LAW FOR ALL

Friday, March 29, 2019

whether (1) the High Court was justified in invoking amended provision which has been introduced by Arbitration and Conciliation(Amendment Act), 2015 with effect from 23rd October, 2015(hereinafter being referred to as “Amendment Act, 2015”); (2) whether the arbitration agreement stands discharged on acceptance of the amount and signing no claim/discharge certificate and (3) whether it was permissible for the High Court under Section 11(6) of the Arbitration and Conciliation Act, 1996(prior to the Amendment Act, 2015) to appoint third party or an independent Arbitrator when the parties have mutually agreed for the procedure visàvis the authority to appoint the designated arbitrator.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(s). 3303 OF 2019
(Arising out of SLP(C ) No(s). 6312 of 2018)
UNION OF INDIA ……Appellants(s)
VERSUS
PARMAR CONSTRUCTION COMPANY ……Respondent(s)
WITH
CIVIL APPEAL NO(s).3306 OF 2019
(Arising out of SLP(C ) No(s). 6034 of 2018)
CIVIL APPEAL NO(s). 3304 OF 2019
(Arising out of SLP(C ) No(s). 2166 of 2018)
CIVIL APPEAL NO(s). 3307 OF 2019
(Arising out of SLP(C ) No(s). 6316 of 2018)
CIVIL APPEAL NO(s). 3312 OF 2019
(Arising out of SLP(C ) No(s). 7720 of 2018)
CIVIL APPEAL NO(s). 3310 OF 2019
(Arising out of SLP(C ) No(s). 8019 of 2018)
CIVIL APPEAL NO(s). 3311 OF 2019
(Arising out of SLP(C ) No(s). 8021 of 2018)
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CIVIL APPEAL NO(s). 3305 OF 2019
(Arising out of SLP(C ) No(s). 7937 of 2018)
CIVIL APPEAL NO(s). 3308 OF 2019
(Arising out of SLP(C ) No(s). 8597 of 2018)
CIVIL APPEAL NO(s). 3319 OF 2019
(Arising out of SLP(C ) No(s).8256 OF 2019)
(Arising out of Diary No.8885/2018)
CIVIL APPEAL NO(s). 3309 OF 2019
(Arising out of SLP(C ) No(s). 8596 of 2018)
CIVIL APPEAL NO(s). 3314 OF 2019
(Arising out of SLP(C ) No(s). 9514 of 2018)
CIVIL APPEAL NO(s). 3313 OF 2019
(Arising out of SLP(C ) No(s). 8598 of 2018)
CIVIL APPEAL NO(s). 3315 OF 2019
(Arising out of SLP(C ) No(s). 9559 of 2018)
CIVIL APPEAL NO(s). 3317 OF 2019
(Arising out of SLP(C ) No(s). 11417 of 2018)
CIVIL APPEAL NO(s). 3318 OF 2019
(Arising out of SLP(C ) No(s). 11862 of 2018)
CIVIL APPEAL NO(s). 3316 OF 2019
(Arising out of SLP(C ) No(s). 22263 of 2018)
J U D G M E N T
Rastogi, J.
Leave granted.
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2. The question that arises for consideration in the batch of
appeals by special leave is as to whether (1) the High Court was
justified in invoking amended provision which has been
introduced by Arbitration and Conciliation(Amendment Act),
2015 with effect from 23rd October, 2015(hereinafter being
referred to as “Amendment Act, 2015”); (2) whether the
arbitration agreement stands discharged on acceptance of the
amount and signing no claim/discharge certificate and (3)
whether it was permissible for the High Court under Section
11(6) of the Arbitration and Conciliation Act, 1996(prior to the
Amendment Act, 2015) to appoint third party or an independent
Arbitrator when the parties have mutually agreed for the
procedure visàvis the authority to appoint the designated
arbitrator. The High Court has passed separate orders in
exercise of its powers under Section 11(6) of the Act, 1996 in
appointing an independent arbitrator without adhering to the
mutually agreed procedure under the agreement executed
between the parties. Since the batch of appeals involve common
questions of law and facts with the consent of parties, are
disposed off by the present judgment.
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3. The facts have been noticed from civil appeal arising out of
SLP(Civil) no. 2166 of 2018.
4. The work for construction of office accommodation for
officer and rest house was allotted to the respondent contractor,
at Dungarpur in the State of Rajasthan on 21st December, 2011.
As alleged, the extension was granted by the appellants to
complete the work by 31st March, 2013. The measurement was
accepted by the respondent under protest and when appellants
officials failed to clear 7th final bill until the respondent put a line
over “under protest” and signed no claim certificate. The total
value of the work executed was of Rs. 58.60 lakhs against which
Rs. 55.54 lakhs was paid and escalation cost was not added with
interest @ 18% over delay payment. Demand notice was sent to
the appellants to appoint an arbitrator invoking Clause 64(3) of
the GCC to resolve the disputes/differences on 23rd December,
2013. When the appellants failed to appoint the arbitrator in
terms of Clause 64(3), application came to be filed under Section
11(6) of the Act, 1996 before the Chief Justice/his Designate for
appointment of an independent arbitrator who after hearing the
parties under the impugned judgment allowed the application of
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the respondent and appointed a retired judge of the High Court
as an independent arbitrator to arbitrate the proceedings.
5. In the instant batch of appeals, one fact is common that the
orders were placed for various nature of construction works for
its execution and the agreement executed between the parties
includes a separate chapter for settlement of disputes leaving any
dispute or difference between the parties to be resolved through
the process of arbitration by appointing an arbitrator invoking
clause 64(3) of the contract. As per terms of the agreement, date
of completion of the project was delayed as alleged due to breach
of obligations by the appellants and the scheduled date of
completion had to be extended. Meanwhile, due to rise in the
prices of raw material, the project was impossible to be completed
by the respondent contractors and hence correspondence was
made to either pay the escalated price or in the absence, the
respondents would not be in a position to conclude the contract.
It was alleged that the appellants accepted the terms and
conditions for escalated prices and asked the respondents to
complete the work and handover the project.
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6. But when the respondents raised the final bills in the predetermined format (which also included the no dues certificate)
on the newly agreed prices, dispute has arisen in context of
payment of escalated prices or withholding of security deposits,
taking note of the existence of arbitration clause in the agreement
the respondents sent a notice to appoint an arbitrator as per
clause 64(3) of GCC to resolve the dispute of payment of
outstanding dues which was declined by the appellants by
sending the reply that “No Due Certificate” was signed and that
entails no dispute to be sent to arbitration. Since the appellants
failed to appoint the arbitrator in accordance with the arbitration
clause in the agreement, each of the respondent filed application
under Section 11(6) of the Act before the High Court for
appointment of an independent arbitrator and the primary
objection of the appellants before the High Court was that on
furnishing the no claim certificate by the contractor, no dispute
subsists which is to be sent to the arbitrator and further the
claims which has been submitted were beyond time as prescribed
in the agreement and thus falls under the ‘excepted matter’ in the
agreement.
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7. After the matter being heard, the application for
appointment of arbitrator under Section 11(6) of the Act, 1996
came to be decided by the High Court of Rajasthan by separate
order(s) keeping in view the independence and neutrality of
arbitrator as envisaged under Section 12(5) of the Amendment
Act, 2015. The High Court further observed that the amended
provisions of Act, 2015 shall apply to the pending proceedings
and mere furnishing of no claim certificate would not take away
the right of the parties and it is open for adjudication before the
arbitrator and appointed a retired Judge of the High Court as an
independent sole arbitrator under the impugned judgment in
exercise of power under Section 11(6) of the Act, 1996.
Indisputedly, the request for the dispute to be referred to
arbitration in the instant batch of appeals was received by the
appellants much before the Amendment Act, 2015 came into
force (i.e. 23rd October, 2015).
8. Mr. K.M. Natarajan, learned Additional Solicitor General
appearing for the appellants submits that Section 12 including
subsections (1) and (5) as also Fifth and Seventh Schedule, has
come into force by the Amendment Act, 2015 w.e.f. 23rd October,
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2015 and indisputedly, in the instant batch of appeals, request to
refer to the arbitration was received by the appellants much prior
to the Amendment Act, 2015. In view of Section 21 read with
Section 26 of the Amendment Act, 2015 where the request has
been sent to refer the dispute to arbitration and received by the
other side before the amendment Act, 2015 has come into force,
the proceedings will commence in accordance with the preamended provisions of the Act, 1996 and in the given
circumstances, apparent error has been committed by invoking
Section 12(5) of the Amendment Act, 2015 for appointment of an
independent arbitrator without resorting to the clause 64(3) of
GCC as agreed by the parties and in support of submission,
learned counsel has placed reliance on the decision of this Court
in the case of M/s. Aravali Power Company Private Limited
Vs. Era Infrastructure Engineering Limited 2017(15) SCC 32
and S.P. Singla Constructions Pvt. Ltd. Vs. State of
Himachal Pradesh and Others 2018(15) Scale 421.
9. Learned counsel further submits that once the no claim
certificate has been signed by each of the respondent and after
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settlement of the final bills, no arbitral dispute subsists and the
contract stands discharged and they cannot be permitted to urge
that they gave the no claim certificate under any kind of financial
duress/undue influence and even in support thereof, no prima
facie evidence has been placed on record. In the given
circumstances, the appointment of an independent arbitrator by
the High Court under Section 11(6) of the Act, 1996 is not
sustainable and in support of submission, learned counsel has
placed reliance on the decisions of this Court in Union of India
and Others Vs. Master Construction Company 2011(12) SCC
349; New India Assurance Company Limited Vs. Genus
Power Infrastructure Ltd. 2015(2) SCC 424; ONGC Mangalore
Petrochemicals Limited Vs. ANS Constructions Limited and
Anr. 2018(3) SCC 373.
10. Learned counsel further submits that none of the
respondents had made any allegation of bias to the arbitrator
who was likely to be appointed by the railways in terms of the
agreement. The said issue would have cropped up only when the
appointment of arbitrator was made by the railways. It was
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required in the first instance to make every possible attempt to
respect the agreement agreed upon by the parties in appointing
an arbitrator to settle the disputes/differences and only when
there are allegations of bias or malafide, or the appointed
arbitrator has miserably failed to discharge its obligation in
submitting the award, the Court is required to examine those
aspects and to record a finding as to whether there is any
requirement in default to appoint an independent arbitrator
invoking Section 11(6) of the Act, 1996 and in support of
submission, learned counsel has placed reliance on the decision
of this Court in Union of India & Another Vs. M.P. Gupta
2004(10) SCC 504, Union of India & Another Vs. V.S.
Engineering(P) Ltd. 2006(13) SCC 240, Northern Railway
Administration, Ministry of Railway, New Delhi Vs. Patel
Engineering Co. Limited 2008(10) SCC 240, Union of India Vs.
Singh Builders Syndicate 2009(4) SCC 523.
11. Learned counsel further submits that as indicated in clause
64(7) of the GCC, all statutory modifications thereof will be
binding to the arbitration proceedings and after promulgation of
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the Arbitration and Conciliation (Amendment) Act, 2015, clause
64(7) stood amended to fulfil the mandate of Amendment Act,
2015 and it was clarified that all statutory modifications thereof
shall apply to the appointment of arbitrator and arbitration
proceedings and the respondents being signatory to the
agreement have accepted the enforceability of aforesaid clause
64(7) and, therefore, are bound by any modification made in GCC
even subsequently and placed reliance on the judgment of this
Court in S.P. Singla Constructions Pvt. Ltd’s case(supra).
12. Per contra, Mr. Sameer Jain, learned counsel for the
respondents submits that respondents are the registered
contractors undertaking various nature of works contracts with
the railway establishment and are not in a bargaining position
and it is a ground reality that final bills are not being released
without a no claim certificate being furnished in advance by
them. In all the cases, unilateral deductions have been made
from the final bills furnished by each of the respondent and they
are very small and petty contractors and the payments are not
released unless the no claim certificate is being furnished, it is
nothing more than a financial duress and undue influence by the
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authorities and is open for the arbitrator to adjudicate by
examining the bills which was furnished for payment.
13. Learned counsel further submits that the effect of no claim
certificate has been examined by this Court in National
Insurance Company Limited Vs. Boghara Polyfab Private
Limited 2009(1) SCC 267 and there are series of decisions of this
Court where no claim certificate in itself has never been
considered to be the basis to nonsuit the request made in
appointing an arbitrator to independently examine the dispute
arising under the terms of the agreement.
14. Learned counsel further submits that once the appellants
have failed to appoint an arbitrator under the terms of agreement
before the application under Section 11(6) being filed before the
Court, the authority forfeits its right of appointing an arbitrator
and it is for the Chief Justice/his designate to appoint an
independent arbitrator under Section 11(6) of the Act, 1996 as
held by this Court in Datar Switchgears Ltd. Vs. Tata Finance
Ltd. and Another 2000(8) SCC 151 followed in Punj Lloyd Ltd.
12
Vs. Petronet MHB Ltd. 2006(2) SCC 638 and later in Union of
India Vs. Bharat Battery Manufacturing Co. (P) Ltd. 2007(7)
SCC 684 that once the party fails to appoint an arbitrator until
filing of an application under Section 11(6) of the Act, the
opposite party would lose its right of appointment of arbitrator(s)
as per the terms of the contract.
15. Learned counsel further submits that while dealing with
Section 11(6), the Chief Justice/his designate can even overlook
the qualification of the arbitrator under the agreement but
arbitration agreement in the instant case does not contain any
specific qualification of the arbitrator under Clause 64(3) of the
GCC and since the appellants failed to appoint an arbitrator until
the application was filed, Section 11(6) empowers the Court to
deviate from the agreed terms if required by appointing an
independent arbitrator and by virtue of operation of Section 12(5)
of the Amendment Act, 2015, the employee of the railway
establishment became ineligible to be appointed as arbitrator. In
the given circumstances, the authority is vested with the Chief
Justice or his designate to appoint an independent arbitrator
under Section 11(6) of the Act and the same has been held by
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this Court in North Eastern Railway and Others Vs. Tripple
Engineering Works 2014(9) SCC 288 and Union of India and
Others Vs. Uttar Pradesh State Bridge Corporation Limited
2015(2) SCC 52.
16. Learned counsel further submits that the primary object by
introducing the remedy to measure arbitration is to have a fair,
speedy and inexpensive trial by the Arbitral Tribunal.
Unnecessary delay or expense would frustrate the very purpose
of arbitration and it holds out that arbitrator should always be
impartial and neutrality of the arbitrator is of utmost importance
and that has been noticed by the Parliament in amending Section
12(5) of the Act, 1996 which came into force on 23rd October,
2015 and when the matters have been taken up for hearing by
the High Court after the amendment has come into force, the
effect of the amended provisions would certainly be taken note of
and in the given circumstances, if an independent arbitrator has
been appointed which is indisputedly an impartial and neutral
person fulfilling the mandate of the object of the proceedings of
arbitration, the amended provision has been rightly invoked by
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the High Court in the appointment of an independent arbitrator
invoking Section 11(6) of the Act, 1996.
17. We have heard learned counsel for the parties and with
their assistance perused the material on record.
18. The facts which manifest from the batch of appeals are that
the respondents are the registered contractors with the railway
establishment and undertaking work contracts (construction) of
various kinds. They raised a demand for escalation cost and the
interest accrued thereon because the date of the completion of
the project was delayed as alleged due to breach of obligations by
the appellants and the scheduled date of completion had to be
extended. In the interregnum period, there was a rise in the
prices of the raw material and the project became impossible to
be completed by the respondent contractors. Hence, a request
was made to the appellants to either pay the enhanced escalation
price otherwise the respondent contractors would not be in a
position to conclude the contract and on the acceptance for
payment of the escalation costs, respondent contractor completed
the work and delivered the project and raised final bills in the
15
prescribed predetermined format (which also included no dues
certificate). Since the dispute has arisen in the context of the
payment of the escalated cost, as demanded by respondent
contractors, and their being a clause of arbitration in the
agreement, each of the respondent contractors sent a notice for
arbitration invoking clause 64(3) of GCC, which in majority of the
cases declined by the appellants stating that no dues certificate
has been furnished and that entailed no subsisting dispute and
that was the reason due to which each of the respondent
contractor had approached the High Court by filing an
application under Section 11(6) of the Act, 1996. It is also not in
dispute that the request for referring the dispute to arbitration
was received by the appellants much prior to the enforcement of
the Amendment Act, 2015 which came into force, w.e.f. 23rd
October, 2015.
19. To proceed with the matter further, it will be apposite to
take note of the relevant clauses of the agreement with which we
are presently concerned:
“CLAIMS 43.(1) Monthly Statement Of Claims : The
Contractor shall prepare and furnish to the Engineer
once in every month an account giving full and detailed
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particulars of all claims for any additional expenses to
which the Contractor may consider himself entitled to
and of all extra or additional works ordered by the
Engineer which he has executed during the preceding
month and no claim for payment for and such work
will be considered which has not been included in such
particulars.
43.(2) Signing Of "No Claim" Certificate : The
Contractor shall not be entitled to make any claim
whatsoever against the Railway under or by virtue of or
arising out of this contract, nor shall the Railway
entertain or consider any such claim, if made by the
Contractor, after he shall have signed a "No Claim"
Certificate in favour of the Railway in such form as
shall be required by the Railway after the works are
finally measured up. The Contactor shall be debarred
from disputing the correctness of the items covered by
"No Claim" Certificate or demanding a clearance to
arbitration in respect thereof.
64.(1) Demand for Arbitration:
64.(1) (i) In the event of any dispute or difference
between the parties hereto as to the construction or
operation of this contract, or the respective rights and
liabilities of the parties on any matter in question,
dispute or difference on any account or as to the
withholding by the Railway of any certificate to which
the contractor may claim to be entitled to, or if the
Railway fails to make a decision within 120 days, then
and in any such case, but except in any of the
“excepted matters” referred to in Clause 63 of these
Conditions, the contractor, after 120 days but within
180 days of his presenting his final claim on disputed
matters shall demand in writing that the dispute or
difference be referred to arbitration.
64.(1) (ii) The demand for arbitration shall specify the
matters which are in question, or subject of the
dispute or difference as also the amount of claim itemwise. Only such dispute(s)or difference(s) in respect of
which the demand has been made, together with
counter claims or set off, given by the Railway, shall be
referred to arbitration and other matters shall not be
included in the reference.
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64.(1) (iii) (a) The Arbitration proceedings shall be
assumed to have commenced from the day, a written
and valid demand for arbitration is received by the
Railway. (b) The claimant shall submit his claim
stating the facts supporting the claims alongwith all
the relevant documents and the relief or remedy
sought against each claim within a period of 30 days
from the date of appointment of the Arbitral Tribunal.
(c) The Railway shall submit its defence statement and
counter claim(s), if any, within a period of 60 days of
receipt of copy of claims from Tribunal thereafter,
unless otherwise extension has been granted by
Tribunal. (d) Place of Arbitration : The place of
arbitration would be within the geographical limits of
the Division of the Railway where the cause of action
arose or the Headquarters of the concerned Railway or
any other place with the written consent of both the
parties.
64.(1) (iv) No new claim shall be added during
proceedings by either party. However, a party may
amend or supplement the original claim or defence
thereof during the course of arbitration proceedings
subject to acceptance by Tribunal having due regard to
the delay in making it.
64.(1) (v) If the contractor(s) does/do not prefer
his/their specific and final claims in writing, within a
period of 90 days of receiving the intimation from the
Railways that the final bill is ready for payment,
he/they will be deemed to have waived his/their
claim(s) and the Railway shall be discharged and
released of all liabilities under the contract in respect
of these claims.
64.(2) Obligation During Pendency Of Arbitration :
Work under the contract shall, unless otherwise
directed by the Engineer, continue during the
arbitration proceedings, and no payment due or
payable by the Railway shall be withheld on account of
such proceedings, provided, however, it shall be open
for Arbitral Tribunal to consider and decide whether or
not such work should continue during arbitration
proceedings.
64.(3) Appointment of Arbitrator :
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64.(3) (a)(i) In cases where the total value of all claims
in question added together does not exceed Rs.
25,00,000 (Rupees twenty five lakh only), the Arbitral
Tribunal shall consist of a Sole Arbitrator who shall be
a Gazetted Officer of Railway not below JA Grade,
nominated by the General Manager. The sole arbitrator
shall be appointed within 60 days from the day when a
written and valid demand for arbitration is received by
GM. {Authority : Railway Board’s letter no. 2012/CEI/CT/ARB./24, Dated 22.10./05.11.2013}
64.(3) (a)(ii) In cases not covered by the Clause 64(3)(a)
(i), the Arbitral Tribunal shall consist of a Panel of
three Gazetted Railway Officers not below JA Grade or
2 Railway Gazetted Officers not below JA Grade and a
retired Railway Officer, retired not below the rank of
SAG Officer, as the arbitrators. For this purpose, the
Railway will send a panel of more than 3 names of
Gazetted Railway Officers of one or more departments
of the Railway which may also include the name(s) of
retired Railway Officer(s) empanelled to work as
Railway Arbitrator to the contractor within 60 days
from the day when a written and valid demand for
arbitration is received by the GM. Contractor will be
asked to suggest to General Manager at least 2 names
out of the panel for appointment as contractor’s
nominee within 30 days from the date of dispatch of
the request by Railway. The General Manager shall
appoint at least one out of them as the contractor’s
nominee and will, also simultaneously appoint the
balance number of arbitrators either from the panel or
from outside the panel, duly indicating the ‘presiding
arbitrator’ from amongst the 3 arbitrators so
appointed. GM shall complete this exercise of
appointing the Arbitral Tribunal within 30 days from
the receipt of the names of contractor’s nominees.
While nominating the arbitrators, it will be necessary
to ensure that one of them is from the Accounts
Department. An officer of Selection Grade of the
Accounts Department shall be considered of equal
status to the officers in SA grade of other departments
of the Railway for the purpose of appointment of
arbitrator.
64.(7) Subject to the provisions of the aforesaid
Arbitration and Conciliation Act, 1996 and the rules
thereunder and any statutory modifications thereof
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shall apply to the arbitration proceedings under this
Clause.
20. As per clause 43(2), the contractor signs a “No claim”
certificate in favour of the railway in the prescribed format after
the work is finally measured up and the contractor shall be
debarred from disputing the correctness of the items covered
under the “No Claim” certificate or demanding a clearance to
arbitration in respect thereof. Each of the respondent has to
attach no claim certificate with final bills in the prescribed format
to be furnished in advance before the final bills are being
examined and measured by the railway authorities. Although it
has been seriously disputed by the appellants but that is the
reason for which even after furnishing no claim certificate with
the final bills being raised, it came to be questioned by the
respondent(contractor) by filing an application to refer the matter
to arbitration invoking clause 64(3) of the conditions of contract
as agreed by the parties.
21. Under clause 64(1), if there is any dispute or difference
between the parties hitherto as to the construction or operation
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of the contract, or the respective rights and liabilities of the
parties on any matter in question or any other ancillary disputes
arising from the terms of the contract or if the railway
establishment fails to take a decision within the stipulated period
and the dispute could not be amicably settled, such dispute or
difference is to be referred to arbitration and who shall arbitrate
such disputes/differences between the parties, the General
Manager may nominate the officer by designation as referred to
under clause 64(3)(a)(i) and a(ii) respectively with further
procedure being prescribed for the sole arbitrator or the Arbitral
Tribunal to adjudicate the disputes/differences arising under the
terms of contract between the parties.
22. It is also not disputed that when the request of the
respondent contractors was rejected by the appellants on the
premise of the no claim certificate being furnished, arbitral
dispute does not survive which is to be sent to arbitration, each
of the respondent contractor approached the High Court by filing
an application under Section 11(6) of the Act for appointment of
an arbitrator for settling their disputes/differences arising from
the terms of contract as agreed between the parties.
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23. It is to be noticed that the cost of escalation which was
raised by each of the respondent contractor with final bills were
appended with the no claim certificate in the prescribed predetermined format and each of the claim of the respondent
contractor for making a reference to the Arbitrator for settling the
disputes/differences arising from the terms of the contract, as
agreed between the parties was turned down by the appellants
because of furnishing no claim certificate.
24. As on 1st January, 2016, the Amendment Act, 2015 was
gazetted and according to Section 1(2) of the Amendment Act,
2015, it deemed to have come into force on 23rd October 2015.
Section 21 of the Act, 1996 clearly envisage that unless otherwise
agreed by the parties, the arbitral proceedings in respect of a
dispute shall commence from the date on which a request for
that dispute to be referred to arbitration is received by the
respondent and the plain reading of Section 26 of Amendment
Act, 2015 is selfexplicit, leaves no room for interpretation.
Section 21 & 26 of the Act, 1996/Amendment Act, 2015 relevant
for the purpose is extracted hereunder:
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“21. Commencement of arbitral proceedings. —
Unless otherwise agreed by the parties, the arbitral
proceedings in respect of a particular dispute
commence on the date on which a request for that
dispute to be referred to arbitration is received by the
respondent.
26. Act not to apply to pending arbitral
proceedings – Nothing contained in this Act shall
apply to the arbitral proceedings commenced, in
accordance with the provisions of Section 21 of the
principal Act, before the commencement of this Act
unless the parties otherwise agree but this Act shall
apply in relation to arbitral proceedings commenced on
or after the date of commencement of this Act.”
25. The conjoint reading of Section 21 read with Section 26
leaves no manner of doubt that the provisions of the Amendment
Act, 2015 shall not apply to such of the arbitral proceedings
which has commenced in terms of the provisions of Section 21 of
the Principal Act unless the parties otherwise agree. The effect of
Section 21 read with Section 26 of Amendment Act, 2015 has
been examined by this Court in Aravali Power Company
Private Limited Vs. Era Infra Engineering Limited (supra)
and taking note of Section 26 of the Amendment Act, 2015 laid
down the broad principles as under:
“22. The principles which emerge from the decisions
referred to above are:
22.1. In cases governed by 1996 Act as it stood before
the Amendment Act came into force:
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22.1.1. The fact that the named arbitrator is an
employee of one of the parties is not ipso facto a
ground to raise a presumption of bias or partiality or
lack of independence on his part. There can however
be a justifiable apprehension about the independence
or impartiality of an employee arbitrator, if such
person was the controlling or dealing authority in
regard to the subject contract or if he is a direct
subordinate to the officer whose decision is the
subjectmatter of the dispute.
22.1.2. Unless the cause of action for invoking
jurisdiction under Clauses (a), (b) or (c) of subsection
(6) of Section 11 of the 1996 Act arises, there is no
question of the Chief Justice or his designate
exercising power under subsection (6) of Section 11.
22.1.3. The Chief Justice or his designate while
exercising power under subsection (6) of Section 11
shall endeavour to give effect to the appointment
procedure prescribed in the arbitration clause.
22.1.4. While exercising such power under subsection
(6) of Section 11, if circumstances exist, giving rise to
justifiable doubts as to the independence and
impartiality of the person nominated, or if other
circumstances warrant appointment of an independent
arbitrator by ignoring the procedure prescribed, the
Chief Justice or his designate may, for reasons to be
recorded ignore the designated arbitrator and appoint
someone else.
22.2. In cases governed by 1996 Act after the
Amendment Act has come into force: If the arbitration
clause finds foul with the amended provisions, the
appointment of the arbitrator even if apparently in
conformity with the arbitration clause in the
agreement, would be illegal and thus the court would
be within its powers to appoint such arbitrator(s) as
may be permissible.”
which has been further considered in S.P. Singla Constructions
Pvt. Ltd. case(supra).
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“16. Considering the facts and circumstances of the
present case, we are not inclined to go into the merits
of this contention of the appellant nor examine the
correctness or otherwise of the above view taken by the
Delhi High Court in Ratna Infrastructure Projects case;
suffice it to note that as per Section 26 of the
Arbitration and Conciliation (Amendment) Act, 2015
the provisions of the Amended Act, 2015 shall not
apply to the arbitral proceedings commenced in
accordance with the provisions of Section 21 of the
Principal Act before the commencement of the
Amendment Act unless the parties otherwise agree. In
the facts and circumstances of the present case, the
proviso in clause (65) of the general conditions of the
contract cannot be taken to be the agreement between
the parties so as to apply the provisions of the
amended Act. As per Section 26 of the Act, the
provisions of the Amendment Act, 2015 shall apply in
relation to arbitral proceedings commenced on or after
the date of commencement of the Amendment Act,
2015(w.e.f. 23.10.2015). In the present case,
arbitration proceedings commenced way back in 2013,
much prior to coming into force of the amended Act
and, therefore, provisions of the Amended Act cannot
be invoked.”
26. We are also of the view that the Amendment Act, 2015
which came into force, i.e. on 23rd October, 2015, shall not apply
to the arbitral proceedings which has commenced in accordance
with the provisions of Section 21 of the Principal Act, 1996 before
the coming into force of Amendment Act, 2015, unless the parties
otherwise agree.
27. In the instant case, the request was made and received by
the appellants in the concerned appeal much before the
25
Amendment Act, 2015 came into force. Whether the application
was pending for appointment of an arbitrator or in the case of
rejection because of no claim as in the instant case for
appointment of an arbitrator including change/substitution of
arbitrator, would not be of any legal effect for invoking the
provisions of Amendment Act, 2015, in terms of Section 21 of the
principal Act, 1996. In our considered view, the
applications/requests made by the respondent contractors
deserves to be examined in accordance with the principal Act,
1996 without taking resort to the Amendment Act, 2015 which
came into force from 23rd October, 2015.
28. The thrust of the learned counsel for the appellants that
submission of a no claim certificate furnished by each of the
respondent/contractor takes away the right for settlement of
dispute/difference arising in terms of the agreement to be
examined by the arbitrator invoking Clause 64(3) of the
conditions of the contract. The controversy presented before us
is that whether after furnishing of no claim certificate and the
receipt of payment of final bills as submitted by the contractor,
26
still any arbitral dispute subsists between the parties or the
contract stands discharged.
29. Before we take note of the factual aspect of the present
matters, it will be appropriate to carefully consider the plenitude
of decisions of this Court referred to by learned counsel for the
parties and to summarise (first category) Union of India Vs.
Kishorilal Gupta & Bros. AIR 1959 SC 1362; P.K. Ramaiah &
Co. Vs. Chairman and Managing Director, National Thermal
Power Corpn. 1994 Supp(3) SCC 126; State of Maharashtra
Vs. Nav Bharat Builders 1994 Supp(3) SCC 83; Nathani Steels
Limited Vs. Associated Constructions 1995 Supp(3) SCC
324……(second category) Damodar Valley Corporation Vs. KK
Kar 1974(1) SCC 141; Bharat Heavy Electricals Limited
Ranipur Vs. Amarnath Bhan Prakash 1982(1) SCC 625;
Union of India and Anr. Vs. L.K. Ahuja and Co. 1988(3) SCC
76; Jayesh Engineering Works Vs. New India Assurance Co.
Ltd. 2000(10) SCC 178; Chairman and MD, NTPC Ltd. Vs.
27
Reshmi Constructions Builders & Contractors 2004(2) SCC
663.
30. The aforesaid cases fall under two categories, the one
category where the Court after considering the facts found that
there was full and final settlement resulting in accord and
satisfaction and there was no substance in the allegations of
coercion/undue influence. In the second category of cases, the
Court found some substance in the contention of the claimants
that “nodues/no claims certificate or discharge vouchers” were
insisted and taken (either on a printed format or otherwise) as a
condition precedent for release of the admitted dues and
consequently this Court held that the disputes are arbitrable. It
took note of the principles earlier examined and summarised in
National Insurance Company Limited Vs. Boghara Polyfab
Private Limited case (supra) as under:
“44. None of the three cases relied on by the appellant
lay down a proposition that mere execution of a full
and final settlement receipt or a discharge voucher is a
bar to arbitration, even when the validity thereof is
challenged by the claimant on the ground of fraud,
coercion or undue influence. Nor do they lay down a
proposition that even if the discharge of contract is not
genuine or legal, the claims cannot be referred to
arbitration. In all the three cases, the Court examined
28
the facts and satisfied itself that there was accord and
satisfaction or complete discharge of the contract and
that there was no evidence to support the allegation of
coercion/undue influence.”
31. Further, taking note of the jurisdiction of the Chief Justice/
his Designate in the proceedings under Section 11(6) of Act 1996,
this Court culled out the legal proposition in paragraph 51 as
follows:
“51. The Chief Justice/his designate exercising
jurisdiction under Section 11 of the Act will consider
whether there was really accord and satisfaction or
discharge of contract by performance. If the answer is
in the affirmative, he will refuse to refer the dispute to
arbitration. On the other hand, if the Chief Justice/his
designate comes to the conclusion that the full and
final settlement receipt or discharge voucher was the
result of any fraud/coercion/undue influence, he will
have to hold that there was no discharge of the
contract and consequently, refer the dispute to
arbitration. Alternatively, where the Chief Justice/his
designate is satisfied prima facie that the discharge
voucher was not issued voluntarily and the claimant
was under some compulsion or coercion, and that the
matter deserved detailed consideration, he may instead
of deciding the issue himself, refer the matter to the
Arbitral Tribunal with a specific direction that the said
question should be decided in the first instance.”
32. It further laid down the illustrations as to when claims are
arbitrable and when they are not. This may be illustrative (not
exhaustive) but beneficial for the authorities in taking a decision
as to whether in a given situation where no claim/discharge
voucher has been furnished what will be its legal effect and still
29
there is any arbitral dispute subsists to be examined by the
arbitrator in the given facts and circumstances and held in para
52 of National Insurance Company Limited Vs. Boghara
Polyfab Private Limited(supra) as follows:
“52. Some illustrations (not exhaustive) as to when
claims are arbitrable and when they are not, when
discharge of contract by accord and satisfaction are
disputed, to round up the discussion on this subject
are:
(i) A claim is referred to a conciliation or a prelitigation
Lok Adalat. The parties negotiate and arrive at a
settlement. The terms of settlement are drawn up and
signed by both the parties and attested by the
conciliator or the members of the Lok Adalat. After
settlement by way of accord and satisfaction, there can
be no reference to arbitration.
(ii) A claimant makes several claims. The admitted or
undisputed claims are paid. Thereafter negotiations are
held for settlement of the disputed claims resulting in
an agreement in writing settling all the pending claims
and disputes. On such settlement, the amount agreed
is paid and the contractor also issues a discharge
voucher/noclaim certificate/full and final receipt.
After the contract is discharged by such accord and
satisfaction, neither the contract nor any dispute
survives for consideration. There cannot be any
reference of any dispute to arbitration thereafter.
(iii) A contractor executes the work and claims payment
of say rupees ten lakhs as due in terms of the contract.
The employer admits the claim only for rupees six
lakhs and informs the contractor either in writing or
orally that unless the contractor gives a discharge
voucher in the prescribed format acknowledging
receipt of rupees six lakhs in full and final satisfaction
of the contract, payment of the admitted amount will
not be released. The contractor who is hardpressed for
funds and keen to get the admitted amount released,
30
signs on the dotted line either in a printed form or
otherwise, stating that the amount is received in full
and final settlement. In such a case, the discharge is
under economic duress on account of coercion
employed by the employer. Obviously, the discharge
voucher cannot be considered to be voluntary or as
having resulted in discharge of the contract by accord
and satisfaction. It will not be a bar to arbitration.
(iv) An insured makes a claim for loss suffered. The
claim is neither admitted nor rejected. But the insured
is informed during discussions that unless the
claimant gives a full and final voucher for a specified
amount (far lesser than the amount claimed by the
insured), the entire claim will be rejected. Being in
financial difficulties, the claimant agrees to the
demand and issues an undated discharge voucher in
full and final settlement. Only a few days thereafter,
the admitted amount mentioned in the voucher is paid.
The accord and satisfaction in such a case is not
voluntary but under duress, compulsion and coercion.
The coercion is subtle, but very much real. The
“accord” is not by free consent. The arbitration
agreement can thus be invoked to refer the disputes to
arbitration.
(v) A claimant makes a claim for a huge sum, by way of
damages. The respondent disputes the claim. The
claimant who is keen to have a settlement and avoid
litigation, voluntarily reduces the claim and requests
for settlement. The respondent agrees and settles the
claim and obtains a full and final discharge voucher.
Here even if the claimant might have agreed for
settlement due to financial compulsions and
commercial pressure or economic duress, the decision
was his free choice. There was no threat, coercion or
compulsion by the respondent. Therefore, the accord
and satisfaction is binding and valid and there cannot
be any subsequent claim or reference to arbitration.”
33. It is true that there cannot be a rule of absolute kind and
each case has to be looked into on its own facts and
circumstances. At the same time, we cannot be oblivious of the
31
ground realities that where a petty/small contractor has made
investments from his available resources in executing the works
contract and bills have been raised for the escalation cost
incurred by him and the railway establishments/appellants
without any justification reduces the claim unilaterally and take
a defence of the no claim certificate being furnished which as
alleged by the respondents to be furnished at the time of
furnishing the final bills in the prescribed format.
34. The nature of work under contract of the respondent
contractors and the claim of the contractors which is the dispute
in brief to be adjudicated by the arbitrator is submitted as
follows:
S.N
o
SLP No Name of
Contractor
Nature of Work under
Contract
Claim of Contractor
1. 6312/2018 Parmar
Construction
Company
Construction,
Strengthening and
rebuilding of major
bridges between
Nadbhai-Idgah (Agra)
Total Cost of Contract
Rs 3,30,71,724/-
Rs 1,07,98,765/-
(Final Bill) + Interest
and Arbitration Cost.
2. 2166/2018 S.K.
Construction
Construction of Office
Accomodation for
officers and rest house
at Dungarpur.
Total Cost of Contract
Rs 43,76,112/-.
Rs 2.96 Lacs (Deficit
amount) + Rs 2.65 Lacs
(Escalation cost) + Rs 2.39
Lacs (Commercial Interest @
18% p.a.)
32
Total value of Work
done was Rs 58.50
Lacs.
Rs 55.54 Lacs were
paid.
Total Rs 8 Lacs
3. 7937/2018 Anil Trading
Company
Augmentation of the
capacity of Diesel Shed,
Bhagat-ki-kothi,
Jodhpur.
Contract Price Rs
2,42,85,808.84/-
Rs. 2,15,000/- (Non
availability of Drawing) + Rs
1,50,000/- (Non availability
of clear site) + Rs 1,14,099
(interest on delay of Final bill
payment) + Rs 12,15,000/-
(Bank Guarantee) + Rs
12,14,290/- (Security Deposit
with interest) + Rs 1,00,000/-
(Arbitration Cost)
Total Rs 30,08,389/-
4. 6034/201
8
Rajendra
Prasad Bansal
Construction addition
and alteration and
raising of existing
platform surfacing
RRI Building, S&T
Structures and
dismantling of various
structures at
Bharatpur-Agra Fort
Station Yard.
Total Cost of Contract
Rs 87,85,292/-
3 Supplementary
contracts of the value
of rs 24,62,511.52/-,
Rs 3.5 Lacs & Rs
26,12,977,14/-
Rs 1.5 Lacs (deducted along
with interest of 18% p.a.) +
Rs 7.9 Lacs (expenses
incurred on office staff and
labour office) + Rs 1.2Lacs
(delayed release of security
amount & Final bill) + Rs
2Lacs (Loss of Profit)
Total Rs 12,60,000/-
5. 6316/201
8
Maya
Construction
Pvt Ltd
Construction of
Ratangarh Bye Pass.
Total Cost of Contract
Rs 8,29,25,822.68/-
Rs 38,27,196/- (Final bill
amount) + Rs 17,78,231/-
(PVC Final bill amount) +
Rs 50,63,738/- (Security
deposit & EMD)
Total Rs 1,06,69,165/-
6. 8597/201
8
Bharat Spun
Pipes &
Construction
Company
Construction of Road
Over Bridges across
Railway track in
Dausa Yard.
Total Cost of Contract
Rs 3,81,90,423.68/-
Rs 1,88,709/- (charged
under head Cess) + Rs
8,36,386/- (Final PVC Bill)
Total Rs 10,25,095/-
33
7. 8596/201
8
Harsha
Constructions
Construction of new
Major Bridge no 178
(on Banas River)
Total Cost of Contract
Rs 10,51,42,109/-
Rs 1,30,960/- (Payment
withheld for expansion
joints) + Rs 1 Lacs (Refund
of penalty from bill no
XXV) + 36 Lacs (refund of
cost of PSC box girder) + Rs
3,19,573/- (Loss due to
delay in making final
payment) + Rs 76,15,206/-
(Incresed cost of material)
Total Rs 1,17,65,739/-
8. 8019/2018 Bharat Spun
Pipes &
Construction
Company
Construction of road
over bridges across
railway track
Total cost of
Contract Rs
6,31,07,472.50/-
Rs 6,18,302/- (charged
under head Cess) + Rs
10,30,081/- (Final PVC Bill)
Total Rs 16,48,383/-
9. 8021/2018 SB-SHC-MCDPL
(JV)
Construction of Major
Bridges including
earth work.
Total Cost of
Contract Rs
15,92,08,761.97/-
Rs 27,93,752/- (amount
deducted which was
previously paid on account
of overlapping under 10th
running bill) + Rs 1,66,785/-
(work done outside the
scope of work order) +
7,98,214/- (deduction of 1%
Cess) + Rs 5,78,144/-
(Interest on delayed
payment) + Rs 28,085 (Cost
of computer stolen) + Rs
24,87,864/- (Cost of
expansion joint) + Rs
1,81,003/- (Price variation)
+ Rs 60,390/- (Welding and
bolting)
Total Rs 70,94,237/-
10. 7720/2018 Bharat Spun
Pipes &
Construction
Company
Construction of road
over bridges across
railway track
Total cost of
Contract Rs
2,98,59,531/-
Rs 44,514/- (charged under
head Cess) + Rs 7,80,547
(Final PVC Bill)
Total Rs 8,25,061/-
11. 8598/2018 Rajendra
Prasad Bansal
Construction of misc.,
AEN Office,
Signalling structure,
platform surfacing,
Rs 8.8 Lacs (loss of Profit) +
Rs 5 Lacs (loss due to bad
debts) & some other grounds
like price variation, non
34
temporary site offices,
addition and alteration
of existing structure,
dismantling and
rebuilding various
structures between
Idgah-Agra Fort
Station Yard.
Total Cost of Contract
Rs 1,40,43,594/-
payment of final bill and
security deposit for 1.5 yrs
& interest on amount of final
bill
Total Rs 13.8 Lacs/-
[exact amount not
ascertainable from
documents on record]
12. Diary No
8885/2018
Bharat Spun
Pipes &
Construction
Company
Construction of road
over bridges across
railway track
Total cost of
Contract Rs
5,47,26,451.47/-
Rs 4,78,780/- (charged
under head Cess) + Rs
23,07,563/- (Final PVC Bill)
along with price variation
and interest
Total Rs 27,86,343/-
13. 9514/201
8
B.M.
Construction
Company
Construction of major
bridge between
Kanauta- Jaipur
stations.
Total Cost of
Contract Rs
8,46,08,660/-
Rs 7,21,733/- (for adding
10% more cement) + Rs
6,23,923/- + Rs 7,55,734/-
(Extra work) + Rs
11,07,561/ -(Price variation
of Steel purchased) + 4Lacs
(using pressure rings) +
4,53,304/- (Labour Cess
deducted), Rs 1.25Lacs
(deduction from bills) + Rs
3,47,880/- (interest on
delayed paymet) + Rs 1.28
Lacs (Deducted as penalty)
+ Rs 19,01,537 (on a/c of
PVC) + Rs 60Lacs (20Lacs
each for business losses,
mental agonies and social
humiliation) along with
interest
Total Rs 1,93,34,667/-
14. 9559/201
8
Balaji Builders
& Developers
Construction of 72
Units Type-II, 108
Units Type-III, 36
Units Type-IV in
multi-storied tower
and health units,
shopping complex and
Rs 1,32,71,424/- (Final PVC
Bill) + Rs 50Lacs (Price
variation of steel bars)
Total Rs
1,82,71,424/-
35
other ancillary works
near Getore Jagatpur
Railway Station.
Total Cost of Contract
Rs 28,28,20,028/-
15. 22263/20
18
B.M.
Construction
Company
Construction of major
bridge between
Jatwara- Kanauta
stations.
Total Cost of
Contract Rs
10,4484,441/-
Rs 39,05,010/- (for vacant
labour charges of 9 months)
+ Rs 19,46,970/- (delay in
providing drawing) + Rs
13,66,488/-(Price variation
of Steel purchased) + Rs
3,91,534.88/- (using
pressure rings) + 1,32,655/-
(Labour Cess deducted), Rs
1,30,771/- (deduction from
bills) + Rs 50,000/-
(Deducted from 21 running
bills) + Rs 11,91,127/-
(interest on delayed
payment) + Rs 56,40,327/-
(Security Amount) + Rs
1,38,000/- (deducted as
penalty) + Rs 76,39,600/-
(PVC Bill)+ Rs 60Lacs
(20Lacs each for business
losses, mental agonies and
social humiliation) along
with interest
Total Rs 2,85,32,482/-
16. 11417/20
18
Kewai
Constructions
Co (JV)
Construction of Minor
Bridge between Dausa
– Lalsot
Total Cost of Contract
Rs 5,98,22,476/-
Rs 16,74,748/- (security
Deposit) + Rs 47,66,869/-
(Payment of Bill) + Rs
31,33,116/- (Cost of
material left at site) + Rs
10Lacs (PSC Slab
Advances) + Rs 13.85 Lacs
(Idle Labour Charge) + Rs
50,000/- (Cost of
Arbitration)
Total Rs. 1,20,09,733/-
17. 11862/20
18
Harinarayan
Khandelwal
Construction of
Staircase for fire exit,
drilling tube well,
underground water
tank, and other
Rs 4,82,283.26/- (Final PVC
Bill)
36
miscellaneous works
Total Cost of Contract
Rs 1,56,63,006.87/-
35. The respondents are the contractors and attached with the
railway establishment in the instant batch of appeals are
claiming either refund of security deposits/bank guarantee,
which has been forfeited or the escalation cost has been reduced
from final invoices unilaterally without tendering any
justification. It is manifest from the pleadings on record that the
respondent contractors who entered into contract for
construction works with the railway establishment cannot afford
to take any displeasure from the employer, the amount under the
bills for various reasons which may include discharge of his
liability towards the bank, financial institutions and other
persons, indeed the railway establishment has a upper hand. A
rebutable presumption could be drawn that when a no claim has
been furnished in the prescribed format at the time of final bills
being raised with unilateral deductions made even that
acceptable amount will not be released, unless no claim
certificate is being attached to the final bills. On the stated facts,
para 52(iii) referred to by this Court in National Insurance
37
Company Limited Vs. Boghara Polyfab Private Limited(supra)
indeed covers the cases of the present contractors with whom no
option has been left and being in financial duress to accept the
amount tendered in reference to the final bills furnished and
from the discharge voucher which has been taken to be a defence
by the appellants prima facie cannot be said to be voluntary and
has resulted in the discharge of the contract by accord and
satisfaction as claimed by the appellants. In our considered view,
the arbitral dispute subsists and the contract has not been
discharged as being claimed by the appellants employer(s) and all
the contentions in this regard are open to be examined in the
arbitral proceedings.
36. Learned counsel for the appellants has referred to the
judgments in Union of India and Others Vs. Master
Construction Company(supra); New India Assurance
Company Limited Vs. Genus Power Infrastructure Limited
(supra); ONGC Mangalore Petrochemicals Limited Vs. ANS
Constructions Limited and Anr. (supra). In all the cases
referred, this Court has taken note of the judgment in National
38
Insurance Company Limited Vs. Boghara Polyfab Private
Limited (supra) on which a detailed discussion has been made
and taking note of the pleadings of the case on hand, this Court
arrived at a conclusion that prima facie there is an evidence on
record to justify that no claim certificate or letter of subrogation
was voluntary and free from coercion/undue influence and
accordingly held that there is no live claim subsists, which is
arbitrable after the discharge of the contract by accord and
satisfaction.
37. The further submission made by the appellants that the
High Court has committed error in appointing an independent
arbitrator without resorting to the arbitrator which has been
assigned to arbitrate the dispute as referred to under clause 64(3)
of the contract. To examine the issue any further, it may be
relevant to take note of three clauses in subsection 6 of Section
11 of Act, 1996(preamended Act, 2015) which is as under:
“(6) Where, under an appointment procedure agreed
upon by the parties,—
(a) a party fails to act as required under that
procedure; or
39
(b) the parties, or the two appointed arbitrators, fail to
reach an agreement expected of them under that
procedure; or
(c) a person, including an institution, fails to perform
any function entrusted to him or it under that
procedure,
a party may request the Chief Justice or any person or
institution designated by him to take the necessary
measure, unless the agreement on the appointment
procedure provides other means for securing the
appointment.
38. Clause (c) of subsection (6) of Section 11 relates to failure
to perform any function entrusted to a person including an
institution and also failure to act under the procedure agreed
upon by the parties. In other words, clause(a) refers to the party
failing to act as required under that procedure; clause(b) refers to
the agreement where the parties fails to reach to an agreement
expected of them under that procedure and clause (c ) relates to a
person which may not be a party to the agreement but has given
his consent to the agreement and what further transpires is that
before any other alternative is resorted to, agreed procedure has
to be given its precedence and the terms of the agreement has to
be given its due effect as agreed by the parties to the extent
possible. The corrective measures have to be taken first and the
Court is the last resort. It is also to be noticed that by appointing
40
an arbitrator in terms of subsection (8) of Section 11 of Act,
1996, due regard has to be given to the qualification required for
the arbitrator by the agreement of the parties and also the other
considerations such as to secure an independent and impartial
arbitrator. To fulfil the object with terms and conditions which
are cumulative in nature, it is advisable for the Court to ensure
that the remedy provided as agreed between the parties in terms
of the contract is first exhausted.
39. It has been considered by a three Judges’ Bench of this
Court in Union of India & Another Vs. M.P. Gupta(supra).
Taking note of clause 64 of the agreement for arbitration, the
Court held that in view of express provision contained in terms of
the agreement in appointment of two gazetted railway officers,
the High Court was not justified in appointment of a retired
Judge as the sole arbitrator. It held as under:
“3. The relevant part of clause 64 runs as under:
“64. Demand for arbitration.—***
(3)(a)(ii) Two arbitrators who shall be gazetted railway
officers of equal status to be appointed in the manner
laid in clause 64(3)(b) for all claims of Rs 5,00,000
(Rupees five lakhs) and above, and for all claims
irrespective of the amount or value of such claims if
41
the issues involved are of a complicated nature. The
General Manager shall be the sole judge to decide
whether the issues involved are of a complicated
nature or not. In the event of the two arbitrators being
undecided in their opinions, the matter under dispute
will be referred to an umpire to be appointed in the
manner laid down in subclause (3)(b) for his decision.
(3)(a)(iii) It is a term of this contract that no person
other than a gazetted railway officer should act as an
arbitrator/umpire and if for any reason, that is not
possible, the matter is not to be referred to arbitration
at all.”
4. In view of the express provision contained therein
that two gazetted railway officers shall be appointed as
arbitrators, Justice P.K. Bahri could not be appointed
by the High Court as the sole arbitrator. On this short
ground alone, the judgment and order under challenge
to the extent it appoints Justice P.K. Bahri as sole
arbitrator is set aside. Within 30 days from today, the
appellants herein shall appoint two gazetted railway
officers as arbitrators. The two newly appointed
arbitrators shall enter into reference within a period of
another one month and thereafter the arbitrators shall
make their award within a period of three months.”
40. It was further considered by this Court in Union of India
and Another Vs. V.S. Engineering(P) Ltd. (supra) as under:
“3. The learned Additional Solicitor General appearing for the
appellants Union of India has pointed out that as per clauses
63 and 64 of the General Conditions of Contract, this Court in
no uncertain terms has held that the Arbitral Tribunal has to
be constituted as per the General Conditions of Contract, the
High Court should not interfere under Section 11 of the Act
and the High Court should accept the Arbitral Tribunal
appointed by the General Manager, Railways. In this
connection, the learned ASG invited our attention to a
decision of this Court directly bearing on the subject in Union
of India v. M.P. Gupta [(2004) 10 SCC 504] wherein a similar
question with regard to appointment of the Arbitral Tribunal
for the Railways with reference to clause 64 of the General
Conditions of Contract came up before this Court and this
42
Court held that where two gazetted railway officers are
appointed as the Arbitral Tribunal, the High Court should not
appoint a retired Judge of the High Court as a sole arbitrator
and the appointment of sole arbitrator was set aside. The
conditions of clauses 63 and 64 of the General Conditions of
Contract are almost analogous to the one we have in our
hand. In that case also relying on clause 64 of the contract a
three-Judge Bench presided over by the Chief Justice of
India observed as follows: (SCC p. 505, para 4)
“4. In view of the express provision
contained therein that two gazetted railway
officers shall be appointed as arbitrators,
Justice P.K. Bahri could not be appointed by
the High Court as the sole arbitrator. On this
short ground alone, the judgment and order
under challenge to the extent it appoints
Justice P.K. Bahri as sole arbitrator is set
aside. Within 30 days from today, the
appellants herein shall appoint two gazetted
railway officers as arbitrators. The two newly
appointed arbitrators shall enter into
reference within a period of another one
month and thereafter the arbitrators shall
make their award within a period of three
months.”
and further reiterated by this Court in Northern Railway
Administration, Ministry of Railway, New Delhi Vs. Patel
Engineering Company Limited(supra) as follows:
“5. It is pointed out that there are three clauses in
subsection (6) of Section 11. Clause (c) relates to
failure to perform function entrusted to a person
including an institution and also failure to act under
the procedure agreed upon by the parties. In other
words, clause (a) refers to parties to the agreement.
Clause (c) relates to a person who may not be party to
the agreement but has given consent to the agreement.
It is also pointed out that there is a statutory mandate
to take necessary measures, unless the agreement on
the appointment procedure provided other means for
securing the appointment. It is, therefore, submitted
that before the alternative is resorted to, agreed
procedure has to be exhausted. The agreement has to
43
be given effect and the contract has to be adhered to as
closely as possible. Corrective measures have to be
taken first and the Court is the last resort.
6. It is also pointed out that while appointing an
arbitrator in terms of subsection (8) of Section 11, the
Court has to give due regard to any qualification
required for the arbitrator by the agreement of the
parties and other considerations as are likely to secure
the appointment of an independent and impartial
arbitrator. It is pointed out that both these conditions
are cumulative in nature. Therefore, the Court should
not directly make an appointment. It has to ensure
first that the provided remedy is exhausted and the
Court may ask to do what has not been done.
12. A bare reading of the scheme of Section 11 shows
that the emphasis is on the terms of the agreement
being adhered to and/or given effect as closely as
possible. In other words, the Court may ask to do what
has not been done. The Court must first ensure that
the remedies provided for are exhausted. It is true as
contended by Mr. Desai, that it is not mandatory for
the Chief Justice or any person or institution
designated by him to appoint the named arbitrator or
arbitrators. But at the same time, due regard has to be
given to the qualifications required by the agreement
and other considerations.”
and further, in Union of India Vs. Singh Builders
Syndicate(supra) it was held as under:
“11. The question that arises for consideration in this
appeal by special leave is whether the appointment of a
retired Judge of the High Court as sole arbitrator
should be set aside and an Arbitral Tribunal should
again be constituted in the manner provided in terms
of Clause 64.
12. Dealing with a matter arising from the old Act (the
Arbitration Act, 1940), this Court, in Union of
India v. M.P. Gupta [(2004) 10 SCC 504] held that
appointment of a retired Judge as sole arbitrator
44
contrary to Clause 64 (which requiring serving gazetted
railway officers being appointed) was impermissible.
13. The position after the new Act came into force, is
different, as explained by this Court in Northern
Railway Admn., Ministry of Railway v. Patel Engg. Co.
Ltd.[(2008) 10 SCC 240]. This Court held that the
appointment of arbitrator(s) named in the arbitration
agreement is not mandatory or a must, but the
emphasis should be on the terms of the arbitration
agreement being adhered to and/or given effect, as
closely as possible.
14. It was further held in Northern Railway
case [(2008) 10 SCC 240] that the Chief Justice or his
designate should first ensure that the remedies
provided under the arbitration agreement are
exhausted, but at the same time also ensure that the
twin requirements of subsection (8) of Section 11 of
the Act are kept in view. This would mean that
invariably the court should first appoint the arbitrators
in the manner provided for in the arbitration
agreement. But where the independence and
impartiality of the arbitrator(s) appointed/nominated
in terms of the arbitration agreement is in doubt, or
where the Arbitral Tribunal appointed in the manner
provided in the arbitration agreement has not
functioned and it becomes necessary to make fresh
appointment, the Chief Justice or his designate is not
powerless to make appropriate alternative
arrangements to give effect to the provision for
arbitration.”
41. This Court has put emphasis to act on the agreed terms and
to first resort to the procedure as prescribed and open for the
parties to the agreement to settle differences/disputes arising
under the terms of the contract through appointment of a
designated arbitrator although the name in the arbitration
agreement is not mandatory or must but emphasis should always
45
be on the terms of the arbitration agreement to be adhered to or
given effect as closely as possible.
42. The judgments in Datar Switchgears Ltd. case(supra);
Punj Lloyd case(supra) and Union of India Vs. Bharat Battery
Manufacturing Co. (P) Ltd. case(supra) on which reliance has
been placed by the learned counsel for the
respondents/contractors may not be of assistance for the reason
that the question for consideration before this Court was that if
one party demands the opposite party to appoint an arbitrator
and the other party fails to appoint an arbitrator within 30 days
what will be its legal consequence and it was held in the
cases(supra) that if one party demands the opposite party to
appoint an arbitrator and if the opposite party has failed to make
an appointment within 30 days, the right to make appointment is
not forfeited but continues, but an appointment has to be made
before the former makes an application under Section 11 seeking
appointment of an arbitrator. In the instant cases, the question
for consideration is as to whether the Chief Justice or his
Designate in exercise of power under Section 11(6) of the Act
46
should directly make an appointment of an independent
arbitrator without, in the first instance, resorting to ensure that
the remedies provided under the arbitration agreement are
exhausted.
43. In the present batch of appeals, independence and
impartiality of the arbitrator has never been doubted but where
the impartiality of the arbitrator in terms of the arbitration
agreement is in doubt or where the Arbitral Tribunal appointed in
terms of the arbitration agreement has not functioned, or has
failed to conclude the proceedings or to pass an award without
assigning any reason and it became necessary to make a fresh
appointment, Chief Justice or his designate in the given
circumstances after assigning cogent reasons in appropriate
cases may resort to an alternative arrangement to give effect to
the appointment of independent arbitrator under Section 11(6) of
the Act. In North Eastern Railway and Others Vs. Tripple
Engineering Works (supra), though the panel of arbitrators as
per clause 64(3)(a)(ii) and (iii) of the general conditions of contract
under GCC was appointed in the year 1996 but for two decades,
the arbitrator failed to pass the award and no explanation came
47
forward. In the given situation, this Court observed that general
conditions of the contract do not prescribe any specific
qualification of the arbitrators to be appointed under the
agreement except that they should be railway officers further
held that even if the arbitration agreement was to specifically
provide for any particular qualification(s) of an arbitrator the
same would not denude the power of the Court acting under
Section 11(6) to depart therefrom and accordingly, confirmed the
appointment of an independent arbitrator appointed by the High
Court in exercise of Section 11(6) of the Act, 1996. Almost the
same situation was examined by this Court in Union of India
and Others Vs. Uttar Pradesh State Bridge Corporation Ltd.
(supra) and after placing reliance on North Eastern Railway
and Others Vs. Tripple Engineering works(supra) held that
since Arbitral Tribunal has failed to perform and to conclude the
proceedings, appointed an independent arbitrator in exercise of
power under Section 11(6) of the Act, 1996. In the given
circumstances, it was the duty of the High Court to first resort to
the mechanism in appointment of an arbitrator as per the terms
of contract as agreed by the parties and the default procedure
48
was opened to be resorted to if the arbitrator appointed in terms
of the agreement failed to discharge its obligations or to arbitrate
the dispute which was not the case set up by either of the
parties.
44. To conclude, in our considered view, the High Court was not
justified in appointing an independent arbitrator without
resorting to the procedure for appointment of an arbitrator which
has been prescribed under clause 64(3) of the contract under the
inbuilt mechanism as agreed by the parties.
45. Consequently, the orders passed by the High Court are
quashed and set aside. The appellants are directed to appoint
the arbitrator in terms of clause 64(3) of the agreement within a
period of one month from today under intimation to each of the
respondents/contractors and since sufficient time has been
consumed, at the first stage itself, in the appointment of an
arbitrator and majority of the respondents being the petty
contractors, the statement of claim be furnished by each of the
respondents within four weeks thereafter and the arbitrator may
decide the claim after affording opportunity of hearing to the
parties expeditiously without being influenced/inhibited by the
observations made independently in accordance with law.
49
46. The batch of appeals are accordingly disposed of on the
terms indicated. No costs.
47. Pending application(s), if any, stand disposed of.
…………………………J.
(A.M. KHANWILKAR)
…………………………J.
(AJAY RASTOGI)
NEW DELHI
March 29, 2019
50

such disputes once made are required to be adjudicated on facts and the evidence. The factual controversy cannot be adjudicated in OA by the Tribunal or by the High Court in a writ petition.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.3290 OF 2019
(Arising out of S.L.P.(C) No.4072 of 2016)
Sunil Kumar Biswas ….Appellant(s)
VERSUS
Ordinance Factory Board & Ors. ….Respondent(s)

J U D G M E N T
Abhay Manohar Sapre, J.
1. Leave granted.
2. This appeal is directed against the final
judgment and order dated 16.07.2015 passed by
the High Court at Calcutta in WPCT No.82 of 2015
whereby the High Court dismissed the writ petition
1
filed by the appellant and respondent Nos.46
herein.
3. A few facts need mention hereinbelow for the
disposal of the appeal, which involved a short point.
4. The appellant and respondent Nos.46 herein
approached the Central Administrative Tribunal
(CAT), Calcutta against respondent Nos.13
(Ordinance Factory Board & Ors.) in OA No. 159 of
2013 praying therein for a relief that they have been
appointed by the Contractor to render their services
with the Ordinance Factory Board (respondent No.1
herein) which they have been doing from the last 25
years, therefore, they claimed a relief that their
services be regularized.
5. The Tribunal, by order dated 23.05.2013,
dismissed the OA filed by the appellant and
respondent Nos.46 which gave rise to filing of the
2
writ petition by them before the High Court at
Calcutta.
6. By impugned order, the High Court dismissed
the writ petition and held that the remedy of the
appellant and respondent Nos. 46 lies in
approaching the Central Government in making a
reference to the Industrial Tribunal under Section
10 of the Industrial Disputes Act, 1947(hereinafter
referred to as “ID Act”). It is against this dismissal of
the writ petition, the unsuccessful writ petitioners
felt aggrieved and have filed this appeal by way of
special leave in this Court.
7. So, the short question, which arises for
consideration in this appeal, is whether the
Tribunal and the High Court were justified in
dismissing the OA and writ petition.
3
8. Having heard the learned counsel for the
parties and on perusal of the record of the case, we
find no merit in this appeal.
9. In our opinion, the High Court was right in
observing that the remedy of the appellant and
respondent Nos.46 herein (writ petitioners) lies in
applying to the Central Government to make an
industrial reference to the Industrial Tribunal under
Section 10 of the ID Act in relation to the dispute
which has arisen between them but not to pursue
their remedy for adjudication of their grievance by
filing OA before the Tribunal or/and writ petition in
the High Court.
10. Having regard to the nature of the controversy
raised by the appellant and respondent Nos.46, we
are also of the considered view that their remedy
lies in getting their alleged dispute settled by the
4
Industrial Tribunal in a reference under Section 10
of ID Act.
11. The reason is that such disputes once made
are required to be adjudicated on facts and the
evidence. The factual controversy cannot be
adjudicated in OA by the Tribunal or by the High
Court in a writ petition.
12. We, therefore, find no good ground to take
any other view than the one taken by the High
Court while declining to entertain the writ petition.
13. Needless to say, if the reference is eventually
made to the Industrial Tribunal at the instance of
the appellant and respondent Nos.46 by the
Central Government on their request under Section
10 of the ID Act and issue in question is gone into
on facts, the same shall then be decided strictly in
accordance with law by the Industrial Tribunal
uninfluenced by any observations made by the
5
Tribunal, the High Court and this Court in these
proceedings.
14. The appeal thus fails and is accordingly
dismissed.
.………...................................J.
[ABHAY MANOHAR SAPRE]

…...……..................................J.
[DINESH MAHESHWARI]
New Delhi;
March 29, 2019
6

the benefit of doubt must always be reasonable and not fanciful.= the evidence of the other prosecution witnesses (especially PWs 7, 26, 27, 29, 32 and 33) is homogeneous, consistent and reliable, and corroborates the testimony of PWs 1 and 2, which leads us to conclude that the chain of circumstances is complete and points solely at the guilt of the accused. In our considered opinion, the prosecution has proved the complicity of all the appellants in murdering Santhakumar by strangulating him and thereafter throwing the dead body at TigerChola. It is worth recalling that while it is necessary that proof beyond reasonable doubt should be adduced in all criminal cases, it is not necessary that such proof should be perfect, and someone who is guilty cannot get away with impunity only because the truth may develop some infirmity when projected through human processes. The traditional dogmatic hypertechnical approach has to be replaced by a rational, realistic and genuine approach for administering justice in a criminal trial. Justice cannot be made sterile by exaggerated adherence to the rule of proof, inasmuch as the benefit of doubt 48 must always be reasonable and not fanciful

REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NOS. 680681 OF 2009
Pattu Rajan .....Appellant
Versus
The State of Tamil Nadu .....Respondent
WITH
Criminal Appeal Nos. 799800 of 2009
Criminal Appeal No. 824 of 2009
Criminal Appeal Nos. 801802 of 2009
Criminal Appeal Nos. 822823 of 2009
J U D G M E N T
MOHAN M. SHANTANAGOUDAR, J.
The judgment dated 19.03.2009 passed in Criminal Appeal
No. 637 and 748 of 2004 passed by the High Court of Judicature at
1
Madras whereby the High Court convicted the accused appellants
for the abduction and murder of one Santhakumar, husband of the
complainant Jeevajothi (PW1), is called into question in these
appeals.
2. The material facts leading to these appeals are as under:
Accused No. 1 is the proprietor of a chain of hotels (Saravana
Bhavan). Either upon the advice of an astrologer or having become
besotted with PW1, Accused No.1 had evinced a keen desire to take
PW1 as his third wife, though she was already married to
Santhakumar (the deceased). In order to fulfil his desire, Accused
No.1 used to financially help PW1, her family members and her
husband. He used to talk to PW1 over the phone frequently, and
also gave her costly gifts such as jewellery and silk sarees and even
went to the extent of paying her medical bills. In a further bid to
gain PW1’s love and affection, he frequently interfered in her
personal matters. Once when she was ill, under the pretext of
better treatment as advised by another doctor, Accused No. 1
forcefully shifted her to another hospital, where he advised her not
to have sexual relations with her husband and made her undergo a
2
series of tests. The deceased Santhakumar was instructed to get
himself tested for AIDS and other such diseases, which he refused
outright.
3. On 01.10.2001, PW1 and her husband were abducted by
Accused No.1 and his henchmen (including the appellants herein),
for which a separate complaint (Ext. P3) was lodged by PW1 and a
separate trial was conducted. Some of the accused therein were
convicted. Separate appeals were also filed against the judgment of
conviction for the incident of abduction. As they have been decided
separately, we do not propose to discuss the said incident and
offence in detail in these appeals.
4. Accused No.1 took the help of the other appellants in order to
eliminate the husband of PW1, for securing PW1 as his third wife.
Subsequent to the incident of 01.10.2001 relating to abduction,
Accused No. 2 contacted PW1 and told her that he regretted the
previous events and suggested to PW1 to lodge a police complaint. A
few days prior to the murder, Accused No. 2 instructed PW1 to tell
her husband to come alone to a certain Sai Baba temple to meet a
press reporter whom Accused No.2 personally knew in order to
3
highlight Accused No. 1’s wrongdoings. In other words, Accused
No.2 posed himself as a wellwisher of PW1 and the deceased.
5. On 18.10.2001, PW1 as well as her husband went to the Sai
Baba temple as instructed by Accused No. 2. Soon after, two
Ambassador cars bearing Registration Nos. TN 09 T 3224 (M.O.1)
and TN 22 5202 (M.O.2), and a Tata Sumo vehicle bearing
Registration No. TN 09 Q 1310 (M.O.3) came and halted behind the
car in which PW1 and her husband were sitting. Accused Nos. 3
and 4, armed with knives, got out of one of the cars and forced PW1
and her husband to board the car of the accused in which Accused
No.5 was sitting, and took them to Chengalpattu. At about 8.30
p.m. on the same night, a Mercedes Benz bearing Registration No.
TN 10 M 7755 (M.O.4) belonging to Accused No. 1 arrived with the
parents of PW1 along with Accused No.1. Thereafter, PW2, the
mother of PW1, informed PW1 that Accused No.1 was in the said
Benz car, and wanted PW1 to leave her husband and meet Accused
No.1 in the car. As PW1 resisted, Accused Nos. 3 and 4 forcibly took
PW1 to the Benz car, and she was taken to Tiruchirappalli in the
said car.
4
6. On 19.10.2001, PW1 was taken to PW9 by Accused Nos.5 and 8
at Parappadi village, to remove the alleged influence of witchcraft
(black magic) which was allegedly the cause of her being in love
with Santhakumar. From there, she was taken to Veppankulam
village to seek the advise of an astrologer (PW8). At the said place,
an employee of Accused No.1, Janarthanam came and informed
PW1 that her husband had escaped the clutches of the henchmen
of Accused No.1 and his whereabouts were unknown.
Subsequently, after spending the night at Hotel Ariyas at
Tirunelveli, PW1 and her family, along with Accused Nos. 1, 5, 6
and 8 returned to Chennai by train.
7. After two days, Santhakumar spoke to PW1 over a phone call
and stated that Accused No. 2 had told him about being given Rs. 5
lakhs by Accused No.1 to kill him, but Accused No. 2 had let him go
unharmed out of sympathy, and had asked him to escape to
Mumbai and contact him from there after fifteen days. However,
Santhakumar returned to PW1 upon her request. Subsequently, on
21.10.2001, both of them approached Accused No.1 to seek his
mercy, thus revealing that Santhakumar was still alive. Later on
5
the same day, when Accused No.2 told Accused No.1 a false story
about how he and the other accused had killed Santhakumar and
destroyed the evidence, on Accused No.1’s cue, Santhakumar and
PW1 entered the room, much to the shock of Accused No.2.
Disgraced and feeling betrayed, Accused No.2 started assaulting
Santhakumar, and was joined by Accused Nos. 3 and 4. On
24.10.2001, they took the couple to the office of the Deputy
Commissioner of Police to withdraw the complaint relating to the
incident of abduction which had been lodged earlier that month,
and also made them sign a few blank papers. On the same day,
Accused Nos. 5 and 6 took Santhakumar, PW1 and her family
members in a Tata Sumo bearing Registration No. TN 10 M 7755
belonging to Accused No. 1, again to remove the influence of black
magic on PW1, after which they reached Tirunelveli.
8. On 26.10.2001, at about 6.30 a.m., Accused No. 5 came to the
room in which PW1 and her family members were staying in
Tirunelveli and informed them that Accused No.1 had instructed
Santhakumar to be brought to him. Unwilling to send him alone,
PW1 also went along with Santhakumar and Accused No.5.
6
Accused No. 1 made PW1 and her husband get into his Tata Sumo
(Registration No. TN 10 M 7755). This vehicle, being driven by
Accused No. 9, with Accused Nos. 5 and 8, PW1 and Santhakumar
seated within, was followed by another Tata Sumo (M.O.3). Upon
reaching the Karai Illupu culvert, and upon a signal by Accused No.
5, the other vehicle stopped, and Accused Nos. 2 to 4 and 6 alighted
therefrom. Accused No.1 got out and grabbed Santhakumar by the
collar, dragging him out. He pushed Santhakumar down and
handed him over to Accused Nos. 2 to 4 and 6 and ordered them to
“finish him off”. The Tata Sumo (M.O. 3) driven by Accused No. 7
took Santhakumar along with the said accused towards Dindigul.
Accused No. 1 and the other accused took PW1 back, and later
brought her and her family back to Chennai.
9. While PW1 was staying at her mother’s house at Velachery,
Accused Nos. 5, 8 and other henchmen of Accused No.1 kept a
constant vigil over the movements of PW1 and her family.
Thereafter, at the instance of Accused No.1, PW1 and her family
members were taken to an astrologer by the name of Ravi (PW4),
and later, she was made to undergo certain rituals, conducted by
7
one Raghunatha Iyer, in the presence of the second wife of Accused
No.1 at K.K. Nagar. Later, much to her shock, PW1 learnt that these
rituals were traditionally conducted by the wife after the death of
her husband. Therefore, upon growing gravely suspicious, she
lodged the first information on 20.11.2001 stating that Accused
No.1 and his henchmen had murdered her husband, and the same
was registered as Crime No.1047 of 2001.
10. The motive put forth by the prosecution for the commission of
the offence is that Accused No.1 wanted to take PW1 as his third
wife despite knowing that she was already married to the deceased
Santhakumar. Accused No.1 made several failed attempts with the
help of the other accused to sever the relationship between PW1
and her husband. Ultimately, Accused No.1 committed the offence
in question in order to eliminate the deceased so as to be able to
marry PW1 without any obstruction.
11. In the meanwhile, i.e. on 31.10.2001, prior to the lodging of
the FIR, one forester by name Raman and Forest Guard Murugusen
(PW26 and 27 respectively) of the Kodaikanal Range discovered the
dead body of a male near the TigerChola forest area. On seeing the
8
dead body, PW27 lodged the first information, Ext. P42, at
Kodaikanal Police Station, which was registered as C.R. No. 559 of
2001, recording the finding of an unidentified body and its
unnatural death. The postmortem was conducted on 01.11.2001
by PW35 and thereafter, as the body remained unidentified, it was
buried in the Hindu burial ground of the Kodaikanal Municipality
by PW33, Anithalai, in the presence of PW32, Head Constable
Sebastian. Meanwhile, the accused had surrendered and confessed
to the commission of Santhakumar’s murder. Based on Accused
No. 2’s confession that he and the other accused had killed the
victim and thrown the dead body in the forest area of TigerChola
near a curve on the road, the investigation team proceeded to that
place, and it was eventually determined that the dead body found
by the forest officials was that of Santhakumar. The preburial
photographs of the dead body clicked by the Kodaikanal Police
(M.O. 11, 12, 13, 14) as well as the apparel found on the body of the
deceased (M.O. 5, 6 and 8) were identified as Santhakumar’s by
PW1 and her family, as well as by some of the accused. The dead
body was exhumed by PW33 and two others, and was sent for a
second postmortem, which was conducted by PW38. During the
9
course of investigation, the procedure of superimposition of the face
of the deceased was done by PW34, Dr. Jayaprakash, after which
the dead body was concluded to be that of Santhakumar. After
exhumation, the body was also identified by PWs 1 and 2 through a
scar mark still visible on the waist.
Charges were framed under various provisions of the Indian
Penal Code (hereinafter referred to as “the IPC”) including Sections
302, 364 and 201, and the trial was conducted.
12. The Trial Court, upon evaluation of the material on record,
convicted the accused appellants for the offences punishable under
Sections 364, 304 Part I and 201 of the IPC. The accused appellants
as well as the State appealed before the High Court, wherein the
High Court while confirming the finding of guilt of the accused,
modified the conviction for the offence punishable under Section
304 Part I to Section 302 of the IPC. The Trial Court as well as the
High Court concluded that the evidence of the prosecution
witnesses, particularly that of PWs 1 and 2, along with the other
supporting evidence, was believable and trustworthy; the motive for
commission of the offence had been proved; the last seen
10
circumstance had been proved by the prosecution beyond
reasonable doubt; and that the recovery of the dead body based on
the statement of Daniel (Accused No.2) had also been proved. Both
the Courts tested the evidence of PW1 on the touchstone of
consistency with the tenor of the case. The Trial Court, which had
the opportunity to observe the demeanor of PWs 1 and 2, held that
the discrepancies and contradictions, if any, were minor in nature,
and did not affect the credibility and consistency of the evidence of
PWs 1 and 2.
13. The Courts, relying on the evidence of the doctors PWs 35 and
38, who conducted the two postmortem examinations, concluded
that the death was homicidal in nature, as the cause of death was
found to be asphyxia due to throttling.
14. Shri Sushil Kumar, learned senior counsel for the appellants
took us through the entire material on record and submitted that
the circumstances relied upon by the prosecution have not been
proved in accordance with law. He argued that the High Court and
the Trial Court have merely proceeded on assumptions and
conjectures, and the motive for commission of the offence has not
11
been proved, in addition to the fact that the evidence relating to the
recovery of the dead body is shaky. He laid more stress on the
argument that the first information in the present case (Ext. P1)
registered on 20.11.2001 could not have been registered at all,
inasmuch as there cannot be a second FIR relating to the same
incident. According to him, the incident as found in the first
information report dated 20.11.2001 is merely a continuation of the
earlier offence of abduction which had taken place on 01.10.2001,
which had generated proceedings pursuant to the first information
lodged on 12.10.2001. Thus, according to him, the FIR in the
present case would only assume the character of a statement
recorded under Section 161 of the Code of Criminal Procedure
(hereinafter “the Cr.P.C”), and the proceedings in this matter would
stand vitiated. He further submitted that the first information of the
abduction case dated 12.10.2001 had been marked and relied upon
in the present matter as Ext. P3 and its use as a substantive piece
of evidence was illegal. It was also argued that the evidence relating
to the last seen circumstance as deposed by PW1 was not put to the
accused while examining them under Section 313 of the Cr.P.C,
and therefore, such portion of evidence could not be made use of by
12
the prosecution against the accused. Learned counsel also
submitted that the identification of the body merely on the basis of
a superimposition test was improper, in the absence of a DNA test.
Per contra, Shri Balaji Srinivasan, the learned Additional
Advocate General appearing on behalf of the State, argued in
support of the judgments of the Courts below.
15. We do not find any force in the arguments of the learned
Senior Advocate for the appellants that the incident of murder in
the case in hand is merely a continuation of an earlier offence, i.e.
Crime No. 1030 of 2001 relating to the abduction of PW1 and the
deceased Santhakumar, which occurred on 01.10.2001.
Undoubtedly, factors such as proximity of time or place, unity
of purpose and design and continuity of action, in respect of a
series of acts, have to be considered in order to determine whether
such acts form part of the same transaction or not (See State of
A.P. v. Cheemalapati Ganeswara Rao, (1964) 3 SCR 297). A
quick overview of the sequence of unfolding of the incident of
murder in question and the prior incident of abduction would show
13
that the above factors cannot be said to be satisfied in this case.
Even when the two FIRs Ext. P1 and P3 are read together, it
becomes clear that the first incident of abduction began and ended
on 01.10.2001. The crime of abduction commenced when the
victims (PW1 and the deceased) were forced into captivity on the
said date, and was completed on the same day immediately after
the victims were released. In respect of the said incident, the first
information came to be lodged on 12.10.2001 by PW1. During the
investigation of the said case, on 24.10.2001, the accused brought
the deceased, PW1 and her family members to Tirunelveli. The
present crime came to be committed on 26.10.2001, whereby PW1
and her husband, Santhakumar were taken away in a car, and on
the direction of Accused No.1, Accused Nos. 2 to 4, 6 and 7 forcibly
took away Santhakumar by separating him from his wife,
committed his murder and threw away his body at the TigerChola
forest area within the jurisdiction of Kodaikanal Police Station.
Evidently, the time and place of occurrence of the two
incidents are different. Even the number of accused involved in the
incidents is different. No continuity of action can be gathered from
14
the sequence of events either. It may be noted that the motive for
commission of both the offences may be the same, inasmuch as
they were committed to enable Accused No. 1 to marry PW1, but
merely because of their common motive, the second offence cannot
be said to be in continuation of the first incident, in light of there
being distinct intentions behind the two offences. The first offence
was committed with the intention to abduct the deceased and PW1,
the purpose for which was merely to threaten and pressurize them.
In contrast, the intention behind the second offence was to murder
the deceased with a view to permanently get rid of him. Therefore, it
is evident that unity of purpose and design between the two
offences is also absent. Thus, it is amply clear that the incident of
murder is entirely separate and distinct from the earlier incident of
abduction.
16. Undisputedly, the first information pertaining to the incident
of abduction, after passing through various stages and various
police officers, ultimately came to be registered as an FIR on
09.11.2001 in the jurisdictional Police Station. Nevertheless, the
fact remains that the offence of abduction was completed on
15
01.10.2001 itself and the first information came to be lodged on
12.10.2001.
17. There cannot be any dispute that a second FIR in respect of an
offence or different offences committed in the course of the same
transaction is not only impermissible but also violates Article 21 of
the Constitution. In T.T. Antony v. State of Kerala, (2001) 6 SCC
181, this Court has categorically held that the registration of a
second FIR (which is not a counter case) is violative of Article 21 of
the Constitution. It is relevant to note paragraphs 19, 20 and 27 of
the said decision in that regard:
“19. The scheme of CrPC is that an officer in
charge of a police station has to commence
investigation as provided in Section 156 or 157
CrPC on the basis of entry of the first information
report, on coming to know of the commission of a
cognizable offence. On completion of investigation
and on the basis of the evidence collected, he has to
form an opinion under Section 169 or 170 CrPC, as
the case may be, and forward his report to the
Magistrate concerned under Section 173(2) CrPC.
However, even after filing such a report, if he comes
into possession of further information or material,
he need not register a fresh FIR; he is empowered to
make further investigation, normally with the leave
of the court, and where during further investigation
16
he collects further evidence, oral or documentary, he
is obliged to forward the same with one or more
further reports; this is the import of subsection (8)
of Section 173 CrPC.
20. From the above discussion it follows that
under the scheme of the provisions of Sections 154,
155, 156, 157, 162, 169, 170 and 173 CrPC only
the earliest or the first information in regard to the
commission of a cognizable offence satisfies the
requirements of Section 154 CrPC. Thus there can
be no second FIR and consequently there can be no
fresh investigation on receipt of every subsequent
information in respect of the same cognizable
offence or the same occurrence or incident giving
rise to one or more cognizable offences. On receipt of
information about a cognizable offence or an
incident giving rise to a cognizable offence or
offences and on entering the FIR in the station
house diary, the officer in charge of a police station
has to investigate not merely the cognizable offence
reported in the FIR but also other connected
offences found to have been committed in the course
of the same transaction or the same occurrence and
file one or more reports as provided in Section 173
CrPC.
x x x x x x x x x x
27. A just balance between the fundamental
rights of the citizens under Articles 19 and 21 of the
Constitution and the expansive power of the police
to investigate a cognizable offence has to be struck
by the court. There cannot be any controversy that
subsection (8) of Section 173 CrPC empowers the
police to make further investigation, obtain further
evidence (both oral and documentary) and forward a
17
further report or reports to the Magistrate.
In Narang case [Ram Lal Narang v. State (Delhi
Admn.), (1979) 2 SCC 322 : 1979 SCC (Cri) 479] it
was, however, observed that it would be appropriate
to conduct further investigation with the permission
of the court. However, the sweeping power of
investigation does not warrant subjecting a citizen
each time to fresh investigation by the police in
respect of the same incident, giving rise to one or
more cognizable offences, consequent upon filing of
successive FIRs whether before or after filing the
final report under Section 173(2) CrPC. It would
clearly be beyond the purview of Sections 154 and
156 CrPC, nay, a case of abuse of the statutory
power of investigation in a given case. In our view a
case of fresh investigation based on the second or
successive FIRs, not being a countercase, filed in
connection with the same or connected cognizable
offence alleged to have been committed in the
course of the same transaction and in respect of
which pursuant to the first FIR either investigation
is under way or final report under Section 173(2)
has been forwarded to the Magistrate, may be a fit
case for exercise of power under Section 482 CrPC
or under Articles 226/227 of the Constitution.”
18. However, the aforementioned principles of law may not be
applicable to the facts of the incident on hand, as the crimes
underlying the two FIRs are distinct and different. The offence
punishable under Section 302, in the present case, was committed
during the course of investigation of the case in the first FIR, i.e.
18
relating to the crime of abduction. We are of the considered opinion
that the allegations and offences under this present FIR relating to
the murder of the deceased are substantially distinct from the
information lodged in Crime No. 1030 of 2001 relating to abduction.
We are unable to accept the argument of Shri Sushil Kumar that at
the most, further investigation could have been made by the police
in the earlier crime registered relating to abduction since the
murder has allegedly taken place during the subsistence of
investigation of the crime of abduction. As mentioned supra, the
facts and circumstances of the matter clearly indicate that the
offence of abduction committed by the appellants and the offence of
murder were two different and distinct offences, and therefore,
there is no question of further investigation to be made in the crime
of abduction by the investigating agency relating to the offence of
murder which was committed during the subsistence of the
investigation relating to abduction. Further investigation, as
envisaged under Subsection 8 of Section 173 of the Cr.P.C,
connotes investigation of the case in continuation of an earlier
investigation with respect to which the chargesheet has already
been filed. In case a fresh offence is committed during the course of
19
the earlier investigation, which is distinct from the offence being
investigated, such fresh offence cannot be investigated as part of
the pending case, and should instead be investigated afresh. It is
pertinent to note that the facts on hand are similar to the facts in
the case of Awadesh Kumar Jha v. State of Bihar, (2016) 3 SCC
8, wherein this Court held that the case arising out of a second FIR,
if relating to a separate transaction, cannot be investigated along
with a previous FIR under the clause ‘further investigation’ as
contemplated under Subsection 8 to Section 173 of the Cr.P.C.
19. In Rameshchandra Nandlal Parikh v. State of Gujarat,
(2006) 1 SCC 732, earlier judgments of this Court including T.T.
Antony (supra) were considered, and it was held that in case the
FIRs are not in respect of the same cognizable offence or the same
occurrence giving rise to one or more cognizable offences, and have
not been alleged to have been committed in the course of the same
transaction or the same occurrence as the ones alleged in the first
FIR, there is no prohibition on accepting the second FIR. In this
respect, in the case of Nirmal Singh Kahlon v. State of Punjab,
(2009) 1 SCC 441, this Court observed thus:
20
“67. The second FIR, in our opinion, would be
maintainable not only because there were different
versions but when new discovery is made on factual
foundations. Discoveries may be made by the police
authorities at a subsequent stage. Discovery about a
larger conspiracy can also surface in another
proceeding, as for example, in a case of this nature. If
the police authorities did not make a fair
investigation and left out conspiracy aspect of the
matter from the purview of its investigation, in our
opinion, as and when the same surfaced, it was open
to the State and/or the High Court to direct
investigation in respect of an offence which is distinct
and separate from the one for which the FIR had
already been lodged.”
20. We may also refer to the following observations made by this
Court in the case of Babubhai v. State of Gujarat, (2010) 12 SCC
254, while considering a similar question:
“20. Thus, in view of the above, the law on the
subject emerges to the effect that an FIR under
Section 154 CrPC is a very important document. It is
the first information of a cognizable offence recorded
by the officer in charge of the police station. It sets
the machinery of criminal law in motion and marks
the commencement of the investigation which ends
with the formation of an opinion under Section 169
or 170 CrPC, as the case may be, and forwarding of a
police report under Section 173 CrPC. Thus, it is
quite possible that more than one piece of
information be given to the police officer in charge of
21
the police station in respect of the same incident
involving one or more than one cognizable offences.
In such a case, he need not enter each piece of
information in the diary. All other information given
orally or in writing after the commencement of the
investigation into the facts mentioned in the first
information report will be statements falling under
Section 162 CrPC.
21. In such a case the court has to examine the facts
and circumstances giving rise to both the FIRs and
the test of sameness is to be applied to find out
whether both the FIRs relate to the same incident in
respect of the same occurrence or are in regard to the
incidents which are two or more parts of the same
transaction. If the answer is in the affirmative, the
second FIR is liable to be quashed. However, in
case, the contrary is proved, where the version in
the second FIR is different and they are in
respect of the two different incidents/crimes, the
second FIR is permissible. In case in respect of
the same incident the accused in the first FIR
comes forward with a different version or
counterclaim, investigation on both the FIRs has
to be conducted.”
(emphasis supplied)
In light of the aforementioned settled legal proposition, we
have no hesitation in holding that the separate first information
lodged in this case is just, legal and proper.
21. Furthermore, it is no doubt true that the first information
relating to the crime of abduction dated 12.10.2001 was marked in
22
the case on hand relating to murder. However, we cannot accept the
contention that the same has been used as a substantive piece of
evidence in this matter. This is because the said document was
practically used only as supportive material to show the motive for
the accused to commit the crime.
22. Coming to the merits of the matter, it is pertinent to note that
the prosecution mainly relied upon three circumstances to prove
the guilt of the accused, i.e. motive, the last seen circumstance and
the recovery of the dead body at the instance of the accused. An
additional link in the chain of circumstances is the nonexplanation
by the accused about the last seen circumstance in their statement
recorded under Section 313 of the Cr.P.C. Clearly, there is no
direct evidence in this matter and the whole case rests on
circumstantial evidence.
Before we undertake a consideration of the evidence
supporting such circumstances, we would like to note that the law
relating to circumstantial evidence is well settled. The Judge while
deciding matters resting on circumstantial evidence should always
tread cautiously so as to not allow conjectures or suspicion,
23
however strong, to take the place of proof. If the alleged
circumstances are conclusively proved before the Court by leading
cogent and reliable evidence, the Court need not look any further
before affirming the guilt of the accused. Moreover, human agency
may be faulty in expressing the picturisation of the actual incident,
but circumstances cannot fail or be ignored. As aptly put in this oftquoted phrase: “Men may lie, but circumstances do not”.
As mentioned supra, the circumstances relied upon by the
prosecution should be of a conclusive nature and they should be
such as to exclude every other hypothesis except the one to be
proved by the prosecution regarding the guilt of the accused. There
must be a chain of evidence proving the circumstances so complete
so as to not leave any reasonable ground for a conclusion of
innocence of the accused. Although it is not necessary for this
Court to refer to decisions concerning this legal proposition, we
prefer to quote the following observations made in Sharad
Birdhichand Sarda v. State of Maharashtra, (1984) 4 SCC 116
(SCC p. 185 para 153154):
24
“153. A close analysis of this decision would show that the
following conditions must be fulfilled before a case against
an accused can be said to be fully established:
(1) the circumstances from which the conclusion of
guilt is to be drawn should be fully established.
It may be noted here that this Court indicated that the
circumstances concerned “must or should” and not “may
be” established. There is not only a grammatical but a
legal distinction between “may be proved” and “must be or
should be proved” as was held by this Court in Shivaji
Sahabrao Bobade v. State of Maharashtra 1973 CriLJ
1783 where the following observations were made:
“Certainly, it is a primary principle that the
accused must be and not merely may be guilty
before a Court can convict and the mental distance
between ‘may be’ and ‘must be’ is long and divides
vague conjectures from sure conclusions.”
(2) the facts so established should be consistent
only with the hypothesis of the guilt of the
accused, that is to say, they should not be
explainable on any other hypothesis except that
the accused is guilty,
(3) the circumstances should be of a conclusive
nature and tendency,
(4) they should exclude every possible hypothesis
except the one to be proved, and
(5) there must be a chain of evidence so complete
as not to leave any reasonable ground for the
conclusion consistent with the innocence of the
accused and must show that in all human
25
probability the act must have been done by the
accused.
154. These five golden principles, if we may say so,
constitute the panchsheel of the proof of a case based on
circumstantial evidence.”
23. In order to satisfy our conscience, we have independently
considered the evidence on record in its entirety in view of the
aforementioned principles. However, as we do not wish to burden
this judgment by reiterating the depositions of all the witnesses on
record in detail, we deem it fit to discuss only the important aspects
highlighted by some of the prosecution witnesses in their testimony.
24. It would be appropriate to begin with the testimony of PW1,
the wife of the deceased. She has deposed in detail as to how
Accused No.1 wanted to marry her and how he often tried to lure
her through undue favours. She has deposed that as Accused No.1
wished to take her as his third wife, he wanted to separate her from
her husband. Whenever PW1 or her family were in need of money,
Accused No.1 would generously help them. He even used to talk to
PW1 over the phone regularly, and used to interfere in her personal
matters unwarrantedly. She has narrated elaborately about the
26
prior incident of abduction as well. As far as the matter on hand is
concerned, she has deposed that on 24.10.2001, PW1, her parents
and the deceased were taken by Accused No.1 and the other
accused to different places and they ultimately reached Tirunelveli.
In the early hours of 26.10.2001, Accused No.5 asked the deceased
to meet Accused No.1. PW1, being reluctant to send the deceased
alone with Accused No. 5, went along with her husband to meet
Accused No. 1, who made PW1 and the deceased get into the vehicle
bearing Registration No. TN 10 M 7755 (driven by Accused No. 9)
along with himself and Accused Nos. 5 and 8. On the way, upon
the signal of Accused No. 5, Accused Nos. 2, 4 and 6 got down from
a vehicle (M.O. 3) which had been following behind, and took away
the deceased. Accused No. 1 further instructed these accused to
“finish him off”, definitely intending to instruct them to kill the
deceased. Thereafter, PW1 was forcibly taken back by Accused No.1
and later was made to undergo different rituals, which made her
suspect the murder of her husband and led her to lodge a
complaint regarding the same.
27
PW1 has also deposed about the identification of the clothes
worn by the deceased at the time of leaving her company, on which
basis she identified the clothes on the discovered dead body to be
those of Santhakumar’s. She also identified his personal belongings
that were recovered from Accused No.6. She has deposed about the
exhumation of the dead body and her identification of the dead
body based on the scar on the left side of her husband’s waist. She
has meticulously deposed about the role of each of the appellants in
the crime. In the crossexamination, she has also explained the
delay in lodging the first information by deposing that she could not
file the complaint before 20.11.2001 though her husband was
abducted on 26.10.2001 because she was under the constant
surveillance of Accused No. 1 and his henchmen and could only
free herself after 06.11.2011. Also, importantly, in the first incident
(being the incident of abduction, i.e. Crime No. 1030 of 2001), her
husband had been spared by Accused No. 1, and on a subsequent
occasion also, he had been spared by Accused No. 2. Thus, she
was hopeful that her husband would escape on this occasion as
well. She also admitted in the crossexamination that her mother
28
had informed her that if she married Accused No.1, he would set up
a business for their family and also pay them Rs. 10 Lakhs.
Though PW1 was crossexamined at length, the defence could
not discredit her evidence on material particulars. Minor variations
pointed out by the defence, as such neither affect the prosecution
version nor PW1’s evidence in its entirety.
25. In effect, PW1 has deposed about the aspect of motive, the last
seen circumstance as well as the identification of the personal
belongings of the deceased and his dead body. She is the witness
who saw the deceased in the company of the accused for the last
time before his death. While the date on which she saw the
deceased with the accused was 26.10.2001, the dead body was
found on 31.10.2001, i.e. within five days of the incident, and as
per the postmortem report given by PW35, Dr. A. Sivakumar, the
victim appeared to have died 35 days prior to the examination,
which was conducted on 02.11.2001. This fact is well corroborated
by the examinationinchief of PW35 as well.
26. The evidence of PW1 is fully supported by the evidence of PW2,
the mother of PW1. PW2 has deposed about the conduct of
29
Accused No.1 towards her family members, as well as the
dishonourable motive of Accused No.1 to marry PW1 and make her
his third wife. She has fully corroborated the evidence of PW1
regarding the events of the day of the incident as well as the
preceding days. She has testified to the fact that Accused No.5
came to their room in Tirunelveli and asked the deceased to go
along with Accused No.1. However, PW1 also went along with them,
but she returned to the room alone, crying, and revealed that the
accused had beaten the deceased and taken him away. She has
also deposed about Accused No.1 taking PW1 to an astrologer, and
for removing the influence of black magic, etc.; and that she was
present during the exhumation of the body and had identified the
dead body of her soninlaw by the scar mark on his waist. She had
also identified the belongings of the deceased. In her crossexamination, she denied the suggestion made to her by the defence
that PW1 had falsely lodged the complaint to extract money from
Accused No.1. She has also explained the delay in filing the FIR,
stating that her house was being monitored by Accused No.1 and
his aides and that she was hoping that the deceased would return
30
safely, as he had previously. The evidence of PW2 fully corroborates
the evidence of PW1.
It is evident from the above discussion that the evidence of
PWs 1 and 2 with regard to the motive for commission of the
offence, the last seen circumstance and recovery as well as the
identification of the dead body is consistent with the case of the
prosecution. We do not find any artificiality in their evidence. On
the other hand, their evidence remains natural, consistent, cogent
and probable, and thus we do not find any reason to disagree with
the findings arrived at in that regard by the Trial Court as well as
by the High Court.
27. The testimony of PW7, the Village Administrative Officer
working in the office of the Tehsildar, is also relevant and
significant. As per the requisition of the Assistant Commissioner of
Police, PW7 went to the Chennai Kotturpuram Police Station on
30.11.2001. In his presence, Accused No.2 confessed to the
Inspector of Police, PW42, that if taken to Kodaikanal, he would
show the spot at TigerChola where the dead body of Santhakumar
was thrown. Accordingly, Accused No.2 was taken to the said place
31
on 01.12.2001 and he pointed out the place of disposal of the body,
and also identified the dead body of the deceased from the
photographs available with the police. PW7 further deposed that
PWs 1 and 2, who came the next day, i.e., on 02.12.2001, also
identified the dead body shown in the photographs, and the body
was exhumed after 2 days, after completing the formalities. He also
deposed that on 13.12.2001, Accused No.6 confessed that if taken
to his colony at Saligramam Road, he would identify and produce
the wallet (M.O.7) and gold chain (M.O.9) of the deceased, and the
same were recovered at the instance of Accused No. 6. PW7 has
also deposed about the recovery of one lungi (M.O. 15) from the
Tata Sumo in which the deceased was last seen. Nothing material
worth considering in favour of the defence has been extracted from
the crossexamination of PW7.
It was argued by Shri Sushil Kumar that the confession made
by Accused No.2 before PW7 was not admissible in evidence. There
cannot be any dispute that a confession made by the accused in
police custody is an inadmissible confession. The confession herein
cannot even be called an extrajudicial confession because of the
32
presence of the police. Be that as it may, if a confession is made by
the accused before the police and a portion of the confession leads
to the recovery of any incriminating material, such portion alone is
admissible under Section 27 of the Indian Evidence Act. Since only
such portion of the confession relating to the recovery of certain
material objects was admitted in evidence and relied upon, such
reliance was in accordance with law.
28. The testimony of PWs 26, 27, 29, 32 and 33 pertains to the
vital aspect of the recovery of the body of the deceased. PW26
Raman, the forester, has deposed that while he was working with
Forest Guard Murugesan (PW27) on 31.10.2001, they found a dead
body lying at TigerChola in an abyss in the forest. The body had a
bluecoloured checked fullsleeved shirt and sandalcoloured pant
with a blackcoloured belt. After seeing the dead body, PW26 and
PW27 went to the Kodaikanal Police Station and lodged the first
information (Ext. P42) with regard to the discovery of the
unidentified dead body. Thereafter, the police came to the spot
along with a camera and took photographs of the dead body. PW27
33
has reaffirmed what has been stated by PW26 and has deposed that
the dead body was taken to the hospital by the police for autopsy.
PW29, the SubInspector of Police of Kodaikanal Police
Station, has deposed that on 31.10.2001, PWs 26 and 27 lodged the
complaint which came to be registered on the same day. Thereafter,
PW29 along with other personnel went to the concerned spot at
TigerChola, and saw the dead body of a male aged about 30 years
wearing the aforementioned clothes. He took the photographs of the
dead body from all angles and prepared the observation mahazar
(Ext. P45) and panchnama of the dead body (Ext. P46). Thereafter,
the dead body was sent to the government hospital for postmortem
examination. Since the body was unidentified and no relatives could
be found, he asked Head Constable Sebastian (PW32) to bury the
body in the municipality burial ground. He also told PW32 to mark
the place where the dead body was buried. In the crossexamination, he has denied the suggestion that the pictures
mentioned were merely photographs of the original photographs
taken on the spot of discovery. Further, he has deposed that he
conducted an inquest of the dead body and prepared the same
34
under the light of a Petromax. Although he saw a scar on the dead
body, he did not mention the same in the observation mahazar. The
colour of the shirt was seen as brown in the light of the Petromax,
but on rechecking it in morning, he realized that it was actually
blue, and thus struck it out and corrected it accordingly in the
mahazar.
PW32, the Head Constable, has reiterated what has been
deposed by PW29. He was present during the burial of the dead
body by PW33 Anithalai, and instructed him to place an identifier
on the spot of burial. PW32 exhumed the dead body in the presence
of the Tehsildar, upon whose direction, he kept the dead body at a
place that was elevated. He also deposed that PW1, Jeevajothi,
identified the dead body to be that of her husband and had left the
place crying. PW32’s version as to the burial was corroborated by
PW33, who has deposed that he buried the body and put the
identification mark of a blue metal stone near the head to identify
the place.
29. We may also briefly discuss the testimony of PWs 35 and 38
(the doctors who conducted the postmortems of the deceased).
35
PW35 conducted the first postmortem examination. He has stated
in his examinationinchief that the hyoid bone in the neck was
found broken and the brain was found decomposed. He opined that
the person could have died 3 to 5 days prior to the postmortem
examination. The hyoid bone in the neck could have been broken
due to strangulation of the said person by using materials like a
lungi. PW38, who conducted the second postmortem examination
upon exhumation of the dead body, was also present at the spot of
exhumation. PW38 deposed that while the body was being
exhumed, he had noticed that a wooden stick had been put up
along with a small stone on the southern part of the place. He also
deposed that there was an old injury scar on the right lower
abdomen of the dead body, the hyoid bone was broken, and that the
fracture found in the hyoid bone was antemortem, which was
confirmed through a Bensidine test. He opined that the cause of
death appeared to be compression of the neck.
30. It is also relevant to note the testimony of PW36, the
handwriting expert. During the course of investigation, the records
of the various hotels in which the accused had stayed along with
36
the deceased, PW1 and her family were collected. PW36 compared
the handwritings in the hotel records with the handwritings of the
accused and opined the former to belong to Accused Nos. 4, 5, 6
and 8. This supports the conclusion that the accused in fact took
PW1 and her family members to various places as deposed by them.
31. Shri Sushil Kumar also argued that a DNA test should have
been conducted in order to identify the dead body, and
identification merely on the basis of a superimposition test, which is
not a tangible piece of evidence, may not be proper.
One cannot lose sight of the fact that DNA evidence is also in
the nature of opinion evidence as envisaged in Section 45 of the
Indian Evidence Act. Undoubtedly, an expert giving evidence before
the Court plays a crucial role, especially since the entire purpose
and object of opinion evidence is to aid the Court in forming its
opinion on questions concerning foreign law, science, art, etc., on
which the Court might not have the technical expertise to form an
opinion on its own. In criminal cases, such questions may pertain
to aspects such as ballistics, fingerprint matching, handwriting
37
comparison, and even DNA testing or superimposition techniques,
as seen in the instant case.
32. The role of an expert witness rendering opinion evidence before
the Court may be explained by referring to the following
observations of this Court in Ramesh Chandra Agrawal v.
Regency Hospital Limited & Ors., (2009) 9 SCC 709:
“16. The law of evidence is designed to ensure that the
court considers only that evidence which will enable it to
reach a reliable conclusion. The first and foremost
requirement for an expert evidence to be admissible is
that it is necessary to hear the expert evidence. The test
is that the matter is outside the knowledge and
experience of the lay person. Thus, there is a need to
hear an expert opinion where there is a medical issue to
be settled. The scientific question involved is assumed to
be not within the court's knowledge. Thus cases where
the science involved, is highly specialized and
perhaps even esoteric, the central role of an expert
cannot be disputed…”
(emphasis supplied)
Undoubtedly, it is the duty of an expert witness to assist the
Court effectively by furnishing it with the relevant report based on
his expertise along with his reasons, so that the Court may form its
independent judgment by assessing such materials and reasons
furnished by the expert for coming to an appropriate conclusion. Be
38
that as it may, it cannot be forgotten that opinion evidence is
advisory in nature, and the Court is not bound by the evidence of
the experts. (See The State (Delhi Adminstration) v. Pali Ram,
(1979) 2 SCC 158; State of H.P. v. Jai Lal & Ors., (1999) 7 SCC
280; Baso Prasad & Ors. v. State of Bihar, (2006) 13 SCC 65;
Ramesh Chandra Agrawal v. Regency Hospital Ltd. & Ors.
(supra); Malay Kumar Ganguly v. Dr. Sukumar Mukherjee &
Ors., (2010) 2 SCC (Cri) 299).
33. Like all other opinion evidence, the probative value accorded to
DNA evidence also varies from case to case, depending on facts and
circumstances and the weight accorded to other evidence on record,
whether contrary or corroborative. This is all the more important to
remember, given that even though the accuracy of DNA evidence
may be increasing with the advancement of science and technology
with every passing day, thereby making it more and more reliable,
we have not yet reached a juncture where it may be said to be
infallible. Thus, it cannot be said that the absence of DNA evidence
would lead to an adverse inference against a party, especially in the
39
presence of other cogent and reliable evidence on record in favour of
such party.
34. This leads us to the question of the propriety of relying upon
the superimposition test conducted in the instant case for
identifying the deceased. As noted supra, the learned counsel for
the appellants has argued that evidence pertaining to the use of the
superimposition technique is not a tangible piece of evidence. We
find ourselves unable to agree with this view. There cannot be any
dispute that evidence on superimposition is also based on experts’
opinion. We would like to note that the use of the superimposition
technique in Indian investigations for identification purposes is not
a new phenomenon. Notably, it has been employed in the
investigations pertaining to the Nithari murders, the Russian
murder incident in Goa in 2008, and even before that in the Morni
Hill murder case and the Paharganj bomb blast case as far back as
in 1996, and the Udhampur murder case in 2005 (See Modi, A
Textbook of Medical Jurisprudence and Toxicology, 26th edn., 2018,
pp. 267271). This Court itself has placed reliance on identification
of the deceased through superimposition on several occasions (see
40
Shankar & Ors. v. State of Tamil Nadu, (1994) 4 SCC 478;
Swamy Shraddananda v. State of Karnataka, (2007) 12 SCC
288; Inspector of Police, Tamil Nadu v. John David, (2011) 5
SCC 509; Mahesh Dhanaji Shinde v. State of Maharashtra,
(2014) 4 SCC 292), clearly indicating that it is an acceptable piece
of opinion evidence.
35. It is relevant to note that all of the decisions of this Court cited
in the above paragraph were based on circumstantial evidence,
involving aspects such as the last seen circumstance, motive,
recovery of personal belongings of the deceased, and so on, and
therefore in none of the cases was the superimposition technique
the sole incriminating factor relied upon to reach a conclusion of
guilt of the accused. Indeed, in Mahesh Dhanaji Shinde (supra),
the Court also had the advantage of referring to a DNA test, and in
John David (supra), of referring to a DNA test as well as dental
examination of the deceased, to determine the identity of the victim.
This is in line with the settled practice of the Courts, which
generally do not rely upon opinion evidence as the sole
incriminating circumstance, given its fallibility. This is particularly
41
true for the superimposition technique, which cannot be regarded
as infallible.
36. In view of the above discussion, we hold that the High Court
was justified in observing that a superimposition test cannot be
taken as a conclusive one for the identification of a dead body,
because by itself it may not conclusively establish identification.
However, the High Court rightly accepted the expert testimony on
this aspect since in the instant case, the superimposition test was
merely one piece of evidence relied upon by the prosecution to
corroborate the evidence of PWs 1 and 2 in order to strengthen its
case.
37. Moreover, it is evident from the testimony of PW34, Dr.
Jayaprakash, who conducted the superimposition test, that the test
was conducted by using three different methods, i.e. video
superimposition, visual observation, and dental trait
superimposition, and in spite of challenges to the reliability of such
evidence, the Courts, after carefully assessing the methodology
adopted, accepted the finding reached by PW34 regarding the
42
identification of the body, and we see no error in such conclusion
reached by the Courts.
38. Therefore, we are of the opinion that the scientific evidence of
PW34 was rightly believed by the Trial Court as well as by the High
Court, and strengthens the evidence of PWs 1 and 2 regarding the
identification of the body. Though a DNA test would have helped the
Courts immensely in determining the reliability of the identification
of the body of the deceased, in the presence of other reliable
evidence on record in favour of the prosecution version on this
aspect, we reject the contention that the nonconducting of a DNA
test and the reliance on evidence regarding identification through
superimposition is improper. This is all the more true since no
material is forthcoming to the effect that the parents of the
deceased were alive during the relevant period, so as to conduct
comparative DNA tests.
39. It is noteworthy to emphasise that based on the confession of
Accused No.6, recoveries of a wallet containing a photograph of
PW1, gold chain etc. were effected from his house, which, as
43
mentioned supra, also stand positively identified by PW1 and her
family as belonging to the deceased.
40. From the evidence of the witnesses discussed supra, it is amply
clear that the dead body recovered from TigerChola was identified
by PW1 and her family members as Santhakumar’s, and the same
body was exhumed from the burial grounds. It is evident from the
depositions that the recovery of the dead body was made from the
TigerChola forest area, which is the same place to which Accused
No. 2 led the investigation team based on his confession about
disposal of the dead body. It is relevant to note at this juncture that
merely because the actual recovery of the body happened before the
accused lead the police to the scene, it does not, in the facts and
circumstances of this case, negate the validity of the recovery based
on a confession, in terms of Section 27 of the Evidence Act.
In our considered view, the recovery of the body of the
deceased at the instance of Accused No. 2 and the identification of
the body as that of Santhakumar by PW1, her family as well as by
the accused, on the basis of photographs, the clothes and
44
belongings of the deceased, and his scar, stand proved beyond all
reasonable doubt.
41. As mentioned supra, the evidence of PWs 1 and 2 proves the
circumstance relating to the last seen evidence beyond reasonable
doubt, apart from other circumstances. Both of them in their
evidence (especially PW1), as mentioned supra, have consistently
and cogently deposed that the deceased was last seen along with
the accused, who took the deceased away upon the orders of
Accused No. 1. No explanation, much less any plausible
explanation has come from the accused in their statements under
Section 313 of the Cr.P.C rebutting the strong evidence against
them. Though the burden had shifted onto the accused to explain
the said circumstance as to when they left the company of the
deceased, no explanation was adduced in that regard by the
accused herein. Hence, an adverse inference has to be drawn
against the accused. It may be noted that such nonexplanation by
the accused provides an additional link in the chain of
circumstances.
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Furthermore, although it was argued by Shri Sushil Kumar
that the evidence relating to the last seen circumstance as deposed
by PW1 was not put to the accused while recording their statement
under Section 313, such an argument cannot be accepted, since
Question No. 22 and Question No. 30 specifically relate to the
evidence of the last seen circumstance, and were put to Accused
No.1. Same is the case with the other appellants. A perusal of the
statements of the accused recorded under Section 313 also reveals
that the relevant questions pertaining to taking Santhakumar along
with PW1 in the car on 26.10.2001, detection of the decomposed
dead body and the postmortem thereof were all put to the accused
so as to fully enable them to explain all the incriminating
circumstances appearing against them in the evidence adduced by
the prosecution. It is needless to observe that it has been
established through a catena of judgments of this Court that the
doctrine of last seen, if proved, shifts the burden of proof onto the
accused, placing on him the onus to explain how the incident
occurred and what happened to the victim who was last seen with
him. Failure on part of the accused to furnish any explanation in
this regard, as in the case in hand, or furnishing false explanation
46
would give rise to a strong presumption against him, and in favour
of his guilt, and would provide an additional link in the chain of
circumstances. (See Rohtash Kumar v. State of Haryana, (2013)
14 SCC 434; Trimukh Maroti Kirkan v. State of Maharashtra,
(2006) 10 SCC 681).
42. It is also relevant to note that the bill book and cash book of a
petrol pump at Palani (Ext. P32), where the Tata Sumo bearing
Registration No. TN 09 Q 1310 (M.O.3) was refuelled, were also
seized. This is very crucial evidence to show that the Tata Sumo in
which the accused were travelling along with the deceased had in
fact gone towards Kodaikanal, as is evident from the fact that fuel
was filled from a petrol pump enroute to Kodaikanal at Palani on
the relevant date.
43. In our considered opinion, the overwhelming, consistent,
cogent and reliable testimonies of PWs 1 and 2, along with the
aforementioned corroborative evidence, conclusively prove the
prosecution case. We reiterate that PWs 1 and 2 were steadfast in
their testimony about the motive, the last seen circumstance,
recovery of the dead body based on the confession of Accused No.2,
47
and about the identification of the dead body. We do not find any
embellishment or exaggeration in the evidence of these witnesses.
Moreover, the evidence of the other prosecution witnesses
(especially PWs 7, 26, 27, 29, 32 and 33) is homogeneous,
consistent and reliable, and corroborates the testimony of PWs 1
and 2, which leads us to conclude that the chain of circumstances
is complete and points solely at the guilt of the accused. In our
considered opinion, the prosecution has proved the complicity of all
the appellants in murdering Santhakumar by strangulating him
and thereafter throwing the dead body at TigerChola. It is worth
recalling that while it is necessary that proof beyond reasonable
doubt should be adduced in all criminal cases, it is not necessary
that such proof should be perfect, and someone who is guilty
cannot get away with impunity only because the truth may develop
some infirmity when projected through human processes. The
traditional dogmatic hypertechnical approach has to be replaced by
a rational, realistic and genuine approach for administering justice
in a criminal trial. Justice cannot be made sterile by exaggerated
adherence to the rule of proof, inasmuch as the benefit of doubt
48
must always be reasonable and not fanciful. (See Inder Singh v.
State (Delhi Administration), (1978) 4 SCC 161; State of H.P. v.
Lekh Raj & Anr., (2000) 1 SCC 247; Takhaji Hiraji v. Thakore
Kubersing Chamansing & Ors., (2001) 6 SCC 145; Chaman &
Anr. v. State of Uttarakhand, (2016) 12 SCC 76).
44. Having regard to the entire material on record and the totality
of the facts and circumstances, we find that the evidence on record
fully proves the case of the prosecution and that the Trial Court as
well as the High Court evaluated the material on record in its
proper prospective while coming to their conclusion. Thus, the
judgment of the Trial Court as modified by the High Court need not
be interfered with. Hence these appeals fail and stand dismissed.
...........................................J.
(N.V. Ramana)
............................................J.
(Mohan M. Shantanagoudar)
……………………………………..J.
(Indira Banerjee)
New Delhi;
March 29, 2019.
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LAW FOR ALL

LawforAll

advocatemmmohan

Just for legal information but not form as legal opinion

Friday, March 29, 2019

such disputes once made are required to be adjudicated on facts and the evidence. The factual controversy cannot be adjudicated in OA by the Tribunal or by the High Court in a writ petition.