N. N. Mithal, J. - (1.) AN application under section 20 of the Arbitration Act having been dismissed by the trial court the plaintiff applicant has come up in appeal.
(2.) THE grievance of the appellants against the decision is two fold. Firstly, it is contended that the proceeding under section 20 is in the nature of a suit and the court should have recorded evidence by examining witnesses in open' court and not on affidavits. THE second contention is that there being admittedly a dispute between the parties the matter should have been referred for decision through arbitration as there was an agreement between the parties to refer the dispute to arbitration but the trial court has erroneously decided the dispute itself without referring the matter to arbitration. Before we embark upon the discussion on the two points a few background facts may first be narrated. The appellants' tender for carrying out certain earth work for construction of Madhya Ganga Canal between kilometres 34800 to 35:30 kilometres i.e. for the total length of 500 metres was accepted. The rate agreed was Rs. 5-34 per cubic metre. According to the case of the appellants he deposited Rs. 12,610/- besides Rs 16,000/- deposited earlier in the form of F. d. receipts. Before the contract bond could actually be executed between the parties the appellant was directed to start the work which he complied The agreement was executed only towards the end of March, 1979 vide contract bond No. 36/S.E./78-79. For the work done by the appellant running bills 15 in number were submitted by the appellant but at the time of making payment the rate was reduced to Rs. 5 30 per cubic metres. The work was completed and its completion report was submitted on 29th April, 1980 to the department with a request that the work may be inspected, verified and if any deficiency or defect is found the same may be communicated to the appellant. The spot was actually inspected but no defect or deficiency was found therein. According to the appellant, after sufficient delay a communication was received on 30th June, 1980 making allegations that the work was defective and many discrepancies in the work was pointed out although in fact no defect was ever pointed out earlier at the time of site inspection. A penalty of one percent was imposed inviolation of the terms of the agreement which was absolutely arbitrary. During the intervening period there were heavy rains and the work done by the appellant was damaged on that account causing furrous in the slopes of the canal. Final bill was passed at the flat of Rs. 5/- although the agreed rate between the parties was Rs. 534 per cubic metres.
(3.) SINCE there was a dispute regarding payment of the amount to the appellant in respect of the work done by him an application under Sec. 20, Arbitration Act for referring the dispute to arbitration was made after serving requisite notice under section 80 CPC.;