ORDER Arun Mishra, J. This revision has been preferred by the petitioner Shri Vijay Bhandari calling in question the illegality of an award dt.20-9-2005 passed by the M.P. Arbitration Tribunal, Bhopal in Case No. 79/1997. Pursuant to the NIT floated by the respondents a contract was given to the petitioner for construction of commercial and residential complex at Prakash Chauraha, Rewa. It was a rate contract that the tender was accepted at 3.86 % above S.O.R. Period of completion was two years. Work order was issued and date of completion was 13-9-1997. Petitioner submitted that clear site was not provided. Complete drawings, design and sufficient fund were not available with the Corporation. Though contract was given by Town Improvement Trust, it was abolished and taken over by Corporation. There were certain quarters occupied by PWD employees. The position of trees was such that without cutting them complete lay out could not have been given. Petitioner relying on the bona fides of the respondents had deployed labour for digging pits. The petitioner has collected about 125 MT of steel, cost of which was Rs. 18,75,000/-. The respondents sanctioned secured advance on steel and a bill amounting to Rs. 15,45,412/- was prepared on 15-1-1996. Out of this Rs. 10,00,000/- were paid. The work could not be carried out after digging the pits. The petitioner remained on site on 24th and 25th April, 1996, the subordinate of the respondents tried to give lay out and measure the work-site but they found lot of variation in the drawings and in the site. Partial lay out was given on 27th, 28th and 29th May, 1996. It was not possible to carry on construction work as clear site was not provided. The claim was raised under the head of balance costs of steel, payment of work done but not paid, escalation, interest, loss of profit, loss of overhead, refund of security amount and cost of tube-well, total Rs. 34,87,744/-. The petitioner submitted his claims to the final authority for the first time on 25-4-1997 and subsequently on 24-10-1997. No decision was taken. The stand of the respondents was that the Public Works Department's work-shop at the site had already been shifted to the new location.
34,87,744/-. The petitioner submitted his claims to the final authority for the first time on 25-4-1997 and subsequently on 24-10-1997. No decision was taken. The stand of the respondents was that the Public Works Department's work-shop at the site had already been shifted to the new location. The site had been vacated by the Public Works Department and was available for clearing by the petitioner who was required to do dismantling of the structures as part of the contract. Jungle clearance and removal of trees was also to be done by the petitioner. Major portion of the area of the site had already been cleared by dismantling the sheds by the petitioner who had been entrusted with the work and rest was in his possession including the buildings which he was retaining for his own use as stores and office. Petitioner failed to carry out the work in spite of fulfilling the obligation on the part of the respondents. The excavation of pits after laying R.C.C. foundation was also paid in the first running account bill prepared on 4-11-1995 which shows that the petitioner was already provided lay out for the RCC footings and columns and he had done excavation before laying concrete for RCC foundations. The work was executed under a self generated scheme hence the funds were bound to come. They had already paid a sum of Rs. 16,23,196/-to the petitioner from their own resources apart from spending Rs. 40,00,000/-on the construction of work-shop and Rs. 7.5 lakhs on the construction of flats provided to the Public Works Department in lieu of existing work-shop complex taken over from them. Thus, the respondents had invested more than Rs. 65 lakhs on the scheme and paid the fees of architect to the tune of Rs. 2,00,000/. Further funds were being created by auction of shops and residential flats which were to be constructed under the scheme. There was abandonment of the work by the petitioner. He removed the material also though an amount of advance was paid. He had removed 50% steel for which secured advance to the tune of Rs. 11.16 lakhs had already been received by him. Removal was made in the month of August, 1996. Thus, he had no intention to work after receiving mobilization advance and payment of running bills which were submitted.
He had removed 50% steel for which secured advance to the tune of Rs. 11.16 lakhs had already been received by him. Removal was made in the month of August, 1996. Thus, he had no intention to work after receiving mobilization advance and payment of running bills which were submitted. The Arbitration Tribunal has found that the petitioner had removed the steel and abandoned the work. Thus, the claims made under the heads of Balance cost of steel, escalation, interest, loss of profit, loss of overhead and costs of tube-well have been disallowed and adjustment of the amount under the head of Payment of work done but not paid to extent of Rs. 3,06,618/-, part of security amount has been ordered to be adjusted. Counter-claim made by the Corporation has been allowed to the extent of adjustment of costs of steel removed by the petitioner. Removal part of the claim with respect to extra expenditure incurred through the work completed by debital agency has been disallowed. Aggrieved by the award this revision has been preferred by the petitioner. Shri Umesh Nigam learned counsel appearing on behalf of the petitioner has submitted that the rejection of the claim with respect to remaining quantity of steel, costs of steel, escalation, rejection of partial claim with respect to payment of work done, interest based thereupon, loss of profit, loss of overhead and rejection of claim, costs of tube-well, has wrongly been made by the Tribunal. He has further submitted that there was no abandonment of the work on the part of the petitioner. There was violation in not providing clear site, possession was not handed over, there were few houses of the PWD employees situated over the site. A civil suit was filed by one of the employees. Trees were also there, to cut the trees permission of the Forest Department/Collector was necessary. Thus, the aforesaid claims ought to have been allowed. The work was not abandoned. After abolition of TIT when work was taken over by the Corporation, dispute arose and in fact the Commissioner of the Corporation had acted mala fidely and was responsible for missing of file with respect to 3rd running bill, his intention was not to pass the bill. He has relied upon the complaint (P/11) in that regard. He has further submitted that two final claims were submitted, one was submitted on 25-4-1997, another on 5-10-1997.
He has relied upon the complaint (P/11) in that regard. He has further submitted that two final claims were submitted, one was submitted on 25-4-1997, another on 5-10-1997. He has also relied on the decision of the Apex Court in McDermott International Inc vs. Burn Standard Co. Ltd. and ors. 2006 Arb. W.L.J.625 (SC) to submit that there are several formulae for computation of loss of profit and overhead expenditure. Thus, it was not necessary to prove the loss of profit and overhead expenditure as that could be ascertained by application any of the formulae such as Hudson Formula, Emden Formula and Eichleay Formula. Shri Anil Khare, learned counsel appearing on behalf of the respondents has submitted that there was abandonment of the work by the contractor. He after obtaining advance removed the steel in the month of August, 1996, there are communication on record sent by the Corporation with respect to removal of the iron. In spite of clearing first two bills, the intention was not to carry on the work any further. Substantial area of the site was already available as against which two running bills were passed. However, intention of the petitioner was not to carry out further work, as such he removed 50% of the steel. Thus, the contract had to be ultimately terminated as per the order (D/26) under clause 3C of the agreement. He has further submitted that due to abandonment of the work the work had to be completed by debital agency in which huge extra expenditure was incurred. He has further submitted that u/s 19 of the Arbitration Act scope of interference in revision is not as that of appeal. Finding cannot be said to be perverse or unreasonable. No illegality has been committed by the Tribunal, as such on case for interference in this revision is made out. It is clear that the work order was issued on 14-9-1995. It is also not in dispute that the first running bill was prepared on 4-11-1995. The said running bill indicates that the lay out was already provided without lay out for the RCC footings and columns and other excavation before laying concrete for RCC foundations could not have been done by the petitioner. Thus, the submission raised that initial lay out was not provided cannot be accepted. There was escalation clause in the agreement entered into between the parties.
Thus, the submission raised that initial lay out was not provided cannot be accepted. There was escalation clause in the agreement entered into between the parties. It appears that there were some trees etc. However, there are documents on record, to suggest that the trees stood removed in the month of July, 1996. There are communications (D/17 and D/18) dt. 26-9-1996 and 29-9-1996 respectively, it was mentioned in the letter D/17 that the iron was removed without permission of the competent authority by the petitioner, after lay out was given small quantity of work was done and thereafter no further work was carried out and on the spot it was found that there were no standing trees. The petitioner was informed that if he fails to start the work within two days, he was likely to be blacklisted. Thus, it was clear that there was abandonment of the work by the petitioner, his intention was not to carry on further work. Ultimately the contract had to be rescinded under clause 3C of the agreement of the Corporation on 17-3-1999. With respect to balance steel the claim No. 1 was made by the petitioner for a sum of Rs. 8,75,000/-. It is clear that in spite of availability of the site petitioner did not initiate the work as apparent from communications (D/17 and D/18). We are unable to accept the submission raised by Shri Nigam, learned counsel appearing on behalf of the petitioner that the steel was removed by the Corporation, not by the petitioner. He has placed reliance on the first and second running bill of 1996 that the quantity of 125MT was at the spot. There is no dispute that in the first and second running bill quantity of steel mentioned was 122.86 MT, 125MT steel was not brought to the spot and out of 122.86 MT steel petitioner secured the advance of Rs. 11,16,000/, whereas the steel was valued at Rs. 15,45,412/-, it appears that as the advance given was Rs. 11,16,000/-petitioner had removed the steel as apparent from communications (D/17 and D/18) 61.982 MT steel was removed and as per the measurement book No. 434 (Article-F) of the year 1999-2000, it is clear that at the spot only 60.88 MT steel was available.
15,45,412/-, it appears that as the advance given was Rs. 11,16,000/-petitioner had removed the steel as apparent from communications (D/17 and D/18) 61.982 MT steel was removed and as per the measurement book No. 434 (Article-F) of the year 1999-2000, it is clear that at the spot only 60.88 MT steel was available. The submission raised by Shri Nigam that the measurement book of 1999-2000 could not have been relied upon, has no force, as the deficit quantity has been found, is supported by earlier communication of August, 1998 which clinches the issues against the petitioner. In the reply to the communication (D/17) dt.26-9-1996, a reply (D/22) was sent on 30-9-1996, in that petitioner has initially tried to satisfy the department that the advance given by the Corporation was less than the steel supplied on the spot. Thereafter he has denied that he had removed the steel from the spot, but, in case no steel was removed, the petitioner ought to have taken other steps. Thus, we find that the finding of the Tribunal to be correct that the steel was in fact removed by the petitioner as he had no intention to carry on the work any further and had abandoned it. There was intention to abandon the work and not to carry it any further as petitioner had submitted two claims, one of them within the period of two years of the contract, before completion of the period of contract. First claim was submitted on 25-4-1997 and another one on 5-10-1997. Thus, clearly there was an intention to abandon and not to carry further work by claiming damages along with interest. However, the work was not carried out in spite of availability of the site and written correspondence made by the Corporation to carry out the work, otherwise he would be blacklisted. Thus, we affirm the finding of the Arbitration Tribunal that the steel was utilized and left, the value of the steel at full rate i.e. Rs. 15,000/- per MT, as recorded in Ex. D.8, comes to Rs. 91,22,000/-, against this the petitioner has already received Rs. 11,16,437/-. As per the case of the contractor the material was under the watch and ward of the petitioner.
15,000/- per MT, as recorded in Ex. D.8, comes to Rs. 91,22,000/-, against this the petitioner has already received Rs. 11,16,437/-. As per the case of the contractor the material was under the watch and ward of the petitioner. On specific query being made to the petitioner counsel, he was unable to point out any clause under the agreement that it was the duty of the Corporation to look after the material. Petitioner has in fact made a claim under the loss of profit and overhead expenditure for employing a watchman and other staff to look after the material on spot. Thus, the case with which the petitioner came makes no room for any doubt that the iron was possessed by the petitioner and was removed by him from the spot. This act not only affect the claim of the petitioner for the balance quantity of steel, but, shows his intention that he did not intend to carry out the work any further, that is why he had removed the steel, even the quantity against which he had obtained mobilization advance. Thus, we have no hesitation in affirming the finding of the Claims Tribunal recorded on Claim No. 1. With respect to payment of work done, but not paid amount of Rs. 4,15,000/-, it was claimed that under the 3rd running bill the work of to the aforesaid extent was done. It was claimed by the petitioner that he had submitted 3rd running bill on 13-9-1996 for the aforesaid amount which was not paid. The stand of the Corporation was that the work on the site was found to be of Rs. 3,13,831/-, mobilization advance of Rs. 5 lakh was still outstanding against the petitioner. File relating to 3rd running bill was not traceable, it was taken away/removed in connivance with some employees of the Corporation. Thus, the petitioner was found entitled for a sum of Rs. 3,13,831/- only, not any further amount. Out of the aforesaid amount recovery of Rs. 7,313 was made of the previous bill. Thus, the amount payable came to Rs. 3,06,618/-. Petitioner's counsel has heavily relied upon the photocopy of the 3rd running bill (P/12). Perusal of the said bill discloses that it bears the seal of the Commissioner in original in blue ink and it is not in dispute that that file of 3rd running bill was missing from the office of the Commissioner.
3,06,618/-. Petitioner's counsel has heavily relied upon the photocopy of the 3rd running bill (P/12). Perusal of the said bill discloses that it bears the seal of the Commissioner in original in blue ink and it is not in dispute that that file of 3rd running bill was missing from the office of the Commissioner. Counsel for the petitioner has submitted, on specific query being made as to how this bill with seal came in possession of the petitioner, counsel has relied upon a letter (P/9) dt.6-8-2004 of the petitioner in which he has prayed from the Corporation to supply certain documents (P/12). Submission of the counsel is that the said documents (P/12) was supplied as per the request made in the letter (P/9).Letter (P/9) goes to indicate that copy of the correspondence was sought, not that of the final bill. Thus when the file was missing with respect to bill in the office of Corporation, it was not possible to supply it. It is not a certified copy supplied by the Corporation. A bare perusal of the bill produced by petitioner makes it clear that it is not a certified copy, it appears to be photocopy in which seal in original has been affixed at several places at page Nos. 4 and 5. There is no corresponding memo shown by the counsel by which this so-called bill Ex.P/12 has been supplied by the Corporation to the petitioner. Thus, origin and possession of this final running bill is shrouded in mystery, in ordinary course bill with seal in original should not have been in possession of the petitioner and it was supposed to be with the Corporation. However, as file was missing, bill Ex.P/12 cannot be said to be reliable as petitioner has utterly failed to explain as to how he came in possession of this document? We leave the matter at that. Now there is on record final measurement book (Article F) in which measurements have been recorded and petitioner was specifically required to keep himself present by communications (D/26) and (D/27), but, he failed to turn up, as such the measurement was taken. There is nothing to doubt the same. Thus, we have to rely upon the measurement made in Article F for which due intimation was given to the petitioner and measurements have not been shown to be incorrect by any other reliable material on record.
There is nothing to doubt the same. Thus, we have to rely upon the measurement made in Article F for which due intimation was given to the petitioner and measurements have not been shown to be incorrect by any other reliable material on record. Thus, we find that in spite of the work of Rs. 4,15,000/- claimed by the petitioner, work worth Rs. 3,13,931/- was done against which Rs. 7,313/- was adjusted against the previous bill. Thus, we affirm the finding given that the petitioner was entitled to obtain Rs. 3,06,618/- only., not Rs. 4,15,000/- as claimed by him. Coming to question of escalation : escalation has to be decided in the backdrop of facts as the petitioner had abandoned the work, he cannot be said to be entitled claim of escalation, apart from that escalation chart was not admitted, petitioner has failed to adduce evidence. He had failed to submit price index. No doubt about it once factual matrix is established for claiming escalation, it can be worked out on the basis of formulae discussed by the Apex Court in McDermott International Inc. vs. Burn Standard Co. Ltd. and ors, 2006 Arb.W.LJ. 625(SC) on the basis of Hudson Formula, Emden Formula and Eichleay Formula. But factual matrix in order to claim loss of profit and overhead expenses has not been established in the instant case. Thus, in our opinion, this claim has been rightly rejected. With respect to claim of interest: suffice is to observe that based upon admissibility of the claim over which the interest was claimed, agreement also nowhere provided for payment of interest, amount has already been overpaid to the petitioner. There was recovery as against petitioner as steel was removed from the spot for which an advance was obtained. With respect to security, adjustment has already been ordered. With respect to costs of tube-well : it has not been established that this work was done under the contract and order of the respondents, petitioner has also failed to adduce evidence that the tube-well along with pump were still available on the site. In view of the aforesaid, we are not inclined to entertain the claim with respect to tube-well. Resultantly, we find no merits in any of the submissions raised by the learned counsel for the petitioner. No case is made out for making interference in revision u/s 19 of the Arbitration Act.
In view of the aforesaid, we are not inclined to entertain the claim with respect to tube-well. Resultantly, we find no merits in any of the submissions raised by the learned counsel for the petitioner. No case is made out for making interference in revision u/s 19 of the Arbitration Act. Revision is hereby dismissed with costs of Rs. 10,000/- to be paid to the respondents. Final Result : Dismissed