Partly allowed

Prem Singh v. The State Of Bihar and Ors.

Patna HC21 Jan 2013C.R./154/2012

Case brief

AI extract

What is this about?

The Patna High Court addressed a civil revision challenging an arbitration tribunal's award rejecting a contractor's claim on limitation grounds. The court noted undisputed dues and admitted lack of a final bill. It advised the respondent to reconsider the claim per higher law and modified the tribunal order to that effect.

What did the court decide?

The order of the Bihar Public Works Contracts Disputes Arbitration Tribunal was modified, directing the Executive Engineer to reconsider the petitioner's claim within three months.

Prem Singh Vs The State Of Bihar and Ors. — Contract and Commercial Disputes | Patna HC (2013)

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IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Revision No.154 of 2012

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====================================================== Prem Singh S/o Late Badudeo Singh Resident of Mohalla- Alkapuri, Police Station- Gardanibagh, District- Patna. .... .... Petitioner/s

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Appearance:

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Versus 1. The State of Bihar through the Principal Secretary, Building Construction Department, Government of Bihar, Nirman Bhawan, Bailey Road, Patna. 2. The Executive Engineer, Building Construction Department, North Gandhi Maidan, Patna.

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.... .... Respondent/s

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====================================================== Appearance: For the Petitioner/s : Mr. Uma Shankar Tiwary For the Respondent/s : Mr. Devendra Kumar Sinha, AAG-2

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====================================================== CORAM: HONOURABLE MR. JUSTICE JYOTI SARAN ORAL ORDER 06. 21.01.2013 I.A. No. 7323 of 2011

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This interlocutory application has been filed on behalf of the petitioner praying for condonation of delay that has occasioned in filing the Civil Revision application. As per computation made by the office, the period of limitation for filing the Civil Revision application expired on 14.08.2012 whereas the Civil Revision application was filed on 22.08.2012, thus there is a delay of about eight days in filing the Civil Revision application.

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Having heard learned counsel for the parties and for the reasons assigned in the interlocutory application, the delay occasioned in filing the Civil Revision application is condoned and the interlocutory application stands allowed.

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C.R. No. 154 of 2012

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This Civil Revision application is directed against a part of the award dated 17.04.2012 passed by the learned Bihar Public Works Contracts Disputes Arbitration Tribunal in Reference Case No. 55 of 2010 (Shri Prem

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Patna High Court C.R. No.154 of 2012 (6) dt.21-01-2013

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Singh versus State of Bihar), whereby of the nine claims raised by the petitioner, the learned Tribunal has allowed seven of the claims while rejecting the claim set forth in respect of Work No. 8 connected with Agreement No. 263 F2 of 1997-98 for an amount of Rs. 43,647/- and the claim relatable to Work No. 9 connected with Agreement No. 410 F2 of 2002-03 for an amount of Rs. 42,830.00 inter alia on grounds of having been raised belatedly and beyond the period of limitation of three years prescribed under the provisions of Limitation Act.

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As the claim relatable to Agreement No. 263 F2 of 1997-98 was not pressed before the Tribunal, hence Mr. Uma Shankar Tiwary, learned counsel appearing for the petitioner has questioned the award only to the extent the learned tribunal has rejected the claim relatable to Work No. 9 arising from Agreement No. 410 F2 of 2002-03 for an amount of Rs. 42,830/-.

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The facts are not in dispute. The petitioner a registered contractor entered into nine agreements with the respondent Executive Engineer, Building Construction Department, Patna for execution of the following works.

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(i) Annual repair of the Professor Quarter occupied by Professor U.K. Shrivastava of Bihar College of Engineering, Patna for year 2003-04 under Agreement No. 562 of 2003-04 for an amount of Rs. 59,929/-;

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(ii) Annual repair of compound wall and Chaukidar residence of Patna Training College Campus, Patna for the year 2004-05 under Agreement No. 17 F2 of 2005-06 for an amount of Rs. 49,911)/-;

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(iii) Special repair of Sales Tax Officer’s Compound wall and Temporary Shed of Residence No. 2 of Chhajubagh, Patna for the year 2003-04 (occupied by Shri Zakir Hussain, Chairman Vigilance) Part-1 under Agreement

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Patna High Court C.R. No.154 of 2012 (6) dt.21-01-2013

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No. 663 F2 of 2003-04 for an amount of Rs. 1, 92,546/-;

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(iv) Special repair of Sales Tax Officer’s Residence No. 2 at Chhajubagh, Patna for the year 2003-04 under Agreement No. 604 F2 of 2003-04 for an amount of Rs. 49,977/-;

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(v) Special repair Tax Officer’s Residence No. 3 and 4 at Chhajubagh, Patna for the year 2003-04 under Agreement No. 508 F2 of 2003-04 for an amount of Rs. 96,568/-;

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(vi) Special repair of Sales Tax Officer’s Residence No. 2 at Chhajubagh, Patna for the year 2003-04 (Part-2) under Agreement No. 605 F2 of 2003-04 for an amount of Rs. 1, 53,121/-;

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(vii) Annual repair of compound wall at Patna Training College Campus, Patna for the year 2003-04 under Agreement No. 561 F2 of 2003-04 for an amount of Rs. 49,796/-;

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(viii) Annual repair of Sales Tax Officer’s Residence No. 4 at Chhajubagh, Patna for the year 1997-98 under Agreement No. 263 F2 of 1997-98 for an amount of Rs. 43,647/-;

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(ix) Special repair of Sales Tax Officer’s Residence No. 2 (Part-2) at Chhajubagh, Patna for the year 2002-03 (occupied by Shri Zakir Hussain, Chairman Vigilance) under Agreement No. 410 F2 of 2002-03/-.

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The petitioner claims to have executed the work as per the terms and conditions and as per the specifications set out in the agreements well within time. As despite on account / final bill having been submitted and part payments having been made by the respondent Executive Engineer, an amount of Rs. 6,49,415/- remained unpaid, hence the petitioner after requesting the respondent Executive Engineer for release of the payments

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Patna High Court C.R. No.154 of 2012 (6) dt.21-01-2013

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ultimately served a notice upon him on 22.01.2007 under the provisions of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act of 1996’) for appointment of an Arbitrator for settlement of the claims. Copy of the notice is placed at Annexure-1 of the application. The Executive Engineer neither took steps for making payment of the unpaid dues as claimed by the petitioner nor took steps for referring the matter to an Arbitrator. The petitioner thus was constrained to file a Request Case No. 6 of 2008 under the provisions of Section 11 of the ‘Act of 1996’. The Request Case was considered by a Bench of this Court and by order passed on 29.01.2010 the petitioner was permitted to withdraw the Request Case for filing an appropriate application before the Bihar Public Works Contracts Disputes Arbitration Tribunal (hereinafter referred to as the Tribunal) constituted under the provisions of Bihar Public Works Contracts Disputes Arbitration Tribunal Act, 2008 (hereinafter to as the ‘Act of 2008’). In the light of the liberty granted by this Court, the petitioner filed a Reference Case No. 55 of 2010 before the Tribunal raising his claim of Rs. 6,49, 415 /- relatable to the works executed by the petitioner under the nine agreements set out hereinabove in this order together with interest and cost. An application for condonation of delay was also filed under Section 5 of the Limitation Act, 1963. The respondent Executive Engineer appeared in the matter and filed a detailed reply. As the issue raised in the present application is only restricted to the work executed by the petitioner pursuant to Agreement No. 410 F2 of 2002-03, hence this Court would be referring only to the pleadings made before the tribunal and the response made by the respondents in relation thereto. The said claim of the petitioner was rejected by the tribunal having been raised beyond the period of three years and thus

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Patna High Court C.R. No.154 of 2012 (6) dt.21-01-2013

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being barred by Limitation.

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Mr. Uma Shankar Tiwary, learned counsel appearing for the petitioner with reference to the agreement placed at Annexure-5 more particularly to Clause 6 of the Conditions of Contracts submits that a certificate is required to be issued by the Executive Engineer who is also referred to as the Engineer In-Charge, upon completion of the work by the Contractor and upon his removal from the area of the premises, all Scaffolding, surplus material, rubbish etc. as also the dirt from the wood work, doors, windows, halls, floors or other part of the building. If the Contractor failed to remove the said materials, the Engineer In-Charge was at liberty to remove the same at the expense of the Contractor. Clause 7 of the agreement required the Contractor to submit a bill in each month for the works executed in the previous month and the claim upon measurement being taken and found admissible would be adjusted if possible before expiry of 10 days of presentation of the bill. A final bill is to be prepared by the officers of the Public Works Department in accordance with the rules of Department in presence of the Contractor within the month of the date fixed for completion of the work as per Clause 8 of the agreement.

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Mr. Tiwary with reference to the copy of the ‘on account bill’ present at Annexure-6 submitted that the petitioner had raised an on account bill relatable to the work in question and the Executive Engineer upon consideration thereof found an amount of Rs. 1,46,653/- admissible to the petitioner and after reducing the payment made on 05.03.2003 of Rs. 1,03,823/- an amount of Rs. 42,830/- was found payable to the petitioner. As no steps were being taken by the respondents for making payment of the same hence the petitioner was constrained to take recourse to the legal

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Patna High Court C.R. No.154 of 2012 (6) dt.21-01-2013

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remedies available to him and which ultimately culminated in the order passed by the tribunal. It is stated that the respondent Executive Engineer while filing his written statement on 12.07.2011 has admitted to the dues payable to the petitioner arising from the Agreement No. 410F2 of 2002-03 amounting to Rs. 42,830/- and has also admitted that the said payment could not be made due to paucity of fund. It was thus submitted that where the respondents themselves have not raised any objection to the claim being barred by Limitation rather have admitted the claim of the petitioner, the learned tribunal has misdirected itself in rejecting the claims on grounds of Limitation even when a petition had been filed for condonation of delay.

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Mr. Tiwary has referred to a judgment of the Rajasthan High Court reported in AIR 1977 Raj. 165 ( State of Rajasthan Vs. Ram Kishan) , more particularly paragraphs 13, 28 to 30 to submit that a date of breach in such case would be the date of drawing the final bill and as in the present case the final bill was not prepared at least until the service of legal notice dated 22.01.2007 hence there is no issue of the claim being time barred. It is further submitted that in the present case the petitioner has no information about the preparation of the final bill nor has he received any communication in this regard. With reference to a Bench decision of this Court reported in 1990 (2) PLJR 259 (Hindustan steel Ltd. vs. R.C. Roy) , paragraph 13,16, 18 and 19 it is submitted that the limitation would only begin when the work under the agreement is wholly done, the details are entered in the measurement book and a final bill prepared. He submits that since these necessary requirements have not been fulfilled by the respondents, hence the claim cannot be rejected on grounds of limitation. Reference was also made by learned counsel to a judgment of the Supreme Court reported in ( 1988)2

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Patna High Court C.R. No.154 of 2012 (6) dt.21-01-2013

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SCC 388 (Major (Retd.) Inder Singh Rekhi vs. Delhi Development Authority) , more particularly to paragraph 4 thereof to submit that where a bill has not been finally prepared, the claim raised by the claimant would be the date of accrual of the cause of action and thus the cause of action in the case of the petitioner would be 22.1.2007 when he raised a claim for payment of the amounts. Learned counsel has also referred to the provisions of Article 18 of the Limitation Act to submit that a period of three years have been prescribed to claim the price of work done by a party at the request of the defendant and which would start running from the date the work is done. It is stated that the completion of work would be the date on which a certificate in terms of Clause 6 of the agreement is issued by the Executive Engineer and a final bill is prepared by him in terms of Clause 8 and as until the raising of the claim by the petitioner under the notice dated 22.01.2007 no such steps were taken by the respondents nor any intimation given to the petitioner in this regard, hence the claim cannot be rejected on grounds of limitation.

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The submissions of Mr. Tiwary has been strongly contested by Mr. Devendra Kumar Sinha, learned AAG-2 appearing for the respondents.

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With reference to the statement made by the petitioner in paragraph-4, 5, 7 and 8 of the application it is stated that the petitioner having himself admitted to preparation of final bill, he cannot now retract from the admission. In continuation Mr. Sinha with reference to the bill present at Annexure-6 submits that as the same was prepared in the year 2003, the claim raised through the notice dated 22.01.2007 present at Annexure-1 of the application was beyond the period of three years as prescribed under the provisions of the Limitation Act and thus not maintainable. Mr. Sinha again

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Patna High Court C.R. No.154 of 2012 (6) dt.21-01-2013

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with reference to the statement made by the petitioner in paragraph 23 of the application submits that the petitioner himself admits to a delay of nine months in preferring the claim and it is in these circumstances that he had also filed an application for condonation of delay but the learned tribunal having examined the rival contentions in the backdrop of judicial pronouncement was pleased to reject the same. Mr. Sinha with reference to the provisions of Section 9 of the ‘Act of 2008’ submitted that a period of one year has been prescribed under the Act for entertaining any reference to be calculated from the date on which the dispute has arisen and although a power is vested in the tribunal to condone the limitation period under Section 18 but the tribunal having examined the reason assigned by the petitioner and having not found it to be a sufficient cause for condoning the delay, this Court may not interfere with the part of the award rejecting his claim.

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I have heard learned counsel for the parties and have perused the materials on record. The facts as stated are not in dispute. The work executed by the petitioner again is not in dispute. The amount of Rs. 42,830/- found payable to the petitioner again is not in dispute. The only issue which falls for consideration before this Court is that whether in the aforementioned admitted circumstances, the order of the learned tribunal put to question before this Court suffers from any jurisdictional error or material irregularity requiring indulgence. The contention of the petitioner relying upon the judgments taken note of hereinabove on the issue that until such time a final bill is prepared, the limitation would not begin to run and since no intimation was given to the petitioner regarding issuance of certificate in terms of Clause 6 or preparation of final bill in terms of Clause 8, hence the claim cannot be rejected on grounds of limitation, in absence of any

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Patna High Court C.R. No.154 of 2012 (6) dt.21-01-2013

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documents being placed on record by the respondents to prove to the contrary, merits consideration. In fact even before the tribunal the claim of the petitioner was not objected to by the respondents on grounds of being barred by limitation rather even before the tribunal the stand taken by the respondents while admitting to the execution of work in question, was paucity of fund for not making the payment of the balance dues. Even the bill which is placed on record at Annexure-6, is signed on 10.03.2003 and countersigned by the Executive Engineer on 12.03.2003 and admits that an amount of Rs. 42,830/- is payable to the petitioner. Thus where the dues stands admitted and no document has been placed on record demonstrating any steps being taken by the Executive Engineer in terms of Clause-6 and 8 of the agreement placed at Annexure-5 and taking into consideration the judicial pronouncement relied upon by learned counsel for the petitioner clearly holding that the cause of action and the date of limitation would start running from the date of preparation of the final bill, this Court is of the opinion that the best course in the present circumstances would be to direct the Executive Engineer to consider the issue in the backdrop of the observations made hereinabove and the judicial pronouncement on the issue and pass appropriate orders in accordance with law after giving opportunity of hearing to the petitioner within a period of three months from the date of receipt /production of a copy of the order. The order of the tribunal put to question before this Court in the present application stands modified to that extent.

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With the observations and directions aforesaid, this application stands

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disposed of.

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S.Sb/-

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(Jyoti Saran, J)

Prem Singh v. The State Of Bihar and Ors.

Case brief

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Prem Singh v. The State Of Bihar and Ors.

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