Full Judgment Text
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CASE NO.:
Appeal (civil) 3287 of 2002
PETITIONER:
WCEOSRTPNB.EN&GAALNOSTTHAETRE WAREHOUSING
Vs.
RESPONDENT:
SUSHIL KUMAR KAYAN & ORS.
DATE OF JUDGMENT: 03/05/2002
BENCH:
V.N. Khare & Ashok Bhan
JUDGMENT:
Bhan, J.
Leave granted.
The West Bengal State Warehousing Corporation
(hereinafter referred to as ’the Corporation’) and The
Superintendent, Oil Installation Warehouse have filed this
appeal by special leave against the judgment and order passed
by the Calcutta High Court in favour of Sushil Kumar Kayan
(hereinafter referred to as ’the respondent).
In the year 1985 the respondent imported 338 coils
weighing 1995.180 Metric Tons of Seconds/Defective Zink
Aluminium Sheets in coils from European Economic
Community and declared the value of the goods at Rs.2,440.76
per metric ton. The Customs Authorities assessed the value of
the goods at Rs.3995/- per metric ton. The goods were kept in
the godown of the Corporation. Respondent filed a writ
petition before the High Court saying that there was no basis for
assessing the value of goods at such an enhanced rate. A
learned Single Judge issued an interim direction for the goods
to be released to the respondent upon furnishing a bank
guarantee for 50% of the disputed custom duty and the personal
bond for the balance of the disputed duty. It appears that in the
meantime, the Special Investigation Branch of the Customs
House issued instructions to the Corporation not to deliver the
goods to the respondent.
Another writ petition was filed in the High Court which
was dismissed by a learned Single Judge. The respondent filed
an appeal against the order of the learned Single Judge. During
the pendency of the appeal a theft took place in the warehouse
Corporation and 18 coils weighing 107.152 Metric Tons,
belonging to the respondent, were stolen. According to the
respondent, the value of the stolen 18 coils was Rs.25 lacs.
On the other hand ,the Corporation claimed Rs.23 lacs as
warehousing charges in respect of the entire goods including
the goods which were stolen from the godown of the
Corporation. The High Court passed an interim order in
respect of the removal of the goods by the respondent from the
warehouse of the Corporation. The respondent was directed to
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furnish security to the extent of Rs.10 lacs towards the claim of
the Corporation. The respondent furnished the security of
Rs.10 lacs in the form of fixed deposit before the Registrar,
Original Side, Calcutta. Later the High Court further directed
the respondent to deposit Indira Vikas Patra for a sum of Rs.8
lacs by way of security in respect of the claim of the
Corporation after taking note of the fact that Rs.10 lacs have
already been deposited. In that connection the following
direction was issued by the High Court:
"We, therefore, direct that Indira Vikash
Patra of Rs.8 lacs now lying with the
Registrar, Original side, shall be retained by
him. In other words, the fixed deposit
receipt of Rs.10 lacs and Indira Vikash Patra
of Rs.8 lacs shall be retained by the
Registrar, Original side, till 30th November,
1992. If within the time specified above, the
West Bengal State Warehousing
Corporation institutes any proceeding in
respect of their claim against the appellant,
the said security shall continue to the Credit
Court of such suit until further orders of the
Court where such proceedings may be
initiated by the said Corporation. If,
however, no such proceedings are initiated,
in that event, the said fixed deposit receipt
and Indira Vikash Patra of Rs.8 lacs shall be
returned to the appellant by the Registrar,
Original side. Inasmuch as the entire claim
of the West Bengal State Warehousing
Corporation is secured, they can have no
further lien over and in respect of subject
goods. Their lien, if any, will stand shifted
to the aforesaid security."
The present appeal was filed against the aforesaid
directions of the High Court.
On 26th November, 1993, this Court in an interim
order came to the conclusion that the appellant Corporation
being a public institution was entitled to the charges in respect
of the goods kept by the respondent in their godown.
Accordingly by way of an interim arrangement the Corporation
was permitted to withdraw the amount deposited by the
respondent. Rs.10 lacs deposited by the respondent with the
Registrar of the High Court on Original side were ordered to
be withdrawn. Out of Rs.8 lacs deposited in the form of
Indira Vikash Patra, Corporation was permitted to withdraw
Rs.5 lacs by making necessary endorsements on the Indira
Vikash Patra and the balance of Rs.3 lacs was ordered to be
kept in the deposit in the form of Indira Vikash Patra. That
left the court with regard to the claim involving the liability of
the Corporation of the value of 18 coils which were stolen and
the extent to which the Corporation would be liable to set off
the amounts due from the Corporation to the respondent in
respect of 18 coils stolen and the balance of charges that would
be payable by the respondent to the Corporation. Mindful of
the fact that adjudication in the civil court would take a
considerable time it was decided to refer the dispute to an
arbitrator who would decide the same within a period of two
months. The parties were directed to come forward with the
necessary proposals and issues to be referred to the arbitrator.
Finally, on 17-6-1995 on an agreement arrived at
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between the counsel for the parties the matter was referred for
arbitration and Mr. Justice M.R. Mallick, former Judge of the
Calcutta High Court was appointed as the arbitrator to decide
the dispute. The disputes enumerated in the Reference were as
under:
"(i)The claim of the petitioner-West Bengal
State Warehousing Corporation against the
respondent towards warehousing charges;
(ii)The claim of the respondent for damages
in respect of the 18 coils which were stolen
while in custody of the petitioner W.B.State
Warehousing Corporation;
(iii)Any incidental question connected with
the aforesaid disputes."
It was specifically stated in the order that parties shall not
be allowed to raise questions which had become final by way of
judicial pronouncement.
The conclusion arrived at by the Arbitrator in his award
dated 29th October, 1997 on the three issues referred for
arbitration were as follows:
ISSUE NO.1
"It has been disclosed by the
Corporation at the time of hearing of
the argument that the Corporation in
terms of the order passed by the
Hon’ble Supreme Court in relation to
SLP No.14418 of 1992 received
Rs.10,00,000.00 (Rupees Ten Lacs
only) on 08.01.1996 being the
matured value of 200 numbers of
Indira Vikash Patra of Rs.2500.00
each(Face Value) amounting to
Rs.5,00,000.00(Rupees Five Lacs
only). The Corporation has also
received by Cheque No.8333993
dated 8.1.1996 on the Reserve Bank
of India for Rs.10,00,000.00 (Rs. Ten
Lacs only) through Registrar, Original
Side, High Court, Calcutta.
Therefore, towards the claim of
warehousing charges, the Corporation
has received Rs.20,00,000.00(Rupees
Twenty Lacs only) on 08.01.1996 and
is, therefore, entitled to the balance, if
any, to which it is to be found
entitled. On considering the
submissions made by the Learned
Advocates for both the parties and
also on considering all aspects of the
case, I award Rs.25,00,000.00
(Rupees Twnety Five Lacs only) to
the Corporation by way of
warehousing charges including
interest and as
Rs.20,00,000.00(Rupees Twenty Lacs
only) have already been received by
the Corporation by the Order of the
Hon’ble Supreme Court, Shri Sushil
Kumar Kayan is liable to pay further
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sum of Rs.5,00,000.00(Rupees Five
Lacs only) towards the warehousing
charges together with interest."
ISSUE NO.2
"On considering the oral evidence and
also on considering the fact that the
goods imported were of damaged
condition, I award Shri Sushil Kumar
Keyan the damages to the extent of
Rs.15,00,000.00(Rupees Fifteen Lacs
only). By adjusting Rs.5,00,000.00
(Rupees Five Lacs only) awarded
towards the balance warehousing
charges including interest, Shri Sushil
Kumar Keyan shall get from the
Corporation Rs.10,00,000.00(Rupees
Ten Lacs only). The above
compensation has to be paid within a
period of 90(Ninty) days from the
date of this Award, failing which the
sum of Rs.10,00,000.00(Rupees Ten
Lacs only) shall carry interest at the
rate of Rs.12.00 per annum till full
payment."
ISSUE NO.3
"In the facts of the present case I
direct each of the parties to bear the
respective costs of this Arbitration
themselves. As the Corporation has
submitted a claim with the Oriental
Insurance Company Limited claiming
Rs.5,31,748.40 p. and the claim has
not yet been settled, if the claim is
settled by the Insurance Company in
favour of the Corporation, the said
insurance money shall be the property
of the Corporation.
Under Issue No.2 the Corporation before the Arbitrator
had taken the plea that the damages, if any, are to be restricted
to the declared value of the goods in the agreement entered into
between the Corporation and the respondent through its
clearing Agent. This plea was rejected. Counsel for the
appellant relying upon the clauses (f) and (g) of paragraph 44
of the Judgment of this Court in Rajasthan State Mines and
Minerals Ltd. vs. Eastern Engineering Enterprises and Anr.
[1999 (9) SCC 283] contended that if the Arbitrator travels
beyond his jurisdiction or acts in excess of his jurisdiction then
the award can be set aside and submitted that since the
Arbitrator had acted beyond the terms of agreement arrived at
between the parties, the Arbitrator had acted in excess of
jurisdiction and, therefore, the award was liable to be set aside.
We do not find any merit in this submission. Clauses
(e), (f) and (g) of paragraph 44 have to be read together. What
has been held by this Court is that the award made by an
Arbitrator can be set aside if the Arbitrator acts beyond
jurisdiction, and, to find out whether the Arbitrator has travelled
beyond jurisdiction, it would be necessary to consider the
agreement between the parties containing the arbitration clause
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and if the Arbitrator acts beyond the arbitration clause then it
would be deemed that he has acted beyond jurisdiction. In
order to determine whether the arbitrator has acted in excess of
his jurisdiction what has to be seen is whether claimant can
raise a particular claim before the arbitrator. If there is a
specific term in the contract or the law which does not permit to
the parties to raise a point before the arbitrator and if there is a
specific bar in the contract to the raising of the point then the
award passed by the arbitrator in respect thereof would be in
excess of his jurisdiction. Neither of the conditions mentioned
in clauses (f) and (g) referred to above stand satisfied to hold
that the arbitrator had acted in excess of his jurisdiction. This
Court on the agreement arrived at between the parties referred
three points by way of disputes to be resolved between the
parties and the arbitrator has limited his adjudication on the
points of reference made to him. Counsel for the appellant
could not point out as to in what way or manner the Arbitrator
had acted in excess of his jurisdiction on the matters referred to
him. According to us the Arbitrator has confined his award
within the framework of the reference made to him and did not
exceed the jurisdiction conferred upon him.
For the reasons stated above we do not find any merit in
the objection raised by the counsel for the appellant-
Corporation. The award is made rule of the Court. The appeal
is disposed of in terms of the award. No costs.
J.
(V.N. Khare)
J.
( Ashok Bhan)
May 03, 2002