2019 Supreme(MP) 481
IN THE HIGH COURT OF MADHYA PRADESH AT GWALIOR
Sanjay Yadav, Vivek Agarwal, JJ.
State of M.P. And Others Petitioners
Versus
Sew Construction Ltd. Respondent
Arb. Rev. No. 4 of 2009
Decided On : 03-05-02019
For the Petitioner:Pratip Visoriya, Government Advocate
For the Respondent: V. R. Rao, Senior Counsel with Nitin Agrawal
Headnote:
Arbitration Revision - Interpretation of Contract Clause - M.P. Madhyastham Adhikaran Adhiniyam 1983, Section 7-B - Summary of Acts and Sections: The court discussed the interpretation of clause 3.11(A) of the agreement, the provisions contained in section 7-B of the M. P. Madhyastham Adhikaran Adhiniyam 1983, and the legal principles under section 70 of the Indian Contract Act. The court highlighted the importance of the employer's sanction for variation clauses and the entitlement of the contractor to compensation for such variations.
Fact of the Case:
The State of Madhya Pradesh filed an Arbitration Revision against an award passed in a reference case by the M.P. Arbitration Tribunal. The dispute arose from the contractor's claim for extra payment for bringing sand from a distant lead, which was permitted by the Superintending Engineer due to circumstances beyond the contractor's control. The State argued that the claim was time-barred and that the interpretation of the contract clauses by the Tribunal was arbitrary.
Finding of the Court:
The court found that the reference petition was within the prescribed period of limitation as stipulated in section 7-B of the M. P. Madhyastham Adhikaran Adhiniyam 1983. It also held that the plea of res judicata did not apply as there were two distinct causes of action. The court upheld the contractor's claim for compensation for the extra lead, as it was sanctioned by the Superintending Engineer and was in the interest of the work. The court dismissed the Arbitration Revision, stating that there was no illegality or arbitrariness in the impugned award.
Issues: The issues revolved around the interpretation of contract clauses, the applicability of limitation periods, the plea of res judicata, and the entitlement of the contractor to compensation for variations sanctioned by the employer.
Ratio Decidendi: The court's decision was based on the interpretation of the contract clauses, the provisions contained in section 7-B of the M. P. Madhyastham Adhikaran Adhiniyam 1983, and the legal principles under section 70 of the Indian Contract Act. The court emphasized the importance of the employer's sanction for variation clauses and the entitlement of the contractor to compensation for such variations.
Final Decision: The Arbitration Revision was dismissed, and the parties were directed to bear their own costs.
ORDER :
VIVEK AGARWAL, J.
State of Madhya Pradesh through its instrumentalities has filed this Arbitration Revision being aggrieved by award dated 26-11-2008 passed in Reference Case No. 6/08 by M. P. Arbitration Tribunal, Vindhyachal Bhawan, Bhopal, in the case of M/s S.E.W. Construction Ltd. vs. State of M. P. (Water Resources Department), whereby on the ground of expenditure incurred by the respondent in bringing sand from Mahuar river as per the terms and conditions of sanction granted by the Superintending Engineer in terms of the provisions contained in clause 3.11(A), Reference Case has been allowed and Arbitration Tribunal has directed to pay such difference amount on account of cost incurred by the contractor in bringing sand for the purpose of construction from a distant lead along with interest at the rate of 9% from the date of filing of the reference petition.
2. Learned counsel for the State submits that State had issued tender notice No. 1/1992-93 for the construction of Masonry Dam from RD 80M to 543M of Madikhed Dam. The tender of the respondent/contractor was accepted on 6-11- 1993 for an amount of Rs. 1,22,81,86,600/-. Thereafter a contract was entered into between the parties and as per para 4.3.29.2 of the agreement for any kind of dispute, the respondent was to first approach petitioner No. 3 and in terms of such clause respondent/Contractor submitted an application dated 10-11-2006 raising claims for extra payment and same was rejected vide memo dated 14-12-2006. It is submitted that though the limitation for preferring his claim was 28 days as per the agreement, but the respondent approached the Tribunal on 10-12- 2007, thus, the entire claim of the contractor is time barred.
3. It is also submitted by learned counsel for the State that whole controversy hinges on interpretation of clause 3.11(A) which reads as under :-
“3.11(A) The quoted rates of the contractor shall be inclusive of the leads and lifts and in no case separate payment for leads or lifts to any materials including water shall be payable. Similarly no leads or lifts for the materials issued by the department as prescribed in the tender documents shall be payable. The contractor shall bring approved quality of materials. Different quarries are shown in Annexure C. The details shown in the Annexure C are only as a guide to the contractor but the contractor before tendering should satisfy himself regarding the quantity and quality available and all other details of Annexure C and provide for any variation in respect of leads, lifts, place and method of quarrying, type of rocks to be quarried and all such other aspects in his tendered rate. Later on any claim whatsoever shall not entertained except where any quarry is changed for circumstance beyond the control of contract under the written order of Superintending Engineer in-charge of work.”
4. Thus, placing reliance on clause 3.11(A) of the agreement, it is submitted that the details of different quarries are shown in Annexure C which are to be used only as a guide. The claimant/contractor had entered into contract with open eyes after satisfying himself and had accepted the quarry. Therefore, plea of the contractor in his reference petition that as lot of water had flown through the Nala in past rainy season eroding the sand quarries necessitating the contractor to approach the competent authority in terms of the clause 3.11(A) with a request to transport sand from Mahuar river quarry (Chandrapetha) and demanding extra expenditure incurred in extra lead in transportation of sand could not have been permitted by the Arbitration Tribunal. It is submitted that learned Tribunal erred in shifting the entire burden on the State for such extra lead having failed to appreciate the fact that principle of pari materia is attracted because the terms and conditions of the contract agreement and other