M/s Ferro Concrete Construction i Pvt. Ltd. Vs State Of Chhattisgarh

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2025:CGHC:7633

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NAFR

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HIGH COURT OF CHHATTISGARH, BILASPUR

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CR No. 33 of 2017

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Reserved on : 19.11.2024

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Delivered on : 13.02.2025

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M/s Ferro Concrete Construction (I) Pvt. Ltd., a limited company incorporated under Companies Act, 1956, having its office at Bhagirath Pura Indore, represented through its attorney holder Mr. V.K. Geed, aged about 85 years, S/o Late Shri Keshav Geed, R/o 191, Palsikar Colony, Indore M.P.

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---- Applicant

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Versus

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State of Chhattisgarh Through

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The Secretary, Water Resource Department Chhattisgarh Raipur, Chhattisgarh

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The Executive Engineer, Mand Project Division, Kharsia W.R.D. Raigarh, District – Raigarh (C.G.)

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---- Respondents

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For Applicant	: Mr. Ashok Kumar Mishra, Advocate.
For State	: Mr. Neeraj Sharma, Dy. A.G.

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Hon'ble Shri Narendra Kumar Vyas, J. CAV ORDER

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This civil revision has been filed by the applicant/claimant under Section 19 of the Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983 challenging legality and propriety of the order dated 30.11.2016 passed by the Chhattisgarh Madhyastham Adhikaran (Arbitration Tribunal) (for short “the Tribunal”), Raipur in Reference Petition No. 113/2005 by which claims of the applicant/claimant regarding compensation to cover loss of

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ARUN KUMAR DEWANGAN

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Digitally signed by ARUN KUMAR DEWANGAN Date: 2025.02.14 10:56:24 +0530

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infructuous overhead expenses, claim for balance of payment of final bill, balance payment of escalation, compensation to cover loss due to idling of men and machinery, reimbursement of excess recovery of electric charges, settlement of rate and payment of extra items, royalty charges, refund of security deposit, compensation to cover loss due to non-conversion of security deposit into interest bearing security, interest on overdue payment amounting to Rs. 1,97,46,163/- have been rejected.

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The brief facts as reflected from records are that the respondents have issued notice inviting tender (NIT) on 11.08.1992 for construction of issued tender for ‘construction of Mand Weir under Sluice, head regulator including R.C.C. diaphragm wall and other appurtenant works of Mand Diversion Project, DistrictRaigarh’. The petitioner being lowest bidder was awarded tender for the aforesaid work and a work contract agreement was executed between the parties on 07.05.1993 and a work order was issued on 03.11.1993. As per the NIT, the stipulated time period for completion of the work was 36 months including rainy reason i.e. on or before 02.11.1996. The estimated cost of work put to tender was Rs. 1036.75 lacs, cost of contract according to accepted item rates was Rs. 1657.97 lacs and the total value of work done including extra items is Rs. 2230.70 lacs. During execution of the contract, a dispute arose between the applicant and the respondent, therefore, he raised a dispute before the

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Page 3 of 13 Executive Engineer who has rejected the same on 27.03.2001 and final authority i.e. Superintending Engineering and Chief Engineer have not decided the said dispute which has compelled the applicant to file the reference petition before the learned Tribunal Bhopal which has been transferred to Raipur, Chhattisgarh and registered as Reference Case No. 113/2005.

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The applicant has filed the reference petition mainly contending that the respondents despite persuasion have not issued the work order though the agreement was executed on 07.05.1993 and they have issued the work order after lapse of six months on 15.11.1993 which has caused delay in execution of work order. The respondents have also not paid the grant of machinery advance amounting to Rs. 125.98 lacs against machinery which were brought to the sight. It has also been contended that interim monthly payment for work done have also not been made regularly. The respondents have issued the construction designing for additional diagram wall, PCC Blocks and establishment of casting yard, delay in taking decision regarding change of quarries, delay in recording measurement of work done and release of fund thereof, as a result of delay and hindrance caused by the respondents, the applicant suffered heavy financial loss as much as entitle to claim compensation on account of various losses suffered by the applicant as detailed in the reference petition, already referred by this Court in foregoing paragraphs. Thus, the applicant’s claim on Rs. 1,97,46,163/- on

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various heads.

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Respondent No. 2 has filed reply denying the allegation made in the application mainly contending that:-

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(i) In the work order dated 03.11.1993 it has been specifically mentioned that the starting of work will be counted from the date of work order, as such, it cannot be said that there is a delay on the part of the respondents.

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(ii) The applicant has not followed the terms and conditions of General Condition No. 3 & 9 mentioned in the agreement to which the applicant has to submit physical and financial construction programme, name of the engineer, detail of local representative, income tax clearance certificate, labour registration certificate and all other information within 15 days before the Executive Engineer which the applicant has failed to do it.

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(iii) Vide memo dated 25.02.1994, it has been informed to the applicant to complete the work but he has failed to do it and all the legally permissible dues have been paid within the stipulated time period to the applicant. Vide letter dated 11.02.1994, the respondents have directed to submit demand of machinery and vehicle mobilization advance as per Section 8 of the General Clause V but he has failed to do it.

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(iv) The drawing was given to the applicant within time period. It is empathetically denying that there is delay in taking decision

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with regard to construction of additional cross diaphragm wall. In fact due to delay in taking decision, additional time was granted to the applicant without any imposition of penalty and in fact he can execute all other works related to the agreement, as such, there is no delay on the part of the respondents.

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(v) So far as change of quarries is concerned, the applicant has not informed at pre-bid conference regarding unavailability of muram in the Banipathar mines. As such, the applicant himself is responsible for non-availability of muram. The applicant has received his final payment in June, 1999 after getting measurement of all the work done upto the month of December, 1998 without any objection as such he is stopped for claiming other amounts.

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(vi) The applicant has not completed the work of riprap and intent to take the payment of the work although the respondents have not imposed penalty for delay, execution of care and diversion work which has to be completed upto the month October, 1998.

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(vii) As per the agreement, the maintenance work and correction in technical error for one year has to be performed by the contractor, but the contractor has not performed the contract as such, there is no delay on the part of the respondents.

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(viii) The extension of 26 months to execute the work contract without imposition of any penalty has been given to the applicant which shows that the applicant is responsible for delay and the

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exaggerated amount has been claimed without any foundation or material placed before the Tribunal, as such prayed for dismissal of the reference petition.

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The applicant to substantiate his claim has filed an affidavit and also exhibited the documents Ex. A/1 to A/195 . The applicant to substantiate his claim has examined Mr. V.K. Geed by way of an affidavit wherein he has referred to the documents, admitted the signatures of the persons in these documents. The respondents have exhibited documents Ex. D/1 to D/38 . The respondents have examined T.S. Koshle, Executive Engineer, Arvind Kumar Nath before the Tribunal who have reiterated the defence taken by them in the affidavit.

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Learned Tribunal without appreciating the documents, evidence and has recorded his finding that both the parties were equally responsible for delay in construction as the applicant has deliberately suppressed the necessity for construction of diaphragm. It has also recorded its finding that after advice of the applicant, the respondents have prepared the diaphragm wherein no time limit for construction was fixed. The Tribunal has further held that the respondent has not deliberately committed any mistake which entitled the applicant to claim damages from the respondents vide its order dated 30.11.2016. Being aggrieved with this order, the applicant has preferred this revision.

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Learned counsel for the applicant would submit that the learned

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Page 7 of 13 Tribunal has committed illegality in holding that work of cross diaphragm was the part of contract, in fact it was subsequently added by the respondents and despite holding that both the parties are responsible for delay, the learned Tribunal has committed illegality in not granting damages to the proportionate delay on the part of the respondents. He would further submit that the learned Tribunal has committed illegality in dismissing the reference petition without considering the evidence, material on record and on perverse finding, as such, he would pray for quashing of the impugned order.

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Per contra, learned counsel for the respondent/State would support the order and would submit that the learned Tribunal has passed the impugned order which is legal, justified and the same does not warrant any interference by this Court.

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During pendency of the revision petition, this Court on 22.02.2024 has directed the State to file an affidavit explaining how much payment has been made to the applicant, how much payment has been withheld and what are the reasons for withholding of the payment and whether the same has been done by following the procedure prescribed under the NIT. The State has filed an affidavit wherein it has been contended that the respondents have paid Rs. 2068 lacs to the applicant and no amount has been withheld as evident from letter dated 01.10.1999 given by the applicant himself. The certificate has also been placed on record wherein the date of completion of

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project has been mentioned as 31.12.1998 and have stated that the work performed by the contractor is satisfactory. The State has filed another affidavit on 09.09.2024 wherein it has been stated that with regard to the agreement in question, no claim in respect of any head, is pending with them.

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This Court has also directed the applicant to file an affidavit wherein it has been stated that the respondent himself agreed for payment of extra quantity and additional items which have been used for construction of work but the applicant has not given any consent for this.

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I have heard learned counsel for the parties and perused the documents placed on record with utmost satisfaction.

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From the submission raised by the parties and the documents annexed with the petition, the point emerged for determination for this Court is:-

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“Whether the learned Tribunal is justified in dismissing the reference petition without considering the pleadings, material placed before it by non-speaking order?”

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To appreciate this issue, it is expedient for this Court to refer to the Section 16 of the Chhattigarh Madhyashtam Adhikaran Adhiniyam, 1983 which provides that the award of the Tribunal shall be passed after recording of evidence, if necessary and after pursuing the material on record and after affording opportunity to the parties to submit their arguments, make such

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award. This Section further provides that the Tribunal shall give reason in brief while passing an award including an interim award. Section 16 reads as under:-

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“ Award and Orders of Tribunal or its Benches Section 16. Award .—(1) The Tribunal shall after recording evidence, if necessary and after perusing the material on record and on affording opportunity to parties to submit their arguments, make an award : Provided that the Tribunal may make an ‘interim’ award : [Provided further that the Tribunal shall give reasons in brief for an award including an interim award.]

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(2) The Tribunal shall, as far as possible, make its award within four months from the date of service notice of reference on opposite party.

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(3) The Tribunal may award costs and interest at such rate as may appear reasonable to it. [(4) The award shall be as per opinion of the majority of the members. If the Members of Bench differ in opinion on any point, the points shall be decided according to the opinion of majority if there is a majority, but if the members are equally divided, the point or points on which they differ shall be stated for reference of the case for hearing on such point or points by one or more of the other Members of the Tribunal, or by the Chairman himself, as the case may be, and then such point or points shall be decided according to the opinion of the majority of the Tribunal, who have heard the case including those who had first heard it.]

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(5) The award shall spell out clearly the relief granted, the party in whose favour and against whom relief has been granted and by whom and in whose favour costs and interest, if any, are payable.

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(6) Copies of the award, certified under hand and seal of an officer of the Tribunal authorized in that behalf by the Chairman, shall be supplied to all the parties.”

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From bare perusal of this Section, it is quite vivid that the Tribunal is not required to pass award giving detailed reason but as per proviso to Sub-Section (1), the Tribunal should give reason in brief. As such, the Tribunal is not obliged to give detailed reason for reaching its conclusion but it has to give some reason in its award.

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From perusal of the impugned award, it is quite vivid that even the Tribunal has not given any brief reason why it has not considered the evidence, documents produced by the parties though some of the documents were admitted by the respondents also. Learned Tribunal has also committed illegality in recording a finding that both the parties are at fault in delay execution of work contract, therefore, it is incumbent upon the Tribunal atleast to give reason in brief who’s at fault on higher pedestal, because of whose delayed action, the work order has been delayed, loss has been suffered by the applicant or the State in completion of work order. The award is silent on these aspects and no reason has been mentioned in the award. As such, the award passed by the Tribunal is against the provisions of Section 16 of the Adhiniyam, 1983. Therefore, on this count alone, the award deserves to be set aside.

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Even learned Tribunal has not discussed why the claim made by the applicant deserves to be rejected, no brief reasons have been assigned which shows that the Tribunal has not taken care to go through the voluminous documents filed by the parties, as such, it has committed material irregularly and illegality in passing the award which warrants interference by this Court while exercising its revisional power under Section 19 of the Adhiniyam, 1983 as it appears to this Court that the Tribunal has committed material irregularity and has not considered the factual aspect of the case. The impugned award could

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demonstrate that the Tribunal has dealt the matter in a very casual and perverse manner. The Tribunal has not taken care to discuss the material placed before it and the finding recorded by the Tribunal does not meet requirement of Section 16 of the Adhiniyam, 1983. The issue of giving brief reason by the Tribunal while passing the award, has come up for consideration before Hon’ble the Division Bench of Madhya Pradesh High Court in case of C.E.C. Ltd. Vs. State of M.P. & others [2015 (3) MPLJ 50] wherein it has been held in paragraph 22 & 23 as under:-

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“22. Similar is the position with various other claims. If the written arguments submitted by the learned counsel is seen from para 40 onwards with reference to various claims and the documents referred to therein the petitioner in this regard under various heads including the cost of excavation made a detailed claim as indicated in the written argument, however, the Tribunal has refused to interfere only on the ground that petitioner is responsible for the illegal termination and therefore, the claim cannot be permitted. Even though by referring to the written argument in detail and the documents available on record, an argument was advanced by Shri Ruprah to say that the claim should now be allowed by this Court, but Shri Rahul Jain, learned Dy. Advocate General points out that this is only a revision petition under section 19 of the Adhiniyam of 1983, and therefore, the same is not permissible. We are of the considered view that exercising our limited jurisdiction in the matter, it is not appropriate for us to go into the merits of the claim and pass an award based on documents available on record. The documents available on record may suggest that a prima facie strong case on behalf of the petitioner is available, but all these documents has to be meticulously analyzed and thereafter a positive finding recorded with regard to the payment of claim of the petitioner. This cannot be done by exercising revisional jurisdiction available to us. Matter would have been different if jurisdiction available to us was the appellate jurisdiction

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but in revisional jurisdiction, we cannot go into these factual aspects on merits, but at the same time, if we analyze the manner in which the award is passed by the Tribunal, we do find that Tribunal has dealt with the matter in a very casual and perverse manner. Most probably the Tribunal was carried away with the fact that it is the petitioner who was responsible for the termination of the contract and as the claim was beyond time, the Tribunal did not deal with the matter in its right perspective. This was not permissible. Once the Tribunal had indicated that it was going to deal with the matter on merits, then analysis of the evidence available on record both orally and documentary should have been done meticulously and then a finding recorded. The analysis of evidence done and the findings recorded by the Tribunal in this case does not meet this requirement. That being so, it is a fit case where once we have found that the claim was within the period of limitation, the matter should be remanded back to the Tribunal with a direction to reconsider the claim and take a decision in accordance with law.

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We may observe that any observation made by us with regard to tenability of the claim and the reasons for interference indicated in the body of this order are nothing but a prima facie assessment made by us for considering the submission of Shri Ruprah for grant of benefit to the petitioner or to consider the question of remanding the matter back to the Tribunal, that being so the Tribunal is now free to decide the claim without being influenced by observations. We have only analyzed the merits of the case to find out whether the Tribunal has exercised the jurisdiction in rejecting the claim on merits in a proper way or not? On being satisfied that the assessment of merit made by the Tribunal is not in accordance with law, we are of the considered view that the matter should be remanded back to the Tribunal.”

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Considering the entire aspect of the matter, facts and law on the subject, it is quite vivid that the Tribunal has not given any brief reason while disallowing the claim of the applicant though it has recorded its finding that both the parties are responsible for

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Page 13 of 13 delay and has not assigned any reason how the parties are responsible for delay which clearly demonstrate that the Tribunal has also not considered the evidence, documents placed before it and even no brief discussion has been done to believe or disbelieve the material placed before it which is nothing but material irregularity warrants interference by this Court.

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Accordingly, the impugned award dated 30.11.2016 deserves to be set aside and accordingly, it is set aside. The matter is remitted back to the Tribunal to decide the reference case afresh and if the parties intent to file additional pleadings and evidence, they may be allowed and the matter will be decided by the Tribunal within an outer limit of six months from the date of receipt of copy of this order.

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Consequently, the revision is allowed in part by remitting back the matter to the Tribunal for deciding afresh as stated above.

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A copy of this order be sent to the Tribunal along with original record for compliance.

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Sd/(Narendra Kumar Vyas) Judge

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Arun

M/s Ferro Concrete Construction i Pvt. Ltd. v. State Of Chhattisgarh

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M/s Ferro Concrete Construction i Pvt. Ltd. v. State Of Chhattisgarh

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