The main legal point established in the judgment is the importance of adhering to the terms of the contract, including the dispute resolution mechanism, and the court's limited revisional powers in interfering with the arbitral award.

ORDER :

The applicant/contractor has filed the present Civil Revision No. 117/2005 and the State of M.P. has filed the present Civil Revision No. 512/2005 under Section 19 of the M.P. Madhyastam Adhikaran Adhiniyam, 1983 against the Award dated 30.08.2003 passed by M.P. Arbitration Adhikaran, Bhopal in Reference Case No. 111/1993. Since both the Civil Revisions arise out of the award dated 30.08.2003 passed by the M.P. Madhyatam Adhikaran, Bhopal hence, both are being decided by this common order.

The facts of the case, in short, are as under:

Facts of the case are being taken from Civil Revision No. 117/2005 for deciding both cases.

1. Shri N.D. Grover is an Engineer and Contractor registered in A-B categories both in The Public work and the Water Resource Department State of M.P. Respondent No. 1 is the Water Resources Department of State of M.P. and respondent No. 2 is Executive Engineer, Water Resources Department Division No. 1.

2. The respondents issued an NIT for work of construction of Malipura Tank, Dhar on 03.11.1988 on an item rate basis. The applicant quoted rates 44.366% below USR. The applicant submitted the bid and vide letter dated 10.04.1989 bid was accepted by Chief Engineer, Narmada Tapti Basin. Thereafter agreement No. 8/T-89-90 was executed for an estimated contract cost of Rs.26,82,302.60. The Executive Engineer issued a work order to the applicant on 01.06.1989 to be completed within 18 months including three months of rainy season i.e. upto 31.05.1991.

3. According to the applicant, he submitted a construction program on 07.10.1989 and started the work as per schedule but the local tribals created a hindrance in the work as the Government did not pay the compensation to their land after acquisition. The applicant was attacked by the villagers led by Gangaram Sarpanch on 08.12.1989, which he reported to the police. According to the applicant, the local villagers are under impression that the land has been acquired by the Government without payment of compensation, and the department did not support him, hence it became impractical for him to give progress.

4. According to the applicant, he applied for advance payment on 14.11.1989 but the sanction was given by S.E. on 28.12.1989 which was the reason for the delay in starting the work.

The running bills were not paid to him within time and due to non-cooperation by respondent No. 2 and his sub-ordinate staff, the progress could not be shown. The applicant executed the puddle trench except for a strip of 10 m length in the month of Feb.1990 itself despite that respondent No. 2 vide letters dated 04.04.1990 and 09.04.1990 threaten him to take up the work of excavation of the puddle trench departmentally under the provisions of Clause 4.3.16 of the General Conditions of Contract-Agreement. According to the applicant, permission for filling the puddle in the trench was not forthcoming so he shifted heavy machinery for working at other sites in the third week of May 1990. Respondent No. 2 had made up his mind to terminate the contract on this petty issue.

5. It is further submitted that respondent No. 2 issued a fresh tender for the balance work vide NIT dated 17.12.1990, even without terminating the existing contract. The notice was issued to the applicant on 13.12.1990 which was replied to vide letter dated 19.12.1990. It appears that the reply was not found satisfactory, therefore, respondent No. 2 vide order dated 18.02.1991 rescinded the contract in exercise of the power conferred under Clause 4.3.3.3 of the agreement. Being aggrieved by the aforesaid action, vide letter dated 08.04.1991 the applicant represented to the Superintending Engineer Water Resources Department that the stipulated date of completion is yet to come on 30.11.1991 and he is in a position to complete the work, however, the Superintending Engineer vide letter dated 29.04.1991 upheld the ac