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Madhya Pradesh High Court · body

2018 DIGILAW 895 (MP)

State of M. P. v. Vigyashree Infrastructure Ltd.

2018-10-22

ATUL SREEDHARAN, HEMANT GUPTA

body2018
ORDER (Oral) 1. The challenge in the present petition is to an order passed on 18.1.2018 by Arbitral Tribunal constituted under Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 (for short “the Act”) in Case No. 106/2015 whereby the respondent, the contractor was permitted to amend the reference petition. 2. The contractor filed an I.A. No. 2/2016 on 21.10.2016 for introducing the revised claim in the reference petition. Subsequently, I.A. No. 4/2017 was filed on 4.8.2017 to amend I.A. No. 2/2016. Learned Tribunal allowed I.A. No. 4/2017 relying on section 17-A of the Act conferring inherent powers on 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. Learned Tribunal relied upon section 141 of Code of Civil Procedure, 1908 (for short “the Code) in support of the finding that the Code is applicable to all miscellaneous proceedings; therefore, the Tribunal has the jurisdiction to allow the amendment. 3. The argument of learned counsel for the petitioner is that the statutory Arbitral Tribunal under the Act is a creation of statute. It derives jurisdiction and powers under the Act. Certain provisions of the Code of Civil Procedure have been extended in proceedings before the statutory Arbitral Tribunal to discharge its functions but the Code itself has not been made applicable. It is contended that section 141 of the Code is applicable in the proceedings “in any Court of civil jurisdiction”. The Arbitrator is not a Court as defined in terms of section 141 of the Code. The reliance is placed upon a Division Bench judgment of this Court reported as 1991 MPLJ 520 (Maheshchandra L. Gupta v. State of Madhya Pradesh and others). The Learned counsel for the petitioner also relies upon the judgment reported as (2003)6 SCC 230 (Dwarka Prasad Agarwal (D) By LRs. and another v. B. D. Agarwal and others) wherein, the provisions of the Code of Civil Procedure were not found applicable to the writ proceedings. It was held that the Code of Civil Procedure would be applicable only with regard to the procedural machinery provisions but no new right can be created. 4. Learned counsel for the petitioner also pointed out that Madhya Pradesh Madhyasthan Adhikaran Regulations, 1985 (for short “the Regulations”) have been published by the State Government to give effect to the provisions of the Act. 5. 4. Learned counsel for the petitioner also pointed out that Madhya Pradesh Madhyasthan Adhikaran Regulations, 1985 (for short “the Regulations”) have been published by the State Government to give effect to the provisions of the Act. 5. The relevant provisions of the Code, the Act and the Regulations read as under : “Civil Procedure Code Section 141. Miscellaneous proceedings.—The procedure provided in this Code in regard to suits shall be followed, as far as it can be made applicable, in all proceedings in any Court of civil jurisdiction. Explanation.—In this section, the expression “proceedings” includes proceedings under Order IX, but does not include any proceeding under article 226 of the Constitution. Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 7-A. Reference petition.— (1) Every reference petition shall include whole of the claim which the party is entitled to make in respect of the works contract till the filing of the reference petition but no claims arising out of any other works contract shall be joined in such a reference petition. (2) Where a party omits to refer or intentionally relinquishes any claim or any portion of his claim, he shall not afterwards be entitled to refer in respect of such claim or portion of claim so omitted or relinquished. (3) Notwithstanding anything contained in sub-section (1) or sub-section (2) disputes relating to works contract which may arise after filing of the reference petition may be entertained as and when they arise, subject to such conditions as may be prescribed. 7-B. Limitation.— [(1) The Tribunal shall not admit a reference petition unless- (a) the dispute is first referred for the decision of the final authority under the terms of the works contract; and (b) the petition to the Tribunal is made within one year from the date of communication of the decision of the final authority : Provided that if the final authority fails to decide the dispute within a period of six months from the date of reference to it, the petition to the Tribunal shall be made within one year of the expiry of the said period of six months. (2) Notwithstanding anything contained in sub-section (1), where no proceeding has been commenced at all before any Court preceding the date of commencement of this Act or after such commencement but before the commencement of the Madhya Pradesh Madhyastham Adhikaran (Sanshodhan) Adhiniyam, 1990, a reference petition shall be entertained within one year of the date of commencement of Madhya Pradesh Madhyastham Adhikaran (Sanshodhan) Adhiniyam, 1990 irrespective of the fact whether a decision has or has not been made by the final authority under the agreement. (2-A) Notwithstanding anything contained in sub-section (1), the Tribunal shall not admit a reference petition unless it is made within three years from the date on which the works contract is terminated, foreclosed, abandoned or comes to an end in any other manner or when a dispute arises during the pendency of the works contract : Provided that if a reference petition is filed by the State Government, such period shall be thirty years. xxx xxx xxx 12. Power of Tribunal or Bench regarding discovery, production of evidence, affidavit etc. (1) The Tribunal shall, for the purposes of this Act, have the same powers as are vested in a Court under the Code of Civil Procedure, 1908 (No. 5 of 1908), when trying a suit in respect of the following matters, namely : (a) discovery and inspection; (b) enforcing the attendance of any person and examining him on oath; (c) examining or allowing either party to a reference to examine an expert on any point at issue where opinion of such expert would be relevant under the provisions of the Evidence Act, 1872 (No. 1 of 1872); (d) compelling the production of books of account and other documents subject to the provisions of sections 123 and 124 of the Evidence Act, 1872 (No. 1 of 1872). (e) issuing commissions; (f) calling proof of facts by affidavit of the party or of any witness and ordering that such affidavit may be read at the hearing on such conditions as the Tribunal or the Bench concerned, thinks fit. xxx xxx xxx 17-A. Inherent powers. (e) issuing commissions; (f) calling proof of facts by affidavit of the party or of any witness and ordering that such affidavit may be read at the hearing on such conditions as the Tribunal or the Bench concerned, thinks fit. xxx xxx xxx 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 inj unction, 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. Madhya Pradesh Madhyastham Adhikaran Regulations, 1985 11. The Rules 1 to 6 of the Order III of the Code of Civil Procedure shall be applicable to the proceedings before the Tribunal or its Benches. 12. The reference shall be accompanied with all the documents on which the petitioner relies to establish his claim and the written reply of the opposite party shall, likewise, be accompanied with all the documents which he intends to rely upon in defence or support of his case. xxx xxx xxx 23. Hearing of the case. -- After the written reply is filed by or on behalf of the defendant, a date will be fixed for settlement of points in dispute and the evidence which the parties will adduce in support of their respective cases. 24. Final hearing. -- On settlement of points for determination and the evidence, the case shall be posted for final hearing. Cases with the valuation exceeding Rs.25 lacs shall be heard by Three Members Bench, therefore, the petitioner is required to submit in paper book form and in triplicate, copies of reference petition, petitioner’s documents and affidavit evidence; likewise, the opposite party is required to submit in paper book form and in triplicate, copies of written reply, respondents documents and affidavit evidence, at least three weeks before the date of final hearing. Each party is also required to furnish copy of its paper book to the opposite party.” 6. The question as to whether the Code is applicable to the Tribunal has been examined by the Division Bench of this Court in a judgment in the case of Maheshchandra L. Gupta (supra). Each party is also required to furnish copy of its paper book to the opposite party.” 6. The question as to whether the Code is applicable to the Tribunal has been examined by the Division Bench of this Court in a judgment in the case of Maheshchandra L. Gupta (supra). The Court was examining an application filed by the petitioner to sue as indigent person in terms of Order 33 of the Code. The argument raised was that the Tribunal under the Motor Vehicles Act acts like a civil Court, therefore, the judgment of Full Bench of this Court reported as 1990 JLJ 386 = 1990 MPLJ 387 (Sarmaniya Bai wd/o Probhoo Lal and others v. Madhya Pradesh Rajya Parivahan Nigam and others) will be applicable to the proceedings under the Act. The relevant extract from the judgment reads as under : “13. On the other hand, the Adhiniyam makes no secret of the fact that the “dispute” contemplated under section 2(d) is to be “arbitrated” and unlike jurisdiction of a Motor Accidents Claim Tribunal, jurisdiction is not vested in that Tribunal to “adjudicate” the dispute. In Black’s Law Dictionary, 5th Edition, at P. 39, the word “adjudication” is said to mean, “the formal giving or pronouncing a judgment or decree in a case”; and at P. 96, “arbitration” is said to connote, “the reference of a dispute to an impartial person chosen by parties to the dispute to agree in advance to abide by the arbitrator’s award issued after a hearing at which both parties have an opportunity to be heard.” “Wharton’s Law Lexicon defines “adjudication” to mean, “giving or pronouncing a judgment or decree”. Stroud’s Judicial Dictionary (3rd Edition) Vol. I, gives the classic definition of “arbitration” propounded by Remilly, M.R. in Collins v. Collins 28 LJ Ch. 186, that it means, “a reference to the decision of one or more persons, either with or without umpire, of a particular matter in difference between parties”. The term “adjudication” is used to imply “a judgment of a Court or as involving the exercise of judicial power to a hearing upon an issue, the receiving and weighing of evidence and act of rendering a Judgment. (See, Corpus Juris Secundum, Vol.2, P.49). The term “adjudication” is used to imply “a judgment of a Court or as involving the exercise of judicial power to a hearing upon an issue, the receiving and weighing of evidence and act of rendering a Judgment. (See, Corpus Juris Secundum, Vol.2, P.49). Arbitration has a Common Law origin and has always been contra-distinguished with a judicial proceeding and it has been noticed that even in cases of statutory arbitration, the essential principles do not change (ibid, Vol. 6, PP. 152-154). xxx xxx xxx 20. For the reasons aforesaid, we uphold the contention of Government Advocate Shri S. B. Mishra. We hold that the Tribunal constituted under the Adhiniyam, does not possess any inherent power to entertain any application from any party making a Reference under section 7, Adhiniyam, to examine its indigence, applying Order 33, Civil Procedure Code and grant exemption from payment of Court fees in respect of which express provision is made under section 7(3) and rule 10(ii) read with item No. 1 of the Schedule contemplated under that Rule. That Rule is framed under section 29 of the Adhiniyam and is part of Madhya Pradesh Madhyastham Adhikaran Niyam, 1984. No case is made out accordingly for our interference with the impugned order. Although the Tribunal exceeded its jurisdiction in entertaining application of the petitioner and has rejected his prayer on merit for exemption of court-fee, that order being a nullity for the reasons mentioned by us, is not required to be set aside.” 7. Learned Tribunal has relied upon section 141 of the Code to entertain the application for amendment, inter alia, on the ground that the Tribunal has inherent powers to allow amendment. We do not find that the said approach of the Tribunal is correct. In a judgment reported as (2003)8 SCC 431 (Prakash H. Jain v. Marie Fernandes), the Supreme Court was examining the Maharashtra Rent Control Act, 1999. The Court held that there is no such thing as inherent power of the Court to condone delay in filing proceeding before a Court/Authority concerned, unless the law warrants and permits it. The Court held as under : “8. The Court held that there is no such thing as inherent power of the Court to condone delay in filing proceeding before a Court/Authority concerned, unless the law warrants and permits it. The Court held as under : “8. In Gurditta Mal v. Bal Swarup [ AIR 1980 Del 216 ] a learned Single Judge of the said High Court chose to infer conferment of power under rule 23 of the Delhi Rent Control Rules, 1959, though such power was not conferred under the statute, by relying upon section 151 CPC which in our view could not have been, having regard to the very nature and content of power under section 151 and its inapplicability to authorities other than ordinary Courts. The decision in Mukri Gopalan v. Cheppilat Puthanpurayil Aboobacker [ (1995)5 SCC 5 ] proceeded on the assumption, keeping in view the authority concerned which was held to be “Court” and not a person designata, that the Limitation Act applied in view of section 29(2) of the said Act. The decision in P. Sarathy v. State Bank of India [ (2000)5 SCC 355 ], while construing section 14 of the Limitation Act observed that the authority constituted under section 41(2) of the Tamil Nadu Shops and Establishments Act to hear and decide appeals was a “Court” within the meaning of the said provision, though not a “civil Court” on the view that the proceedings before him were civil proceedings. In Thakur Jugal Kishore Sinha v. Sitamarhi Central Coop. Bank Ltd. [ AIR 1967 SC 1494 ] the Assistant Registrar of Cooperative Societies, was considered to be “Court” for purposes of attracting the Contempt of Courts Act, keeping in view the nature of powers discharged by him. xxx xxx xxx 10. We have carefully considered the submissions of the learned counsel appearing on either side. Questions of the nature raised before us have to be considered not only on the nature and character of the authority, whether it is Court or not but also on the nature of powers conferred on such authority or Court, the scheme underlying the provisions of the Act concerned and the nature of powers, the extent thereof or the limitations, if any, contained therein with particular reference to the intention of the legislature as well, found expressed therein. There is no such thing as any inherent power of Court to condone delay in filing proceedings before a Court/authority concerned, unless the law warrants and permits it, since it has a tendency to alter the rights accrued to one or the other party under the statute concerned…....... xxx xxx xxx 13. The competent authority constituted under and for the purposes of the provisions contained in Chapter VIII of the Act is merely and at best a statutory authority created for a definite purpose and to exercise, no doubt, powers in a quasi-judicial manner but its powers are strictly circumscribed by the very statutory provisions which conferred upon it those powers and the same could be exercised in the manner provided therefor and subject to such conditions and limitations stipulated by the very provision of law under which the competent authority itself has been created. Clause (a) of sub-section (4) of section 43 mandates that the tenant or licensee on whom the summons is duly served should contest the prayer for eviction by filing, within thirty days of service of summons on him, an affidavit stating the grounds on which he seeks to contest the application for eviction and obtain the leave of the competent authority to contest the application for eviction as provided therefor. The legislature further proceeds to also provide statutorily the consequences as well laying down that in default of his appearance pursuant to the summons or obtaining such leave, by filing an application for the purpose within the stipulated period, the statement made by the landlord in the application for eviction shall be deemed to be admitted by the tenant or licensee, as the case may be, and the applicant shall be entitled to an order for eviction on the ground so stated by him in his application for eviction. It is only when leave has been sought for and obtained in the manner stipulated in the statute that a hearing is envisaged to be commenced and completed once again within the stipulated time. It is only when leave has been sought for and obtained in the manner stipulated in the statute that a hearing is envisaged to be commenced and completed once again within the stipulated time. The net result of an application/affidavit with grounds of defence and leave to contest not having been filed within the time as has been stipulated in the statute itself as a condition precedent for the competent authority to proceed further to enquire into the merits of the defence, the competent authority is obliged, under the constraining influence of the compulsion statutorily cast upon it, to pass orders of eviction in the manner envisaged in clause (a) of sub-section (4) of section 43 of the Act. The order of the learned Single Judge of the High Court under challenge in this appeal is well merited and does not call for any interference in our hands.” 8. In a subsequent judgment reported as (2012)2 SCC 60 (Iqbal Singh Narang and others v. Veeran Narang), the Court held that the Rent Controller, being a creature of statute, has to act within the four corners of the statute and could exercise only such powers as had been vested in him by the statute. The Court held as under : 10. The aforesaid question has fallen for consideration in several cases before this Court and the consistent view which has been taken is that the Rent Controller, being a creature of statute, has to act within the four corners of the statute and could exercise only such powers as had been vested in him by the statute. 11. In the decision rendered by this Court in Prakash H. Jain v. Marie Fernandes [ (2003)8 SCC 431 ], this Court held that the competent authority under the Maharashtra Rent Control Act, 1999, is at best a statutory authority created for a definite purpose and to exercise powers in a quasi-judicial manner, but its powers were strictly circumscribed by the very statutory provisions which conferred upon it those powers and the same could be exercised in the manner provided therefor and subject to such conditions and limitations stipulated by the very provisions of law under which the competent authority itself was created. The aforesaid observations were made by this Court in the context of the powers conferred on the competent authority appointed under the Maharashtra Rent Control Act, 1999, which included powers to condone the delay in the filing of the proceedings. It is in such circumstances that it was observed by this Court that the High Court had rejected the submissions made on behalf of the appellant therein that since it had all the trappings of a Court, the competent authority was a Court in the eye of the law and consequently possessed inherent powers to condone the delay. The High Court also rejected the said prayer upon observing that statutory authorities have to act within the powers conferred on them by statute. 12. The same views were also expressed by this Court in Om Prakash v. Ashwani Kumar Bassi [ (2010)9 SCC 183 ] wherein it was held that in the absence of a specific power being vested in the Rent Controller, it being a creature of statute, it could only act in terms of the powers vested in it by the statute and could not, therefore, entertain an application under section 5 of the Limitation Act for condonation of delay, since the statute did not vest him with such power. 13. The aforesaid decisions of this Court establish that though the Rent Controller discharges quasi-judicial functions, he is not a Court, as understood in the conventional sense and he cannot, therefore, make a complaint under section 340 CrPC. Consequently, as held by the High Court, a complaint could be made by a private party in the proceedings.” 9. The five Judge Bench of this Court in a judgment reported as [ 2013(1) JLJ 20 = 2012(4) MPLJ 212 (Sanjay Dubey v. State of M.P. and another) also held that where a Tribunal derives its jurisdiction from the statute that creates it and that statute also defines the conditions under which the Tribunal can function, it goes without saying that before Tribunal assumes jurisdiction in a matter, it must be satisfied that the conditions requisite for acquiring seisin of that matter have in fact arisen. The relevant extract reads as under : “6. The Tribunal gets the jurisdiction to adjudicate the dispute under the Act, but for the Act, it would have no jurisdiction to adjudicate the dispute in relation to works contract. The relevant extract reads as under : “6. The Tribunal gets the jurisdiction to adjudicate the dispute under the Act, but for the Act, it would have no jurisdiction to adjudicate the dispute in relation to works contract. It is well settled in law that where a Tribunal derives its jurisdiction from the statute that creates it and that statute also defines the conditions under which the Tribunal can function, it goes without saying that before that tribunal assumes jurisdiction in a matter, it must be satisfied that the conditions requisite for its acquiring seisin of that matter have in fact arisen. Wherever jurisdiction is given to a Court by an Act of Legislature and such jurisdiction is only given upon certain specified terms contained in that Act it is a universal principle that these terms must be complied with, in order to create and raise the jurisdiction for if they be not complied with, the jurisdiction does not arise…........ xxx xxx xxx 11. ...Similarly, the contention that aggrieved person can approach the Superintending Engineer as well as the Chief Engineer within a period of three years as provided in Article 113 of the Limitation Act also cannot be accepted as it is well settled in law that provisions of Limitation Act apply to Courts only and the authorities under the agreement are admittedly not the Courts. [See: State of Jharkhand and others. v. Shivam Coke Industries, Dhanbad and others, [ (2011)8 SCC 656 ].” 10. We find that the reliance on section 141 of the Code is not tenable in respect of the proceedings before the Tribunal. Section 141 of the Code would be applicable to proceedings in any Court of civil jurisdiction. The Tribunal under the Act is not a Court of civil jurisdiction; therefore, the procedure contained in the Code cannot be extended to a statutory Arbitral Tribunal relying upon section 141 of the Code. Section 141 of the Code would be applicable to proceedings in any Court of civil jurisdiction. The Tribunal under the Act is not a Court of civil jurisdiction; therefore, the procedure contained in the Code cannot be extended to a statutory Arbitral Tribunal relying upon section 141 of the Code. Section 12 of the Act makes the provisions of Code of Civil Procedure applicable to the proceedings before the Tribunal in respect of discovery and inspection; enforcing the attendance of any person and examining him on oath; examining or allowing either party to a reference to examine an expert on any point at issue where opinion of such expert would be relevant under the provisions of the Evidence Act, 1872; compelling the production of books of account and other documents subject to the provisions of sections 123 and 124 of the Evidence Act, 1872; issuing commissions; calling proof of facts by affidavit of the party or of any witness and ordering that such affidavit may be read at the hearing on such conditions as the Tribunal or the Bench concerned, thinks fit and that enhancement of claim by amending the reference petition is not which is permissible in terms of section 12 of the Act. Thus all other provisions of the Code stands excluded other than those specifically made applicable to the proceedings before the Tribunal. 11. Section 7-A of the Act mandates that every reference petition shall include “whole of the claim” which a party is entitled to make in respect of works contract at the time of the filing of the reference petition. Therefore, the statute has made it mandatory that the entire claim in respect of a work contract has to be included in the reference as on the date of filing of the refer nce. Still further, section 7-B of the Act puts a restriction on the Tribunal not to admit a reference beyond the period prescribed in sub-section (1) or sub-section (2-A) of the Act. Therefore, a claim which was not included in the reference petition on the date of filing of the reference petition cannot be included by virtue of amendment. A thing which cannot be done directly cannot be done indirectly as well. Therefore, a claim which was not included in the reference petition on the date of filing of the reference petition cannot be included by virtue of amendment. A thing which cannot be done directly cannot be done indirectly as well. Therefore, the claim which could not be made within the period of limitation and not included in a reference petition under section 7-A of the Act, the same could not be included by virtue of amendment in the reference petition. 12. The Arbitral Tribunal is a creation of statute which provides that all claims have to be raised in a reference petition which is to be filed within the period of limitation prescribed. Therefore, the limitation as well as the mandate of section 7-A of the Act cannot be avoided by amending the reference so as to enhance the claim. The clerical or arithmetical mistakes which may arise in a reference petition can be permitted to be corrected in terms of section 17-A of the Act and not the claim which was not included in the reference petition originally, can be included under the guise of amendment in the claim petition. The section 17-A of the Act does not empower the Tribunal to enhance the amount of claim by ignoring the provisions of sections 7-A and 7-B of the Act. 13. Thus, we hold that as the Tribunal is a creation of the Statute and can entertain reference which includes whole of the claim on the date of its filing in terms of section 7-A of the Act. Such reference has to be filed within the period of limitation. If reference does not include whole of the claim on the date of its filing and within the period of limitation, such claim cannot be claimed under the guise of amendment of the reference petition. 14. We may notice that in a judgment reported as (2008)7 SCC 487 (State of Madhya Pradesh and another v. Anshuman Shukla) the Court held that the Arbitral Tribunal is a Court for the purposes of applicability of the Limitation Act in relation to the revision to be filed before this Court under section 19 of the said Act. 14. We may notice that in a judgment reported as (2008)7 SCC 487 (State of Madhya Pradesh and another v. Anshuman Shukla) the Court held that the Arbitral Tribunal is a Court for the purposes of applicability of the Limitation Act in relation to the revision to be filed before this Court under section 19 of the said Act. The Court has referred the matter to the Larger Bench in view of the order passed in the case of Nagarpalika Parishad, Morena v. Agrawal Construction Co., reported as (2004)2 MPJR 374 and that such order has been wrongly affirmed by the Supreme Court. The Larger Bench in a judgment reported as (2014)10 SCC 814 (State of Madhya Pradesh and another v. Anshuman Shukla) held that section 19 of the Act does not contain any express rider on the power of the High Court to entertain an application for revision after the expiry of the prescribed period of three months. Therefore, it cannot be said that the legislative intent was to exclude the applicability of section 5 of the Limitation Act to section 19 of the State Act. After returning such finding, it was observed that it is unnecessary to delve into the question whether the Arbitral Tribunal constituted under the Act is a Court or not. 15. A Full Bench of this Court in case of Telecommunications Consultants India Ltd. v. Madhya Pradesh Rural Road Development Authority and another (A. R. No.2/2016) decided on 3.10.2018 held that the Tribunal is a Court, but such finding is in the context of applicability of the Limitation Act to the revision petition before this Court under section 19 of the Act. Therefore, the statutory Tribunal created under the State Act does not possess any inherent powers to allow amendment in the claim petition which is not permissible in terms of section 7-A read with section 7-B of the Act. 16. In view therefore, the order passed by the Arbitral Tribunal on 18.1.2018 in Case No. 106/2015 cannot be sustained in law and the same is accordingly set aside. 17. Accordingly, the present petition is allowed.