DCRUZ BROTHERS Vs. STATE OF KERALA

JUDGEMENT

(1.) The civil revision petition is directed against the order passed by the Principal Sub Judge, Trivandrum; in O. S. (Arbitration) 185 of 1977, setting aside the award passed by the 2nd respondent on 18-12-1975 and remitting, the same to him for disposal on merits. The award in question happened to be passed in the following circumstances: The petitioner is a contractor firm. This firm had entered into am agreement with the 1st respondent. State of Kerala, on 2-2-1965 for execution of certain construction work. The contract was unilaterally terminated by the 1st respondent after a portion of the work was executed. Differences arose and they were referred to the Government Arbitrator, who, as per his award Ext. C4 dated 12-12-1971 allowed certain claims made by the petitioner. In the last paragraph of the said award, the Arbitrator allowed the retention amount to be released to the petitioner after setting off all the liabilities. The said award was filed in Court and a decree was passed in terms of the award on 20-12-1972 in Arbitration O. P. No. 97 of 1971. The petitioner took out execution of the decree by filing Ext. C5 application. That petition was resisted with the plea that the first respondent had to get Rs. 85,400/- from the petitioner and therefore, no amount could be paid to the petitioner. This objection was overruled and as per Ext. C6 order dated 22-6-1974 execution was allowed to proceed. On 8-3-1974 the decree was reported satisfied as per Ext. C9 order and the Government Pleader reported to the Court that the amount had been deposited. Subsequent to this the petitioner filed an application for review of the decree claiming certain extra amounts. This was resisted by the State by filing Ext. C7 objection. The review petition was dismissed on 23-3-1976 as per Ext. C8 order. The petitioner received Ext. C12 letter dated 29-12-1977 from the 2nd respondent informing him that an amount of Rs. 85,4001- was outstanding as liability payable by him to the Department. This was followed by Ext. C13 letter by which he was told that if the amount was not paid revenue recovery proceedings would be taken. The petitioner replied to these letters by Ext. C15 denying liability to pay the amount mentioned in the two letters referred to above and also raising a plea that the claim was barred by the earlier decisions. However, as revenue recovery proceedings were initiated, the petitioner filed O. S. (Arbitration) 185 of 1977 under S.20 of the Arbitration Act to direct the respondents to file the agreement in Court and for reference to the Arbitrator the dispute that had subsequently arisen in. the form of the claims made under Exts. C12 and C13 letters. That application was allowed and reference was made to the Government Arbitrator. The Arbitrator entered on the reference and passed an award holding that the claim now made was barred by res judicata. Before the Arbitrator, the 1st respondent had made a counterclaim and that counter claim was rejected by the Arbitrator. The Arbitrator filed the award in Count. Objections were filed by the respondents and a prayer was made to set aside the award. The Court below after considering the abjections held that the Arbitrator went wrong in holding that the dispute referred to him was barred by res judicata and remitted the award for disposal on the merits. Hence the revision.

(2.) Before considering the rival contentions put forward before me, it will be useful to refer to the relevant portions of the earlier orders. The only paragraph which is relevant for the purpose of this petition is para.7 of the award which reads as follows:

(3.) The points formulated by the learned counsel for the petitioner in support of his case that the order under revision has to be set aside are (1) the second order of reference passed on 28-6-1978 in O. S. (Arbn) 185 of 1977 cannot be used against him to contend that the dispute now raised is not covered by the earlier award. The only judicial act that the Court does before giving a direction to fife the agreement is to decide whether such a direction is necessary. What follows is only a ministerial act. (2) The claim for the amount in dispute was raised by the respondents at the execution stage and in the review petition: and that claim was overruled, rendering a further claim on this count impermissible to be raised by operation of the principles of res judicata. As a second limb to this argument, he raised the additional point that in any case this claim is one that ought to have been raised and Explanation IV to S.11 CPC operated as a bar if it had not been raised. This bar is applicable to proceedings in arbitration cases also. (3) The arbitrator understood the only question referred to him to be the question of res judicata. Even if the Arbitrator commits a mistake in his conclusions on this question, it cannot be interfered with by a Court as an error apparent on the face of the award, (4) Assuming for arguments' sake that this question was not specifically referred, the Arbitrator cannot be said to have committed an error in formulating the question regarding res judicata and coming to the conclusion that there was bar of res judicata since such a conclusion is strictly in conformity with the principle enunciated by binding authorities. .....