IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA OSA No. 9 of 2008. Judgment reserved on: 21.11.2008 Date of Decision : 3.12.2008. M/s. Ansal Properties and Industries Ltd. …..Appellant/defendant. Versus Himachal Pradesh State Electricity Board …. Respondent/plaintiff. Coram The Hon’ble Mr.Justice Jagdish Bhalla, Chief Justice. The Hon’ble Mr.Justice Kuldip Singh, Judge. Whether approved for reporting?1 No For the appellant: Mr. Chetan Sharma, Sr. Advocate with M/s. Ajay Kumar, Y. Paul, Gaurav Puri and Rohit Singh, Advocates. For the Respondent : Mr. K.D. Sood, Advocate. Kuldip Singh, Judge This judgment shall dispose of OSA No.9 of 2008 filed by appellant, who was defendant, against judgment, decree dated 9.7.2008 passed by learned Single Judge in CS No.3 of 2000. 2. The brief facts necessary for disposal of this appeal are that respondent filed a suit for the recovery of Rs.75,48,000/- against the appellant on account of compensation levied vide order dated Whether the reporters of the local papers may be allowed to see the Judgment? Yes 29.12.1998 for delay in execution and completion of work under Clause 2 of the agreement for the period 16.10.1995 to 31.7.1996. The further facts are that the respondent for the construction of several works of Baner Hydel Project had invited the tenders. The work was awarded to M/s. Satluj Construction Company, Chandigarh, which was later on rescinded and work was allotted to appellant. The award letter was issued to the appellant on 7.1.1991 and the agreement No.1 of 1991 was executed on 21.2.1991 vide which the appellant was required to execute the balance work of Baner Hydel Project at a cost of Rs.4,20,000,00/-. The time for completion of the work was 24 months commencing from the date of letter i.e. 17.2.1993. It was further alleged that appellant failed to execute the work within the stipulated period and sought various extensions for completion of the work subject to levy of requisite charges/damages in accordance with the terms of the agreement. The final extension was granted vide letter dated 28.8.1998. The respondent vide notice dated 18.11.1998 sought show cause from appellant why the compensation should not be levied on it in view of terms and conditions of the agreement. The appellant replied and Chief Engineer ( Project) of the respondent levied a compensation of Rs.68,00,000/- for the period 16.10.1995 to 31.7.1996 at the rate of 15% as determined by him on the value of balance work calculated as mentioned in the letter. The appellant having failed to pay the amount, the dispute was not arbitrable, therefore, respondent had filed the suit for recovery of compensation along with interest. 3. The appellant contested the suit by filing written statement and denied the claim set up by the respondent. It was pleaded that the extensions were granted by the respondent for the completion of the work, therefore, respondent is estopped from claiming the suit amount from appellant. It was pleaded that respondent has filed the suit for penalty ignoring the fact that the delay in the project was caused on account of factors wholly and exclusively attributable to respondent. In addition no reasons have been given for levying of the penalty. It has been pleaded that the term liquidated damages is used which is a misnomer since 15% is an excessive rate and amounts to penalty, which is impermissible as per law since time was not the essence of contract and no damages in the form of penalty could have been claimed. 4. The replication was filed. On the pleadings of the parties, the following issues were framed by the Court on 27.9.2001:- 1. Whether the plaint has not been verified in accordance with the provisions of the Code of Civil Procedure? OPD 2. Whether the plaintiff can file the suit when the relief has already been claimed in arbitration proceedings pending between the parties? OPD 3. Whether liquidated damages are in the nature of penalty? OPD 4. Whether the levy of penalty is barred by limitation? OPD 5. Whether time was of the essence of the contract? If no, whether penalty could be levied? OPP 6. Whether the plaintiff has proved loss before levy of penalty? OPD. 7. Whether the plaintiff is entitled to an amount of Rs.75,48,000/- as claimed ? OPP. 8. Whether the plaintiff is entitled to interest at the rate of 12% p.a.? OPP. 9. Whether the defendant failed to execute the work within the stipulated period and the extensions sought were granted subject to the requisite charges/damages in accordance with the terms of the agreement, particularly clause 2? If so, its effect? OPP. 10. Whether time was the essence of the contract? OPP. 11. Whether the extensions granted to the defendant from time to time were without prejudice for levying damages and compensation? If so, its effect? OPP. 12. Whether levying of compensation of Rs.69 lacs on the defendant is recoverable from it? OPP. 13. Whether the compensation levied is not the subject matter of arbitration? OP Parties. 14. Whether the delay caused in execution of the work is attributable to the plaintiff, as alleged? OPD. 15. Whether the present claim is a counter-blast to award by Arbitrator as alleged? OPD. 16. Relief. 5. On 30.7.2004 on the basis of amended pleadings of the parties the following additional issues were framed:- 15-A. Whether the suit is liable to be stayed, as alleged? OPD 15-B. Whether the plaintiff is estopped from filing the suit on account of its acts, deeds and conduct etc., as alleged ?OPD. 15-C. Whether the clause of penalty in the agreement is unequitable, unfair, one side, oppressive and unconscionable, as alleged? OPP 15-D. Whether the suit is not maintainable, as alleged? OPD 15-E. Whether the action of the Petitioner-Board in imposing penalty is illegal, arbitrary, oppressive and contrary to the Indian Contract Act, as alleged? OPD 6. The learned Single Judge decreed the suit on 9.7.2008 for the recovery of Rs.75,48,000/- along with interest at the rate of 12% from the date of the suit till realization, hence this appeal. 7. We have heard Mr. Chetan Sharma, Sr. Advocate assisted by M/s. Ajay Kumar, Y. Paul, Gaurav Puri, Rohit Singh, Advocates for the appellant and Mr. K.D. Sood, learned counsel for the respondent and gone through the record. On behalf of the appellant it has been submitted that learned Single Judge has not decided issues No.15-A to 15-E which were framed on 30.7.2004. The issue No.4 of limitation was decided along with issue No.3 of damages. The reasons in support of the conclusion that the suit is within limitation are lacking, pleadings and evidence have not been considered to support the conclusion that the suit is within limitation. The documents supporting the case of the appellant have not been considered. In brief it has been submitted that the learned Single Judge has erred in deciding the suit in accordance with law. The learned counsel for the respondent has submitted that in substance, learned Single Judge while deciding issues No.1 to 15 has answered issues No.15-A to 15-E also against the appellant. He has submitted that except issue No.15-A, the substance of issues No.15-B to 15-E is covered by issues No.1 to 15. The issue No.15-A does not affect the jurisdiction of the Court to decide the suit. It has been submitted on behalf of the respondent that appellant has miserably failed to make out any case for interference. In any case the Division Bench in appeal has jurisdiction to decide the entire matter afresh after hearing the parties or findings may be called from the learned Single Judge on the issues which according to appellant have not been decided by learned Single Judge and thereafter the appeal may be decided by the Division Bench instead of remanding the case to the learned Single Judge. 8. We have perused the impugned judgment. There is no denial of the fact that issues No.1 to 16 were initially framed by learned Single Judge on 27.9.2001 and thereafter additional issues No.15-A to 15-E were framed on 30.7.2004 on the basis of amended pleadings. The learned Single Judge has decided issues No.1 to 16 and has not decided issues No.15-A to 15-E. As per Rule 5 Order 20 CPC, the Court shall state its findings or decision, with the reason therefore, upon each separate issue, unless the findings upon any or more issue is sufficient for the decision of the suit. In the impugned judgment there is no finding that decision on issues No.15-A to 15- E is not required in view of decision on issues No.1 to 16. 9. In M/s. Fomento Resorts and Hotels Ltd., v. Gustavo Ranato da Cruz Pinto and others, AIR 1985 SC 736 it has been held as follows:- “In a matter of this nature where several contentions factual and legal are urged and when there is scope of an appeal from the decision of the Court, it is desirable as was observed by the Privy Council long time ago to avoid delay and protraction of litigation that the court should, when dealing with any matter dispose of all the points and not merely rest its decision on one single point” The impugned judgment is not in accordance with the mandate of Rule 5 Order 20 CPC. The learned counsel for the respondent faced with this situation has submitted that the entire matter may be decided in appeal without resorting to remand of the case or findings on the issues which have not been decided may be called from the learned Single Judge and then entire matter may be decided in the appeal itself. This has been opposed by learned counsel for the appellant. He has submitted that by the course suggested by learned counsel for the respondent either party will be deprived of one right of appeal and in these circumstances the matter may be sent back to learned Single Judge to decide the suit afresh. 10. In Om Parkash and others vs. State of Himachal Pradesh and others, AIR 2001 Himachal Pradesh 18, a Division Bench of this Court after noticing AIR 1985 SC 736 rejected the submission that the Division Bench should examine the conclusion arrived at by the District Judge by referring to the evidence on record and give findings on each issue in appeal on the ground that it would not be just and fair and it will deprive the losing party of a right to appeal and remanded the case for fresh decision. In view of ‘Om Parkash and others’ supra the submission of learned counsel for the respondent that case may not be remanded or the findings on issues not decided by the learned Single Judge, may be called for and then appeal be decided, is rejected. The learned Single Judge has not decided issues No.15-A to 15-E in the impugned judgment. The issues left undecided are material issues and therefore, impugned judgment is not sustainable. 11. No other point was urged. 12. The result of the above discussion, appeal is accepted, judgment, decree dated 9.7.2008 passed by learned Single Judge in CS No.3 of 2000 is set aside and the case is remanded to learned Single Judge for fresh decision on all issues. No costs. ( Jagdish Bhalla ) Chief Justice. ( Kuldip Singh ) Judge. December 3, 2008 (sks)