the Arbitration & Conciliation Act, 1996 and therefore, it is absolutely maintainable under the law."
10. Perusal of the contents of the aforementioned para reveals that the plaintiff herein admitted the award being made by majority and was acceptable to it. Not the least, the plaintiff was defending the said award before the Hon'ble High Court. As such, on the date of institution of the present suit, the plaintiff was well aware about making of the award, filing of the objection by BEL against the same and its acceptance of the award and defending the same before the Hon'ble High Court. However, the plaintiff 5/15 National Highway Authority vs. O P Chopra concealed all the said facts while filing the present suit. Not only that counsel for the plaintiff made a wrong statement to this effect in the court. In view of the foregoing discussions, it can be held that admittedly, the award was made by the AT way of majority on 28.07.2007. The plaintiff has not challenged the award 28.07.2007. Rather, the plaintiff accepted the award and defended the same in OMP no. 624/2007. As such, the same has attained finality qua plaintiff. As such, the defendant had not created any obstacle in arbitration proceedings and making of the award. Therefore, it can be held that the plaint does not disclose cause of action.
11. In the plaint, the plaintiff also questioned the appointment and conduct of the defendant as to arbitrator in the present proceedings. Now the question arises whether the present suit is maintainable in law. Admittedly, the AT was constituted; the arbitration proceedings were conducted; and award was made under the Act. Section 5 of the Act puts a bar on the judicial intervention except so provided in the Act. Section 12 of the Act provides that a party can challenge the appointment of the arbitrator on the grounds provided therein. Section 13 (1) & (2) of the Act provides the procedure to challenge the appointment of the arbitrator. Section 13 (4) of the Act provides that if the challenge is not successful, the arbitral tribunal shall continue the arbitral proceedings and make an award. Section 13 (5) provides that an aggrieved party can challenge the award under section 34 of the Act. Section 13 (6) provides that once an award is set aside on an application made under section 13(5) of the Act, the concerned court may decide whether the arbitrator is entitled to any fee. As such, as per the scheme of the Act, a party may become entitled for the refund of fee paid to an arbitrator at the discretion of the court only that too once he challenges an 6/15 National Highway Authority vs. O P Chopra award under section 13 (5) of the Act in terms of section 34 of the Act and becomes successful. Perusal of the record reveals that on 19.08.2006, first meeting of the AT was held. Para 15 of the order dated 19.08.2006 passed in the arbitration proceedings mentions that if for any reason the arbitrator is unable to continue with the case, he shall be paid fee for the period of his appointment and the same will not called for refund. The said order was passed in the presence of the plaintiff and there is nothing on record to suggest that the said observation was challenged by it. As such, the plaintiff is estopped from raising the said plea at this stage. Further, during the arbitration proceedings, the plaintiff moved an application under section 12 of the Act challenging the appointment of the defendant as coarbitrator. Vide order dated 08.01.2007, the AT dismissed the said application. Thereafter, the plaintiff participated in the arbitration proceedings and the award was made. If the plaintiff was aggrieved by the order dated 08.01.2007 passed by the AT then the only remedy available to the plaintiff was to challenge the said order by way of petition u/s 34 of the Act. However, the plaintiff had not challenged the said award before the competent court. Instead, the plaintiff accepted the award and defended the same in OMP no. 624/2007 filed by BEL before the Hon'ble High Court. Therefore, an action which required to be taken under the Act i.e. the Special Act and if not taken, the same cannot be taken under the General Law i.e. by way of the present suit. Hence, the present action of the plaintiff to claim the fee on the said account is barred under section 5 of the Act. Therefore, the suit is barred under section 9 of the CPC. In view of the foregoing discussions, it can be held that the present suit is not maintainable in law.
12. In replication, the plaintiff pleaded that the award was illegal 7/15 National Highway Authority vs. O P Chopra and invalid which caused loss of time and effort and money to him. In reply to the present application, the plaintiff pleaded that the said award was made in violation of Section 10 and 15 of the Act. As discussed above, in the plaint, the plaintiff has not mentioned about the award at all nor was it pleaded that the award made was illegal which caused loss of money to it. Therefore, the said plea is beyond pleadings and cannot be considered while deciding the present application. Secondly, this court is not the proper forum to raise such pleas to challenge the award by way of present suit. Thirdly, the plaintiff accepted the award being a majority award and defended the same before the Hon'ble High Court in OMP no. 624/2007, therefore, it cannot be allowed to take the contradictory plea in the replication.
13. It is not a case where the plaintiff raised a contradictory plea for the first time as to its stand on the award in the plaint. In para 3 of the order dated 16.10.2012, the Hon'ble High Court quoted the para no.13 of the reply of the appellant therein/plaintiff herein filed a OMP No.624/2007 wherein the plaintiff admitted the making of the award by majority under the Act. In para 4 of the order it was also held that the respondent therein/BEL also admitted that the Award would not become illegal having not been signed by the defendant herein. As such, both the parties admitted in OMP 624/2007 that the award was duly made by majority under the Act. However, para 7 of the said order reveals that the appellant therein/the plaintiff herein changed its stand and pleaded that since the defendant herein had resigned before making the award, hence, the AT was liable to be reconstituted. In para 10 of the order the Hon'ble High Court rejected the said submissions observing that the plaintiff herein itself admitted the validity of the award under the Act. It was held that in appeal, the appellant the plaintiff therein cannot be 8/15 National Highway Authority vs. O P Chopra allowed to raise contradictory plea. Similarly, the plaintiff is raising a contradictory plea in the present suit also, which cannot be allowed.
14. Counsel for the plaintiff relied upon the order dated 16.10.2012 and pleaded that even in those proceedings the Hon'ble High Court observed that the defendant herein should be held liable for refund of the fee, however, it was not ordered because the matter was being put to an end. The said observation was made by the Hon'ble High Court in the proceeding which was the upshot of the arbitration proceedings under the Act. That being so, the plaintiff either could have perused the remedy under the Act or would have pressed in the said appeal, but the same cannot be raised by way of present suit being barred by Section 5 of the Act and Section 9 of CPC.
15. It is the settled law that one must approach the court with clean hands. Admittedly, the award was made by the AT way of majority on 28.07.2007. As discussed above, at the time of institution of the present suit, the petition being OMP no. 624/2007 filed by BEL challenging was pending before the Hon'ble Delhi High Court and the plaintiff/the respondent therein was defending the award and admitted that the award was made by majority under the Act. However, in the entire plaint, the plaintiff has not disclosed the facts of making the award dated 28.07.2007 and its challenge by BEL and its stand to accept the same before the Hon'ble Delhi High Court. Even in para 18 of the plaint relating to cause of action, the plaintiff mentioned various dates prior to 28.07.2007 and thereafter, but it remained silent regarding the award dated 28.07.2007. Hence, it can be held that the plaintiff has deliberately concealed the material facts from this court and has not approached this court with clean hands. In the plaint, the plaintiff not 9/15 National Highway Authority vs. O P Chopra only concealed the material facts but also made the false and frivolous pleas and claim. The present suit is also gross abused of process of law. Therefore, the present plaint is liable to be rejected. Reliance is placed upon the judgment passed by the Hon'ble Delhi High Court in CM (M) No.265/2009 titled as "Sardar Khushwant Singh & another vs. Kirpal Singh". False claims and defences
16. In Maria Margarida Sequeria Fernandes V. Erasmo Jack De Sequeria, 2012 (3) Scale 550, the Supreme Court held that false claims and defences are serious problems with real estate litigation, predominantly because of ever escalating prices of the real estate. The Supreme Court held as under: "False claims and false defences
84. False claims and defences are really serious problems with real estate litigation, predominantly because of ever escalating prices of the real estate. Litigation pertaining to valuable real estate property is dragged on by unscrupulous litigants in the hope that the other party will tire out and ultimately would settle with them by paying a huge amount. This happens because of the enormous delay in adjudication of cases in our Courts. If pragmatic approach is adopted, then this problem can be minimized to a large extent."
17. In Dalip Singh V. State of U.P., (2010) 2 SCC 114, the Supreme Court observed that a new creed of litigants have cropped up in the last 40 years who do not have any respect for truth and shamelessly resort to 10/15 National Highway Authority vs. O P Chopra falsehood and unethical means for achieving their goals. The observations of the Supreme Court are as under: "1. For many centuries, Indian society cherished two basic values of life i.e., 'Satya' (truth) and 'Ahimsa' (non violence), Mahavir, Gautam Buddha and Mahatama Gandhi guided the people to ingrain these values in their daily life. Truth constituted an integral part of the justicedelivery system which was in vogue in the pre independence era and the people used to feel proud to tell truth in the courts irrespectively of the consequences. However, post independence period has been drastic changes in our value system. The materialism has over shadowed the old ethos and the quest for personal gain has become so intense that those involved in litigation do not hesitate to take shelter of falsehood, misrepresentation and suppression of facts in the court proceedings.
2. In last 40 years, a new creed of litigants has cropped up. Those who belong to this creed do not have any respect for truth. They shamelessly resort to falsehood and unethical means for achieving their goals. In order to meet the challenge posted by this new creed of litigants, the courts have, from time to time, evolved new rules and it is now well established that a litigants, who attempts to pollute the stream of justice or who touches the pure fountain of justice with tainted hands, is not entitled to any relief, interim or final."
18. In Satyender Singh V. Gulab Singh, MANU/DE/1047/2012, the Hon'ble Delhi High Court following Dalip Singh v. State of U.P. (supra) observed that the courts are flooded with litigation with false and incoherent pleas and tainted evidence led by the parties due to which the judicial system in the country is choked and such litigants are consuming Court's time for a wrong cause. The observations of this Court are as under: "2. As rightly observed by the Supreme Court, Satya is 11/15 National Highway Authority vs. O P Chopra a basic value of life which was required to be followed by everybody and is recognized since many centuries. In spite of cautions, courts are continued to be flooded with litigation with false and incoherent pleas and tainted evidence led by the parties. The judicial system in the country is choked and such litigants are consuming courts time for a wrong cause. Efforts are made by the parties to steal a march over their rivals by resorting to false and incoherent statements made before the court. Indeed, it is a nightmare faced by a Trier of Facts; required to stitch a garment, when confronted with a fabric where the weft, shuttling back and forth across the warp in weaving, is nothing but lies. As the threads of the weft fall, the yarn of the warp also collapses; and there is no fabric left."
Imposition of costs
19. In Ramrameshwari Devi v. Nirmala Devi, (2011) 8 SCC 249, the Supreme Court has held that the Courts have to taken into consideration pragmatic realities and have to be realistic in imposing the costs. The relevant paragrahps of the said judgment are reproduced hereunder: "45......We are clearly of the view that unless we ensure that wrongdoers are denied profit or undue benefit from the frivolous litigations, it would be difficult to control frivolous and uncalled for litigations. In order to curb uncalled for and frivolous litigations, the courts have to ensure that there is no incentive or motive for uncalled for litigation. It is a matter of common experience that court's otherwise scarce and valuable time is consumed or more appropriately wasted in a large number of uncalled for cases."
"52. The main question which arises for our consideration is whether that prevailing delay in civil litigation can be curbed? In our considered opinion the existing system can be drastically changed or improved 12/15 National Highway Authority vs. O P Chopra if the following steps are taken by the trial courts while dealing with the civil trials.
C. Imposition of actual, realistic or proper costs and or ordering prosecution would go a long way in controlling the tendency of introducing false pleadings and forged and fabricated documents by the litigants.
Imposition of heavy costs would also control unnecessary adjournments by the parties. In appropriate cases the courts may consider ordering prosecution otherwise it may not be possible to maintain purity and sanctity of judicial proceedings..."
"54. While imposing costs we have to take into consideration pragmatic realities and be realistic what the defendants or the respondents had to actually incur in contesting the litigation before different courts. We have to also broadly take into consideration the prevalent fee structure of lawyer and other miscellaneous expenses which have to be incurred towards drafting and filing of the counter affidavit, miscellaneous charges towards typing, photocopying, court fee etc.
55. The other factor which should not be forgotten while imposing costs is for how long the defendants or respondents were compelled to contest and defend the litigation in various courts. The appellants in the instant case have harassed the respondents to the hilt for four decades in a totally frivolous and dishonest litigations in various courts. The appellants have also wasted judicial time of the various courts for the last 40 years.
56. On consideration of totality of the facts and circumstances of this case, we do not find any infirmity in the well reasoned impugned order/judgment. These appeals are consequently dismissed with costs, which we quantify as Rs. 2,00,000/ (Rupees Two Lakhs only).
We are imposing the costs not out of anguish but by 13/15 National Highway Authority vs. O P Chopra following the fundamental principle that wrongdoers should not get benefit out of frivolous litigations.
20. In Maria Margarida Sequeria Fernandes v. Erasmo Jack De Sequria (supra) the Supreme Court held that heavy costs and prosecutions should be ordered in cases of false claims and defences. The Supreme Court held as under: "85........This court in a recent judgment in Ramrameshwari Devi and Ors. (supra) aptly observed at page 266 that unless wrongdoers are denied profit from frivolous litigations, it would be difficult to prevent it. In order to curb uncalled for and frivolous litigations, the Court have to ensure that there is no incentive or motive for uncalled for litigation. It is a matter of common experience that Court's otherwise scarce time is consumed or more appropriately, wasted in a large number of uncalled for cases. In this very judgment, the Court provided that this problem can be solved or at least be minimized if exemplary cost is imposed for instituting frivolous litigation. The Court observed at pages 267268 that imposition of actual, realistic or proper costs and /or ordering prosecution in appropriate cases would go a long way in controlling the tendency of introducing false pleadings and forged and fabricated documents by the litigants. Imposition of heavy costs would also control unnecessary adjournments by the parties. In appropriate case, the Courts may consider ordering prosecution otherwise it may not be possible to maintain purity and sanctity of judicial proceedings.
21. Reliance is also placed upon the judgment passed by the Hon'ble Delhi High Court in the case titled as "Hardip Kaur vs. Kailash & others" in RFA no. 648/2006, wherein it as held :
"25. False claims and defences are really serious problems with real estate litigation, predominantly 14/15 National Highway Authority vs. O P Chopra because of ever escalating prices of the real estate. Litigation pertaining to valuable real estate properties is dragged on by unscrupulous litigants in the hope that the other party will tire out and ultimately would settle with them by paying a huge amount. It is a matter of common experience that court's otherwise scarce time is consumed or more appropriately, wasted in a large number of uncalled for cases."
"26.It is the duty of the courts to see that such wrong doers are discouraged at every step and even if they succeed in prolonging the litigation, ultimately they must suffer the costs of all these years long litigation. Imposition of actual, realistic or proper costs and/or ordering prosecution in appropriate cases would go a long way in controlling the tendency of filing false cases."
22. Therefore, the present application is allowed. The plaint is rejected. Cost of Rs. 20,000/ is imposed upon the plaintiff out of which 50% be paid to the DLSA Fund (Central).
Announced in Open Court today, i.e. 7th of December, 2012.
(PANKAJ GUPTA)
Addl. District Judge (Central07)
Tis Hazari Courts: Delhi
15/15 National Highway Authority vs. O P Chopra