UNION OF INDIA Vs. SOHOUN CONSTRUCTIONS

JUDGEMENT

(1.) THE appellants-Railways entered into an agreement with the respondent-company and entrusted certain construction work of bridges in Kottavelasa-Kirandole section. In the execution of that construction work, disputes arose between the parties. THE respondent-contractor filed the suit (out of which this appeal arises) O.S.No. 112/80 on the file of Principal Subordinate Judge, Visakhapatnam under S.20 of the Arbitration Act for a direction to the appellant to file agreement dt. 31-3-1973 into the court and for referring the disputes to arbitrator in accordance with the arbitration clause in the said agreement. THE appellants contested the suit on the ground that the respondent-company could not complete the work as stipulated, consequently the appellants had to get the work executed through some other agency and that no amount was due to the respondent-plaintiff which is evident from the fact that it gave a no claim certificate on 15-5-1976 (Ex.B.3). It was further stated that the respondent also executed a collateral agreement on 17-5-1976 (Ex.B.2) which supersedes the original agreement dt. 31-3-1973 containing the arbitration clause between the parties. On these pleas, it was prayed, that the suit be dismissed.

(2.) THE trial Court, after framing necessary issues and considering the evidence on record, came to the conclusion that as Exs. B.2 and B.3 are disputed, the matter can be referred to the arbitrator who would also go into the question of their genuineness or otherwise. In that view of the matter, it decreed the suit directing the appellant to file the original agreement dt. 31-3-1973 in the court and nominate its arbitrator for reference of the disputes within three months from the date of judgment. Aggrieved by the said judgment and decree, the defendants preferred this appeal.

(3.) THE next submission made by the learned counsel for the appellant is that in the collateral agreement, Ex.B.2 dt.17-5-1976, the parties have agreed that the earlier agreement dt.31-3-1975 is superseded, therefore, the dispute cannot be referred to arbitration. Sri Sitarama Murthy, the learned counsel for the respondent, on the other hand, contends that the agreement, Ex.B.2, is not a valid agreement, first because it is executed due to coercion and undue influence and secondly because it is not supported by any consideration and thirdly because the contract is not signed by the appellant either in accordance with Art.299 of the Constitution or otherwise, therefore, there is no binding agreement between the parties so as to supersede the original agreement of March 31, 1975. However, it is submitted by the learned counsel for the appellant that these pleas were not taken in the pleadings, so they cannot be permitted in the appeal. In so far as the first two contentions are concerned, I am inclined to agree with the learned counsel for the appellant. But in regard to the third contention viz., that Ex.B.2 is not signed by and on behalf of the Railways much less it is executed in accordance with Art.299 of the Constitution, though this ground was not taken before the trial Court, yet the fact remains that not signing of the contract is evident on the face of Ex.B.2 itself and does not require adducing of any evidence. I consider that in the interests of justice, this point may be permitted to be urged. THE written statement contains a recital that the original agreement is being filed along with the written statement, which is marked as Ex.B.2 in evidence. However, on the request of the learned counsel to enable him to find out whether any original of the said collateral agreement duly signed in accordance with Art.299 of the Constitution is available with the appellant, I granted him sufficient time. Ultimately, he reported that no other original collateral agreement is available with the appellant. Having regard to these facts, I cannot but hold that Ex.B.2 is the original collateral agreement and that it is not signed by the Railways, so there is no concluded contract which supersedes the agreement of Mar 31, 1975. However, Sri P. Venkatrami Reddi, the learned counsel for the appellant submits that though the contract is unenforceable as against the appellant, in so far as the respondent is concerned, it is binding on him as he has signed. In support of his contention he relied on the following passages in "Chitty on Contracts (24th Edn) para 17 at page 13-