Kashmir Pulses Roller Flour Mills v. State Of J. &K.
2009-07-16
MUZAFFAR HUSSAIN ATTAR
body2009
DigiLaw.ai
1. Order dated 10th of June, 2009 passed by Learned Principal District Judge, Srinagar in case M/s Kashmir Pulses Roller Flour Mills v. State of J&K is called in question in this appeal. 2. To appreciate the controversy raised, it is apposite to give a brief narration of facts: - Notice No. DCAPDK/ADM/GS-37/Genl/07/471 dated 13th July, 2007 was issued by the respondent No. 2 inviting tenders for grinding of PDS wheat into whole meal atta on monthly basis as per the monthly allocation in Kashmir Division. The appellant also responded to the said notification. Rate of Rs. 30/- per quintal was fixed in terms of communication No. CAPD/FS/5/2003/Food-II dated 24th of August, 2007 which was to remain in force upto ending March, 2009. The appellant accepted the rates fixed by the Government respondents and in consequence thereof agreement was executed by the appellant with the respondents. The respondents allotted monthly quota of wheat in favour of the appellant for the year 2007-2008 for grinding of PDS wheat into whole meal atta for supply to consumers under Public Distribution System. The monthly allocation of wheat to the appellant was stopped from September, 2008 because of the slow pace of wheat grinding, which had resulted in delay in supply/return of atta during the month of June and July, 2008. The appellant was asked by the respondents to return the bye- products of the PDS wheat balance lying with him. The appellant made a representation requesting therein for extension of time for return of the bye-product of the wheat. The respondents acting on representation of the appellant granted number of opportunities to him to fulfill his commitments. When the appellant failed to fulfill his part of the agreement and his commitment to the respondents, they were constrained to issue notice to the appellant, in which he was informed that as per statement furnished by Assistant Director Mills, PDS wheat 7159-00 quintals, Atta 113-00 quintals, Wheat bran 83-00 quintals and Empty bags 25802-Nos are lying with the appellant and despite earlier notices he has failed to return the same. The appellant was also informed that he was given number of opportunities to return above referred items. The appellant failed to respond to notices issued to him. The respondents vide Notice No. DCAPDK/ADM/GS-37/KP/09/942 dated 6th of March, 2009 asked the appellant to return the retained PDS stocks (supra) within a period of 7 days positively.
The appellant was also informed that he was given number of opportunities to return above referred items. The appellant failed to respond to notices issued to him. The respondents vide Notice No. DCAPDK/ADM/GS-37/KP/09/942 dated 6th of March, 2009 asked the appellant to return the retained PDS stocks (supra) within a period of 7 days positively. It was further informed that in case the appellant failed to comply with the said notice, the respondents will proceed further in the matter and besides seeking the recovery of the stocks of retained Government stocks at penal rates as per Government order No. 15-FS of 2000 dated April, 2000, the respondents will also be seeking recovery of the same as "Arrears of Land Revenue". Clause 15 of the agreement specifically provided that the agreement shall remain in force from 1st of September, 2007 upto ending March, 2009. Para 24 of the agreement provided as under: - "If at any time any doubt, dispute, question or difference, as may arise in connection with or in relation to this contract/agreement, either-party may give to other, seven days prior notice for the existence of such doubt, dispute, question or the difference and same shall be dealt under the provisions of the J&K Arbitration Act." 3. The appellant filed application under section 9 of J&K Arbitration and Conciliation Act, 1997 (for short Act of 1997) before the court of Principal District Judge, Srinagar. The appellant sought the following reliefs in the said application:- "i) the respondents/non-applicants be restrained from proceeding against the petitioner under and in terms of notice No. DCAPDK/ADM/Gs-37/KP/09/942 dated 16-3-2009 for recovery of alleged retained PDS stocks as arrears of land revenue by any manner, mode or method. ii) The respondents/non-applicants be directed to forebear from black listing the petitioner concern. iii) The respondents/non-applicants be directed to resume the monthly supply of PDS wheat for grinding into whole meal atta retrospectively w.e.f. September, 2008. iv) The respondents/non-applicants be directed to release the payment with-held by them of the petitioner w.e.f. April 2008 and for future as well. v) Any other order or direction which this Honble Court may deep fit and proper under the facts and circumstances of the case be also passed in favour of the applicant and against the respondents/non-applicants." 4.
iv) The respondents/non-applicants be directed to release the payment with-held by them of the petitioner w.e.f. April 2008 and for future as well. v) Any other order or direction which this Honble Court may deep fit and proper under the facts and circumstances of the case be also passed in favour of the applicant and against the respondents/non-applicants." 4. This application seeking interim relief under section 9 of the Act, of 1997 was purportedly filed on the plea that matter is likely to be referred to arbitrator in terms of clause 24 of the agreement. 5. The learned Principal District Judge passed an ex-parte interim order on 23rd of March, 2009, the operative portion whereof is reproduced hereunder: - "issue notice to the respondents requiring the respondents to file objections, if any, to this petitioner by or on next date of hearing. In the meantime the respondents are temporarily restrained from acting upon the Notice No. DCAPDK/ADM/GS-37/KP/09/942 dated 16-03-2009 or black listing, the petitioner till next date of hearing and also to consider resumption of monthly PDS wheat supplies to the petitioner till the aforesaid date. Let the application come up on 30-03-2009 for further proceedings." 6. The respondents filed the objections and matter was re-considered by the learned Principal District Judge, who after hearing the parties, passed the order dated 10-06-2009, which is impugned in this appeal. The learned trial Judge vide impugned order dismissed the application and revoked the earlier ex-parte interim order. 7. When this appeal came up for consideration before this court, the court vide order dated 23rd of June, 2009 directed for issuance of notice to respondents as also to Mr. M.A. Wani, Deputy Advocate General, returnable within a period of one week. Notice was also issued in the CMP and the case was directed to be listed on 7th of July, 2009. It was further directed that till then the impugned order dated 10th of June, 2009 and notice dated 16th of March, 2009 shall remain stayed. The respondents filed CMP No. 331-2009 in which prayer for vacation/recalling of order dated 23rd of June, 2009 passed by this court was made. Alongwith the said application respondents also produced order No.10-DCAPDK of 2009 dated 18-06-2009, wherein and whereunder respondent No. 2 found that an amount of Rs.
The respondents filed CMP No. 331-2009 in which prayer for vacation/recalling of order dated 23rd of June, 2009 passed by this court was made. Alongwith the said application respondents also produced order No.10-DCAPDK of 2009 dated 18-06-2009, wherein and whereunder respondent No. 2 found that an amount of Rs. 94,34,054-00 as cost of the PDS stocks, details whereof have been given in this order, have been retained by the appellant unauthorizedly and the said amount was ordered to be debited against the appellant and also declared as shortages to be recovered from appellant as "Arrears of Land Revenue". It was also ordered that the appellant was further in arrears of Rs. 9,43,053-00 on account of previous out-standings and thus the total amount which was sought to be realized from the appellant worked at Rs. 1,03,77,107-00 only. Request was made to District Collector, Dy. Commissioner, Pulwama to recover the said amount as "Arrears of Land Revenue" from movable/immovable property as well as other assets of the appellant and same was requested to be transmitted to the Government Treasury under rules. This order was passed by the respondent No. 2, after passing of the order dated 10th of June, 2009 by learned Principal District Judge, Srinagar. 8. The notices were issued. The record reveals that Mr. M.A. Wani, Deputy Advocate General was informed about the case on 25th of June, 2009 and the official respondents received the copy of the court order dated 23rd of June, 2009 on 29th of June, 2009. The order dated 18th of June, 2009 passed by respondent No. 2 has not been passed in violation of any directions of the court, but has been passed in compliance to the order dated 10th of June, 2009. On this subsequent development, application under section 9 of the Act of 1997 as also this appeal is rendered infructuous and is liable to be dismissed on this ground alone. 9. Heard learned counsel for parties. Considered the matter. 10. Mr.
On this subsequent development, application under section 9 of the Act of 1997 as also this appeal is rendered infructuous and is liable to be dismissed on this ground alone. 9. Heard learned counsel for parties. Considered the matter. 10. Mr. Javed Iqbal, learned counsel for the appellant, however, while arguing the case submitted that the learned Principal District Judge while dismissing the application of the appellant has committed serious errors of law by holding that the agreement on which reliance has been placed by the applicant in view of terms and conditions contained therein has come to an end on 31st of March, 2009 and in the submission of the learned counsel for the appellant this would also mean that the arbitration clause contained in the agreement has also outlived its life. The learned counsel further submitted that the learned Principal District Judge could not direct that the recovery process be monitored at the highest level. 11. The arbitration petition under section 9 of the Act of 1997 has been instituted on 23rd of March, 2009 and same was dismissed on 10th of June, 2009. During this period no effort has been made by the appellant, neither any steps have been taken as required by law for seeking appointment of the arbitrator. Section 9 of the Act of 1997 provides as under: - "9.
During this period no effort has been made by the appellant, neither any steps have been taken as required by law for seeking appointment of the arbitrator. Section 9 of the Act of 1997 provides as under: - "9. Interim measures etc., by Court -- A party may before or during arbitral proceedings or at any time after the making of the arbitral award but before it becomes decree of a Court, apply to a court i) for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings; or ii) for an interim measure of protection in respect of any of the following matters, namely;- the preservation, interim custody or sale of any goods which are the subject matter of the arbitration agreement; securing the amount in dispute in the arbitration; the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute and arbitration, or as to which any question may arise therein and authorizing for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorizing any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence; interim injunction or the appointment of a receiver; such other interim measure of protection as may appear to be Court to be just and convenient, and the Court shall have the same power for making orders as it has for the purpose of and in relation to any proceedings before it." 13. Section 11 of the Act of 1997 refers to appointment of arbitrators and is reproduced as under: - "11. Appointment of arbitrators A person of any nationality may be an arbitrator unless otherwise agreed by the parties. Subject to sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators. Failing any agreement referred to in sub-section (2), in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators shall appoint the third arbitrator who shall act as the presiding arbitrator.
Subject to sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators. Failing any agreement referred to in sub-section (2), in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators shall appoint the third arbitrator who shall act as the presiding arbitrator. If the appointment procedure in sub-section (3) applies and- a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the other party; or the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment, the appointment shall be made, upon request of a party, by the Chief Justice of the High Court or any person or institution designated by him. 5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitration within thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by the Chief Justice of the High Court or any person or institution designated by him. 6) Whereunder an appointment procedure agreed upon by the parties,- a) a party fails to act as required under that procedure; or b) the parties, of the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or c) a person, including an institution, fails to perform any function entrusted to him or it under that procedure; a party may request the Chief Justice of the High Court or any person or institution designated by him to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment. 7) A decision on a matter entrusted by sub-section (4) or sub-section (5) or sub-section (6) to the Chief Justice of the or the person or institution designated by him is final. 8) The Chief Justice of the High Court or the person or institution designated by him in appointing an arbitrator, shall have the regard to- a) any qualification required of the arbitrator by the agreement of the parties; and b) other considerations as are likely to secure the appointment of an independent and impartial arbitrator.
8) The Chief Justice of the High Court or the person or institution designated by him in appointing an arbitrator, shall have the regard to- a) any qualification required of the arbitrator by the agreement of the parties; and b) other considerations as are likely to secure the appointment of an independent and impartial arbitrator. 9) The Chief Justice of the High Court may make such scheme as he may deem appropriate for dealing with matters entrusted by sub-section (4) or sub-section (5) or sub-section (6) to him." 14. Section 9 of the Act of 1997 on its plain reading makes it writ large on the face of the statue that an application under this provision can be filed by a party before or during arbitral proceedings or at any time after making an arbitral award but before it becomes decree of court. The section 9 of the Act of 1997 on the doctrine of interpretation of statutes make it manifestly clear that application for interim measure etc can be filed by a party before or during proceedings, which could mean that the party who is filing application under section 9 of the Act of 1997 is prevented from taking immediate steps for appointment of arbitrator by some compelling reasons or due to circumstances beyond its control, but because of the urgency involved invokes the court power under section 9 of the Act of 1997 to seek protection of his legal rights and interests before taking steps in accordance with the agreement/statue for seeking appointment of arbitrator. 15. Reading of section 9 and 11 of the Act of 1997 in conjunction make it abundantly clear that only a person will be entitled in law to invoke section 9 of the Act of 1997 for issuance of interim measure by the court who is intending to seek appointment of an arbitrator. The court before whom application under section 9 of the Act of 1997 is filed, is thus duty bound in law to satisfy itself in the facts and circumstances of the case as to whether the application is bonafide and the applicant is likely to take immediate steps for seeking appointment of arbitrator. The learned Judge is duty bound to record the reasons even for prima-facie purposes for issuing interim measure etc.
The learned Judge is duty bound to record the reasons even for prima-facie purposes for issuing interim measure etc. If the learned Judge is prima-facie satisfied that the application under section 9 of the Act of 1997 is filed only as a cloak to defeat the rights of the other party without seeking appointment of the arbitrator, the application would not be maintainable in law and will be liable to be dismissed in limini. In this case neither any steps have taken by the learned Trial Judge to ascertain the bonafide of the appellant nor any prima-facie reason has been recorded by the learned Trial Judge as to whether the appellant is bonafide in taking steps for seeking appointment of the arbitrator. In his order dated 23rd of March, 2009, without recording such satisfaction even for prima-facie purposes, exparte injunction order dated 23rd of March, 2009 has been passed, which on the face of it is illegal. 16. The learned counsel for the appellant was asked as to even till the date of hearing of this appeal any steps have been taken by the appellant for seeking appointment of the arbitrator. The learned counsel submitted that no such steps have been taken till date by the appellant. In view of this fact situation obtaining in this case, the application filed by the appellant under section 9 of the Act of 1997 is held to be neither bonafide nor competent and on this count alone this application merits rejection. 17. The learned counsel, however referred to and relied upon case titled "Indian Drugs and Pharmaceuticals Ltd. (Appellant) v. Indo Swiss Synthetics Gem, Mfg. Co. Ltd and others (respondents) reported in (1996) 1 Supreme Court Cases 54 and case titled National Agricultural Co-Op. Marketing Federation India Ltd. Vs. Gains Trading Ltd. reported in AIR 2007 Supreme Court 2327 to state the point that even though a contract comes to an end, the arbitration clause does not ipsofacto come to an end. This question cannot be raised and adjudicated upon in an interim application. The issue can be raised and decided only in an application when steps are taken for seeking appointment of arbitrator. The learned Trial Judge has also not recorded any finding about this aspect of the matter in the impugned order.
This question cannot be raised and adjudicated upon in an interim application. The issue can be raised and decided only in an application when steps are taken for seeking appointment of arbitrator. The learned Trial Judge has also not recorded any finding about this aspect of the matter in the impugned order. The another ground taken by learned counsel of the appellant, that no direction could be issued to the authorities by the learned Principal District Judge, is also misconceived in the facts and circumstances of this case. A person who is entrusted with public property and out of such entrustment he is permitted to make earnings for himself also, cannot be permitted to retain public property indefinitely and to derive benefits thereof illegally. If such, a situation is permitted to continue then it will be allowing the "Fence to eat the field". The public property and public money cannot be allowed to be squandered in any manner whatsoever by any person and process of the court cannot be permitted to be abused to perpetuate fraud. The courts of law, survive in democratic country like ours, on the faith of people so courts are accountable to society. The court of law has to enforce and implement laws of the land. When stark and naked act of loot and plunder is brought to the notice court, then court is duty bound to issue directions for securing and safeguarding the public property. 18. The appellant despite having been given numerous opportunities has failed to discharge his duty in returning the bye-product/original product to the respondents. The appellant has no case even on this score for seeking issuance of interim measure. The appellant in view of the averments made in the pleadings acted irresponsibly and may be on design has retained stocks entrusted to him by the respondents. The application has been rightly rejected by the learned Principal District Judge, this appeal being merit less is also dismissed alongwith connected CMPs. 19. The change in value system has brought the entire society to a catastrophic situation. Some people who amass wealth in present day scenario are ruling the roost. The money power seems to have become the biggest power. In order to attain this power some people have cast to winds all the moral values.
19. The change in value system has brought the entire society to a catastrophic situation. Some people who amass wealth in present day scenario are ruling the roost. The money power seems to have become the biggest power. In order to attain this power some people have cast to winds all the moral values. Such type of people are acting as parasites and are preying on the blood of the poor and are swelling and inflating their coffers by denuding the ordinary mortals of their source of survival. The mad race to attain money power by some flint-hearted persons has subjected the lesser mortals to untold miseries. It is because of this abominable practice indulged into by few people we are finding extreme affluence/richness on one side and extreme poverty on the otherside. Right to become affluent and rich cannot be denied to a person but same cannot be permitted to be accomplished by indulging in corrupt and illegal practices. Like any other part of our country, in state of Jammu and Kashmir also we find the section of population living below poverty line. The taxes which are exacted for public good are mostly being siphoned-off into the coffers of few people. The conscentitious people are duty bound to ensure that public property and public money is saved from being plundered. The courts are duty bound to ensure that the public property and public money is not looted and plundered with impunity and are further duty bound to ensure that same is retrieved through legal means. 20. The Government of Jammu and Kashmir may take steps for enacting laws which would provide for speedy recovery of public property/public money and ensure deterrent action against the wanton culprits. 21. The Registrar Judicial to send a copy of this Judgment to the Chief Secretary of the J&K State.