People's Republic of Bangladesh vs. Respondent: Hazildris Mia

Jun 21, 2022

IN THE SUPREME COURT OF BANGLADESH (HIGH COURT DIVISION)

Memorandum of Appeal from Original Decree No. 82 of 1993

Decided On: 12.06.2013

Appellants: People’s Republic of Bangladesh
Vs.
Respondent: Hazildris Mia

**Hon’ble Judges:**Md. Nuruzzaman and Farid Ahmed, JJ.

Counsels:
For Appellant/Petitioner/Plaintiff: Promila Biswas, Deputy Attorney General

For Respondents/Defendant: Abul Kalam Chowdhury, Advocate

**Acts/Rules/Orders:**Stamp Act, 1899 - Section 29(g)

JUDGMENT

Md. Nuruzzaman, J.

  1. This appeal, at the instance of the Government is directed against the judgment and decree dated 25.9.1989 passed by the Subordinate Judge, 2nd Court, Chittagong in other Suit No. 300 of 1984 making Rule of the Court the Award dated 01.2.1983 passed by the Arbitrator, in reference of agreement dated 23rd February 1973, between Hazi Idris Mia, Proprietor of M/S. Hazi Idris and sons Versus People’s Republic of Bangladesh, represented by the Secretary, Ministry of Commerce.

  2. The material facts relevant for disposal of the appeal as have been derived from the application for arbitration, in short, are that the plaintiff was appointed a stockist for stevedoring, lighterage, receiving, stocking and despatching of coal/coke at the Chittagong coal dump under an agreement dated 23.2.1973 for a period of two years with effect from 23.2.1973. It was stipulated in the agreement that the contract is renewable on satisfactory performance of duties by the stockist i.e., the plaintiff. The defendant on appreciating the satisfactory performance of the plaintiff renewed the contract for another period of one year by a letter dated 8.2.1975 with effect from 23.2.1973. The plaintiff is a bona fide businessman doing contract business for a long time with honesty and for that he is enjoying high reputation in the business circle. The plaintiff as a coal/coke stockist has discharged his duties as per terms of contract most honestly, efficiently and to the full satisfaction of all concerned including the Coal Controller, Mr. M.N. Ullah. Hence, the defendant by his letter No. CG/I./DMP/Comt/HIS/73/7893 dated 8.2.1975 was pleased to renew the contract for another period of one year, but all on a sudden only three weeks after renewal of contract Mr. M.N. Ullah, the Coal Controller of the defendant without giving any notice or any opportunity to show cause or personal hearing most illegally and arbitrarily terminated the said contract with effect from 17.3.1975 and took over the coal dump with fall stock of coal and coke on the same date. The plaintiff protested handing over the charge of coal dump to Asghar Ali, Senior Coal Inspector, Chittagong, under a written letter before handing over and taking over charge list dated 17.3.1975. Thereafter the plaintiff at the time of handing over the dump demanded physical measurement of the stock of coal/coke at the dump site at Chittagong Port Land at Patenga. But the representative of the defendant willfully avoided to take such physical measurement of coal/coke at the dump site. It was assured by the representative of the defendant that the measurement would be taken afterwards. The plaintiff to keep watch and account of the coal dump wanted to keep his representative at the dump until finalisation of the physical measurement of the coal/coke. But the officers and staffs of the defendants most illegally refused to allow any staff of the plaintiff to stay at the dump site. All officers and staffs of the plaintiff had to move out of the coal dump site on 17.3.1975 under intimidation and threat leaving the entire coal/coke shed and other establishments at the disposal of Senior Coal Inspector. Since that date the defendant started to sell and give delivery of coal and coke without any measurement in presence of any representative of the plaintiff. Mr. Shah Asghar Ali, in obedience to the order of the Coal Controller dated 15.3.1975 did the said activities. Therefore, responsibilities of the plaintiff as coal/coke stockist had been ceased with effect from 17.3.1975 and started to sell and deliver the coal and coke to many parties at their ability without reference to that and without taking any physical measurement of the stock in presence of the plaintiff. The plaintiff requested the officers of the defendant to comply with the terms of the arbitration as provided in the agreement and refer the matter to the Arbitrator as per agreement of contract. The plaintiff also requested the defendants in many times for referring the outstanding disputes and differences to the arbitrator as per provision of arbitration arising out of the agreement dated 23.2.1973 which is renewed again by the defendant’s letter dated 8/10th February, 1975; but the defendant did not comply with the request of the plaintiff. Hence, the plaintiff through his Advocate issued a Legal Notice dated 8th December, 1975 under registered post with A/D for referring the aforesaid disputes and differences to an Arbitrator to be nominated by the defendant and the defendant had received the said notice of the plaintiffs Advocate on 11.12.1975. But in spite of all efforts the defendants had not referred the dispute and differences mentioned above to the Arbitrator as per terms of contract. According to the terms of agreement and existing law of the country the defendants were bound and required to appoint an arbitrator within the stipulated period. Since, the defendants did not appoint any Arbitrator the plaintiff has been compelled and obliged to file this application in Court for appointment of an Arbitrator. Against the aforesaid application for appointment of Arbitrator the Government filed written-objection denying all the material allegations made in the application stating, inter alia, that the application is mala fide, illegal, false, frivolous and has been made on false claims and allegations. There was no genuine dispute or claim in the application and as such, the same is not tenable in facts and law. Furthermore it is asserted in the written objection that the application is a counter attempt against the huge legitimate claims of the Government amounting to Tk. 1,27,15,251/60 payable by the applicant. The applicant had no other alternative but to pay the heavy dues and legitimate claims of the Government amounting to Tk. 96, 74, 307.60 on account of shortage of steam coal, Taka 22,99,944/- on account of shortage of hard coke and Taka 7,41,000/- on account of demurrage. The applicant’s application, is thus, liable to be dismissed with heavy cost against the Government.

3. Thereafter upon hearing of both the parties the Subordinate Judge (now joint District Judge), 2nd Court, Chittagong in Other Suit No. 9 of 1976 vide its order dated 01.07.1981 allowed the application and appointed Mr. Justice D.C. Bhattacharjee as an Arbitrator. Mr. Justice D.C. Bhattacharjee, the learned Arbitrator after serving the notices upon the parties started the arbitration Reference.

  1. After conclusion of hearing the learned Arbitrator passed the Award dated 01.2.1983. The Awardee on 28/2/1983 on an application prayed for a direction to submit the Award dated 01-2-1983 in the Court However, before passing any order on the application for submitting the Award in Court the Arbitrator through his man, namely, Mr. SerajUddin Ahmad Mozumder submitted a copy of the Award in Court. The learned Subordinate Judge, after hearing both the parties by his order dated 25/09/1989 allowed the Other Suit No. 9 of 1984 and thereby made the Award Rule of the Court.

  2. Being aggrieved by the Judgment and decree dated 25th September, 1989 (decree signed on 2/10/1989) the defendant Government as appellant preferred the instant First Appeal before this Division.

  3. Mrs. Promila Biswas, the learned Deputy Attorney General submitted that she has stated the grounds in the Memo of Appeal and for convenience of the Court she has placed the grounds.

  4. It has been contended that admittedly all the coal dumps of the country as a matter of state policy were taken over and assessed by the Government under order of the highest executive body, i.e. the Hon’ble President and as such, the learned Arbitrator committed a legal misconduct in holding that the deed of agreement was not determined lawfully by the notice dated 15.3.1975 and the learned Subordinate Judge also failed to appreciate the same and as such, erred in law in making the said Award Rule of the Court.

  5. She has further submitted that in view of the admitted position that the contract was terminated in pursuance of the Government policy not a particular or only plaintiff’s contract but as a matter of state policy there was a President Order to take over all coal dumps in the country and not as a punitive measure against the contractor, thus, the learned Arbitrator committed a legal misconduct in holding that the termination of contracts and taking over of all coal dumps were unlawful and as such, the learned Subordinate Judge ought to have refused to make the Award Rule of the Court.

  6. She has further added that admittedly the stockist is to construct stuck of coal neatly and regularly so that it can easily be measured. The stacking rule as provided in clause 10 of the agreement Exts. 1 and 1/A requires that the coal/coke is to stacked in open, dry, oil and on consolidated land which would be reasonably levelled and free from negotiation but the land on which lower dump was situated and exposed to high tide, tidal bore and flood water of river Karnafuli and after the land goes under water and get soft and muddy as a result that part of the coal are submerged under the water and became covered with mud. The learned Arbitrator committed misconduct in absolving the stockist from the responsibility of the loss resulted from the aforesaid breach of rules of the stacking and as such, the learned Subordinate Judge ought not to have made the Award Rule of the Court as the learned Arbitrator committed legal misconduct in not giving finding that the contractor has violated the Rules of stacking as provided in the clause 10 of the agreement which are exhibit 1 and 1/A.

  7. She has further added that the Arbitrator having found no evidence in respect of the 1st measurement, but the second measurement having been proved by the verification report vide Ext. D(6), which shows that shortage of stack coal to be 15, 145 tons 17 cwt and that of hard coke to be 130 tons 6 cwt and 1 1/2 qr., thus the learned Arbitrator committed misconduct himself in holding that there having been no proper stacking and trimming of the coal stock in the lower dump, the measurement as recorded in the verification report Ext. D(6), cannot be accepted as the basis for fixing the liability for shortage upon the respondent and as such, the learned Subordinate Judge ought not to have made this Award Rule of the Court.

  8. She has further submitted that the Arbitrator having found that it was the responsibility of the stockist to construct stacks of coal regularly and neatly so that it can be easily measured and the stockist cannot be permitted to question on the measurement of the stock taken in pressure of a Magistrate on the ground of improper stacking and the learned Arbitrator committed misconduct in absolving the respondent from the liability of shortage on the ground of improper stacking and trimming and as such, the learned Subordinate Judge ought to have refused to make the Award as Rule of the Court.

  9. She has also submitted that admittedly the stockist is bound by the contractual terms and special stipulations to pay demurrage and there being no dispute that the stockist failed to discharge the ship in scheduled time. Thus, the learned Arbitrator misconduct himself in holding that the claim of the Government for demurrage is not sustainable against the stockist and as such, the learned Subordinate Judge erred in law in making the Award Rule of the Court.

  10. She has further pointed out that in view of the fact that due to violation of the stacking rules by the stockist there was a shortage of stack coal to the extent of 15.145 tons 17 cwt, and the hard coke at 130 tons 6 cwt. and 1 1/2 qr. and further the Government had to pay demurrage for the failure of the stocking the discharge the ship as per schedule, hence, the learned Subordinate Judge ought to have held that the learned Arbitrator committed misconduct in holding that the stockist is entitled to get payment of Tk. 4,43,276.22 on account of bill money and get refund of Tk. 4,61,000/- of security deposit from the Government and as such, ought to have refused to make the award Rule of the Court.

  11. She has further added that the award in question has been prepared in white paper without giving proper stamp from which it is apparent from the face of the record that the learned Arbitrator as well as the Court below committed serious misconduct in law not to considering the Award is otherwise invalid as there is no proper stamp duty for validating Award as per Stamp Act and as such, the proceeding of the Court in making the Award Rule of the Court is illegal.

  12. She has further added that the appointment of Arbitrator as has been derived from the order-sheet was made before 01.7.1981. However, on 9.11.1988 it was found by the Court below that the Arbitrator without filing the original award along with the arbitration proceeding only filed a copy of the award before the Court through his man. Therefore, the Court below directed the learned Arbitrator by a letter to produce the original award before the Court by 28.11.1988. However, the learned Arbitrator failed to produce the same before the Court below on the date fixed by the Court. On 16.7.1989 the learned Arbitrator filed the original award with the proceeding which was beyond the period of limitation, because the Arbitrator is to file the award within 120 days from the date of receipt of the writ. If the time was extended by the Court below with the joint prayer of the parties, in that case the Arbitrator ought to have deposited the Award within the extended period of time. But in the case in hand the learned Arbitrator has failed to comply with the provision of law as well as the Court’s order which are apparent from the face of the record. The Court below without considering the aforementioned legal aspects as misconduct in law by the Arbitrator make the Award Rule of the Court thus, erred in law and as such, the impugned order is liable to be set aside.

  13. She has further pointed that since the Arbitrator filed the award on 16.7.1989 therefore, it is apparent from the face of the record that the award was filed beyond the period of limitation which is otherwise invalid. Therefore, chiefly on the above two grounds she assailed the impugned judgment and decree. In support of her submissions Mrs. Promila Biswas, the learned D.A.G. for the appellant referred the precedents to the case of Province of East Pakistan Vs. Najibur Rahman, reported in LEX/HEPK/0057/1965 : 18 DLR 588. Thereafter she fortified her arguments that the award submitted by the Arbitrator which was made Rule of the Court by the Court below is nothing but an illegal paper which cannot be sustained in law.

  14. On the other hand, Mr. Abul Kalam Chowdhury, the learned Advocate for the respondent has submitted that this application for appointment of Arbitrator was made under Section 8, read with 20 of the arbitration Act, 1940, i.e., power of the Court to appoint arbitrator or umpire, the Court shall make an order of reference to the Arbitrator appointed by the parties or by the Court. The appellant’s application under Section 20 of the arbitration Act, 1940 and it is not the case under Section 14 of the arbitration Act. He has further submitted that the Arbitrator neither committed any legal error nor committed legal misconduct in passing the Award thus, the same is legal and lawful. Therefore, the Court below has rightly after appreciating the materials on record by its judgment dated 25th September, 1989 make the award Rule of the Court. He has further submitted that the Court below cannot act or sit as Court of appeal but only to ascertain whether the Arbitrator committed any legal or personal misconduct in passing the impugned judgment. However, the Court below has rightly found that the learned Arbitrator in passing the impugned judgment committed no misconduct in person and law, therefore, he prayed for dismissing the appeal and affirming the judgment and decree passed by the Court below. In support of his contention he relied to the precedent to the case of Ramchand Gurdasmal and another versus Gobindram Gurdasmal and others, reported in Indian Cases (Vol. LIII) 337, wherein the Indian Judges held

“that the fact that an award duly signed by the arbitrators is not stamped, does not affect its original validity”

And therefore he argued that non-submitting of requisite number of stamp or without depositing the stamp the Arbitrator committed no misconduct in law.

  1. He has further fortified his argument that if the Court passed any order to give the stamp that can be deposited by order of this Court. Therefore, the Court below did not commit any legal misconduct in making the Award Rule of the Court. He has lastly submitted that if the Court allow to submit the Award before the Court either before pronoun cement of the judgment or within the specified time of limitation in that case the question of limitation does not arise at all.

  2. We have considered the submissions of the learned Advocates of the respective parties. On consideration of the materials on record it transpires from the application dated 25-2-1983 under section 14(2) of the arbitration Act, 1940 that it was learnt by the contractor Ist party that on 06-2-1983 the learned Arbitrator had passed the Award on 1st February, 1983 thus, the said application was filed in Court for calling the Award and accepting the same. Before passing any order by the Court on the said applications, however, learned Arbitrator instead of filing the original Award with proceeding of the reference, on 28-02-1983 by one Serajuddin Ahmed Mozumder filed a copy of Award as per firishti along with a petition supported by affidavit for accepting the Award.

  3. The Court after receiving the same ordered to keep it with the record. Thereafter on 09.11.1988 at the time of hearing of the case it was detected that the Arbitrator did not file the original award with the arbitration proceeding but only a copy of the Award was submitted earlier. The Court on 09-11-1988 directed the Arbitrator to submit the original award and the arbitration proceeding before the Court by 28.11.1988. Thus, it appears from the order-sheet that the learned Arbitrator failed to comply the Court’s order dated 09-11-1988, however, the learned Arbitrator filed the original Award with proceeding on 16.7.1989 after expiry of the period of limitation which was received by the concerned officer on the same day. The Court fixed the date on 22.8.1989 for hearing of the case.

  4. On scrutiny of the materials on record it further transpires that the original Award was filed before the Court in a white paper, it was not stamped as per section 29(g) of the Stamp Act, 1899. Upon meticulous scanning the Act, 1940 it appears that the award is adjudication by the Arbitrator and take place of a decree passed by a Court. The Court only can interfere with the award if an Arbitrator or Umpire misconduct himself or the proceedings; award has been improperly procured or is otherwise invalid. So, it is apparent on the face of the award as well as records that non-stamping the award as per provisions of law leads to us to consider that the Award was procured otherwise. Seemingly the Award in question is invalid as such, the same cannot be taken into evidence to consider as neither legal instrument nor decree for making Rule of the Court and as such, the Court below erred in lawmaking the Award Rule of the Court. It is our considered view that unless due stamp has been paid on the Award, an award cannot be taken into consideration by the Court below, far away to pass an order and decree making the same Rule of the Court. Mr. Abul Kalam Chowdhury learned Advocate, appearing for the respondent although relied upon the precedent of the Indian Jurisdiction and forcefully argued that in the facts and circumstances of the instant case the learned Arbitrator as well, the Court below did not comit any misconduct either in person or proceeding, however, he is willing to submit the requisite number of stamp if passed such order by this Court. We are of the view that the submission advanced by the learned Advocate appearing for respondent asking for order submitting due stamp may be considered by the Court below before taking the Award into evidence and passing an order making the same Rule of the Court. However, while the Court make the Award Rule of the Court without stamp violating the specific provision of law which has already invalided the Award. In such situation, now this Court cannot allow for depositing stamp because such deposition of stamp would not suffice to cure the legal error committed by the Court below.

  5. From the above discussions of facts and law, we are unable to accept the contentions advanced by Mr. Chowdhury, the learned Advocate for the respondent, as those are not the legal exposition of the facts and law, rather, the contentions advanced by the learned Deputy Attorney General appearing for the appellant are the legal and true exposition of the facts and law of the instant case.

  6. So, from the above discussions it is apparent from the face of the record that the Arbitrator committed legal misconduct in filing the award after the period of limitation fixed by the Court below as well as non-stamping the Award as per Stamp Act, 1899 as per precedent referred to the case of Province of East Pakistan Vs. Najibur Rahman, reported in 18 DLR 588. The Court below making the Award Rule of the Court has failed to detect the aforesaid misconduct in law. Thus, the impugned judgment and decree passed by the Court below making the award Rule of the Court is nothing but nullity. As such, the same cannot be sustained in law.

  7. In view of the discussions made hereinabove, we are of the view that the Court below also erred in law in making the Award Rule of the Court and as such, the same cannot be sustained in law.

  8. We are of me view that there is substance in the submissions of the learned Advocate, appearing for the appellant and the appeal bears merit.

Thus, the appeal having merit, it succeeds.

In the result, the appeal is allowed without any order as to cost.

  1. The impugned judgment and decree dated 25.9.1989 passed by the Subordinate Judge, 2nd Court, (now Joint District Judge), Chittagong in Other Suit No. 300 of 1984 making the Award Rule of the Court is hereby set aside.

Send down the lower Court records with a copy of this judgment at once.

Meghna Sales and Distribution Company Ltd. vs. Respondent: Government of the People's Republic of Bangladesh and Ors.
Dhaka South City Corporation vs. Respondent: District Judge and Arbitration Appellate Tribunal, Dhaka and Ors.

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