Calcutta High Court
Smt. Mita Mitra vs Satyanarayan Kamal Kumar And Anr. on 9 March, 1990
Equivalent citations: (1991)1CALLT182(HC)
JUDGMENT Shyamal Kumar Sen, J.
1. The material facts leading to all the three appliccations taken up together at the instance of the parties are inter alia as follows : On 1st September, 1983 Hire Purchase Agreement was entered into in respect of one new TDV chasis. Under the said agreement the hirer agreed to pay apart from the initial hire of Rs. 54,608/-, a sum of Rs. 1,68,000/ in 24 equal hires of Rs. 7,000/- each commencing from 25th September, 1983, There was also an arbitration agreement entered into on the same day between the parties. On December 1, 1983 an affidavit was affirmed by Smt. Mita Mitra before the Judicial Magistrate, First Class, Alipore, 24Parganas confirming the execution of the Hire Purchase Agreement and the arbitration agreement and the amount payable under the said agreement. On December 11, 1984 the said hire purchase agreement was terminated by a letter issued by Meharia & Company, Advocates for the financier. On 12th December, 1984 financier referred the disputes to the arbitration of Mr. S. IC. Laik, Advocate. On December 19, 1984 an application under Section 41 of the Arbitration Act, 1940 was moved and an ad interim order was made appointing Receiver. On December 28, 1984 the hirer Smt. Mita Mitra sent a letter acknowledging receipt of the said letter dated 11th December 1984 and assured that the amount would be paid. On February 6, 1985 ad interim order passed on 19th December, 1984 was confirmed on notice to the hirer and the guarantor. On 8th April, 1985 the arbitrator passed his award. Possession of the said motor vehicle was obtained with the help of the Officer-in-Charge, Ranaghat Police Station. On June 5, 1985 consent decree was passed according to the terms of settlement. The terms of settlement was also signed by Chinmoy Mitra, husband of Mrs. Mita Mitra and one Himanshu Ranjan Acharya as the sureties under which a sum of Rs. 1,97,520/- was to be paid in 30 equal instalment of Rs. 6,584/- each commencing from 10th June, 1985 inclusive of interest in full and final settlement. Pursuant to the terms of the settlement Chinmoy Mitra, husband of Smt. Mita Mitra obtained possession of the motor vehicle from the Officerin-Charge, Ranghat Police Station. On 21st January, 1987 in view of the default made the motor vehicle was again taken possession of by the authorised agent of the Receiver with the help of Officer-in-Charge, Narkeldanga Police Station. On February 23, 1987 consent decree passed on 5th June, 1985 was modified by consent of the parties under which it was agreed that the respondents would pay a sum of Rs. 1,73,000/- in full and final satisfaction of the claim. The said terms of settlement was signed by Smt. Mita Mitra, Chinmoy Mitra, husband of Smt. Mitra and one Chitan Kumar Tiwari as sureties'.'Pursuant to the said terms of settlement Smt. Mita Mitra obtained possession of the motor vehicle upon payment of Rs. 10,000/-. On August 19, 1987 the said motor vehicle was again taken possession of with the help of Officer-in-Charge, Ranaghat Police Station in view of the default made by the respondents. On 27th February, 1987 Smt. Mita Mitra paid a sum of Rs. 5,275/- out of balance sum of Rs. 1,63,000/- payable in terms of the consent order as modified on 23rd February, 1987. On 2nd September 1987 an application was moved by Smt. Mita Mitra for payment of Rs. 1,57,000/- in easy instalments and for release of the motor vehicle. No notice of the said application has been served on the sureties. On 16th September, 1987 an order was passed by S. K. Hazari, J. on the application made by Smt. Mita Mitra to pay the admitted sum of Rs. 1,57,000/- in monthly instalment of Rs. 10,000/- immediately and thereafter at the rate of Rs. 3,000/- per month for six months and thereafter at the rate of Rs. 4,000/- per month till the entire amount is fully paid. On 17th April, 1987 Mr. P. K. Roy, Advocate addressed a letter to Meharia & Company, Advocate for the financier requesting the said Advocate to accept payment of Rs. 10,000/- and release the motor vehicle to Chinmoy Mitra, the authorised representative of Smt. Mita Mitra. On 19th September, 1987 the motor vehicle was released to Smt. Mita Mitra by the Receiver. On 23rd February, 1988 an order was made directing payment to be made by cash or bank draft or cheque payable at Calcutta. Between 16th September 1987 and July 20, 1988 the respondents paid an aggregate sum of Rs. 36,000/-. On 16th August, 1988 the petitioner made an application in the above Award Case inter alia for the following reliefs :
"(a) That the order dated 16th September, 1987 passed by the Hon'ble Mr. Justice Sachi Kanta Hazari be modified as follows :
(b) That the balance amount of Rs. 1,20,500/- paid in 60 equal instalments first of such instalments to be paid on or before 15th September and thereafter by the 15th of each subsequent month ;
(c) an order of injunction be passed restraining the receiver Sashi Kanta Todi from taking possession of the vehicle and/or to dispose of and/or to deal with the vehicle in any manner till the disposal of this application ;
(d) an ad interim order in terms of prayer (c) ;
(e) each party to bear their respective costs ;
(f) to pass such further and/or other order or orders as Your Lordships may seem fit and proper."
2. The said application was moved ex parte whereupon an order was passed by Sachi Kanta Hazari, J. on 16th August, 1988 to the following effect:
"The Court : The matter will appear on 22.8.1988. In the meantime Sri Sashi Kanta Todi Receiver is restrained from taking possession of the vehicle and/or deal with the vehicle which is now lying in possession with the hirer. Receiver and all parties to act on a signed copy of this order."
3. The said application was made by hirer for payment of Rs. 1,20,500/as admitted amount due. On 29th August, 1987 the said application made by the petitioner appeared as new motion before Sachi Kanta Hazari, J. when a prayer was made for vacating the ex parte ad interim order but the matter was adjourned till 12th September, 1988. Another application was moved under Section 36 of the Bengal Money Lenders Act before Sachi Kanta Hazari, J. on 6th September, 1988 whereupon an order was passed to the following effect :
"The Court: Heard Mr. Roy, learned Advocate appearing for the petitioner. It is submitted by Mr. Roy that there was a hire purchase agreement but in fact the petitioner took a loan from the Respondents for the purchase. ,of the truck under Section 36 of the Bengal Money Lenders Act, 1940 as amended by the West Bengal Money Lenders Amendment Act, 1985. Considering the facts and circumstances of this case and considering the urgency of the matter there will be an order in terms of prayer (e) of the petition. Returnable on 12.9.88. The petitioner is directed to serve a copy of the application forthwith.
All parties to act on a signed copy of the minutes of this order on the usual undertaking."
4. The said application appeared as new motion on 12th September, 1988 along with the other application which was already adjourned till that date. On 12th September, 1988 again the prayer was made for vacating the ad interim order but such prayer was not allowed. In the circumstances the respondent No. 1 firm preferred two separate appeals from the order dated 16th August, 1988 and from 5th September, 1988. Both the said appeals were disposed of by orders dated 20th September, 1988. The main order disposing one of such appeal is set out hercinbelow :
"There will be an order in terms of prayer (a) of the petition.
Mr. Sashi Kanta Todi, Receiver is discharged from further acting. In his place and stead Mr. Subrata Chatterjee an Advocate of this Court is appointed Receiver over the vehicle bearing registration No. WMK-9372. The Receiver will take possession of the vehicle and keep the same in a garage to be selected by him. Both the parties will be at liberty to offer garage and the receiver will select whichever is suitable for garaging the vehicle. The receiver will make an inventory of the vehicle before taking possession of the vehicle. The respondent is directed to produce the vehicle before the receiver on 22.9.88 at 10-30 a.m. at Babughat. The Receiver will continue to keep the vehicle in his possession till the disposal of the case pending in the court below. The initial remuneration of the receiver is fixed at 60 gms. to be paid by Mrs. Pal's client. All costs, charges and expenses of the receiver the garaging charges will also be borne by Mrs. Pal's client at the first instance. It is made clear that the trial court will be at liberty to proceed with the hearing of the case.
By consent of the parties, both the application and the appeal are treated as on day's list. The appeal and the application are disposed of by the above order.
All parties including the outgoing receiver and the incoming receiver arc to act on a signed copy of the minutes of this order on the usual undertaking."
5. In the other appeal also following order was passed on the same day :
"The Court: In view of the order passed in the application being Appeal No. of 1988. Award Case No. 240 of 1985 M/s. Satyanarayan Kamal Kumar v.. Smt. Mita Mitra and Ors., this day, no further order need be passed in this application."
On 29th September, 1988 review application was made by the hirer before the appeal court. On 30th September, 1988 direction upon the hirer was made to file an affidavit explaining his conduct regarding the condition of the vehicle. On 11th October, 1988 review application was dismissed by the appeal court. On 25th September, 1988 another application was made before the trial court for production of accounts, inspection of accounts and disallowing the claim of the petitioner and for other reliefs under Section 36 of the Bengal Money Lenders Act.
6. The question involved under the aforesaid circumstances is if the decree passed in terms of the award under the Arbitration Act is liable to be set aside and can be reopened under the Bengal Money Lenders Act and if the Section 36 of the Bengal Money Lenders Act is at all applicable in the instant case.
7. The learned Advocate for the petitioner submitted that under Section 36(1) of the Bengal Money Lenders Act the Court's power extends to reopening of decree and the fact that the decree was made by consent and that the amount was argeed upon one of no consequence. According to him the expression "transaction" in Section 36(1) of the Bengal Money Lenders Act includes decree as in the instant case and as such the decree can be reopened. In support of his contention the learned Advocate relied upon the judgment and decision in the case of Rukmanand Khaitan v. Jawala Dutt Lohia and Anr. . The learned Advocate also relied upon a judgment and decision in the case of Shyamsundar Bubna v. Manindra Nath Ghosh and Anr. reported in AIR 1967 Calcutta 257. It was decided in the aforesaid decision considering the real intention of the plaintiff in obtaining the hire purchase agreement was to secure the loan advanced to defendant No. 1. The transaction was merely a financing transaction and the defendant No. 1 was always and had been the owner of the car by right of purchase from Auto Distributors Limited the dealers even though he purchased the car with borrowed money and he had no further right in the car to acquire from the plaintiff. It was further held that the defendant No. 1 was only liable to pay the debt due to the plaintiff firm. In pith and substance the transaction was found to be merely a finan- cing transaction and the court observed that the same should not have been treated as a hire purchase agreement. It has been urged on behalf of the petitioner that in the instant case even though there is a hire purchase agreement the same should be treated as merely financing transaction and there is no reason why Section 36 of the Bengal Money Lenders Act should not be made applicable so as to reopen the decree passed in the instant case. In my opinion the judgment and decision in the case of Rukmanand Khaitan v. Jawctia Dutt Lohia and Anr. (Supra) cannot be of any assistance to the petitioner. The facts involved in the said judgment inter alia are that the plaintiffs/respondents had instituted a suit in the First Subordinate Judge's Court at Alipore, 24-Parganas against the defendant appellant being Title Suit No. 56 of 1973 under Section 36(6) (a) (i) of the Bengal Money Lenders Act, 1940. The learned Subordinate Judge decreed the said suit in the preliminary form and also ordered that the decree passed by this court in terms of arbitration award on 14th March, 1973 on consent of parties and the transactions of loan between them be taken and that final decree would be made upon taking such accounts. Being aggrieved the defendant preferred first appeal to this court. Undisputed facts involved in the said appeal before this court were that on diverse dates between 19th September 3962 and 31st March 1969 the defendant Rukmanand Khaitan, who was an Insurance Agent, had advanced and paid an aggregate sum of Rs. 24,151.58 P., towards premia of the insurance polices held by the plaintiffs and other members of their family. The defendant, Rukmanand Khaitan, had further claimed that he had lent and advanced for commercial purposes to the plaintiffs another sum of Rs. 30,000/- which carried interest at the rate of 1 1/4% per month compoundable at the close of the year upto March, 1966, and thereafter at the rate of 14% per month compoundable at the close of the year. By an agreement dated 18th March 1970 made between the plaintiffs and the defendant, the differences and disputes between them in respect of the said monetary transactions were referred for decision to the sole arbitration of one Sri Ram Gopal Agarwalla. The said Ram Gopal Agarwalla, the Arbitrator, by his award dated December 1970 directed that Jawala Dutt Lohia and Jewan Kumar Lohia, the plaintiffs, would jointly and severally pay Rukmanand Khaitan, the defendant, a sum of Rs. 95,000/- with interest at the rate of 9 % per annum from the date of the award till payment. Pursuant to the requisition made by Rukmanand Khaitan, on 9th January 1971 the said Arbitrator has filed his Award in this High Court (Award Case No. 18/1971). The plaintiff respondents filed in this court an application under Sections 30 and 33 of the Arbitration Act, 1940, for setting aside the said award, inter alia, on the grotrad that the learned Arbitrator has misconducted himself in the proceedings. Si.'K. Roy Chowdhury, J., by his judgment delivered on 29th June, 1972, had dismissed the said application under Sections 30 and 33 of the Arbitration Act, 1940. The learned Judge, inter alia, held that there was no error apparent on the face of the record and no ground had been made for setting aside the same. It would appear from the judgment of the learned Judge that at the time of the hearing of the application for setting aside the said award, the present plaintiffs had mainly urged that the learned Arbitrator had committed an error apparent on the face of the record by allowing the defendants' claim which according to the plaintiffs was already barred by limitation. On August 18, 1972 the present plaintiffs respondents had preferred Appeal from Original Order No. 213 of 1972 against the aforesaid order of S. K. Roy Chowdhury, J., dated June 29, 1972, dismissing their aforesaid application under Sections 30 and 33 of the Arbitration Act for setting aside and declaring that the Award dated December 5, 1970 was invalid. They however, did not present any appeal against the judgment and decree of S. K. Roy Chowdhury, J., dated 10th July, 1972 in Award Case No. 18 of 1971. On March 13,1973 S. K. Mukherjea and S. C. Deb, JJ., by consent of parties, disposed of the said Appeal No. 213 of 1972. The order appealed against was confirmed and it was recorded that if the appellants, Jawala Dutt Lohia and Jiwan Kumar Lohia (meaning the present plaintiff), paid to Rukmanand Khaitan, the decree holder in the said appeal (the present defendant) a total sum of Rs. 1,05,000/- together with interest as stipulated thereunder in the manner set out in the said order, the decree holder would accept the same in full satisfaction of the decretal amount. The sum of Rs. 1,05,000/- with interest was payable by six instalments. The Compromise Decree further recorded if the said instalments or any of them or part thereof or any interest thereupon be not paid, then the decree holder would be entitled to execute the decree dated 10th July, 1972 for the balance amount then remaining. On 31st May, 1973 as already stated, the plaintiffs filed the aforesaid Title Suit No. 56 of 1973 under Section 36(6)(a)(i) of the BML Act, 1940 in the First Court of the Sub-ordinate Judge, Alipore, 24-Parganas, inter alia, for reopening the loan transactions and the decree made between them, for taking accounts between the parties, to make a declaration that all liabilities of the plaintiffs in respect of the loan stood fully discharged by virtue of the payments already made by them and also to direct the defendant to re-pay the plaintiffs a sum of Rs. 10,848.42p., allegedly paid in excess. Some of the averments made in the plaint of their suit were not appropriate to a proceeding under Section 36 of the BML Act because the plaintiffs had purported to deny that apart from Rs. 24,151.51p., which was advanced towards premia of the plaintiffs' insurance policies they paid for them any other sum. In paragraph 7 of the said judgment at page 118 the Division Bench observed as follows :
"The plaintiffs in their plaint of Title Suit No. 56 of 1973 filed in the First Subordinate Judge's Court, Alipore did not mention that after their application under Section 30 of the Arbitration Act was dismissed on 10th July, 1972, S. K. Roy Chowdhury, J., had passed his judgment upon the aforesaid Arbitration Award and decree had followed. Their plaint in Title Suit No. 56 of 1973 did not also contain any specific prayer for setting aside either the award or the said judgment and decree passed upon it on 10th July, 1972. The learned Subordinate Judge by preliminary decree has purported to direct that the decree dated 13th March, 1973 passed in Appeal No. 213 of 1972 be reopened and accounts be taken. We have already pointed out that the Division Bench by their Judgment and decree dated 13th March, 1973 had affirmed' the order of S. K. Roy Chowdhury, J. dismissing the plaintiffs' application under Section 30 of the Arbitration Act, but by consent of parties, the Division Bench had granted the plaintiffs six instalments to pay the sum of Rs. 1,05,000/- with interest which was due under the award passed by Ram Gopal Agarwalla. In case of default in payment, the decree holder (the defendant herein) was given liberty to execute the decree upon award passed against the present plaintiffs. The preliminary decree passed by the court below for reopening only the said decree dated 13th March, 1973 was in appropriate because the learned Subordinate Judge has not granted the plaintiffs any relief in respect of the judgment and decree dated 10th July, 1972 passed upon the said award. Even if the said judgment and decree passed by the court below is maintained, the award which was made Rule of the Court would remain operative and binding upon the parties."
8. Under such circumstances it cannot be said that the reopening as contemplated under Section 36 of the Bengal Money Lenders Act would also apply to a decree passed in terms of the award under the Arbitration Act.
9. From the facts already noted it appears that on June 5, 1984 there was a consent decree on the basis of terms of settlement filed by the parties. On February 23, 1987 the said consent decree passed on 5th June, 1985 was modified by consent of the parties. It is on record that after the consent decree was passed on June 5, 1985 pursuant to the terms of settlement Chinmoy Mitra, husband of the petitioner obtained possession of the vehicle. Thereafter there was default in payment in terms of the consent decree and the Receiver took possession of the vehicle and after the consent decree was further modified allowing extension of time to make payment with the consent of the parties on February 23, 1987. Pursuant to the said terms the petitioner obtained possession of the motor vehicle upon payment of Rs. 10,000/-. There cannot be any dispute that the parties accepted the said consent decree and gave effect to the same and obtained further orders from the court on the basis of such terms which all along went to the advantage of the petitioner. In any event, however, the Arbitration Act is a special procedure providing for a special machinery for passing of decree in terms of the award. Section 17 of the Arbitration Act, 1940 provides as follows :-
"Where the Court sees no cause to remit the award on any of the matters referred to arbitration for consideration or set aside the award, the Court shall, after the time for making application to set aside the award has expired, or such application having been made after refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow ; and no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the award."
10. In terms of the said section the court shall after the time for making the application to set aside the award has expired, or such application having been made after refusing it proceed to pronounce judgment according to the award and upon such judgment being pronounced decree shall follow. The section presupposes, therefore, that in the event no application is made within the period stipulated the decree will follow as a matter of course in terms of the award. The court has, therefore, no option left but to pass a decree in terms of the award if no application is made for setting aside or for modification of the said award. Section 14 of the Arbitration Act provides for filing of the award by the arbitration which is as follows :
"(1) When the arbitrators or umpire have made their award they shall sign it and shall give notice in writing to parties of the making and signing thereof and the amount of fees and charges payable in respect of the arbitration award.
(2) The arbitrators or umpire shall, at the request of any party to the arbitration agreement or any person claiming under such party or if so directed by the Court and upon payment of the fees and charges due in respect of the arbitration and award any of the costs and charges of filing the award, cause the award or a signed copy of it, together with any depositions and documents which may have been taken and proved before them to be filed in Court shall thereupon give notice to the parties for the filing of the award.
(3) Where the arbitrators or umpire state a special case under clause (b) of Section 13, the Court, after giving notice to parties and hearing them, shall pronounce its opinion thereon and such opinion shall be added to, and shall form part of the award."
11. Section 15 of the Arbitration Act provides for power of court to modify the award which is as follows ;
"The Court may by order modify or correct an award-
(a) Where it appears that a part of the award is upon a matter not referred to arbitration and such part can be separated from the other part and does not affect the decision on the matter referred ; or
(b) Where the award is imperfect in form, or contains any obvious error which can be amended without affecting such decision ; or
(c) Where the award contains a clerical mistake or an error arising from an accidental slip or omission."
12. Section 16 provides for power of court to remit the award for reconsideration which is as' follows :
"(1) The Court may from time to time remit the award of any matter referred to arbitration to the arbitrators or umpire for reconsideration upon such terms at it thinks fit-
(a) Where the award has left undetermined any of the matters referred to arbitration, or where it determines any matter not referred to arbitration and such matter cannot be separated without effecting the determination of the matters referred ; or
(b) Where the award is so indefinite as to be incapable of execution ; or
(c) Where an objection to the legality of the award is apparent upon the fact of it.
(2) Where an award is remitted under sub-section (1), the Court shall fix the time within which the arbitrator or umpire shall submit his decision to the Court:
Provided that any time so fixed may be extended by subsequent order of the Court.
(3) An award remitted under sub-section (1) shall become void on the failure of the arbitrator or umpire to reconsider it and submit his decision within the time fixed."
13. In view of the privisions contained in the aforesaid sections viz, Sections 14, 15, 16 and 17 of the Arbitration Act there is no scope for reopening of the decree which has been passed in terms of the award under the Arbitration Act and is made a rule of court. In the event such an application is allowed that will make the aforesaid provisions in the Arbitration Act nugatory and will have no effect. It may be noted in this connection that the Arbitration Act is a complete code by itself. In terms of the provisions of the Arbitration Act which have already been noted, if no application is made for setting aside an award within the statutory period .fixed under the Act the court is bound to pass a decree in terms of the award. The decree cannot be reopened as prayed for without modifying the award accordingly.
14. As already noted the decree passed in terms of the award was by consent of the parties by filing terms of settlement in court signed by the parties. The said consent decree provided for payment by 30 equal instalments of Rs. 6,584/- each commencing from 10th June, 1985. The petitioner committed default and got extentions for payments and obtained possession of the motor vehicle upon payment of Rs. 10,000/- only. Subsequent orders were also obtained by consent of parties for extention of time to pay and for payment of the amount due by easy instalments as the petitioner defaulted in making payments. It may be noted in this connection that the petitioner made defaults in payments on various occasions and all these' defaults were waived and at no stage either before the arbitrator or before this court the petitioner raised the question that Money Lenders Act is applicable in the instant case. In the present case no doubt the impugned decree was a compromise decree. But such a decree binds the parties as much as a decree made in a contested proceeding. It has been held by a Division Bench Judgment of this Court in the case of Sadasukh Kabra v. Jugal Kishore Singh reported in 61 CWN 67 that a judgment by consent is as effective as estoppel between the parties as a judgment whereby the court exercises its mind in a contested case. A decree made on compromise so long as it as stands, operates as an estoppel and binds the parties in the same way as a contested decree and until and unless it is set aside in appropriate proceedings it remains fully alive and operative and cannot be treated as a nullity colaterally. Apart from that it is clear in the instant case that the petitioner has obtained advantage of the consent decree and in fact got the said consent decree modified by consent from time to time and both parties have acted on the basis of such modification and having acquiesced and acted upon such consent decree the parties have altered their position and it will, therefore, cause prejudice to the other party if such a decree is held to be a nullity at this stage and is set aside and allowed to be reopened. In the instant case as already noted liberal instalments have been granted from time to time and that was also extended to suit the convenience of the petitioner. It has also not been shown by the petitioner in this application that the petitioner could have obtained any better relief had the decree been reopened.
15. The application is accordingly dismissed with costs. The learned advocate for the petitioner prays for stay of operation of the order.
16. Status quo of the vehicle in question will continue until 31st March, 1990 and thereafter, the Receiver will hand over possession of the vehicle to the decree-holder in terms of the Decree dated 5th June, 1985 as modified by consent of the parties on 23rd February, 1987.
17. Under such circumstances, no stay is necessary and the prayer for stay is rejected.