MAA BHAGWATI CONSTRUCTION Vs. STATE OF CHHATTISGARH

JUDGEMENT

(1.) Being aggrieved by the award/order dtd. 14/2/2025 (Annexure P/1) passed by the Division Bench of the Chhattisgarh Madhyastham Adhikaran, Raipur (hereinafter referred to as "the Learned Tribunal" for the sake of brevity) in Reference Case No. 02/2023, titled Maa Bhagwati Construction v. State of Chhattisgarh & Others, whereby the Reference Petition filed by the petitioner has been dismissed as not maintainable, the petitioner is constrained to prefer the present Civil Revision Petition under Sec. 19 of the Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983.

(2.) Facts of the case, as projected by the applicant, in a nutshell, are that the applicant is an A-Class Contractor and is duly eligible to participate in various tenders issued by the Public Works Department of the State of Chhattisgarh. The applicant filed a Reference Case before the Learned Tribunal seeking an award allowing its claims to the tune of Rs.40,27,584.00 (Rupees Forty Lakhs Twenty-Seven Thousand Five Hundred and Eighty-Four Only) along with ante-lite, pendente-lite and post-lite interest, costs of arbitration and other appropriate reliefs. However, without adjudicating the claims on merits, the Learned Tribunal erroneously dismissed the reference petition solely on the ground of maintainability. The respondent department issued a Notice Inviting Tender dtd. 1/5/2017 for execution of certain construction work. The applicant, being an eligible bidder, participated in the tender process and its bid was accepted vide letter dtd. 5/7/2017. Pursuant thereto, an agreement bearing No. 64/D.L./2017-18 was executed for the work titled "Construction of 50-50 Capacity Prisoners Barracks (G+1) (12 Units) at Central Jail, Raipur with Electrification Work" (hereinafter referred to as the subject work). A work order was thereafter issued on 18/9/2017, and the applicant commenced execution of the subject work accordingly. The total contract value of the subject work was Rs.11,12,33,000.00. The time allowed for completion of the work was 18 months, including the rainy season, with the stipulated date of completion being 17/3/2019. Immediately after issuance of the work order, the applicant submitted a detailed work programme dtd. 20/9/2017, clearly demonstrating its intention to complete the work well before the due date. The applicant successfully executed and completed the entire work on 12/11/2018, i.e., much prior to the stipulated date of completion, and a completion certificate to that effect was issued by the competent authority. During execution of the work, payments were made by the respondent department in accordance with the contractual terms at various stages. The final agreement bill, except for the incentive bonus, was released on 19/12/2019, which was acknowledged by the applicant under protest. As required under Clause 5 of the agreement, the petitioner submitted a written undertaking dtd. 5/11/2018, expressly waiving its right to seek any extension of time, thereby fulfilling all conditions necessary for entitlement to Incentive Bonus under Clause 5.3 of the agreement. Clause 5.3 of the agreement specifically provides that where the contractor completes the work before the original stipulated time and waives the right to claim extension of time, the contractor shall be entitled to payment of incentive bonus at the prescribed rates. Since the applicant fulfilled all the conditions under the said clause, it became legally entitled to the incentive bonus. The undertaking dtd. 5/11/2018 was duly served upon the respondent authorities both personally and by post. Despite completion of the entire work, including electrification, and despite there being no dispute with regard to the quality or quantity of work executed, the respondent authorities arbitrarily withheld the incentive bonus. Repeated representations made by the applicant asserting its entitlement under the agreement were not considered. Initial representations dtd. 11/11/2019 and 3/12/2019 were submitted, followed by forwarding of the matter by higher authorities, including the office of the concerned Minister; however, no action was taken. In the meantime, the final bill excluding the incentive bonus was released on 19/12/2019, which the applicant accepted under protest. As the respondent authorities failed to act on the representations, the petitioner approached this Court by filing WPC No. 461 of 2020, which was disposed of on 3/2/2020 with a direction to the respondents to consider the claim of applicant for incentive bonus and interest in terms of the agreement. Pursuant to the directions of this Court, the applicant submitted a fresh detailed representation dtd. 11/2/2020. However, the respondent authorities reiterated their earlier stand and rejected the claim vide letters dtd. 3/3/2019 and 6/7/2020, without reconsidering the matter in light of this Court's order. This rejection gave rise to a formal dispute under Clause 28 of the agreement. Thereafter, the applicant invoked the dispute resolution mechanism under Clause 28 by submitting representations to the Superintending Engineer, Chief Engineer and other higher authorities within the prescribed time. All such representations were rejected, the final rejection being communicated vide order dtd. 24/11/2020 by the Chief Engineer. Aggrieved by the said rejection, the applicant filed WPC No. 3320 of 2020, which was dismissed on 11/8/2021 on the ground of availability of alternative remedy of arbitration. The writ appeal and Special Leave Petition preferred thereafter were also dismissed, culminating in dismissal of SLP No. 4304/2022 on 21/3/2022. It is submitted that the cause of action for filing the reference arose from the rejection order dtd. 24/11/2020, and the limitation period stood extended owing to the orders passed by the Hon'ble Supreme Court in view of the Covid-19 pandemic. Consequently, the reference filed before the Learned Tribunal was well within limitation and after due compliance of Clause 28 of the agreement. There is no dispute regarding completion of the work within the stipulated time or submission of the undertaking waiving extension of time. The sole dispute pertains to arbitrary non-payment of incentive bonus, which is contrary to the express terms of the agreement, particularly Clause 5.3. In this factual backdrop, the applicant filed a reference under Sec. 7 of the Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983, seeking adjudication of its claims. The respondents raised a preliminary objection regarding maintainability, which was duly replied to by the applicant. However, the Learned Tribunal, instead of adjudicating the dispute on merits, wrongly upheld the preliminary objection and dismissed the reference petition, giving rise to the present civil revision.

(3.) Learned counsel for the applicant submits that the impugned award dtd. 14/2/2025 passed by the learned Tribunal is ex facie illegal, perverse and bad in law. The learned Tribunal has committed a manifest error of law in dismissing the reference petition on the ground of maintainability, without adjudicating the claim on merits, despite the existence of a live and arbitrable dispute between the parties. It is further submitted that the learned Tribunal has failed to appreciate the facts and circumstances of the case in their proper perspective and has adopted a hyper-technical approach, thereby rendering the applicant remediless. Such an approach defeats the very object of the Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983, which is intended to provide an efficacious forum for resolution of contractual disputes involving the State. Learned counsel submits that the rejection of the claim by the respondent authorities, denying payment of Incentive Bonus despite admitted completion of the work within the stipulated time, issuance of completion certificate and submission of the undertaking waiving extension of time, is arbitrary, discriminatory, illegal, without jurisdiction and contrary to the express terms of the contract. The learned Tribunal failed to examine this arbitrariness and mechanically upheld the stand of the respondents. It is submitted that the learned Tribunal has failed to appreciate the settled position of law that any contractual clause which absolutely restricts a party from enforcing its rights or curtails the statutory period of limitation is void to that extent under Sec. 28 of the Contract Act, 1872. The interpretation adopted by the learned Tribunal has the effect of extinguishing the applicant's remedy and is therefore legally unsustainable. Learned counsel further submits that it is a fundamental principle of law that no person can contract out of the protection of the courts. The underlying rationale is to ensure fairness, particularly where the parties are not on an equal footing. Courts and tribunals are therefore duty-bound to interpret contractual clauses in a manner that advances justice and preserves remedies, rather than adopting a narrow and technical construction that frustrates legitimate claims. It is contended that where two interpretations of a contractual clause are possible, the interpretation that keeps the remedy alive must be preferred. In the present case, the agreement does not curtail the period of limitation but merely provides the stage at which rights crystallize upon rejection of the claim. Therefore, filing the reference after rejection of the claim cannot be held to be violative of Sec. 28 of the Contract Act. Learned counsel submits that the learned Tribunal failed to appreciate that the agreement does not contain any clause which is contrary to Sec. 28 of the Contract Act, nor does it impose an unreasonable restriction requiring the claimant to approach the Tribunal prior to rejection by the final authority under Clause 28. Treating delayed reference as a bar would, in fact, render the clause vulnerable to invalidation under Sec. 28. It is further submitted that the learned Tribunal erroneously held that the applicant had not complied with the time limits prescribed under Clause 28 of the agreement and, on that basis, concluded that the Tribunal lacked jurisdiction. Such a finding is wholly erroneous and contrary to the material placed on record. Learned counsel submits that the right of the applicant was asserted when the claim was made and was enforced only after the dispute arose upon rejection of the claim by the Executive Engineer vide letter dtd. 3/3/2020 and finally by the Chief Engineer vide order dtd. 24/11/2020. The cause of action to approach the Tribunal therefore arose only on 24/11/2020. The agreement governs assertion of rights, not enforcement before a judicial forum, which is governed by law.