NASIR SAEED SHEIKH, J. --- The appellant is a Contractor and was awarded the work by the respondents for construction of road network within the KSEC and adjoining linkage length 10.50 KM in November 2009. A written contract was entered between the parties which provided for resolution of the controversy, if any, between the parties through arbitration proceedings. The appellant is stated to have neglected in the performance of the contractual obligations within the stipulated and further extended time. Vide letter dated 13.11.2012 issued by the District Office Roads, Highway Division, Kasur the following action was taken and the intimation was given to the appellant:- REGISTERED AD,
1. M/s. Javid Ahmed Malik, Government Contractor, 322-F-Johar Town Lahore.
2. Kot Samaba District Rahim Yar Khan.
No. 1359/EDO Dated: 13.11.2012 Subject:- CONSTRUCTION OF ROAD NET WORK WITHIN THE KSEC KASUR SPORTS AND EDUCATIONAL COMPLEX AND AJOININGJ LINKAGES LENTGH=10.50 KM.
The work cited as subject was allotted to you vide District Officer Roads, Highway Division, Kasur No. 969/M, dated 26.11.2009 with an agreement amount of Rs. 13,34,92,480/- and a time limit of 09 months. But due to change in scope, revision of estimate and other reasons sufficient time was extended for completion of work by the authority and price veriation (variation) was also paid to you. But you could not complete work even after lapse of more then (than) sufficient time. Rather you have stopped the work for last several months. Several notices alongwith final notice No. 934/EDO, dated 27.6.2002 was served to you for resuming and early completion of work. Also the authority has provided you an opportunity for personal hearing and resuming work but all in vain.
Now the authority/Chief Engineer, Punjab, District Support & Monitoring Department, Lahore has allowed to proceed against you under clauses 60 and 61 of contract agreement. The balance work is withdrawn from you and is being put to tenders at your risk and cost.
A committee comprising upon the following Officers/Officials is also constituted to record the final measurements of work done by your firm.
(1) Mr. Muhammad lqbal Javid, Deputy District Officer Roads, Highway Sub-Division, Patlold.
(2) Mr. Sarfraz Hussain Mazhar, Sub-Engineer, Highway Sub-Division, Kasur.
(3) Muhammad Latif, Sub-Engineer, Highway Sub-Division, Kasur.
(4) Mr. LiaQat A.I, Sub-Engineer, Highway Sub-Division, Pattoki.
You are therefore, directed to attend the site of work on 21.11.2012 at 10.00 a.m. For taking Final Measurement of the work executed by you. This is without prejudice.
Sd/- District Officer Roads, Highway Division, Kasur.
Endst. No. Dated.
A copy is forwarded lo the:---
(1) Executive District Officer, Works & Services Department, Kasur for information with reference to his letter endst. No. 3472, dated 13-11-2012.
(2) Deputy District Officer Roads, Highway Sub- Division, Pattoki.
(3) Mr. Sarfraz Hussain Mazhar Sub-Engineer, Highway Sub Division, Kasur.
(4) Mr. Liaqat Alt Sub-Engineer, Highway Sub-Division, Pattoki.
(5) Mr. Muhammad Latif, Sub-Engineer, Highway Sub- Division, Kasur.
Final Measurements of the work executed by M/s. JAVID AHMED MALIK Government Contractor should be recorded on 21.11.2012 at 10.00 a.m. In presence of THE Contractor and his signatures should be obtained in token of its acceptance. In case contractor or his' authorized representative does not appear at site even then measurements should be recorded to avoid further delay in completion of work."
Sd/- District Officer Roads, Highway Division, Kasur.
2. The appellant moved an application u/s. 20 of the Arbitration Act, 1940 before the learned Civil Judge, Kasur seeking a direction against the respondents to file the agreement in the Court in original and take further steps towards the arbitration. This application is pending before the learned Civil Judge. Alongwith the main application u/s. 20 the appellant moved an application u/s. 41 Schedule-II of the Arbitration Act, 1940 read with Order XXXIX, Rules 1 & 2 of CPC in which application the following prayer was made:- -- "In view of the above it is, therefore, respectfully prayed that operation of the impugned letter dated 13.11.2012 may kindly be suspended till such time the joint measurements are taken through some independent agency other than the respondents against whom the petitioner has already informed the respondent No. 1 and 2 ABOUT their bussiness and no other agency be allowed to ENTER at site unless the site is visited by the arbitrators. It would not be out of place to mention here that the petitioner is still ready to complete the balance job within the time extended to avoid further complications.
Any other relief, which this Honourable Court deem fit, may also be granted in favour of the petitioner."
This application was dismissed by the learned Civil Judge Kasur vide order dated 21.11.2012. The operative part of the order which elaborates th- reasoning of the learned Civil Judge is reproduced as follows:- "It is ad w admitted fact that as per letter No. 1359/EDO, dated 13.11.2012 today Vie. 21.11.2012 was fixed for measurement but petitioner instead of participating in said measurement filed the instant application for suspension of said letter dated 13.11.2012 by virtue of which his contract has been rescinded and measurement is going to be done. Petitioner filed the instant application merely on the basis of apprehension that committee which is conducting measurement is biased without participating in the proceedings and prior to their report. Contract of the petitioner has already been rescinded and remaining work is going to be allocated to some other contractor, so, issuance of interlocutory order at this stage will amount to issuance of mandatory injunction and restoring the rescinded contract of the petitioner which is not permissible (permissible) under the law, therefore, in view of above, I found no prima facie arguable case for interlocutory order in favour of the petitioner, resultantly, application u/s. 41 read with schedule-2 of Arbitration Act read with Order 39, Rules 1 and 2, CPC stands dismissed. Now to come up for filing of parawise written reply of application alongwith the agreement in original in the Court. Now to come up on 08.12.2012."
3. The appellant then preferred F.A.O.No. 522 of 2012 which F.A.O. Was not pressed by the appellant and was dismissed as withdrawn as Joint Committee was constituted by the appellant and the respondents. Para-2 of the order dated 29.11.2012 passed by a learned single Judge of this Court in F.A.O.No. 522 of 2012 is relevant and is reproduced:- "2. It has also been mutually agreed that the joint committee headed by the District Officer (Building), Kasur shall commence its assignment on 03.12.2012 at 11.00 a.m. The District Officer (Roads), Kasur shall communicate the order of this Court to the District Officer (Building), Kasur who shall be heading the joint committee. The appellant shall be available at the spot on the notified date and time."
4. The appellant moved another application dated 28.1.2013 before the learned Civil Judge Kasur u/s. 41 of Schedule-II read'with Order XXXIX, Rules 1 & 2 of CPC. In this application dated 28.1.2013 the appellant made the following prayer:--- "In view of submissions made above, it is, therefore, most respectfully prayed that pending the decision before the learned arbitrators the operation of clause for risk and cost may kindly be suspended with the directions to the respondents not to disturb the status of the security lying with the respondents till the date of award."
5. This application was contested by the respondents and the learned Civil Judge Kasur has dismissed the same through order dated 19.2.2013. The learned Civil Judge made the following observations in the order dated 19.2.2013 at the time of dismissing the application:- "According to clause 61 of the agreement between the parties, in every case in which the contract is rescinded under clause 60 and in the opinion of the Engineer Incharge such work should be done at the risk and costs of the Contractor such remaining work can be done at the risk and costs of previous Contractor. As per available record after publication of proclamation contract has been given to new contractor for completion of remaining work at the risk and costs of original contractor. As per law loss which can be measured in money cannot be termed as an irreparable loss, so, in this situation, request for suspension of clause of the agreement regarding risk and costs is without any force which is hereby declined and application under discussion is hereby turned down. However, if at subsequent stage arbitrators decide the reference in favour of petitioner, in said eventuality petitioner can effect recovery of his outstanding amount from the respondents who is Provincial Government."
6. Through the instant F.A.O. The order dated 19.2.2013 passed by the learned Civil Judge Kasur has been assailed before Court.
7. It is contended by the learned counsel for the appellant that in pursuance to the order passed by this Court in F.A.O.No. 522 of 2012 a Joint Committee has been constituted with the consent of both the parties for the measurement of the incomplete work and that until measurement is undertaken and completed by the Joint Committee so constituted the security amount deducted from the payments of the appellant cannot be made use of by the respondents for completion of the work at the risk and costs of the appellant. The learned counsel for the appellant contended that the learned Civil Judge has misconstrued the order passed by the learned single Judge of this Court in F.A.O. No. 522 of 2012 and has illegally dismissed the application of the appellant. The learned counsel for the appellant contends that clause-61 of the contract in question has also been misconstrued by the learned Civil Judge in rejecting the application of the appellant. The learned counsel for the appellant relies upon the judgments reported as M/S. HATTA CONSTRUCTION COMPANY (PVT.) LTD. v. FAISALABAD DEVELOPMENT AUTHORITY, FAISALABAD THROUGH DIRECTOR AND ANOTHER (1995 CLC 1877) and STANDARD CONSTRUCTION COMPANY (PVT.) LIMITED v. PAKISTAN THROUGH SECRETARY M/O COMMUNICATIONS AND OTHERS (2010 SCM R 524) in support of his contentions.
8. I have considered the arguments of the learned counsel for the appellant.
9. The contract of the appellant has been admittedly rescinded by the respondents and the incomplete work has been undertaken to be got completed at the risk and costs of the appellant.
This decision of the respondents was incorporated and communicated to the appellant through the letter dated 13.11.2012. The appellant assailed that letter through the application moved u/s. 20 of the Arbitration Act, 1940 and also sought interim relief regarding the suspension of the said letter dated 13.11.2012. The prayer of the learned counsel for the appellant about that interim relief has been declined by the learned Civil Judge through the order, dated 21.11.2012 and a learned single Judge of this Court while hearing the F.A.O.No. 522 of 2012 did not interfere with the said order, however a Joint Committee has been constituted for measurement of the incomplete work which measurement is to be undertaken. The learned counsel further contended that the security amount will be utilized by the respondents at any time. The Project is to be completed by the respondents at the risk and costs of the appellant. The appellant is not entitled to withdraw the amount of security from the respondents as per clauses 48, 49 & 50 of the agreement a photocopy of which clauses has been placed on the record through C.M. No. 3-C of 2013 by the learned counsel for the appellant on the direction of this Court. These clauses No. 48, 49 and 50 are reproduced below:--- "Clause 48: Deduction of Security Deposit.
Contract Executive Engineer/ District Officer At the time of marking any payment to the contractor for the work done under this contract, the engineer-in-charge shall retain from the amount so payable to the contractor, the amount of security deposit at the percentage rate specified in item (d) of the memorandum of work annexed hereto. The earnest money of the contractor on execution of the contract, will, however, be adjusted towards the amount of his first bill of the work done by him and payable to the contractor under this contract.
All compensations of other sums of money payable by the contractor to the government under the terms of this contract may be deducted from the amount of his security deposit of the contract or from any sums which may be due or may become due to the contractor by the government on any account whatsoever, and in the event of his security deposit being reduced by such deductions, the contractor shall, within ten days thereafter make good in cash any sum or sums which may have been deducted from his security deposit, or may be made good through additional deductions from his bill or dues.
Clause 49: If the contractor so desires and makes a written request to the engineer-in-charge to the effect that the amount of security deposit retained from the bills of the contractor may be converted into the recognized form of profit bearing security at the cost of the contractor, the amount of security deposit retained from bills of the contractor shall be deposited in any of the following banks:-
1. National Bank of Pakistan Ltd.
2. Habib Bank Ltd.
3. United Bank Ltd.
4. Muslim Commercial Bank Ltd.
5. Allied Bank of Pakistan Ltd.
6. The Bank of Punjab. and pledged in the name of the executive engineer. Clause 50: Refund of security deposit Contractor Executive Engineer/District Officer
(a) The amount retained as security deposits shall not be refunded to the contractor before the expiry of six (6) months in the case of original works valuing upto Rs. 5 million and twelve (12) months or even more as may be determined by the engineer-incharge with the prior approval of the Chief Engineer, in the case of works valuing above Rs. 5 million after the issue of the certificate of completion of the work under clause 40 hereof by the engineer-in-charge provided that in case the contractor is required by the engineer-in-charge to rectify any imperfection, damage, defects of other faults in work, etc. During the period of maintenance, the security deposit shall not be refunded till the contractor has fulfilled his obligations under clauses 43 and 44 thereof to the satisfaction of the engineer-in-charge.
(b) Should the contractor so apply in writing to the engineer -in-charge the amount of security deposit will be refunded to the contractor three (3) months after the issue of certificate of completion of work by the engineer-in-charge under clause 40; subject to the production of bank guarantee from a scheduled bank in Pakistan to the satisfaction of and in the form suitable to the engineer-in-charge for the same amount covering the balance of period of maintenance, to the effect that the contractor shall fulfill his obligations under Clauses 43 and 44 of the contract.
(c)
10. Clause-61 of respondents. Towards the neglected in Subject to the conditions stipulated in sub-clause (a) of this clause, in the case of contracts for maintenance and repair works, the security deposits would be refunded to the contractor after the expiry of three (3) months of the issue of certificate of completion of work by the engineer- incharge."
The appellant has not placed on record a copy of the contract entered between the appellant and the The measurement of the work is one of ,the steps completion of the Project which the appellant has not completing. The instant application moved by the appellant before the learned Civil Judge is aimed at restricting the respondent from making use of the security amount for the completion of the incomplete work. The equity does not exist in favour of the appellant for granting him this relief in view of the fact that the decision incorporated in the letter dated 13.11.2012 duly communicated to the appellant and upheld by the Civil Court would be rendered frustrated in case the use of the security deducted from the payments of the appellant is restrained to be used by the respondents for the completion of the incomplete work. The balance of inconvenience does not lie with the appellant and he does not have any prima facie case in his favour. The learned Civil Judge further held that the appellant will not suffer any irreparable loss keeping in view the previous order passed by the learned Civil Judge on the application of the appellant moved u/s. 41 of Schedule-II read with Order XXXIX, Rules 1 & 2 of CPC. No case is made out for restraining the respondents from making use of the security amount deducted from the payments of the appellant for completion of the incomplete work.
11. The case-law relied upon by the learned counsel for the appellant has no application to the instant case. In the judgment reported as 1995 CLC 1877 some recovery was to be effected through process by making use of the procedure prescribed for the recovery of an amount as arrears of land revenue and in the said judgment it was held that for the purpose of enforcing the recovery through the said procedure determination of the "amount due" is first condition. In the instant case no recovery is to be effected through the process of recovery of arrears of Land Revenue therefore this judgment is of no help to the learned counsel for the appellant. In the judgment reported as 2010 SCM R 524 relied upon by the learned counsel for the appellant the question of encashment of a bank guarantee was involved and the honourable High Court exercised the discretion against the encashment of a bank guarantee in the said case. The honourable Supreme Court of Pakistan although disapproved the course adopted by the High Court yet did not set aside the order passed by the High Court in exercise of its discretionary powers.
The facts and circumstances of the said case are also distinguishable from the facts and circumstances of the instant case. The reported judgment has no relevance and application herein.
12. The F.A.O. Instituted by the appellant has no merits at all and is accordingly dismissed in limine.
F.A.O. Dismissed.