Arijit Pasayat, J. - (1.) These two appeals are interlinked and, therefore, taken up together for disposal, Civil Appeal No. 2078 of 1984 is by the State of Kerala questioning correctness of the decision rendered by learned single Judge of the Kerala High Court directing deposit for Rs. 5,75,500/- in Court, upholding the directions of deposit given by Sub-Court, Trivandrum in E.P. No. 109 of 1981 in O.P. (Arbitration) No. 4 of 1979. Learned single Judge held that there was nothing wrong with the direction to warrant interference under S. 115 of the Code of Civil Procedure, 1908 (in short the Code). Civil Appeal No. 362 of 1988 has been filed by M/s. Arya Refrigeration and Air Conditioning Co. Ltd. (hereinafter referred to as the claimant) questioning correctness of the judgment rendered by the Division Bench of the Kerala High Court setting aside the decree in terms of the award given by the two arbitrators appointed by the Court.
(2.) Though the case has a chequered history, it is not necessary to deal with the factual position in detail, as the same is almost undisputed. Claimant entered into an agreement with the State of Kerala on 18-1-1965 for supply and erection of a 100 tonne ice-cum-cold storage plant at Willington Island, Cochin. The agreed amount was Rs. 9,40,000/-. Though some plants and machines were supplied, they could not be installed because of non-construction of the building to house them. As time passed, dispute arose between the parties and the matter was referred to arbitrators in terms of Cl. 15 of the agreement. There were two arbitrators who passed an award on 2-11-1978. The amount awarded by the arbitrators was Rs. 5,05,500/-. Soon after the award was passed, the State Government cancelled the contract and the same was terminated w.e.f. 17-11-1978. Claimant questioned the cancellation and raised the claims. In view of the cancellation of the contract the claimant referred the matters to arbitration and nominated the arbitrator under S. 9 of the Arbitration Act, 1940 (in short the Act). Notice was served on the State but it did not nominate any arbitrator. Arbitration proceedings continued, State did not participate before the sole arbitrator and finally the award was passed on 17-5-1982 awarding Rs. 22,72,500/- to the claimant. The State questioned correctness of the award. But the trial Court overruled objections of the State and made the award given by the arbitrator rule of the Court. The State questioned the correctness of the decree passed by the Subordinate Court in terms of the award. By the impugned judgment dated 10-11-1986, a Division Bench of the High Court, as noted above, set aside the award. Before this Court also the matter was taken up. Parties finally agreed to settle the dispute out of the Court, but later on requested for appointment of an arbitrator by this Court to adjudicate the dispute. By order dated 13-12-1999 Mr. Justice B. M. Thulsidas, a retired Judge of the Kerala High Court was appointed as an arbitrator, though initially another Arbitrator was appointed. As an interim measure, by order dated 16-4-1984 in Civil Appeal No. 2078 of 1984, it was directed that the appellant-State should deposit Rs. 5,75,500/- as awarded by the Arbitrator with the registry of this Court. The claimant was permitted to withdraw the amount with the stipulation that the claimant shall return the amount together with interest @ 15% p.a. in case the appeal is allowed. Mr. Justice Thulsidas has filed the award before this Court. In the award the Arbitrator has held, after consideration of the claimants claim and counter-claim of the State, that claimant is liable to pay to the State a sum of Rs. 28, 12,554/- with interest @ 15% from the date of award i.e. 11-12-2002 till payment or deposit. The claimant was also directed to pay Rs. 25,666/- by way of Arbitrators remuneration. The Arbitrator has held that out of the agreed amount of consideration stipulated in the contract i.e. Rs. 9,40,000/-, claimant had received for the material supplied Rs. 6,75,780/- as 80% of the value and sales tax. The cost of material that was actually supplied was Rs. 8,40,730/- leaving balance of Rs. 99,270/- which form cost of labour, service and profit element. It was held that claimant was entitled to receive Rs. 2,83,000/- being the balance amount with interest for years i.e. 1966 to 1974. After adjustment of the sum of Rs. 47,000/- which was deposited as security deposit and has been refunded in 1974, the claimant was finally held to be entitled Rs. 2,36, 174/- with interest on the said amount @ 9%. It was further held that the claimant was entitled to Rs. 25,000/- as expenses with interest @ 9% from January, 1978 when the first award was given.
(3.) Arbitrator was of the view that it was no fault of the claimant and, therfore, it was entitled to balance amount of Rs. 99,270/- together with interest @ 9% in 1966 till 10-1-1973 when the claimant gave notice to the State that departmental works of erection would not be taken up. The Arbitrator worked out the entitlement at Rs. 1,66,010/-. On the above basis total claim of the claimant came to Rs. 5,25,774/-.;