SOUTHERN ENGINEERING CO. Vs. STATE OF WEST BENGAL

JUDGEMENT

(1.) This Rule is directed against judgment and order dated Jan. 31, 1979 passed by Shri A.K. Dutta, learned Additional District Judge, 4th Court, Alipore in Title Appeal No. 1066 of 1978 affirming the judgment and order dated Nov. 18, 1978, passed by Shri M.K. Sengupta, the learned Second Munsif at Alipore in Title Suit No. 125 of 1977. The petitioner is a partnership firm and, inter alia carries on the business of construction and other allied Engineering works. The petitioner firm submitted a sealed tender invited by the Superintending Engineer, State Highway Circle No. 1 for construction of Haldia Bridge approach road at Narghat. According to the petitioner the total claim of the petitioner against the department amounted to Rs. 6,05.575.21 but tire cone rued Department failed and neglected to make payment of the said sum. On the other hand, the Executive Engineer concerned issued a Memo bearing No. 6-S37 dated Sept. 6, 1976, inter alia stating therein that the petitioner firm had faded to execute the work within the stipulated time and the petitioner firm was threatened with a liability to pay compensation as per clause 2 of the Contract Form No. 2911 (ii). It was further stated in the said Memo that the amount of compensation would be determined by the Superintending Engineer, State Highway Circle No. 1. In the agreement entered by and between the parties there was a clause namely clause 25 which, inter alla, provided for reference of all disputes and questions relating to the said agreement to an Arbitrator to be appointed by the Chief Engineer. As other disputes arose between the petitioner firm and the deportment concerned the petitioner firm made an application under Sec. 20 of the Arbitration Act and on the said application Title Suit No. 119 of 1976 in the Court of the learned First Subordinate Judge at Alipore was started. It appears that the learned Judge had earlier directed for reference to the Chief Engineer as Arbitrator hut the petitioner firm being aggrieved by the aforesaid order of the learned Subordinate Judge moved this Court in Revision and a Civil Rule No. 1630 of 1977 was issued by this Court and the said Rule wan disposed of to the following effect :

(2.) It appears that during the pendency of such arbitration proceeding the petitioner firm filed another suit being Title Suit No, 125 of 1977 of the Second Court of the learned Munsif at Alipore for a declaration that clause 2 of the agreement as alleged by the department was not in existence at the time of the agreement mails between the parties and the said clause no. 2 was sought to be inserted fraudulently at a later stage. The petitioner firm contended that when the written statement was filed by tire department in the previous suit, the aforesaid fact was made known and as such the petitioner firm was compelled to file the said Title Suit No. 125 of 1977 for the aforesaid declaration that the existence of the said alleged clause 2 was not in the agreement but such clause had been fraudulently inserted at a later stage.

(3.) The department thereafter made an application under section 34 of the Arbitration for stay of all further proceedings of this Title Suit before the learned Munsif and it is contended, inter alia, by the Department that when the agreement in writing to refer the disputes to the Arbitrator is admitted by the parties and when admittedly the parties are willing to refer the matter to Arbitration, the aforesaid Title Suit for declaration should be stayed and the disputes sought to be raised in the Title Suit being also a dispute relating to one of the clauses of the said agreement, the Arbitrator is quite competent to decide the said dispute raised by the petitioner firm that clause 2 was not in existence but such clause has been fraudulently inserted at a later stage. It appears that the learned Munsif was pleased to allow the said application under Sec. 34 of the Arbitration Act an appeal was preferred by the petitioner firm being the said Title Appeal No. 1066 of 1978 but the learned Additional District Judge, 4tli Court, Alipore dismissed the said appeal and affirmed the order of the Trial Court granting stay under section 34 of the Arbitration Act. the petitioner firm thereafter moved this Court in Revision and the instant Rule was issued by this Court.