PROVINCE OF PUNJAB through Secretary, C and W Department, Lahore and 2 others vs M_s. SHAFSAL ENTERPRISES, GOVERNMENT CONTRACTOR through its Managing Partner

ORDER

' ABDUL SHAKURUL SALAM, J.---Petitioner seeks leave to appeal against an order of a learned Judge of the Lahore High Court in FA.O. No, 22 of 1990 dated 27-6-1990.

1. The petitioner accepted a tender of the respondent for the construction of road from Kahna Nau to Kot Arain via Jia Bagga Mile 0/0 to Mile 3/0 group 1 on 13-12-1973, at the estimated cost of the work being Rs,7.5 lacs. The respondent partly completed the work but the payments were withheld and finally vide letter dated 7-12-1976 it was informed that the contract had been rescinded. The respondent filed an application under section 20 of the Arbitration Act for the dispute being referred to arbitration in terms of clause 25 (A) of the contract. It was pleaded that the contract had illegally been rescinded. The learned Civil Judge vide order dated 18-1-1987 appointed two senior officers of the Public Works Department namely Mr. Ghulam Ahmad Sheikh, Director, Designs Standardization Cell and Mr. Ijaz Ahmad Chaudhry, Superintending Engineer, as arbitrators and referred the dispute to them. The respondent filed their claim before the arbitrators giving details of each item and the sum of money which they claimed due to them, the total claimed being Rs,6,63,988. The principal question for determination was whether the contract was rightly rescinded. It was the case of the appellant that the respondent had become 'defaulter'. On the other hand, the case of the respondent was that the appellant was guilty of breach of contract; had failed to fulfil its part of the contract and the rescission of the contract was, therefore, invalid.

After recording the evidence, perusing the record and hearing the parties, the learned arbitrators found that the appellant had not been able to prove the 'default' of the respondent and concluded that "rescission of contract was not proper". After considering each item of the claim, the arbitrator accepted the claim of the respondent for a total sum of Rs,5,19,791 vide Award dated 19-5-1989. It was submitted before the learned trial Court. The petitioner filed objections. These were rejected and the award was made rule of the Court vide judgment dated 7-10-1990. The petitioner filed an appeal before the Lahore High Court bearing FA.O. No, 22 of 1990. It was partly allowed vide judgment dated 27-7-1990.

2. The first contention is that the agreement was not placed on record before the learned trial Court, therefore, it cannot be said that the award was in conformity with its terms. The learned trial Court has held that the petitioner did not produce the agreement, therefore, it cannot be said that the arbitrators had exceeded their authority, and rightly so we may say. Moreover, no such argument, as pointed out by the learned counsel for the respondent; was raised in appeal before the High Court. It is too late in the day to rake up the controversy. It was secondly contended that under clause 3(a) of the Contract it was open to the Government to rescind the contract and forfeit the security. Learned counsel omitted to take into account that contingency arises when the contractor renders himself "liable" to pay compensation. In this case, the respondent contractor was not found liable. The shoe is on the other foot. The petitioner has been found to have acted illegally.

3. After hearing the learned counsel for the petitioner at some length we find that the award given by the two senior officers of the Government itself as A modified by the learned Judge of the High Court calls for no interference. The petition is, therefore, dismissed.