KUNDAN LAL HANDA Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) This appeal has been filed against the order of the learned District Judge, Udaipur dated on Jan. 4, 1983 by which he dismissed the petitioner's application moved under Sec. 41, Arbitration Act read with Order 39, Rules 1 and 2 and Sec. 151 of the Civil Procedure Code, praying that the defendant respondent be restrained from realising the amount of penalty of Rs. 56,283/- imposed under Clauses (2) and (3) of the contract through coercive methods or by deducting it from payments to be made to the appellant in respect of other contracts. The facts of the case giving rise to this appeal may be summarised thus.

(2.) The appellant was granted a contract by the State of Rajasthan for the construction of a Syphon Aqueduct at R.D. 18018 on Left Main Canal, N. Bajaj Sagar Project, Bansawara. Be executed a portion of the work to the extent of Rs. 1,98,078.22 p. He could not carry out further work due to the unreasonable hinderances and obstacles of the Engineering staff of the respondent. He moved the concerned Executive Engineer. He intimated that the appellant may refer the matter for arbitration to Chief Engineer. Accordingly, he moved the Chief Engineer but with no avail. Ultimately, he moved an application under Sec. 8 read with Sec. 20 of the Arbitration Act in the Court of the District Judge, Udaipur for getting the agreement filed and for appointing an arbitrator. Meanwhile, the Chief Engineer proceeded to levy the penalty and compensation and directed the recovery of Rs. 56,283/- from the amounts payable to the appellant in respect of other contracts. After hearing the parties, the learned District Judge dismissed the application by his order dated Jan. 4, 1983 which has been challenged in this appeal.

(3.) It has been contended by the learned Counsel for the plaintiff-appellant that the amounts of compensation and penalty determined by the Chief Engineer are illegal and they have been imposed without any loss or damage. He further contended that the amount of damages for breach of a contract cannot be recovered from other amounts payable to the party in respect of the other contracts. He relied upon in State of Rajasthan Vs. Mool Chand, AIR 1974 Supreme Court 1265 : 1975 W.L.N. (U.C.) 3.