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2001 DIGILAW 1668 (MAD)

Mahabaleswar Service Station v. Indian Oil Corporation Limited and Another

2001-12-21

PRABHA SRIDEVAN

body2001
Judgment :- The Order of the Court was as follows : An interesting point has been raised in this revision, which is against the order passed under the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act). The parties to the revision had entered into an agreement for dealership of petroleum products. Clause 67 of the agreement provides for resolution of disputes by referring to the sole Arbitrator, the Managing Director of the respondent-Corporation. The petitioner was appointed as a dealer of petroleum products by the respondent. Alleging breach of the terms of agreement, the respondent terminated the agreement, by an order dated 20.2.2001. The respondent filed I.A. No. 8807 of 2001 under Section 8(1) of the Act. This application was ordered and therefore, this revision was filed. The learned counsel for the petitioner, Mr. Veerapathiran, stated that the application was not maintainable since it did not comply with the mandatory provisions of the Act. Further, he also submitted that the termination order was null and void. On 4.5.1999, a show cause notice was issued by the respondent to the petitioner. The second show cause notice was issued on 20.10.1999 to which the petitioner had given his detailed reply. Therefore, a dispute arose as to whether the petitioner had committed breach of the agreement, in which case the respondent ought to have referred the matter to arbitration. Instead of this the respondent took law into their own hands and terminated the agreement. When the respondent had themselves given the go-by to the arbitration agreement it is not open to them to now say that the petitioner should have referred the dispute to arbitration. Therefore, according to the learned counsel this petition under Section 8 of the Act is not maintainable. Further, he submitted that Section 8(2) of the Act requires the party to produce the original of the agreement or a duly certified copy thereof and without that the judicial authority referred to in Section 8 should not entertain the application. In this case, according to the learned counsel the order ex-facie would show that the application was accompanied only by a xerox copy of the agreement and only at the time of hearing the respondent had produced the original of the agreement. Inspite of this the Court below had entertained the application which was violative of provisions of Section 8 of the Act. Inspite of this the Court below had entertained the application which was violative of provisions of Section 8 of the Act. The learned counsel pointed out to the definition of certified copy of the Judicial Dictionary and also to Sections 74 and 75 of the Evidence Act which dealt with what is a certified copy of a public document. Since the xerox copy was not a certified copy as per the provisions of the Evidence Act it ought not to have been accepted. He submitted that since words "shall not be entertained" are used in the section, production of the original is mandatory.The learned counsel referred to Thatha vs. Paru, where a carbon copy was treated as certified copy though it did not contain a certificate to that effect. He referred to if for the purpose that in that case under Section 79 of the Evidence Act, a legal presumption was drawn in favour of the genuineness of the document though it was not in strict compliance that the provisions for certifications of a copy. In that case the words 'duly certified' were explained as copies officially issued under the authority of the Court. The learned counsel submitted that when this copy of the arbitration agreement was not certified by the Manager of the respondent-Corporation it cannot be treated as duly certified copy. He also referred to Malayalam Plantations Limited, Quilon vs. Commissioner of Income-Tax, Mysore 1959 AIR(Ker) 34 = 1958 KLT 518 ), where the words "certified copy" came up for consideration and it was held that by long usage, "certified copy" has always been understood as the copy which the party preferring the appeal obtains under Section 76 of the Evidence Act on payment of the necessary fee. So according to the learned counsel the words "duly certified" connote a certain formality and therefore, a xerox copy cannot be treated as duly certified. Next, he referred to Mohan Reddy vs. Neelagiri Muralidhar Rao 1958 AIR(AP) 485 = 1958 1 An WR 495). In this case, the Division Bench of the Andhra Pradesh High Court had to consider the effect of production of an authenticated copy in the place of a certified copy which entailed rejection of the nomination paper. That case arose out of an election petition. In this case, the Division Bench of the Andhra Pradesh High Court had to consider the effect of production of an authenticated copy in the place of a certified copy which entailed rejection of the nomination paper. That case arose out of an election petition. This was referred to by the learned counsel to show that the since authenticated copy emanated from the electoral registration office it only underscores the position that a certified copy should be produced from the custody of the officer who is entitled to the same.Finally, he referred to Refrigeration and Appliances and others vs. Jayaben Bharatkumar Thakkar and others 2000 (8) JT 101 , where an application was filed under Section 8 of the Act and it was challenged as not maintainable since the certified copy of the agreement was not filed thereafter, another application was moved complying with the provisions of the Act and this technical objection was withdrawn. This was relied on by the learned counsel to show that Supreme Court had not rejected the objection totally. The matter was not considered only because the objection was withdrawn. Ms. Meera Gupta, learned counsel for the respondent on the other hand submitted that the xerox copy of the agreement was certified by her as true copy as an Advocate and therefore, it acquired the character of the duly certified copy. She also submitted that this objection was not raised before the Court below. She referred to P. Anand Gajapathi Raju and others vs. P.V.G. Raju (died) and others 2000 AIR(SCW) 1489 = 2000 (2) Arb. LR 204 (SC)), for the purpose of showing that the Supreme Court has clearly held that Courts should encourage resolution of disputes by arbitration expeditiously and Court's intervention should be minimal. She also referred to Wharton's Law Lexicon for the meaning of 'certified copy' wherein it is stated that it is a copy of a document signed and certified as a true copy by the officer to whose custody the original is entrusted. According to her, since the original was entrusted to her and since she had signed and certified it as a true copy there was no error on the part of the Lower Court in allowing the application. The language of Section 8 of the Act is as follows : "Power to refer parties to arbitration where there is an arbitration agreement :8(1). The language of Section 8 of the Act is as follows : "Power to refer parties to arbitration where there is an arbitration agreement :8(1). A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement, shall if a part so applies not latter than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. (1) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. (2) Notwithstanding that an application has been made under Sub-section (1) and that the issue is pending before the judicial authority, and arbitration may be commenced or continued and an arbitral award made." The impugned order shows that this ground regarding non-compliance with provision of Section 8 of the Act had been taken by the petitioner even before the Court below, because it was assailed that it was mandatory on the part of the petitioner to produce the original document. The Court nonetheless, decided the application because at the time of enquiry the original agreement was shown by the counsel for the respondent. If the original of the agreement is shown at the time of enquiry would it amount to compliance with the provisions of the Act ? The Act clearly says that the application shall not be entertained unless it is accompanied by the original of the agreement or duly certified copy. In Dhoom Chand Jain vs. Chaman Lal Gupta 1962 AIR(All) 543 ), a Division of the Allahabad High Court had an occasion to consider the meaning of the word 'entertained'. This was in the context of an application under Order 21, Rule 90, C.P.C. where it is provided that no application to set aside a sale shall be entertained unless the conditions enumerated in the rule are satisfied. The Court held that, "(8) The dictionary meaning of the word 'entertained' is to deal with, to admit to consideration. In its application to Clause (a) the word bear the meaning of admitting to consideration. That clause enjoins the Court from considering the application on any ground which could have been taken on or before the drawing up of the sale proclamanation. In its application to Clause (b) the word should bear the same sense. In its application to Clause (a) the word bear the meaning of admitting to consideration. That clause enjoins the Court from considering the application on any ground which could have been taken on or before the drawing up of the sale proclamanation. In its application to Clause (b) the word should bear the same sense. Accordingly, while the Court cannot refuse to take an application which is not backed by deposit or security, it cannot judicially consider it. It is expected that the Court would ordinarily given an opportunity to the applicant to comply with Clause (b) and would reject the application if Clause (b) were still not complied with." Then again, in Kundan Lal vs. Jagan Nath Sharma 1962 AIR(All) 547 ), which also arose out of an application under Order 21, Rule 90, C.P.C. another Division Bench of the same High Court held thus : "The use of the word" entertain, "in the proviso (All) to Order 21, Rule 90 denotes a point of time at which an application to set aside the sale is heard by the Court. The expression "entertain" does not mean the same thing as the filing of the application by the Court. A Court hearing an application under Order 21, Rule 90 can only be said to entertain the application when it is actually disposing of the application on merits and the mere filing of the application by the judgment-debtor would not be its entertainment by Court." Therefore, though the learned counsel for the petitioner would vehemently submit that 'entertain' only means filing or admission of the application, the aforesaid decisions show that it does not mean the same thing as filing and that the Court entertains an application only when it is actually adjudicating or disposing the application on merit. In Hindustan Commercial Bank Limited vs. Punnu Sahu, the Supreme Court approved of the above construction of the expression "entertain" to mean adjudicate upon or proceeding to consider on merits. An almost identical situation arose in M/s. Lakjshmiratan Engineering Works Limited vs. Assistant Commissioner (Judicial) I, Sales Tax, Kanpur Range. The Supreme Court had an occasion to consider Section 9 of the U.P. Sales Tax Act, which deals with the power of appeal. An almost identical situation arose in M/s. Lakjshmiratan Engineering Works Limited vs. Assistant Commissioner (Judicial) I, Sales Tax, Kanpur Range. The Supreme Court had an occasion to consider Section 9 of the U.P. Sales Tax Act, which deals with the power of appeal. The proviso to that section reads thus : "Provided that no appeal against an assessment shall be entertained unless it is accompanied by satisfactory proof of the payment of the amount of tax admitted by the appellant to be due or of such instalments thereof as may have become payable." In that case the appeal was filed stating that the amount of tax had been paid accompanied by an affidavit. At the time of hearing, the appellant produced a certificate from the Sales Tax Officer that the tax had been paid. The Supreme Court held that the Assistant Commissioner ought therefore, to have proceeded with the appeal because it was accompanied by satisfactory proof of the payment of the tax and that to hold otherwise would put a premium upon a technicality which will not advance the case either for the collection of the tax or for administration of justice. The Supreme Court held that when the proviso speaks of the entertainment of the appeal it means that the appeal such as this when filed will not be admitted to consideration unless there is satisfactory proof available of making of the payment of the admitted tax. The word "entertain" was construed to mean not "received" or "aspect" but "proceed to consider on merits or adjudicate upon." In the present case, when the Court below took up the application the original agreement was before the Court as is seen from the impugned order. The Supreme Court has constantly held that all rules and procedures are intended to advance justice and not to defeat it. Therefore, it is not necessary to decide whether a xerox copy signed to be a true copy by an Advocate is duly certified or not in this case, since when the application under Section 8 of the Act was entertained, the original of the agreement was before the judicial authority. To hold that, unless the original agreement had accompanied the application at the time of filing, the application is not maintainable would go contrary to the decision of the Supreme Court with regard to the meaning of the word "entertain". To hold that, unless the original agreement had accompanied the application at the time of filing, the application is not maintainable would go contrary to the decision of the Supreme Court with regard to the meaning of the word "entertain". In these circumstances; the objection raised by the petitioner without merit. The other objections regarding the propriety of the respondent to terminate the agreement are matters that are well within the Arbitrator's power to decide. The civil revision is therefore, dismissed. No costs. The connected C.M.Ps. are also closed.