-1- IN THE HIGH COURT OF BOMBAY AT GOA APPEAL UNDER ARBITRATION ACT NO. 3 OF 2008 WITH CIVIL APPLICATION NO. 315 OF 2008 Government of Goa, represented by the Director of Tourism, and the Competent Authority, with his office at Patto Plaza, Panaji-Goa. ...... Appellant (Ori. Respondent) V e r s u s Jaisu Shipping Co. Pvt. Ltd., a Private Limited Company incorporated under the Companies Act, 1956, represented by its Executive Director, Mr. Vishin Kewalramani, and having its registered office at Kewalramani House, Near Customs and Port Building, New Kandla, Kutch District, Gujarat – 370 210. ...... Respondent (Ori. Applicant) Mr. S. G. Dessai, Senior Advocate with Mr. P. Talaulikar, Advocate for the Appellant. Mr. S. D. Lotlikar, Senior Advocate with Ms. Jimi John, Advocate for the Respondent. CORAM : P. B. MAJMUDAR & U. D. SALVI, JJ. DATE : 19 th March, 2009 . -2- ORAL JUDGMENT (Per P. B. MAJMUDAR, J ) Government of Goa has preferred this appeal against the Judgment and Order passed by Principal District Judge, Panaji, dated 26.08.2008. By the impugned Order, the Principal District Judge, Panaji, partly allowed the applications submitted by the respondent herein. 2. The respondent preferred an application under Section 9 of the Arbitration and Conciliation Act, 1996, for the purpose of interim measure. The dispute is in connection with removal of the vessel namely M. V. River Princess, grounded off at Sinquerim Beach, Candolim. So far as the ship is concerned, it is grounded on the said beach since 06.06.2000, i.e. more than eight years and in order to prevent environmental hazard, it was felt necessary on the part of State of Goa to see that the said ship is removed and taken out for the purpose of refloating and towing it away wholly to the ship breaking yard. For the aforesaid purpose, an agreement was entered into between the present appellant and respondent dated 05.01.2007, by which, the respondent herein had agreed to remove the vessel namely M. V. River Princess along with its contents by refloating and towing it away wholly to any authorized ship breaking yard and dispose it off. As -3- per the agreement, the respondent was required to refloat the said ship and tow it away wholly from the site within a period of 180 days from the date of the letter of acceptance of the bid i.e. from 23.10.2006. The respondent herein also gave Bank Guarantee for the performance of the contract for Rs.5.50 crores (Rupees Five Crores Fifty Lakhs only), in favour of present appellant. According to the appellant, since the respondent failed to carry out the said obligation within stipulated period, and that since time being the essence of the contract and since the respondent failed to carry out the contractual obligation, the appellant forfeited the security deposit by encashing the performance Bank Guarantee. The appellant also issued a show cause notice to the respondent as to why the contract should not be terminated on 03.06.2008. At that stage, the present respondent preferred the said application under Section 9 of the Arbitration and Conciliation Act, 1996, on various grounds as mentioned in the application. The said application was opposed by the appellant on various grounds. 3. The learned Principal District Judge, Panaji, passed following Order : ORDER (a) Application is partly allowed. (b) The respondent is restrained from, in -4- any manner whatsoever causing an interference with or impediment to the applicant's work under the said Agreement dated 05.01.2007, and/or from terminating the same and from making any demand on the applicant or taking away by way of damages or otherwise and from taking any action in furtherance of show cause notice dated 05.06.2008, and from awarding the work which is the subject matter of the said agreement, to any other person or entity, under the re-flotation of the vessel or until the final disposal of the arbitration proceedings for commencement of which the applicant shall take steps within one month from today, whichever is earlier, as the case may for the reliefs concerned.” 4. It is the aforesaid Order which is impugned at the instance of the appellant in this Appeal and which is filed under Section 37(1)(a) of the Arbitration and Reconciliation Act, 1996. 5. Learned Counsel Mr. Dessai, appearing for the appellant has vehemently submitted that the interim direction given by the learned Judge could not be given and in the facts and circumstances of the case. It is submitted that the time being the essence of the contract and when the respondent failed to carry out the contractual obligations, the contract came to an end as per the Clause in the contract and, -5- accordingly, the learned Trial Judge could not have given the direction which is given in the Judgment. It is submitted that Judgment of the learned Trial Judge is contrary to law and facts of the case. 6. During the course of hearing, learned Counsel Mr. Dessai pointed out that at the time when the question of formation of the contract and finalisation of the contract was pending with the State Government, the concerned Judge, who passed the Judgment, was a Law Secretary and he had dealt with the file in the capacity of Law Secretary and, therefore, he should not have taken up the matter on judicial side. It is submitted by Mr. Dessai that at the time of formation of the contract as well as at the time of execution of the contract, some correspondence went on between the parties and the Principal District Judge, who has passed the Order, had signed various notings in his capacity as Law Secretary of the Government. It is submitted by Mr. Dessai that the tender notice was invited on 31.01.2006 and the same was submitted on 27.02.2006. The tenders were finalised on 20.10.2006 and the formal Agreement was entered into on 05.01.2006. Learned Counsel Mr. Dessai has placed the file for perusal of the Court and learned Counsel Mr. Lotlikar was also permitted to go through the filein order to satisfy himself as to whether the learned Principal District Judge had dealt with the said file when he was the Law Secretary. As -6- per the file, the Law Secretary has signed the noting which is at page 27(N) in the file. The said noting reads as under : “ Notes at page 20/N to 22/N perused. The opinions at page 23/N to 26/N are also perused. I have also gone through the notice at page 254/C. 2. Under the said notice, at page 254/C, vide paragraph no. 7, the applicants want information regarding the nature and terms of the performance Bank Guarantee and of the Agreement that would be entered into. In paragraph 8 of the said notice, the applicants have applied for copies of the draft of performance Bank Guarantee for Rs.4.00 Crores and the draft of the Agreement, as referred to in Clause 6(6.1). 3. The Department in its note has clarified that there is sufficient time to finalise the Tender and that their Office has not yet prepared the draft of the said Guarantee and also of the Agreement. Since the drafts are not yet prepared, the question of furnishing copies of the said drafts to the applicants in terms of the said Notice of Advocate Smt. Carmita De Costa does not arise. However, the question is whether the applicants are entitled to the information sought for, vide paragraph 7 of the Notice. The relevant -7- provisions of the Right to Information Act, 2005, which are enumerated at pages 23/N and 24/N may be perused. It is the State Public Information Officer who is to decide the said Notice/application in terms of Sections 7 and 8 of the Right to Information Act and the State Public Information Officer is bound to give reasons for his decision and further the decision of the State Public Information Officer is appealable under Section 19 of the said Act. Hence, the State Public Information Officer, though not deciding any lis nor is hearing two contending parties and though the contest is between the authority and the subject, however, the Information Officer is required to act judicially under the said Act and, therefore, his decision is quasi-judicial. 4. As has been rightly pointed out at pages 25/N and 26/N, the State Public Information Officer has to give decision independently in terms of the said Act and no legal advice can be tendered by this Department on the subject issue.” 7. As per the noting on the file, there is an opinion of the Advocate General dated 02.03.2006, wherein it has been recommended by the Advocate General that the Law Department can tender advice to Competent Authority and the Competent Authority may reach its own -8- conclusion in the matter and advice by the Law Department to assist the Competent Authority to reach a decision. On a note prepared by Joint Secretary, Law, one Mr. S. G. Marathe, dated 14.12.2006, the signature has also been put by Law Secretary, Mr. Bakre on 14.12.2006. The said noting is in connection with asking the Department to send the copy of draft Agreement to the contractor for acceptance. There are other notings also on the file and where the said Officer has put his signature. As per the record of the Government up to 14.12.2006, he was associated with this matter as a Law Secretary before he was transferred and posted as a Principal District Judge. 8. It is submitted by learned Counsel Mr. Dessai that when the said Officer in charge of Law Secretary has perused the file as a Law Secretary and put his signatures in connection with acceptance of tender up to the date of conclusion of the contract, that he should not have taken the matter which came before him as a Principal District Judge. Mr. Dessai has frankly pointed out to the Court that though it was initially decided to raise this point in Appeal Memo at the instance of his Officer, this point was not raised in the Appeal Memo. However, he has placed a copy of the notings on the file for our perusal. Mr. Lotlikar, learned Senior Counsel for respondent, was also requested to go through the said notings of the file and after going through the said file, -9- he has fairly submitted that so far as the noting of the file is concerned, it is of the same Judge. He, however, submitted that since the appellant had not raised the said point before the Principal District Judge and since the said point is raised for the first time in this appeal, this Court may not entertain the said argument of the appellant to the effect that the learned Principal District Judge should not have taken up the matter. Mr. Lotlikar further submitted that the appellant having taken chance by arguing the matter on all the points on merits before the Principal District Judge, now it is not open for the applicant to raise this point before this Court. 9. It is submitted by Mr. Lotlikar, that it was the duty of the Officer of the Appellant to point out to the learned Principal District Judge that while he was a Law Secretary, he had dealt with the file in connection with the contract in question. It is submitted that the stand taken by the Appellant before this Court is nothing but an afterthought as the Appellant has taken a chance before the Trial Court and, if the appellant had succeeded in the Trial Court, it would not have raised this point before us. 10. We have heard both the learned Advocates and we have gone through the Order of the learned Principal District Judge as also -10- other documents annexed to the Appeal Memo. It is true as argued by learned Counsel Mr. Lotlikar that the point which is raised before us was not raised before the learned Principal District Judge at the time when the learned Principal District Judge decided the application under Section 9 of the Arbitration and Conciliation Act, 1996. It is also true that the point is raised for the first time before us at the time of hearing of this Appeal. However, an important question which requires consideration is as to whether the learned Judge should have rescued himself from taking the matter especially when he had dealt with the file in connection with the subject matter while he was a Law Secretary in the Law Department. As pointed out earlier, as a Law Secretary, the concerned Judge had dealt with the matter extensively and at various places his signatures on the notings are finding place. In our view, simply because the Appellant and the Respondent had not pointed out the said fact to learned Principal District Judge while he was deciding the matter, yet, the learned Judge himself should have pointed out this aspect to the parties that he had dealt with the file as a Law Secretary and as to whether any of them have got any objection if he decides the matter. In our view, once the Principal District Judge has dealt with the file in connection with the contract in question in a capacity as a Law Secretary, it was desirable that he should not have taken the matter on judicial side unless specific consent was given by both the sides. -11- Learned Counsel Mr. Dessai submitted that the concerned Advocate for the Appellant was not aware at the time when the matter was argued before the Trial Court that the concerned Judge had dealt with the file in connection with the contract in question as a Law Secretary. However, it is not possible for us to believe that the said aspect must have escaped the notice of the learned Judge as the learned Judge has extensively dealt with the said matter as a Law Secretary in view of his signatures at various places which is reflected on the file. When the contract in question is of a large amount, it is not possible to believe that the learned Judge must not be aware that he had dealt with this matter as a Law Secretary while he was on deputation in the State service. It is shocking that the learned Judge decided the matter on judicial side without disclosing before the parties that he had dealt with the matter extensively while he was the Law Secretary of the State of Goa. A golden principle that justice should not only be done, but it should appear to have been done, is always required to be remembered in this behalf. 11. In our view, simply because the parties before the Trial Court have not pointed out this fact to the learned Principal District Judge, the learned Principal District Judge, on his own, could have pointed out this fact to the parties asking them if they had any objection -12- if the matter is heard by him. Once a Judge has dealt with the matter on administrative side or in any other capacity such as a Law Secretary, normally, he should resist himself from taking up the matter on judicial side. Simply because the parties are not objecting, is no ground for the Judge to up the matter on judicial side. In a given case, when both the sides ultimately agree before the Judge that they have no objection if the concerned Judge takes up the matter, then, naturally, the Judge can take up the matter. But, that is not the factual aspect of the present matter. Even if, in a given case, the party may not be aware that the concerned Judge has dealt with the matter in any other capacity but, in such cases, it is the duty of the Judge to disclose the said fact to the parties before taking up the matter. It is unfortunate that the concerned Officer of the Appellant-State, who was in charge of the matter at the time when the matter was pending before the learned Principal District Judge, has even not pointed out this aspect to the Advocate appearing for the Appellant and, as pointed out earlier, learned Counsel for the Appellant submitted that the Advocate for the Appellant was not aware that the matter was dealt with by the same Principal District Judge while he was a Law Secretary. Copy of this Order may be also sent to the Chief Secretary, Government of Goa, to consider as to whether any steps are required to be taken against the concerned Officer, who negligently or otherwise did not point out the said aspect to the -13- Advocate appearing in the matter for the State. 12. In our view, considering the aforesaid aspect of the matter, it would be just and proper to set aside the impugned Order and send the matter back to another Judge for deciding the issue, afresh, on merits. In a given case, even if the Judge has any doubt as to whether he can take up the matter or not, it is always safer to the Judge to say “Not before me”, unless the parties specifically give consent that they have no objection if the matter is taken by the concerned Judge. 13. At this stage, learned Counsel Mr. Lotlikar, submitted that even though it is true that the concerned Judge has signed on certain notings on the file, that itself may not be a ground for the Judge not to take up the matter on judicial side. We are not in a position to agree with the said submission. Once in a matter of such a magnitude if it is found that the Judge has dealt with the file as Law Secretary of the Department, it was not proper on the part of the concerned Judge to take up the matter on judicial side and that too without disclosing this aspect to the parties appearing before him. As pointed out earlier, it is impossible for us to believe that the concerned Judge must not be aware that he has dealt with the matter while he was functioning as a Law Secretary in the State. -14- 14. Considering the aforesaid aspect of the matter, in our view, the impugned Order is required to be set aside and accordingly he said Order is set aside. It is directed that the said matter now be placed before the Principal District Judge, South Goa, Margao, who shall proceed with the matter de novo on its own merits. 15. Learned Counsel Mr. Lotlikar submitted that, as an Advocate, he has no objection if the matter is transferred to another Judge. He, however, submitted that since the matter in question is required to be decided only by the Principal District Judge in whose jurisdiction it arose, perhaps, the learned Principal District Judge, Panaji, might be under impression that this matter cannot be transferred to any other Judge in the same District. However, even if that be so, the concerned Judge should have asked the parties to approach the High Court by way of a transfer application under Section 24 of C.P.C. and should have left the matter of transfer to be decided by the High Court. 16. Considering the aforesaid aspect of the case, we quash and set aside the impugned Order of the learned Principal District Judge, Panaji, and the matter be now remanded and transferred to Principal District Judge, South Goa, Margao, to decide afresh the application -15- under Section 9 of the Arbitration & Conciliation Act, submitted by the respondent on its own merits. Considering the fact that the matter is of urgent nature, after the matter is transferred to the concerned Principal District Judge, the learned Principal District Judge, South Goa, Margao, may dispose off the same latest by 30.04.2009, without any further delay. 17. Since the impugned Order today is in favour of the respondent, it would be just and proper to extend the status quo prevailing as on today for sometime so that in the meanwhile the parties may approach before the concerned Court. The parties are directed to maintain status quo prevailing as on today up to 06.04.2009 and thereafter it will be open to the Respondent herein to apply for interim Order and the concerned Principal District Judge, South Goa, Margao, may decide such prayer in accordance with law after hearing both the sides. It is clarified that we have not expressed our opinion on merits, in any manner, and the concerned Principal District Judge, South Goa, Margao, may decide the matter de novo and to consider the application under Section 9 of the Arbitration & Conciliation Act, in accordance with law. 18. The Principal District Judge, Panaji, is directed to transfer -16- the case papers of the said case to Principal District Judge, Margao, immediately so that the matter is not further delayed. 19. The appeal is allowed accordingly to the aforesaid extent. There shall be no Order as to costs. P. B. MAJMUDAR, J. U. D. SALVI J. arp/*