Patna High Court – Orders
The State Of Bihar vs M/S Mishra And Company, Partner … on 28 July, 2026
IN THE HIGH COURT OF JUDICATURE AT PATNA
CIVIL REVISION No.278 of 2016
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1. The State of Bihar through The Principal Secretary, Rural Works
Department, Vishweshwaraia Bhawan, Bailey Road, Patna.
2. The Engineer-in-Chief cum-Additional Secretary, Rural Works Department,
Vishweshwaraia Bhawan, Bailey Road, Patna.
3. The Superintending Engineer, Rural Works Department, Sasaram Circle,
Rohtas.
4. The Executive Engineer, Rural Works Department, Works Division No. 1,
Sasaram.
5. The Assistant Engineer, Rural Works Department, Works Division, Sasaram.
... ... Petitioner/s
Versus
1.1. Prabha Mishra wife of Late Surendra Kumar Mishra, X
2. The partner of M/s Mishra and Company namely Awadh Bihari Mishra X
... ... Respondent/s
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Appearance :
For the Petitioner/s : Mr. Piyush Kumar Pandey, AC to SC-11
For the Respondent/s : Mr. Anup Kumar, Advocate
======================================================
CORAM: HONOURABLE MR. JUSTICE RAMESH CHAND
MALVIYA
CAV ORDER
44 28-07-2026
Heard the learned counsel for the petitioner and the
respondent.
2. This Civil Revision Application is filed under
Section 13 of the Bihar Public Works Contract Dispute
Arbitration Tribunal Act, 2009 (hereinafter referred to as ‘Act’),
against the arbitral award dated 13.10.2015 passed in Reference
Case No. 29 of 2013, passed by the learned Bihar Public Works
Contracts Disputes Arbitration Tribunal, Patna, (hereinafter
referred to as the Tribunal) whereby and where under Reference
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case has been disposed of holding that Opposite Party M/s.
Mishra & Co. is entitled to receive Rs. 25,30,854/-(Twenty Five
Lakh Thirty Thousand Eight Hundred and Fifty Four) if not paid
earlier, with simple interest @ 10% p.a. from the date of filing
(dated 04.03.2013) till realisation, and further awarded litigation
costs of Rs. 26,865.
3. The brief facts of this case are that a tender for
various schemes, including construction and maintenance (for
up to 5 years) of the Pahari Senduar Road to Panauli Road under
the Mukhya Mantri Gram Sarak Yojna, was invited via letter no.
1922 dated 10.12.2006 by the Executive Engineer, Rural Works
Division, Sasaram. The letter stated that the work was to be
completed within 9 months and made it clear that participants
had to first satisfy themselves regarding the estimate, site
conditions, quarry availability, etc., before submitting their
tender, and that no claims on these counts would be entertained
afterwards (marked as Annexure 1.) M/s Mishra & Co. (the
Opposite Party) entered into Agreement No. 18F2 of 2007-08,
and a work order was issued on 8.8.2007, requiring completion
by 7.5.2008. Instead of complying, the construction company
kept stalling, sending applications, citing difficulties with the
approach road and other issues.
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4. The company was repeatedly asked to finish the
work via letters no. 651 (dated 29.2.2008), 1353 (dated
2.5.2008), 1726 (dated 30.5.2008), and 1819 (dated 11.6.2008)
since only 16% of the work had been completed, for which it
had already been paid Rs. 23,71,736/-(Twenty Three Lakh
Seventy One Thousand Seven Hundred and Thirty Six). Due to
the inaction of the Opposite Party, the Executive Engineer via
letter no. 1915 dated 24.6.2008, asked the Engineer-in-Chief to
consider to blacklist the company. This was followed by letter
no. 2225 (dated 22.7.2008), which stated that a date would be
fixed for measuring the work done, the agreement would be
canceled, an estimate for the incomplete work would be
prepared afresh, a new tender would be invited, all additional
costs recovered, security forfeited, and penal action taken
against M/s Mishra & Co., if it failed to submit a work
programme with specific dates. Through letter no. 3646, dated
15.12.2008, again, a representation was made by the Executive
Engineer to blacklist the Opposite Party.
5. Finally, per a decision taken in a meeting, the
Executive Engineer issued Notice no. 06/2009-10 (dated
19.10.2009), directing faulty contractors, including M/s Mishra
& Co., to be present (through an authorised representative) at
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the work site on the specified date, since final measurement was
to be taken on 28.11.2009, after which Agreement no. 18F2 of
2007-08 would stand cancelled, security money seized, the
company blacklisted, and additional costs for completing the
remaining work recovered. Meanwhile, the petitioner had filed
Writ Petition No. CWJC 15535 of 2009, which the (present)
petitioner contested, the writ was ultimately dismissed as
withdrawn, with liberty to approach the Bihar Public Works
Contract Dispute Arbitration Tribunal.
6. M/s Mishra & Company then filed Reference Case
No. 29 of 2015, seeking:
a. Rs. 25.00 lakhs for completing the 2.5 km
road;
b. Rs. 25,30,854/- for BSG work on the same
2.5 km stretch;
c. Rs. 6,00,000/- for repair work on a 0.04
km stretch.
The petitioners contested this Reference Case and filed a
counter-affidavit on 26.11.2013 denying the claim. The Hon’ble
Tribunal disposed of the Reference Case by order dated
13.10.2015, holding that M/s Mishra & Co. was entitled to
earnest money of Rs. 3,46,000/-(Three Lakh Forty Six
Thousand), Bank Guarantee of Rs. 5,18,000/-(Five Lakh
Eighteen Thousand), Security Deposits of Rs. 5,63,163/-(Five
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Lakh Sixty Three Thousand One Hundred and Sixty Three),
Time Extension of Rs. 10,57,069/-(Ten Lakh Fifty Seven
Thousand Sixty Nine), less Rs. 46,612/-(Forty Six Thousand Six
Hundred and Twelve) deducted for quality test; totalling Rs.
25,30,854/-(Twenty Five Lakh Thirty Thousand Eight Hundren
and Fifty Four). The Tribunal awarded this amount with 10%
simple interest per annum from the date of filing (dated
4.3.2013) till realization, plus litigation costs of Rs. 26,865/-
(Twenty Six Thousand Eight Hundred and Sixty Five). Being
aggrieved by the impugned Award dated 13.10.2015 passed by
the Tribunal, Patna, in Reference Case No. 29 of 2013, this
revision application is being preferred before this Court.
7. Learned counsel for the petitioner submits that in
the impugned Award, the Tribunal allowed the respondent’s
claims. The counsel then further submits that while allowing the
claimant-respondent’s claims, the Tribunal noted, in effect, that
“nothing has been brought to show that the agreement was
rescinded,” though, if we look closely, the Tribunal itself in Para
6, Page 6 of the Award had already noticed the claimant-
respondent’s own submission that the petitioners had arbitrarily
rescinded the agreement.
7.i. The counsel next submits that the claimant-
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respondent, in Paragraph 2 of the claim petition, had itself
referred to the order rescinding the contract vide Letter No.
1674 dated 19.10.2009 and Press Communique No. 2/2012-13.
Both were annexed as Annexure-2 series, and then prayed that
those communications be treated as arbitrary, with a prayer for
payment of Rs. 56,30,854/-(Fifty Six Lakh Thirty Thousand
Eight Hundred and Fifty Four). The counsel next submits that in
case there was a breach by the claimant-respondent, Clause 3 of
Agreement No. 18 F2 of 2007-2008 dated 08.08.2007 provides
for forfeiture of the security deposit, while Clause 2 speaks
about non-payment of compensation deducted for delay unless
an application for Extension of Time was made by the claimant-
respondent and the same was allowed by the Executive
Engineer.
7. ii. The counsel for the petitioner submits that,
nevertheless, the Tribunal without proper adjudication on the
rescission part of the agreement (Letter No. 1674 dated
19.10.2009 and Press Communique No. 2/2012-13) in the light
of the Agreement dated 08.08.2007, and also without assigning
any sort of reason, proceeded to allow the claims regarding
Earnest Money (Rs. 3,46,000/-), Bank Guarantee (Rs.
5,18,000/-) and Security Deposit (Rs. 5,63,163/-), though all are
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liable to be forfeited under Clause 3 of the Agreement. The
counsel further submits that the Tribunal allowed Rs.
10,57,069/- deducted towards Time Extension, which is contrary
to Clause 2 read with Clause 5 of the Agreement. It also allowed
Rs. 46,612/- towards Quality Test Report, without adjudicating
that Clause 32 of the Special Conditions of Contract requires
furnishing of a Quality Test Report as a precondition for
payment against material supplied.
7. iii. The counsel submits that the impugned Award
was passed without: (i) adjudicating the issue of rescission of
contract vide Letter No. 1674 dated 19.10.2009 and Press
Communique No. 2/2012-13, (ii) assigning any reason at all,
and (iii) appreciating the terms of Agreement No. 18 F2 of
2007-2008 dated 08.08.2007, relying on Associate Builders v.
DDA, (2015) 3 SCC 49, as followed in Delhi Metro Rail
Corporation Ltd. v. Delhi Airport Metro Express Pvt. Ltd.,
(2024) 6 SCC 357, Paras 35, 36 and 39. The counsel finally
submits that the impugned Award, being wholly unreasoned, is
plainly illegal, and that the Tribunal has committed a material
irregularity in passing it. So it is urged that this Hon’ble Court,
in exercise of its power under Section 13 of the Bihar Public
Works Contracts Disputes Arbitration Tribunal Act, 2008, may
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set aside the Award dated 13.10.2015.
8. The counsel for the Opposite Party submits that the
work in question under the Mukhya Mantri Gramin Sarak Yojna
(MMGSY), was allotted to the Opposite Party vide Agreement
No. 18F2 of 2007-08 dated 08.08.2007, pursuant to tender
invited vide Letter No. 1922 dated 10.12.2006, for an estimated
cost of Rs. 1,72,64,506/-, inclusive of five years’ maintenance
cost of Rs. 16,43,146/-, with the stipulated period for
completion being nine months, i.e., by 07.05.2008. The counsel
next submits that it would appear from the records of the Civil
Revision Petitioners themselves that substantial work was
executed by the Opposite Party under the said Agreement, the
show cause filed on behalf of Respondent No. 5 before the
Tribunal on 29.10.2013 itself recording completion of work
worth Rs. 1,12,63,673/-, entered in Measurement Book Nos.
1810 and 2243 (marked as Annexure C), and paid for by
Respondent No. 5 to the petitioner. The counsel adds that the
Opposite Party’s own claim chart before the Tribunal showed
the value of work done at Rs. 1,37,63,673/- against a total
agreement value of Rs. 1,72,64,506/-, i.e., more than 90% of the
value of the work.
8 i. The counsel submits that despite such execution,
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payment lawfully due to the Opposite Party, Earnest Money of
Rs. 3,46,000/-, Bank Guarantee of Rs. 5,18,000/-, Security
Deposit of Rs. 5,63,163/-, Time Extension refund of Rs.
10,57,069/-, and Quality Test deduction refund of Rs. 46,612/-,
aggregating Rs. 25,30,854/- was withheld, and this very break-
up was calculated and entered by the Executive Engineer
himself in the Measurement Book, as recorded in paragraph 5 of
the Counter Affidavit of the Opposite Party and in the body of
the impugned Award itself. The counsel further submits that on
account of non-payment despite repeated representations dated
30.01.2008 and 02.02.2008 to the Executive Engineer (on which
the Executive Engineer himself called for a report from the
Junior Engineer, Sri Ram Naresh Singh, vide order dated
04.02.2008), and a further reference by the Chief Engineer
himself to the Civil Revision Petitioners/Respondents vide letter
dated 16.07.2008 calling for a report that appears never to have
been furnished, the Opposite Party was constrained to approach
this Hon’ble Court in CWJC No. 15535 of 2009, which was
permitted to be withdrawn vide order dated 23.01.2013 with
liberty to approach the Tribunal constituted under the Bihar
Public Works Contract Dispute Arbitration Tribunal Act, 2009.
8. ii. The counsel submits that the Opposite Party
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accordingly filed Reference Case No. 29 of 2013, claiming
under three heads:
(a) Rs. 25,00,000/- towards completion of
the road of length 2.5 km;
(b) Rs. 25,30,854/- towards the amounts
referred to above; and
(c) Rs. 6,00,000/- towards repair of 0.4 km
of approach road.
The counsel points out that the Tribunal, vide the impugned
Award dated 13.10.2015, rejected claims (a) and (c) for want of
corroborative proof, the assertions in support thereof being
found ‘merely verbal’ and unsupported by any agreement or
record; however, on claim (b), the Tribunal recorded a clear
finding that the Opposite Party had proved entitlement to the
sum of Rs. 25,30,854/-, the same being reflected in the
Measurement Book, and further observed that nothing had been
brought to show that the agreement was rescinded. The counsel
submits that it is this very finding, confined to claim (b) alone,
that is sought to be supported in the present proceeding.
8.iii. The counsel submits that the Award proceeds on
an erroneous finding that security deposit is refunded only on
completion of work the counsel submits that this proceeds on a
mis-characterisation of the impugned Award, since the Tribunal
has nowhere held that the work stood fully completed; on the
contrary, it rejected the Opposite Party’s claim of Rs.
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25,00,000/- for completion of the 2.5 km road for want of proof.
The counsel submits that the award of Rs. 25,30,854/- is
founded not on completion but on specific entitlement to refund
of Earnest Money, Bank Guarantee, Security Deposit, Time
Extension and Quality Test amounts, all duly recorded in the
Measurement Book maintained by the Department’s own
Executive Engineer, and that refund of such securities ought not,
as a matter of law, remain contingent upon proof of 100%
completion, particularly where the Tribunal found that nothing
had been brought to show the agreement was rescinded in
accordance with law.
8.iv. He further submits that time extension/quality
control refunds require sanction, and that the claim of Rs. 25
lakhs was not entered in the Measurement Book. The counsel
submits that this conflates two distinct heads of claim; the claim
of Rs. 25,00,000/- was a separate and independent claim, which
the Tribunal itself disallowed precisely because it was not
reflected in the Measurement Book and was unsupported by
evidence. The counsel submits that the sum of Rs. 25,30,854/-
actually awarded is a wholly different head comprising
refundable securities and deductions, each computed and
entered by the Executive Engineer himself, and that this, being a
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computation by the Department’s own officer, may be regarded
as an admission against the interest of the Civil Revision
Petitioners, and the grievance of want of sanction may not be
permitted to be raised for the first time so as to detract from the
Department’s own recorded entries.
8.v. The counsel next submits that the disputed fact
that only 4% of the work was completed as against the claimed
90% is purely a disputed question of fact placed before and
considered by the Tribunal, the fact-finding forum constituted
for that purpose, and that the figure of 90% completion finds
independent corroboration in the Petitioners’ own show cause
filed before the Tribunal on 29.10.2013, recording work worth
Rs. 1,12,63,673/- as completed and paid for. The counsel
submits that the figure of 4% now revived stands contradicted
by the Department’s own pleadings, and may not, with respect,
be re-agitated as a question of fact in revisional jurisdiction.
8.vi. In response to the allegation that Clause 15 of the
Agreement bars entertainment of any claim of the Opposite
Party, the learned counsel for the Opposite Party submits that
Clause 15 would operate, on its own terms, as a bar only against
claims arising out of alleged breach of contract, and cannot be
read to extinguish the contractor’s entitlement to refund of his
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own Earnest Money, Bank Guarantee and Security Deposit,
which are refundable securities and not ‘claims’ for damages or
loss. The counsel submits that the Petitioners have not
demonstrated how Clause 15 defeats refund of these particular
components, especially where the same stand computed and
recorded in the Department’s own Measurement Book.
8. vii. Giving a response to the allegation that no
reasonable ground for extension of time was shown, the learned
counsel for the Opposite Party submits that the record annexed
to the Counter Affidavit shows that the delay in execution was
substantially attributable to the Civil Revision Petitioners and
not to any default of the Opposite Party. The representations
dated 30.01.2008 and 02.02.2008 were responded to by the
Executive Engineer, calling for a report from the Junior
Engineer vide order dated 04.02.2008, indicating active
engagement with site difficulties rather than abandonment by
the contractor. The counsel further submits that the Chief
Engineer’s letter dated 16.07.2008 appears to have gone
unanswered, leaving the claim ‘hanged under confusion’, a state
attributable to the Department’s own inaction. The counsel also
submits that the price of bitumen, a principal component of the
work, was required to be neutralised under the Bitumen Price
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Neutralisation Scheme introduced vide Road Construction
Department Resolution No. 3943(S) dated 18.03.2008, but such
adjustment does not appear to have been extended to the
Opposite Party despite enhancement in bitumen prices, resulting
in hardship and delay not attributable to the contractor.
8. viii. The counsel draws attention to the point of law
that this Hon’ble Court, while exercising revisional jurisdiction,
may not ordinarily re-appreciate the evidence or substitute its
own view for that of the Tribunal, save where jurisdictional
error, illegality, or material irregularity is shown to exist. The
counsel submits that the facts of the present case are squarely
covered by the law laid down by this Hon’ble Court in Rama
Kant Singh v. National Hydraulic Power Corporation Ltd.,
2012(4) PLJR 259, a decision in closely analogous
circumstances involving a works contract for road construction
under a similar Government scheme, where payment for
admittedly executed work was withheld by the employer, who
thereafter sought to terminate the contract and forfeit the
contractor’s securities. The counsel next relies on the Hon’ble
Supreme Court’s judgment in Hind Construction Contractors
v. State of Maharashtra, (1979) 2 SCR 1147, held that where
the employer itself fails to adhere to the payment terms and time
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ceases to be of the essence by reason of the employer’s own
conduct, any unilateral rescission by the employer is rendered
wrongful, and the contractor becomes entitled to refund of
security deposit, bank guarantee, and value of work done,
together with interest. The counsel submits that applying this
principle to the present facts, the Petitioners do not appear to
have finally rescinded the Agreement in accordance with law, a
fact specifically found by the Tribunal, while continuing to
correspond with the Opposite Party regarding completion well
beyond 07.05.2008 and withholding payment for admittedly
executed work; and that, on a parity of reasoning with Rama
Kant Singh (supra), no accountability for delay ought to be
fastened on the Opposite Party so as to defeat its entitlement to
refund.
8.ix. The counsel submits that the very limited scope
of revisional interference under Section 13 stands further
fortified by the recent co-ordinate Bench decision of this
Hon’ble Court in State of Bihar v. Devendra and Devendra
Engicons Private Limited, C.R. No. 272 of 2016, decided on
19.07.2023, wherein, upon closely analogous facts, this Hon’ble
Court dismissed the State’s revision and upheld an award of
refund of earnest money, bank guarantee and security deposit in
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favour of the contractor, extracting the same principle from
Rabindra Kumar Gupta v. Union of India, 2010(1) PLJR (SC)
145 wherein it was stated that:
“13. In view of the nature of objection
raised in the instant revision application,
which amounts to adjudication of disputed
facts between the parties and also
considering the fact that there is no error
apparent on the face of the record of the
impugned award as well as there is no
irregularity gross or jurisdictional error in
passing the impugned award, this court
finds no merit in this revision application.”
The counsel submits that an identical view was taken in State of
Bihar v. M/s Kumar Construction Company, C.R. No. 196 of
2012, decided on 19.08.2013, where despite the State’s
contention that only 28% of the work had been completed and
the contract rescinded, this Hon’ble Court upheld the Tribunal’s
award of refund on the ground that the very order of rescission
did not reflect that forfeiture was a measure to recompense loss
suffered by the State, but was a measure of penalty consequent
upon rescission alone, and further held that the State could not,
for the first time during arbitral proceedings, supplant the order
of forfeiture with fresh reasons of loss not found in the original
order and further observed:
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an award stands circumscribed to the
eventualities set out in Section 13 of the
Act, there has been extensive arguments by
both sides on the merits of the issue. The
Supreme Court in paragraphs 9 to 14 of the
judgments passed in the case of Rabindra
Kumar Gupta(supra) has referred to a
catena of judgments on the scope and ambit
of judicial review of an arbitration award.
The opinion expressed in the judgment so
referred makes it manifestly clear that
unless there is a jurisdictional infraction by
the Arbitral Tribunal in making of the
award or the award suffers from manifest
illegality or material irregularity, it is not to
be interfered with, in a routine manner. In
fact merely because there exists a possible
second view also cannot be a ground for
interference with an Arbitral Award. It is
also well settled that the High Court in
exercise of powers of judicial review would
not sit as a Court of appeal to reappreciate
the evidence led by the parties. Thus unless
the finding of the Tribunal is hounded with
the perversity or is based on a wrong
preposition of law, the High Court would
not interfere with the award merely for a
different possible view.”
8. x. The counsel submits that the parity between
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cited matters, as here, the Petitioners sought to resist refund of
the contractor’s own security deposit, earnest money and
connected deductions by re-agitating disputed questions of fact
already considered by the Tribunal, without demonstrating any
jurisdictional infirmity, manifest illegality or material
irregularity in the impugned Award, and in both cases this
Hon’ble Court declined interference. The counsel submits that
the same result must follow here, where the Tribunal’s finding
that the Civil Revision Petitioners failed to show valid
rescission of the Agreement, coupled with the Department’s own
computation of the refundable amounts in the Measurement
Book, leaves no room for interference in revisional jurisdiction.
8. xi. The counsel lastly submits that, for the reasons
stated above, the impugned Award dated 13.10.2015 may kindly
be regarded as a well-considered finding of fact, based on the
Petitioners’ own Measurement Book and documentary record,
disclosing no jurisdictional error, illegality or material
irregularity warranting interference. The counsel submits that
the grounds raised by the Civil Revision Petitioners appear to be
either factually incorrect, already considered and answered by
the Tribunal, or in the nature of an attempt at re-appreciation of
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pleased to dismiss the present Civil Revision No. 278 of 2016
and uphold the Award dated 13.10.2015 passed in Reference
Case No. 29 of 2013, with costs.
9. Having considered the rival submissions advanced
on behalf of the parties, and the impugned order, two points fall
for determination: first, whether the impugned Award discloses
any jurisdictional error, illegality, or material irregularity within
the meaning of Section 13 of the Bihar Public Works Contract
Disputes Arbitration Tribunal Act, 2008; and second, only if the
first is answered in the affirmative, whether the Opposite Party’s
entitlement to refund as found by the Tribunal is sustainable on
facts and law.
10. From the perusal of the impugned award dated
13.10.2015, it appears that the learned Tribunal allowed the
claim to the extent of Rs. 25,30,854/-, comprising Earnest
Money of Rs. 3,46,000/-, Bank Guarantee of Rs. 5,18,000/-,
Security Deposit of Rs. 5,63,163/-, Time Extension refund of
Rs. 10,57,069/-, and Quality Test deduction refund of Rs.
46,612/-, together with simple interest @10% from the date of
filing, i.e., 04.03.2013, till realization, while rejecting the further
claims of Rs. 25,00,000/- (for completion of 2.5 km. of road and
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500 m. BSG work) and Rs. 6,00,000/- (for maintenance of 4 km.
of road) for want of proof.
11. The jurisdiction under Section 13 of the Act is
revisional only, not appellate. So, this Court is not sitting like a
Court of First Appeal to take another swing at evidence, or to
swap its own understanding of the facts for the Tribunal’s view,
which is specially set up for such adjudication. Interference is
really called for only when the Award is suffering from patent
illegality, a jurisdictional error, or a material irregularity that
cuts at the root. Not just because another perspective on the
evidence was reasonably possible.
12. On perusal of the impugned Award it becomes
clear that the learned Tribunal was aware about the need for
physical verification of the work done, but it has also very
specifically recorded that the Opposite Party (Petitioner before
the Tribunal) did not show up at the time of that physical
verification, and that his plea that he couldn’t do the remaining
work because the road was not fit, did not really inspire
confidence, especially because he himself brought materials to
site and even constructed 19 culverts. The Tribunal also noted
that the claim about non-completion of 500 m of BSG work, and
the 2.5 km. road, remained unrebutted by the contractor, and
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since it was only verbal, it couldn’t be accepted. On that basis,
the Tribunal rejected the claim of Rs. 25,00,000/-.
13. Similarly, regarding the claim of Rs. 6,00,000/- for
maintenance of 4 km. of road, the Tribunal held that there was
absolutely no agreement at all between the parties for making a
road of that length, and that the contractor’s statement on that
was only verbal and without proof. Therefore, it refused that
claim too. These are findings of fact, made after consideration
of the material and the contractor’s own conduct, so they really
do not call for any interference, and, rightly, they were not being
attacked by either side in this proceeding.
14. Learned counsel for the petitioner- State has laid a
lot of stress on the fact that the Award, in allowing the sum of
Rs. 25,30,854/-, records only that “nothing has been brought to
show that the agreement was rescinded” and, it is argued, this
finding sits somewhat uneasily with the Tribunal’s own recital
elsewhere of the contractor’s own submission that the State had
rescinded the agreement, vide Letter No. 1674 dated 19.10.2009
and Press Communique No. 2/2012-13. So, the line is that an
Award which notes the existence of a purported rescission, but
then goes ahead, without dealing with it properly, to hold that no
rescission is shown, is unreasoned, and, therefore, plainly
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illegal.
15. This submission cannot just be dismissed as a
mere disagreement on facts , because it really goes to the
adequacy of reasons. At the same time, learned counsel for the
Opposite Party is right to say that the letter dated 19.10.2009
and the press communique of 2012-13 were themselves put in
issue by the contractor as arbitrary, and they were never shown,
either before the Tribunal or in this revision, to be a rescission
that was actually and validly done in terms of the Agreement, or
under the law. On a reasonable reading, the Tribunal’s finding
can be taken to mean that no lawful, effective rescission (and
not just a unilateral communication) was established. And this
Court isn’t convinced that this aspect alone makes the Award
unreasoned in such a way that it becomes patent illegality.
Therefore, Earnest Money, Bank Guarantee, and Security
Deposit, being refundable securities, whose forfeiture under
Clause 3 of the General Conditions presupposes an earlier,
established liability of the contractor to pay compensation under
some other clause, cannot be said to have been wrongly
refunded, since no such earlier liability, and no valid rescission,
stands established. These figures were, additionally, computed
and entered by the State’s own Executive Engineer in the
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Measurement Book, which fact the Tribunal has itself noted.
The refund of those three amounts, totalling Rs. 14,27,163/-,
along with the interest awarded thereon, shows no jurisdictional
defect or patent illegality that calls for interference.
16. But the situation is a bit different when we come
to the sum of Rs. 10,57,069/- allowed towards Time Extension.
The petitioner has specifically pushed that this deduction was
controlled by Clause 2 read with Clause 5 of the General
Conditions, which requires no compensation for delay unless an
application for extension is made by the contractor and allowed
by the Executive Engineer. Neither in the Award, nor in the
Opposite Party’s reply before this Court, is there any
engagement with whether such an application was actually
made and allowed under Clause 5. An Award which grants this
claim without referencing this specific contractual condition,
and without recording any finding on it, falls short of what a
reasoned Award requires, and, for this narrow, limited reason at
least, this Court cannot ignore the flaw even in revisional
jurisdiction.
17. As for the sum of Rs. 46,612/- allowed towards
the Quality Test deduction, no surviving infirmity remains for
consideration. Clause 32 of the Special and General Conditions,
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on which the petitioner relied, concerns only rejection of
substandard material supplied by the contractor, and its removal
at the contractor’s own cost, failing which removal by the
Department at the contractor’s cost. It does not link payment to
the furnishing of any Quality Test Report, and no other clause
has been shown to impose such a precondition. So the
petitioner’s challenge to this component has to fail on its own
terms, and this amount stands on the same plane as the Earnest
Money, Bank Guarantee and Security Deposit already discussed
in Paragraph 6 above.
18. In these circumstances, the impugned Award does
not warrant being set aside in its entirety, since its core findings
rejection of the claims of Rs. 25,00,000/- and Rs. 6,00,000/- for
want of proof, the finding of non-establishment of a valid
rescission resulting in refund of Earnest Money, Bank Guarantee
and Security Deposit, and the allowance of the Quality Test
deduction of Rs. 46,612/- are all findings of fact and law
reasonably arrived at and are not open to interference in
revisional jurisdiction. The Award cannot, however, be sustained
as regards the Time Extension component, which requires
reconsideration in light of the specific contractual clauses relied
upon by the petitioner.
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19. Accordingly, the present Civil Revision is allowed
in part.
20. The impugned Award dated 13.10.2015, insofar
as, it rejects the claims of Rs. 25,00,000/-(Twenty Five Lakh)
and Rs. 6,00,000/-(Six Lakh), is upheld, no interference being
called for therein.
21. The impugned Award, insofar as it directs refund
of Earnest Money (Rs. 3,46,000/-), Bank Guarantee (Rs.
5,18,000/-), Security Deposit (Rs. 5,63,163/-), and the Quality
Test deduction refund of Rs. 46,612/-(Forty Six Thousand Six
Hundred and Twelve), aggregating Rs. 14,73,775/-(Fourteen
Lakh Seventy Three Thousand Seven Hundred and Seventy
Five), together with simple interest @10% per annum thereon
from 04.03.2013 till realization, is upheld and shall not be
disturbed.
22. The impugned Award, insofar as it directs
payment of Rs. 10,57,069/-(Ten Lakh Fifty Seven Thousand and
Sixty Nine) towards Time Extension, together with interest
thereon, is set aside, and the matter to this limited extent is
remitted to the learned Tribunal for fresh adjudication in light of
Clause 2 read with Clause 5 of the General Conditions, and
Clause 15 of the Special and General Conditions bearing on rate
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fluctuation, after affording both parties an opportunity of
hearing.
23. The Tribunal shall endeavor to dispose of the
remitted issue expeditiously, and preferably within a period of
four months from the date of receipt of a copy of this order.
24. The parties shall bear their own costs.
(Ramesh Chand Malviya, J)
Sunnykr/-
U
