Appeal (Lodging) No.1002 of 2006,Arbitration Petition No.351 of 2005

4th June, 2007

Petitioner Counsel: Shri. S. H. DOCTOR,M/s. Khaitan & Jaykar
Respondent Counsel: Shri. P. K. SAMDANI,M/s. Purohit & Co.

Cases Cited:
M/s. M. Ramnarain Private Limited Vs. State Trading Corporation of India Limited, (1983)3 SCC 75 [Para 4,5]
Maharashtra Industries Development Corporation Vs. Govardhani Constructions Company, 2007(3) ALL MR 22=(2007)2 Bom.C.R. 835 [Para 4,6]

JUDGMENT

R. M. S. KHANDEPARKAR, J.:- This appeal arises from the order dated 18-4-2006 passed by the learned single Judge in Arbitration Petition No.351 of 2005. By the impugned order, the learned single Judge has dismissed the said arbitration petition filed by the appellants/petitioners.

2. The impugned order is sought to be challenged on the ground that though specific grounds as regards the lack of jurisdiction to the arbitrator to deal with the dispute in question, absence of any settlement of claim by the respondents/claimants and failure to comply with the principles of natural justice by the learned arbitrator were specifically raised and further that the counsel for the appellants was never instructed to give up or concede on any of those grounds, the learned single Judge erred in dismissing the petition without addressing to the said issues and without considering the said grounds. It is the contention on behalf of the appellants that the impugned order is contrary to the case put forth by the appellants and in any case since the point of jurisdiction goes to the root of the matter, irrespective of the fact whether the same was argued by the learned Advocate for the appellants or not, since it was specifically raised in the petition, the learned single Judge ought to have considered and decided the said issue.

3. A preliminary objection is sought to be raised on behalf of the respondents about the non-maintainability of the appeal in as much as that the appellants had earlier preferred Appeal No.690 of 2006 against the impugned order but the same was withdrawn without reserving any liberty to file a fresh appeal against the impugned order and, therefore, the right to appeal having been abandoned without any reservation, the appellants are not entitled to file yet another appeal against which the appeal filed earlier by the appellants was withdrawn. As regards the merits of the case, it is the contention on behalf of the respondents that there was total inaction and reluctance on the part of the appellants to render assistance to the arbitrator in deciding the issue of jurisdiction and apart from merely making submission about the absence of jurisdiction, the appellants did not even bother to pursue the said objection when the matter was fixed for hearing on the said issue and therefore based on the assessment of the materials on record, the learned arbitrator clearly arrived at the finding about the existence of jurisdiction to the arbitrator to deal and decide on the dispute between the parties. In any case, the impugned order apparently discloses that the appellants had sought to challenge the award only on two grounds which were not raised in the arbitration petition and, therefore, the learned single Judge has refused to interfere on those grounds and further that no other ground was canvassed before the learned single Judge. That being the clear finding recorded in the impugned order, and there being no material on record to suggest the said finding to be contrary to the records, it is not permissible for the appellants to contend that the Court should have considered the said issues while deciding the matter.

4. As regards the preliminary objection sought to be raised on behalf of the respondents, it is the contention on behalf of the appellants that the Appeal No.690 of 2006 was an incompetent appeal in as much as that the said appeal was filed without the payment of the necessary Court fee and in any case, the withdrawal thereof was not with the intention to give up the right to challenge the impugned order by way of an appeal but it was merely to facilitate the appellants to pursue the remedy of review before challenging the impugned order by way of an appeal and the same is also apparent from the order dated 22-9-2006, which was passed in Appeal No.690 of 2006 while allowing the appellants to withdraw the said appeal. Reliance is sought to be placed in the decision of the Apex Court in the matter of M/s. M. Ramnarain Private Limited and another Vs. State Trading Corporation of India Limited, reported in (1983)3 SCC 75 and a decision of a Division Bench of this Court in the matter of Maharashtra Industries Development Corporation Vs. Govardhani Constructions Company {Appeal No.903 of 2006 in Arbitration Petition No.159 of 2006}, delivered on 7-3-2007, reported in (2007)2 Bom.C.R. 835 : [2007(3) ALL MR 22].

5. It cannot be disputed that the Apex Court in M. Ramnarain's case (supra) has clearly ruled that the appeal which is filed without adequate payment of the requisite Court fee payable in respect of such an appeal against the decree would be an incompetent appeal and therefore, the filing of an incompetent appeal and withdrawal of the same would not prejudice the right to file a proper appeal and cannot be held to constitute such a conduct on the part of the appellant so as to deprive him of his right to file a valid appeal. It was also held that Order 23, Rule 1 of the C.P.C. would not stand in the way of maintainability of the subsequent appeal. It was clearly observed that :

"It is common knowledge that in matters of litigation the litigant who is not expected to be familiar with the formalities of law and rules of procedure is generally guided by the advice of his lawyers."

and further that :

"The filing of an incompetent appeal on the mistaken advice of a lawyer cannot, in our opinion, reflect any such conduct on the part of the defendant-appellant. An appeal which is not competent is necessarily bound to fail, and in such a case the proper course for an appellant would be to file a valid and competent appeal."

Obviously therefore, in cases where incompetent appeal is filed and if it is withdrawn, that would not preclude the party withdrawing the appeal from filing proper and valid appeal thereafter. The withdrawal of an incompetent appeal would not come in the way of exercise of right to file appeal by the party aggrieved by the decree or order of the Court of the Original Jurisdiction.

6. A Division Bench of this Court to which one of us (Shri. R.M.S. Khandeparkar, J.) was a party in Govardhani Constructions Company's case [2007(3) ALL MR 22] (supra) had clearly ruled that the appeal against the order passed by the learned single Judge under Section 34 of the Arbitration and Conciliation Act, 1996, herein after called as "the said Act" would attract Court fee as if payable on the appeal in terms of Article 3 of Schedule-I of the Bombay Court Fees Act, 1959. It is not in dispute that the appellants had not paid the Court fee, payable in terms of Article 3 of Schedule-I of the Bombay Court Fees Act in the Appeal No.690 of 2006. Obviously therefore, the said appeal was an incompetent appeal and the withdrawal of an incompetent appeal, therefore, would not preclude the appellants from filing the fresh present appeal.

7. Perusal of the impugned order discloses that the learned single Judge has clearly observed that the learned Advocate appearing for the appellants herein, after taking instructions from the appellants, had stated that the appellants would be willing to argue the petition on the ground that the award was liable to be set aside on the ground that the same is contrary to the principles of natural justice because the learned arbitrator had omitted to consider the relevant evidence and had taken into consideration irrelevant evidence and secondly, that in view of the evidence which was led before the Magistrate who had tried the matter of offence punishable under Section 138 of the Negotiable Instruments Act, the award was liable to be set aside. The learned single Judge has also observed that both these grounds were not raised in the arbitration petition and in the absence of those grounds being raised in the petition, the appellants were not entitled to canvass the same in the course of the arguments in the matter. It has been further observed that apart from those two grounds, no other ground was argued. It has also been observed that the petitioner has given up the ground that the award was liable to be set aside because the claimant did not file the statement of claim and that therefore the award had been made in breach of the provisions of the said Act. In short, the grounds which were raised in the petition to challenge the award were given up in the course of the hearing of the matter and on two other grounds the award was sought to be challenged, though those two grounds did not find any place in the memo of the petition.

8. It is pertinent to note that after withdrawal of the Appeal No.690 of 2006, the appellants had moved a review application before the learned single Judge which has been dismissed and which is the subject-matter of yet another appeal filed by the appellants. We are not concerned with the said appeal in this matter as it would be dealt with separately. However, definitely certain observations made by the learned single Judge in the order dismissing the review application would be relevant for appropriate decision in the matter in hand.

9. It is well-settled law that a petitioner challenging an award under the provisions of the said Act has to raise all the grounds of challenge in the petition so filed. In the absence of ground being specifically raised in the petition filed under Section 34, the petitioner is not entitled to canvass any ground extraneous to those grounds enumerated in such petition and those which are not reflected from the pleadings in the petition. It is also well-settled law that once the judgment or order or the proceeding sheet disclose narration of the facts and happenings in the Court in the course of the hearing of the matter, such recording is to be accepted as revealing the correct description of such happenings in the Court unless the concerned party files before the same Court, immediately after the records in that Court are prepared by the Court, an affidavit disputing such recording by the Court and bringing to the notice of the Court, the facts which could disclose the recording by the Court to be contrary to what had actually happened in the Court. The law in that regard is well-settled. Undisputedly, the appellants have not filed any such affidavit disputing the findings arrived at by the learned single Judge in relation to the fact that the appellants had restricted the challenge to the award in question on only two grounds and both those grounds were not raised in the memo of the appeal filed under Section 34 of the said Act. That apart, the impugned order clearly records that no other ground was canvassed. The contention of the appellants now that there was some misunderstanding between the parties and their lawyer or that the lawyer was not instructed to give up any ground of challenge or that the grounds of challenge were not given up by the appellants are apparently after-thought. The appellants have not been able to point out any material which could convince the Court to believe the appellants' case in this regard, or something which could reveal that the Advocate for the appellants had in fact insisted for arguing the matter on the grounds which were enumerated in the petition under Section 34, nor there is any material to disclose that the grounds which were sought to be canvassed were not those foreign to the grounds enumerated under the petition.

10. That apart, the judgment is delivered by the Judge of the High Court, after hearing the parties. It is established practice by this Court to deliver the judgment and order in the open Court immediately after conclusion of the arguments, unless the judgment to be delivered happens to be lengthy and therefore it could take longer time, in which case the Judge would prefer to dictate the judgment in the chamber so that the Court hours are made available and utilised for hearing other matters. But that happens in exceptional cases. Normal practice is to dictate the judgment and order in the open Court, and undisputedly, the impugned order was no exception to the same. It is not the case of the appellants that the order was reserved and was thereafter dictated in the chamber and only the operative portion of the judgment was pronounced in the open Court. In other words, the impugned order was dictated in the open Court to the knowledge of the appellants and their Advocate. It is not in dispute that at no point of time, after completion of the dictation of the impugned order or any time prior to filing of this appeal, the learned single Judge was informed about any discrepancy as such in the impugned order or any lapse on the part of the Court in taking note of any of the points which were required to be considered while deciding the matter nor that the appellants had filed any affidavit disclosing any such discrepancy or lapse, if any, on the part of the learned single Judge while delivering the impugned judgment.

11. The contention of the appellants that the Advocate for the appellants was not instructed to give up any ground of challenge or to make any concession in that regard is totally devoid of substance. Merely because numerous grounds are enumerated in the arbitration petition, it is to the common knowledge that when the matter comes up for hearing, only the relevant grounds are canvassed. If the ground alleged in the petition is found to be unsustainable, nothing prevents the counsel from making submission in that regard and thereby assist the Court and save the time of the Court from being wasted. In case the party wants to disagree with the counsel, nothing prevents the party from bringing the said fact to the Courts notice immediately after delivery of the judgment. Nothing prevented the party from filing affidavit in that regard, even after dismissal of the matter. Neither such affidavit was filed nor the learned single Judge was informed about any failure on his part to consider any of the grounds.

12. If the contention of the appellants about the alleged failure on the part of the learned single Judge to take into consideration the issues regarding lack of jurisdiction, non-compliance of principles of natural justice and failure on the part of the respondents to file the statement of claim is accepted, along with the contention that on account of alleged failure on the part of the Advocate to canvass the arguments, the appellants should be given liberty to canvass those arguments by setting aside the impugned order, it would have disastrous effect of not only leading to multiplicity of proceedings, but simultaneously it would result in miscarriage of justice.

13. It cannot be presumed that in spite of the fact that the Advocate for the appellants had argued the matter that the learned single Judge had not considered the same. On the contrary, as already observed above, the specific finding in the impugned order is that, apart from the two grounds which were not borne out from the arbitration petition, no other ground was argued. In this regard, the judgment and the records regarding the proceedings in the Court made by the Presiding Officer thereof have to be preferred over the after-thought submissions made on behalf of the party.

14. Even assuming that the contention sought to be raised on behalf of the appellants are of some substance, it is pertinent to note that as regards the point of jurisdiction, bare perusal of the said award discloses that in spite of repeated opportunity being given to the appellants, not even a plea raising the point of jurisdiction was filed on behalf of the appellants and, that too, in spite of specific direction in that regard. Further, when the matter was fixed for oral arguments, the appellants and their Advocate chose to remain absent and did not render any assistance to the learned Arbitrator. Yet, the learned arbitrator by taking into consideration the undisputed and proved facts held that it had jurisdiction to deal with the disputes between the parties. We find no fault in the said finding and for the same reason, there is no case for interference in the impugned order. That apart, Clause 38 of the Bye-laws of the East India Cotton Association clearly provides for arbitration proceedings to settle the dispute of the nature referred to the arbitration in the matter in hand.

15. As regards the second ground about the absence of settlement of claim, once the impugned order clearly discloses that such ground was apparently waived by the appellants, they are not entitled to re-agitate the same.

16. As regards the point of failure to comply with the principles of natural justice, obviously, the said ground was not raised in the petition under Section 34 of the said Act and, therefore, no fault can be found with the impugned order rejecting the said ground as the law in that regard is well-settled.

17. For the reasons stated above, therefore, there is no case for interference in the impugned order and hence the appeal fails and is dismissed.

Appeal dismissed.