Madhya Pradesh High Court
M/S Leney Construction Co. vs The State Of M.P. & Anr on 9 March, 2026
Author: Vivek Rusia
Bench: Vivek Rusia
NEUTRAL CITATION NO. 2026:MPHC-JBP:20305
1 CR-709-2003
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
&
HON'BLE SHRI JUSTICE PRADEEP MITTAL
ON THE 12th OF MARCH, 2026
CIVIL REVISION No. 709 of 2003
M/S LENEY CONSTRUCTION CO.
Versus
THE STATE OF M.P. & ANR
Appearance:
None appears for petitioner.
Shri Abhijeet Awasthi Deputy Advocate General for State.
ORDER
Per: Justice Pradeep Mittal The present arbitration revision is preferred under Section 19 of the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983, challenging the award dated 26.02.2003 passed by the Madhya Pradesh Madhyastham Adhikaran Tribunal, Bhopal, in Reference Case No. 70 of 2000. By the said award, the Tribunal rejected the claims of the petitioner in full.
2. The case of the petitioner before the tribunal was that the respondents floated a tender on 06.12.1995 for the construction of an RCC slab of a medium bridge with two abutments on both sides. The petitioner submitted a tender on 19.01.1996 quoting 53% above the scheduled rates, which was accepted on 12.06.1996. The stipulated time for completion of the work was eight months plus thirty days, and the work order was issued on Signature Not Verified Signed by: MANVENDRA SINGH PARIHAR Signing time: 13-03-2026 18:27:47 NEUTRAL CITATION NO. 2026:MPHC-JBP:20305 2 CR-709-2003 28.06.1996. However, the respondents handed over the construction site only on 03.04.1997, after the removal of telephone poles and lines, which was after the expiry of the contractual completion period. Thereafter, the respondents also changed the original design by introducing a pier between the two abutments, and the revised drawing was supplied by the Sub- Divisional Officer on 07.10.1997. Due to this delay in handing over the site and providing the revised design, the petitioner's quoted rates became unworkable because of the escalation in the prices of materials and labour. After completing the work to the satisfaction of the respondents, the petitioner submitted claims for escalation (Rs.83,550), infructuous overheads (Rs.25,000), and loss of profits (Rs.25,000), totalling Rs.1,33,550. As these claims were refused, the petitioner filed Reference Petition No. 70 of 2000 before the MP Arbitration Tribunal, Bhopal. The learned Tribunal, by award dated 26.02.2003, rejected the claim for escalation on the ground that the agreement did not contain an escalation clause, and dismissed the other claims on the ground that the petitioner had not proved the losses through direct evidence. The petitioner pleads that the award is unjust, inequitable, and illegal, as it fails to consider that the delay and breach of contractual obligations were caused by the respondents, resulting in financial loss to the petitioner.
3. The case of the petitioner is that petitioner reached the site to commence the work; however, several hindrances existed at the site, including a telephone line passing through the construction area. The said telephone line was shifted on 07.01.1997, and the layout of the work was Signature Not Verified Signed by: MANVENDRA SINGH PARIHAR Signing time: 13-03-2026 18:27:47 NEUTRAL CITATION NO. 2026:MPHC-JBP:20305 3 CR-709-2003 arranged only on 03.04.1997, i.e., after the expiry of the stipulated period for completion. The petitioner commenced the work on 03.04.1997 and requested the Executive Engineer to treat this date as the date of commencement of the work and to exclude the rainy season from the contractual period.
4. The Sub-Divisional Officer (SDO) forwarded the RCC design for the deck slab on 05.05.1997, which was received by the petitioner on 13.05.1997. The petitioner informed the department about the progress of work up to 09.06.1997 through a letter dated 12.06.1997, but the drawings for the pier were still awaited. Consequently, the labour remained idle from 10.06.1997 to 16.06.1997, causing financial loss to the petitioner.
5. The petitioner thereafter sought an extension of time up to 30.06.1998 by letter dated 14.07.1997 under Clause 5 of the agreement, citing the hindrances at the site. The revised design for the pier was eventually supplied by the SDO on 07.10.1997. During the execution of the work, the petitioner brought steel to the site and received a secured advance of Rs.58,727 in the fourth running bill.
6. The work was ultimately completed on 17.03.1998 to the satisfaction of Respondent No. 2, and a completion certificate was issued under Clause 6 of the agreement. The final bill was settled on 08.06.1998. As the delay in execution of the work was attributable solely to the department, the Superintending Engineer granted an extension of time up to 17.03.1998 under Clause 5 of the contract vide letter dated 31.10.1998.
7. Subsequently, the petitioner submitted an escalation bill of Rs.
Signature Not Verified Signed by: MANVENDRA SINGH PARIHAR Signing time: 13-03-2026 18:27:47NEUTRAL CITATION NO. 2026:MPHC-JBP:20305 4 CR-709-2003 93,930 on 13.01.1999 and further submitted quantified claims before the Superintending Engineer on 21.04.1999 under Clause 29 of the contract. After the abolition of the office of the Superintending Engineer with effect from 01.07.1999, the petitioner submitted the claims before the Chief Engineer, Capital Zone on 19.07.1999. As the claims were not decided, the petitioner filed the present petition before the Tribunal on 22.03.2000.
8. The respondents have admitted that a telephone pole existed at the working site and was shifted on 07.01.1997. However, they contend that the presence of the telephone line did not cause any hindrance to the petitioner in carrying out the work, and that the petitioner is attempting to rely on a frivolous ground.
9. The respondents further submit that alternative working areas were available to the petitioner, and the layout was accordingly provided. They also admit that an extension of time was granted to the petitioner under Clause 5 of the agreement, which itself specifies the reasons for permissible delays.
10. In view of the above, the respondents contend that the petitioner's claims are false and baseless, and therefore, he is not entitled to any relief. They pray that the petition be dismissed with costs.
11. Regarding Escalation Claim, the Tribunal noted that the petitioner sought escalation of Rs.83,550/-, claiming additional work due to changes in the pier design and relying on the extension granted under Clause 5 for delays attributable to the department. The respondents denied any additional work beyond the contract, pointing out that the actual work done Signature Not Verified Signed by: MANVENDRA SINGH PARIHAR Signing time: 13-03-2026 18:27:47 NEUTRAL CITATION NO. 2026:MPHC-JBP:20305 5 CR-709-2003 did not exceed the contract amount. Moreover, Clause 11-C (escalation clause) was struck off and duly attested, leaving no contractual basis for escalation. Following State of Orissa vs. Sudhakar Dass (2000) 3 SCC 27 , the Tribunal held that the petitioner was not entitled to escalation, and the claim was rejected.
12. As regards Infructuous Overhead and Loss of Profit Claims, the petitioner claimed Rs.25,000/- each for infructuous overheads and loss of profit, citing idle labour due to delayed pier designs and rainy season. The respondents denied that the delay was caused by them and contended that the petitioner did not attempt to plan or execute the work efficiently. The Tribunal observed that the petitioner failed to provide any evidence to substantiate either claim. He merely relied on assumptions and accounting entries, which are insufficient to prove actual loss. Citing Bishnuprasad Agrawal vs. M.P.S.T.D.C. (2002) and other precedents, the Tribunal confirmed that the burden of proof rests on the petitioner. In the absence of supporting evidence, both claims were rejected.
13. Upon considering the record, pleadings, and submissions of the respondents, we find that the claim for escalation of Rs.83,550/- was rejected because the contract did not contain an escalation clause (Clause 11-C was struck off) and the actual work did not exceed the contract amount. There was thus no contractual basis for escalation, in line with State of Orissa vs. Sudhakar Dass (2000) 3 SCC 27. The claims for infructuous overheads and loss of profit of Rs.25,000/- each were rejected as the petitioner failed to provide direct or cogent evidence of actual loss. Assumptions, ledger entries, Signature Not Verified Signed by: MANVENDRA SINGH PARIHAR Signing time: 13-03-2026 18:27:47 NEUTRAL CITATION NO. 2026:MPHC-JBP:20305 6 CR-709-2003 or generalized accounts were insufficient. The burden of proof rested on the petitioner, as held in Bishnuprasad Agrawal vs. M.P. State Tourism Development Corporation (Full Bench Decision, Reference Case No. 85/95, decided on 19.09.2002). The delays were either not proven to be solely attributable to the respondents or were covered by the extension granted under Clause 5.
14. In view of the above, the Tribunal correctly applied the law, considered the contractual provisions, and judicially assessed the claims. The award dated 26.02.2003 dismissing all claims of the petitioner is therefore upheld as just, lawful, and equitable. Consequently, the revision petition being devoid of substance and merit is accordingly dismissed. Record, if any, be returned to the tribunal within two weeks. Interim relief, if any, shall stand vacated.
(VIVEK RUSIA) (PRADEEP MITTAL)
JUDGE JUDGE
MSP
Signature Not Verified
Signed by: MANVENDRA
SINGH PARIHAR
Signing time: 13-03-2026
18:27:47