Summary
A contractor building a masonry dam for Madhya Pradesh found the allotted sand quarry exhausted. An inspection committee confirmed this, and in November 2002 the Superintending Engineer permitted sand to be taken from a more distant quarry under clause 3.11(A). That clause allows a claim where a quarry is changed for reasons beyond the contractor's control on the Superintending Engineer's written order. The Executive Engineer added a condition barring any claim for extra lead. The arbitral tribunal awarded Rs 5.51 crore escalation, and the High Court upheld it. The Supreme Court dismissed the State's appeal. Both contractual conditions were met, so the right to escalation arose from the contract itself. Officers administering a government contract have no discretion to add conditions the contract does not contain. An earlier award on a different, unsupported quarry request was no bar.
Issues
- Whether a contractor was entitled to escalation for extra lead under clause 3.11(A) after a quarry change ordered by the Superintending Engineer, despite the Executive Engineer's condition denying extra payment.
- Whether an earlier arbitral award rejecting a previous quarry claim barred the claim as res judicata.
Provisions considered
- Sections 7 and 19, Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983The dispute went to statutory arbitration under Section 7; the High Court rightly declined to interfere in revision under Section 19(2), there being no jurisdictional error, misconduct or invalidity in the award. (¶¶ 11, 26, 27)
Held
- Under clause 3.11(A) a claim lies where the quarry is changed for circumstances beyond the contractor's control under the Superintending Engineer's written order; the inspection report of 31.10.2002 showing the allotted quarry was depleted and the order of 12.11.2002 satisfied both conditions. (¶¶ 18, 25)
- Where a contract permits escalation on stated conditions and they are met, the contractor has a contractual right; administrative discretion has no place in contractual matters unless the contract provides for it, so the Executive Engineer could not impose a condition denying extra lead. (¶¶ 22, 23, 24)
- The earlier award concerned a request made without proof of circumstances beyond control or any written sanction, and was rejected; these differences make res judicata inapplicable, though the contractor's argument that the contract could be split into two parts was rejected. (¶¶ 17, 20)
Result
Civil Appeal No. 8571 of 2022 dismissed, upholding the Madhya Pradesh High Court (Gwalior Bench) order dated 03.05.2019 in Arbitration Revision No. 04 of 2009 and the award dated 26.11.2008 of Rs 5,51,03,040 with 9% interest; parties to bear their own costs.