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Madhya Pradesh High Court · body

2018 DIGILAW 882 (MP)

NKG Infrastructure Pvt. Ltd. v. State of M. P.

2018-10-11

ATUL SREEDHARAN, HEMANT GUPTA

body2018
ORDER 1. The challenge in the present writ petition is to an order passed by the Superintending Engineer on 14.6.2018 and by the Statutory Arbitral Tribunal on 1.10.2018 constituted under Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 (for short "the Act"). The Superintending Engineer found that a sum of Rs. 492.72 lacs is due and payable by the petitioner. The petitioner challenged the said order before this Court in Writ Petition No. 17070/2018 [M/s NKG Infrastructure Pvt. Ltd. v. The State of Madhya Pradesh] which was withdrawn on 17.9.2018. 2. Admittedly, thereafter, the petitioner has invoked the jurisdiction of statutory arbitration under the Act. In that proceedings, the petitioner filed an application for grant of stay of recovery which was declined by the Arbitral Tribunal on 1.10.2018 as there is prohibition for issuing of stay under section 17-A of the Act. The order of the Tribunal reads as under : "The petitioner's counsel submitting an application under section 17-A of Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 (hereinafter referred to the 'Act') (I.A.No.1) has made a prayer for issuing stay order against the respondents for recovery amounting to Rs. 4.92 Crore but without giving opportunity of hearing to the respondents, no ex-parte order as prayed by the petitioner can be passed against the respondents because there is prohibition for issuing stay order under section 17-A of the Act which reads as under : "[17-A Inherent Powers.- Nothing in this Act shall be deemed to limit or otherwise affect the inherent powers of the Tribunal to make such order as may be necessary for the ends of justice or to prevent abuse of the process of the Tribunal : Provided that no interim order by way of injunction, stay or attachment before award shall be granted : Provided further that the Tribunal shall have no power to review the award including the interim award. On payment of process fee within seven days, by registered A.D. notices be issued to the respondents with the direction to submit their written statement with supporting documents and file the reply of I.A.No.1. List on 10.12.2018 for submission of the respondents' written statement with supporting documents and the reply of I.A.No.1. C.C. be issued today to the petitioner as per Rule." 3. List on 10.12.2018 for submission of the respondents' written statement with supporting documents and the reply of I.A.No.1. C.C. be issued today to the petitioner as per Rule." 3. Learned counsel for the petitioner referred to Hon'ble Supreme Court judgment reported as (2002) 5 SCC 521 (Secretary, Minor Irrigation and Rural Engineering Services, U.P. and others v. Sahngoo Ram Arya and another), to contend that even if the Tribunal has no jurisdiction to grant an ad-interim order but this Court under Article 226 of the Constitution of India can pass an order of stay. Learned counsel for the petitioner relies upon the following paragraph of the said judgment : "12. Mr Sunil Gupta, learned counsel appearing for the petitioner contended that the remedy before the Tribunal under the U.P. Public Services (Tribunals) Act is wholly illusory inasmuch as the Tribunal has no power to grant an interim order. Therefore, he contends that the High Court ought not to have relegated the petitioner to a fresh proceeding before the said Tribunal. We do not agree with these arguments of the learned counsel. When the statute has provided for the constitution of a Tribunal for adjudicating the disputes of a government servant, the fact that the Tribunal has no authority to grant an interim order is no ground to bypass the said Tribunal. In an appropriate case after entertaining the petitions by an aggrieved party if the Tribunal declines an interim order on the ground that it has no such power then it is possible that such aggrieved party can seek remedy under Article 226 of the Constitution but that is no ground to bypass the said Tribunal in the first instance itself. Having perused the impugned order, we find no infirmity whatsoever in the said order and the High Court was justified in directing the petitioner to approach the Tribunal. In the said view of the matter, the appeals are dismissed. No costs." 4. Learned counsel for the petitioner has referred to various other judgments to contend that Revenue Recovery Certificate cannot be issued without any adjudication. We need not examine the said argument at this stage, since the adjudication is pending consideration before the statutory Arbitral Tribunal. 5. In the said view of the matter, the appeals are dismissed. No costs." 4. Learned counsel for the petitioner has referred to various other judgments to contend that Revenue Recovery Certificate cannot be issued without any adjudication. We need not examine the said argument at this stage, since the adjudication is pending consideration before the statutory Arbitral Tribunal. 5. The well-established principles of grant of injunction are that : (i) irreparable injury or damage will ensue before legal right would be established, (ii) comparative hardship or mischief or inconvenience which is likely to occur from withholding the injunction, and (iii) prima facie case. 6. In judgment reported as (2000) 5 SCC 57 , Union of India v. Era Educational Trust and another), it was held that Order 39 of CPC would not be applicable at the stage of granting interim relief in a petition under Article 226 or 227 of the Constitution but at the same time various principles laid down under Order 39 of CPC are required to be taken into consideration. The Court held as under : "6. It may be that Order XXXIX CPC would not be applicable at the stage of granting interim relief in a petition under Article 226 or 227 of the Constitution, but at the same time various principles laid down under Order XXXIX for granting ad interim or interim reliefs are required to be taken into consideration. In the case of Morgan Stanley Mutual Fund v. Kartick Das [ (1994) 4 SCC 225 ], after considering the various authorities this Court laid down the guiding principles in relation to grant of an ad interim injunction which are as under : "36. As a principle, ex parte injunction could be granted only under exceptional circumstances. The factors which should weigh with the Court in the grant of ex parte injunction are - (a) whether irreparable or serious mischief will ensue to the plaintiff. As a principle, ex parte injunction could be granted only under exceptional circumstances. The factors which should weigh with the Court in the grant of ex parte injunction are - (a) whether irreparable or serious mischief will ensue to the plaintiff. (b) whether the refusal of ex parte injunction would involve greater injustice than the grant of it would involve; (c) the Court will also consider the time at which the plaintiff first had notice of the act complained so that the making of improper order against a party in his absence is prevented; (d) the Court will consider whether the plaintiff had acquiesced for sometime and in such circumstances it will not grant ex parte injunction; (e) the Court would expect a party applying for ex parte injunction to show utmost good faith in making the application; (f) even if granted, the ex parte injunction would be for a limited period of time. (g) General principles like prima facie case, balance of convenience and irreparable loss would also be considered by the Court." 7. In a three Judge Judgment reported as Morgan Stanley Mutual Fund v. Kartick Das, (1994) 4 SCC 225 , Supreme Court was examining the power of Consumer Forums to grant injunction. It was held that Consumer Forums under the Consumer Protection Act, 1986 have not been conferred any power to grant any interim order. The Court also delineated parameters before granting injunction. The relevant extract form the judgment reads as under : "Q. 3: Does the Consumer Disputes Redressal Forum have jurisdiction in matters of this kind? 35. In view of our answers to Questions 1 and 2, it follows that the Consumer Disputes Redressal Forum has no jurisdiction whatsoever. Q. 4: What are the guiding principles in relation to the grant of an ad interim injunction in such areas of the functioning of the capital market and public issues of the corporate sector and whether certain 'venue restriction clauses' would require to be evolved judicially as has been done in cases such as Sanchaita case State of W.B. v. Swapan Kumar Guha and Sanchaita Investments etc. [ (1982) 1 SCC 561 ]? 36. As a principle, ex parte injunction could be granted only under exceptional circumstances. [ (1982) 1 SCC 561 ]? 36. As a principle, ex parte injunction could be granted only under exceptional circumstances. The factors which should weigh with the Court in the grant of ex parte injunction are- (a) whether irreparable or serious mischief will ensue to the plaintiff; (b) whether the refusal of ex parte injunction would involve greater injustice than the grant of it would involve; (c) the Court will also consider the time at which the plaintiff first had notice of the act complained so that the making of improper order against a party in his absence is prevented; (d) the Court will consider whether the plaintiff had acquiesced for sometime and in such circumstances it will not grant ex parte injunction; (e) the Court would expect a party applying for ex parte injunction to show utmost good faith in making the application. (f) even if granted, the ex parte injunction would be for a limited period of time. (g) General principles like prima facie case, balance of convenience and irreparable loss would also be considered by the Court. 37. In United Commercial Bank v. Bank of India (1981) 2 SCC 766 , this Court observed : (SCC pp. 787-88, paras 52-53) "No injunction could be granted under Order 39, rules 1 and 2 of the Code unless the plaintiffs establish that they had a prima facie case, meaning thereby that there was a bona fide contention between the parties or a serious question to be tried. The question that must necessarily arise is whether in the facts and circumstances of the case, there is a prima facie case and, if so, as between whom? In view of the legal principles applicable, it is difficult for us to say on the material on record that the plaintiffs have a prima facie case. It cannot be disputed that if the suit were to be brought by the Bank of India, the High Court would not have granted any injunction as it was bound by the terms of the contract. What could not be done directly cannot be achieved indirectly in a suit brought by the plaintiffs. Even if there was a serious question to be tried, the High Court had to consider the balance of convenience. We have no doubt that there is no reason to prevent the appellant from recalling the amount of Rs. 85,84,456. What could not be done directly cannot be achieved indirectly in a suit brought by the plaintiffs. Even if there was a serious question to be tried, the High Court had to consider the balance of convenience. We have no doubt that there is no reason to prevent the appellant from recalling the amount of Rs. 85,84,456. The fact remains that the payment of Rs. 36,52,960 against the first lot of 20 documents made by the appellant to the Bank of India was a payment under reserve while that of Rs. 49,31,496 was also made under reserve as well as against the letter of guarantee or indemnity executed by it. A payment 'under reserve' is understood in banking transactions to mean that the recipient of money may not deem it as his own but must be prepared to return it on demand. The balance of convenience clearly lies in allowing the normal banking transactions to go forward. Furthermore, the plaintiffs have failed to establish that they would be put to an irreparable loss unless an interim injunction was granted." **** **** 40. Today the corporate sector is expanding. The disgruntled litigants indulge in adventurism. Though, in this case we have come to the conclusion that the District Consumer Forum will have no power to grant injunction yet in general cases it becomes necessary to evolve certain venue restrictions. **** **** 44. A careful reading of the above discloses that there is no power under the Act to grant any interim relief of (sic or) even an ad interim relief. Only a final relief could be granted. If the jurisdiction of the Forum to grant relief is confined to the four clauses [Ed.: Increased to nine clauses by Amendment Act 50 of 1993) w.e.f. 18.6.1993] mentioned under section 14, it passes our comprehension as to how an interim injunction could ever be granted disregarding even the balance of convenience." 8. The said well-known test is reiterated in a judgment reported as (1995)5 SCC 545 (Gujarat Bottling Co. Ltd. and others v. Coca Cola Co. and others). 9. The petitioner seeks stay of recovery though; adjudication of the dispute is pending before the statutory Arbitral Tribunal. There is prohibition to grant injunction in terms of section 17-A of the Act. The said well-known test is reiterated in a judgment reported as (1995)5 SCC 545 (Gujarat Bottling Co. Ltd. and others v. Coca Cola Co. and others). 9. The petitioner seeks stay of recovery though; adjudication of the dispute is pending before the statutory Arbitral Tribunal. There is prohibition to grant injunction in terms of section 17-A of the Act. Therefore, where the statute prohibits grant of stay, the jurisdiction of this Court is invoked only for an interim order when adjudication is still pending before the statutory Arbitral Tribunal, is not justified. This Court in exercise of power of judicial review does not and should not act only for the purpose of grant of stay, when the adjudication is pending before a Tribunal. Therefore, in a writ of certiorari, the order passed by the Tribunal cannot be said to be suffering from any illegality. 10. In Secretary, Minor Irrigation and Rural Engineering Services, U.P. and others' case (supra), Special Leave to Appeal (Civil) No.5097- 5102/2001 (Shiv Narain Tripathi v. State of U.P.) was also taken up for decision. In the said case, the Court granted liberty to the petitioner to avail alternative remedy before U.P. Public Services Tribunal. It is, at that stage, it was argued that since the Tribunal has no power to grant an interim order, therefore, in appropriate cases the aggrieved party can seek remedy under Article 226 of the Constitution. The said judgment relates to service matter in which, there could be situation of irreparable loss and injury but in the present case the claim is of money, the recovery of which cannot be said to cause an irreparable loss and injury. The Supreme Court in a judgment reported as (1981) 4 SCC 283 (State of Assam and others v. Banshidhar Shewbhagavan and Company) held that no irreparable loss or damage would cause to the plaintiff, which cannot be compensated in money, which would result from vacating the injunction. 11. In (1994) 1 SCC 502 (Svenska Handelsbanken v. M/s Indian Charge Chrome and others), the Supreme Court was examining the issue of encashment of Bank Guarantee. The Court held as under : "86. We have already held that the contracts between the lenders and the borrower are not vitiated by any fraud much less established fraud and there is no question of irretrievable injury. The Court held as under : "86. We have already held that the contracts between the lenders and the borrower are not vitiated by any fraud much less established fraud and there is no question of irretrievable injury. Therefore, there was no reason for the High Court to set aside the order of the trial Court. Again there is no case of any irretrievable injury either of the type as held in the case of Itek Corpn. v. The First National Bank of Boston etc, 566 Fed Supp 1210, 1217 as there is no difficulty in the judgment of this country being executable in the Courts in Sweden. *** *** *** 88. The High Court was also in error in considering the question of balance of convenience. In law relating to bank guarantees, a party seeking injunction from encashing of bank guarantee by the suppliers has to show prima facie case of established fraud and an irretrievable injury. Irretrievable injury is of the nature as noticed in the case of Itek Corpn. (supra). Here there is no such problem. Once the plaintiff is able to establish fraud against the suppliers or suppliers-cum-lenders and obtains any decree for damages or diminution in price, there is no problem for effecting recoveries in a friendly country where the bankers and the suppliers are located. Nothing has been pointed out to show that the decree passed by the Indian Courts could not be executable in Sweden." 12. In a Single Bench judgment of Delhi High Court reported as AIR 1978 Delhi 44 (M/s Model Press (P) Ltd. v. Delhi Municipal Corporation and another) considering the principles for grant of injunction under Order 39 rule 1 and 2 of CPC, the Court held as under : "9. I must also say that I have taken the liberty of analysing the provisions of the Code of Civil Procedure at some length in this case not because the circumstances are such, but because the situation faced by the Subordinate Judge is one which is very common. In a large variety of cases, a question arises whether an ex-parte order should be passed or not. If the Court is in doubt, it must lean towards the furtherance of the cause of justice which is to grant the injunction so that the subject-matter of the dispute may be preserved during the pendency of the case. In a large variety of cases, a question arises whether an ex-parte order should be passed or not. If the Court is in doubt, it must lean towards the furtherance of the cause of justice which is to grant the injunction so that the subject-matter of the dispute may be preserved during the pendency of the case. In the present case, the question before the Court was one of payment of taxes. It is a money claim. The loss of money has never been considered to be an irreparable loss in the sense of loss of property or loss of rights, etc. Thus, there is a practice in the High Court not to grant stay in the case of money decrees, but in the case of property to stay dispossession, etc. This practice is based on a sound sense and logic. Hence, when an order claiming an injunction to restrain the Corporation from collecting taxes is claimed, there may be two different circumstances. There may be a case where a person is unable to pay the taxes and his house or other property has been attached, then the Court will grant an injunction to restrain the sale of that property or its alienation. There may be another case where a party has to deposit money with the Corporation. In such a case, the Court will be chary in granting an injunction. These are circumstances to be considered at the time when the question of the grant of an interim injunction, etc., arises before the Court." 13. In a judgment reported as (2005) 4 SCC 1 (Sihor Nagar Palika Bureau v. Bhabhlubhai Virabhai and Co.), the Court while considering the provisions of Order 41 rule 1 of C.P.C. contemplating deposit of money held that execution of money decree is not stayed, inasmuch as, the satisfaction of money decree does not amount to irreparable injury as remedy of restitution is available to successful party. The Court held as under : "6. Order 41 rule 1(3) CPC provides that in an appeal against a decree for payment of amount the appellant shall, within the time permitted by the appellate Court, deposit the amount disputed in the appeal or furnish such security in respect thereof as the Court may think fit. The Court held as under : "6. Order 41 rule 1(3) CPC provides that in an appeal against a decree for payment of amount the appellant shall, within the time permitted by the appellate Court, deposit the amount disputed in the appeal or furnish such security in respect thereof as the Court may think fit. Under Order 41 rule 5(5), a deposit or security, as abovesaid, is a condition precedent for an order by the appellate Court staying the execution of the decree. A bare reading of the two provisions referred to hereinabove, shows a discretion having been conferred on the appellate Court to direct either deposit of the amount disputed in the appeal or to permit such security in respect thereof being furnished as the appellate Court may think fit. Needless to say that the discretion is to be exercised judicially and not arbitrarily depending on the facts and circumstances of a given case. Ordinarily, execution of a money decree is not stayed inasmuch as satisfaction of money decree does not amount to irreparable injury and in the event of the appeal being allowed, the remedy of restitution is always available to the successful party. Still the power is there, of course a discretionary power, and is meant to be exercised in appropriate cases.” 14. The said judgment was referred to in a subsequent judgment reported as (2015) 5 SCC 267 (Kanpur Jal Sansthan and another v. Bapu Constructions). 15. We find that this Court cannot be treated only to be a Court to grant an ad-interim order when the main adjudication is pending before the statutory Arbitral Tribunal. The order passed by the statutory Arbitral Tribunal cannot be said to be without jurisdiction as there is a statutory prohibition in granting stay. Such order, which falls within the jurisdiction of the Tribunal, does not warrant any interference in the writ jurisdiction. Still further, the petitioner has filed the writ petition against the demand raised by the Superintending Engineer, which writ petition was withdrawn by him. In these circumstances, the prayer of the petitioner to grant ad-interim stay of recovery is not satisfying the condition of irreparable loss and injury or balance of convenience, as such conditions are required to be satisfied even if the petitioner has a prima facie case. 16. In these circumstances, the prayer of the petitioner to grant ad-interim stay of recovery is not satisfying the condition of irreparable loss and injury or balance of convenience, as such conditions are required to be satisfied even if the petitioner has a prima facie case. 16. In view of the said fact, we do not find any merit in the petition, the same is dismissed.