BEPZA Dhaka Vs. M/S. Abdul Mannan and others, 3 LNJ AD (2013) 33

Case No: Civil Petition for Leave to Appeal Nos. 1602 & 1603 of 2010

Judge: Md. Muzammel Hossain,

Court: High Court Division,,

Citation: 3 LNJ AD (2013) 33

Case Year: 2014

Appellant: BEPZA Dhaka

Respondent: M/S. Abdul Mannan and others

Subject: Arbitration,

Delivery Date: 2011-02-23


APPELLATE DIVISION
(CIVIL)
 
A. B. M. Khairul Haque, CJ.
Md. Muzammel Hossain, J
S. K. Sinha, J

Judgment on
23.02.2011
  Executive Chairman, Bangladesh Export Processing Zones Authority (BEPZA), BEPZA Complex, Dhaka.
. . . Petitioner.
(in both the petitions)
-Versus-
M/S. Abdul Mannan and others
. . . Respondents.
(in C. P. No. 1602 of 2010)
M/S. Mesbah Enterprise and others
. . . Respondents.
(in C. P. No. 1603 of 2010)
 
Arbitration Act (I of 2001)
Section 10
In the instant case it is noticed by the High Court Division that the defendants-petitioners by filing written statements contested the suit. They submitted themselves to the jurisdiction of the Civil Court i.e. the trial court and thereby they failed to avail the opportunity of resorting to arbitration by seeking stay of the suit. . . .(14)
 
Evidence Act (I of 1872)
Sections 63 and 65
In the instant case it appears that the defendant-petitioner was directed by the Court to produce the same at the time of trial as per prayer of the plaintiff-respondent. Moreover, the defendant-petitioner has not challenged that Exbt.1 series were not the original photocopies of the originals or that those were not supplied by the defendant-petitioner to the plaintiff-respondent. In that view of the matter the High Court Division rightly held that “This being the position, it is crystal clear that as per section 65(a) of the Evidence Act, the documents marked as Ext.1 series are admissible in evidence and consequently, we are led to hold that the learned District Judge was wrong in his finding that those photocopies in Ext. 1 series were not admissible in evidence.”. . .(21)

 
State of U.P. -Vs- Janki Saran Kailash Chandra, AIR 1973 S.C. 2071 and Popular Biscuit Limited -Vs- Beximco Bremer Export Cantor Brand, 4 ADC (2007) 743 ref.
 
For the Petitioners (In both the Petitions): Mr. Md. Bodruddoza, Advocate, instructed by Mr. Mohammad Nawab Ali, Advocate-On-Record.
 
For the Respondent No. 1 (In both the Petitions): Mr. Khair Azaz Masud, Advocate, instructed by Mr. A.K.M. Shahidul Huq, Advocate-On-Record.
 
For the Respondent Nos. 2-6 (In both the Petitions): None Represented.
 
Civil Petition for Leave to Appeal Nos. 1602 & 1603 of 2010
(Arising out of the same judgment and order dated 17.11.2009 passed by the High Court Division in Civil Revision Nos. 389 of 2008 and 422 of 2008).
 
JUDGMENT
Md. Muzammel Hossain,J:
 
These two civil petitions for leave to appeal arising out of the same judgment and order, taken together for hearing analogously are directed against the judgment and order dated 17.11.2009 passed by a Division Bench of the High Court Division making the Rules absolute in Civil Revision Nos. 389 of 2008 and 422 of 2008.
 
C. P. No. 1602 of 2010 has arisen out of judgment and order dated 17.11.2009 passed by a Division Bench of the High Court Division in Civil Revision No. 389 of 2008 which was directed against the judgment and decree dated 13.09.2007 passed by the learned District Judge, Comilla in Money Appeal No. 2 of 2007 allowing the appeal and reversing the judgment and decree dated 13.11.2006 passed by the learned Joint District Judge, 1st Court, Comilla in Money Suit No. 5 of 2003 decreeing the suit in part.
 
C. P. No. 1603 of 2010 has arisen out of the judgment and order dated 17.11.2009 passed by a Division Bench of the High Court Division in Civil Revision No. 422 of 2008 which was directed against the judgment and decree dated 13.09.2007 passed by the learned District Judge, Comilla in Money Appeal No. 1 of 2007 allowing the appeal and reversing the judgment and decree dated 13.11.2006 passed by the learned Joint District Judge, 1st Court, Comilla in Money Suit No. 4 of 2003 decreeing the suit in part.
 
The relevant facts in respect of C. P. No. 1602 of 2010 are as follows:
The present respondent No.1 as the plaintiff instituted Money Suit No.5 of 2003 against the defendants in the 1st Court of Joint District Judge, Comilla praying decree for realization of Tk. 5,19,258.00 from the defendants-petitioners. The plaintiffs' case, in short, is that the Chief Engineer, Bangladesh Export Processing Zone Authority (BEPZA) issued work order being No. BEPZA / CE-11-99 / 71 dated 12.02.2001 in his favour through tender procedures for development of the land of Kha Goup being eighteen industrial plots with construction of roads of Comilla EPZ (Export Processing Zone) fixing the date for completion of the work on 27.08.2001. As per tender schedule, formation level of earth was fixed at 04.00 metre height. Accordingly the plaintiff started earth work on 12.02.2001 in full speed under the supervision of defendant nos. 1 and 2 and was allowed to withdraw running bills of Tk. 85,77,895.22 in four installments. In the midst of work, the defendants verbally directed the plaintiff to reduce the formation level of earth from 4.00 metre to 3.50 metre height. For this, a considerable quantum of earth became surplus and the defendant no.6, on 21.05.2001 verbally asked the plaintiff to extend the said volume of work with the surplus earth to their chosen site and accordingly, the plaintiff started the modified work relying upon the verbal assurance of the defendant No.6 that written sanction for extension of time for completion of work would be commu-nicated later on. However, verbally the time for completion of the work was changed and extended up to 26.09.2001. As per measurement book (MB), the plaintiff-respondent No.1 completed the original Schedule work before 27.08.2001 and additional modified work within revised time schedule. After completion of work, the work value was assessed at Tk. 1,15,70,173.51 and after deduction of the amount withdrawn by current bills, Tk. 24,68,629.42 was payable to the plaintiff-respondent No.1 but the defendants arbitrarily allowed him to withdraw Tk. 21,60,577.91 deducting Tk. 3,73,396.94 from the actual dues as penalty on the plea of violation of contractual time limit for completion of work as per schedule. The plaintiff then submitted an application on 11.03.2002 to defendant no.6 for withd-rawal of the penalty arbitrarily imposed upon him but to no effect. Hence, the suit was filed for recovery of money amounting to total Tk. 5,19,258.00 being the deducted amount of Tk. 3,73,369.00 and compensation thereon at the rate of Bank interest amounting to Tk. 1,45,862.00.
 
The relevant facts in respect of C.P. No.1603 of 2010 are stated below:
The present respondent No.1 as the plaintiff instituted Money Suit No.4 of 2003 against the defendants in the 1st Court of Joint District Judge, Comilla praying for realization of Tk. 5,84,982.00 from the defendants-petitioners. The plaintiff's case, in short, is that the Chief Engineer, BEPZA issued work order being No.BEPZA / CE­-11 / 99 / 72 dated 12.02.2001 in his favour through tender procedures for development of land of 'Ga Group' eighteen industrial plots with construction of roads of Comilla EPZA fixing the date for completion of the work on 27.08.2001. As per tender schedu1e, formation level of earth was fixed at 4.00 metre height. Accordingly, the plaintiff started earth work on 12.02.2001 in full speed under the supervision of defendant nos.1 and 2 and was allowed to withdraw running bills of Tk. 97,35,875.61 in four installments. In the midst of work the defendant verbally directed the plaintiff to reduce the formation level of earth from 4.00 metre to 3.50 metre height. For this alternation, a considerable quantum of earth became surplus and the defendant no.6 on 21.05.2001 verbally asked the plaintiff to extend the side volume of work with the surplus earth to their chosen site and accordingly, the plaintiff started the modified work relying upon the verbal assurance of the defendant no.6 that the written sanction for extension of time for completion of the work would be communicated later on. However, time schedule for completion of work was verbally extended to 26.09.2001. In the measurement book (MB) maintained by the plaintiff-respondent it is noted that the plaintiff completed the original work as per tender schedule before 27.08.2001 and he also completed the additional modified work as per verbally revised schedule of time. But after deduction of the amount already withdrawn by current bills, the defendants allowed him to receive Tk. 29,66,688.91 deducting Tk. 4,21,083.66 as penalty charge on the plea of violation of contractual time limit for completion of work as per schedule. The plaintiff-respondent then submitted an application on 11.03.2002 to the defendant no.6 for withdrawal of the penalty arbitrarily imposed allowing him to have the money, but to no effect. Hence, the suit for recovery of money amounting to total Tk. 5,84,982.00 being the deducted amount of Tk. 4,21,083.66 and compensation thereon at the rate of bank interest amounting to Tk. 1,63,898.34.
 
The present petitioner as defendant contested both the suits by filing joint written statements separately stating, interalia, that they admit that the work orders were issued to the plaintiff-respondent and the formation level of earth was changed from 4.00 metre to 3.50 metre height and the plaintiffs were asked to fill up adjoining areas of the work-site with the surplus earth within the same specified time. They denied the extension of time for completion of the work stating that since the subsequent instruction modifying original work order, did not increase the total volume of work, time was not necessary for rescheduling the tender work. Their further case was that the plaintiffs having failed to complete the work within specified time penalty was imposed upon them at the rate of 3% which was deducted from their submitted bills and that no verbal assurance of extending time of work was given to the plaintiff and that suit was liable to be dismissed.
 
The learned Joint District Judge, 1st Court, Comilla decreed the Money Suit No. 4 of 2003 in part for Tk. 4,21,083/- and Money Suit No. 5 of 2003 in part for Tk. 3,73,696.94 by separate judgments and decrees both dated 13.11.2006.
 
The defendants-petitioners being aggrieved by the aforesaid judgments and decrees preferred Money Appeal No.1 of 2007 against the judgment and decree passed in Money Suit No.4 of 2003 and Money Appeal No.2 of 2007 against those passed in Money Suit No.5 of 2003. The learned District Judge, Comilla having heard both the appeals analogously disposed of the same by a single judgment and decree dated 13.09.2007 allowing the appeals.
 
Being aggrieved by the aforesaid judgment and decree dated 13.09.2007 passed by the learned District Judge the plaintiff-respondent moved the High Court Division in revisional jurisdiction in Civil Revision Nos. 422 of 2008 and 389 of 2008 respectively and a Division Bench of the High Court Division by a single judgment and order dated 17.11.2009 made both the Rules absolute setting aside the judgments and decrees passed by the Court of appeal below. The defendant-petitioner being aggrieved by the impugned judgment and order dated 17.11.2009 passed by the High Court Division in aforesaid two civil revisions preferred the instant two Civil Petitions for Leave to Appeal before this Court.
 
Mr. Bodruddoza, the learned Advocate appearing on behalf of the petitioners in both the petitions submits that the High Court Division erred in law in passing the impugned judgment and order on the issue of the existence of Arbitration Clause and that these suits are not maintainable without exhausting the remedy available in the Arbitration Clause and that there being no illegality committed by the Court of appeal below, the judgment and decree passed by the court of appeal below deserves no interference by the High Court Division. He finally submits that without considering these legal aspects of the matter both the Rules were made absolute and hence the impugned judgments and orders passed by the High Court Division in both the Rules are liable to be set aside and leave should be granted.
 
Mr. Khair Azaz Masud, the learned Advocate for the respondent No.1 submits that there is no illegality in the impugned judgment and order as such both the leave petitions are liable to be dismissed in limini.
 
We have heard the learned Counsels appearing for both the parties, perused the impugned judgment and order passed by the High Court Division and other materials available on record.
 
In the instant case there is a provision for arbitration in Clause 25 of the contract of work which provides amongst others that all questions and disputes relating to the meaning of the specifications, designs, drawings and instruction and also as to the quality of workmanship or materials used on the work, or as to any other questions, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, designs drawings, specifications, estimates, instructions, orders or those conditions or otherwise concerning the work or the execution or failure to execute the same whether arising during the progress of the works or after the completion or abandonment thereof shall be referred to the tender accepting authority of BEPZA in the manner provided by law relating to arbitration for the time being in force who after such investigation as he may think proper shall deliver his award which shall be final, conclusive and binding on all parties to the contract. Admittedly in the instant case arbitration shall be governed by the Arbitration Act, 2001. section 10 of the Arbitration Act, 2001 envisages power of the Court to stay illegal proceedings where there is an arbitration agreement between the parties to refer the Arbitration. It is pertinent to re-produce section 10 of the Arbitration Act which reads as under:
 
“10. Arbitrability of the dispute-
Where any party to an arbitration agreement or any person claiming under him commences any legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred to arbitration, any party to such legal proceedings may, at any time before filing a written statement, apply to the Court before which the proceedings are pending to refer the matter to arbitration.
Thereupon, the Court shall, if it is satisfied that an arbitration agreement exists, refer the parties to arbitration and stay the proceedings, unless the court finds that the arbitration agreem-ent is void, inoperative or is incapable of determination by arbitration.
Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, arbitration may be commenced or continued and an arbitral award made.”
 
In the instant case it is noticed by the High Court Division that the defendants-petitioners by filing written statements contested the suit. They submitted themselves to the jurisdiction of the Civil Court i.e. the trial court and thereby they failed to avail the opportunity of resorting to arbitration by seeking stay of the suit. In that view of the matter the High Court Division rightly observed as follows:

“So none of the parties had intention to settle up the dispute through arbitration. It is also clear that section 10 of the Arbitration Act, 2001 does not operate as a bar against filing of the instant suit and the learned District Judge completely failed to take notice of this aspect of law. Therefore, we are of the opinion that the learned District Judge has committed an error of law resulting in an error in the decision occasioning failure of justice in holding that the suit was not maintaina-ble for not redressing the dispute through the arbitrator.”
 
In coming to the aforesaid conclusion the High Court Division has rightly considered the decision in the case of State of U.P. -Vs- Janki Saran Kailash Chandra reported in AIR 1973 S.C. 2071 at page 2075, para 7 wherein the Supreme Court of India observed as under:

“When a party to an arbitration agreement commences any legal proceedings against any other party to the said agreement with respect to the subject matter thereof, then the other party is entitled to ask for such proceedings to be stayed so as to enable the arbitration agreement to be carried out. It is, however, to be clearly understood that the mere existence of an arbitration clause in an agreement does not by itself operate as a bar to a suit in the Court. It does not by itself impose any obligation on the Court to stay the suit or to give any opportunity to the defendant to consider the question of enforcing the arbitration agreement. The right to institute a suit in some Court is conferred, on a person having a grievance of a civil nature, under the general law. It is a fundamental principle of law that where there is a right there is a remedy. Section 9 of the Code of Civil Procedure confers this general right of suit on aggrieved person except where the cognizance of the suit is barred either expressly or impliedly. A party seeking to curtail this general right of suit has to discharge the onus of establishing his right to do so and the law curtailing such general right has to be strictly complied with. To enable a defendant to obtain an order staying the suit apart from other conditions mentioned in section 34 of the Arbitration Act, he is required to present his application praying for stay before filing his written statement or taking any other step in the suit proceedings. In the present case, the written statement was indisputably not filed before the applicat-ion for stay was presented. The question is whether any other step was taken in the proceeding as contemplated by section 34 and it is this point with which we are directly concerned in the present case. Taking other steps in the suit proceedings connotes the idea of doing something in aid of the progress of the suit or submitting to the jurisdiction of the Court for the purpose of adjudication of the merits of the controversy in the suit."
 
In the case of Popular Biscuit Limited -Vs- Beximco Bremer Export Cantor Brand reported in 4 ADC (2007) 743 this Division discussed the extent and scope of section 34 of the Arbitration Act, 1940 and held to the effect that when parties to the suit submit themselves to the jurisdiction of the civil court, the dispute should not be referred to arbitration. At page 756, para 29 this Division observed as under:

“The High Court Division while staying the proceedings of the trial court, did not at all take into consideration the two basic lawful aspects of the case i.e. the respondent nos. 3-6 took steps on several occasions to adjourn the case in the name of filing written statement and that the respon-dent nos. 1 and 2 backed out from the arbitration proceedings which was pending before the ICC Paris. So the judgment and order dated 15.05.2000 passed by the High Court Division in staying the suit can not be sustained.”
 
In view of the provisions of section 10 of the Arbitration Act, 2001 and the principles enunciated by the Apex Courts of the Sub-Continent including this Court we are of the opinion that section 10 of the Arbitration Act enables either of the parties to the arbitration agreement “at any time before filing of written statement to apply to the Court before which the proceedings are pending to refer the matter to the arbitration" whereupon the Court having been "satisfied that an arbitration agreement exists refer the parties to the arbitration and stay the proceedings."
 
While considering section 10 of the Arbitration Act, 2001 this Division in the case of Maico Jute and Bag Corporation -Vs- Bangladesh Jute Mills Corporation and others reported in 8 MLR (AD) 4 proceeded to the effect that section 10 of the Arbitration Act, 2001 provides for reference of dispute for settlement by arbitration if there is any such clause in the contract agreement and in that event the court shall, if it is not found inoperative or incapable of such settlement, refer the dispute to the arbitrator for settlement and award and thereupon shall stay further proceedings of the suit. There is nothing wrong if the Court stays suo motu the further proceedings of the suit pursuant to an arbitral reference.
 
We have already noticed that the defendant has submitted themselves to the jurisdiction of the Civil Court by filing written statement and contested the suit and thereby they failed to avail the opportunity of resorting to the arbitration by seeking stay of the suit before the Civil Court.
 
As regards admissibility of the photocopies of some documents of the tender file which were marked as Exhibits-l series, in the instant case the High Court Division elaborately discussed the relevant provisions of law as to the admissibility of documentary evidence. The photocopies of some documents of the tender file are secondary evidence. Admissibility of secondary evidence is regulated by section 63 of the Evidence Act, 1872. The High Court Division rightly noticed that admittedly the original tender documents are in the possession of the defendant-petitioner. Section 65 of the Evidence Act provides that secondary evidence may be given of the existence, condition or contents of a document when the original is shown or appears to be in possession or power of the person against whom the document is sought to be proved or of any person legally bound to produce it, or when the existence, condition or contents of the original have been proved to be admitted in writing by the person against whom it is proved or by his representative in interest.
 
In the instant case it appears that the defendant-petitioner was directed by the Court to produce the same at the time of trial as per prayer of the plaintiff-respondent. Moreover, the defendant-petitioner has not challenged that Exbt.1 series were not the original photocopies of the originals or that those were not supplied by the defendant-petitioner to the plaintiff-respondent. In that view of the matter the High Court Division rightly held that:

“This being the position, it is crystal clear that as per section 65(a) of the Evidence Act, the documents marked as Ext.1 series are admissible in evidence and consequently, we are led to hold that the learned District Judge was wrong in his finding that those photocopies in Ext. 1 series were not admissible in evidence.”
 
It appears that the High Court Division rightly found that the learned District Judge allowed the appeals on two technical grounds without entering into merit of the case and without reversing the findings of the trial court about the plaintiffs’ entitlement of decree in both the suits. It has also been rightly noticed by the High Court Division that admittedly in the midst of tender work, the plaintiffs of both the money suits were verbally directed by the defendants to reduce the formation level of earth from 4.00 metre to 3.50 metre height and no revised or fresh written work-order was issued to that effect. It has also been noticed that by this verbal work-order the period for completion of work was extended from 27.08.2001 to 26.09.2001 which has been conceded by the learned Advocate for the petitioners (BEPZA) before the High Court Division.
 
Having considered the submissions advanced on behalf of the defendant-petitioner and the material evidence on record the High Court Division rightly observed as follows:

“we find that the learned Joint District Judge rightly held that the plaintiffs were entitled to part decrees as no other condition was imposed in the works done. The learned Joint District Judge appears to have found, by referring to the admission of D. W. 1 Moniruzzaman who himself is defendant No.1 to the effect that the plaintiffs did their work as per approval, there was no scope to deduct compe-nsation from the bills of the plaintiffs at the rate 3%. This finding appears to be based on evidence. We also do not find any reason to realise compensation from the payable amount.
 
In view of the discussions made above, we find that the learned District Judge appears to have committed errors of law in his finding as regards the maintain-ability of the suits on the grounds that those were hit by arbitration clause referred to above and in­admissibility of the photocopies of note sheet of the tender file in evidence which resulted in an error in the decision occasioning failure of justice and thus it calls for our interference. The Rules, therefore merit consideration.”
 
In view of the above discussions and findings, we do not find any illegality in the impugned judgment and order dated 17.11.2009 passed by the High Court Division in both the Civil Revision No. 389 of 2008 and Civil Revision No. 422 of 2008 calling for no interference by this Court. In consideration thereof, we do not find any merit in these two leave petitions.

            Accordingly, these leave petitions are dismissed.

            Ed.