Ram Barai Singh & Co. Versus State of Bihar



CIVIL APPEAL NO. 11465 OF 2014

[Arising out of S.L.P.(C)No.8101 of 2011]

M/s. Ram Barai Singh & Co. …..Appellant


State of Bihar & Ors. …..Respondents


Learned counsel for the appellant has assailed the aforesaid order of the Division Bench on facts as well as on law. On law, it was contended that the writ petition could not have been held not maintainable, more so when no such objection was taken by the other side. On facts, it was submitted that the agreement noticed by the Division Bench no doubt contained an arbitration clause entitling either of the parties to invoke arbitration by the concerned Superintending Engineer in case of any dispute arising out of the agreement but the Division Bench failed to notice that the agreement itself was no longer in existence because the work was completed long back and payments including payment on account of labour escalation costs amounting to Rs.9.53 lacs was paid in February 1992. Thus, according to the appellant, the agreement dated 06.02.1989 had worked itself out and it was much later that a dispute arose when the respondent authorities withheld the security amount of the appellant of Rs.30 lacs for a long period. On persistent demand, Rs.20 lacs out of the security amount, was returned after 10 years in December 2002 and that too without any interest. At that stage appellant came to know that Engineer-in-Chief vide an order dated 09.06.2001 had ordered for making a recovery of Rs.9.53 lacs from the appellant which had been paid long back on account of labour escalation cost. 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….read more