HINDUSTHAN PAPER CORPORATION LTD v. KENILHOUSE ANGAMI
1990-12-18
MONORANJAN MALLICK
body1990
DigiLaw.ai
M. R. MALLICK, J. ( 1 ) MATTER Nos. 1387 and 1388 of 1990 are taken up together for reasons of convenience as the same question of law and fact arise in both the petitions. In both the petitions the petitioner Hindusthan Paper Corporation Limited has prayed for review of the order dated March 23, 1989 passed by S. K. Hazari, J issuing the injunction order against the petitioner restraining them from invoking several bank guarantees in respect of the Contract entered into between the parties in two applications u/s. 41 (b) of the Arbitration Act. ( 2 ) BEING aggrieved the present petitioner moved the Supreme Court and the Supreme Court by the order dated 15th December, 1989 gave liberty to the present petitioner to approach the learned Single Judge of this court by way of review. Thereafter, in both the application u/s. 41 (b) of the Arbitration Act the application for review have been filed being Matter No. 13187 and 1388 of 1990. ( 3 ) IT is submitted that the Division Bench in appeal against both the Special Suits u/s. 20 of the Arbitration Act deleted the references of the dispute regarding the bank guarantees by the order dated 14th August, 1989 as corrected by the order dated August 25, 1989. It is also submitted that against the judgment of the Division Bench the present respondent moved the Supreme Court and the Supreme Court has dismissed the Special Leave Petition. The petitioner in each of the review petitions therefore submits that as the references of the dispute over the invocation of bank guarantees are no longer subject matters of arbitration the said reference being deleted by the Division Bench, the interim injunction orders restraining the present petitioner for invoking the bank guarantees could no longer continue and must be vacated. ( 4 ) BOTH the matters have been contended by the respondent.
( 4 ) BOTH the matters have been contended by the respondent. It is submitted that the petition in each of these cases does not come within the purview of review under Order 47 Rule 1 Civil Procedure Code, that the application for review is barred by the law of Limitation and that on the date when the interim injunction orders were issued by the learned Trial Judge he already made the reference of the dispute over the invocation of bank guarantees also to arbitration and therefore, at about the time when the orders were passed by the learned Trial Judge there was no error apparent on the face of the record and as the detection of the references over. The dispute of the invocation of bank guarantee is a subsequent development because of the order passed by the Division Bench, there is no scope for review of the orders passed by the learned Trial Judge in the two applications u/s. 41 (b) of the Arbitration Act, ( 5 ) THE matters have been heard in presence of the learned Advocates of both sides threadbare. Mr. Bhaskar Gupta appearing for the respondent has challenged the maintainability of the review petition in both the cases and has also submitted that it is barred by the law of limitation and no petition for condonation of delay has been made u/s. 5 of the Limitation Act. ( 6 ) MR. Das appearing for the petitioner has refuted both the above contentions of Mr, Gupta by submitting that this is not actually the application for review under Order 47 Rule 1 of Civil Procedure Code, that as the Supreme Court of India in the Civil Appeal No. 4167-68 of 1989 which are the appeals filed against the orders passed by the learned Trial Judge u/s. 41 (b) of the Arbitration Act directed the learned Trial Judge for reconsideration of the matter this court as trial Judge has to hear the petition on merits.
In view of the stand taken by the appellant that all the aspects raised by it had not been considered when the impugned order was made the Supreme Court passed the order when in terms of the order of the Supreme Court of India this application has been filed then this court cannot reject this application in limine either on the ground that it is not maintainable or that it is barred by law of limitation. ( 7 ) ON careful perusal of the order passed by the Supreme Court which is annexed as Annexure 'j' to the petitions I am of the view that the Division Bench of Supreme Court directed the appellant to approach this Court by way of review and in case such an application is made the Supreme Court directed that the learned Single Judge should hear the parties and redispose the matter in accordance with law and on the merits of the case. In view of the above clear direction of the Supreme Court to hear the case on merits I am unable to accept the contention of Mr. Gupta that this Court could dismiss this application in limine on the ground that such an application is not maintainable under Order 47, Rule 1 of Civil Procedure Code or that it is barred by limitation, Therefore, the first contention of the respondent cannot be entertained by this Court in view of the clear order of the Supreme Court dated 15th December, 1989. ( 8 ) SO far as the merits of the present applications are concerned it cannot be distributed by the respondent that against the orders passed by the learned Trial Judge under section 20 of the Arbitration Act in the two Special suits regarding the references of disputes to arbitration the Division Bench in appeal deleted the portion of the reference of the dispute over the bank guarantees. It is also an admitted position that against the said judgment of the Division Bench the petitioner moved the Supreme Court in Special Leave Petition and the said Special Leave petition has been dismissed. Therefore, the judgment of the Division Bench has become final and conclusive and the disputes over the invocation of bank guarantee is no longer a dispute referred to arbitration.
Therefore, the judgment of the Division Bench has become final and conclusive and the disputes over the invocation of bank guarantee is no longer a dispute referred to arbitration. On behalf of the petitioner my attention has been drawn to the provisions of section 41 (b) of the Arbitration Act and it is submitted that under section 41 (b) of the Arbitration Act the Court has been given power to issue temporary interim injunction but such power has to be exercised only for the purpose of and in relation to arbitration proceeding. In H. M. Kamaluddin and Co. v. Union of India reported in AIR 1984 SC 29 the Supreme Court has clearly held that the Court in a proceeding under section 41 (b) cannot issue interim injunction order restraining the purchaser from withholding any amount due under another contract which is not the subject matter of the reference. Mr. Das, therefore, submits that when the question whether the present petitioner is entitled to invoke the bank guarantees or not being the subject matter of reference before the Arbitrator this Court under section 41 (b) cannot restrain the present petitioner from invoking the bank guarantees. ( 9 ) THERE can be no doubt that the Court under section 41 (b) of the Arbitration Act can only pass interim order for the purpose of and in relation to arbitration proceeding. When in view of the judgment of the Division Bench the question whether the bank guarantees have been properly invoked or not is no longer the subject matter of arbitration before the Arbitrator. Then the present petitioner could not be restrained by this Court from invoking the bank guarantees. This is only because such dispute is no longer arbitrable before the Arbitrator which has been appointed by virtue of the orders passed by the Court under section 20 of the Arbitration Act in both the matters. Mr. Gupta has also sought to urge that in terms of the bank guarantees the same cannot be invoked. So far as that aspect of the case is concerned there is no scope for entering into that question when under the law this Court cannot issue any interim injunction order restraining the present petitioner from invoking the bank guarantees when the dispute over the invocation of the bank guarantees is no longer the subject matter of reference before the Arbitrator.
In that view of the matter I allow both the Review Petitions filed in both these matters and vacate the interim injunction order passed on 23rd March, 1989 in both the petitions under section 41 (b) of the Arbitration Act and dismiss the respondent's applications for injunction under section 41 (b) of the Arbitration Act. However, in view of the facts and circumstances of this case I direct both the parties to bear the respective costs of the petitions themselves. ( 10 ) THE prayer for stay of operation of the order is prayed for and the same is refused. ( 11 ) ALL parties including the concerned Bank in which the bank guarantees have been furnished shall act upon the signed copy of the operative portion of this judgment which governs both the Matter Nos. 1387 and 1388 of 1990. Petitions allowed.