Recovery proceedings must adhere to the agreed arbitration clause in the contract, and the U.P. Public Moneys (Recovery of Dues) Act, 1972, may not apply when an arbitration clause is in place.

SHARAD KUMAR SHARMA, J.

1. In the Writ Petition, in question, the petitioner has questioned the demand of recovery made on 15th October, 2016 and 13th December, 2016, as issued by respondent No. 2 and the recovery citation as a consequence thereto as issued by respondent No.4, whereby, the petitioner has been directed to appear on 24th March, 2017, to make good the demand as raised by the respondent No. 2.

2. Brief facts of the case as involved in the instant matter is that the petitioner who is engaged in the business of supply of Tent, Tin (GC sheet), furniture and various others articles of establishment and amenities for conducting the Mela, the Government had invited tender for the supply of the aforesaid components to organize the Ardh Kumb Mela of 2016 and the notice in that regard, when it came to the knowledge of the petitioner, he participated in the tendering process and an award / agreement was executed between the petitioner and respondent No. 2 on 28th November, 2015. Consequently, an agreement was executed, wherein, in its Clause 20, it provides an Arbitration Clause, which reads as under :-

“Arbitration

20- bl fufonk ds vUrxZr Bsdsnkj o fofHkUu foHkkxksa ds izeq[kksa ds chp Hkh erHksn ;k fookn] vFkok bl fufonk ds vUrxZr lHkh i{kksa ds vf/kdkjksa vFkok mRrjnkf;Ro ds lEcU/k esa mRiUu gj izdkj ds izdj.k vko';d lek/kku gsrq vkfcZVsVj dks gh lanfHkZr fd;s tk ldsaxs] tks vk;qDr] x<oky e.My] mRrjk[kaM gksaxsA vkfcZVsVj dk fu.kZ; vafre gksxk tks nkuks i{kksa ds fy, ck?;dkjh gksxkA dksbZ Hkh izdj.k lanfHkZr fd;s tkus ij lanHkZ o vkfcZVs'ku dk ewY; vkfcZVsVj ds foosdk/khu gksxk tks bldh /kujkf'k dk fu.kZ; djsxsa rFkk ;g Hkh funsZf'kr djsxsa fd ;g /kujkf'k fdlds }kjk fdldks vkSj fdl jhfr ls vnk dh tk;sxhA ;gkW mij mfYyf[kr fd;s x;s izdj.k ds lEcU/k esa dksbZ Hkh i{k fdlh U;k;ky; ls vuqrks"k izkIr djus dk vf/kdkjh ugh gksXkkA**

3. The petitioner successfully completed the work and it is not in dispute that on completion of the work assigned to the petitioner and that the work which was later on increased an assigned to the petitioner, have been performed by the petitioner satisfactory and respondents by their own wisdom and, according to their own computation of the bills presented by the petitioner in pursuance to the work awarded to him in terms of the contract dated 28th November, 2015, had been made with a full and final payment to the petitioner to the tune of Rs.4,21,84,291.19 on 16th May, 2016.

4. Surprisingly, after the payment of the aforesaid amount, it could be inferred that the terms of the contract and the liabilities accruing from it rather stands settled after the payment of the bill to the petitioner. Later on, the petitioner was surprised to receive a demand notice issued by respondent No. 2 on 15th October, 2016, directing the petitioner to remit back a sum of Rs.32,43,612/-, which, according to the respondents, was sought to be demanded in view of the audit objection Nos. 584, 572 and 624 and the respondents attempted to settle the amount as against the security deposit made by the petitioner at the time of entering into the contraction on 28th November, 2015.

5. Out of the total amount thus demanded, Rs.20 lacs was adjusted from the security deposit and the balance amount of Rs.12,43,612/- which constituted to be part of the audit objection No. 585, was demanded from the petitioner by an order dated 13th December, 2016. Failure to do so, has resulted into the issuance of the recovery citation (undated), impugned in the writ petition.

6. The petitioner has questioned the subsequent recovery proceedings resorted to by the respondents after the remittance of the full and final payment to the petitioner based on the audit objection, the process of recovery of the amount as arrears of land revenue by issuing the recovery citation runs contrary of the contract itself, which in its Clause 20 provides that in case if there arises any dispute in pursuance to the contract, in question, either before or after t