| Headnote |
Contract – Contract between appellant and respondent forconstruction of dam – Notification issued escalating minimum wagespayable to workers – Writ petition filed by respondent claiminglabour escalation charges with interest as per Ex.P-20 – While thepetition was pending, appellant terminated the contract – Writpetition filed by respondent challenging the same and seekingpayment of works done as per Ex.P59, allowed directing theappellant to pay the amounts as claimed u/Ex.P-20 and Ex.P-59 –Challenged by appellant in C.A.No.4092 of 2000, but Supreme Courtdeclined to interfere – Appellant paid an amount of Rs.12,82,96,320/-– However, three years thereafter, respondent filed I.A.No.6 of 2006before Supreme Court on which it was granted liberty to move HighCourt for recovery of the disputed amount – Writ petition filed byrespondent before High Court, allowed – Issue as to mode ofappropriation of payments made by the appellant and claim forsubsequent interest – Held: By respondent’s own statement, he hadadjusted all payments received from the appellant firstly towardsthe labour escalation due i.e. the principal amount – But, whenrespondent filed I.A.No.6 of 2006, the entire method of calculationwas changed by showing adjustment of payments firstly towardsinterest and then towards principal, only to claim that in spite ofpayment of Rs.12,82,96,320/- by the appellant, amounts were stilldue and payable to him – This important aspect of change in themethod of adjustment/appropriation was lost sight by High Court –Respondent not justified in changing the method of calculation –High Court’s direction to the appellant to make payment u/Ex.P20to the respondent, set aside – Further, direction of High Court topay future interest on the claims made u/Ex.P59, also set aside –Judgment of High Court set aside – Code of Civil Procedure, 1908– Or. XXI, r.1.Code of Civil Procedure, 1908 – s.34(2) – Interest – Paymentof – Contract between appellant and respondent for constructionof dam – Notification issued escalating minimum wages payable toworkers – Writ petitions filed by respondent claiming labourescalation charges with interest as per Ex.P-20 and for payment ofworks done as per Ex.P59, allowed – Challenged by appellant inC.A.No.4092 of 2000 – Supreme Court declined to interfere –Another writ petition filed by respondent inter alia claiming intereston amounts payable u/Ex.P20 and Ex.P59, allowed – Held: Undersub-s.(2) of s.34, where a decree is silent as to payment of furtherinterest on the principal sum, it shall be deemed to have been refused– In the present case, since there was no direction for future interesteither by High Court or Supreme Court, in view of sub-s.(2) of s.34,it must be deemed that the court had refused such interest – Directionof High Court to pay subsequent interest u/Ex.P20 and u/Ex.P59 isset aside.Code of Civil Procedure, 1908 – s.89 – Reference to arbitration– Agreement between appellant and respondent-contractor forconstruction of dam – Dispute between parties inter alia regardingclaims of additional work u/Ex.P59 – High Court with the oralconsent of the counsel for the parties without written instructionfrom the party, referred the parties to arbitration – Held: Sincereferring the parties to arbitration has serious consequences oftaking them away from the stream of civil courts and subject themto the rigour of arbitration proceedings, in the absence of arbitrationagreement, the court can refer them to arbitration only with writtenconsent of parties either by way of joint memo or joint application– There was no arbitration agreement between the parties – HighCourt ought not to have referred the parties to arbitration –Arbitration and Conciliation Act, 1996 – s.7.Constitution of India– Art.136 – Jurisdiction under, ofSupreme Court– Held: In exercise of jurisdiction u/Art.136, SupremeCourt does not normally re-appreciate the evidence and findings offact; but where the findings of High Court are perverse or thefindings are likely to result in excessive hardship, Supreme Courtwould not decline to interfere merely on the ground that findings inquestion are findings of fact. |
