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1991 DIGILAW 1360 (ALL)

State of U. P. v. District Judge

1991-11-01

M.P.SINGH

body1991
JUDGMENT : M.P. SINGH, J. 1. Delay is one of the besetting sins of the administration. The executive should ensure that the matters coming before it are dealt with expeditiously. If delay is inevitable in a particular instance, the citizen should be apprised of the same. A citizen has a reasonable expectation that a certain line of conduct will be followed. This usually should not be departed from without very good reasons. In the instant case. Government has shown sufficient cause of not appointing its arbitrator within the statutory period as contemplated in Section 9(b) of the Arbitration Act. 2. For the construction of the left bunk diversion tunnels on the (sic) Bhagirathi and Bhilanga at Tehri, an agreement was entered into between Karam Chand Thapar and Brothers, Ticil Division, Tehri (in short, Thapars) and the Superintending Engineer, Tehri Dam Circle I, Tehri (in short, the Government) on 28th April, 1978. 3. The agreement contained an arbitration clause. The relevant Clause 1-3-01 provided that in the event of any dispute between the parties, the matter would be referred to two arbitrators, one to be appointed by each party. 4. A dispute arose between the parties regarding rate of furnishing and placing of chain link fabric on the tunnels face. 5. In terms of the agreement, Thapars informed the Government on 23rd November, 1987 that they had appointed Sri K.C. Goel as their arbitrator. The Government was requested to appoint its arbitrator. A reminder was sent on 7th January, 1988, but nothing was done. 6. Section 9 of the Arbitration Act contemplates two appointments: (i) Appointment of an arbitrator of the choice of one of the parties; (ii) If the other party having been informed of such appointment fails to appoint its arbitrator, then the party who has appointed arbitrator may appoint its arbitrator as the sole arbitrator. Unless the second appointment as sole arbitrator is made, the arbitrator has no power to arrogate to himself the functions of the sole arbitrator and act as such. It further requires that appointment of arbitrator should be made prior to the giving of notice. 7. Thapars appointed Sri K.C. Goel as sole arbitrator on 2nd March, 1988. This appointment was subsequently recalled on 3rd May, 1988. Thapars again appointed Sri K.C. Goel as sole arbitrator on 13th May, 1988. He entered into the reference on 10th June, 1988. It further requires that appointment of arbitrator should be made prior to the giving of notice. 7. Thapars appointed Sri K.C. Goel as sole arbitrator on 2nd March, 1988. This appointment was subsequently recalled on 3rd May, 1988. Thapars again appointed Sri K.C. Goel as sole arbitrator on 13th May, 1988. He entered into the reference on 10th June, 1988. Notice was issued to the Government to file claim petition on or before 8th July, 1988. 8. In the meantime, the Government had filed two applications u/s 9(b) of the Arbitration Act on 16th June, 1988, in the Court of the learned District Judge, as there were two references. It was prayed that the appointment of Sri K.C. Goel as sole arbitrator be set aside and the applicant be permitted to nominate and appoint its own arbitrator. Thapars filed objections. The applications were rejected on 29th November, 1990, by separate but identical orders. The present writ petitions are directed against those orders. 9. Heard Sri Milan Banerji on behalf of the State Government and Sri S.P. Gupta Senior Counsel appearing on behalf of Thapars at great length. 10. The Petitioners filed two civil revisions on 20th November, 1990. Sri Ajay Kumar Advocate had filed caveat in these two revisions and had put in appearance on behalf of Thapars Both the revisions remained pending. No orders were passed. 11. In the meantime, summer vacations intervened on 6th June, 1991, the present writ petitions were filed challenging the same orders dated 29th November, 1990, against which the revisions had already been filed and were pending. The Petitioner has mentioned about the filing of the revisions in the writ petitions. The Court stayed further proceedings before the sole arbitrator. 12. On 12th August, 1991, when the revisions as well as the writ petitions came for admission, Sri S.P. Gupta raised an objection that the Petitioner cannot be permitted to peruse two alternative in his submission. Accordingly, Sri Milan Banerji appearing on behalf of the Government, made a statement that he would not press the revisions and the controversy may be decided in writ petitions 13. Counsel for both the parties further agreed that the writ petitions may be heard and finally decided at the admission stage. Looking to the importance and urgency of the matter, I agreed to decide the petitions finally. 14. Counsel for both the parties further agreed that the writ petitions may be heard and finally decided at the admission stage. Looking to the importance and urgency of the matter, I agreed to decide the petitions finally. 14. Before I come to the merit of the case, certain aspects of the matter are to be looked into. CONDUCT OF THE STATE GOVERNMENT 15. Impropriety on the part of the Government is floating on the surface with a big question mark. Was it proper on the part of the State Counsel to have filed the writ petitions and obtained ex-parte stay order without serving a. copy of the writ petitions on Sri Ajay Kumar, Advocate, who had already put in appearance on behalf of Thapars Certainly not. It was highly improper. Fairness is the core of our Jurisprudence. The Government is not expected to deviate from the same. The conduct of the Government was worse than an ordinary litigant. Both the petitions could have been dismissed on this very ground alone. But if I do so, who would suffer? The Government? No. In the ultimate analysis, it is the interest of the general public which would suffer. Huge amount of public money is involved in the present case Only this aspect is preventing me from dismissing the writ petitions on this ground. MAINTAINABILITY OF THE WRIT PETITIONS 16. The next submission of Sri Gupta was that against the impugned orders, only revision lay u/s 115 of the CPC. Interference by this Court under Article 226 of the Constitution may amount to misuse of the power. Though according to him, in some cases of gross injustice, departure is permissible. He further contended that once the Petitioner had chosen to avail the remedy u/s 115 Code of Civil Procedure, it was not open to it to invoke the writ jurisdiction. I find no merit in this submission. 17. When the entire matter came up for hearing before me on 12th August, 1991, on the objection of Mr. Gupta, the Petitioner got the civil revisions dismissed and persued only the writ petitions. Sri Gupta permitted the writ petitions to survive and the final hearing commenced. 18. What an anomalous position has been created. On the one hand on his objections, the revisions were dismissed as not pressed on the other hand, now he contends that only revisions were maintainable. Sri Gupta permitted the writ petitions to survive and the final hearing commenced. 18. What an anomalous position has been created. On the one hand on his objections, the revisions were dismissed as not pressed on the other hand, now he contends that only revisions were maintainable. The writ petitions may be dismissed. If his contention is accepted, it may amount to denial of justice to the Petitioner. 19. In support of his contention, Sri Gupta has referred to a decision, Sarguja Transport Service Vs. State Transport Appellate Tribunal, M.P., Gwalior and Others, AIR 1987 SC 88 , In that case, writ petition was dismissed as withdrawn without any permission to file a fresh petition. The Supreme Court, applying the public policy contained in Order XXIII Rule 1, CPC held that a fresh petition on the same cause of action was not maintainable. That case is hardly relevant for the present case. Here the revisions have been got dismissed on 12-8-1991 as not pressed. But on that day, the writ petitions were already pending. They were not filed later on. 20. Sri S.P. Gupta has referred to a judgment of the Supreme Court in Qamruddin v. Rasul Baksh 1990 (1) AWC 308, to support his contention that writ petition was not maintainable. 21. In that case, the provisions of the U.P. Amendment Act 31 of 1978, which came into effect on 1-8-1978, were not brought to the notice of the Supreme Court. The effect of the said amendment had already been considered by a Full Bench of this Court Jupiter Chit Fund (Pvt.) Ltd. Vs. Dwarka Diesh Dayal and Others, AIR 1979 All 218 which was affirmed by the Supreme Court in two cases Vishesh Kumar Vs. Shanti Prasad, AIR 1980 SC 892 Miss. Nishi Maghu and Others Vs. State of Jammu and Kashmir and Others, AIR 1980 SC 1975 . Even these two cases were not brought to the notice of the Supreme Court with the result, without over ruling the two earlier judgments in Vishesh Kumar and Vishnu Awatar (supra), the Supreme Court expressed a contrary view holding that the writ petition was not maintainable. 22. After the judgment of the Supreme Court in the case of Qamruddin (supra), the matter was referred to a Full Bench for clarification and further guidance. 23. 22. After the judgment of the Supreme Court in the case of Qamruddin (supra), the matter was referred to a Full Bench for clarification and further guidance. 23. The Full Bench while considering the matter in the case of Ganga Saran v. Civil Judge 1991 AWC 213 , held that the case of Qamruddin does not lay down the law correctly. It has further held that if it is found from the impugned order that some fundamental principle of law has been violated and further that it has caused substantial injustice to the party aggrieved, the High Court would not be precluded under Article 226 of the Constitution to interfere with such an order. Of course, a caution has been given, that the Court should exercise the power within the well established limits and recognised principles laid down by the Supreme Court. 24. There is no inflexible rule that such a writ cannot be issued where the Court thinks it just and proper to do so in the interest of justice. The existence of an alternative remedy merely touches the field of exercise of discretion and does not bar the jurisdiction of the High Court to interfere with in the exercise of the power under Article 226 of the Constitution. 25. Moreover, an alternative remedy is not an absolute bar to invoking the jurisdiction of this Court under Article 226 of the Constitution. The High Court does not become powerless if otherwise the facts and circumstances of the case call for the exercise of the power. The revisional power of the High Court u/s 115 CPC is complementary to the power of superintendence under writ jurisdiction. There are catena of cases where High Courts have interfered under Article 226 even where revisions lay u/s 115 Code of Civil Procedure. See L. Hirday Narain Vs. Income Tax Officer, Bareilly, AIR 1971 SC 33 , Collector of Customs and Excise, Cochin and Others Vs. A.S. Bava, AIR 1968 SC 13 , The District Co-operative Bank Ltd. and Another Vs. Deputy Registrar, Co-operative Societies and Others, AIR 1973 All 348 Ved Prakash v. IIIrd Additional District Judge 1977 UPRCC 390, Joti Prasad Sharma Vs. Additional Civil Judge, Dehradun and Others, AIR 1968 All 42 Vidya Nand Sinha v. The State of Bihar AIR 1976 Pat 31 Gian Chand Dhawan and Another Vs. Deputy Registrar, Co-operative Societies and Others, AIR 1973 All 348 Ved Prakash v. IIIrd Additional District Judge 1977 UPRCC 390, Joti Prasad Sharma Vs. Additional Civil Judge, Dehradun and Others, AIR 1968 All 42 Vidya Nand Sinha v. The State of Bihar AIR 1976 Pat 31 Gian Chand Dhawan and Another Vs. Union of India and Others, Rawat v. State of Rajasthan AIR 1957 Raj. 343 . 26. After having given due consideration to the matter at great length, I am of the view that the writ petitions are maintainable. The jurisdiction of this Court is not barred. 27. Sri Gupta did not raise any objection regarding the maintainability of the writ petitions at the initial stage. He agreed to argue the case on merit. It was at the time of the final hearing that this objection was raised. The writ petitions cannot be dismissed on this ground at this stage. See Ram Kishan v. The District Judge Banda AIR 1977 NOC 38 Radhey Shyam v. Smt. Ramwati Devi 1977 UPRCC 145, Ramchandra Prasad Baid Vs. The State of Bihar and Others, AIR 1972 Patna 387. 28. Relying upon a decision of the Supreme Court in Shankar Ramchandra Abhyankar Vs. Krishnaji Dattatreya Bapat, AIR 1970 SC 1 , Sri Gupta contended that since the revisions have been summarily dismissed, the writ petitions become non-maintainable. If any relief is granted under writ jurisdiction, it will amount to destroying the legal effect of withdrawal and the consequential rights of the opposite party. I do not find any merit in this submission. The revisions were not dismissed summarily. They were got dismissed only on the ground that the Petitioner wanted to peruse the remedy under writ jurisdiction. There was no occasion for the court to apply its mind on the merit of the revisions. 29. The next submission raised by Sri Gupta was that there were laches on the part of the Petitioner and the delay has not been properly explained. The writ petitions were liable to be dismissed on this ground alone. I do not find any merit in this submission as well. 30. The impugned orders were passed on 29th November, 1990, against which the Petitioner had filed two revisions within time. No orders were passed on the same. The sole arbitrator had issued notice to the Petitioner to file claim petition. I do not find any merit in this submission as well. 30. The impugned orders were passed on 29th November, 1990, against which the Petitioner had filed two revisions within time. No orders were passed on the same. The sole arbitrator had issued notice to the Petitioner to file claim petition. The High Court was closed on account of summer vacations. The cases could not have been listed. Under the circumstances, it became necessary for the Petitioner to obtain stay orders b y filing the writ petitions. The delay, if there was any, is self explanatory. It will not be in the interest of justice if the petitions are dismissed on the ground of delay. The short delay is, therefore, condoned. 31. Next submission raised by Sri Gupta was that since the arbitrator has interfered into the reference on 10th June, 1988, the court should refrain from interfering with the same. The submission is devoid of merit. It is well settled that an arbitrator enters upon a reference only he applies his mind to the merit of the case See Ram Nath Agrawalla v. Messrs Goenka and Co. AIR 1978 Cal. 253, and not otherwise MAIN CONTROVERSY 32 The entire dispute confines to the proviso contained in Section 9(b) of the Arbitration Act, which is reproduced below: 9. Power to party to appoint new arbitrator or in certain cases, a sole arbitrator--Where an arbitration agreement provides that a reference shall be to two arbitrators, one to be appointed by each party, then, unless a different intention is expressed in the agreement. (a)... . (b) if one party fails to appoint an arbitrator, either originally or by way of substitution as aforesaid, for fifteen clear days, after the service by the other party of a notice in writing to make the appointment such other party having appointed his arbitrator before giving the notice, the party who has appointed an arbitrator may appoint that arbitrator to act as sole arbitrator in the reference, and his award shall be binding on both parties as if he had been appointed by consent; Provided that the court may set aside any appointment as sole arbitrator made under Clause (b) and either, on sufficient cause being shown allow further time to the defaulting party to appoint an arbitrator or pass such other order as it thinks fit. Explanation--The fact that an arbitrator or umpire, after a request by either party to enter on and proceed with the reference, does not within one month comply with the request may constitute a neglect or refusal to act within the meaning of Section 8 and this section. STATE AMENDMENT Uttar Pradesh In its application to the State of Uttar Pradesh- (i) in Clause (b) of Section 9, for the words "fifteen clear days" substitute the words "one month or where that party is government, "for three months" and (ii) in the Explanation, for the words "within the meaning of Section 8 and this section" substitute the words "within the meaning of Sub-section (2) of Section 4, Section 8 and this section. U.P. Act 57 of 1976, Section 17 (1-1-1977) 33. In this case, the court has to examine the scope of the phrase "sufficient cause". The question to be considered is whether there was sufficient cause to set aside the appointment of Sri K.C. Goel as sole arbitrator and to allow further time to the Petitioner to appoint its arbitrator. 34. Admittedly, the Government did not appoint it arbitrator within the time prescribed. It filed an application u/s 9(b) of the Act for condonation of the same, showing sufficient cause. 35. In order to decide the issue whether there was sufficient cause or not, it will be necessary to go through the internal correspondence of the Government. 36. On 23-11-1987 Thapars informed the Government that they had appointed Sri K.C. Geol as their arbitrator. The Government was requested to appoint its arbitrator. 37. After getting the notice from Thapars about the appointment of Sri K.C. Goel as arbitrator and before his appointment as sole arbitrator on 13-5-1988, the Superintending Engineer wrote to Thapars that the matter had been referred to the Government for suitable orders. On 28-3-1988, the Superintending Engineer wrote a letter to the Deputy Secretary, Irrigation, Lucknow, requesting that steps may be taken for appointment of an arbitrator. A similar letter was sent by the Chief Engineer to the Joint Secretary. Irrigation on 30-3-1988 for immediate orders. Another letter was sent to the Deputy Secretary on 7-4-1988. 38. The Deputy Secretary wrote a letter to the Superintending Engineer on 2-4-1988 for sending some more information. A reply was sent on 28-4-1988. 39. A similar letter was sent by the Chief Engineer to the Joint Secretary. Irrigation on 30-3-1988 for immediate orders. Another letter was sent to the Deputy Secretary on 7-4-1988. 38. The Deputy Secretary wrote a letter to the Superintending Engineer on 2-4-1988 for sending some more information. A reply was sent on 28-4-1988. 39. When some delay was being caused at the secretariat level, the Superintending Engineer sent another letter on 11-5-1988 requesting the Government for appointment of the arbitrator immediately. It was followed by letters dated 19 -5-1988, 21-5-1988, 30-6-1988, 2-7-1988. The last letter was dated 14-7-1988. Ultimately, Sri S.K. Jain, a retired Commissioner, Sales Tax, was appointed as arbitrator on behalf of the Government on 14-7-1988. 40. Now, both the parties have appointed their arbitrators. The matter can proceed. it will be in the interest of justice that the matter may be disposed of expeditiously. On behalf of the Government, a very fair offer was made to Thapars in this Court that in case they have any objection in the appointment of Sri S.K. Jain as arbitrator, then they were prepared to change him. The name of Sri H.N. Seth, Ex-Chief Justice of Punjab & Haryana High Court, was proposed, but Thapars did not give any concrete answer. Probably, they preferred litigation. 41. The appointment of the arbitrator by the Government was objected to by Thapars mainly on the ground that the Government had no right to appoint an arbitrator after the expiry of the statutory period and after the valid appointment of the sole arbitrator by them. Right from 23-11-1987 till 13-5-1988 the Government failed to appoint its arbitrator. The attitude and conduct of the Government was obstructive and evasive. 42. It is not necessary for me to scrutinise departmental correspondence in detail, but a perusal of the same shows that there was a very sincere effort on the part of the Government to appoint its arbitrator. There can not be any denial of the fact that a particular file has to pass through several desks in the Government departments. It is bound to take some time. 43. While considering the scope of the phrase "sufficient cause being shown" used in the proviso to Section 9(b) of the Arbitration Act, the principles underlying for disposing of an application u/s 5 of the Limitation Act are to be followed. 44. It is bound to take some time. 43. While considering the scope of the phrase "sufficient cause being shown" used in the proviso to Section 9(b) of the Arbitration Act, the principles underlying for disposing of an application u/s 5 of the Limitation Act are to be followed. 44. A reading of the proviso to Section 9(b) of the Arbitration Act shows that the principle of limitation is indirectly involved. The proviso enables the defaulting party to make an application for condoning the lapse, on its part, of not appointing its arbitrator in time. Between this proviso and the provisions of Section 5 of the Limitation Act, there is a close analogy. While deciding this question, the court has to keep in mind the entire correspondence. The court has a wide discretion to set aside the appointment of the sole arbitrator if it is satisfied that the conduct of the State Government was not obstructive or evasive. Reference may be made to Satya Narayan Agarwall Vs. Baidyanath Mandal and Others, AIR 1972 Patna 29, Kamani Engineering Corporation Ltd. Vs. Madhya Pradesh Electricity Board and Another, AIR 1964 MP 268 . PROCEDURAL LAW-LIBERAL INTERPRETATION 45. Provisions of Section 9(b) are procedured in nature. The settled view of law is that procedural law is to be given a very liberal interpretation. Where possible, a construction should be so adopted which will facilitate the smooth working of the scheme of the Act. The expression 'sufficient cause' employed by the Legislature is adequately elastic to enable the court to apply the law in a meaningful manner to serve the ends of justice. It is for advancing justice and not to punish any party. See Bhagwan Swaroop and Others Vs. Mool Chand and Others, AIR 1983 SC 355 . 46. A similar view has been taken by the Supreme Court in the case G. Ramegowda, Major and Ors Vs. Special Land Acquisition Officer, Bangalore, AIR 1988 SC 897 . In this case, an additional point was decided. It was held that in a litigation to which the Government is a party, if the case is lost on ground of default of the officers, no person is individually affected but it is the public interest which suffers. 47. No doubt, the law of limitation is same for every private citizen as well as the Government. It was held that in a litigation to which the Government is a party, if the case is lost on ground of default of the officers, no person is individually affected but it is the public interest which suffers. 47. No doubt, the law of limitation is same for every private citizen as well as the Government. But the court cannot ignore the peculiar and characteristic functioning of the Government. A certain amount of latitude is, therefore, permissible. It would be unfair and unrealistic to put the Government and private parties on the same footing in all respects in such matters. In the functioning of the Government, procedural delay is incidental to the decision making process. 48. An individual can take immediate decision but a bureaucratic set up cannot do so with the same speed. Particularly, these days, nobody wants to take the responsibility for various reasons, may be to save themselves from public raising their fingers at them. Every officer wants to play very safe. But this practice has to be discouraged in the interest of the administration. Similar view has been taken by this Court in a case Smt. Laxmi Devi Vs. U.P. State and Another, AIR 1988 All 133 . 49. Having given careful consideration to the matter, I am of the view that the attitude of the Government was neither obstructive nor evasive. On the other hand, there was due diligence in getting an order from the authority concerned for the appointment of an arbitrator in accordance with the provisions of the arbitration clause. 50. After hearing the learned Counsel for the parties and perusing the impugned orders, I am of the view that the learned District Judge has not gone through the internal correspondence carefully with the result he has arrived at an erroneous conclusion resulting in rejection of the application u/s 9(b) of the Arbitration Act filed by the Government. The finding recorded by the learned District Judge to the contrary is hereby set aside. 51. The learned Counsel for the Respondent submitted that the findings on the question of sufficient cause is a pure question of fact and could not be interfered with in the writ petitions. According to him, the Petitioner has failed to plead and prove sufficient cause for not appointing a co-arbitrator in time. There is no quarrel with this legal proposition. The learned Counsel for the Respondent submitted that the findings on the question of sufficient cause is a pure question of fact and could not be interfered with in the writ petitions. According to him, the Petitioner has failed to plead and prove sufficient cause for not appointing a co-arbitrator in time. There is no quarrel with this legal proposition. A Full Bench of this Court in the case Babu Ram, Ashok Kumar and Another Vs. Antarim Zila Parishad, AIR 1964 All 534 , while considering the scope of interference with discretionary orders, has laid down the guidelines that if the discretion has been exercised in good faith after giving due weight to the relevant matters and without being swayed away by irrelevant matters, then the order should not be interfered with, but in case if the exercise of discretion was manifestly wrong, then of course, the interference was permissible. In the instant case, the learned District Judge without discussing the internal correspondence of the department properly has rejected the application holding that there was no sufficient cause for condoning the lapse, as provided in the proviso to Section 9(b) of the Arbitration Act. There has been manifest error in the exercise of discretion. The cause shown was sufficient. This Court would be justified in interfering with the impugned orders in the interest of justice. While doing so, it would be exercising the powers within the permissible limits of law. ORDER In the result, both the writ petitions succeed and are allowed with cost. The impugned orders dated 29th November, 1990 are quashed. The delay in appointing its arbitrator by the Petitioner is condoned. The appointment of Sri K.C. Goel as sole arbitrator is hereby set aside.