Patna High Court
Union Of India (Uoi) vs B.C. Basu And Anr. on 30 August, 1982
Equivalent citations: AIR1983PAT25, 1982(30)BLJR506, AIR 1983 PATNA 25, (1983) 1 CIVLJ 268, (1982) BLJ 597, 1982 BLJR 506, (1982) PAT LJR 450, (1983) BLJ 439, 1982 BBCJ 541
JUDGMENT Hari Lal Agrawal, J.
1. This appeal by the Union of India as thej owner of the North East Frontier Rail-way Administration, is under Section 39 (1) (vi) of the Arbitration Act against the order of the Third Additional Subordinate Judge, Purnea, rejecting its objection to the award.
2. The relevant facts, briefly stated, are that the respondents entered into a contract on 28-8-1957 for handling of the goods of the Railways including their loading and unloading from railway wagons into other wagons at Katihar Railway Station under a written agreement containing an arbitration clause. This handling work was done by the respondents from September, 1957 to October, I960.
3. Some disputes arose between the parties with respect to certain payments and all efforts made by the respondents to refer the dispute to arbitration according to the terms of the agreement proved abortive. The respondents, therefore, filed an application under Section 8 of the Arbitration Act along with a copy of the agreement for reference to an Arbitrator for his award. The difference between the parties arose on account of the claim of the contractors for double handling of the goods byway of unloading and then loading again after an interval of 24 hours, as well as for extra rate for night handling of the goods. The Union of India appeared in the said proceeding and ultimately (1) Shri N. M. Ghose, an Advocate of the purnea Court and (2) Shri Jagdish Roy. Deputy, F. A. C. A./O/Pandu were appointed as Arbitrators. It further appears that on difference between the Arbitrators for appointment of the Umpire, the court appointed Shri S. K. Das, a retired Deputy Magistrate against a practising Advocate, as the Umpire. The Arbitrators submitted their award dated 12-7-1965 on 13-7-65. Objections were filed by the appellant for setting aside the award, inter alia, on the ground that the Arbitrators had misconducted themselves in law by going beyond their jurisdiction. The main attack on the award was that in the meeting held an 10-9-1959 no settlement or compromise was arrived at, but only some proposals of the contractors were taken into consideration without any commitment.
The contractors also filed certain objections as their entire claim was not accepted, but later on an objection in the shape of a rejoinder to the objections of the appellant was filed by them.
4. It appears that the Arbitrators based their decision mainly on the minutes of meeting held on 10-9-59 between the District Commercial Superintendent and some other officers of the Railway Administration on the one hand and some Directors of the contractor company on the other, wherein a provisional arrangement was arrived at that the Railway Administration would pay at the rate of Rs. 1,500/- per month to the contractor instead of Rs. 2,000/- for their claim for double operation and night handling etc. besides some other agreements.
It further appears from the perusal of the order of the court below that the appellant also took a plea that the settlement arrived at the meeting on 10-9-59 being in contravention of Article 299 of the Constitution of India, the same was not enforceable and inasmuch as that was the basis of the award, the award was fit to be set aside.
5. The trial court rejected all these objections and held that the appellant miserably failed to establish any misconduct on the part of the Arbitrators. It further held that the settlement arrived at in consequence of the discussions held in the meeting on 10-9-59 could not be said to be an independent contract and, therefore, the plea of the bar of Article 299 of the Constitution was entirely unfounded.
Yet another objection that was taken fa the court below and also before us was that part of the claim of the contractor, namely, from Feb. 1959 to Oct. 1960 had become time-barred and, therefore, the Arbitrators committed an illegality in allowing the claim for this period. This objection was rejected by the court below on the ground that no such objection was taken by the appellant before the Arbitrators "nor any sufficient material was brought to his notice in this regard at the time of hearing of the application." The learned Additional Subordinate Judge accordingly held that the award was fit to be accepted and ordered that it should be made the rule of the court. The Union of India has accordingly filed the present appeal.
6. Mr. S. R. Ghosal, appearing for the respondents, raised a preliminary objection to the maintainability of the appeal, namely, that the award having already been made a rule of the court and a decree having followed, this appeal was not maintainable as provided under Section 17 of the Arbitration Act In order to appreciate this argument of Mr. Ghosal, I would do better to quote Section 17 which runs as follows:--
"Where the Court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration Or to set aside the award, the court shall, after the time for making an 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 Ue from such decree except on the ground that it is in excess of, or not otherwise in accordance with the award."
From a perusal of Section 17 it is manifest that it contemplates two different situations (i) making of an order refusing to set aside an award, and (ii) pronouncement of the judgment according to the award upon which a decree follows. An award may be corrected or modified under Section 15. remitted tor reconsideration under Section 16 or set aside under Section 30. If no objections are filed by either party under any of these sections, or, if filed, having been disallowed, the court has to pronounce the judgment according to the award and the decree will follow the judgment. The section contemplates objections only under Sections 16 and 30. but it is obvious that if any objections are filed under Section 15 they will also have to be decided by the court.
Under Section 96 of the Civil P. C. all decrees are appealable as such. This section, however, makes a decree passed on the basis of an award, non-appealable unless it is (i) in excess of the award, or (ii) not in accordance with the award.
If the conditions set forth in the sections are fulfilled the court has no option but to pronounce the judgment in terms of the award. The arbitrator or the Umpire can be Judge of fact as well as of law. If he makes an error of law on the point of law submitted to him on which a court of law might have come to a different conclusion, that is no ground for setting aside the award. In other words the court cannot review the award and correct the mistake in its adjudication, unless objection to the legality of the award is apparent on the face of it (see Firm Madanlal Roshanlal Mahajan v. Hukumchand Mills Ltd., Indore : AIR 1967 SC 1030).
A Bench of this Court in Patel Engineering Co. Ltd. v. Indian Oil Corporation Ltd. (AIR 1975 Patna 212) has gone still further and held that. the question of construction of agreement, document or term of the contract is a question of law. In such cases, however the courts are not powerless to interfere if it appears from the award that the arbitrator has proceeded illegally in reaching its decision. On the award becoming a decree of the court the only remedy to the aggrieved party is to file an appeal against the decree on the only ground that the decree was in excess of, or not in accordance with the award. The award cannot be challenged in any other way. (See Khudiram Mahto v. Chandhu Charan Mahto, AIR 1916 Patna 190, Sadhu Singh v. Ramdeo Singh. AIR 1943 Patna 318 and Mishri Lal Yadav v. Par-meshwar Yadav, 1970 Pat LJR 730).
7. There appears to be some difference of opinion in the various High Courts as to whether an appeal would lie where a decree has been passed by the court without allowing the parties the full time (now 30 days) for filing objections against the award, but the Courts are unanimous that an order confirming award made before the expiry of the period for filing objection is without jurisdiction and a revision is certainly maintainable. The view of this Court that an appeal is not maintainable against such an order may be found in the case of Misri Lal Yadav (supra), and that a revision would lie as held in Parmeshwar Yadav v. Misri Lal Yadav (AIR 1974 Patna 67). However, it is not necessary for me, for the question arising in this case, to go into any detail in this regard, but this is manifest that Section 17 places limitations on the right of appeal. In other words, all that this section does is to curtail the existing right of appeal so as to give finality to a decree based on an award in certain circumstances. The right of appeal is, however, reserved and left unaffected in those cases only where an appeal is sought on the ground that the decree is in excess of, or not otherwise in accordance with the award. The right of appeal conferred by the Legislature cannot be lightly defeated and all orders of the nature specified in Section 39 will be open to appeal even if they have been incorporated in the decree or a decree has been passed in the case in the meantime. The mere drawing up of a decree will not take away the right of appeal against the order. If the appeal against the order is allowed, the decree will automatically become inoperative. There may be cases where the court passes a composite order which on the one hand dismisses the objections of the defendant to the award and on the other hand adopts the award and directs that decree should be prepared in terms of the judgment passed by it. Such an order should be treated to be an order refus-j ing to set aside an award and an appeal would be maintainable against the order under Section 39 (6). There are various! authorities of different High Courts on this point including that of this Court by a learned single Judge in the case of Prasad Gope v. Makhan Gope, (AIR 1969 Patna 307).
8. Examining the preliminary objection of Mr. Ghosal in t.he light of the above discussions, it is manifest that the present appeal, which has been filed against the order of the trial court rejecting the objections of the appellant, is maintainable, although the court below while rejecting the objections of the appellant also simultaneously directed the office to prepare the decree in accordance with the award.
9. Now I take up for consideration the contentions advanced by Mr. A. B. Ojha in support of this appeal. He pressed the two objections which were taken in the trial court for our consideration, namely, (1) the agreement arrived at between some of the officers of the Railway Administration and the contractors in a meeting held on 10-9-59 could not be enforced in view of the provisions contained in Article 299 of the Constitution of India, and (2) part of the claim of the contractors had already become time-barred, that period being from Feb. 1959 to Oct. i960, and therefore, the arbitrators had committed an apparent error of law in allowing the claim of the contractors for this period.
With regard to the first contention of Mr. Ojha, the trial court has discussed the question in some detail and has taken a correct view in the matter that the agreement arrived at in the said meeting did not amount to any fresh contract but was something like a settlement in pursuance of the existing and binding contract between the parties. Apart from the above fact, the arbitrators were quite within their jurisdiction while deciding the dispute to rely upon the said material as a piece of evidence in support of the genuineness of the claim of the contractors. I, therefore, do not find any merit in this contention of Mr. Ojha.
Mr. Ojha's second objection has been overruled by the trial court on the sole ground that no such objection was taken by the appellant before the arbitrators, nor any sufficient material was brought to its notice in this regard either. Although it is not possible to accept the reasoning of the trial court to the effect that sufficient . materials were not brought to its notice, as the relevant period of the claim and the date of the institution of the proceeding in court could be ascertained from the records, this much is. however, undisputed that neither any objection was taken by the appellant at the time of making of the reference to the arbitrators that a part of the claim was barred by limitation nor any such objection was raised by them before the arbitrators. For the first time the objection was taken before the court after the award was filed. As the maxim that limitation bars only the remedy but does not destroy the right is well known, no illegality was therefore committed by the arbitrators in entertaining the claim of the contractors for the said period.
10. Then there is yet another aspect of the matter and it is that in the meeting which was held at Pandu on 10-9-59 a provisional arrangement was arrived at where the Railway Administration agreed to pay Rs. 1,500/- per month to the contractors instead of Rs. 2,000/-for the items including night handling and dumping etc This arrangement can be safely taken to be an admission within the meaning of Section 19 of the Limitation Act and this would clearly save the entire period of claim from the bar of limitation. This point, therefore, is also devoid of any merit.
11. Before, however, parting with this case I may also refer to another intervening event. The appellant had filed a petition for stay in this Court. On 17-9-79 the stay matter was disposed of with a direction to the appellant to deposit the decretal money in the court below within six months from that day with liberty to the respondents -to withdraw the same on furnishing security to the satisfaction of the court below. We have been informed that the money was deposited and the respondents have already withdrawn the same on furnishing security. Since the appeal is being dismissed, the respondents will be entitled to withdraw the said security.
12. For the above discussions, this appeal has got no merit which must fail and is accordingly dismissed In the circumstances, however, I shall make no order as to costs.
S. Shamsul Hasan, J.
I agree.