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TMI Blog1983 (8) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 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 first class the appellant firm made an offer to supply 1016 cubic metres at a flat rate of Rs. 669 per cubic metre. The DGS&D accepted the tender on 24th of December, 1973. Pursuant to the acceptance of the tender a standard form of contract was drawn up containing various clauses. Two important clauses of that standard from of contract with which we are mainly concerned are cls; 18 and 24, which read: "18. Recovery of Sums Due: Whenever any claim for the payment of a sum of money arises out of or under the contract against the contractor, the purchaser shall be entitled to recover such sum by appropriating in whole or in part, the security, if any, deposited by the contractor, and for the purpose aforesaid, shall be entitled to sell and/or realise securities forming the whole or part of any such security ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 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 respondents from appropriating, withholding or recovering the amount claimed from its other bills in any manner whatsoever. As there was cleavage of opinion between the Judges of the same High Court on the question whether such an injunction as prayed for could be issued under s. 41 of the Arbitration Act, the learned Single Judge referred the matter to a larger Bench. The learned Single Judge's own view was that such an injunction could be issued under s. 41. The Division Bench on reference, however, held that the Court could grant an injunction restraining the respondent from appropriating or recovering the amount of damages claimed from appellant's other pending bills, but No order restraining the Union of India from withholding payments of the other pending bills could be issued under s. 41 of the Arbitrati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould 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 any direction to the Union of India to pay the amounts due to the respondent under other contracts. It is not only in form but also in substance a negative injunction. It has no positive content. What it does is merely to injunct the appellant from recovering suo motu the damages claimed by it from out of the pending bills of the respondent. It does not direct that the appellant shall pay such amounts to the respondent. The appellant Union of India can still refuse to pay such amounts if it thinks it has a valid defence and if the appellant does so, the only remedy to the respondent would be to take measures in an appropriate forum for recovery of such amounts, where it would be decided whether the appellant is liable to pay such amounts to the respondent or not. No breach of the order of interim injunction as such wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder 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 the appellant: "41. Procedure and powers of Court:- Subject to the provisions of this Act and of rules made thereunder- (a) the provisions of the Code of Civil Procedure, 1908 shall apply to all proceedings before the Court, and to all appeals, under this Act, and (b) the Court shall have, for the purpose of, and in relation to, arbitration proceeding, the same power of making orders in respect of any of the matters set out in the Second Schedule as it has for the purpose of, and in relation to, any proceedings before the Court:- provided that nothing in clause (b) shall be taken to prejudice any power which may be vested in an arbitrator or umpire for making orders with respect to any of such matters." In view of cl. (b) of s. 41 the Court has been given power of passing orders in respect of any of the matters set ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the purpose of and in relation to arbitration proceedings. This apart, the amount due under the pending bills to the appellant was not the subject matter of the present proceedings and, therefore, the injunction order restraining the respondents from withholding the amount due to the appellant under the pending bills in respect of other contracts could not be said to be for the purpose of and in relation lo the present arbitration proceedings. In this view of the matter it was not open to the Court to pass the interim injunction restraining the respondents from withholding the amount due to the appellant under pending bills in respect of other contracts. The learned counsel Shri Kacker, however, strongly relied on the following observations of the Court in Union of India v. Raman Iron Foundry (supra): "But here the order of inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Court would be loath and reluctant to pass such an ineffective injunction order. The court never passes an order for the fun of passing it. It is passed only for the purpose of being carried out. Once this Court came to the conclusion that the Court has power 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 and further that 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 and, therefore, the Court obviously could not make any interim order which though ostensibly in form an order of interim injunction, in substance amount to a direction to the appellant to pay the amounts due to the respondent under other c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or 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 damages which is disputed by the contractor. It is only when a claim for damages is adjudicated upon by a civil court or an arbitrator and the breach of the contract is established and the amount of damages ascertained and decreed that a debt due and payable comes into existence; till then it is nothing more than a mere right to sue for damages, and it does not fall within the words of cl. 18. Moreover, cl. 18 merely provides a mode of recovery and it can have no application where a claim, even though it be for a sum due and payable, is disputed by the contractor and has to be established in a court of law or by arbitration. Clause 18 applies only where a claim is either admitted, or in case of dispute, substantiated by resort to the judicial process. Therefore, when a purchaser has a claim for damages which is disputed by the contractor, the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 as to ambiguous words. The law is clear that those headings cannot be used to give a different effect to clear words in the section where there cannot be any doubt as to the ordinary meaning of the words. The golden rule is that when the words of a statute are clear, plain and unambiguous, that is, they are reasonably susceptible to only one meaning, the courts are bound to give effect to that meaning irrespective of the consequences. The duty of a Judge is to expound and not to legislate, is a fundamental rule. If we apply the same principle to the interpretation of cl. 18 of the standard form of contract, it would be clear that the clause unequivocally contemplates a claim for the payment and it is open to the Union of India to appropriate any amount due to the contractor under other pending bills. It does not contemplate the amount due and, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 substantially reiterated the same argument in his written note. We are clearly of the view that an injunction order restraining respondents from withholding the amount due under other pending bills to the contractor virtually amounts to a direction to pay the amount to the contractor-appellant. Such an order was clearly beyond the purview of cl. (b) of s. 41 of the Arbitration Act. The Union of India has no objection to the grant of an injunction restraining it from recovering or appropriating the amount Lying with it in respect of other claims of the contractor towards its claim for damages. But certainly cl. 18 of the standard contract confers ample power upon the Union of India to withhold the amount and no injunction order could be passed restraining the Union of India from withholding the amount. We find no error in the impugned order passed by the All ..... X X X X Extracts X X X X X X X X Extracts X X X X
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