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2015 Supreme(MP) 109

MADHYA PRADESH HIGH COURT
RAJENDRA MENON and C. V. SIRPURKAR, JJ.
C. E. C. Ltd. – Appellant
vs
State of M. P. & others – Respondents
Civil Revision No. 80 of 2004
Decided On : 20/02/2015

The main legal point established was that the claim was not time-barred and the Tribunal's rejection of the claims on merits was arbitrary, leading to the direction for reconsideration of the claims.

Headnote:

Adhiniyam of 1983 - Construction Contract Dispute - S. 19

Fact of the Case:

The petitioner filed a revision petition under S. 19 of the Madhya Pradesh Madhyastham Adhiniyam, 1983, challenging an award by the M.P. Arbitration Tribunal. The dispute arose from a construction contract for a dam project, with the petitioner claiming illegal termination of the contract and non-settlement of their claims by the respondents.

Finding of the Court:

The court found that the claim was not time-barred as the cause of action accrued when the contract was terminated on 31-3-1989, and the reference was made within the three-year limitation period. The court also held that the Tribunal's rejection of the claim on merits was arbitrary and unsustainable.

Issues: The main issues were the timeliness of the claim and the merit of the petitioner's claims for compensation and damages.

Ratio Decidendi: The court held that the claim was within the limitation period and directed the Tribunal to reconsider the petitioner's claims in accordance with the law, as the Tribunal had rejected the claims without proper consideration of the evidence.

Final Decision: The revision was partly allowed, quashing the finding of time-bar and directing the Tribunal to reconsider the petitioner's claims within six months.

JUDGMENT :

” This revision petition has been filed by the petitioner under S. 19 of the Madhya Pradesh Madhyastham Adhiniyam, 1983 being aggrieved by an award dated 29th October, 2003 passed by the M.P. Arbitration Tribunal, Bhopal, in a proceeding held under the M.P. Madhyas-tham Adhiniyam, 1983 (hereinafter refer to as ' the Adhiniyam of 1983' ).

2. Facts in brief which are necessary for deciding the issue in question goes to show that the State Government issued a notice inviting tender for the purpose of constructing right and left rockfill dam in the Ban Sagar Project, District Shahdol. Petitioner submitted their offer for both the right and left rockfill dam. Petitioner” s tender was accepted and a contract was given to the petitioner for the purpose of right rockfill dam. The contract for left rockfill dam was given to M/s. Bihar State Construction Corporation. An agreement was entered into between the petitioner and respondent No. 4 on 3-10-1983 and the agreement stipulated conclusion of the work within three calender years excluding rainy season. As per the agreement, petitioner was required to do the following :”

(i) Excavation by wedging and barring for final founding grades/seats of the Dam.

(ii) Balance excavation of cut off trench (COT) and its back filling.

(iii) All filters in the down stream seat and around the Central Earth Core.

The total value of the contract was Rs. 6.93 crores. The work order was issued on 3-10-1983. Petitioner commenced the work on 18-10-1983 and as per the agreement the work was to be completed on or before 15-6-1986. However, the fact remains that due to various reasons the time limit for conclusion of the work was extended from time to time and the records do indicate that final extension granted to the petitioner for conclusion of the work was up to 31-3-1989.

3. However, it is the case of the petitioner that from the very inception the department failed to discharge its obligation under the agreement and, therefore, petitioner was handicapped in completing the work within the scheduled period. Some of the allegations made by the petitioner against the department which resulted in non-conclusion of the work are detailed by the Arbitration Tribunal in para 5 of its award and, therefore, for the present it is not necessary to go into the same in detail.

4. Based on the work concluded and the dispute between the parties, petitioner raised various claims categorised as Claim ' A” to ' P” , details of these claims are as under :”

(Tabullar Matter Is Omitted......Ed)

5. The petitioner submitted that there has been an illegal termination of contract, the petitioner was not permitted to work after 31-3-1989 and as the respondents have not settled the claim of the petitioner in accordance to the work done by the petitioner, he was entitled to a total sum of Rs. 6,60,18,905/- as detailed herein above.

6. When repeated representations and approach to the department failed, a reference was made by the petitioner under S. 7 of the Adhiniyam of 1983 before the Arbitration Tribunal. The department filed a detailed reply and challenged the action of the petitioner and came out with a case that the petitioner was responsible for the delay, he was not willing to work and in fact, after 31-3-1989, left the work and did not do work. As a result it was stated that he is not entitled for any benefit. However, a serious objection was raised by the department to say that the claim of the petitioner was rejected by the Superintendent Engineer on 15-4-1988 vide Exhibit P-55 and Exhibit D-14 and as the reference made under S. 7 was after a period of three years i.e. on 22-4-1991, the reference was not maintainable, it was barred by time-barred. A preliminary objection in this regard was raised apart from raising various grounds on meit to say that the claim is not maintainable.

7. The Tribunal formulated certain questions and the first question which fell for consideration before the Tribunal was as to whether the claim





























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