Executive Engineer, Roads and Highway Department (RHD) vs. Md. Nurul Islam and Ors.

IN THE SUPREME COURT OF BANGLADESH (APPELLATE DIVISION)

Civil Appeal No. 457 of 2017

Decided On: 05.03.2019

Appellants: Executive Engineer, Roads and Highway Department (RHD)
Vs.
Respondent: Md. Nurul Islam and Ors.

Hon’ble Judges:Hasan Foez Siddique, Zinat Ara and Md. Nuruzzaman, JJ.

Counsels:
For Appellant/Petitioner/Plaintiff: Mahbubey Alam, Senior Advocate, Biswajit Debnath and Zahurul Islam, Advocates instructed by Zainal Abedin, Advocate-on-Record

For Respondents/Defendant: Fida Mohammad Kamal, Senior Advocate instructed by Mohammad Ali Azam, Advocate-on-Record

Subject: Property

Catch Words

Mentioned IN

Relevant Section:
arbitration ACT, 2001 - Section 7

Acts/Rules/Orders:Code of Civil Procedure (CPC), 1908 - Order VII Rule 11; Code of Civil Procedure (CPC), 1908 - Section 151

Prior History:
From the Judgment and Order dated 19-1-2016 passed by the High Court Division in First Appeal No 458 of 2014

JUDGMENT

Md. Nuruzzaman, J.

1. This Civil Appeal, by leave, is directed against the judgment and decree dated 19-1-2016 passed by the High Court Division in First Appeal No. 458 of 2014 allowing the appeal and thereby setting aside the judgment and decree dated 28-10-2014 passed by the learned Joint District Judge, 1st Court, Dhaka in Title Suit No. 79 of 2013 with a direction to the Court below to proceed with the suit expeditiously in accordance with law,
2. Facts leading to filing of this civil appeal, in short, are that:

The respondent Nos. 1-3 herein as plaintiffs instituted Title Suit No. 79 of 2013 for recovery of compensation money of Taka 10,95,61,094 against the defendants-respondents, appellant and others herein, in the Court of Joint District Judge, 1st Court, Dhaka praying for the following reliefs;

3. The plaintiffs' case, in brief, are that, the plaintiff No. 1 is the owner of M/s. MN Islam, the plaintiff Nos. 2 and 3 are the proprietors of M/s. JU Construction and M/s. Imtiaz Construction. The plaintiff No. 1 in addition to his own work also used to do the works of the plaintiff Nos. 2 and 3. They had been working under different Road Divisions of Roads and Highways Department as contractor. They had constructed 12 (twelve) roads under Munshiganj Road Division, 7 (seven) roads under Qazipur Road Division, 2 (two) roads under Narayanganj Road Division, 1 (one) road under Feni Road Division thus total 22 (twenty two) roads expanding by earth filling and other works, but the defendants did not pay the bills for the construction work in time, rather, delayed payment for about 7 to 10 years, which caused huge financial loss of the plaintiffs. The plaintiffs have been claiming compensation for the inordinate delay in payment of bills for those works. The plaintiffs earlier filed Writ Petition No. 2871 of 2010 against the defendants before the High Court Division for realisation due bills of Taka 3,79,07,346 for construction works. The High Court Division, on hearing the parties, by its judgment and order dated 13-10-2011 directed the defendants to pay outstanding bills to the plaintiffs within 3 (three) months. The defendants as respondents herein without making payment in order to drag the matter, filed Civil Petition for Leave to Appeal No. 952 of 2011 before this Division which was dismissed on 3-2-2013. The defendants have paid some bills to the plaintiffs but they caused 7 to 10 years delay in payment of those works bill though the plaintiffs had completed the construction works of the roads within the stipulated time. The plaintiffs suffered a lot for non-payment of bills for 12 (twelve) works under Munshiganj Road Division, 7 works under Gazipur Road Division, 2 (two) works under Narayanganj Road Division, 1 (one) work under Feni Road Division, that is, the plaintiffs suffered loss in total about at Taka 10,95,61,094. Under the aforesaid facts and circumstances, on 10-11-2013 the plaintiffs served a legal notice upon the defendants. The defendants received the same properly but on 26-11-2013 refused to make payment of the said compensation money. Hence, the suit.
4. The defendant Nos. 1-10 contested the suit by filing written statement denied all the material allegations made in the plaint contending, inter alia, that the suit was not maintainable in its present form and manner.
5. During pendency of the suit the defendants-respondents filed an application under Order VII, rule 11 read with section 151 of the Code of Civil Procedure (hereinafter referred to as the Code) for rejection of the plaint on the ground that the suit is barred by limitation and under Clause 25 of the Terms and Condition of the Work order of the Agreement under BD Form No. 2911/2908 (shortly, Agreement) and section 7 of the arbitration Act, 2001. It is further asserted in Application that in compliance of the Court’s order dated 13-1-2011 passed in Writ Petition No. 2871 of 2010, the defendants paid Taka 1,50,37,216 to the plaintiff No. 1 and paid Taka 21,46,090 to the plaintiff No. 2 from the Government’s fund. The payments of bills to the contractors depend upon allocation of budget of the Government construction work. There is no provision to pay interest in the work for public interest, and thus, claiming of compensation money with interest money is illegal. The plaintiffs accepted the terms and conditions of the payment of bills of the Works as laid down in the work orders that the bill will be paid as and when Government allocation would be available. The authority have paid the bills as soon as received allocation of fund from the Government, thus plaintiffs are not entitled to get compensation or interest, and, as such, the plaint is liable to be rejected.
6. The learned Joint District Judge, 1st Court, Dhaka, upon hearing the parties, allowed the application under Order VII, rule 11 read with section 151 of the Code and thereby rejected the plaint of Title Suit No. 79 of 2013 by his judgment and decree dated 28-10-2014.
7. Feeling aggrieved by the judgment and decree dated 28-10-2014 passed by the Court below, the respondent Nos. 1-3 herein as plaintiffs-appellants preferred First Appeal No. 458 of 2014 before the High Court Division.
8. In due course, a Division Bench of the High Court Division, upon hearing the parties, allowed the appeal and set aside the judgment and decree of the Court below by the impugned judgment and decree dated 19-1-2016.
9. The Executive Engineer, Roads and Highways Department (RHD), Road Division, Munshiganj feeling aggrieved by the judgment and decree dated 19-1-2016 of the High Court Division as leave petitioner preferred Civil Petition for Leave to Appeal No. 1183 of 2016 before this Division and obtained leave which gave rise to the instant appeal.
10. Mr. Mahbubey Alam, the learned Senior Counsel appearing on behalf of the appellant submits that the learned Joint District Judge, 1st Court, Dhaka considering the averment of plaint found that there is no statement about taking steps for arbitration as per Clause 25 of the Agreement and the plaintiffs admittedly did not make any effort for arbitration, thus the suit is barred under Clause 25 of the Agreement and under section 7 of the arbitration Act. He next submits that the High Court Division overlooked such non^ compliance and allowed the appeal. He further submits that the plaintiffs without referring the dispute to arbitration as per clause 25 of the Agreement filed the suit but prior to it they had filed a writ petition and as per direction of the High Court Division passed in the said writ petition received their outstanding dues. He also submits that all disputes including financial matters should be referred to the arbitration as per agreement but the High Court Division upon misconceive view held that there is no legal scope to allow the application under Order VII, rule 11 read with section 151 of the Code on the ground that the suit is barred by limitation and under section 7 of the arbitration Act. He finally submits that regarding claim of outstanding bills of 22 projects under various Road Divisions the plaintiffs prior to filing the instant suit filed Writ Petition No. 2871 of 2010 and the High Court Division made the Rule absolute and directed to pay the outstanding bills. The learned Joint District Judge, 1st Court, Dhaka, in rejecting the plaint of Title Suit No. 93 of 2013 held that as per order of the writ petition the defendant had paid the outstanding bills to the plaintiffs and there is no scope to file the suit for the same claim the High Court Division ignored such material facts and wrongly held that to decide the claims of the suit evidence is necessary which can be available in course of trial of the suit, and, as such, the impugned judgment and order passed by the High Court Division is liable to be set aside.
11. Per contra, Mr. Fida M. Kamal, the learned Senior Counsel appearing on behalf of the respondent Nos. 1-3 submits that the learned Joint District Judge, 1st Court, Dhaka failed to appreciate that Claiming compensation does not fall within the ambit of Clause 25 of the Agreement because the said clause does not disclose anything with regard to payment of damage or compensation after completion of the construction/development works and therefore making any effort for arbitration being irrelevant question. He next submits that in the circumstances, the suit is not barred by limitation and under section 7 of the arbitration Act read with Clause 25 of the Agreement and, as such, the High Court Division rightly passed the impugned judgment and order by setting aside the judgment of the Court below and directing to proceed With the suit expeditiously in accordance with law. He further submits that the subject matter of the present suit and subject of Writ Petition No. 2871 of 2010 are not similar, rather, totally distinct in nature and, as such, the High Court Division on proper consideration of law and facts of the case allowed the appeal holding clear view that there is no scope to allow the application tinder Order VII Rule 11 read with section 151 of the Code because the suit is not barred by limitation and under section 7 of the arbitration Act and hence, the High Court Division has rightly passed the impugned judgment and order and, as such the impugned judgment and order of the High Court Division should be upheld for the ends of justice. He next submits that the learned Joint District Judge, 1st Court, Dhaka upon misconception of law and facts of writ and suit opined that according to the order passed in the said writ petition the defendant paid the outstanding bills to the plaintiffs-respondents and there is no scope to file the suit for second time for the same claim and, as such, the High Court Division rightly allowed the appeal by setting aside the judgment and decree of the trail Court. He also Submits that the High Court Division did riot overlook the relevant Clause 25 of the Agreement, rather, it has rightly interpreted the said clause and thus, the High Court Division rightly held that evidence is necessary to decide the truth of the matter which can be available only in course of trial and so, the High Court Division rightly allowed the appeal by setting aside the judgment and decree of the trail Court. He also in support of his submissions cited the decisions reported 31 DLR (AD) 139, 63 DLR 504, 43 DLR 286 and 53 DLR 200, the High Court Division Considering the facts and circumstances of the instant case and the precedents of the Apex Court as cited by the respondents rightly held that there is no legal scope to allow the application under Order VII, rule 11 read with section 151 of the Code for rejection of the plaint on the ground that the suit is barred by limitation and under section 7 of the arbitration Act. It is unfortunate that the learned Joint District Judge, 1st Court Dhaka did not at all consider all these aspects of the case in rejecting the plaint which cause a great miscarriage of justice, and therefore, the judgment and decree of the Court below is totally unacceptable and the same suffers from legal infirmity and error of law. He finally submits that the defendants filed a written statement on 16-4-2014 without applying to the Court to refer the matter to arbitration and after filling the written statement, filed an application under Order VII, rule 11 read with section 151 of the Code for rejection of the paint on 17-9-2014 is clear violation and contrary to the provision of section 10 of the arbitration Act, 2001, thus, the application for rejection of the plaint not only superfluous but surely it is flagrant violation of mandatory provision of section 10 of the arbitration Act.
12. We have heard the learned Senior Counsels of both the sides. Perused the impugned judgment and decree of the High Court Division and other connected materials on record.
13. The leave was granted to consider the propriety of the judgment of the High Court Division as to whether the plaintiffs waived the compensation in their earlier writ petition in which they Claimed only the outstanding dues against the construction works.
14. To appreciate the leave granting order we have perused the Statement and prayer of the Writ Petition No. 2871 of 2010 along with judgment and order.
15. On a careful scrutiny of the Rule Nisi order it is clearly divulged that it Was issued only to direct the respondents to show cause as to why they should not be directed to make the payment of bills to the petitioner immediately for the Construction/development works done by them under different Work orders.
16. Per contra, now they are claiming compensation of Taka 10,95,61,094 against the appellants instituting a title suit being Suit No. 79 of 2013, the prayer of the suit quoted supra in this judgment for ready reference and convenience of the discussion.
17. On perusal of the averment of the plaint and prayer of the instant title suit it is clearly revealed that the plaintiffs are now claiming compensation for causing inordinate delay in paying their payment of bills for construction works under different work orders as stated in the plaint. The appellant herein as defendant contested the suit by filing written statement denying the material allegations as claimed by the plaintiffs. However, during pendency of the suit after examination-in-Chief and cross-examination of PW No. 1 filed an application under Order VII, rule 11 of the Code. In the application for rejection of the plaint the defendants have stated that the instant suit is barred by section 1 of the arbitration Act, 2001 and law of limitation.
18. To appreciate the issue of law the learned Joint District Judge, 1st Court, Dhaka neither Specifically discussed the law as contemplated in the sections 7 and 10 of the arbitration Act, 2001 as to how the suit is barred as opined in the judgment and decree rejecting the plaint nor clearly opined as to how clause 25 of the Agreement stand as bar to file a suit of compensation for damage as per averment of the plaint
19. Now the legal question before this Division is whether the High Court Division in reversing the judgment of the trial Court committed any error of law.
20. On a careful scrutiny of the judgment of the High Court Division it is clearly revealed that it has extensively discussed the legal issue involved in the present case quoting the provisions of section 10 of the arbitration Act.
21. It is deafly divulged that the High Court Division in its judgment noticed that the defendant had filed the application for rejection of plaint after filing the written statement. It is also noticed in the impugned judgment that according to the provision of section 10 of the arbitration Act, 2001 the defendants Without filling application for rejection of the plaint filed the written statement in the suit. It was further opined by the High Court Division that the trial Court rejected the plaint for not to referring the matter to the arbitration in view of the provision of clause 25 of the Agreement between the parties
22. In our considered view the provision of clause 25 of the Agreement that is the arbitration clause of BD Form No. 2911/2908 would come into play, in other words, may be invoked in the instant suit if the claiming of compensation of damage falls within the purview of dispute as per stipulation of agreement. Therefore, it is pertinent to quote the clause 25 of the   Which runs as follows:

23. In the judgment the learned Joint District Judge has not specifically decided as to whether the claiming of compensation as damage falls within dispute as per terms of agreement rather, he opined ambiguously since there is a clause for arbitration in the agreement for resolving dispute, hence, the suit is barred. He, therefore, rejected the plaint as barred by law. Thus, it is evident that the judgment and order of the Joint District Judge suffers from legal infirmity as well as violating the settle principles enunciated by this Division
24. In Abut Khair ’s case reported 53 DLR (AD) 62 this Division held that–

“The Court while deciding application about rejection of plaint is not permitted in law to travel beyond the averments made in the plaint.”

25. In determining Whether a plaint is to be rejected, the court will take only the plaint and documents filed therewith into consideration and not what has been urged by the defendant in a petition or in the written statement.
26. The legislature has enacted the provision of bar in the arbitration Act, 2001 with a view to prevent the parties to an arbitration agreement to start any proceeding before any Court without exhausting the provision of arbitration. The legislature, therefore, in sub section (1) Of the section 10 has laid down the provision which has clearly and positively provided that any objection regarding the proceeding in the civil Court that must be taken in the earliest opportunity before filling the written statement in the suit. However, from the facts of the instant case and from the pleadings of the plaint it is crystal clear that there is no legal impediment or any cogent reason to hold that clause 23 of the Agreement stands as a bar to file the instant suit for compensation.
27. We have, therefore, no hesitation to opine that when a party in a pending proceeding willingly participate by filling a written statement instead of invoking provision of the arbitration clause raising legal issue in a suit surrendering his jurisdiction of arbitration and thereby the provision of section 7 of the arbitration Act become nugatory regarding the said proceeding. On a careful reading of the stipulations of clause 25 of the   we are of the view that it can’t be treated as bar to sought relief in a suit claiming compensation. The terms and subjects of the said clause of arbitration as laid down specifically which are not the subject of the suit nor on a plain reading of the averment of the suit it appears that its touch the subject of clause 25 of the Agreement.
28. It is, therefore, our considered view, civil suit is, therefore, never ipso facto intended to be barred in view of the existence of an arbitration clause in the agreement. The defendants take the plea of bar only for dragging the proceeding of the suit which is deprecated by this Division,
29. Having regard to the facts, circumstances and laws have been discussed hereinabove this Division find no illegality and infirmity in the judgment of the High Court Division.
30. Therefore, the appeal having no merit,

Accordingly, the appeal is dismissed with above observations, however, without any order as to cost.

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