State cannot recover amounts from contractors without prior adjudication; such actions violate principles of natural justice.

Judgment :

Sanjay K. Agrawal, J.

1. The applicant has preferred this revision under Section 19 of the Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983, (for brevity, “Adhiniyam, 1983”) calling in question legality, validity and correctness of the order dated 16.11.2016 by which his reference has been rejected finding no merit.

2. The aforesaid challenge has been made on the factual backdrop:-

(i) The applicant has executed an agreement with the State Government bearing Agreement No.5/DL of 2002-03, of which the work order was issued to the applicant on 05.04.2002. As per the said agreement, the applicant was required to perform the maintenance work of the road for 3 years i.e. commencing from the date of completion of work and ending on after expiry of three years. The work was completed on 20.06.2002 and the final bill was paid to him. The applicant also said to have executed the maintenance work for complete three years i.e. from 22.06.2002 to 22.06.2005.

(ii) It is the case of the applicant that after period of 4 & ½ years, after expiry of maintenance period, the respondents demanded from him an amount of Rs. 42,56,000/- on the ground of some audit objection raised by the Accountant General of Chhattisgarh. In furtherance of the said demand, the respondents recovered Rs. 7,39,006/- from the security deposit of other contract bearing Agreement No.97/DL of 2008-09, of the petitioner, vide memo dated 30.11.2019. Against which the applicant by invoking Clause 29 of the agreement made a request to the Superintending Engineer to settle the dispute, but the Superintending Engineer rejected the demand, thereafter the applicant preferred an appeal to the Chief Engineer which also came to be dismissed leading to filing of reference petition for refund of Rs. 7,39,006/- along with interest thereon @ 14%, meaning thereby the total amount is Rs. 7,64,871/-

(iii) The respondent-State filed its reply and refuted the claim made by the applicant herein. In the reply it has been stated that though the performance guarantee was refunded, but on 21.01.2004, the respondents asked the applicant to carry out repair works on account of visit of Hon’ble President of India, but the petitioner did not commence and conclude the work and the same was get done through an another agency which caused the respondents a loss of Rs. 42,56,000/- and the same is recoverable from the applicant.

3. After appreciating the oral and documentary evidence available on record, the Chhattisgarh Madhyastham Adhikaran, Raipur (for short, ‘Tribunal’) has dismissed the reference relying upon the Clauses 37 & 39 of the Agreement. Feeling aggrieved and dissatisfied with the aforesaid order of the Tribunal, the applicant preferred the present civil revision under Section 19 of the Adhiniyam, 1983.

4. Mr. Kabir Kalwani, learned counsel for the applicant, would submit that alleged amount which was never adjudicated from the applicant, therefore, the same could not have been recovered from the applicant’s other contract bearing Agreement No.97/DL of 2008-09. To buttress his submission, he would rely upon the decision of the Division Bench of this Court in the matter of M/s. A.K. Construction Company v. The State of M.P. (now Chhattisgarh) and others, [2005 (4) M.P.H.T. 15 (CG)]

5. Mr. R.S. Marhas, learned State counsel, would support the impugned order and submit that that since the applicant did not perform the maintenance and repair work, the amount has rightly been recovered from the applicant and, therefore, the instant civil revision deserves to be dismissed.

6. I have heard learned counsel for the p