High Court Jharkhand High Court

Tata Iron & Steel Co. Ltd. vs State Of Jharkhand And Ors. on 6 May, 2002

Jharkhand High Court
Tata Iron & Steel Co. Ltd. vs State Of Jharkhand And Ors. on 6 May, 2002
Equivalent citations: 2002 128 STC 92 Jharkh
Author: S Mukhopadhaya
Bench: S Mukhopadhaya


ORDER

S.J. Mukhopadhaya, J.

1. The petitioner
has challenged the order dated 25.6.2001 passed by Additional Deputy Commissioner, West Singhbhum, Chaibasa in Kolhan Title (Arbitration Suit No. 1 or 1995. whereby and whereunder while exercising the power under Section 20 of the Arbitration Act, 1940), the Additional Deputy Commissioner, West Singhbhum, Chaibasa directed the Managing Director of petitioner-TISCO to inspect the site of work awarded to the 4th respondent. to report the position to authority and to appoint an independent arbitrator in place of one Sri R.L. Das. Senior Divisional Manager of TISCO.

2. The only question arises as to whether a civil suit under Wilkinson’s Rules is maintainable for the purpose of preferring a suit as referred under Sub-section (2) of
Section 20 of the Arbitration Act. 1940 or not.

3. The case of petitioner-TISCO is that the 4th respondent-M/s. A.K. Bhattacharjee & Co. filed an application under Section 20 of the Arbitration Act. 1940 before the Additional Deputy Commissioner, West Singhbhum, Chaibasa on 31.1.1995 for direction on the petitioner-TISCO to file the agreement entered between the parties concerning a contract work known as “providing a peripheral dam around the slime, pond of Chirubera and raising the height of the Main Dam at Noamundi Iron Ore Mines”, as was awarded to the respondent No. 4, vide work order No. MFC/VI/1510002/MA-47, dated 16.8.1991 and other contract Jobs of providing drain, awarded vide work order No. MPC/NT/SE/9210127/1/1/MA-47, dated 9.1.1990 and extending two tunnels of intake Walls by 10 meters raising height vide work order No. MPC/NI/SE/1/051012/MA-47, dated 18.12.1990 and for referring the aforesaid contract to arbitration.

It was registered as Kolhan Title (Arbitration) Suit No. 1 of 1995. In the order sheet, it was reflected to have been filed for appointment of arbitrator as per Section 20 of the Arbitration Act. 1940. The Managing

Director of petitioner-TISCO was directed on 24.5.1995 to appoint the arbitrator as per the arbitration clause in the contract exercising power under Section 20 of the Arbitration Act, 1940. One Sri L.K. Pattanaik was appointed as arbitrator which was opposed by the petitioner whereinafter with the consent of the petitioner, Sri L.K. Pattanaik, Senior Divisional Manager of TISCO was appointed as an Arbitrator. The said Arbitrator was granted three months time on 21.5,1996 to make and publish award. Subsequently, the 4th respondent filed a petition for removal of Sri Pattanaik doubting his integrity and for appointment of another Arbitrator.

In the meantime, the Arbitrator, Sri L.K. Pattanaik submitted award on 2.11.1996 and parties were given 30 days time to file objection. Thereafter the Additional Deputy Commissioner. West Singhbhum, Chaibasa on hearing the parties vide order dated 13.10.1999 held the charges of misconduct and corruption against the Arbitrator ‘proved’. The award was set aside and petitioner was asked to suggest a panel of impartial persons for appointment as Arbitrator.

Thereafter the petitioner preferred an appeal before the Commissioner, South Chotanagpur Division, Ranchi being Kolhan Misc. Appeal No. 135/99. It was disposed of on 17.7.2000 with a direction to the petitioner to nominate a new Arbitrator through its Managing Director as per Arbitration Clause. One Sri P.K.L. Das was appointed as Arbitrator by Managing Director on 13.12.2000 but the Additional Deputy Commissioner, West Singhbhum, Chaibasa did not accept the same and vide order dated 25.6.2001 held that he had the power to appoint Arbitrator under Sections 11 and 12 of the Arbitration Act, 1940,

4. Counsel for the respondent No. 4 submitted that no Court except the Court as stipulated under Wilkinson’s Rules can administer civil justice within the Kolhan area. Even for the purpose of appointment of Arbitrator under Section 20 of the Arbitration Act, 1940, suit to be filed in a Kolhan Court which will try and decide the matter as per the provision of the Arbitration Act, 1940. He not only placed reliance on Rule 2 of the Wilkinson’s Rules but also relied on the decision of the Patna High Court in Tata Iron & Steel Co. Ltd. and Anr. v. Kolhan Superintendent and Ors.,
reported in 1983 BBCJ 226.

Further, according to counsel for the respondent No. 4, once the petitioner submitted to a Court under Wilkinson’s Rules, cannot challenge the jurisdiction of such Court. In this respect, he placed reliance on the decision of the Supreme Court in Prasun Roy v. Calcutta. M.D. Authority. AIR 1988 SC 205.

From the show cause/written statement filed by the petitioner as defendant in Kolhan Title (Arbitration) Suit No. 1 of 1995 (Annexure 2), it will be evident that the petitioner raised specific objection that the Kolhan Court had no jurisdiction to entertain suit under Section 20 of the Arbitration Act, 1940 (Paragraph 24 of the written statement). The petitioner appeared and took part subject to such objection. Thus, the respondent No. 4, who was the plaintiff in Kolhan suit, cannot derive any benefit of the decision of the Supreme Court, reported in AIR 1988 SC 205.

5. The case of TISCO v. Kolhan Superintendent and Ors., reported in 1983 BBCJ 226, reiated to transfer. It was tried by a Kolhan Court as per Wilkinson’s Rules wherein an order of injunction was passed. In the said case, plea was taken by the respondents of the case, that the Kolhan Court had jurisdiction to determine any suit in respect to personal or real property. The Court held that the ‘personal property’ cannot mean to remain at a particular place and further held that the Kolhan Court had no jurisdiction to entertain suit for such declaration.

The Wilkinson’s Rules was framed sometime in the year 1933. The Rule 20 of Wilkinson’s Rules provide decision through panches. The Deputy Commissioner cannot nominates himself as one of the punches but to accept the nomination of panches as made by the plaintiff and defendant, whatever the finding is given by the punches is binding on the Deputy Commissioner except in the case of bias or mala fide. In this background, the question of appointment of an Arbitrator and to entertain application under Section 20 of the Arbitration Act, 1940 by a Kolhan Court does not arise. Such appointment of Arbitrator will be against the provision of Rule 20 of the Wilkinson’s Rules and will vitiate the entire proceeding. In the case of Kushnu Sinku v. State of Bihar and Ors., reported in 1987 BBCJ 577, a Bench of this Court held

that the duties, function and power of the authorities under the Wilkinson’s Rule have been mentioned by reasons of the said rule (Wilkinson’s Rules). Although the jurisdiction of the Civil Court has been taken away but the Court, of the agent/Govern or General in Council or his Assistant cannot be equitted with Civil Court. The Governor General in Council or his Assistants is not governed by the Code of Civil Procedure and their powers are confined only to the four corners of the provision of the Wilkinson’s Rules.

6. In the circumstances, even if it is accepted that the present case will not be covered by the decision of the Full Bench, reported in 2000 (1) PLJR 692, for the reasons stated above, it can be said that the petition under Section 20 of the Arbitration Act, 1940 is not maintainable before a Kolhan Court and cannot be tried under Wilkinson’s Rules.

Accordingly, Kolhan Title (Arbitration) Suit No. 1 of 1995 and the orders passed therein are set aside. However, it will be open to the parties to move before a Court of competent jurisdiction for appropriate relief.

7. The writ petition is allowed, with the aforesaid observations.