N D RADHAKRISHEN Vs. UNION OF INDIA

JUDGEMENT

(1.) THE appellants whose agreement to act as city booking agents and out agents for Northern Railways commencing from the year 1971 initially for a period of five years and extended from time to time ultimately expired on 30th of June, 1986, are continuing the business of the agency on the basis of an interim order of the District and Sessions Judge, Srinagar dated 30-3-1987 directing the maintenance of status quo. THE respondent-Union of India filed an application on 20th of May, 1989 praying therein that as the court had ordered the maintenance of status quo regarding the termination of the agency, the appellants herein be directed to deposit savings/earnings which they have collected on behalf of the Northern Railways in the account of Northern Railways at State Bank of India Branch, Srinagar on the basis of the old agreement executed between the parties. THE Trial Court after hearing the learned Counsel for the parties, perusing the record and admission of the appellants directed them to deposit sum of Rupees 22,79,739.20 in the State Bank of India, Residency Road Branch, Srinagar before the next date of hearing vide the order now impugned in this appeal. THE order of the Trial Court has been challenged in this appeal on various grounds as detailed in sub-paras (i to vi) of para 5 of the memo of appeal. It is submitted that the impugned order is without jurisdiction, not arising out of the proceedings pending before the Trial Court, wrong in law, contrary to facts and based upon no evidence.

(2.) THE facts giving rise to the filing of the present appeal are that the appellants herein were acting as City booking agents and out agents for the Northern Railways on the basis of the agreement executed between the parties initially in the year 1971 which was extended from time to time vide addenda issued in that behalf. As the appellants request for renewal of contract was not accepted, they addressed a letter dated 18-6-1984 to the Chief Marketing Superintendent Northern Railways calling upon him to refer the disputes and differences which had arisen between the parties to an arbitrator in terms of an arbitration clause incorporated in the agreement executed between the parties. THE District Judge, Srinagar vide his order dated 18-6-1985 appointed General Manager, Northern Railways New Delhi as an arbitrator between the parties and referred him the disputes specified in his order. THE arbitrator who entered upon the reference filed his award dated 28-1-1987 deciding all the points raised and disputes referred against the appellants-claimants. THE Union of India filed an application in the Trial Court under sections 14 and 17 of the Arbitration Act praying therein for direction to the arbitrator to file the award in the court and make the same a rule of the court. THE appellants herein prayed for setting aside the award passed in the case. THE main petition for either setting aside the award or making the award a rule of the court remained pending and has not been decided so far. However, during the pendency of the proceedings the claimants-appellants filed an application for the maintenance of status quo on 20th March, 1987, which was allowed and an ex parte order was passed directing the maintenance of status quo till the award matter was disposed of subject to the objections of the other side. THE respondent-Union of India filed an application on 20th of May, 1989 praying that despite getting the order of status quo the appellants herein were not depositing savings/earnings collected on behalf of Northern Railways in their Bank Account according to the terms and conditions of the old agreement executed between the parties. THE trial court vide its order dated 24th June, 1989 directing the counsel for the petitioner therein to place the original accounts prepared according to the terms of the agreement before the court so that necessary orders could be passed in the case. It appears that a statement as "summary of misappropriation of Govt. cash (railways earnings)" was filed by the Railways which showed that the appellants herein had withheld a sum of Rs. 38,82,172.90 as on 5th June, 1989, giving them the credit of Rupees 16,02,433.70 as their commission they were held liable to deposit net amount of Rs. 22,79,739.20. After perusing the record and hearing the learned counsel for the parties the impugned order in this appeal was passed.

(3.) MR. Shah the learned counsel appearing for the appellants has submitted that the impugned order being without jurisdiction is liable to be quashed. It is submitted that the Trial Court had no jurisdiction to pass the impugned order by giving the direction to the appellants to deposit the amount as the court was not seized of the matter arising independently between the parties according to the terms of the agreement. It is submitted that after the order of reference the Trial Court had no jurisdiction to deal with any matter and had the limited jurisdiction of dealing with the issues arising collaterally in the case as provided under the Arbitration Act. The Trial Court should have only decided as to whether the award is to be made a rule of the court or set aside, argued the learned counsel. The amount has been determined without any evidence or perusal of any record which is alleged to be against the principles of law rendering it liable to be set aside. The order impugned is alleged to be cryptic and illegal. MR. Shah has referred to a case entitled Union of India v. Raman Iron Foundry, AIR 1974 SC 1265 : in support of his contention.