Madhya Pradesh High Court
Baijnath Singh vs State Of M.P. And Ors. on 23 June, 2005
Equivalent citations: 2005(4)MPHT132
Author: A.K. Shrivastava
Bench: A.K. Shrivastava
ORDER A.K. Shrivastava, J.
1. By this writ petition filed under Articles 226 and 227 of the Constitution of India, the petitioner has challenged the pregnability of the Revenue Recovery Certificate (hereinafter referred to as 'RRC') dated 19-8-99 (Annexure P-1) being void, illegal and against the law. The petitioner has further prayed to declare by appropriate writ or order that the impugned action of the respondents is arbitrary, illegal and without any authority, power and jurisdiction.
2. As per the averments made in the petition, the petitioner is a B-class contractor. He entered into an agreement with the respondents for construction of Dammari approach road from 0 km. to 3 kms. His tender was accepted being the lowest and he was directed to complete the work within 4 months, i.e., upto 30-9-1984. The petitioner commenced his work from 1-4-1984 and looking to the approaching rainy season completed maximum possible work. The petitioner, on the basis of accepted measurement, submitted his first running bill to the tune of Rs. 3,47,895/- which is 80% of the total amount of contract.
3. As per the petitioner, the work undertaken by him was earth work collection of morram with boxing, spreading of morram, collection of stone chips and 40 mm B.T. metal. While the measurement of his first bill was being recorded, the petitioner continued to do the work and during that period completed the collection and boxing of balance quantity of morram required. According to him, the work of spreading of morram and stone chips was also done. The petitioner submitted second running bill on 5-1-1985, i.e., after the rainy season even though the work was done before the rains. It has been pleaded in the petition that the item of spreading of metal chips was not included in this bill and this was accepted to be included and paid in the subsequent bill as the final measurements have been recorded.
4. The agony of the petitioner is that without giving any proper notice to him, some fictitious measurement were seen to have been recorded ex-party after 3 1/2 years and on that basis the already recorded quantities were scored out and the newly recorded measurements reduced the quantities. Thus, according to the petitioner it is being said that excess payment has been made to him.
5. The respondents adjusted the security deposit made by the petitioner towards the said excess payment so made and the balance has been ordered to be recovered from the petitioner and for that respondent No. 4 has issued a RRC under the provisions of Section 146 of the Madhya Pradcsh Land Revenue Code, 1959. Copy of the RRC dated 19-8-1999 vide recovery of Rs. 1,27,014/- has been placed on record as Annexure P-l. Indeed the petitioner has challenged this RRC.
6. It has also been set forth in the petition that the petitioner also made certain counter claims against the respondents and for the realizing of the same he filed an application before the M.P. Madhyastham Adhikaran, Bhopal (hereinafter referred to as 'the Adhikaran') which was registered as Reference Case No. 204/1991. However, the said proceedings were dismissed by the Adhikaran on 17-12-96, as per the petitioner his Counsel reported no instructions.
7. The contention of the learned Counsel for the petitioner is that the State Government did not file any application before the said Adhikaran for the adjudication and it is trying to recover the alleged losses byway of RRC. It has been further contended by Shri Adhikari. the learned Counsel that RRC to the tune of Rs. 1,27,014/- dated 19-8-99 (Annexure P-l) is void, illegal and arbitrary for the simple reason that the State Government is not entitled to recover the said amount getting the matter adjudicated by the Adhikaran. The learned Counsel has submitted that unless the question of breach is decided by an independent agency, the respondents are not entitled to recover any sum of amount from him. In support of his contention the learned Counsel has placed reliance on the decision of the Supreme Court in the case of State of Karnataka v. Rameshwara Rice Mills, Thirthahalli, AIR 1987 SC 1359. The learned Counsel has further placed reliance on a Single Bench decision of this Court passed in W.P. No. 640/98, M/s. Thakurdas Narangand Sons v. State of Madhya Pradesh and Ors., decided on 13-4-99 (Annexure P-3) in which the decision of the Apex Court in the case of Rameshwara Rice Mills, Thirthahalli (supra) was relied. The learned Counsel has further placed reliance on the Division Bench decision of this Court passed in M.P. No. 716/75, Ramnarayanlal v. State of M.R, decided on 12-3-96.
8. On the other hand, Shri S.K. Yadav, the learned Govt. Advocate, by drawing my attention to the return filed on behalf of the respondents, has submitted that as per Clause 4.3.7 of the agreement (Annexure P-2) there is a provision for making intermediate payment on the basis of running bills submitted by the contractor. According to the respondents the petitioner failed to submit his final bill resulting therein the measurement and of the total amount payable for the work was undertaken by the Engineer-in-Chief. On such work being undertaken, it was found that the amount payable for the work which the petitioner was entitled for was Rs. 2,14,727/- wherein the amount in advance was paid to him was Rs. 3,67,1.31/-, The petitioner, therefore, was liable to account for Rs. 1,52,405/- out of which Rs. 25,392.50 was adjusted from the security and other amount deposited by the petitioner in the present contract and other contract and thus, the petitioner was liable to pay back the remaining amount of Rs. 1,27,014/- which he received in excess through running bills.
9. Shri Yadav, the learned Govt. Advocate, by inviting my attention to Annexure R-1 which is a copy of the petition filed under Section 17 of the M.P. Madhyastham Adhikaran Adhiniyam, 1983, (in short the Adhiniyam) by the petitioner before the Adhikaran and has submitted that the petitioner submitted the application for realisation of the amount of Rs. 52,439/-. The contention of the learned Govt. Advocate is that in Para 3 of the said application the impugned amount of Rs. 1,52,405/- has also been shown to be an amount to be recovered inter alia other amount mentioned in the application. The learned Govt. Advocate further pointed out that reply to the said application was submitted before the Adhikaran by the Government and the copy of which has been placed on record is Annexure R-2. It has been further contended by the learned Govt. Advocate that instead of prosecuting the said case, the petitioner allowed the same to be dismissed for want of prosecution on 7-12-96 (Annexure R-3) and, therefore, when the claim of the petitioner has been dismissed, though by an order dismissing the case in default, he has estopped from saying that the respondents can not realize the said amount.
10. Apart from this the learned Govt. Advocate has also invited my attention to Clause 4.3.38.1 of the agreement (Annexure P-2) and has submitted that under this clause the dues can be recovered from the petitioner. On the basis of these premised arguments, it has been contended by the learned Govt. Advocate that this petition sans substance and the same be dismissed.
11. After having heard the learned Counsel for the parties I am of the view that this petition deserves to be allowed.
12. It is no doubt true that the petitioner himself submitted an application before the Adhikaran under Section 17 of the M.P. Madhyastham Adhikaran Adhiniyam, 1983, for realization of certain amount. It is also equally true that in the application (Annexure R-l) the petitioner specifically stated that amount shown as recoverable Rs. 1,52,405.00 inter alia other payments. It is also true that vide order dated 7-12-1996 (Annexure R-3) the claim of the petitioner was dismissed in default by the Madhyastham Adhikaran. But, the whole point hinges whether plaintiff accepted the liability of payment of Rs. 1,52,405/- which is being recovered against him by the respondents or this amount has been ascertained by the Adhikaran. The answer is in negative. Merely because the claim case of the petitioner, filed before the Adhikaran, was dismissed in default would not mean that it has been determined by the Adhikaran on merits that the respondents (who were non-applicants before the Adhikaran) are entitled to recover Rs. 1,52,405/-. The petitioner, before the Adhikaran, submitted an application stating therein that he is entitled to recover the amount mentioned in his application and if his application has been dismissed in default, would not mean that there is any adjudication determining the rights of the respondents that they are entitled to recover the amount of Rs. 1,52,405/- from the petitioner. For better understanding I may quote an example. If a suit for grant of decree of perpetual injunction is filed by the plaintiff against the defendant stating therein that he is in possession of the suit property and the defendant had no right, title and interest to evict him and if that suit is dismissed in default, it would not mean that the defendant, who is not in possession of the property in question, may take law in his own hands and may evict the plaintiff forcibly without obtaining the recourse of law. Certainly, he has to approach the Court for obtaining a decree for possession and then only he could evict the plaintiff in accordance with law. Similarly, here, merely the claim case of the petitioner was dismissed in default before the Adhikaran, would not mean that the respondents may recover the impugned amount of Rs. 1,52,405/- without availing the procedure prescribed under the law. It is not the case of the respondents that the petitioner has admitted that he is liable to pay the impugned amount of Rs. 1,52,405/-. Thus, it is yet to be determined whether the respondents are legally entitled to recover the said amount. Hence, there is no merit in the contention of Shri Yadav, the learned Govt. Advocate, that since the claim of the petitioner was dismissed in default by the Adhikaran, the respondents can recover the impugned amount of Rs. 1,52,405/- by issuing RRC.
13. The Adhikaran is constituted under the Adhiniyam. The petitioner, no doubt, submitted an application under Section 17 of the said Adhiniyam for the realization of certain amount mentioned in the application. The respondents did not file any counter claim before the Adhikaran for the realization of the impugned amount of Rs. 1,52,405/-. Indeed, in all fairness, if they were having any legitimate claim against the petitioner for the realization of the said amount, they could have filed a counter claim for its realization. But, they did not file any counter claim. Section 12 of the said Adhiniyam speaks about the procedure which is to be adopted by the Adhikaran constituted under the said Adhiniyam. No doubt, neither under the Adhiniyam nor under the rules which were framed in the year 1984 there is any specific provision permitting filing of any counter claim or counter reference by the opposite party. But the respondents could have filed a counter claim or counter reference as there is no bar in that regard. In this regard I may preferably rely a Division Bench decision of this Court in the case of P.K. Pande v. State of M.P. and Ors., 2000(2) M.P.H.T. 455 : 2000(1) MPLJ 367, wherein Hon'ble D.M. Dharmadhikari, J. (as His Lordship then was) by placing reliance on the decision A.A. Haja Muniuddian v. Indian Railways, , wherein the Apex Court in Para 14 has held as under :
"14. In the earlier paragraphs of this order we have indicated the background in which the State Legislature thought it necessary to provide a forum of a statutory Arbtiration Tribunal to parties involved in disputes in works contracts in substitution of the arbitrators either nominated by the department or appointed by the parties. Arbitration Tribunals have been constituted as substitutes for the traditional Courts which were found ill-suited for adjudication of such disputes. The procedure of the traditional Courts is too formalistic and burdensome. It is not flexible enough to deal rapidly and efficiently due to lack of technical knowledge on the subject matter of disputes which arise in works contract. Under Section 11 of the Act (quoted above), the Tribunal is empowered to regulate its own procedure. The Counsel for the contractor argues that under Section 10 when regulations have been framed by the Tribunal laying down procedure before it to be followed by the parties, in exercise of powers under Section 11 the Tribunal could not evolve a procedure of permitting filing of a counter- claim not provided by the Regulations. On reading Sections 10 and 11 together we find that by framing of Regulations for procedure, the Tribunal is not in any manner inhibited for adopting such just and fair procedure as would advance the cause of justice and be convenient to the parties and Court. By permitting a counter- claim or reference, the Tribunal has not in any manner violated any of the provisions of the Rules or Regulations but in fact has tried to fill the gap in them. In our opinion, Section 11 is clearly intended to empower the Tribunal with ancillary powers to deal with disputes requiring technical and legal expertise. The legislature intends that the Tribunal should have simpler procedure than in regular Courts, the procedure should be more flexible, speedy, informal as well as socially and technically conscious. The constitution of the Arbitration Tribunal is such that it has on its Bench technical expertise through the Technical member and legal expertise through the Judicial Member. They together provide a forum totally different from traditional Civil Courts for deciding disputes in a less formal but speedier manner. The provisions of Sections 10 and 11 with the Rules and Regulations framed thereunder have to be interpreted keeping in view the aim and object of the legislation under consideration. We find that the Full Bench of the Tribunal has not in any manner tried to legislate in permitting filing of a counter claim or has tried to substitute some words or rules in the Act and the Regulations. Its attempt has been to evolve a just and fair procedure for better and quicker dispensation of justice. A counter-claim, in our view, is nothing but a reference, of dispute in relation to same works contract by the opposite party. It can not be said that the opposite party (such as the department of the State herein) is not competent to make a reference under Section 7 of the Act. The subject matter on which it has filed the counterclaim constitutes relevant material for filing a separate reference petition. The counter claim is, therefore, nothing but a counter reference petition. It is not the case that the party submitting such counter reference has not followed the provisions regarding payment of Court fees on it as leviable under the rules. It is also within limitation. It is true that as required by the Regulations, a reference petition is to be filed in the Registry before the Registrar and then it is placed before the Bench. But merely for this reason it can not be said that the Bench of the Tribunal which is competent to adjudicate the dispute can not entertain a reference directly. The Registrar in receiving the claim petition only discharges ministerial or administrative functions. The judicial function or powers of the Tribunal thereby arc in no manner inhibited. Even if counter-claim is held untenable, the opposite party was in any case entitled to file a counter-reference petition for its claim and dispute. In such a situation where two petitions or claims on same works contract have been filed, it would be in the interest of justice and fair procedure for the Tribunal to have clubbed them for a joint trial. If a counter reference could be filed by the opposite party which could be linked for trial and disposal by the Tribunal with the pending reference of the contractor, we find no logic or reason why the reference tenable at the instance of opposite party can not be entertained in the same pending reference as a counter reference on payment of the requisite Court fees on it and within the prescribed period of limitation. The decision in A.A. Haja Muniuddin (supra) relied on, on behalf of the department fully supports the view taken by us. In that case, there was no specific provision permitting filing of a claim before the Railway Claims Tribunal by the party as a pauper or indigent person as provisions of Order 33 of the Civil Procedure Code were not applicable to the proceedings before the Railway Tribunal. By construing provisions similar to those contained in Section 11 of the Act under consideration before us, the Supreme Court held that a pauper who is unable to pay Court fees can not be denied the remedy before the Railway Tribunal. It was observed thus :
"Nowhere in the Act is there any provision which runs counter to or is inconsistent with the provisions of Order XXXIII of the Code. Although the Act and the Rules do not specifically provide for the application of Order XXXIII of the Code, there is nothing in the Act or the Rules which precludes the Tribunal from following that procedure if the ends of justice so require. If the view taken by the Tribunal if accepted as laying down the correct law, the result would be that a claimant who has a genuine claim for compensation under the provisions of the Act would be denied access to the Claims Tribunal if he is an indigent person and does not have the means to pay the fee required on the claim petition. Before the establishment of the Claims Tribunal he would have been able to file the suit invoking Order XXXIII of the Code as an indigent person. Now that a Special Claims Tribunal has been established under the Act, can it be said that indigent persons who do not have the means to pay the fee required on the claim application are altogether debarred from seeking compensation from the railway administration for the wrong done to them ? Access to justice can not be denied to an individual merely because he does not have the means to pay the prescribed fee. Such a view would leave indigent persons without a remedy. It is, therefore, essential that the provisions of the Act and the Rules must be broadly interpreted to ensure access to justice. If a claimant is left without redress even if he has a valid claim against the railway administration merely because he is an indigent person, it would be a sad day and the poor will lose confidence in the system. No one can be heard to say, much less the railway administration, that even though the claimant has a genuine claim for compensation against the railway administration, he must forgo the same if he does not have the means to pay the requisite fee. Such an interpretation which denies justice must he avoided. Section 18 (1) only says that the Claims Tribunal 'shall not be bound' by the procedure laid down by the Code but does not go so far as to say that it 'shall be precluded' from invoking the provisions laid down by the Code even if the same is not inconsistent with the Act and the Rules. Since the Claims Tribunal is empowered to regulate its own procedure, there is nothing in the Act and the Rules which precludes the invocation of Order XXXIII of the Code. A view which advances the cause of justice must be preferred to the one which defeats it. We are, therefore, of the opinion that the Tribunal adopted a narrow interpretation of the relevant provisions of the Act in coming to the conclusion that the Act as well as the Rules did not permit invocation of Order XXXIII of the Code. The view taken by the Tribunal results in a person not having the means to pay the fee prescribed for preferring a claim being left without a remedy. Such a view would result in gross injustice. The Tribunal has the power to lay down its own procedure and as stated earlier Section 18 (1) does not preclude it from invoking the provisions of Order XXXIII of the Code if the ends of justice so require. When an indigent person approaches the Tribunal for compensation for the wrong done to him, the Tribunal can not refuse to exercise jurisdiction merely because he does not have the means to pay the fee. In such a situation we think the ends of justice require that the Tribunal should follow the procedure laid down in Order XXXIII of the Code to do justice for which it came to be established."
(Emphasis supplied)
14. Thus, if the respondents were required to recover the amount of Rs. 1,52,405/- they could have filed counter claim before the Adhikaran. Needless to emphasis if the claim case is dismissed in default, there is no law as such that the counter claim or counter reference would also go or stand dismissed.
15. There is substance in the averment of Shri Adhikari, the learned Counsel for the petitioner, that without adjudicating the impugned claim of Rs. 1,52,405/- by the independent agency, the respondents are not entitled to straightaway issue the impugned RRC for the realization of the said amount. The decision of the Apex Court in the case of Rameshwar Rice Mills (supra) is quite relevant in this regard. It would be condign to rely Para 7 of the said decision which reads thus :
"7. On a consideration of the matter we find ourselves unable to accept the contentions of Mr. lyengar. The terms of Clause 12 do not afford scope for a liberal construction being made regarding the powers of the Deputy Commissioner to adjudicate upon a disputed question of breach as well as to assess the damages arising from the breach. The crucial words in Clause 12 are 'and for any breach of conditions set forth hereinbefore, the first party shall be liable to pay damages to the second party as may be assessed by the second party'. On a plain reading of the words it is clear that the right of the second party to assess damages would arise only if the breach of conditions is admitted or if no issue is made of it. If it was the intention of the parties that the officer acting on behalf of the State was also entitled to adjudicate upon a dispute regarding the breach of conditions the wording of Clause 12 would have been entirely different. It can not also be argued that a right to adjudicate upon an issue relating to a breach of conditions of the contract would flow from or is inhered in the right conferred to assess the damages arising from a breach of conditions. The power to assess damages, as pointed out by the Full Bench, is a subsidiary and consequential power and not the primary power. Even assuming for argument's sake that the terms of Clause 12 afford scope for being construed as empowering the officer of the State to decide upon the question of breach as well as assess the quantum of damages, we do not think that adjudication by the Officer regarding the breach of the contract can be sustained under law because a party to the agreement can not be an arbiter in his own cause. Interests of justice and equity require that where a party to a contract disputes the committing of any breach of conditions the adjudication should be by an independent person or body and not by the other party to the contract. The position will, however, be different where there is no dispute or there is consensus between the contracting parties regarding the breach of conditions. In such a case the Officer of the State, even though a party to the contract will be well within his rights in assessing the damages occasioned by the breach in view of the specific terms of Clause 12."
16. Basing this decision the Single Bench of this Court in the case of Mis. Thakurdas Namngand Sons (supra) took the same view and I do not think to defer with the view taken by the learned Single Bench in the said case since it is based on the decision of the Apex Court Rameshwar Rice, Mills Thirthahalli (supra). Since there is no adjudication by the independent agency justifying the impugned recovery for which the RRC (Annexure P-l) has been issued by the respondents, according to me the respondents can not be permitted under the law to be a Judge of his own cause and definitely they arc required to adjudicate their claim, if any, by an independent agency. Having not done so, according to me, the impugned RRC (Annexure P-l) which has been issued against the petitioner to the tune of Rs. 1,27,012/- is not wholly arbitrary but without any authority. I would be failing in my duty it I do not rely the Division Bench decision of this Court in the case of Ramnarayanlal v. State of M.P. (supra), wherein Para 8 this Court has held as under :
"8. In our opinion, the proceedings for recovery could not be initiated without resort to the arbtiration clause. In Chief Conservator of Forests, Rewa v. Ratan Singh, , Their Lordships said:
"On behalf of the respondent, it was urged before the High Court, as also before this Court, that where a dispute arose between the Divisional Forest Officer and the contractor, whether the contractor, his servants or agents had caused damage in a reserved forest, the question could be decided in the manner appointed in Clause 9 of the contract alone, i.e., by arbitration of the officer denominated and not by the Divisional Forest Officer"."
It was pointed out in the same paragraph :
"Plainly, the Divisional Forest Officer claimed that the contractor had committed a breach of the terms of the contract, and when the contractor denied the breach, a dispute arose between the parties as to the performance of breach of the terms of the contract, and it had to be referred to the Chief Conservator of Forests."
So also, Union of India v. Raman Iron Foundry, , Mr. Justice Bhagwati, speaking for the Court, said :
"That makes us to the second ground of challenge against the order of interim injunction. This ground of challenge is based on the proper interpretation of Clause 18. The argument of the appellant was that what is required for attracting the applicability of Clause 18 is a mere claim for payment of a sum of money arising out of or under the contract against the contractor and it is not necessary that a sum of money must be actually due and payable from the contractor to the purchaser. If the purchaser has a claim for payment of a sum of money against the contractor, he would be entitled to exercise the right given under Clause 18, even though such claim may not be for a sum due and payable but may be for damages and it may be disputed by the contractor and may not have been adjudicated upon in a Court of law or by arbitration.... It is only when a claim for damages is adjudicated upon by a Civil Court or an arbitration and the breach of the contract is established and the amount of damages ascertained and decreed that a debt due and payable comes into existence; till then it is nothing more than mere right to sue for damages and it docs not fall within the words of Clause 18."
17. The contention of Shri Yadav, the learned Govt. Advocate, that under Clause 4.3.38.1 of the agreement (Annexure P-2) the parties entered into an agreement and the powers are vested in the respondents to recover the dues from the contractor. In this context it would be germane to quote the said clause which reads thus :
"4.3.38.1. Recovery of dues from the contractor: Whenever any claim, against the contractor for the payment of a sum or money arises out of to under the contract, Govt. shall be entitled to recover such sum by appropriating, in part or whole, the security deposit of the contractor and to sell any Govt. promissory notes etc. forming the whole or part of such security. In the event of 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 sum then due or which at any time there after may become due to the contractor under this or any other contract with Govt. should this sum be not sufficient to cover the full amount recoverable from the contractor then it shall be recovered from him as an arrears of land revenue."
18. There is no quarrel to the above said clause, but the opening words of this clause are whatever any claim, against the contractor.... The question is what is that claim. Certainly, it should not be in accordance to the whims of the respondents, but it should be an ascertained claim and for the ascertainment there should be an adjudication and for adjudication one has to go before the independent agency to ascertain the claim.
19. For the reasons stated hereinabove the impugned RRC dated 19-8-99 (Annexure P-l) can not be allowed to remain stand. The same is hereby quashed. The respondents arc free to adjudicate their claim if they are having any against the petitioner in accordance with law.
20. In the result the petition succeeds and is hereby allowed with costs. Counsel fee Rs. 2,000/- if pre-certified.