Kerala State electricity Board and ANR. V/S Kurien E. Kalathil and ANR.
The court stated that referring the parties to arbitration has serious civil consequences procedurally and substantively The Appellant-Kerala State Electricity Board, entered into an agreement on 16.09.1981 with respondent- contractor for construction of a composite dam. After commencement of work, Government of Kerala issued a notification dated 30.03.1983, by which minimum wages payable to certain categories of workers was revised with effect from 01.04.1983. The Appellant-Kerala State Electricity Board, entered into an agreement on 16.09.1981 with respondent- contractor for construction of a composite dam. After commencement of work, Government of Kerala issued a notification dated 30.03.1983, by which minimum wages payable to certain categories of workers was revised with effect from 01.04.1983. The respondent claimed labor escalation charges from 01.04.1983 to December, 1984. The Government of Kerala referred the matter to the industrial tribunal for adjudication of the dispute. The industrial tribunal passed the award dated 14.10.1993 holding that the notification of Government of Kerala was applicable to workmen employed by the respondent. Respondent filed O.P.No.283 of 1995 claiming an amount of Rs.6,32,84,050/- towards labor escalation charges and an amount of Rs.7,66,35,927/- being interest at the rate of 18% per annum payable under Ex.P20 in respect of various bills issued by the respondent for the period 15.01.1985 to 31.10.1994. When the said writ was pending, the appellant terminated the contract with respondent, which again came to be challenged before the High Court by filing O.P.No.10759 of 1997 against termination of contract and for the payment of works done (Ex.P59) by respondent. PROCEDURAL HISTORY:The High Court disposed of both the petitions by a common judgment held that the termination of contract was arbitrary and directed the Board to pay the amount claimed by the respondent with interest at the rate of 18% per annum. The High Court also directed the Board to pay the amount under Ex.P59 towards additional work done by the respondent.Being aggrieved, appellant approached this Court by way of appeal in C.A.No.4092 of 2000 reported in Kerala State Electricity Board and Another v. Kurien E. Kalathil and Others[1]. In para (11) of the judgment, this Court observed that the contract between the parties is in the realm of private law and not a statutory contract and the matter could not have been agitated in the writ petition. However, having regard to the fact that the contract was of the year 1981 and the notification was issued in 1983 and in the peculiar facts and circumstances, this Court did not interfere with the order of the High Court, but reduced the rate of interest from 18% p.a. to 9% p.a. So far as Ex.P59 is concerned, there was no direction by this Court. Review petition filed by the appellant was dismissed by this Court.The appellant has so far paid an amount of Rs.12,82,96,320/- under Ex.P20 which was accepted by the respondent without any demur. Three years after the payment, respondent filed I.A.No.6 of 2006 seeking direction of the court to make payments due, with further interest to be paid. In which this Court had passed the order that “the Kerala State Electricity Board is liable to pay certain amount to the Petitioner-Contractor and gave liberty to the Petitioner to move to the High Court of Kerala seeking further steps for the recovery of the amount and if there is any dispute between the petitioner and the Electricity Board, the High Court would consider the same and issue appropriate directions within a reasonable time….” The appellant has so far paid an amount of Rs.12,82,96,320/- under Ex.P20 which was accepted by the respondent without any demur. Three years after the payment, respondent filed I.A.No.6 of 2006 seeking direction of the court to make payments due, with further interest to be paid. In which this Court had passed the order that “the Kerala State Electricity Board is liable to pay certain amount to the Petitioner-Contractor and gave liberty to the Petitioner to move to the High Court of Kerala seeking further steps for the recovery of the amount and if there is any dispute between the petitioner and the Electricity Board, the High Court would consider the same and issue appropriate directions within a reasonable time….” Respondent-contractor filed W.P. before the High Court. The High Court allowed the writ petition directing the Board to pay Rs.12,92,29,378/- within three months with 9% simple interest. So far as the claim as to the additional work done, the High Court directed the parties to mutually discuss among themselves. Further, the High Court referred the matter to the sole arbitrator Justice K.A. Nayar, former Judge of the High Court of Kerala to resolve the dispute. The appellant-Board filed review, which was dismissed on 23.06.2009. Being aggrieved, the appellant is before this court. ISSUE BEFORE THE COURT:Whether the contractor is justified in appropriation of payment firstly towards interest? Whether the contractor is justified in appropriation of payment firstly towards interest? Whether the contractor is entitled to subsequent interest on the amount claimed in Ex.P20? Whether the High Court was right in referring the parties to arbitration on the oral consent given by the counsel without written instruction from the party? RATIO OF THE COURTAfter hearing to both the learned counsels, the court observed that as per the facts and circumstances of the present case and since public money is involved, the court deem it a fit case for reappreciating the facts and the materials on record or otherwise the findings of the High Court are likely to result in excessive hardship to the appellant-Board and consequently passed on to the consumers. In the same manner, for all the bills, the respondent has calculated the “Value of work done”, “difference in wages” and “Labor Escalation Charges” on monthly basis. After so calculating, the respondent shown Rs.6,32,84,050/- as total amount due towards labor escalation. The court observed that, in computation, the respondent contractor himself adjusted all payments received from the appellant, only towards the principal and not towards interest. Parties are governed by the terms of the contract. Clause E1.079 of the agreement expressly provided that the appellant would pay no interest to the respondent for delayed payment. But when the respondent filed I.A.No.6 of 2006, the entire method of calculation was changed by showing adjustment of payments firstly towards interest and then towards principal. Since the respondent changed the method of adjustment, even after payment of Rs.12,82,96,320/, according to him Rs.3,38,57,618/- was still due to him. This manner of appropriation, is in clear violation of the directions given by this Court. This important aspect was lost sight by the High Court and the direction of the High Court to make further payment of Rs.4,12,58,224/- under Ex.P20 is not sustainable. Learned counsel for the respondent submitted that in the case of a debt due with interest, the normal rule is that any payment made by the debtor, in the first instance, to be adjusted towards satisfaction of interest and only thereafter to the principal. The learned counsel placed reliance upon Meghraj and Others vs. Mst. Bayabai and Others[2] and I.C.D.S. Ltd. vs. Smithaben H. Patel (Smt.) and Others[3] where the court in para (14), held that, “the general rule of appropriation of payments towards a decretal amount is that such an amount is to be adjusted firstly, in accordance with the directions contained in the decree and in the absence of such direction, adjustments be made firstly in payment of interest and costs and thereafter in payment of the principal amount.” In this particular case, since this Court directed the payment as per Ex.P20, the respondent cannot turn round and say that the amount received by him will be adjusted towards the interest first and then towards the principal.At this juncture, the court may usefully recapitulate respondent’s own letter to the appellant extracted in para (11) where the respondent himself has stated that he has deducted the advances from the principal amount claimed under “Labor Escalation Charges” and “interest” are shown separately.As per the court, the respondent is not justified in changing the method of calculation and claim appropriation. The claim of the respondent for a further sum of Rs.2,29,34,559/- with interest under Ex.P20 cannot be sustained and the direction of the High Court to pay the same is liable to be set aside.Coming on to the question that whether the respondent is entitled to subsequent interest on the amount claimed under Ex.P20. The court observed, under Section 34(2) CPC, where a decree is silent as to payment of further interest on the principal sum, it shall be deemed to have been refused. In the present case, since there is no direction for future interest, the respondent cannot claim further interest on the amount payable under Ex.P20.The appellant has paid a total amount of Rs.12,82,96,320/- and according to the Board, it has overpaid the respondent an excess amount of Rs.1,74,75,247/-. In the absence of any direction in the order of the High Court and order of this Court to pay subsequent interest, the respondent is not entitled to claim subsequent interest on the amount payable under Ex.P20. The direction of the High Court to pay subsequent interest of Rs.1,83,23,665/- under Ex.P20, is not sustainable. The impugned judgment of the High Court directing the appellant to pay Rs.4,12,58,224/- under Ex.P20, should also be set aside.So far as Ex.P59 is concerned, it is towards additional work done – material escalation and labor escalation. Earlier, the High Court held, in para (26) of its judgment that, “the Board shall also pay to the petitioner the bills raised by him for the work done till date including labor escalation payment etc.”So far as Ex.P59 is concerned, the contractor has made a claim of Rs.5,55,62,597/- towards additional work and the Board has disputed the claim made by the respondent and pleaded that the total work done was only for Rs.1,55,65,817/- including cost of departmental materials. The learned senior counsel for the respondent submitted that the claim of the respondent in Ex.P59 was not disputed by the appellant in its counter filed. But this contention does not merit acceptance. As pointed out above, the claim of the respondent on each one of the items in Ex.P59, the appellant has filed a detailed reply in I.A.No.6 of 2006 disputing the claim on each of the items claimed by the respondent. It is in this context, this Court has disposed of I.A. No.6 of 2006 observing that there is dispute regarding the quantum of the amount payable and giving liberty to the respondent contractor to move to the High Court. It is seen from the impugned judgment that the High Court has also taken note of the counter filed by the appellant in which the appellant disputed each one of the items in Ex.P59. The High Court proceeded to observe that the contention of the appellant that only Rs.1,55,65,817/- is payable under Ex.P59 cannot prima facie be accepted as the measurement was taken by the Board after ten years of the judgment; whereas the contractor’s claims were made then and there by the contractor on actual measurement. The High Court directed the appellant to pay Rs.8,79,71,154/-. The High Court ordered single uniform rate for labor escalation at 173.60% and material escalation at 98%. The appellant contended that the direction of the High Court, is contradictory to the terms of the agreement as the material escalation and labor escalation are to be calculated on a monthly basis as claimed by the respondent in other bills. The High Court did not keep in view the respondent’s own method of calculation and erred in allowing labor escalation and material escalation at single uniform rate of 173.60% and 98% respectively and the direction of the High Court to pay Rs.5,81,53,892/- is not sustainable. As the High Court has directed the appellant to pay subsequent interest of Rs.2,98,17,262/- on the amount directed to be paid under Ex.P59. view of the express provision of Section 34(2) CPC, no future interest is payable under Ex.P59. The direction of the High Court to pay future interest of Rs.2,98,17,262/- on the claims made under Ex.P59 is not sustainable and is liable to be set aside. After getting the oral consent of the counsel for the appellant, the High Court has referred the parties to arbitration appointing Justice K.A. Nayar as the arbitrator. There was no arbitration agreement between the parties. The question falling for consideration is whether the High Court was right in referring the parties to arbitration without written instruction from the party.Insofar reference of the parties to arbitration, oral consent given by the counsel without a written memo of instructions does not fulfill the requirement under Section 89 CPC. In the absence of arbitration agreement, the court can refer them to arbitration only with written consent of parties either by way of joint memo or joint application; more so, when government or statutory body like the appellant is involved. In a subsequent decision in the context of examining the compromise under Order XXIII Rule 3 CPC, in Banwari Lal v. Chando Devi (Smt) and Anr.[4], this Court has observed that the case of Byram Pestonji Gariwala had ignored the law laid down in Gurpreet Singh v. Chatur Bhuj Goel  and held that when parties enter into a compromise, the court must insist upon the parties that the compromise be reduced into writing. The court stated that referring the parties to arbitration has serious civil consequences procedurally and substantively. When there was no arbitration agreement between the parties, without a joint memo or a joint application of the parties, the High Court ought not to have referred the parties to arbitration. Now coming on to the issue that whether this court can interfere in exercise of jurisdiction under Article 136 of the Indian Constitution. The learned senior counsel for the respondent urged that in exercise of jurisdiction, the Supreme Court normally does not reappreciate the evidence and findings of fact unless there is miscarriage of justice or manifest illegality. In support of his contention, he referred the case of Taherakhatoon (D) by LRs. v. Salambin Mohammad[5].In exercise of jurisdiction under Article 136 of the Constitution of India, this Court does not normally reappreciate the evidence and findings of fact; but where the findings of the High Court are perverse or the findings are likely to result in excessive hardship, the Supreme Court would not decline to interfere merely on the ground that findings in question are findings of fact. In the case of Mahesh Dattatray Thirthkar vs. State of Maharashtra[6], this Court in para (35) stated some principles in answer to the question of exercising power to interfere with findings of fact under Article 136 of Indian Constitution: “…..It is open to this Court to interfere with the findings of fact given by the High Court if the High Court has acted perversely or otherwise improperly…..”In the present case, the appellant has so far paid Rs.56.58 crores and additionally rupees five crores by order of this Court dated 20.02.2017. As discussed above, the findings of the High Court are perverse causing loss to the statutory body like the appellant-Board, therefore this Court would not decline to interfere merely on the ground that the findings in question are findings of fact. DECISION HELD BY COURT:In this case the judgment was given by JUSTICE R.BANUMATHI that the impugned judgment of the High Court is set aside and these appeals are allowed with the following observations and directions The direction of the High Court to pay future interest of Rs.2,98,17,262/- is set aside.The award passed by the arbitrator Justice K.A. Nayar is set aside and the Arbitration Appeal filed by the appellant pending before the High Court of Kerala is allowed. The amount of Rs.1,74,75,247/- paid under Ex.P20 which is in excess of the claim under Ex.P20 and the amount of rupees five crores paid to the respondent vide order of this Court be treated as payment under Ex.P59 for additional work including tender excess, material escalation and labor escalation charges and in full quit of all claims under Ex.P59. Parties to bear their respective costs.            
 Appeal186 of 2001 Special Leave Petition2436 of 2000 DR.SURAJMANI STELLA KUJUR Vs DURGA CHARAN HANSDAH & ANR DATE OF JUDGMENT: 14 02 2001 K.T.Thomas R.P.Sethi SETHI J Leave granted. Who is a "Hindu" for the purposes of the applicability of the Hindu Marriage Act 1955 hereinafter referred to as "the Act") is a question of law to be determined in this appeal. Section 2 of the Act specifies the persons to whom the Act is applicable Clauses (b) andof Sub sectionof Section 2 make the Act applicable to a person who is a Hindu by religion in any of its forms or developments including a Virashaiva a Lingayat or a follower of the Brahmo Prarthana or Arya Samaj and to persons who is a Buddhist Jaina or Sikh by religion. It is also applicable to any other person domiciled in the territories of India who is not a Muslim Christian Parsi or Jew by religion. The applicability of the Act is therefore comprehensive and applicable to all persons domiciled in the territory of India who are not Muslims Christians Parsis or Jews by religion. The term "Hindu" has not been defined either under the Act or Indian Succession Act or any other enactment of the Legislature. As far back as in 1903 the Privy Council in Bhagwan Koer v. J.C. Bose & Ors. Calcutta Series 11] observed: "We shall not attempt here to lay down a general definition of what is meant by the term ’Hindu’. to make it accurate and at the same time sufficiently comprehensive as well as distinctive is extremely difficult. The Hindu religion is marvellously catholic and elastic. Its theology is marked by eclecticism and tolerance and almost unlimited freedom of private worship. Its social code is much more stringent but amongst its different castes and sections exhibits wide diversity of practice. No trait is more marked of Hindu society in general than its horror of using the meat of the cow. Yet the Chamaras who profess Hinduism but who eat beef and the flesh of dead animals are however low in the scale included within its pale. It is easier to say who are not Hindus not practically and separation of Hindus from non Hindus is not a matter of so much difficulty. The people know the differences well and can easily tell who are Hindus and who are not The Act is therefore applicable to: "(1) All Hindus including a Virashaiva a Lingayat a Brahmo Prarthana Samajist and an Arya Samajist Budhists Jains Sikhs In this appeal the parties are admittedly tribals the appellant being a Oraon and the respondent a Santhal. In the absence of a notification or order under Article 342 of the Constitution they are deemed to be Hindus. Even if a notification is issued under the Constitution the Act can be applied to Scheduled Tribes as well by a further notification in terms of Sub sectionof Section 2 of the Act. It is not disputed before us that in the Constitution Scheduled Tribes) Order 1950 as amended by Scheduled Castes and Scheduled Tribes OrderActs 63 of 1956 108 of 1976 187 and 15 of 1990 both the tribes to which the parties belong are specified in Part XII. It is conceded even by the appellant that "the parties to the petition are two Tribals who otherwise profess Hinduism but their marriage being out of the purview of Hindu Marriage Act 1955 in light of Section 2(2) of the Act are thus governed only by their Santal Customs and usage". The appellant has however relied upon an alleged custom in the Tribe which mandates monogamy as a rule. It is submitted that as the respondent has solemnised a second marriage during the subsistence of the first marriage with the appellant the second marriage being void the respondent is liable to be prosecuted for the offence punishable under Section 494 of the Indian Penal Code. No custom can create an offence as it essentially deals with the civil rights of the parties and no person can be convicted of any offence except for violation of law in force at the time of commission of the act charged. Custom may be proved for the determination of the civil rights of the parties including their status the establishment of which may be used for the purposes of proving the ingredients of an offence which under Section 3(37) of the General Clauses Act would mean an act or omission punishable by any law by way of fine or imprisonment Article 20 of the Constitution guaranteeing protection in respect of conviction of offence provides that no person shall be convicted of any offence except for violation of law in force at the time of commission of the act charged as an offence. Law under Article 13 clause of the Constitution means the law made by the Legislature including intravires statutory orders and orders made in exercise of powers conferred by the statutory rules. The expression custom and usage" has been defined under Section 3(a) of the Act as: "the expression ’custom’ and ’usage’ and rule which having been continuously and uniformly observed for a long time has obtained the force of law among Hindus in any local area tribe community group or family Provided that the rule is certain and not unreasonable or opposed to public policy and Provided further that in the case of a rule applicable only to a family it has not been discontinued by the For custom to have the colour of a rule or law it is necessary for the party claiming it to plead and thereafter prove that such custom is ancient certain and reasonable Custom being in derogation of the general rule is required to be construed strictly. The party relying upon a custom is obliged to establish it by clear and unambiguous evidence. In Ramalakshmi Ammal v. Sivanatha Perumal Sethuraya held: "It is of the essence of special usage modifying the ordinary law of succession that they should be ancient and invariable and it is further essential that they should be established to be so by clear and unambiguous evidence. It is only by means of such evidence that the courts can be assured of their existence and that they possess the conditions of antiquity and certainty on which alone their legal title to This Court in Mirza Raja Pushpavati Vijayaram Gajapathi Raj & ors. v. Sri Pushavathi Visweswar Gajapathiraj Rajkumar of Vizianagram & Ors. again reiterated the same position of law regarding the establishment of a custom upon which a party intends to rely. The importance of the custom in relation to the applicability of the Act has been acknowledged by the Legislature by incorporating Section 29 saving the validity of a marriage solemnised prior to the commencement of the Act which may otherwise be invalid after passing of the Act Nothing in the Act can affect any right recognised by custom or conferred by any said enactment to obtain the dissolution of a Hindu Marriage whether solemnised before or after the commencement of the Act even without the proof of the conditions precedent for declaring the marriage invalid as incorporated in Sections 10 to 13 of the Act. In this case the appellant filed a complaint in the Court of Chief Metropolitan Magistrate New Delhi stating therein that her marriage was solemnised with the respondent in Delhi according to Hindu rites and customs". Alleging that the respondent has solemnised another marriage with the Accused No.2 the complainant pleaded: "That the accused No.1 has not obtained any divorce thro’ the Court of Law upto this date and hence the action of the accused No.1 is illegal and contravene the provision of law as laid down under Section Nowhere in the complaint the appellant has referred to any alleged custom having the force of law which prohibits the solemnisation of second marriage by the respondent and the consequences thereof. It may be emphasised that mere pleading of a custom stressing for monogamy by itself was not sufficient unless it was further pleaded that second marriage was void by reason of its taking place during the life of such husband or wife. In order to prove the second marriage being void the appellant was under an obligation to show the existence of a custom which made such marriage null ineffectual having no force of law or binding effect incapable of being enforced in law or non est. The fact of second marriage being void is a sine qua non for the applicability of Section 494 IPC. It is settled position of law that for fastening the criminal liability the prosecution or the complainant is obliged to prove the existence of all the ingredients constituting the crime which is normally and usually defined by a statute. The appellant herself appears to be not clear in her stand inasmuch as in her statement in the court recorded on 24th October 1992 she has stated that "I am a Hindu by religion". The complaint was dismissed by the trial court holding "there is no mention of any such custom in the complaint nor there is evidence of such custom. In the absence of pleadings and evidence reference to Book alone is not sufficient". the High Court vide the judgment impugned in this appeal held that in the absence of notification in terms of sub sectionof Section 2 of the Act no case for prosecution for the offence of bigamy was made out against the respondent because the alleged second marriage cannot be termed to be void either under the Act or any alleged custom having the force of law. In view of the fact that parties admittedly belong to the Scheduled Tribes within the meaning of clause of Article 366 of the Constitution as notified by the ConstitutionOrder 1950 as amended by Scheduled Castes and Scheduled Tribes Order Amendment) Acts 656 1076 187 and 190 passed in terms of Article 342 and in the absence of specific pleadings evidence and proof of the alleged custom making the second marriage void no offence under Section 494 of the Indian Penal Code can possibly be made out against the respondent. The Trial Magistrate and the High Court have rightly dismissed the complaint of the appellant Learned Counsel appearing for the appellant however submitted that even if the second marriage was not void for the purposes of attracting the applicability of Section 494 and holding the respondent guilty of bigamy the appellant is entitled to maintenance succession and other benefits on account of her being the legally wedded wife of the respondent. We cannot adjudicate upon such a proclaimed right of the appellant. The appellant is at liberty to get her right established by way of civil proceedings in a competent court of jurisdiction. If any such proceedings are initiated the same would be decided on their merits in accordance with the principles of pleadings and proof not being influenced by any of the observations made by the trial magistrate or the High Court. There is no merit in this appeal which is accordingly dismissed