Judgment:
$~12 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgement delivered on:
26. 11.2014 + O.M.P. 741/2013 BRIG (RETD.) M.M. SHARMA FRGS ..... Petitioner versus LT. GEN. DEPINDER SINGH ..... Respondent Advocates appeared in this case: For the petitioner: Mr A.B. Pandey, Advocate For the respondent: Dr. Roxna Swamy, Advocate CORAM: HON'BLE MR. JUSTICE RAJIV SHAKDHER RAJIV SHAKDHER, J1 The petitioner herein is the sole proprietor of a concern going by the name of Trishul Publications. The predecessor-in-interest of this proprietorship concern is another concern, which went by the name of Dattatreya Prakashan. 1.1 The disputes between the parties herein arose out of the publication agreement executed between them, which was entered between them in September, 1991. The said publication agreement, broadly, defines the rights of the parties herein with respect to a book written by the respondent, entitled “IPKF In Sri Lanka”. 1.2 The petitioner (i.e., the original claimant), was aggrieved by the fact that the respondent had allowed the republication of the book by another concern, by the name of, Nataraj Publishers. In this background the petitioner had lodged claims before the learned arbitrator in the sum of Rs. 35,64,535/- with interest at the rate of 18% per annum, payable with effect from 10.05.2002. The respondent, not only lodged his statement of defence, but also a counterclaim, seeking award of a sum of Rs.22,36,024.19/- along with interest. Based on the pleadings, the learned arbitrator had framed ten issues in the matter, none of which pertained to costs.
2. The learned arbitrator vide award dated 09.04.2013 dismissed the claims lodged by the petitioner. However, while rejecting the counter-claims of the respondent, the learned arbitrator, has allowed costs in the sum of Rs. 2 lacs to the respondent. The principal reason, based on which, the counter-claims, were rejected was that the respondent had not been “vigilant” and “diligent” in pursuing his legal remedies. The learned arbitrator was evidently of the view that the respondent permitted publication of the second and third edition of his book, without raising any objections, even though there was no subsisting agreement between the parties. 2.1 The central theme, which runs through the reasoning of the learned arbitrator in the rejection of the claims lodged by the petitioner was, that the copyright in the aforementioned book authored by the respondent, remained with him, and that, the petitioner himself had permitted republication of the said book by Nataraj Publishers. 2.2 It is in this background that the learned arbitrator, while allowing costs in favour of respondent no.2, made the following observations:
“.... COSTS: The present is a case wherein the Respondent Author of the book, himself a celebrated officer of the Army has been embroiled in disputes. The total earning of the author under the agreement is only Rs. 11,401/- since the time he has entered into the Agreement of September 1991. He has not earned anything more. The Claimant on the other hand has published three editions of the book and has paid a pittance to the author. Thus the respondent is entitled to costs of the proceedings quantified at Rs. 2 lakhs....”
3. At the very outset, Mr Pandey, learned counsel for the petitioner submitted that he is impugning only that part of the award, whereby costs have been awarded to the respondent. It is, therefore, the contention of Mr Pandey that there was no issue framed with respect to costs and, therefore, the learned arbitrator decided an issue which was neither contemplated by parties, nor did it fall within the terms of submission made before her for adjudication. 3.1 In other words, it was contended that the decision on costs was rendered on a matter which was beyond the scope of submission made to the learned arbitrator. 3.2 Mr Pandey pegged this legal submission on the provisions of Section 34(2)(iv) of the Arbitration & Conciliation Act, 1996 (in short the Act). In support of this submission, Mr Pandey drew my attention to the issues framed in the matter, as set out in the body of the award.
4. Dr. Roxna Swamy, learned counsel for the respondent, on the other hand, submitted that the respondent was entitled to costs as he was dragged into litigation, which he did not want to engage in. It was her submission that the arbitrator had requisite powers to grant costs under the provisions of Section 31(8) of the Act. 4.1 Furthermore, learned counsel for the respondent drew my attention to the affidavit of evidence filed by the respondent before the learned arbitrator, wherein a reference was made to the fact that a sum of Rs. 1,45,363/- had been incurred by the respondent towards payment of fee to counsel and arbitrator. 4.2 On the aspect of costs, as adverted to in the affidavit of evidence, I had queried both Mr Pandey as well as Dr. Roxna Swamy. Both counsel affirmed that there was no question put to the respondent in cross-examination on the aspect of costs. In this context, I had also put to Dr. Roxna Swamy, as to whether her client, i.e., the respondent, would be satisfied if costs in the matter are restricted to the sum alluded to, by him, in his own affidavit of evidence. To this query, Dr. Roxna Swamy, categorically stated before me, that in view of the inherent limitation, that the affidavit of evidence quantified the costs incurred by the respondent only to the extent of Rs. 1,45,363/-, he would be satisfied if this court were to restrict the costs awarded by the arbitrator to the said figure.
5. I have heard the learned counsels for the parties and perused the record. An examination of the record, as placed before me, shows that in the counterclaim filed on behalf of the respondent, there is a prayer made, specifically, by the respondent, for award of costs incurred by him during the course of proceedings taken out by him for appointment of arbitrator, as well as those, which were undertaken before the learned arbitrator. Reference in this regard may be made to paragraph 44(c) of the written statement and counter-claim filed by the respondent. 5.1 In the rejoinder and reply to the counter-claim filed on behalf of the petitioner, there is no rebuttal to the assertions made in paragraph 44 of the written statement and counter-claim filed on behalf of the respondent. However, while concluding the rejoinder and reply to the counter-claim, the petitioner has asserted that the counter-claim of the respondent should be dismissed, and that, an award should be passed in terms of prayer made in the statement of claims filed by the petitioner. 5.2 The matter pertaining to costs was, thus, squarely in contention between the parties. The parties were aware of the same, which is why, in the affidavit of evidence filed by the respondent, he made the following assertions:
“.... 31(a) Till today while pursuing the instant Arbitration proceedings and its predeccessors in the Delhi High Court and the Supreme Court of India, I have paid by cheques to my counsel/ to the Hon’ble Arbitrator, an amount of Rs. 1,45,363/- only. This is in addition to amounts I had to incur on travel to and maintenance in Delhi to defend all these cases. I have also had to pay my lawyers in Panchkula and in the criminal courts in Delhi in related proceedings. I have also suffered much mental agony in being pursued in this fashion...”
6. Therefore, in my opinion, notwithstanding the fact that a specific issue was not struck by the learned arbitrator, it did not prevent the learned arbitrator from deciding the issue of cost, as it was an aspect which was raised in the pleadings, which was followed with requisite evidence on that aspect of the matter. The parties were clearly aware that the matter was in contention; which is why the respondent led evidence qua costs. Though there was opportunity given to petitioner, he chose not to question the respondent’s testimony on this aspect. The learned arbitrator, as indicated above, cannot be faulted for her approach in dealing with issue of costs, and therefore, cannot be held to have acted beyond the scope of submission, as contended on behalf of the petitioner. The observations of the Supreme Court in the case of Bhagwati Prasad v. Shri Chandramaul, AIR1966SC735being apposite are extracted hereinbelow:
“....10. But in considering the application of this doctrine to the facts of the present case, it is necessary to bear in mind the other principle that considerations of form cannot over-ride the legitimate considerations of substance. If a plea is not specifically made and yet it is covered by an issue by implication, and the parties knew that the said plea was involved in the trial, then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon it if it is satisfactorily proved by evidence. The general rule no doubt is that the relief should be founded on pleadings made by the parties. But where the substantial matters relating to the title of both parties to the suit are touched, though indirectly or even obscurely in the issue, and evidence has been led about them, then the argument that a particular matter was not expressly taken in the pleadings would be purely formal and technical and cannot succeed in every case. What the Court has to consider in dealing with such an objection is: did the parties know that the matter in question was involved in the trial, and did they lead evidence about it ?.” (emphasis is mine) 6.1 Admittedly, there was no cross-examination conducted of the respondent on the point of costs. Therefore, the respondent was, in my opinion, entitled to costs, though restricted to the amount he had claimed and with respect to which he had led evidence. As indicated above, the petitioner, at his own peril, chose not to confront the respondent in the cross-examination on the aspect of costs. As regards the power to award costs is concerned, in my opinion, there can be no cavil qua the said proposition, as the provisions of sub-section (8) of section 34 of the Act confers such power on the arbitrator. 6.2 As noted above, Dr. Roxna Swamy, accepted that the respondent would be satisfied with the quantum of costs as awarded by the learned arbitrator, being reduced, from a figure of Rs. 2 lacs to Rs. 1,45,363/-.
7. Accordingly, for the reasons given above, the petition is disposed of with the concession given by Dr. Roxna Swamy that the costs as awarded shall stand reduced to Rs. 1,45,363/-. Parties shall, however, bear their own costs qua the present proceedings. RAJIV SHAKDHER, J NOVEMBER26 2014 kk