1. The present First Appeal has been filed being aggrieved by the judgment and order passed by the learned Civil Judge (SD), Ahmedabad Rural at Mirzapur in Special Civil Suit No.76 of 1988 dated 6.5.1993 on the grounds mentioned in the memo of Appeal inter alia that the learned Judge has failed to consider the relevant material and has failed to appreciate the evidence on record. It has been contended that the learned Judge has erred in law while appreciating the contention about the jurisdiction. It is contended that the work contract of the canal is at Himatnagar, District Sabarkantha for which the work order has been issued by the office of Executive Engineer at Himatnagar and the work has also been carried out at Himatnagar, and therefore, the court had no jurisdiction to entertain and try the Suit. It is also contended that the learned Judge has failed to appreciate that the Suit was barred by law of limitation. It is also contended that the learned Judge has failed to appreciate that the Appellant was not negligent or responsible for any delay as the work plan was provided late which is an integral part of the term. It is therefore contended that the learned Judge has failed to appreciate the terms of the contract and the contractual liability, and therefore, the present First Appeal may be allowed. It is also contended that under the law of contract, for breach of contract one could be held liable for liquidated the damages which has not been appreciated, and what is to be considered is, the liquidated damages, and in the absence of any liquidated damages, the court cannot pass any order awarding such damages. It is therefore contended that the impugned judgment and order is erroneous and the present First Appeal may be allowed.
2. Heard learned AGP Mr. P.P.Banaji for the Appellant State and Mr. K.G.Sukhwani for the Respondent - Original Plaintiff.
3. Learned AGP Mr. P.P.Banaji submitted that the suit has been filed by the Plaintiff for recovering the amount in respect of the work done by the Respondent - Original Plaintiff. The issues were framed and the court below has, on appreciation of evidence, and considering the rival submissions, decreed the suit partly, without considering the specific contentions raised by the Appellant State. Learned AGP Mr. Banaji submitted that the court below has failed to consider whether the suit was barred by limitation and whether the court has the jurisdiction. Learned AGP Mr. Banaji submitted that the two issues on the aspect of limitation as well as jurisdiction have not been properly considered resulting into the present First Appeal. It is submitted that the work for canal division Himatnagar was awarded to the Plaintiff as the tender of the Plaintiff was accepted. Thereafter, the work order was given on 16.10.1980 and work was required to be completed on or before 15.4.1982. However, the Plaintiff was required to perform his contractual obligation, which he failed to perform, and thereby committed breach of the contract. It is contended that though the work was required to be completed on or before 15.4.1982 it was extended till 15.1.1983 and thereafter the work was not completed even after the extension the compensation was levied as per terms of the contract. Learned AGP Mr. Banaji submitted that there was another Suit being Special Civil Suit No.165 of 1986 filed for having recourse to the arbitration as per the arbitration clause in the agreement / contract. Thereafter, the Arbitrator Mr. J.C.Patel made an award which is challenged in the present Suit on the ground that the Arbitrator has not considered all the claims for that purpose. The reliance has been placed to appeal memo and other papers. However, learned AGP Mr. Banaji submitted that the date of the contract was 16.10.1983, the work was to be completed on or before 15.4.1982 and actually it was completed on 15.3.1983 and the suit has been filed on 28.3.1986 beyond the period of limitation. It was therefore strenuously submitted that the suit itself is barred by limitation.
4. Leaned AGP Mr. Banaji has also submitted that the court below has failed to appreciate the contention about the jurisdiction. It was submitted that the work of the canal was at Himatnagar, the work order was given from the Executive Engineer, Himatnagar and the work was executed also at Sabarkantha and no cause of action can be said to have been arisen within the jurisdiction of court at Ahmedabad, which has not been appreciated. He has also referred to the written statement at Exh.10. Learned AGP Mr. Banaji submitted that there was no deliberate act on part of the Government to commit any breach of the contract, and the contention which has been raised that the flow of water at the canal could not be stopped was for the reasons beyond the control, but it cannot be said that it has any bearing or the basis for the purpose of completion of the work. Learned AGP Mr. Banaji has also submitted referring to the documents which are at Exhibits 29, 33, 34, 35, 36 and 37, which are the letters by the Defendant to the Plaintiff. He also referred to notice exh.41 under Section 80 of of the Code of Civil Procedure and submitted that the notice regarding the appointment of the arbitrator and the letters are two different things. He submitted that as per the terms of the agreement / contract, there was a arbitration clause. However, it was submitted that when the arbitrator had not admitted all the claims, the cause of action for filing the present suit arose and therefore notice ought to have been given before filing the present suit. It was submitted that the notice exh.41, which was given generally, cannot be said to be a valid notice under Section 80 for the purpose of the present suit, where the cause of action was the award of the arbitrator disallowing the part of the claims. He therefore submitted that the present suit is bad for want of statutory notice under Section 80 of CPC which is a mandatory requirement.
5. In support of his submission, learned AGP Mr. Banaji has referred to and relied upon the judgment of the Hon'ble Apex Court in case of Bishandayal & Sons v/s State of Orissa, AIR 2001 SC 544. He submitted that as observed in this judgment the amended suit was not maintainable for want of notice under Section 80. Learned AGP Mr. Banaji has also submitted that in the facts of the present case, admittedly the arbitration proceedings were initiated and after the arbitrator has made an award, the present suit has been filed on the ground that some of the claims have not been entertained which was the basis for filing the suit, and therefore, fresh notice under Section 80 was necessary.
6. Learned AGP Mr. Banaji has also referred to and relied upon the judgment of this Court in case of Union of India & Another v. Natwarlal M. Badiani, 2000 (3) GLH 689. He has submitted that, therefore, as discussed even in the judgment that the work was delayed due to the Defendant. He submitted that the non-supply of material or delay in supply of the material has been raised but the work was not required to be stopped and it is nobody's case that for want of material the contractor could not progress. Learned AGP Mr. Banaji submitted that the another argument is that the flow of water through the canal was not stopped, which has lead to the delay, also cannot be accepted as it would have to be considered depending upon the situation, and therefore, there is no substance in such argument, and the present Appeal may be allowed.
7. Learned Advocate Mr. K.G.Sukhwani for the Respondent has submitted that admittedly the tender of the Respondent - Original Plaintiff was accepted after following the procedure. Work order was given on 16.10.1980 and the work was required to be completed within a stipulated period of 18 months, i.e. on or before 15.4.1982. However, learned Advocate Mr. Sukhwani referred to the evidence and submitted that in light of the evidence of the Appellant and the papers / contract, it would make it clear that there was delay in supply of the papers and thereafter in supply of the material. It was therefore submitted that infact the extension was granted knowing the reasons and therefore now it cannot be said that there was any default or negligence on part of the Respondent - Original Plaintiff. Learned Advocate Mr. Sukhwani submitted that infact no issues have been framed by the trial court regarding the notice under Section 80 CPC. He submitted that admittedly exh.41 - notice has been given before filing of the Suit, i.e. both the Suits had covered all the aspects or the claims. Learned Advocate Mr. Sukhwani therefore submitted that once the notice is given comprehensively for all the points there is no need to give a separate notice after the arbitration proceedings for which part of the claim is admitted. It was submitted that therefore when the notice Exh.41 has been a comprehensive notice and arbitration proceedings have been initiated as per terms of the contract, the grievance cannot be made that the suit is filed subsequently in respect of some of the claims which have not been granted or allowed by the arbitrator. He therefore submitted that the issue was not framed with regard to the provisions of Section 80 CPC and therefore such a contention is misconceived. Learned Advocate Mr. Sukhwani also submitted that as the claim of the Respondent - Original Plaintiff arise out of the contract, and as whole of the claim was not believed or accepted, the suit was required to be field after the arbitration proceedings. Therefore, learned Advocate Mr. Sukhwani submitted that once the notice Exh.41 was given covering all the claims, there was no need for fresh notice after the arbitration proceedings. Therefore, such a contention is misconceived. He submitted that the delay cannot be attributed to the Respondent - Original Plaintiff, for which, he referred to the record including Exh.26 to Exh.29 and Exh.33. He submitted that the release of the water in canal lead to stoppage of work and the same cannot be attributed to the Respondent - Original Plaintiff. Learned Advocate Mr. Sukhwani submitted that even in the letter Exh.32 reply given by the Government, it has been accepted that the extent to which there is any shortage it would be covered and considered by the Government. Therefore Mr. Sukhwani submitted that the present Appeal may be dismissed. He has also referred to the deposition of witnesses including the deposition at Exh.18.
8. In rejoinder, learned AGP Mr. P.P.Banaji submitted that in the absence of specific notice under Section 80 C.P.C. the Suit would not be maintainable as it is a mandatory requirement. Learned AGP Mr. Banaji therefore again submitted that earlier notice Exh.41 was given in respect of the grievance for the earlier Civil Suit No.165 of 1986. Thereafter it was referred to the arbitrator and the arbitrator made an award which is challenged by way of present Suit. Therefore it was submitted that before filing the suit, the basis or the cause of action was the award passed by the arbitrator, and therefore, it was a fresh cause of action and notice ought to have been given as required under law - CPC.
9. In view of the rival submissions, it is required to be considered whether the present First Appeal can be entertained or not.
10. Before going into the the details about the aspect of the time limit as to when the tender was accepted, work order was given and the work was required to be completed within a stipulated period, however even after the extension it has not been completed and it is in this background whether the First Appeal can be entertained considering the submissions.
11. The first aspect is regarding the statutory requirement of notice under Section 80 C.P.C. The provisions of Section 80 C.P.C. clearly provide that the notice shall be served and no such suit shall be instituted without serving any notice. This submission is required to be appreciated in light of the undisputed facts that except the notice under Section 80 C.P.C. at Exh.41, no other notice has been served. This notice at Exh.41 has been served initially before the matter was referred to the arbitrator as per the terms of the contract / agreement. Therefore, the notice Exh.41 under Section 80 C.P.C. was given initially before arbitration proceedings were initiated as per terms of contract / agreement. It is after the arbitrator decided the claims disallowing some of the claims, the present suit has been filed by the plaintiff challenging such award of the arbitrator disallowing the claims.
12. Therefore, what is required to be considered is whether the notice Exh.41 can be said to be a notice as required under Section 80 C.P.C.
13. As could be seen from the observations made by the Hon'ble Apex Court in case of Bishandayal & Sons v/s State of Orissa (supra), it is clear that the said notice Exh.41 given under Section 80 C.P.C. covered all the claims. However, the real cause arise again after the arbitration proceedings were over and the arbitrator allowed some of the claims. Therefore, it would be a fresh cause of action or the real cause of action can be said to have been arisen only after the termination of the arbitration proceedings inasmuch as when the arbitrator disallowed the claims or partly allowed the claims, it created the cause for filing the present Suit. Therefore, it cannot be said that the notice at Exh.41 which was given initially even before arbitration proceedings for recovery of the amount was good for the purpose of Section 80 of the CPC. Infact the law presupposes that a notice is required to be served before filing the suit which is filed in respect of a specific cause of action or the specific prayer. In the facts of the present case, the cause of action was the award of the arbitrator who has not allowed fully the claims. Therefore, the notice exh.41 purported to have been under Section 80 cannot be said to be valid notice under Section 80. The notice exh.41 is a comprehensive notice in respect of all the claims and the arbitration proceedings have been initiated thereafter, resulting in cause of action when the part of the claims have not been allowed. Therefore, it was incumbent upon the Respondent - Original Plaintiff to issue a fresh notice under Section 80 C.P.C. Admittedly, no such notice has been given. The Hon'ble Apex Court in case of Bishandayal and Sons v. State of Orissa and Others, AIR 2001 SC 544 has clearly observed:
"The next question for consideration is whether the amended suit was not maintainable for want of notice under Section of the Code of Civil Procedure."
It has been further observed referring to the other judgments: "In our view the finding in the impugned judgment that the suit based on this claim was not maintainable is correct and requires no interference. If a new cause of action is being introduced a fresh notice under S.80. C.P.C. would be required to be given. The same not having been given, the suit on this cause of action was not maintainable."
14. In background of this observations, what is required to be considered is that that the notice under Section 80 C.P.C. has to be served qua the cause of action for which the suit has been filed. Therefore, it has to have a direct nexus or bearing on the cause of action for which the suit is filed and notice is addressed to the Government specifically on particular issue or cause of action for which the suit is filed.
15. In the facts of the present case therefore the notice at exh.41 issued earlier in respect of all claims with regard to the same work which was in general for making the demand for the outstanding amount cannot be said to be a notice as contemplated under Section 80 C.P.C. It is only on this count the present Appeal deserves to be allowed.
16. The another facet of the argument with regard to the jurisdiction may not be relevant, as admittedly, the contract has been signed at Gandhinagar, and therefore, the court had the jurisdiction to decide the suit though the reasoning may not have been properly addressed or recorded. Further, on the aspect of limitation also though the court below may not have recorded properly, it leaves no doubt that the finding has been given by the court below referring to the fact about arbitration proceedings, and it has been clearly stated that, as the earlier suit being Civil Suit No.165 of 1986 was filed for referring the dispute to the arbitrator, when the arbitrator was appointed, who made an award on 7.2.1988. Therefore, the subsequent suit, i.e. the present Suit No.76 of 1988 cannot be said to be time barred. Infact this aspect will further lend support to the reason that the real cause of action for filing the present suit arise after the award was made by the arbitrator on 7.2.1988 refusing some of the claims. Infact it has been stated that the right to file fresh suit has arisen to the plaintiff from the date of the award published in February 1988. Therefore, the Respondent - Original Plaintiff cannot be permitted to approbate and reprobate. He referred to the award and arbitration proceedings that the cause of action could arise only subsequently, whereas, for the purpose of Section 80 C.P.C., the Respondent - Original Plaintiff cannot be permitted to say that it was already addressed at Exh.41. Therefore, no fresh notice was required inspite of his own say that the cause of action could arise only after the termination of the arbitration proceedings and the award of the arbitrator in February 1988 when some of the claims were not allowed.
17. Though an attempt has been made by learned Advocate Mr.
K.G.Sukhwani for the Respondent referring to the judgment of the Division Bench of this Court reported in case of State of Gujarat & Anr. v. M/s. Sheth Construction Co. Rajkoit, 1991 GLR 440 that the court can refer the matter to arbitrator, however, there is an agreement to refer such matter in dispute to the arbitrator. His emphasis on the point that it came for the first time for deciding by the arbitrator, that it is not covered by the arbitration clause, and therefore, he will not entertain such claim lead to filing of the suit subsequently, and therefore, the notice which he had given earlier at Exh.41 would be valid, cannot be accepted.
18. Therefore, without any further elaboration on further details or the minute details on discussion about the reasons and findings given, the present First Appeal deserves to be allowed only on this count. Accordingly, the present First Appeal stands allowed. The impugned judgment and order passed by the learned Civil Judge (SD), Ahmedabad (Rural) at Mirzapur dated 6.5.1993 decreeing the Plaintiff's suit for recovery of Rs.1,68,000/- with interest @ 9% is hereby quashed and set aside.
(Rajesh H. Shukla,J) Jayanti*