UNION OF INDIA (UOI) Vs. SWASTIC CONSTRUCTION COMPANY AND OTHERS [JKHC]-22/10/1998

Whether the decree, on the basis of an order, which is not a judgment, is executable ? This question was considered by the Allahabad High Court in Amod Kumar Verma Vs. Hari Prasad Burman and Others, , where it was held that such a decree is nullity by observing as under :–

“There is no judgment pronounced by the trial Court. It has only passed an order refusing to set aside the award and at once passed a decree. The decree is null and void in the absence of a Judgment. After refusing to set aside the award the trial Court ought to have pronounced a judgment on the merits of the disputes between the parties as settled by the award.”

(2000) AIR(J&K) 9 : (2000) 1 ArbiLR 346 : (1999) 4 RAJ 34

JAMMU AND KASHMIR HIGH COURT

SINGLE BENCH

( Before : O.P. Sharma, J )

UNION OF INDIA (UOI) Vs. SWASTIC CONSTRUCTION COMPANY AND OTHERS

Writ Petition No. 165 of 1996

Decided on : 22-10-1998

Jammu and Kashmir Arbitration and Conciliation Act, 2002 – Section 17
Cases Referred

Amod Kumar Verma Vs. Hari Prasad Burman and Others, AIR 1958 All 720
Achutananda Baidya Vs. Prafullya Kumar Gayen and others, AIR 1997 SC 2077 : (1997) 2 CTC 333 : (1997) 5 JT 75 : (1997) 3 SCALE 475 : (1997) 5 SCC 76 : (1997) 3 SCR 709 : (1997) AIRSCW 1904 : (1997) 3 Supreme 673
Counsel for Appearing Parties

B.S. Salathia, for the Appellant; Anil Mahajan, for the Respondent

ORDER

O.P. Sharma, J.—The admitted facts of the case are that a dispute arising out of an arbitration agreement between the petitioner and M/s. Swastic Construction Company had been referred to the sole arbitrator who made the award on31-12-1992. On the application of Construction Company (respondent No. 1), the arbitrator filed the award in the Court of Additional District Judge, Jammu to which the petitioner filed a composite application u/s 30/33 of the Arbitration Act challenging the award on various grounds. By an ex-parte order dated 4-4-1994, the award was made rule of the Court.

2. An application filed on behalf of Union of India for restoration of proceedings came to be dismissed by Court order dated 17-7-1995 and the appeal challenging the same was dismissed by order dated 6-2-1996 with liberty reserved to the petitioner to prosecute any other remedy available under law. The petitioner has moved this petition for quashing the order dated 4-4-1994, being perverse.

3. The respondents have questioned the maintainability of the petition on the grounds :

i) that it raises disputed questions of facts; and

ii) that the matter stands finally concluded in view of the dismissal of appeal challenging the order dated 17-7-1995 without challenging the decree.

4. The facts which are not disputed are that the case was dismissed in default on 4-4-1994. However, soon after another order making the award rule of the Court was passed but without recalling the order of dismissal. Thus ex parte order was passed on the request of the counsel for the petitioner after the order of dismissal had been signed and announced also.

5. On May 4, 1994, an application was filed on behalf of Union of India on the ground that the case had been adjourned to 4-5-1994, but was taken up on for hearing on 4-4-1994 without notice to their Standing counsel who came to know about the order dated 4-4-1994 when he appeared in the Court on 4-5-1994, the date fixed. This fact has been specifically pleaded in the application, as is evident in para 1 of the order passed by the trial Court on 17-7-1995, which reads :–

This is an application for restoration of a petition moved by Union of India u/s 30 of Arbitration Act which was dismissed in default by this Court order dated 4-4-1994. The application has been moved on the ground that the date given to him by the Court was not 4-4-1994 but was 4-5-1994 and the date was changed in his absence and as such he could not appear in the Court on the due date i.e. on 4-4-1994 resulting in dismissal of the application and his absence was not intentional and it was because of change of date not to his knowledge.”

However, this application was dismissed by the Court, on the grounds that:

i) since the award has been made rule of the Court, therefore, only an appeal was maintainable; and

ii) the application was filed beyond the period of limitation.

6. The petitioner had also preferred an appeal (CIMA No. 154 of 1995) along with application for condonation of delay (CMP No. 43 of 1996) which was dismissed by this Court vide order dated 6-2-1996. While dismissing the application for condonation of delay, a learned single Judge of this Court observed that:

“………even if, the delay is condoned no appeal is maintainable under the provisions of Section 39 of the Arbitration Act…………..”

He further observed that:–

“………….However, in the interest of justice appellants are at liberty to prosecute any other remedy which is available to them in law, if so advised.”

7. Before analysing the legal issue involved, it is necessary to refer to the facts of the case. The minutes of the proceedings of the trial Court indicate that application u/s 30/33 of the Arbitration Act was filed on 31-1-1994 and the case was adjourned to 19-2-1994 for framing of issues. It was again adjourned for the same purpose to 31-3-1994. On this date, the case was again adjourned to 4-5-1994, but figure “5” was then changed to “4” and this overwriting is not even initialed by the Presiding Officer. It is in this background that absence of the petitioner’s counsel has to be appreciated. The case was first dismissed in default and then award made the rule of the Court, as it was taken up on the same date. The Court passed two orders on the same date, first dismissing the proceedings in default and then without restoring the case making the award rule of the Court.

8. The question involved is, whether the order impugned is perverse or otherwise bad in law ? The first contention of Mr. Salathia is that the case was adjourned to 4-5-1994 and had been taken up on 4-4-1994 without notice to him. There is much force in this submission because the case was wrongly taken up on 4-4-1994. The figure “5” has been changed to 4 by overwriting. This overwriting is not even initialed. The fact that the petitioner’s counsel appeared before the trial Court on 4-5-1994 and was informed about the order dated 4-4-1994, lends assurance to the plea put forward on behalf of the petitioner. This fact is corroborated by the fact that an application for restoration of application u/s 30/33 of the Arbitration Act was filed on 4-5-1994 itself. Moreover, as there was overwriting on the figure “5”, the Presiding officer ought to have adjourned the case to 4-5-1994 when the parties did not appear.

9. The next question is, whether the order dated 4-4-1994 amounts to a judgment in terms of Section 17 of the Arbitration Act, which reads :

“Judgment in terms of award : Where the Court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award, the Court shall, after the time for making an application to set aside award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow, and no appeal shall lie from such decree except on the ground that It is in excess of, or not otherwise in accordance with, the award.”

So the Court has to pronounce a judgment even where no objection to the award are filed. Judgment, as defined in Section 2(9) of the Code of Civil Procedure, means statement of the grounds of decree or order. The question is, whether order dated 4-4-1994 amounts to a judgment?

The order dated 4-4-1994 reads:

“Koyee hazir nai hai, halanke muqadma bar bar bulaya giya, illa zahir hota hai ki koyee hazir na ayaa. Is se saaf ayan hota hai ki fareeken muqadma hiza kee pervikarne mein koyee interest na rakhta hai. Lehaza muqadma hiza ba-adam pervi freeken kharij kiya jave. Hukam sunaya giya. Sd/- Judge.

Is Marhala par advocate Shri Anil Mahajan minjanab M/s. Swastic Constructions Company hazir ayya, usne istadaa kee ki jo award pesh hua ko Rule of Court banaya jave. Uski istadaa manzoor ki jave and Award shamil hokar Rule of Court banaya jave. Is had tak Decree-sheet maratab kee jave. Hukam Sunaya giya. Sd/- Addl. Distt. Judge, Jammu.”

The order has been mechanically passed without application of mind and as such is bad. The question, as to what a judgment should contain was considered by the Madras High Court in N. Jayaraman v. Glaxo Laboratories India Limited, Madras AIR 1981 Mad 258 wherein it has been held :

“………… .The judgment given by the Court has already been extracted. That does not indicate that the Court applied its mind to the claim made by the petitioner in the suit and after considering such evidence as was made available by the petitioner, proceeded to afford relief to the petitioner. A perusal of the Judgment would indicate that it was the result of a mere mechanical application of the provisions of Order 8, Rule 10 C.P.C. It is necessary to point out that the judgment does not even conform to the requirements of the definition of a ‘judgment’ u/s 2(9) CPC which requires that the judgment should contain the grounds for a decree or order. In the present case, no ground as such for entertaining the claim of the petitioner and affording relief to him has been mentioned in the decree of the order pronounced by the Court. The judgment in the present case does not satisfy the requirements of Section 2(9) CPC and cannot, therefore, be held to be a judgment on the merits of the case.

The judgment as well as the decree passed in the present case clearly establish that they were also passed for default of appearance of the respondent and in its absence and by not even examining the evidence, if any, on behalf of the petitioner. In other words, the adjudication is one sided and in favour of the petitioner for the failure of the respondent to file its written statement on that day. It is the substance of the Court’s action and adjudication that matters and not the label appended to it. The requirement under Order 8, Rule 10 CPC to pronounce a judgment against the party who fails to present a written statement does not indicate that the need for writing a judgment is dispensed with and that a mechanical one sided order should be made by the Court without applying its mind. It, therefore, follows that in the present case there has been no judgment on the merits, but only a decree against the respondent owing to its failure to file a written statement …….”

I respectfully agree with the above statement.

11. The next question is, whether the decree, on the basis of an order, which is not a judgment, is executable ? This question was considered by the Allahabad High Court in Amod Kumar Verma Vs. Hari Prasad Burman and Others, , where it was held that such a decree is nullity by observing as under :–

“There is no judgment pronounced by the trial Court. It has only passed an order refusing to set aside the award and at once passed a decree. The decree is null and void in the absence of a Judgment. After refusing to set aside the award the trial Court ought to have pronounced a judgment on the merits of the disputes between the parties as settled by the award.”

12. As noticed above, the order dated 4-4-1994 only makes a reference to the contention of counsel for the Swastic Constructions Company for making the award rule of the Court. As a matter of fact, there is no order that the award be made rule of the Court. Besides being a mechanical it is perfunctory and perverse to say the least. While it is certainly not a judgment, it does not record even the minutes of the proceedings properly. This is apart from the fact that he has dismissed the application u/s 14 of the Arbitration Act and ought to have first restored the same. So the prayer of the learned counsel for the Swastic Constructions Company could not be termed as a judgment and as such the order is not a judicial order. In Achutananda Baidya Vs. Prafullya Kumar Gayen and others, . It has been laid down that:

“If the evidence on record in respect of a question of fact is not at all taken into consideration and without reference to such evidence, the finding of fact is arrived at by inferior Court or Tribunal, such finding must be held to be perverse and lacking in factual basis. In such circumstances, in exercise of the jurisdiction under Article 227, the High Court will be competent to quash such perverse finding of fact.”

So there can be no better case to hold that the order impugned is neither a judgment nor a judicial order. Since if is perverse and perfunctory, therefore, in order to do justice between the parties, it cannot be allowed to stand.

13. In view of the above, this petition succeeds and the order dated 4-4-1994 is quashed and the Additional District Judge, Jammu directed to re-admit the petition and decide the same in accordance with law after framing issues. The parties through their counsel are directed to appear before the Court of Addl. District Judge, Jammu on 10th of November, 1998.