UNION OF INDIA v. BATLIBOI AND COMPANY LIMITED` — 1983 DIGILAW 18 (DEL)

Yogeshwar Dayal ( 1 ) THIS is a petition for revision on behalf of Union of India against an order of Additional District ludge, dt. 20. 10. 81 dismissing an application for leave to defend filed by the petitioner and decreeing the suit filed by the plaintiff-respondent, under Order 37 of the Civil Procedure Code for recovery of Rs. 84, 862-49 ps. ( 2 ) THE plaintiff-respondent filed aforesaid suit for recovery of aforesaid amount inter alia on the allegations that the petitioner through the Director General of Supplies and Disposals, New Delhi, placed an order dt. 12. 6. 1978 upon the respondent Company for the purchase of goods as mentioned in the aforesaid order. In terms of that order the respondent Company supplied the goods which were accepted by the petitioner. Accordingly, there is no dispute between the parties with regard to the supply of goods. The respondent Company further alleged that as per terms and conditions, the respondent submitted bill dt. 9. 10. 1979 representing 95% of the goods sold amounting to Rs. 72, 999. 39 but the petitioner had failed to pay the amount and thereafter the plaintiff served a notice U/s 80 of the Civil Procedure Code on the petitioner and also claimed interest w. e. f. 9. 10 1979 and thus claimed the aforesaid amount. ( 3 ) THE defendant-Union of India being served with the summons in the prescribed form filed the application for leave to defend. Apart form various other pleas, the defendant took a plea that as per clause-26 of the schedule to tender, the defendant was within its right to with-hold the amount of Rs. 72, 999. 39 against the expenses incurred by the Union of India in carrying out modifications and repairs of the machines supplied by the plaintiff in compliance of another acceptance offender dt. 6. 12. 1974. The said contract was governed by arbitration clause and the dispute arising out of the said contract had to be referred to arbitration and the Union of India is referring the same to arbitration. The claim of interest was also denied. The defendant had also taken the plea that the suit under Order 37, Civil Procedure Code is not maintainable. The said contract was governed by arbitration clause and the dispute arising out of the said contract had to be referred to arbitration and the Union of India is referring the same to arbitration. The claim of interest was also denied. The defendant had also taken the plea that the suit under Order 37, Civil Procedure Code is not maintainable. The learned trial Court held that the suit under Order 37 is maintainable and that the plaintiff Company was entitled to interest in view of the alleged notice served by the plaintiff on defendant. ( 4 ) ON the plea of the defendant that it had the right to withhold amount, trial Court took the view that this ground is not open to the defendant as the claim of the defendant is a disputed amount and it has still to be referred to the arbitrator and unless and until the arbitrator gives the award, the defendant cannot be said to be entitled to with-hold that amount and accordingly held that it is no defence and consequently dismissed the application for leave to defend and decreed the suit. ( 5 ) UNION of India being aggrieved has come up in revision. It is submitted that amended clauses 18 and 18-A of the General Conditions of Contract contrained in the standard From of Contract No. D. G. S. and. D-68 were introduced after the decision of the Supreme Court in Union of India vs. Raman Iron Foundary A. I. R. 1974 S. C. 1265 [1974. Rajdhani L. R. 369] and now a right has been given expressly to Union of India to have a lien over the adimitled claim of the contractor so long as claims under other contracts of the purchaser are pending finalisation or adjudication. It is submitted that the clauses 18 and 18-A were amended and the contract in dispute contains such amended clauses and parlies are no longer governed by the decision of the Supreme Court in the aforesaid case of Raman Iron Foundary. [in paras 6,7 clauses 18 and 18-A are reproduced. It is submitted that the clauses 18 and 18-A were amended and the contract in dispute contains such amended clauses and parlies are no longer governed by the decision of the Supreme Court in the aforesaid case of Raman Iron Foundary. [in paras 6,7 clauses 18 and 18-A are reproduced. ] ( 6 ) THE Supreme Court while deciding the aforesaid case of Raman Iron Foundary (supra) interpreted the meaning of the word any claim in the light of the right to appropriation given to the purchaser in the clause which was there at that time and took the view that the true construction of clause 18 before amendment was that the expression any claim for the payment of a sum of money occuring therein meant an adjudicated claim i. e the claim which had been found by an adjudicating body either Court or Arbitrator and not a mere claim for liquidated or unliquidated damages which has not been adjudicated upon. The Supreme Court observed that it refers to a claim which was recoverable in present time and not a claim recoverable by adjudication in future. Bhag- wati J. speaking for the Supreme Court at page 1271 observed : "it is important to note that Cl. 18 does not create a lien on other sums due to the contractor or give to the purchaser a right to retain such sums until his claim against the contractor is satisfied. If merely a right of lien or retention were given to secure payment of a claim, then even if the claim were for a sum not presently due and payable, the provision perhaps would not have been so startling or unusual. " ( 7 ) AFTER the aforesaid decision and in the light of the aforesaid observations it appears that the form was amended. It appears prima facie from the amended clauses 18 and 18-A that now an express right of lien or retention has been given to the purchaser even to secure a bare claim for money when it is being finalised or adjudicated. ( 8 ) MR. It appears prima facie from the amended clauses 18 and 18-A that now an express right of lien or retention has been given to the purchaser even to secure a bare claim for money when it is being finalised or adjudicated. ( 8 ) MR. D. K. Sayal, learned counsel for the respondent, submitted that the Supreme Coun in the aforesaid case of Raman Iron Foundary (supra) has given interpretation to the expression any claim for the payment of sum of money and has held that this expression means a sum of money which has been adjudicated upon in favour of party and not a mere claim which has not been adjudicated upon. I am afraid this reasoning cannot be accepted in view of the expressed wording of the amended clauses 18 and 18-A The judgment of the Supreme Court was based on the reading of the entire clause 18 and not merely the expression "any claim for the payment of sum of money. In this view of the matter it could not be said that no triable issue arises in the present case. ( 9 ) IT appears to me that the amended clause 18 and 18-A of General Conditions of Contract were not brought to the notice of learned trial Court as there is no discussion of the amended clauses in the judgment.