Madhya Pradesh High Court
Saluja Constructions vs State Of M.P. And Anr. on 22 March, 2002
Equivalent citations: 2002(3)MPHT553
Author: Dipak Misra
Bench: Dipak Misra
ORDER Dipak Misra, J.
1. In this writ petition preferred under Article 227 of the Constitution of India the petitioner has called in question the defensibility of the order dated 21-8-2001, Annexure P-1, passed by the Madhya Pradesh Arbitration Tribunal, Bhopal (in short 'the Tribunal') whereby the Tribunal has issued directions to the petitioner to pay the respondents-State a sum of Rs. 6,50,000/- along with interest and has also issued certain further ancillary directions.
2. The facts as have been adumbrated in the writ petition are that the petitioner instituted a Reference Case No. 104/89 before the Tribunal under the provisions of Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 (hereinafter referred to as 'the Act') whereby the Tribunal vide order dated 7-9-1995 passed an award in favour of the petitioner for grant of Rs. 11,79,166/-which included the claim of overhead charges of Rs. 6 lakhs and loss on profit of Rs. 50,000/-. Against the said award the petitioner preferred a Civil Revision No. 2136/95 before this Court. In the civil revision this Court vide order dated 7-9-1999 remanded the matter to the Tribunal with certain guidelines. In the meantime, the petitioner in execution of the award had recovered the whole amount with interest. Because of this situation the respondents filed an application under Section 17-A of the Act for refund of the amount. The said application was opposed by the petitioner on the ground that the High Court had not overturned the order of the Tribunal in entirety and in any case, the Tribunal had no jurisdiction to entertain the petition of this nature. The Tribunal on consideration of the provision enshrined under Section 17-A of the Act and taking note of certain decisions came to hold that it has the power of restitution as envisaged under Section 144 of the Code of Civil Procedure (in short 'the CPC') and further expressed the view that the petitioner cannot be allowed to retain any amount which was received by him under the award which has been set aside by the High Court. In that backdrop the Tribunal issued directions in Paragraph No. 11, which are reproduced below:--
"(a) Rs. 6,50,000/- along with interest which has been realised by the petitioner from the respondents (the petitioner has realised interest on the amount of Rs. 6,50,000/- @ 12% p.a. from the date of filing of the reference petition i.e., 27-11-1989 till the date of realisation). The petitioner has realised this amount from the respondent-State as per award dated 7-9-1995.
(b) Petitioner is further directed to pay interest @ 12% p.a. on the total amount of Rs. 6,50,000/- and the amount of interest which has been realised by the petitioner as shown in aforesaid para (a) from the date of actual realisation to the date of actual refund under this order to the respondents.
(c) The petitioner to refund the aforesaid amount within two months from today, otherwise, respondent-State of M.P. may file execution proceedings before the proper forum."
3. After the said order was passed the petitioner filed an interlocutory application for recall of the order passed by the Tribunal. The Tribunal considering the totality of circumstances and discussing the law arrived at the conclusion that the Tribunal had no jurisdiction to quash the order dated 21-8-2001.
4. Assailing the aforesaid order, it is submitted by Mr. V.R. Rao, learned Counsel for the petitioner that the Tribunal has no power under Section 144 of the CPC for directing restitution and the inherent power which has been engrafted under Section 17-A of the Act does not enable the Tribunal to pass an order of this nature. It is further proponed by him that assuming the Tribunal has jurisdiction to entertain a petition of this nature the order is absolutely vulnerable inasmuch as the principles which are inherent in the concept of restitution, are not attracted in the case at hand, inasmuch as the High Court had not set aside the award but had remanded the matter for reconsideration as it felt the petitioner was entitled to a higher sum. It is further urged by him, it was the petitioner who being dissatisfied with the award passed by the Tribunal, had approached this Court in civil revision and hence, the order passed at his instance cannot work in a detrimental manner affecting the interest of the petitioner.
5. Mr. R.S. Jha, learned Deputy Advocate General for the State combatting the aforesaid submissions of the learned Counsel for the petitioner, submitted that a Tribunal has the jurisdiction to pass an order of restitution as conceived of under Section 144 of the CPC inasmuch as it has inherent power to pass such orders as may be necessary in the ends of justice or to prevent abuse of the process of Tribunal. It is further proponed by him that if the order of the High Court is scrutinised in proper perspective, it becomes crystal clear that the benefit which had already enured to the petitioner was put to the naught and, therefore, the petitioner cannot be allowed to retain the amount at the cost of the State. To bolster the aforesaid submission he has placed heavy reliance on the decision rendered in the case of Mrs. Kavita Trehan and Anr. v. Balsam Hygiene Products Ltd., AIR 1995 SC 441.
6. From the aforesaid contentions which have been putforth before this Court two important issues emerge, namely, whether the Tribunal has the power of restitution; and whether such power could have been utilised in the case at hand ? I shall advert to the first issue as on that the learned Counsel for the parties have founded their submissions. The Tribunal has been constituted under the Act to adjudicate certain categories of disputes. The lis in respect of the said disputes has been taken out of the jurisdiction of the Civil Court. Section 144 of the CPC deals with an application for restitution. The said provision reads as under :--
"144. Application for restitution.-- (1) Where and in so far as a decree or an order is [varied or reversed in any appeal, revision or other proceeding or is set aside or modified in any suit instituted for the purpose, the Court which passed the decree or order] shall on the application of any party entitled to any benefit by way of restitution or otherwise, cause such restitution to be made as will, so far as may be, place the parties in the position which they would have occupied but for such decree or order or [such part thereof as has been varied, reversed, set aside or modified]; and, for this purpose, the Court may make any orders, including orders for the refund of costs and for the payment of interest, damages, compensation and mesne profits, which are properly [consequential on such variation, reversal, setting aside or modification of the decree or order].
Explanation:-- For the purposes of sub-section (1), the expression "Court which passed the decree or order" shall be deemed to include--
(a) where the decree or order has been varied or reversed in exercise of appellate or revisional jurisdiction, the Court of first instance;
(b) where the decree or order has been set aside by a separate suit, the Court of first instance which passed such decree or order;
(c) where the Court of first instance has ceased to exist or has ceased to have jurisdiction to execute it, the Court which, if the suit wherein the decree or order was passed were instituted at the time of making the application for restitution under this section, would have jurisdiction to try such suit.
(2) No suit shall be instituted for the purpose of obtaining any restitution of other relief which could be obtained by application under Sub-section (1)."
7. Submission of Mr. Rao is that the said provision relates to Courts and, therefore, the Tribunal could not have exercised the said power.
Per contra, Mr. Jha, learned Deputy Advocate General for the State has placed heavy reliance on Section 17-A of the Act. The said provision reads as under:--
"17-A. Inherent powers.-- Nothing in this Act shall be deemed to limit or otherwise affect the inherent powers of the Tribunal to make such order as may be necessary for the ends of justice or to prevent abuse of the process of the Tribunal."
8. The question that falls for consideration is whether reliance on Section 17-A of the Act is justified and whether the Tribunal can exercise jurisdiction in the obtaining fact situation. It is true, there is no express provision in the Act for refund of the amount. The Act is silent on this score. Section 7 of the Act reads as under :--
"7. Reference to Tribunal.-- (1) Either party to a works contract shall irrespective of the fact whether the agreement contains an arbitration clause or not, refer in writing the dispute to the Tribunal.
(2) Such reference shall be drawn up in such form as may be prescribed.
(3) The reference shall be accompanied by such fee as may be prescribed.
(4) Every reference shall be accompanied by such documents or other evidence and by such other fees for service or execution of processes as may be prescribed.
(5) On receipt of the reference under Sub-section (1), if the Tribunal is satisfied that the reference is a fit case for adjudication, it may summarily reject the reference after recording reasons therefor.]"
The said provision has to be read conjointly with Section 17-A of the Act. Section 17-A of the Act deals with inherent powers. The said provision has been widely worded. It not only says about that inherent powers of the Tribunal but also confers jurisdiction on the Tribunal to pass order in the ends of justice and to prevent abuse of the process of the Tribunal. The terms "ends of justice" are of wide import. The question of restitution arose in the case of M/s. Kavita Trehan (supra). In the said case their Lordships referred to the decision rendered in the case of Padam Sen v. Slate of U.R. AIR 1961 SC 218, and Section 151 of the CPC and eventually in Paragraph Nos. 13 and 14 held as under :--
"13. The law of restitution encompasses all claims founded upon the principle of unjust enrichment. 'Restitutionary claims are to be found in equity as well as at law'. Restitutionary law has many branches. The law of quasi-contract is "that part of restitution which stems from the common indebitatus counts for money had and received and for money paid, and from quantum meruit and quantum valebat claims." (See "The Law of Restitution" - Goff & Jones, 4th Edn. Page 3). Halsbury's Laws of England, 4th Edn. Page 434 states :--
"Common Law. Any civilised system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit, that is, to prevent a man from retaining the money of, or some benefit derived from, another which it is against conscience that he should keep. Such remedies in English law are generically different from remedies in contract on in tort, and are now recognised to fall within a third category of the common law which has been called quasi contract or restitution.
For historical reasons, quasi contract has traditionally been treated as part of, or together with, the law of contract. Yet independently, equity has also developed principles which are aimed at providing a remedy for unjustifiable enrichment. It may be that today these two strands are in the law, which may be termed "restitution".
Recently the House of Lords had occasion to examine some of these principles in Woolwich Equoitable Building Society v. Inland Revenue Commissioners, 1993 AC 70.
14. In regard to the law of restoration of loss or damage caused pursuant to judicial order, the Privy Council in Alexander Rodger Charles Carnie v. The Comploir D 'Escompte De Paris, (1869-71) 3 AC 465 at 475 stated :
"..... one of the first and highest duties of all Courts is to take care that the act of the Court does no injury to any of the suitors, and when the expression "the act of the Court" is used, it does not mean merely the act of the Primary Court, or of any intermediate Court of appeal, but the act of the Court as a whole, from the lowest Court which entertains jurisdiction over the matter upto the highest Court which finally dispose of the case."
In Jai Berham v. Kedar Nath Marwari, AIR 1922 PC 269 at 271, the Judicial Committee referring to the above passage with approval added:
"It is the duty of the Court under Section 144 of the Civil Procedure Code to "place the parties in the position which they would have occupied, but for such decree or such part thereof as has been varied or reversed."
Nor indeed docs this duty or jurisdiction arise merely under the said section. It is inherent in the general jurisdiction of the Court to act rightly and fairly according to the circumstances towards all parties involved.
In Binayak Swain v. Ramesh Chandra Panigrahi, (1966) 3 SCR 24 at 27 : (AIR 1966 SC 948 at p. 950), this Court stated the principle thus :--
"...... The principle of the doctrine of restitution is that on the reversal of a decree, the law imposes an obligation on the party to the suit who received the benefit of the erroneous decree to make restitution to the other party for what he has lost. This obligation arises automatically on the reversal or modification of the decree and necessarily carries with it the right to restitution of all that has been done under the erroneous decree; and the Court in making restitution is bound to restore the parties, so far as they can be restored, to the same position they were in at the time when the Court by its erroneous action had displaced them from ....."
9. In this context, I may also refer to the decision rendered in the case of Union of India and Anr. v. Paras Laminates (P) Ltd., (1990) 4 SCC 453, wherein in Paragraph No. 8 their Lordships expressed the view as under :--
"8. There is no doubt that the Tribunal functions as a Court within the limits of jurisdiction, it has all the powers conferred expressly by the statute. Furthermore, being a judicially body, it has all those incidental and ancillary powers which are necessary to make fully effective the express grant of statutory powers. Certain powers are recognised as incidental and ancillary, not because they are inherent in the Tribunal, nor because its jurisdiction is plenary, but because it is the legislative intent that the power which is expressly granted in the assigned field of jurisdiction is efficaciously and meaningfully exercised. The powers of the Tribunal are no doubt limited. Its area of jurisdiction is clearly defined, but within the bounds of its jurisdiction, it has all the powers expressly and impliedly granted. The implied grant is, of course, limited by the express grant and, therefore, it can only be such powers as are truly incidental and ancillary for doing all such acts or employing all such means as are reasonably necessary to make the grant effective. As stated in Maxwell on Interpretation of Statutes (11th Edn.) "where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution."
10. In this context I may also profitably refer to the decision rendered in the case of Lal Bhagwat Singh v. Sri Kishen Das, AIR 1953 SC136, wherein in Paragraph No. 14 their Lordships held as under :--
"The doctrine of restitution is that on the reversal of a judgment the law raises an obligation on the party to the record, who received the benefit of the erroneous judgment, to make restitution to the other party for what he had lost and it is the duty of the Court to enforce that obligation unless it is shown that restitution would be clearly contrary to the interests of justice."
11. Submission of Mr. Rao is that the judgments are applicable to the Civil Courts and will not engulf in its ambit a Tribunal. The aforesaid submission, in my considered view, is of no consequence inasmuch as in the case of Paras Laminates Pvt. Ltd. (supra) their Lordships have held in a categorical manner that the Tribunal [in that case it was Customs, Excise and Gold (Control) Appellate Tribunal was referred to] functions as a Court within the limit of its jurisdiction and the Tribunal being a judicial body, it has all those incidental and ancillary powers which are necessary to make fully effective the grant of statutory powers.
12. In view of the aforesaid law laid down by the Apex Court and considering the total scheme of the Act and specially in view of Section 17-A of the Act. I have no hesitation in holding that the Tribunal has power of restitution.
13. The next question that falls for consideration is whether in the present case, the ingredients warranting power of restitulion had been satisfied. As has been indicated earlier the Tribunal had passed the award in the reference case of the petitioner who had approached this Court in a civil revision. The Civil Revision was disposed of by a Division Bench judgment of this Court authored by D.M. Dharmadhikari, J. (as his Lordship then was). The Division Bench addressed itself to the grievance of the claimant-petitioner and took note of the fact that on the head of claim relating to overhead expenses, the Tribunal had directed payment of a sum of Rs. 6 lakhs and also took note of the fact Rs. 50,000/- was awarded with regard to loss of profit. It was contended before the Bench that a higher amount of damage and compensation should have been paid and there was no justification on the part of the Tribunal to hold the Department responsible for a delay of only 14 months. It was urged before the Division Bench that due to fundamental breach committed by the Department additional 37 months were required to complete the contract and, therefore, the contractor was entitled to be paid damages or compensation for the entire 37 months delay and not for 14 months delay. Considering the submission of the learned Counsel for the petitioner and the learned Counsel for the State the Division Bench in Paragraph Nos. 10 and 11 held as under:--
"10. We have gone through the reasoning of the Tribunal in Paragraph 10 of the award on the question of extent of liability of the department for delay caused in making available the work site. According to the Tribunal the contractor had completed the work in 37 additional months but for the entire 37 months the department cannot be held liable. The extent of liability of the department is limited to the period of delay caused solely on account of the faults, omissions or errors committed by the department in respect of matter the fulfilment of which was on the department. In limiting the liability for delay of the department to 14 months, the Tribunal has also taken into consideration the fact that the contractor would not have carried out the construction work in all parts of the work site simultaneously. The contractor was also expected to execute the work in phases and not simultaneously. The work site was made available to the contractor in phases as and when the work of clearance of forest was completed in parts by the forest department. The last part of the work site was handed over to the contractor in 8-8-94 and by that time, keeping into consideration the progress of work of the contractor on the part of the site available, the Tribunal has come to a conclusion that for entire 37 months required to complete the work, the department cannot be held liable. The liability of department for delay on its part is found to be limited to the period between the due date of completion of the contract and the date on which the full work site was made available to him. Taking into consideration the progress of work of the contractor on the basis of his payment of 18th running bill the delay caused on account of the defaults on the part of the department has been worked out. On this aspect the Tribunal has given consideration to the technical knowledge available to it. We find no error in the award of the Tribunal in that regard. The liability of the department for delay has to be ascertained with due regard to the working capacity of the contractor for the quantum of work awarded to him. We find no ground to disturb the finding reached by the Tribunal that there was liability of the department for delay only to the extent of 14 months and not for 37 months which was the total period taken by the contractor to complete the work.
11. The next ground urged by the learned Counsel on behalf of the contractor is that the Tribunal committed a gross error of calculation in arriving at a figure of Rs. 6,00,000/- only as compensation awardable towards overhead expenses. Referring to the calculation for arriving at figure of overhead expenses contained in Paragraph 22 of the award it is urged that having arrived at the serial No. 13 the amount of Rs. 31,45,600/- as the actual amount of overhead expenses payable to the contractor, there was no justification to reduce the overhead expenses on the ground that in the claim petition the contractor had limited his claim to Rs. 26,72,000/- for purposes of Court fees. In the same respect it is submitted that there was no justification to reduce the amount by 50% and then work out overhead expenses at 45% being the extent of delay for which the department was held liable."
Thereafter in Paragraph No. 14 their Lordships expressed the view as under:--
"Serial No. 13 shows the figure of Rs. 31.456 lacs. In serial No. 14 (as shown above) despite the above calculation of Rs. 31.466 lacs, the awardable amount is calculated on the basis of claim on this head restricted by the contractor in his petition for purposes of Court fees to Rs. 26.72 lacs. From serial No. 15 it appears that this amount was further reduced by 50% as the claim made of 26.72 lacs by the petitioner was a consolidated claim for overhead expenses and loss of profit. The 50% amount as claimed (13.36 lacs) is further reduced to 45% which was held to be the extent of liability for delay on the part of the department. Thus in round figure a sum of Rs. 6,00,000/- has been awarded. There is great force in the contention advanced on behalf of the contractor that the calculation of quantum of compensation on this head should have been made on the basis of figure of compensation towards overhead work site out up to serial No. 23 i.e., 31.456 lacs. Even if the calculation would have been made on that basis, the total awardable amount would still have been less than the amount of Rs. 26.72 lacs claimed in the petition and on which the Court fees was paid. We find also great merit in the submission made that the figure of Rs. 31,465 lacs arrived at on the head of loss of profit should have been reduced by 45% being the extent of delay attributable to the department Calculating thus the figure works out to Rs. 14,16,640/-. This should have been the correct amount on the consolidated claim of overhead expenses and loss of profit."
14. In this backdrop the Court directed in Paragraph 25, which I may profitably quote:--
"25. In the interest of justice, in our opinion the case deserves to be remanded to the Tribunal to allow the parties to lead evidence and produce material in relation to the consolidated claim. The Tribunal giving the opportunities to the parties shall adjudicate afresh the claim of the contractor towards overhead expenses and loss of profit. The remaining part of the award passed by the Tribunal in relation to other claims is hereby confirmed and shall remain undisturbed. Let the Tribunal after service of due notice to the parties and after permitting them to lead evidence take a fresh decision only on the above mentioned head of claim of the contractor towards overhead expenses and loss of profit. The record of the Tribunal shall forthwith be returned. In the circumstances, the parties shall bear their own costs."
15. On a perusal of the aforesaid findings, there remains no scintilla of doubt that the amount granted in favour of the petitioner was never set aside being not payable to him. On the contrary this Court held that he is entitled to more and the Tribunal has erred by awarding the less sum to the petitioner. Thus, it is not a case where an award has been "over-turned" and the contractor has availed the money in execution and is bound to refund and, therefore, the doctrine of restitution has to be made applicable. On the contrary, the order of this Court should be read as a whole and not in parts. It is not exactly in the realm of open remand. The Tribunal has fallen into gross error by not considering the case of the claimant in proper perspective. Thus, the original awarded sum, in my considered view, has not been disturbed. The same remains as it is.
Mr. Jha, learned Deputy Advocate General for the State has given immense emphasis on the word 'afresh' in Paragraph 25 of the order. The use of the word 'afresh' does not change the complexion of the entire order as it has to be understood in the context and not dehors the context. I am conscious I am not interpreting a statute but while understanding and appreciating a judgment a singular word or single sentence cannot be allowed to govern. It must be understood in proper perspective keeping in view the findings recorded in previous paragraphs and directions given by it. Apart from the above, it cannot be lost sight that it was the petitioner who had approached this Court and not the State Government.
16. In view of my preceding analysis, I find the orders passed by the Tribunal are susceptible and they are accordingly quashed. However, in the peculiar facts and circumstances of the case there shall be no order as to costs.