AI Structured Summary
Not yet generated for this judgment
Judgment
Rajendra Nath Mittal, J.—Briefly, the facts are that the Petitioner installed an indigenous soap manufacturing plant under the name and style of Nagina Enterprise at Amritsar, in the month of April, 1973. It is alleged that in order to deprive the Petitioner of the allocation and release of hard fats and other facilities for the entire year 1973-74, the Senior Director Industries Officer registered him as a Small Scale Industrial Unit in March, 1974. The Petitioner having felt aggrieved against his action filed a Civil Writ Petition No. 4707 of 1974 in this Court. The secretary to the Government Punjab, Industries Department, issued directions to the Director of Industries Punjab to the effect that no further quota of raw material namely hard fats be released to him till the writ petition was decided by the High Court.
The case of the Petitioner is that in view of the aforesaid order he filed another writ petition titled as N. Nagina v. State of Punjab and Ors. (C.W.P. No. 127 of of 1977) in this Court praying that the Respondents be directed to allot and release the quantity of hard fats to his industrial unit for the years 1974:75, 1975-76 and 1976-77. The petition was accepted on May 17,1977 by a learned Single Judge and the State Government was directed to release the quantity of hard fats to the Petitioner for the aforesaid years. The Letters Patent Appeal by the Single Judge was dismissed by the Letters Patent Bench on July 22, 1977.
The case of the Petitioner is that in spite of the decision of the writ petition, the Respondents did not allot hard fats to him. Consequently, he filed a contempt petition (C.O.C.P. 162 of 1977) u/s 12 of the Contempt of Courts Act in this Court. A notice of motion was issued in that petition to the Respondents. Mr. Sukhbir Singh Bedi, Director of Industries, Respondent No. 1, in view of the notice in contempt petition passed an order on December 5, 1947 that the Petitioner be given 174.66 M. ton of hard fats. A similar statement was made by the condemner in the contempt proceedings before this Court. In view of the aforesaid order of Mr. Sukhbir Singh, the learned Counsel for the Petitioner got dismissed the contempt petition as having become in fructuous.
After the contempt petition was dismissed, the Petitioner received a delivery order from the Godown Supervisor of the Managing Director, Punjab State Small Industries Corporation Chandigarh informing him that 131.120 M. tons of hard fats shall be allocated to him at the rate of of Rs. 6,8000/- per M. ton and the remaining 40.720 M. tons of hard fats would be released to him on receipt of fresh stock at the rate of which would be intimated at the time of delivery. He requested the Managing Director to charge price at the rate of Rs. 5,3000/- per M. ton as was being done by him in other cases. He, however, did not agree to the Petitioner''s request and insisted that he could lift 131.120 M. ton. of hard fats on payment of Rs. 6,800/-per M. ton. He further threatened that in case the Petitioner failed to lift the material the same would be disposed of at his risk. The Petitioner thereafter met several officers but to no result. Consequently, he filed another contempt petition numbered as C.O.C.P. 57 of 1978.
Notice of motion was issued to the Respondents in the contempt petition. Later, a compromise was arrived at between the parties on May 19,1978. In view of the compromise Mr. D.V. Sehgal counsel for the Petitioner made a statement in the Court that the Managing Director, the Punjab Small Scale Industries Corporation, had agreed to release 131.120 M. tons of hard fats at the rate of Rs. 6,200/- per M. ton. He further stated that dispute between the parties regarding price and damages be referred to Mr. Justice B. R. Tuli, a retired Judge of this Court, as Arbitrator. There was settlement regarding other disputes as well but that is not relevant for the purposes of the present case. In terms of the statements Mr. Justice Tuli was unpainted as an Arbitrator. Mr. Sehgal in view of the compromise got the contempt petition dismissed. The order dated May 19, 1978 reads as follows:
In terms of the statement of the learned Counsel for the parties, 1 appoint Mr. Justice B.R. Tuli, retired Judge of the Punjab & Haryana High Court as an Arbitrator He shall decide the matter regarding the price of the material and damage which the Corporation shall claim. In view of the compromise between the parties Mr. Sehgal does not press the petition. I therefore discharge the rule. I fix Rs. 2,000/- as fee of the arbitrator for the time being. The fee of the arbitrator shall be paid by the Petitioner. C.M. has become in fructuous and the same is dismissed.
During the pendency of the arbitration proceedings an application (C.M. 199-CII of 1979) in COCP 57 of 1978 was filed by the Punjab State Small Industries Corporation Limited u/s 78 of the Arbitration Act (hereinafter referred to as the Act) for enlargement of the time for making the award by a further period of 4 months. It was allowed on February 1, 1979 after issuing a notice to the Respondent and the period for making the award was extended as prayed for. The Arbitrator made the award dated July 14, 1979 whereby he awarded Rs. 56,160/- to the Punjab State Small Industries Corporation Limited.
An application (C.M. 2268-CII of 1979) was filed on behalf of the Corporation u/s 14(2) of the Act praying that the Arbitrator be directed to file the award along with all the documents and notice of the filing of the same to be given to the other side. Notice of that application was issued to the Petitioner namely K. Nagina who filed objections. These were disposed of by G.C. Mittal, J. vide order dated December 12, 1979 observing that after filing of the award by the Arbitrator notice of the same be issued to the opposite party, who shall file objections against the award and the objections, which have been taken by the Petitioner in the Civil Miscellaneous, shall be decided along with those objections. The Arbitrator thereafter filed the award in the Court.
The Petitioner filed objections to the award u/s 30 of the Act. One of the objections taken by him is that the reference to arbitration does not fall within Sections 20 and 21 of the Act and consequently the Court has no jurisdiction to entertain the award and make it rule of the Court. He also raised an objection that application u/s 14 is not maintainable in this Court. On the pleadings of the parties, the, following preliminary issue was framed on May 13, 1980:
Whether this Court has jurisdiction to entertain the award and make it rule of the Court ?
The parties did not lead any evidence on the issue.
It is contended by Mr. Sehgal that the order dated May 19, 1978 is not a reference within the meaning of Sections 20 and 21. He further submits that Section 14 is applicable to references made without intervention of the Court. According to him, the application under that section can be filed in the Court where suit relating to subject-matter of the reference can be filed.
On the other hand Mr. Kapur has submitted that the reference was made by this Court with the consent of the parties. He has further argued that after having consented to refer the matter to the Arbitrator, the Petitioner cannot be allowed to say that no reference was made by this Court within the meaning of Sections 20 and 21 of the Act and the Court has no jurisdiction to entertain the application u/s 14.
I have heard the learned Counsel at a considerable length and given due consideration to their arguments. In order to examine the question in controversy it will be necessary to make reference to the provisions of the Act. The Act provided three types of arbitrations-firstly, arbitration without intervention of Court, Secondly arbitration with the intervention of the Court where there is no suit pending and thirdly, arbitration in suits. Chapter 2 (Sections 3 to 29) deals with the arbitration without the intervention of Court. Chapter 3 (Section 20) with arbitration with intervention of the Court where there is no suit pending and Chapter 4 (Section 21 to 25) with arbitration in suits. The counsel for Respondent No. 2 admits that the present case does not fall within the purview of Chapter 2. According to him, his case is covered by Chapter 3 (Section 20) and Chapter 4 (Section 21). The sections are reproduced below:
Chapter III.
Section 20. (1) Where any persons have entered into an arbitration agreement before the institution of any suit with respect to the subject matter of the agreement or any part of it, and where a difference has arisen to which the agreement applies, they or any of them instead of proceeding under Chapter II, may apply to a Court having jurisdiction in the matter to which the agreement relates that the agreement be filed in Court.
(2). The application shall be in writing and shall be numbered and registered as a suit between one or more of the parties interested or claming to be interested as Plaintiff or Plaintiffs and the remainder as Defendant or Defendants, if the application has been presented by all the parties or if otherwise, between the applicant as Plaintiff and the other parties as Defendants.
(3) On such application being, made, the Court shall direct notice thereof to be given to all parties to the agreement other than applicants, requiring to them to show cause within the time specified in the notice why the agreement should not be filed.
(4) Where no sufficient cause is shown, the Court shall order the agreement to be tiled, and shall make an order of reference to the arbitrator appointed by the parties whether in the agreement or otherwise, or where the parties cannot agree upon an arbitrator, to an arbitrator appointed by the Court.
(5) Thereafter the arbitration shall proceed in accordance with, and shall be governed by, the other provisions of this Act So as they can be made applicable.
Chapter IV.
Section 21. Where in any suit all the parties interested agree that any matter in difference between them in the suit shall be referred to arbitration they may at any time before judgment is pronounced apply in writing to the Court for an order of reference.
The phrase "arbitration agreement" is defined in Section 2-A in the following terms:
''Arbitration agreement'' means a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not.
It is now to be seen as to whether the present proceedings are covered cither by Section 20 or Section 21. Sub-section (1) of Section 20 provides that where any persons have entered into an arbitration agreement before the institution of any suit with respect to the subject matter of the agreement, and where a difference has arisen, they or any one of them may apply to the Court having jurisdiction in the matter that the agreement be filed in the Court. In the present case, admittedly none of the parties filed a written application in this Court for filing the arbitration agreement. On the other hand, a contempt petition was pending wherein inter-alia there was dispute regarding the price of the hard fats. The parties by making the statements in the Court agreed that the dispute regarding determination of the price of the commodity be referred to arbitration. Thus, the arbitration agreement came into existence during the pendency of the contempt proceedings. In order to invoke Section 20, an application is to be filed in the Court to the effect that the arbitration agreement be filed in Court. The Court has been defined in Section 2(c) and it means a Civil Court having jurisdiction to decide the questions farming the subject matter of the reference if the same had been the subject matter of a suit, but does not, except for the purpose of arbitration proceedings u/s 21 of the Act. include Small Cause Court. The proceeding in which the present order was passed were contempt proceedings, and, therefore, this Court will not fall within the definition of the Court. In the aforesaid circumstances, I am of the opinion that the present case does not fall within the purview of Section 20 of the Act.
According to Section 21, a matter in difference between the parties in a suit can be referred to arbitration if the parties apply in writing to the Court for an order of reference. As already said above, the proceedings which were before this Court in "which the parties agreed to refer the matter to arbitration, did not constitute a suit. The parties also did not make any application in writing to refer the matter to the arbitration. It is clear from the aforesaid circumstances, that the present reference does not fall within the purview of Section 21 of the Act.
The question that now arises is whether an application can be filed u/s 14 of the Act to this Court when the reference is neither u/s 20 nor 21 of the Act. Section 14 is incorporated in Chapter 2 which relates to arbitration without intervention of a Court. It provides that when the arbitrator has made an award, he shall sign it and give notice in writing to the parties of making and signing thereof. He shall, at the request of any party to the arbitration agreement, or if so directed by the Court, cause the award together with any depositions and documents which may have been taken and proved before him to be filed in Court, The Court as already said above, has been defined in Clause (c) of Section 2. The application was therefore, maintainable before a Civil Court having jurisdiction to decide the questions forming the subject-matter of the reference, if the same had been the subject-matter of the suit. I have already held above, that Sections 20 and 23 are not applicable to the present proceedings. The High Court does not fall within the definition of the word ''Court'' if it is interpreted in conjunction with Section 14. Thus, this Court has no jurisdiction to entertain the application u/s 14 of the Act.
Faced with this situation, Mr. Kapur, learned Counsel for the Respondent, argues that the Petitioner is estopped from arguing that this Court has no jurisdiction to entertain the application u/s 14. He further submits that Respondent No 2 filed an application to this Court u/s 28 for enlarging period for making the award and the Petitioner did not object regarding the jurisdiction at that stage. The Court on the basis of the application enlarged time. He submits that now the Petitioner cannot be allowed to raise the objection.
I have given due consideration to the argument of Mr. Kapur but am not impressed with it. This question is not res integra. It was held in Virendra Saigal v. Sumatilal Jamnalal AIR 1790 Del 14, that filing of an award would not give jurisdiction to the Court regarding subsequent proceedings, u/s 31(2) of the Act. The Supreme Court in Mathura Prasad Bajoo Jaiswal and Others Vs. Dossibai N.B. Jeejeebhoy, , has settled that if a Court erroneously holds that it has jurisdiction to try which in fact it does not have, the question does not operate as res judicata between the parties. The following observations may be read with advantage:
Similarly by an erroneous decision if the Court assumes jurisdiction which it does not possess under the statute, the question cannot operatic as res judicata between the same parties, whether the cause of action in the subsequent litigation is the same or otherwise, because, if those decisions are considered as conclusive, it will assume the statuts of a special rule of law applicable to the parties relating to the jurisdiction of the Court in derogation of the rule declared by the legislature." It is also well settled that whatever is without jurisdiction the same does not acquire any sanctity merely because the parties do not raise an objection of jurisdiction as no amount of consent can confer jurisdiction (See Ajit Singh and Another Vs. Fateh Singh and Others, , and Kehr Chand Dhiman and Anr. v. Dharam Chand Dhiman (1976) 78 P.L.R. 382.
Mr. Kapur has made reference to Bonagiri Sreeramulu Vs. Karumuri Venkatanarasimham and Others, and Letters Patent Appeal No. 10 of 1959 (Brij Lal v. Hans Raj) L.P.A. 10 of 1959, decided on February 15, 1961. Suffice it to say that the aforesaid cases are distinguishable and the ratio in them is not applicable to the facts of the present case. I am, therefore, of the opinion that the application u/s 14 is not maintainable in this Court and it has no jurisdiction to entertain the award and make it a Rule of the Court.
For the aforesaid reasons. I accept the objection of the Petitioner and direct the Respondent to file the application u/s 14 of the Act in the Court of competent jurisdiction.
No order as to costs.