THRESIA v. STATE OF KERALA — 1979 DIGILAW 34 (KER)

Judgment :- 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 S.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. 1,25,5000.00 or any other amount by way of final bill payment due for works done by late Sr. 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. I. 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/1975-76 dated 27th October 1975 lying to the credit of late Sri. A.1. Varoo with the Defendants. (4). Whether the Plaintiffs are entitled to a declaration that the balance works under contract No. 3/SEMI/1975-76 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 pendent 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 of. In CRP. On 28-10-1978 the lower court dismissed this application on the ground that the suit has been disposed of. In CRP. 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 S.20 of the Act, power to grant interim injunction. The learned counsel for the revision-petitioners rely on S.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 the 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 CRP. 3349 of 1978. 4. The learned Government Pleader raised a preliminary objection to the maintainability of CRP. 3348 of 1978 on the ground that the order dismissing an application for temporary injunction is an order appealable under 0.43 R.1(r) of the Code Civil Procedure, 1908. S.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 rules thereunder The provisions in the Code conferring right of appeal have to be read subject to S.39 of the Act; this means that only such orders passed under the Act as are mentioned therein are appealable. See Gopal v. M. P. Sundari (AIR. 1955 Patna 277 (280). Therefore, S.104(1)(i) of the Code read with 0.43 R.1(r) therein does not govern an order passed on an application for interim injunction filed under S.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 S.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. 5. In view of S.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 commences, and answered it in the negative by holding that the court can exercise its powers under S.41(b) of the Act read 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 S.20(4) of the Act The court can, while making an order of reference to the arbitrator, in exercise of its power under S.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 tiled under clause (a) of S.41 of the Act. 6. Though the court is competent to grant interim injunction, as aforesaid, it is to be remembered that granting of injunction 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 injunction 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. 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 18 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 CRP. 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 backs-is still not finished. 8. According to the petitioners 'proper measurements' have not been recorded, and they fear that if the work is completed without taking measurements it will not be possible to ascertain 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. 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 stand-still 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 CRP. 3349 of of 1978 arises. S.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. "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. 111) The learned author, for this relies on S.12 (6) (g) of the English Statute, Arbitration Act, 1950, corresponding to item 3 in the second schedule to the Act read with S.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 (S. 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 3. 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 S.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 S.13 (1) of the Act, the arbitrator can administer oath to witnesses, wherefore the commissioner can be compelled to give such evidence under oath. 10. Relying on the observations in Jammu Forests Co. v. State (MR. 10. Relying on the observations in Jammu Forests Co. v. State (MR. 1968 J. & K. 86) that proceedings before the arbitrator pursuant to an order of reference made under S 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 S.41 (b) as aforesaid in Jammu Forest Co. v. State (AIR. 1968 J. & K. 86), it appears to me, would make clause (b) of S.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 S.41(b) of the Act read with the matters set out in the second schedule, and nothing 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 S.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 S.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 S.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. 11. In the light of the above discussion it has to be said that Order XXVI R.10 (2) of the Code which enables a party to a suit to examine the commissioner 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 S.41 (b) of the Act read with item 3 in the second schedule for the purpose of and in relation to proceedings before the arbitrator No doubt the order under revision in CRP. 3349 of 1978 was passed a few days earlier, on 17-10-78, 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 quantum of work executed by Varoo upto 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 upto 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 arbitration 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. In this connection it is necessary to point out that the arbitration 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, Russel on Arbitration, 18th Edition Page 190 and implied condition No.6 in the 1st schedule 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 without receiving evidence." (Ibid) Here the parties have agreed upon the Chief Engineer (Arbitration) as the 3 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. Besides "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 authorises him to do so. 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 authorises 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 the work done by late Sri. Varoo, under Agreement No. 3/SEMI/1975-'76 for a period of two months from today. 14. In the result CRP. 3348 of 1978 is disposed of as indicated above in the preceding paragraph. 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 submits that they are agreed that the remuneration of Sri. K. A. Jossie can initially be fixed at Rs. 1,000/-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. A. 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.