M/S Rani Construction Pvt. Ltd. Vs State of Madhya Pradesh (Now State of Chhattisgarh)

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2026:CGHC:12566

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NAFR

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HIGH COURT OF CHHATTISGARH AT BILASPUR

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CR No. 34 of 2018

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M/s Rani Construction Pvt. Ltd. C-10, Community Centre, Ashoka Tower, Iind Floor, Janakpuri, New Delhi-110058 Through Its Chairman Shri Galla Gundaiah, District : New Delhi, Delhi

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... Applicant

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versus

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State Of Madhya Pradesh (Now State Of Chhattisgarh) Secretary, Irrigation Department, Govt. Of Chhattisgarh, Mahanadi Bhawan, New Raipur, Raipur, District Raipur, Chhattisgarh, District : Raipur, Chhattisgarh

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The Executive Engineer Water Management Division No. 01, Irrigation Department, Raipur, District Raipur, Chhattisgarh, District : Raipur, Chhattisgarh

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... Non-applicants

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For Applicant :	Mr. S. Rajan, Advocate along with
	Ms. Aparajita Pandey, Advocate
For Non-applicants/ State :	Mr. Anil Pandey, G.A.

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Hon’ble Shri Justice Rakesh Mohan Pandey

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Judgment On Board

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16.3.2026

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1) The applicant has preferred this civil revision under Section 19 of Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983 [herein after to be referred as ‘Act of 1983’] assailing the award passed by the learned Chhattisgarh Arbitral Tribunal, Raipur in Reference

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Case No. 01/2014 dated 13.4.2016 whereby the claim of applicant was partly allowed.

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2) Facts of the present case are that a works contract for remodelling of Mahanadi Main Canal from KM 49.22 to 70 was awarded to the applicant and Agreement No. 2/DL of 90-91 was executed between the parties. The work order was issued on 22.6.1990 and work was to be completed within 18 months including rainy season. However, while executing the works contract, the quantities mentioned in the tender increased many fold, therefore in accordance with the aforesaid contract, the applicant sought extension of time up to March, 1993. The applicant addressed several letters seeking revision of rates but received no response. The applicant completed the work in year 1996 after five years of date of completion. In year 1995, non-applicants terminated the agreement and encashed the bank guarantee but at the same time issued additional direction for work exceeding original work. Being aggrieved, applicant filed reference petition before Madhya Pradesh Arbitral Tribunal, Bhopal and Reference Case No. 98/1998 was registered which was dismissed at preliminary stage on the ground of limitation vide order dated 27.2.1999. Thereafter, applicant filed Civil Revision No. 1340/1999 before High Court of Madhya Pradesh, Principal Seat – Jabalpur challenging the dismissal order. Meanwhile, in the year 2005 State authorities wrote to applicant for final bill on the basis of final measurements. The case was heard at length by this Court and revision preferred

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by applicant was allowed and matter was remanded back to Tribunal for hearing it afresh on merits. The reference petition was re-registered by Chhattisgarh Arbitral Tribunal, Raipur as Reference petition No. 1/2014. Subsequently, claim was partly allowed by the Tribunal vide its award dated 13.12.2017.

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3) Learned counsel for the applicant submits that even though reference petition was re-registered before learned Arbitral Tribunal pursuant to order dated 17.12.2013 passed by this Court, Arbitral Tribunal has rejected some of the claims on untenable grounds. He further submits that since the quantities indicated in the Bill of Quantities (BOQ) varied widely during execution, the contract could not be completed before the original completion date. He contends that State authorities were under obligation to revise the rates and also grant extension of time as per Clauses 31, 32 and 50 of the General Conditions of Contract (GCC). He further contends that dispute mainly revolves around claims involving loss of overheads and profit ; extra rates of increased quantities and interest component. He prays to set aside the award impugned.

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4) On the other hand, learned State counsel appearing for the nonapplicants would oppose. He submits that Arbitral Tribunal has meticulously gone into every aspect of the issue and passed the award, therefore the judicial interference to re-appreciate the evidence is uncalled for.

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5) Heard learned counsel appearing for the parties at length, considered their rival submissions made herein above and perused the record placed on the file with utmost circumspection.

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6) The applicant filed reference petition under Section 7A of Act of 1983 for an award of Rs. 1,54,00,653/- along with interest @ 21% from the non-applicants on different heads as under :-

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Claim No. 1 Head loss of overheads and profit Rs. 11,32,633.00/- Claim No. 2 Encashment of bank guarantee Rs. 2,00,000.00/- Claim No. 3 Idle Charges of machinery Rs. 6,00,000.00/- Claim No. 4 Final Bill Rs. 19,09,141.00/- Claim No. 5 Extra Rates for deviated quantities Rs. 1,13,49,800.00/- Claim No. 6 Refund of excess security deposit Rs. 1,09,079.00/- Claim No. 7 Damages on account of illegal termination Rs. 1,00,000.00/- Claim No. 8 Interest @ 21% p.a. from date of cause of action till payment Claim No. 9 Cost of Arbitration Rs. 2,60,913.00/-

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7) Admittedly, the applicant is not aggrieved by the Arbitral Tribunal’s assessment of claim amounts pertaining to bank guarantee, final bill, security deposit and cost of arbitration. The applicant is aggrieved by the reasoning given by Arbitral Tribunal with regard

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to claims regarding loss of overheads, extra rates for increased quantities and interest component.

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8) In respect to Claim No. 1 which relates to loss of overheads, Arbitral Tribunal has reached the conclusion holding that there is no evidence with regard to idling of manpower and machinery without shedding light on the letters dated 1.9.1991 and 13.9.1991 (Ex. P-37, 38 and 39) which were duly written by the applicant to respondent authorities at relevant point of time stressing the idling of manpower and machinery.

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9) Now coming to claim No. 5 which relates to extra rates of deviated quantities. It is the case of applicant that rates of earth work of all soils increased by 30% and rates of rock excavation increased by 75% during the course of works contract which led to noncompletion of work within stipulated time frame. Further, Clause 50 of the GCC expressly provides that if applicant is unable to complete the work within stipulated time frame on account of increase in the quantities, it should be given extension of time. Clause 31 of GCC stipulates that if the rates of BOQ items are increased by 30%, then the rate for such items shall be revised in accordance with procedure indicated under Clause 32.

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10) The Applicant highlighted the issue of extra rates via letters dated 3.1.1992, 31.12.1992, and 29.11.1993 (Ex. P-42, 54, and 50), but to no avail. Surprisingly, respondent authorities extended similar reliefs to other agencies working in neighboring area and such act

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has not been denied in evidence. Thus, in that view of the matter, Arbitral Tribunal ought to have accepted the rates indicated by the respondents instead of awarding only 10% of the total claim of applicant under the head of final bill to compensate the extra cost incurred by the applicant.

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11) Although, the applicant has claimed interest on all claim amounts @ 21% p.a. from the date of cause of action till its realization but Arbitral Tribunal has awarded interest @ 6 % p.a. for the period between 13.8.1998 till 27.2.1999 and from 17.12.2013 till date of award. In the instant revision, the applicant has pleaded that Tribunal has not considered the claim of pre reference interest and awarded only 6% and that too not for the whole period, thus applicant has been denied pendente lite interest for no fault of theirs. It is also quite vivid that the award impugned speaks nothing with respect to past, pendente lite and future interest, if any, which may be awarded by the Tribunal.

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12) Taking into consideration the above-discussed facts, the award passed by the Arbitral Tribunal dated 13.12.2017 is hereby setaside and the matter is remitted back to the Tribunal to decide it afresh after affording due opportunity of hearing to the parties, preferably within period of four months from the date of receipt of copy of this order.

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13) Accordingly, the instant civil revision stands disposed of . The parties are directed to appear before the Arbitral Tribunal on 20 th

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April, 2026. The records of the concerned Tribunal be sent back forthwith. The award amount already disbursed by the respondent authorities shall be adjusted against the final award, if any, which shall be passed ultimately by the Arbitral Tribunal.

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Sd/-

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(Rakesh Mohan Pandey) JUDGE

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A j i n k y a Digitally signed by AJINKYA PANSARE Date: 2026.03.23 10:35:41 +0530

M/S Rani Construction Pvt. Ltd. v. State of Madhya Pradesh (Now State of Chhattisgarh)

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M/S Rani Construction Pvt. Ltd. v. State of Madhya Pradesh (Now State of Chhattisgarh)

Case brief

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