KAMALUDDIN ANSARI & CO. versus UNION OF INDIA

Citation: [1983] 3 S.C.R. 607 · Decided: 12-08-1983 · Supreme Court of India · Bench: D.A. DESAI · Disposal: Dismissed

Cited by 2 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

607 
KAMALUD,PIN ANSARI & CO. 
v. 
UNION OF INDIA 
Augus/ 12, 1983 
(D.A. DESAI, V. BALAKRISHNA ERADI AND R. B MISRA, JJ.]. 
Arbitration Act, 1941!-'-cls. (a) and (b) off- 41-Interpretation [of- Court 
has power under cl. (b) to issue interim injunctions only for the purpose .of and in 
relation to the arbitration proceedings before the Court. 
Contracts with Government oflndia-cl.18 of Standard Form of Contract 
-Interpretation of- Whether for fulfilment of a claim for payment of a sum of 
money arising under a contract the Government has power to withhold sum due 
under other contracts ? 
· 
A 
B 
c 
lnterpretation-'Headings' cannot be used ~o give different 'effect to clear 
D 
words in the section. 
~. 
' 
The DGS&D) representing the Government of India, had entered into a 
contract with the appellent firm for supply of some timber. Clause 18 of the 
standard form of contract, uqder the head "Recovery of sums due", provided 
inter alia that whenever any claim for payment of a sum of money arose out of 
or under the contract against the contractor, the purchaser shall be entitled 
to recover such sum by appropriatina: any sum then due or which at any time 
B 
thereafter may become due to the contractor under any other contract with 
the pUrchaSer. Clause 24 thereof provided for arbitration in the event of any 
dispute arising J:>etween the parties. The appellant failed to supply th~ timber. 
The [ GS&D cancelled the contract, made ·risk purchases at extra cost and 
issued notice ca11ing upon the appellant to pay the extra .cost incuried and 
threatening to withhold the amount from the payments due under the pending 
F 
bills of other contracts. The appellant moved a petition under s. 33 of the 
Arbitration Act, 1940 alleging that there was no concluded contract in exis-
tenc.e between the parties, con.taining any arbitration clause and praying for an 
injunction restraining the Union of India frotn appropriating, withhokfins or 
recovering the amount claimed from its other bills. The High Court held that 
under s. 41 of the Act it could only grant an injunction restraining the Union 
-G 
of India from appropriating or recovering the amount of damages claimed 
from the other pending bills of the appellant, and rejetted the prayer for 
grant of injunction restraining the Union of India from witholding payi:uents of 
the other pending bills. 
Dismissing the appeal, 
HELD: I. Clause 18 of the standard form of contract confers ample 
power upon th(( Union, Qf lndia tq \Vithholcl the .._mount and nQ injunction 
B 
A 
8 
c 
D 
E 
F 
608 
SUPll.BME COURT ll.EPORTS 
[1983] 3 s.c.ll.. 
order could ·be passed restraining: the UniCjl of India from withholding tl!ie 
amount. [623 BJ 
(i) The golden rule of c_onstruction is that when the words of a statiite 
are cle~r. plain and unambiguous, that is, they are reasonably susceptible to 
only one meaning, the Courts a·re bound to give effect to that meaning irres .. 
pective of the consequences. 'The dory of a judge_ is to expound and not to 
legislate a is 'rundamental rule. If this principle is applied to the interpretation 
of cl. 18 of the standard form of contract it would be clear that the clause 
unequivoCally contemplates a claim for payment. It does not contemplate 
the amount due and, therefore, the heading of this clause which talks of only 
'Recovery of sums due' will not control cl. 18. Headings cannot be used to 
give a different Cffect to clear words in the section where there cannot be any 
doubt as to the ordinary meaning of the words. The clause gives wide pow:rs 
to the Union of India to recovei: the amount ciaimed by approprialing any 
sum then due or which at af:1.y time ·thereafter may recorne due to thc- contractor 
under other contracts. [620 A-G] 
(li) 
Clau~ 18 was slightly differently worded earlier when it read 
'whenever under this contract any sum of money is recoverable from and pay-
able by the contractor'. _But this formUla was deliberately and advisedly 
altered when the present standard form was introduced by substituting the 
words .~whenever any claim for payment of a sum of money arises' and this 
change in phraseology indicated that in order to attract the applicability.of 
ihe present cl. 18, it was not necessary that there should be a sum of money 
due and payable by the contractor to the purchaser, but it Was enough if there 
was a mere claim on the part of the purchaser for payment of a sum of money 
by the contractor irrespective of the

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