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1988 DIGILAW 137 (ORI)

RAMA CHANDRA SAHU v. STATE OF ORISSA

1988-05-12

R.C.PATNAIK

body1988
JUDGMENT : R.C. Patnaik, J. - This revision is directed against an order, passed by the learned Subordinate Judge, First Court, Cuttack, rejecting an application filed by the Petitioner under Order 7, Rule 11 of the Code of CPC for, rejection of the plaint. 2. To appreciate the point, it is necessary to delineate the facts in brief. The Petitioner entered into agreement No. 39/F-2 of 1972-73 for construction of H. L.. Bridge. Disputes having arisen, motion was made for reference to arbitration. It is unnecessary to state the chequered career of the arbitration proceeding. ~Suffice it to say that an award was filed by opposite party No. 3, the retired Chief Engineer, who had been appointed as arbitrator, in Court. Objection was raised by opposite party Nos. 1 and 2 to the award. The learned Subordinate Judge after hearing the parties, negatived the objections and passed a decree in Title Suit No. 2 of 1983 in terms of the award. Opposite parties 1 and 2 did not question the decree by way of an appeal. The decree, therefore, became final as between the parties. The Petitioner levied execution of the decree in Execution Case No. 43 of 1984. Opposite party Nos. 1 and 2 on several occasions sought time for satisfaction of the decree. When an order of attachment was issued by the executing Court, opposite parties "1 and 2 move~ the Court on 20-11-1984 to recall the order of attachment under taking to satisfy the decree within one month. In view of the undertaking of opposite parties 1 and 2, the Court recalled the writ of attachment. Having obtained time, as aforesaid, from the Court after furnishing undertaking, opposite parties 1 and 2 filed Title Suit No. 470 of 1984 for declaration that the decree passed in Title Suit No. 2 of 1983 was void and inoperative, the award being fraudulent and collusive. They also moved the Court for and obtained an order of stay of disbursement of payment to the Petitioner of the amount deposited by them in the execution case. The Petitioner entered appearance in the suit and filed an application for rejection of the plaint under Order 7. Rule 11 CPC . The learned Subordinate Judge rejected the motion for rejection of the plaint holding that consideration of implication of Section 32 of the Arbitration Act was extraneous to the plaint. The Petitioner entered appearance in the suit and filed an application for rejection of the plaint under Order 7. Rule 11 CPC . The learned Subordinate Judge rejected the motion for rejection of the plaint holding that consideration of implication of Section 32 of the Arbitration Act was extraneous to the plaint. The said question could be raised by the Defendant-Petitioner at a subsequent stage after filing of the written statement and the plaint averments disclosed prima facie case. The learned Subordinate Judge observed that opposite parties 1 and 2. Plaintiffs had participated in the arbitration proceeding and had filed their objection to the award. But in as much as there was controversy on an interpretation of law, the question could not be decided before evidence was led by both the parties. 3. The learned Subordinate Judge has fallen into errors. Firstly, he has been misled by the dexterity in the drafting of the plaint. If the suit is not maintainable and is not to be entertained, by the mere use of the words 'fraudulent and collusive', the suit does not become competent. The entire pleadings should have been examined by the learned Subordinate Judge to ascertain if really any fraud on the party or on the Court was alleged or collusion imputed. The counsel for the parties placed whole of the plaint before me. The lengthy plaint does not disclose anywhere if the Petitioner had played fraud either on the Plaintiffs-opposite parties 1 and 2 or on the Court. The Plaintiffs - opposite parties have challenged the award that was passed as excessive, illegal, unjust, unfair and erroneous. There is no whisper of fraud on the Plaintiffs opposite parties 1 and 2. It may be that the award is wholly erroneous and should not have been passed, the Petitioner was not entitled to a paise even. But the arbitration law has its own parameters. The arbitrator is not bound to give reasons for the award. The award for that reason is not void or illegal. May be, the party to the proceeding is aggrieved. He has to seek refuge under the provisions of the Arbitration Act. Plaintiffs-opposite parties 1 and 2 do not challenge that there was no arbitration agreement or that there was no arbitration proceeding. Their objection relates to, as I have already said, the correctness or justness of the award. May be, the party to the proceeding is aggrieved. He has to seek refuge under the provisions of the Arbitration Act. Plaintiffs-opposite parties 1 and 2 do not challenge that there was no arbitration agreement or that there was no arbitration proceeding. Their objection relates to, as I have already said, the correctness or justness of the award. They did file objection to the award. They were heard in the proceeding and their objections were negatived by,the learned Subordinate Judge in Title Suit No. 2 of 1983. If they were still aggrieved, they could have challenged the decision of the learned Subordinate Judge by appealing to this Court. But they did not, when the decree was executed, they went on taking time for satisfying the same. When writ of attachment, was issued, they got it recalled giving an undertaking to deposit the amount under execution. They deposited the amount but filed the suit and obtained an order of stay. Such conduct on the part of the officers of Government was highly deplorable. 4. Order 7, Rule 11 (d) of the Code of CPC provides that the plaint shall be rejected where the suit appears from the statement in the plaint to be barred by any law. The question before the Court was if under the provisions of the Arbitration Act, the suit of the present nature was barred. 5. Refinance to a few sections of the Arbitration Act is called for. Section 14-Award to be signed and filed.- (1) When the arbitrators or umpire have made their award, they shall sign it and shall give notice in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbitration and award. (2) The arbitrators or umpire shall, at the request of any party to the arbitration agreement or any person claiming under such party or if so directed by the Court and upon payment of the fees and charges 'due in respect of the arbitration and award and of the costs and charges of filing the award, causae the award or a signed copy of it, together with any depositions and documents which may have been taken and proved before them, to be filed in Court, and the Court shall thereupon give notice to the parties of the filing of the award. (3) Where the arbitrators or umpire state a special case under Clause (b) of Section 13, the Court after giving notice to the parties and hearing them, shall pronounce its opinion thereon and such opinion shall be added to, and shall form part of the award. Section 17-judgment in terms of award - Where the Court sees no cause to remit the award or any, of the matters referred to arbitration for reconsideration or to set aside the award the Court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow, and no appeal shall lie from such decree except on the ground that it is in excess of, or not other wise in accordance with the award. Section 30 Grounds for setting aside award - An award shall not be set aside except on one or more of the following grounds namely (a) that an arbitrator or umpire has -misconducted himself or the proceedings; (b) that an award' has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have' become invalid u/s 35 ; (c) that an award has been improperly procured or is otherwise invalid. Section 32-Bar to suits contesting arbitration agreement or award. Notwithstanding any law for the time being in force no suit shall lie on any ground, whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or an award, nor shall any arbitration agreement or award be set aside, amended, modified or in any way affected otherwise than as provided in this Act.... Section 33-Arbitration agreement or award to be contested by application. Any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits ; Provided that where the Court deems it just and expedient, it may set down the application for hearing on other evidence also, and it may pass such orders for discovery and particulars as it may do in a suit." 6. The Arbitration Act, 1940, is a self-contended and exhaustive code and the relief against the award can be obtained in accordance with the relevant provisions of the Act. See Rukmani Bai v. Collector, Jabalpur AIR 1981 S.C. 477 . The language used in Section 32 is very wide and it says that notwithstanding any law for the time being in force, no suit shall lie on any ground whatsoever for a decision upon the validity of an award nor shall any award be set aside, amended modified or in any way affected otherwise than as provided in the Act. Hence, its correctness or justness or propriety cannot be questioned in an independent suit. The only recourse available is under Sections 30 and 33. 1. In this case, the Plaintiffs opposite parties 1 and 2 challenged the award and failed. They allowed the decree to become final. It was not thereafter open to them to challenge the award. 7. There are however two exceptions. First, where the decree is a nullity as being forbidden by any law, as was in the case of Bahadur v. M. S. Das 1969 (21) S.C. R. 432, where the decree was based on an award directing the tenant to deliver possession of the premises to the landlord contrary to Section 13 (1) of Delhi Ajmer Control Act. Secondly where the decree is vitiated by fraud. The sanctity is lost. The bar is lifted. Such was a case in Vineet Kumar Vs. Smt. Bhagwandei. It was alleged by the Plaintiff there that she had not entered into any arbitration agreement nor was she a party to any arbitration proceeding. She had not made an application to the District Court for making the award a rule of the Court. Her alleged signature was forged. Therefore her entire case was that fraud had been played on her as well as on the Court in the motion for arbitration, in course of the arbitration proceeding as well as in the proceeding for making the award a rule of the Court. When the decree was executed, she discovered the fraud and filed the suit, for declaration that the decree was null and void and inoperative. When the decree was executed, she discovered the fraud and filed the suit, for declaration that the decree was null and void and inoperative. It was held that since fraud in the proceeding, in the Court after the award was filed was alleged and Section 33 would not apply to a stage after the decree, suit on allegation of fraud was maintainable. The facts' are no peculiar that no difficulty is felt in holding that suit in such circumstances is maintainable. The party alleged that she was wholly unaware .of the proceeding and the litigation whereas by forgery it has been made to appear as if she had voluntarily participated. 9. In this case, the Plaintiffs-opposite parties 1 and 2 had the opportunity of challenging the award in court. It is not alleged that there was any exercise of fraud either on them or on the court in course of the proceedings in Title Suit No. 2 of 1983. They failed in their challenge to the a ward. The decision of the learned Subordinate Judge, considered from another angle, operates as res judicata (see in this connection Damodar Das & Sons Ltd. v. L. Basheshar Nath and Ors. AIR 1936 Lah. 863, and Lala Panna Lal v. Mt Rupa and Ors. AIR 1945 Oud. 92. In the latter case it was observed that 'it was open to the Appellant to challenge the award before judgment was pronounced by the Court according to it under the provisions of Sch. 2, Code of CPC and it was not open to him to challenge it in any other way. It was observed in Bahaduy's2 case (supra) that having regard to the scheme of Sections 14 to 17 and 31 to 33, all questions relating to the validity of the award had to be determined by the court in which the award was filed. The award which is invalid on any ground could be set aside u/s 30. After a decree is passed on the award, it is not open to the parties to raise any objection as to the validity of the award; as between them the decree conclusively determined that the award was valid nor could the decree be pronounced to be invalid on the ground that the award was invalid. 10. After a decree is passed on the award, it is not open to the parties to raise any objection as to the validity of the award; as between them the decree conclusively determined that the award was valid nor could the decree be pronounced to be invalid on the ground that the award was invalid. 10. Despite careful perusal of the plaint averments I could not come across the faintest allegation of fraud on the party, the arbitration or on the court. By the mere use of the word's 'fraud and collusion', the Plaintiffs cannot succeed to get over the bar of Section 32. The suit filed by opposite parties 1 and 2 was vexatious and in the nature of an abuse of the process of law and of court. The learned Subordinate Judge should have seen through the veil and exercised jurisdiction of guillotine vested in him under order 7. Rule 11 CPC I record my appreciation of the stand taken by Mr. K. C.J. Ray, learned Government Advocate who rightly and fairly submitted that the plaint is unsupportable. I would have otherwise awarded heavy cost against opposite parties 1 and 2 but for the fair attitude of the learned Government Advocate. 11. In the result. I allow the revision but in the circumstances there would be no order as to costs.