IN THE HIGH cook": or KAKNATAKA AT -.
DATED THIS THE 26"' DAY OF MAY';.::201f}§ ._ "'
PRl:LSEN'1'_
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MR. T Sadashiva Rae'
S/0 Babu Rap, :
Dead by LR3: TL
1. Smt.I}s ha__Ran k
Wfo late TL Sadashixfarao,' «
Agesi 53%years;» 1} _ " ' %
'V Ran,
v"gfg)'1ateTifSé1dasl;iva Rae,
' ~agc»d_« aB<"2!i_fi
3. Lk M§}nevi§ra}n«x1 Ran T
SE0 laie._T' Sadashivarao,
x V' » about 30 years,
M are Riat Shiva Ragh Kadri,
Mangaiore 02. APPELLANTS
(By Sri Hatikrishsza S H0213. ~«~ Advacate)
hi
And:
I. The Muaicipal Corporation
Rep. by its Commissiener,
Mangaiorc.
2. The State ofKarnataka.,
Rep. by its Deputy Commission.e:1;.___ " %
T).K .Mangalore. 'L' ' '
(By Sri K V Narasimhan .Advrabé{te '~:&;%{R1
Szi Sangamcsh G Patii---é fifidvcgatg} _
REA is filed u1's:_ 96__ of «V;f,5f§)'<:edure against the
judgment and in O S N0.2521'I 99} on the
me nfthe II Adds. --{AI'.xiVV§'*'i"V§.J1fi%ig¢"(§é*;Dn.} & cm, Mangalore dismissing
the suit for declAfiz*2_Lt'i(}n find Vif§j'u1j£$ié:§uii1;".money_
This ';3'p}'}§3| ;;0mjfig' 0;; f:or hearing before the Court may,
A J, , fd§Iiver«:§{§m'£H}1 t: following:
" 3 JULXJMENT
"Hie plaintifi" has approached tms Court challenging the
' " --Tiéga1_it3I and cdrgébmess of the judgment passed by the I} Add}. Civil Judge
V iqangalore dated 15/1/2001 in 0 S No.252/91. The Suit was
by the plaintiff to declare that the texminaticn of contract made by
£7,
the respondent in null and void and to grant a decree for --j"iiJit}1b
court costs and current interest. ‘
2. The facts leading to this case are es
3. The plaintiff is a contractor.
by the respondent ~defenziei:i, ij:;~ee:1ent on
20/-,7/1939 for in Sy.No.62/21
of Idya the work was for
es.2?,29,34e}g,V Rs.28,0GO/- as E.M.D. He
was tdeemptxiete within 90 days.
4. Accerdiitg to §h€!_ p1aV’;i21t’eeyfer3;iefc1ts, the defendant did not take any
action’ to of the site for construction
V. VeCc.e-p-tanee of the tender. The defendant agreed to
emtent at current scheduie rates. In spite of the
geegégz the defextdant failed to supply the steel and
tkte current schedule rate and possession of the property
not handed over in full. The piainfiff was required. to
, ‘. 1% K;
V’ ebnsfiuct the buziiding a: an area where 35 shops were located. The
shops No.25 to 35 were not handed over to the plaintiff to demeljsh
;–<
'*3.
16% per annum from the date of suit till the
However. the court hekl that it had no me:
in View of the arbin-ation clause.
on Issue No.5. the suit of ‘_ =—- a1xpe–§Iaent”cai§_1e”ete””be
Chailengmg the presen’
We have heard the leamegi counsc} f,~t11 the pariiesryv ”
It is p1.é:;m_«;§f that the trial court has
cenLtn{‘d;e€i4’an that the suit of the plaintiff was not
for ie., (312) the respondent ~– defendant did
an apgnlitafien’ 11/ s 34 of the Arbination Act to stay the
*’ in View of the arbitration ciause in the
c:}.1′:’ii:rac£_t1.&ie: the civil suit: filed by the plaintiff was not
nlainininable. According to the learned counsel for the appellant
once the respondent participated in the proceedings without
K a little finger in regard to the arbitration proceedings and
having filed the written statement, it is not open for the defendant to
contend that the suit filed by the plaintiff was not xtnajntainable in
eve
10.
View of the arbitration clause and (b) altematively he also’:
that there was no agreement for referring the matter ioan
and clause 30 of the agreement iipon by
defendant cannot be considered as
requires the appellant to drive ‘oefosfe””the athitrator. V
view, he relied upon the ju<ig;;zent;of Coo.tt'2'1t Ptmjab S fate
-v. Dim: Not}: reported it: also the another
judgment in K 2\rf’:§tfi_’D. KN ride: eécéiigaagvgq’ reported in AIR 1998 so
1297. twto contmds that clause 30 of
the agree’irtent4’_ca1znotVTbe: are an arbitration clause in order to
drive the aprvelhnt to go the arbitrator. Therefore, he requests
‘~ the {to szet ast§ié’tt:e.«}’adgrr1ent and decree of the trial court and
V’ favout.
Fer x(.:)§tii?itVE:t,”I’€1j;i1_i’Itx’§.<Zi'V.(f£)t2ItS\'3:t for the respondent contends that in View
V –V of the agmtent, it has to be held that there isgéfirbiflafion
K artti suit filed by the piaintiff was not maintainable. He
aitetnéitive137 contends that even if Issue No.5 is reversed by this
" "Court, the respondent can contend that the finding of the trial £30111'! in
at
W
11.
holding that the piaintifi would be entitled for a sum of
with Current interest at 16% per annum in ” he ‘A ”
requests the Court to reconsider the eitfife ‘evidez’tce “a.nd~
since the respondent was not requited….to file’-an ofw . L’
the findings on other issues viewd.offthe offilleisuit of the
plaintifi relying upon I-3i11_e_ Civil Procedure.
He contends that even he can’ to take a different
View on the iseueé”hetdp..3;%gaj,;t$t.¢_titeresponciegnt; defendant.
Having lteard the for the parties, this Court is
required to consider fo1}.ovwihg points in this appeal.
V. (1) §F’\’b.e’t}ie:r.t}:1e trial.._Court}3as committed an error in holding that it
V’ :2-gdjfitiedietion to entertain the suit in View of clause 30 of the
‘
-(9.) If held in the affimtative, whether the respondent can
., -perntitted to urge the points which are held against him in View
a -9% order 41 Rule 22, if it is so, whether the findings of the trial
” “Court on other issues are required to be interfered with?
ta
(3) Whether the interest awarded at 16% per annum from the date of
the suit is on higher side and requires to be interfered L’
It is net in dispute that pursuant to tender invited by the ‘
the plaintiff became the successful tenderer’ and he t”<';~_
complete the work of construction of a _
days from the date of entmstment work" in h' V
regard to the terms and condi.-tipns o'f,the.. But dispute
is whethe;-vtthé' chm? :51: "error in not cempleting the
work within the whether the defendant was
entitled to terxttirzate the-_aAgree1z1"ent on account of latches on the part
'V "c»f_the 'So point is concerned, it is not in dispute
has appointed an Engineer Mrjagadeesh to
— ht 0ver’se_erhthev_Weekiletttrusted to the plaintiff by the respondent 14
a. months the execution of the agreement. If the defendant has
an Engineer 14 maonths after the execufion of the
egxeéement, it is impossible for the eonfiactor to execute the Wfirk
iwithjn 90 days in the absence of an Engineer appointed by the
respondent. E:<.P14 is the letter addressed by the Chief Officer ef
fy,
in favour of the plaintifif. But the defendant has not
appeal. Even if he has got preferred any appeal, as ~
out by the learned counsel for the respendergt, he K V'
grounds requesting this Court ta set asifte tlzée
Court. But on re~appre<:iation of fl1eTe§idenceh£ PW-_~u1T' * L'
the documents relied on by the parfles.~-tee varé-not. £1' positirjn to take
a difierent View on the other has rightly held
that the termjrtatiovn ef the and the amount
spent by' *1&e':%Iaief?1f£ 55%: in by the respondent. While
confirming:VL?;e";::ointsV}:eid. of the plaintiff by the trial Court,
we are of the of current interest from the date
'V bf. ciate efifeaiizeiion at 16% per axmum on Rs.1.24,?40/– is
the suit transaction is of the year 1989.
— VV Thee rate by the Banks itself could not be more
7% to Be that as it may. when the Court is awarding intearest
of suit 11/’ 3 34 of Code of Civil Procedure, it cannot be
H “*-‘i1 1ere§fl1an 6% per annum. Se only to fifit extent, we have to modify
V’ ‘~ ihe findings of the trial Court on other issues.
5%
13.
V th _ <;Oi\5}"1{A(;T(§i{
So far as Point No.1 is concerned, it is not in dispute thaéfits
30 of the agreement, the defision of the
Administration is final, conclusive and the saxziefl one
parties. It wouid be useful fo1':_us.V to to uvthe',
agreement, which reads thus:
CLAUSE 30:- Except the contract and
subject to the ‘by..,C;overnnm1t unfier the
Code Rules Director of Municipal
A. be final conclusive and
binéing 2.21 ti”-:e4V”co:1§itz*e.ict upon all questions relating to the
meaning of tiesigns, drawings and instructions
hereto ‘before 4.VnaenVtioi~:ect’ as the quality of workmanship; or
V’ the’wor1< or as to any other questton relating to the
fications, es&ma' tee, instructions orders or those
ooedifiohs to execute the same.
C1*iflfl” Ui*’l*’1C.ER
TOWN M.UNiCL{‘AL COUNCIL, SUKATHKAL.
arising dtzxing the progess of the work, or after the
t’ V” corrrpletiorz of abandonment thereof.
fly
¥
iii.
A perusal of clause 38 of the agreement clearly .
decision of the Director of Municipal A(Zt11ftiJ.’t§StIa’fifJit” ” *
both the parties relafing to the speci£1’catiQns,;’ ‘aw
insfiuctions and as to the théfwcrrkm, .1′ tiie
materials used on the work 0;’ as to to the
meaning of the spedficatimt” orders or those
conditions or faflur9_:to__exec1ité”.t,!i(§n§.;’ Supreme Court
whzne considerigxgthe STATE vs., DINA
NATH, ‘ ‘iaasfilteld as under in paragraph
“15. In the dcc’isio’n Ccfurt in case of State of U}? V.
‘I’i;;!:i=3;r (Zhand'(sup1f_e_1_t,_t’his court hewever held that the
V ciaiise in that decision between the parties did
iimft té3:’t;a;§’1j..arbitt’ation agreement. In that decision,
fiti$”Vt30i:t&I*.f.V’v’fit!fl1€1’ held that clause under consideration
befcirc ttscriiywhich provided that except where otherwise
fiptecifiécis in the contract the éecisien of the
,, / . 5.gpc;;intending Engineer for the time being shalt be final,
c»:)ncIus_ive and binding on ail the parties to the contract
Winpon all questions relating t0 the meaning d the
specifications etc. and the decision of the Superintsending
Engineer as to the quality workmanship etc. shall be final,
conclusive and binding between the gaarties aims not
constitute an arbitration agreement but while ff ‘V’
such a conclusion this Court referred to a decision ._
Iammu and Kashmir High Court inthe of
Chand V. State of Jammu 8: Kashmir JR: ” T
In the Dewan Chanel case (supr;4.)_ the claufee titans
as follows: – “For any dispute the contréetor
the Department the decieion of the’ Chief”Engineef”PW;D
Iammu 81: Kashmir, will i$e””§inel__;iii§I ehaggg upon the
contractor. This Court in~–th.at=deciseiontihlieitifivtit strong
reliance on the the
contractor a%ndfl’o_”the” “aim. ‘ approved the
conclusionéiarlfiseed By the] ‘& K” Court. It came to
the conictusion that clause that there
did not e3’cistL as the decision of
the Segserintending Engiizeefsin connection with the work
:x::. was meant for supervision and
execution of –tlie-wort: and administrative control over it
However, in Clause 4 of the Wort:
Qrciet in case, which specifically states that in
oi’. dispute between the appellants and the
it * ‘:–.confi:a_ctinsg panties, the matter shall be refened to the
‘Snnefintending Engineer. Therefore, the use of the words
n feiiy ciispute” would clearly mean that it would lead to
it ” ‘ . conclude that the said agreement was in fact an arbitration
and thus these words do not restrict the scope of the
contract.”
w
Therefore, the question is whether there is scope ” 9
matter to arbitsafion and whether there is .’
to us, in this case, by reading clause»3ii’ the”agi*eeme;.1t; ‘ of
Municipal Administration caemot be _ as ” and
decide the dispute. His poweeeexre to the iesuance of
specification, d.esig11s_,’d..rewings and aiso to
verify the used on the work.
Therefore, the the View of clause 36 of the
agreement,V fl1e’e_22it has to be reversed, since
there is no disouteé in £:11e_case which could be referred to an
“arI%>1tra£of’iarg5:iV:that too there is no clause for referring the matter
to aI1V’a1f:bi§’tii*ioti._’ ‘ 1- .
if t11e~ces:e of the defendant is accepted for the sake of argument,
opinion the trial Court is not jusfifieci in disnfiwing the
Sgince the defendant has participated in the civil suit under the
‘ ». ._}%rb1trafi.on Act, 1940 when there is an age-ement of arbifletion if any
legal proceedings are initiated without exhausfing the remedy of
arbihation, the defendant is bound to make an application u/:5 of
the Act to stay the legal proceedings and request the
matter to arbitration in terms of the ageement. But K
the instant case, the defendant has ente1*ec§L
From 26/ 11/ 1991 case was adjoumed frotn. ttine to L»
various applications filed by the under -“’39 2 and
Order 6 Rule 9 of Code at ‘Civil ad the mm
statement was filed on 24/1 clear that the
defendant has pa;’V’u’eij3eted without making an
appucaeoim/s 3«iVVof~.tI{:ej:’Arf’bitt:aiior¢ Act, 1940. When the defendant
has failed to 34 aed having parficipated in the
_ .. V;.>roceec-‘tiitgtgus of the eivil he cannot contend that the suit filed
tsifiot maintainable. Therefore, on this point also, the
Court on issue No.5 has to be set aside.
Accordtiig.l3é’twe4eI1swer all the points in favour of the appellant and
= V ‘ -the respondent.
‘ ” result, the appeal is allowed with costs. The judgment and
decree passed by the Civil Judge (Sr.Dn.} at Mangalore in O S
.-w
a1<d*
No.25}:/1991 dated 15/1/200: are hereby modified
appellant ~» plaintiff is entitled for recevexy' of ;u '
interest at 6% per anmzm from the dfite u ?'o§
realization. .
xfiage