Research › Search › Judgment

Himachal Pradesh High Court · body

2016 DIGILAW 1111 (HP)

C. M. Chawla v. State of Himachal Pradesh

2016-06-21

SANDEEP SHARMA

body2016
JUDGMENT : Sandeep Sharma, J. The present civil revision petition filed under Section 115 CPC is directed against the Judgment dated 19.3.2005 passed by the learned District Judge, Una, HP, in Civil Misc. Appeal No. 61 of 1999, whereby learned court below partly accepted the appeal preferred by the present petitioner and held him entitled to amount of Rs. 64,074/- over and above the finally payment. Petitioner being aggrieved with the non-granting of interest, if any, on the aforesaid amount, approached this Hon’ble Court by way of present proceedings. 2. Briefly stated facts necessary for adjudication of the present case are that petitioner was awarded contract of construction of Lift Irrigation Scheme, Santoo Tilla on the basis of agreement No.1 of 1990-91 amounting to Rs. 6,18,227/-. Since the dispute with regard to payment arose between the parties, matter was referred to arbitration in terms of the agreement. Learned Arbitrator, vide award dated 10.10.1994 (Annexure P-1) allowed the claims filed by the present petitioner and held him entitled to an amount of Rs. 78,947/-. Perusal of the award also suggests that learned Arbitrator while passing award also granted an amount of Rs. 12,582/- on account of interest for nonpayment of substitute/ extra items. Respondent-State being aggrieved and dissatisfied with the award passed by the learned Arbitrator, filed objections under Sections 30 & 33 of the Indian Arbitration Act, in the Court of learned Senior Sub-Judge Una, whereby the objections filed by the respondent-state were allowed and award was set-aside. Being aggrieved with the order of learned Sub-Judge, petitioner preferred an appeal before the court of learned District Judge, Una, whereby he partly allowed the appeal holding him entitled to an amount of Rs. 64,074/- over and above the final payment. Since, learned Court below while partly allowing the appeal, held petitioner entitled for an amount of Rs. 64,074/- over and above the final payment but failed to award any interest, the petitioner approached this Hon’ble Court by way of Civil Revision Petition. 3. Smt. Ruma Kaushik. Advocate for the petitioner vehemently argued that learned court below while partly allowing appeal, vide judgment dated 19.3.2005, has erred in not awarding the interest to the petitioner. 64,074/- over and above the final payment but failed to award any interest, the petitioner approached this Hon’ble Court by way of Civil Revision Petition. 3. Smt. Ruma Kaushik. Advocate for the petitioner vehemently argued that learned court below while partly allowing appeal, vide judgment dated 19.3.2005, has erred in not awarding the interest to the petitioner. She forcefully contended that learned court below, while passing the impugned judgment, miserably failed to take cognizance of the law laid down by the Hon’ble Apex Court, wherein it has been repeatedly held that the court has power to award interest on the awarded amount to the petitioner. It is contended on behalf of the petitioner that since the petitioner was held entitled to amount over and above the final payment, learned court below ought to have awarded interest on the awarded amount. Ms. Kaushik forcefully contended that learned Court below failed to appreciate that learned Arbitrator while passing award dated 10.10.1994 had awarded the interest of Rs. 12,582/- for nonpayment of substitute/extra items and, as such, learned court below has failed to exercise jurisdiction duly vested in him, whereby he could always grant interest on the amount awarded by him. In the aforesaid background, it is prayed that judgment passed by the court below in Civil Misc Appeal No. 61 of 1999 dated 19.3.2005 be modified and petitioner be held entitled to the interest on the amount so paid to the petitioner in terms of judgment dated 19.3.2005 as per law. 4. Per contra, Mr. Rajat Chauhan, Law Officer, representing the respondent-state vehemently opposed the present petition preferred by the petitioner on the ground of jurisdiction. Mr. Chauhan, strenuously argued that this Court has no jurisdiction, whatsoever, to entertain the present petition in view of the specific remedy provided under Section 37 of the Arbitration Conciliation Act, 1996 (in short “the Act, 1996”). It is also contended that petition filed by the petitioner is not maintainable at all, especially, when remedy of appeal in the Act, 1996 has been already exhausted by the petitioner by filing the appeal in the court of learned District Judge, Una. He also forcefully contended that learned court below has rightly not awarded interest on the amount so awarded by it as it is exclusive domain of the Arbitrator in terms of the Section 31 of the Act, 1996 to award interest, if any. He also forcefully contended that learned court below has rightly not awarded interest on the amount so awarded by it as it is exclusive domain of the Arbitrator in terms of the Section 31 of the Act, 1996 to award interest, if any. In view of the aforesaid submissions, he prayed for dismissal of the present petition. 5. I have heard learned counsel for the parties as well carefully gone through the record. 6. Before adverting to the merits/demerits of the case, it may be noticed that judgment dated 19.3.2005 has attained finality, as no challenge, whatsoever, has been laid to the same by the respondent-State in any competent court of law, meaning thereby, respondent-State has accepted the verdict of the learned District Judge, Una, whereby present petitioner has been held entitled to amount of Rs. 64,074/- over and above the final payment. 7. Since specific objection with regard to the maintainability of present petition has been raised on behalf of the State, it would be proper for this court to examine the issue of maintainability and jurisdiction of this Court at the first instance. To find answer to aforesaid issue, it would be apt to reproduce Section 37 of the Act, 1996, which is as follows:- “37. Appealable orders.— (1) An appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:— (a) granting or refusing to grant any measure under section 9; (b) setting aside or refusing to set aside an arbitral award under section 34. (2) An appeal shall also lie to a Court from an order granting of the arbitral tribunal.— (a) accepting the plea referred in sub-section (2) or sub-section (3) of section 16; or (b) granting or refusing to grant an interim measure under section 17. (3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.” 8. Bare perusal of aforesaid section suggests that appeal would lie to the court authorized by law to hear appeals against the order granting or refusing to grant any measure under Section 9 and order setting aside or refusing to set-aside an arbitral award under Section 34. Bare perusal of aforesaid section suggests that appeal would lie to the court authorized by law to hear appeals against the order granting or refusing to grant any measure under Section 9 and order setting aside or refusing to set-aside an arbitral award under Section 34. Hence, after careful perusal of the aforesaid provision of law, it can be safely inferred that order passed by Court below considering the objection filed under Section 34 of the Act, 1996, is an appealable order and appeal, if any, can be filed against that order in terms of Section 37 of the Act, 1996. Since in the present case, remedy of appeal, as prescribed under Section 37 of the Act, 1996, has been availed by the petitioner by filing CMP No. 61 of 1999, in the court of learned District Judge, Una, no further appeal is maintainable. But in the present case aggrieved with the judgment passed by the learned District Judge, Una, the petitioner has filed civil revision petition under Section 115 CPC, hence, question, which needs to be determined at this stage is, whether revision petition preferred by the petitioner is maintainable or not? It is undisputed that perusal of the section 37 of Arbitration Act clearly bars filing second appeal. Now question which requires to be determined is that in absence of any specific remedy appeal/proceedings, what is the remedy available to the petitioner for assailing the judgment passed by learned appellate Court in appellate proceedings under Section 37 of the Act, 1996. Learned counsel appearing for respondent – State argued that petitioner has/had any remedy if, any, to file special leave petition under Article 136 of the Constitution of India, before the Hon’ble Apex Court. Since present petition has been filed under Section 115 CPC, it would be profitable to reproduce the provisions of Section 115 CPC herein below:- “115. Learned counsel appearing for respondent – State argued that petitioner has/had any remedy if, any, to file special leave petition under Article 136 of the Constitution of India, before the Hon’ble Apex Court. Since present petition has been filed under Section 115 CPC, it would be profitable to reproduce the provisions of Section 115 CPC herein below:- “115. Revision.- (1) The High Court may call for the record of any case which has been decide by any court subordinate to such High Court and in which no appeal lies thereto, and if such subordinate court appears— (a) to have exercised a jurisdiction not vested in it by law, or (b) to have failed to exercise a jurisdiction so vested, or (c) to have acted in the exercise of its jurisdiction illegally or with material irregularity, the High Court may make such order in the case as it thinks fit:— Provided that the High Court shall not, under this section, vary or reverse any order made, or any order deciding an issue, in the course of a suit or other proceeding, except where the order, if it had been made in favour of the party applying for revision, would have finally disposed of the suit or other proceedings. (2) The High Court shall not, under this section vary or reverse any decree or order against which an appeal lies either to the High Court or to any court subordinate thereto. (3) A revision shall not operate as a stay of suitor other proceeding before the Court except where such suit or other proceeding is stayed by the High Court. Explanation .- In this section, the expression “any case which has been decided” includes any order made, or any order deciding an issue, in the course of a Suit or other proceeding.” Close scrutiny of provisions of Section 115 CPC clearly suggests that High Court is empowered to call for the records of any case decided by the court subordinate to it, where there is no further provision of appeal. When it is satisfied that subordinate court has not exercised jurisdiction vested in it by law or have failed to exercise jurisdiction so vested or to have committed any exercise of its jurisdiction illegally with material irregularity. When it is satisfied that subordinate court has not exercised jurisdiction vested in it by law or have failed to exercise jurisdiction so vested or to have committed any exercise of its jurisdiction illegally with material irregularity. In the present case also, learned District Judge has passed impugned order/judgment while exercising power under Section 37 of the Act, 1996, meaning thereby, party aggrieved with the order of learned District Judge in exercise of Section 37 has no remedy of appeal, if any, to challenge the order passed by learned District Judge in exercise of power under Section 37 of the Act. As has been noticed above, since there is no further remedy available to the petitioner to assail the order/judgment passed by learned appellate Court in exercise of its power under Section 37 of the Arbitration Act, he has rightly approached this Court invoking provisions of Section 115 CPC which certainly empowers the High Court to entertain the petition in the facts and circumstances as discussed hereinabove. Moreover, perusal of the impugned order passed by the learned Appellate Court clearly suggests that he has failed to exercise jurisdiction vested in him by not awarding interest on the amount to which petitioner has been held entitled over and above the final. 9. In this regard, reliance is also placed in judgment rendered by the Hon’ble Apex Court in “ITI Ltd. v Siemens Public communication Network Ltd.”, 2002 (5) SCC 510 , the relevant paras of which are reproduced herein below:- “21. Provisions of Section 37 of the Act of 1996 bars Second Appeal and not revision under Section 115 of the Code of Civil Procedure. The Power of appeal under Section 37(2) of the Act against order of arbitral Tribunal granting or refusing to grant an interim measure is conferred on court. Court is defined in Section 2(e) meaning the 'principal Civil Court of Original Jurisdiction' which has 'jurisdiction to decide the question forming the subject-matter of the arbitration if the same had been the subject matter of the suit'. The power of appeal having conferred on a Civil court all procedural provisions contained in the Code would apply to the proceedings in appeal. Such proceedings in appeal are not open to Second Appeal as the same is clearly barred under Sub-section (3) of Section 37. The power of appeal having conferred on a Civil court all procedural provisions contained in the Code would apply to the proceedings in appeal. Such proceedings in appeal are not open to Second Appeal as the same is clearly barred under Sub-section (3) of Section 37. But I agree with the conclusion reached by Brother Hegde J. that the supervisory and revisional jurisdiction of High Court under Section 115 of the Code of Civil procedure is neither expressly nor impliedly barred either by the provisions of Section 37 or Section 19(1) of the Act. Section 19(1) under Chapter V of the Part I of the Act merely states that the Arbitral Tribunal shall not be bound by the Code of Civil Procedure. The said action has no application to the proceedings before civil court in exercise of powers in appeal under Section 39(2) of the Act. 22. The supervisory jurisdiction to be exercise by the High Court under Section 115 of the Code is for the purpose of correcting jurisdiction error if any committed by Sub-ordinate Court in exercise of power in appeal under Section 37(2) of the Act. The approach made to the Revisional Court under Section 115 of the Code is not a resort to remedy of appeal. In appeal, interference can be made both on facts and law whereas in revision only errors relating to jurisdiction can be corrected. Such revisional remedy is not expressly barred by the provisions of the Act. We have also not found any implied exclusion of the same on examination of the scheme and relevant provisions of the Act.” 10. Reliance is also placed on judgment passed by the Hon’ble Apex Court in Shyam Sunder Agarwal & Co. v. Union of India, 1996(2) SCC 132 , which also reads as follows:- “26. In our view, a revisional application before the High Court against an appellate order passed under Section 39 of the Arbitration Act is maintainable. There is no express provision in the Arbitration Act putting an embargo against filing a revisional application against appellate order under Section 39 of the Act. The Arbitration Act has put an embargo on filing any second appeal from appellate order under Section 39 of the Act. The Arbitration Act is a special statute having limited application relating to matters governed by the said Act. The Arbitration Act has put an embargo on filing any second appeal from appellate order under Section 39 of the Act. The Arbitration Act is a special statute having limited application relating to matters governed by the said Act. Such special statute, therefore, must have its application as provided for in the said statute. The revisional jurisdiction of the High Court under the Code or under any other statute therefore shall not stand superseded under the Arbitration Act if the Act does not contain any express bar against exercise of revisional power by the High Court provided exercise of such revisional power does not mitigate against giving effect to the provisions of the Arbitration Act. 28. It may be stated that even if a special statute expressly attaches finality to an appellate order passed under that statute. It has been held by this Court in the case of Hari Shanker (supra) that such provision of finality will not take away revisional powers of the High Court under Section 115 of the Code of Civil Procedure. There is also no such express provision in the Arbitration Act attaching finality to the appellate order under Section 39 of the said Act. As already indicated, only bar under sub section (2) of Section 39 is of a second appeal from an appellate order under Section 39. The impugned order of the High Court upholding maintainability of revisional application under Rule 36A of the Rules, therefore, is justified and no interference against such decision is warranted. This appeal, therefore, fails and is dismissed without any order as to costs. As the revision application is sending for a long time, the High Court is directed to dispose of revisional application on merits as early as possible but not exceeding four months from the date of communication of this order.” 11. This court also examined submission made on behalf of respondent, wherein specific submission was made that remedy, if any, against the judgment passed by learned District Judge under Section 37 of the Act lies before the Hon’ble Apex Court under Article 136 of the Constitution of India in the absence of any specific remedy available under the Act. This court also examined submission made on behalf of respondent, wherein specific submission was made that remedy, if any, against the judgment passed by learned District Judge under Section 37 of the Act lies before the Hon’ble Apex Court under Article 136 of the Constitution of India in the absence of any specific remedy available under the Act. Though, the Hon’ble Apex Court in the judgments referred herein above, has categorically held that provisions contained in Section 37 of the Act, 1996, bars second appeal but not revision under Section 115 of CPC, meaning thereby, revision petition filed under Section 115 CPC is maintainable challenging therein the order passed by the first Appellate court under Section 37 of the Act, 1996. Similarly, the Hon’ble Apex Court while examining the scope of granting leave to appeal under Article 136 of the Constitution of India against any order/judgment, wherein there is no provision of second appeal provided under the Act, held in “Shin-etsu Chemical Company limited and others v. Vindhya Telelinks Limited and others,” 2009(14) SCC 16 , as under:- “16. Relying upon the exception contained in sub-section (2) of Section 50, the appellant contended that even though an appeal may not lie from the order in the appeal, the right of appeal to Supreme Court having been specifically saved, these appeals to the Supreme Court are maintainable. The appellant does not dispute that the Act does not provide a ‘right to appeal' to Supreme Court against an appellate order under Section 50(1)(a) of the Act. 17. The appellant would contend that as Article 136 contemplates Supreme Court granting leave to appeal from any judgment, decree or order and as sub-section (2) of Section 50 of the Act specifically saves the right to appeal to Supreme Court, an appeal to Supreme Court by obtaining leave under article 136 should be held to be a remedy in regard to an appellant order under Section 50(1) of the Act, even if the court of appeal was a court inferior to the High Court. 18. What is exempted from the bar against second appeals is ‘any right to appeal to the Supreme Court'. 18. What is exempted from the bar against second appeals is ‘any right to appeal to the Supreme Court'. Article 136 of the Constitution provides that notwithstanding anything in Chapter IV of Part V of the Constitution, the Supreme Court may in its discretion grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India. 19. Article 136 does not confer a right to a party to appeal to the Supreme Court. The said article confers discretion upon the Supreme Court to grant leave to appeal in suitable cases. The power vested in Supreme Court to grant leave, which is to be used sparingly in appropriate cases, cannot be construed as vesting of a right of appeal in a party under Article 136. 28. Though, Article 136 provides that this Court has the discretion to grant leave to appeal against any order (judgment, or determination) in any cause by any court, this Court has been consistently following the practice of not entertaining appeals directly from the orders of district courts or court subordinate thereto, if an alternative remedy by way of appeal or revision was available before the High Court. In fact, after the scope of revision under section 115 was curtailed by Amendment Act 46 of 1999 with effect from 1.7.2002, the availability of even the remedy by invoking the supervisory jurisdiction under Art. 227 of the Constitution (as enunciated by this Court in Surya Dev Rai vs. Ram Chander Rai - 2003 (6) SCC 675 ), has been considered as an adequate alternative remedy, for the purposes of Article 136.” 12. In view of the discussion made herein above as well as law laid down by the Hon’ble Apex Court, this Court has no reason whatsoever to accept the contention with regard to maintainability put forth on behalf of the respondent-State. After perusing the relevant provision of law as well as judgments cited above, it can be safely concluded that present petition filed under Section 115 CPC is maintainable. 13. After perusing the relevant provision of law as well as judgments cited above, it can be safely concluded that present petition filed under Section 115 CPC is maintainable. 13. Now adverting to the merits of the present petition, wherein petitioner has sought modification of the impugned judgment and claimed interest on the amount to which he has been held entitled by the learned District Judge in its judgment, perusal of the grounds of appeal (Annexure-P2) filed by the petitioner in the court of learned District Judge, Una, challenging therein order dated 23.6.1999 passed by learned Senior Sub Judge in Arbitration Case No. 1 of 1994 suggests that present petitioner had specifically prayed for acceptance of the award passed by the learned Arbitrator as a whole, by rejecting the objections filed by the respondent and with further prayer to award the interest @18% p.a. 14. Careful perusal of impugned judgment nowhere suggests that learned Appellate Court while holding the present petitioner entitled to the amount in question over and above the final payment dealt with issue of entitlement of interest, if any, to the petitioner. Learned Appellate Court after perusing the record made available to him observed that Executive Engineer made an offer of Rs. 747.05 as the costs of per kilo gram of 4mm thick pipe as per agreement and as such contractor-petitioner was entitled to the rate i.e. Rs. 747.05 per meter. 15. Learned Court below also observed that since aforesaid offer was made by the Government to the Contractor, Government cannot wriggle out of the same. Fact remains that by way of impugned order appellant was held entitled for payment of rates as suggested by the Executive Engineer to the Arbitrator vide letter and on the basis of calculations, as reproduced in the impugned judgment, present petitioner was held entitled for the payment of Rs. 74,047/- over and above the final payment of Rs. 2,66,122.92 paisa, which stood received by the Contractor at the time of adjudication by the Court of learned District Judge, Una. As has been noticed above, the aforesaid judgment has attained finality as no appeal/proceedings, if any, were filed by the respondent in any court of law, meaning thereby, amount determined by the learned District Judge in the appeal was accepted by the respondent. As has been noticed above, the aforesaid judgment has attained finality as no appeal/proceedings, if any, were filed by the respondent in any court of law, meaning thereby, amount determined by the learned District Judge in the appeal was accepted by the respondent. This Court is of the view that once respondents accepted the verdict of learned District Judge, wherein petitioner was held entitled to amount of Rs. 60,474/- over and above the final payment of Rs. 2,66,122.92 paisa, petitioner has rightly staked his claim for interest on the amount so awarded by learned District Judge. As per Section 31 of the Arbitration and Conciliation Act, Arbitrator is competent to award the interest on the awarded amount, as has been noticed above. 16. Since specific challenge was laid to the award passed by the learned Arbitrator and ultimately, petitioner was held entitled to the sum over and above the final payment received by him, learned Appellate Court ought to have awarded interest on the amount awarded by it to the petitioner. Since learned appellate Court had passed judgment dated 19.3.2005 in the arbitration appeal constituted/maintained by the present petitioner in terms of Section 37 of the Act, 1996, proceedings, if any, would be considered in continuation of the Arbitration proceedings initiated with the reference of dispute to the Arbitrator and, as such, same would be governed by the provisions of the Arbitration and Conciliation Act. Since Section 31 of the Arbitration Act specifically provides for interest on the awarded sum and as such this, Court has no hesitation to conclude that the petitioner is entitled to be awarded interest on the amount determined by the learned Appellate Court. 17. In this Regard, reliance is placed on Judgments rendered by the Hon’ble Apex Court in Jagdish Rai and Brothers v. Union of India (1999) 3 SCC 257 and Ghulam Mohammad Dar versus State of J&K and others, (2008) 1 SCC 422 , which reads as follows:- “Jagdish Rai and Brothers v. Union of India (1999) 3 SCC 257 :- 8. The learned counsel for the appellant relied upon several decisions of this Court to state the proposition that such interest could be granted. It is unnecessary to make any detailed reference to them. The learned counsel for the appellant relied upon several decisions of this Court to state the proposition that such interest could be granted. It is unnecessary to make any detailed reference to them. We think it appropriate to modify the decree of the court of Sub-Judge by including a direction for payment of interest @ 12% per annum from the date when the award was made the decree of the court of Sub-Judge till realisation. The appeal is allowed to the extent indicated above. However, in the circumstances of the case, there shall be no orders as to costs.” “Ghulam Mohammad Dar versus State of J&K and others, (2008) 1 SCC 422 :- 8. Learned senior counsel appearing for the appellant, by drawing our attention to the direction of the Arbitrator as well as the ultimate order passed by the High Court, submitted that in view of default in payment of the amount within the stipulated time, the appellant is entitled interest @ 18% p.a. from the date of the Award and not from the date of the decree. In the light of the controversy, we verified the direction of the Arbitrator and the order passed by the High Court both in the Arbitration and Revision Petition. On perusal of the same and of the fact that the respondents are none other than the State Government, we agree with the order of the High Court dated 30.04.1998 passed in Arbitration Petition No. 171 of 1991 and hold that the claimant is entitled to interest @ 18% p.a. for the award amount from the date of the decree till realization. To this extent, we clarify the position. The Civil Appeal is disposed of on the above terms. No costs.” 18. In view of the discussion made hereinabove as well as law cited by this Court, present civil petition is allowed and the petitioner is held entitled to the interest @ 12% p.a. from the date when award was made decree by the court of learned District Judge, Una, on 19.3.2005 till its payment. The petition stands disposed of accordingly.