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Judgment
(1) Heard Mr. J. Roy, learned counsel appearing for the petitioner as well as Mr. H. Maurya, learned counsel appearing for the respondent.
(2) This is an appeal under Order XLIII Rule 1(w) read with section 104 CPC. Theappeal is directed against the order dated 29.11.2008 passed by
the learned Civil Judge No.3, Kamrup (M), Guwahati in Misc. (J) Case No.195/08, thereby allowing the application for review preferred by the
respondent against the judgment and order dated 25.07.2008 passed by the said learned Court in Misc.(J) Case No.105/08 arising out of T.S.
No.03/2008. By the order dated 25.07.2008, the learned Court below had allowed the application filed by the appellant under section 5 and 8 of the
Arbitration and Conciliation Act, read with sections 9 and 151 CPC and the parties were referred to arbitration. Incidentally, while referring the parties
to arbitration, the learned Court below had passed an order to the effect that the suit is dismissed.
(3) The facts in brief are that the respondent No.1 herein had filed a suit being T.S.No.3/2008. The said suit was filed before the Court of learned
Civil Judge No.3, Guwahati for disposal. In the plaint, the respondent No.1 had made the following prayers:
“(a) Declaration to the effect that the schedule vehicle sold by the defendants to the plaintiff has an inherent manufacturing and incurable defect
and hence the plaintiff is entitled to replacement of the vehicle with a defect free new vehicle of the same make and kind under the same loan cum
hypothecation agreement subject to necessary corrections and settlement of accounts and to be made effective from the date of replacement of the
vehicle by duly adjusting the payments already made by the plaintiff.
(b) Declaration to the effect that the loan cum hypothecation agreement and theinstallment chart sent by the defendant No.2 are contradictory to each
other and are unenforceable, illegal and malafide and of no effect in their present form.
(c) Rendition of Accounts by the defendants & Settlement of the same withcorrect statements and figures by correcting the amounts of down
payment, interest period, interest amounts, and thereby resettling the installments after correct calculation.
(d) Waiver of overdue, late interest, penal interest etc. if any, as the default inpayment of installments, if any, is due to the inherent manufacturing
defect of the vehicle rendering the vehicle unfit for operation as mentioned above and for reimbursement of overdue, penal interest, late interest, if
any, already collected by the defendants.
(e) Reimbursement of the sum of Rs.85,997/- (Rs. Eighty five thousand Ninehundred Ninety seven) only, which is unnecessarily incurred by plaintiff
as stated above with interest @ 12% p.a. with effect from institution of this suit till realization.
(f) Full costs of the suit.
(g) any other relief/ reliefs to which the plaintiff may be found entitled to underthe law/ equity.â€
9(4) The case projected by the respondent No.1 was that the vehicle manufacturedby the respondent/appellant herein was a defective vehicle and it is
in the said context that the aforesaid prayer was made in the plaint. It is further seen that for the purpose of getting finance for purchasing the vehicle,
the respondent No.1 entered into a loan cum hypothecation agreement dated 21.09.2005, inter-alia, containing arbitration clause. In view of the
existence of the arbitration clause the appellant filed an application under section 5 and 8 of the Arbitration and Conciliation Act, 1996 read with
sections 9 and 151 CPC for referring the parties for arbitration. As indicated above, the said application was allowed and while referring the matter to
arbitration, the suit was dismissed. Aggrieved by the dismissal of the suit and based on the said order dated 25.07.2008, the respondent No.1 preferred
an application for review under section 114 read with Order XLVII Rule 3 CPC. The learned trial Court upon hearing the learned counsel for both
sides allowed the prayer for review on the ground that the prayer (a), (d) and (e) of the plaint were outside the purview of adjudication by arbitration
and were not covered under the loan cum hypothecation agreement and therefore, by holding that there was a misunderstanding of facts which led to
the mistakes being crept in the decision, it was held that the loan cum hypothecation agreement is not covered by the prayer made by the respondent
No.1 and by invoking the doctrine of actus curiae neminem gravabit and on being satisfied with the loan cum hypothecation agreement containing
arbitration clause which does not relate to the prayer made by the respondent No.1, the application for review was allowed and petition No.1229/08,
being Misc.(J) Case No.105/08 filed by the appellant for referring the parties to arbitration was rejected.
(5) Aggrieved by the said prayer, this appeal has been preferred.
(6) This Court by order dated 14.11.2017 had passed a query as to whether anapplication for review was maintainable in respect of orders passed
under section 8 of the Arbitration and Conciliation Act, 1996 or such an order was to be assailed under the appropriate provisions of law, the learned
counsel for the respondent No.1 has referred to the order dated 25.07.2008 passed by the learned trial Court in Misc. (J) Case No.105/08 to project
that while the learned trial Court had referred the matter to arbitration, it was ordered by the learned trial Court that the suit was dismissed. It is
further submitted that while referring the matter to arbitration, the learned trial Court had made an observation that the matter was referred to
arbitration “as agreedâ€. He submits that there was no agreement by the respondent No.1 to subject herself to arbitration and therefore, the
respondent No.1 was aggrieved by the said observation of reference to the matter of arbitration “as agreedâ€. By further referring to the order
dated 25.07.2008 passed by the learned trial Court in T.S. No.3/2008, it is submitted that the order specifically states that the suit is dismissed and the
parties to the suit may refer the matter to arbitration “as agreed†upon. Therefore, it is submitted that as the order was for dismissal of the suit,
the said order became appealable under the provision of section 96 CPC and, as such, the application for review was maintainable.
(7) The learned counsel for the appellant submits that the learned Court below hadexercised the power of the review incorrectly and by the impugned
order, the earlier order dated 25.07.2008 passed in Misc. (J) Case No.105/08 was completely set aside and modified and the decision of referring the
matter to arbitration was reversed which is not permissible while exercising jurisdiction under review. It is submitted that in an application filed under
section 8 of the Arbitration and Conciliation Act, 1996 the learned trial Court was only required to see if the arbitration clause existed and the Civil
Court had no jurisdiction to decide the sufficiency of the or applicability of arbitration clause because under the provisions of section 16 of the
Arbitration and Conciliation Act, jurisdiction was conferred to the Arbitral Tribunal to decide as to whether the arbitration agreement was applicable or
not and therefore, the arbitral Tribunal alone had the power and authority to pass order as regards its jurisdiction and hence, the decision by the
learned trial Court by holding that the arbitration clause contained in the loan cum hypothecation agreement did not cover the prayer made in the plaint
was not wanted.
(8) Referring to the case of Konkan Railway Corporation Ltd. Vs M/S Rani Construction Pvt. Ltd (2002) 2 SCC 388 and Hindustan Petroleum
Corpn. Ltd. vs. Pinkcity Midway Petroleums, reported in (2003) 6 SCC 503, it is submitted that if the existence of clause in agreement providing for
was admitted by the plaintiff, the learned trial Court had no jurisdiction to decide whether the subject matter of the suit attracted arbitration clause or
not and it is further submitted that the manner in which the learned Court below had exercised jurisdiction, it was as if the learned trial Court was
exercising the power of appeal in disguise.
(9) Opposing this appeal, the learned counsel for the respondent No.1 hassubmitted that as per the case projected in the plaint, the vehicle was
purchased from the respondent No.2 and during the warranty period of the vehicle started showing manufacturing defects, and could not be repaired
by the respondents. Therefore, it is projected that the respondent No.1, who had purchased the vehicle for commercial purpose, could not put the said
vehicle to effective use and therefore, not only loss was sustained, but the vehicle, which was purchased by him, being defective was required to be
replaced. Hence, the dispute which was raised in the plaint was not at all covered by loan and hypothecation agreement as the said agreement only
related to finance and repayment of such finance and the said agreement did not cover for any dispute regarding manufacturing defects and the same
was required to be adjudicated only by the Civil Court.
(10) It is further submitted that the respondent No.2 who was the seller of thevehicle was not a party to the loan and hypothecation agreement, and
therefore, there was no question that all the parties to the suit had agreed to settle the dispute through arbitration because all the parties to the suit
were not the signatory to the arbitration agreement containing arbitration clause. Hence, such non-signatory could not be subjected to submit himself to
the arbitration proceeding.
(11) It is further submitted that it is not envisaged in the scheme of Arbitration and Conciliation Act, 1996 that a part of such dispute would be settled
by arbitration and another part of the dispute would be adjudicated before the learned Civil Court. It is submitted that the vehicle was having some
manufacturing defect, which could not be adjudicated in arbitration and hence, there was no point for the respondent No.1 to subject himself for
arbitration for a dispute which could not be settled in arbitration.
(12) Heard the learned counsel for both sides and materials available on record havealso been perused.
(13) Although elaborated submissions have been made by the learned counsel forthe both sides, this Court is of the considered opinion that as the
learned Civil Judge No.3, Kamrup (M) Guwahati had referred the parties to arbitration with the use of the words “suit is dismissed†was an
erroneous application of the said words.
(14) This Court finds force in the submission made by the learned counsel for therespondent that once the learned trial Court dismisses a suit, the
dismissal be seen as a decree against the respondent No.1 and such an observation and decree would haunt the respondent No.1 in the arbitration
proceeding as well as in any other proceeding arising therefrom. This Court also finds force in the submission made by the learned counsel for the
respondent No.1 that he had not agreed to subject himself to the arbitration proceeding, as such, the observation made by the learned Civil Court that
the parties had agreed to arbitration was against the interest on the respondent No.1. Nonetheless, as the effect of the order dated 25.07.2008 passed
by the learned Court below in Misc. (J) Case No.105/2008 in T.S. No.3/2008 was to refer the parties to arbitration, in essence, the said order must be
read as if the said order was passed under section 8 of the Arbitration and Conciliation Act, and the use of the words “suit was dismissedâ€
appears to be an inadvertent error in part of the learned Court below. However, it is seen that the said error had resulted in about 10 years of wasteful
litigation to both the parties.
(15) Having seen that in exercise of review jurisdiction the learned Civil Judge No.3,Kamrup (M), Guwahati had reheard the entire matter on merit
and had reversed the order dated 25.07.2008 by taking diametrically opposite stand from the one taken by the learned Court below. This Court finds
that the learned Court below had committed jurisdictional error, having re-visited the order dated 25.07.2008 by re-appreciating the matter in dispute.
(16) In the opinion of this Court an erroneous decision can be corrected in appeal orin a revision, but it is not permissible by the same Court to hear the
matter afresh on merit without there being any existence of the 3 ingredients for review as provided under section 114 as well as under Order XLVII
Rule 1 CPC being (1) discovery of new and important matter of evidence which after exercising of due diligence, was not within his knowledge or
could not be produced by him at the time when the decree or order was passed, (2) there being mistake or error apparent on the face of record and
(3) for any other sufficient reasons, the scope of all of which have been well defined in various case laws of various Courts. In the understanding of
this Court, the error apparent must be found out from the order itself and not with the reasoning of the learned Court while passing the impugned order
in review and therefore, the erroneous appreciation of facts in law could not be seen as a fresh ground to invoke the jurisdiction of review for such an
order can only be corrected in a higher forum.
(17) In the case of Surendra Kumar Vakil & Ors vs Chief Executive Officer, M.P. & ors, (2004) 10 SCC 447, the Hon’ble Apex Court has held
that a point that has been heard and decided cannot form a ground for review even if assuming that the view taken in the judgment under review was
erroneous. It has already being held herein before that the use of word “dismissal of suit†was a mistake made by the learned Court below. The
suit was not dismissed but the parties were referred to arbitration and the suit could not have been dismissed because the dismissal of the suit, as
indicated above, would only amount to a decree against the respondent No.1.
(18) This Court is conscious that the order dated 25.07.2008 passed by the learnedCourt below in Misc. (J) Case No.105/2008 is not within the scope
of challenge of this Court. However, it is seen that if the parties are once again delegated back to the Court below for purpose of correcting the said
order so as to omit the use of the word “dismissal of the suit†in the order dated 25.07.2008 after a lapse of about 10 years, the same would cause
further delay and inconvenience to both sides because it would subject the respondent No.1 to file a fresh application for correction of the said error
and it would consume a lot of judicial time to correct the said error because the dismissal of the suit could not be sustained in view of the fact that the
parties were referred to arbitration.
(19) Therefore, by invoking the provisions of Order XLI Rule 33 CPC, in order to docomplete justice to the parties, this Court is inclined to observe
that the T.S. No.3/2008 shall not be treated as a suit dismissed by the learned Civil Judge No.3, Kamrup (M), Guwahati and the said order as well as
order dated 25.07.2008 passed by the learned Civil Judge No.3, Kamrup (M), Guwahati in T.S. No.3/2008, mentioning that the suit was dismissed shall
now be read as if the said suit was not dismissed but only the parties to the suit were referred to arbitration. Therefore, it is further provided that the
order dated 25.07.2008 passed by the learned Civil Judge No.3, Kamrup (M), Guwahati in Misc. (J) Case No. 105/2008 shall only be treated as if the
order was passed under section 5 and 8 of the Arbitration and Conciliation Act, 1996. As a result, it would be open to the respondent No.1 to take
such recourse as may be available against the said order in accordance with law.
(20) If such an application is filed, taken from the date of said order dated25.07.2008 till upto 60 (sixty) days after today the time taken shall be treated
as the time taken in bonafide litigating in respect of order dated 25.07.2008. Therefore, the period of 60 (sixty) days time from today is granted to the
respondent No.1 to take steps against the grievance against the said order to avail the benefit of section 14 of the Limitation Act.
(21) As a result this appeal stands allowed with the observations as well as liberty asindicated above.