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Madhya Pradesh High Court · body

2014 DIGILAW 659 (MP)

Unity Infraproject Ltd. v. State of M. P.

2014-06-17

S.K.GANGELE, S.K.PALO

body2014
Judgment: 1. They are heard. 2. Petitioner has filed this petition challenging the order Annexure P/1. 3. A contract was awarded to the petitioner in regard to construction of Harsi High Level main canal from Km 30 to 65 and its entire distribution network system of distributaries minors and sub minors up to 40 ha chak. Allegation against the petitioner is that the petitioner has not completed the work within time. A show cause notice was issued to the petitioner. Petitioner challenged the show cause notice before this Court in Writ Petition No. 2992/2014. The petition was dismissed vide order dated 19/5/2014 with the following observation: Submissions so made, in the opinion of this Court, are misconceived and misdirected. Admittedly, the show cause notice is issued on 21/4/2014 calling upon the petitioner to show cause on the subject matter mentioned therein. Petitioner has filed reply thereto on 1/5/2014. After filing of reply, petitioner has filed claim before the Superintending Engineer on 8/5/2014 i.e. subsequent to the show cause notice and filing of reply. Now under the pretext of filing of claim petitioner seeks indulgence of this Court to stop the proceedings before the Executive Engineer pursuant to the show cause notice dated 21/4/2014. This cannot be done for more that one reasons, viz. First, proceedings initiated by the Executive Engineer by issuance of show cause notice is with the authority under clause 4.3.3 for initiating action under clause 4.3.3.3 of the agreement. Said clause 4.3.3.3 is self contained & independent and the same is not subject to arbitration clause 4.3.29.2; and secondly, proceedings pursuant to the show cause notice dated 21/4/2014, to which reply is filed on 1/5/2014, is much prior to the claim under clause 4.3.29.2 on 8/5/2014. Under such circumstances, the petition sans merits. However, petitioner is always free to bring to the notice of Executive Engineer his claim pending before the Superintending Engineer. With the aforesaid observation, writ petition is dismissed. 4. Thereafter, order Annexure P/1 has been passed. By the aforesaid order, the Authority rescinded the contract and further ordered that contract shall be awarded to another contractor and the petitioner shall be liable to pay damages and the costs on account of awarding contract to another party. 5. In terms of clause 4.3.29.2 of the general conditions of contract, petitioner raised a dispute before the Superintending Engineer. By the aforesaid order, the Authority rescinded the contract and further ordered that contract shall be awarded to another contractor and the petitioner shall be liable to pay damages and the costs on account of awarding contract to another party. 5. In terms of clause 4.3.29.2 of the general conditions of contract, petitioner raised a dispute before the Superintending Engineer. Copy of the letter raising dispute before the Authority dated 8/5/2014 is filed as Annexure P/31. In between, the petitioner challenged the order Annexure P/1. 6. Counsel for the petitioner have contended that the order Annexure P/1 is arbitrary and illegal and the Authority has not applied its mind before rescinding the contract, nor the order is speaking one. It is further contended that the order Annexure P/1 is against the judgment of Full Bench of this Court in B.B. Verma Vs. State of MP, [ 2007(4) MPLJ 610 ]. 7. We are not in agreement with the arguments advanced by learned counsel for petitioner. Clause 4.3.29.2 of general conditions of contract provides machinery for resolving dispute. It is as under: Except where otherwise specified in the contract, for claims valued at Rs. 50,000/- or more the decision of the S.E. Of the circle for the time being in respect of all questions and disputes relating to the meaning of the specifications, designs, drawings and instructions hereto before mentioned and as to quality of workmanship or materials used on the work or as to any other question, claim, right, matter or thing, whatsoever, in any way arising out of, or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or those conditions or otherwise concerning the work of execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be final provided that the Superintending Engineer shall before giving his decision in writing in the matter gives an opportunity of being heard, to the parties to the contract. If any party to the contract is dissatisfied with the final decision of the S.E. in respect of any matter, he may within 28 days after receiving notice of such decision may refer such dispute to the Arbitration Tribunal constituted under the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1982 (No. 2 of 1983). 8. If any party to the contract is dissatisfied with the final decision of the S.E. in respect of any matter, he may within 28 days after receiving notice of such decision may refer such dispute to the Arbitration Tribunal constituted under the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1982 (No. 2 of 1983). 8. In accordance with the aforesaid clause, petitioner has already raised a dispute before the Superintending Engineer and the matter is pending. Aforesaid clause further provides that if the party is dissatisfied with the final decision of the Superintending Engineer, he can further file a dispute before the Arbitration Tribunal. In this view of the matter, at present, this Court could not entertain this writ petition. 9. Counsel for the petitioner have submitted that the impugned order Annexure P/1 is against the Full Bench decision of this Court in B.B. Verma's case (supra). In that case, the Full Bench has observed as under in regard to recovery by the Authority after rescinding the contract. A perusal of Clause 4.3.29.2 of the conditions of the contract quoted above would show that the decision of the S.E. of the Circle for the time being in respect of questions and disputes mentioned therein 'or as to any other question, claim, right, matter or thing whatsoever in any way arising out of, or relating to the contract.... or otherwise concerning the work of execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be final'. Hence, the decision of the Divisional Officer or the Executive Engineer under Clause 4.3.3.3 of the conditions of contract quoted above to have the unexecuted work completed by another contractor and claim the expenses which may have been incurred in excess of the um which would have been paid to the original contractor is subject to the final decision of the S.E. if the contractor raises a dispute on such claim made by the Divisional Officer or the Executive Engineer. The second para of Clause 4.3.29.2 further stipulates that if any party to the contract is dissatisfied with the final decision of the S.E. in respect of any matter, he may within 28 days after receiving notice of such decision refer such dispute to the Arbitration Tribunal constituted under the Adhiniyam. The second para of Clause 4.3.29.2 further stipulates that if any party to the contract is dissatisfied with the final decision of the S.E. in respect of any matter, he may within 28 days after receiving notice of such decision refer such dispute to the Arbitration Tribunal constituted under the Adhiniyam. Hence, any dispute taken and any amount claimed by the Executive Engineer or the Divisional Officer under Clause 4.3.3.3 of the conditions of contract is not final but subject to the decision of the S.E. and any decision of the S.E. on these aspects is also subject to the decision of the Tribunal under the Adhiniyam, if referred to the Tribunal by any party to the contract. The result is that the amount claimed by the Executive Engineer or the Divisional Officer under Clause 4.3.3.3 will not become a sum due from the contractor until the dispute is decided by the S.E. on an appeal made before him from the decision of the Executive Engineer or the Divisional Officer, or until the dispute is adjudicated by the Tribunal under the Adhiniyam where the decision of the S.E. is challenged by way of reference. 10. In the present case, no recovery has been ordered against the petitioner; only an observation has been made that damages can be recovered from the petitioner. Because the matter is pending before the Superintending Engineer, in such circumstances, in our opinion, it could not be held that the order Annexure P/1 is contrary to the aforesaid Full Bench decision of this Court. 11. Consequently, we do not find any merit in the petition. It is hereby dismissed. 12. If there would be any recovery, the petitioner is at liberty to take recourse in accordance with law.