Krishna Bhagya Jala Nigam Limited, Bangalore v. G. Harishchandra Reddy
2010-10-23
AJIT J.GUNJAL, N.KUMAR
body2010
DigiLaw.ai
JUDGMENT N. Kumar, J : This appeal is preferred by Krishna Bhagya Jala Nigam Limited, a Government of Karnataka Undertaking, challenging the award dated 28.7.1990 passed by the Arbitrator as well as the judgment and decree dated 30.10.1998 passed by the Principal Civil Judge (Sr.Dn.), Bijapur, affirming the said award. 2. The appellant was not a party to the proceedings before the Arbitrator as well as before the Civil Court. Therefore, the appellant filed an application under Section 151 of the Code of Civil Procedure, seeking leave of this Court to grant leave to prefer this appeal. This Court by an order dated 17.6.1999 granted the leave sought for subject to any objection to be filed by the respondent on their appearance. 3. The first respondent Sri.G.Harishchandra Reddy (for short hereinafter referred to as the ‘Contractor’) was entrusted with the work of construction of power dam across Krishna river near Almatti by the State Government under an agreement dated 12.11.1982. In terms of the agreement and in the course of the execution of the work, the contractor had taken 90% of the value of the machinery amounting to Rs. 19,00,000/- from the Department as machinery advance in terms of Clause 8 of the agreement. He executed a bond hypothecating all the machineries in favour of the State Government. The Government terminated the contract on 17.12.1986. The contractor disputed the said termination. He requested the matter to be referred to an Arbitrator in terms of the contract. Accordingly, the matter ,vas referred to the arbitration. The Arbitrator passed an award holding that the termination of the contract is illegal and consequently, the contractor is entitled to damages and compensation. Accordingly, he allowed the claim Nos. 1, 4, 5, 7, 9, 12, 13, 14 and 15 and rejected the other claims. The counter claim preferred by the respondent - Government was also rejected by its award dated 24.1.1988. After the passing of the said award, the contractor requested the Government to release the hypothecated machinery, so that he could sell the same. The Government insisted on his refunding the amount paid towards purchase of said machinery as advance. Therefore, they did not release the machinery, which was hypothecated. It is in this con text, the claimant-contractor again preferred, one more claim before the Government and requested for referring the matter to arbitration. Accordingly, the matter was referred to arbitration.
The Government insisted on his refunding the amount paid towards purchase of said machinery as advance. Therefore, they did not release the machinery, which was hypothecated. It is in this con text, the claimant-contractor again preferred, one more claim before the Government and requested for referring the matter to arbitration. Accordingly, the matter was referred to arbitration. The claims 'put forth in the said second arbitration are: (1) Payment of idle charges for the machinery under hypothecation for the period from 17.12.1986 to 30.11.1988 @ Rs. 8,200/- per day; (2) Payment of past interest @ 24% per annum from the date of occurrence of the claim till the date of reference; (3) Payment of pendentelite interest @ 24% per annum from the date of reference till the date of the award; and (4) Payment of future interest @ 24% per annum from the date of award till the date of decree or payment, whichever is earlier. After the arbitrator entered on reference, he issued notice to the Government, who, on service of such notice entered appearance and filed their statement of objections contesting the aforesaid claim. They contended firstly that the claim made is hit by Order 2, Rule 2 of the Code of Civil Procedure. Secondly, they contended that in the earlier proceedings, which culminated in the award, the said claim was considered by the Arbitrator and it was rejected and the said award rejecting the said claim has not been challenged by the contractor and therefore, it has attained finality. The said finding would operate as res judicata and therefore, not maintainable. Thirdly, they contended that, as is clear from the averments in the claim petition and the other material on record, it is clear that the machinery was idle for want of work, the contractor could not utilize the machinery, as he did not have any work and therefore, the question of awarding any compensation under the heading of idling charges would not arise, as in the earlier proceedings, the claim of the contractor under the heading of loss of profit has been upheld and amount is awarded, which has been paid by the Government. The present claim under a different nomenclature is wholly misconceived and therefore, they sought for dismissal of the said claim. In support of their respective contentions, both the parties adduced evidence.
The present claim under a different nomenclature is wholly misconceived and therefore, they sought for dismissal of the said claim. In support of their respective contentions, both the parties adduced evidence. The arbitrator after considering the evidence on record held, the claim pertaining to idling charges relates to the period subsequent to six months from the date of termination of the contract, which was not the subject matter of the earlier arbitration proceedings. Under the earlier award when compensation is awarded to the contractor, which has to be adjusted towards the amount due by the contractor to the Government, the Government was not justified in insisting on payment of machinery advance, as a condition precedent for releasing the hypothecated machinery. Therefore, the claim for idling charges is made out. It also held that, Order 2, Rule 2 has no application because the present claim is a claim, which is subsequent to six months from the date of the cancellation of the agreement. It also held the principle of res judicata is not applicable because as is clear from the recitals in the earlier award, the case of idling charges was not considered by the arbitrator. For the aforesaid reasons, he upheld the claim of the contractor though not to the full extent, but passed an award. Aggrieved by the same, the Government preferred a petition before the civil Court under Sections 30 and 31 of the Arbitration Act, 1940 (hereinafter referred to as the Act'), challenging the award on the ground of legal misconduct. The learned Civil Judge after hearing both the parties and going through the arbitration award held that, when once the Arbitrator has considered the entire material on record, given reasons for arriving at its conclusion, even if two views are possible and the Court would not agree with the finding recorded by the Arbitrator, it has no jurisdiction to interfere with the findings recorded by the Arbitrator. It was of the view that the scope of judicial review under Sections 30 and 31 of the Act was very limited and the case did not fall within the said parameters and therefore, it declined to interfere with the award. On the contrary, it affirmed the award passed by the Arbitrator. Aggrieved by these two awards and the judgment and decree, the present appeal is filed. 4.
On the contrary, it affirmed the award passed by the Arbitrator. Aggrieved by these two awards and the judgment and decree, the present appeal is filed. 4. During the pendency of the matter before the Civil Court, the Government of Karnataka, established Krishna Bhagya Jala Nigam Limited, a Company under the Indian Companies Act, 1956 and transferred all the assets and liabilities in respect of Upper Krishna Project from the Upper Krishna Project authorities to the appellant from the date of registration of the Company. In those circumstances, as the appellant, is the person, who has to satisfy the impugned award, they preferred this appeal, seeking leave of the Court., as they are the persons aggrieved by the said award. 5. Learned Counsel for the appellant assailing the impugned award and the judgment and decree of the Trial Court contended as under: (a) The entire claim of the contractor flows from the illegal termination of the contract by the Government on 17.12.1986. Not only the contractor sought in the earlier arbitration proceedings a declaration to the effect that the termination is illegal, he also sought for several consequential reliefs by way of damages and compensation, which included a claim for idling of machinery because of such illegal termination of contract. Therefore, the present claim emanates from such illegal termination of contract. The claim, which is now put forth, ought to have been put forth in the earlier proceedings and in fact, it was put forth for a period of six months from the date of termination and therefore, Order II, Rule 2 of CPC is a bar and the second claim cannot be entertained. b) He also contended that the question whether the contractor is entitled to damages under the heading of idling of machinery was gone into in the earlier proceedings before the Arbitrator and the arbitrator has categorically recorded a finding that, as he has allowed the claim of the contractor for loss of profit in executing the contract because of the illegal termination, declined to grant any compensation or damages under the specific head. The said finding has attained finality. It is between the same parties. The said finding operates as res judicata and the second arbitration proceedings was not maintainable.
The said finding has attained finality. It is between the same parties. The said finding operates as res judicata and the second arbitration proceedings was not maintainable. (c) He further contended that, as is clear from the pleadings in this case, it is not a case of the contractor that he had work at his hand and because of the illegal termination and consequent refusal to release the machinery from hypothecation, he was prevented from making use of the machinery, which was idle and therefore, he is entitled to idling charges. The specific case of the contractor was that he had no work and he has not used that machinery, which he has purchased out of machinery advance given by the Government, which is hypothecated to the Government and he wanted to sell those machinery. The hypothecation was coming in the way and therefore, the entire claim of idling charges is ex facie without any basis and therefore, there is an error apparent on the face of the record committed by both the Arbitrator as well as by the Civil Judge and therefore, on that ground also, he wants the impugned award to be set aside. 6. Per contra, learned Senior Counsel appearing for the contractor contended as under: (a) The contractor entered into an agreement with the State Government. When dispute arose by way of illegal termination of the contract, he raised a dispute and requested for referring the dispute to arbitration, which was done and the Arbitrator has passed an award. Aggrieved by the said award, the Government preferred a petition to the Civil Court seeking setting aside of the said award. After the said petition came to be dismissed on merits, the contractor and the Government entered into negotiations for settling the dispute among themselves, the contractor agreed to give up a portion of the interest in the said meeting. The appellant was also present when a tripartite agreement came into existence under which the Government ultimately agreed to pay the said amount and accordingly, the amount is paid. It is in these circumstances, the present appeal filed by the appellant is wholly misconceived, as the appellant is a stranger to the contract and therefore, the appeal filed by the third person is not maintainable and he wants the appeal to be dismissed in limine.
It is in these circumstances, the present appeal filed by the appellant is wholly misconceived, as the appellant is a stranger to the contract and therefore, the appeal filed by the third person is not maintainable and he wants the appeal to be dismissed in limine. (b) He further contended that, in order to succeed in a plea under Order II Rule 2 of CPC, the requirement is that the pleadings in the earlier proceedings should be produced in evidence before the Arbitrator. It is only on looking into the said material allegations in the earlier pleadings, the finding regarding the subsequent proceedings being hit by Order 2, Rule 2 of CPC could be considered. In the instant case, no such pleadings are produced and therefore, such a plea was rightly rejected by these two authorities. In support of his contentions, he relied on the judgment of the Constitution Bench of the Apex Court. (c) He also contended that the plea of res judicata is also without any basis because the cause of action for the present proceedings is totally different from the cause of action for the earlier proceedings and that is precisely what the Arbitrator has said and therefore, it cannot be found fault with. (d) Lastly he contended that, the Arbitrator has given detail reasons to negative his contentions, though under law, he was not under obligation to give reasons. Once he has given reasons, he has considered the statutory provisions, material on record and recorded a finding after deducing the principles from the said statutory provisions, even if he has committed any error, that cannot be the subject matter of the judicial review by the Courts much less by this Court in appeal. In support of the said contentions, he relied on several judgments and therefore, it was contended that this appeal is misconceived and requires to be dismissed. 7. In the light of the aforesaid material on record and the rival contentions, the points that arise for our consideration in this appeal are as under: (1) Whether the appeal preferred by the Krishna Bhagya Jala Nigam is maintainable? (2) Whether the instant proceedings are hit by Order II Rule 2 of CPC? (3) Whether the instant proceedings are hit by Section 11 of the Code of Civil Procedure, 1908 and res judicata?
(2) Whether the instant proceedings are hit by Order II Rule 2 of CPC? (3) Whether the instant proceedings are hit by Section 11 of the Code of Civil Procedure, 1908 and res judicata? (4) Whether there is any error apparent on the face of the record, which justifies interference by this Court in the impugned award as well as the judgment and decree of the Civil Court? POINT NO.1 8. It is not in dispute that the contractor entered into an agreement with the Government on 12.11.1982. On the day the agreement was entered into, the appellant was not in existence at all. The agreement came to be terminated on 17.12.1986, even on that date the appellant was not in existence. After the matter was referred to Arbitrator, the Arbitrator has passed an award on 28.7.1990, on which date also, the appellant was not in existence. Therefore, the Government, Which was aggrieved by such an award, filed its objection before the Civil Court on 13.11.1990. It is during the pendency of the matter before the Civil Judge, by virtue of a Government order dated 6th May 1994, the appellant-Company/Corporation was decided to be formed for implementation of the Upper Krishna Project under Indian Companies Act, 1956. Accordingly, the appellant - Company was registered on 12.8.1994 under the provisions of the Companies Act, 1956, which is the date of birth as far as appellant is concerned. No steps were taken after the Company came into existence to implead the Company in the matter, which was pending before the Civil Judge. However, the Government contested the matter and the award came to be passed on 30.10.1998. As the said award was affecting the interest of the Company, in terms of the aforesaid Government Order under which all the assets and liabilities of the said project stood transferred to the appellant, the appellant preferred an appeal on 16.3.1989. As the' appellant was not a party to the proceedings, the appellant flied an application seeking leave of the Court to prosecute the appeal. It is settled law that not only the parties to the order, even the persons who are successors in interest to the original parties, may prefer an appeal against the order, provided such a statutory right is conferred.
It is settled law that not only the parties to the order, even the persons who are successors in interest to the original parties, may prefer an appeal against the order, provided such a statutory right is conferred. Even the persons, who are aggrieved by such an order, are entitled to prefer an appeal with the leave of the Court, if they are able to demonstrate before the Court that they are aggrieved by such an order. In the instant case, not only the appellant is aggrieved by the said award, the appellant by virtue of the aforesaid Government Order is the successor in interest, and therefore, this Court, on an application being filed, granted leave to appeal subject to the condition that, after the service of notice, respondents could file their objections. A perusal of the order sheet in this appeal shows that no such objections are filed. Even otherwise, from the aforesaid material, it is clear that when once all the assets and liabilities of this project are handed over to the appellant, the award has to be satisfied by the appellant and therefore, the appellant is not only the successor of the Government to the extent the assets and liabilities of the project are transferred to them, as they are in law liable to satisfy the award, they fall within the term “aggrieved person” and therefore, the appeal is maintainable and accordingly, we do not find any merit in the first contention raised. POINT NO.2: 9. It is not in dispute that after the termination of the contract on 17.12.1986, the contractor put forth his claim, requested for referring the matter to arbitration and the Arbitrator was appointed. Before the Arbitrator, the contractor put forth sixteen claims, claiming damages compensation and interest. The award passed by the Arbitrator is produced by the contractor himself in the present proceedings and it is marked as Ex.C23. The said Ex.C23 clearly sets out each claim. Claim No.8 in the said claim petition reads as under: “Claim No.8: Payment towards idle charges for idle plant and machinery till the claimant finds alternative work or at least for 6 months whichever is earlier - Claim for Rs. 20,45,000/-.” By a detailed reasoning, the Arbitrator rejected the said claim. The material on record also contains the claim petition preferred by the contractor in the present proceedings.
20,45,000/-.” By a detailed reasoning, the Arbitrator rejected the said claim. The material on record also contains the claim petition preferred by the contractor in the present proceedings. In paragraph-43 after referring to the various correspondence, the claim as put forth by the claimant is referred, which reads as under: “Payment of idle charges for idle machinery under hypothecation to Government for the period from 17.12.1986 to 30.11.1988 at the rate of Rs. 8,200/ - per day. The Executive Engineer terminated the contract unilaterally and illegally by his letter dated 16.12.1986 (Annexure-1). As a direct result, the claimant's machinery under hypothecation to Government was rendered idle for want of work. As the machinery was under hypothecation, it was not possible for the claimant to sell the machinery. In spite of several requests, the Executive Engineer refused to release the hypothecation to enable the claimant to sell the machinery. As a result of the action of the Respondent in illegally terminating the contract and further refusing to release the hypothecation, the claimant had to keep his machinery idle at Almatti dam site without any work. As the respondent is fully responsible for this, the claimant requested for the payment of idle charges at the rate of Rs.8,200.00 per day for the period from 17.12.1986 to 30.11.1988, and 30.11.1988 being the date on which hypothecation was released. Details of the claim are given in Annexure No.15”. 10. In the prayer column, it was prayed as under: “Payment of idle charges for the machinery under hypothecation for the period 17.12.1986 to 30.11.1988 at the rate of Rs.8,200.00 per day.” The Government has filed its detailed objection disputing the said claim not only on merits, hut also has taken a specific plea that this plea is hit by Order 2, Rule 2 of CPC. Both the parties understood their respective cases, submitted the written arguments and also produced documentary evidence in support of their contention. The Arbitrator understood what is the point in controversy and in the impugned award, he has in detail referred to this contention. The reasoning is found at page Nos.37, 38 and 39 of the award.
Both the parties understood their respective cases, submitted the written arguments and also produced documentary evidence in support of their contention. The Arbitrator understood what is the point in controversy and in the impugned award, he has in detail referred to this contention. The reasoning is found at page Nos.37, 38 and 39 of the award. He observes after referring to the aforesaid pleadings, that claim No.8 in the earlier case as under: “The respondent argued that similar claim was rejected in the course of another arbitration proceedings when the claimant made a claim for idle charges in respect of entire Machinery for a period of six months from 17.12.1986 and therefore, the present claim cannot be raised. On deeper examination, I am of the view that the contention of the Government is devoid of substance. Under claim No.8 in the earlier case as the Claimant was awarded damages under the head Loss of Profit due to termination of the Contract the issue as to payment of idle charges for six months subsequent to the termination was not considered. Here the claimant pleads that non release of the machinery from hypothecation after termination of the contract by the respondent has resulted in idling of machinery causing him losses and hence he is entitled for relief. As the issue is entirely different in the present case, there is no bar for considering this claim in the present reference. Further what has been claimed in Claim No.8 in earlier reference is the damages in consequence of termination of contract. Here, in the present claim the Claimant pleads for award of damages because of failure of the respondent in releasing the machinery from hypothecation and consequential idiling of the same, though adequate amounts under the final bill were available with the Government to cover the machinery advance. As the cause of action and claims are entirely different, the contention of the Respondent cannot be accepted.” The argument is that the cause of action for such claim is distinct. Question of applying Order 2, Rule 2 to this case does not arise. The learned Civil Judge has accepted this reason and has upheld the said finding. It is in the background of these undisputed facts, we have to find out, whether this plea is barred by Order II Rule 2 of CPC. Order II Rule 2 of CPC reads as under: - “2.
The learned Civil Judge has accepted this reason and has upheld the said finding. It is in the background of these undisputed facts, we have to find out, whether this plea is barred by Order II Rule 2 of CPC. Order II Rule 2 of CPC reads as under: - “2. Suit to include the whole claim.-(1) Every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action: but a plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any Court. (2) Relinquishment of part of claim. -Where a plaintiff omits to sue in respect of, or intentionally relinquishes, any portion of his claim, he shall not afterwards sue in respect of the portion so omitted or relinquished. (3) Omission to sue for one of several reliefs.-A person entitled to more than one relief in respect of the same cause of action may sue for all or any of such reliefs.; but if he omits, except with the leave of the Court, to sue for all such reliefs, he shall not afterwards sue for any relief so omitted. Explanation.-For the purposes of this rule an obligation and a collateral security for its performance and successive claims arising under the same obligation shall be deemed respectively to constitute but one cause of action.” 11. The aforesaid provision is based on the principle that the defendants should not be twice vexed for one and the same cause. The rule is directed against two evils, the splitting of claims and the splitting of remedies. It provides if a plaintiff omits any portion of the claim, which he is entitled to make or any of the remedies which he is entitled to claim in respect of the cause of action for his suit., he shall not thereafter sue for the portion claimed or for the remedy so omitted. The rule does not preclude a second suit based on a distinct and separate cause of action. In order to invoke the rule, two conditions must be satisfied, first, that the previous suit and the present Suit must arise out of the same cause of action and secondly, they must be between the same parties.
The rule does not preclude a second suit based on a distinct and separate cause of action. In order to invoke the rule, two conditions must be satisfied, first, that the previous suit and the present Suit must arise out of the same cause of action and secondly, they must be between the same parties. In fact, the requirement of Order 2, Rule 2 is that every suit should include the whole of the claim which the plaintiff is entitled to make in respect of a cause of action. Cause of action is a cause of action which gives occasion for and forms the foundation of the suit. If that cause of action enables a person to ask for a larger and wider relief than that to which he limits his claim, he cannot afterwards seek to recover the balance by independent proceedings. 12. The Supreme Court had an occasion to consider the said aspect. The Constitutional Bench of the Apex Court in the case of Gurbax Singh Vs. Bhooralal reported in AIR 1964 SC 1810 at para Nos.6 and 7 has held as under: “In order that a plea of a bar under Order 2, Rule 2(3), Civil Procedure Code should succeed the defendant who raises the plea must make out (1) that the second suit was in respect of the same cause of action that on which the previous suit was based; (2) that in respect of that cause of action the plaintiff was entitled to more than one relief: (3) that being thus entitled to more than one relief the plaintiff, without leave obtained from the Court, omitted to sue for the relief for which the second suit had been' filed. From this analysis it would be seen that the defendant would have to establish primarily and, to start with, the precise cause of action upon which the previous suit was filed, for unless there is identity between the cause of action on which the earlier suit was filed and that on which the claim in the later suit is based there would be no scope for the application of the bar. No doubt, a relief which is sought in a plaint could ordinarily be traceable to a particular cause of action but this might, by no means, be the universal rule.
No doubt, a relief which is sought in a plaint could ordinarily be traceable to a particular cause of action but this might, by no means, be the universal rule. As the plea is a technical bar it had to be established satisfactorily and cannot be presumed merely on basis of inferential reasoning. It is for this reason that a plea of a bar under O.2 R.2, Civil Procedure Code cart be established only if the defendant files in evidence the pleadings in the previous suit and thereby proves to the Court the identity of the causes of action in the two suits. The cause of action in the previous suit would be the facts which the plaintiff had then alleged to support the right to the relief that he claimed. Without placing before the Court the plaint in which those facts were alleged, the defendant cannot invite the Court to speculate or infer by a process of deduction what those facts might be with reference to the reliefs which were then claimed. It is not impossible that reliefs were claimed without the necessary averments to justify their grant. From the mere use of the words ‘mesne profits’ in the previous suit one need not necessarily infer that the possession of the defendants was alleged to be wrongful. It is also possible that the expression has been used in the present plaint without a proper appreciation of its significance in law. What matters is not the characterisation of the particular sum demanded but what in substance is the allegation on which the claim to the sum was based and as regards the legal relationship on the basis of which that relief was sought. It is because of these reasons that a plea based on the existence of a former pleading cannot be entertained when the pleading on which it rests has not been produced.” Similar is to the effect in the case of M/s. Bengal Waterproof Limited Vs. M/s Bombay Waterproof Manufacturing Company and Another reported in AIR 1997 SC 1398 .
It is because of these reasons that a plea based on the existence of a former pleading cannot be entertained when the pleading on which it rests has not been produced.” Similar is to the effect in the case of M/s. Bengal Waterproof Limited Vs. M/s Bombay Waterproof Manufacturing Company and Another reported in AIR 1997 SC 1398 . At para-8 it is held as under: “Where the cause of action for the first suit was based on the infringement of plaintiffs trade mark by the defendants till the date of the suit and the grievance regarding passing off of the defendants' goods as if they were plaintiffs goods was also confined to the situation prevailing on the date of the earlier suit, the second suit in which plaintiffs grievance was regarding the continuous acts of infringement of its trade mark and the continuous passing off action on the part of the defendants, subsequent to the filing of the earlier suit and which had continued on the date of the second• suit would not be barred under O.2, R. 2(3). Such infringement of a registered trade mark carried on from time to time would give a recurring cause of action to the holder of the trade mark to make a grievance about the same and similarly such impugned passing off actions also would give a recurring cause of action to the plaintiff to make a grievance about the same and to seek appropriate relief from the Court. In cases of continuous causes of action bar of O.2, R.2, sub-rule (3) cannot be invoked. As act of passing off is an act of deceit and tort every time when such tortious act or deceit is committed by the defendant the plaintiff gets a fresh cause of action to come to the Court by appropriate proceedings. Similarly infringement of a registered trade mark would also be a continuing wrong so long as infringement continues. Therefore, whether the earlier infringement has continued or a new infringement has taken place cause of action for filing afresh suit would obviously arise. It was more so when earlier suit was disposed of as technically not maintainable in absence of proper reliefs.
Therefore, whether the earlier infringement has continued or a new infringement has taken place cause of action for filing afresh suit would obviously arise. It was more so when earlier suit was disposed of as technically not maintainable in absence of proper reliefs. In such a case for all times to come in future defendant of such a suit cannot be armed with a licence to go on committing fresh acts of infringement and passing off with impunity without being subjected to any legal action against such future acts.” 13. In the context of Arbitration Act also, our High Court has an occasion to consider, whether these principles, which are well settled under the provisions of the Code of Civil Procedure with reference to civil matters are applicable to arbitration proceedings? 14. In the case of Union of India and Others Vs. M/s. V.L. Roche and Brothers reported in 2002(4) KCCR SN 372 (DB), it is held that, after laying down the conditions, which are to be satisfied for applying Order II Rule 2 of CPC, in a dispute which arose between Railways and contractor in construction work of Hassan-Mangalore Railway Track that, an earlier dispute was referred to arbitration and award was satisfied by Railways. Later, contractor raised a second dispute for reference to arbitration basing its claim on the findings of the Arbitrator in the earlier reference. Trial Court allowed the reference. On appeal one of the Judge held the second reference application with respect to Claim Item No.9 was maintainable and rejected the rest. Another member of Division Bench, held the entire second reference application was not maintainable. On reference to third judge, it was held that entire second reference was not maintainable and dismissed the entire reference of dispute to arbitration. 15. Similar view is taken by the Delhi High Court in the case of Delhi Development Authority, New Delhi and Another Vs. M/s. Alkrma, New Delhi reported in AIR 1985 DELHI 132 where at para- 16 it is held as under: "The view that in no case would the provisions of 0.2, R.2 be applicable to arbitration proceedings cannot be accepted. The provisions of 0.2, R.2 would apply if the request for referring more disputes to arbitration is made after the making of the award.
The provisions of 0.2, R.2 would apply if the request for referring more disputes to arbitration is made after the making of the award. Once an award has been made a party cannot be permitted to raise more disputes which he/it could and ought to have raised earlier. Where however, an award has not been made, it is open to a claimant to ask for more disputes to be referred to arbitration provided the arbitration proceedings are not yet over. In such an event, ifthe authority competent to appoint an arbitrator and to refer the disputes, fails to do so, the Court has the jurisdiction to order the filing of the arbitration agreement and to direct the Engineer Member (competent authority under arbitration clause) to refer the disputes to arbitration." The Apex Court in the case of K. V. George Vs. Secretary to Government, Water and Power Department Trivandnun and Another reported in (1989) 4 SCC 595 , dealing with the application of Order II Rule 2 to the arbitration proceedings held at paragraphs-14 and 15 as under: "14. It is pertinent to refer in this connection to the decision• in Muhammad Hafiz Vs. Mirza Muhammad Zakariya wherein a mortgage deed provided that ifthe interest was not paid for six months the creditor should be competent to realise either the unpaid amount of the interest due to him or the amount of principal and interest, by bringing a suit in Court without waiting for the expiration of the time fixed and the plaintiff more than 3 years after (i.e. time fixed), brought a suit for interest alone and got a decree. It was held that the second suit for principal and arrears of interest was not maintainable as under Order II, Rule 2, CPC he must be deemed to have relinquished his claim for further relief, he having exercised the option of suing for interest alone. It was further held that the cause of action referred to in the rule is the cause of action which gives occasion to, and forms the foundation of the suit, and if that cause enables a man to seek for larger and wider relief than that to which he limits his claim, he canpot afterwards seek to recover the balance by independent proceedings. 15.
15. In the instant case, the con tract was terminated by the respondents on April 26, 1980 and as such all the issues arose' out of the termination of the contract and they could haye been raised in the first claim petition filed before the arbitrator by the appellant. This having not been done the second claim petition before the arbitrator raising the remaining disputes is clearly barred." From the aforesaid judgment, it is clear that, the principle underlying Order II Rule 2 is equally applicable to. proceedings under the Arbitration Act. 16. What has been laid down by the Constitution Bench of the Apex Court is, as the plea is a technical bar; it had to be established satisfactorily and cannot be presumed merely on basis of inferential reasoning. It is for this reason that a plea of a bar under Order 2 Rule 2 of the Civil Procedure Code can be established only ifthe defendant files in evidence the pleadings in the previous suit and thereby proves to the Court the identity of the causes of action in the two suits. The cause of action in the previous suit would be the facts which the plaintiff had then alleged to support the right to the relief that he claimed. In the aforesaid case, it was held that, from the mere use of the words 'mesne profits' in the previous suit one need not necessarily infer that the possession of the defendants was alleged to be wrongful. It is also possible that the expression has been used in the present plaint without a proper appreciation of its significance in law. Therefore, in the facts of that particular case, when the cause of action pleaded in the proceedings was not clear and in the subsequent proceedings, inferences were drawn, the Supreme Court held as the pleadings in the earlier proceedings are not produced, the Courts were not justified in upholding the plea of res judicata. 17. They have not laid down as a proposition of law that if the pleadings in the earlier proceedings are not produced in the subsequent proceedings, the plea of Order II Rule 2 of CPC cannot at all be considered by the Courts. It depends on facts of each case.
17. They have not laid down as a proposition of law that if the pleadings in the earlier proceedings are not produced in the subsequent proceedings, the plea of Order II Rule 2 of CPC cannot at all be considered by the Courts. It depends on facts of each case. In the instant case, the claim, which was put forth by the contractor in the earlier proceedings is available on record, though the claim petition itself is not produced before the Arbitrator. Firstly, it is to be noticed that, in arbitration proceedings, strict rules of civil procedure need not be adhere to, it is the substance, which matters. Secondly, in the instant case, claim No.8 as put forth by the contractor is clearly set out in the award of the Arbitrator passed in the earlier dispute. The said claim we also have extracted as above. The Arbitrator understood the case of the contractor as well as the objection raised by the Government in the light of the principle underlying Order II Rule 2 of epe and did not have any difficulty in considering the said claim and rejecting the same on the ground that the Order II, Rule 2 epe is not attracted. No inferences are drawn by process of deduction. The language employed is unambiguous. The claim is specifically mentioned. Therefore, it is not possible to accept the contention that, in the absence of the pleadings in the earlier proceedings, the said plea cannot be entertained at all. In fact, that is not the reasoning given either by the Arbitrator or by the learned eivil Judge, who found that the claim put forth is specific as well as the objection raised by the Government is also specific. 18. Once the claim and the objection is specific, the question is, whether the principle underlying Order II Rule 2 is attracted to the facts of this case. We have set out in detail the pleadings in the present case. The claim in the earlier proceedings is al.so based on the illegal termination of contract on 17.12.1986. The present claim is also based on the illegal termination of the contract on 17.12.1986.
We have set out in detail the pleadings in the present case. The claim in the earlier proceedings is al.so based on the illegal termination of contract on 17.12.1986. The present claim is also based on the illegal termination of the contract on 17.12.1986. As is clear from claim No.8, because of the said illegal termination, the contractor was prevented from continuing with the contract, the machinery, which he had purchased out of the machinery advance given by the Government, was not put to use and therefore, as a consequence of illegal termination, a claim for idling charge of the machinery was put forth specifically. As is clear from the words used in claim No.8, the claim payment towards idle charges for idle plant and machinery till the claimant finds alternative work or at least for 6 months whichever is earlier. The claimant could have put forth a claim for idling of plant and machinery till the Arbitrator adjudicated the dispute and actually the amount is paid to contractor. But the claimant chose to restrict his claim under the aforesaid head only for a period of six months or till an alternative work is found, whichever is earlier. Therefore, though in law, a claimant was entitled to damages under the aforesaid head till the permission is granted to the contractor to sell the hypothecated machinery or till the passing of the award and subsequent to the award till the payment is made by the Government, the claimant chose to give up such claims. Therefore, Order II, Rule 2 sub-clause (2) is squarely attracted to the facts of this case where it has been held, where a plaintiff omitted to sue in respect of or intentionally relinquishes, any portion of his claim, he shall not afterwards sue in respect of the portion so omitted or relinquished. 19. In this case, the second claim arises after the award was passed by the Arbitrator because when once an award was passed by the Arbitrator, the amount was determined, the amount payable by the' Government to the contractor was directed to be adjusted towards the amount due by the contractor to the Government, which he had received by way of mobilization advance, advance of machinery and also additional advance of ~ 30 lakhs.
Therefore, it was contended that, they ought to have adjusted this amount due under the head of machinery advance and permitted the contractor to sell the machinery, as the hypothecation stood in the way. The argument is that, the cause of action for the second claim is subsequent to the cause of action for the earlier claim and therefore, Order II Rule 2 is not attracted. Such an interpretation would run counter to Order II Rule 2. The cause of action for all the claims for the contractor against the Government arose on the date the contract stood terminated i.e., on 17.12.1986. Once the Arbitrator held that the termination is illegal, the contractor became entitled to damages, compensation, interest, etc... The period for which the second claim is put forth, that directly emanates from such illegal termination. Therefore, we do not find any substance in the contention raised on behalf of the contractor in this regard. 20. These undisputed facts are ignored by the Arbitrator as well as by the Civil Judge. There is an error apparent on the face of the record. It is not a case of recording a wrong finding on facts. It is a clear case of misreading the evidence, misapplication oflaw and the finding recorded runs counter to the express provisions contained in Order II Rule 2 of CPC. Therefore, it constitutes a legal misconduct and said finding is liable to be set aside. Accordingly, it is set aside. POINT NO.3: 21. As set out in answering point No.2. the question whether the contractor is entitled to idling charges on account of the illegal termination of the contract on 17.12.1986 was directly and substantially in issue in the earlier proceedings between the same parties before an Arbitrator, who was competent to determine the said issue. After considering the pleadings of the parties, the rival contentions and the material produced on record, the Arbitrator held that the contractor is not entitled to any payment under the aforesaid head i.e., claim No.8. The reason assigned is that the said claim is already included under the heading of loss of profit and the Arbitrator is upholding the claim of the contractor under the aforesaid head and therefore, if the claimant is awarded any compensation under the head claim No.8, it would be a repetition. Therefore.
The reason assigned is that the said claim is already included under the heading of loss of profit and the Arbitrator is upholding the claim of the contractor under the aforesaid head and therefore, if the claimant is awarded any compensation under the head claim No.8, it would be a repetition. Therefore. the said claim was negatived holding that the claimant is not entitled to idling charges on account of the illegal termination of the contract on 17.12.1986. When the Arbitrator passed an award, the Government being aggrieved by the same, preferred an appeal before this Court in IVLF.A.No.781/1990, which came to be dismissed on 15th February 1991. However, as the finding in respect of claim No.8 was against the contractor where his claim had been negatived, he did not choose to challenge the said finding. Therefore, the said finding on claim No.8 attained finality. It is concluded between the parties and therefore, the said question could not have been re-agitated by way of fresh claim petition, camouflaging it as a subsequent event. The said claim ought to have been put forth in the earlier proceedings. In this regard, it is necessary to refer to the judgment of the Apex Court in the case of K. V. George (supra). At para Nos. 16 to 18 it has been held as under: "16. With regard to the submission as to the applicability of the principles of res judicata as provided in Section 11 of the Code of Civil Procedure to arbitration case, it is to be noted that Section 41 of the Arbitration Act provides that the provisions of the Code of Civil Procedure will apply to the arbitration proceedings. The provisions of res judicata are based on the principles that there shall be no multiplicity of proceedings and there shall be finality of proceedings. This is applicable to the arbitration proceedings as well. It is convenient to refer to the decision in Daryao Vs. State of U.P. wherein it has been held that the principles of res judicata will apply even to proceedings under Articles 32 and 226 of the Constitution of India.
This is applicable to the arbitration proceedings as well. It is convenient to refer to the decision in Daryao Vs. State of U.P. wherein it has been held that the principles of res judicata will apply even to proceedings under Articles 32 and 226 of the Constitution of India. It has been observed that: "Now, the rule of res judicata as indicated in Section 11 of the Code of Civil Procedure has no doubt some technical aspects, for instance the rule of constructive resjudicata may be said to be technical but the basis on which the said rule rests is founded on considerations of public policy. It is in the interest of the public at large that a finality should attach to the binding decisions pronounced by Courts of competent jurisdiction, and it is also in the public interest that individuals should not be vexed twice over with the same kind of litigation. If these two principles form the foundation of the general rule of res judicata the cannot be treated as' irrelevant or inadmissible even in dealing with fundamental rights in petitions filed under Article 32." 17. In Satish Kumar Vs. Surinder Kumar it has been observed that: "The true Legal position in regard to the effect of an award is not in dispute. It is well settled that as a general rule, all claims which are the subject matter of a reference to arbitration merge in the award which is pronounced in the proceedings before the arbitrator and that after an award has been pronounced the rights and liabilities of the parties in respect of the said claims can be determined only on the basis of the said award. After an award is determined only on the basis of the said award. Mter an award is pronounced, no action can be started on the original claim which had been the subject matter of the reference.... This conclusion, according to the learned Judge, is based upon the elementary principle that, as between the parties and their privies, an award is entitled to that respect which is due to judgment of a Court of last resort. Therefore, if the award which has been pronounced between the parties has in fact, or can, in law, be deemed to have dealt with the present dispute, the second reference would be incompetent.
Therefore, if the award which has been pronounced between the parties has in fact, or can, in law, be deemed to have dealt with the present dispute, the second reference would be incompetent. This position also has not been and cannot be seriously disputed." 18. Considering the above observations of this Court in the aforesaid cases we hold that the principle of res judicata or for that the principles of constructive res judicata apply to arbitration proceedings and as such the award made in the second arbitration proceeding being Arbitration Case No.276 of 1980 cannot be sustained and is therefore, set aside. The High Court has rightly allowed the F.M.A. No.304 of 1982 holding that the appellant contractor was precluded from seeking the second reference. No other points have been raised before us by the appellant." In fact, reliance was placed on yet another judgment of the Apex Court by the learned Counsel for the contractor in the case of Isher Singh Vs. Sarwan Singh and Others reported in AIR 1965 SC 948 . Atparagraph3, It is stated as under: "The point that is raised in this appcal is really not so much as to the scope of a plea of res judicata and the law bearing upon it, but merely the application of well -settled principles to the facts of the case. The main submission of Mr. Bishan Narain -learned Counsel for the appellant was that the issue as regards the relationship of the respondents to the deceased - Jati as his collaterals was not "a matter directly and substantially in issue" in the former suit. Obviously, this question has to be decided (a) on the pleadings in the former suit, (b) the issues struck therein, and (c) the decision in the suit. So far as the pleadings themselves are concerned, they did raise a controversy as to whether the respondents were the collaterals of Jati. The plaint filed by Isher Singh on January 20, 1954 is by no means a long one. After reciting in paragraph 2 the death of Jati without leaving any widow or issue, he set out that he had been rendering service to the deceased and the latter being pleased with him, made an oral Will in respect of his entire moveable and immoveable properties in his favour and had thus declared him to be his heir.
After reciting in paragraph 2 the death of Jati without leaving any widow or issue, he set out that he had been rendering service to the deceased and the latter being pleased with him, made an oral Will in respect of his entire moveable and immoveable properties in his favour and had thus declared him to be his heir. Paragraph 3 set out the proceedings in regard to mutation and pointed out that the oral Will was not permitted to be established, in those proceedings, with the result that the matter had been decided by the Revenue authorities against his contention. It is paragraph 4 which is very relevant and we shall read it in full: "4. The defendants are altogether strangers and not heirs. They are not at all related to Jati deceased. Nor are they his collaterals. On the other hand, they belong to a separate family. Besides it, the 'Will' made in favour of the plaintiff is valid and is not open to objection. So the defendants have no rights of succession qua the plaintiff in respect of the land in dispute." Paragraph 5 after setting out the mutation proceedings, stated that the defendants were bent upon denying the plaints ownership, and added: "They are threatening to take possession of the land. So the plaintiff has a right to file this suit." and paragraph 6 was the sequel and it read: 'The defendants were repeatedly asked to acknowledge the right of ownership of the plaintiff and to refrain from taking possession of the land, but they did not agree and after evasive replies they flatly refused at Kotia a week ago. The right to sue has accrued to the plaintiff from the 7th October, 1953, the date of the order of the financial commissioner Patiala." The relief claimed was a declaration that the plaintiff had title to the suit properties and that a permanent injunction be issued restraining the defendants from taking possession of the land in suit." 22. In the light of the aforesaid settled legal position, applying to the facts of the present case, the question whether the contractor is entitled to idling charges was raised in the earlier proceedings and it was rejected and the claim put forth in the subsequent proceedings arise out of the same cause of action and therefore, the claimant was not entitled to put forth such claim.
Unfortunately, both the Arbitrator and the Civil Judge have not appreciated the aforesaid material on record properly and erroneously came to the conclusion that the said doctrine of res judicata is not applicable, as the cause of action for the subsequent claim is different from the cause of action for the earlier proceedings. For the aforesaid reasons, the said finding also cannot be sustained and accordingly, it is hereby set aside. POINT NO.4: 23. This is regarding the scope of judicial intervention under the Arbitration Act to awards passed by the Arbitrator under the Act. In this context also, the law on the point is well settled. The Apex Court in the case of M/s. Sudarsan Trading Co. Vs. The Govt. of Kerala and Another reported in AIR 1989 SC 890 (Kerala) at paragraph-28 has held that, an award could be set aside if the arbitrator had misconducted himself or the proceedings or had proceeded beyond his jurisdiction. These are separate and distinct grounds for challenging an award. Where there are errors apparent on the face of the award it can only be set aside if in the award there is arty proposition of law which is apparent on the face of the award, namely, in the award itself or any document incorporated in the award. They relied on the observations of the Apex Court in the case of Alopi Parshad and Sons Ltd. Vs. Union of India reported in AIR 1960 SC 588 , where it was held that, the award was liable to be set aside because of an error apparent on the face of the award. An arbitration award might be set aside on the ground of an error on the face of it when the reasons given for the decision, either in the award or in any document incorporated with it are based upon a legal proposition which is erroneous. It was further held that, these two grounds viz., error apparent on the face of the record and the Arbitrator exceeded his jurisdiction are two different and distinct grounds on which the award of an Arbitrator could be set aside. Again the Apex Court in the case of Food Corporation of India Vs.
It was further held that, these two grounds viz., error apparent on the face of the record and the Arbitrator exceeded his jurisdiction are two different and distinct grounds on which the award of an Arbitrator could be set aside. Again the Apex Court in the case of Food Corporation of India Vs. Joginderpal Mohinderpal and Another reported in (1989) 2 SCC 347 held at para-7 to the effect that, one should view the scope and limit of correction by the Court of an award made by the Arbitrator in the context of the principle underlying of the Arbitration Act. It is necessary to find out whether the arbitrator has misconducted himself or the proceedings legally in the sense whether the arbitrator has gone contrary to the terms on reference between the parties or whether the arbitrator has committed any error of law apparent to the face of the award. It is necessary to emphasize that these' are grounds for setting aside the award, but these are separate and distinct grounds. The award can also be set aside, if it benefited the arbitrator who misconducted himself or the proceedings. In fact the Supreme Court after referring to the catena of decisions and the problems which are faced by the Courts in dealing with this award, had expressed comprehensively regarding the jurisdiction of the Court in such matters in the case of State of Rajasthan Vs. Puri Construction Co. Ltd. and Another reported in (1994) 6 SCC 485 , it is held as under: "31. In recent times, error in law and fact in basing an award has not been given the wide immunity as enjoyed earlier, by expanding the import and implication of "legal misconduct" of an arbitrator so that award by the arbitrator does not perpetrate gross miscarriage of justice and the same is not reduced to mockery of a fair decision of the- lis between the parties to arbitration. Precisely for the aforesaid reasons, the erroneous application of law constituting the very basis of the award and improper and incorrect findings of fact, which without closer and intrinsic scrutiny, are demonstrable on the face of the materials on record, have been held, very rightly, as legal misconduct rendering the award as invalid.
Precisely for the aforesaid reasons, the erroneous application of law constituting the very basis of the award and improper and incorrect findings of fact, which without closer and intrinsic scrutiny, are demonstrable on the face of the materials on record, have been held, very rightly, as legal misconduct rendering the award as invalid. It is necessary however, to put a note of caution that in the anxiety to render justice to the party to arbitration, the Court should not reappraise the evidences intrinsically with a close scrutiny for finding out that the conclusion drawn from some facts, by the arbitrator is, according to the understanding of the Court, erroneous. Such exercise of power which can be exercised by an appellate Court with power to reverse the finding of fact, is alien to the scope and ambit of challenge of an award under the Arbitration Act. Where the error of finding of facts having a bearing on the award is patent and is easily demonstrable without the necessity of carefully weighing the various possible viewpoints, the interference with award based on erroneous finding of fact is permissible;. ''Similarly, if an award is based by applying a principle of law which is patently erroneous, and but for such erroneous application of legal principle, the award could not have been made, such award is liable to be set aside by holding that there has been a legal misconduct on the part of the arbitrator. In ultimate analysis, it is a question of delicate balancing between the permissible limit of error of law and fact and patently erroneous finding easily demonstrable from the materials on record and application of principle of law forming the basis of the award which is patently erroneous. It may be indicated here that however objectively the problem may be viewed, the subjective element inherent in the judge deciding the problem, is bound to creep in and influence the decision. By long training in the art of dispassionate analysis, such subjective element is, however, reduced to minimum. Keeping the aforesaid principle in mind, the challenge to the validity of the impugned award is to be considered with reference to judicial decisions on the subject." 24. Therefore the law and point is well settled. It is also to be remembered that these judgments have been rendered under the earlier enactment.
Keeping the aforesaid principle in mind, the challenge to the validity of the impugned award is to be considered with reference to judicial decisions on the subject." 24. Therefore the law and point is well settled. It is also to be remembered that these judgments have been rendered under the earlier enactment. Under the earlier enactment there was no need for the arbitrator to give reasons for his award. Once he gives reasons, it is subjected to judicial scrutiny and if the reasons given are patently erroneous, it expressly showed wrong application of law, omission to take into consideration the relevant material on record and has recorded findings which run counter to statutory provisions, clear case of legal misconduct is made out. 25. In the instant case, the dispute arouse because of the termination of the contract on 17.12.1986 on the ground that it is a illegal termination. The contractor put forth several claims. All the claims put forth by the contractor emanate from such wrongful termination. In the earlier proceedings the arbitrator held the termination as illegal and allowed certain claims and disallowed certain claims. One such claim, which was putforth was claim for idling charges for machinery and plant. Idling charges presupposes machinery is at the site, the contractor is prevented from using the machinery to execute the work. The normal circumstances are not handing over the site, not making available the plan, sketches, approved drawings to execute the work or instructions issued not to go on with the work. In those circumstances as the contractor has mobilized the plant, machinery and men 'and he is prevented from executing the work, he is entitled to the idling charges. In the Instant case the pleadings on record, the earlier correspondence with the parties clearly show except the contract in question the contractor had no other work. He was pleading with the government to permit him to sell the hypothecated articles, as he had no use of the said machinery. In those circumstances as he had no work and he had incurred loan in purchasing these machineries, interest has to be paid, he wanted to reduce the burden by selling away machinery. In the light of the aforesaid plea, he was not at all entitled to idling charges which aspect has been clearly lost by the arbitrator.
In those circumstances as he had no work and he had incurred loan in purchasing these machineries, interest has to be paid, he wanted to reduce the burden by selling away machinery. In the light of the aforesaid plea, he was not at all entitled to idling charges which aspect has been clearly lost by the arbitrator. Even otherwise in the earlier proceedings, the arbitrator rejected the said claim on the ground that the contractor has been compensated under the heading loss of profit in executing the work as the contract was illegally terminated. The contractor accepted the said findings. He did not challenge the same and it has attained finality. Therefore, it was not open for him to putforth a claim after the arbitrator has passed the award, on the ground that after award permission is not granted to him to sell the machinery and he was not permitted to redeem the hypothecated articles and the cause of action in the second claim is subsequent to the award. This is precisely what the law prohibits both under Order 2 Rule 2 of the Code of Civil Procedure as well as under Section 11 of the Code of Civil Procedure. Unfortunately, the arbitrator as well as the learned Judge have overlooked these two legal principles, which underlines public policy and which also underlines a rule of evidence, which finds statutory recognition and thus committed a serious error in upholding the claim. It was without any basis, contrary to law, runs counter to the statutory provisions. Therefore it is a clear case of the arbitrator committing a legal misconduct. The error is apparent on the face of the record. The reasons assigned by him in upholding claim are contrary to statutory provisions and the principles underlining the aforesaid provisions and therefore, the award is liable to be set aside on the ground of legal misconduct. 26. The claims for interest is based on the above claim. If the claim for idling charges is negatived, consequently the claim for interest also fails. 27. For the aforesaid reasons, we pass the following order: ORDER (i) The impugned award passed by the arbitrator dated 28.07.1990 and the judgment and decree passed by the learned Civil Judge dated 30.10.1998 are hereby set aside.
If the claim for idling charges is negatived, consequently the claim for interest also fails. 27. For the aforesaid reasons, we pass the following order: ORDER (i) The impugned award passed by the arbitrator dated 28.07.1990 and the judgment and decree passed by the learned Civil Judge dated 30.10.1998 are hereby set aside. (ii) The claim made by the contractor is rejected both on the ground of the sail\(' being hit by Order 2 Rule 2 of the Code of Civil Procedure as well as under Section 11 of the Code of Civil Procedure. By virtue of the interim orders passed by this Court, the appellant was made to deposit the amount awarded. After the deposit the respondent was permitted to withdraw the said amount by furnishing bank guarantee. The said payment was subject to the ultimate result of this appeal. Now the appeal is allowed, the impugned award as well as the judgment an~ decree of the Civil Court is set aside, the amount received by the respondent is to be paid back to the appellant. The respondent shall repay the amount, which he has withdrawn within 90 days from today. If the amount is not repaid within 90 days, the appellant is entitled to invoke the bank guarantee and recover the said amount, with 12% interest till the date of payment as ordered by this Court in its order dated 16.04.2010. Parties to bear their own cost in the appeal.