' LAL JAN KHATTAK J.--- This regular first appeal is directed against the judgment and decree dated 22-4-2013 of the learned Civil Judge-IV, D.I.Khan whereby suit of the respondent, for the recovery of escalation charges amounting to Rs.1.071 million, has been decreed against the appellants.
2. Brief facts giving rise to the instant appeal are that the appellants on 25-5-2008 invited tenders from the registered Contractors of Works and Services Department, Government of Khyber Pakhtunkhwa for the "CONSTRUCTION OF 200 KM ROAD 1/C 10-NO BRIDES IN N.-W.F.P." ADP NO.536 70646 (2007-08) SUB HEAD:- CONSTRUCTION OF 4-KM ROADS IN DISTRICT D.I.KHAN, SUB WORK:- CONSTRUCTION OF BLACK TOPPED ROAD FROM D.I.KHAN TANK ROAD TO GOMAL KALAN (2-KM)."
3. The respondent participated in the tender process and the rates offered by him, being lowest, were accepted and approved by the appellants and resultantly he was directed to attend the concerned office for execution of contract agreement of work which he duly executed where after letter of acceptance was issued to him on 18-6-2008.
4. It was the respondent's case before the trial court that after issuing the work order by the appellants-defendants, he zealously and devotedly carried out the required work on the site and successfully completed it according to its specification and he was paid all his bills except the escalation amount to which he is legally entitled to as per clause 5-A of the notification issued on 30-6-2005 by the Government of Khyber Pakhtunkhwa. Appellants when summoned contested the suit by filing their written statement wherein they denied and refuted claim of the respondent.
Necessary issues were framed from the divergent pleadings of the parties and they were directed to produce their evidence which they did whereafter the learned trial court decreed the suit of the respondent vide judgment and decree dated 22-4-2013 which has now been impugned by the appellants through the instant appeal.
5. Learned Additional Advocate General while arguing the case for the appellants contended that the respondent is not entitled to the decree so granted in view of the No Demand Certificate given by him to the appellants wherein he has categorically stated that he has received all his dues from the department. It was further contended by the learned Additional Advocate General that as the respondent has not applied for arbitration proceedings for settlement of the dispute as per clause 25 of the agreement executed by the department with him, therefore, he is debarred from invoking the jurisdiction of civil court.
6. As against the above, learned counsel for the respondent contended that the No Demand Certificate given by the respondent was independent of his right and demand for the escalation charges which were denied to him by the department for no valid and legal justification. Regarding the arbitration clause in the agreement it was contended by the learned counsel for the respondent that the top brass of the appellants has refused to pay escalation charges to the respondent and directed him to seek his remedy from the court of law, therefore, not availing the arbitration forum was immaterial by the respondent keeping in view the refusal of the respondent's claim by the appellants.
7. I have heard learned Additional Advocate-General for the appellants and learned counsel for the respondent and have also gone through the record of the case.
8. Admittedly the appellants have not denied application of clause 5-A to the case of the respondent which has been made part of the agreement executed between the parties to the case vide which the Government of Khyber Pakhtunkhwa, through notification dated 30th June, 2005, has agreed to approve payment of escalation charges to the contractors on all sorts of work tendered on or after 1st July, 2005. Copy of the said notification has been produced by PW-1 Khadim Hussain, Head Clerk of the C&W Department, D.I.Khan as Exh.PW1/6. According to clause 5- A(1) in case any variation (increase or decrease) to the extent of 5 percent or more, in the price of any of the item mentioned in sub-clause (2) of clause 5-A takes place after the acceptance of tender and before the completion of contract, then the amount payable under the contract shall be adjustable to the extent of the actual variation in the cost of the item concerned. Nouman Bashir, SDO, C&W Department, D.I.Khan appeared as DW-1 for the appellants who admitted in his cross-examination that the condition of escalation amount is a part of the agreement executed with the respondent. He further admitted in his cross-examination that the escalation charges of the respondent were assessed but the same were not allowed to him by the higher authorities and the respondent was directed to approach the court of law. He has further deposed that vide letter No.9827 dated 19-9-2010 which is Exh.DW1/D-1, a revised administrative approval was prepared qua the escalation work of the respondent. A startling disclosure was made by this witness in his cross- examination that according to the escalation notification of 2005, the department is making payment to different contractors under the orders of the competent authorities. He once again admitted it correct that clause 5-A is applicable to the case of the respondent and is a part of his agreement.
9. From the above discussion and reference to the evidence of the department, it is manifest that notification dated 30th June 2005 which is Exh.PW1/6, clause 5-A is attracted to the case of the respondent being a part of his agreement with the appellants. The appellants have raised two- pronged objections to the claim of the respondent. Firstly, that he has issued No Demand Certificate to the department at the time of receiving final bill/dues from the appellants, therefore, he is not entitled to the escalation amount and second that he has not gone for arbitration proceedings. Answer to the first objection lies in Exh.PW1/10 which is a copy of a letter addressed to the Secretary C&W Department Government of Khyber Pakhtukhwa by the President of all Contractors Association on 22-11-2011 wherein non-compliance of Works and Services Department on the Notifications on the subject of escalation/deescalation by the concerned Executive Engineer was depricated. Also there is a letter dated 29-11-2011 Exh.PW1/9 sent by the Chief Engineer to all Executive Engineers of the C&W Department directing them to process the genuine cases of escalation/de-escalation of the Contractors. Apart from the above two letters, there is a copy of the minutes of scrutiny committee meeting held on 25-2-2012, which is Exh.PW1/8, according to which claim of the respondent was refused and he was directed to approach a court of law for the redressal of his grievance. While on the other hand emphasis of the appellants for non-suiting the respondent is on the No Demand Certificate given by him on 19-10-2010 to the department. Had the respondent waived his right of payment of escalation charges then what for he pursued the same through the hectic efforts depicted in Exh.PW1/8, Exh.PW1/9 and Ex:PW1/10, which letters have been issued after the No Demand Certificate mentioned above. Thus this No Demand Certificate is of no help to the appellants for non-suiting the respondent as neither the same expressly mentions any waivering of the escalation charges nor there is any legal backing behind it which could debar the respondent from claiming his due right.
10. So far as the second objection of not referring the controversy to arbitration by the respondent is concerned, suffice it to say that the arbitration clause has been misunderstood and misinterpreted by the appellants, firstly because they themselves have closed the door of resolving the dispute any further when in the scrutiny committee meeting held on 25-2-2012 they directed the respondent to approach a court of law for his help. This meeting was chaired by the Secretary of the department and it is known to all and sundry that when a decision is taken about a matter in a high level meeting chaired by the administrative head of a department then nothing is left for an officer junior to him to decide the matter in a different way and even if he goes to decide it he will not dare to go beyond what has been decided by his administrative head on the issue. Secondly, the respondent alone should not be blamed for not approaching the forum of arbitration.
According to clause 25 of the agreement, in the event of any disagreement arising out of the contract, the matter shall first be referred to the Superintending Engineer for decision who shall give his decision within a period of not later than three months. The appellants have thrown the ball in the court of the respondent by blaming him that he has not gone for arbitration. Question arises why the department itself has not referred the matter/ disagreement to arbitration. The arbitration clause is not a one sided cycle and the appellants themselves could have referred the matter to the arbitrator who was their own officer, had they been serious in resolving the dispute through arbitration. Instead of directing the respondent to approach to a court of law they could have directed him to go for arbitration or they themselves could have sent the issue to the arbitrator. So the appellants are stopped to raise the plea that due to non-availing of the arbitration clause the respondent be non-suited.
11. On the other hand the respondent has proved his case for claiming the escalation charges from the department as on merit his claim for the aforesaid chArges has not been disputed by the appellants and only on technical grounds, as discussed above, his claim was denied which denial and resistance is not based on any legal footings.
12. The nutshell of the above discussion is that the respondent is very much entitled to the decree prayed for by him and the learned trial court has committed no illegality in decreeing his suit which decision of the learned trial court is well-reasoned being based on proper appreciation of the facts and evidence produced before the court. The appeal of the appellants has no legal force in it which is hereby dismissed.