This appeal has been filed by the Union of India, through the Railways against the order dated 17.7. 1989 passed by the learned Assistant District Judge No. 2, Gauhati in Title Suit No. 92 of 1989. The above suit was filed on an application filed under section 20 of the Arbitration Act, 1940, for short, 'the Act'. The suit was filed against the present appellants and the plaintiff is a contractor under the appellants. The plaintiff also filed an application under section 41 of the Act read with Order 39 Rules 1 and 2 and section 151 C.P.C, which was allowed by the impugned order. Hence, the present appeal- As a measure of caution, the appellants have also filed a revision petition. 2. Mr. Sarma, learned counsel for the respondent has raised a preliminary objection that in view of section 39 of the Act, the present appeal is not maintainable. I have also heard Dr. Sarma, learned counsel for the appellants and I find after perusing section 39 of the Act that contention of Mr. Sarma has considerable force and I hold that the appeal is not maintainable and accordingly it is dismissed. 3. Let me now rake up the revision petition in which rules has already been issued on 6.9.89. I have heard learned counsel for both the parties at length and I propose to dispose of the entire petition by this order. There was a written agreement dated 4.6.87 between the parties under which the respondent herein was entrusted with the work of construction of a bridge for Rs.47 lakhs and odd. There was also a subsidiary agreement which was executed on 1.12.88. Both the contracts dated 16.4.87 and 1.12.83 were cancelled by the appellants on 27.2.89. As the agreement contains a clause of Arbitration respondent took up the matter for appointment of an Arbitrator with the appellants and as no Arbitrator was appointed, the present suit was filed. In the plaint various allegations have been made regarding harassment, delay etc. by the appellants and these have been denied by the appellants. In this proceeding, I need not enter into this aspect of the matter and it is for the learned Arbitrator, if appointed to decide disputes between the parties. 4.
In the plaint various allegations have been made regarding harassment, delay etc. by the appellants and these have been denied by the appellants. In this proceeding, I need not enter into this aspect of the matter and it is for the learned Arbitrator, if appointed to decide disputes between the parties. 4. By the impugned order the learned trial Court issued a temporary injunction restraining the appellants from withholding any amount from any bill due to the plaintiff, for deducting any amount on any account whatsoever from the out-standing bills of the plaintiff for the contract works done by the plaintiff, restraining the appellants from invoking the bank guarantee furnished by the plaintiff from taking over possession of the J. C. V. excavator and from recovering any hire charges for it from the plaintiff. The present petition is against the above injunction order. 5. Dr. Sarma has drawn my attention to the impugned order and has submitted that the learned trial Court passed temporary injunction order relying on the decision of Apex Court in Raman Iron Foundry, AIR 1974 SC 1265 and learned counsel has submitted that the ratio laid down in the above decision was not accepted by the Apex Court in a subsequent decision in M/s. H.M. Kamaluddin Ansari and Co. vs. Union of India and ors., (1983), 4 SCC 417 : AIR 1984 SC 29 .1 find considerable force in the submission of Dr. Sarma. However, Mr. Sarma, learned counsel for the respondent has tried to distinguish this case by drawing my attention to the various paragraphs including paragraphs 29 and 31 (S.C.C.). Mr. Sarma has further urged that the agreement which was considered by the Apex Court in Kamaluddin Ansari (supra) is different from the agreement in the case in hand. I shall consider the submission of Mr. Sarma at the appropriate place. 6. In paragraphs 29 (S.C.C.) of Kanaluddin Ansari (supra) their Lordships quoted paragraph 6 (S.C.C.; of Raman Iron Foundry (supra) and held that the said ratio laid down in paragraph 6 is incongruous with the proposition of law laid down by the Apex Court and according to their Lordships it is difficult to agree that injunction withholding payment is not a positive order and the party could refuse to pay such amount. 7.
7. In Kamalnddin Ansari (supra), it was held that an injunction order restraining the respondent from withholding the amount due under other pending bills to the contractor virtually amounts to a direction to pay the amount to the contractor and an order is beyond the purview of clause (b) of section 41 of the Arbitration Act. However, as clause 18 which was considered by their Lordships gave ample power to the Union of India to withhold such amount, it was held that no injunction order could be passed restraining the Union of India from withholding the amount vide paragraph 3) (S.C.C.); their Lordships however held on the basis of the language of the said clause 18 that Union of India can be injected from recovering or appropriating it to the damages claimed. In other words, if under a particular clause of a contract, there is an agreement between the parties that any amount due to a contractor from other contract works can be withheld in respect of any claim for the contract in question, no injunction can be granted. But the party can be injected from recovering or appropriating the amount towards the damages claimed in the contract in question. 8. Mr. Sarma has drawn my attention to clause 43.1 of the present agreement which runs as follows I "43.1-The Railway shall have a lien on over all or any moneys they may become due and payable to the contractor under the present and/or also on for and over the deposit for security amount or amounts, repayable to the contractor under the conditions herein contained for or in respect of any debt or sum that may become due and payable to the Railway by the contractor either under this or under any other contract or transaction of any nature, whatsoever between the railway and the contractor.” From clause 2.2. of the present agreement, I find that if there is a conflict between special condition contained in the agreement with the general conditions of the contracts and standard specification issued by the North East Frontier Railway, the special condition of the present agreement shall prevail. In this connection Dr. Sarma has drawn my attention to clause 52A of the General Conditions of Contract & Standard Specifications which runs as follows :- "52A.
In this connection Dr. Sarma has drawn my attention to clause 52A of the General Conditions of Contract & Standard Specifications which runs as follows :- "52A. Any sum of money due and payable to the contractor (including the security deposit returnable to him) under the contract may be withheld or retained by way of lien by the Railway against any claim of this or any other Railway or any other Department of the Central Government in respect of payment of a sum of money arising out of or under any other contract made by the contractor with this or any other Railway or any or her Department of the Central Government." 9. From reading this two clauses, I find that there is no conflict. Clause 5 A of the General Conditions of Contract is in respect of lien of claims in other contracts and there is no such clause in the present contract. Clause 43.1 of the present contract is in respect of money due and payable to the contractor under the present contract including security deposit repayable to the contractor. It has nothing to do with the lieu of the Railways in respect of other contracts. 10. Clause 18 of Kamaluddio Ansari (supra) which was considered by their Lordships runs as follows : "18. Recovery of sums due.-Whenever any claim for the payment of a sum of money arises out of or under the contract against the contractor, the purchaser shall be entitled to recover such sum by appropriating in whole or in part, the security if any, deposited by the contractor, and for the purpose aforesaid, shall be entitled to sell and/or realise securities forming the whole or part of any such security deposit. In the event of the security being insufficient, the balance and if no security shall be recovered by appropriating any sum then due or which at any time thereafter "may become due to the contractor under the contract or any other contract with the purchaser of the such sum even be not sufficient to cover the full amount recoverable, the contractor shall on demand pay to the purchaser the balance remaining due .." Comparing this clause 18 with clause 52A, I find that this clause is wider and it includes any claim of the Railways. Applying the ratio laid down in Kamlauddin Ansari (supra) which squarely covers the case in hand.
Applying the ratio laid down in Kamlauddin Ansari (supra) which squarely covers the case in hand. I am of the opinion that the injunction granted by the learned lower Court restraining the present appellants from withholding of any payment of any bill to the respondent is contrary to the ratio laid down by the Apex Court and as such it is illegal. However, the injunction restraining the appellants from deducting any amount on any account whatsoever from the out-standing bills of the respondent is in accordance with the law laid down by the Apex Court in Kamaluddlin Ansari (supra). 11. Mr. Sarma has pleaded that if all the bills are withheld, the plaintiff-respondent who is a regular contractor of the Railway will not be able to execute other contract works. Railway being a public undertaking is suppose to act fairly in such matter. In this connection Mr. Sarma has made a statement that the plaintiff respondent is prepared to give any Bank guarantee for the amount due. Dr. Sarma has however opposed the contention of Mr. Sarma. Be that as it may, I direct that the respondent may file a petition before the Chief Engineer, Construction, N F. Railway, Silchar for allowing him to withdraw the amount on furnishing a Bank guarantee. If such a petition is filed, it shall be considered by the Chief Engineer and dispose of the matter within a period of 15 days. 12. Regarding the order of injunction in respect of the Bank guarantee, in view of the legal position and as this Bank guarantee has been furnished for a specific purpose, I do not find the injuction justified and accordingly it is set aside. As the Bank guarantee is going to expire tomorrow i. e, 30.11,89, Railway may put into its claim. Mr. Sarma has however submitted that the plaintiff is prepared to extend the Bank guarantee for another period of one year. In that event the Bank need not pay to the Railway at present and keep the amount pending during the period of the fresh Bank guarantee, if it is so furnished. 13. Regarding injunction restraining the appellants from taking over possession of GCV excavation, Dr.
In that event the Bank need not pay to the Railway at present and keep the amount pending during the period of the fresh Bank guarantee, if it is so furnished. 13. Regarding injunction restraining the appellants from taking over possession of GCV excavation, Dr. Sarma has drawn my attention to deed of hypothecation entered between the parties on 17.1.89 and more particularly to the following clause : "The party of the first part agrees and undertakes not to remove the schedule mentioned plant, machinery and equipment etc. from the vacinity of the site without the consent of the party of the second part and also until the advance taken by the first part is fully paid." By the present injunction the appellants were restrained from taking over possession of JCV excavator and for recovery of hire charges for it. By the above deed executed between the parties, the respondent only agreed to keep the said machinery within the vacinity. Mr. Sarma has rightly pointed out that as it was a hypothecation deed and respondent is paying amount, the ownership vested with the respondent. I need not enter into this controversy at this stage. However, I am of the opinion that restraining the appellants to take possession of the machinery is not in violation of the agreement and as such I do not propose to interfere. However, if the machinery is taken away from the vacinity without the consent of the appellants, the trial Court may be approached and if the Court is satisfied that it has been so taken away in violation of the agreement, the injunction order shall stand automatically vacated. 14. As this is an Arbitration matter, the learned trial Court shall dispose of the petition within a period of one mouth from the date of appearance of the parties. I direct both the parties to appear before the learned trial Court on 11.12.89. 15. From what has been stated above, the injunction order is modified as indicated above. Parties shall also comply with the directions issued by this Court. Petition is disposed of accordingly. No costs. Office to transmit the record by Special Messenger forthwith along with a copy of this order.