R.S.Singh, J. - (1.) THIS is the plaintiff's appeal against the decree and judgment dated 30-3-1972 passed by the IInd Additional District Judge, Kanpur affirming the decree of the trial Court and dismissing the plaintiff's suit.
(2.) THE plaintiff had filed a suit for recovery of Rs. 14,347. THE plaintiff appellant is a recognized contractor in the U. P. P. W. p., Kanpur. In the year 1953, the plaintiff obtained a contract from the defendant for constructing culverts at Chaubeypur, Bela Road, G. T. Road, Kanpur vide contract bond No. 60/SE dated 27-2-1953 (hereinafter referred to as first contract). Value of the contract was Rs. 1,86,515. Later on, the plaintiff got another contract from the defendant for constructing two roomed labour quarters at Jajmau, Kanpur vide contract bond No. CB 27/EE dated 2-3-1963 (hereinafter referred to as the second contract). THE plaintiff completed the work of second contract by 31st Dec., 1963 and the final measurement of work was also done in the month of Sept., 1964. In making payment of first running bill, in respect of the second contract, the defendant illegally deducted a sum of Rs. 10,408/- on the ground that the plaintiff had not performed the work of the first contract properly and in time. THE plaintiff claimed a decree for the above amount along with interest. It was alleged by the plaintiff-appellant that he had performed the work of the first contract regarding construction of culverts on Chaubeypur Bela Road satisfactorily. THE amount of Rs. 10,408/- was illegally deducted by the defendant-respondent from the amount due for performing the second contract. It was alleged by the plaintiff-appellant that he had never owed any sum to the defendant in connection with the first contract and deduction of Rs. 10,408/- was totally unauthorised and illegal. THE plaintiff moved an application under Section 20, Arbitration Act before the Civil Judge, Kanpur, which was registered as Suit No. 96 of 1960. THE suit was contested by the State of Uttar Pradesh on the ground that the claim arising out of the said contract had become barred by time. THE said suit was dismissed but in spite of dismissal of the suit, the defendant had no right to deduct the above amount unilaterally without having any recourse to a Court of law. In the year 1965, the plaintiff served the defendant with a notice under Section 80, C. P. C. He also filed an application under Section 20, Arbitration Act in the Court of IInd Civil Judge, Kanpur as the agreement was contained on Arbitration clause. THE application was filed on 24-8-1965 and it was registered as Misc. Case No. 102 of 1965. THE application was contested by the defendant, but it was allowed on 26-2-1966 and the dispute was referred to the Superintending Engineer, which was named arbitrator in the Arbitration clause. THE Arbitrator entered into a reference proceedings continued before him and the hearing of the arbitration proceedings were adjourned from time to time. On 3-7-68 the Arbitrator directed the plaintiff to obtain extension for filing award. In pursuance of the direction, the plaintiff moved an application under Section 28 of the Indian Arbitration Act on 11-7-1968. THE Arbitrator fixed 19-7-1968 in the Arbitration proceedings. On that date, the plaintiff informed the arbitrator that he had made a motion for extension of time to make an award, but in spite of this, the arbitrator dropped the proceedings on an application, in which the defendant had prayed that the proceedings be dropped as it had been held by the Hon'ble High Court that clause 23 of form GPW 9 of the contract bond was not arbitration clause and on that account the arbitrator had no jurisdiction in the matter. Accordingly, the reference made by the Civil Judge, Kanpur to the arbitrator became infructuous and thus, the plaintiff was compelled to claim his remedy from the Court of Law and he served another notice under Section 80, C. P. C. on the defendant on 12-9-1968, claming interest as well. It was further claimed that the time spent by the plaintiff in the arbitration proceeding from 24-8-1965 to 19-7-1968 has to be excluded while computing the period of limitation and as such the suit for recovery of the plaintiff for this amount along with interest was within time. The suit was contested by the defendant and it was pleaded that work of the plaintiff in respect of the first contract was found defective and poor and its progress was not also in accordance with the terms of the contracts. So after the inspection of the work done by the plaintiff in respect of that contract, on 4-6-1953, the Executive Engineer sent him a letter dated 6-6-53 informing him that the work done by him was not in accordance with the terms of the contract and as such he had rendered himself liable to pay as compensation an amount equal to 1% of the estimated cost of the whole work, for every day the work had been behind the schedule, and the total compensation would be 10 % of the estimated cost of the work as shown in the contract bond. The Executive Engineer, therefore, took action under Clause 3 (a) of the conditions of the contract and rescinded the agreement with effect from 6-6-1953 and forfeited the security deposit to the Govt. Consequently, according to the terms of the said agreement the plaintiff became liable to pay compensation for the breach of the contract. Thus a sum of Rs. 10,408/- became payable by him to the defendant. In this manner Rs. 18,683 was the amount of penalty and Rs. 8,274/- was due to the plaintiff leaving a' balance of Rs. 10,408/-which was deducted from the plaintiff's claim regarding 2nd contract. The validity of the notice under Section 80, C. P. C. was challenged and the bar of limitation was also challenged. The suit was dismissed by the trial Court, which was affirmed by the lower Appellate Court.
(3.) IT has been contended by the learned counsel for the appellant that the question of limitation has been wrongly decided by the Courts below. According to him, he is entitled to get benefit of Section 14 of Limitation Act and the period between 24-8-1965 and 19-7-1968, during which period he was bona fide litigating before the Civil Court, should be excluded from computing the limitation to see whether the suit has been filed within time or not. IT was further contended by the learned counsel for the appellant that Section 37, Sub-clause (5) of the Arbitration Act is not applicable to the facts of the present case and the Courts below have illegally rejected the claim of the appellant holding it to be time barred under Section 37, Sub-clause (5) of the Arbitration Act.;