Paulus and 2 others vs The State of Tamil Nadu

Jagadeesan, J.—The petitioners have filed this Revision against the Order dated 2.12.1993 in I.A. No. 124 of 1993 in un-numbered A.S.

/1993 on the file on the Sub-Court, Kuzhithurai. The respondent has filed the said I.A. u/s 5 of the Limitation Act to condone the delay of 465

days in filing the appeal. The lower Appellate Court has allowed the application on condition that the respondent has to pay a sum of Rs. 500/- on

or before 14.12.1993 by way of cost. Mr. Ravichandrababu, learned counsel for petitioners contended that the lower court is not correct in

condoning the enormous delay without considering the averments made in the counter that the delay is 583 days and not 465 days as mentioned by

the respondent and the respondent has stated in the affidavit filed in support of the petition u/s 5 of the Limitation Act that due to the

communication gap in the official administrative affairs the appeal was not able to be filed within the period of limitation and moreover the judgment

and decree of the lower court along with the entire case bundle was sent to Madras for getting the legal opinion regarding the filing of the appeal

and the opinion from the Additional Government Pleader, High Court was received and the final decision taken by the Department for filing the

appeal only in the month of April, 1993 and for this reason also some delay accrued in the matter. A perusal of this affidavit would clearly show

that the respondent has not given any particulars with regard to the date on which the papers were sent to Madras and the date on which the

Additional Government Pleader at Madras gave opinion etc. and even assuming that the final decision has been taken in April, 1993 the appeal has

been filed in July 1993 and the respondent has failed to give any reason for such delay of nearly three months in filing the appeal, after getting the

opinion of the Additional Government Pleader, Madras.

Mr. Swaminathan, learned Additional Government Pleader (C.S) contended that the revision itself is not maintainable, since the petitioners have

received the cost of Rs. 500/- as directed by the lower court and as the payment of cost is a condition precedent for allowing the application, once

the cost is received, it is not open to the petitioners to challenge the order. By way of reply Ravichandrababu, learned counsel for petitioners

contended that the petitioners had received the cost without prejudice to their right to file the Revision and as such the petitioners cannot be

estopped from challenging the order of the court below. He also relied upon the Judgment reported in Bijendra Nath Srivastava (Dead) through

LRs. Vs. Mayank Srivastava and others, Umesh Jha Vs. The State and Another, and Tarapore and Company Vs. Cochin Shipyard Ltd., Cochin

and Another, .

To verify the statement made by the learned counsel for the petitioner that the amount has been received without prejudice to the right, the

records were called for. I find from the records that the petitioners had received the amount with an endorsement ""Amount received without

prejudice to the right to file Revision before the High Court."" Hence it necessitates to give a finding with regard to the maintainability of the revision

as to whether the petitioners are estopped from challenging the Order of the court below. It has been held in Umesh Jha Vs. The State and

Another, as follows:

The first contention has no substance. It is the admitted case of the parties that the rent that was accepted by the State of Bihar from the petitioner

for the year 1361 Fasli was accepted without prejudice and this fact was noted on the receipt itself. That being so, there is no force in the argument

that the State of Bihar was estopped from challenging the genuineness and validity of the settlement under S. 4(h) of the Act.

The words ""without prejudice"" import into any transaction that the parties have agreed that as between themselves the receipt of money by one and

its payment by the other shall not by themselves have any legal effect on the rights of the parties, but they shall be open to settlement by legal

controversy as if the money had not been paid. (See Words and Phrases, Permanent Edition, West Publishing Company, Vol 45, page 439). This

contention of the petitioner has, therefore, to be rejected as being without any merit.

It has to be seen in that case, it relates to the receipt of the rent without prejudice to the further right by the landlord and the Court has held that

when the words ""without prejudice"" is mentioned in any of the transaction in respect of the receipt of money by one and payment by the other, it

shall not have any effect on the rights of the parties and it shall be open to settlement by legal controversy as if the money has not been paid. The

discussion in Tarapore and Company Vs. Cochin Shipyard Ltd., Cochin and Another, at page 1086 runs as follows:

Before we conclude on this point we mistake note of a contention of Mr. Pal that the respondent cannot be estopped from contending that the

arbitrate had no jurisdiction to entertain the dispute as the re respondent agreed to the submission without prejudice to its rights to contend to the

contrary. It is undoubtedly true that in the letter dated March 29, 1976 by which the respondent agreed to refer the dispute to the Arbitrator, it

was in terms stated that the reference is being made without prejudice to the position of the respondent as adopted in the letter meaning thereby

without prejudice to its rights to contend that the claim of the appellant is not covered by the arbitration clause"". In the context in which the

expression ''without prejudice'' is used, it would only mean that the respondent re served the right to contend before the arbitrator that the dispute

is not covered by the arbitration clause. It does not appear that what was reserved was a contention that no specific question of law was

specifically referred to the arbitrator. It is difficult to spell out such a contention from the letter. And the respondent diraise the contention before

the Arbitrator that he had no jurisdiction to entertain the dispute as it would not be covered by the arbitration clause. Apart from the technical

meaning which the expression ''without prejudice'' carries depending upon the context in which it is used, in the present case on a proper reading of

the correspondence and in the setting in which the term is used, it only means that the respondent reserved to itself the right to contend before the

arbitrator that a dispute raised or the claim made by the contractor was not covered by the arbitration clause. No other meaning can be assigned to

it. An action taken without prejudice to one''s right cannot necessarily mean that the entire action can be ignored by the party taking the same. In

this case, the respondent referred the specific question of law to the arbitrator. This was according to the respondent without prejudice to its right

to contend that the claim or the dispute is not covered by the arbitration clause. The contention was to be before the arbitrator. If the respondent

wanted to assert that it has reserved to itself the right to contend that no specific question of law was referred to the arbitrator, in the first instance,

it should not have made the reference in the terms in which it is made but should have agreed to the proposal of the appellant to make a general

reference. The appellant on the reference of a specific question which error High Court appears to have committed, it could have declined to make

the reference of a specific question of law touching his jurisdiction and should have taken recourse to the court by making an application u/s 33 of

the Arbitration Act to have the effect of the arbitration agreement determined by the court. Not only the respondent did not have recourse to an

application under Sec.33 of the Arbitration Act, but of its own, it referred a specific question of law to the arbitrator for his decision, participated in

the arbitration proceeding, invited the arbitrator to decide the specific question and took a chance of a decision. It cannot therefore, now be

permitted to turn round and contend to the contrary on the nebulous plea that it had referred the claim/dispute to the sole arbitrator without

prejudice to its right to contend to the contrary. Therefore, there is no merit in the contention of Mr. Pal.

Here also the Supreme Court held that apart from the technical meaning which the expression ""without prejudice"" carries depending upon the

context in which it is used, an action taken without prejudice to one''s right cannot necessarily mean that the entire action can be ignored by the

party taking the same. So the letter of words have to be interpreted under the context in which it has been used.

In Bijendra Nath Srivastava (Dead) through LRs. Vs. Mayank Srivastava and others, at page 2572, it has been held as follows:

That apart, the principle of estoppel which precludes a party from assailing an order allowing a petition, subject to payment of costs where the

other party has accepted the costs in pursuance of the said order, applies only in those cases where the order is in the nature of a conditional order

and payment of costs is a condition precedent to the petition being allowed. In such a case it is open to the party not to accept the benefit of cost

and thus avoid the consequence of being deprived of the right to challenge the order on merits. The said principle would not apply to a case where

the direction for payment of costs is not a condition on which the petition is allowed and costs have been awarded independently in exercise of the

discretionary power of the court to award costs, because, in such a case, the party who has been awarded costs has no opportunity to waive his

right to question the validity or correctness of the order.

Learned Government pleader contended that once pursuant to a Court order the cost has been received, even though the party has received the

cost without prejudice to his rights, such party is estopped from challenging the order and he made classification between the Judicial order and

non-judicial order.

On considering the arguments of both the counsel, I am of the view that there cannot be any classification between judicial orders and non-

judicial orders. Even if it is a non-judicial order, such orders are passed by quasi judicial authorities and the parties are bound by the same. If the

matter is considered in this aspect, as pointed out by the learned counsel for the petitioner, the petitioners are not estopped in challenging the order

of the lower court. In AIR 1956 Patna 425 (supra) it has been clearly held that once payment of the money and the receipt of the same is without

prejudice to the rights of the parties, there is no finality with regard to the payment, and the rights of parties are open. Equally so, in AIR 1984 SC

1072(supra) it has been held that in all cases estopped cannot be inferred, but the words ''without prejudice'' have to be construed under the

context in which it has been used. Applying the principles to the facts of the present case, if we consider the context under which the words have

been used, though the lower court has allowed the application as a condition precedent to payment of cost, the petitioners had received the same

without prejudice to their right to file revision before the High Court. Hence, it is very clear that the petitioners had reserved their right to file the

Revision before the High Court and when they make such an endorsement, the respondent''s counsel would have refused to pay the amount. At

the time of payment of the cost, the respondent is fully aware that the petitioners have received the cost only without prejudice to their right of

challenging the order before the High Court in Revision, that means, the respondent has already been put on notice by the petitioners that the

petitioners want to file the revision. As such it is not open to the respondent now to contend that the petitioners are estopped from filing the revision

because of the receipt of the cost. Coming to the last case, Bijendra Nath Srivastava (Dead) through LRs. Vs. Mayank Srivastava and others, , in

this case the Supreme Court has held that the principle of estoppel which precludes a party from assailing an order allowing a petition subject to

payment of cost where the other party has accepted the cost in pursuance of the said order, applies only in those cases where the order is in the

nature of a conditional order and the payment of cost is a condition precedent to the petition being allowed. Here, the Supreme Court has not

considered the question as to what would be the position of the party who received the amount without prejudice to his rights of challenging the

order. The Supreme Court has merely said that the receipt of the cost would amount to estoppel, if the payment of cost is a condition precedent to

the petition being allowed. Hence this may not be applicable to the present facts of the case. Following the principles of the earlier two judgments

reported in Tarapore and Company Vs. Cochin Shipyard Ltd., Cochin and Another, and Umesh Jha Vs. The State and Another, I hold that the

Revision is maintainable and the petitioners cannot be driven out on the ground of estoppel. Coming to the merits of the case, as already pointed

out, the respondent has stated in the affidavit filed before the lower court that the main reason for the delay is due to the communication gap in the

official administrative affairs and the additional reason is that they got the opinion from the Additional Government Pleader, High Court, Madras.

The respondent has not given any particulars with regard to the date of correspondence either internal or outside the office. He has not even stated

in the affidavit as to the date on which the Judgment copy was applied, the date on which he received the certified copy especially when he filed an

appeal after nearly two years. The trial court has delivered the judgment on 8.11.1991 The appeal has been filed on 15.7.1993. In the absence of

any particulars, the court below has simply accepted the affidavit, on the ground that the petitioners have not denied the fact that the respondent

has obtained the legal opinion from the Additional Government Pleader, Madras and hence the delay is not a wanton one and the cause for the

delay in getting the final opinion is an acceptable one. It may be pertinent to note that the respondent has not stated that the delay is only due to

getting the final legal opinion from Madras He has also stated that there is a communication gap due to administrative reasons. Even if the delay is

due to getting the final opinion, still he is bound to give the relevant particulars with regard to the dates, failing which, the Court is not in a position

to appreciate the bona fides of the respondent for the cause of the delay. The Court below is not correct in allowing the petition for condonation of

de lay. Accordingly, I set aside the order of the court below and allow the Civil Revision Petition. However, there is no order as to costs. The

petitioners are directed to return Rs. 500/-, which they have received, within two weeks from today to the respondent, failing which, the Civil

Revision Petition will stand dismissed.