Madhya Pradesh High Court
B.B. Verma And Anr. vs The State Of M.P. And Anr. on 28 March, 2006
Author: Arun Mishra
Bench: Arun Mishra
ORDER Arun Mishra, J.
1. In these writ petitions common question has been raised with respect to power of respondents to proceed upon recovery or the amount pursuant to cancellation, of the contracts.
2. Petitioner was given different contracts, contract was terminated in writ petition No. 49/99 as per Orders P. 5) dated 10.7.96 under clause 4.3.3.3 of the agreement and the balance work was to be got executed at the cost of petitioner. Thereafter an Order (P.7) was issued for recovery of Rs. 22,70,756/- under clause 4.3.38. Petitioner has raisea a dispute before SE in which it was submitted that action of Executive Engineer was illegal, Department is not entitled to charge any amount whatsoever due to termination or contract. Certain other claims were also made. As the matter was not decided within the time, it is stated by learned Sr. Counsel Shri Rohit Arya that an application under M.P. Madhyastham Adhikaran Adhiniyam, 1993 thereinafter referred to as "the Adhiniyam") was filed which was pending consideration at the time of filing of petition.
3. Petitioner has filed this writ petition assailing the orders of termination of contracts and recovery of amount on the around that action taken by respondent, No. 2 is arbitrary, unconstitutional and unsupported by any detail. There is no adjudication made of the claim of State Govt. as such amount could not be recovered as provided, under Section 7 of the Adhiniyam. Breach of contract requires adjudication by an independent person. A dispute arose between the parties, it ought to have been raised by the State before the Tribunal constituted under the Adhiniyam. Notice of recovery is absolutely illegal, the amount cannot be recovered , cannot be said to amount recoverable as an arrear or land revenue. The respondents cannot be allowed to be Judge in their own cause.
4. In the return filed in WP No. 49/99, it is contended that in case any party is dissatisfied! with the decision of SE has to approach the Arbitration Tribunal, in the instant case work order was withdrawn after giving snow cause notice to the petitioner, opportunity of hearing was given by EE while passing order (R/3) withdrawing the agreement. Power was exercised under clause 4.3.3. It was for the petitioner to invoke Arbitration clause under 4.3.29.2. The recovery of the amount as arrears of land revenue is in accordance with the existing conditions of agreement (P.1), the amount is recoverable as arrears of land revenue under clause 3.4.36.1 Time fixed for completion of contract was 15 months, petitioner did not complete the work in time and finished only 3.23% of the work within the stipulated time of 15 months, the contract was rescinded on expiry of period in accordance with law. SE has taken cognizance of claim and has fixed the case for hearing on 5.8.96, this petition is pre mature and decision of SE ought to have been awaited, amount can be recovered without adjudication by M.P. Madhyastham Adhikaran.
5. Shri Kohit Arya, learned senior counsel appearing with Shri Bnagwan Singh, for petitioner has strenuously urge a that until and unless there is an adjudication, made by SE under clause 4.5.29.2, it was not permissible to recover the amount. He has further submitted that amount ought to have been adjudicated by SE before recovery was initiated, and if any party was dissatisfied with the final decision of SE ought to have approached the Arbitration Tribunal constituted under the Adhiniyam. He has also submitted that respondents cannot act as judge in their own cause and recover the amount pursuant to the termination of the contract under clause 4.3.3.
6. Shri K. Pathak, GA has relied upon clause 4.3.36.1 so as to contend that once contract was cancelled and work was completed through debitable agency at the risk and cost or petitioner, the difference is recoverable as per the agreement under aforesaid clause, there was no necessity for approaching any higher authority or -Tribunal constituted under Adhiniyam. He has further submitted that as petitioners have filed applications before M.P. Madnyastham Aahikaran Adniniyam assailing the very cancellation or contract on the basis of which recovery was initiated, these writ petitions are not maintainable due to availing or alternative remedy by petitioners.
7. The first question for consideration is whether it was permissible for the respondents to recover the amount without approaching Arbitration Tribunal or without decision of SE.
8. It is clear that after cancellation of contracts debitable agency was employed and an order was passed or recovery of amount under clause 4.3.38.1 on 8.12.97 in WP No. 49/99. Similar orders were passed in other writ petitions Clause 4.3.38.1 is clear, same 13 quoted below :
4.3.38.1: Recovery of dues from the Contractor - Whenever any claim, against the Contractor for the payment of a sum of money arises out of or under the contract, Government shall be entitled to recover such sum by appropriating, in part or whole, the Security deposit, of the Con Contractor to sell any Government promissory notes etc. forming the whole or part of such security. In the event the security being insufficient or if no security has been taken from the contractor, then the balance or the total sum recoverable, as the case may be, shall be deducted from any such then due or which at any time thereafter may become due to the Contractor under this or any other contract with Government. Should this sum be not sufficient to cover the full amount recoverable from the contractor then it shall be recovered from him as arrears of land revenue.
It is clear that any claim against the contractor for payment of any sum of money which arises under the contract, Government is entitled to recover. It was not necessary for the respondents to approach the Arbitration Tribunal under Section 7 of Adhiniyam. A Division Bench or this Court in Seth Mohanlal Hiralal v. State of M.P.and Anr. 2001 (5) MPHT 539 has laid down thus :
10. The submission raised by the learned Counsel for the petitioner that the respondents ought to have raised claim before the Tribunal in order to entitle them to recover Rs. 1,87,356/- and in the absence of raising the counter claim it was not open for the respondents to prepare the final bill, is totally devoid of merit. It is a duty enjoined on respondents under the terms of the contract itself to prepare the final bill they can recover the amount found due from the petitioner. This question has been considered by this Court in the case of Chandrashekhar v. State of M.P. 2001 R.N. 6 wherein it has been laid down that if adjudication by authority under agreement is in favour of Government, it need not prefer claim before Tribunal as it is not aggrieved by the final bill, there was no occasion to file counter claim. It may be necessary only in case where Government is dissatisfied by final aujudication under the agreement of dispute, as is equally true for any other party to such contract. In view of the said decision, it is clear that it was not necessary for the respondents to raise a counter claim before the Tribunal. As a waller of fact, no award has been passed in favour of the respondents. They are having an independent right to recover the amount found due from the petitioner under the terms of the contract agreement.
9. As the claim was not adjudicated by SE within the time stipulated under the Adhiniyam, admittedly petitioners have approached the Arbitration Tribunal, the claim made by respondents emanates from cancellation of the contract, validity of the termination of the contract, is subject matter of pending dispute before Arbitration Tribunal, which will have effect on employment or depltable agencies, other amounts have also been claimed by petitioners.
10. Whatever that may be, fact remains that under the aforesaid clause the amount can be recovered once debitable agency has been employed pursuant to cancellation of contract. It is not necessary that EE should have approached the SE in the matter for adjudication of the dispute raised by petitioner. As the petitioner was dissatisfied by the claim of difference of amount made due to employing of the debitable agency, it was for him to approach the higher authority and the Tribunal, he has done so but that does not effect the power of respondents to take action to recover the amount. Thus, it cannot be said that there was any bar to recover the amount as per aforesaid clause of agreement (P.1). Petitioner has relied upon clause 4.3.3.3 and 4.3.29.2 of agreement (P.1). These clauses are quoted below:
4.3.3.3 To measure up the work of the Contractor and to take such part thereof as shall be unexecuted out of his hands and give it to another Contractor to complete, in which case any expenses which may be incurred in excess of the sum which would have been paid to the original Contractor, if the whole work hid been executed by him (for the amount of which excess, the certificate in writing of the Divisional Officer shall be final and conclusive) shall be borne and paid by the original Contractor and may be deducted from any money due to him by Government under the contract or otherwise, or from his Security deposit or the proceeds of sale thereof, or a sufficient part thereof, If the work is carried out at lower rates, the Contractor shall not be entitled for any refund on this account.' Savings, if any, shall go to the Government.
In the event of any of the above courses being adopted by the Divisional Officer, the Contractor shall have no claim to compensation, for any loss sustained by him by reason of his having purchased or procured any materials or entered into any engagements or made any advance on account of, or with a view to the execution of the work or the performance or the contract. And in case the contract shall be rescinded under the provisions aforesaid, the Contractor shall not be entitled to recover or be paid any sum for any work thereof actually performed under this contract, unless and until the Sub-Divisional/Divisional Officer will have certified in writing the performance of such work and" the value payable in respect thereof, and he shall only be entitled to be paid the value so certified.
4.3.29.2 Except where otherwise specified in the contract, for claim valued at Rs. 50,000/- or more the decisions of the S.E. of the Circle for the time being in respect of all questions and disputes relating to the meaning of the specification, designs, drawings, and instructions hereto before mentioned and as to the 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 S.E. 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 mailer, he may within 26 days after receiving notice of such decision may refer such dispute to the Arbitration Tribunal constituted under the M.P. Madhyastham Adhikaran Adhiniyam, 1982 (No. 2 of 1983).
A conjoint reading of clause 4.3.3.3 and clause 4.3.38.1 makes it clear that amount could have been recovered by the respondents without any adjudication by the Tribunal. Clause 4.3.29.2 also lays down that an aggrieved party has to approach the Tribunal. Clause 4.3.29.2 makes the decision of SE to be final. As the application has been filed before the Arbitration Tribunal, it was open to the petitioner to raise these questions also which have been raised in these petitions before Arbitration Tribunal as they arise out of cancellation of contract.
11. Resultantly, writ petitions are devoid of merit. Same are hereby dismissed. No costs.