IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH F . A O . N o . 3 9 2 7 o f 2 0 0 7 Date of Decision : November 18, 2008 The Punjabi University, Patiala through its Registrar and another .....Appellants Versus Deepak Kumar Jindal .....Respondent CORAM : HON'BLE MR JUSTICE T.P.S. MANN Present : Mr. Kanwaljit Singh, Senior Advocate with Mr. I.S. Gill, Advocate for the appellants. Mr. K.K. Goel, Advocate for the respondent. T.P.S. MANN, J. Application under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') filed by the respondent for restraining the appellants from calling tenders/allotment to the other agencies of the remaining work of the Girls' Hostel at Talwandi Sabo and for allowing the respondent to remove the machinery/shuttering and also for restraining the appellants from using it in any form or manner and from using the building till the final decision of the arbitration proceedings, was partly allowed by the learned Additional District Judge, Patiala vide order dated June 02, 2007. The respondent was allowed to F.AO. No. 3927 of 2007 -2- remove his machinery and material lying at the spot after applying to the Junior Engineer concerned and after issuance of gate-pass. The remaining part of relief sought by him was, however, declined. Aggrieved of the order allowing the respondent to remove his machinery and material lying at the spot, the appellants moved this Court by filing the appeal under Section 37 of the Act. The case of the respondent in his application under Section 9 of the Act was that the work of construction of Girls' Hostel at Talwandi Sabo was allotted to him by the Executive Engineer, Punjabi University, Patiala vide letter dated 5.5.2005 for an amount of Rs. 83,68,487/- with a time limit of six months. Consequently, agreement dated 23.9.2005 was executed between the parties. As per Clause 2 of the same, compensation could be levied on the Contractor in the event of delay in completion of the works. Clause 3 provided for taking of other measures by the appellants in case the Contractor did not complete the work inspite of levy of compensation. Without resorting to any action including two clauses of the agreement, the Executive Engineer, vide letter dated 27.4.2006, withdrew the work. It was admitted by the Executive Engineer in the said letter that the work to the tune of Rs. 37,22,100/-, out of the total work, had already been done. Before withdrawing the work, the Executive Engineer did not serve any show cause notice upon the Contractor. The reason for non- completion of work lay with the department, as correct drawings were not given in time. Monthly payments were not made. The Contractor had asked for release of Rs. 13,00,000/- on account of the work done, but the F.AO. No. 3927 of 2007 -3- same was not released. The machinery was lying idle at the spot, causing financial loss to him. On 19.6.2006, he wrote a letter to Senior Superintendent of Police, Bathinda for getting the machinery and shuttering released. As per Clause 25 of the agreement, the Contractor was seeking arbitration from the Arbitrator to be appointed by the Vice Chancellor of the University. Instead, the appellants filed a suit in the Court at Bathinda and obtained an ex parte stay. The Contractor moved letter dated 29.7.2006 to the Executive Engineer. He, accordingly, prayed for restraining the appellants from calling tender/allotment to the other agencies of the remaining work and for allowing him to remove the machinery/shuttering, besides asking for the release of 70% of the payment due. On the other hand, the case of the appellants before learned Additional District Judge, Patiala was that the work was to be completed within six months but the progress of the work was very slow right from the beginning. On 3.9.2005, the Contractor was called in a meeting by the Assistant Engineer, where he undertook to complete the work upto 31.12.2005. Inspite of the same, the work progressed at a slow pace. The Contractor was again advised in writing to speed up the work. A period of two months expired, but no appreciable progress of work was there. On 3.11.2005, a meeting was held and the Contractor submitted a revised schedule so as to complete the work upto 31.12.2005. Even this did not yield any positive results. The Contractor then promised to complete the F.AO. No. 3927 of 2007 -4- ground floor upto 30.4.2006, first floor upto 30.5.2006 and second floor upto 30.6.2006. Despite all this, the work was not completed. Under these circumstances, there was no other option but to proceed in terms of Clause 3 (b) of the agreement. It was the Contractor, who himself was at fault. The drawings were supplied to him in time. He was required to submit bills for payment, but he did not submit any bill. Payment had been withheld so as to adjust the same for incomplete work. Regarding the material, it was averred that the material could be taken out from the campus for which the Contractor should give details to the Junior Engineer concerned, who was to issue the gate-pass after getting it signed from S.D.O. Incharge, Security Officer and Security Incharge. However, no such request had ever been made by the Contractor. The only dispute in the present appeal pertains to the allowing of the request of the Contractor to remove his machinery and material lying at the spot, and, that too, after applying to the Junior Engineer concerned and after issuance of gate-pass. Learned counsel for the appellants submitted that the machinery of the Contractor-respondent cannot be released for the reason that work was being carried out at the risk and cost of the Contractor and the machinery would act as a security for recovery of the amount. Moreover, learned lower Court should not have granted the permission to the Contractor-respondent to remove his machinery as that matter could be decided by the Arbitrator as per the provisions of the agreement. F.AO. No. 3927 of 2007 -5- Learned counsel for the respondent has submitted that it had already been admitted by the Executive Engineer in his letter dated 27.4.2006 that work to the tune of Rs. 37,22,100/-, out of the total work, had already been done, but the said payment has not been released. At the same time, the machinery and the shuttering material belonging to the Contractor-respondent at the spot cannot be detained. I have heard learned counsel for the parties and perused the impugned order. As is clear from the impugned order, the total cost of the work was Rs. 83,68,487/-. Out of the said, work to the tune of Rs. 37,22,100/- has been done, as admitted by the Executive Engineer in his letter dated 27.4.2006 when the remaining work was withdrawn from the Contractor- respondent and, that too, without resorting to realization of compensation under Clause 2 of the agreement. The Contractor-respondent had averred that monthly payments were not made. He had asked for release of Rs. 13,00,000/- for the work done, but the same was not released. In case the Contractor-respondent had failed to complete the work within time, the appellants, on the basis of the agreement, were free to call tenders or allot work to other agencies, besides using the building which had already been partly constructed. At the same time, the appellants could not be directed to release the payment to the Contractor-respondent since a dispute had already arisen between the parties and the appellants were required to get the remaining work done, may be at some additional cost. However, this F.AO. No. 3927 of 2007 -6- could not have permitted the appellants to detain the machinery and material of the Contractor-respondent lying at the spot. Even otherwise, the appellants had undertaken in their written statement before learned Additional District Judge, Patiala that the Contractor-respondent could take out his machinery and shuttering material from the campus after giving details to the Junior Engineer concerned, who was to issue the gate-pass after getting it signed from S.D.O. Incharge, Security Officer and Security Incharge. As is clear from the financial statement of machinery and shuttering material brought on record by the respondent by filing C.M. No. 14341-CII of 2008, the total cost of the machinery lying at the spot is approximately Rs. 35,00,000/-, while for the shuttering material lying at the spot, he has to pay charges everyday and by now the bill for the same is already running into lacs of rupees. In view of the above, no fault can be found with the impugned order, which was just and proper. The appeal is without any merit and, therefore, dismissed. ( T.P.S. MANN ) November 18, 2008 JUDGE satish Whether to be referred to the Reporters : YES / NO