In a second appeal, the High Court dismissed the defendant-appellant's challenge to a decree awarding Rs. 76,000 with interest to the respondent-contractor. The court held that the courts below correctly found appellants failed to clear the site, making forfeiting the deposit illegal.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
RSA No.2977 of 2014(O&M)
1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
RSA No.2977 of 2014(O&M) Date of decision: 29.5.2014
Haryana State Agriculture Marketing Board & anr. ......Appellant(s)
Versus
M/s Dashmesh Construction Company ......Respondent(s)
CORAM:HON'BLE MR.JUSTICE RAKESH KUMAR GARG
Present: Mr. Ramesh Hooda, Advocate for the appellant(s).
Rakesh Kumar Garg, J. (Oral)
This is defendants' second appeal challenging the judgments and decrees of the Courts below whereby suit of the plaintiff-respondent has been partly decreed for recovery of a sum of Rs.76,000/-
The plaintiff-respondent was allotted the work of construction of a Sports Stadium at Village Keorak, Kaithal on 13.12.2006 and as per the allotment letter, the work was to be completed within 4 months after getting the site cleared in all respects. However, according to the plaintiff, the Gram Panchayat, Keorak failed to hand over the clear site to it. It is the further case of the plaintiff that it had engaged labour and collected material but could not start the work because the appellants failed to provide the site and and thus, suffered loss on this account. The plaintiff requested the defendant-appellants for release of its security amount of Rs.76,000/-. However, it was informed that its security amount has been forfeited. It is the case of the plaintiff that there was no breach of contract on its behalf and therefore, it was entitled to refund of security amount of
Saini Pushpinder 2014.05.30 13:29 I attest to the accuracy and integrity of this document High Court Chandigarh
2
RSA No.2977 of 2014(O&M)
Rs.76,000/- along with damages to the tune of Rs.70,000/-
The suit was contested by the defendant-appellants stating that the site was given by them to the plaintiff but it did not start the work at the spot and thus, the Department and the public at large suffered because of delay in the construction. According to the appellants, there was no problem for execution of the work or for starting the construction at site and it was only because of plaintiff-respondent's own negligence that it failed to start the work and thus, the security amount was rightly forfeited. Rest of the contents of the plaint were denied and dismissal of the suit was prayed for.
After hearing counsel for the parties and due appreciation of the oral as well as documentary evidence, the trial Court decided issue No.1 partly in favour of the plaintiff and issues No.2 to 4 were decided against the defendants. Resultantly, the suit was partly decreed in the following manner:
“It is ordered that the suit of the plaintiff succeeds partly and the same is hereby partly decreed with costs. The defendants are directed to make the payment of Rs.76,000/- to the plaintiff company along with interest @ 6% per annum within a period of two months along with damages to the tune of Rs.20,000/- failing which the plaintiff company shall be at liberty to recover the same in accordance with law.”
Feeling aggrieved from the aforesaid judgment and decree of the trial Court, the defendants filed an appeal before the First Appellate Court and the same was dismissed with a slight modification i.e the
Saini Pushpinder 2014.05.30 13:29 I attest to the accuracy and integrity of this document High Court Chandigarh
3
RSA No.2977 of 2014(O&M)
plaintiff-respondent was held entitled to recover the amount of Rs.76,000/only along with costs and interest @ 6% per annum, further observing that it was not entitled to the damages of Rs.20,000/- as granted by the trial Court.
Still not satisfied, the defendants have filed the instant appeal submitting that the following substantial questions of law arise in this appeal:
“(i) Whether clause of arbitration is made out from the perusal of arbitration clause 25, 25A and amended 25A of the contract agreement and whether the jurisdiction of the civil court was barred as per the arbitration clause? (ii) Whether the amount of security was liable to be forfeited as the contractor did not execute the contract on stamp paper within seven days from the date of agreement and whether such a mandatory clause could be presumed as lapsed due to passage of time? (iii) Whether the findings recorded by the courts below are perverse?”
Learned counsel for the appellants has vehemently argued that there was no fault of the appellants as the site was made available to start the work but the plaintiff-respondent did not start the work and finally requested to return the security amount. It is the further case of the appellants that there is enough evidence to prove that the appellants were asking the contractor to start the work but it was not starting the work on one or the other pretext. The site was fully ready for construction, however, the Courts below have committed an illegality while recording a finding that the site was not made available to the plaintiff-respondent for construction.
Saini Pushpinder 2014.05.30 13:29 I attest to the accuracy and integrity of this document High Court Chandigarh
4
RSA No.2977 of 2014(O&M)
According to the appellants, in fact it was the respondent who did not want to start the work and thus, both the Courts below have committed an illegality while decreeing the suit of the plaintiff-respondent.
The argument raised is misconceived and liable to be rejected. Both the Courts below on appreciation of evidence on record have recorded a concurrent finding that there was no fault on the part of the plaintiff-respondent for not starting the construction work at the spot and there was no breach of contract on its part rather the demarcation and levelling of the land and other formalities which were required to be done by the appellants were not completed by them and therefore, the plaintiffrespondent cannot be held liable for their fault. Thus, they could not forfeit the security amount for the wrong committed by themselves.
No other point has been argued.
No substantial question of law arises in this appeal.
Dismissed.
May 29, 2014 ps
(RAKESH KUMAR GARG) JUDGE
Saini Pushpinder 2014.05.30 13:29 I attest to the accuracy and integrity of this document High Court Chandigarh
3 issues framed by the court
Whether jurisdictions of civil court was barred due to existence of an arbitration clause?
Whether the security amount was liable to be forfeited as the contractor did not execute the contract on stamp paper within seven days?
Whether the findings recorded by the courts below are perverse?
Haryana State Agriculture Marketing Board
M/s Dashmesh Construction Company
Rakesh Kumar Garg
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
