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2007 DIGILAW 707 (MP)

S. S. Constructions v. State of M. P.

2007-07-10

A.K.MISHRA, K.S.CHAUHAN

body2007
ORDER Mishra, J. -- 1. This revision has been preferred under section 19 of the M.P. Madhyastham Adhikaran Adhiniyam, 1983 (for short 'the Adhiniyam') aggrieved by an order dated 11.8.2003 passed in reference case No. 42/03 dismissing the reference as barred by limitation. 2. The petitioner M/s. S.S. Constructions filed a dispute under section 7 of the Adhiniyam. As per the claim filed the tenders were invited on 16.4.1991 for construction of earth work of main canal for duct portion from RD. 7730M to 8470M of Jobat Project for an estimated amount of Rs. 20.74 lacs. It was to be completed within 11 months including rainy season. Agreement was drawn between the petitioner and the executive engineer. The work order was issued on 21.10.1991. The work was to be completed by 20.9.1992. The work could not be completed in the aforesaid period. The contract was rescinded under clause 4.3.3.3 of the agreement as per order dated 31.5.1993. It was informed to the contractor that remaining work would be completed through debitable agency and extra expenditure would be recovered from the contractor. A demand letter was sent by the respondents on 26.4.2000 for recovery of Rs. 10,42,802/-. The claimant submitted that respondents delayed the matter, as such they had no legal right to take action under clause 4.3.3.3. The contractor had not abandoned the work and asked for extension and had shown willingness to execute the work. The executive engineer had changed the scope of the work. It was likely to increase the total time of completion by more than 12 months, thus, rescission of the contract was illegal. The letter dated 22.7.1994 of executive engineer was not replied and the agreement had come to end for all time to come, thus, the recovery which was sought to be made was illegal. It was prayed to revoke the demand and to pay final bill and release the security deposit and earnest money, otherwise petitioner would invoke arbitration clause 4.3.29.2. Petitioner filed a monetary claim before the Superintending Engineer on 11.8.2000, for more than in year no communication was received, as such petition was preferred before the Tribunal raising the following claims: 1. That debitable cost of Rs. 8,87,587/- cannot be recovered from the petitioner. 2. The respondents cannot recover penalty under clause 4.3.2 for not completing the work in time of Rs. 1,63,760/-. 3. That debitable cost of Rs. 8,87,587/- cannot be recovered from the petitioner. 2. The respondents cannot recover penalty under clause 4.3.2 for not completing the work in time of Rs. 1,63,760/-. 3. The respondents have no right to adjust the earnest money of Rs. 15,400/-. 4. The respondents have no right to adjust the amount of security against the debitable recovery amount. 5. The respondents be directed to make the payment of incomplete final bill to the tune of Rs. 1 lac. 6. Pendente lite interest was also claimed of Rs. 26,217/-. Total claim was Rs. 12,23,215/-. The Tribunal has dismissed the claim as barred by limitation as per the impugned order. Dissatisfied with the order this revision has been preferred. 3. Shri Y.R. Rao, learned counsel for petitioner, has submitted that in the instant case as debitable agency was employed and a demand was made in the year 2000, of Rs. 8,87,587/-, as such the period of limitation ought to have been computed by the Tribunal w.e.f. 11.8.2000 when recovery was proposed. He has further submitted that there was delay in completing the work through debitable agency, consequently the contractor could not have been held liable to make the payment of the work done through the debitable agency. 4. Shri Sudesh Verma, learned Government Advocate, has submitted that the application was hopelessly barred by limitation. It was not the case set up that there was any delay in completion of the work through debitable agency. Order of rescission of the contract was passed on 31.5.1993 and it was made clear that the remaining work would be completed through debitable agency and extra cost incurred would be recovered from the contractor, thus, as per amended section 7-1 of the Adhiniyam, the maximum limitation was 3 years, that expired on 30.5.1996, consequently the reference case has been rightly dismissed as barred by limitation. 5. We have minutely gone through the petition filed under the Adhiniyam. The basis of the claim made by the contractor is that contract was wrongfully rescinded, thus, the firm was not liable to make the payment of extra cost paid to debitable agency. There is absolutely no whisper in a reference petition filed by the contractor that there was any delay in getting the work completed through debitable agency thereby it has resulted in escalation of the debitable cost. There is absolutely no whisper in a reference petition filed by the contractor that there was any delay in getting the work completed through debitable agency thereby it has resulted in escalation of the debitable cost. The question of limitation has to be decided on the basis of the averments made in a reference petition. In which wrongful rescission of the contract has been alleged with respect to the events that happened before rescission of the contract on 31.5.1993. In view of clear case set by the contractor, the basis of the claim was rescission of contract on 31.5.1993. The amended section 7-B of Adhiniyam containing limitation came into force in the year 1995. Section 7-B reads thus: 7-B. Limitation.-- Subs. by M.P. Act 36 of 1995, w.e.f. 15.12.1995, (1) The Tribunal shall not admit a reference petition unless -- (a) the dispute is first referred for the decision of the final authority under the terms of the works contract; and (b) the petition to the Tribunal is made within one year from the date of communication of the decision of the final authority. Provided that if the final authority fails to decide the dispute within a period of six months from the date of reference to it, the petition to the Tribunal shall be made within one year of the expiry of the said period of six months. (2) Notwithstanding anything contained in sub-section (1), where no proceeding has been commenced at all before any Court preceding the date of commencement of this Act, or after such commencement but before the commencement of the Madhya Pradesh Madhyastham Adhikaran (Sanshodhan) Adhiniyam, 1990 a reference petition shall be enteI1ained within one year of the date of commencement of Madhya Pradesh Madhyastham Adhikaran (Sanshodhan) Adhiniyam, 1990 irrespective of the fact whether a decision has or has not been made by the final authority under the agreement." Inserted by M.P. Act 19 of 2003, w.e.f. 29.4.2003, [(2-A) Not with standing anything contained in sub-section (1), the Tribunal shall not admit a reference petition unless it is made within three years from the date on which the dispute arises.] Substituted by M.P. Act No. of 2004 (w.e.f. 5.2.2004). [(2-A) Notwithstanding anything contained in sub-section (1), the Tribunal shall not admit a reference petition unless it is made within three years from the date on which the works contract is terminated foreclosed, abandoned or comes to an end in any other manner or when dispute arises during the pendency of the works contract.]" 6. It is clear that the contract was terminated on 31.5.1993 and a reference was made on 8.2.2002. The contractor had not referred the dispute to the final authority in terms of work contract within the time prescribed. It was made clear the contractor that work was to be done through debitable agency, in case petitioner desired to challenge the employment of debitable agency and wanted to assail the rescission of the contract as wrongful, it was necessary to prefer an application under section 7 of the Adhiniyam. Thus, application filed under section 7 on 8.2.2002 after about 9 years and 7 months was hopelessly barred by limitation. A full Bench of this Court in State of M.P. and another v. Kamal Kishore Sharma [ 2006 (I) JLJ 322 = 2006 (2) MPLJ 113 ] has laid down that firstly the dispute has to be filed under the agreement to the final authority. Considering the clear provision of section 7 - B Full Bench has laid down thus: "16. Considering the provision of section 7-B (I) (a) we are of the, opinion that on interpreting the provisions of section 7 -B (1) it is crystal clear that no reference shall be admitted by the Tribunal unless dispute is first referred for the decision of the final authority in a manner as provided under the terms of the contract. Thus right of contractor to approach Tribunal arises after he has approached final authority after decision of Superintending Engineer in terms of the contract. If the contractor has failed to approach the final authority as provided under the terms and conditions of the works contract, petition will not be admitted by the Tribunal. Dispute to the final authority should be preferred in the manner prescribed under the works contract. Since in the present case it is provided that in the case of abandonment or cancellation or in any dispute of works contract, the dispute must be raised before the Superintending Engineer within a period of 30 days. Dispute to the final authority should be preferred in the manner prescribed under the works contract. Since in the present case it is provided that in the case of abandonment or cancellation or in any dispute of works contract, the dispute must be raised before the Superintending Engineer within a period of 30 days. On his failure to decide the dispute within 60 days or after decision of the dispute, appeal must be preferred within 30 days, which shall be decided by Chief Engineer within 90 days. Therefore, if appeal has not been preferred to the final authority in accordance with the terms of the works contract, petition will not be maintainable before the Tribunal." 7. Thus, in our opinion, the contractor did not approach the final authority under the agreement within the time stipulated in the agreement. We find no merit in the revision. Revision is hereby dismissed. However, we leave the parties to bear their own costs as incurred.