The central legal point established in the judgment is the interpretation and application of contractual provisions in construction disputes, and the significance of evidence and actions in supporting or challenging contentions.

JUDGMENT

1. This revision under Section 19 of Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 (for short Adhiniyam, 1983) is directed against the award dated 10.4.2001 passed by Madhya Pradesh Arbitration Tribunal, Bhopal (for short Tribunal) in Reference Case No.33/1988.

2. On a dispute arising from an agreement for construction of earthen dam from R.D. 668 M to R.D. 1500 M of Kanhargaon Tank Project, District Chhindwara, non-applicant, viz., Munnalal Pannalal Constructions filed a reference under Section 7 of the Adhiniyam, 1983 before the Tribunal.

3. Out of seven claims, the Tribunal allowed Claim No.4, based on construction of rock toe consisting of Item No.3 and 3(a) and Claim No. 7 for price escalation.

4. As per non-applicant, the rate of work has been mentioned as Rs.60/- per cubic metre for construction of rock toe. Nonapplicant has reduced the rate of 9th and 10th running bill from Rs.60/- per cubic metre to Rs.39.69/- per cubic metre. Similarly, 13th to 16th running bills were also reduced from Rs.60/- to Rs.39.69/- per cubic metre. Non-applicant has challenged this reduction as arbitrary. Tribunal has allowed Claim No. 4 and held that non-applicant is entitled to get a sum of Rs.1,57,553/- under the head of Claim No.4.

5. Under the head of Claim No. 7, non-applicant has claimed that extension of time has been granted to them without any penalty, therefore, applicants cannot deny escalation of price.

Learned Tribunal has allowed the Claim No.7 of non-applicant and held that they are entitled to get a sum of Rs.46,017.50/- under Claim No.7.

6. As to Claim No. 4, the Tribunal found that the work executed by the Contractor in respect of Item No. 3 and 3(a) of Schedule G was in accordance with the terms of agreement and there was no justification for the employer to have reduced the rate of work. The Tribunal, accordingly, awarded sum of Rs. 1,57,553/- towards Claim No.4.

7. As to Claim No.7, Tribunal found the Contractor entitled for the escalation for extended period attributed to the employer.

8. Applicants have challenged the award passed by the Tribunal before this Court. It is contended that:--

(i). Tribunal failed to take into consideration General Condition-6, and 18(b). As per the said Clause, applicants can reduce the rate from Rs.60/- m to Rs.39.69/- m, as stones used in the contract are not quarried but were picked up.

(ii) Learned Tribunal failed to consider that number of warnings were given to the petitioner, thereafter, decision was taken to reduce the rates as petitioner continued to use picked up stones for contract work.

(iii) Non-applicant was himself responsible for not completing the work within stipulated time. He cannot take advantage of the same for getting escalation of price.

(iv) The amount of unfinished work was more than Rs. 60 lakhs, therefore, Superintending Engineer, who is subordinate to Chief Engineer cannot decide the issue as same is beyond his pecuniary jurisdiction, hence, it was Chief Engineer who exercised the power for extension of time. In view of above, order has rightly been passed by Chief Engineer and it cannot be said to be without jurisdiction.

(v) Non-applicants themselves admitted that there will be no escalation of price and they also received final bills, therefore, escalation of price was wrongly allowed by the Tribunal.

9. The non-applicant, however, opposes the contentions and supports the reasons given given by the Tribunal in allowing Claim No. 4 and 7.

10. Considered rival submissions and perused the record.

11. As to contention (i) :-- General Condition 6 and 18(b) provides that Engineer-in-Charge may reject at any stage the work which he considers to be defective in quality and shall not be debarred from rejecting materials not in accordance with contract by reason of his having previously passed them in an unworked condition. Any portion of the work or materials rejected shall be removed from the work site at the contractors expense, upon written instruc