Johnson John, J
1. The appellants are the plaintiffs in a suit for realization of money.
2. The appeal is filed challenging the rejection of the plaint as per Order VII Rule 11(d) of the Code of Civil Procedure, 1908. The defendant
â€"Contractor was engaged by the plaintiffs for execution of certain works under the Kallada Irrigation Project. But, the defendant abandoned the
work after receiving the part bills and materials. Hence, the plaintiffs terminated the contract and initiated revenue recovery proceedings to realize the
difference in the rearrangement of the work and the cost of the materials. The contract contained an arbitration clause. The revenue recovery
proceedings were challenged before this Court by the Contractor and as per the judgment in W.A No. 2116 of 2000, it was ordered that the revenue
recovery proceedings shall continue only after finalisation of arbitration proceedings. The State had in the meantime enacted the Kerala Revocation of
Arbitration Clauses and Reopening of Awards Act, 1998 (‘Act, 1998’ for short) nullifying all arbitration clauses and awards in Government
contracts. The validity of the Act, 1998 was challenged before this Court. This Court declared the Act, 1998 to be unconstitutional. Thereafter, the
Honourable Supreme Court stayed the said order. But, subsequently, the Honourable Supreme Court upheld the judgment of this Court that the Act,
1998 is unconstitutional. The plaintiffs had filed the suit when the Honourable Supreme Court stayed the order of this Court declaring the Act,1998 as
unconstitutional.
3. Heard the learned Special Government Pleader appearing for the appellants and the learned counsel for the respondent.
4. The points that arise for determination are the following:
1. Whether the rejction of the plaint as per Order VII Rule 11(d) CPC is legally sustainable?
2. Whether the order directing the plaintiffs to pay cost to the defendant warrants any interference?
Point No.1:
5. It is not in dispute that the Honourable Supreme Court upheld the judgment of this Court declaring the Act, 1998 to be unconstitutional. It is also not
in dispute that the contract between the plaintiffs and the defendant contained an arbitration clause. It is in evidence that the plaintiff appointed
arbitrators in view of the judgment in W.A No. 2116 of 2000 and since Act, 1998 is already declared as unconstitutional, the plaintiffs can only
proceed with the arbitration proceedings as directed by this Court in W.A. No. 2116 of 2000. In that circumstance, we find no illegality in rejecting the
plaint as per Order VII Rule 11(d) CPC by the trial court. The point is answered against the appellant.
Point No.2:
6. The learned counsel for the appellant pointed out that the trial court, apart from rejecting the plaint, also ordered that the defendant is entitled to the
cost of the suit and that part of the decree is liable to be set aside, as the plaintiffs instituted the suit during the period when the Honourable Supreme
Court stayed the order of this Court regarding the unconstitutionality of the Act, 1998.
7. Considering the facts and circumstance of the case, it cannot be held that the plaintiffs made any frivolous claim or instituted any vexatious
proceedings without bona fides. Therefore, we find that the order in the impugned judgment directing the plaintiffs to pay the cost of the suit to the
defendant can be set aside and the parties can be directed to bear their respective costs, and we do so.
The appeal is disposed as above.
