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2002 DIGILAW 415 (GAU)

Bengal Surgic Als Limited v. L. B. Enterprise

2002-09-25

N.SURJAMANI SINGH

body2002
N.S. SINGH, J.— Heard Mr. D. Mazumdar, learned counsel for the petitioner and Mr. N.M. Lahiri, learned senior counsel assisted by Mr. N. Choudhury, learned counsel for the opposite party/respondent. 2. The facts of the Case in a short compass are as follows:- The present opposite party/respondent herein instituted a Money Suit No. 114/1997 as against the present petitioner and one another who is the Managing Director of the present petitioner for recovery of the outstanding dues to the tune of Rs. 1,30,531.99 out of which the defendant, petitioner herein admitted its liability to the tune of Rs. 35,736.66 and when the suit was pending before the learned Civil Judge (Senior Division) No. 2, Karnrup, Guwahati, the defendant No. 1, petitioner herein filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 for referring the parties to Arbitration in respect of the dispute and the claim and the relief sought for by the plaintiff in the said suit in terms of Clause 29 of the Agreement dated 3rd December, 1992 coupled with a prayer for stay of the proceeding of the said Money Suit No. 114/1997 by contending inter-alia, that despite the existence of the Arbitration agreement and the related Clause 29 for Arbitration, the plaintiff filed a suit and sought for the reliefs claimed in the plaint which is not maintainable. However, the learned Court below, upon hearing the parties the prayer of the defendant No. 1, the petitioner herein was rejected under the impugned order dated 25.5.1998 passed in M.S. No. 114/ 1997. Being dissatisfied with the impugned order the present petitioner filed this revision petition. At the very outset Mr. Mazumdar, learned counsel appearing for the petitioner contended that the learned Court below had completely misappreciated the provisions of law laid down under Section 8 read with Section 34 of the Arbitration and Conciliation Act, 1996 inasmuch as the learned Court below ought to have referred the parties to Arbitration in terms of the related Clause 29 of the said agreement. It is argued by the learned counsel that, agreement was for 3 years, and during the validity of the said agreement the petitioner filed a petition under Section 8 of the Arbitration and Conciliation Act, 1996 for short the Act of 1996 as the agreement and its validity was upto 3rd December, 1995. According to Mr. It is argued by the learned counsel that, agreement was for 3 years, and during the validity of the said agreement the petitioner filed a petition under Section 8 of the Arbitration and Conciliation Act, 1996 for short the Act of 1996 as the agreement and its validity was upto 3rd December, 1995. According to Mr. Mazumdar, learned counsel, though a copy of the agreement was submitted/filed before the Court below on 8.12.97 that is before the final disposal of the matter under Section 8 of the Act, 1996, the learned Court below ought to have held that the said application preferred under sub section 1 of Section 8 should be entertained. Supporting his submission Mr. Mazumdar, learned counsel has also relied upon the decision of the Apex Court rendered in Laxmi Ratan Engineering Works Ltd. Vs Assistant Commissioner (Judicial) Sale Tax reported in AIR 1968 SC 488 and contended that the word 'entertain' means either to deal with or admit to consideration and that being the position; at the time of the hearing of the present case in hand the petitioner filed the certified copy of the agreement and as such the same ought to have been examined by the Court below and ought to have admitted it as the plaintiff has not raised any objection about the existence of the said agreement. Mr. Mazumdar farther relied upon another decision of the Apex Court rendered in Martin and Harris Ltd. Vs. VI Additional District Judge and others respondents reported in AIR 1998 SC 492 and submitted that the word 'entertain' mentioned in Section 8 of the Act of 1996 is necessarily means entertaining the ground for consideration for the purpose of adjudication of the case on merits and not at any stage prior thereto. Therefore, the impugned order suffers from certain illegality Mr. Mazumdar argued. 3. Mr. N.M. Lahiri, learned senior counsel assisted by Mr. N. Choudhury for the respondent has submitted that a larger Bench of the Apex Court has dealt with the matter about the law enunciated by the Apex Court in Laxrni Ratan Engineering Works Ltd. Vs. Assistant Commissioner, Sales Tax (supra) inasmuch as in a case between Lala Ram Vs. 3. Mr. N.M. Lahiri, learned senior counsel assisted by Mr. N. Choudhury for the respondent has submitted that a larger Bench of the Apex Court has dealt with the matter about the law enunciated by the Apex Court in Laxrni Ratan Engineering Works Ltd. Vs. Assistant Commissioner, Sales Tax (supra) inasmuch as in a case between Lala Ram Vs. Hari Ram reported in 1969 (III) SCC 173 the Apex Court was of the view that "entertain" means "file or received by the High Court and that being the position the present petitioner filed an application under Section 8 of the Act, 1996 which was to be accompanied by the Original Arbitration Agreement or a duly certified copy thereof but in the instant case, it was not done, and as such the Court below rightly rejected the prayer of the present petitioner. It is also argued by the learned senior counsel that Section 8 of the Act pf 1996 is mandatory and, it is to be followed strictly for entertaining the application under Section 8 of the Act of 1996 and as such there is no infirmity or illegality in the impugned order. The respondent also relied upon a decision of this Court rendered in North Eastern Electric Power Corporation Ltd. and Others Vs. Jeeban Kr. Shah, respondent reported in 1999 (3) GLT 16: 2000 (2) GLR 242 and submitted that this Court held that proviso of Section 8 of the Act is ought to be strictly complied with and the parties should not be referred to Arbitration unless the procedure or other requirement of law as provided under Section 8 is not complied with strictly. 4. Now this Court is to see and examine as to whether the impugned order is tenable in the eye of law or not. 5. 4. Now this Court is to see and examine as to whether the impugned order is tenable in the eye of law or not. 5. Upon hearing learned counsel for the parties and also on perusal of the available materials on record, I am of the view that the impugned order is not tenable in the eye of law for the following reasons:- There is a specific Arbitration Clause that is Clause 29 of the Agreement which is relevant in the instant case and accordingly, the same is quoted below: “If any question of difference or dispute shall at any time arise between the Agent and the principal with respect to the meaning, interpretation or effect of any clause in the Agreement or the rights or liabilities of the parties hereto respectively hereunder then such question or dispute shall be referred to Arbitration at Calcutta whose award shall be conclusive and binding on both the parties. The Arbitrator shall be appointed by the Company.” 6. In the instant case, the life and validity of the related agreement is upto 3rd December, 1995 and the plaintiff did not make an endeavour to avail the recourse of the said Arbitration Clause 29 before filing the present suit i.e. M.S. No.l 14/1997. 7. The case laws so far cited by the learned senior counsel for and on behalf of the respondent do not help or support the case of the respondent, rather it supports the case of the defendant/petitioner herein for the following reasons - In North Eastern Power Electric Corporation Ltd. And Others Vs. Jeeban Kr. Shah (supra); in a connected suit for recovery of a sum of Rs. Jeeban Kr. Shah (supra); in a connected suit for recovery of a sum of Rs. 33,750/- the concerned defendants filed an application under Order Vn Rule n CPC for rejection of the plaint and that application was rejected by the trial Court and in that case the party defendants filed so called agreement which is nothing but a part of the extract copy of the Arbitration Agreement in other words it is neither the original nor, a certified copy of it and keeping in view of it, this Court was of the view that the Arbitration Agreement is a solemn agreement entered between the parties for Resolution of the dispute, and as such the Provisions of Section 8 of the Act of 1996 is to be strictly complied with and; in that case procedure and other requirement of law as provided under Section 8 of the Act of 1996 was not complied with strictly. Therefore, the decision of this Court rendered in North Eastern Power Corporation Ltd. and others Vs. Jeeban Shah (supra) has no relevancy with the present case. In Lala Ram Vs. Hari Ram (supra) the Apex Court while dealing with the maintainability of an application under Section 417(3), (4) Cr.P.C. and/or application for Special Leave to appeal to the High Court after 60 days of the order, the ratio thereof referring to the decision rendered in Laxmi Ratan Engineering Works Vs. Assistant Commissioner, Sales Tax (supra); make a specific observation that 'entertain' means 'Tile or received by the High Court" and it has no reference to the actual hearing of the application for leave to appeal. Hence, decision of the Apex Court rendered in Lala Ram Vs. Hari Ram (supra) does not help the case of the respondent. 8. In a given case, under Order 41 Rule 1 CPC it is provided that the Memorandum of Appeal shall not be filed or presented unless it is not accompanied etc. etc. in Section 17 of the Small Causes Courts Act, the expression is “at the time of presenting the application” like wise, in Section 6 of the Court Fees Act the words are 'file' and 'shall be received'. The question therefore, is at what stage can the appeal be said to be entertained for the purpose of the application of the proviso? The question therefore, is at what stage can the appeal be said to be entertained for the purpose of the application of the proviso? Is it “entertained” when it is filed or, is it entertained when it is admitted and the date is fixed for hearing or is it finally entertained when it is heard and disposed of? This legal aspect can be carefully examined by the Apex Court in Laxmi Ratan Engineering Works Vs. Assistant Commissioner, Sales Tax (supra) which is relevant in the instant case and as such the relevant observation is quoted below :- “7 To begin with it must be noticed that the proviso merely requires that the appeal shall not be entertained unless it is accompanied by satisfactory proof of the payment of the amount of tax admitted by the appellant to be due. A question thus arises what is the meaning of the word 'entertained' in this context? Does it mean that no appeal shall be received or filed or does it mean that no appeal shall be received or filed or does it mean that no appeal shall be admitted or heard and disposed of unless satisfactory proof is available? The dictionary meaning of the word 'entertain' was brought to our notice by the parties and both sides agreed that it means either to deal with or admit to consideration". We are also of the same opinion. The question therefore is at what stage can the appeal be said to be entertained for the purpose of the application of the proviso? Is it entertained when it is admitted and the date is fixed for hearing or is it finally entertained when it is heard and disposed of? Numerous cases exist in the law reports in which the word entertained or similar cognate expressions have been interpreted by the courts. Some of them from Allahabad High Court itself have been brought to our notice and we shall deal with them in due course. For the present we must say that if the legislature intended that the word 'file' or 'receive' was to be used there was no difficulty in using those words. In some of the statutes which were brought to our notice such expressions have in fact been used. For the present we must say that if the legislature intended that the word 'file' or 'receive' was to be used there was no difficulty in using those words. In some of the statutes which were brought to our notice such expressions have in fact been used. For example under Order 41 Rule 1 of the Code of Civil Procedure it is stated that a memorandum shall not be filed or presented unless it is accompanied etc. in S.I7 of the Small Causes Courts Act the expression is at the time of presenting the application in Section 6 of the Court Fee Act the words are 'file' of 'shall be received'.” Similarly, the Apex Court in Martin and Harris Ltd. Vs. Vlth Additional District Judge & Ors reported in AIR 1998 SC 492 also dealt with some legal issue i.e. the question for interpretation of Section 21 (1 )(a) of the U.P. Urban Building Regulation of Letting Rent and Eviction) Act, 1972 and in that case, the Apex Court held that to entertain mentioned in the said proviso to Section 21 (1) would necessarily mean entertaining the ground for consideration for the purpose of adjudication on merit. The relevant observation of the Apex Court in that regard would be important and accordingly, it is reproduced as hereunder: “A mere look at the aforesaid provision of the first proviso to S 21 (1) of the Act shows that no application filed by a landlord is to be entertained by the prescribed authority on grounds mentioned in Cl (a) unless a period of three years has expired since the date of purchase of the property by the landlord when the building which is purchased is having a sitting tenant. It is not in dispute between the parties that the appellant was a sitting tenant since 1966 in the said building when it was purchased by respondent landlord on 30th June 1985. It is of course true that respondent landlord moved an application for possession against the appellant both under S 21 (1) (a) of the Act and also under S 21 (1) (a) of the Act. However, so far as the ground under Section 21(1) (a) of the Act is concerned the application was filed before the expiry of three years from the date of such purchase. However, so far as the ground under Section 21(1) (a) of the Act is concerned the application was filed before the expiry of three years from the date of such purchase. It was in fact filed within seven months from the date of purchase of the premises. The moot question is whether the very filing of such application was barred by the provisions of the said proviso. It must be kept in view that the proviso nowhere lays down that no application on the grounds as mentioned in Cl (a) of S 21 (1) could be instituted within a period of three years from the date of purchase. On the contrary the proviso lays down that such application on the said grounds cannot be 'entertained' by the authority before the expiry of the period. Consequently it is not possible to agree with the extreme contention canvassed by the learned Sr counsel for the appellant that such an application could not have been filed at all within the said period of three years, learned Sr counsel for the appellant Sri Rao in this connection invited our attention to a decision of this court in the case of Anandi Lal Bhanwarlal Vs Smti Kasturi Devi Ganeriwala (1985) 1 SCC 442 AIR 1985 SC 376 . In the said decision this court was concerned with the interpretation of Section S 13(3) (A) of the West Bengal Premises Tenancy Act 1956. The said provisions reads as under (at) p 377 of AIR. “Where a land lords has acquired his interest in the premises by transfer, no suit for the recovery of possession of the premises on any of the ground mentioned in CL (F) or CL (FF) of subsection (1) shall be instituted by the landlord before the expiration of a period of three years from the date of acquisition of such interest. ……………” As in that case the very 'institution' of suit for recovery of possession was barred for a period of 3 years from the date of acquisition of interest of landlord in such premises this court took the view that the decree for possession passed in the face of such statutory Prohibition was illegal. As the proviso to S 21 (1) of the Act in the present case is not so worded the said decision cannot be of any avail to learned Sr counsel for the appellant. As the proviso to S 21 (1) of the Act in the present case is not so worded the said decision cannot be of any avail to learned Sr counsel for the appellant. However he submitted that the word 'entertain' should be construed as being synonymous with the word “institute'. It is difficult to agree. The statutory scheme for S 21 (A) contra - indicates such a contention. Sub-section( 1) of Section 21 lays down that the prescribed Authority may on an application of the landlord in that behalf Order the eviction of a tenant from the building under tenancy or any specified part thereof if it is satisfied that any of the following grounds exists Section 21(1) deals with grounds mentioned not only Cl (a) but also in Cl (b) the proviso 21(1) bars entertainment of the application only on the ground mentioned in Cl (a) thereof it is easy to visualise that an application for possession may be filed by the land lord not only invoking grounds mentioned in Cl (a) S 21 (1) but even other grounds mentioned in that subsection. Therefore, the stage at which the court has to consider whether the grounds mentioned in Cl (a) are made out by the plaintiff will be reached when the court takes up the application for consideration on merits. It has to be kept in view that application for possession filed under Section 21(1) of the Act are not placed for admission before the prescribed authority once they are filed they are to be possessed for being decided on merits after issuing notices to the parties concerned. Therefore, when the application reaches final hearing on merit the authority has to shift the grounds on which the application is based and he finds that the application is based amongst others on the grounds mentioned in Cl (a) it has to ascertain whether three years' period has expired since the date of the purchase of the said property by the plaintiff landlord and if the period of three years is found to have expired then the grounds mentioned in Cl (a) would become alive for consideration of the Authority. If not the grounds would not be entertained for consideration. If not the grounds would not be entertained for consideration. Thus the word 'entertained' mentioned in the first proviso of S 21(l)in connection with grounds mentioned in Cl (a) would necessarily mean entertaining the ground for consideration for the purpose of adjudication on merits and not at any stage prior thereof as tried to be submitted by the learned Sr counsel Sri Rao for the appellant. Neither at the stage at which the application is filed in the office of the authority nor at the stage when summoned is issued to the tenant the question of entertaining such application by the prescribed authority would arise for consideration. This conclusion also flows from the statutory scheme discemable from the third proviso 21(1) of the Act. It is seen that the said proviso uses the similar terminology in the effect such .application u/s 21 (1) (a) shall not be entertained under contingencies contemplated by various sub-Clause of the said proviso. The provisions clearly show while entertaining the application for possession under Cl (a) of Sub-Section (1) of S 21 of the Act the court has to find out on evidence led before it as to what is the purpose of the charitable trust and also whether the Residential building is sought for occupation for business purposes or whether the tenant of residential premises if he is a member of armed forces has got a certificate to the effect that he is serving under Special condition mentioned in Section 3 Indian Soldier (Litigation) Act 1925 or whether he has died by enemy action while so serving and proceedings are being filed against his heirs all these questions of fact will have to he considered while entertaining the application under C1(A) of S 21(1) of the Act as laid down by the third proviso it is obvious that the said stage would be reached only when the prescribed authority takes up the application for consideration on merits on the grounds mentioned in Cl (a) of Section 21(1) which are pressed in service by the landlord for getting possession." 9. It maybe mentioned that the Respondent did not make any attempt to refer the matter for Arbitration as discussed above. The certified copy of the related agreement was filed before the learned Court below before passing the impugned order. It maybe mentioned that the Respondent did not make any attempt to refer the matter for Arbitration as discussed above. The certified copy of the related agreement was filed before the learned Court below before passing the impugned order. In my considered view the learned court below ought to have considered the matter and allowed the prayer of the present petitioner. 10. It is also noteworthy to highlight the settled law of the land that when substantial justice and technical consideration are pitted against .each other, cause of substantial justice deserves to be preferred. Judiciary is respected not on account of its power to legalise injustice on technical ground but because it is capable of removing injustice and is expected to do so. 11. This Court need not go into more depth as suffice is made with the above observations to set aside the impugned order dated 25.5.1998 passed by the court below in M.S. No. 114/97 and accordingly it is set aside. The petition of defendant No. 1 petitioner under Section 8 of the Arbitration and Conciliation Act, 1996 failed before the court below is allowed with a direction to the parties concerned to comply with the provisions of Clause 29 of the related Arbitration Agreement and the learned court below shall refer the parties to Arbitration in terms of the said clause 29 of the Agreement. 12. In the result, the petition is allowed. No. costs. Let a copy of this order be communicated to the learned Courts below. Registry will act accordingly. Parties are at liberty to obtain a certified copy of this order and submit the same before the learned court below for doing needful in terms of this order.