Delhi High Court
Delhi Metro Rail Corporation Ltd. vs Sh. Satish Gujral on 20 July, 2015
Author: Valmiki J. Mehta
Bench: Valmiki J.Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(OS) No. 120/2006
20th July, 2015
DELHI METRO RAIL CORPORATION LTD. ..... Plaintiff
Through: Mr. Tarun Johri, Advocate
versus
SH. SATISH GUJRAL ..... Defendant
Through: Mr. Venancio D'costa, Advocate with
Mr. Saleem Hasan, Advocate
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not? Yes
VALMIKI J. MEHTA, J (ORAL)
1. This is a suit for recovery of money filed by plaintiff/Delhi Metro Rail Corporation Ltd. A total amount of Rs.36,50,000/- (Rupees Thirty Six Lacs Fifty Thousand only) is claimed from the defendant. Out of the amount of Rs.36,50,000/-, an amount of Rs.10,00,000/- (Rupees Ten Lacs only) is the amount which was paid as advance to the defendant for the eight artworks/murals which the defendant was to create and thereafter supply to the plaintiff, and with respect to which obligation the defendant has as per the suit, committed breach. Plaintiff claims that defendant has committed breach of contract by withdrawing from the project and even the two murals, out of the total of eight murals which the defendant had to CS(OS)No. 120/2006 Page 1 of 19 supply, were not made on the agreed subject matter of "Speed", and hence, defendant is liable to refund the amount of Rs.10 lacs which was paid as an advance amount by the plaintiff to the defendant. The price of the eight murals which was to be paid to the defendant was a sum of Rs.20 lacs. The plaintiff in addition to recovery of the advance of Rs.10 lacs seeks damages of Rs.25 lacs on account of delay in the finalisation of the finishes and treatment to be done on the walls and ceiling of the concourse level upon which the said artworks/murals to be supplied by the defendant was to be implemented.
2. Defendant has contested the suit. As per the defendant he is a world renowned artist and plaintiff had no right to reject the murals/artworks supplied by the defendant, inasmuch as, the defendant under the contract was to be the final judge of the artworks/murals i.e whether the artworks/murals did or did not fall under the subject of "Speed". It is also contended on behalf of the defendant that there was no agreement for supply of murals under the subject "Speed" and plaintiff is unjustified in arguing that the artworks/murals supplied by the defendant are not on the subject of "Speed". The contention of the defendant also is that he is not liable to refund a sum of Rs.10 lacs because this amount is to be taken as the value of CS(OS)No. 120/2006 Page 2 of 19 two murals which the defendant has supplied to the plaintiff. The claim for damages made by the plaintiff of Rs.25 lacs is also denied. It is prayed that the suit of the plaintiff be dismissed.
3. In the suit the following issues were framed on 23.08.2007:-
"(1) Whether as per the terms of the contract, the plaintiff could reject the murals made by the defendant? OPP (2) Whether the defendant is liable to refund the advance amount of Rs.10 lakhs taken by him from the plaintiff? OPP (3) Whether the plaintiff is entitled to any damages? If so, to what amount? OPP (4) Whether the plaintiff is entitled to the amount claimed in the suit? OPP (5) Whether the plaintiff is entitled to any interest? If so at what rate and on what amount and for which period? OPP (6) Relief."
4. My findings with respect to the above issues are:-
ISSUE NO.1 (1) Whether as per the terms of the contract, the plaintiff could reject the murals made by the defendant? OPP
5. The crux of the matter is what were the terms between the parties and as to whether the defendant was bound to supply murals on the subject "Speed". Also, related to this aspect is the aspect as to whether the defendant is the final judge of the murals/artworks to be supplied by the defendant to the plaintiff and as to whether the plaintiff under no CS(OS)No. 120/2006 Page 3 of 19 circumstances can question the designs of the murals supplied by the defendant, although, as per the plaintiff the artworks/murals supplied have no nexus or correlation to the subject "Speed".
6. The offer made by the defendant to the plaintiff is contained in the letter of the defendant dated 14.10.2004 addressed to Ms. Tripta Khurana, Chief Architect of the plaintiff. This document is Ex. P-1. This letter dated 14.10.2014 reads as under:-
"14 October 2004 Ms. Tripta Khurana Chief Architect Delhi Metro, New Delhi Sub: Mural Work for the Upper Level of Connaught Place station of Metro Dear Madam, Kindly refer to the subject mentioned above. In this connection I have met you and visited the site accompanied by you. I am giving below my proposal.
I propose doing eight panels as suggested by you on the upper level walls of the station platform in the following measurement:-
1. 668 sq.ft. 2 Nos. 3. 332 sq.ft. 2 Nos.
2. 297 sq.ft. 2 Nos. 4. 396 sq.ft. 2 Nos.
The murals will be designed by me but executed in glass mosaic by the party you may choose. You will also meet all the expenses directly as proposed by the executing party. I will of course provide the executing party designs and also periodical supervision but for regular day to day supervision if necessary you will provide person at your expenses. I will of course assist finding such a person.
CS(OS)No. 120/2006 Page 4 of 19 The Contractors for execution should undertake to fabricate the mosaic panels in New Delhi.
My fee for designing the eight panels will be Rs.20,00,000/- (Rupees Twenty Lakhs only). Plus any service or other taxes applicable.
Mode of Payment:-
1. 50% of the fee will be paid as advance.
2. Another 25% will be paid on providing complete drawings to the contractor.
3. A third 12.5% shall be paid on commencement of installation of the above mentioned panels.
4. The balance 12.5% will be paid within two weeks after the completion of work.
I hope you find the above proposal as agreeable and issue me your formal acceptance at you earliest convenience since the time available for execution is very short.
Thanking you Sincerely, Sd/-
SATISH GUJRAL" (underlining added)
7. A reading of the aforesaid letter shows that eight murals were to be supplied by the defendant to the plaintiff as stated in this letter and which were to be designed by the defendant. Execution of the design by creating the mural, however, had to be by a contractor of the plaintiff, and who had to fabricate the mosaic panels on which the artwork/mural was to be implemented. Defendant was to supervise the fabrication of the mosaic panels on which the defendant's artworks/murals were to be implemented. A total fee of Rs.20 lacs was to be paid. 50% of the same was to be paid in CS(OS)No. 120/2006 Page 5 of 19 advance with the balance being payable in three instalments of 25%, 12.5% and 12.5% as stated in this letter. Defendant received 50%, i.e Rs.10 lacs, as advance from the plaintiff and as was the condition imposed upon the plaintiff by the defendant in terms of this letter dated 14.10.2004.
8. Plaintiff accepted this offer of the defendant in terms of its letter dated 16.10.2004, Ex. P-2, and this letter reads as under:-
"DMRC/12/CA/17/4165 October 16, 2004
Shri Satish Gujral,
16, Feroze Gandhi Road,
New Delhi-110024
Sub: Letter of Acceptance: Mural Work for the Upper Level Connaught Place of Delhi Metro Ref: Your letter number Nil dated 01 November 2004 Dear Sir, In response to your letter quoted under reference, it is clarified that:
"The Mural will be designed by you but executed in glass Mosaic by the party, the DMRC may choose. DMRC will also meet all the expenses directly as proposed by the executing party. You will provide the executing party design and also periodical supervision but for regular day to day supervision, if necessary, DMRC will provide a person at their own expense. In addition, the contractors for execution will undertake the fabrication of Mosaic panels in New Delhi."
This letter shall be read in continuation to our letter of even number dated 29 October 2004 and shall form part of the agreement.
You are requested to return one copy of both the letters duly signed by you immediately.
CS(OS)No. 120/2006 Page 6 of 19 Thanking you, Yours sincerely, Sd/-
(Tripta Khurana) Chief Architect"
(underlining added)
9. At this stage, it bears clarification that the letter dated 16.10.2004 refers to a letter of a later date i.e 01.11.2004, however, since there was a slight change in the contents of the earlier issued letter dated 16.10.2004, the document Ex. P-2 is the changed letter dated 16.10.2004, and it was written after the defendant's letter dated 01.11.2004.
10. A reading of this letter shows that it is agreed between the parties that the eight murals will be designed by the defendant and the defendant will periodically supervise the fabrication of the mosaic panels on which the murals were to be implemented.
11. A reading of the aforesaid letters, as also other letters which have been exchanged between the parties, Ex. P-4 letter dated 01.11.2004 from defendant to plaintiff, and Ex. P-5 letter dated 19.11.2004 from defendant to plaintiff, do not show with any other correspondence, that, the subject matter of the murals must be "Speed", however, the fact that the murals which were to be supplied by the defendant to the plaintiff were to be under the subject CS(OS)No. 120/2006 Page 7 of 19 of "Speed" becomes clear from Ex. P-6, the letter dated 17.12.2004 sent of the defendant himself, and sent to the plaintiff. In this letter dated
17.12.2004 the defendant categorically and clearly admits that the designs of the murals will be on the subject and give expression to "Speed". This letter is extremely crucial for the decision of the present suit and therefore this letter Ex. P-6 dated 17.12.2004 is reproduced as under:-
"17 December 2004 Mrs. Tripta Khurana Chief Architect Delhi Metro, New Delhi Sub: Mural Work for the Upper Level of Connaught Place station of New Delhi Metro Dear Mrs. Khurana, Kindly refer to the telephonic talks you had with my wife Kiran on 15th December.
True that while offering my service for the above mentioned project I had promised that the design will give the expression to "Speed", which is essence of Metro and by which mode it intend to bring progress to the lives of people who use them. I am an artist of International standing with experience of more than six decades plus the fact that I am responsible for introducing this medium of murals in India. As such I presumed that my opinion held some credibility as to what "Speed"
means in graphic language. It is read not in the illustratio of theme but in linear character and form.
I believe that murals in public space should not only create atmospheric beauty but also help the people learn the contemporary language of visual arts. It was in this spirit that I accepted less than 10% of my usual fee and have worked for three months presuming that my understanding of mural has unquestionable credibility.
CS(OS)No. 120/2006 Page 8 of 19As such I find it rather shocking that you don't find the design I submitted fit the definition of Speed. Without offering further argument I regretfully withdraw from this project. I also offer to return as much of the advance money you had paid with fair consideration for the part of labour I had contributed. Thanking you Sincerely, Sd/-
SATISH GUJRAL" (underlining added)
12. A reading of para 2 of this letter leaves no manner of doubt that the murals/artworks which were to be supplied by the defendant to the plaintiff were to give expression or have the subject matter of "Speed".
13. At this stage it would be useful to refer to the Supreme Court judgment in the case of The Godhra Electricity Co. Ltd. and Another Vs. The State of Gujarat and Another (1975) 1 SCC 199, and para 11 of this judgment lays down the ratio that irrespective of the language of a contract if parties have understood the language to mean a particular thing, then irrespective of the language seeming to suggest otherwise, the actions of the parties have to be taken to be the language of the document executed between the parties. This relevant para 11 of the said judgment reads as under:-
"In the process of interpretation of the terms of a contract, the Court can frequently get great assistance from the interpreting statements CS(OS)No. 120/2006 Page 9 of 19 made by the parties themselves or from their conduct in rendering or in receiving performances under it. Parties can, by mutual agreement, make their own contracts; they can also by mutual agreement remake them. The process of practical interpretation and application, however, is not regarded by the parties as a remaking of the contract; nor do the courts so regard it. Instead, it is merely a further expression by the parties of the meaning that they give and have given to the terms of their contract previously made. There is no good reason why the courts should not give great weight to these further expressions by the parties, in view of the fact that they still have the same freedom of contract that they had originally. The American Courts receive subsequent actings as admissible guides in interpretation. It is true that one party cannot build up his case by making an interpretation in his own favour. It is the concurrence therein that such a party can use against the other party. This concurrence may be evidence by the other party's express assent thereto, by his acting in accordance with it, by his receipt without objection of performances that indicate it, or by saying nothing when he knows that the first party is acting on reliance upon the interpretation."
(underlining is mine)
14. In view of the ratio of the judgment in the case of The Godhra Electricity Co. Ltd.'s case (supra), once parties have acted and understood a particular document, though if it was silent with respect to the subject matter of the murals that the same was to be on the subject of "Speed" then it is the agreement between the parties that murals which were to be supplied by the defendant to the plaintiff was for giving expression to the concept/subject of "Speed" and it is hence not permissible for the defendant to say that, merely because he is a world renowned artist, whatever murals the defendant will supply to the plaintiff, they are deemed to be taken under CS(OS)No. 120/2006 Page 10 of 19 the heading of "Speed" and that plaintiff is nobody to question the designs/murals that they are not on the subject of "Speed". Also, no doubt as per the contract and correspondence between the parties, defendant had the final authority to decide as to what should be the designs/murals with respect to the subject "Speed", however, that cannot be that every mural given by the defendant should automatically be taken as that to be under the heading/subject/expression of "Speed". If the murals supplied by the defendant do not have even a reasonable nexus, leave aside direct nexus to the expression "Speed", then, the defendant cannot argue that merely because he was the final authority to decide the design of the murals, each and every design supplied by the defendant should automatically be taken under the expression "Speed".
15. To understand this issue better as to whether the murals/designs of murals supplied by the defendant to the plaintiff fall or do not fall under the heading "Speed", I am reproducing below the two graphics showing the two artworks of the two murals which were supplied by the defendant to the plaintiff and which two murals, according to the defendant, are on the subject of "Speed":-
CS(OS)No. 120/2006 Page 11 of 19 CS(OS)No. 120/2006 Page 12 of 19
16. I may note that the graphics/designs of the murals have been filed by both the parties, and though these documents have not been exhibited, I am entitled to look at these documents as they have been filed by the defendant himself. Though these documents are marked 'B' and 'C', I now Exhibit these documents as Ex. PDX-1 and PDX-2.
17. A reference to the aforesaid two designs shows that the first design only shows that there is a man with a baby animal in his hand along with a stick and he is looking at a picture of a lady with the head of a lamb with horns besides her. I agree with the counsel for the plaintiff that this mural/design under no circumstances can be said to have even a remote connection, leave aside a reasonable connection, to the subject/concept/ expression of "Speed". No doubt, defendant is the final authority as to design the mural on the subject of "Speed", however, this final authority cannot mean that anything and everything which the defendant says, he is entitled to decide, as an artist, is to be taken to be the subject of "Speed". Such an argument of the defendant cannot be accepted by the Court. The argument urged on behalf of the defendant is a most unreasonable argument inasmuch even assuming that the defendant is a world renowned artist, surely some basic parameters of the subject matter in question had to be CS(OS)No. 120/2006 Page 13 of 19 complied with by the defendant and therefore murals/designs had to have some correlation with the subject of "Speed". I thus do not find, so as far as the first mural design is concerned, that it has any connection with the subject of "Speed".
18. Even the second design has no connection with the subject of "Speed" because the second design/mural shows a man with a kite in his hand and a lady on the other side of the kite trying to help him to fly the kite. Again this mural/design has no reasonable nexus or correlation with the subject "Speed" and in my opinion the argument of the defendant in this regard is "kite flying". It is not permissible for an artist to argue that merely because he is 'a world renowned artist', he is the final authority and no one can question any design which is supplied by an artist such as the defendant even though designs supplied have no bearing whatsoever to the subject matter of the design which was to be supplied. In my opinion, the defendant is taking a most unreasonable stand, and defendant having breached the contract by stating that he will not perform the contract on the ground that plaintiff has rejected the two designs/murals, the defendant hence is guilty of breach of contract and he was thus in no manner entitled to the benefit of the doctrine of quantum meruit by seeking to retain 50% of the price viz Rs.10 CS(OS)No. 120/2006 Page 14 of 19 lacs given by the plaintiff to the defendant. Of course, the principle of quantum meruit would have come into play if the defendant would have done the work under the contract, however, this principle can have no application if the work done by the defendant cannot said to be the work under the contract. On the contrary, the principles akin to the principles comprised in Sections 65 and 70 of the Indian Contract Act, 1872 will come into play, and as per which if a defendant has received money under a contract which becomes void, then such a defendant is bound to reimburse the benefit. No doubt, in this case the contract has not become void but has been breached by the defendant, but in law, a person is not entitled to retain any amount which he has received under a contract which he himself has breached. The principle of Section 70 of the Indian Contract Act, 1872 will come into play, in that if a person receives benefit of a non-gratuitous act, then, the person who receives the benefit is bound to reimburse the person who has given the non-gratuitous benefit. Also, it is most important and relevant to note that as per Section 73 of the Indian Contract Act, 1872, on the defendant committing breach, he is in fact liable to compensate the plaintiff for the losses suffered under the contract and therefore refunding the advance amount paid under the contract would be one of the ways for retrieving the losses which are suffered by the plaintiff. CS(OS)No. 120/2006 Page 15 of 19
19. Though counsel for the defendant sought to place reliance upon certain statements made by the witness of the plaintiff Ms. Tripta Khurana, PW-1 in her cross-examination, and which aspects were used to argue that the contract does not contain the subject of "Speed", however, in view of the categorical admission of the defendant made in the letter dated 17.12.2004 Ex. P-6, there can be no manner of doubt that the defendant had to give designs for the murals on the subject of "Speed". The oral statements in cross-examination thus cannot change the specific and categorical admission contained in a written document, especially when the same has a categorical admission by none else than the defendant himself.
20. All in all, and in sum and substance, the defendant has received an amount of Rs.10 lacs under the contract which the defendant himself has breached, and hence the defendant cannot claim to retain the amount received under the contract. Defendant thus is liable to compensate the party such as the plaintiff who has paid advance to the defendant under the contract.
21. In view of the above, issue no.1 is decided in favour of the plaintiff and against the defendant and it is held that the defendant is guilty of breach of contract and defendant has failed to supply the murals/designs on the subject/design/expression of "Speed" to the plaintiff and which was the contract and understanding between the parties. CS(OS)No. 120/2006 Page 16 of 19 ISSUE NO.2 (2) Whether the defendant is liable to refund the advance amount of Rs.10 lakhs taken by him from the plaintiff? OPP
22. In view of the decision on issue no.1 in favour of the plaintiff, issue no.2 is also decided in favour of the plaintiff and it is held that the defendant is liable to refund the advance amount of Rs.10 lacs taken by the defendant from the plaintiff.
ISSUE NO.3 (3) Whether the plaintiff is entitled to any damages? If so, to what amount? OPP
23. No doubt, issue no.3 has been proved by the plaintiff in its favour to the extent that defendant is held guilty of breach of contract, however, damages can only be awarded if the damages are proved by the plaintiff, in accordance with law. Section 73 of the Indian Contract Act, 1872, which applies in the present case, requires the plaintiff to lead evidence as to how its cost had increased with respect to the work which was executed by it and that such an increase was on account of breach of contract by the defendant. However, plaintiff has led no credible evidence, CS(OS)No. 120/2006 Page 17 of 19 whatsoever, except self serving statements and self serving oral statements cannot be taken as discharge of onus of proof of damages having been caused to the plaintiff.
24. Issue no.3 is therefore is held against the plaintiff and it is held that the plaintiff has failed to prove damages caused to the plaintiff on account of the breach of contract by the defendant with the plaintiff. Plaintiff hence cannot be awarded damages as claimed.
ISSUE NO.4 (4) Whether the plaintiff is entitled to the amount claimed in the suit?
OPP
25. In view of the findings of issue nos.1 and 2 in favour of the plaintiff, it is held that plaintiff is entitled to refund of Rs.10 lacs from the defendant.
ISSUE NO.5 (5) Whether the plaintiff is entitled to any interest? If so at what rate and on what amount and for which period? OPP CS(OS)No. 120/2006 Page 18 of 19
26. In the facts and circumstances of the case, though retention of the money by the defendant in my opinion is most unreasonable and this Court was inclined to award a high rate of interest at 12% p.a. simple, but, in the peculiar circumstances of this case I think grant of simple interest @ 9% p.a. to the plaintiff will meet the ends of justice. Plaintiff is hence awarded simple interest on the amount of Rs.10 lacs @ 9% p.a. from 17.12.2004, being the date of letter Ex. P-6 and by which letter the defendant has breached the contract by illegally withdrawing from the same, till the date of filing of the suit.
ISSUE NO.7 (7) Relief.
27. The suit of the plaintiff is decreed against the defendant for a sum of Rs.10 lacs along with simple interest @ 9% p.a. from 17.12.2004 till the date of filing of the suit. Plaintiff will also be entitled to payment of simple interest @ 9 % p.a. pendente lite and till realisation of the amount. Plaintiff is also held entitled to costs of the suit.
Decree sheet be prepared accordingly.
JULY 20, 2015 VALMIKI J. MEHTA, J.
nn
CS(OS)No. 120/2006 Page 19 of 19