NARMADA ENTERPRISES Vs. STATE OF M P

JUDGEMENT

(1.) PETITIONERS are assailing the award (P -4) dated 24 -12 -2001 which has been made a Rule of the Court by Vth A.D.J., Bhopal as per order P -5. Main challenge is on the ground that Arbitrator has exceeded the terms of contract and has virtually rewritten the contract between the parties M/s. B.D. Bhanot and M.P. State Mining Corporation to the detriment of right of other contractors and public exchequer.

(2.) IN the year 2000 tenders were invited for 'one year' for extraction of sand as per advertisement (P -1), dated 24 -10 - 2000, Sand was to be extracted from the sand mines. Advertisement (P -1) provided that the tenderers would be required to remove 4,44,567 cubic meters of sand within 'one year' and would deposit royalty in accordance with the prescribed rates. The work order was given w.e.f. 8 -11 -2000, Respondent No. 3 worked the mines for about 4 months and made a request for reduction of the quantity of extraction of sand by at least 31045 cubic meters which was reduced to 413522 cubic meters. This was to be removed within the period of one year from 8 -11 -2000 to 7 -11 -2001 and the contract was executed between the parties on 19 -3 -2001. RespondentNo. 3 was required to deposit a sum of Rs. 1,34,87,320/ - as instalments for the period between 8 -11 -2000 and 20 -5 -2001. By 25 -5 -2001, the respondent No. 3 had deposited only Rs. 89,81,005.75 paisa. There was outstanding balance of Rs. 45,04,514 in the instalments, since it was not paid in time, the respondent No. 3 was liable to pay interest Rs. 1,27,994.00. The total amount of Rs. 46,94,308.25 was outstanding against the respondent No. 3. This was a clear breach of condition No. 6 of the agreement (P -2). Order P -3 for terminating agreement was passed on 30 -5 -2001.

(3.) BEFORE the Arbitrator petitioners filed an application for intervention and to participate in the proceedings which application was rejected by learned Arbitrator. Arbitrator ultimately passed an award (P -4) on 24 -12 -2001. The Arbitrator has ordered that termination of contract by State Mining Corporation was not in accordance with law as well as the forfeiture of the security amount. As per agreement the quantity to be lifted is 4,13,522 cubic meters. Respondent No. 3 had lifted the quantity of 1,74,000 cubic meters only by the time the agreement was terminated. As such adequate time be given to respondent No. 3 M/s. B.D. Bhanot and Sons and respondent No. 3 be allowed to lift minimum of 17,000 cubic meters per month and possession of all the leased quarries be handed over to lift minimum of 17,000 cubic meters of sand per month. In case some of the quarries out of 59 are not available in lieu unavailable quarry thereof some other quarry be made available to M/s. B.D. Bhanot so that he is able to take out the requisite quantity of 17,000 cubit meters and to keep the separate account for that purpose. Other ancillary directions have also been issued which are to operate till respondent No. 3 is not able to lift the total quantity of 4,13,522 cubic meters of sand taking out 17,000 cubic meters per month of remaining quantity of 2,39,552 cubic meters. The security amount shall remain in deposit with the State Mining Corporation without any interest. However, security amount be reduced in proportion toquantity of 1,74,000 cubic meters which has been already removed by respondent No. 3 before termination of contract. The Arbitrator had passed an interim order not to auction the quarry till the decision of the matter. Said injunction has been vacated while passing the award (P -4).