IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR BEFORE HON'BLE SHRI JUSTICE VIVEK RUSIA &

HON'BLE SHRI JUSTICE PRADEEP MITTAL

th

ON THE 10 OF DECEMBER, 2025 CIVIL REVISION No. 1105 of 2002 THE STATE OF M.P.

Versus M/S FERRO CONCRETE CO LTD Appearance:

Shri Abhijeet Awasthi - Deputy Advocate General for petitioner.

Shri Manoj Kumar Sharma with Shri Prajas Bhatti - Advocate for respondent.

ORDER Per: Justice Pradeep Mittal This Civil Revision under Section 19 of the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 is directed against the award dated 21.12.1998 passed by the Madhya Pradesh Arbitration Tribunal, Bhopal, in Reference Case No. 92/1991, whereby Tribunal has awarded amount of Rs.75,746/- against the claim to @ tune Rs. 3,88,744 under the head of overhead expenses and loss of profits, refund of Security Deposit amount Rs. 21275/- with interest @ 12% p.a. on the amount of final bill from 01.03.1990 to 31.03.1990 amounting Rs.2677/-, interest on the amount of Security Deposit @ 12% p.a. from 01.03.1990 to 31.03.1990 amounting. Rs. 213/ total amount of 1,0,4,911/- along with pendente-lite interest from

22.04.1991 to 20.08.1991 on the amount of final bill of Rs. 2,67,744/- amounting to Rs.10,709/- and pendente-lite and post-lite interest on the amount of Security from 22.4.91 till the date of payment.

2. The respondent–contractor submitted a tender for Work Contract Agreement No. 64/DL/1988-89 relating to the balance work of drilling and grouting from RD 1410 M and 660 M in the Kanhargaon Project Division, District Chhindwara (M.P.). The tender of the respondent having been accepted, work order was issued on 13.03.1989. As per the terms of agreement, the time stipulated for completion of the work was five months, and the scheduled date of completion was 12.08.1989. As the work could not be completed within the stipulated period, the department granted an extension up to 25.10.1989, and further extended the time up to 25.11.1989. However, according to departmental records, the contractor abandoned the work on 11.11.1989. After a long interval, on 20.08.1991, the respondent applied seeking extension of time up to 28.02.1992 for completion of the remaining work. The Executive Engineer forwarded the said request to the Superintending Engineer on 21.08.1991 with his recommendation. On 23.08.1991, the Superintending Engineer granted extension up to 28.02.1992, but specifically clarified that the escalation clause would not be applicable. Thereafter, on 10.09.1991, the contractor addressed a communication to the Executive Engineer requesting that the escalation clause be made applicable, stating that otherwise he would be unable to complete the work. The Superintending Engineer, by letter dated 25.09.1991, informed the contractor that the escalation clause could not be applied, as no such prayer was made in his original application for extension. Subsequently, on 23.12.1991, the Executive Engineer issued a notice to the contractor directing him to commence the work immediately, failing which the work would be withdrawn under Clause 45 and 46 of the agreement.

3. The case of the respondent–contractor before the Tribunal was that the entire site was never handed over by the department, despite repeated requests, and therefore the contractor had sought extension only because the department failed in fulfilling its reciprocal obligations under the contract. It was contended that due to non-availability of the work site and lack of directions from the department, there was substantial delay which resulted in loss of profit, idling of machinery and manpower, and overhead expenses. The department, on the other hand, contested the claim, asserting that the contractor himself was responsible for delay. It was submitted that the contractor was simultaneously executing another work (Contract No. 60/DL) in the same division and did not possess adequate machinery to complete both contracts. It was further argued that after the contractor had aban