Critical Analysis on Decision Making in the Bharvgi Construction's Case

A decision has a momentum of its own. In order to understand and appreciate the binding force of a decision, it is always necessary to see what were the facts of the case and what was the point which had to be decided.[1]

The facts of the Bharvagi Construction case are different from the facts of the case in State of Punjab Vs Jalour Singh& others but both the cases were decided by the Supreme Court.

The former was decided by citing the later. In the former case, a civil suit for specific performance was filed in the court of first instance/trial court (District Court). During the pendency of the suit a compromise was effected and the parties (plaintiff and defendants) settled the matter in relation to the suit land and a written compromise was entered and signed by all the parties and it was filed before the Lok Adalat and an award was passed by the Lok Adalat U/s 21 of the Legal Services Authorities Act, 1987 (hereinafter referred to as LSA).

However subsequently some of the original defendants filed a civil suit against the original plaintiff and the other remaining original defendants for a declaration that the award passed by the Lok Adalat was obtained by playing fraud and misrepresentation on the present plaintiffs in the present/subsequent suit and hence the award be declared illegal, null and void and not binding on the present plaintiffs.

The defendants in the present suit, on being served with summons in the suit, filed an application U/O VII R 11 (d) of CPC for rejection of plaint and it was contended that the remedy for the plaintiff was in filing a writ petition U/Articles 226 and 227 of the Constitution of India to challenge the award in view of the decision in State of Punjab & another Vs Jalour Singh & others.

The trial court allowed the application and rejected the plaint but the High Court, on appeal, allowed the appeal, set aside the impugned order of the trial court and restored the suit on file for disposal on merits according to law. The High Court held that since the suit is based on the allegations of misrepresentation and fraud it is capable of being tried on its merits by the civil court (of original jurisdiction/trial court).

But, on appeal by special leave, the Supreme Court, referring to its decision in State of Punjab Vs Jalour Singh & others, held that its decision is binding and reiterated that the award can be challenged only by filing a writ petition U/Articles 226 & 227 of the Constitution of India and that too on very limited grounds. It was further held that the High Court was not right in by-passing the law laid down by the Supreme Court on the ground that the suit can be filed to challenge the award, if the challenge is based on the allegations of fraud. In the result the plaint stood rejected.

Now the facts and circumstances in State of Punjab Vs Jalour Singh have to be examined. The original claim/petition was filed before the Motor Accident Claims Tribunal at Faridkot for compensation due to a fatal motor accident involving a Punjab roadways bus. Appeal was filed by the claimants before the High Court against the quantum of compensation awarded by the Tribunal. While the appeal was pending in the High Court, the appeal was referred to Lok Adalat organized by the High Court for settlement.

Unfortunately, before the Lok Adalat the matter was ‘heard’ and ‘order’ passed with condition that if parties object to the proposed ‘order’ they may move the High Court within two months for disposal of appeal on merits according to law. The matter was evidently dealt with contrary to the provisions of Legal Services Authorities Act.

True to form, the roadways filed objections against the proposed ‘order’ since it was passed without consent. Complicating the matter further, the single judge of the High Court dismissed/rejected the appeal/objection in view of his decision in Charanjit Kaur Vs Balwant Singh in which he had held that an ‘order’ passed by Lok Adalat can be challenged only by a petition U/Article 227 of the Constitution because all proceedings before the Lok Adalat are deemed to be judicial proceedings and Lok Adalat is deemed to be a civil court U/s 22(3) of Legal Services Authorities Act.

Thereafter the petition U/Article 227 filed by the roadways was rejected by another single judge of the High Court by referring to the proposed ‘order’ of the Lok Adalat and holding the petition is not maintainable U/Article 227 since nothing has been pointed out that it was maintainable U/Article 227. This order was challenged in the Supreme Court.

The factual matrix of the judicial process in State of Punjab Vs Jalour Singh is dismaying and the manner in which the entire matter was dealt with undermined the very purpose and object of the Lok Adalat and the Legal Services Authorities Act. At every stage the Lok Adalat and the High Court have acted in a manner contrary to the legal provisions/law.

However, the Supreme Court, while correctly explaining the nature of the process to be involved in a Lok Adalat and the nature of the outcome based on consent of the litigants underlying the award, unconsciously and without any factual basis and adjudicatory issue on the subject held that only by filing a petition U/Article 226 and/or Article 227 can a party challenge the award passed based on settlement and that too on limited grounds in State of Punjab Vs Jalour Singh.

There was no reasoning given why only U/Article 226 and/or Article 227 can an award be challenged and no reference to any provision of law in either in the Legal Services Authorities Act or CPC[2] was made. There was also no explanation for excluding the jurisdiction of the original jurisdiction of civil court based on pecuniary and territorial considerations as stipulated by law in S.9 of CPC.

Both the cases are, without doubt, matters of civil nature and when an award is passed under a settlement arrived at in a Lok Adalat the rights of the parties to the settlement in respect of their rights to property, civil status or claim for compensation is affected, enforced and has civil consequences. In such an eventuality any dispute arising out of such an award, when questioned, challenged or impugned on grounds of fraud, misrepresentation, inducement, coercion and there being no bar to mount such a challenge either in LSA or in any other law being in force, the proper forum by law contained in Section 9 of CPC, is the civil court, which is vested with the jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred.

One of the basic principles of law is ubi jus ibi remediem. There is an inherent right in every person to bring a suit of a civil nature and unless the suit is barred by statute one may, at one’s peril, bring a suit of one’s choice. It is no answer to a suit, however frivolous the claim, that the law confers no such right to sue.[3]

The expansive nature of S.9 of CPC is demonstrated in the use of phraseology. The language used is simple, explicit and clear and it is structured on the basic principle of a civilized jurisprudence that absence of machinery for enforcement of right renders it nugatory. The heading which is normally the key to the section brings out unequivocally that all civil suits are cognizable by civil court unless barred. The earlier part of the section opens the door widely and the latter debars entry to only those which are expressly or impliedly barred. The ambit of the section is further widened by the use of the word ‘shall’ and the expression, ‘all suits of a civil nature unless expressly or impliedly barred’. Each word and expression casts an obligation on the court to exercise jurisdiction for enforcement of right. The section would, therefore, be available in every case where the dispute has the characteristic of affecting one’s rights which are not only civil but of civil nature.[4]

It is obvious that in all types of civil disputes civil courts have inherent jurisdiction as per Section 9 of CPC unless a part of that jurisdiction is carved out from such jurisdiction, expressly or by necessary implication, by any statutory provision and conferred on any other tribunal or authority.[5]

The provisions of LSA, particularly Section 21, under which the award is passed in any matter referred to the lok adalat for settlement and settled by consent of the parties to the litigation/dispute, does not exclude the original ordinary jurisdiction of the civil court. Section 21 (2) of LSA only stipulates that the award so passed, based on consent, compromise or settlement, is final and binding on all the parties to the dispute and no appeal shall lie to any court against the award keeping in line with the aims and objectives and purposes of LSA and the mechanisms provided under it. The only exception is S.22 (e) (4) of LSA.

In other words when an award is passed U/S 21 of LSA, based on the procedure contemplated U/S 19 (5) and S.20 of the Act, what is prohibited is an appeal making the award binding and final on the parties with the objective of bringing to a close the pending litigation/dispute. But it does not mean or bar or exclude the ordinary original jurisdiction of the civil court to entertain a suit challenging the award on the grounds of fraud, misrepresentation, undue influence or coercion or mistake, a remedy available to challenge a decree of a court or a deed/document affecting the rights of the parties as provided in the provisions of the Indian Contract Act and contemplated under law.

An authority has to be understood in the context of facts based on which observations therein are made. The ratio of a decision is generally secundum subjectam materiam.[6] A decision which is not express and is not founded on reasons, nor which proceeds on consideration of the issues, cannot be deemed to be a law declared to have a binding effect U/Article 141 of the Constitution.[7] Every passing expression of a judge cannot be treated as an authority.[8] Decision on a point not necessary for the purpose of or which does not fall to be determined in that decision becomes an obiter dictum.[9]

It is now well settled that a decision of this Court based on specific facts does not operate as a precedent for future cases. Only the principles of law that emanate from a judgment of this Court, which have aided in reaching a conclusion of the problem, are binding precedents. In other words, if the Court determines a certain issue for a certain set of facts, then, that issue stands determined for any other matter on the same set of facts. [10]

A precedent, therefore, writes Salmond, is a judicial decision which contains in itself a principle. [11] Any judgment of any court is authoritative only as to that part of it which is called the ratio decidendi which is considered to have been necessary to the decision of the actual case between the litigants.[12]

Another aspect that was not considered by the court is that the aggrieved person should have access to court and justice to seek redressal for the infraction of his right in the ordinary and normal civil courts of original jurisdiction as per the provisions of the ordinary law, viz., CPC.

The Bhargavi Construction case simply cited the decision of the court in State of Punjab vs Jalour Singh without considering the correctness and applicability of the decision in Jalour Singh case.

In the normal course the court in Bhargavi Construction case should have considered the jurisdiction of the civil courts U/s 9 of CPC but did not do so. Both the decisions under analysis and review have not considered the provisions of LSA and Section 9 of CPC. Both the decisions are not authoritative interpretations of S.9 of CPC. The ratio decidendi in both cases are not on the issue of the scope and extent of the jurisdiction of the civil court U/S 9 of CPC.

In the light of the decisions of the Supreme Court in Arun Kumar Aggarwal[13] and in State of Haryana Vs Ranbir[14] the observation in both the cases under analysis and review that an award passed by a Lok Adalat u/s 21 of the LSA can be challenged only U/Art.226 and/or 227 of the Constitution is not the ratio decidendi.

The only plausible reason that can be attributed for the court to remark that an award can be challenged only U/Article 226 and/or 227 of the Constitution is because the matter was referred to Lok Adalat while it was pending before the High Court. But both the decisions cannot be considered as law on the point that an award can be challenged only in the High Court U/Article 226 and/or 227 of the Constitution since in both the cases the ratio was not based on the facts pleaded and correct appreciation and application of law.

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[1] Kandeaker Vs Deshpande, 1971 (1) SCC 438 at p.448 [2] Section 9 of CPC [3] Smt. Ganga Bai v Vijay Kumar, AIR 1974 SC 1126 [4] P.M.A. Metropolitan v Moran Mar Marthoma, AIR 1995 SC 2001 [5] Sankaranarayanan Potti (Dead) by LRs v K. Sreedevi & others, AIR 1998 SC 1808 [6] Rajendra Prasad Vs State of UP, (1979) 3 SCC 646 [7] S. Shanmugavel Nadar Vs State of Tamil Nadu, (2002) 8 SCC 361 [8] Saiyada Mossarat Vs Hindustan Steel Ltd., (1989) 1 SCC 272 [9] Per Ray, CJ in ADM Jabalpur Vs Shivkant Shukla, AIR 1976 SC 1207 [10] Fida Hussain Vs Moradabad Development Authority, AIR 2011 SC 3001 at page 3008 paragraph 20 [11] Salmond, Jurisprudence, (10th edition), p.191 [12] Allen, Law in the Making, (4th edition) p.227; State of Orissa Vs Sudhansu Sekhar, AIR 1968 SC 647 [13] AIR 2011 SC 3056 at paragraphs 21 to 30 [14] AIR 2006 SC 1796