Arthur Branwell & Company Limited v. Indian Fibers Limited
1992-12-21
AMAL KANTI BHATTACHARJI, SHAMSUDDIN AHMED
body1992
DigiLaw.ai
JUDGMENT Ahmed, J.: This appeal is directed against the judgment and order dated 13.2.1989 passed in matter No. 146 of 1988 by a learned single Judge of this Court. 2. To appreciate the contentions raised in this appeal, it is necessary to set out the brief facts giving rise to the same. In between 24th May, 1984 to 29th May, 1984, a contract was entered into by and between the respondents, Indian Fibers Limited (Indian Company) and Arthur Branwell & Company Limited (English Company). By exchange of telex messages Indian Company agreed to sell F. O. B. Bombay and English Company agreed to purchase 60 m.t. of Guargum of agreed specifications on agreed terms and conditions. On 27.6.84, Indian Company shipped 1600 bags of Guargum from Calcutta to England pursuant to the said contract. The goods were discharged at Felix Stowed on 2.3.84. The English Company sold 5 m.t. of Guargum to "M/s. Loyns Maid", the well-known manufacturer of icecream on 2.8.84. The said "M/s. Loyns Maid" rejected the goods on the ground that it was contaminated by insecticides. The English Company immediately kept the Indian Company informed. A dispute arose between the English Company, Arthur Branwell, appellants and "M/s. Loyns Maid". The dispute was settled on Payment of 10,000 sterling by the English Company to "M/s. Loyns Maid". English Company asked Indian Company to refund the amount paid by it for the said contaminated bags shipped to England. The English Company by a letter dated 17.3.85 invoked the Arbitration Clause in the contract, and intimated the Indian Company that the disputes between the parties are to be referred to Arbitration under the Rules of General Prosuce Association of London, and called upon the respondent Indian Company to concur in the appointment of an Arbitrator and Umpire. By a letter dated 30.4.85, the Indian Company intimated its refusal to the appointment of an Arbitrator. It took the stand that there was no Arbitration Clause in the agreement for contract between the parties. On 18.6,85, the Indian Company filed an application before this Court under Section 33 of the Arbitration Act with a prayer for declaration that the contract to the parties did not contain any Arbitration Clause, and ex-parte order was obtained restraining English Company from proceeding with the reference in England.
On 18.6,85, the Indian Company filed an application before this Court under Section 33 of the Arbitration Act with a prayer for declaration that the contract to the parties did not contain any Arbitration Clause, and ex-parte order was obtained restraining English Company from proceeding with the reference in England. The English Company did not come within the jurisdiction of the Calcutta High Court on the plea that the company is not the resident in India and it has no place of business or assets here. On 13.8.85, the learned single Judge disposed of the application granting the declaration, sought for. The Judge further passed an order of injunction against the English Company restraining it from proceeding with the reference in England. On 26.8.85, the appellant, English Company filed an application before the English Court for extention of time in relation to the Arbitration proceedings. In the said application, a reference was made to a judgment of this Court dated 13.8.85. Accordingly, the Indian Company was informed, but the Indian Company took a stand that the English Court has no jurisdiction in the matter, and as such refused to take part in the proceedings. On 22.12.85, Mr. Justice Hirst delivered a judgment in England extending time for Arbitration proceedings. The learned Judge considered the judgment dated 13.8.85 delivered by Single Judge of this Court. He differed from the judgment and held that Arbitration Clause has been incorporated in the contract, and that the order passed by the Indian Court was without jurisdiction and not binding on English Company according to well settled principles of private international law. The English Company proceeded with the reference in England, and on 9.5.86 an award was made in its favour. On 19th November, 1987, the English Company filed a suit in the Court of the District Judge at Jaipur, Rajasthan for enforcement of the said Foreign A ward under the provisions of the Foreign Awards (Recognition & Enforcement) Act, 1961. Mr. Ramesh Ch. Khattry, who is appellant No.2, was the Advocate engaged by the English Company.
On 19th November, 1987, the English Company filed a suit in the Court of the District Judge at Jaipur, Rajasthan for enforcement of the said Foreign A ward under the provisions of the Foreign Awards (Recognition & Enforcement) Act, 1961. Mr. Ramesh Ch. Khattry, who is appellant No.2, was the Advocate engaged by the English Company. On 9.2.88, Indian Company filed an application in the Calcutta High Court alleging that the filing of the suit at Jaipur by the English Company was an act of contempt of this Court inasmuch as, the said action had violated the final order passed by this Court on 13.8.85, and also prayed for an order restraining the English Company from proceeding with the suit at Jaipur. By a letter dated 13. 2. 89, the learned Single Judge held the appellant guilty of contempt. The learned Judge also passed an order of injunction against the English Company restraining it from proceeding with the suit filed at Jaipur and also imposed a fine of Rs. 1.000/- on the appellant No. 1. This appeal is directed against the order dated 13.2.89. 3. The contempt application was contested by the appellants mainly on two grounds, namely that the order passed on the application under Section 33 of the Arbitration Act dated 18.6.85 and 13.8.85 were without jurisdiction, and does not bind respondent No. 1, namely the appellant herein and as such question of its violation or committing any contempt of Court does not at all arise. It was also urged that the application for contempt was barred under Section 20 of the Contempt of Courts Act. 1971. The learned Single Judge ultimately held that the order of injunction passed by this Court against the appellant was valid order but it is not enforceable in London. Its violation by respondent No.1 in London did not amount to committing Contempt of Court. But as soon as the respondent No. 1 submitted to the jurisdiction of Indian Court contempt proceeding became maintainable against the appellant. The learned Single Judge also held that the attempt on the part of the appellant to enforce the award in violation of the two orders passed by this Court amount to Contempt of Court.
But as soon as the respondent No. 1 submitted to the jurisdiction of Indian Court contempt proceeding became maintainable against the appellant. The learned Single Judge also held that the attempt on the part of the appellant to enforce the award in violation of the two orders passed by this Court amount to Contempt of Court. The Court was of the view that the appellant No. 2 acted as an agent of appellant No. 1 for enforcing the award, and accordingly, he is also liable for committing contempt of this Court. The defence of the appellants is that the proceeding was barred under Section 20 of the Con tempt of Courts Act, 1971, was also repelled by the learned Single Judge. The learned Judge referred to a decision in matter No. 2421 of 1987 (1) The Tata Iron & Steel Company Limited v. Ramniwas Poddar & Others, in which it was held that Section 20 of the Contempt of Courts Act, 1971 was ultra vires of Article 215 of the Constitution. Taking into consideration the contention raised by the appellants and upon careful consideration of Articles 229, 142(1) and (2) and 215 and as well as entry No. 77 of list (i) and entry No.14 of list (iii) of the 7th schedule of the Constitution, the learned Judge held that Section 20 of the Contempt of Courts Ad is ultra vires of Article 215 of the Constitution, because, accordingly to her, Article 215 in its term is absolute and neither the parliament nor the said legislature has been empowered by the Constitution to make laws, affecting restricting, limiting or defending the special jurisdiction of the High Court as the as the Courts of record to punish for its contempt summarily. 4. In appeal, the findings arrived at by the learned Judge is under challenge. Mr. Ghosh,-learned Counsel appearing for the appellants, has contended that the learned Trial Judge was without jurisdiction passing an order against the appellant No.1 restraining it from proceeding with the suit filed by it in the Jaipur Court.
4. In appeal, the findings arrived at by the learned Judge is under challenge. Mr. Ghosh,-learned Counsel appearing for the appellants, has contended that the learned Trial Judge was without jurisdiction passing an order against the appellant No.1 restraining it from proceeding with the suit filed by it in the Jaipur Court. It was also contended by him that the alleged contempt of Court is only a civil contempt as defined under Section 2(b) of the Contempt of Courts Act and an order restraining the contemner from proceeding with the suit, cannot be Passed in terms of Section 12 of the Contempt of Courts Act, He has further contended that the Court has inherent power to punish for its contempt, but such power cannot be exercised in disregard to in statutory provision. In this case, in terms of Section 41(b) of the Specific Relief Act, there cannot be an order of injunction restraining the appellants from proceeding with the suit at Jaipur Court, which is not a Court subordinate to the Calcutta High Court. This statutory prohibition cannot be overcome by resorting to inherent power. In the memo of appeal, the appellant has also stressed that the Indian Arbitration Act, 1940 does not apply to the present Arbitration proceeding in which the order was passed by the learned Single Judge in a proceeding under Section 33 of the said Act. The order is without jurisdiction and does not bind the appellants. It is further contended that the appellant No. 1 does not reside or carryon any business within the jurisdiction of this Court and had never submitted to its jurisdiction, accordingly, he cannot be restrained by an order of injunction from persuing its remedy before a foreign tribunal. The order dated 13.8.85 is not enforceable as against him. It has also been contended that the order dated 13.8.85 is not directed against appellant No.2, and he cannot be punished for its alleged violation. Action taken by appellant No.2 cannot be termed as an action in violation of the aforesaid order it has also been urged that the order dated 13.8.85 only restrains from proceedings and the order does not cover a suit in execution of an award under the provision of Foreign Award (Recognition & Enforcement) Act, 1961.
Action taken by appellant No.2 cannot be termed as an action in violation of the aforesaid order it has also been urged that the order dated 13.8.85 only restrains from proceedings and the order does not cover a suit in execution of an award under the provision of Foreign Award (Recognition & Enforcement) Act, 1961. It has lastly been urged that the contempt application is barred under the provisions of Section 20 of the Contempt of Courts Act, 1971. 5. Mr. Roychowdhury, learned Counsel appearing for the Indian Company submitted that since leave under Clause 12 of the letter patents were obtained by Indian Company, and no application for revocation of the same nor any appeal was preferred against the order of injunction dated 18.6.85 and 13.8.85, the order must be deemed to be valid and beyond challenge on the ground of jurisdiction. In support, he has relied on the rules of High Court of judicater at Fort William in Bengal by E. C. Ormone and have placed Clause 12 of the letters patent which provides that the High Court shall be empowered to receive, try and determine suits of every discretion, if. in the case of suits of land or other immovable property, such rand or property shall be situated or in all other cases if the cause-of-action shall have arisen either wholly or in case the leave of the Court shall have been first obtained in case whose cause of action in part has arisen within the limits of the ordinary original jurisdiction of the said High Court or if the defendant at the time of the commencement of the suit shall dwell or carryon business or personally work for gain within such limits; except that the said High Court shall not have such original jurisdiction in cases falling within the jurisdiction of Small Causes Court at Calcutta. He has also referred to n communication dated December 1st, 1948 by Registrar, Original Side, circulating the directions of Hon'ble Mr. Justice Banerjee in connection with the leave under Clause 12 of the Charter. In granting leave under Clause 2, the Court applied its judicial discretion.
He has also referred to n communication dated December 1st, 1948 by Registrar, Original Side, circulating the directions of Hon'ble Mr. Justice Banerjee in connection with the leave under Clause 12 of the Charter. In granting leave under Clause 2, the Court applied its judicial discretion. The reliance was also placed on decision reported in (2) AIR 1984 Calcutta page 24, Tobu Enterprises Pvt. Limited v. Cameo Industries Limited to impress on us that leave under Clause 12 can also be obtained that an appeal against an order under Clause 12 of the letters patent under Section 20 of the Arbitration Act is not barred. Accordingly, he submits that the leave under Clause 12 was sought for and granted in accordance with law and since no step has been taken for revocation of the same or no appeal has been preferred it remains binding and the appellants cannot challenge the order of injunction granted by the learned trial Judge. Next case cited by Mr, Roychowdhury is reported in (3) AIR 1947 Calcutta rage 364. Amiya Prabha Das v. Jyoti Prokash Ghosh, as an authority of the proposition that where leave to sue has been granted under Clause 12 of the letters patent and where the propriety of the grant has been challenge, the proper course of the defendant is to apply at the earliest possible opportunity for revocation of the grant. It held that a judgment-debtor, who was aware of the institution of the suit against him, does not take steps to revoke the leave or to set aside the decree; he cannot be permitted in the course of the execution proceedings to claim that the decree was without jurisdiction on that ground. Mr. Roychowdhury has also referred to Section 2 of the Decrees and Orders Validity Act (V) of 1936 which provides that decree passed by the High Court of judicater in Bengal in exercises of its ordinary original civil jurisdiction under Clause 12 of the letters patent shall be called in question in any other Court on the ground that the High Court passed the decree of making the order had no jurisdiction to pass or make the decree or order. It has also been submitted that Section 2 applies not only to decrees passed by the Presidency High Court but also to proceedings in the execution of that decree ordered by the same High Court.
It has also been submitted that Section 2 applies not only to decrees passed by the Presidency High Court but also to proceedings in the execution of that decree ordered by the same High Court. In this connection, reliance has also been placed on decisions reported in (4) AIR 1949 Allahabad page 703, Suiti Devi v. Banarsi Das, (5) AIR 1955 Allahabad page 569, Hiralal Patni v. Sri Kali Nath and (6) AIR 1955, N. U. C. Calcutta 2939 ; Malina Banerjee v. Ramani Mohan Aich. 6. These contentions were made by Mr. Roychowdhuty in answer to the submissions of the appellant that the order of injunction passed by the Trial Judge, violation of which has been alleged was without jurisdiction. We may mention that we are not called on to examine whether the order passed by the learned Trial Judge is without jurisdiction as we are dealing with an appeal against an order by the same Trial Judge holding the appellants guilty for Contempt of Court for committing breach of the order of injunction passed in that suit. We are primarily concerned with the order passed in the contempt proceedings. Incidentally, we may require to examine whether the order passed by the learned Trial Judge is a nullity, inasmuch as, it lacked initial jurisdiction. It appears to us that the appellant was aware of the leave granted under Clause 12 of the letters patent in favour of the Indian Company. Inspite of, they did not take any step. They only made known their stand that they are not bound to submit to the jurisdiction of the Calcutta High Court, inasmuch as, the High Court had no jurisdiction to entertain the suit concerning the contract entered into by and between the parties. We may consider this aspect further, if, found necessary subsequently. Mr. Roychowdhury then submitted that the rule of private international law that a Court has no jurisdiction against the foreigner subject to rules of municipal law. In this connection, he has placed reliance on Section 20 of the Civil Procedure Code and Cause 12 of the letters patent. A suit is maintainable in an Indian Court against a foreigner, is a part of cause-of-action has arisen within the jurisdiction of that Court. A decree passed in such a suit, however, would not be enforceable in foreign Court. A decision reported in (7) AIR 1957 Patna 256.
A suit is maintainable in an Indian Court against a foreigner, is a part of cause-of-action has arisen within the jurisdiction of that Court. A decree passed in such a suit, however, would not be enforceable in foreign Court. A decision reported in (7) AIR 1957 Patna 256. Suresh Narain Sinha v. Akhauri Balbhadra Prasad, the Court held that it is true that according to the principles of international law, a Court has no jurisdiction to entertain a suit against a foreigner who does not permanently or temporarily reside within the jurisdiction and who had not submitted its jurisdiction, but if the legislature confers jurisdiction upon the Court to entertain suits against foreigners, where cause-of-action wholly or partly arises within the jurisdiction, then such Court undoubtedly had jurisdiction. Private International Law is, therefore, in this regard, subject to the rules of municipal law. In support of the same contention reliance has also been placed on the decisions reported in (8) AIR 1962 Madras page 731, (9) AIR 1962 Snpreme Court page 1 and also on English Supreme Practice 1982 edition page 91 and 92. It has also been submitted that relief against foreign Courts have also been granted by the Indian Courts, and in support, Mr. Roychowdhury has cited (10) All England Reporter 1967 Vol. I, 1005, 1011 (F & G) : 1969 (3) SCC 562 Tractoro export Moscow v. Tarapur Company & Another and on (11) 1987(1) SCC page 496, Oil & Natural Gas Commission v. Western Company of North America. In the first case, it was held that an Injunction could properly be granted against the defendant, although it was held a foreign collaboration. We stop its agents from doing acts in breach of contract either in England or abroad and notwithstanding that there was no evidence before the Court that the foreign collaboration had assets within the jurisdiction, for, it was for the defendants to produce of the evidence of such assets if it wished an injunction to be refused on that ground.
We stop its agents from doing acts in breach of contract either in England or abroad and notwithstanding that there was no evidence before the Court that the foreign collaboration had assets within the jurisdiction, for, it was for the defendants to produce of the evidence of such assets if it wished an injunction to be refused on that ground. In the second case, one the Moscow firm and Tarapur, the Supreme Court held that when a suit is being tried in the Court of this country which cannot be stayed under Section 3 of the; Foreign Award (Recognition & Enforcement) Art, 1961 in the absence of the actual submission of the disputes to the Arbitrial Tribunal at Moscow prior to the institution of the suit. The only proper course to follow is to restrain the Russian firm which has grant to Moscow Tribunal for adjudication of the disputes from getting the matter decided by the tribunal so long as the suit here in pending and has not been disposed of. In the third case, O. N. G. C. v. Western Company, the Supreme Court has instituted jurisdiction in exercises of its coherent powers to grant such a restrained order whenever the circumstances of the case made it necessary or expectant to do so or the ends of justice so required. It would be unfair to refuse the restrained order in a case like the present one for the action in the foreign Court would be oppressive in the facts and circumstances of the case though Supreme Court would exercising its jurisdiction to restrain a party from proceeding further with an action in a foreign Court. The present case was one of those rare cases where the Court would be failing in its duty if it hesitates in granting the restrained order. 7. It appears that the decree obtained by the English Company has been filed in Jaipur Court under the Provisions of Foreign Awards (Recognition & Enforcement) Act, 1961. As has been submitted by Mr. Roychowdhllry that the order passed by our High Court on the application under Section 33 of the Arbitration Act is binding and final, and no action contrary to the terms of the said order or ancillary thereto can be taken by the appellants. If the submissions of Mr.
As has been submitted by Mr. Roychowdhllry that the order passed by our High Court on the application under Section 33 of the Arbitration Act is binding and final, and no action contrary to the terms of the said order or ancillary thereto can be taken by the appellants. If the submissions of Mr. Roychowdhury is accepted, it would appear that two decrees-one passed by Union Court and another passed by in the English Court, claim to the legal and valid, even though one is contrary to the terms of the other. If this aspect of the matter is not thrust out in presence of both the parties, the position will lead to a absuror by taking recourse to the contempt application the relief obtained by English Company, cannot be defeated in the manner it is being done. There are enough scope for the respondent company to appear and contest the proceedings initiated in Jaipur and to establish the fact that it does not bind them. Without doing so, they have up before this Court by contempt application and thereby debarring the relief claimed by the English Company in Jaipur Court. It appears to us that the respondent company should appear before the Jaipur Court to establish its own case. 8. The ether point taken by the appellant is that the contempt application is barred by limitation under Section 20 of the contempt of Court Act, 1971. On this point, the respondents have relied on a decision in matter No. 2471 of 1987, (The Tara Iron & Steel Company Limited v. Ramniwas Poddar & Others). In the said decision, the learned Single Judge held that the Section 20 of the Contempt of Courts Act, 1971, was ultra vires of Article 215 of the Constitution. According to the learned Single Judge Article 215 in its term is absolute and neither the parliament nor the said State Legislator has been empowered by the Constitution to make laws effecting, restricting, limiting the special jurisdiction of the High Court as the Court of record to punish for its contempt summarily. this decision is reported in AIR 1989 Calcutta Page 375. 9. In arriving at the conclusion, the learned Single Judge mainly relied on the observations of the Supreme Court in (13) Sukdev Singh v. Hon’ble Chief Justice, Teza Singh reporting in AIR 1954 Supreme Court page 186.
this decision is reported in AIR 1989 Calcutta Page 375. 9. In arriving at the conclusion, the learned Single Judge mainly relied on the observations of the Supreme Court in (13) Sukdev Singh v. Hon’ble Chief Justice, Teza Singh reporting in AIR 1954 Supreme Court page 186. The Hon'ble Supreme Court observed that every High Court is vested with the power to punish for contempt and no act of a legislature or would take away the jurisdiction and confer it affresh by virtue of its own authority, Article 215 provides that every High Court shall be a Court of records and shall have all the powers of such a Court including the power to punish for contempt of itself. This power is not derived on the statue. The jurisdiction is clearly stressed to the fact of it being the Court of record, Article 215 only corroborates this status of the High. Court. Even without Article 215, the High Court would have the jurisdiction to punish for its contempt. This power of the High Court to punish for contempt of itself cannot be taken away by parliamentary legislation, except by way of constitutional amendment. It, therefore, follows that the power to punish for contempt be taken away. But, does it mean that legislature is not competent to provide for laying down procedure in a contempt application. Items 77 and 78 of List of Schedule I of the Constitution empowers the parliament to enact laws on constitution, jurisdiction and powers of the High Court. These articles clearly authorise the parliament to enact laws regarding the jurisdiction and the procedure to be applicable in a contempt proceedings before this Court. Section 20 is procedural in nature and prescribes a period of limitation to remove any uncertainty and to eliminate the stale complaints. Section 20 being a procedural law, the parliament have authority to enact such law. We are unable to agree with the decision of the learned Single Judge of this Court reported in AIR 1989 Calcutta 375, Tata Iron & Steel Company Limited v. Ramniwas Poddar & Others, and hold that Section 20 is not ultra vires, and no contempt proceeding can be initiated after the period of limitation prescribed by Section 20 of the Contempt of Courts Act, 1971.
In the facts of the instant case, there is no doubt that the contempt proceedings were initiated after the period of limitation expired under Section 20. In this view of the matter, the learned Single Judge is wrong in awarding the punishment to the contemners in a proceeding which is clearly barred by limitation under Section 20. In this view of the observation as above, we allow the appeal and set aside the order impugned and the Rule on which order impugned was passed, shall stand discharged. Parties to act on a signed xerox copy of the judgment with usual undertaking. Bhattacharji, J. : I agree.