ARJUN PREM KUMAR MITRA v. U. P. STATE MICRO AND SMALL ENTERPRISES FACILITATION COUNCIL
2016-03-10
RAN VIJAI SINGH
body2016
DigiLaw.ai
JUDGMENT Hon’ble Ran Vijai Singh, J.—Heard Sri S.D. Singh, learned Senior Counsel assisted by Sri Nishant Mishra, learned counsel for the petitioner and learned Standing Counsel appearing for the State-respondents. 2. Through this writ petition, the petitioner has prayed for issuing a writ of certiorari quashing the award dated 22.9.2014 passed by the U.P. State Micro and Small Enterprises Facilitation Council, Kanpur in Claim Petition No. 14 of 2012 (M/s. Agra Pulp and Papers v. Lakhani Apparel Pvt. Ltd. and another) and order dated 28.2.2014 (signed on 26.6.2014) passed by the same authority. Further prayer has been made to issue a writ of mandamus directing the respondents to entertain and decide the application of the petitioner for recall of the ex parte award dated 22.9.2014. 3. While assailing the impugned order, learned counsel for the petitioner submits that the award is ex parte against the petitioner as at no point of time, any notice was served upon him. Learned standing counsel appearing for the State - respondents submitted that the petitioner has got an alternative remedy of appeal under Section 34 before the Civil Court, therefore, the writ petition is not maintainable. 4. The facts of the case, in brief, are that the Agra Pulp & Papers (hereinafter referred to as, ‘APP’) filed a claim petition claiming Rs. 21,66,738/- before the U.P. State Micro and Small Enterprises Facilitation Council, Kanpur (hereinafter referred to as, ‘the council’) on the ground of non-payment of sale consideration in respect of goods supplied by the APP to Lakhani Apparel Pvt. Ltd. (hereinafter referred to as, ‘the LAPL’) impleading LAPL and the petitioner designating him as Managing Director. The claim petition was registered by the Council as Claim Petition No. 14 of 2012 and notices were issued to the respondents. 5. It appears, the notices were not served upon the respondents and the Council required the correct address of LAPL and the petitioner. The APP provided the correct addresses of the respondents mentioning “Plot No. 136, Sector 24, Faridabad & 896, Sector - A, Pocket - C, IIIrd Floor, Vasant Kunj, New Delhi.” 6. Thereafter, the representative of the APP requested the Council for appointment of Special Messenger for effecting service upon the respondents.
The APP provided the correct addresses of the respondents mentioning “Plot No. 136, Sector 24, Faridabad & 896, Sector - A, Pocket - C, IIIrd Floor, Vasant Kunj, New Delhi.” 6. Thereafter, the representative of the APP requested the Council for appointment of Special Messenger for effecting service upon the respondents. From the perusal of the papers, which have been brought on record, it transpires that the Council has prepared notice for service only to LAPL and one Sri R.K. Nigam, Additional Statistical Officer was appointed as Special Messenger to serve notice upon LAPL. From the perusal of other papers brought on record, it transpires that the special messenger prepared the notice for Managing Director, LAPL at the address of LAPL, i.e., Plot No. 136, Sector - 24, Faridabad and not on the correct address provided by the claimant-respondent of the petitioner, i.e., 896, Sector - A, Pocket - C, IIIrd Floor, Vasant Kunj, New Delhi. It is stated in paras 4 & 5 of the writ petition that the petitioner was never appointed as Managing Director and has also no share in the LAPL. It is stated that the petitioner was appointed as President of LAPL on 18.9.2009 and resigned from the post of President on 20.4.2011. In para 46 of the writ petition, it is stated that after resignation, the petitioner was appointed as Chief Executive Officer in M/s. Strange Exports Pvt. Ltd., Noida on 14.6.2011. 7. On 18.2.2014, the APP requested the Council to proceed ex parte on the ground of non-appearance of LAPL despite service of notice by the special messenger in its premises. On 19.2.2014, the Office of the Council issued another letter to LAPL through its Managing Director directing the LAPL either to settle the matter with APP or file written submissions/objection before the Council within a period of two weeks. Thereafter, the Council passed an award on 22.9.2014 against the respondent for payment of Rs. 37,09,744.47. 8. The award dated 22.9.2014 thereafter was put for execution before the learned Additional District Judge, Faridabad in the State of Haryana. From there, summons has also been issued to the petitioner to appear on 4.9.2015 for execution of the award. At this time, the summons has been issued to the petitioner only on his correct address, i.e., 896, Sector - A, Pocket - C, IIIrd Floor, Vasant Kunj, New Delhi. 9.
From there, summons has also been issued to the petitioner to appear on 4.9.2015 for execution of the award. At this time, the summons has been issued to the petitioner only on his correct address, i.e., 896, Sector - A, Pocket - C, IIIrd Floor, Vasant Kunj, New Delhi. 9. Learned counsel for the petitioner contends that in the earlier part of the award, the word “respondents” has been mentioned, whereas in the later part of the award after service of notice at the LAPL premises only the word “respondent” has been mentioned, therefore, this award cannot be executed against the petitioner as the Arbitrator consciously used the word “respondent” and not “respondents” in the later part of the award including the operative portion of the award. 10. The further argument of the learned counsel for the petitioner is that the order impugned has been passed in palpable breach of principles of natural justice, therefore, it deserves to be quashed under Article 226 of the Constitution of India, instead of relegating the petitioner to avail alternative remedy where before filing the appeal, the appellant would be required to deposit 75% of the awarded amount. In his submissions, it will be nothing, except abuse of process and such abuse can effectively be corrected only under Article 226 of the Constitution of India without relegating the petitioner to avail the remedy of appeal. In support of his submissions, he has placed reliance upon the judgement of the Hon’ble Apex Court in Union of India and others v. Tantia Construction Pvt. Ltd., 2011 (5) SCC 697 , Agriculture Finance Com. Ltd. v. Micro and Small Enterprises Facilitation Council and another (W.P. No. 18318 (W) 2012, Kolkata High Court) and State Water and Sanitation v. The A.P. Micro and Small Enterprises Facilitation Council (W.P. No. 13639 of 2014, Andhra High Court). 11. He has further contended that where the award has been passed in breach of flagrant violation of principles of natural justice, that can also be corrected by exercising powers of the review. In this regard, he has placed reliance upon the judgment of the Hon’ble Apex Court in Grindlays Bank Ltd. v. Central Government Industrial Tribunal and others, AIR 1981 SC 608 and Kapra Mazdoor Ekta Union v. Management of Birla Cotton Spinning and Weaving Mills Ltd. and another, AIR 2005 SC 1782 . 12.
In this regard, he has placed reliance upon the judgment of the Hon’ble Apex Court in Grindlays Bank Ltd. v. Central Government Industrial Tribunal and others, AIR 1981 SC 608 and Kapra Mazdoor Ekta Union v. Management of Birla Cotton Spinning and Weaving Mills Ltd. and another, AIR 2005 SC 1782 . 12. In view of the aforesaid submissions, it is to be examined as to whether under the facts and circumstances of the case the petition can be entertained under Article 226 of the Constitution of India or the petitioner is to be relegated to avail the remedy of appeal. 13. Learned counsel for the petitioner has placed reliance upon the case of Tantia Construction (supra), wherein in para 27, the Hon’ble Apex Court has observed as under: “27. Apart from the above, even on the question of maintainability of the writ petition on account of the Arbitration Clause included in the agreement between the parties, it is now well-established that an alternative remedy is not an absolute bar to the invocation of the writ jurisdiction of the High Court or the Supreme Court and that without exhausting such alternative remedy, a writ petition would not be maintainable. The various decisions cited by Mr. Chakraborty would clearly indicate that the constitutional powers vested in the High Court or the Supreme Court cannot be fettered by any alternative remedy available to the authorities. Injustice, whenever and wherever it takes place, has to be struck down as an anathema to the rule of law and the provisions of the Constitution. We endorse the view of the High Court that notwithstanding the provisions relating to the Arbitration Clause contained in the agreement, the High Court was fully within its competence to entertain and dispose of the Writ Petition filed on behalf of the Respondent Company.” Reliance has also been placed upon the judgment in the case of Agriculture Finance Com. Ltd. (supra); wherein the Kolkata High Court, dealing with the same fact, has made following observations: “An issue as to the remedy available under Section 19 of the said Act has also been raised. Section 19 provides for a party aggrieved by a decree or award or order of the Council to apply for setting aside the same.
Ltd. (supra); wherein the Kolkata High Court, dealing with the same fact, has made following observations: “An issue as to the remedy available under Section 19 of the said Act has also been raised. Section 19 provides for a party aggrieved by a decree or award or order of the Council to apply for setting aside the same. Ordinarily, if the reference is concluded upon arbitration taking place, Section 34 of the Act of 1996 would be available to a party aggrieved by the award. However, when the issue that is raised is one of gross or palpable violation of the principles of natural justice, the availability of an alternative remedy is no bar to the Court exercising its authority under Article 226 of the Constitution if the body rendering the award is amenable to the writ jurisdiction of the Court as being a State or other authority within the meaning of Article 12 of the Constitution.” Likewise, the Andhra Pradesh High Court in the case of State Water and Sanitation (supra), has intervened in such kind of matter and set aside the award itself laying down following principles: “It is important to notice that the provisions contained in Sections 15 to 23 of the Act have been given overriding effect by the Parliament, notwithstanding anything inconsistent therewith contained in any other law for the time being in force. It is, undoubtedly, true that by providing for such an overriding effect to the provisions contained in Sections 15 to 23 of the Act, the Parliament intended to protect the interests of Micro, Small and Medium Enterprises and promote the competitiveness of theirs, so that they can stay afloat with other industries. But these provisions, in my opinion, cannot be read as excluding the judicial review power of the High Court under Article 226 of the Constitution. For the present, I am not pronouncing any final opinion on such an issue, in view of the conclusion to which I have arrived, as set out herein below. Judicial review power vested with the constitutional Courts springs from the very Constitution. Therefore, even by a statutory exercise, no Legislature can seek to curtail or diminish that power totally. It may be a different aspect as to when the Court should really be called upon to exercise such power.
Judicial review power vested with the constitutional Courts springs from the very Constitution. Therefore, even by a statutory exercise, no Legislature can seek to curtail or diminish that power totally. It may be a different aspect as to when the Court should really be called upon to exercise such power. However, where principles of natural justice are breached, it is only appropriate that the error should be set right immediately. Lest, the very exercise of power carried out in flagrant violation of the principles of natural justice would hold the field unjustly. This is one major reason that is weighing with my mind when I generated a debate in this regard at the Bar. I have also suggested that the matter should be sent back to the Council for a proper consideration duly hearing the petitioner herein. This apart, the Award has not assigned any specific reasons. As is too well-known, reasons are the live links, which bring out the application of mind by the decision-maker. The reasons offer clarity and fairness of approach adopted while deciding the issue. It is one thing to say that very exhaustive reasons may not have been required to be spelt out like a well-trained Court would have while adjudicating a lis brought before it, but however, the 1st respondent Council, which has been clothed with the power to adjudicate and pronounce upon an order relating to payment of arrears and its recovery, it is essentially required of it to assign reasons as to why it has reached the conclusion to which it did. Lest, whole exercise would turn itself into an arbitrary fiat. Therefore, for sheer violation of the principles of natural justice in providing a fair and effective opportunity to the petitioner to meet the case set up by the 2nd respondent in the form of a revised claim, the Award passed by the 1st respondent on 5.10.2013 deserves to be set aside." 14. Apart from the aforesaid judgments cited by the learned counsel for the petitioner in general applicability too where the order has been passed in breach of principles of natural justice, which leads to civil consequence, the alternative remedy cannot be absolute bar.
Apart from the aforesaid judgments cited by the learned counsel for the petitioner in general applicability too where the order has been passed in breach of principles of natural justice, which leads to civil consequence, the alternative remedy cannot be absolute bar. The Hon’ble Apex Court in the case of Whirlpool Corporation v. Registrar of Trade Marks, 1998 (8) SCC 1 , has carved out two exceptions for entertaining the writ petition under Article 226 of the Constitution of India, i.e., (a) where the order impugned has been passed in flagrant violation of principles of natural justice; and (b) where the order has been passed without jurisdiction. 15. In view of the factual position of the case, as mentioned herein above, that no notice, at any point of time was served upon the petitioner, which, upto some extent from the perusal of the present papers brought on record, has a strength of truth and considering the rigour of depositing 75% of the awarded amount before preferring the appeal, in case the petitioner is relegated to file appeal without there being any adjudication against him, he would unnecessarily be harassed by depositing 75% of the awarded amount and if in this type of matter, the power under Article 226 of the Constitution of India is not invoked, to my mind, it would lead to failure of justice, therefore, the writ petition is being entertained. 16. Here again before proceeding with the matter on merit, I want to consider the another submission of the learned counsel for the petitioner regarding availability of the remedy of review. In this regard, the petitioner has placed reliance upon the judgment of the Hon’ble Apex Court in Grindlays Bank Ltd. (supra); wherein the Hon’ble Apex Court has observed as under: “13. We are unable to appreciate the contention that merely because the ex parte award was based on the statement of the manager of the appellant, the order setting aside the ex parte award, in fact, amounts to review. The decision in Narshi Thakershi v. Pradyumansinghji, AIR 1970 SC 1273 , is distinguishable. It is an authority for the proposition that the power of review is not an inherent power, it must be conferred either specifically or by necessary implication. Sub-sections (1) and (3) of Section 11 of the Act themselves make a distinction between procedure and powers of the Tribunal under the Act.
It is an authority for the proposition that the power of review is not an inherent power, it must be conferred either specifically or by necessary implication. Sub-sections (1) and (3) of Section 11 of the Act themselves make a distinction between procedure and powers of the Tribunal under the Act. While the procedure is left to be devised by the Tribunal to suit carrying out its functions under the Act, the powers of Civil Court conferred upon it are clearly defined. The question whether a party must be heard before it is proceeded against is one of procedure and not of power in the sense in which the words are used in Section 11. The answer to the question is, therefore, to be found in Sub-section (1) of Section 11 and not in Sub-section (3) of Section 11. Furthermore, different considerations arise on review. The expression ‘review’ is used in two distinct senses, namely (1) a procedural review which is either inherent or implied in a Court or Tribunal to set aside a palpably erroneous order passed under a misapprehension by it, and (2) a review on merits when the error sought to be corrected is one of law and is apparent on the face of the record. It is in the latter sense that the Court in Narshi Thakershi’s case held that no review lies on merits unless a status specifically provides for it. Obviously when a review is sought due to a procedural defect, the inadvertent error committed by the Tribunal must be corrected ex debito justitiae to prevent the abuse of its process, and such power inheres in every Court or Tribunal.” In Kapra Mazdoor Ekta Union (supra), the Hon’ble Apex Court in para 19 has observed as under: “Applying these principles it is apparent that where a Court or quasi judicial authority having jurisdiction to adjudicate on merit proceeds to do so, its judgment or order can be reviewed on merit only if the Court or the quasi judicial authority is vested with power of review by express provision or by necessary implication. The procedural review belongs to a different category.
The procedural review belongs to a different category. In such a review, the Court or quasi judicial authority having jurisdiction to adjudicate proceeds to do so, but in doing so commits a procedural illegality which goes to the root of the matter and invalidates the proceeding itself, and consequently the order passed therein. Cases where a decision is rendered by the Court or quasi judicial authority without notice to the opposite party or under a mistaken impression that the notice had been served upon the opposite party, or where a matter is taken up for hearing and decision on a date other than the date fixed for its hearing, are some illustrative cases in which the power of procedural review may be invoked. In such a case the party seeking review or recall of the order does not have to substantiate the ground that the order passed suffers from an error apparent on the face of the record or any other ground which may justify a review. He has to establish that the procedure followed by the Court or the quasi judicial authority suffered from such illegality that it vitiated the proceeding and invalidated the order made therein, inasmuch the opposite party concerned was not heard for no fault of his, or that the matter was heard and decided on a date other than the one fixed for hearing of the matter which he could not attend for no fault of his. In such cases, therefore, the matter has to be re-heard in accordance with law without going into the merit of the order passed. The order passed is liable to be recalled and reviewed not because it is found to be erroneous, but because it was passed in a proceeding which was itself vitiated by an error of procedure or mistake which went to the root of the matter and invalidated the entire proceeding. In Grindlays Bank Ltd. v. Central Government Industrial Tribunal and others (supra), it was held that once it is established that the respondents were prevented from appearing at the hearing due to sufficient cause, it followed that the matter must be re-heard and decided again. “ 17.
In Grindlays Bank Ltd. v. Central Government Industrial Tribunal and others (supra), it was held that once it is established that the respondents were prevented from appearing at the hearing due to sufficient cause, it followed that the matter must be re-heard and decided again. “ 17. From the perusal of the law laid down by the Hon’ble Apex Court in the aforesaid two cases, it is clear that where there is a procedural lapse in passing the order, in that circumstances, even in absence of statutory power of review, the Courts have inherent power to correct the procedural defect and correct the consequential order too. 18. In view of the law laid down by the Hon’ble Apex Court in Grindlays Bank Ltd. (supra) and Kapra Mazdoor Ekta Union (supra), I do not find it appropriate to issue notice to the respondents and call for counter-affidavits and decide the matter thereafter, as ultimately, the factual status of the case has also to be examined, therefore, without issuing any notice and inviting counter-affidavits in this case, I find it appropriate to direct the petitioner to avail the remedy of review in view of the law laid down by the Hon’ble Apex Court in Grindlays Bank Ltd. (supra) and Kapra Mazdoor Ekta Union (supra). 19. In case such review is filed by the petitioner within a period of four weeks from today alongwith certified copy of the order of this Court, the U.P. State Micro and Small Enterprises Facilitation Council, Kanpur shall consider and decide the petitioner’s review application on merit in accordance with law without being influenced by any of the observations made hereinabove in this judgment touching the merit of the case, expeditiously, preferably, within a period of three months from the date of filing of the review application. 20. With the aforesaid observations/directions, this writ petition is disposed of.