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2000 Supreme(Ker) 164

KERALA HIGH COURT
K Narayana Kurup, K V Sankaranarayanan
RAMBAL COMPANY - PETITIONER
v.
KERALA STATE SCIENCE AND TECHNOLOGY MUSEUM, THIRUVANANTHAPURM AND OTHERS - RESPONDENTS.
O.P. No. 23815 of 1999(I)
Decided on :: March 23, 2000.

Advocates appeared:
Sh. Nair Ajay Krishnan, for the Petitioner.
Sh. R. D. Shenoy and Sh. P. J. Mathew, for the Respondent No. 1. Sh. Gracious Kurilakose, Govt. Pleader, for the Respondents 2 and 3.

Headnote:

Constitution of India, Art.226 - contracting parties - Compensation - Damages - Agreement - Even where power of State or its instrumentality under an agreement entered into by with private individual expressly provided for assessment damages breach of conditions of agreement and recovery of damages that power can be exercised only in cases where breach of conditions is admitted or is not disputed - Now well settled that one of contracting parties cannot adjudicate upon disputed question of breach as well as to assess damages arising from breach -Held, Question as whether there is breach of contract and so what is quantum of damages are all matters which are best left to be adjudicated upon by Court or Tribunal and not by one of contracting parties - When breach is not admitted one of contracting parties cannot arrogate to itself power to claim compensation for breach from other party without there being any adjudication by an outside agency as to whether there was any breach of contract -Order accordingly

JUDGMENT

NARAYANA KURUP, J. - The petitioner had entered into Ext. P1 agreement with the first respondent Kerala State Science and Technology. Thiruvananthapuram which is a society registered under the Travancore Cochin Literary and Scientific Societies Registration Act, 1955, on 15-6-1988 for the "construction of planetarium building of the Kerala State Science and Technology Museum and allied Civil Works". Dispute having arisen between the parties, the agreement came to be terminated as could be seen from Ext. P2 termination notice dated 3-11-1989 issued by the first respondent. Ext. P2 was followed by Ext. R1(c) letter from the Managing Partner of the petitioner company allegedly admitting the breach of contract, suit notice dated 6-11-1990 issued by the first respondent to the petitioner which was replied by the petitioner as per Ext. P3 dated 31-12-1990 repudiating the alleged breach and raising a counter claim - According to the petitioner, there was a long silence after Ext. P3 which was broken on 12-1-1998 on which date, the petitioner received Ext. P4 demand notice from the 2nd respondent Deputy Tahsildar (RR), Thiruvananthapuram under Section 34 of the Revenue Recovery Act, 1968 calling upon it to remit an amount of Rs. 22,16,303/- with future interest at the rate of 12% from 1-4-1997. On receipt of Ext. P4, the petitioner moved this Court with Arbitration Request No. 2/98 under Section 11 of the Arbitration and Conciliation Act, 1996 for the appointment of an Arbitrator for resolution of all disputes and differences between the parties concerning the performance of the work under Ext. P1 agreement. The request of the petitioner was resisted by the first respondent contending, inter alia, that there is no provision for arbitration in Ext. P1 agreement. It was also contended that as per Clause 54 of Ext. P1 agreement, there is a specific exclusion of resolution of disputes by arbitration and the Civil Courts at Thiruvananthapuram alone are clothed with jurisdiction to resolve the disputes arising between the parties out of Ext. P1 agreement. In other words, not only Ext. P1 does not contain an arbitration clause, on the contrary, Ext. P1 specifically rules out arbitration as a mode of settlement of disputes or claims arising out of Ext. P1. Accepting the contentions raised by the 1st respondent, this court, as per Ext. P9 order in Arbitration Request No. 2/98 rejected the request. After Ext. P9 order was rendered by this Court, the petitioner filed Ext. P10 writ petition, being O.P. No. 22633/98 to quash Ext. P4 demand notice and for other reliefs which came to be disposed of by Ext. P11 judgment dated 17-11-1998 directing the 3rd respondent District Collector to consider and pass orders on Ext. P8 representation preferred by the petitioner within one month from the date of receipt of a copy of Ext. P11 judgment. Pending issuance of orders by the District Collector as aforesaid, the demand notice as evidenced by Ext. P4 was stayed. As a sequel to Ext. P11 judgment, the 3rd respondent District Collector passed Ext. P12 order rejecting Ext. P8. Upon rejection of Ext. P8 by Ext. P12, Ext. P4 was revived and the petitioner was called upon to pay the amount mentioned therein being the loss suffered by the 1st respondent in re-arrangement the work at the risk and cost of the petitioner. It was at this stage, that the petitioner moved this Court with the present writ petition praying for the issuance of a writ of certiorari or any other appropriate writ, direction or order quashing Ext. P12 order and Ext. P4 demand notice as illegal and arbitrary and for the issuance of a writ of mandamus declaring the revenue recovery proceedings may be initiated against the petitioner only after prior adjudication by a Court of law or any other independent judicial/quasi-judicial body and other reliefs.

2. When the writ petition came up for hearing before the learned single Judge, it was contended by the learned counsel for the petitioner

















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