HIGH COURT OF ORISSA: CUTTACK. R.F.A. NO.127 of 2011 From the judgment and decree dated 20.6.2011 passed by Shri B.K. Patra, Civil Judge (Senior Division), Balasore in C.S. No.45 of 2010-III. Union of India and another …… Appellants …… Respondent - VersusAnanta Prasad Sahoo For Appellants : Mr. Janmejaya Katikia (CGC) For Respondent : Mr. S. Rath, B.K. Nayak-3, D.K. Mohanty and M/s. G. Rath --------PRESENT: THE HONOURABLE SHRI JUSTICE B.K. PATEL Date of hearing – 25.4.2013 :: B.K. PATEL, J.Date of judgment –16.7.2013 Defendants, who represent Union of India in the Ministry of Shipping, Road Transport and Highways, are in appeal against the judgment and decree passed by learned Civil Judge (Senior Division), Balasore in C.S. No.45 of 2010-III by which the suit for realization of Rs.8,35,578/- instituted by the respondent-plaintiff has been decreed.
2. Plaintiff is an Advocate. He was appointed as Additional Standing Government Counsel of the Government of India by order dated 4.7.2005 and thereafter as Standing Government Counsel of the Government of India vide orders dated 3.10.2007 2 and 17.9.2009 for conducting cases on behalf of Union of India in the district of Balasore. Collector, Balasore allowed the plaintiff to appear as an Advocate on behalf of Government of India in the court of District Magistrate-Cum-Arbitrator, N.H. Project, Balasore, Orissa in arbitration cases. These facts are not disputed.
3. Plaintiff’s case is that he having successfully conducted the arbitration cases on behalf of Union of India submitted bills towards payment of his remuneration, prepared according to the fee structure prescribed in O.M. No.27(11)/99-Judl. dated 24.9.1999 of Government of India, before the court of Arbitrator, N.H. Project, Balasore for issuance of certificate in his favour in support of his appearance on the dates fixed. The bills were verified and certified to be correct by the court upon which the bills were submitted to the Collector, Balasore who again verified the bills towards legal charges and expenses for Rs.3,86,120/- and forwarded the same to defendant no.2- Superintending Engineer, Government of India, Ministry of Shipping, Road Transport and Highways, Regional Office, Bhubaneswar for sanction and payment under letter no.318 dated 2.2.2009 within a month from the date of receipt of bills as provided under above referred O.M. No.27 (11)/99-Judl. dated 24.9.1999. It is further pleaded that after verification of the bills, Collector, 3 Balasore submitted the same to the Government of India on 25.8.2006 and 4.4.2007 for placement of required funds in respect of plaintiff’s fees for conducting 402 numbers of arbitration cases. As the said fees remain unpaid, the plaintiff submitted bill for Rs.3,01,500/- for legal charges and expenses on 15.5.2009 for the above said 402 numbers of arbitration cases. Also, as fee amount of Rs.3,86,120/- and Rs.3,01,500/- remained unpaid, the plaintiff requested the defendants by letters dated 24.2.2010 and 10.2.2010. Thereafter, the plaintiff instituted the suit claiming Rs.8,35,578/- as under: “(a) Fee bills alongwith legal charges and expenses dt. 02.02.2009 - Rs.3,86,120/- (b) Bill for legal charges and expenses dt.15.05.2009 for 402 Arbitration Cases as per Fee Bill dt.25.08.06 and 04.04.2007 - Rs.3,01,500/- (c) Interest 12 % on Rs.3,86,120/- as per Bill dt.02.02.09 from 01.04.09 to 31.07.10 (1 year 4 months). - Rs.61,778/- (d) Interest 12% on Rs.3,01,500/- as per Bill dt.15.05.09 from 01.08.09 to 31.07.10 (1 year). - Rs.36,180/- 4 (e) Compensation for harassment since 02.02.09 - Rs.50,000/Total Rs.8,35,578/-”.
4. Written statement on behalf of both the defendants was filed by defendant no.2 resisting plaintiff’s claim. It is pleaded that the suit is barred by law of limitation and that the plaintiff has no cause of action to file the suit against the defendants. It is averred in the written statement that the Additional District Magistrate, Balasore forwarded the bill amounting to Rs.3,86,120/- of the plaintiff to defendant no.2 vide letter dated 2.2.2009. The bill was examined and forwarded to the Project Director, National Highway Authority of India (NHAI), Bhubaneswar by defendant no.2 vide letter dated 21.4.2009 for verification and payment. The Project Director, NHAI, Bhubaneswar forwarded the bill to the office of the Project Director, NHAI, Kharagpur vide letter dated 4.6.2009. After verification of the bill, Project Director, NHAI, Kharagpur sent Bank Draft for Rs.83,183/- to the plaintiff vide letter dated 23.7.2009 calculated in accordance with terms and conditions of engagement of the plaintiff vide order dated 4.7.2005 and OM No.27(11)/99-Judl. dated 24.9.1999. However, the plaintiff did not receive the Bank 5 Draft. It is further averred that the District Collector, Balasore forwarded a bill for Rs.2,13,800/- for plaintiff’s appearance in 154 numbers of cases and another bill for Rs.4,59,400/- for his appearance in 248 numbers of arbitration cases to the Project Director, NHAI, Bhubaneswar which were also forwarded to the office of the Project Director, NHAI, Kharagpur upon which another Bank Draft for Rs.30,633/- (after deduction of TDS) was sent to the plaintiff which he did not accept. It is contended that the plaintiff having not accepted the fee amount sanctioned by the authority, has no right to file the suit.
5. It appears that the plaintiff filed a rejoinder to the written statement asserting that calculation of fees payable to the plaintiff was not correct. According to the plaintiff, arbitration cases cannot be heard analogously as the Arbitral Court cannot pass a common judgment in arbitration cases. The Arbitration Authority heard each of the arbitration cases independently and passed separate awards. Therefore, stand of the defendants that fee was calculated on the basis of analogous hearing of cases involving substantially identical question is not acceptable.
6. On the basis of rival pleadings, following issues were framed by the trial court:
1. Is the suit legally maintainable?”
2.
3. Is the suit barred by law of limitation?.
4. Whether the plaintiff is entitled to the relief/ reliefs prayed for?. and 5.
7. Is there any cause of action to bring the suit?. To what other relief(s) the plaintiff is entitled to?. In order to substantiate his claim plaintiff examined himself as P.W.1 and also placed reliance on documents marked Exts.1 to 34. Though the defendants participated in the hearing by cross-examining the plaintiff, no oral or documentary evidence was adduced from the side of the defendants.
8. On an appraisal of materials on record, placing reliance on oral evidence of plaintiff P.W.1 supported by documentary evidence, the trial court accepted the plaintiff’s contentions that authority to sanction bills submitted by the plaintiff is vested with the Union of India in the concerned Ministry of Shipping, Road Transport and Highways and not with NHAI. It was further held by the trial court that the plaintiff conducted 402 arbitration cases separately and is entitled to bills separately as certificate was issued separately to the plaintiff being the Standing Counsel of Government of India. The trial court also took note of written argument filed by the Central Government Counsel appearing for the defendants to the effect that the plaintiff is entitled to separate fees in each case and 7 that fees and charges claimed by the plaintiff are genuine and the defendants cannot reduce the bill amount towards fees of Rs.3,86,120/- and bill amount towards legal charges and expenses of Rs.3,01,500/-. Accordingly, the trial court decreed the suit directing the defendants to make payment of Rs.8,35,578/- (inclusive of interest at the rate of 12 per cent per annum calculated up to 31.7.2010) within three months from the date of judgment and held that in case of non-payment of the decretal dues within the stipulated period, the plaintiff is at liberty to realize the decretal amount with pendent lite and future interest at the rate of 12 per cent per annum till full realization through process of court.
9. In assailing the impugned judgment learned counsel for the appellants did not raise any contention with regard to quantum of decretal amount which the defendants have been directed to pay to the plaintiff. Moreover, in course of hearing, learned counsel for the appellants was constrained to submit that on the basis of materials on record the trial court could not have passed any decree other than directing the defendants to pay the amount as claimed by the plaintiff.
10. However, learned counsel for the appellants strenuously contended that the suit is liable to be dismissed on the ground of collusion between the plaintiff and the learned Central Government 8 Counsel appearing for the defendants in the trial court. According to Sri J.Katikia, learned counsel appearing for the appellants, conduct of the suit is fraught with fraud and collusion which render the impugned judgment and decree void. It was further contended that the suit is also bad for non-joinder of necessary party. It was argued that the NHAI is a necessary and proper party to the suit in absence of which plaintiff’s suit is not maintainable. It was also contended on behalf of the appellants that the plaintiff had no authority to appear on behalf of the defendants in the arbitration proceedings for which he is not entitled to any claim towards fees or legal charges and expenses.
11. Learned counsel for the respondents supported and defended the impugned judgment. It was argued that there is no material on record to indicate that the plaintiff colluded with any person to obtain the impugned decree. Admittedly, defendants filed their written statement duly signed and verified by defendant no.2, a Superintending Engineer of the Ministry and responsible officer of the Government. Maintainability of the suit was not assailed in the written statement on the ground of non-joinder of NHAI. On the contrary, defendants took the plea of dispatch to the plaintiff of bank draft for Rs.83,183/- as sanctioned by the Ministry and the NHAI. Therefore, defendants cannot avoid the responsibility of paying fees 9 and expenses to the plaintiff. It was contended that the plaintiff’s appearance in the arbitration proceedings was certified by the District Collector. Bills were verified and forwarded for payment by the District Collector to the Ministry and thereafter by the Ministry to the NHAI. Materials on record go to show that in each of the arbitration proceedings plaintiff made separate and independent appearance. In such circumstances, appellants have also no scope to assail the quantum of decretal amount directed to be paid to the plaintiff.
12. In the background of submission that the trial court could not have passed any other judgment and decree on the basis of materials on record, learned counsel for the appellants sought to assail the impugned judgment and decree on the ground of collusion. In this connection, it was contended that learned Central Government Counsel appearing for the defendants in the trial court not only did not take a plea of non-joinder of NHAI to assail maintainability of the suit but also failed to adduce any evidence from the side of the defendants and filed a written argument admitting plaintiff’s claim. All these circumstances were marshaled by the learned counsel for the appellants as evidence of collusion. However, as has been stated above written statement of the defendants was filed by the defendant no.2 a Superintending 10 Engineer of the concerned Ministry. No plea of non-joinder of parties has been raised therein. Considering the circumstances of the case, defendants could not have taken plea of non-joinder of the party in view of the fact that the bills submitted by the plaintiff was verified not only by the District Collector but also verified and forwarded to the NHAI for payment by the appellant Ministry. That apart, plea of non-joinder of parties having not been taken at the earliest, there is no scope for the plaintiff to raise the plea at this stage in view of the provision under Rule 13 of Order 1 of the C.P.C. which reads: “All objections on the ground of non-joinder or misjoinder of parties shall be taken at the earliest possible opportunity and, in all cases where issues are settled, at or before such settlement, unless the ground of objection has subsequently arises, and any such objection not so taken shall be deemed to have been waived.”
. Issue of non-joinder of NHAI having not been raised by the defendants in the suit, such objection has to be deemed to have been waived by the defendants.
13. Learned counsel for the appellants also submitted that learned Central Government Counsel for the defendants appearing in the trial court filed written argument stating that the plaintiff is entitled to separate fees in each case which he has not been paid. It was contended that such stand of the learned counsel appearing for 11 the defendants in the trial court was in excess of authority granted by the defendants. However, in view of certificates granted by the arbitral authority and the District Collector, Balasore, and approval of the bills by the Ministry, learned Central Government Counsel for the defendants cannot be said to have exceeded his authority in pointing out the undisputed facts as found from the record.
14. Learned counsel for the appellants cited the decisions of the Supreme Court in Nagubai Ammal and others –vs- B.Shama Rao and others : AIR 195.S.C. 593 and Gram Panchayat of Village Naulakha –vs- Ujagar Singh and others : (2000)7 SCC 54.in support of his contention that the impugned decree is a collusive decree. Reliance was specifically placed by Shri Katikia, learned counsel appearing for the appellants on paragraph 15 of the decision in Nagubai Ammal and others –vs- B.Shama Rao and others (supra) which reads: “Now, there is a fundamental distinction between a proceeding which is collusive and one which is fraudulent. “Collusion in judicial proceedings is a secret arrangement between two persons that the one should institute a suit against the other in order to obtain the decision of a judicial tribunal for some sinister purpose.”
.(Wharton’s Law Lexicon, 14th Edn., P.212). In such a proceeding, the claim put forward is fictitious the contest over it is unreal and the decree passed therein is a mere mask having the similitude of 12 a judicial determination and worn by the parties with the object of confounding third parties. But when a proceeding is alleged to be fraudulent, what is meant is that the claim made therein is untrue, but that the claimant had managed, to obtain the verdict of the court in his favour and against his opponent by practicing fraud on the Court. Such a proceeding is started with a view to injure the opponent, and there can be no question of its having been initiated as the result of an understanding between the parties. While is collusive proceedings the combat in a mere sham, in a fraudulent suit it is real and earnest.”
. Also Shri Katikia, learned counsel appearing for the appellants placed reliance on the observations in the decision in Gram Panchayat of Village Naulakha –vs- Ujagar Singh and others (supra) to the effect that in order to contend in a later suit or proceeding that an earlier judgment was obtained by collusion, it is not necessary to file an independent suit for a declaration as to its collusive nature or for setting it aside, as a condition precedent.
15. In the present case appellants duly filed a written statement in which plaintiff’s claim so far as it relates to quantum of claim is concerned was disputed. It is not pleaded that the defendants were not liable to sanction bills submitted by the plaintiff for payment. Appellants-defendants do not claim to be third parties in respect of the dispute raised by the plaintiff. In the memorandum of appeal also the impugned decree has not been assailed as collusive or fraudulent or being bad for non-joinder of 13 necessary party. Allegation of collusion and fraud is being made in course of hearing of the appeal not only against the respondentplaintiff but also against learned Central Government Counsel appearing for the defendants in the trial court who is not a party to this appeal. Allegation of collusion and fraud is quasi-criminal in nature. Any finding in support of such allegation in absence of learned Central Government Counsel against whom allegation is made shall be in blatant violation of principles of natural justice. Declaration with regard to collusive nature of decree has to be made in presence of all persons against whom allegation is made. The present appeal is a continuation of the suit in which issue of collusive or fraudulent nature of the suit was not an issue.
16. Hon’ble Supreme Court in Inderjit Singh Grewal –v- State of Punjab & Anr.:
2011. 2) OJ.747 (S.C.) in answering the question as to whether it is permissible for a party to treat the judgment or order as null and void without getting it set aside from the competent court, held at paragraphs 12, 13 and 14 as follows:“12.However, the question does arise as to whether it is permissible for a party to treat the judgment and order as null and void without getting it set aside from the competent court. The issue is no more res integra and stands settled by a catena of decisions of this Court. For setting aside such an order, even if void, the party has to approach the appropriate forum. (Vide: State of Kerala v. M.K.Munhikannan Nambiar Manjeri Manikoth, 14 Naduvil (dead) & Ors., AIR 199.SC 906.and Tyabbhai M. Bagasarwalla & Anr. V. Hind Rubber Industries Pvt. Ltd., AIR 199.SC 1240).
13. In Sultan Sadik v. Sanjay Raj Subba & Ors. AIR 200.SC 1377.this court held that there cannot be any doubt that even if an order is void or voidable, the same requires to be set aside by the competent court.
14. In M. Meenakshi & Ors. V. Metadin Agarwal (dead) by Lrs. & Ors., (2006) 7 SCC 470.this Court considered the issue at length and observed that if the party feels that the order passed by the court or a statutory authority is non-est/void, he should question the validity of the said order before the appropriate forum resorting to the appropriate proceedings. The Court observed as under:“It is well settled principle of law that even a void order is required to be set aside by a competent Court of law, inasmuch as an order may be void in respect of one person but may be valid in respect of another. A void order is necessarily not non-est. An order cannot be declared to be void in collateral proceedings and that too in the absence of the authorities who were the authors thereof.”
. Similar view has been reiterated by this Court in Sneh Gupta v. Devi Sarup & Ors. (2009) 6 SCC 194.From the above, it is evident that even if a decree is void ab initio, declaration to that effect has to be obtained by the person aggrieved from the competent court. More so, such a declaration cannot be obtained in collateral proceedings.”
17. In the present case none of the circumstances available on record is indicative of collusion or fraud on the part of the learned counsel appearing for the defendants in the trial court. Trial court appears to have granted several adjournments for examination of witnesses on behalf of the defendants. It appears from the lower 15 court records that a memo was filed on behalf of the defendants not to adduce any evidence on their behalf which was accepted by the trial court. Considering the nature of dispute between the parties, the entire case of the plaintiff depends on documentary evidence. An application under Order 41 Rule 27 of the C.P.C. has been filed in this appeal on behalf of the appellants to take into account certain documents like notifications and office memorandum of the Government of India. Office Memorandum has already been taken note of by the trial court. The notifications are public documents and there appears nothing in the impugned judgment to indicate that there has been any violation of any notification by the plaintiff. No prayer has been made by the appellants to adduce further evidence by way of examination of any witness. In absence of any material on record to establish collusion as observed above and in view of the submission that the trial court could not have passed any other judgment and decree on the basis of materials available on record, there is no merit in the contention that the impugned decree is collusive.
18. As regards the contention that plaintiff had no authority to appear on behalf of the defendants in the arbitration proceedings, as has been observed earlier, his appearance in the proceedings was certified and bills submitted by him were verified and forwarded by 16 the District Collector. It is not denied that the bills submitted by the plaintiff were forwarded to defendant no.2 by the District Office, Balasore under Ext.14 for payment. The trial court has also referred to materials on record to the effect that under Ext.25, the Office Memorandum issued from Government of India, Ministry of Law and Justice, Department of Legal Affairs, Judicial Section to the appellant Ministry for settlement of payment of fee to the plaintiff without any further delay and also letter under Ext.29 issued by defendant no.2 forwarding plaintiff’s bills to the appellant Ministry in order to take appropriate decision on payment of plaintiff’s fees at the earliest. Moreover, defendants having categorically pleaded that Bank Draft for certain amount towards plaintiff’s bill for appearing in arbitration proceedings, there is no scope to take the stand that plaintiff has appeared in the arbitral proceedings without authority. Defendants simply disputed the quantum of the bill amount during trial. However, there is no material to find fault with the finding of the trial court to the effect that the plaintiff had conducted 402 arbitration cases separately and as such is entitled for payment separately as per certificates issued by the arbitral authority.
19. In view of above discussion, there is no merit in any of the contentions raised on behalf of the appellants. liable to be dismissed. The appeal is 17 Accordingly, the appeal is dismissed. The impugned judgment and decree passed by learned Civil Judge (Senior Division), Balasore in C.S. No.45 of 2010-III are confirmed. Parties shall bear their own costs. ….……………… B.K. Patel, J.Orissa High Court, Cuttack, Dated the 16th July,2013/B. Jhankar