The main legal point established in the judgment is the entitlement to claim compensation for fundamental breach of contract and the impact of the acceptance of performance on the interpretation of contract clauses.

( 1 ) IN this Civil Revision preferred under Section 19 of the M. P. Madhyastham Adhikaran Act, 1983 (for brevity "the Act") the State of M. P. and its functionaries have called in question the pregnability and penetrability of the award passed by the M. P. Arbitration Tribunal (in short 'the Tribunal') in reference case of 55 / 91 where by the respondents has been awarded a sum of Rs. 91,306/- and interest @12% p. a. on the sum of Rs. 51,300/- from the date of award till the realization of the amount.

( 2 ) THE respondent entered into a contract vide agreement No. 5 of 1979-80 dated 22-2-1980 for construction of R. C. C. Box for C. D. work at Ch. 134 of Pipariya Branch canal along with Nallah training. The estimated cost of the tender was 2 lacs and tender costs of the works contract was 2. 90 lacs. The period stipulated for completion of the contract was six months, including rainy season. The work order was issued on 22-2-1980 as per Exhibit P-1. Hence, the stipulated date for completion was 21-8-1980.

( 3 ) AFTER receiving the work order the respondent contractor mobilised his resources, engaged sufficient labourers and started excavation of the foundation of the cross-drainage work. Vide letter dated 18-3-1980, exhibit P-2, he informed the Executive Engineer that the foundation is likely to be ready by 25-3-1980 and therefore 1000 bags of cement and approximately 28 MT of steel be issued to him, but the respondents failed to supply quantity of steel till the expiry of the contract period i. e. 20-8-1980. Correspondences were made by the contractor that as the cement and steel were not supplied to him and he was incurring additional costs for which department would be liable to compensate him as market prices for the aforesaid articles were getting escalated day by day as a consequence of which he had been sustaining heavy loss. On 10-12-1980 the Executive Engineer as per his letter Exhibit P-5 informed the petitioner to take delivery of the steel for bottom raft and walls and steel for slab will be arranged after the consumption of the steel. The contractor informed the Executive Engineer vide p-6 dated 15-1-1981 that the S. D. O. had not stocks of 10 MM/12mm bars required for bottom raft and wall stirrups and he has only stocks of 16mm/18mm bars which would not be used without stirrups. While asking for second extension as per 25-3-1981 the petitioner informed that the work at standstill from June, 1980 for want of M. S. Bars and if the steel was supplied immediately he would be able to complete the work by 30-6 1981. Only fifteen days before the Monsoon of the year 1981 steel was supplied to him. He had also stated that the work was likely 10 be complete by 15-1-1982 and prayed for extension as per letter No. 4-2-1982, exhibit P-9. The petitioner also informed that due to opening of canal in Nov. 81, earth work on canal banks would not be done. Thereafter, he withdrew his labourer and asked the department to take measurement of the work clone and excluding the earth work and prepared the final bill.

( 4 ) BEFORE the Tribunal claimant /respondents put forth eight claims claiming a sum of Rs. 2,01,613. 00. He also stated that due to prolongation of contract for 17 months he had suffered damage in the form of additional establishment expenditure, loss of earning, idle wage and price rise. He had submitted claim to the Executive Engineer, with copy to the Superintending Engineer as per Exhibit P-10 dated 5-2-1982. The executive Engineer rejected his claim on the ground of Clause 2. 1. 22 of the agreement. The Superintending Engineer addressed to the objection raised by the petitioner and vide Exhibit P-13 rejected his claim. However, request was also negatived. Thereafter, the petitioner submitted an application on 16-10-1984 vide Annexure P-24 before the Secretary, Irrigation Department, Bhopal for referring the dispute to Arbitration to decide his claim. He also sent reminder on 13-1-1985. As Arbitration proceeding was no

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