UNION OF INDIA Vs. S KESAR SINGH

JUDGEMENT

(1.) THIS appeal under the Letters Patent is aimed at oversetting the judgment of a learned Single Judge of this Court, whereby he has passed a decree in the amount of Rs. 91,727/ - in favour of the respondent against the appellants with costs. The facts which have led to the filling of this appeal may be briefly recounted as below.

(2.) IN response to a tender notice issued by the Chief Engineer Western Command, Simla, the respondent offered to supply 14,439 Charpoys fitted with mosquito not frames with gutties and clumps at the rate of Rs. 19/ - per charpoy for the use of troops stationed in Jammu. This offer was accepted by the Chief Engineer Western Command on 8 -12 -1956 and a deed of contract came to be executed between the President of India and the respondent, according to which, the entire supply was to be completed by 31 -12 -1957. The respondent had supplied only 2045 charpoys, when on 21 -10 -57 further work was suspended by the Engineer -in -charge vide a notice sent by him to the respondent in terms of clause 6 of the agreement. This was followed by another notice issued by the Officer Commanding 969 Works Section on 31 -3 -1958 informing the respondent that the remaining charpoys were to be supplied by him without mosquito not frames at a rate less by Rs. 4.33 from the rate already fixed per charpoy and calling upon him to indicate whether these terms were acceptable to him. The respondent, in reply thereto, even though questioned the right of the Officer Commanding to make the proposed deviation in the terms of the contract, yet offered to supply the remaining charpoys without mosquito not frames, but only at a rate to be reduced by Rs. 1.50 per charpoy instead of Rs. 4.33 as suggested by the Officer Commanding, The contract was ultimately cancelled with effect from 29 -5 -1958 by the Headquarters Western Command Engineers Simla Branch by a notice dated 22 -5 -1958 sent to the respondent in terms of clause 28 of the agreement and the respondent was further told that the supply according to the contract would be completed through other sources at his cost. The respondent without losing much time filed a suit for perpetual injunction of 31 -5 -1958 against the appellants and others in the court of Sub Judge, Jammu, restraining them from carrying out the work either departmentally or through other agency and further directing them to accept the supplies from the respondent in terms of the agreement. The defendants, it appears, made an application under Section 34 of the Arbitration Act for staying the proceedings in the suit in terms of clause 36 of the agreement which made provision for arbitration. The court trying the suit vide its order dated 16 -8 -1958 stayed the suit and allowed the parties to refer their disputes to an arbitrator. Thereafter, the disputes were referred to the sole arbitration of one M. L. Baheja who entered upon the reference and ultimately made this award on 19 -4 -1963. The award favoured the appellants. Consequently an application to make the same a rule of the court was moved by the appellants in the High Court. A learned Single Judge of this Court (J. N. Bhat J), who heard the application as well as the objections to the award filed by the respondent. Eventually set aside the award on 29 -3 -1966. The appellants challenged the order of the learned Single Judge in a Letters Patent appeal but without any success and the appeal was dismissed by a Division Bench of this Court on 9 -5 -1968.

(3.) THE present suit was brought by the respondent on the plea that the appellants had no right to vary the terms of the contract unilaterally and cancel the same on the failure of the respondent to agree to the terms proposed by them as the contract was not a lump sum contract within the meaning of clause 5 of the agreement. He also alleged that he was always ready to make the supplies in accordance with the terms of the contract and the work orders issued thereunder from time to time but the department did not accept the supplies. The respondent relying upon a number of facts and circumstances pleaded that his suit was within time and claimed a decree for Rs. 1,05,000/ - against the appellants on account of damages for breach of contract, refund of security deposits, payment of balance price of charpoys supplied, interest on the amount illegally withheld by the appellants and expenses incurred by him during arbitration proceedings. The appellants resisted the suit mainly on the ground that cancellation of the contract under clause 28 of the agreement was fully justified as the respondent had failed to make the supplies in time. It was further pleaded that the suit was barred under the provisions of 0.2 R. 2 CPC besides the same being barred by limitation. The appellants also denied that the respondent had ever offered to supply charpoys which the appellants refused to accept. It may also be mentioned that before filing the written statement, the appellants moved an application on 2 -9 -1959 under section 34 of the Arbitration Act, which was dismissed by the learned Single Judge trying the suit. An appeal was then taken by the appellants against the said order to a Division Bench of this Court but later on the appellants decided not to press the same with the result that the appeal was dismissed by the Court on 29 -3 -1974.