Bapna, J. - (1.) THIS is a revision against an Order of the learned Senior Civil Judge, Ajmer dated 8th of August, 1958 in misc. case No. 3 of 1958.
(2.) MANMOHANLAL contractor undertook to construct an Assembly Hall in the Government College, Ajmer for the Union of India. Tenders were invited for the work by the Divisional Officer, Central Public Works Department Ajmer and MANMOHANLAL was one of the persons who submitted a tender for the work. He received a letter (Ex. D. 2) from the Executive Engineer, Ajmer Construction Division, C. P. W. D. Ajmer as follows : - Shri Man Mohan Lal, Govt. Contractor, Kaiser Ganj, Ajmer. No. 7261-68. Dated 14. 5. 1956. Sub : - Construction of Assembly Hall at Govt. College, Ajmer. Dear sir, Your tender for the work mentioned above has been accepted on behalf of the President of India at your tendered percentage of Rs. 4/11/-% above the estimated cost. (2) You are requested to attend this office to complete the formal agreement within seven days of the receipt of this letter. (3) Your are also requested to arrange to start the work at once. The date of commencement will be reckoned from the date of issue of this letter. Time of Completion: - 9 months. Yours faithfully, Sd/- K. C. Jain Executive Engineer, Ajmer Construction Division. Copies of this were sent to the Superintending Engineer and various other officers. This tender was subject to general directions and conditions of contract for works on percentage tender, and Clause 25, in short, provided that all questions and disputes arising out of the contract or relating thereto, shall be referred to sole arbitration of the Additional Cheif Engineer, or if he is unwilling to work, to the sole arbitrator appointed by him and willing to act in the matter. Certain disputes arose between the parties, and the Additional Chief Engineer appointed Mr. O. P. Mittal, Superintending Engineer, C. P. W. D , New Delhi as the arbitrator. Mr. Mittal gave notice to Mr. Man Mohan Lal Agarwal, the contractor and the Executive Engineer, Ajmer Central Division representing the other party to the dispute to present to him a statement of facts within a fortnight from the date of the issue of the letter and further directed that each one of the parties should supply a copy to the other party. Mr. Man Mohan Lal submitted his statement of the dispute on 20th of December, 1957. It may be briefly stated as under: - Dispute No, 1: - According to item No. 16 of the agreement, the Contractor had to do a certain quantity of Mild Steel reinforcement for R. C. C. work for which the department was to issue material at Rs. 25/- per cwt. , but it was actually issued at Rs. 30/- per cwt. plus 2%. Storage charges. He stated that cement for the same purpose was to be issued by the Department at Rs. 86/- per ton, but was issued at Rs. 105/-per ton plus 2% storage charges. Further, the contractor was required to do a much greater quantity for R. C. C. work against item No. 16 and he should not be compelled to carry out unlimited quantities of additional work over the agreement quantity of item No. 16. The claimant requested the Executive Engineer to finalize his bill for the quantities of work already executed by him and not to press him for carrying out further work against item No. 16, Dispute No. 2: - Dispute No. 2, shortly stated, was that although the Contractor had requested for an arbitrator to be appointed to decide whether he was responsible for executing additional quantities of work mentioned in dispute No. 1. the Executive Engineer threatened for action being taken under Clauses 2 and 3 of the agreement and the case of the Contractor was that there was no justification for the Executive Engineer to take action under Clauses 2 and 3 of the agreement. The Counter Statement submitted by the Executive Engineer, Ajmer Central Division on behalf of the Union of India was: - (1) That, the contractor was not justified in refusing to do the additional quantities of work as he could be called upon to do the additional work under clause 12 of the Agreement. It was also stated that the recovery of the cost of steel and cement supplied at the higher rates, was properly made. (2) With respect to dispute No. 2, the case was that the Contractor had not kept pace with the stipulated period at the intermediate intervals as well as the final, completion of the work and was liable to pay compensation under clause 2 of the Agreement and further, as he did not execute the work which was required to be done, he had rendered himself liable to action under Clauses 2 and 3 of the Agreement. Clause 12, in short, of the General conditions of work, authorised the Engineer-m-charge to make alterations and additions to original specifications and to direct the contractor to execute the additional work on the rates specified in the tender for the main work. Clause 2, in short, says that the time allowed for carrying out the work as entered in the tender shall be strictly observed by the contractor and shall be reckoned from the date on which the order to commence work is given to the contractor. Mention is made as to how the work shall be proceeded with at stipulated intervals with the clause and that in the event of the contractor failing to comply with this direction, he shall be liable to pay as compensation an amount equal to one per cent or such similar amount as the Superintending Engineer may decide on the said estimated cost of the whole work for every day that the due quantity of work remains incomplete: Provided that the entire amount of compensation was not to exceed ten per cent on the estimated cost of the work as shown in the tender. Clause 3 lays in brief that in any case in which there is breach of certain clause or clauses or the contract, the contractor shall render himself liable to pay compensation amounting to the whole of his security deposit and further the Divisional Officer on behalf of the President of India, shall have power to adopt any of the following courses ; as he may deem best suited to the Government: - (a) To rescind the contract and in which case, the security deposit of the contractor shall stand forfeited and will be absolutely at the disposal of the Government. (b) To employ labour paid by the Public Works Department and to supply materials to carry out the work, or any part of the work, debiting the contractor with the cost of the labour and the price of the materials so supplied and crediting him with the value of the work done, as if it had been carried out by the contractor ; (c) To measure up the work of the contractor, and to take such part thereof as shall be unexecuted out of his hands and to give it to another contractor and to hold the contractor responsible for the expenses in excess of what might have been payable to the original contractor. That, in, the event of any of the above courses being adopted by the Divisional Officer, the contractor shall have no claim to compensation for any loss sustained by him in various manners mentioned in the clause. On 3rd June, 1958, Shri Mittal wrote to the parties that he entered upon the reference on 13th December, 1957, but as the period of four months had elapsed; the parties may take action to obtain from competent court extension of time for a period of four months from the date of such extension and forward the same to the arbitrator.
(3.) THE arbitrator perhaps thought that joint action will be taken by the parties in the matter, but as it happened, each one of the parties moved different courts for the same purpose. THE present revision arises out of an application under sec. 28 of the Indian Arbitration Act made by Manmohan Lal to the court of Senior Civil Judge, Ajmer. Shri Manmohan Lal submitted an application through his advocate to the Senior Civil Judge, Ajmer on 30th June, 1958 for extension of time by four months. It was mentioned that the Court had jurisdiction as the agreement was executed at Ajmer and the work was also done at Ajmer and its value was Rs. 2,28,000/ -. It was mentioned that the application had been made, because the arbitrator had directed the parties to obtain an extension of four months' time from the competent court. The other party to the dispute was mentioned to be the Union of India through the Executive Engineer, Central P. W. D. , Ajmer. On behalf of the Union of India, Shri G. T. Gajria, standing counsel for C. P. W. D. filed an objection on 7th July, 1958 that the Court had no jurisdiction to entertain the application as the respondent (Union of India) had already submitted an application for same purpose in the court of the Senior Sub-Judge, Delhi on 11th June, 1958, which was transferred to the court of Shri Gyan Chand Jain, Sub-Judge, First Class, Delhi, who had directed notice to be issued to the contractor for 4th August, 1958. On the merits, it was admitted that a dispute had arisen in connection with the carrying out or the construction of the Assembly Hall in the Government College, Ajmer, between the parties and an arbitrator had been appointed for the purpose. It was not denied that the arbitrator had asked the parties to obtain an extension of time. The contention On behalf of the Union of India was that the tender had been accepted by the Superintending Engineer at Delhi and, therefore, the Delhi court had also the jurisdiction to entertain an application under sec. 28 of the Indian Arbitration Act. It was then urged that where two courts can have jurisdiction to entertain proceedings under the Arbitration Act, the court in which the first application has been made under the Act shall alone have the jurisdiction over all subsequent proceedings arising out of the arbitration. The argument was that since the application had been made first in point of time in Delhi court, that court alone could deal with the matter. The learned Senior Civil Judge, Ajmer after going through the evidence, both oral and documentary, passed the order on 9th of August, 1958. He held that the Executive Engineer, Ajmer took the tender from the contractor and after its acceptance gave instructions to the contractor to carry on the work which was to be performed at Ajmer and that the court at Ajmer had jurisdiction to entertain the application under sec. 28 of the Arbitration Act and further that the Delhi court had no jurisdiction to entertain the application simply because the tender was accepted by the Superintending Engineer, Delhi. ;