1963 Supreme(MP) 108

High Court Of Madhya Pradesh
Shiv Dayal and S. P. Bhargava, JJ.
MUNICIPAL COMMITTEE - Appellant
Versus
HARDA ELECTRIC SUPPLY CO.(PRIVATE) LTD. - Respondents
First Appeal 29 Of 1959
Decided On : 10/30/1963

Headnote:(1) Arbitration Act - S.3, Rule 7 and Ss. 17 and 32 - matters included in arbitration agreement - award final on those matter - award how can be attacked - no suit lies on matters included in the agreement nor It can be challenged in defence to a suit -jurisdiction of Court barred.

       A decree on the basis of an award is final and binding on the parties and persons claiming under them respectively. This is one of the statutory terms of the arbitration agreement, hence an action on the original cause is barred. Section 17 of the Arbitration Act enjoins the Court to proceed to pronounce judgment and to pass a decree according award if the conditions envisaged in that section are fulfilled, It is open to a party to challenge the award before judgment is pronounced according to the provisions of the Arbitration Act. An award is not open to challenge in any other way. No suit lies for 3 declaration that the award is invalid and ineffective. Once it is filed in Court, the award extinguishes all claims embraced in the submission and is conclusive of the matters which it decides. When the award becomes final, it puts an end to all the controversies between the parties and the points which were taken, either in attack or in defence, cannot be reagitated. A judgment under section 17 of the Arbitration Act amounts to a judgment by consent and is intended to put a stop to litigation just as much as a decision of the Court after the matter has been fought to the end. An a ward, apart from anything else operates as estoppel by judgment.

       Section 32 of the Arbitration Act provides that an award cannot be set aside, nor amended, nor modified nor in any way affected, except in the manner provided in the Act It can only be set aside by an application under the Arbitration Act.

       The first part of section 32 bars a suit, while the second part is comprehensive enough to bar a defence being raised which would be "inconsistent with the award. AIR 1956 SC 346, (1895) 1 Ch. 37, 1929 AC 482, AIR 1952 SC 378 relied on. [Paras 7 & 8

       Once the dispute is found to be within the jurisdiction of the arbitrator, the Court cannot enter into the merits of the dispute.1950 SCR 792 relied on. [Para 9

       (2) Contract Act-Ss.4 & 5 - proposal made and accepted - not repudiated before acceptance - is a binding contract - writing down of a formal document-when necessary.

       When a proposal is made and it is accepted and the proposal is not repudiated before its acceptance, there a binding contract. When there is nothing in the correspondence between the parties to show that the writing of an agreement was a condition precedent, the contract becomes concluded on the acceptance of proposal. AIR 1947 PC 97 and AIR 1947 Bom. 247 referred to. [Para 19

       (3) Municipalities Act, 1912 (C.P. & Berar) – S.44 - contract folling under - must be expressed in the mariner prescribed by the section-contract for sale of movable property need not be in writing signed by the President or Vice President and secretary - sale of electrical energy - is contract for sale of movable property.

       Where the contract on behalf of a Municipal Committee was contained in a resolution which was conveyed to the other party to the contract by a letter signed only by the Secretary and not by the President or vice President also. it would be invalid and inoperative if it falls within the purview of section 44 of the Act. When the law prescribes that the intention should be expressed in a particular manner, it can be taken into account only if it is so expressed. An intention not duty expressed is, in a Court of law, in the same position as a, intention not expressed at all. AIR 1962 SC 113, AIR 1962 SC 554, (1883) 8 AC 517 and AIR 1955 SC 233 relied on.

       But a contract for sale or purchase of moveable property is out side the purview of section 44. Electricity is moveable property and a contract for its sale or purchase is not covered by section 41. [Paras 20, 21 and 22

       (4) General Clauses Act, 1897 - S.3 (36) - Electricity Act, 1910 - S.39 – Electricity - is movable property.

       Electricity is a 'thing' and therefore property It is movable property' within the meaning of section 3 (36) of the Genera Clauses Act. [Para 22

       (5) Limitation Act-Art. 52 - 'goods' - meaning of - electricity is 'goods' - suit should be filed within three years - Sales of Goods Act -S.2.

       The word 'goods' occuring in Article 50 of the Limitation Act is not defined in it. it has been defined in section 2 of the Sales of Goods Act, 1930. The first part of this definition can be applied to the Limitation Act being in pari materia and in so far as it is not repugnant to the said Act A suit for the recovery of sum' on account of the supply of electricity is governed by Art. 52 of the Limitation Act. AIR 1938 Lah 338 and AIR 1946 All. 502 relied on [Para 24

       (6) Evidence Act - S.1I5 - estoppel-does not lie against statutory requirements.

       Where a statute imposes a duty by a positive action, estoppel cannot prevent it Estoppel is only a rule of evidence which can be invoked under special circumstances. but is not available to release a party from the obligation to obey the statute. The duty of each party is to obey the law.

       Where the statute makes a specific provision that a body corporate has to act In a particular manner, and in no other, that provision of law being mandatory and directory, has to be strictly followed AIR 1937 PC 114, (1961) 2 All ER 46, AIR 1962 SC 554 relied on. [Para 27

       (7) Electricity (Supply) Act, 1948 - Schedule VI, Cl. (1) - enhancement of rate - notice to Government necessary.

       Clause (1) of the Sixth Schedule to the Electricity (Supply) Act enables a licencee to so adjust his rates for the sale of electricity whether by enhancing or reducing them that his clear profit in any year of account shall not, as far as possible exceed the amount of reasonable return This argument is obviously misconceived in view of the third proviso to that clause. It peremptorily requires a notice in writing of not less than sixty clear days of the intention to so enhance the rates to be given to the State Government and to the Board. It is conceded that such a notice was not given. The argument that the question of notice is between the Company and the Government, so that the Municipality is not entitled to raise any objection on that account, is untenable, The statute lays down their

       requirement as a condition precedent and unless it is fulfilled rates cannot be enhanced. [Para 28

       (8) Damages - plaintiff should prove the amount - difficulty in assessing damages - no ground not to award damages - Contract Act - S.73.

       The undoubted law is that damages must be proved by the plaintiff. It must satisfy the Court both as to the fact of damage and as to its amount when it claims substantial damages. At the same time, when it is clear that some substantial loss has been incurred, the fact that the assessment is difficult because of the nature of the damage is no reason for awarding no damages or merely nominal damages.

       In view of the principles embodies in section 73 of the Contract Act, the damages Should be ascertained. (1911) 2 786, (1951) 1 KB 422, (1938) 2 All ER 788, (1892) 2 QB 524 and (1854) 9 Ex. 341 relied on. [Paras 30 and 31