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1997 (2) JLJ 336
S.K. Dubey and Dipak Misra, JJ.
State of M.P. and another v. Engineering Projects (India) Ltd.
C. Revn. No. 820 of 1996; against the award passed by Arbitration Tribunal, Bhopal. in reference No.3 of 1989; Decided on 11.4.1997.
(2) Madhyastham Adhikaran Adhiniyam, 1983 (M.P.) -- S. 19 -- revision under -- award containing findings of facts -- findings neither perverse nor manifestly illegal-- no interference called for in revisional jurisdiction.
[Para 13]
(3) Legal Maxims -- in pari delicto patior est conditio.. possidentis __ doctrine applies in contract which are against public policy -- contract neither illegal nor immoral -- doctrine has no application. [Para 14]
(4) Contract Act, 1872 -- S. 73 Expl. -- principle of mitigating of loss -- does not apply when a party has nothing in his hands. AIR 1955 SC 468 distinguished. [Para 15]
(5) Contract Act, 1872 -- S. 73 -- principle of mitigation of loss -- does not give any right to party who is in breach of the contract -- concept has to be borne in mind by Courts while awarding damages. AIR 1981 SC 162 followed. [Para 15]
(6) Madhyastham Adhikaran Adhiniyam, 1983 (M.P.) -- S. 16 -- "off site" or "head office" expenses -- 4% of the primary cost -- not on higher side. Statutory Arbitration in works contracts by Justice S.K. Chawla page 139 relied on. [Para 16]
(7) Madhyastham Adhikaran Adhiniyam, 1983 (M.P.) -- S. 16 -- award of site expenses or ‘on site, overhead expenses -- 1 % and 3% of prime cost not excessive, [Para 17]
(8) Madhyastham Adhikaran Adhiniyam, 1983 (M.P.) -- S. 16 -- award of compensation on ground of loss of profit -- profit is cost of being in business today and remaining in business tomorrow -- breach not attributable to contractor -- he is entitled to have award on this count. AIR 1984 SC 1703 followed. [Para 18]
(9) Madhyastham Adhikaran Adhiniyam, 1983 (M.P.) -- S. 16 (3) -award of interest -- delay caused not attributable to any party -- delay caused due to non-constitution of tribunal-- interest cannot be awarded for such period.
[Para 19]
(10) Court -- party should not suffer for act of the Court. [Para 19]
¼1½ ek/;~LFke vf/kdj.k vf/kfu;e] 1983 ¼e-iz-½ && /kkjk 16 && dk;Z lafonk && Bsdsnkj dks LFky dk vuU; vkSj vck/k dCtk ugha fn;k x;k && lafonk voS/k :i ls fo[kafMr Hkh dh xbZ && izfrdj dk nkok vkSj ipkV izkIr djus dk gdnkj gSA ¿ iSjk 24À ¼2½ ek/;~LFke vf/kdj.k vf/kfu;e] 1983 ¼e-iz-½ && /kkjk 19 && iqujh{k.k && iapkV esa rF; ds fu"d"kZ u foi;ZLr vkSj u izdVr% voS/k && iqujh{k.k vf/kdkfjrk esa gLr{ksi ugha fd;k tk ldrkA ¿ iSjk 13À ¼3½ fof/kd lw= && ** lenks"k esa] dCtk j[kus okys dh vofLFkfr csgrj gksrh gS** && fl)kar mu lafonkvksa esa ykxw gksrk gS tk yksduhfr ds foijhfr gksrh gS && lafonk] u voS/k vkSj u vuSfrd && fl)kar ykxw ughaA ¿ iSjk 14À ¼4½ lk{; vf/kfu;e] 1872 && /kkjk 73 && Li"Vhdj.k && gkfu ds U;wuhdj.k dk fl)kar && ykxw ugha gksrk tc i{kdkj ds gkFk esa dqN gS gh ughaA , vkb vkj 1955 ,l lh 468 izHksfnrA ¿ iSjk 15À ¼5½ lk{; vf/kfu;e] 1872 && /kkjk 73 && gkfu ds U;wuhdj.k dk fl)kar && ml i{k dks dksbZ vf/kdkj izkIr ugha gksrk ftlus lafonk dk Hkax fd;k gS && uqdlkuh dk vf/kfu.kZ; nsrs le; U;k;ky;ksa dks bl ladYiuk dks /;ku esa j[kuk pkfg,A , vkb vkj 1981 ,l lh 162 vuqlfjrA ¿ iSjk 15À ¼6½ ek/;~LFke vf/kdj.k vf/kfu;e] 1983 ¼e-iz-½ && /kkjk 16 && ** LFky ls nwjh ds** vFkok **iz/kku dk;kZy;** O;; && ewy ykxr d 4 izfr‘kr && Å¡ph vksj ugha gSA U;k- ,l-ds- pkoyk —r **dkaLVªsDl**] i` 139 voyafcrA ¿ iSjk 16À ¼7½ ek/;~LFke vf/kdj.k vf/kfu;e] 1983 ¼e-iz-½ && /kkjk 16 && LFky O;; vFkok **LFky ij** mifjO;; && ewy ykxr dk 1izfr‘kr rFkk 3izfr‘kr vR;f/kd ugha gSA ¿ iSjk 17À ¼8½ ek/;~LFke vf/kdj.k vf/kfu;e] 1983 ¼e-iz-½ && /kkjk 16 && ykHk dh gkfu ds vk/kkj ij izfrdj dk iapkV && ykHk] dkjksckj es vkt fLFkr jgus vkSj dy dk;e jgus dh ykxr gS && Hkax] Bsdsnkj }kjk gqvk ekus tkus ;ksX; ugha && og bl vk/kkj ij iapkV izkIr djus dk gdnkj gSA , vkb vkj 1984 ,l lh 1703 vuqlfjrA ¿ iSjk 18À ¼9½ ek/;~LFke vf/kdj.k vf/kfu;e] 1983 ¼e-iz-½ && /kkjk 16¼3½ && C;kt dk vf/kfu.kZ; && foyac fdlh i{k dh vksj ls gqvk ekus tkus ;ksX; ugha && foyac] vf/kdj.k xfBr ugha gksus ds dkj.k gqvk && ,slh vof/kd ds fy, C;kt vf/kfu.khZr ugha fd;k tk ldrkA ¿ iSjk 19À ¼10½ U;k;ky; && i{kdkj dks U;k;ky; ds dk;Z ds dkj.k gkfu ugha gksuk pkfg,A ¿ iSjk 19À
Dubey, J. -- 1. This is a revision under section 19 of the M.P. Madhyastham Adhikaran Adhiniyam, 1983 (for short 'the Act') against the award dated 7.12.1995, passed in Reference Petition No. 3/89 by M.P. Arbitration Tribunal, Bhopal (the Tribunal).
2. Facts giving rise to this revision are thus: State of M.P., through, the executive Engineer, PWD (B&R), Rewa Division No. II, Rewa entered into an agreement No. 25 of 1986-87 Art. A with the respondent for construction of 800 beded Sanjay Gandhi Memorial Hospital within the campus of S.S. Medical College Rewa. The estimated cost of the work was Rs. 6,78,70,202.00. On the item rate tender of the respondent the contract value of the work was worked out to Rs. 7,04,43,802/-. The stipulated period of completion of work was four years inclusive of rainy season from the date of the work order which was given on 8.2.1987 (Ex. P. 2). The respondent could not at all commence any kind of construction under the contract, therefore, after about one and half years from the date of work order, on 30.7.1988 the Executive Engineer petitioner No.2 vide order Ex. P. 3 rescinded the contract under clause 3 (c) of '\.; contract agreement, took out the work from the hands of the respondent for giving it to another contractor on extra cost to be recoverable from the respondent. The other contractor i.e. Frontier Construction Company of Kanpur also could not complete the work, hence again after taking away from the hands of the aforesaid contractor, the contract was given to third contractor Prakash Wadhwani at Bhopal.
3. The respondent raised a dispute before the Superintending Engineer on 27.9.1988, vide Ex. P. 20, in terms of clause 29 of the agreement. The Superintending Engineer did notgive any decision, therefore, the respondent on 25.1.1989 made a reference by a petition under section 7 of the Act for making an award under section 16 of the Act of various claims total Rs. 1,08,35,858.96 paise detailed in the Schedules annexed with the petition. Summary of claims is thus:
"Claim No. Particulars Amount
1. Compensation for site Rs. 8,44,058.46
office expenses at actuals
2. Compensation for loss of Rs.70,44,780.00
profit @ 10% of contract value.
3. Compensation for depreciation Rs. 6,97,500.00
and maintenance charges.
4. Compensation for marketing/ Rs. 5,28,358.50
tendering expenses @ 75%
5. Compensation for Head Rs. 17,21,162.00
office expenses.
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Total Rs. 1,08,35,858.96
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4. The petitioners denied the claim and averred that inspite of delivery of unhindered possession of the site on 30th December, 1987 and release of three instalments of Mobilisation advance, i.e. Rs. 10 lacs on 22.6.87, Rs. 7.5 lacs on 30.11.87 and Rs. 7.5 lacs on 29.2.1988, the respondent did not commence the work, therefore, a show cause notice Ex. P. 14 dated 18.5.1988 was issued. Thereafter, when the work was not commenced the contract was rescinded vide order dated 30.7.88 Ex. P. 3.
5. From the facts which have come on record it is not in dispute that even when the work order Ex. P. 2 was given on 8.2.87 to the respondent, there existed on the site of the work two G.A.D. quarters, one private house, and a number of small hutments of sweepers. A power transmission line of 11 KV feeding Medical College and Hospital also existed over the land of the work area. There also existed over-hanging telephone lines and pipelines running underground of the site. Demolition of aforesaid structures was undertaken by the petitioner No. 2 after the occupants of those structures were provided with alternative accommodation through the agency of the executive officers. The power line was got shifted through the agency of M.P. Electricity Board, telephone lines through the agency of Telephone Department and pipelines through the agency of Public Health Engineering Department of Govt. of M.P.
6. The case of the respondent was that the possession of unhindered sit
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