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2005 DIGILAW 396 (CAL)

UNION OF INDIA v. LAKSHMI ENGINEERING WORKS

2005-06-23

D.K.SETH, MAHARAJ SINHA

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D. K. Seth And Maharaj Sinha, JJ. ( 1 ) LONG time has since elapsed after the order appealed against was passed. Mr. Roy is unable to enlighten the Court as to whether pursuant to the order the amount recovered from another bill was refunded or not. However, he submits that he obtained an order of stay in the appeal but whether before the order of stay was passed the amou it was refunded or not is not within his knowledge. There is a direction for referring the matter to the arbitration. The question relates to enforcement of terms of contract. We do not think that we can deal with each and every stage of the contract or the performance of its various clauses. ( 2 ) MR. Roy, however, draws our attention to one of the provisions of the contract at page 88 of the paper book viz: Clause 8 of the General Terms and Conditions of this contract, where it is stipulated that the telecommunication Department is entitled to recover such amount from any sum due to the contractor under the same contract or any other contract after exhausting the security deposit of the concerned contract. ( 3 ) IN Union of India vs. Raman Iron Foundry, AIR 1974 SC 1265 , relied upon by the learned Single Judge in support of the order for refund, it was held that such a recovery was illegal. However, the said decision was considered in the case of H. M, Kamaluddin Ansari and Co. vs. Union of India and Ors. , AIR 1984 SC 29 . In paragraph 26 thereof the Apex Court held while dealing with clause 18 of the contract that "the clause, in our opinion, gives wide powers to the Union of India to recover the amount claimed by appropriating any sum then due or which at any time thereafter become due to the contractor under other contracts. " ( 4 ) WE may note that Clause 8 of the General Conditions of this contract is identical to Clause 18 of the contract interpreted in identical context in the said decision after considering the view taken in Raman Iron Foundry (supra ). " ( 4 ) WE may note that Clause 8 of the General Conditions of this contract is identical to Clause 18 of the contract interpreted in identical context in the said decision after considering the view taken in Raman Iron Foundry (supra ). The decision is Raman Iron Foundry (supra) dealing with a question relating to grant of injunction under section 41 (b) of the Arbitration Act, 1940 in a case where the Union of India was purporting to appropriate from the dues of the contractor arising out of one contract on account of damages arising out of a different contract in respect of which arbitration was pending. In that context it was held that Union of India was not entitled to appropriate such sum under Clause 18 on account of damages which was yet to be determined and, therefore, was not an amount due which could be appropriated under Clause 18. Therefore, the said decision would not enable a Writ Court to interfere in a case where amount due is sought to be appropriated under Clause 8 of the present contract. ( 5 ) IN H M. Kamaluddin Ansari the decision in Raman Iron Foundary (supra) was distinguished in paragraph 20 as incongruous for the reasons explained in paragraph 21 thereof. After having so distinguished the Apex court proceeded to interpret Clause 18 of the standard contract and held that clause 18 permits recovery of dues arising out of one contract from any sum due' under any other contract after exhausting the security deposit if any. ( 6 ) MR. Roy has further relied upon a decision by a Division Bench of this court in Nagendra Nath Chakravorty vs. State of West Bengal and Ors. , AIR 1987 Calcutta 199, in which it was laid down that where there is an arbitration agreement in a contract, the appellant was not entitled to invoke the writ jurisdiction for enforcing any such right under the contract. The law is settled. The jurisdiction of the Writ Court is confined to threshold of the contract and not beyond. It is not necessary to discuss any further. But in this case, the matter was directed to be referred to arbitration. The rights between the parties can be decided only through arbitration. But it is not known whether arbitration has commenced or not. The jurisdiction of the Writ Court is confined to threshold of the contract and not beyond. It is not necessary to discuss any further. But in this case, the matter was directed to be referred to arbitration. The rights between the parties can be decided only through arbitration. But it is not known whether arbitration has commenced or not. In the circumstances we keep all points open and dispose of the appeal with the following direction. ( 7 ) IN case the amount has already been refunded in terms of the order of the learned Single Judge in that event it will be open to the appellant to agitate the said point before the arbitrator or any other forum, or in such other manner including those under Clause 8 of the General Conditions of contract, as they may be advised. In case the amount has not been refunded in that event the question may again be agitated by the contractor on merit before the arbitrator or any other forum as the contractor may be advised. The rights of the parties, if there be any, may be determined accordingly by the learned Arbitrator without being influenced by any observation made by the learned Single Judge or in this order. We make no observation with regard to the respective rights of the parties on merits and dispose of the appeal in terms of the above. ( 8 ) THERE will be no order as to costs. Appeal disposed of.