Water Resource Department vs Gsco Infrastructure Pvt. Ltd ...
2022 Latest Caselaw 5109 MP

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                                                                   AR No. 31/2019



           IN THE HIGH COURT OF MADHYA PRADESH
                                    AT INDORE

                              AR No. 31 of 2019
     (WATER RESOURCE DEPARTMENT AND OTHERS Vs GSCO INFRASTRUCTURE PVT. LTD
                 THROUGH POWER OF ATTORNEY SHRI JAGJIT SINGH)



                                   ORDER

(Passed on 08.04.2022) Per Vivek Rusia, J :

         Shri   Aditya       Garg    learned     Govt.   Advocate     for    the
petitioners/State.

Shri Siddhartha Kumar Jain learned counsel for the respondent. Heard on I.A. No.7063/2019, an application for stay. Government of M.P., Water Resources Department has filed the present revision u/s. 19 of the M.P. Madhyastham Adhikaran Adhiniyam, 1983 (hereinafter referred to as "the Act of 1983" for short) against the award dated 14.5.2019 passed in Reference Case No. 01/2012 filed by the respondent whereby claim of Rs.1,97,19,659/- with interest @ 6% per annum from the date of filing of the reference till full realization has been allowed.

The facts of the case, in short, are as under :

1/ Petitioner No.2 issued the Notice Inviting Tender (NIT) on 17.7.2003 for the work of construction of "Upper Beda Project including Earthen Dam, Composite Dam (Central Sillway) Non- Overflow portion Construction of Head Sluice, River Diversion Work and all other connected work". The respondent submitted a bid which was accepted, and the work order was issued and thereafter agreement No.1 of 2003-04 was executed on 1.0.2003. The total cost of the project was Rs.3,871.21 Lakhs. Since a large quantity was required in

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AR No. 31/2019

the construction of the Upper Beda Dam Project, therefore, quarries S- 1, S-2 and S-3 located at the bank of the river were also allotted to the respondent by way of the same contract for extraction of sand. Since it was made part of the NIT therefore it was obligatory on the part of the respondent to visit the site and check the availability of quality and quantity of the sand before submitting a Bid/ offer. After starting the construction work, the respondent has realized that the sand available at S-1, S-2 and S-3 was not up to mark. Said three quarries were containing only 15% sand at an average that too mixed with various stones of various sizes. The respondent made various correspondence to the Superintending Engineer (S.E.) that extra cost would be incurred in improving the quality and for arranging sand from other places to fulfil shortage. The respondent vide letter dated 24.10.2009 has submitted a claim of Rs.4,03,39,955/- before the S.E in terms of Clause 4.3.29.2 of the contract agreement. Thereafter, a reference was made to the M.P. Madhyastham Adhikaran, Bhopal (hereinafter referred to as "the Tribunal" for short) u/s. 7 of the Act of 1983 on 26.11.2011.

2/ Department appeared before the Tribunal and filed a written statement refuting all the claims of the respondent. It is specifically stated in the written statement that as per terms and conditions of NIT the quoted rates by the contractor shall be inclusive of the leads and lifts and in no case separate payment for leads or lifts to any materials including water shall be payable. The details shown in Annexure 'A' are only as a guide to the contractor but the contractor before tendering should satisfy himself regarding the quality and quantity available and all other details of Annexure 'C' and provide for any variation in respect of leads, lifts, place and methods of quarrying, etc.

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The appellant has denied that any extra cost was worked out for payment to the contractor and again and again reiterated that the work under contract being an item rate contract, the petitioner cannot claim any extra cost in bringing any material to the specifications as contained in technical specification Volume II. The Tribunal has passed the award by 2: 1 majority allowing the claim of the respondent holding that the respondent is entitled to the payment to the extra item of screening and washing and awarded an amount of Rs.1,97,19,659/- with interest @ 6% per annum. Hence, the present revision before this Court.

3/ Shri Aditya Garg, learned Govt. Advocate has drawn the attention of this Court to Annexure 'C' of Form - "B" - Item Rate Tender Contract Document of NIT No.1 of 2003-2004 in which a note is appended to the effect that this statement is only for the guidance of the contractor. The respondent should have satisfied himself regarding the availability of the required quality and quantity of the materials before participation in the tender process. Learned Government Advocate has further drawn the attention of this Court to Clause 3.11(A) which provides that the quoted rates of the contractor shall be inclusive of the leads and lifts and in no case separate payment for leads, or lifts to any materials including water shall be payable. Hence, the Tribunal has erred in awarding the sum of Rs.1,97,19,659/- incurred as an extra item for screening and washing the sand due to the non-availability at the site i.e. Quarries S-1, S-2 and S-3. It is further submitted by the learned Government Advocate for Clause 4.3.13.3 of the agreement does not provide the screening and washing of the extracted material from the quarry as an extra item. Therefore, the Tribunal has grossly erred in holding that the Contractor is entitled

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to the extra cost. If the amount of Rs.1,97,19,659/- is paid and released to the respondent, it would be very difficult to recover the same after the decision in the present arbitration revision. 4/ On the other hand, Shri Siddhartha Kumar Jain, learned counsel appearing for the respondent opposed the prayer by submitting that the NIT, as well as the contract executed between the parties specifically, provide for payment of extra charges. The Tribunal has duly considered the report submitted by the technical experts and rightly awarded the sum of Rs.1,97,19,659/- incurred by the respondent as an extra cost. The respondent has also filed Arbitration Revision No.20/2019 before this Court as its original claim of Rs.4,55,39,955/- has not been allowed in its entirety. It is further submitted by Shri Jain that since the award being a money decree cannot be stayed in a revision hence the petitioners be directed to deposit at least 50% of the awarded amount with permission to withdraw by submitting adequate security to the satisfaction of the Tribunal. The respondent is entitled to the fruits of the award as the reference was filed in the year 2012 which came to be decided in the year 2019 and if its execution stays, then that would cause an extra burden on the State to pay the amount with interest in the event of dismissal of this revision. In support of his contention, he has placed reliance on the judgments of the Apex Court in the case of Sihor Nagar Palika Bureau V/s. Bhabhlubhai Virabhai & Co. : (2005) 4 SCC 1; Malwa Strips Pvt. Ltd. V/s. Jyoti Ltd. : (2009) 2 SCC 426; and Pam Developments Pvt. Ltd. V/s. State of West Bengal : (2019) 8 SCC 112.

We have heard the learned counsel for the parties at length and perused the material available on record.

5/ It is not in dispute that the contract executed between the parties

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is a rate contract. All the works proposed for execution of the contract were notified in the NIT and made known to the tenderer. Clause 2.3.3 of the contract provides that each tenderer should carefully examine the drawings, specifications, special conditions and other particulars, etc. and visit the site of works and fully satisfy and quaint himself about the nature, location of the work, the surface conditions, quality and quantity of the materials required, the character of equipment and ancillaries needed preliminary to and during the executions of the work and general and local conditions which may affect the work or its cost. All the conditions of the tender notice will be binding on the contractor and will be part of the agreement. It has also been made clear from Clause 2.25 that the materials to be used on work specified in the contract will be only from the quarries specified in Annexure 'C' and if the change of quarries, from those mentioned in Annexure 'C', are necessitated due to any reason during the execution of work, such changes will be made only with the approval of the S.E. given in writing. As per Clause 3.11(A), the quoted rates of the contractor shall be inclusive of the leads and lifts and in no case separate payment for leads, or lifts to any materials including water shall be payable finally, before signing the agreement, the tenderer was required to satisfy himself regarding availability of required quality and quantity of the materials as noticed in Annexure 'C. After starting the work, the respondent has started complaining that the sand available in the quarries is not of the specifications mentioned in the NIT and an extra cost has been incurred for washing and cleaning. Learned Tribunal has observed that the petitioner (respondent herein) has not submitted any document to demonstrate as to how the claim of Rs.4,55,39,955/- was assessed and calculated. The Tribunal itself has not calculated the

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amount payable before awarding the amount of Rs.1,97,19,659/- and accepted the report of the Committee vide Exh. P/16. Therefore, a prima facie case in favour of the petitioners/State is made out. If the entire amount of Rs.1,97,19,659/- with interest from the date of filing of the reference till its realization is released, it would be very difficult for the State to recover the same from the respondent. The team of engineers of the department has valued the extra cost incurred by the respondent. As per Clause 2.25 that the materials to be used on work specified in the contract will be only from the quarries specified in Annexure 'C' and if the change of quarries, from those mentioned in Annexure 'C', is necessitated due to any reason during the execution of work, such changes will be made only with the approval of the S.E. given in writing.

Keeping in view of the facts and circumstances in totality execution of the impugned award shall remain stayed subject to a deposit amount of Rs 75.00.000/- ( In words seventy-five lakhs) within six weeks from today. The respondent shall be at liberty to withdraw on security to the satisfaction of the Tribunal.

List for final hearing.

      CC as per rules


         [ VIVEK RUSIA ]             [AMAR NATH (KESHARWANI)]
             JUDGE.                          JUDGE.
Alok/-

 Digitally signed by ALOK GARGAV
 Date: 2022.04.12 10:33:39 +05'30'