Bihar Industrial Area Development Authority & Ors v. Rama Kant Singh

Case Number: Civil Appeal No. 2030 of 2022 [arising Out of Slp (Civil) No. 4843 of 2022] [diary No. 41870 of 2019]

Judges Name: Hon’ble Judges Ajay Rastogi J, Abhay S. Oka J

Order dated: 15.03.2022

Facts of the case:

  • This is an appeal preferred by Bihar Industrial Area Development Authority (Appellant No.1) against Rama Kant Singh (Respondent). The Appellant No.1 is constituted under the Bihar Industrial Area Development Act, 1974 floated a tender and Respondent’s bid was accepted. An agreement between the parties was executed on 15.12.2007 which was terminated by the Appellant No.1. The Tribunal under the Bihar Public Works Contracts Disputes Arbitration Tribunal Act, 2008 (Act), was constituted to hear disputes between parties to a works contract. Disputes must be referred to the Tribunal under the Act, within 1 year from the date on which they arose, irrespective of whether there is an arbitration clause in the contract. The dispute regarding termination arose in 2010 but was referred in 2013. The learned Tribunal passed an award dated 15.09.2014 in favour of the Respondent and held that Article 137 of the Limitation Act, 1963 was applicable. Therefore, the reference is within time. A revision petition was filed by the Appellants before the Hon’ble High Court which held that Article 137 of the Limitation Act, 1963 was applicable and dismissed the revision petition. Thus, the Appellants have approached the Hon’ble Supreme Court.

Supreme Court observed/held as follows:

  • The Appellant argued that the reference to the learned Tribunal was to be made within one year from the date on which dispute arisen. The dispute arose on 08.06.2010. But reference was made only on 21.05.2013. Article 137 of the Limitation Act, 1963 does not apply in this case as the Act is a local law and grant of interest is illegal.
  • The Respondent argued that the learned Tribunal has powers under Section 18 of the Act to condone the delay and there was no clause in the agreement for the forfeiture of the earnest money and security deposit.
  • On the point of limitation, it was observed by the Court that the Hon’ble High Court recorded that the finding that a representation made by the Respondent against the order of termination of the agreement was kept pending for a long time and was not decided.
  • It was observed that the learned Tribunal held that there is no provision in the agreement to forfeit the earnest money and security deposit and Hon’ble High Court rightly found that scope to interfere in revisional jurisdiction is narrow.
  • The Court directed the Appellant to pay principal amount only and in case of failure to pay so within 3 months, interest will be payable by the Appellant at the rate of 10% per annum on the principal amounts set out in the award with effect from 21.03.2013.

The Hon’ble Supreme Court partly allowed the appeal.


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