1974 (3) TMI 105 - SUPREME COURT

Whether the order of. interim injunction was made by the learned Judge under s. 41 (b) read with the Second Schedule to the Indian Arbitration Act, 1940?

What is required for attracting the applicability of cl. 18 is a mere claim for payment of a sum of money arising out of or under the contract against the contractor and it is not necessary that a sum of money must be actually due and payable from the contractor to the purchaser?

Held that:- The only thing which the appellant,is interdicted from doing is to make recovery of its claim for damages by appropriating such amounts in satisfaction of the claim. 'That is clearly Within the power of the Court under s. 41 (b) because the claim for damages forms the subject matter of the arbitration proceedings and the Court can always say that until such claim, is adjudicated upon, the appellant shall be restrained from recovering it by appropriating other amounts due to the respondent. The order of interim injunction made by the learned Judge cannot, therefore, be said to be outside the scope of his power under s. 41 (b) read with the Second Schedule.

A claim for damages for breach of contract is, therefore, not a claim for a sum presently due and payable and the purchaser is not entitled, in exercise of the right conferred upon it under cl. 18, to recover the amount of such claim by appropriating other sums due to the contractor. Thus the appellant had no right or authority under cl. 18 to appropriate the amounts of other pending bills of the respondent in or towards satisfaction of its claim for damages against the respondent and the learned Judge was justified in issuing an interim Injunction restraining the appellant from doing so. Appeal dismissed.