Madhya Pradesh High Court

M/S Dedaram Gorakhram Through Its ... vs M.P. Rural Road Development Authority on 31 January, 2025

Author: Vivek Rusia

Bench: Vivek Rusia

NEUTRAL CITATION NO. 2025:MPHC-IND:2569

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IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
&
HON'BLE SHRI JUSTICE GAJENDRA SINGH
ON THE 31st OF JANUARY, 2025
WRIT PETITION No. 23146 of 2024
M/S SHREE SAI CONSTRUCTION CO. THROUGH ITS
AUTHORIZED SIGNATROY SHRI ARVINDKUMAR BHIKHABHAI
PANDYA
Versus
M.P. RURAL ROAD DEVELOPMENT AUTHORITY THROUGH ITS
CHIEF EXECUTIVE OFFICER AND OTHERS

Appearance:
Shri Shekhar Sharma, learned Senior Advocate (through V.C.)
alongwith Ms. Nibedita Das - Advocate the petitioner.
Shri Bhavishya Sharma - Advocate for the respondents.

WITH
WRIT PETITION No. 18519 of 2024
NARAYANDAS PHOOLCHAND MISHRA INFRASTRUCTURE PVT.
LTD THROUGH ITS DIRECTOR SHRI PANKAJ MISHRA
Versus
M.P. RURAL ROAD DEVELOPMENT AUTHORITY AND OTHERS

Appearance:
Shri Shekhar Sharma, learned Senior Advocate (through V.C.)
alongwith Ms. Nibedita Das - Advocate the petitioner.
Shri Bhavishya Sharma - Advocate for the respondents.

WRIT PETITION No. 19703 of 2024
NARAYANDAS PHOOLCHAND MISHRA INFRASTRUCTURE PVT.
LTD. THROUGH ITS DIRECTOR SHRI PANKAJ MISHRA

Signature Not Verified
Signed by: DIVYANSH
SHUKLA
Signing time: 01-02-2025
12:41:35
NEUTRAL CITATION NO. 2025:MPHC-IND:2569

-2-
Versus
M.P. RURAL ROAD DEVELOPMENT AUTHORITY AND OTHERS

Appearance:
Shri Shekhar Sharma, learned Senior Advocate (through V.C.)
alongwith Ms. Nibedita Das - Advocate the petitioner.
Shri Bhavishya Sharma - Advocate for the respondents.

WRIT PETITION No. 19704 of 2024
NARAYANDAS PHOOLCHAND MISHRA INFRASTRUCTURE PVT.
LTD. THROUGH ITS DIRECTOR SHRI PANKAJ MISHRA
Versus
M.P. RURAL ROAD DEVELOPMENT AUTHORITY AND OTHERS

Appearance:
Shri Shekhar Sharma, learned Senior Advocate (through V.C.)
alongwith Ms. Nibedita Das - Advocate the petitioner.
Shri Bhavishya Sharma - Advocate for the respondent [CAVEAT].

WRIT PETITION No. 19973 of 2024
M/S DEDARAM GORAKHRAM THROUGH ITS DIRECTOR SHRI
DEDA RAM
Versus
M.P. RURAL ROAD DEVELOPMENT AUTHORITY AND OTHERS

Appearance:
Shri Shekhar Sharma, learned Senior Advocate (through V.C.)
alongwith Ms. Nibedita Das - Advocate the petitioner.
Shri Vishwajeet Joshi - Additional Advocate General for the respondent
/ State.
Shri Bhavishya Sharma - Advocate for the respondents No.1, 2 & 3

WRIT PETITION No. 19996 of 2024
M/S DEDARAM GORAKHRAM THROUGH ITS DIRECTOR SHRI
DEDA RAM
Versus

Signature Not Verified
Signed by: DIVYANSH
SHUKLA
Signing time: 01-02-2025
12:41:35
NEUTRAL CITATION NO. 2025:MPHC-IND:2569

-3-
M.P. RURAL ROAD DEVELOPMENT AUTHORITY AND OTHERS

Appearance:
Shri Shekhar Sharma, learned Senior Advocate (through V.C.)
alongwith Ms. Nibedita Das - Advocate the petitioner.
Shri Bhavishya Sharma - Advocate for the respondents.

WRIT PETITION No. 21797 of 2024
NARAYANDAS PHOOLCHAND MISHRA INFRASTRUCTURE PVT.
LTD. THROUGH ITS DIRECTOR SHRI PANKAJ MISHRA
Versus
M.P. RURAL ROAD DEVELOPMENT AUTHORITY THROUGH ITS
CHIEF EXECUITVE OFICER AND OTHERS

WRIT PETITION No. 23148 of 2024
M/ SHREE SAI CONSTRUCTION CO. THROUGH ITS
AUTHORIZED SIGNATORY SHRI ARVINDKUMAR BHIKHABHAI
PANDYA
Versus
M.P. RURAL ROAD DEVELOPMENT AUTHORITY THROUGH ITS
CHIEF EXECUTIVE OFFICER AND OTHERS

Signature Not Verified
Signed by: DIVYANSH
SHUKLA
Signing time: 01-02-2025
12:41:35
NEUTRAL CITATION NO. 2025:MPHC-IND:2569

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ORDER

Per: Justice Vivek Rusia

Regard being had to the similitude to the controversy involved in the present cases, with the joint request of the parties, all these petitions are finally heard and decided by this common order. Facts are being taken from Writ Petition No.23146 of 2024.

02. Petitioner has filed the present petition challenging the order dated 25.01.2024 sent by the General Manager, Madhya Pradesh Rural Road Development Authority, Alirajpur directing petitioner to deposit the amount of Rs.50,998.00 Lacs on the basis of focus area based audit submitted by Office of Audit General. The petitioner is a partnership firm engaged in the construction of road, bridge, building, etc.

03. The respondent No.3 was awarded a work of construction and maintenance of the road under PMGSY-III to the petitioner vide Package No.MP-49701 vide letter of acceptance dated 18.05.2020. The agreement was executed between the parties for the work to the tune of Rs.5,59,51,773/- with stipulated period of completion of the work within 12 months including rainy season. The petitioner completed the work and the respondent No.3 issued a completion certificate on 22.03.2021 thereafter, the maintenance period started and almost 3 years have been completed.

04. All of a sudden, the petitioner has been served with an impugned notice by the respondent. According to the petitioner, the aforesaid notice has wrongly been issued under Clause 52.2 of the General Condition of Contract which deals with the contract of the petitioner has not been completed, therefore, the recovery by invoking the Clause 52(i) and (ii) is absolutely illegal and liable to be set aside.

05. Learned counsel for the respondent submits that the identical bunch of writ petitions have already been dismissed by the Principal

NEUTRAL CITATION NO. 2025:MPHC-IND:2569

Bench at Jabalpur by relegating petitioner to avail the remedy available under the law i.e. arbitration before the Madhyastam Adhikaran. It is further submitted that as per Clause 25 of General Condition of Contract any dispute or difference of any kind whatsoever between the parties are liable to be decided by way of arbitration. Therefore, this petition is also liable to be dismissed.

Heard.

06. The Clause 25 of General Condition of Contract is reproduced below:

25. Arbitration 25.1 Either party will have the right of appeal, against the decision of the competent authority, nominated under Clause 24, to the Madhya Pradesh Arbitration Tribunal Constituted under Madhya Pradesh Madhyastham Adhiniyam, 1983 provided the amount of claim is more than Rs.50,000/-.

07. It is clear from the language of the aforesaid clause that any dispute or differences of any kind whatsoever arising in connection with or arising out of those contract whether before its commencement during progress of work or after termination shall be first referred for settlement to the competent authority and in failure of the settlement either party will have right to appeal against the decision of competent authority under Clause 25 to the M.P. Arbitration Tribunal, therefore, the contract between the parties has not come to an end because the maintenance period is going on. Hence, we have no reason to take a different view as has been taken in bunch of the writ petitions.

08. The similar issue came up for consideration before the Division Bench of this Court at Principal Seat Jabalpur and vide order dated 22.05.2024 in Writ Petition No.13981 of 2024, the petition has been dismissed with liberty to avail the remedy in accordance with the law. The order dated 22.05.2024 is reproduced below:

"Heard on the question of admission and interim relief.

NEUTRAL CITATION NO. 2025:MPHC-IND:2569

In this petition under Article 226 of the Constitution of India, petitioner has assailed the order dated 19.03.2024 and letter dated 24.04.2024 (Annexure P/8) issued by respondent No.3 whereby petitioner has been directed to deposit an amount of Rs. 51,97,471/- on account of submission of private bills of bitumen not issued by the public sector refineries.

2. The brief facts of the case are that the petitioner is a proprietorship firm involved in civil construction and maintenance. After being successful in the bid, petitioner was allotted the tender and issued a letter of acceptance dated 17.02.2020 for construction and routine maintenance of rural road under the Pradhan Mantri Gram Sadak Yojna in Mandsaur District. The construction was completed and after satisfaction by the respondents, petitioner submitted the final payment bill voucher along with receipt of bitumen bills. Respondent No. 3 issued show cause notice dated 14.07.2022 and 30.11.2023 for calling original bills of bitumen to which the petitioner submitted reply on 04.12.2023. However, without considering the reply and the documents filed by the petitioner, respondent No.3 issued the impugned communication dated 19.03.2024 and 24.04.2024 raising demand of Rs. 51,97,471/- against the petitioner in gross violation of the principles of natural justice. Hence, this petition.

3. Learned counsel for the petitioner submits that the road constructed and maintained with the usage of said bitumen have been recorded in the measurement book and taken into consideration and being approved while drawing the final bill of the petitioner for the work. As per Clause 4 Condition of Contract of the Standard Bidding Document, Condition No. 4.6B prescribes for price adjustment providing for grant of any variation in the cost of bitumen or steel on theoretical consumption. Further, the respondents have raised objection on the ground of purchase of bitumen from private refinery and that the bills have not been submitted by the petitioner. It is not the case of the respondents that the bitumen is of inferior or lesser quality. The conduct of the respondents in firstly permitting the petitioner to lay the bitumen and thereafter issuing order for recovery on the basis of audit objection is not permissible on the touchstone of Doctrine of Promissory Estoppel. Further, as per the contractual terms, no consequence is provided for non purchase of bitumen from the government refineries. No other efficacious remedy is available to the petitioner at this stage other than to approach this Court against the impugned action of the respondents. Hence, on these grounds, the writ petition deserves to be entertained.

4. In support of his contentions, learned counsel for the petitioner has relied on the judgment of the Apex Court in case of State of Karnatak vs. Shree Rameshwara Rice Mills, (1987) 2 SCC 160 wherein it is held that adjudication of concerning the contract violation by either of those privy to the contract cannot

NEUTRAL CITATION NO. 2025:MPHC-IND:2569

be legal. This is because allowing a party to the agreement to serve as the arbiter in their own case contradicts the fundamental principle of nemo debetesse judex in propria causa meaning one should not be a judge in their own cause. Learned counsel has also placed reliance on the Full Bench judgment of this Court in case of B.B.Verma vs. State of M.P., 2007 (4) MPLJ 610 upheld by the Apex Court in Tulsi Narayan Garg vs. M.P.Road Development Authority, 2019 SCC OnLine SC 1158.

5. Per contra, learned counsel appearing for the respondents opposed the prayer and submitted that the petitioners have an alternate and efficacious remedy available under Clauses 24 and 25 of the tender document/Conditions of Contract. Hence, this petition is liable to be dismissed being not maintainable.

6. Heard learned counsel for the parties. Perused the record.

7. The Clause 24 and 25 'General Conditions of Contract' of the tender document/Contract reads as under:

''24. Dispute Redressal System 24.1 If any dispute or difference of any kind what-so-ever shall arise in connection with or arising out of this Contract or the execution of Works or maintenance of the Works there under, whether before its commencement or during the progress of Works or after the termination, abandonment or breach of Contract, it shall, in the first instance, be referred for settlement to the competent authority with 45 days or arising of the dispute or difference, described along with their powers in the Contract date, above the rank of the Engineer. The competent authority shall, within a period of sixty days after being requested in writing by the Contractor to do so, convey his decision to the Contractor. Such decision in respect of every matter so referred shall, subject to review as hereinafter provided, be final and binding upon the Contractor. In case the Works is already in progress, the Contractor shall proceed with the execution of the Works, including maintenance thereof, pending receipt of the decision of the competent authority as aforesaid, with all due diligence.''

25. Arbitration 25.1 Either party will have the right to appeal, against the decision of the competent authority, nominated under Clause 24, to the Madhya Pradesh Arbitration Tribunal constituted under the Madhya Pradesh Madhyastham Adhiniyam, 1983 provided the amount of claim is more than Rs. 50,000/-.''

8. As per the aforesaid Clause, there is a proper dispute redressal system constituted by the State for resolution of any dispute between the parties. It is apparent from the record that the petitioner, without approaching the competent authority has filed this writ petition.

NEUTRAL CITATION NO. 2025:MPHC-IND:2569

9. The Apex Court in the case of Hindustan Coca Cola Beverage Private Ltd vs. Union of India and others reported in (2014) 15 SCC 44, in which it is held that:- "when the statute provides for statutory appeal, the said remedy is to be availed by the litigating parties". In Hameed Kunju vs. Nizam (2017) 8 SCC 611, the Apex Court held that any petition under Article 227 of Constitution of India should be dismissed in limine where there is statutory provision of appeal. In another case Ansal Housing and Construction Limited vs. State of Uttar Pradesh and others (2016) 13 SCC 305, it is held that when there statutory appeal is provided, then the said remedy has to be availed.

10. Taking into consideration the aforesaid pronouncement of law, this petition is not maintainable in view of the fact that Clause 24 and 25 of the Contract stipulates for a dispute redressal system, therefore, if it all there is any dispute between the parties, the petitioner is very well entitled to avail remedy under the said dispute redressal system.

11. Accordingly, the petition stands dismissed. However, petitioner would be at liberty to avail remedy in accordance with law, if so advised."

09. The Court has also relaxed the limitation provided under Clause 24.1 of General Conditions of Contract of the tender document / Contract. The order dated 09.01.2025 is reproduced below:

"Identical petitions involving same issue have already been decided vide order dated 22/05/2024 in WP No.13981/2024. These petitions are also disposed of in similar terms, however, liberty is granted to the petitioners to take steps to approach Dispute Redressal Mechanism in view of the order passed in the said petition or to approach same Court, if any issue has not been considered by the said Bench.

2. On approach being made by the petitioners within two weeks, the concerned authorities are directed to dispose of the same within the time bound period and not beyond two months from the date of this order.

3. Till then, recovery shall not be effected upon the petitioners.

4. In view of the time granted by this Court, the bar of limitation contained in Clause 24.1 of General Conditions of Contract of the tender document/Contract shall not come into the way of the petitioners.

5. Accordingly, the petitions stand disposed of."

10. Therefore, by relying on both the aforesaid orders, this Writ Petition is disposed of. As a consequence, all the aforesaid writ petitions also stand disposed of. The orders dated 22.05.2024 and 09.01.2025

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(supra) shall apply mutatis mutandis in the present cases also.

11. Let a photocopy of this order be kept in all the connected cases also.

(VIVEK RUSIA) (GAJENDRA SINGH) JUDGE JUDGE Divyansh