M/S Ram Barai Singh & Co vs State Of Bihar & Ors

The appellant preferred a writ petition bearing C.W.J.C.No.3686 of 2005 to claim the interest on undue delay in refunding the security deposit and against the direction for recovery of labour escalation cost. The respondents did not raise plea of arbitration clause and that writ petition was disposed of on 20.09.2006 allowing 12% interest on account of delay in payment of security amount. The issue of labour escalation cost was remanded back to the concerned Engineer-in-Chief who was directed to pass a reasoned order after hearing the appellant or his representative, within a fixed period. The appellant was granted liberty to seek his remedy if he was aggrieved by the order that may be passed by the Engineer-in-Chief. The respondents preferred a Letters Patent Appeal bearing No.877 of 2006 in which also they did not raise the issue of alternative remedy by way of arbitration clause. The LPA was disposed of on 11.12.2007 with the following direction :

The Engineer-in-Chief passed a fresh order on 21.05.2008 against the appellant over-ruling the various grounds and objections raised by the appellant in his representation relating to merits of the matter as well as jurisdiction of the Engineer-in-Chief who, according to appellant, had no role in the issue which was to be finalized at the stage of Executive Engineer and the Superintending Engineer. The appellant challenged the order of Engineer-in-Chief through writ petition bearing C.W.J.C. No.10173 of 2008 which was allowed by the learned Single Judge on 18.02.2009 by a reasoned order. There is no dispute that respondents filed a counter affidavit but did not raise any objection of alternative remedy by way of an arbitration clause in the agreement dated 06.02.1989. The learned Single Judge allowed the writ petition preferred by the appellant by setting aside the order of the Engineer-in-Chief dated 21.05.2008. The Court found that the Engineer-in-Chief had raised demand of interest in the year 2008 along with refund of labour escalation cost only to offset the State's liability to pay interest on refund of security deposit after a delay of about 10 years. Thus the action of the respondents was held to be for ulterior reasons and objection to labour escalation cost after a long gap from its actual payment was held to be arbitrary and unreasonable.

In our view, learned counsel for the appellant has made out a case for setting aside the order under appeal both on the facts noticed above which show that there was no existing agreement because the work had been completed and payment had already been made long back and also on the question of law raised in this appeal that a constitutional remedy through a writ petition cannot be held to be not available and not maintainable on account of an alternative remedy. It is for the writ court to consider whether in an appropriate case, writ petitioner should be relegated to avail alternative remedy or not. But once writ petition is heard at length and decided against one or the other party on merits, such a decision/order cannot be held to be bad in law only on the ground that writ petition was not maintainable due to availability of alternative remedy. Having considered the matter on merits as reflected by the order of the learned Single Judge, we find sufficient merit in this appeal and hence it is allowed. The order under appeal is set aside and the judgment and order of the learned Single Judge is restored along with a cost of Rs.25,000/- (Rupees twenty five thousand) to be paid by the respondents to the appellant within two months.

December 17, 2014.

Civil Appeal No. 11465 of 2014 in Petition(s) for Special Leave to Appeal (C) No(s). 8101/2011 M/S RAM BARAI SINGH & CO. Appellant(s) VERSUS STATE OF BIHAR & ORS. Respondent(s) Date : 17/12/2014 This appeal was called on for judgment today.

For Petitioner(s) Mr. Gaurav Agrawal,Adv.

For Respondent(s) Mr. Gopal Singh,Adv.

Hon'ble Mr. Justice Shiva Kirti Singh pronounced the judgment of the Bench comprising of Hon'ble Mr. Justice M.Y. Eqbal and His Lordship.

Leave granted.

The appeal is allowed in terms of the signed judgment.

(Signed reportable judgment is placed on the file)