Order : 1. This Civil Revision is directed against the Award dated 22.11.2016 passed by Chhattisgarh Madhyastham Adhikaram, Raipur ('Adhikaran' for brevity) in Reference Case No.9/2014, rejecting the claim of the Petitioners for refund of security amount, cost of maintenance, damages and interest etc. 2. The aforesaid challenge has been made on the following factual background of the case:- (i) In September, 2008 the State of Chhattisgarh had floated Notice Inviting Tender for construction and maintenance of 11 Rural Roads under Pradhan Mantri Gram Sadak Yojana, Package No. CG-15-82 of District Rajnandgaon for the year 2008-09. As per the tender, the total amount of contract value was Rs. 843.32 Lakh and the contract period was for 12 months for completion of work till 14.10.2009. (ii) The original Petitioner Late Anil Kumar Jaiswal being the lowest bidder was awarded the contract and the Agreement was executed between the parties on 1.10.2008 and the accepted value of work was Rs. 659.88 Lakh. The price of the contract was further revised to Rs. 570.61 Lakh. The extension was granted for completion of work till 15.1.2010 on account of naxal problem in executing the work. (iii) The Petitioners completed 9 out of 11 roads, as one road i.e., Chhuikhadan to Budhanbhat, was already completed by the Public Works Department. However, the road relating to 'Tendubhata to Sarodhi' could not be completed on account of naxal problem. Hence, the Petitioners requested the Respondents for the foreclosure of the contract in light of clause 55.1 of the Agreement. The Executive Engineer wrote a letter to the Superintending Engineer for the foreclosure of the contract under clause 55.1, pursuant to which the Superintending Engineer in turn also wrote a letter (Annexure P-3/4) to the Chief Executive Officer for the foreclosure of the contract under clause 55.1 of the Agreement. (iv) On 26.5.2010 (Ex. P-3), permission was granted by the Chief Executive Officer for the foreclosure of the contract for package No.15-82 as per Clause 55.1 of the Agreement with certain conditions that the Petitioners will complete the construction of the said road under a separate piece-rated work agreement as the main agreement was agreed to be foreclosed. (v) Ultimately, on 28.5.2010 (Ex. P-3/2) the work was completed by the Petitioners and Work Completion Certificate was issued by the Executive Engineer-cum- Member Secretary, PUI-5, Pradhan Mantri Gram Sadak Yojna. (v) Ultimately, on 28.5.2010 (Ex. P-3/2) the work was completed by the Petitioners and Work Completion Certificate was issued by the Executive Engineer-cum- Member Secretary, PUI-5, Pradhan Mantri Gram Sadak Yojna. Thereafter, the Petitioners requested for finalization of the final bill amounting to Rs.7,80,917/- which could not be finalized by the Respondents, but the Respondents issued notice to the Petitioners for recovery of Rs.28.211 Lakh towards imposed liquidated damages and penalties by deducting the payment of the final bill and also withheld the security deposit. On 8.10.2012 (Ex. P-7), the Petitioners raised their objection against the said recovery. However, on 27.4.2013 (Ex. P-1), the Chief Engineer, Pradhan Mantri Gram Sadak Yojna, rejected the claim of the Petitioner under clause 24 (Dispute Redressal Forum) of the Agreement. (vi) Eventually, the aforesaid reference case under Section 7-A of the Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983 was filed by the Petitioners before the Adhikaran claiming amount of Rs.81,569 Lakh under different heads. Respondents filed their Written Statement before the said Tribunal stating inter-alia that the Petitioners are not entitled for the said claim. However, the Respondents accepted the letter dated 26.5.2010 whereby permission was granted for the foreclosure of the contract for package No.15-82 as per clause 55.1 of the Agreement and only pleaded that the Petitioners are responsible for completing the work with a delay of 8 months. (vii) However, the Adhikaran, by the impugned Award dated 22.11.2016, after hearing the parties, rejected the claim of the Petitioners holding that the Petitioners have failed to complete the work of one road i.e., Tendubhata to Sarodhi, and has also failed to maintain the said road in accordance with the Agreement and therefore the Petitioners are not entitled for refund of security amount, cost of maintenance amount, any dues, damages or interest, as the said claim has not substance. It is against this order of rejection of the claim of the Petitioners that the present Civil Revision has been filed by the Petitioners. 3. Ms. Astha Shukla, learned Counsel appearing for the Petitioners submits that by Order dated 26.5.2010 (Ex. It is against this order of rejection of the claim of the Petitioners that the present Civil Revision has been filed by the Petitioners. 3. Ms. Astha Shukla, learned Counsel appearing for the Petitioners submits that by Order dated 26.5.2010 (Ex. P-3) passed by the Chief Executive Officer, the foreclosure of the contract for package no.15-82 was accepted as per clause 55.1 of the Agreement and consequently Rs.17.62 Lakh withheld as security amount, Rs.15.00 Lakh withheld as performance guarantee towards maintenance, Rs.7.809 Lakh withheld towards payment of the balance amount of last bill, Rs.23.80 Lakh for damages and also Rs.17.34 Lakh towards interest at the rate of 9% on the said amount withheld from the date of completion of work till filing of the reference case (from May, 2010 to 25.4.2014), totaling to Rs.81.569/-, ought to have been refunded to the Petitioners without any reservation, else it would amount to rescission of contract by virtue of Section 62 of the Indian Contract Act, 1872 in view of the Order dated 26.5.2010 passed by the Competent Authority. Therefore, the impugned Award is liable to be set-aside and the Petitioners are entitled to get Rs.81,569/- towards the aforementioned heads. 4. Mr. Rahul Tamaskar and Mr. Sharad Mishra, learned State Counsels, however support the impugned Award and submit that the Petitioner-Contractor is defaulter and despite the Order dated 26.5.2010 (Ex. P-3), the Petitioner-Contractor could not complete the work of the said road and also failed to maintain the same in accordance with the terms and conditions of the Agreement. Therefore, the Petitioner-Contractor is not entitled for refund of security amount, cost of maintenance amount, damages or interest etc. and the impugned Award deserves to be affirmed dismissing the present Civil Revision. 5. I have heard learned Counsels appearing for the parties, considered their rival submissions made herein-above and also perused the record of the case with utmost care and circumspection. 6. It is not in dispute that pursuant to the award of contract dated 1.10.2008, within the extended time, the Petitioner-Contractor had completed the work of 9 out of 11 roads which was awarded to them. The work of one road 'Chhuikhadan to Budhanbhat' was already completed by the Public Works Department and therefore there is no dispute with regard to the work of 10 roads which was completed by the Petitioner- Contractor. The work of one road 'Chhuikhadan to Budhanbhat' was already completed by the Public Works Department and therefore there is no dispute with regard to the work of 10 roads which was completed by the Petitioner- Contractor. The dispute arose between the parties is only with regard to the work of one road 'Tendubhata to Sarodhi' which the Petitioner-Contractor could not complete on account of naxal problem and for which he requested the Respondents for the foreclosure of contract in light of clause 55.1 of the Agreement, which states as under:- "55. Release from performance 55.1 If the contract is frustrated by the outbreak of war or by any other event entirely outside the control of the Employer or the Contractor, the Engineer shall certify that the Contract has been frustrated. The Contractor shall make the Site safe and stop work as quickly as possible after receiving this certificate and shall be paid for all work carried out before receiving it and for any work carried out afterwards to which a commitment was made." 7. Pursuant to the said request made by the Petitioner-Contractor, the Executive Engineer-cum-Member Secretary, Project Implementation Unit-5, Pradhan Mantri Gram Sadak Yojna made a correspondence on 12.1.2010 to the Superintending Engineer for the foreclosure of the contract under clause 55.1 of the Agreement. Based on the recommendation of the Executive Engineer and the reasons mentioned by the Petitioner-Contractor, the Superintending Engineer vide memo dated 15.2.2010 (Annexure P-3/4) with his recommendation, sought opinion of the Chief Executive Officer, Chhattisgarh Grameen Sadak Vikas Abhikaran, Raipur for further proceeding in the matter. Accordingly, on 26.5.2010 (Ex. P-3), the Chief Executive Officer accepted the foreclosure of the contract for package No.15-82 as per Clause 55.1 of the Agreement and allowed the parties to foreclose the contract with regard to construction of 'Tendubhata to Sarodhi' road. The contents of the said Order dated 26.5.2010 are being reproduced herein below:- 8. A careful perusal of the above-mentioned order would show that apart from foreclosing the contract under clause 55.1 of the Agreement, the Contractor will not be entitled for any damages as per clause 11 of the Agreement and further for the uncompleted work, withholding 10% amount, it was directed that the Petitioner-Contractor will complete the remaining work as per old rate by executing Piece Work Agreement. However, there is no such agreement on record entered into between the Petitioner-Contractor and the Respondent-Department for completion of the said uncompleted work. 9. Now, at this stage, the effect of foreclosure may be considered with reference to Section 62 of the Indian Contract Act, 1872 which provides as under:- "62. Effect of novation, rescission, and alteration of contract.- If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract, need not be performed." 10. A careful perusal of the above-mentioned provisions of Section 62 of the Indian Contract Act would show that if the parties to a contract agree to rescind the original contract it need not be performed. However, in this regard, their Lordships of the Supreme Court in their decision rendered in the matter of Damodar Valley Corporation v. K.K. Kar , [ (1974) 1 SCC 141 ] have clearly held that as the contract is an outcome of the agreement between the parties, it is equally upon to the parties thereto to agree to bring it to an end or to treat it as if it never existed and it may also be open to the parties to terminate the previous contract and substitute in its place a new contract or alter the original contract in such a way that it cannot subsist. It has been observed in paragraphs 7 & 8 therein as under :- "7. The contention that has been canvassed before us is that as there has been a full and final settlement under the contract, the rights and obligations under the contract do not subsist and consequently the arbitration clause also perishes along with the settlement. If so, the dispute whether there has or has not been a settlement cannot be the subject of an arbitration. There is, in our view, a basic fallacy underlying this submission. A contract is the creature of an agreement between the parties and where the parties under the terms 'of the contract agree to incorporate an arbitration clause, that clause stands'--apart from the rights and obligations under that contract, as it has been incorporated with the object of providing a machinery for the settlement of disputes arising in relation to or in connection with that contract. The questions of unilateral repudiation of the rights and obligations under the contract or of a full and final settlement of the contract relate to the performance or discharge of the contract. Far from putting an end to the arbitration clause, they fall within the purview of it. A repudiation by one party alone does not terminate the contract. It takes two to end it, and hence 'it follows that as the contract subsists for the determination of the rights and obligations of the parties, the arbitration clause also survives. This is not a case where the plea is that the contract is void, illegal or fraudulent etc., in which case, the entire contract along with the arbitration clause is non est, or voidable. As the contract is an outcome of the agreement between the parties it is equally upon to the parties thereto to agree, to bring: it to an end or to treat it as if it never existed. It may also be open to the parties to terminate the previous contract and substitute in its place a new contract or alter the original contract in such a way that it cannot subsist. In all these cases, since the entire contract is put an end to, the arbitration clause, which is a part of it, also perishes along with it. Section 62 of the Contract Act incorporates this principle when it provides that if the parties to a contract agree to substitute a new contract or to rescind or alter it, the original contract need not be performed. Where, therefore, the dispute between the parties is that the contract itself does not subsist either as a result of it's being substituted by a now contract or by rescission or alteration that dispute cannot be referred to the arbitration as the arbitration ,clause itself would perish if the averment is found to be valid. As the very jurisdiction of the arbitrator is dependent upon the existence of the arbitration clause under which he is appointed, the parties have no right to invoke a clause which perishes with the contract. 8. In certain circumstances, it may be that there has been a terminal tion of the contract unilaterally and as a consequence the parties may agree to rescind the contract. 8. In certain circumstances, it may be that there has been a terminal tion of the contract unilaterally and as a consequence the parties may agree to rescind the contract. In such a situation the rescission would put an end to the performance of the contract in futuro, but it may remain alive for claiming damages either for previous breaches or for the breach which constituted the termination." 11. Further, in the matter of Citibank N.A. v. Standard Chartered Bank & Others , [ (2004) 1 SCC 12 ] , it has been held by the Supreme Court that novation, rescission or alteration of a contract under Section 62 of the Indian Contract Act can only be done with the agreement of both the parties of a contract and both the parties have to agree to substitute the original contract with a new contract or rescind or alter and it cannot be done unilaterally. As such, in case of valid rescission, the contract between the parties becomes void ab initio and the avoidance relates back to the date of making the contract. 12. In the instant case, admittedly, the Agreement entered into between the parties on 1.10.2008 for construction and maintenance of 'Tendubhata to Sarodhi' road stood withheld by virtue of clause 55.1 of the Agreement as proposed by the Petitioner-Contractor and accepted by the Respondent-Department on 26.5.2010 (Ex. P-3). However, the Respondents proposed to substitute a new contract in place of the old contract by executing Piece Work Agreement which could not be executed between the parties and as such the previous contract was not substituted with new contract and the previous contract with regard to construction and maintenance work of 'Tendubhata to Sarodhi' road stood rescinded. Therefore, for non-completion of the said work, the balance amount of Rs.7.809 Lakh payable towards last bill could not have been withheld and therefore the Petitioners are hereby held to be entitled to get the said amount from the Respondent-Department. Further, Rs.17.62 Lakh withheld as security deposit also could not have been withheld and for this amount also the Petitioners are hereby held to be entitled to receive it from the Respondent-Department. Further, Rs.17.62 Lakh withheld as security deposit also could not have been withheld and for this amount also the Petitioners are hereby held to be entitled to receive it from the Respondent-Department. However, as regards the claim of the Petitioners with reference to amount of Rs.15.00 Lakh withheld as performance guarantee towards maintenance the same cannot be awarded, as the Petitioners themselves in paragraph-17 of the their reference case have clearly stated that the maintenance was not possible and therefore could not be done. Similarly, the amount of Rs.23.80 Lakh claimed towards damages also cannot be awarded in light of the foreclosure of the contract, as the Order dated 26.5.2010 (Ex. P-3) issued by the Chief Executive Officer clearly states as a result of the said order clause 11 of the Agreement will not be applicable and the Contractor will be not be entitled for any kind of damages on account of foreclosure of the contract. However, so far as the interest part is concerned, the Petitioners will be entitled for interest at the rate of 6% per annum on the balance amount of Rs.7.809 Lakh payable towards last bill and also on the amount of Rs.17.62 Lakh payable towards security deposit, from the date of filing of reference case i.e., 28.4.2014, till actual payment of the said amount is made. 13. Accordingly, the impugned Award dated 22.11.2016 is set-aside/quashed and the present Civil Revision stands allowed to the extent indicated herein-above, leaving the parties to bear their own costs.