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1997 DIGILAW 420 (CAL)

K. BALACHANDRAN NAIR v. M. RAJENDRAN

1997-11-21

D.K.JAIN, RABIN BHATTACHARYYA

body1997
R. BHATTACHARYYA, J. ( 1 ) THIS appeal is directed against the order dated 15th October, 1996, in connection with FMAT No. 3767 of 1996, passed by the learned trial Judge, in connection with the C. O. No. 106 (W) of 1996, where the trial Judge, after substituting his own decision reversed the order of the learned Arbitrator on the count that the arbitration proceedings suffered from jurisdictional error as the Arbitrator was denuded of jurisdiction to assume power to adjudicate upon the dispute. This is all sore in the litigation which has pushed the appellant to this court. ( 2 ) BEFORE embarking on the controversy in dispute for decision of the dispute, it is worthwhile to get a grip to the core controversy, and, therefore, the narration of the facts would be the crying need of the hour, lest the whole judgment would be submerged into futility. Grasping the facts for appreciation, in our estimation, will pay the way to decide the dispute. It looms large that much water had flown into the ganges when the parties fell out against each other to resolve the dispute through the multiple corridors of the writ courts. The appellant, having lost before the learned trial Judge, has now approached this court for redressal of his grievances as he has been made to be a scapegot. ( 3 ) NOW a few facts :-one Mr. Rajendran, however, was awarded a contract by the Andaman Public Works Department, shortly he described as APWD for the sake of brevity, the object being to construct 5000 metric tonnes capacity godown for the supply department of Andaman and Nicobar Administration at Dollygunj at an estimated cost of Rs. 29,71,209/- only. ( 4 ) AS a first limb of the contract awarded to M. Rajendran, the petitioner and the respondent No. 4, Mr. K Balchandran entered into an agreement whereupon it was agreed by and between the parties for financing the contract for facilitating loan to the petitioner by the respondent No. 4 to the tune of Rs. 2,00,000/- stipulating a period for refund of the same without any interest. The agreement did not come to an end there as it contained amongst other a clause for settlement of dispute by an Arbitrator, if the harmonious performance of the work is threatened by any action of party. Undoubtedly, the agreement was parties interse. 2,00,000/- stipulating a period for refund of the same without any interest. The agreement did not come to an end there as it contained amongst other a clause for settlement of dispute by an Arbitrator, if the harmonious performance of the work is threatened by any action of party. Undoubtedly, the agreement was parties interse. ( 5 ) AS we all know facts are stranger than fiction and the state of harmony ultimately turned into a state of turmoil when the parties having lost the confidence re-posed in each other flocked to the writ court to adjudicate upon their dispute, where the Andaman and Nicobar State Cooperative Bank Limited, Port Blair became a passenger of the same ship. ( 6 ) THE writ court presided over by the learned single judge on 22nd August, 1994 in CO No. 5938 (W) of 1994 by its order, directed the Registrar of the Co-operative Societies to arbitrate the dispute or a person to be nominated by him to settle the dispute within 4 weeks from the date of communication of the order after observing the formalities of natural justice in letter so that none could cry before he is hurt. ( 7 ) THE Registrar in faithful adherence to the order passed by His Lordship on 22nd August, 1994, nominated an Arbitrator to arbitrate the dispute which went through all the passages of the arbitration proceedings where none of the parties raised their fingers of protest about his authority. The appellant and the respondent since locked up in dispute were absolved from their liabilities by the award dated 10th February, 1995 which injured the right of the Bank when an appeal filed before the appellate Tribunal by the Co-operative Bank. The appeal was ultimately disposed of by the respondent No. 2 by his order dated 5th August, 1996, substituting the liability on Rajendran after relieving the bank from its obligations where Mr. K. Balachandran approached the writ court to repair his grievances. ( 8 ) THE learned trial Judge by his order dislodged the award on the ground that he was benefit of jurisdiction to adjudicate upon the dispute between the respondent Bank and the private parties absolving the Bank from its liability. K. Balachandran approached the writ court to repair his grievances. ( 8 ) THE learned trial Judge by his order dislodged the award on the ground that he was benefit of jurisdiction to adjudicate upon the dispute between the respondent Bank and the private parties absolving the Bank from its liability. ( 9 ) HOWEVER, it is pre-dominent from the order impugned of the learned trial Judge, that he modified the appellate order by quashing the order of the Tribunal dated 5th August, 1996 affording right to the private parties to enforce their respective claims in according with law. ( 10 ) THEREAFTER, the judgment was delivered on 25th June, 1997 dismissing the appeal after affirming the order of the learned trial Judge by the court. Patently, aggrieved by the order of 25th June, 1997, an application for review was filed on 21st July, 1997, which, however, was disposed of by Their Lordships on 29th August, 1997 and, therefore, the order of the learned trial judge again revived for consideration by this court in the appeal, the object being to consider the propriety or otherwise of the impugned order of the learned trial Judge dated 15th October, 1996. ( 11 ) MR. Arun Sunder Roy, the learned advocate appearing for the appellants has argued with much industry that the jurisdiction of the Arbitrator has found to be non est by the learned trial Judge which is a misnomer as it overriden the sanctity of the judicial order passed by the earlier bench of coordinate jurisdiction. To found the claim, the learned counsel for the appellant has laid much emphasis that the court could not substitute its own view over a decision of the Arbitrator for the in-action of the parties which took part in the arbitration proceeding without any demur. It is now water and air tight and beyond penetration. ( 12 ) TO rebut the claim, Mr. Hemraj Bahadur, the learned Advocate appearing for the respondent has assailed the jurisdiction of the Arbitrator and in course of his submission, he gave a silver lining to the claim of the respondent that the dispute, since confined between the parties interse, the same can be enforced by any other remedy except the writ. The Arbitrator, in short, is divested of jurisdiction to meddle in the dispute. The Arbitrator, in short, is divested of jurisdiction to meddle in the dispute. The impugned judgment of the trial Judge, according to him, has re-opened the chapter of jurisdiction and has affected the power of arbitration of the Arbitrator. ( 13 ) MR. Asish Kumar Roy, the learned advocate appearing for the Bank, although not borrowed the submission of the appellant, has founded his claim almost in line with the claim of the appellant. According to Mr. A. K. Roy, there is no hole in the arbitration proceeding to which the parties appeared and took part without being influenced by any other extraneous circumstances. ( 14 ) THE above argument is the sumum bonum of the contentions of the parties over which the parties have crossed their swords asserting their respective rights. The above proceeding from its very core was not shadowed by the order of the learned single Judge dated 22nd August, 1994 passed in C. O. No. 5938 (W) of 1994, as argued. Upon making a close scrutiny of the entire materials on record, it passes all comprehension to believe that none of the parties addressed the court about the fate of the order dated 22nd August, 1994. Now the respondent is crying over the legal competence of the court and the jurisdiction of the Arbitrator. The respondent cannot eat the cake and have it. The order dated 22nd August, 1994 never indulged in hostility to the Regulations 55 and 56 of the Andaman and Nicobar Islands Cooperative Societies Regulation, 1973 and the Andaman and Nicobar Islands Cooperative Societies Rules, 1974. There is enough transparency in the order which does not invite any criticism at the fag end of the day. ( 15 ) IN fact, the court upon taking an analytical approach for settlement of the dispute between the parties, walked through the bosom of the Regulations 55 and 56 and in consideration of the same passed an order for arbitration either by the Registrar himself or through his nominee, for which, according to us, no parties suffered any casualty. It is worth to note that the Registrar did not arbitrate the dispute since the adjudication by him might lash the provision of appeal. Thus, he elected to have the dispute adjudicated upon by his nominee to avoid the controversy. It is worth to note that the Registrar did not arbitrate the dispute since the adjudication by him might lash the provision of appeal. Thus, he elected to have the dispute adjudicated upon by his nominee to avoid the controversy. Over and above the order dated 22nd August, 1994 falls in line with the regulations contained in chapter VIII of the Andaman and Nicobar Islands Cooperative Societies Regulation, 1973. ( 16 ) MR. Hemraj Bahadur, the learned Advocate took much pain to submit that the order dated 22nd August, 1994 is but a direction which acquires no force. But there is no cleavage of opinion that there is a conceptual difference between an "order" and "direction". The apex court in Bashiruddin Ashrat v. Bihar Subai Sunni Majdis Awaquaf (1965)1 SCJ 72 held that an order is more peremptory than a direction, and an argument can never be right which suggests that while disobedience of a direction should merit punishment, disobedience of an order should go unpunished. It is not a direction but an order as pre-eminent from it. This itself is an earlier blush to the contention of Mr. Hemraj Bahadur. ( 17 ) REVERTING back to examine the potency of the claim of the appellant, we cannot take any different view about the order dated 22nd August, 1994. The order dated 22nd August, 1994 attained its finality when no appeal taken by any party to a Superior Court. The Arbitrator assumed jurisdiction on the anvil of the order of the court and the proceeding smoothly proceeded upon due observance of formalities which was a prelude to its sanctity. It is now too late in the day to cry over the split milk. The private respondent sat on the fence to bide time and deliberately missed the bus for the proceedings being salubrious. ( 18 ) THE Supreme Court while adverting to adjudge the arbitration proceeding and the award came to the conclusion in M/s Neelkantan and Brothers Construction v. Superintending Engineer, National Highways, Salem and others AIR, 1988 SC 2045, that a party acquiescing any appointment of an Arbitrator cannot challenge the appointment, the object being to invalidate the proceeding. ( 18 ) THE Supreme Court while adverting to adjudge the arbitration proceeding and the award came to the conclusion in M/s Neelkantan and Brothers Construction v. Superintending Engineer, National Highways, Salem and others AIR, 1988 SC 2045, that a party acquiescing any appointment of an Arbitrator cannot challenge the appointment, the object being to invalidate the proceeding. The apex court again in Prasun Roy v. Calcutta M. D. Authority and another AIR, 1988 SC 205, held that "in view of the acquiescence of the parties one of them could not be allowed to challenge the arbitration proceeding on the ground that because of some disability, the matter could not be referred to arbitration". There is no scope to say on the decision aforesaid at this stage that this is the bottom-line or pitfall. It is impermissible to approbate and reprobate. The contention of the respondent is, therefore, aimed at to salvage the point before drowning. ( 19 ) UPON going through the impugned order passed by my learned Brother on 15th October, 1996 under appeal, we cannot therefore, agree at this stage that the Arbitrator had forfeited his jurisdiction to arbitrate the dispute having his jurisdiction anchored at the unimpeached order dated 22nd August, 1994. It is a striking that the learned trial Judge passed an order on 15th October, 1996 after holding the severalty of the award dated 10th February, 1995, which suffered a quashing. The writ court afforded an opportunity to respondent-bank to proceed against the writ petitioner and the responded No. 4 for enforcement of its claim against them in accordance with law, and "the respondent bank to appropriate the proceeds of any cheque which may have received from the Executive Engineer or any other authority pursuant to the order of this court in protanto to satisfaction of its dues against the writ petitioner and/or respondent No. 4". ( 20 ) WE respectfully hold that this part of the order does not agree with the view of the learned trial Judge as he held that the Arbitrator had no jurisdiction to adjudicate upon the dispute, between the said respondent bank, writ petitioner and the respondent No. 4. If the basic thing dis-appears its repetation attributes to a shadow without any substance. If the basic thing dis-appears its repetation attributes to a shadow without any substance. When the learned trial Judge found that the Arbitrator had no jurisdiction, it bolted the award and the severaitty of the award is putting the horse behind the cart. It must stand or fall with the award. ( 21 ) FURTHER, the learned trial Judge cannot undo the order dated 22nd August, 1994 so long it held the field. The court is to reach a logical conclusion of the order which travelled without being intercepted from any end. ( 22 ) IT is undisputed, since law has been already set at rest by the apex court in its landmark decision in Renusagar Power Company Limited v. General Electric Company, AIR, 1994 SC 860, that the orders of the courts must be complied with for any action which involves dis-regard for which orders when adversely affected the administration of the justice and would be destructive the rule of law and would be contrary to the public policy. ( 23 ) THERE is no shred of asbcurity in the order which could make the order vulnerable as it was passed in line with the regulation of the Islands. It is trite saying that the writ court is a court of equity which could pass an order to do a complete justice between the parties. There is an ominous silence about the jurisdiction of Arbitrator who derived his power under the order of the court which cannot be shaken at this stage. The exploration of relief in any other forum is not subject to judicial scrutiny as the public law element is involved. ( 24 ) THE learned Arbitrator did not make the proceeding as a turf of his own and used as it as the landing pad for passing the Award. ( 25 ) WE respectfully cannot agree with the order of the learned trial Judge under appeal, in the back-ground of the factual and legal exposure of the case. Therefore, we cannot accept any of the contentions of the learned counsel for the respondent No. 1 as we accept the contentions of the appellant and the respondent bank, since supported by fact and law. With the above observations we allow the appeal, set aside the order impugned dated 15th October, 1996 and the documents be returned to the appellant by the bank. D. K. Jain, J.-I agree. With the above observations we allow the appeal, set aside the order impugned dated 15th October, 1996 and the documents be returned to the appellant by the bank. D. K. Jain, J.-I agree. Appeal allowed.