Judgment

R. S. PATHAK, J. :- This appeal is directed against the judgment and order of the High Court of Andhra Pradesh disposing of a revision petition filed by the Appellant in execution proceedings.

2. The Appellant is a contractor, who entered into two agreements with the Government of the State of Andhra Pradesh for providing B.T. Macadam wearing coat and seal coat along two stretches of the Hyderabad-Vijayawada National Highway. While the work was in progress, the contractor made certain claims in respect of the loss suffered on account of delay, escalation of rates and other heads. The claims were referred to arbitration. On Sept. 4, 1979 the Arbitrator held the contractor entitled to a sum of Rs. 99,00,000/- under five heads of claim. The contractor applied to the Civil Court for making the award a rule of the Court while the State Government prayed for setting aside the entire award. The Civil Court set aside the award and refused to pass a decree in terms of the award. The contractor appealed to the High Court, and on April 19, 1982 the High Court allowed the appeal to the extent of one of the claims only, the claim being for loss of profit in the sum of Rs. 16,00,000/- together with interest. The appeal was dismissed in respect of the other heads of claim.

3. For the realisation of the amount due under the decree the contractor filed Execution Petition No. 48 of 1982 before the V Additional Judge, City Civil Court, Hyderabad claiming recovery of Rs. 16,00,000/- towards the decretal amount, Rs. 7,80,000/- towards interest in terms of the award up to the date of the execution petition and Rs. 8,691/- towards costs of the Execution Petition. The State Government filed objections, contending inter alia that a sum of Rs. 22,91,332/- was recoverable by it from the contractor and claimed adjustment against the amount due to the contractor under the said decree. It urged that after adjusting the amount due to the State Government the balance payable to the contractor would stand reduced to Rs. 76,667/-. This sum together with the other deposits of the contractor with the Government and refundable to him, viz. Rs. 3,92,236/- was deposited in the Executing Court. The contractor withdrew the amount without prejudice to his rights to contest the adjustment. The Executing Court held that the State Government was entitled to set off the amounts claimed by it, and accordingly adjourned the Execution Petition for further proceedings.

4. The contractor filed a revision petition before the High Court and contended that the State Government was not entitled to claim adjustment in execution proceedings. It was pointed out that the sum of Rs. 22,91,332/- of which adjustment was sought by the State Government against the amount for which the contractor had taken out execution, consisted of (a) an amount of Rs. 10,21,800/- claimed by the State Government as due to it upon the preparation of the final bill in respect of the contracts covered by the award and (b) an amount of Rs. 12,69,532/- claimed by the State Government under a separate contract on the ground that the contractor had committed a breach of that contract. The contractor disputed both claims. He contended that the final bill in respect of the earlier contract had been prepared in his absence and that he challenged the inclusion of several items in that bill. In regard to the latter amount he urged that he was not guilty of any breach of contract.

5. The High Court has found that so far as the first claim to adjustment was concerned the State Government was justified in making it because the arbitration was effected while the work was still in progress and the contract was in the progress of execution by the contractor, and having regard to clause 68 of the agreement final payment had to be made to the contractor after taking into account the amount which had been received by him earlier. The second claim to adjustment was made by the State Government under another contract, and t