1 WP 5231/10 abs IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 5231 OF 2010 M/s Patel Engineering Ltd. .. Petitioner V/s B.T. Patil & Sons Belgaun (Construction) Pvt. Ltd. & Ors. .. Respondents Mr. M.S. Doctor with Mr. Nimay Dave i/b Bachubhai Munim & Co. for the petitioner. CORAM: D.G. KARNIK, J. DATE : 20TH JULY 2010 P.C. : 1. Heard. 2. By this petition, the petitioner challenges the order dated 12 February 2010 passed by the learned Civil Judge, Senior Division, Satara allowing the respondents’ application under Order 23 Rule 1 of the Code of Civil Procedure for withdrawal of the suit with liberty to institute a fresh suit in respect of the same subject matter, subject to payment of costs of Rs.3,000/- to the other side (petitioner). 3. The petitioner was awarded a contract for civil construction pertaining to Stage IV, Koyna Hydroelectric 2 WP 5231/10 Project at Koyna by the State of Maharashtra. The petitioner with the consent of the government granted sub-contract of part of the work to respondent nos.1 and 2 (hereinafter collectively referred to as “the respondents”). It appears that the respondents completed the work under the sub-contract but were not paid in full, because the State of Maharashtra in turn had not paid the full money to the petitioner. The petitioner thereafter made a claim on the State of Maharashtra and on its refusal to pay initiated an arbitration proceeding against the State of Maharashtra. I am informed at the Bar that the arbitration proceeding initiated against the State of Maharashtra has been concluded and an award has been passed in favour of the petitioner. According to the respondents, they are entitled to receive a portion (88.5%) of the amount under the award for the work done by them. Disputes have arisen between the petitioner and the respondents. Arbitration proceeding is pending between the respondents and the petitioner before the sole arbitrator appointed by the respondents. 4. In the meanwhile, apprehending that the petitioner would receive the entire money from the State of Maharashtra in pursuance of the award without paying to the 3 WP 5231/10 respondents their legitimate dues, the respondents filed a suit, bearing Special Civil Suit No.117 of 2008, in the Court of Civil Judge, Senior Division, Satara, for the following reliefs: “[a] BY WAY OF PERMANENT INJUNCTION, the Defendant Nos.2 to 6 be restrained permanently from disbursing and releasing any amount to defendant No.1 pursuant to the claim set under arbitration Awards dated 29-03-2008 under Volume No. IV to VIII & the payments under any other heads till the claim of the plaintiffs are finally settled. [b] BY WAY OF MANDATORY INJUNCTION, the Defendant Nos.2 to 6 be directed to deposit the entire amount in the court till the claim between the plaintiffs and the defendants are finally settled. [c] AWARDING cost of the suit. [d] AWARDING any other equitable reliefs for which the plaintiffs are found entitled to.” It appears that the respondents thereafter made an application for amendment of the plaint to claim some 4 WP 5231/10 additional reliefs and the application was allowed. However, the amendment was never carried out and the suit continued with the original reliefs extracted above. The respondents then made an application for withdrawal of the suit with liberty to prosecute appropriate legal proceedings. By an order dated 12 February 2010, the trial court allowed that application. The operative part of the order reads thus: “The plaintiff (the respondents herein) is allowed to withdraw the suit with liberty to institute fresh suit subject to costs of Rs.3,000/- to other side.” It is this order which is impugned in this writ petition. 5. Learned counsel for the petitioner submitted that there was no formal defect in the suit filed by the petitioner which is a condition precedent for granting permission under Order 23 Rule 1(3) of the Code of Civil Procedure (for short “the Code”). Consequently, the application ought to have been rejected. In support, he referred to and relied upon a decision of the Supreme Court in K.S. Bhoopathy v. Kokila, (2000) 5 SCC 458. Secondly, the learned counsel submitted that by withdrawing the suit the respondents want to make 5 WP 5231/10 certain additional claims before the Arbitral Tribunal in the pending arbitration proceeding which cannot be done. Initially, the respondents had made only claim regarding Volume I and II only before the Arbitral Tribunal, but by withdrawing the suit with liberty to file fresh proceeding they want to include the claims contained in Volume IV, V, VII and VIII before the Arbitral Tribunal. Withdrawal of the suit was with an oblique motive to enable the respondents to make a claim before the Arbitral Tribunal in respect of Volume IV, V, VII and VIII and, therefore, the trial court ought not to have allowed the withdrawal. Thirdly, the learned counsel submitted that the respondents had chosen a public forum, namely the civil court, for making a claim and by withdrawing the suit they wanted to choose private forum, namely the Arbitral Tribunal, for making the claim for Volume IV, V, VII and VIII. Having once chosen the public forum, the jurisdiction of which was not objected to by the petitioner, the respondents cannot be allowed to change the forum, i.e. from public forum to private forum. In support, he referred to and relied upon a decision of this Court (incidentally decided by me) in Onyx Musicabsolute.com Pvt. Ltd. v. Yash Raj Films Pvt. Ltd., 2008 (6) Bom. C.R. 418. Counsel for the petitioner also submitted that the only ground that was pleaded by the 6 WP 5231/10 respondents for withdrawal of the suit was that there was a formal defect in the suit. The learned Judge, without holding that there was a formal defect, has allowed the suit to be withdrawn on other sufficient ground which was not permissible. 6. As regards the first contention of the petitioner, it would be appropriate to consider what was the nature of the original suit (Special Civil Suit No. 117 of 2008 filed by the respondents). The prayers in the plaint clearly show that it was a suit for seeking only interim reliefs. By prayer (a), which is the main relief in the suit, the respondents had sought an injunction, to be operative only till their claim was settled by the petitioner, restraining the State of Maharashtra from disbursing and releasing the amount and restraining the petitioner from receiving the amount in respect of the claim for Volume IV, V, VII and VIII under the arbitration award. The suit was not for recovery of money either from the State of Maharashtra or from the present petitioner. The respondents were only apprehensive that the petitioner would recover the money due for the contract from the State of Maharashtra by enforcement of the award in its favour without paying the share of the sub-contractor, i.e. of the 7 WP 5231/10 respondents. The suit was filed only with a view to prevent the petitioner from walking away with the money due under the contract without making payment to the sub-contractor. Claim of the respondents against the petitioner was not the subject matter of the suit. The subject matter of the suit was only the interim relief to restrain the petitioner from receiving money till the adjudication of the respondents’ claim before the Arbitral Tribunal. That relief could have been obtained by the respondents by making an application under section 9 of the Arbitration Act before the District Court or making an application under section 17 of the Arbitration Act before the Arbitral Tribunal in its arbitration proceeding. Instead of that, they filed the suit. The suit merely for interim relief was misconceived. Consequently, in my view, there was sufficient cause within the meaning of Order 23 Rule 1(3) of the Code for granting permission to the respondents to withdraw the suit. 7. The second contention of the petitioner, to put tersely, is that withdrawal of the suit with liberty to file appropriate legal proceeding (relating to the same subject matter) was malafide and with a view to enable the respondents to make claims before the Arbitral Tribunal which they could not have made without the 8 WP 5231/10 withdrawal of the suit. I am unable to agree. Claims contained in Volume IV, V, VII and VIII were not the subject matter of the suit. The respondents were therefore not required to withdraw the suit with leave of the Court to institute a fresh suit in respect of the same subject matter before the Arbitral Tribunal. Again, leave under Rule 23 Rule 1 of the Code is a leave to be granted for withdrawal of the suit to enable the plaintiff to file a fresh suit relating to the same subject matter. Permission to withdraw the suit with liberty to file fresh suit is necessary only where the second suit relates to the same subject matter. Strictly speaking, the leave may not be necessary when the new proceeding is not a “suit” as well as where the new proceeding is not in respect of the “same subject matter”. Though the respondents had made a prayer for withdrawal of the suit with liberty to file fresh legal proceeding in case of need, leave was not granted for institution of fresh legal proceedings, but leave was granted to withdraw the suit with liberty to file “a fresh suit” in respect of the same subject matter. In the circumstances, the impugned order cannot be faulted. 8. The third contention of the petitioner that the respondents having chosen a public forum of a civil court they could not have 9 WP 5231/10 been permitted to move the Arbitral Tribunal which is a private forum based upon a decision of this Court in Onyx Musicabsolute.com Pvt. Ltd. v. Yash Raj Films Pvt. Ltd. (supra), is also misconceived. As stated earlier, the suit did not relate to claim contained in Volume IV, V, VII and VIII and the respondents had not chosen the public forum of a civil court for enforcing their claim for recovery of the amount due under claim contained in Volume IV, V, VII and VIII. All that they had prayed for was that the petitioner should not recover from the State of Maharashtra the money under the award in petitioner’s favour without making payment to the respondents. There is no merit in the contention. 9. There is one more reason on account of which, in my view, the suit filed by the respondents was not maintainable. Clause (a) of section 41 of the Specific Relief Act provides that an injunction cannot be granted to restrain any person from prosecuting a judicial proceeding pending at the institution of a suit in which the injunction is sought, unless such restraint is necessary to prevent the multiplicity of proceedings. Clause (b) of section 41 of the Specific Relief Act provides that an injunction cannot be granted to 10 WP 5231/10 restrain any person from instituting or prosecuting any proceeding in a Court not subordinate to that from which the injunction is sought. Clause (b) of section 41 clearly prohibits a Court from restraining any person from instituting or prosecuting any proceeding before another Court which is not subordinate to the Court from which the injunction is sought. The civil court, therefore, could not have granted an injunction restraining the petitioner from pursuing the proceedings before the Arbitral Tribunal or enforcing the award passed by the Arbitral Tribunal in its favour in an arbitration proceeding against the State of Maharashtra because the Arbitral Tribunal is not subordinate to the civil court in which the suit was filed. It is true that the Arbitral Tribunal may not be a Court, but the principle contained in clause (b) of section 41 of the Specific Relief Act would equally be applicable for restraining the Arbitral Tribunal from proceeding with the arbitration proceedings. Section 5 of the Arbitration and Conciliation Act, 1996 prohibits judicial intervention in matters pertaining to the arbitration. The legislative policy of preventing judicial intervention in arbitration proceedings clearly came in the way of the respondents’ suit for injunction restraining the petitioner from proceeding with the arbitration and/or enforcing 11 WP 5231/10 the award and recovering the money from the government by enforcing the award passed in its favour. As the suit in the present form was not maintainable, there was sufficient cause for the Court to grant permission to the respondents to withdraw the suit with liberty to file a fresh suit on the same subject matter. Consequently, the writ petition fails and is hereby rejected. (D.G. KARNIK, J.)