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1993 JLJ 423
D.M. Dharmadhikari and M.V. Tamaskar, JJ.
P.C. Rajput v. State Government of M.P. and others
Civil Revn. No. 474 of 1988; Decided on 22.7.1992.
(2) Arbitration -- there must be a difference for arbitration -- if there is none nothing is to be arbitrated -- arbitrator‘s jurisdiction does not arise until a dispute has arisen. Russoll on Arbitration 19th Edn. P. 55 relied on. [Para 17
(3) Madhyastham Adhikaran Adhiniyam, 1983 (M.P.) -- S. 7 -- reference under -- may be made even without raising dispute to the authorities concerned -- absence of denial may be presumed when there is a reference to the Tribunal.
There may be different circumstances and even if a dispute has been raised, there may not be denial or refusal. In such circumstances, the view of the Tribunal cannot be accepted that it cannot entertain the dispute at all. If the Tribunal entertains a dispute then it cannot shut out the claimant on the ground that it has not approached the authorities and, therefore, the claim is not entertain able. The Tribunal may well consider whether to entertain the reference petition in respect of such cases and decide at the threshold the question and direct the claimant to approach the authorities under the agreement but cannot throw the claim altogether. True it is that the dispute arises only when there is assertion and denial as understood under the arbitration proceedings. Absence of denial when there has been an approach should be presumed to raise a dispute entertain-able by the Tribunal. [Para 25 .
(4) Madhyastham Adhikaran Adhiniyam, 1983 (M.P.) -- Ss. 7-A and 7-B -- whole claim should be included as it exists on the date of reference -- claim not made before the final authority under the agreement -- cannot be entertained by the Tribunal. .
Section 7-A speaks about the inclusion of whole claims on the date of making a reference petition, while S. 7-B is of great importance to construe the meaning of the word ‘dispute‘. S. 7-B of the Act states that the decision in respect of a dispute under the terms of agreement for the works contract by the final authority under the agreement has to be given and from the date of his decision the reference is to be made within one year from the date of communication. [Para 27
It has been a settled view that unless there is a difference there cannot be any dispute. 1973 JLJ 695 relied on. Ref. No. 84/87 approved. [Paras 27, 29 & 30
(5) Contract -- escalation clause deleted -- contract executory - - contractor not entitled to extra claim on account of escalation. 1988 JLJ 343 (SC) followed.
[Para 42
(6) Contract -- ‘‘fundamental breach" -- is a breach of fundamental term of a contract -- it forms "core" of the contract -- to be gethered from intention of the parties -- results in giving rise to a claim to opposite party, Anson‘s Law of Contract, 23rd Edn. P. 163, (1964) 1 Lloyd‘s Rep. 446, (1967) 1 AC 361 and (1976) 1 All E.R. 225 relied on. [Para 31
M. V. Tamaskar, J. -- 1. This revision shall also govern the disposal of Civil Revision No. 481 of 1988 (State Govt. of Madhya Pradesh v. P.C. Rajput).
2-3. The applicant/claimant had entered into a contract with the State Govt of Madhya Pradesh on 26.10.1983 for construction of masonry structures on the right bank of the main canal of Kolar Project in Kms. 6 to 11 including the gap filling in masonry structures. The work also included construction of five road bridges. The work was to be completed by 26.10.1984. The period of contract was 12 months.
4. The work order was issued on 27.10.1983. After the completion of twelve months i.e. 26.10.1984 the same was extended on request of the claimant/applicant and remained in operation till 29 months up to 28.6.86. However, the contract was terminated on 28.3.86 on the refusal of the applicant/contractor to execute the work vide Ex. P-3. The construction cost of masonry structure of B.B.M.C. of Kolar Project in Kms. 6 to 11 including the gap filling was estimated at Rs. 6.20 lakhs and cost of construction of earth work of B.B.M. C. Kolar Project Kms. 11 to 16 was estimated at Rs. 7.93lakhs.
5. The claimant raised the following disputes in reference petition:
(1) The respondents did not fulfil the reciprocal promises which were stipulated as per the terms of the contract/agreement. The work as such could not be started by the applicant for about six months.
(2) The complete work site was not handed over.
(3) The quarries for stone and sand were. not made available.
(4) Steel and cement were not supplied regularly at work site.
(5) Revised drawings and designs were not given in time.
(6) Payment of running bills and grant of secured advances were not prompt.
(7) Difficulties and problems which cropped up from time to time in the execution of the work were not resolved by the respondents, taking active steps.
(8) The user of canal road was obstructed.
(9) Approach roads were not built promptly.
(10) Rates for extra items were not settled and
(11) Various hindrances and bottlenecks were placed by the department.
As such on the following seven counts the claim was filed before the Arbitration Tribunal at Bhopal.
(1) Overhead expenses and loss of profit. 3,62,500-00
(2) Escalation in wages, costs of ma trial etc. 40,000-00
(3) Idling of labour etc. 38,450-00
(4) Excess recovery of interest 6,650-00
on mobilisation advances.
(5) Final bill amounting to : 1,55,000-00
(6) Refund of security deposits & 23,976-00
other amounts withheld, and .
(7) Interest antelite. 23,424-00
Total Rs. 6,50,000-00
The department on the other hand submitted that the department was not responsible for any breach of reciprocal promises. That contractor right from the beginning acted in a careless, negligent and unbusiness like manner. He had neither an engineer nor a site officer nor did he care to attend the pre-tender conference nor did he take any steps to make an inspection of sites before start of work. It was obligatory on the part of the contractor to make himself aware of the contract conditions and existing quarries, sites, roads, culverts etc.
6. It was also submitted by the department that the applicant did not submit construction programme nor he adhered to any systematic work plan in order to give positive results in respect of the execution of the contract in question. He was paid running bills regularly. He did not make any indents of steel. The applicant even though responsible for construction of the approach roads, did not take any steps in the matter. Despite several reminders the applicant did not resume the work and as such the contract had to be terminated vide Ex. P-3 dated 28.3.86 and a recovery of Rs. 1,13,568.96 ordered.
7. The Tribunal after recording the evidence and hearing both the parties returned the following findings:
(1) That the entire work site was in black cotton area in which no work of excavation etc. was possible during four months of rainy season.
(2) The work site was
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