BHAWANI SINGH Vs. A K MISHRA

JUDGEMENT

(1.) THE petitioner has filed the revision aggrieved by the Award of Rs.21,822/ - passed by Madhya Pradesh Arbitration Tribunal, Bhopal in Reference Case No. 80 of 1998.

(2.) THE respondent No. 1 filed a dispute before the Arbitration Tribunal, claiming a total sum of Rs.95,106/ - on various counts along with interest at the rate of 18% per annum. Respondent's tender for the work of construction of Class Rooms at P.T.S. Pachmarhi was accepted by M.P. Police Housing Corporation Limited. An agreement was executed on 19.5.95 and the work order was issued. Estimated cost of work as per Tender was Rs.2,84,000/ - and contract price of the accepted tender was Rs.3,38,386/ -. Time allowed was six months from the date of the work order. Earnest Money Rs.3,000/ - was deposited. The final bill was settled on 19.2.97. The security deposit of Rs.11.193/ - deducted from the running bills was refunded to the petitioner. The case of the respondent No. 1 was that due to defaults and breaches of the respondent No. 3, the respondent remained tied up with the work upto 30.3.96. The payment of final bill was also delayed and Rs.16,000/ - were arbitrarily deducted from the running bills by way of penalty and this amount was not refunded. Respondent No. 1 claimed a sum of Rs.95,106/ -. On account of delayed payment of final bill, interest from 1.7.96 to the date of payment calculated at Rs.2,679/ - was claimed. Interest on delayed refund of Security Deposit, calculated at Rs.1,025/ - was also claimed, and the refund of Rs.16,000/ - which were arbitrarily deducted from the running bills and final bill was also claimed, along with interest. Several other items were also put forth which have been disallowed by the Tribunal.

(3.) AN amount of Rs.16.000/ - along with interest has been ordered to be paid as this amount was deducted by way of penalty on the ground that a sum of Rs.1.500/ - was deducted as extra deposit for delay; an amount of Rs. 3,000/ - was deducted as extra deposit, without specifying as to for what purpose this amount of Rs.3,000/ - has been deducted for extra deposit. Further from the final bill a sum of Rs.14.747/ - was deducted as extra deposit. Out of this amount, an amount of Rs.3,247/ - was for roof and Rs.11,500/ - was for time extension. These facts have been culled out by the Tribunal from the Measurement Book. Before imposing these penalties, the Tribunal has found that no adjudication was made by the Managing Director for levy of compensation under Clause 2 of the agreement and the penalty order involves civil consequences and should not have been passed in a mechanical manner. A reasoned order should have been passed in accordance with the principles of natural justice and no justification was put forth before the Tribunal for deducting the amount on account of the penalty. Hence, the payment of the amount of Rs. 16,000/ - illegally deducted by way of penalty, has been ordered by the Tribunal along with interest of Rs.2, 856/ - thereon.