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Tamil Nadu Civil Supplies Corporation Limited Vs. Ramaswamy Rice Merchants, a Partnership Firm Represented by Its Managing Partner C. Muthuswamy and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtChennai High Court
Decided On
Reported in(1995)1MLJ524
AppellantTamil Nadu Civil Supplies Corporation Limited
RespondentRamaswamy Rice Merchants, a Partnership Firm Represented by Its Managing Partner C. Muthuswamy and O
Cases ReferredJatley v. College of Vocational Studies Sheik Sarai
Excerpt:
- securitisation & reconstruction of financial assets & enforcement of security interest act, 2002 [c.a. no. 54/2002]section 17; power of tribunal to impose condition relating to deposit for grant of stay of auction held, there is no specific provision made under section 17 of securitisation act or under any other provisions of the said act empowering the tribunal to pass any interim order. but under sub-section (12) of section 19 of the recovery of debts due to banks and financial institutions act, 1993, the tribunal has been empowered to pass various interim orders. if sub-section (7) of section 17 of securitisation act is read along with sub-section (12) of section 19 of recovery of debts due to bank is and financial institutions act, it would be clear that the tribunal also has.....srinivasan, j.1. these appeals arise out of common judgment in o.p. nos. 801 and 802 of 1992 and application numbers 5547 and 5548 of 1992, on the file of the original side. the learned single judge has dismissed the original petitions and consequently held that the first respondent before him in each of the original petitions was entitled to a decree in terms of the awards passed by the second respondent/ arbitrator. thus, the two applications before him were ordered by him.2. the facts are shortly thus: tamil nadu civil supplies corporation limited, which is hereinafter referred to as the appellant, invited tenders for supply of rice in may, 1989. the first respondent in o.s.a. nos. 284 and 287 of 1994, which will be hereinafter referred to as the first respondent, and the first.....
Judgment:

Srinivasan, J.

1. These appeals arise out of common judgment in O.P. Nos. 801 and 802 of 1992 and Application Numbers 5547 and 5548 of 1992, on the file of the Original Side. The learned single Judge has dismissed the original petitions and consequently held that the first respondent before him in each of the original petitions was entitled to a decree in terms of the awards passed by the second respondent/ arbitrator. Thus, the two applications before him were ordered by him.

2. The facts are shortly thus: Tamil Nadu Civil Supplies Corporation Limited, which is hereinafter referred to as the appellant, invited tenders for supply of rice in May, 1989. The first respondent in O.S.A. Nos. 284 and 287 of 1994, which will be hereinafter referred to as the first respondent, and the first respondent in O.S.A. Nos. 285 and 286 of 1994, which will be hereinafter referred to as the second respondent, submitted the tenders. After negotiations, they entered into agreements on 16.6.1989 and on 23.6.1989 with the appellant for the supply of 27,250 MTs. of parboiled rice at the rate of Rs. 3,999 per Metric Tonne. The contracted quantity of rice was to be loaded within 90 days by each of the respondents. They also furnished bank guarantee to the extent of Rs. 21,79,455 and deposited Rs. 1,00,000 by way of earnest money each. According to the respondents, the contracted quantity could not be supplied, as agreed, in view of the unprecedented heavy rains in Andhra Pradesh. The respondents prayed for extension of time and the appellant unilaterally cut the price by Rs. 9 per MT in the first instance. Again, the appellant cut a further sum of Rs. 100 per MT with the result the total cut was Rs. 109 per MT for boiled rice and Rs. 125 for raw rice. According to the respondents, the officials of the appellant, at the loading point without conducting any quality test has cut certain amounts for alleged quality defect and towards railway freight. After the supply was completed, the matter was referred to arbitration at the instance of the respondents. Originally, the arbitrator gave award dismissing the claims. The respondents filed Original Petition Nos. 446 and 447 of 1991 in this Court, for setting aside the awards. This Court by order dated 2.12.1991, had set aside the awards passed. Thereafter, a retired District Judge was appointed as the sole arbitrator and he passed an award on 25.8.1992. Challenging the said award, the appellant filed the two Original Petitions Nos. 801 and 802 of 1992. The respondents filed Application Nos. 5547 and 5548 of 1992, for passing decrees in terms of the awards. The learned single Judge, agreed with the arbitrator and dismissed the original petitions and held that the respondents are entitled to get decrees in terms of the awards.

3. Thus the appellant has preferred four appeals, two against each of the two respondents. The main contention in the appeals is that the award of the arbitrator is vitiated by an error apparent on the face of the record, which would amount to a legal misconduct, on the part of the arbitrator. It is also contended that the arbitrator has omitted to take into account a vital document which proved that the case of the respondents was not true. It is contended that the learned single Judge also committed the same error by ignoring the said document and adopting a similar reason as that of the arbitrator in confirming the awards.

4. Before considering the arguments on merits, we are obliged to perform a painful duty and refer to an incident which happened in the court, during the arguments of these appeals. On the first occasion, the appeals were posted for admission on 30.11.1994. The respondents had entered caveat and the names of their counsel also appeared in the list. On that day, as requested by learned Counsel on both sides, the matter was adjourned to the next week. Thereafter, the appeals were posted in the list on 12.12.1994. On that day, learned Senior Counsel for the appellants began his arguments. He wanted to concentrate on the petitions for stay, during the tendency of the appeals. When the court pointed out that the appeals could be decided on merits finally then itself as both sides were present, learned senior counsel for the appellants, expressed surprise that the appeals were not admitted by the Registrar. He stated that the appeals, being allowed by Section 39 of the Arbitration Act, there was no necessity for posting the same for admission before court. We did not agree with him. However he wanted time to prepare his argument in the appeal and prayed for an adjournment. The matter was adjourned to 19.12.1994. On that day, counsel on record for the appellant prayed for adjournment for one day and accordingly, they were taken up for hearing yesterday (20.12.1994). 5. Learned Senior counsel wanted to address the court, first on the question whether appeals should be posted for admission before court. Even when he began his arguments, the court pointed out that there was no doubt about the position that the appeals should be posted for admission and the court was entitled to hear the same for admission and the court put a question to him, whether there was any binding authority to the effect that the appeals are entitled to automatic admission by the Registrar. Learned senior counsel said that he would rely upon certain judgments and convince the court that the appeals need not be posted for admission and only the stay petitions should come up before this Court for hearing. He proceeded to read Sections 39 and 41 of the Arbitration Act and referred to the judgment of the Supreme Court in Union of India v. Mohindra Supply Company : [1962]3SCR497 . He read out passages in the judgment and in particular paragraphs 3 to 5 thereof. We pointed out to the counsel that the question before the Supreme Court in that case was whether an appeal would lie against the Judgment of a learned single Judge of the High Court rendered in an appeal under Section 39(1) of the Arbitration Act. The question was whether Clause 10 of the Letters Patent of the High Court of Punjab enabled a party to prefer an appeal against the judgment of a single Judge of that High Court rendered in appeal, under Section 39 of the Arbitration Act, and whether such an appeal would amount to a 'second appeal' within the meaning of Section 39(2) of the Arbitration Act. We also told learned Counsel that the decision has no relevance whatsoever to the question before us. We pointed out to learned Counsel that it would be futile to contend before us that an appeal under Section 39 of the Arbitration Act cannot be posted for admission before the court and the moment the appeal is taken on file, the Registry shall issue notice to the respondents. Learned Counsel got wild and took exception to the view expressed by us and started saying things which were unpalatable and not becoming of a senior advocate. We pointed out to him that the court is entitled to express its view on a matter, in which the position of law is well settled and there was no need for the court to hear arguments at length from any counsel, whether he is senior or Junior particularly when the question was wholly unnecessary for deciding this case. But learned Counsel insisted that as a senior counsel he is entitled to argue and the court is bound to hear. He also said that thereafter he would not argue the matter and he would merely give the citations as the court had made up its mind. He proceeded to refer to certain passages in the following judgments.

Balde Pentaiah v. Balaganti Mallaiah : AIR1968AP228 , Union of India v. N.K. Private Limited : AIR1972Delhi202 , Bapi Engineering and Company v. State of West Bengal : AIR1983Cal212 and Slate of West Bengal v. Dilip Kumar Saha : AIR1983Cal213 .

Though learned Counsel did not read any passage from any of those judgments, we went through those judgments and found that they have no relevance, in the present case. Learned Counsel proceeded to refer to Order 2, Rules 3, 4 and 14 of the Appellate Side Rules and concluded that the court had no jurisdiction to decide whether the appeals should be admitted or not. According to learned Counsel, Section 39 of the Act conferred a right of appeal, in favour of the appellant and the Registry ought to have issued a notice the moment the appeals were taken on file.

6. Not stopping with that, learned Counsel proceeded to state that he would not get justice from this Court as the court had already expressed its opinion, even before his arguments began, on this aspect of the matter. He repeated that more than once. We told the counsel that we will make a record of that in this appeal, but he did not bother about that.

7. We would not have recorded this incident in this judgment but for the fact that such instances of counsel hurling abuses against the judges in open court are on the increase. Recently, we had a bitter experience in two other cases. Some junior members of the Bar, who come to court without preparing themselves, either on facts or on law, are not able to answer the questions of the court and find themselves ill at ease. At that stage, they start abusing the court and telling the court that they are not getting justice, probably, with a view to get the matters posted before some other Bench. But, we never expected a senior counsel, for whose erudition in tax law, we have great regard, would indulge in such activities. In a fit of anger, learned senior counsel threw to winds the professional etiquette, when he found that his arguments were blunted by the replies of the court on the question of law, which he raised unnecessarily. Obviously he felt that he should resort to the course of abusing the court that he would not get justice in this Court.

8. However, we directed him to proceed with the arguments, on the merits of the case and immediately after finishing his arguments on the merits of the case, he left the court hall in a huff, even without waiting to know whether we will be delivering judgment immediately or reserving the orders. We informed learned Counsel on record that judgment would be delivered this afternoon (21.12.1994). This morning, we sent word to learned senior counsel through Mr. K. Mani, one of the counsel on record to find out whether learned senior counsel would be prepared to come to this Court and express regret so that we can avoid the unpleasantness of making a record of the incident, in this judgment. But, learned senior counsel sent word that he left the matter to the discretion of the court. It is very unfortunate that learned senior counsel is not prepared to repent or express his regret, inspite of an opportunity being given to him. We are not making a record of the incident in this judgment just for the pleasure of satisfying our vanity but as pointed out already, we find such instances are on the increase and we must make an endeavour to see that they are reduced if not stopped.

9. If senior counsel also begin to behave in this manner, it would only lead to a catastrophe and disaster of which we abhor to think. We are here to render justice between the parties and not to satisfy the ego of Counsel appearing before us.

10. Rule 2 in Section 1 of the Rules framed by the Bar Council of India under Section 49(c) of the Advocates Act, 1961 relating to Standards of Professional conduct and etiquette, reads that ''an advocate shall maintain towards the courts a respectful attitude bearing in mind that the dignity of the judicial office is essential for the survival of a free community.' The Supreme Court had an occasion to refer to this aspect of the matter when they were dealing with the proceedings in contempt in R.K. Garg v. State of Himachal Pradesh : 1981CriLJ1029 . The Supreme Court said:.Those who are informed of the question and think deeply upon it entertain no doubt that the Bar and the Bench are an integral part of the same mechanism which administers justice to the people. Many members of the Bench are drawn from the Bar and their past association is a source of inspiration and pride to them. It ought to be a matter of equal pride to the Bar. It is unquestionably true that courtesy breeds courtesy and just as charity has to begin at home, courtesy must begin with the Judge. A discourteous Judge is like an ill-tuned instrument in the setting of a court room. But members of the Bar will do well to remember that such flagrant violations of professional ethics and cultured conduct will only result in the ultimate destruction of a system without which no democracy can survive.

11. In M.B. Sanghi v. High Court of P. & H. : 1991CriLJ2648a , the appellant, a practicing advocate, having failed to persuade the learned Subordinate Judge to grant an ad interim injunction pending filing of a counter by the opposite party, switched gear from persuasive advocacy to derogatory remarks in the fond hope that such tactic would succeed and the learned Judge would be browbeaten into submission. The learned Subordinate Judge did not yield to it. But instead he made record of the disrespectful and derogatory remarks made with intent to tarnish his image as a Judicial Officer and forwarded a report to the District Judge who in turn reported the matter to the High Court to enable it to inititate to proceedings for contempt of court against the appellant. While dealing with the matter, the Supreme Court said..and, when a member of the profession resorts to such cheap gimmicks with a view to brow beating the Judge into submission, it is all the more painful. When there is a deliberate attempt to scandalise which would shake the confidence of the litigating public in the system, the damage caused is not only to the reputation of the concerned Judge but also to the fair name of the judiciary. Veiled threats, abrasive behaviour, use of disrespectful language and at times blatant condemnatory attacks like the present one are often designedly employed with a view to taming a Judge into submission to secure a desired order. Such cases raise larger issues touching the independency of not only the concerned Judge but the entire institution. The foundation of our system which is based on the independence and impartiality of those who man it will be shaken if disparaging and derogatory remarks are made against the Presiding Judicial Officers with impunity. It is high time that we realise that the much cherished judicial independence has to be protected not only from the executive or the legislature but also from those who are an integral part of the system. An independent judiciary is of vital importance to any free society. Judicial independence was not achieved overnight. Since we have inherited this concept from the British, it would not be out of place to mention the struggle strong-willed judges like Sir Edward Coke, Chief Justice of the Common Pleas, and many others had to put up with the Crown as well as the Parliament at considerable personal risk. And when a member of the profession like the appellant who should know better so lightly trifles with the much endeared concept of judicial independence to secure .small gains it only betrays a lack of respect for the martyrs of judicial independence and for the institution itself. Their sacrifice would go waste if we are not jealous to protect the fair name of the judiciary from unwarranted attacks on its independence.

The appellant in that case, tendered apology to the court. But it was not accepted. The Supreme Court observed:.Having regard to the fact that incidents of insubordination and use of improper language towards the Judges are on the increase, the High Court was of the view that the appellant could not be allowed to get away by simply feeling sorry by way of apology as the easiest way, I am unable to say that the High Court was not justified in taking this view. Taking into consideration the facts and circumstances of the case and the fact that the appellant, a fairly senior advocate, is prone to use disparaging and contemptuous remarks against Judges, I am of the opinion that this is not a case in which the apology tendered by the appellant may be accepted.

12. In Mohd. Zahir Khan v. Vijai Singh : 1992CriLJ610 , the Supreme Court said that exercise of jurisdiction in the nature of contempt is in fact a painful duty which the court is called upon to perform not because any allegation is directed against a Judge or Judges of the court or to vindicate personal honour but to maintain the dignity and decorum of the court. They referred to an earlier judgment in Delhi Judicial Services Association v. State of Gujarat : AIR1991SC2150 , wherein it was observed that the object of punishing a contemner is to protect the administration of public justice and not judges personally.

13. In this case, the object of our making a record of the incident in this judgment is only to maintain the dignity of the judiciary and protect the administration of justice and not to vindicate any personal honour of ours. No doubt, we could have issued a notice of contempt to the senior counsel, but having regard to the fact that it is the first occasion in which he has indulged in such tactic, we do not think it is necessary to proceed against him in contempt. But, however, we are recording this incident in this judgment which itself will be sufficient to serve the purpose. We hope that the said senior counsel will not repeat the behaviour in future and no other advocate will try to emulate what has been done by the senior counsel, in this case. We, however, wish to point out that we have made the above remarks as both of us are from the Bar and we are very much interested in the Bar in upholding the great traditions which have always been the hall-mark of the Madras Bar.

14. Now, we proceed to point out how the contention raised by learned senior counsel that the appeals ought not to have been posted for admission, is without any substance whatever. Section 39 of the Arbitration Act is a substantive provision of law which provides for appeals being filed against certain orders expressly set out therein. The section says that no other order is appealable. The section also provides that no second appeal shall lie from an order passed in appeal under that section. Section 41 of the Arbitration Act is to the effect that subject to the provisions of the Act and Rules made thereunder, the provisions of the Code of Civil Procedure, 1908, shall apply to all proceedings before the court and to all appeals, under the Act. In Secretary, Irrigation Department, Government of India v. C.C. Roy : [1991]3SCR417 , the court stated categorically that a reading of Section 41 of the Arbitration Act shows that the provisions of the Code of Civil Procedure are applicable to all proceedings before the court including the appeals under that Act. It is the contention of learned Counsel that the provisions contained in the Code of Civil Procedure are subject to the provisions of the Act and therefore when Section 39 of the Act confers an unqualified right of appeal over the orders mentioned therein, the court has no jurisdiction to insist upon posting such appeals for admission, and considering whether those appeals could be dismissed in limine. As pointed out already, learned Counsel points out Order 2, Rule 3, and Order 4, Rule 30 of the Appllate Side Rules. Order 2, Rule 3 of the Appellate Side Rules provides that in appeals against (a) original decree of subordinate courts, (b) final judgments in original suits disposed of by the High Court in the exercise of its original jurisdiction and (c) under Clause 15 of the Letters Patent from the judgment of single Judges passed in appeals from appellate decrees or orders where the certificate provided for in Order 4, Rule 28, has already been obtained, the Registrar shall issue notice forthwith. This provision is contained in Clause (i) of Sub-rule (3) of Rule 2 of the Appellate Side Rules. Clause (ii) of the said sub-rule provides that all miscellaneous appeals, other than appeals under Order 43, Rule (u) of the Code, the Registrar may direct the issue of notice forthwith or post any such appeal before the court for orders. Even this Rule is clearly against the contention of learned senior counsel. There are only three kinds of appeals mentioned in Clause (i) of Sub-rule (3), (1) appeals against judgments of subordinate courts, (2) appeals against final judgments in original suits disposed of by the High Court in exercise of its original jurisdiction, and (3) under Clause 15 of the Letters Patent against judgments of single Judges passed in appeals. These appeals are said to have been filed under Section 39 of the Arbitration Act and are directed.... against orders passed by a learned single Judge of this Court. They are not decrees or judgments in original suits contemplated by the second clause provided in Clause (1) of Sub-rule (3). In fact Section 39 of the Act itself expressly uses certain words. When the said section provides for an appeal against the orders mentioned in those clauses, those orders cannot be considered to be decrees or judgments passed on the original side of the High Court. Hence, Order 2, Rule 3 does not help the appellant to contend that these appeals ought not to have been posted for admission. On the other hand, Clause (ii) of Sub-rule (3) gives a discretion to the Registrar to issue notice forthwith or to post any appeal before the court for others. In fact, prior to 1977 or 1978, several miscellaneous appeals against orders of Subordinate Courts were being admitted by the Registrar himself and notices were being issued in the appeals by the Registrar. Only the miscellaneous interlocutory petitions were being posted before the court. But, the then Honourable the Chief Justice issued an order that all civil miscellaneous appeals shall be posted before court for admission and the Registrar shall not admit them by himself. It is only thereafter, civil miscellaneous appeals came to be posted before court for admission including appeals against the awards passed by the Motor Claims Tribunal. In one case when the matter was posted before the First Bench of this Court, for admission, an argument was raised by learned Counsel that there was a right of appeal under the provisions of the Act and the Registrar ought not to have posted it for admission. That contention was rejected by the First Bench and they proceeded to hear the appeals for admission on merits. Unfortunately, the Registry is not able to get hold of the number of the said appeal. One of us (Srinivasan, J.) is aware of the same because he was present in court, on that occasion, in connection with some other case, as advocate.

15. It is, however, not necessary to cite the said judgment as precedent, as it is not available to be put up now.

16. Order 4, Rule 30 of the Appellate Side Rules, on which reliance is placed by learned senior counsel for the appellant reads that an appeal under Clause 15 of the Letters Patent not being specified in Rule 3(3)(i)(b) or (c) of Order 2 shall be posted before a Bench of two Judges for orders and notice shall be issued to the respondents. This Rule is really supplementary to the Rule in Order 2, Rule 3(1)(b), (c) and (d) of the Appellate Side Rules. We have already seen that Order 2, Rule 3 enabled the Registrar to issue notice in appeals under Clause 15 of the Letters Patent, if they are accompanied by a certificate provided for in Order 4, Rule 28 of the Appellate Side Rules. Turning to Order 4, Rule 28, it is seen that when an appeal against an appellate decree or order has been heard and disposed of by a single Judge, any application for a certificate that the case is a fit one for further appeal under Clause 15 of the Letters Patent shall be made orally and immediately after the judgment has been delivered. In those days, before the amendment, of the Code of Civil Procedure in 1976, when second appeals were disposed of by single Judge and Counsel prayed for leave under Clause 15 of the Letters Patent the court used to consider the same and pass appropriate orders. It is only in cases in which leave was granted on such request, a certificate was being issued and it is only such a certificate, which is referred to in Order 4, Rule 30 of the Appellate Side Rules. The amendment of the year 1976, to the Code of Civil Procedure Provided that no appeal under Clause 15 of the Letters Patent would lie against a judgment rendered in a second appeal, (See: Section 100-A, C.P.C.) Thereafter Order 4, Rule 28, Appellate Side Rules has become a dead letter.

17. The crucial aspect of the matter, which has been overlooked by learned senior counsel, and which he refused to understand inspite of the court pointing out again and again, is that while the substantive provision under Section 39 of the Arbitration Act provides a right of appeal, the procedural part of it is left to the court and the right of appeal will not by itself give a right to avoid the procedure prescribed either by the Code or by the court. Such a procedure prescribed by the Code or court is in no way altered by the right of appeal provided in Section 39 of the Arbitration Act. Learned senior counsel relied on Section 41 of the Arbitration Act. He said that the said provision was expressly subject to the other provisions of the Act. No doubt, it is so. But there is no section in the Arbitration Act which prescribes the procedure for hearing the appeals under Section 39 of the Act, either by the High Court or any other court. For the matter of ascertaining the procedure to be adopted one has to look to either the Code of Civil Procedure or the Rules framed by the High Court.

18. In the Civil Procedure Code, Section 122 empowers the High Court to make rules regulating their own procedure and the procedure of the civil courts subject to their superintendence from time to time after previous publication and may by such rules annul, alter or add to all or any of the rules in the First Schedule. This shows that the Rules may be framed by the High Court for courts subject to their super intendence in superession of the Rules contained in the First Schedule of C.P.C. Insofar as powers of chartered High Courts are concerned, Section 129, C.P.C. provides that notwithstanding anything in the Code, the High Court may make such Rules not inconsistent with the Letters Patent or order or other law establishing it to regulate its own procedure in the exercise of its original civil jurisdiction as it shall think fit, and nothing therein contained shall affect the validity of any such rules in force at the commencement of the Code. This is the power of the High Court to make its own Rule to regulate its procedure, with regard to matters to be dealt with by it, as recognised and reaffirmed again and again by the provisions of the Code.

19. Clause 37 of the Letters Patent, 1865 empowers the High Court to make Rules and Orders to regulate its own procedure in the exercise of its original civil jurisdiction, from time to time, including proceedings in its admiralty, testamentary and intestate jurisdiction and matrimonial jurisdiction. In Section 106 of the Government of India Act, 1915, Sub-section (1) provides that the several High Courts are courts of record and have such jurisdiction, original and appellate, including admiralty jurisdiction, and all such powers and authority over or in relation to the administration of justice, including the power to make rules for regulating the practice of the court, as are vested in them by Letters Patent, all such jurisdictions, powers and authority as are vested in those courts respectively at the commencement of that Act. A similar provision is found in Section 223 of the Government of India Act, 1935. The same position was continued, when the Constitution of India was passed in the year 1950. Article 225 provides for the continuation of the same situation. Under that Article, the High Court is empowered to make rules of court and to regulate the sittings of the court and of members thereof sitting alone or in Division Courts.

20. It is, in exercise of the power under Article 225 of the Constitution of India, rules are being framed by this Court and the Original Side Rules are amended from time to time by virtue of the said power. Order 36, Rule 1 of the Original Side Rules provides that a memorandum of appeal shall be in Form No. 2 and shall be accompanied by a certified copy of the decree and judgment or order amounting to judgment appealed from, and a notice to the respondent in Form No. 83 and also a copy thereof signed by the appellant or his advocate. No doubt, there was no rule expressly providing in Original Side Rules, that appeals against orders which are not decrees in original suits should be posted for admission before court. But that has been the consistent and long standing practice ever since 1956, when the present Original Side Rules were framed. Taking note of the absence of such a provision in the Original Side Rules, recently, this Court has amended the Original Side Rules, by introducing an express provision that appeals against orders passed in proceedings which are not original suits and appeals against judgments, which on no account will amount to final judgments shall be posted before court for admission. However, even without such a rule, Order 36, Rule 6 of the Original Side Rules provides that at any time, after the submission of the appeal, any party may apply, to the court that the appeal may be rejected on any ground on which the admission thereof might have been refused by the court. That Rule contemplates an admission of an appeal referred to in Rule 1 of Order 36. This is similar to Order 41, Rule 11, C.P.C. which provides for dismissal of first appeals in limine even though Section 96, C.P.C. gives a right of appeal against judgments and decrees of subordinate courts. Hence, there is no merit in the contention that an appeal provided under Section 39 of the Arbitration Act should not be posted for admission before the court. Even if the Registry had admitted the appeal and issued notice, it is open to the party to request the court to post the matter for disposal, on the ground that the admission of the appeal would have been refused by the court. Rule 11 of Order 36 provides that an appeal from an order amounting to a judgment shall be made to the court by a memorandum or appeal in Form No. 2 and stamped with the fee prescribed and in case of doubt whether an order amounts to a judgment, the Registrar shall post the appeal for orders as to admission.

21. Taking note of the relevant Rules and the provisions in the Letters Patent, the Government of India Act and the Constitution of India, a Full Bench of this Court rendered a Judgment in Loyal Textile Mills Limited v. Allenberg Cotton Company (1993) 1 L.W. 132, that an appeal would lie under Clause 15 of the Letters Patent, even if the order is not appealable by virtue of Section 39 of the Arbitration Act. While holding so, the Full Bench referred to and relied upon a judgment of the Supreme Court in Umaji v. Radhikabai : [1986]1SCR731 and pointed out that an appeal will lie against a judgment of a learned single Judge to a Division Bench if the conditions prescribed by Clause 15 of the Letters Patent are satisfied and when there is no specific bar in statute for filing an appeal. The Full Bench held that the Letters Patent law being a special law, it shall prevail against any general law, so long as there is no specific abridgement, amendment or repeal by a competent Legislature.

22. It is interesting to note that in all the memoranda of appeals in these matters, the only provision of law quoted is Order 36, Rule 1 of the Original Side Rules. Section 39 of the Arbitration Act has not been referred to in the Memoranda of Grounds. But, we never said on that ground that the appeals were not maintainable. In fact, we never questioned the maintainability of the appeals or that appeals could be posted for admission and it is open to the court to decide whether the appeals should be admitted or to be dismissed in limine. In this case, in particular, when we found that the respondents have entered caveat and both parties were available before this Court, we thought it fit to hear the parties on merits so that the appeals could be disposed of straightaway. Unfortunately, learned senior counsel failed to take note of this aspect of the matter and took the view that this Court had made up its mind to negative his contentions. We are very sorry that learned Senior Counsel did not post himself with the relevant provisions of law as well as decisions on this subject, which we have referred. Unnecessarily, he has spent his own time, which is more valuable than ours and also the time of the court. We pointed out to him that his time is more valuable and we did not want him to argue on this point because we were quite aware that there was absolutely no merit. But learned Counsel insisted in saying that the court was bound to hear what he was arguing. His contention is wrong. If a procedure is based on an established principle of law and if a contrary contention is raised, it is not the duty of the court to hear learned Counsel at length and the court could point out to learned Counsel that there was no substance in his contention and he need not spend more time on that contention. It is also the duty of learned Counsel not to advance any frivolous contention or contention which cannot be sustained in any manner known to law. It is very unfortunate that learned senior counsel has failed to take note of this aspect of the matter. Hence, we reject the contention of learned senior counsel that the appeals ought not to have been posted for admission and the Registrar ought to have issued notice to the respondents, immediately after the appeals were taken on file.

23. Now we shall proceed to the merits of the case. The contention of learned senior counsel for the appellants is that the awards of the arbitrator are vitiated by ignoring a crucial document marked as Ex.A-19 before the learned Judge. The document is an invoice dated 20.10.1989 issued by the first respondent, A reading of it shows that the price of the boiled rice was worked out at the rate of Rs. 389 per bag. Freight charges are added thereto. From the said amount a sum of Rs. 300 is deducted for quality cut and gunny cut as per O.C. No. 1993, dated 19.10.1989. Learned Counsel contends that this is an invoice prepared by respondents themselves and they have voluntarily agreed for the cut in the price and it is not open to them to raise a contention that there was an economic coercion on the part of the appellant. Learned Counsel submits that this is not a solitary document and there were a series of documents covering a period of more than three months and those documents were placed before the learned single Judge in a bound volume of typed set. A copy of the said typed set is produced before us marked as Additional typed set II (a). But learned Counsel for the respondents immediately raised an objection to out looking into the said additional typed set submitting that the documents shown in that set were never marked before the arbitrator or before the learned single Judge. He said that a typed set was produced before the learned single Judge and when an objection was raised that those documents were not produced before the arbitrator, the learned single Judge refused to look into that typed set of papers. No attempt was made before the learned Judge or before us to get the documents marked as exhibits in a manner known to law. We cannot now look into the typed set produced by learned Counsel for the appellants and even assuming that this is looked into, the contents of those documents will not in any way help the appellants to prove that the awards of the arbitrator are vitiated by misconduct or an error apparent on the fact of the record.

24. The arbitrator has not only recorded documentary evidence but also recorded oral depositions given by the parties. Some portions of the depositions of the parties were read over to us. It is not necessary for us to refer to them as the learned single Judge in his judgment has adverted to the same. Suffice it for us to refer that passage in the judgment of the learned single Judge which is under appeal. In paragraph 27 of the judgment, the learned single Judge has stated:

I am unable to accept the contention of Mr. V. Ramachandran. It was submitted by the learned Counsel for the 1st respondent, Mr. V.S. Subramaniam, that the findings were without evidence on the ground, that there was no evidence with reference to the economic coercion. On the side of the 1st respondent, one Palanivel had been examined, who had spoken to the economic coercion. There had been no cross-examination in relation to the economic coercion, on behalf of the petitioner. This apart, on the side of the petitioner, one Krishnakumari, who had no personal knowledge about the facts, had been examined and she admitted in the course of chief-examination that the petitioner did not suffer any loss and in the Chief examination, with reference to the economic coercion, there was no evidence, and in the cross-examination she had admitted that for any fault, they would withhold the Bank guarantee. She admitted that if the respondent did not enclose the quality cut certificate any claim at the reduced price will not be paid to the contractors. It is stated that there was error of law, which was apparent on the face of the record, on the ground, that the arbitrator had applied the second paragraph of Section 55(2), while he should have applied the second paragraph of Section 55(3). When once, as a matter of fact, the learned arbitrator has found economic coercion, the question of application of Section 55(3) will not arise and only second paragraph of Section 55 could have been applied and therefore, no error had been committed by him, and, hence I hold that there is no error of law apparent on the face of the record.

After referring to the various judgments of the Supreme Court cited before him, the learned single Judge has held that the awards do not suffer from any infirmity and they are not liable to be set aside. The learned single Judge opined that the arbitrator has taken pains to consider the rival claims of both parties and has come to the conclusion that the awards are unassailable. (See: Paragraph 42 of the judgment of the learned single Judge).

25. The arbitrator has referred to various facts and circumstances of the case and given a finding that there was an economic coercion as contended by the respondents, in the relevant passage, in his award, in the following terms:.The learned Counsel also refers to Clause 11 of Ex.A-2 of agreement containing forfeiture clause to forfeit the deposit of Rs. 21,79,455 for any violation of agreement or loss and also claim for further damages or loss after forfeiture of deposits. The condition to enforce the deposit has also been conceded by R.W.1 in her evidence. She has categorically admitted that the bank guarantee would be cancelled. A close scrutiny of the terms of agreement in Ex.A-2 would go to show that the respondent is having upper hand and therefore as spoken to by P.W. 1 in his evidence that the petitioner has supplied the rice accepting the cut, as they have no other alternative. In fact P. W. 1 in his evidence at page 6 says since they have invested huge sums of money and made all arrangements to procure and also given bank guarantee to the tune of Rs. 22 lakhs and if they failed to supply, they would suffer financial loss and therefore they supplied rice though the price was reduced. The cross-examination of P.W.1 does not reveal any discrepancy or contradiction on this aspect. Considering the terms and conditions of contract under Ex.A-2 the circumstances under which the petitioner was placed at the time of supply of rice would only show that he was not in a position to make any written protest and had to supply rice though the price was cut. As rightly pointed out by the learned Counsel for the petitioner that there was indirect economic coercion making the petitioner to accept the price cut tacitly, failing which he would incur innumerable loss on various account.

The learned Counsel also drew my attention to various English decisions viz. (1989) 3 All E.R. 837: (1989) 1 All.E.R. 641 to show that even assuming acceptance of new terms was vitiated by economic duress. At this stage, the learned Counsel of the respondent pointed out that extension of time was only at the request of the petitioner and while extending the time the condition was imposed by the respondent which is within the jurisdiction. In this connection, he would rely on Clause 14(1) of the contract Ex.A-2 viz., the Corporation has reserved its right to waive or modify any other terms of contract. In this case the extension having been sought for at the request of the petitioner, a reply was sent with a condition which he had accepted and therefore it is an implied contract under Clause 14 and hence it is not open to him to object to the price cut at this distant time. In other words according to the learned Counsel of the respondent, Clause 17(1) has actually been complied with by reason of the letters written by the petitioner under Ex.A-6, A-10, A-13, especially when there was no protest for the price cut till supply was completed. According to him the plea of economic coercion has no legs to stand. In strict terms of the contract Clause 14.1 there was modification of the agreement by reason of above documents and hence it cannot be contended by the petitioner that there was modification without the consent of the petitioner.

I am unable to agree with the contention of the learned Counsel of the respondent inasmuch as there is no written subsequent contract and further even agreeing with the contentions of the respondents there is no consideration for variation of the contract. The mere reliance of correspondence without reference to the terms of contract would not in any way go to show that there is a written consent. Hence it cannot be said that Clause 14.1 has been complied with. Having now come to the conclusion that the petitioner was subject to economic coercion, the next question would arise whether the price cut made by the respondent was correct....

26. A perusal of the abovesaid passage would show that the arbitrator has not ignored any document forming part of evidence available to him and there is no justification in contending that Ex.A-19 was ignored by him. No doubt he has not made an express reference to Ex.A-19. Discussion shows that he has taken into account all the documents produced before him and the oral evidence adduced before him. On a perusal of the awards, we are entirely in agreement with the view taken by the learned Judge that the awards do not suffer from any misconduct or any error apparent on the fact of the record.

27. Learned Counsel for the appellant submits that for the first time on 21.3.1990, the respondents have made a grievance of the cut in the price, when they issued a lawyer's notice marked as Ex.B.4. According to learned Counsel, the delay in taking such a stand after having voluntarily submitted their invoice, agreeing to a price cut is not explained. We are unable to accept this contention. We have found earlier that the finding given by the arbitrator with regard to economic coercion is correct. Hence, there is no question of the respondents having voluntarily submitted their invoices and agreeing to price cut. The fact that they chose to issue a lawyer's notice after the completion of the supply will not prevent or stop them from contending that there was an economic coercion on the part of the appellant.

28. Learned Counsel for the respondents brings to our notice the judgment of the Privy Council in Champsey Company v. Jivraj Balldo Company A.I.R. 1923 P.C. 66 to explain what is an error apparent on the face of the award. At page 69, the court said 'an error in law on the face of the award means, in their Lordships' view, that you can find in the award or a document actually incorporated thereto as for instance, a note appended by the arbitrator stating the reasons for his judgment, some legal proposition which is the basis of the award and which you can then say is erroneous.'

29. In Coimbatore District Podhu ThozhillarSangam v. Balla Subramania Foundry : [1987]3SCR852 the Supreme Court said that 'an award can only be set aside where there is an error on its fact and it is an error of law and not mistake of fact committed by the arbitrator which is justiciable in the application before the court.' The Supreme Court relied upon the observation of the Privy Council in Champsey Bhara and Company v. Jivraj Balldo Spinning and Weaving Company Limited A.I.R. 1923 P.C. 66: (1923) 50 LA. 324 and other earlier judgments of the Supreme Court and observed 'wrong or right the decision was binding, if it be reached fairly after giving adequate opportunity to, the parties to place their grievances in the manner provided by the arbitration agreement.'

30. Our attention is drawn to the decisions in Raipur Development Authority v. Chokhammal Contractors A.I.R. 1990 S.C. 1426 and in Secretary, Irrigation Department, Government of India v. G.C. Roy : [1991]3SCR417 , in which it has been held that an award passed by an arbitrator need not contain reasons and it cannot be set aside merely on the ground that no reasons have been given in its support except where the arbitration agreement or an order made by the court, requires that the arbitrator should give reasons for the award. In the present case, the arbitrator has given sufficient reasons for coming to the conclusion arrived at by him.

31. Reference is also made to a judgment of the Supreme Court in Bijendra Nath Srivastava v. Mayank Srivastva A.I.R. 1994 S.C. 256 and S.S Jatley v. College of Vocational Studies Sheik Sarai, New Delhi (1994) 2 S.C.C. (Supp.) 402, in support of his contention that the court should normally support the award, particularly in upholding the award and should not set aside the award, unless there is a clear error on the fact of the record.

32. We have said enough in this case, to point out that there is no misconduct on the part of the arbitrator and there is no error apparent on the fact of record. As the views taken by the learned single Judge that the awards are based on the evidence available on record and there is no misconduct are well founded, the order of the learned single Judge is confirmed. The appeals are dismissed, with costs in O.S.A. Nos. 284 and 285 of 1994. The appellant shall pay costs to the first respondent in each of the said appeals. Counsel's fee Rs. 5,000 (Rs. Five thousand only) in each of the appeals.


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