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

HON'BLE SHRI JUSTICE PRADEEP MITTAL

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ON THE 18 OF FEBRUARY, 2026 CIVIL REVISION No. 668 of 2003 M/S AJAY CONSTRUCTION COMPANY Versus STATE OF M.P. & ANR Appearance:

Senior Advocate Manoj Kumar Sharma appeared for the petitioner.

Shrunkhla Durrekar appeared for petitioner.

Ritwik Parashar Ga appeared for respondent.

ORDER Per: Justice Pradeep Mittal This Civil Revision, filed under Section 19 of the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983, is directed against the award dated 27.07.2000 passed by the Madhya Pradesh Arbitration Tribunal, Bhopal, in Reference Case No. 30/1990 whereby claim of the petitioner has been rejected and counter claim of respondent has been allowed.

2. The basic facts relating to the execution of the contract work, the terms and conditions of the agreement, the period of execution, and the disputes which arose between the parties have been elaborately discussed by the learned Tribunal in the impugned award. Since the said factual matrix is not in dispute between the parties, and no serious challenge has been raised with regard to the narration of facts as recorded by the Tribunal, the same are not being reiterated herein for the sake of brevity. Suffice it to say that the present revision is confined primarily to the legality, correctness, and propriety of the conclusions drawn by the Tribunal on the claims and counter-claims.

3. By way of reference, the petitioner had raised claims amounting to Rs.

3,10,206/- under various heads as detailed in the statement of claim. However, the learned Tribunal, after appreciation of evidence, rejected the entire claim of the petitioner. On the other hand, the counter-claim preferred by the respondents was allowed to the extent of Rs. 3,89,182.42, along with a direction to pay interest at the rate of 12% per annum from 20.02.1991, being the date of filing of the counter- claim, till actual realization. The said rejection of the petitioner’s claim and allowance of the respondents’ counter-claim, particularly the grant of interest, is assailed in the present civil revision on the grounds stated hereinbelow.

4. Learned counsel for the petitioner submits that, in the facts and circumstances of the case, the impugned award is vitiated by patent illegality, jurisdictional error, and material irregularity, rendering it unsustainable in law. It is contended that the present case is a classic example of the learned Tribunal having exercised a jurisdiction not vested in it by law.

5. It is further submitted that a bare perusal of the provisions contained under Section 7-B of the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983, clearly demonstrates that the Tribunal is expressly prohibited from admitting a reference unless the concerned party has first exhausted the remedy of approaching the final authority as provided under the agreement. In the present case, the mandatory requirement of Section 7-B has been grossly violated, thereby striking at the very root of the Tribunal’s jurisdiction.

6. It is further submitted that the Act does not contemplate or provide for the filing or entertainment of a counter-claim, and therefore, the counter-claim preferred by the respondents could not have been entertained by the Tribunal. At the highest, the petitioner’s claim could have been dismissed on merits; however, in the absence of any statutory provision enabling a counter-claim, the petitioner could not have been saddled with a substantial monetary liability by allowing such counter-claim.

7. Without prejudice to the aforesaid submissions, and assuming for the sake of argument, though without conceding, that a counter-claim is maintainable under the Act, it is submitted that such counter-claim is equally subject to the rigours of Section 7-B. Admittedly, the respondents never referred their alleged claims to the final authority under the agreement, and therefore, the counter-claim could not