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High Court Of Calcutta
Monjula Bose
TALCHAR COALFIELDS LTD. - Appellant
Versus
CENTRAL COALFIELDS LTD. - Respondent
Suit 496 Of 1958
Decided On : 05/12/1978
CONTRACT - BREACH - DAMAGES - WRONGFUL WITHHOLDING OF MONEY - WHETHER MAINTAINABLE - PRINCIPLES OF RES JUDICATA - APPLICABILITY TO ARBITRATION PROCEEDINGS AND AWARDS - SECTION 73 OF THE INDIAN CONTRACT ACT - INTERPRETATION.
Fact of the Case:
Plaintiff and defendant entered into an agreement for the supply of electricity. Disputes arose, and the parties agreed to arbitration. The arbitrator awarded the plaintiff a sum of money. The plaintiff then filed a suit for damages for wrongful withholding of money by the defendant. The defendant contended that the claim was barred by res judicata, as it had been the subject matter of the arbitration.
Finding of the Court:
The court held that the plaintiff's claim for damages was barred by res judicata. The court found that the parties had submitted all their disputes to arbitration, including the dispute as to whether the defendant was entitled to deduct money from the plaintiff's bills. The court also found that the arbitrator had dealt with the issue of whether the defendant had wrongfully withheld money from the plaintiff. Therefore, the court held that the plaintiff could not now bring a second action on the same claim.
Issues: 1. Whether the plaintiff's claim for damages was barred by res judicata. 2. Whether the defendant had wrongfully withheld money from the plaintiff.
Ratio Decidendi: 1. The court held that the plaintiff's claim for damages was barred by res judicata because: (a) The parties had submitted all their disputes to arbitration, including the dispute as to whether the defendant was entitled to deduct money from the plaintiff's bills. (b) The arbitrator had dealt with the issue of whether the defendant had wrongfully withheld money from the plaintiff. 2. The court held that the defendant had not wrongfully withheld money from the plaintiff because: (a) The agreement between the parties provided that payments made by the plaintiff would be without prejudice to its claims for excess charges and faulty meters installed. (b) The defendant had continued to supply electricity to the plaintiff's power house pending the decision of the arbitrator, as required by the agreement.
Final Decision: The court dismissed the plaintiff's suit with costs.
( 1 ) THE plaintiff's case in the plaint is shortly as follows:--By an agreement dated Oct. 29, 1930, by and between the plaintiff and the Madras and South Mahratta Railway Company Ltd. , the latter undertook to supply electric energy to the plaintiff from its power house at Talchar, Orissa on terms and conditions set out in the said agreement. Sometime after 1935, the said Railway Company was acquired by the Government of India and all its assets and liabilities including its rights and obligations under the aforesaid agreement vested in the Government. In Oct. 1965, the National Coal Development Corporation Pvt. Ltd. (hereinafter referred to as the said Corporation) was incorporated, and it inter alia having taken over the said power house at Talchar, rights and obligations of the Government under the said agreement, stood vested in the said Corporation. On October 23, 1975, the name of the said Corporation was changed to Central Coalfields Ltd.
( 2 ) LONGSTANDING disputes between the plaintiff and the predecessors in interest of the defendant in respect of dues of the defendant on account of electricity supplied from the said power house and enhancement of rates and faulty meters installed, resulted in an agreement being entered upon by and between the parties, recorded in a letter of January 17, 1957. The said agreement provided inter alia as follows:-- (a) the plaintiff would by adjustment of its monthly bills for supply of coal to the Southern Railway pay to the said corporation a sum of Rs. 40,000/- every month commencing from February 1957 till its dues were fully liquidated (b) all coal-sale bills of the plaintiff to the Southern Railway would be submitted through the Railways Chief Accounts Officer and the Railways would deduct Rs. 40,000/- per month from such bills and remit the same directly to the said Officer at Calcutta for payment to the defendant, (c) The arrangement for deduction from the plaintiff's bills as aforesaid would continue until the Southern Railway would be advised by the said Corporation to stop such remittances and not otherwise, (d) The said arrangement would be without prejudice to the plaintiff's claim against the said Corporation and its predecessor for excess amounts charged and faulty meters installed.
( 3 ) THE plaintiff alleges that on June 22, 1957, it demanded of the said corporation immediate termination of the aforesaid arrangement starting from bills for the second half of May 1957 and that thereafter in terms of the said agreement the plaintiff had demanded that the Southern Railway be directed to pay all further bills to the plaintiff directly inasmuch as the plaintiff's dues had been fully realised by the said Corporation, The plaintiff alleges further that the said Corporation wrongfully continued to realise according to the said arrangement further sums of Rs. 80,000/-and Rs. 90,000/- aggregating to Rs. 1,70,000/- from the plaintiff's bills, though nothing remained due to the defendant in May 1957. The plaintiff alleges that on the contrary it had a claim of Rs. 1,99,377. 13 against the defendant. In consequence of the failure and neglect of the said Corporation which was bound to terminate the arrangement and to instruct the Railways to pay the bills directly to the plaintiff on and from May 1957, the plaintiff alleges it was unable to pay its own workmen at its collieries, greatly injuring its credit, reputation, and good will for which it has suffered damages to the extent of Rs. 5,00,000/- and special damages of Rs. 3,16,800/- by reason of non-payment of the workers dues, and by reason of consequent fall in the production of coal in its colliery by 1800 tons monthly on an average since May 1957 to December 57, The plaintiff also claims the sum of Rs. 1,70,000/- as having been wrongfully retained by the defendant.
( 4 ) THE defendant in its written statement has inter alia, alleged that on March 21, 1958 the parties had agreed to and had referred their d
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