9911796707
TMI Blog2008 (1) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2002 filed by the applicant herein was rejected by the learned Chief Justice. The order dated 19.5.2006 had reviewed this order of 24.2.2006 and appointed a retired Judge of this Court, Hon'ble Shri Justice Giridhar Malviya, as an Arbitrator. The order dated 22.9.2006 recalled this order dated 19.5.2006. Consequently, the main Arbitration Application No. 41 of 2002 to appoint an arbitrator stood rejected. By the present application, this order of 22.9.2006 is sought to be recalled. All the three orders are passed by the then Chief Justice Hon'ble A.N. Ray, C.J. All the three orders are subsequent to the judgment of the Apex Court in SBP Co. v. Patel Engineering Ltd . decided on 26.10.2005, reported in (2005) 8 SCC 618. 2. The main ground of the present application dated 12.12.2006, seeking review of the order dated 22.9.2006, is that under the prior order dated 19.5.2006, an Arbitrator had already been appointed and had started functioning and, therefore, the order dated 22.9.2006 reviewing the order dated 19.5.2006 appointing an Arbitrator was not called for. As against this, the submission of the respondents is that although an Arbitrator was appointed under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is clear that at the highest, the last claim out of these five was due from 30.5.1996. The applicant has annexed to the Arbitration Application a letter of the respondents-IFFCO dated 1.7.1998 written to the applicant. It refers to five work orders and then states that it is brought to your notice that final bills in respect of the above jobs have not been submitted from your end. You are requested to submit the final bills in respect of each job within one week's time. Your cooperation in this regard shall be solicited. Thus, from this letter, the applicant was expected to submit the final bills by 8.7.1998. In paragraphs 4 and 5 of the main application, it is submitted that the applicant replied to this letter on the same day, i.e., 10.7.1998 that the desired bills have already been submitted since long. The respondents pointed out that there are many interpolations in this letter and that as on the date of this letter first five claims were clearly time barred. As far as the letter dated 30.11.2001 is concerned, the respondents submit that the author of the letter one Rashid Iqbal was not in their employment at that time and there was no occasion to write any such lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice has thereafter allowed this application by order dated 22.9.2006. This time, the then Hon'ble Chief Justice has passed a little detailed order. Amongst others, he has stated that a large part of the claim of the claimant, if not the whole, is already barred by limitation, both before 1998 and again after 1998, even if that letter dated 1.7.1998 relied upon by the applicant is treated to be an authentic letter, the genuineness of which was seriously disputed by the respondents. The Hon'ble Chief Justice also noted that Rashid Iqbal author of the disputed letter dated 30.11.2001 could not be said to be an employee of the respondents. The then Hon'ble Chief Justice referred to a judgment of the Apex Court in SBP Company v. Patel Engineering Ltd. and particularly paragraph 8 of that judgment, reported in 2005 (7) ST 610. The Hon'ble Chief Justice noted that even at the threshold when the appointment of the arbitrator is to be made, some sort of satisfaction about the desirability and the appropriateness of the case to go to arbitration has to be made by the applicant. No Court and no Arbitrator can ex facie disregard the point of limitation. Hence by order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State Government had any power to review its own order under Section 63 of that Act. Later, in that very paragraph, the Court observed that no provision in the Act was brought to its notice from which it could be gathered that the Government had power to review its own order. 16. One judgment, which we must refer to in this behalf and which holds the field, is in the case of Grindlays Bank v. Central Government Industrial Tribunal (1981)ILLJ327SC . That was a case where the Tribunal made an ex parte award. The Respondents had applied for setting aside the ex parte award on the ground that they were prevented by sufficient cause from appearing when the reference was called for hearing. The Tribunal set aside the exparte order on being satisfied that there was sufficient cause within the meaning of Order 9 Rule 13 of the Civil Procedure Code and accordingly set aside the exparte award. That award was upheld by the High Court and thereafter by the Supreme Court. It is the observations of the Apex Court in para 13 which are relevant for our purpose. The Court specifically referred to the judgment in Patel Narshi Thakershi's case (supra) in this para. It noted the proposition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this judgment reads as follows: 19 . 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. In such a review, the court or quasijudicial authority having jurisdiction to adjudicate proceeds to do so, but in doing so commits (sic) ascertains whether it has committed 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Chief Justice or the person or the Institution designated by him when moved under Sub-section (4), or Sub-section (5), or Sub-section (6) of Section 11 (See para 6 of the judgment). The Court held that the Chief Justice is not a persona designata. The Court explained as to why the high functionary like the Chief Justice has been mentioned as the appointing authority under this Act. The Act was intended to comprehensively cover international and commercial arbitration and conciliations as also domestic arbitrations and conciliations. It envisages the making of arbitral procedure, which is fair, efficient and capable of meeting the needs of the arbitration concerned. Dragging a party to an arbitration when there existed no arbitration agreement or when there existed no arbitrable dispute, can certainly affect the right of that party, and, even on monetary terms, impose on him a serious liability for meeting the expenses of the arbitration, even if it be the preliminary expenses and his objection is upheld by the arbitral tribunal. Therefore, it is not possible to accept the position that no adjudication is involved in the constitution of an Arbitral Tribunal. The decision to appoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otherwise of a live claim, the existence of the condition for the exercise of his power and on the qualifications of the arbitrator or arbitrators. The Chief Justice or the designated Judge would be entitled to seek the opinion of an institution in the matter of nominating an arbitrator qualified in terms of Section 11(8) of the Act if the need arises but the order appointing the arbitrator could only be that of the Chief Justice or the designated Judge. (v). Designation of a District Judge as the authority under Section 11(6) of the Act by the Chief Justice of the High Court is not warranted on the scheme of the Act. (vi) Once the matter reaches the Arbitral Tribunal or the sole arbitrator, the High Court would not interfere with the orders passed by the arbitrator or the Arbitral Tribunal during the course of the arbitration proceedings and the parties could approach the Court only in terms of Section 37 of the Act or in terms of Section 34 of the Act. (vii) Since an order passed by the Chief Justice of the High Court or by the designated Judge of that Court is a judicial order, an appeal will lie against that order only under Article 136 of the Constitution to the Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a majority of 6:1 held the function performed by the Chief Justice of a High Court or his nominee or by the Chief Justice of India or his nominee to be a ' judicial one. Once the function performed by the Chief Justice of India or his nominee is held to be judicial, it cannot be contended that an application for review of an order passed by the Chief Justice of India or his nominee is not maintainable. In my opinion, the learned counsel for the applicant is right in relying upon Article 137 of the Constitution, which reads thus: 137. Review of judgment or orders by the Supreme Court:- Subject to the provisions of any law made by Parliament or any rules made under Article 145, the Supreme Court shall have power to review any judgment pronounced or order made by it. 8. An order passed by the Chief Justice of India or his nominee under Section 11(6) of the Act is indeed an order within the meaning of Article 137 of the Constitution and is subject to review under the aforesaid provision. (ii) It is material to note that the Apex Court relied on the provision of Article 137 of the Constitution to maintain the application for review. There is no corresponding Article in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uasi-judicial authority is vested with the power of review by express provision or by necessary implication. In the absence of any express provision, in the present case also, the review of the order on merit will not be available, but if there is a procedural illegality, which vitiates the proceeding and invalidates the order, for no fault of the party concerned, the order could be reviewed by exercising what is described as the procedural review. 24 (i). The applicant sought to rely upon Section 151 of the Civil Procedure Code to submit that the Chief Justice, while acting under this Act had the inherent power to make such orders, as may be necessary for the ends of justice, or to prevent the abuse of the process of the Court. They relied upon the judgment of the Apex Court in Manohar Lal Chopra v. Rai Bahadur Rao Raja Seth Hira Lal reporte at AIR1962SC527 , where in the context of the power to grant injunction, the majority judgment held that Section 151 itself says that nothing in the Code shall be deemed to limit or otherwise affect the inherent power of the Court to make orders necessary for the ends of justice and held that it is not possible to hold that the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration. That is how he entertained the application dated 24.3.2006. Surely this could not be the ground to recall the order, which he had passed earlier on 24.2.2006, wherein he had held that the matter was delayed by 20 years. The Hon'ble Chief Justice did not give any reason apart from this one sentence that the claimant was serious. The claim, which was clearly time barred was sought to be referred to arbitration merely by stating that the claimant was serious about the same. That is why when this order was sought to be reviewed, Hon'ble the Chief Justice has recalled this order of 19.5.2006 after referring to the judgment of the Apex Court in SBP Co. v. Patel Engineering Ltd . (supra) and held that the Court could not disregard the point of limitation. This order of 22.9.2006 by recalling the order of 19.5.2006 takes back one to the original position of the order passed on 24.2.2006. The order dated 24.2.2006 has been restored by the Hon'ble Chief Justice and has thus, dismissed the original application. 27. In the present application seeking recall of the order dated 22.9.2006, two submissions are made. Firstly, it is submitted on behalf of the applicant that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the present applicant on 23.8.2006. They filed one more supplementary counter affidavit on 19.9.2006. In none of the three counter affidavits dated 18.7.2006. 23.8.2006 and 19.9.2006, the applicant herein took the point that the Arbitrator had started his proceeding and that, therefore, the order dated 19.5.2006 should not be recalled. If this submission was raised before the Hon'ble Chief Justice, he would have dealt with it. This submission is being raised now after the Hon'ble Chief Justice recalled his order dated 19.5.2006. From the record also, it appears that except that an Arbitrator was appointed, no progress appears to have taken place before the Arbitrator This situation is clearly distinguishable from the one in the State of Nagaland (Supra). 30. The second submission of the applicant is concerning limitation and is based on the two letters dated 1.7.1998 and 30.11.2001. It amounts to re-agitating same points and seeking substantive review, which is not permissible. Yet even if one decides to look into the submission, what we find is that according to the respondent, the second letter dated 30.11.2001 is a forged one. The last admitted letter of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondents to extend the period of limitation to their own prejudice, when in a letter written just two months before dated 8.9.2001 they informed the applicant that no bills were pending for disposal at their end. The Hon'ble Chief Justice has, therefore, held that no reasonable authority will even prima facie be satisfied that there is a case for trial, which is of sufficient recent origin 33. As far as the application of period of limitation to arbitration proceeding is concerned, the following dicta of the Supreme Court in paragraph 12 of Panchu Copal Bose v. Hoard of Trustees, Calcutta Port reported at [1993]3SCR361 , is very relevant for our purpose, which is as follows: 12 . Therefore, the period of limitation for the commencement of an arbitration runs from the date on which, had there been no arbitration clause, the cause of action would have accrued. Just as in the case of civil actions the claim is not to be brought after the expiration of a specified number of years from the date on which the cause of action accrued, so in the case of arbitrations, the claim is not to be put forward after the expiration of the specified number of years from the date when the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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