Shyam Om Kinker vs State of U.P.

This petition has a peculiar background and it challenges an award of the arbitrator in proceedings of arbitration under the U.P. Cooperative Societies Act, 1965. Sri Bajpai for the respondent urges that the petition is not entertainable.

The background in which such an arbitration came up for consideration was the outcome of payments to a contractor on the basis of a legal noting of the petitioner who was the then Law Officer of the respondent-Cooperative Federation.

The allegation is that the petitioner was a Member of a six member High Powered Committee that had taken a decision for payment to the contractor, and according to the internal departmental objections taken, such payment was on the basis of a totally wrong calculation causing a huge financial loss to the federation.

Consequently, two sets of proceedings emanated, one for computing the loss caused and realization as surcharge from the personnel who were responsible for it including the petitioner, and the second was the invoking of the arbitration clause by the contractor to receive the same disputed amount.

So far as the disputed amount is concerned, the arbitration proceedings initiated by the contractor ended up in an interim award in favour of the contractor dated 24.10.2000. This proceeding was challenged before the High Court and the interim award of the arbitrator was upheld whereafter the respondents went to the Apex Court and their SLP was dismissed.

The contention of the learned counsel for the petitioner is that if this proceeding relating to the disputed amount has been adjudicated and held to be payable to the contractor then the same amount cannot be realized as a surcharge from the petitioner.

The second argument of Sri L.P. Mishra learned counsel for the petitioner is that apart from this, similar amounts as against the other members of the Committee was also sought to be realized in a similar fashion as against the petitioner, namely, Sri Anil Chaudhary, Sri Bhagwan Baksh Singh and the others, but on a challenge raised they have not been found liable for the same. Not only this, the respondent did not challenge the said orders before this Court that have become final.

Sri Mishra therefore contends that the petitioner also stands at par with the said officials particularly Sri Anil Chaudhary who was Incharge Finance and was a Member of that Committee and who stands exonerated.

On the other hand Sri Bajpai learned counsel for the respondent contends that this writ petition itself was not maintainable as it is against an arbitrator''s award and he contends that this fact was noticed when a similar challenge was raised by one of the officials Mr. O.P. Dwivedi in Writ Petition No. 3921 of 2003. He contends that the order dated 5.8.2003 passed therein indicates reference to this writ petition as well whereafter the aforesaid writ petition No. 3921 of 2003 was finally dismissed vide order dated 5.8.2003. He submits that if the same nature of proceedings have been held to be not amenable to the writ jurisdiction arising out of the same dispute, then there was no occasion for having entertained this writ petition which also deserves to be dismissed on the ground of an alternate remedy available to the petitioner to file an appeal against the award.

Dr. Mishra does not dispute that an appeal is maintainable against an award but he contends that on account of the matter being pending for the past almost 12 years, it will not be a sound exercise of discretion to throw out the petition on an alternate remedy. He has relied on decisions to that effect to substantiate his submissions. He has also cited decisions to contend that alternative remedy is no bar for this Court to entertain a petition.

Having heard learned counsel for the parties we are of the opinion that the first issue that requires to be determined is as to whether the writ petition is maintainable and as to whether the petitioner has a remedy for filing an appeal or not. We are conscious of the fact that the limitation of filing an appeal has already expired. Not only this, from the record it transpires that the following interim order was passed on 7.8.2003:-

Hon''ble Pradeep Kant, J.

Hon''ble Kamal Kishore, J.

The Rejoinder affidavit filed today be placed on record.

Learned counsel for the State, on the basis of record, submits that because the Committee constituted, has recommended for payment to the contractor, therefore the loss has been occasioned because of this recommendation.

Sri S.K. Kalia and Sri Rakesh Srivastava appearing for the petitioner, submits that the Committee was constituted by Sri K.L. Meena the then M.D., P.C.F. for finding an out of court settlement but said recommendations do not say anywhere that the payment be made but says that in case payment is to be made, the permission from the committee of Management be asked for an there is a legal opinion also which says that before the payment is made, prior permission of the Registrar be taken. The P.C.F. has denied of even any such recommendation for making payment.

Learned counsel for the respondent, from the record, could not indicate as to how this recommendation of the Committee has been treated to be recommendation for payment to the contractor whereas from the record, it is prima facie clear that there is no order or recommendation of the Committee for payment nor any recommendation has been made payment, by the petitioner.

Sri A.K. Bajpai appearing for P.C.F. has produced the record and has stated that the payment was made under the orders passed by the then General Manager Mrs. Sangh Mitra Shankar, the then Joint Managing Director Sri S.P. Verma and the then Managing Director Sri Rakesh Bahadur.

The question regarding alternative remedy would also be seen in the light of the appeal filed by the petitioner O.P. Dwivedi before the Cooperative Tribunal. In that appeal one of the Members has refused to hear the interim relief application on the ground that he had acted as an Arbitrator in the instant arbitration case and one Member has retired in whose vacancy no fresh appointment has been made.

The entire matter shall be considered on the next date as today the arguments could not be concluded.

List the matter on 13.8.2003 on the request of learned Addl. Chief Standing Counsel. Till then. Interim order to remain continue.

The aforesaid interim order was not extended after November, 2003. It came to be extended thereafter as is evident from the orders passed on the order-sheet in the year 2008. It is thus clear that the issue relating to alternate remedy had been raised at the very outset by the learned counsel for the respondent who has also relied on the five Judge Full Bench of this Court in the case of Vijay Bihari Srivastava Vs. U.P. Postal Primary Co-operative Bank Ltd. and Another, to urge that such a petition is not maintainable. Sri Bajpai contends that if there is a statutory remedy of arbitration and an appeal against the same, then there is no occasion for the petitioner to challenge the award by way of a writ petition as he could have also availed of the remedy of appeal.

It is true that after 12 years this matter has been ultimately argued before us but at the same time it cannot be lost site of, that the issue of alternative remedy had been raised as a primary objection at the very outset, as stands recorded in the interim order dated 7.8.2003. The issue therefore requires a determination and in our opinion where such questions of fact relating to a financial liability arise, it is always appropriate that the statutory remedy should be availed of because a writ petition is not an appropriate remedy for deciding disputed questions of facts.

Whether the petitioner was liable for the surcharge and recovery and whether the said amount is identical which has been awarded to the contractor which has been upheld upto the Supreme Court is the issue which requires determination vis-�-vis the liability of the petitioner or any other members of the Committee who had allegedly taken the collective decision to make the payment to the contractor. This would require an assessment of evidence and facts for which the remedy of appeal is available.

It is also the case of Dr. Mishra that the payment was made only on the asking of the Managing Director and the petitioner was only a Law Officer concerned with the legal notings and nothing beyond the same. He therefore submits that in such a situation the present writ petition deserves to be entertained and the award being founded on the same facts and for the amount already awarded, no liability for realization can be fixed on the petitioner. He contends that if an adjudicatory forum has held that the amount to be payable to the contractor then it is not understood under what logic, the same can be recovered as surcharge from the petitioner.

We are unable to agree with this proposition inasmuch as the payment under the arbitration was not an adjudication in relation to the liability of the petitioner that resulted in such payment. Consequently, the petitioner will have to independently get exonerated and for that purpose he ought to have filed an appeal. The objection which has been raised by Sri Bajpai is not without foundation in view of the facts aforesaid and further that similarly placed persons had availed such remedy after the dismissal of their writ petition particularly in the case of Mr. O.P. Dwivedi.

Merely because an interim order was passed on 7.8.2003 without adjudicating the issue of an alternate remedy which is a statutory remedy, the same does not make the petition maintainable at this stage as well.

However, we are conscious that sending the petitioner to avail of the remedy at this stage when he has retired may cause inconvenience.

We are of the opinion that convenience and justice do not often together. If the law requires the following of a statutory procedure for adjudicating a liability, then avoidance of such a procedure where a disputed question of fact is required to be decided is not permissible. It has to be done in that manner alone. The petitioner will have to therefore avail of the alternate remedy of filing an appeal.

At the same time, we direct that no further recovery be made from the petitioner at this stage, when the matter has not been decided for the past 12 years, till such an appeal is filed and orders are passed.

Consequently, we give liberty to the petitioner to file an appeal within three weeks'' from today and in the event such an appeal is filed the same shall be treated within time in the aforesaid peculiar background, and shall be decided on merits preferably within a period of three months thereafter. The out come of the said appeal shall be the foundation for fixing any liability or otherwise as against the petitioner including emoluments which are payable to him about which reference has been made by us in Writ Petition No. 1263 of 2003.

The prayer for quashing of the order dated 24.12.2013 would therefore be covered by the outcome in the appeal and the payments as prayed for shall also follow thereafter.

The prayer made in the amendment application shall stand disposed of accordingly.

The writ petition stands disposed of with the aforesaid directions.