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1994 DIGILAW 506 (MP)

VENTAC ASSOCIATES, ENGINEER AND CONTRACTORS v. STATE OF M. P.

1994-07-20

P.N.S.CHOUHAN

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JUDGMENT P. N. S. Chouhan, J. - Contract for construction of Koserteda Tank Project from Ch. 2431 was awarded to the applicant on 35% above U.C.S.R. vide Agreement No. 20, DL/1981-82. The amount of contract was Rs. 24.435 lacs. The time for completion of work was one year excluding rainy season. The work order was issued on 15.10.1981. The work was completed in June 1984 instead on the stipulated date 21.1.1983. Compaction (ramming, rolling and watering) as also dewatering was the responsibility of the department. During execution of work depth of the design was increased. The petitioner had to work in narrow trench beyond designed depth in watery and slushy conditions. The quantity of excavation exceeded during the execution by more than one hundred per cent. After the completion of the work the contractor presented his claim before the Superintending Engineer in terms of the agreement. The same was rejected. The applicant then presented a claim for Rs. 20,04,363.00 before the M.P. Arbitration Tribunal Bhopal on various heads. By award dated 29.9.1988, passed in Arbitration Case No. 65 of 1987, an award amounting to Rs. 75,579.23 paise was passed in favour of the contractor. Interest was awarded at the rate of 12% per annum on Rs. 45,944.04 paise from the date of filing the claim. Aggrieved by the said award this revision has been presented claiming various sums on various heads on the ground that they were illegally rejected by the learned Tribunal. 2. Out of the various claims included in the petition for revision the following were pressed during arguments. (1) Escalation in wages. The contention is that the claim on this account ought to have been accepted by the learned Tribunal as the amount claimed by the contractor represented the sum actually spent by him in payment of labour charges at the enhanced rates as during the currency of the work the fair wages were increased by the Government and as per the terms of the agreement the contractor was bound to abide by them. Issue No. 8 related to claim for compensation for increase in rate of fair wages. The petitioner contractor claimed Rs. 10,11,483.00 on this head The increase of fair wages from time to time during the period of the contract has not been disputed. It is also admitted that fair wage of Rs. Issue No. 8 related to claim for compensation for increase in rate of fair wages. The petitioner contractor claimed Rs. 10,11,483.00 on this head The increase of fair wages from time to time during the period of the contract has not been disputed. It is also admitted that fair wage of Rs. 4.00 per day for unskilled labour prevailing at the time of work order escalated to Rs. 9.00 per day on 22.1.1983 when the work ought to have completed as per stipulation. We agree with the learned Tribunal that the contractor was not entitled to any compensation on this head for the stipulated period of contract and was entitled to be compensated for escalated wages only for the period of four months from 22.1.1983 to 21.5.1983 as this extension of period was necessiated mainly on account on breaches and laches attributable to the department. The learned Tribunal held, in para 49 of the impugned award, that the value of work done during the extended period of four months was Rs. 4,67,242.00. Then the Tribunal proceeded to observe that the petitioner failed to produce any oral or documentary evidence to substantiate the wages actually paid during the extended period. Since there was no provision in the agreement in this behalf the learned Tribunal adopted the so called time tested formula given in Chapter-II, Appendix 2-10-A of the M.P. Works Department Manual. In para 3.9 of statement of claim filed by the contractor it has been mentioned that the labour component of work is to be reckoned as 40% of the total value of work as laid down by Engineer-in-Chief in his circular, dated 22.1.1985. This pleading has not been controverted by the State in its reply. We hold that even if the said circular was not produced it will make no difference. Similarly, the fact that this circular was issued in 1985 will make no difference because the subject matter which it deals with is not one likely to vary with the change of time. We, therefore, hold that there was no justification for the learned Tribunal to have resorted to the formula given in the P.W.D. Manual instead of this basis to be found in the aforesaid circular letter of Engineer-in-Chief. Worked out on the basis of this circular the labour component of the total work done in the extended period comes to Rs. 2,33,121.00. Worked out on the basis of this circular the labour component of the total work done in the extended period comes to Rs. 2,33,121.00. In order of determine compensation payable on this head it has to be found as to what was the extra cost incurred by the contractor for having paid the unskilled labour Rs. 9.00 instead of Rs. 4.00. It comes to Rs. 1,29,511.00. The contractor has already been awarded Rs. 4,890.00 on this head but, as informed by Shri Rao, the amount has not been paid so far. We, accordingly hold him entitled to compensation of Rs. 1,29,511.00 on the escalation of labour charges. Deducting the amount awarded by the learned Tribunal the sum works out to Rs. 1,24,621.00. This amount will carry interest at the rate of 12% per annum from today till realisation. The amount awarded by the Tribunal will carry interest at the rate awarded by the Tribunal from the date of award. (2) We are unable to accept the contention that the learned Tribunal went wrong in disallowing the claim on the overhead expenses during the period of extended four months. The reason assigned by the learned Tribunal appear to be reasonable. Right from the inception of the Tribunal it has been the practice not to entertain any claim which does not figure in the claim presented before the Superintending Engineer. Admittedly, no extra overhead charges for the aforesaid period now claimed were claimed before the Superintending Engineer. We, therefore, hold that the finding of the learned Tribunal in this behalf is not liable to be interfered with. 3. No other item of claim was pressed. 4. In result, the revision is partly allowed. The petitioner's claim as aforesaid in para 2(1) is allowed. Parties are directed to bear their own costs as incurred.