SBCMA No.1488/2008 M/s. Jeevan Lal Dalal Vs. State of Raj. & Anr. 1 SBCMA No.1488/2008 M/s. Jeevan Lal Dalal Vs. State of Raj. & Anr. DATE OF ORDER : - 25.2.2009 HON'BLE MR. PRAKASH TATIA, J. Mr.Dinesh Mehta, for the appellant. Mr. RK Soni, for the respondent-State <><><> Heard learned counsel for the parties. The appellant is aggrieved against the order dated 14.10.2008 by which his application filed under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act of 1996) has been dismissed by the court of District Judge, Jaisalmer. Brief facts of the case are that in pursuance of the notice inviting tender, the petitioner was granted contract for Escape Channel and Saddle Dam, Down Stream No.47.650 of Sagarmal Gopa Shakha and contract agreement no.2/08-09 has been executed between the appellant and the respondent no.2. As per the said work order dated 29th April, 2008, the appellant was supposed to SBCMA No.1488/2008 M/s. Jeevan Lal Dalal Vs. State of Raj. & Anr. 2 commence the work 10 days after the issuance of the order dated 29th April, 2008 and he was required to complete the entire work within a period of one year i.e., by 28th May, 2009. The appellant's contract was terminated by order dated 23rd Sept., 2008 (Annex.2) on the ground that appellant did not commence the work to complete it by 28th May, 2009. The appellant aggrieved against the said order dated 23rd Sept., 2008 submitted petition under Section 9 of the Act of 1996 with the allegation that the order dated 23rd Sept., 2008 is absolutely illegal, void and also has been issued malafidely. It is submitted that for the work order dated 29th April, 2008 for which period of completion was 28th May,2009, the appellant's work contract could not have been terminated within a period of about five months as the appellant would have completed the work in remaining period. It is also submitted that because of the dispute between the various officers of the respondent-department, the appellant could not start the work with such a speed which the respondents were expecting but that itself cannot be ground for passing the order dated 23rd Sept., 2008 as SBCMA No.1488/2008 M/s. Jeevan Lal Dalal Vs. State of Raj. & Anr. 3 there is no requirement of giving periodical progress with particular speed. It is also submitted that the site was not even ready for work and, therefore, it was the fault of the respondents and their officers and because of that only, the work with fast speed was not commenced. It is also submitted that by order dated 23rd Sept., 2008 the penalty of Rs.9,27,174/- has been imposed without affording any opportunity of hearing to the petitioner and without determination of any loss to the respondents. It is also submitted that the petitioner is ready to complete the work within the stipulated period as given in the work order. It is also submitted that there is a provision for extension of time also and petitioner is entitled to extension of time as he was prevented from starting the work by the acts and omissions of the officers of the respondents. It is also submitted that in view of the facts and circumstances, any monitory compensation or damages may not be adequate relief to the petitioner whose reputation is also involved in the work apart from the fact that he will suffer the monitory loss. Learned counsel for the respondent submitted reply to SBCMA No.1488/2008 M/s. Jeevan Lal Dalal Vs. State of Raj. & Anr. 4 the stay petition and pointed out that work contract was given to the appellant and he was supposed to start the work within 10 days from the issuance of the work order dated 29th April, 2008. It is true that he was supposed to complete the work within 12 months and the appellant even did not start the work for four and half months and he was served with the letters dated 30th May, 2008, 9th June, 2008, 18th June, 2008 and 1st August, 2008, yet he did not start the work. It is submitted that it was matter of public interest and in the manner in which the appellant acted, he is not entitled to any indulgence. It is also submitted that the trial court rightly rejected the appellant's application after considering all the relevant documents and the appellate court may not interfere in the said order passed by the court below. I considered the submissions of learned counsel for the parties and perused the record. So far as imposition of penalty upon the appellant is concerned, that on the face of it appears to be has been imposed without giving any opportunity of hearing to the appellant and without following the process which was SBCMA No.1488/2008 M/s. Jeevan Lal Dalal Vs. State of Raj. & Anr. 5 required to be followed under the principle of natural justice. The straightway imposing of penalty by order dated 23rd Sept., 2008 cannot be justified in any manner therefore, part of the order imposing penalty is stayed. However, the respondents will be free to initiate any proceedings for imposing penalty upon appellant and may pass appropriate order after affording opportunity of hearing to the appellant in accordance with law.. So far as relief as prayed by the appellant in application under Section 9 of the Act of 1996 that he may be permitted to complete the work is concerned, no prima facie case is made out because of the reason the letters exchanged between the parties, copies of which are placed on record clearly demonstrate that slight work rather say, some action in the name of work has been shown by the appellant, which he has done after various letters exchanged between the parties. The respondents also submitted that the work has been shown only to avoid the action against the appellant as a minor work can be done at any time. It also apparent that the matter involves the public interest. Therefore, in the facts of the case, if SBCMA No.1488/2008 M/s. Jeevan Lal Dalal Vs. State of Raj. & Anr. 6 appellant has suffered any loss then he can certainly claim compensation in accordance with law. It is true that business reputation of the appellant may be involved in the transaction, but at the same time, for that also, he can claim the damages. The dispute raised by the appellant that the work was not completed because of the fault of the respondents is required to be decided after evidence in the arbitral proceedings if started, but at this stage, it cannot be held that any case is made out to the extent of passing a positive direction against the respondents allowing appellant to complete the work and it is not the case of such gravity. However, it is made clear that till any decision is taken in arbitration proceedings or under contract against the appellant, the respondents shall not be entitled to recover amount referred in the order dated 29th Sept., 2008 as penalty. In view of the above, the appeal of the appellant is partly allowed. (PRAKASH TATIA), J. c.p.goyal/-