KURIACHEN Vs. KERALA STATE ELECTRICITY BOARD

JUDGEMENT

(1.) THIS appeal arises from the order of the Subordinate Judge, Trichur, in I.A. No. 886 of 1976 in O.S. No. 136 of 1976. The learned Judge dismissed an application filed by the Appellant (Defendant in the suit) under Section 34 of the Arbitration Act, 1940.

(2.) THE suit was filed by the Kerala State Electricity Board, to recover from the Defendant a sum of Rs. 65,950.13 with future interest by way of damages for breach of contract. It is alleged in the plaint that an agreement was entered into between the Plaintiff and the Defendant on 7th August 1973 for the construction of temporary buildings at Mukkali in connection with the Silent Valley Hydro -Electric Project. The agreement provided that the contract work was to be completed on or before 9th July 1973 and that all unused materials supplied by the Plaintiff to the Defendant had to be returned to the Plaintiff, failing which the cost of such materials was recoverable from the Defendant at a penal rate as stipulated under the contract. It is alleged that the Defendant, contrary to the provisions of the contract, failed to complete the work within the stipulated time and furtively removed from the site the unused materials. When the Plaintiff came to know of the clandestine removal of materials, a complaint was lodged with the Augali police and Cr. No. 16/75 was registered. Augali police investigated into the matter, but sent a final report to the Magistrate of the I Class at Mannarghat to refer the case as a mistake of fact. In the circumstances the Plaintiff filed the suit for recovery of amounts as per the contract.

(3.) THE Plaintiff thereupon filed objections to the said application on various grounds. The Plaintiff contended that the subject -matter of the suit was outside the scope of the arbitration clause; the award of the arbitrator would not bind the Plaintiff; there was no dispute between the parties which could be referred to arbitration; and in view of the allegations of fraud and misappropriation, the civil court was the proper forum to decide such questions and the arbitrator had no jurisdiction in respect of the same.