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2009 Supreme(MP) 331
(SUPREME COURT)
L.S. Panta and B. Sudershan Reddy, JJ.
Madhya Pradesh Housing Board v. Progressive Writers and
Publishers
Civil Appeal No. 1746 of 2009 : against the order of
M.P. High Court, Jabalpur, passed in
Miscellaneous Appeal No.705 of 2002; Decided on 20.3.2009.
L.N. Rao with Ms. Vibha Datta Makhija for appellant;
C.A. Sundaram with Sushil Kumar Jain Ms. Archana Tiwari for respondents.
Headnote:(1) Arbitration Act, 1940 -- S.30 n finding of arbitrator that time is not essence of agreement n based on documentary evidence -- cannot be interfered with.
The arbitrator found that the Board had itself waived the time clause and was willing to accept money from the depositor even after 31.10.1980 as is evident from the negotiations which continued between the parties till the year 1985-86. The arbitrator relied on documentary evidence made available by the parties in arriving at the conclusion that in the present case time is not the essence of the agreement.
It is fairly well settled that time is not normally an essence of any agreement qua immovable properties and even if there was an express covenant of time being an essence, the overall agreement have to be looked at to determine whether time was the essence. Whether time is the essence of the contract would, therefore, be a question of fact to be determined in each case and merely expression of the stipulated time would not make time an essence of the contract.
In the present case, on the material available and upon appreciating the same the arbitrator arrived at the finding that time was not of the essence and the agreement subsisted even after 31.10.1980. The finding cannot be said to be perverse to give rise to legal misconduct deserving intervention under section 30 of the Act. (2001)6 SCC 347, (1999)9 SCC 449, AIR 1923 PC 66, AIR 1967 SC 1032, (1975)1 SCC 289, (1989)2 SCC 38, (1994)6 SCC 485, (1999)5 SCC 651, (2003)7 SCC 396 and (2004)8 SCC 689 relied on. [Paras 26, 27 & 31
(2) Evidence Act, 1872 -- Ss.101-103 -- Civil PC, 1908 -- O.6 Rr.1 and 2 -- time is essence of contract -- has to plead and prove by party who alleges the same. [Para 38
(3) Arbitration Act, 1940 -- S.23 -- Civil PC, 1908 -- O.14 R.5 -arbitrator has power to frame additional issues in the case -- it has all the powers of the Court.
We cannot accept the contention of the Board that no additional issue could have been framed by the arbitrator on his own for its decision. In a reference made under section 23, the arbitrators power to determine the lis between the parties is much wider. The arbitrator has all the powers which the Court itself would have in deciding the issues in the suit. The Courts power to frame an additional issue if it is just and necessary for deciding the matter in dispute cannot be denied and so also of the arbitrator where disputes between the parties pending adjudication on suits have been referred to the arbitrator for determination. (1993) 1 SCC 114 relied on. [Para 41
(4) Arbitration Act, 1940 -- S.30 -- award of arbitrator should be read as a whole reasonably -- it is because to find out implication and meaning thereof.
An award of an arbitrator should be read reasonably as a whole to find out the implication and the meaning thereof .... Even in a case where the arbitrator has to state reasons, the sufficiency of the reasons depends upon the facts and the circumstances of the case. The Court, however, does not sit in appeal over the award and review the reasons. The Court can set aside the award only if it is apparent from the award that there is no evidence to support the conclusion or if the award is based upon any legal proposition which is erroneous. (1989) 1 SCC 532 relied on. [Para 45
(5) Arbitration Act, 1940 -- S.30 -- award of arbitrator can be interfered with within four corners of procedure provided in the Act -power of appellate Court cannot be exercised by the Court. (1989)2 SCC 347 and (1994)6 SCC 485 relied on. [Paras 46 & 47
¼1½ ek/;LFke~ vf/kfu;e] 1940 && /kkjk 30 && e/;LFk dk fu"d"kZ fd le; djkj dk eeZ ugha gS && nLrkosth lk{; ij vk/kkfjr && gLr{ksi ugha fd;k tk ldrkA
e/;LFk dk fu"d"kZ Fkk fd cksMZ us Lo;a le; ds [kaM dk vf/kR;tu fd;k Fkk rFkk 31-10-1980 ds i‘pkr~ Hkh fu{ksid ls /ku Lohdkj djus dk bPNqd Fkk tSlk fd mu okrkZvksa ls Li"V gS tks i{kdkjksa ds e/; o"kZ 1985&86 rd tkjh jghaA e/;LFk us bl fu"d"kZ ij igq¡pus esa fd le; djkj dk eeZ ugha gS i{kdkjksa }kjk miyC/k djk, x, nLrkosth lk{; dk vkJ; fy;kA
;g fu"d"kZ :i ls lqLFkkfir gS fd lkekU;r% le; fdlh djkj dk LFkkoj laifRr ds :i esa eeZ ugha gS rFkk Hkys&gh le; ds eeZ gksus dh vfHkR;Dr izlafonk gks] ;g vo/kkfjr djus ds fy, fd D;k le; lafonk dk eeZ gS ;g izR;sd ekeys esa fofuf‘pr fd, tkus ;ksX; rF; dk iz‘u gksxk rFkk vuqcaf/kr le; dh vfHkO;fDr ek= le; dks lafonk dk eeZ ugha cuk,xhA
orZeku ekeys esa] miyC/k lkexzh ls rFkk mldk foospu djus ij e/;LFk bl fu"d"kZ ij igq¡pk fd le; eeZ ugha gS rFkk djkj 31-10-1980 ds i‘pkr~ Hkh tkjh jgkA fu"d"kZ dks vf/kfu;e dh /kkjk 30 ds v/khu fof/kd e/;{ksi ds ;ksX; fof/kd vopkj mn~Hkwr djus okyk foo;ZLr fu"d"kZ ugha dgk tk ldrkA ¼2001½6 ,l lh lh 347] ¼1999½9 ,l lh lh 449] , vkb vkj 1923 ih lh 66] , vkb vkj 1967 ,l lh 1032] ¼1975½1 ,l lh lh 289] ¼1989½2 ,l lh lh 38] ¼1994½6 ,l lh lh 485] ¼1999½5 ,l lh lh 651] ¼2003½7 ,l lh lh 396 rFkk ¼2004½8 ,l lh lh 689 voyafcrA
¼iSjk 26] 27 ,oa 31
¼2½ lk{; vf/kfu;e] 1872 && /kkjk 102&103 && flfoy Áfdz;k lafgrk] 1908 && vk-6 fu-1 rFkk 2 && le; lafonk dk eeZ gS && vfHkdFku djus okys i{kdkj }kjk lkfcr rFkk vfHkopfur fd;k tkuk gksxkA ¼iSjk 38
¼3½ ek/;LFke~ vf/kfu;e] 1940 && /kkjk 23 && flfoy izfdz;k lafgrk] 1908 && vk-14 fu-5 && e/;LFk dks ekeys esa vfrfjDr fook|d fojfpr djus dh ‘kfDr gS && og U;k;ky; dh lHkh ‘kfDr;k¡ j[krk gSA
ge cksMZ dk ;g ladFku Lohdkj ugha dj ldrs fd e/;LFk }kjk blds fofu‘p; ds fy, Lor% gh vfrfjDr fook|d fojfpr ugha fd;k tk ldrk FkkA /kkjk 23 ds v/khu fd, x, funsZ‘k esa] i{kdkjksa es e/; okn dk fofu‘p; djus ds fy, e/;LFk dh ‘kfDr vf/kd O;kid gSA e/;LFk oks lHkh ‘kfDr;k¡ j[krk gS tks Lo;a U;k;ky; okn esa fook|dksa dk fofu‘p; djus esa j[krk gSA U;k;ky; dh rFkk tgk¡ oknksa ij U;k;fu.kZ;u dk i{kdkjksa ds e/; fookn vo/kkj.k ds fy, e/;LFk dks fufnZ"V fd, x, gSa ogk¡ e/;LFk dh Hkh vfrfjDr fook|d fojfpr djus dh ‘kfDr dk izR;k[;ku ugha fd;k tk ldrk ;fn ;g fookfnr ekeys dk fofu‘p; djus ds fy, U;k;laxr rFkk vko‘;d gksA ¼1993½1 ,l lh lh 114 voyafcrA ¼iSjk 41
¼4½ ek/;LFke~ vf/kfu;e] 1940 && /kkjk 30 && e/;LFk dk laiw.kZ vf/kfu.kZ; ;qfDr;qDr :i ls i<+k tkuk pkfg, && ;g foo{kk rFkk mldk vFkZ [kkstus ds fy, gSA
e/;LFk dk laiw.kZ vf/kfu.kZ; foo{kk rFkk mldk vFkZ [kkstus ds fy, ;qfDr;qDr :i ls i<+k tkuk pkfg, && ml ekeys esa Hkh tgk¡ e/;LFk dks dkj.k crkus gksrs gSa] dkj.kksa dh i;kZIrrk ekeys ds rF;ksa rFkk ifjfLFkfr;ksa ij fuHkZj djrh gSA rFkkfi] U;k;ky; vihy esa vf/kfu.kZ; ls vU;Fkk rFkk dkj.kksa dk iqufoZyksdu ugha djrk gSA U;k;ky; vf/kfu.kZ; ek= rHkh vikLr dj ldrk gS tc vf/kfu.kZ; ls ;g Li"V gks fd fu"d"kZ ds leFkZu esa lk{; ugha gS ;k ;fn vf/kfu.kZ; fdlh fof/k izfriknuk ij vk/kkfjr gks tks xyr gSA ¼1998½1 ,l lh lh 532 voyafcrA ¼iSjk 45
¼5½ ek/;LFke~ vf/kfu;e] 1940 && /kkjk 30 && e/;LFk ds vf/kfu.kZ; esa vf/kfu;e esa micaf/kr Áfdz;k ds pkj dksuksa ds Hkhrj gLr{ksi fd;k tk ldrk gS && vihy U;k;ky; dh ‘kfDr dk U;k;ky; }kjk iz;ksx ugha fd;k tk ldrkA ¼1989½2 ,l lh lh 347 rFkk ¼1994½6 ,l lh lh 485 voyafcrA ¼iSjk 46 ,oa 47
Reddy, J. -- 1. On 18.2.1975 the M.P. Housing Board (for short "the Board") and Progressive Writers and Publishers, New Delhi (hereinafter called as "the depositor") entered into an agreement whereunder the Board agreed to construct a building called "Hitavada Press Complex" on the land admeasuring 33,932 sq.ft. situated at T.T. Nagar, Bhopal.
2. The terms of the agreement, inter alia, provided that the Board would execute the construction of Hitavada Press Complex and charge 5% supervision charges of the actual expenditure on the project. The cost of construction was to be borne by the depositor. The depositor was required to place funds including supervision charges at the disposal of the Board in advance as agreed upon. The work was expected to be completed within 18-24 months. The possession of the land was handed over to the Board for the purposes of construction of building. In case of overrun of expenditure and funds, the revised estimates were to be submitted and the administrative approval of the depositor was required to be obtained. In the event of any dispute, the matter was required to be referred to the Secretary, Government of Madhya Pradesh for decision.
3. The cost of construction of the building was estimated at Rs.28 lacs out of which the depositor was required to deposit an amount of Rs.14 lacs at the outset and the balance thereafter. The initial amount of Rs.14 lacs was accordingly deposited by the depositor with the Board. However, the depositor failed to deposit the balance amount. In the meanwhile, the Board had paid the amounts from its own funds in order to complete the construction of the building.
4. The depositor expressed its desire to retain only that portion of the building where the printing press was located including the mezzanine floor along with two adjacent halls on the first floor and accordingly made a representation to the Board. The Board in its turn agreed to the suggestion and thereafter the parties entered into the second building agreement dated 4.5.1977.
5. Under the agreement dated 4.5.1977 it was expressly agreed between the parties that the depositor would transfer the total area of the land and building which was 33,932 sq.ft. and the Board would in turn retransfer 7,437 sq.ft. of land along with the hall having the press portion constructed thereon for which the depositor would pay Rs.3.50 lacs to the Board in 15 equal yearly instalments. The Board agreed to grant a loan of Rs.3.50 lacs repayable with interest against an equitable mortgage of the press building and the portion of the land thereon. Out of the said amount, Rs,50,000/- was to be paid by the Board to Punjab and Sind Bank as per the instructions of the depositor.
6. It was also agreed between the parties that the Board in order to acquire full ownership of the entire complex shall return the amount of Rs.14 lacs and for that purpose the original documents pledged by the depositor· with Punjab and Sind Bak were to be redeemed by the Board upon payment of Rs.13 .50 lacs to the Bank. Upon fulfilment of the said conditions, the Board was entitled to complete the construction of the building in its possession and enjoy the same as the full owner.
7. The Board in terms of the second building agreement had paid the agreed sum to the Bank and obtained the original title deeds of the part of the plot admeasuring 19,319 sq.ft. only. However, the title deeds of the residual area were not handed over to the Board. The construction was completed by the Board.
8. For whatever be the reasons, the parties have entered into a third building agreement on 31.5.1980. The recitals in the agreement disclose that certain complications and disputes arose between the parties after execution of the earlier two agreements resulting in litigation between the parties which were pending as on the date of the third building agreement.
9. In the third building agreement it was inter alia stated that "on the request of the deposi
