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P.K. Thresia and ors. Vs. the Government of the State of Kerala and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKerala High Court
Decided On
Case NumberC.R.P. Nos. 3348 and 3349 of 1978
Judge
Reported inAIR1979Ker212
ActsArbitration Act, 1940 - Sections 41; Code of Civil Procedure (CPC) , 1908 - Order 26, Rule 10(2)
AppellantP.K. Thresia and ors.
RespondentThe Government of the State of Kerala and anr.
Appellant Advocate M.A. George and; K.L. Varghese, Advs.
Respondent AdvocateGovt. Pleader
Cases ReferredJammu Forest Co. v. State
Excerpt:
.....code of civil procedure, 1908 - order dismissing application for temporary injunction - in view of section 41 (b) court competent to grant interim injunction even if no proceeding pending in any court provided arbitration has commenced - court making order of reference to arbitrator - court empowered to grant interim injunction for purpose of arbitration proceeding. (ii) interim injunction - granting of interim injunction equitable relief dependent upon judicious exercise of discretion on part of court - relief to be granted before hand to prevent or restrain some threatened act causing consequential damages which cannot be compensated by money. - .....entrusted the execution of the balance work to one joseph. varoo's widow and children, the revision petitioners, then filed a suit under section 20 of the arbitration act, 1940, (for brevity, the act). the lower court allowing the suit has made an order of reference to the appointed arbitrator -- the chief engineer (arbitration) -- as per its decision dated 28-10-1978. the points referred are :--'(1) whether the plaintiffs are entitled to an amount of rs. 1,25,000.00 or any other amount by way of final bill payment due for works done by late sri a. i. varoo under agreement no. 3/semi/ 1975-76 dated 27-10-1975, (2) whether the plaintiffs are entitled to extra payment for additional lead for the conveyance of earth done by late sri. a. l. varoo involving a distance of about 8 km as.....
Judgment:
ORDER

George Vadakkel, J.

1. Varoo was a Government Contractor. He died on 13-5-1977 before completion of a work he had undertaken to execute. The 1st respondent-State entrusted the execution of the balance work to one Joseph. Varoo's widow and children, the revision petitioners, then filed a suit under Section 20 of the Arbitration Act, 1940, (for brevity, the Act). The lower Court allowing the suit has made an order of reference to the appointed arbitrator -- the Chief Engineer (Arbitration) -- as per its decision dated 28-10-1978. The points referred are :--

'(1) Whether the plaintiffs are entitled to an amount of Rs. 1,25,000.00 or any other amount by way of final bill payment due for works done by late Sri A. I. Varoo under Agreement No. 3/SEMI/ 1975-76 dated 27-10-1975,

(2) Whether the plaintiffs are entitled to extra payment for additional lead for the conveyance of earth done by late Sri. A. L. Varoo involving a distance of about 8 KM as against 3 KM specified in the agreement and if so what is the amount payable by the defendants to the plaintiffs.

(3) whether the plaintiffs are entitled to refund of the Security Deposit and retention amounts pertaining to contract Agreement No. 3/SEMI/l975-76 dated 27th Oct. 1975 lying to the credit of late Sri. A. I. Varoo with the defendants.

(4) Whether the plaintiffs are entitled to a declaration that the balance works under contract No. 3/SEMI/l 975-76 dated 27-10-1975 if any, got executed or to be got executed by the defendants, the same shall not be at the risk and cost of the estate of late Sri. A. I. Varoo or his legal heirs or successors.

(5) Interest pendente lite,

(6) Costs.

(7) What are the reliefs to be granted against the above issues in favour of the plaintiffs.'

2. As per order on I. A. 467 of 1978 the lower Court had restrained the respondents (the 2nd respondent is the concerned Superintending Engineer) from altering, modifying, destroying or In any way changing the work already carried out by Varoo till 'proper measurements* thereof are taken. On 28-10-1978 the lower Court dismissed this application on the ground that the suit has been disposed (A In C. R. P. No. 3348 of 1978 directed against this order of dismissal of I. A. 467 of 1978 it is contended that the lower Court should have continued the injunction granted and that the lower Court has, notwithstanding the disposal of the suit under Section 20 of the Act, power to grant interim injunction. The learned counsel for the revision-petitioners rely on Section 41(b) of the Act and Item 4 in the Second Schedule to the Act,

3. During the pendency of the suit, at the instance of the revision petitioners, a commission was issued to take the measurements of the work done by Varoo. He submitted a report. Dissatisfied with it the revision petitioners by I. A. 1092 of 1978 sought to have the commissioner, a retired engineer, summoned and examined in court. The lower court dismissed this application by order dated 17-10-1978 which is under challenge in C. R. P. 3349 of 1978.

4. The learned Government Pleader raised a preliminary objection to the maintainability of C. R P. 3348 of 1978 on the ground that the order dismissing an application for temporary injunction is an order appealable under Order XLIII Rule 1 (r) of the Civil P. C. 1908. Section 41 of the Act, by Clause (a) thereof makes the provisions of the Code applicable to all proceedings before Court, and to all appeals, under the Act, but subject to the provisions of the Act and the Rules thereunder. The provisions in the Code conferring right of appeal have to be read subject to Section 39 of the Act; this means that only such orders passed under the Act as are mentioned therein are appealable. See Gopal v. Sundari (AIR 1955 Pat 277 (280)). Therefore, Section 104(1)(i) of the Code read with Order XLIII Rule 1 (r) therein does not govern an order passed on an application for interim injunction filed under Section 41 of the Act, be it under Clause (a) or Clause (b) thereof. There is no merit in the preliminary objection,

5. In view of Section 41(b) of the Act, and item 4 in the Second Schedule, the court is competent to grant interim injunctions even when no proceedings are pending in court provided arbitration has commenced and arbitration proceedings are pending before the arbitrator. In Baby Paul v. Hindustan Paper Corporation Ltd. (ILR (1978) 2 Ker 392), I examined the question whether the court has power to grant interim injunction anticipating a reference and before arbitration oommences, and answered it in the negative by holding that the court can exercise its powers under Section 41(b) of the Act reed with items 1 to 4 in the second schedule thereto only after the arbitration commences. Arbitration has commenced in this case since the lower court has made an order of reference under Section 20(4) of the Act. The court can, while making an order of reference to the arbitrator, in exercise of its power under Section 41(b) of the Act read with item (4) in the second schedule thereto, grant interim injunction for the purpose of and in relation to arbitration proceedings, and this it appears to me, can be done by passing necessary orders on an application already filed under Clause (a) of Section 41 of the Act.

6. Though the court is competent to grant interim injunction, as aforesaid, it is to be remembered that granting of injunctions is an equitable relief dependent upon the judicious exercise of discretion on the part of the court after taking into account all the facts and circumstances of the case. This is particularly so, so far as preventive injunctions are concerned, for preventive injuc-tion is a relief granted beforehand to prevent or restrain some threatened act being done, which, if done, would cause the applicant substantial damage and for which money would be no adequate or sufficient remedy. Therefore, it is necessary to consider whether this is a fit case to grant interim injunction sought for.

7. In the case on hand what is sought to be prevented is the completion of an irrigation work, the Lift Irrigation Scheme, Kalloor -- which, as per the agreement executed by Varoo on 27-10-1975 was to be completed a couple of years ago, by 25-11-1976. According to the petitioners the work continued thereafter till 8-5-1977 by mutual agreement. After Varoo's death on 13-5-1977, it appears that some correspondence ensued to ascertain the willingness of the 3rd petitioner to take up the remaining work and complete it. He seems to have declined. From the order under revision in C. R. P. 3349 of 1978 it is seen that according to the respondents measurements were taken on 5-9-1977 and 7-9-1977 in the presence of the 3rd petitioner. Fresh tenders returnable by 25-1-1978 were invited. Tender submitted by Joseph was accepted thereafter. The revision petitioners then filed the suit on 21-4-1978 before the Vacation Bench of this Court and by interim injunction issued by this Court on that day and extended thereafter, the respondents were prevented from handing over the site to Joseph for four weeks from then. Thereafter the lower court granted interim injunction on the lines mentioned earlier in this judgment, and this was in force till 28-10-1978. Later, this court by order dated 27-11-1978 granted interim injunction on the same lines, and this is still in force. The result is that the Irrigation Scheme, intended for the benefit of the general public and which was to be completed two years back, is still not finished.

8. According to the petitioner 'proper measurements' have not been recorded, and they fear that if the work is completed without taking measurements it will not be possible to ascerain the quantum of work done by Varoo. Therefore, they sought to have the measurements taken by a commissioner deputed by the lower court. A commission was issued, and the commissioner has submitted his report, but not to the satisfaction of the revision petitioners. They therefore want to examine the commissioner to substantiate their contention that the commissioner has not properly discharged his duties. By examining the commissioner they hope to have the report set aside and a fresh commission sent out, or at least to have the report remitted to the commissioner for supplemental report. This means that the petitioners are indirectly requesting the court to determine the quantum of work executed by Varoo, and to bring all work to a standstill till such determination. Now, that an arbitrator has entered upon the reference, or is about to do so, is it necessary to have the aid of the court for determining the quantum of work carried out by Varoo, and would it be proper for the court to decide that matter which really is the function of the arbitrator, fall for consideration.

9. At this stage, It would be pertinent to consider the question, whether the petitioners are entitled to have the commissioner summoned and examined as sought for by I. A. 1092 of 1978 from which C. R. P. 3349 of 1978 arises. Section 41(b) of the Act read with item 3 in the second schedule thereto confers power on the court to authorise any person to make a local inspection of the work-site and to make any observations which may be necessary or expedient for the purpose of obtaining full information or evidence for the purpose of and in relation to, arbitration proceedings pending before the arbitrator.

'As with other forms of discovery, recourse may be had, in the event of refusal to comply with the arbitrator's order, to the court's powers. These are to make orders in respect of the inspection of any property or thing which is the subject of the reference (or as to which any question may arise there); and to make orders authorising any person to enter for any of these purposes upon or into any land or building in the possession of any party to the reference, and to make orders authorising any samples to be taken or any observation to be made or experiment to be tried which may be necessary or expedient for the purpose of obtaining full information or evidence'. (Russell on Arbitration 18th Edn. P. Ill)

The learned author, for this relies on Section 12(6)(g) of the English Statute, Arbitration Act, 1950, corresponding to item 3 in the Second Sch. to the Act read with Section 41(b) thereof. However, I do not think that the provisions of Order XXVI of the Code would be attracted in that event and this is so, because the provisions of the Code have been made applicable only to proceedings before court (Section 41(a)) so that, so far as proceedings before the arbitrator are concerned, the court's power is only to confer authority on any person to perform one or the other of the things mentioned in item 8. This is, as it ought to be, for it is the arbitrator who has to adjudicate upon the evidence furnished by a person authorised by the court in terms of item 3, and its correctness, veracity and probative value. Note that Section 43 of the Act empowers the court to issue processes to parties and witnesses whom the arbitrator desires to examine directing them to appear before the arbitrator, and therefore the person authorised as aforesaid can be compelled to give evidence before the arbitrator with reference to the results of his observations or of other things done by him, and that under Section 13(1) of the Act, the arbitrator can administer oath to winesses, wherefore the commissioner can be compelled to give such evidence under oath.

10. Relying on the observations in Jammu Forest Co. v. State (AIR 1963 J & K 86) that proceedings before the arbitrator pursuant to an order of reference made under Section 20 of the Act will be deemed to be proceedings before court, it is contended on behalf of the revision petitioners, that all the provisions of the Code would be attracted to matters mentioned in the second schedule even while proceedings are pending before the arbitrator, and court can exercise any of its powers vested in it under the Code in relation to such matters. With respect, the construction placed on Section 41(b) as aforesaid in Jammu Forest Co. v. State (AIR 1968 J & K 86), it appears to me, would make Clause (b) of Section 41 inapplicable to arbitrations without the intervention of the court, and I do not think that in this respect there is any distinction between the three classes of arbitrations dealt with in the Act, It is my view that while arbitration is pending before the arbitrator, the court's powers are only such as are conferred on it by Section 41(b) of the Act read with the matters set out in the Second Sch. and nohing more and nothing less. This is clear from the proviso to that clause whereunder the conferment of powers on the court shall not be taken to prejudice any power, the arbitrator has with respect to such matters. While all proceedings in court under the Act including proceedings under Clause (b) of Section 41 and those after the filing of the award in court would be governed by the provisions of the Code, and while after filing of the award in court, it may under Section 18(1) pass such interim orders as it deems necessary, when proceedings are before the arbitrator, the court's function is only to aid the arbitration proceedings by making such orders under Section 41(b), read with the matters set out in the Second Schedule, for the purpose of, and in relation to, proceedings before the arbitrator, which if made by the arbitrator would have no legal efficacy nor legal sanction.

11. In the light of the above dis-cussion it has to be said that Order XXVI Rule 10 (2) of the Code which enables a party to a suit to examine the commisisioner personally in open court touching any of the matters referred to him or mentioned in his report or as to his report or as to the manner in which he has made the investigation, is not available to examine a person authorised under Section 41(b) of the Act read with items 3 in the Second Sch. for the purpose of and in relation to proceeedings before the arbitrator. No doubt the order under revision in CRP 3349 of 1978 was passed a few days earlier, on 17-10-1978, wherefore, it could, perhaps, be said that the provisions of Order XXVI could be invoked then, but still, in so far as the Commissioner was sought to be examined with the object of inviting the court to determine finally the quanturn of work executed by Varoo up to 8-5-1977, and since that is one of the matters that requires to be determined by the arbitrator, and the suit itself has been disposed of shortly thereafter by making an order of reference, I do not think that any interference is called for with the order under revision in CRP 3349 of 1978.

12. Reverting to the question of interim injunction as prayed for in CRP 3348 of 1978, it is necessary to notice that there is no motion before the court to authorise any person to make a local inspection of the work-site. The effect of the interim injunction as asked for would be to hold up the completion of the work till 'proper measurements' are taken, or in other words, till such time as the arbitrator, on the basis of information and evidence furnished by someone who may hereafter be authorised by court to make a local inspection and take measurements, determines the quantum of work done by Varoo up to 8-5-1977, and, perhaps, if either of the parties is dissatisfied with such determination, till the court and the appellate court, finally pronounces thereon. In this connection it is necessary to point out that the arbitrator himself can, in his discretion, inspect the site and view the premises, and either of the parties can be ordered to show him the same. (See Russell on Arbitration, 18th Edition, Page 190 and implied condition No. 6 in the 1st Sch. to the Act.) No doubt as stated by the learned author :--

'A view or inspection does not do away with the necessity for evidence, except in cases where it is clear from the terms of the submission that the arbitrator was appointed on account of his skill and knowledge of the subject, and that it was intended that he should decide with out receiving evidence'. (Ibid) Here the parties have agreed upon the Chief Engineer (Arbitration) as the arbitrator, and it cannot be disputed that he was appointed on account of his skill, and because he may decide the dispute on the basis of his local inspection alone without any other evidence. Beside - 'It seems that an arbitrator may delegate to another the performance of acts of a ministerial character only, e. g., the measurement of the number of acres in a field or the surface of a lake are acts of such a character. It is not always easy to ascertain what acts are included under the head of ministerial acts'. (Russell on Arbitration -- 18th Edn. p. 192.)

In the light of the above discussion, I am not prepared to say that the lower court went wrong in vacating the interim injunction when it disposed of the suit, though the reason stated therefor cannot be sustained.

13. The learned counsel on both sides have filed a joint memo dated 30-1-1979 stating that they agree that Sri. K. A. Jossie, Executive Engineer, Minor Irrigation Division, Public Works Department, Ernakulam may be appointed as the Engineer-Commissioner to measure and ascertain the quantum of work done by Varoo. The learned Government Pleader said that the Government would make available his services for that, and that he is willing to do the work of measuring and ascertaining the quantum of work done by Varoo. Treating this request as one to confer authority on Sri. K. A. Jossie to make a local inspection and ascertain the quantum of work, I authorise him to do so. In order to facilitate the taking of measurements and ascertaining the quantum of work done by Varoo, I restrain the respondents from altering, modifying, tampering with or in any way changing with the work clone by late Sri. Varoo, under Agreement No. 3/SEMI/l 975-76 for a priod of two months from today.

14. In the result CRP 3348 of 1978 is disposed of as indicated above in the preceding para. I dismiss CRP 3349 of 1978. The parties shall suffer their costs in both the Civil Revision Petitions.

15. A copy of para 13 shall be communicated to Sri. K. A. Jossie mentioned therein forthwith under seal of this Court and signed by Deputy Registrar.

16. The learned counsel appearing for the revision petitioners and the learned Government Pleader submit that they are agreed that the remuneration of Sri. K. A. Jossie can initially be fixed at Rs. l.000/- and the revision petitioners will for the time being pay the same to him. It is also submitted that the revision petitioners will meet initially the expenses that may be necessary for taking the measurements and ascertaining the quantum of work. The learned counsel on both sides are further agreed that the remuneration of Sri. K. V. Jossie may finally be fixed by the arbitrator and that the arbitrator may decide upon as to who shall be liable for the same as also as to who shall be liable for the expenses incurred in connection with taking measurements and ascertaining the quantum of work.

Issue carbon copy of this order to the learned Government Pleader free of cost and to the learned counsel appearing for the revision petitioners on receipt of requisite charges.


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