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State of Bihar and Others v/s M/S Kumar Construction Company, through its Proprietos Narender Kumar Singh

    Civil Revision No. 196 of 2012 In C.Ref. 118 of 2010

    Decided On, 19 August 2013

    At, High Court of Judicature at Patna

    By, THE HONOURABLE MR. JUSTICE JYOTI SARAN

    For the Petitioners: J.S. Arora and Amit Bhushan, Advocates. For the Respondent: Jitendra Singh and Mrigank Mauli, Advocates.



Judgment Text

Jyoti Saran, J.-

I.A. No. 31 of 2013

1. This interlocutory application has been filed praying for condonation of delay of 100 days occurred in filing the civil revision application.

2. It is stated that the delay has occurred in obtaining the departmental approval and thus there is no deliberate laches on the part of the petitioner-State in preferring the application.

3. I have heard learned counsel for the parties on the prayer for limitation and upon being satisfied by the reasons assigned, the prayer is allowed.

4. The delay is condoned. This interlocutory application is allowed.

C.R.No. 196 of 2012

5. This civil revision application is directed against the part of the award dated 16.3.2012 passed by the Bihar Public Contract Disputes Arbitration Tribunal constituted under Section 3 of the Bihar Public Works Contract Disputes Arbitration Tribunal Act, 2008 (hereinafter referred to as the "Act"), in Reference Case No. 118 of 2010 to the extent the Tribunal has held the contractor who is the opposite party herein, entitled to refund of the security deposit of र18,13,377/-, earnest money of र14,21,400/-, refund of the amount deducted for extension of time of र8,04,661/- and refund of penalty amount of र16,46,936/- together with simple interest quantified at 10% payable with effect from 15.4.2008 until its realization.

6. With the consent of the parties the matter has been taken up for disposal at the stage of admission itself.

7. A brief summary of facts essential for disposal of this application is that the opposite party was awarded works contract by the petitioners for construction/widening and strengthening of the Chapra Marhaura Road in Kilometer 1(part), 3(part) and 4 to 23 i.e. total of 20.32 kilometers under the plan head of 2006-07. The total cost of work was estimated at र6,58,77,428/-. An agreement was entered into between the parties to that effect on 31.1.2007 and a copy whereof is placed at Annexure 1 of the present application. Under the contract, the work was to commence on 22.1.2007 and was to be completed by 30.6.2007. Since the work was not completed by the opposite party until 31.3.2008, the contract was rescinded under an order dated 15.4.2008, a copy whereof is placed at Annexure-1 of the supplementary counter affidavit of the opposite party. The opposite party filed an application before the Tribunal giving rise to the reference case in question for payment of the following amounts:-

(i) The payment of dues of र74,00,000/- which was subsequently revised to र88,02,228/-.

(ii) The release of the deducted penalty amount of र16,00,000/-

(iii) The release of earnest money of र14,21,400/-.

(iii) The release of retention money deducted at the rate of 10% from every bill.

(iv) Quashing of the rescinding order dated 15.4.2008.

(v) Quashing of the order bearing letter No. 964 dated 21.5.2008 in respect of forfeiture of security deposit of र15,26,684.

8. The claim was contested by the State who is the petitioner before this Court by submitting a statement demonstrating that it was the opposite party on whom an amount of र15,25,684/- was found due, thereby showing a negative bill.

9. The claim of the contractor-opposite party was primarily contested on grounds that the quality of work was below standard and that the contractor had not maintained the specifications of the construction materials as required to be maintained under the contract and which was a violation of Clauses 10A and 16 of the Contract. The contractor-opposite party was also charged with threatening the Engineers. It was further contended that the contractor had not completed the work even after nine months of the expiry of the work schedule which was a violation of Clause 5 of the Condition of Contract. It is the case of the State that the contractor had in the entire contract period, executed only 28% of the work which was a violation of Clause 2 and Schedule (f) of the Agreement. The State thus on grounds set forth, vide order passed on 15.4.2008 rescinded the contract and forfeited the security deposit. The petitioner raised his claim through the reference case in question, which was considered by the tribunal in the light of the contentions advanced by the contesting parties and the materials on record and by the award in question the Tribunal while upholding the rescinding order dated 15.4.2008 rejected the claim of the contractor-opposite party in respect of the payment of the dues relating to the work claimed to have done by him as revised to र88,02,228. The Tribunal however, upheld the following claims of the contractor-opposite party and allowed the same with interest quantified at 10% per annum payable w.e.f. 15.4.2008 until realisation:-

(a) refund of security deposit and earnest money;

(b) refund of the deducted amount towards time extension and

(c) the refund of the penalty amount.

10. The State aggrieved by the part of the order whereunder the claim of the contractor-opposite party has been allowed, has preferred this application and has questioned the award to that limited extent.

11. Mr. J.S. Arora, learned Standing Counsel No.6 has appeared for the petitioners and Mr. Jitendra Singh, learned Senior counsel has appeared for the contractor-opposite party.

12. Mr. Arora, learned counsel for the State has submitted that despite the work schedule provided under the agreement, the opposite party could execute only 28% of the work and which also was not found satisfactory and hence the contract was rescinded and the security deposit and the earnest money was forfeited in terms of the Clause 3 of the Contract which provides as such.

13. It is contended that after the contract was rescinded, since a major portion of the work yet remained to be executed, the same was assigned to another agency. It was submitted that the Tribunal has proceeded on the presumption of entitlement of the contractor to receive the payment without bothering to adjudicate whether at all, on the facts available, he was entitled to any claim. It was submitted that the judgments relied upon by the Tribunal in no manner supported the claim of the contractor and has been incorrectly applied to the case in question. It was submitted that the Tribunal having accepted that the contractor had completed only 28% of the work allotted within the time schedule and which had led to the rescinding of the contract and having also noted the stand of the State that the contract after being rescinded was handed over to another agency, formulated the points for determination which nowhere notices the stand taken by the State. It was contended by Mr. Arora that even where the Tribunal has taken note of the fact that initially the tender was given to the contractor-opposite party No.1 at 7.3% less than the estimated amount; that the final bill had been accepted by the contractor without any objections; that the contractor had failed to prove the order of performance and that the provisions of sections 52,53 and 54 of the Contract Act would not come to the aid of the contractor, yet has allowed the claim for refund of the security amount as also the other deductions/imposition made by the petitioners.

14. On the issue of unpaid dues, it was submitted that the Tribunal has held that the bill submitted by the contractor in relation to unpaid dues revised after addition of the claim for the work done during the rainy season to र88,02,228/- was devoid of any proof and was not signed by any competent authority in terms of the contract. The contractor also failed to prove as to why the portion of his work was not measured. It was submitted that the acceptance of the running account bill as well as the final bill had not been denied by the contractor and thus in the said circumstances and in absence of evidence and proof, the claim of the contractor towards unpaid dues, was rejected. It was submitted that the petitioners having admitted in his supplementary affidavit that the work was re-tendered and subsequently allotted to another agency, this relevant aspect ought to have been considered by the Tribunal while considering the other claims of the contractor. It was contended that whereas the opposite party was awarded work at 7.3 % below the Bill of Quantity (BOQ for short), the State had to suffer loss when after the rescission of the contract, it was allotted to the other agency at a higher rate. It was thus submitted that the loss suffered by the State was apparent and the Tribunal ought to have granted opportunity to the State to substantiate this aspect. It was submitted that the Tribunal has misdirected itself and has committed an illegality in relying upon the judgments referred to in the award which do not apply in the facts of the present case.

15. With reference to a judgment of the Supreme Court reported in A.I.R 2003 SC 2629; (2003) 5 SCC 705 (Oil and Natural Gas Corporation Ltd. v. SAW Pipes Ltd.) more particularly paragraphs 41 to 56 thereof it was submitted that where a condition as to loss is predetermined in a contract, the principles laid down in the judgments relied upon by the Tribunal would not be applicable. It was submitted that since the forfeiture of the security deposit and earnest money, the deduction towards time extension and penalty are provided for in the contract itself, hence the principles envisaged in the judgments relied upon by the Tribunal would not be applicable. Learned counsel with reference to Clause 2 of the of the Conditions of Contract submitted that it provided for deductions towards time extension. With reference to Clause 3(vii)(a) it was submitted that the same provided for forfeiture of security and earnest money upon rescission of contract. It was submitted that Clause 3(A) debars the party from claiming interest and Clause 14(x)(b) provided for recovery for the loss suffered by the employer in case of allotment of work to other agency. It was submitted that there is no denial to the default of the contractor in completing the work within the time schedule as per the contract leading to the rescission. He thus with reference to the issues framed submitted that even when the loss suffered by the State is apparent from the uncontroverted facts available on record where only 28% of the work had been completed by the contractor requiring its execution by a third agency, the Tribunal has incorrectly rejected the contention on grounds that the State failed to place any document in support of the loss suffered. It was submitted that there was sufficient evidence on the record to support the stand of the State but were never looked into and in absence of any issue being framed on this score, the State had no opportunity to establish the same by leading evidence in support thereof. It was submitted that if the claim of the contractor as regarding refund of security deposit and earnest money was being tested against the principle of loss suffered by the party then equal opportunity should have been given to the State to lead evidence on this score. It was thus submitted that in the circumstances set forth, the contractor was not entitled to any claim and the award to the extent it is put to challenge, is unsustainable.

16. Mr. Jitendra Singh, learned Senior counsel has appeared for the contractor-opposite party and started his argument by first referring to the judgment of the Supreme Court passed in the ONGC case (supra) to submit that the facts were entirely different in the said case. With reference to paragraphs 34 and 43 of the said judgment it was stated that it was a case in which the deduction towards loss had been accepted by the contractor and who was agreeable to pay liquidated damages. With reference to paragraph 35(3) of the judgment it is stated that in the said case the parties had agreed that no interest would be payable on disputed claim and which stipulation is not present in the present case.

17. Mr. Singh with reference to the order rescinding the contract dated 15.4.2008 submitted that there is no order as regarding the deductions toward earnest money, towards time extension and penalty. With reference to the uncontroverted facts taken note of by the Tribunal it was submitted that the State itself had allowed time to the contractor and hence there could not be any issue for deduction on time extension or for penalty. It was submitted that the Tribunal has taken note of the reciprocal default by both the parties i.e. the contractor and the employer and has held that in these circumstances it would be difficult to fix liability on any of the parties effecting the performance of the other party. It was submitted that in view of such finding on facts, there occasioned no reason for either forfeiture of the security/earnest money or imposition of penalty or for deduction towards time extension. With reference to Clause 1 of the Conditions of Contract present at Annexure-1A it was submitted that the earnest money became a part of the security deposit upon the finalization of the contract. Mr. Singh next made reference to Clause 5.2(v)(vii) and Clause 5.4 of the Condition of Contract and submitted that an obligation was cast upon the Engineer-in-charge of giving a fair and reasonable extension in appropriate cases. Mr. Singh further with reference to Clause 7 submitted that the payment on a running account bill or an interim bill submitted by a contractor, was to be made within 10 days of the presentation of the bill subject to a maximum of 15 days and which payment is without prejudice to the right of the employer to recover in case no extension was granted by the competent authority. He thus submits that in view of the said clauses there was no reason for the employer to delay any payments and which acted prejudice to the interest of the contractor and delayed the completion of the contract. It was submitted that the State failed to demonstrate any loss suffered by them on account of the work being discharged by the other contractor and thus in absence of any evidence supporting such loss suffered or any counter claim raised by the State, no legal infirmity can be drawn in the finding of the Tribunal, which is also supported by judicial pronouncements. He submitted that the judgments relied upon by the Tribunal for passing the award in question is upon consideration of similar clause present in the Contracts which were in consideration in those cases. It was submitted that where the employer State itself failed to abide by its terms as envisaged under Clause 7 of the Condition of Contract, no penal action should have been taken by the State. It was submitted that the interest awarded at the rate of 10% is in exercise of discretionary power vested in the Tribunal and which cannot be curtailed by the provisions of Clause 3A of the Condition of Contract which only governs cases where the work could not be started for reasons not within the control of the contractor leading to closure of work at the instance of either party. It is submitted that it is in the said circumstance that the clause stipulates that the earnest money deposit would not earn any interest.

18. Responding to the reliance placed by Mr. Arora on Clause 14(iii) of the Condition of Contract stipulating for recovery, it was submitted that in absence of any quantification of damage by the State, the said provision could not be invoked for forfeiting the claims in question. It was submitted that in case of cancellation of contract in full or in part, for any of the reasons provided in Clauses (i) to (x) thereunder, the Engineer-in-charge has an obligation to determine the amount if any, recoverable from the contractor for completion of work or for the loss-damage suffered by the Government. He thus submitted that in absence of any such exercise, the State cannot justify the deductions. With reference to Section 74 of the Contract Act it was submitted that the provision is applicable where penalty is stipulated but the damage or loss is required to be proved and which is missing in the present case. Mr. Singh with reference to the judgments rendered in the case of Panna Singh reported in AIR 1929 PC 179, Fateh Chand reported in AIR 1963 SC 1405, Maula Bux reported in AIR 1970 SC 1955 and Rampur Distillery reported in AIR 1973 SC 1098, submitted that in each of the cases it has been held that until such time that the employer is able to prove the loss suffered by him consequent upon the allocation of the remaining work to a third agency, the employer is not entitled to forfeit the security deposit. With reference to the finding of the Tribunal on the deduction towards time extension it was submitted that the Tribunal has taken note of the fact that although the work was to be completed by 21.3.2008 but the employer themselves vide letter dated 18.1.2008 permitted the contractor to lift Bitumen until 15.3.2008 thereby granting time extension. It was submitted that the Tribunal has also taken note of the fact that the deductions towards time extension was made from time to time and although Clause 2 of the Contract provided for compensation amount of 2% per month of delay subject to maximum 10% but there was no explanation as to the basis for computation of the rate of deductions @ 10% especially where time extension was granted by the employer themselves. While contesting the negative bill projected by the employer, it was submitted that the Tribunal has correctly observed that in absence of any claim being raised by the State in this regard the same did not merit consideration. On the issue of the power of judicial review of the award passed by the Tribunal, it was submitted that the award could only be questioned by review under Section 12 of the Act or by way of revision under Section 13 of the Act. With reference to Section 13 of the Act it was submitted that it is only where a Tribunal is found to have committed jurisdictional error that the award can be questioned and in no other circumstance.

19. He thus submitted that unless the State could demonstrate that the Tribunal has acted illegally or with material irregularity in exercise of its jurisdiction, this Court would not interfere with the award. Learned counsel in support of his submission has relied upon the following judgments of the Supreme Court:-

(i) (2010)1SCC 409 (Ravinddra Kumar v. Union) paragraph 9 to 14

(ii) AIR 1971 SC 2324 (DLF Housing v. Sarat Singh) paragraphs 6 to 9

(iii) AIR 2002 SC 100 paragraph 5 (Madan Lal v. Shyam Lal)

20. Mr. Arora in reply to the arguments advanced by Mr. Jitendra Singh has submitted that a power of an arbitrator under the Act of 2008 or under the Arbitration and Conciliation Act 1996 is of a distinctive nature and the Tribunal as an Arbitrator ought to have adjudicated the claim of the Contractor in the light of the contentions raised by the State. It was submitted that even in absence of any contention advanced by the Contractor on the issue of loss suffered, the Tribunal has recorded a finding to this effect without any opportunity to the State to rebut the same. It was submitted that once the claim of the contract was being adjudicated on the threshold of loss suffered, the Tribunal should have granted opportunity to the State to lead evidence.

21. Mr. Arora, submitted that the moment the failure of the contractor to abide by the work schedule was accepted by the Tribunal and the rescission of the contract was affirmed, the deductions made were merely consequences. With reference to paragraph 10 of the judgment rendered in the case of Fateh Chand (supra), it was submitted that the Tribunal ought to have measured the damages before the claims were allowed.

22. Mr. Arora with reference to the judgment passed in the case of Maula Bux(supra) more particularly to paragraphs 8 to 10 thereof submitted that opportunity should have been given to the State to lead evidence on loss specially when no issue to such effect had been framed.

23. Mr. Arora also referred to the judgment rendered in the case of Rampur distillery(supra) to submit that there should have been adjudication as to the quantum/measurement of damage. With reference to the finding of the Tribunal it was submitted that even while taking notice of the default of the contractor which led to the rescinding of the contract thus disentitling the contractor to any refund, yet the Tribunal has acted illegally and with material irregularity in ordering refund.

24. Mr. Arora concluding his arguments has submitted that the Tribunal having failed to exercise his jurisdiction as required of it under the provisions of the Act of 2008, the award, to the extent it is put to question, is unsustainable.

25. I have heard learned counsel for the parties and have perused the materials on record.

26. Even while the scope of judicial review of an award stands circumscribed to the eventualities set out in Section 13 of the Act, there has been extensive arguments by both sides on the merits of the issue. The Supreme Court in paragraphs 9 to 14 of the judgments passed in the case of Rabindra Kumar Gupta(supra) has referred to a catena of judgments on the scope and ambit of judicial review of an arbitration award. The opinion expressed in the judgment so referred makes it manifestly clear that unless there is a jurisdictional infraction by the Arbitral Tribunal in making of the award or the award suffers from manifest illegality or material irregularity, it is not to be interfered with, in a routine manner. In fact merely because there exists a possible second view also cannot be a ground for interference with an Arbitral Award. It is also well settled that the High Court in exercise of powers of judicial review would not sit as a Court of appeal to reappreciate the evidence led by the parties. Thus unless the finding of the Tribunal is hounded with the perversity or is based on a wrong preposition of law, the High Court would not interfere with the award merely for a different possible view.

27. Having outlined the scope of judicial intervention in the award it is to be seen whether the State as a petitioner has made out a case for grant of indulgence. The entire argument of the State to contest the award is resting on its power of forfeiture as provided under Clause 3, the right to deductions admissible under Clause 2, and its right to recovery as provided under Clause 14 of the Condition of Contract.

28. The sum and substance of the argument of Mr. Arora has been that since the default of the contractor has been accepted by the Tribunal which has resulted in the rescission of the contract and which rescission has not been interfered with by the Tribunal rather the Tribunal has even rejected the claim of the contractor for payment of his pending dues amount, then in no circumstance could the Tribunal direct for release of the security/earnest money, the deduction towards time extension and the penalty amount which were only consequences of such rescission and was within the power vested in the employer under Clause 2, Clause 3, Clause 5 and Clause 14 of the Conditions of Contract and Clause 3A in so far as the interest part is concerned. The other argument of Mr. Arora has been that since the State was never given to believe that the claim of the contractor would be tested on the anvil of loss/damage suffered, then in absence of any issue framed to this effect, there was no occasion for the State to lead evidence and thus the finding of the Tribunal in ordering release of the security and the earnest money inter alia on grounds of the State having failed to prove damage or loss suffered, was in fact a denial of opportunity to the State and thus contrary to the principles of natural justice. The third limb of argument of Mr. Arora has been that even if the claims were being tested on grounds of absence of proof of loss/damage suffered by the State yet there was an obligation on the Tribunal to measure the damage before the adjudication of the claim. According to Mr. Arora, the cases relied upon by the Tribunal were in a different context and the position has been clarified in the judgment of ONGC(supra) to hold that where the conditions are pre-determined in a contract, there would be no occasion to prove loss or damage before directing forfeiture, recovery or penalty.

29. Surprisingly, except for the order dated 15.4.2008 rescinding the contract and directing forfeiture of the security amount, no other order has either been placed before the Tribunal or before this Court supporting the decision of the State to make deductions at the rate of 10% on time extension from every bill or in respect of the penalty amount nor is there any document to support whether the contractor was given an opportunity before such decision was taken. The argument of Mr. Arora that the power of deduction is invested in the State under the terms of contract itself, is not based on sound principles of law for the simple reason that the Clause of Contract are mere enabling powers of the State and the circumstances have to be existing warranting such exercise. A mere acceptance of the running account bill or the final bill by the contractor would not deprive him to question such deductions especially, where there is no order to such effect. Learned counsel was again not able to justify as to under which clause of the Conditions of Contract, the penalty of र16,46,936/- had been imposed on the Contractor. Thus in absence of any penalty clause in the contract the State could not have ordered for deductions towards penalty. The same position exists in the case of the deductions towards time extension also. What this Court finds is that though in terms of Clause 2 of the Conditions of Contract, a determination to such effect is to be made by Superintending Engineer and which varies from 2% per month up to 10% of the tendered value but there is no evidence on record supporting any such determination by the Superintending Engineer. It has been rightly observed by the Tribunal that in absence of any supportive documents as to the basis for deduction at the rate of 10% from every bill, especially where the State itself had allowed time to the contractor to lift Bitumen until 15.3.2008 even when according to the contract the work was to be completed by 30.6.2007, it did not justify the deductions towards time extensions.

30. That would bring this Court to the issue relating to forfeiture of security deposit and earnest money, which now forms the security deposit. It is the case of the State that since despite the time extension, the work could not be completed by 31.3.2008 rather only 28% of work had been completed, hence the contract was rescinded and the security and earnest money forfeited. The copy of the order rescinding the contract has been placed on record by the contractor and which manifests that it is upon the failure of the contractor to maintain the quality of work and his alleged unbecoming conduct that the contract was rescinded and the security amount was forfeited. In the entire order dated 15.4.2008, rescinding the contract there is no whisper about the forfeiture of the security as a means to recompense the loss/damage suffered by the State. It is thus to be seen whether the arguments of Mr. Arora that since the Tribunal neither framed any issue of loss/damage suffered by the State nor afforded opportunity to the State to establish the loss by leading evidence, the finding of the Tribunal upholding the claim on grounds of failure of the State to demonstrate loss suffered is erroneous, would merit consideration and whether the judgment rendered in the case of ONGC(Supra) makes any departure to the principles settled under earlier judgments.

31. The reason assigned in the order rescinding the contract for forfeiture of the security amount is not based on the principle of loss suffered rather the forfeiture has been ordered as a measure of penalty and is a consequence of the rescinding of the contract. It is thus to be seen whether the State was within its jurisdiction to order for forfeiture of security and earnest money consequent upon the rescinding of the contract as per the terms thereof or despite such stipulation being present in the contract, the power would not be exercised until such time the employer is able to establish by cogent evidence, the loss/damage suffered by him and whether the judgment relied upon by the Tribunal is supportive of its conclusion or the judgment rendered in ONGC(supra) would make a distinction on the issue.

32. The arguments of Mr. Arora on this issue almost persuaded this Court to remit the matter to the Tribunal for consideration and disposal afresh on the issue of security deposit/earnest money, after affording opportunity to the State to adduce evidence as to the loss suffered by them by reason of non completion of work by the contractor- opposite party requiring its completion by a third party but there are certain startling features of this contest which restrained me from doing so and which are as follows:-

(a) The order dated 15.4.2008 whereby the contract was rescinded clearly manifests that the security was forfeited as a measure of penalty in exercise of power vested under Clause 3(a) of the terms of Contract and is not based on the principles of loss suffered.

(b) Though definitely Clause 14 of the terms of Contract vested the Engineer incharge with powers to determine the amount recoverable from the contractor for completion of work left incomplete by him resulting in loss suffered by the Government but the order dated 15.4.2008 forfeiting the security deposit does not reflect exercise of such power.

(c) There is a finding of fact regarding breach of reciprocal promise by the parties to the contract by the Tribunal. Thus the State has also been held equally responsible for the delay in the completion of the contract.

(d) The relief prayed by the contractor seeking payment of his pending dues and refund of the amounts deducted/forfeited was in full notice of the State and thus the onus was entirely on the State to defend their acts. The State thus cannot be allowed to contend that they were at loss of opportunity to lead evidence in support of their order of forfeiture in absence of any issue being framed to that effect. Even if no formal issue was framed by the Tribunal on this score, the pleadings made by the contractor were sufficient indication of the case set up by him.

33. The legal position governing the issue of forfeiture of security deposit stands well settled and the circumstances in which such power can be exercised, is also set at rest. In the circumstances the State cannot complain of being prejudiced due to non framing of an issue on this score since the parties had entered the contest fully aware of the rival case. Reference in this re

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gard is made to a judgment of the Supreme Court reported in AIR 1963 SC 884 (Nedunuri Kameswaramma v. Sampati Subha Rao); "6.no issue was framed, and the one, which was framed, could have been more elaborate; but since the parties went to trial fully knowing the rival case and led all the evidence not only in support of their contentions but in refutation of those of the other side, it cannot be said that the absence of an issue was fatal to the case, or that there was mis-trial which vitiates proceedings." 34. The other relevant aspect of the matter is that the order rescinding the contract dated 15.4.2008 in so far as it directs for forfeiture of the security reads as under :- (Language) (Emphasis supplied) 35. A bare perusal of the order of forfeiture leaves no room for confusion that the same was in consequence of the rescinding of the contract and not as a measure to recompense the loss suffered. Thus where it is not even reflected in the order dated 15.4.2008 that the forfeiture of the security was a means to recompense the loss, the State could not have been permitted to supplant the reasons during the course of the arbitration proceedings by leading fresh evidence. The law is well settled on this issue and reference is made to the judgment of the Supreme Court rendered in the case of Mohinder Singh Gill reported in AIR 1978 SC 851. 36. In the circumstances there is no question of remand of the matter for fresh consideration on the issue of security deposit. The reliance placed by Mr. Arora on the judgment rendered in the case of ONGC (Supra), in no manner comes to the aid of the State because it was never the case of the State at any stage that the forfeiture of the security was a means to recompense the loss suffered. Even otherwise the issue which was the subject matter of the ONGC(supra) is clearly distinguishable from the present case inasmuch as in the said case there was a delay in supply of goods and for which the contractor had sought for time extension, which under the terms of contract, could be granted on payment of liquidated damages. In the said case the contractor had expressly agreed for payment of pre-estimated genuine liquidated damages. Thus it was not a case of breach of reciprocal promise rather the contractor himself had agreed for payment of liquidated damages which deduction was subsequently questioned by him before the Tribunal and was allowed under an award but was reversed by the Supreme Court. In so far as the present case is concerned, since it is not the case of the State that the order of forfeiture of security was for recovery of loss/damage, the contentions advanced by Mr. Arora, supporting the forfeiture relying upon the judgment rendered in the case of ONGC(supra), is wholly misconceived. 37. The conclusive finding of fact as regarding breach of reciprocal promise by the parties, the legal position as regarding the power of forfeiture of security deposit coupled with the fact that the forfeiture of security was a consequence of rescinding of the contract and not as a means to recompense the loss/damage suffered by the State are so self eloquent in the present case that I would not be persuaded to interfere with the part of the award under challenge in this application. 38. For the reasons aforesaid, this civil revision application is dismissed but in the circumstances there shall be no order as to costs.
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