JUDGMENTTAG-JUDGMENT
Sanjeev Sachdeva, J
Since the controversy involved in these petitions are identical, they are being heard and decided by this common order. For the sake of convenience,
the facts and grounds stated in Misc. Petition No.7073 of 2024 are taken into consideration.
2. Petitioner impugns order dated 12.08.2024, whereby the Reference Petition filed by the petitioner under Section 7 of Madhya Pradesh
Madhyastham Adhikaran Adhiniyam, 1983, has been dismissed solely on the ground of limitation.
3. Petitioner was awarded a works contract on 04.09.2012. Certain disputes arose in reference to the works contact and the contract was terminated
on 27.11.2014. The contract contains a clause for dispute redressal in clause 24, which reads as under:
24. Dispute Redressal System : If any dispute or| difference of any kind whatsoever shall arises in connection with or arising out of this
Contract or the execution of Works or maintenance of the Works thereunder, whether before its commencement or during the progress of
Works or after the termination, abandonment or breach of the Contract, it shall, in the first instance, be referred for settlement to the
competent authority described along with their powers in the Contract Data, above the rank of the Engineer. The competent authority shall,
within a period of forty five days after being requested in writing by the Contractor to do so, convey his decision to the Contractor. Such
decision in respect of every matter so referred shall, subject to review as hereinafter provided. be final and binding upon the Contractor. In
case the Works is already in progress, the Contractor shall proceed with the execution of the Works, including maintenance thereof,
pending receipt of the decision of the competent authority as aforesaid, with all due diligence.
4. In terms of clause 24, in cases any dispute a difference of any kind whatsoever arises in connection with or out of the contract or execution of
work or maintenance of work, whether before its commencement, during the progress or after termination. In the first instance, it is to be referred for
settlement to the competent authority and the competent authority was obliged to with, within a period of 45 days, after being requested in writing to
convey decision to the contractor and such decision shall be final and binding.
5. A protest petition was filed by the petitioner against the termination of contract, which was rejected by the competent authority on 23.02.2015. The
Tribunal has noticed that petitioner had filed an undated copy of the quantified claim addressed to the final authority under Clause 24 of the contract,
though there is no date of the receipt of quantified claim, a letter dated 23.07.2017 sent by the final authority mentions the date of submission of the
quantified claim as 20.12.2015 under Clause 24 of the contract and the same was pending on that date.
6. Reference may be had to Section 7-B of the Adhiniyam, 1983.
“7-B. Limitation.-(1) The Tribunal shall not admit a reference petition unless-
(a) the dispute is first referred for the decision of the final authority under the terms of the works contract; and
(b) the petition to the Tribunal is made within one year from the date of communication of the decision of the final authority: Provided that if
the final authority fails to decide the dispute within a period of six months from the date of reference to it, the petition to the Tribunal shall
be made within one year of the expiry of the said period of six months.
(2) Notwithstanding anything contained in sub-section (1), where no proceeding has been commenced at all before any Court preceding the
date of commencement of this Act or after Madhya Pradesh Madhyastham Adhikaran (Sanshodhan) Adhiniyam, 1990, a reference petition
shall be entertained within one year of the date of commencement of Madhya Pradesh Madhyastham Adhikaran (Sanshodhan) Adhiniyam,
1990 irrespective of the fact whether a decision has or has not been made by the final authority under the agreement.
(2-A) Notwithstanding anything contained in sub-section (1), the Tribunal shall not admit a reference petition unless it is made within three
years from the date on which the works contract is terminated, foreclosed, abandoned or comes to an end in any other manner or when a
dispute arises during the pendency of the works contract:
Provided that if a reference petition is filed by the State Government, such period shall be thirty years.â€
7. Section 7-B(1) stipulates that the Tribunal shall not admit a reference petition unless the dispute is first referred for the decision of the final authority
under the terms of works contract; and the petition is filed within one year from the date of communication of the decision of the final authority.
8. Proviso to Section 7-B (1) (b) stipulates that if the final authority fails to decide the dispute within a period of six months from the date of reference
to it, the petition to the Tribunal shall be made within a period of one year of expiry of the said period of six months. The limitation as prescribed under
Section 7-B (1) mandates that the petition has to be filed within one year from the date of communication of decision of the final authority. The final
authority has been given a period of six months to decide the dispute and in case the final authority fails to decide the dispute within a period of six
months, the reference has to be filed within a period of one year from the expiry of period of six months i.e. 18 months in total.
9. In the instant case, the quantified claim was submitted by the petitioner on 20.12.2015. The final authority had a period of six months to decide the
quantified claim i.e. up to 20.06.2016 and thereafter as the final authority failed to decide the dispute within a period of six months, petitioner had a
period of 12 months to file a reference petition i.e. on or before 20.06.2017. Admittedly, in the instant case, reference has been filed on 06.09.2017.
Consequently, the reference was not filed within a period of 18 months of the date of filing of quantified claim by the petitioner.
10. Reliance is placed by learned counsel for petitioner on clause 2-A of Section 7-B to contained that a reference petition can be filed within period
of three years from the date of which the works contract is terminated.
11. We are unable to accept the contention of learned counsel for the petitioner for the reason that Section 7-B(1) comes into play in case there are
specific terms and conditions providing Dispute Redressal Mechanism.
12. In the instant case, Clause 24 extracted hereinabove contains Dispute Redressal Mechanism i.e. need to approach the competent authority. In
case there is a stipulation in the contract then stipulation will come into play and accordingly Section 7-B(1) would be applicable. This is the stipulation
as laid down by a Special Bench of this Court in Sanjay Dubey Vs State of M.P (2012) 4 MPLJ 212, wherein the Special Bench has held as
under:
6. ...............In view of aforesaid enunciation of law, it is apparent that in case where an agreement provides for clause like Clause 29, the
jurisdiction of the Tribunal can be invoked only after approaching the authority as provided under the terms of the work contract. Section
7-B(1) in express terms provides that the Tribunal shall not admit a reference petition unless the dispute is first referred for decision of the
final authority under the terms of the contract and that the petition to the Tribunal is made within one year from the date of communication
of the decision of the final authority. The proviso to sub-section (1) of Section 7-B provides that if the final authority fails to decide the
dispute within the period of six months from the date of reference to it, the petition to the Tribunal shall be made within one year of the
expiry of said period of six months. Thus, it is necessary for an person aggrieved to approach the authority under the terms of the work
contract before filing the reference petition. On fulfillment of the conditions mentioned in the terms of the works contract alone as provided
in section 7-B(1) of the Act, the jurisdiction of the Tribunal can be invoked by filing a reference petition.
13. In view of the preceding analysis, we proceed to state our conclusions as under:-
(i) Where the works contract contains a clause like Clause 29, the jurisdiction of the Tribunal can be invoked only after approaching the
Authority as provided under the terms of the works contract.
(ii) However, subject to final adjudication of the issue by the Supreme Court as to whether Tribunal under the Act is a Court or not, in case
where the dispute has arisen under an agreement prior to coming into force of Section 7-B(2- A) of the Act which does not contain a clause
like Clause 29, an aggrieved person has to approach the Tribunal within a period of three years from the date of accrual of cause of
action.
(iii) Where the works contract does not contain any provision like Clause 29 and the dispute has arisen after coming into force of Section 7-
B(2-A) of the Act, in such a case, sub-section (2-A) of Section 7-B of the Act will apply and an aggrieved person can approach the Tribunal
within a period of three years from the date on which the works contract is terminated, foreclosed, abandoned or comes to an end in any
other manner or when a dispute arises during the pendency of the works contract.
(iv) In a case where the agreement is rescinded, two questions may arise for consideration. Firstly, which party to the agreement is at fault
and consequently, claim for damages for breach of contract. Secondly, the claim with regard to payment of amount of the final bill before
recission of the contract in accordance with the rates prescribed in the agreement. In the first case, the limitation would commence from the
date when the agreement is rescinded whereas in the second case, the limitation would commence from the date when the final bill is
prepared.
(v) The dispute under Clause 29 has to be submitted within the time limit which has been prescribed in the clause. The dispute cannot be
submitted to the Authorities mentioned in Clause 29 of the Agreement within a period of three years as the provisions of Limitation Act do
not apply to the Authorities under the Agreement as they are not the Courts.
(vi) Clause 29 of the Agreement is not violative of Section 28(b) of the Indian Contract Act, 1872.
13. The Special Bench of this Court has held that in case there is clause like Clause 29 (in the case ofS anjay Dubey akin to Clause 24, in the present
case), the jurisdiction of the Tribunal could be invoked only after approaching the authority provided under the terms of works contract. It is only in
case there is no clause akin to Clause 29 then the party would have a period of three years to approach the Tribunal by way of a Reference. In the
instant case, since there is a clause providing a Dispute Redressal Mechanism, the period of limitation would be six months + one year from the date
of making of the quantified claim.
14. In view of the matter, we are of the view that the Tribunal has correctly held that the subject Reference Petition having been filed beyond the
period of limitation on 06.09.2017 after the 18 months period got over on 20.06.2017.
15. We find no infirmity in the view taken by the Tribunal or any ground to interfere with the same.
16. In view of the above, we find no merit in the petition. The petition is consequently dismissed. No order as to costs.