THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO APPEAL SUIT No.1152 of 1993 JUDGMENT: The defendants in O.S.No.6 of 1985 on the file of the Subordinate Judge, Wanaparthy are the appellants herein. The suit was one filed for recovery of a sum of Rs.27,089/-, which is the E.M.D., F.S.D. and the value of cement with interest at 12% from 01.06.1976 to 31.01.1985. The case of the plaintiff in brief was that the plaintiff was entrusted with the work of the construction of Zilder Tippe Project at Malachintapally village and the work was done from 23.01.1975 to 24.11.1975 and the plaintiff has deposited the amounts. Subsequently there were some disputes with regard to the completion of the work and arbitration proceedings were initiated by the plaintiff about the termination and for recovery of money and the department also initiated arbitration proceedings. Being not satisfied with the award of the arbitrator, O.P.No.211 of 1979 and O.P.No.225 of 1979 were filed by both the parties and the award in favour of the plaintiff was confirmed and this Court also confirmed the same. In spite of demands thereafter the defendants have not returned the said amount and hence the suit. The substance of the contentions of the defendants is that the suit was barred by time and the present claim was not made before the earlier arbitration and it is not valid and, therefore, it cannot be considered at this stage. Furthermore, the plaintiff has to do balance of work and the amount is liable to be withheld. On the basis of the above pleadings, the learned judge framed the necessary issues. On behalf of the plaintiff, P.W.1 was examined and marked Exs.A-1 to A- 24 and on behalf of the defendants, D.W.1 was examined and marked Exs.B- 1 to B-9. After considering the evidence on record, the lower Court has decreed the suit of the plaintiff for a sum of Rs.27,089/- with interest from the date of suit and not from 01.06.1976 as claimed. Aggrieved by the said judgment and decree dated 31.12.1992, the present appeal is filed. The points that arise for consideration are: 1. Whether the suit is not maintainable? 2. Whether the plaintiff is entitled for the suit amount? POINTS: The main contention of the appellants is that the contract provides for arbitration and in the earlier arbitration proceedings the claim was not made and, therefore, the suit is not maintainable. So far as this aspect is concerned, evidently, the defendants have participated in the suit and filed written statement and did not ask for stay of the proceedings and consequently it cannot be contended by the appellant that the suit is not maintainable in view of the arbitration clause. Evidently, in the earlier arbitration proceedings, this claim was not included and the question was about the termination of the contract and the amount payable to the contractor. Therefore, in view of the above circumstances, the contention cannot be accepted and the lower Court has considered this aspect after referring to several judgments and I do not think that there is any reason to come to a different conclusion. So far as the deposit of these amounts is concerned, it is not in dispute. The defendant claimed that there is deficiency of work and the contract was having terminated. Evidently, in the previous award, the contention of the defendant was not accepted. It is the contention of the appellant that the defendant has to pay Rs.3,03,317/- after deducting the suit amount. Evidently, a notice was given and to that notice the present stand of the defendant was not taken. There is also no demand for the amount due to the defendant after forfeiting the deposits. The supply of the cement was also accepted. In fact, as can be seen from the award of the arbitrator Ex.A-20 the laches are on the part of the appellant and breach of the contract was on the part of the department when damages were awarded to the plaintiff. It is not in dispute that the award made rule of the Court and it was confirmed by this Court in a judgment in Ex.A-23. That being so, when the contract was found to be illegally terminated and damages having been awarded by the arbitrator, it is not open to the department to say that the deposits shall be adjusted to the amounts due to the appellant. If such a thing is there, the department should have claimed the same benefit when the arbitration proceedings were initiated and the matter was pending before the Court. But, that was not done. The appellants have seriously contended that the suit is not maintainable as it was barred by time. Evidently, the contract has been terminated abruptly and the termination of the contract was due to the fault of the department as held by the arbitrator and also by the contractor and the legal notice was given on 25.10.1984 claiming return of the money and the suit was filed in 1985 and the judgment of this Court was delivered on 13.07.1983, which has become final subsequently. Therefore, unless and until the determination of the breach alleged by the parties is determined, the question of the refund of the deposits does not arise. In this case, the final adjudication about the determination of the breach was done by this Court and the suit is well within time after Ex.A-20 and the lower Court has also considered the plea of mediation from the correspondence and it cannot be said that the appellant is entitled to retain the money. Therefore, there are absolutely no merits in the appeal. Accordingly, the appeal suit is dismissed with costs. ________________________ N.R.L.NAGESWARA RAO, J 31-10-2011 MR THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO APPEAL SUIT NO.1152 OF 1993 Date: 31-10-2011 MR