TMI Blog1983 (8) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... by special leave are directed against the judgment and order of the Allahabad High Court and Delhi High Court dated 24th January, 1980 and 13th November, 1979 respectively. The first one arises out of proceedings under s 20 of the Arbitration Act while the other arises out of proceedings under s. 33 of the Arbitration Act. These appeals raise a common question regarding the inter pretation of cl. 18 of the general conditions of contract contained in the standard from of contract entered into by the parties and the ambit and scope of s. 41 of the Arbitration Act. The facts giving rise to these appeals follow a common pattern and it would, therefore, be sufficient if we set out the facts relating to Civil Appeal No. 2863 of 1982 to bring out clearly the points which arise for consideration in these appeals. The appellant in this appeal is a registered firm and carries on the business of manufacturing and selling timber. The Directorate General of Supplies and Disposals (for short, DGS D) functions as a purchase organisation for the Government of India and makes purchases for various departments. In response to an invitation for tender by the DGS D for the supply of Bijasal logs f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n extra cost of Rs. 92,364. By notice dated 27th December, 1974 the DGS D called upon the appellants to pay that amount failing which alternating arrangements would be made to recover the same. It appears that there were some other contracts between the appellant and the respondent whereunder the appellant has supplied goods and payments were due to it under pending bills. The appellant firm moved a petition under s 33 of the Arbitration Act before the court alleging that there was no concluded contract in existence between the parties containing any arbitration clause and prayed inter alia for determining the. existence, validity and effect of the alleged arbitration agreement. The stand of the Union of India on the other hand is that there was a concluded contract between the parties and the appellant firm was bound by the acceptance of the tender. As the Union of India threatened to withhold the amount of Rs. 92,364 from the payments due under the pending bills of other contracts, the appellant firm sought for an injunction. Under s. 41 read with Second Schedule of the Arbitration Act, and o. 39, rr. 1 and 2 read with s. 151 of the Code of Civil Procedure, restraining the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under s. 41 (b) read with Second Schedule to issue interim injunction, but such interim injunction can only be "for the purpose of and in relation to arbitration proceedings". The arbitration proceedings in the present case were for determination of the mutual claims of the appellant and the respondent arising out of the contract contained in the acceptance of tender dated 16th July, 1968. The question whether any amounts were payable by the appellant to the respondent under other contracts was not the subject matter of the arbitration proceedings. The Court obviously could not, therefore, make an interim order which, though ostensibly in form an order of interim injunction, in substance amounted to a direction to the appellant to pay the amounts due to the respondent under other contracts. Such an interim order would clearly not be for the purpose of or in relation to the arbitration proceedings as required by s. 41 (b)." Having laid down the above dictum on the interpretation of s. 41 of the Arbitration Act this Court proceeded to analyse the impugned order of injunction in that case. In its opinion the order of injunction did not expressly or by necessary implication carry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining the Union of India from adjusting of recovering any damages claimed by it from other pending bills of the contractor no order of injunction restraining the Union of India from withholding the payments due to the contractor under other pending bills could be issued. Following the Full Bench decision the Division Bench in the present case held that the Court in arbitration proceedings was not competent to issue an injunction restraining the Union of India from withholding the amount due to the appellant-contractor under other pending bills. The only remedy of the appellant is to proceed outside the arbitration proceedings for the payments due under the pending bills, from the respondent. The Court can, however, restrain the Union of India from recovering or appropriating the amount due to the appellant-contractor under pending bills towards the damages claimed by the Union, unless it has been adjudicated upon or admitted by the other side. The first question that falls for consideration in this appeal is about the exact scope and ambit of s. 41 of the Arbitration Act It will be appropriate at this stage to read s. 41 in order to appreciate the contention raised on behalf of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted. Clause (a) of s. 41 makes only the procedural rules of the Code of Civil Procedure applicable to the proceedings in Court under the Arbitration Act. This clause does not authoritse the Court to pass an order of injunction. The power is conferred by cl. (b) of s. 41. The source of power, therefore, cannot be traced to cl. (a). If the contention of Shri Kacker is accepted, the appeals would lie under ss. 96, 100 or 104 of the I.P.C. but the Arbitration Act itself provides for appeal under s. 39. Besides, if cl.(a) of s.41 gave wide powers to pass an order of injunction, cl. (b) of s.41 would become otiose. The learned counsel for the appellant, however, contends that the arbitration proceedings relate to the claim for damages by the Union of India. Any act of the Union of India which purports to enforce the said claim for damages, before it has been duly adjudicated upon in arbitration proceedings is an act which relates to such arbitration proceedings. On the own case of the appellant that there was no concluded contract between the parties containing an arbitration clause it will be difficult to say that the application for injunction moved by the appellant was for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, therefore, be said to be outside the scope of his power under s. 41 (b) read with the Second Schedule". With profound respect we find that the aforesaid observation is incongrous with the proposition of law laid down by this Court just before this observation. We find it difficult to agree with the observation of the Court that the impugned order in form and substance being the negative the respondent could refuse to pay such amounts if it thinks it has a valid defence, and if it chooses to do so there would be no breach of the injunction order. It is true that the order of injunction in that case was in negative form. But if an order injuncted a party from withholding the amount due to the other side under pending bills in other contracts, the order necessarily means that the amount must be paid. If the amount ii withheld there will be a defiance of the injunction order and that party could be hauled up for infringing the injunction order. It will be a contradiction in terms to say that a party is injuncted from withholding the amount and yet it can withhold the amount as of right. In any case if the injunction order is one which a party was not bound to comply with, the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tration proceedings for recovering the sums due to him which have been wrongly appropriated by the purchaser and in such suit or arbitration proceedings, the court or the arbitrator, as the case may be, would examine the validity of the claim against which appropriation has been made by the purchaser and if the claim is found to be unsustainable, set at naught the appropriation and pass a decree or award for the sums due to the contractor. But the court cannot and should not restrain the Union of India from exercising its right of appropriation merely because the claim against which appropriation is sought to be made by the purchaser is disputed by the contractor and is pending adjudication before a court of law or arbitrator. Shri Kacker on the other hand contends that though the words used in the opening part of cl. 18 are "any claim for the payment of a sum of money", which are general words of apparently wide amplitude sufficient to cover even a claim for damages arising out of the contract, a proper construction of the clause read as a whole clearly suggests that these words are intended to refer only to a claim for a sum due and payable and do not take in a claim for damage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtual setting. We must, therefore, read the words any claim for the payment of a sum of money occurring in the opening part of cl. 18 not in isolation but in the context of the whole clause, for the intention Of the parties is to be gathered not from one part of the clause or the other but from the clause taken as a whole. It is in the light of this principle of interpretation that we must determine whether the words any claim for the payment of a sum of money refer only to a claim for a sum due and payable which is admitted or in case of disputes, established in court of a law or by arbitration or they also include a claim for damages which is disputed by the contractor." The headings prefixed to a section or a group of sections in some modern statutes are regarded as preambles to those sections. They cannot control the plain words of the statutes but they may explain ambiguous words. The view is now well settled that the headings or titles prefixed to a section or a group of sections can be referred to in determining the meaning of doubtful expressions. It is true that the court is entitled to look at the headings in an Act of Parliament to resolve any doubt they may have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age used by it in an earlier enactment, it would be a fair presumption to make that the alteration in the language was deliberate and it was intended to convey a different meaning. It is a clause in a contract which we are construing and there any reference to a similar or dissimilar clause in another contract would be irrelevant. The Court itself while interpreting cl. 18 of the contract has observed: "It is true that the words "any claim for the payment of a sum of money" occurring in the opening part of cl. 18 are words of great amplitude, wide enough to cover even a claim for damages, but it is well settled rule of interpretation applicable alike to instruments as to statutes .......". But while dealing with another aspect of cl. 18 observed to the contrary that it should not be construed as a statute. It may, however, be pointed out that even after the change in the language of cl. 18 of the standard agreement the Union of India cannot be injuncted from withholding the amount under other bills of the contractor. But it can certainly be injuncted from recovering or appropriating it to the damages claimed. Shri D. C. Singhania appearing along with Shri Kackar substantial ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
