Gujarat High Court
Gujarat Electricity Board vs M/S. Kadakia Alkalies And Chemicals ... on 19 April, 2018
Author: M.R. Shah
Bench: M.R. Shah, A.Y. Kogje
C/FA/335/2018 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 335 of 2018
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE A.Y. KOGJE
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1 Whether Reporters of Local Papers may be allowed to No
see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law No
as to the interpretation of the Constitution of India or any
order made thereunder ?
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GUJARAT ELECTRICITY BOARD
Versus
M/S. KADAKIA ALKALIES AND CHEMICALS LTD.
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Appearance:
MS LILU K BHAYA(1705) for the APPELLANT
MR BIJAL H CHHATRAPATI, ADVOCATE, FOR M/S. J SAGAR ASSOCIATES(8162) for the
RESPONDENT
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CORAM: HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE A.Y. KOGJE
Date : 19/04/2018
CAV JUDGMENT
(PER : HONOURABLE MR.JUSTICE M.R. SHAH) Page 1 of 13 C/FA/335/2018 CAV JUDGMENT
1. Feeling aggrieved and dissatisfied by the impugned order passed by the learned Commercial Court, Vadodara, below Ex.1 in Commercial Civil Suit No.259/2016, by which, instead of deciding the suit on merits, the learned Judge has disposed of the said suit in view of the arbitral award, the original plaintiff has preferred the present appeal under the provisions of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (hereinafter referred to as "the Commercial Courts Act") read with the provisions of the Code of Civil Procedure, 1908.
2. The facts leading to the present appeal in nutshell are as under:
2.1 That the appellant who is the original plaintiff, instituted Special Civil Suit No.176/2001 in the Court of learned Civil Judge, Senior Division, Bharuch, for recovery of Rs.8,84,44,507=78 ps.. That the said suit was filed on 01.08.2001. That the amount claimed by the plaintiff was for the period after September 1999 to April 2001. The amount claimed in the suit consisted of and included Rs.2,00,2,259=73 ps. towards minimum charges, board charges, Government charges, delayed payment charges and delayed payment charges for the period September, 1999 to April, 2001. It also Page 2 of 13 C/FA/335/2018 CAV JUDGMENT consisted of consumption charges, which included demand charges, energy charges, fuel cost adjustment charges, time of use charges, additional charges per KVA, additional charges per KWH, Super HT charges and meter charges, which was as per the bills issued on every month basis for the period September 1999 to April 2001.
2.2 That the respondent herein - original defendant filed a written statement at Ex.9 on 24.12.2001. One of the defence of the defendant, as stated in the written statement, was that in view of the arbitration award in the arbitration proceedings between the parties, which was passed in the year 1999, which is the subject-matter before the Hon'ble High Court, the subject-matter of the suit had merged in the arbitration proceedings and with the arbitration award and therefore, the suit suffers from res-judicata. It was also submitted that it is a futile exercise by the Gujarat Electricity Board in filing the suit.
That thereafter, the learned trial Court framed the following issues at Ex.11 on 05.04.2006:
"(1) Whether the plaintiff proves that
Rs.8,88,44,507=78 ps. remains due from the
defendant of electric consumption including
charges like minimum charges, fixed charges, fuel charges, meter charges, electric duty, Page 3 of 13 C/FA/335/2018 CAV JUDGMENT supplementary bill for slowness, DPC and Sales Tax?
(2) Whether the suit is barred by limitation? (3) Whether the suit is barred by res judicata?
(4) Whether the award of the Arbitrator Mr.B.K.Patel is final and the plaintiff has no cause of action to file this suit?
(5) Whether the plaintiff is entitled to recover the interest at the rate of 24% p.a.?
(6) What is found due to the plaintiff?
(7) What order and decree?"
2.3 That even thereafter, the defendant submitted the application Ex.24 to decide the issue of res-judicata as a preliminary issue. On the aforesaid application, the learned trial Court passed an order that on completion of the evidence of the plaintiff, the said application shall be decided. That thereafter, the suit proceeded further before the learned trial Court and number of applications / counter applications were given by the plaintiff as well as the defendant. 2.4 That thereafter, on establishment of Commercial Court at Vadodara under the provisions of the Commercial Courts Act, the suit came to be transferred to the Commercial Court , Page 4 of 13 C/FA/335/2018 CAV JUDGMENT Vadodara, where it has been numbered as Commercial Civil Suit No.259/2016.
2.5 That at the time of hearing of the suit by the learned Commercial Court, Vadodara, on 24.01.2017, learned advocate appearing for the plaintiff filed an application for seeking adjournment on the ground that the award passed in the arbitration proceedings has been challenged before the High Court in First Appeals No.2511/2000 and 2512/2000. That while dismissing the said application for adjournment by the impugned order, the learned Commercial Court has disposed of the suit itself in view of the arbitral award without even deciding the issues on merits which were already framed, more particularly, the issue with respect to the res judicata etc. 2.6 Feeling aggrieved and dissatisfied by the impugned order passed by the learned Commercial Court in disposing the suit and without deciding and/or considering the suit on merits, and/or even without deciding the issues already framed, the original plaintiff has preferred the present First Appeal.
3. Ms.Lilu K. Bhaya, learned advocate, has appeared on behalf of the appellant - original plaintiff and Shri Bijal H. Page 5 of 13 C/FA/335/2018 CAV JUDGMENT Chhatrapati, learned advocate has appeared for M/s.J.Sagar Associates for the respondent - original defendant.
4. Ms.Lilu K. Bhaya, learned advocate, appearing on behalf of the plaintiff has vehemently submitted that the impugned order passed by the learned Commercial Court disposing of the suit in terms of the arbitration award is absolutely contrary to the known procedure for deciding the suit and the same cannot be sustained.
4.1 It is further submitted by Ms.Lilu K. Bhaya, learned advocate for the appellant, that as such, the learned Commercial Judge has not at all considered the fact that the amount claimed in the suit is altogether different than that claimed in the arbitration proceedings. It is submitted that the award was declared in the arbitral proceedings in the year 1999. However, the suit was filed in the year 2001, claiming the amount of Rs.8,84,44,507=88, in respect to the claim for the period September 1999 to April 2001. It is submitted that therefore when the suit claim was altogether different than that claimed in the arbitration proceedings, the learned Commercial Court ought not to have disposed of the suit in terms of the arbitral award.
Page 6 of 13 C/FA/335/2018 CAV JUDGMENT 4.2 It is further submitted that even the learned trial Court framed the issues and one of the issue was whether the suit is barred by res-judicata, or not. It is submitted that thereafter, even one application was submitted by the defendant to decide the issue with respect of res-judicata as preliminary issue and at the relevant time, the learned trial Court passed an order to decide the said application after the evidence of the plaintiff is over. It is submitted that despite the above, and more particularly, despite the fact that when specific issue was raised with respect to res-judicata in view of the arbitral award, the learned trial Court has disposed of the suit in terms of the arbitral award without even deciding the issue with respect to the res-judicata and without even appreciating the fact that the suit claim is different than that of the claim in the arbitration proceedings.
4.3 It is further submitted that the manner and method in which the learned trial Court has disposed of the suit without considering the suit on merits and/or without even giving any findings on the issues already framed, more particularly the issue with respect to res-judicata, and that too, before the parties led the evidence, the impugned order passed by the learned Judge, Commercial Court , deserves to be quashed and set aside and the matter is required to be remanded to the Page 7 of 13 C/FA/335/2018 CAV JUDGMENT learned trial Court for deciding the suit afresh and on merits and on all issues, including the issue of res-judicata.
5. The present appeal is vehemently opposed by Shri Bijal H. Chhatrapati, learned advocate appearing on behalf of the respondent - original defendant.
5.1 It is submitted by Shri Bijal H. Chhatrapati, learned advocate appearing on behalf of the respondent - original defendant that as such, the issue involved in the suit is directly covered by the arbitral award and the subject-matter of the suit had merged in the arbitration proceedings and with the arbitration award, therefore, the learned Judge has rightly disposed of the suit in terms of the arbitral award. 5.2 It is further submitted that as such, in view of the arbitral award, which as such has become final and conclusive, the plaintiff's suit suffers from res-judicata and as such, it is a futile exercise by the plaintiff in filing the suit and waste of public funds and harassing the consumers. It is submitted that therefore, in the facts and circumstances of the case, the learned Commercial Court has not committed any error in disposing the suit in terms of the arbitration award. 5.3 Making the above submissions, it is requested to Page 8 of 13 C/FA/335/2018 CAV JUDGMENT dismiss the present appeal.
6. Heard learned advocates for the respective parties at length. Perused the impugned order passed by the learned Commercial Court.
7. Having heard the learned advocates for the respective parties and considering the impugned order passed by the learned Judge, Commercial Court, Vadodara, by which the learned Judge has disposed of the Commercial Civil Suit and considering the manner and method by which the learned Judge has disposed of the suit, in which the original plaintiff has claimed a substantial amount of Rs.8,84,44,507=78 ps., even without deciding the issues already framed, we are of the opinion that the impugned order passed by the learned Commercial Court disposing of the suit cannot be sustained.
8. From the impugned order passed by the learned Judge, it appears that the learned Judge has disposed of the suit in terms of the arbitration award passed earlier which, as such, is the subject-matter of appeals before this Court. However, it is required to be noted that the present suit with claim of Rs.8,84,44,507=78 ps. has been preferred by the plaintiff subsequent to the arbitration award between the parties and Page 9 of 13 C/FA/335/2018 CAV JUDGMENT considering the averments in the Plaint, the amount is claimed for the period between September 1999 to April 2001, i.e. post arbitration award. At this stage, it is required to be noted that even earlier, the learned trial Court had already framed the issue with respect to res-judicata, which ought to have been decided by the learned Judge after permitting the parties to lead the evidence. From the impugned order, it appears that the learned Judge has not at all considered the facts in detail, more particularly, the effect of the arbitration award which was for the pre-suit period in question and the claim in the suit which is admittedly for the period post arbitration award. From the impugned order passed by the learned Commercial Court, it appears that disposal of the suit in such a manner is unknown to the procedure for disposal of the suits as provided under the CPC. It is required to be noted that as such, the suit was filed in the year 2001, which subsequently came to be transferred to the Commercial Court and prior thereto, as such, the learned trial Court had framed the issues at Ex.11 as far back in the year 2006 and one of the issue is whether the suit is barred by res-judicata and on another issue framed / raised at the relevant time is whether the award of the arbitrator is final and the plaintiff has no cause of action to file the suit? The aforesaid issues were as such required to be decided by Page 10 of 13 C/FA/335/2018 CAV JUDGMENT the learned Judge along with the other issues after the parties lead the evidence and thereafter on the basis of the evidence led and after giving an opportunity to the parties, the learned Judge was required to adjudicate the aforesaid issues on merits.
9. At this stage, Order XX Rule 5 of the CPC is required to be referred to. Order XX Rule 5 of the CPC provides that in suits in which issues have been framed, the Court shall state its finding or decision, with the reasons therefor, upon each separate issue unless the finding upon any one or more of the issue is sufficient for the decision of the suit. Therefore, the impugned order passed by the learned Judge, Commercial Court disposing of the suit is unknown to the procedure required to be followed under the provisions of the CPC for disposal of the suits and more particularly, it is contrary to Order XX Rule 5 of the CPC. As the learned Judge has not given his finding or decision on the issues already framed at Ex.11 and has not decided the suit on merits at all, and even the parties are yet to lead the evidence, while quashing and setting aside the impugned order disposing of the suit, the matter is required to be remanded to the learned Commercial Court, Vadodara, to dispose of the suit in accordance with law Page 11 of 13 C/FA/335/2018 CAV JUDGMENT and on merits and give its finding or decision on merits on the issues framed, bearing in mind Order XX Rule 5 of the CPC.
10. In view of the above and for the reasons stated above, present appeal succeeds. The impugned order passed by the learned Commercial Court, Vadodara, below Ex.1 in Commercial Civil Suit No.259/2016, disposing the suit in terms of the arbitration award is hereby quashed and set aside and the matter is remitted to the learned Judge, Commercial Court, Vadodara, to decide and dispose of the suit in accordance with law and on merits after giving his finding or decision on issue/ issues framed after taking into consideration Order XX Rule 5 of the CPC and after permitting the parties to lead the evidence. Considering the fact that the suit is of the year 2001, which subsequently thereafter came to be transferred to the Commercial Court, Vadodara, and considering the provisions of the Commercial Courts Act, all endeavour shall be made by the learned Judge, Commercial Court, Vadodara, to finally decide and dispose of the suit at the earliest. All concerned are directed to cooperate the learned Judge to finally decide and dispose of the suit at the earliest. The present appeal is allowed to the aforesaid extent. There shall be no order as to costs.
Page 12 of 13 C/FA/335/2018 CAV JUDGMENT
11. Registry is directed to send the writ of this order to the learned Judge, Commercial Court, Vadodara, forthwith.
The Record and Proceedings be sent back to the Commercial Court, Vadodara, forthwith.
(M.R. SHAH, J) (A.Y. KOGJE, J) sunil Page 13 of 13