Bangalore District Court
M S Meda Narasimhulu And Co vs The Central Power Research Institute on 27 January, 2024
IN THE COURT OF LXXXIX ADDL.CITY CIVIL & SESSIONS
JUDGE, BENGALURU. (CCH-90)
Present: Sri.S.J.Krishna, B.Sc., LL.B.,
LXXXIX Addl.City Civil &
Sessions Judge, Bengaluru.
Dated: 27th JANUARY 2024
Com. O.S.No.5335/2015
PLAINTIFF: M/s. Meda Narasimhulu & Co.,
A registered partnership firm,
Having its office at No.6-3-
609/161/1,
Anandnagar Colony,
Hyderabad-500 004
Represented by its Partners
Mr.G.Balaji
Age; 49 years
(By Ms.B.V.Nidhishree, Advocate)
Vs.
DEFENDANT: The Central Power Research
Institute
Prof C.V.Raman Road,
Sadashivanagar,
Bengaluru-560 080,
Represented by its Secretary &
Director General
(By Smt.Sunita Srinivas, Advocate)
/2/
Com.O.S.No.5335/2015
Date of Institution of : 19.06.2015
suit
Nature of suit : Money Suit
(suit on pronote, suit for
declaration and
possession suit for
injunction, etc.,)
Date of commencement : 07.08.2021
of recording of evidence
Date of judgment : 27.01.2024
Total duration : Year/s Month/s Day/s
08 07 08
(S.J.KRISHNA)
LXXXIX ADDL.CITY CIVIL &
SESSIONS JUDGE, BENGALURU.
(CCH-90)
JUDGMENT
The Plaintiff has filed this suit praying the Court to pass a judgment and decree:
a) Directing the defendant to pay the plaintiff a sum of ₹.2,79,94,347/- towards claim 1 to 8 stated above along with interest thereon at the rate of 18% p.a. from the date of accrual till 31.05.2015.
b) Directing the defendant to pay to the plaintiff interest on the aforesaid amounts at the rate of 18% p.a. from 01.06.2015 till date of payment.
c) Grant costs of this suit and grant such other and further reliefs as are just.
d) Directing the defendant to reimburse GST on suit claim amount in terms of Clause 38 of Ex.P8.
/3/ Com.O.S.No.5335/2015 The summary of the case of the plaintiff is as follows:
02. The plaintiff is a registered partnership firm involved in the business of civil construction and infrastructure development having several years of experience. The Defendant is an autonomous society under the Ministry of Power, Government of India, registered under the Karnataka Societies Act, 1960.
03. The Defendant Institution was desirous of carrying out work of Construction of High Voltage Laboratory at UHVRL, CPRI, Hyderabad, Sub-Head- Civil Works its premises in UHV Research Laboratory Post Bag No.9, Uppal P.O., Warangal Highway, Hyderabad 500 039 and issued a notice for a tender dated 21.10.2009 with the specifications described in the works to be done. The Plaintiff's tender dated 06.11.2009 for a sum of ₹.3,86,35,755.76/- (Rupees Three Crores Eighty Six Lakhs Thirty Five Thousand Seven Hundred and Fifty Five and Seventy Six Paise only) was accepted by the Defendant and the Plaintiff was awarded the contract vide letter dated 27.11.2009. An agreement dated 23.12.2009 was entered into between the Plaintiff and the Defendant in this regard. The Notice inviting Tender, the General Conditions of Contract, the Additional Terms and Conditions and Specifications, Tender dated 06.11.2009, Letter of Acceptance dated 27.11.2009, Letter of /4/ Com.O.S.No.5335/2015 Commencement dated 10.12.2009 and Agreement dated 23.12.2009 are to be read and construed as forming part of the Agreement between the Parties and is collectively produced herewith.
04. The scope of work related to the construction of Ultra High Voltage Laboratory at UHVRL for a contract value of ₹.386.36 lakhs with stipulation to complete the work within a period of 15 months, which commenced from the 15th day of issue of LOA dated 27.11.2009, i.e., 12.12.2009, with the date of contract slated to be 11.03.2011 and included the construction of a Shed (civil work), an Administrative Building, and an Approach Road.
05. Upon receipt of the letter of intent the Plaintiff mobilized all resources in order to complete the awarded to it, well within time and in accordance with the schedule date of completion. The Defendant was to fulfill its contractual obligations including providing to the Plaintiff an unobstructed site, finalized drawings, designs and various other clearances.
06. Right from the date of handover of site, there were delays attributable to the Defendant. The site that was handed over on 12.12.2009 was not free from obstructions.
The Defendant awarded the jungle clearance work to another agency thereby delaying the Project by a period of three /5/ Com.O.S.No.5335/2015 weeks. As per the Contract, the Defendant was required to issue designs and drawings to the Plaintiff in a timely fashion, but failed to do so. The Defendant has failed to provide required design/ drawings in advance and has further failed to give drawings even during the execution stage. The Defendant has resorted to issuing drawings/ designs suffer from under employment and/or idle employment of site materials and resources. As a consequence of this haphazard manner of functioning, the Plaintiff was constantly put at a disadvantage, in terms of utilization of men and materials and caused the Plaintiff to often not follow its carefully laid out project schedule for the execution of works. Owing to delays caused by non-issue of timely drawings/designs, delay in handover of site by the Defendant caused the Defendant to extend the time period for completion of the Project on five occasions, with the last extension being granted upto 30.06.2013.
07. The drawings and designs, relating to the construction of the Shed, that were initially issued, were repeatedly revised by the Defendant thus further delaying the Project. Column center line drawings were initially issued on 18.12.2009 and again revised on 03.02.2010, which was after an initial delay of 7 days and subsequent total delay 80 days from the date of handing over of site, 12.12.2009. The Plaintiff had conducted a survey and readied the 'centre lines' marked on the site based on drawings issued on 18.12.2009.
/6/ Com.O.S.No.5335/2015 However, as there was a revision in the center line drawing, the Plaintiff was constrained to depute the survey agency yet again to revise the center line marking at site. Further, after excavation, the Plaintiff was constrained to keep on hold works such PCC and Footings until clearances towards the same were granted by the Defendant and its consultant geologist. On account of this, there was à hindrance of 30 days (between 07.01.2010 to 08.02.2010). Though the Plaintiff submitted its Concrete Design Mix Report within the stipulated time, to take up work on footings, the Defendant gave its clearance to take up concrete works only on 06.04.2010, causing a further delay of 90 days (from 07.01.2010 to 06.04.2010). Pedestals could not be cast for want of details viz., type of pedestals, and provision of pockets and thus, the Plaintiff could not take up the work of (Coarse Rubble Stone Masonry) CRS Basement all around. The pockets were decided and given clearance only on 05.10.2010, causing delay of over 5 months (from 07.05.2010 to 05.10.2010). Further, after casting of pedestals on 06.10.2010, there was no further scope of work, since the fabrication was entrusted to some other agency.
08. Despite such blatant delays and hindrances to the progress of the Project, the Plaintiff executed civil works entrusted to it pertaining to shed work, by 04.10.2010, in a short span of time. The Defendant employed contractor to execute work, whose work schedule was not fixed in parallel /7/ Com.O.S.No.5335/2015 with that of the Plaintiff's and further added to the delay in the project. The Defendant failed to entrust the steel fabrication and erection work to another agency, immediately after the award of the civil works to the Plaintiff. The plaintiff issued letter dated 27.12.2010 to the Defendant protesting against such inordinate delay. The Defendant entrusted the steel fabrication work to the third party agency only on 08.03.2011. The Plaintiff was thus prevented from carrying out any further work, as the Defendant failed to provide project site to the Plaintiff. Minutes of Meeting dated 30.08.2012 stating that the third party agency employed by the Defendant was yet to complete structural work before handing over site to the Plaintiff.
09. As part of the Project the Plaintiff was to construct the Administrative Building. The working drawings for the said construction were made available to it only on 03.02.2010 i.e., after a delay of nearly two months, though the project was commenced on 12.12.2009. A copy of the extract of the Drawings Register maintained by the Defendant in this regard is produced herewith. Further, though working designs and drawings of administrative building were supplied after a delay of nearly two months, the Defendant failed to furnish supplementary designs and drawings related to the staircase, head room, flooring, windows, sanitary facilities, false ceiling, wood work, approach road connecting to rolling shutters, storm water /8/ Com.O.S.No.5335/2015 drains at northern side and terrace were made available after a lapse of 8 months, as against the total contract period of 15 months. Copies of letters dated 01.09.2010, 11.11.2010 issued by the Plaintiff to the Defendant and Minutes of Meeting dated 08.03.2011 and 13.04.2011 is collectively produced herewith.
10. The clearance for the Approach Road was made available to the Plaintiff on 08.03.2011 much after the scheduled date of completion. The Plaintiff was further asked to take up the construction of a water tank, clearance for which was accorded only in April 2011. Copy of letter dated 24.06.2011 is produced herewith. It is of significance that the construction of a water tank was not within the scope of works awarded to the Plaintiff under the Contract.
11. In addition to the above lapses the Defendant has also been guilty of making delayed payments to the Plaintiff, while also withholding parts of monies due to the Plaintiff without any legal basis. A statement of interest accrued on delayed payments is produced herewith.
12. The Defendant has maintained a hindrance register which shows that there is a total delay of 830 days, solely attributable to the Defendant. In acknowledgment that the delay in the Project was attributable to the Defendant, the Defendant has repeatedly issued to the Plaintiff extensions of /9/ Com.O.S.No.5335/2015 time, the last of which was up to 30.06.2013 i.e. 27 months beyond the scheduled date of completion. Vide Clause 2 of the Contract the Defendant is liable to compensate the Plaintiff for these delays.
13. At the Defendant's instance there were variations/ deviations, in the works awarded to the Plaintiff and the Defendant is solely liable to compensate the Plaintiff for same. During the execution of the work, the quantities of certain items of work were drastically deviated from Bill of Quantities. Despite the procedure for fixation of rate for deviated quantities as per Clause 12.2 and 12.3 of the General Conditions of Contract, the Defendant has failed to adhere to Clause 12.2 and 12.3 and has instead proceeded in an ad-hoc and arbitrary manner. The Plaintiff has incurred heavy losses and expenditure due to the delays and lapses that are attributable to the Defendant. The Plaintiff was further constrained to extend the bank guarantee that formed part of the performance guarantee under the Contract, for no fault of his. The Plaintiff reiterates that it has at all times fulfilled its obligations under the Contract despite which the Defendant has withheld large sums of money in excess of ₹.54,72,351/- payable to the Defendant against duly certified RA bills. Copies of duly certified RA Bills along with the final bill raised by the Plaintiff are produced herewith.
/10/ Com.O.S.No.5335/2015
14. The Plaintiff completed works pertaining to the Administrative Building, Roads and Sump by 09.03.2012, as is evidenced by its letter dated 12.03.2012 issued to the Defendant. A copy of the letter is produced herewith. The Plaintiff issued communication dated 13.02.2013 to the Joint Director of the Defendant requesting the Defendant to declare the date of completion of work as 09.03.2012, in terms of Clause 12 (ii) of the Agreement owing to non- availability of the site. A copy of the letter is produced herewith. After a delay of over 5 months, the Defendant issued a communication dated 20.08.2013, stating that the date of closure of the contract and completion of work as 30.06.2013 and called upon the Plaintiff to submit its final bill. It is pertinent to note that admittedly no work was given to the Plaintiff to be done after completion of work by it on 09.03.2012 and the date of closure of contract arrived at by the Defendant is arbitrary and unscientific. A copy of the said communication is produced herewith. Subsequently, the Plaintiff sought issue of a completion certificate vide its letter dated 09.11.2013, copy of which is produced herewith. The Plaintiff also issued a communication dated 25.11.2013 to the Defendant placing on record all the delays and hindrances that had occurred in the execution of work owing to factors not within the control of the Plaintiff. A copy of the said communication is produced herewith.
/11/ Com.O.S.No.5335/2015
15. Without referring to various communications of the Plaintiff, the defendant proceeded to issue a unilateral single line communication dated 25.11.2013 (received by the Plaintiff on 27.11.2013) levying compensation of ₹.29,94,271/-(Twenty Nine Lakhs Ninety Four Thousand Two Hundred and Seventy One only) under Clause 2 of the Agreement for purported delay of 155 days on the part of the Plaintiff. By communication dated 27.11.2013, the Plaintiff protested against this unilateral and arbitrary levy of compensation and called upon the Defendant to recall the same. Copies of the aforesaid communications are produced herewith. All these communications were between the Plaintiff and the Defendant represented by its Engineer-In- Charge. When the Plaintiff did not receive any response from the Defendant's Engineer-In- Charge, the Plaintiff addressed a communication dated 14.12.2013 to the Defendant's High Power Committee Chairman, further requesting withdrawal of levy of compensation. A copy of the communication is produced herewith. The Defendant through its Engineer-in- charge issued a reply dated 01.01.2014 stating that the communication dated 25.11.2013 of the Defendant was kept in abeyance, till such time that the Competent Authority would review the position in so far as the levy of compensation is concerned. A copy of the communication is produced herewith.
/12/ Com.O.S.No.5335/2015
16. As things stood thus, the Plaintiff was shocked to receive an untenable show cause notice dated 10.01.2014 from the Chairman of the High-Power Committee of the Defendant informing it that compensation under Clause 2 of the agreement was being levied the Plaintiff on account of the delay in the Project, which has been duly to by the Plaintiff on 18.01.2014 inter alia stating that the delay was attributable solely to the Defendant, on account of the Defendant's failure to fulfill its contractual obligations. Copies of the aforesaid communications are produced herewith. The Plaintiff is hereby reiterating that it is not liable to pay any compensation, much less the fanciful claim made by the Defendant purportedly in terms of Clause 2 of the Contract, since the delay was solely attributable to the Defendant, on account of its failure to fulfill its contractual obligations.
17. In accordance with Clause 25 of the Special Conditions of Contract, vide letter dated 27.02.2014, the Plaintiff placed its claims before the Engineering Officer In- charge and the Chairman High Power Committee (Superintending Engineer) calling upon them to inter alia recall the unlawful levy of compensation, and to further pay the outstanding amounts due to it. A copy of the said communication is produced herewith. After a delay of over two months, in what is nothing but a counter-blast, and with no reference to the representations of the Plaintiff, the Defendant issued yet another mechanical response to the /13/ Com.O.S.No.5335/2015 Plaintiff further reiterating the levy of compensation on the Plaintiff and copy of the communication dated 27.03.2014 (received on 03.04.2014) is produced herewith. The Plaintiff issued two communications dated 09.04.2014 to the Director General and protesting the levy of compensation as well as seeking settlement of its final bill against the Defendant. Copies of which are produced herewith. Clause 25 of the Contract provides for resolution of disputes between the Parties. The plaintiff has extracted Clause 25 for the reference of the Court.
18. The Engineering Officer-In-Charge of the Defendant has failed to communicate his decision or otherwise respond to the Plaintiff's representations. Further, the Director-General has till date failed to respond to the representation despite being required to do so within a period of 30 days after affording the Plaintiff a personal hearing.
19. Consequently, the Plaintiff was constrained to issue a legal notice to the Defendant dated 12.08.2014, intimating the Defendant that the Plaintiff would be moving the appropriate Court to enforce its claims against the Defendant. Despite due receipt of the legal notice, the Defendant has failed to respond to the notice. A copy of the legal notice and the postal acknowledgment and shara in this regard are produced herewith. The legal notice was duly served on the Defendant on 13.08.2014. Thus, the Plaintiff is constrained to file this suit.
/14/ Com.O.S.No.5335/2015
20. The Defendant is liable to pay to the Plaintiff the following sums of money towards its various claims as detailed below:
a. Claim No.1-Payments due for work done under the Contract, withheld illegally by the Defendant- ₹.54.72,351/- (Rupees Fifty Four Lakhs Seventy Two Thousand Three Hundred and Fifty One only). The Defendant is due to the Plaintiff the aforesaid amounts accruing from deviations adopted by the Defendant in contravention of Clause 12(2) of the General Conditions of Contract resulting from the indecision on the part of the Defendant and also towards refund of security deposit lying with the Defendant.
b. Claim No.2- Interest on withheld/ delayed payments @ 18% p.a. from date of accrual till 31.05.2015 ₹.43,00,228/- (Rupees Forty Three Lakhs and Two Hundred and Twenty Eight only).
c. Claim No.3 Compensation towards curtailment of contract amount Despite the award of contract for a sum of ₹.3,86,36,000/-, amount work given to the Plaintiff by the Defendant was only to the extent of ₹.2,78,55,000/-. The curtailment of the contract amounting to ₹.1,07,81,000/- is solely attributable to the Defendant and the Plaintiff is entitled to be paid towards loss of profit and overheads. As per Schedule F of the General Conditions of Contract, the expected profits that was to accrue to the Plaintiff on the said project is 15%. Thus, the Plaintiff is entitled to receive a sum /15/ Com.O.S.No.5335/2015 of ₹. 16,17,000/- (Rupees Sixteen Lakhs Seventeen Thousand only) as 15% of the curtailed work towards loss of overheads and profits.
d. Claim No.4: Compensation due to prolongation of contract beyond stipulated time - The initial period of the Contract between the parties was for a period of 15 months which has been extended to a period of 27 months 20 days owing to the lapses and delays attributable solely to the Defendant. The Plaintiff is entitled to receive compensation from the Defendant towards loss and damage caused due to breach of contract in terms of Section 73 of the Indian Contract Act. In accordance established practice, compensation calculated on 'Patil Form" (which is an accерtable commercial standard) in this regard amounts to ₹.1,22,96,000/- (Rupees One Twenty Two Lakhs Ninety Six Thousand only).
e. Claim No.5: Interest and Bank Guarantee commission for delay in release of Performance Guarantee and Security Deposit - The Plaintiff had furnished a Bank Guarantee of ₹.19,50,000/- (Rupees Nineteen Lakhs Fifty Thousand only) as Performance Guarantee towards the Contract. This Performance Guarantee was to be kept current and active for the term of the contract which was to commence on 12.12.2009 and conclude on 11.05.2011. However, the Defendant retained the Bank Guarantee furnished by the Plaintiff till 29.09.2013, for over 28 months /16/ Com.O.S.No.5335/2015 after the initial contract period. The Defendant is liable to compensate the Plaintiff for the delay in return of the Bank Guarantees at the rate of 18% for the 28 months delay in return of the Bank Guarantees which amounts to ₹.8,33,625/- and as well as refund to the Plaintiff the commission paid by the Plaintiff towards the Bank Guarantees which amounts to a sum of ₹.23,439/- totaling a sum of ₹. 12,89,000/- Copies of the Bank Guarantee, subsequent renewals and statement of amount due to the Plaintiff from the Defendant in this regard are produced herewith.
f. Claim No.6: Amounts due towards price adjustment under Clauses 10C, 10CA and 10 CC: The Defendant is also liable to pay to the Plaintiff price escalation in terms of Clauses 10C and 10CA of the Contract which amounts to a principal of ₹.16,87,610/- and with interest upto 31.05.2015 amounts to ₹.20,17,018/- (Rupees Twenty Lakhs Seventeen Thousand and Eighteen only). A copy of the letter dated 05.05.2014 addressed by the Plaintiff to the Defendant in this regard along with a statement of account as on 31.05.2015 is produced herewith.
g. Claim No.7: Amounts due towards construction of cement go-down, stores and site office: In terms of the Contract, the Plaintiff constructed a cement godown, stores and site office to carry on with the Project, as on 09.03.2012. The Defendant is liable to pay to the Plaintiff a sum of ₹.4,00,000/- (Rupees Four Lakhs only), towards the aforesaid /17/ Com.O.S.No.5335/2015 construction. Further, the Defendant liable to pay to the Plaintiff interest of ₹.2,34,000/- (Rupees Two Lakhs Thirty Four Thousand only) @ 18% from 09.03.2012 till 31.05.2015.
h. Claim No.8: Amounts due towards reinforcement steel lying at the Project Site: The Plaintiff procured about 11.17 metric ton of reinforcement steel for balance works such as flooring, etc. without claiming any secured advance from the Defendant. Of this, about 5 metric ton was deployed into execution of works done by the Plaintiff as on 09.03.2012 and the balance of Steel of about 5.17 metric ton was kept at the Defendant's project site for the balance works to be executed. However, the Defendant failed to clear the balance works to be done by the Plaintiff and the reinforcement steel continued to be in possession of the Defendant, despite repeated requests by the Plaintiff to return the steel, since no works were given by the Defendant. However, the Defendant refused to return the steel lying at its project site and consequently, the steel deteriorated and the value has since depreciated. The Defendant is liable to compensate the Plaintiff for the balance steel procured by the Plaintiff and lying at the Defendant's site, unused. The value of the steel lying unused is ₹.2,32,650/- (Rupees Two Lakhs Thirty Two Thousand Six hundred and Fifty only), which the Defendant is liable to pay to the Plaintiff. Further, the Defendant is also liable to pay to the Plaintiff interest of ₹.1,36,100/- (One Lakh Thirty Six Thousand One Hundred only), @ 18% form date of /18/ Com.O.S.No.5335/2015 completion 09.03.2012 till 31.05.2015. Communications exchanged between the Plaintiff and the Defendant in this regard and statement of account towards Claims 7 and 8 is produced herewith.
21. On account of lapses on the Defendant's part the led to the Project being delayed, and that the Defendant's conduct has severely prejudiced it. The Plaintiff has repeatedly written to the Defendant calling upon it to make payments that are due to the Plaintiff, of no avail. It appears that the Defendant is deliberately not adhering to its obligations under the contract but is attempting to unjustly enrich itself at the Plaintiff's expense. The Defendant has committed several breaches of contract as stated in the preceding paragraphs. It appears that the Defendant has resisted these claims on untenable and frivolous grounds, and that the Defendant also has withheld the outstanding payments arising out of the R.A. Bills submitted to it by the Plaintiff. As the Defendant has not complied with the terms of the legal notice issued, the Plaintiff is constrained to file the present suit.
22. The cause of action arose on 23.12.2009, when the Defendant awarded to the Plaintiff works relating to the 'Construction of Ultra High Voltage Laboratory at UHVRL, CPRI, Hyderabad, and on various other dates when the defendant caused unwarranted delay in issue of drawings /19/ Com.O.S.No.5335/2015 and approvals towards the project and arose on 13.02.2013 the Plaintiff issued a communication to the Defendant seeking declaration of completion of work in terms of Clause 12 (ii) and on 20.08.2013, when the Defendant stated that the date of closure of contract and completion of work was 30.06.2013 and called upon the Plaintiff to submit its final bill and on 09.11.2013 when the Plaintiff sought issue of a completion certificate. The cause of action arose on 25.11.2013 when the Defendant arbitrarily levied compensation on the Plaintiff and on 14.12.2013, when the Plaintiff requested the Defendant to withdraw the levy of compensation and on 10.01.2014 when the Defendant issued a show cause notice to the and on 18.01.2014 when the Plaintiff replied to the show cause notice. The cause of action further arose on 27.02.2014, when the Plaintiff placed its claims before the Engineering Officer-in-Charge of the Defendant and on 27.03.2014, when the Defendant mechanically reiterated levy of compensation on the Plaintiff. The cause of action further arose on 09.04.2014 when the Plaintiff issued communications to the Defendant protesting levy of compensation and seeking settlement of its final bill and finally on 12.08.2014, when the Plaintiff got issued a legal notice to the Defendant in terms of Clause 25 of the Contract.
23. No other suit or proceeding has been filed by the Plaintiff in respect of the same cause of action.
/20/ Com.O.S.No.5335/2015
24. The Plaintiff has valued the suit at ₹. 2,79,94,347/- (Rupees Two Crores Seventy Nine Lakhs Ninety Four Thousand Three Hundred and Forty Seven only) as per the separate valuation memo enclosed and has paid court fees of ₹.3,47,097/- (Rupees Three Lakhs Forty Seven Thousand and Ninety Seven only) on this suit as per the relevant provisions of the Karnataka Court Fees and Suit Valuation Act, 1958. Hence, this suit.
25. After the service of summons, the defendant appeared through its advocate. The defendant has filed written statement.
The case of the defendant is as under:
26. At the outset, all averments, allegations, contentions, statements and/or submissions made in the Plaint by the Plaintiff are false and misleading and may be dismissed at the threshold itself. The Plaintiff has not come with clean hands before this Hon'ble court and is required to strictly prove each and every fact in the Plaint.
27. The Plaintiff has hastily approached this Hon'ble Court with this suit without following the procedure for resolution of disputes as stated in Clause 25 of the General Conditions of Contract which clearly states that in the case of disputes, the same shall be settled by Arbitration. The General Conditions of Contract has been signed by the Plaintiff and Defendant thereby accepting the Terms and /21/ Com.O.S.No.5335/2015 Conditions of the Contract. On this ground itself the Plaint is to be dismissed.
28. The Respondent above hereinafter traverse the various contentions and allegations raised by the Plaintiff as follows:
29. Regarding the averments made in plaint paragraphs 1-5 the defendant has submitted that it has no Comments.
30. The Defendant had entered into a Works agreement No. CPRI/CED/HYD/2009 dated 27.11.2009 with the Plaintiff and the said agreement detailed under the Schedule of Quantities and Notice inviting Tender. In the said Agreement, the Defendant had detailed the scope of work included all the items to be completed by the Plaintiff and the Defendant issued all the drawings, designs and required clearances including handing over all three areas of unobstructed site for execution which was accepted by the Plaintiff.
31. The Defendant had handed over the site on 12.12.2009 to the Plaintiff free from all obstructions and the jungle clearance and had obtained the necessary clearances. The different areas of work under scope of contract were readily available from start date for execution at site parallely without any hindrance for construction activities.
/22/ Com.O.S.No.5335/2015
32. The Defendant denies the allegations made in plaint paragraph No.8 in toto. The drawings were issued to the Plaintiff at the beginning of each stage of construction; the first drawing was issued on 18.12.2009. It is not the revision of drawings but the slow progress and less deployment of work force which has resulted in the delay of the project. The clearance was given by the Defendant as and when required by the Plaintiff. The report of the geologist was given on 08.02.2010 for laboratory pits but the Plaintiff commenced the works only on 12.03.2010 resulting in a delay of 34 days by the Plaintiff. Due to this delay, the Plaintiff sought extension and was accordingly granted subject to said conditions stipulated during each Extension of Time. The Extension of Time was granted every time without prejudice to the right of the government to recover liquidated damages in accordance with the provisions of clause 2 of the said agreement. Further, it was also informed that notwithstanding the grant of extension currency of the said contract, time is and shall still continue to be the essence of the said agreement.
33. The allegations made in paragraph No.9 are denied in toto. The drawing containing foundation details for the administrative building and Laboratory was issued on 18.12.2009. There was no delay on the part of the Defendant whereas the 80 days delay by the Plaintiff was due to the failure on the part of the Plaintiff in mobilizing resources and /23/ Com.O.S.No.5335/2015 undertaking parallel activities. The Plaintiff started only the laboratory work in the beginning and the Plaintiff failed to commence the work of administrative building in parallel which took off only from 07.06.2010 i.e. after a delay of nearly five and a half months. The remaining drawings were issued at appropriate stages and as such there was no delay from CPRI side. As the Plaintiff has written to the Defendant seeking extension, the Defendant replied by letter dated 10.06.2010 granting extension of time and specified that the date for completion of the work is granted up to 27.05.2011. Copy of letter dated 10.06.2010 is produced herewith.
34. The Defendant denies the allegations made in Para No.10 as false. The Plaintiff had failed to execute the works under scope of contract independently which was part of the civil works. The Hindrances cited by Plaintiff for its lapses are imaginary and unacceptable. The Plaintiff thereafter had repeatedly sought for extension of time for completion of the work and as the Defendant was left with no other option extended the time for completion of the work. By letter dated 26.05.2011, the Defendant extended the time till 31.12.2011 for completion of the work. Copy of letter dated 26.05.2011 is produced herewith. The Plaintiff again sought for extension of time to complete the works and the defendant extended the time by its letter dated 27.12.2011 till 31.03.2012. Copy of letter dated 27.12.2011 is produced herewith. The Defendant again wrote to Plaintiff by letter dated 09.01.2012 to /24/ Com.O.S.No.5335/2015 complete the work by March 2012 and to procure the necessary material for completion and that running bill was cleared by the defendant. A copy of the letter is produced herewith. The defendant again wrote to the plaintiff by letter dated:12.01.2012 informing that there was delay in the work due to failure on the part of the Plaintiff to deploy sufficient labor to complete the work and also the same letter detailed the works to be completed on priority.
35. The defendant denies the allegations made in plaint para No.11. The Plaintiff failed to undertake parallel execution of works pertaining to the administrative building and laboratory right from date of handing over site and hence the Plaintiff brought upon itself this abnormal delay and the Defendant cannot be blamed for this. The drawings were issued as and when essential at site by the Defendant to ensure that there is no delay in the construction activities. This contention of the Plaintiff is untenable. The Defendant again reminded the Plaintiff by letter dated 26.03.2012 that the work was not completed as detailed in the earlier letter dated 12.01.2012. Copy of letter dated 26.03.2012 is produced herewith.
36. The allegations made in plaint para No.12 are false and untenable. The drawing for approach road work was issued by the Defendant on 19.01.2011 (before the scheduled date of completion i.e. 31.03.2011) but the Plaintiff /25/ Com.O.S.No.5335/2015 commenced the road work from 14.06.2011 resulting in a delay of 3 months after the scheduled date of completion. Again the drawings for sump were issued on 29.12.2009 but the Plaintiff did not start the work of sump / Ground level water tank till 13.01.2011 after a lapse of one year and hence the allegation that the clearance was accorded only on 04.11.2011 is misrepresentation of fact.
37. The payments were done regularly as and when the claims by way of running Bills were submitted by Plaintiff including immediate payment of 75% advance on all bills and hence the untenable claim on accrued interest thereof is inadmissible. This is evident in Document R-4 which states that running bills are being cleared for payment.
38. The allegations made in plaint para No.14 are false and untenable in law and denied. The untenable allegation by the Plaintiff that the total delay of 830 days is solely attributable to the Defendant is a complete distortion of fact as the delay is only due to the Plaintiff and not due to Defendant. In fact the extension of time was granted based on the extension of time sought by the Plaintiff in writing by quoting various hindrances and also to keep the contract alive to facilitate for completion of works. The imaginative claim of the Plaintiff for compensation of ₹. 237 lakhs is totally absurd and baseless. The Plaintiff has been periodically seeking extension of time for completion of the /26/ Com.O.S.No.5335/2015 Work by various applications seeking for extension of time and the total extension granted was 27 months 20 days as on 19.08.2013.
39. The Defendant denies the allegations made in plaint paragraph No:15 and in fact the Plaintiff had to extend the Bank Guarantee as per conditions of the contract as the same had to be valid until at least two months after the completion of the works. The Plaintiff submitted the 2nd Running Account Bill (RAB) on 20.07.2010 however; the rate analysis for deviated items of work was submitted only on 18.05.2012 which is essential for processing the deviation statement/ settlement and the fault of delay in submission of rate analysis lies with the Plaintiff. The Defendant had observed that the claims were not in order against the eligible rates for deviated quantities. The extension of the Bank Guarantee was being insisted upon in order to keep the contract alive till 60 days after the completion of the work as per the General Clauses of the Agreement.
40. The Defendant had in fact asked the Plaintiff to commence the work vide letters under ref. no. CPRI/CED/HYD/ WORKS/2012 dated 20.07.2012, 20.11.2012. A copy of the letters dated 20.07.2012 and 20.11.2012 are produced herewith. Instead of commencing the work the Plaintiff requested for foreclosure of the contract by omitting balance part of the work vide their letter no. NIL dated 13.02.2013 /27/ Com.O.S.No.5335/2015 (Document No. 14). The request for consideration of enhancement of rates as per document no.13 is inadmissible as per the provisions of the contract. The request for short closure of contract under clause 12 (ii) was made vide Document no.14 which was accepted by the Defendant. The approval of the request by the Plaintiff was intimated vide Document no.15 by EIC regarding closure of contract with effect from 30-06-2013. The request for the issue of completion certificate was made by the Plaintiff vide Document no.16 and due to issue of Document no.14, the same was not processed since it implied the date of completion of work. The Plaintiff submitted request for sanction of Extension of Time up to 30-06- 2013 without levy of compensation as per Document no.17. However, the claim that hindrances occurred in work was fully and wholly beyond control of the Plaintiff was not acceptable. As the Defendant reviewed the case and after issue of show cause notice, penalty was levied on the Plaintiff and detailed analysis of all the hindrances was done and weightage were also given in deserving cases for relaxation of the penalty.
41. With regard to the allegations made in paragraph No.17 though the communication regarding the levy of compensation was conveyed by the Engineer-in-Charge in the earlier letter was kept in abeyance and was accordingly informed that the decision was informed to the Competent Authority.
/28/ Com.O.S.No.5335/2015
42. With regard to the allegations made in plant paragraph No;18 the defendants has averred that as earlier stated due to slow progress and less deployment of man power by the Plaintiff, the compensation has been calculated as per clause 2 of the agreement on account of delay in the project. Based on hindrance register and review of reply of the agency to the show cause notice vide Document no.22. in detail a total delay of 155 days is attributable to the Plaintiff and the Defendant is liable for a compensation of ₹.29,94,271/-. The Plaintiff has failed to fulfill the contractual obligations.
43. The allegations made in paragraph No:19 are denied as false and baseless. Based on hindrance register and review of reply of the Plaintiff in detail a total delay of 155 days is attributable to the Plaintiff and are liable for a compensation of ₹.29,94,271/- as the Plaintiff has failed to fulfill the contractual obligations and is liable to compensate the Defendant for the delay in completing the Work. The Defendant had already intimated vide letter 27.03.2014 (Document No.25) that the Plaintiff was liable for a compensation of ₹.29,94,271/- as stipulated under Clause 2 of the Agreement. A Copy of the abstract of costs of the 11th and Final Bill is produced herewith.
44. The Plaintiff was aware that final decision was already conveyed vide letter dated 25.11.2013 (Document -
/29/ Com.O.S.No.5335/2015
18) to the agency for levy of compensation under Clause 2 of contract.
45. The Defendant had sent reply notice denying the allegations by RPAD on 11.09.2014 to the Plaintiff's Counsel which was returned unclaimed by the addressee. Copy of notice dated 14.09.2014 and unclaimed Postal Cover are produced herewith.
46. The Defendant denies the claim made by the Plaintiff and has given the point wise break up:
47. Claim -1 The Plaintiff submitted the 2 nd Running Account Bill (RAB) on 20.07.2010 However, the rate analysis for deviated items of work was submitted only on 18.05.2012 which is essential for processing the statement / settlement. The fault of delay in submission of rate analysis lies with the Plaintiff. The eligible claims have already been considered in the final bill as per the defendant approved rates.
48. Claim -2: The claim is being settled after recovery of compensations under clause 2 of General Clauses for Contracts. The Plaintiff has failed to fulfill the contractual obligations and their imaginative claim is grossly unjustified. The claims are ineligible as final bill works out to be negative.
/30/ Com.O.S.No.5335/2015
49. Claim -3: The Contract was short closed at the request of the Plaintiff citing non-availability of site and hence the claims are inadmissible.
50. Claim -4: The contract was prolonged due to the inordinate delay by the Plaintiff in executing works & Extension of Time had to be granted till the closure of contract in order to keep the same functional for the agency to execute the work.
51. Claim -5 : The claim is inadmissible as Bank Guarantee has to be kept operative till 60 days beyond the date of completion of the work as per the General Clauses for Contracts.
52. Claim -6: The claims are inadmissible as delay has been attributed to the Plaintiff and compensation is being levied for the same in terms of clause 2 of GCC.
53. Claim -7: The infrastructure required by the Plaintiff was done to suit execution of work and expenses incurred have to be borne by the Plaintiff as per contract.
54. Claim -8-: The Plaintiff was permitted to remove the materials at site and conveyed accordingly. However, the same was not adhered to by the Plaintiff. Hence claims are disallowed including interest on the material.
/31/ Com.O.S.No.5335/2015
55. The defendant denies the allegations made in paragraph No.23, as the final eligible claims were reviewed and after considerations of all the issues and recoveries, it is found that the net result is negative bill after levy of compensation. The Defendant had already intimated vide letter 27.03.2014 (Document No.25) that the Plaintiff was liable for a compensation of ₹. 29,94,271/- as stipulated under Clause 2 of the Agreement. Hence, settlement of the outstanding dues of the Plaintiff does not arise for consideration.
56. As the Defendant has already indicated to the Plaintiff that there has been a negative bill after levy of compensation, the question of payment of any dues to the Plaintiff does not arise and the plaintiff is not entitled to any judgment and decree or any other order as prayed for in this suit and hence the suit may be dismissed with exemplary costs.
57. During the Course of trial the Plaintiff got amended the suit prayer by inserting a prayer to Direct the defendant to reimburse GST on suit claim amount in terms of Clause 38 of Ex.P8. The plaintiff has not amended the plaint averments.
The defendant has filed additional written statement as under:
58. In light of the order of this Hon'ble Court dated 21.01.2023, and the Plaintiff filing an amended plaint, the /32/ Com.O.S.No.5335/2015 Defendant humbly submits the following additional written statement to respond to the additional issues arising out of the Plaintiff's amendment of its Plaint (and the same may be read as part and parcel of the Defendant's written statement filed on 10.02.2016):
59. The Plaintiff has amended its Plaint only by adding a new relief to its prayer seeking the reimbursement of GST on the suit claim amount. The Plaintiff's amended claim of being reimbursed GST on the suit claim amount is untenable and liable to be dismissed.
60. By way of background, this suit was filed in 2015 and the issues were framed years later in 2019. Even in 2015, the Plaintiff was well aware of clause 38 of the Exhibit P8 (which it relies on for this relief). The government introduced GST on 1 July 2017 (as the Plaintiff has admitted).
Therefore, even assuming the Plaintiff had the right to claim GST through clause 38 of Exhibit P8 (which is denied), the Plaintiff had two full years during which it could have made this amendment. Instead, the Plaintiff chose to for five years to make this amendment. A diligent party confident of its rights to GST would not have waited for years after the trial commenced to raise such an amendment.
61. Further, GST is imposed for services tendered after 1 July 2017 and does not have retrospective effect. The /33/ Com.O.S.No.5335/2015 services under the contract were provided well before GST was even introduced and the invoices were also raised prior. Therefore, there is no question of the Defendant being liable to the Plaintiff for any GST amounts, particularly given that the services were rendered prior to the introduction of GST and since GST does not have retrospective effect. Hence, the amendment is not necessary to determine the real questions in controversy between the parties and must be dismissed.
62. Further, GST does not come into the picture just because the Plaintiff has disputed the amounts to be paid under its works contract even after GST was implemented. Under section 13 of the CGST Act, 2017 the Defendant submits that GST is imposed at the time of supply, which in the case of a works contract, is at the date when the Plaintiff raised its invoices or when the Plaintiff provided its services or when the Defendant reflects receipt of services in its book of accounts (whichever is earliest). In the Plaintiff's case, its invoices were raised and its services were provided well prior to 2015 (and this suit was instituted in 2015). Therefore, under no circumstance can the time of supply be considered to be post the introduction of GST. It follows that the Defendant cannot be made liable for GST in this case.
63. In particular, no cause of action exists for the reimbursement of GST on the suit claim amount since GST is imposed at time of supply and not at the time a court passes /34/ Com.O.S.No.5335/2015 an order awarding any amounts. Since GST was not imposed at the time of supply, the Defendant cannot be made liable to pay any GST amounts that have accrued as a result of this suit. Those are two entirely separate taxable events, for which the Defendant is not liable to pay GST.
64. In addition, the Plaintiff's amended prayer is not backed by any pleadings on GST. A prayer must arise out of an existing cause of action established in the pleadings, not on the contract, and certainly not out of a hypothetical amount of GST that has not been imposed. The Plaintiff has failed to show any grounds to establish he has any rights to GST as prayed for. Further, the Plaintiff cannot even rely on the evidence of a witness to contradict the express terms of the contract between the parties. It is trite law that "oral evidence is not admissible for the purpose of ascertaining the intention of parties to a written document". Therefore, the Plaintiff has no right to expand the scope of clause 38 of Exhibit P8 by simply relying on statements made by a witness in the course of cross-examination. The clause speaks for itself, and its scope cannot be expanded by relying on oral evidence. This is on the basis of the parol-evidence rule.
65. Further, the relief claimed by way of amendment to the Plaint amounts to a fresh suit and is barred by limitation. The Plaintiff is trying to circumvent the laws of limitation by pleadings belatedly to introduce a fresh cause of action under /35/ Com.O.S.No.5335/2015 the cloak of the existing suit. Consequently, the Plaintiff's claim for reimbursement of GST on the suit claim amount is liable to be dismissed on this ground alone.
66. Without prejudice, the Defendant submits that the Plaintiff has misled the Court by stating that clause 38 of Exhibit P8 provides it a right to GST on the suit claim. On the contrary, per sub- clause (iii) of clause 38 of Exhibit P8, the Plaintiff must place his demand for GST before the Chief Engineer of the Defendant within 30 days of imposition of any amended tax. No tax has been imposed and no such demand has been raised. There is not a shred of evidence to dispute this. Further, the first sentence of clause 38 of Exhibit P8 specifically states: "All tendered rates shall be inclusive of all taxes and levies payable under respective statutes". The Plaintiff is asking this Hon'ble Court to adjudicate on a hypothetical liability that has not even crystallized. Therefore, the Defendant is not at all liable to reimburse any GST to the Plaintiff as claimed and the Plaintiff is solely liable for all taxes and levies payable under statute.
67. Accordingly, in addition to the Prayer stated more fully in the written statement dated 10.02.2016, the Defendant most respectfully prays that this Court may be pleased to dismiss the Plaintiff's claim for reimbursement of GST on the suit claim amount, imposing exemplary costs for bringing a frivolous claim and delaying proceedings.
/36/ Com.O.S.No.5335/2015
68. Based on the rival pleadings the Court has framed following Issues and Additional Issue for its determination.
ISSUES
01. Whether the plaintiff proves that due to non availability of site on time and frequent change of drawings by the defendant the commencement of construction delayed?
02. Whether the plaintiff proves that due to the lapses on the part of the defendant the completion of work delayed or prolonged?
03. Whether the plaintiff proves that the defendant unilaterally and illegally extended the date of completion of the project?
04. Whether the plaintiff proves that due to breach of contract on the part of defendant it suffered from loss?
05. Whether the plaintiff proves that the defendant is liable to pay compensation as claimed in para 22 of the plaint?
06. Whether the plaintiff proves that the defendant failed to refund the bank guarantee within the stipulated period?
07. Whether the defendant proves that this Court has no jurisdiction to try the suit?
08. Whether the plaintiff is entitled for the rate of interest of 18% p.a.?
09. What Order/decree?
/37/ Com.O.S.No.5335/2015 ADDITIONAL ISSUES
1. Whether the plaintiff proves that the plaintiff is entitled for reimbursement of GST amount as per Clause 38 of Ex.P.8? If so what is quantum of reimbursement amount?
2. The Plaintiff has examined Sri.G.Balaji one of the partners of plaintiff firm as PW1. The PW1 has exhibited Ex.P1 to Ex.P53. The plaintiff got exhibited Ex.P54 in the Cross examination of DW1. The Defendant has examined Sri.Panitapu Shiva Prasad, Engineering Officer Grade 4 as DW1. The DW1 has exhibited Ex.D1 to Ex.D41.
69. After the conclusion of the trial I have heard the arguments addressed by the Learned Advocates for the plaintiff and defendant. They have also submitted their respective written arguments.
70. The Learned Counsel for the Plaintiff has relied on the following decisions in support of his case.
Sl.No Particulars Citations
.
1 McDermoti International Inc., Vs. (2006) 11 SCC 181
Burn Standard Co., Ltd., And
Others
2 India Tourism Development 2003 SCC OnLine
Corporation Ltd., Vs. Budhiraja Del 24
Electricals
3 M/s.A.T.Brij Paul Singh and Others (1984) 4 SCC 59
Vs. State of Gujarat
/38/
Com.O.S.No.5335/2015
4 Associated Builders, Engineers 2002 SCC OnLine
and Contractors Vs. Union of Del 1111
India
5 Associate Builders Vs. Delhi (2015) 3 SCC 49
Development Authority
6 Vincent Panikurlangara Vs. Union (1987) 2 SCC 165
of India and Others
71. The Learned Counsel for the defendant has relied on the following decisions in support of her case.
Sl. Particulars Citations
No.
1 Kanchan Udyog Limited Vs. (2017) 8 SCC 237
United Spirits Limited
2 Union of India Vs. Sun Media 2011 (5) Mah LJ 749
Services
3 The New India Insurance Co., Ltd., 2013 (2) Bom CR
Vs. Pyrelal Textile Ltd., & Ors.,
740
4 Oil & Natural Gas Corpn., Ltd., Vs. 2011 (4) Arb.LR 139
Oil Country Tribunal Ltd.,
(Bom)
5 Hindustan Petroleum Corpn. Ltd., 2008 (2) Mah.LJ 542
Vs.Batliboi Environmental
Engineers Ltd.,
6 Grasim Industries Ltd., Vs. 2009 (4) Arb.LR 225
Agarwal Steel
(SC)
7 Rajasthan State Mines & Minerals 1999 (3) Arb LR 350
Ltd., Vs. Eastern Engg.
(SC)
Enterprises & Anr.,
8 MSTC Ltd., Vs Jain Traders & Ors., 2011 (4) Arb LR 219
(Del)
/39/
Com.O.S.No.5335/2015
9 State of Karnataka Vs Stellar 2003 (1) Arb LR 40
Construction Co.,
(KAR) (DB)
10 Mohanlal Harbanslal Bhayana & 2012 (2) Arb LR 91
Co., Vs., Union of India
(Del) (DB)
11 State of Madhya Pradesh and 1989 MP LJ 822
Ors., Vs. Recondo Limited, Bhopal
12 Executive Engineer (R & B) and 2022 SCC OnLine
Ors., Vs. Gokul Chandra Kanungo
SC 1336
72. I have gone through the materials available on record and the ratio of decisions relied on by the plaintiff and the defendants.
73. My findings on the above ISSUES are as under:
ISSUE No.1 to 6 : IN THE AFFIRMATIVE,
ISSUE No.7 : IN THE AFFIRMATIVE,
ISSUE No.8 : Partly AFFIRMATIVE.
ADDITIONAL ISSUE : IN THE AFFIRMATIVE
ISSUE No.9 : As per final order
for the following
REASONS
74. ISSUE No.1 to 6 and 8: These issues are
interconnected to each other as such they are taken together for discussion to avoid repetition of facts.
75. The Plaintiff has filed this suit praying the Court to pass a judgment and decree:
a) Directing the defendant to pay the plaintiff a sum of ₹.2,79,94,347/- towards claim 1 to 8 stated above along with /40/ Com.O.S.No.5335/2015 interest thereon at the rate of 18% p.a. from the date of accrual till 31.05.2015.
b) Directing the defendant to pay to the plaintiff interest on the aforesaid amounts at the rate of 18% p.a. from 01.06.2015 till date of payment.
c) Grant costs of this suit and grant such other and further reliefs as are just.
d) Directing the defendant to reimburse GST on suit claim amount in terms of Clause 38 of Ex.P8
76. The Plaintiff has examined Sri.G.Balaji one of the partners of plaintiff firm as PW1. The PW1 has exhibited Ex.P1 to Ex.P53. Ex.P54 was marked through DW1 in his cross examination. The PW1 has reiterated the plaint averments in his affidavit evidence.
77. The Defendant has examined Sri.Panitapu Shiva Prasad, Engineering Officer Grade 4 as DW1. The DW1 has exhibited Ex.D1 to Ex.D1. The defendant has reiterated the written statement averments in his affidavit evidence.
78. The defendant has issued Notice inviting tender dated: 21.10.2009/Ex.P4 inviting tender for construction of UHV Laboratory @ UHVRL, Hyderabad. The Plaintiff has submitted his tender on 06.11.2009 as per Ex.P5 and offered unconditional rebate of 1.8% on his quoted rates. The /41/ Com.O.S.No.5335/2015 defendant has accepted the tender submitted by the plaintiff vide letter dated:27.11.2009/Ex.P6. The defendant has issued letter of commencement as per Ex.P7.
79. The Plaintiff and defendant have entered into Agreement dated:23.12.2009 as per Ex.P8. The agreement is annexed with General Conditions and Additional Conditions and specifications. The plaintiff and the defendant are bound by the terms and conditions stipulated in the agreement dated:23.12.2009/Ex.P8.
80. The scope of the Work in respect of UHV Laboratory at UHVRL, Hyderabad for a total contract value of ₹.386.36 lakhs with a condition to complete the project within a period of 15 months, which commenced from 15 th day of LOA dated:27.11.2009 i.e. 12.12.2009 the date of expiry of the stipulated period was 11.03.2011. The scope of the work included construction of a Shed (civil work) an Administrative Building and an Approach Road.
81. The plaintiff is contending that he has mobilized men and material to execute the suit project within the period of limitation. The defendant was required to provide unobstructed site, finalized drawings, designs and other clearances. The Plaintiff is contending that the subject contract site was not free from hindrance. The defendant had awarded jungle clearance work to another agency. The /42/ Com.O.S.No.5335/2015 defendant has not furnished designs and drawings in a timely manner. The defendant used to issue drawings, designs in a piecemeal manner. On account of all these acts of defendant the plaintiff was placed in a disadvantageous position. Owing to delays caused by the defendant in handing over the site, failure to provide drawings and designs in time led to the extension of time for completion of the project on five occasions by the defendant itself.
82. The defendant has repeatedly revised the designs relating to the construction of the shed which led to further delay in the completion of the project. Column center line drawings were initially issued on 18.12.2009 and again revised on 03.02.2010 which caused delay of 80 days from the date of handing over of site. The plaintiff had conducted a survey and readied the 'center lines' marked on the site based on drawings issued on 18.12.2009. In view of revision of design made by the defendant, the plaintiff was forced to conduct survey again to realign the 'center lines'. The defendant delayed to give consent to 'Concrete Design Mix Report' though the plaintiff submitted the report in time. The plaintiff could not cast the pedals for want of details viz., type of pedestals, and provision of pockets. The plaintiff could not take up Coarse Rubble stone Masonry. The pockets were decided and given clearance only on 05.10.2010, causing delay of over 5 months. After casting of pedestals on 06.10.2010 there was no further scope of work since the /43/ Com.O.S.No.5335/2015 fabrication was entrusted to another agency.
83. The Plaintiff is contending that it has executed the civil work entrusted to it in respect of Shed work by 04.10.2010. Another Agency appointed by the defendant to carryout Steel Fabrication work was not parallel to the work entrusted to the plaintiff, which has contributed to further delay in the completion of the project. The Plaintiff has submitted a letter protesting the inordinate delay caused in the completion of the work as per Ex.P9/27.12.2010. The minutes of dated 30.08.2012 has recorded that the third party agency employed by the defendant was yet to complete structural work before handing over site to the plaintiff.
84. The defendant provided the working drawings for the construction of Administrative building only on 03.02.2010 after delay of nearly two months though the project was commenced on 12.12.2009. The defendant has failed to furnish supplementary designs and drawings related to the staircase, head room, flooring, windows, sanitary facilities, false ceiling, wood work, approach road connecting to rolling shutters, storm water drains at northern side and terrace were made available after lapse of 8 months as against the total contract period of 15 months. The clearance for the approach road was made available to the plaintiff on 08.03.2011 much after the scheduled date of completion.
/44/ Com.O.S.No.5335/2015 The plaintiff was asked to take up construction of a water tank, clearance for which was given in April 2011. The construction of water tank was not within the scope of tendered work. The defendant used to make payments belatedly and also withholding parts of payments without any legal basis.
85. As per the Hindrance Register maintained by the defendant/Ex.D38 there is a delay of 830 days, solely attributable to the defendant. The defendant has repeatedly extended the time for completion of project the last of such extension was made up to 30.06.20 beyond 27 months from the scheduled date for completion. The defendant is liable to compensate the plaintiff.
86. The plaintiff had completed the works pertaining to Administrative Building, roads and sump by 09.03.2012 and submitted the letter dated:12.03.2012/Ex.P14 in this regard. The Plaintiff submitted a requisition to the defendant vide letter dated:13.02.2013 as per Ex.P15 to declare the date of completion of work as 09.03.2012 in terms of Clause 12(ii) of the Agreement owing to non-availability of the site. After delay of over 5 months the defendant issued a communication dated:20.08.2013 as per Ex.P16 stating that the date of closure of the contract and completion of work as 30.06.2013 and called upon the plaintiff to submit final bill. The plaintiff was not provided with any work subsequent to /45/ Com.O.S.No.5335/2015 09.03.2012 the date of declaration of closure of work as 30.06.2013 is arbitrary. The plaintiff sought issue of completion certificate vide letter dated:09.11.2013 as per Ex.P17. The plaintiff has submitted a letter dated:
25.11.2013/Ex.P18 placing on record all the delays and hindrances that had occurred in the execution of work owing to factors not within the control of the plaintiff.
87. The defendant issued a letter dated:25.11.2013 levying compensation of ₹.29,94,271/- against the plaintiff invoking clause 2 of the agreement for purported delay of 155 days on the part of plaintiff. The plaintiff issued a protest communication dated.27.11.2013 as per Ex.20 and demanded the defendant to withdraw the compensation levied against it. The defendant did not respond to the demand of the plaintiff. Hence, the plaintiff issued a communication to EIC vide letter dated:14.12.2013 as per Ex.P21. The Engineer-in-charge has issued a reply dated:01.01.2014 stating that the communication dated:25.11.2013 of the defendant was kept in abeyance till such time the Competent authority reviews the position so far as the levy of compensation is concerned.
88. The defendant has issued a show cause notice through the Chairman of the High Power Committee dated:10.01.2014 as per Ex.P23 informing the plaintiff that the compensation was levied on account of delay caused by /46/ Com.O.S.No.5335/2015 the plaintiff in completion of the project. The plaintiff has duly replied the said show cause notice vide reply letter dated:18.01.2014 as per Ex.P24.
89. The plaintiff is not liable to pay any compensation.
The delay in completion was for the reasons attributable to the defendant. The plaintiff submitted its claim before E-I-C and the chairman of High Power Committee to withdraw the levy of compensation vide requisition dated:27.02.2014 as per Ex.P25. The defendant issued a communication dated:27.03.2014 reiterating the levy of compensation as per Ex.P26. The Plaintiff submitted another requisition to the Director General denying and protesting the levy of compensation as well as seeking settlement of its final bill against defendant vide communication dated:09.04.2014 as per Ex.P27. The defendant did not respond to the communication of the plaintiff. The plaintiff got issued a legal notice dated:12.08.2014 as per Ex.P29. The defendant has neither replied nor complied with the notice demand. Hence, the plaintiff has filed this suit.
90. As against the case of the plaintiff the defendant has admitted the work entrusted to the plaintiff. The defendant has not denied the exchange of communication between the plaintiff and defendant. The defendant alleged that the delay in completion of the project was for the reasons attributable to the plaintiff. The defendant had been /47/ Com.O.S.No.5335/2015 very cooperative with the plaintiff to complete the project. Hence, it has extended the time for completion of the project. The defendant has stated that the plaintiff is liable to pay compensation of ₹.29,94,271/- as the plaintiff has caused delay of 155 days in the completion of the project. The defendant has denied the Claim No:1 to 7 raised by the plaintiff.
91. The Defendant has exhibited Ex.D1 to Ex.D22. In pursuance of Order dated:02.03.2021 passed on I.A.No:2 filed by the plaintiff, the defendant produced the documents and are marked as Ex.D23 to Ex.D40.
92. Under Claim No:1, the plaintiff is contending that the defendant has withheld ₹.54,72,351/- is illegally and the plaintiff is entitled for the payment of the same.
93. In a construction contract following are the obligations of employer:
1) The employer shall handover possession of hindrance free work site to the contractor;
2) The employer shall provide 'Good for construction Drawings' to the contractor;
3) The employer shall not interfere or stop the work without valid reasons.
/48/ Com.O.S.No.5335/2015
94. The plaintiff has exhibited Building and Engineering Contract, Fifth Edition by B.S.Patil as Ex.P42. I have gone through the commentaries made by the learned author in respect of the obligation of the employer in providing drawings.
95. At page 502 Para 11.6 it is stated that "At the time of signing of an agreement the tender drawings alone are available. If there is no major change expected the contractor should ask, and the engineer should clarify if the contractor can commence the work on the basis of the tender drawings. When the tender drawings clearly carry a note 'not for construction', the contractor, even prior to moving on to the site of the work should ask for a full set of working drawings".
96. In order to determine the rival contentions it is necessary to refer to the entire cross examination of PW1 and DW1.
97. PW1 in his cross examination deposed that "In respect of this case we have submitted our proposal for tender in the year 2009. The tender amount was for a sum of ₹.3,86,35,755/-(Rupees three crore eighty six lakhs thirty five thousand and seven fifty five only). The defendant has awarded the contract to our firm as we were the lowest builder. I am aware that the other agencies will be working /49/ Com.O.S.No.5335/2015 with me for the execution of contract. We were concerned with Civil construction work, construction of Ultra High Voltage laboratory, administrative building, main shed and approach road. 15 months period was provided for execution and completion of contract. We have read the terms and conditions of the contract before signing the agreement. It is true that only after receiving the letter of intent we have mobilized the resources to complete the works awarded to us. We have not ear marked the resources to execute the contract till such time we received letter of intent. It is true that as per Ex.P.7 the site was handed over to us on 10.12.2009.
98. Que: Have informed the defendant that the site was not cleared?
Ans: Yes, we had informed the defendant that the site was not cleared, the jungle clearance was pending.
99. It was known to the defendant that the jungle clearance was pending and I have not produced any documents regarding the jungle clearance.
100. In the tender document there was no covenant regarding jungle clearance. It is not true to suggest that I am deliberately stating that it was the responsibility of the defendant to clear the jungle in the work site.
/50/ Com.O.S.No.5335/2015
101. I do not remember when the defendant has handed over the first drawing. It is true that in Ex.P.9 we have mentioned that the first drawing was issued on 18.12.2009 and on 23.12.2009.
102. The earth excavation work was started after 30-40 days from the date of handing over of site. After 20 days from the date of handing over of site we started earth excavation work. The defendant has to classify the soil, accordingly to their norms they have entrusted the work of soil classification to third party agency. I am not entitled to know why the defendant had entrusted work to soil classification to the third party. They had entrusted the work to some department of Osmania University. It is not true to suggest that as we had some issues with M/s. Siri Consultants, who are the architects for the project awarded to us. M/s.Siri Consultants were not giving drawings to us directly they were rooted through defendant. In some of the meeting when the drawings were handed over to us by the defendant the representatives from M/s. Siri Consultants were present on some occasions. In the joint meetings we used to ask/place our queries regarding drawings. We had not worked with M/s. Siri Consultants in any other projects. Subsequently we had worked with M/s. Siri Consultants in the same premises for a different project. Only with CPRI/defendants project we worked with M/s. Siri Consultants.
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103. I have gone through additional terms and conditions specified in Ex.P.8. On 28.01.2010 we had a oral discussion with the defendant's architect M/s. Siri Consultants. We are referring to the entries made in hindrance register maintained by the defendant regarding total delay of 36 days occurred, as deposed in Para No. 8 of the affidavit. We did not seek for extension for period due to the above said 36 days hindrance. Whenever, the drawings were received by us our representatives used to sign the drawings registers. It is not true to suggest that many a times our representatives refused to sign the drawings register as such the defendant was obliged to send the drawings through registered post. It is true that in Ex.P.33 we had informed the defendant that we have completed excavation for the laboratory portion to the extent of about 90% for footings. The witness volunteers that the further works was delayed.
104. The 'hindrance' referred to in my evidence refers to the delay in furnishing drawings, giving clearances by the defendant and due to natural calamities. As per clause 27.9 GCC, the defendant has to maintain hindrance register.
105. I have not maintained hindrance register. Based on the hindrance register maintained by the defendant, I have seen hindrance register, I am aware of contents of hindrance register. It is not true to suggest that I have not correctly /52/ Com.O.S.No.5335/2015 calculated the delay and wrongly saying 80 days delay in my affidavit. It is true that as per hindrance register there has been a delay of 10 days from 12.12.2009 to 30.12.2009. The witness volunteers to depose out of 18 calendar days the delay is calculated for 10 days.
106. The delay of 30 days between 07.01.2010 to 08.02.2010 deposed in Para 9 of my affidavit is not based on hindrance register. It is based on the delay due to the defendant for that particular work. I have informed about the aforesaid delay of 30 days to the defendant in writing. I have produced documents to evidence the said delay of 30 days. I do not remember whether I have mentioned the dates of delay in my written communication to the defendant. Whenever, the requirements like, furnishing drawing, clearances are delayed by the defendant from the date of my request to the date of furnishing of drawings and clearances is stated by me as delay caused in execution of the work.
107. I am aware of the fact that the defendant maintains the hindrance register. Occasionally, I have seen the hindrance register. I do not remember whether I have made any comments regarding errors if any in recording the delay in the hindrance register. It is false to suggest that I have made false allegations against the defendant regarding the hindrances in my evidence. It is true that whenever, a tender is offered there will be a pre-bid meeting. I do not /53/ Com.O.S.No.5335/2015 remember whether I have attended the pre-bid meeting or my partner has attended it.
108. I have attended pre-bid meeting on 28.10.2009 as per Ex.P.8 (minutes of pre-bid conference). In the pre-bid meeting dated 28.10.2009 I have not raised any queries. I have not raised any queries regarding terms and conditions of the tender as I was satisfied with the terms and conditions with the tender. As per Ex.P.5 dated 06.11.2009 I have offered rebate of 1.8% on our quoted rates. When I have quoted rates for tender I was aware that the rates will be subjected to escalations. While quoting the rates I had estimated total cost of project I would incur for the completion of project within the schedule time fixed for completion of project.
109. We have been doing contract since, 40 years for government organizations and private organizations also. It is not true to suggest that generally there will be a delay in completion of projects due to various reasons.
110. It is true that there is no date, seal of the plaintiff firm and signature of the authorized signatory in Ex.P.35. The witness volunteers to depose that it is an office copy. It is false to suggest that I have not sent letters like, Ex.P.35 and Ex.P.36 to the defendant. It is not true to suggest that whenever a letter is given to the defendant by hand delivery /54/ Com.O.S.No.5335/2015 the defendant used to acknowledge the same. The witness deposes that on some occasions the defendant used to acknowledge the letters submitted by me on some other occasions they would not have acknowledged the letters. It is true that the defendant has acknowledged the letter submitted to it as per Ex.P.38. Whenever I sent email I used to keep a print out in my file. Letter as per Ex.P.39 was sent through email.
111. The term 'deviation' referred to in my affidavit may be with reference to quantity of items of work. I know the contents of my affidavit evidence. I have asked the defendant to pay for deviated quantity. The witness volunteers to depose that the deviation quantities were recorded in the bills and certified by the defendant. It is false to suggest that deviation quantities were recorded in the bills and certified by the defendant. I have submitted rate analysis during 2012 as the defendant insisted to submit the rate analysis.
112. The defendant has prepared deviation statement in accordance with CPWD norms as such I have not accepted the said analysis as on 27.12.2011. Earlier to this letter the bills were prepared as per tender rate and submitted to the defendant and they have accepted the same. I am not accepting CPWD rates. The Ex.P.34 is a copy of CPWD publications.
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113. It is true that the drawings were given on 19.01.2011. The witness volunteers to depose that the revised drawings were given even during November 2011. I do not remember whether I have furnished any documents to show that the revised drawings were given during November 2011. There was no delay on our part in completion of the project. They were giving intimation to us whenever the clearances were given.
114. I have sought for extension of period for completion of project. The witness volunteers that at the instance of defendant I have sought for extension of time. I have not produced any letter showing the defendant has asked us to seek extension of time. It is not true to suggest that I am blaming the defendant as we could not complete the project within the stipulated time. It is not true that the defendant has engaged the services of 3rd party as we were unable to complete the project. The 3rd party expert agency engaged by the defendant has conducted local inspection.
115. I am in receipt of Ex.P19 letter dated 25.11.2013 issued by the defendant. It is false to suggest that I have concocted letter dated 25.11.2013/Ex.P18. I do not remember whether I have any documents to show that letter as per Ex.P18 has been served on the defendant. It is true that in Ex.P20 there is no reference to Ex.P18. It is false to /56/ Com.O.S.No.5335/2015 suggest that I have concocted Ex.P18 letter for the purpose of this case.
116. I had estimated the cost of project while submitting tender with the defendant. I had quoted competitive rates while submitting the tender. It is false to suggest that I could not complete the project as I had not estimated the cost of project properly. I have submitted rate analysis for extra items and deviated quantity items. After execution of the project I have submitted rate analysis for extra items and deviated quantity. The witness volunteers to depose that initially the defendant did not ask for rate analysis.
117. I have completed the project in March 2012. The defendant has asked to submit rate analysis wide Ex.P37 dated 27.12.2011. It is false to suggest that I did not co- operate with the defendant to process the rate analysis. It is false to suggest that I have concocted Ex.P35 for the purpose of this case. Based on the market rates I have calculated 30% in respect of extra work done by me. It is false to suggest that though the delay of 155 days committed by me in completing project, I am blaming the defendant. Based on interest charged by the banks and the private concern, I have calculated the interest rate at 18%. I have borrowed loans from private individuals with interest at 18% p.a. /57/ Com.O.S.No.5335/2015
118. It is true that there is a recital that the contractor shall have no claim to any payment of compensation in Clause 13 of the contract. I have followed the norms enshrined in the contract. I have submitted rate analysis within 15 days as contemplated in Clause 12.2. I have submitted tender in November 2009 I had kept margin for escalation of prices while submitting the tender. Based on the items I used to keep the margins. Before suit project I had completed another project for the defendant. I had done tender work for other Government Departments also. I had not asked for enhancement to the agreed rates in respect of tenders of other departments of the government. Based on market rates I have asked the escalation at 30%. I do not remember the exact date.
119. It is false to suggest that I had threatened the defendant if they fail to pay escalation price at 30%, they would be made to pay at 40% towards escalation price. It is false to suggest that in order to escape my liability to pay compensation to the defendant, I have filed this suit. It is true that there is a clause providing for payment of compensation for delay in executing the project, if the delay was caused by the contractor. It is false to suggest that the defendant has asked to pay compensation as I have delayed the completion of project by 155 days. It is false to suggest that I had terminated the contract. The witness volunteers that the defendant has foreclosed the contract. We have helped the /58/ Com.O.S.No.5335/2015 defendant by showing the clause in the contract to foreclose the work since there was no work front and I had waited for one and half years to foreclose the contract. As there was no work front I kept idle for one and half years. I had paid the wages of my workmen. I have documents to show that I kept idle for one and half years. There was no work front which was beyond my control as such the defendant has foreclosed the contract.
120. It is not for me to follow the procedure prescribed under Clause 25 of the Contract and it is for the defendant to comply with procedure prescribed under Clause 25. The defendant has followed the procedure prescribed in the contract and not paid the amount to me. Hence, I have stated that the payments due for work done under the contract with held illegally by the defendant. I am aware that there is a clause in the contract regarding compensation towards curtailment of contract amount. The witness volunteers that due to the technical requirements, the defendant did not provide the work. I do not remember whether the contract provides for compensation due to prolongation of contract beyond stipulated time. I have made claim for ₹.1,22,96,000/- based on the formula prevailing in such project works. It is true that all the government projects have to adopt and follow CPWD calculations. Since CPWD has no formula to calculate compensation arising out of prolongation of contract beyond stipulated time, I have adopted Patil Form. It /59/ Com.O.S.No.5335/2015 is false to suggest that I have adopted Patil Form to make unjust claim.
121. The defendant did not allow us to take cement and constructions material from the project site. I do not know the reasons why the defendant had prevented us from taking constructions materials from project site. It is false to suggest that I have already taken construction materials from the project site and is making false claim against the defendant. It is false to suggest that I have made all the eight claims to enrich unlawfully at the cost of the defendant. It is false to suggest that there is no provision made under the contract to make claim against the defendant. It is false to suggest that only after receiving letter from the defendant demanding compensation, I have raised all the eight claims against the defendant."
122. DW1 in his cross examination deposed that "Before 2016 I had no information about the Suit Contract and only after my posting at Hyderabad in 2016 I came to know about the Subject Contract. I came to know about the subject contract only after the filing of the subject suit.
123. I am a Post Graduate-M.Tech in Transportation. The subject contract involves Civil Contract. Mr. Dinesh Kumar was Engineer incharge, Mr. Prabhakar Reddy was Engineering officer Grade II and they were directly involved in /60/ Com.O.S.No.5335/2015 the execution of Subject Contract. Mr. Dinesh Kumar and Mr. Prabhakar Reddy have active role and complete knowledge in the execution of subject Contract work. It is true that I have no direct role and knowledge in the execution of subject Contract work. I came to know about subject Contract through documents. I am merely an authorized representative authorized by the defendant for the purpose of the present Suit. I do not remember whether I had written any letter to the plaintiff in respect of subject contract. I have no personal knowledge about the subject contract. I have filed my affidavit in lieu of examination-in-chief based on the information gathered from the documents.
124. The plaintiff has constructed a water sump as part of the subject contract. The construction of water sump was not included in the contract. The witness volunteers to depose that it is not specifically mentioned in the contract.
125. Without knowing finished floor level of a building no contractor can take up excavation work. The subject contract was to be completed within 15 months from the expiry of 15 days from LOA. The subject contract was to be completed on or before 11-03-2011. The site was handed over on 12-12-2009. There were no obstructions in the site on 12-12-2009. There was no Jungle clearance work to be undertaken before the commencement of contract work by the plaintiff.
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126. The drawings available with the tender are 1) Flooring details, 2) East and West side elevations, 3) PVC sheet laying and inner shielding details, 4) MS hand railing details, 5) PVC sheet laid isolation area and 6) Hand railing details.
127. The drawings pertaining to construction of sub- structure for UHB lab shed, Adjoining buildings i.e., Control room, Reception, Technicians room and approach road were not available in the tender.
128. The drawings were prepared by Siri Consultants and issued by Mr. Prabhakar Reddy, as per Ex. D40. The drawings in Ex. D40 were issued for carrying out further work. The drawings were prepared by Siri Consultants furnished along with Tender. The witness deposes that Layout plan is also contained in Tender Document in Ex. P4.
129. The drawings in Ex. D40 are next level drawings of the drawings in the tender. The drawings in the tender pertain to initial level of work and the drawings in Ex. D40 pertain to detailed work.
130. I do not remember whether we have revised the drawings issued for "Good for constructions" during the course of execution of subject project. Wherever the drawings were revised by the defendant the work was carried /62/ Com.O.S.No.5335/2015 out by the plaintiff as per the revised drawings and not as per the original drawings. The drawings furnished in Ex. D40 specify more particulars than the drawings furnished in the tender letter. The plaintiff was obliged to complete the work as per the drawings in Ex. D40. It is true that the plaintiff cannot complete the work as per the drawings in the tender.
131. The drawings in Ex. D40 were issued during the course of Execution of the work depending on the completion of work by the plaintiff. Among the drawings issued by the defendant to the plaintiff during the course of execution of work "Issued/Good for construction drawings" was mentioned.
132. "Issued/Good for construction drawings" means the drawings issued for construction project to the plaintiff by the defendant. It is true the plaintiff has to execute the project as per the drawings where it was specifically mentioned "Issued/Good for Construction drawings".
133. Hindrance register (Ex.D38) means the register meant for recording the hindrances occurred during the course of execution of the project. It is not true to suggest that hindrance means 'delays'. We have followed CPWD works manual (Ex.P34) for maintaining Hindrance register. The Engineering Officer of the defendant is empowered to record Hindrances occurred during the course of Execution of /63/ Com.O.S.No.5335/2015 the project in the Hindrances register. The delays caused by the plaintiff, defendant and natural calamities etc., are to be recorded in Hindrances register. The maintenance of Hindrances Register by the defendant is mandatory.
134. It is true that site in-charge (Assistant Engineer) has to record the Hindrances and the Engineer-in chief(Executive Engineer) has to authenticate the same in the Hindrances register. The Hindrances recorded at page no. 3 point No.7, page no. 11, point no. 27 in the Hindrances register are attributable to the plaintiff and all other Hindrances recorded in the Hindrances Register are not in the control of either the plaintiff or the defendant.
135. There are other Hindrances that occurred during the course of execution of the project other than the Hindrances recorded as per Column No. 2 of Hindrance register Ex. D38 (Nature of Hindrance) occurred during the course of execution of entire subject contract work are 1) Telagana Bundh 2) Classification of Soils 3) Issue of drawings to the plaintiff 4) Heavy rains 5) Power supply breakdown 6) Road work clearances 7) Sump work clearances 8) Head room Slab and brick work decisions, 9) CRS Masonry drawings
10) Foundation bolt pockets in footings decisions 11) Structural steel work of UHVRL decision.
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136. The delay in submission of test report and also the plaintiff's failure to take decision in respect of providing pockets in the foundation, as recorded in page no.9, point no. 23 of Ex. D38 are the Hindrances attributable to the plaintiff.
137. It is true that it takes 28 days for cube testing report after furnishing of cement sample. It is true that in Ex.D.38 / hindrance register at column 3 the effect of hindrances is recorded. It is true that on account of the effects of hindrances which are recorded in column 3 of Ex.D.38, the plaintiff could not take the work to next stage. The witness volunteers to depose that in the absence of parallel work the plaintiff could not have taken up work to the next stage, in this case he could have taken up parallel work. The defendant did not ask the plaintiff to seek extension of time to keep the contract alive. It is true that the defendant has issued letters as per Ex.D.4, D.9 and D.10 asking plaintiff to seek for extension of time to keep the contract alive. The defendant has sanctioned extension of time based on the requisition / application of plaintiff submitted along with hindrances. Schedule F of contract agreement / Ex.P.8 stipulates mile stones in subject contract. The plaintiff has not completed VDF flooring in lab area as specified in schedule F (d) mile stones. Witness volunteers to depose that the plaintiff has to comply with pre-requisite like procuring PVC sheet, sand filling, PCC, polythene sheets to be laid, RCC, copper mesh, cement concrete, the plaintiff has /65/ Com.O.S.No.5335/2015 not complied those pre-requirements as such he has not completed VDF flooring in lab area. It is true that if plaintiff fails to achieve the mile stone, the amount specified against such mile stone has to be withheld and has to be adjusted against the compensation levied at the time of granting final EOT. No amount was deducted in bills against mile stones. A Geologist from Usmania University was called for the purpose of classification of soil strata and to determine the rates payable the plaintiff. It is not true to suggest that the soil investigation or classification ought to have been done before floating the tender. It is not true to suggest that after the commencement of subject work, the calling of Geologist for classification of soil strata and securing a report has resulted in hindrance. The witness volunteers to depose the soil classification was done at the request of plaintiff. I do not remember the initial finished floor level of lab shed. I do not remember after initial excavation of foundation up to (-) 3 meters level and geologist report, a revised excavation of foundation for further (-) 1 meter was required i.e., final excavation of foundation up to (-) 4 meters. On account of geologist report the cost of subject work was increased and not the items and time. It is not true to suggest that the defendant has not done soil classification at admin building footings before calling for tender. I do not remember after soil classification and submission report of geologist further excavation of 1.45 meters was required at IG platform at admin building. Revised foundation drawing was issued on /66/ Com.O.S.No.5335/2015 08.09.2010. The witness volunteers to depose that by that time the plaintiff completed 90% of the foundation work and the revised drawing was issued as per site. It is false to suggest that I have deposed falsely in para 2 of my affidavit evidence regarding issuance of all drawings, designs and required clearances including handing over all the areas of unobstructed site for execution and same was accepted by the plaintiff. It is false to suggest that I have deposed falsely in para 3 of my affidavit evidence regarding handing over site on 12.12.2009 free from all obstructions and further, the different areas of work under scope of contract work readily available from start date for execution at site parallely without any hindrance for construction activities.
138. It is false to suggest that I have deposed falsely in my examination in chief and made false allegations made against the plaintiff. The plaintiff has asked for clearance before procurement of PVC sheets while submitting sample. The defendant has given laboratory balance works scheme i.e., sequence of works as per Ex.D.34 page 64 and 65. It is not true to suggest that as per sequence of works provided under Ex.D.34, flooring work was not an independent work and has to be completed only after erection of structural steel columns. (Witness volunteers to depose the flooring work was an independent work). It is true that some of the flooring work has to be completed by the plaintiff only after laying of GI sheets by Kotagiri Structural and after furnishing /67/ Com.O.S.No.5335/2015 copper mesh by the defendant. The witness volunteers to depose that before Kotagiri Structurals laying GI sheets, the plaintiff ought to have completed 3 layers of flooring work viz., 1) Laying of PVC sheets 2) Sand filling 3) Plain Cement Concrete. The Kotagiri Structural have intimated vide letter dated 30.08.2012 that GI sheets of 275 GSM as required in the site are not available. Copper mesh is a valuable item and it was ready with the defendant at the time of execution of subject work. It is false to suggest that the defendant had not procured copper mesh as GI sheets of 275 GSM was not available in the market at the relevant point of time. It is not true to suggest that Ex.D.5 letter dated 24.05.2011 has no reference to the alleged delay caused by the plaintiff. The deposition made in para 6 of my affidavit evidence that 'despite the defendant informing the plaintiff repeatedly, the plaintiff did not commence the work' refers to the sequence of works specified in page 64 and 65 of Ex.D.34. The plaintiff has not commenced the work specified in the sequence of works. It is not true to suggest that the allegations made in Ex.D.9 are false. The approach road work was required to be started simultaneously with shed work. The details of approach road were furnished to the plaintiff by the defendant on 29.12.2010, 28.03.2011, 13.04.2011 and 17.11.2011. It is not true to suggest that the plaintiff was unable to start and complete the approach road work without the details furnished on 28.03.2011, 13.04.2011 and 17.11.2011. Sump work was not specifically mentioned in /68/ Com.O.S.No.5335/2015 the scope of work. I do not remember when it was specified in the scope of work. The plaintiff has completed sump work, as it was the part of contract. The defendant showed the location for sump work to the plaintiff on 05.10.2010 as per Ex.D.34 page 44. I do not remember if the defendant asked the plaintiff to stop excavation work for sump as rock quantity was increasing. I do not remember that the defendant canceled the sump work as the rock quantity was increasing for excavation for sump and required the plaintiff for construction of tank above the ground level. The defendant has finalized ground tank work on 29.12.2010 as per Ex.D.34 page 55. I do not remember that the initial capacity of the sump was 1,00,000 liters. The initial capacity of sump was revised on 29.12.2010 as per Ex.D.34 page 55. The capacity of sump was revised to 50,000 liters.
139. As per Ex. D34 para 12 page 61, the Electrical works includes Electrical conduits or switch boxes in the walls in Admin building is within the scope of the defendants work. Foundation bolt pockets in footings decisions and leveling of the ground for laying PVC sheets are the Hindrances that are not recorded in the Hindrance Register Ex. D38.
140. It is true that structural work was supposed to be started simultaneously with the plaintiff's civil work. The witness volunteers to depose that after completion of the foundation work, the structural work was to be carried out /69/ Com.O.S.No.5335/2015 with the plaintiff civil work. I do not remember that the tender for structural steel contract work was delayed by 12 months by the defendants. I do not remember the date on which tender for structural steel contract work was called by the defendants. I do not remember how many times the tender for structural steel contract work was called by the defendants.
141. On 26.03.2010 the 1 st pre bid meeting for structural steel contract work as per Ex. D34 page 22 was called by the defendants. On 02.11.2010 the 2nd pre bid meeting for structural steel contract work was called by the defendants as per Ex. D34 page 46. The structural steel contract work was awarded to Kotagi Structurals. They have not completed the structural steel contract work. I do not remember the structural steel contract work awarded to Kotagi Structurals was determined by the defendants as there was delay in fabrication and erection work.
142. The defendants have awarded new contract for structural steel contract work along with the work left over by the plaintiff to a new contractor as a deposit work to BSNL.
143. It is true that the contractor has to raise the running account bills and final bills in the form of a Computerized Measurement Book. It is true that as per Clause 7 page 20 Ex. P8-GCC, the defendant has to pay the /70/ Com.O.S.No.5335/2015 bills on or before 10th working day from the date of presentation of bills by the contractor to the EIC.
144. It is true that as per Ex. D23 to D33 the defendant has made part payment of bills presented by the plaintiff that too beyond 10 working days from the date of presentation of bills. There are two types of deviation quantities in respect of tender quantities i.e., within stipulated limits and above stipulated limits.
145. The defendant has given deposit work to BSNL to complete balance civil work and structural steel work together. It is not true to suggest that the defendant gave deposit work to the BSNL as the defendant was unable to complete the balance civil and structural work by calling fresh tender. The witness volunteers to depose that as per the directions of the Ministry a department can do work up to ₹. 30 lakhs if it exceeds ₹. 30 lakhs the work has to be given to other agencies as deposit work.
146. I am not aware how many times the BSNL has called tender to complete balance civil and steel structural work. As per Ex. P43 the BSNL called tender twice to complete balance civil and steel structural work. The balance civil and steel structural work was completed in 2017.
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147. It is not true that as per Ex. P8 page 13 clause 12 of GCC-Form-F the amounts for work within stipulated limits has to be paid by the defendant immediately along with the tender quantities once RA bills is raised by the contractor without seeking any permission from the higher authority.
148. The deviation in quantities has occurred from RA bill No. I(MB No. 01)/Ex. D23. I do not remember that the defendant has not released the payments for deviation in quantities along with RA bills.
149. It is true that in Ex. D34 page 57 meeting dated 08.03.2011 at point No. 4 it is recorded that the defendant has decided to take up the complete sequence of flooring of shed area after completion of structural steel work in order to avoid damages during erection work. The witness volunteers to depose that in meeting dt 17.11.2011 at point No. 9 the defendant has directed the plaintiff to take up sequence of work date wise as recorded therein.
150. I do not remember that there was electrical conductivity problem occurred in foundation bolts. It is not true to suggest that I have falsely deposed that the soil classification was done at the request of plaintiff. I do not remember whether I have furnished any documents to show that the plaintiff had requested for soil classification.
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151. Prior to Geologist report as per tender the earth work excavation quantity was under all kinds of soil. After geologist report the items of soil was increased to Ordinary rock or all kinds of soil. On account of geologist report there is an increase in items of work from all kinds of soil to ordinary rock. On account of geologist report the excavation work took more time than the anticipated time.
152. It is not true to suggest that I have falsely deposed that "on account of geologist report the cost of subject work was increased and not the items and time". In Ex. D38 item No. 20 hindrance dated 17.07.2010, it is recorded that the classification of soil report was given by geologist on 12.08.2011 for CRS wall at admin building. It is not true to suggest that I have deposed falsely "It is not true to suggest that the defendant has not done soil classification at admin building footings before calling for tender". Witness volunteers to depose that the soil classification at admin building footings was done before calling the tender and again soil classification at admin building footings was done after the receipt of geologist's report.
153. The defendant had purchased Copper Mesh even before floating the subject tender I do not remember whether I have furnished documents to evidence the same before the Court. Witness volunteers that in the tender document itself the defendant has clearly stated that Copper mesh will be /73/ Com.O.S.No.5335/2015 given free of cost. It is false to suggest that I have deposed falsely that the Copper mesh was ready with the defendant at the time of execution of subject contract.
154. Q: When were any of the drawings, decisions and details issued to the plaintiff? Were they issued prior to the commencement of work/during the execution of the work or after completion of the work?
155. A: The defendant has issued drawings, decisions and details before, during and after the execution of work and revised drawings and decisions were given before issuing the drawings and the drawings were updated.
156. The defendant was not in the habit of issuing details after completion of work. Only in case of Center line drawings decision was given prior to issuance of drawings.
157. Q: Was it possible for the plaintiff to start and complete the approach road work without the details furnished on 28.03.2011, 13.04.2011 and 17.11.2011?
158. A: We had furnished drawings on 29.12.2010, however the plaintiff did not commence the work, as such the defendant has issued revised drawings on 28.03.2011, 13.04.2011 and 17.11.2011.
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159. I do not remember whether the defendant has issued any letter stating that due to plaintiff incapacity to commence the approach road work based on drawings furnished on 29.12.2010, the subsequent revised drawings are being issued to him.
160. The value of subject contract is 3.86 Crores. The CPRI has called for tender of subject contract. It is not true to suggest that I have deposed falsely "as per the directions of the Ministry, a department can do work up to ₹. 30 Lakhs if it exceeds ₹. 30 Lakhs the work has to be given to other agencies as deposit work".
161. It is true that the amounts for deviated quantities have been due to the plaintiff since RAB II till the final bill. The defendant has made entries in Cement register daily as per Ex. D35, 36 & 37. When there was no cement work done by the plaintiff the same was entered in cement register. When there was no cement work done by plaintiff the same was entered in hindrance register. The defendant has issued letters to the plaintiff when the plaintiff did not execute the work or when there was slow progress in the work, I do not remember the exact number of letters issued or dates. It is true that the entries in Ex. D37 were entered as nil for nearly 18 months ie., from March 2011 to June 2013 due to no availability of work.
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162. It is true that the plaintiff intimated the defendant as per Ex. P39 that he is satisfied with tender rate in respect of deviated quantities. I do not remember that the defendant has issued reply to Ex.P39. I do not remember whether the defendant has replied to the submission of rate analysis dated 18.05.2012 within 1 month as per clause 12.2 of GCC (ie., Ex. P8). I do not remember that as per clause 12.3 of Ex.P8 and Ex. P34 page 184, in case defendant is proposing to decrease the rate for items for deviated quantities about stipulated limits EIC or the competent authority of the defendant as to give notice to the contractor within one month of occurrence of the excesses.
163. The plaintiff has issued letters dated 03.04.2013 and 12.06.2013- Ex. P21 requesting the defendant to omit the balance scope of work as per clause 12(II) of Ex. P8 Page 32 ie., pre-closure of work due to non availability of work. The defendant has issued Ex. P16 accepting the request of plaintiff to omit the balance scope of work as per clause 12(II) of Ex. P8 Page 32 ie., pre-closure of work due to non availability of work. In Ex. P8 at Clause 6A page 18 and 19 it is specified that the contractor has to submit to the defendant a computerized measurement book duly bound and with its pages machine numbered. Generally the contractor signs on the abstract of the measurement book and not on the last page of the measurement book.
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164. It is true that Ex. D23 to D33 are the computerized measurement books(e-measurement Book)RAB-I to RAB-X and RAB-XI is the final bill. Ex. D23 to D33 were kept in the custody of the defendant after finalization of bills. Page No. 49 and 50 of Ex. D33 are hand written and not machine numbered. Page No. 49 and 50 of Ex. D33 are written and added by the defendant after submission of bills. I do not remember whether the plaintiff was informed about the preparation and addition of Page No. 49 and 50 of Ex. D33.
165. It is not true to suggest that page No. 49 and 50 of Ex. D33 are invented and prepared for the sake of present proceedings as such they were never communicated to the plaintiff. They were prepared for the purpose of settlement of plaintiff's account.
166. A contractor is entitled to know the deductions made by the employer in the final bill. It is not true to suggest that the defendant has acted highhandedly, arbitrarily in making deductions in the final bill even without informing the plaintiff. Ex. D23 to D33 were certified by Additional Director of defendant.
167. The witness admits the letter No.CPRI/ CED/HYD/2009 dated 02.09.2010 written by Addl. Director of CPRI to the plaintiff. The said letter has exhibited as Ex.P.54.
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168. The witness deposes that in Ex.D.34 Page No.71 Para.2 minutes dated 30.08.2012, it is mentioned that Kotagi Structurals in their letter number nil dated 30.08.2012 have expressed that there is non availability of GI sheets of 275GSM and the change from agreement item of GI Sheets of 1MM with 275 GSM is not under manufacture. It is true that in my cross examination dated 06.08.2022 I had deposed that 'It is false to suggest that the defendant had not procured copper mess as GI Sheets of 275 GSM was not available in the market at the relevant point of time'. I have deposed as quoted above since the Kotagi Structurals had informed us that GI Sheets of 275 GSM was not available in the market. Subsequently the defendant has procured GI Sheets of 275 GSM in next contract given to BSNL. I do not remember whether the defendant has asked the plaintiff to submit claim as per clause 10C/10CC/10CA.
169. Que: Is it true that even after the plaintiff requested the defendant twice to take out left over materials the higher officials of the defendant refused the same?
170. Ans: The plaintiff had transferred left over cement to other work and they have taken out some steel left over. To a letter we have asked the plaintiff to remove all the left over materials like steel etc., and clear the site.
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171. The defendant had asked the plaintiff to clear the site by removing all the left over materials vide letter dated 27.03.2015/Ex.D.19. The plaintiff has submitted requisitions as per Ex.D.17 and Ex.D.18 to allow them to clear the site. I do not remember by 2015 the left over steel was rusted, sand and 40mm metal etc., were washed away or mixed with vegetation and rendered useless.
172. Que: Is it true that after the plaintiff had completed pedestal work in lab area there was a delay in erection of stanchions by other agency due to isolation requirement?
173. Ans: 2/3rd of the number of bolts were completed and the balance was to be checked for isolation.
174. As recorded in Ex.D.34, 30.08.2012 was the last meeting between the plaintiff, defendant and other agencies. In Hindrance register or in the site order book, the defendant has not recorded the Hindrance that the plaintiff has not commenced the work even after issuance of Ex.D.13 and Ex.D.14. The defendant has issued letters to the plaintiff regarding non commencement of work. After isolation work only the flooring work can be commenced. As per Ex.D.14 flooring work could be taken up by the plaintiff in Lab area. As on date of issuance of Ex.D.14 the Hindrance in respect of isolation work was solved. It is not true to suggest that Ex.D.13 and Ex.D.14 are false. It is true that the plaintiff has /79/ Com.O.S.No.5335/2015 constructed Cement Go-down, Storage room and office room to execute the subject contract. After completion of a project the contractor would usually remove Cement Go-down, Storage room and office room. It is not true to suggest that as the suit subject contract was pre-closed, the defendant prevented the plaintiff from dismantling Cement Go-down, Storage room and office room. It is not true to suggest that the defendant is liable to pay the expenses towards the construction of Cement Go-down, Storage room and office room. It is not true to suggest that the defendant has utilized Cement Go-down, Storage room and office room for its own use after pre-closure of the subject contract.
175. As on 20.01.2012 the requirement of the plinth beam in Lab area was not finalized. As per clause (38) of Ex.P.8 the defendant was required to reimburse any further tax or levy imposed by statue on suit claim amount, in this case the GST. It is not true to suggest that EOT's in respect of suit subject contract were given as per Clause 5.2(v) of GCC/ Ex.P.8. I do not remember whether defendant has paid back the performance guarantee amount to the plaintiff. The defendant had informed the plaintiff that Rate analysis made for deviated quantities are not supported by proper documents. I do not remember the date of that letter. Siri Consultants has to revise the details for pockets for Grout Foundation bolts without MS interface. Siri consultants was required to take decision as to providing pocket location in /80/ Com.O.S.No.5335/2015 foundation. It is not true to suggest that I have falsely deposed that the delay in submission of test report and also the plaintiff's failure to take decision in respect of providing pockets in the foundation, as recorded in Page No.9, point No.23 of Ex.D.38. As per the terms of contract the initial period of Bank Guarantee was to extend for a period of 60 days after the expiry of stipulated period of contract. It is not true to suggest that due to the fault committed by the defendant the plaintiff was obliged to keep the Bank guarantee alive beyond the stipulated period of contract consequentially suffered interest renewal charges etc.,
176. The defendant has awarded another contract in the same premises to the plaintiff in 2012. The suit subject contract and contract awarded in 2012 are both Civil works contracts. In the contract awarded in 2012 also the plaintiff has raised certain disputes similar to the dispute raised in suit subject contract. The Hon'ble Arbitral Tribunal of Justice K.C Bhanu (Retired High Court Judge) has passed an award on 29.03.2018 in A.C.No.3/2015(Ex.P.41). The defendant has complied the award dated 29.03.2018.
177. It is not true to suggest that I have deposed falsely that the defendant had informed the plaintiff that the rate analysis for deviated quantities is not supported by proper documents. I do not remember whether the defendant has issued any letter to the plaintiff pointing out the defect in /81/ Com.O.S.No.5335/2015 execution of work during defect liability period. I do not remember the bank guarantee was kept alive till 29.09.2013. It is false to suggest that I have falsely deposed that the claim of plaintiff be dismissed as it is a false claim. It is not true to suggest that the defendant has put forth a false defense. It is not true to suggest that each and every specific contentions/allegations made against plaintiff and in support of defendant in my examination in chief are all false. It is false to suggest that I have deposed falsely in my examination in chief with a view to defeat the claim of the plaintiff. It is false to suggest that the defendant is liable to satisfy the suit claim made by the plaintiff."
178. From the materials available on record it is evident that there had been a delay caused by the defendant to handover hindrance free possession of the work site and providing designs and drawings within the stipulated time. The completion of the project was delayed on account of non availability of the hindrance free site and supply of approved/ revised drawings and designs. The entries made in hindrance register Ex.D38 and the deposition of DW1 reinforces the said findings. In addition to this there had been deviation in the works entrusted to the plaintiff. Which are deposed by DW1 in detail in his cross examination i.e. regarding excavation of floor level. It is also borne out from the materials available on record that the plaintiff has carried out the work in excess of specified quantity of work entrusted to it which resulted in /82/ Com.O.S.No.5335/2015 deviated quantities of the work. As per Clause 12.2 and 12.3 of GCC the defendant was required to make payments immediately after submission of Running Bills in respect of deviated quantity. The plaintiff has established that the deviated quantities as per tender quoted rates amount to ₹.27,48,037-04 and total amount for deviated quantities as per market rate works out to ₹.27,50,004-00.
179. The defendant is contending that the plaintiff has miscalculated the amount in the final bill. The plaintiff ought to have asked for ₹.2,30,89,754/- instead he has asked for ₹.2,20,76,807/-. The alleged calculations made by the defendant was not brought to the notice of the plaintiff. The defendant is claiming that the plaintiff is liable to pay ₹.27,93,875/- However the defendant has not made any counter claim against the plaintiff. The defendant is not entitled to adjudicate its own cause and retain ₹.27,93,875/- without making counter claim when the plaintiff is seeking recovery against the defendant.
180. From the evidence available on record particularly Ex.D38 hindrance register it is evident that there has been a total delay of 368 days.
181. The materials available on record show that the defendant has committed beach of terms and conditions of the agreement and is liable to recompense the plaintiff.
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182. The plaintiff has submitted final bill as per Ex.D33 on 22.08.2013. The plaintiff has claimed the amount due for deviated quantity as per Schedule F of Ex.P8 amounting to ₹.19,83,335/- which are within limits. The plaintiff has claimed deviated quantity beyond limits at ₹.27,54,444/-The balance works out to ₹.54,72351/- inclusive of Security Deposit of ₹.11,57,535/-The plaintiff has furnished the necessary details to support the said claim. The claim of the plaintiff remains unchallenged as such the plaintiff is entitled for claim No.1.
183. CLAIM No.2. The Plaintiff is claiming interest on withheld amount/delayed payments at 18% p.a. from the date of accrual till 31.05.2015/-.
184. As per Section 29 of Ex.P34, Section 29.3 provides time schedule for payment of bills. For payment of running bills, Time limit is stipulated as far as possible before expiry of 6 working days from the presentation of the bill. Both AE/AEE and EE should not take more than 3 working days each (clause 7). The Plaintiff has furnished a statement as per Ex.P13 as Annexure-I showing the details regarding the Bill No. Bill Date Date of accrual, Bill Amount, Amount received, Balance Delay period and interest at 18% p.a., and also interest accrued on delayed payments. As per Ex.P13, the Total interest accrued at ₹.41,97,035/- and interest accrued on delayed payments at ₹.1,03,193/- in all ₹.43,00,228/- The /84/ Com.O.S.No.5335/2015 defendant has failed to place any materials on record contrary to the claim of interest made by the plaintiff. Hence, Claim No:2 is accepted.
185. CLAIM No.3: The plaintiff seeking compensation for curtailment of Contract Amount:
186. The plaintiff was entrusted work for a sum of ₹.3,86,36,000/- The plaintiff was constrained to pre close the contract on account of breaches committed by the defendant. The plaintiff was given work to a tune of ₹.2,78,55,000/- and deprived the work worth ₹.1,07,81,000/- It is borne out from the record the hindrance pertaining to flooring work could not be removed by the year 2016. The defendant has terminated the contract of Kotagi Structurals and entrusted the work to BSNL. The BSNL was able to complete the balance civil and steel structural work only in 2017. Hence, the plaintiff had genuine reasons to pre-close the agreement. The plaintiff is deprived of work worth ₹.1,07,81,000/-. The plaintiff is claiming compensation for curtailment of contract at 15% of ₹.1,07,81,000/- which works out to ₹.16,17,000/-In view of the ratio of precedents relied on by the plaintiff the plaintiff is entitled for compensation as claimed under Claim No:3. Thus the plaintiff is entitled for compensation of ₹.16,17,000/- as claimed under Claim No.3.
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187. CLAIM No.4: The Plaintiff is claiming compensation due to prolongation of contract beyond the stipulated time.
188. The delay was caused in the execution of the work for the reasons attributable to the defendant. Section 32.5.7 of CPWD Manual (Ex.P34) provides that Hindrances to be carefully weighed before deciding on EOT. In this case the delay is attributable to the defendants. The DW1 in his cross examination has admitted that the defendant has issued letters as per Ex.D4, D9 and D10 requiring the plaintiff to apply for extension of time to keep the contract alive. The defendant has sanctioned extension of time based on the requisition of the plaintiff submitted along with the hindrance. The stipulated period for completion of the project was 15 months. The time was extended to 27 months 20 days. The plaintiff is contending that he has incurred overheads at 30% towards under utilization, idling of labor and resources. However as per the agreement, overheads and profit is 15%.
189. In order to assess the compensation one may follow any of the three formulas which are widely followed viz. a) HUDSON formula, b) Emden Formula, c) Eichleay Formula. In this case the plaintiff has followed HUDSON formula. In the Hudsun formula the head office overhead percentage is taken from the contract. The Hudson formula is subjected to criticism as it adopts Head office overhead /86/ Com.O.S.No.5335/2015 percentage from the contract as the factor for calculating the costs. This may bear little or no relation to the actual head office costs of the contractor. As per the ratio of the judicial precedents relied on by the plaintiff one has to consider the value of the work entrusted to a contractor and not the value of the work completed by the contractor. By applying Hudson Formula the plaintiff has assessed the loss at ₹.1,32,96,000- In the absence of proper materials to reject the claim of the plaintiff, Claim No:4 deserves to be accepted. The plaintiff is entitled for compensation of ₹.1,22,96,000/-.
190. CLAIM No.5: Interest and Bank Guarantee Commission for delay in release of Performance Guarantee and security deposit.
191. The plaintiff has furnished performance Bank guarantee for ₹.19,50,000/-The plaintiff was required to keep the Performance Bank Guarantee throughout the period of execution of the contract commencing from 12.12.209 ending on 11.05.2021 as per Ex.P6. The defendant has retained the performance bank guarantee till 29.09.2013. The Plaintiff was deprived of his money and also made liable to pay commission on bank guarantee. Though the defendant claims that the plaintiff is liable to compensate ₹.29 lakhs has released the bank guarantee. In these circumstances, the plaintiff is entitled for interest on bank guarantee at 18% p.a. for a period of 28 months which works out to ₹.8,33,625/- and /87/ Com.O.S.No.5335/2015 commission amount of ₹. 23,439/-8,57,064/-.
192. The plaintiff is claiming interest on security deposit from 10.06.2012 to 28.02.2014 on ₹.13,92,760X 185 for 20 months 20 days to a tune of ₹.4,31,825/- In all ₹.12,88,889/-.
193. The defendant has retained the performance Bank Guarantee and the Security Deposit even after accepting the pre-closure offer made by the plaintiff. Hence, the defendant is liable and the plaintiff is entitled to ₹.12,88,889/- which is rounded off to ₹.12,89,000/-under Claim No:5.
194. CLAIM No.6: The Plaintiff has made a claim for payment of amounts due towards price adjustment under Clauses 10C and 10CA.
195. The Plaintiff has submitted a requisition to the defendant as per Ex.P31 dated:05.05.2014 to pay price escalation costs of ₹.16,87,610/- and interest at 18%p.a. from 05.05.2014 to 31.05.2015 amounting to ₹.3,25,408/- in all ₹.20,13,018/-(Ex.P32).
196. The defendant is contending that the plaintiff is seeking price escalation after 11 months after the submission of final bill. The defendant is not entitled to claim escalation amount of ₹.20,13,018/- when he has not submitted the requisition within reasonable time.
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197. The plaintiff is contending that the submission and payment of final bill is altogether a different issue from submission and claiming price escalation. The plaintiff is claiming price escalation as per Clause 10C and 10CA of the contract. In the Inspection Report (Ex.D34) it is noted that the contractor is advised to put up a separate note for escalation with relevant supporting documents for consideration. The plaintiff has invoked Clause 10C and 10CA of the Contract to seek price escalation. Section 151 Clause 10C of Forms No.CPWD 7 & 8 provides for re-imbursement to contractor due to increase/decrease caused as a direct result of coming into force of any fresh law or statutory rule or order.
198. Clause 10(CA) of Forms No.CPWD 7 & 8 provides for varying the amount of contract due to increase or decrease in prices of various materials pertaining to the work. In view of Clause 10C, 10(CA) of contract and Section 32.8 and 32.9 of CPWD Manual the plaintiff is entitled for price escalation as also interest claimed thereon amounting to ₹.20,17,018/- under Claim No:6.
199. Claim No:7: The plaintiff is claiming ₹.6,34,000/- under this head as construction cost of cement go-down, stores and site office. It is not in dispute that the plaintiff has constructed a cement go-down, stores and site office to carry on with the Project as on 09.03.2012, which was to be /89/ Com.O.S.No.5335/2015 dismantled and taken away by the Plaintiff after the closure of the work.
200. The DW1 in his cross examination deposed that it is true that the plaintiff has constructed cement Go-down, storage room and office room to execute the subject contract. After completion of a project the contractor would usually remove Cement go-down, storage room and office room. It is true to suggest that as the suit subject contract was pre closed, the defendant prevented the plaintiff from dismantling Cement go-down, storage room and office room. It is not true to suggest that the defendant is liable to pay the expenses towards the construction of cement go-down, storage room and office room. It is not true to suggest that the defendant has utilized the cement go-down, storage room and office room for its own use after pe-closure of the subject contract.
201. From the above evidence it is clear that the plaintiff was not allowed to remove the Cement go-down, Storage room, office room and the defendant has made use of the same. In such circumstances, the plaintiff is entitled to seek compensation of ₹.4,00,000/- under Claim No.7.
202. CLAIM No.8 : Amounts due towards reinforcement steel lying at the Project site.
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203. It is the case of plaintiff that he had procured about 11.17 metric ton of reinforcement steel for balance works such as flooring etc., without claiming any advance from the defendant. Out of which the plaintiff has utilized about 5 Mt for execution of work done till 09.03.2012 and the balance of about 5.17 MT was kept at the project site to be utilized for balance work. The plaintiff is contending that the defendant has failed to handover the site during the tenure of contract or issued clearance for the plaintiff to execute the balance work. As such the reinforcement steel continued to be in the possession of the defendant.
204. The Plaintiff has requested the defendant to permit them to return the steel lying in the possession of the defendant.
205. The DW1 in his cross examination deposed that the plaintiff had transferred left over cement to the other work and they have taken out some steel left over. To a letter the defendant has asked the plaintiff to remove all the left over materials like steel etc., and clear the site.
206. The defendant had asked the plaintiff to clear the site by removing all the left over materials vide letter dated:27.03.2015/Ex.D19. The plaintiff has submitted requisitions as per Ex.D17 and Ex.D18 to allow them to clear the site. He does not remember by 2015 the left over steel was rusted, sand and 40 mm metal etc., were washed away or mixed with vegetation and rendered useless.
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207. From the above evidence it is clear that the defendant has failed to give permission to the plaintiff to lift the steel, sand and 40 mm metal etc., in time, on account of which the materials lost their utility value and rendered useless. Hence, the defendant is liable to pay value of the material and the interest thereon. In this regard the plaintiff has made an unsuccessful request to the defendant vide letter dated:20.07.2014 as per Ex.P51. Thus the defendant is liable to pay ₹.2,32,650/- and interest at 18% p.a. from 09.3.2012 till 31.05.2015 amounting to ₹.1,36,100/- totaling to ₹.3,68,750/- under Claim No.8.
208. The plaintiff has prayed the Court to award current and future interest at 18% p.a. on all the claims allowed by this Court or at such rate as appears to be reasonable from 01.06.2015 till the date of realization of entire dues.
209. On going through the ratio of the decisions relied on by the plaintiff and defendant it is evident that the Court has discretion to award current and future interest. Having regard to the facts and circumstances of the case it would be appropriate to award interest at 12% p.a. from 01.06.2015 till the date of realization of entire amount. Accordingly, ISSUE No.1 to 6 in the AFFIRMATIVE, ISSUE No.8 PARTLY AFFIRMATIVE.
210. ISSUE No.7: The plaintiff is carrying on its /92/ Com.O.S.No.5335/2015 business at Hyderabad. The Subject matter of the suit project is situated at Hydrabad. The defendant is situated at Bengaluru. The suit dispute is a commercial dispute as it relates to construction contract. The suit was filed on 19.06.2015. The plaintiff is claiming recovery of ₹.2,79,94,347/- which exceeds the specified value of ₹.1,00,00,000/-as fixed under Act No.4 of 2016. Subsequently, the specified value is fixed at ₹.3,00,000/- with effect from 03.05.2018. As the defendant is situated at Bengaluru and the suit dispute is a commercial dispute as per Section 2(c)(vi) of the Commercial Courts Act, 2015 and the value of the suit exceeds the specified value fixed under Section 2(i) of the Act, this Court has jurisdiction to entertain and try the suit. Accordingly, ISSUE No.7 is answered in the NEGATIVE.
211. ADDITIONAL ISSUE: At the fag end of the trial the plaintiff got amended the plaint by inserting a prayer (d) that "to direct the defendant to reimburse GST on suit claim amount in terms of Clause 38 of Ex.P8'.
212. The plaintiff has not made consequential averments in the plaint. The defendant has filed additional written statement contending that the plaintiff has not averred anything about its entitlement to have reimbursement of GST. The plaintiff has made the claim based on the deposition of DW1 in his cross examination. The /93/ Com.O.S.No.5335/2015 GST Act came in to existence with effect from 01.07.2017. As on the date of advent of GST Act no work was pending to be carried out by the plaintiff as the plaintiff had foreclosed/ pre- closed the contract. The invoices were raised in the year 2013. The plaintiff has submitted final bill once more after lapse of 11 months i.e. in 2014. No work has been carried out in 2017. There was nothing to be paid 2017. The plaintiff is liable to pay the defendant ₹.29 lakhs as such the question of making payment and reimbursing GST does not exist at all. The Court had framed issues on 11.03.2019. The plaintiff did not make any claim for alleged reimbursement of GST. The claim of the plaintiff for reimbursement of GST is time barred. The plaintiff was paid his dues in 2013. The GST is not made effective retrospectively. In these circumstances, the claim of the plaintiff deserves to be rejected.
213. Clause 38(i) of Agreement dated:23.12.2009 (Ex.P8) reads that "All tendered rates shall be inclusive of all taxes and levies payable under respective statures. However, pursuant to the Constitution (46th Amendment Act, 1982), if any further tax or levy is imposed by Statute, after the last stipulated date for the receipt of tender including extensions if any and the contractor thereupon necessarily and properly pays such taxes/levies, the contractor shall be reimbursed the amount so paid, provided such payments, if any, is not, in the opinion of the Superintending Engineer (whose decision shall be final and binding on the contractor) /94/ Com.O.S.No.5335/2015 attributable to delay in execution of work within the control of the contractor."
214. In this case it is held while answering Issues that the completion of the project was delayed for the reasons attributable to the Defendant. The claim of the plaintiff for payment of ₹.2,79,94,347/- is pending adjudication. In fact the defendant is contending that the plaintiff is liable to pay compensation levied by it amounting to ₹.29,94,271/-.
215. At the time of entering into agreement dated:23.12.2009 by the plaintiff and defendant GST was not in force. Subsequently GST regime came into force on and from 01.07.2017. The defendant has stated that they have deducted tax as per the statute then prevailing on the payments made to the plaintiff.
216. The DW1 in his cross examination has deposed that "As per Ex.P.8, Page 53, Clause 38 all the tendered rates are inclusive of taxes and levies, for the time being in force. As on the date of contract Service Tax was applicable and was in force. The plaintiff has paid Service Taxes in respect of subject contract. It is not true to suggest that the defendant is not liable to pay any further amount to the plaintiff in respect of Taxes."
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217. The Hon'ble High Court of Karnataka in W.P.No:
2130 of 2022 (T-RES) vide order dated:08.06.2023 has observed that Para2. " 20. ..
(j) A supplementary agreement may be signed with the petitioners for the revised GST-inclusive work value for the Balance Work completed or to be completed as determined above and in case the revised GST-inclusive work value for the balance work, completed or to be completed after 01.07.2017, is more than the original agreement work value, the Petitioners are to be paid/reimbursed, as the case may be the differential tax amount by the concerned employer; so also, in case payments for works completed pre-GST are made post-GST, the concerned employer has to pay or reimburse, as the case may be, the differential tax amount, to the Petitioners'.
218. The plaintiff has not paid GST as his claim is yet to be adjudicated. In such circumstances it is for the defendant to deduct the applicable GST in respect of the payments to be paid by them to the plaintiff in pursuance of the decree passed in this case. The question of applicability of GST retrospectively is to be adjudicated by the competent authority under the provisions of GST Act. In view of the directions of the Hon'ble High Court of Karnataka, it is evident that the plaintiff is entitled to and the defendant is liable to pay the applicable on the payments to be made by the /96/ Com.O.S.No.5335/2015 defendant to the plaintiff. Accordingly, Additional Issue is answered in the AFFIRMATIVE.
219. In view of the above discussion and findings on the above issues the plaintiff is entitled for the following reliefs:
220. The plaintiff is entitled for payment of ₹.2,79,94,347/- (Rupees Two Crores Seventy Nine Thousand ) along with interest at 12% p.a. from 01.06.2015 till the date of realization of entire dues.
221. The plaintiff is entitled to and the defendant is liable to pay the GST at such rates as applicable under GST Act on the payments to be made by the defendant to the plaintiff.
222. Issue No. 9: In view of the findings on Issue No:1 to 8 and additional Issue the following order is passed:
ORDER The suit filed by the plaintiff is hereby decreed with costs.
The plaintiff is entitled for payment of ₹.2,79,94,347/- (Rupees Two Crores Seventy Nine Lakhs Ninety Four Thousand Three Hundred and Forty Seven Only) along with interest at 12% p.a. from 01.06.2015 till the /97/ Com.O.S.No.5335/2015 date of realization of entire dues.
The plaintiff is entitled to and the defendant is liable to pay the GST at such rates as applicable under GST Act on the payments to be made by the defendant to the plaintiff.
Draw Decree accordingly.
The office is hereby directed to send a copy of the judgment to the plaintiff and defendant through e-mail as per Order XX Rule 1 CPC as amended by Section 16 of Commercial Courts Act, 2015.
(Dictated to the Stenographer, corrected, signed and then pronounced by me in the open court on 27th day of January 2024) (S.J.KRISHNA) LXXXIX ADDL.CITY CIVIL & SESSIONS JUDGE, BENGALURU.
(CCH-90) ANNEXURES List of witnesses examined for the plaintiff:
P.W.1 Sri.G.Balaji List of documents exhibited on behalf of the plaintiff:
Sl.No. Particulars of documents Ex.P. 01. Certified copy of registration certificated Ex.P.1
issued by Registrar of Firms to plaintiff.
02. Certified copy of filing made by the Ex.P.2 Registrar of Firms by the plaintiff /98/ Com.O.S.No.5335/2015
03. Original Authorization issued by the Ex.P.3 plaintiff firm dated 05-06-2015
04. Notice inviting tender dated 21-10-2009 Ex.P.4
05. Letter dated 06-11-2009 written by the Ex.P.5 plaintiff.
06. Letter of acceptance dated 27-11-2009 Ex.P.6 issued by the defendant.
07. Letter of commencement dated Ex.P.7 10- Ex.P.7 12-2009 issued by the defendant
08. Agreement dated 23.12.2009 along Ex.P.8 general conditions of contract, 2007 and additional terms and conditions and specifications
09. Copy of letter dated 27-12-2010 Ex.P.9
10. Copy of E-mail dated 27-12-2010 Ex.P.10
11. Office copy of the letter dated 01-09-2010 Ex.P.11 issued by the plaintiff to the defendant
12. Office copy of the letter dated 11-11- 2010 Ex.P.12 issued by the plaintiff to the defendant.
13. Statement of interest accrued as on 31- Ex.P.13 05-2015.
14. Office copy of the letter dated 12.03.2012 Ex.P.14 issued by the plaintiff to the defendant.
15. Office copy of the letter dated 13.02.2013 Ex.P.15 sent by the plaintiff to the defendant
16. Original copy of communication dated Ex.P.16 20.08.2013 issued by the defendant to the plaintiff 17 Office copy of letter dated 09-11-2013 Ex.P.17 sent by the plaintiff to the defendant 18 Office copy of communication dated Ex.P.18 25.11.2013 sent by the plaintiff to the defendant 19 Original communication dated 25.11.2013 Ex.P.19 /99/ Com.O.S.No.5335/2015 issued by the defendant to the plaintiff 20 Office copy of the communication Ex.P.20 27.11.2013 sent by the plaintiff to the defendant 21 Office copy of the letter dated 14.12.2013 Ex.P.21 sent by the plaintiff to the defendant 22 Original communication dated 01.01.2014 Ex.P.22 23 Show cause notice dated 10.01.2014 Ex.P.23 issued by the defendant to the plaintiff 24 Reply letter dated 18.01.2014 issued by Ex.P.24 the plaintiff to the defendant 25 Office copy of the letter dated 20.02.2014 Ex.P.25 issued by the plaintiff to the Chairman of high power committe of the defendant 26 Original copy of the communication dated Ex.P.26 27.03.2014 issued by the defendant to the plaintiff 27 Office copy of the letter dated 09-04- 2014 Ex.P.27 sent by the plaintiff to the Ex. P.27(a) defendant along with postal receipts 28 Office copy of the letter dated 09-04- 2014 Ex.P.28 sent by the plaintiff to the Director General of the defendant 29 Office copy of the Legal Notice dated Ex.P.29 12.08.2014 issued to the defendant 30 Statement of account due to the plaintiff Ex.P.30 from the defendant under claim no.5 31 Office copy of the letter dated 05.05.2014 Ex.P.31 sent by the plaintiff to the defendant 32 Statement of account as on 31.05.2015 Ex.P.32 claim No.6 33 Copy of letter dated 04.02.2010 issued by Ex.P.33 the defendant to the plaintiff 34 CPWD works manual Ex.P.34 /100/ Com.O.S.No.5335/2015 35 Office copy of the letter sent by the Ex.P.35 plaintiff to the Joint Director-CED 36 Office copy of letter dated 26.12.2011 sent Ex.P.36 by the plaintiff to the defendant.
37 Letter dated 27-12-2011 sent by the Ex.P.37 defendant to the plaintiff 38 Office copy of the letter dated 09-01- 2012 Ex.P.38 sent by the plaintiff to the defendant 39 Copy of e-mail dated 01.02.2012 sent by Ex.P.39 the plaintiff to the defendant 40 Office copy of the letter dated 18.05.2012 Ex.P.40 sent by the plaintiff to the defendant 41 Award dated 29-03-2018 passed by the Ex.P.41 Arbitral Tribunal in Case No.3/2015 42 Building and Engineering Contracts by Ex.P.42 B.S.Patil - Fifth Edition-2005.
43 Tender document - BSNL Ex.P.43 44 Original Power of Attorney dated Ex.P.44 27.09.2019 executed by plaintiff firm in favour of G. Balaji.
45 Original letter dated 23.01.2010 issued by Ex.P.45 the plaintiff to the defendant 46 Original letter dated 02.08.2010 issued by Ex.P.46 the plaintiff to the defendant 47 Original letter dated 10.08.2010 issued by Ex.P.47 the plaintiff to the defendant 48 Letter dated 28.03.2013 issued by the Ex.P.48 plaintiff to the defendant 49 Letter dated 21.07.2011 issued by the Ex.P.49 plaintiff to the defendant.
50 Letter dated 21-24/12/2012 issued by Ex.P.50 defendant to the plaintiff 51 Letter dated 24.07.2014 issued by the Ex.P.51 plaintiff to the defendant with postal and /101/ Com.O.S.No.5335/2015 receipts Ex.P.51(a) 52 Letter dated 03.05.2013 issued by the Ex.P.52 plaintiff to the defendant 53 Certificate u/S 65(B) of Indian Evidence Act Ex.P.53 54 letter No.CPRI/CED/HYD/2009 dated Ex.P.54 02.09.2010 written by Addl. Director of CPRI to the plaintiff.
List of witnesses examined for the defendant/s:
DW1 : Sri.Panithapu Shivaprasad List of documents marked for the defendant/s:
Sl. Particulars of Documents Ex.D. No.
1. Letter dated 10-06-2010 addressed to Ex.D.1 the plaintiff 2 Letter dated 12-01-2011 sent by the Ex.D.2 plaintiff 3 Letter dated 21-01-2011 sent by the Ex.D.3 defendant to the plaintiff 4 Copy of Email dated 21-06-2011 Ex.D4. 5 Letter dated 24-05-2011 addressed to Ex.D5.
the plaintiff 6 Letter dated 26-05-2011 addressed to Ex.D6.
the plaintiff 7 Letter dated 27-12-2011 addressed to Ex.D7.
the plaintiff 8 Letter dated 09-01-2012 addressed to Ex.D8.
the plaintiff 9 Letter dated 12-01-2012 addressed to Ex.D9.
the plaintiff /102/ Com.O.S.No.5335/2015 10 Letter dated 26-03-2012 addressed to Ex.D10.
the plaintiff 11 Form of application seeking extension of Ex.D11(1 time submitted by the plaintiff (5 ) to (5) numbers) 12 Letter dated 21-08-2012 addressed to Ex.D12.
the plaintiff 13 Letter dated 20-07-2012 addressed to Ex.D13 the plaintiff 14 Letter dated 20-11-2012 addressed to Ex.D14.
the plaintiff 15 Reply notice dated 10-09-2014 Ex.D15 16 Undelivered postal cover Ex.D16 17 The letter sent through Ex. D16(opened Ex.D16 in the court) (a).
18 Letter dated 26-07-2013 addressed by Ex.D17 the plaintiff 19 Letter addressed by the plaintiff Ex.D18 (endorsement dated 03-03-2014) 20 Letter dated 27-03-2015 addressed to Ex.D19 the plaintiff 21 Copy of Email dated 25-03-2011 Ex. D20 22 Letter dated 26-03-2012 addressed to Ex.D21 the plaintiff 23 Certificate u/sec 65B of Evidence Act. Ex.D22 24 Running account bill I(MB No. 01) with Ex.D23 abstract.
25 Running account bill II(MB No. 02) with Ex. D24 abstract.
26 Running account bill III(MB No. 03) with Ex. D25 abstract.
27 Running account bill IV(MB No. 04) with Ex. D26 abstract.
28 Running account bill V(MB No. 05) with Ex. D27 /103/ Com.O.S.No.5335/2015 abstract.
29 Running account bill VI (MB No. 06) with Ex.D 28 abstract.
30 Running account bill VII(MB No. 07) with Ex. D29 abstract.
31 Running account bill VIII(MB No. 08) with Ex. D30 abstract.
32 Running account bill IX(MB No. 09) with Ex. D31 abstract.
33 Running account bill X(MB No. 10) with Ex. D32 abstract.
34 Running account bill XI(MB No. 11) with Ex. D33 abstract.
35 Inspection report . Ex. D34 36 Cement issue register volume 1 Ex. D35 37 Cement issue register Volume 2 Ex. D36 38 Cement issue register Volume 3 Ex. D37 39 Hindrance register Ex. D38 40 UHV lab civil works- site order Ex. D39 41 Drawing issue register Ex. D40 42 Notice inviting tender including tender Ex.D.41 documents (S.J.KRISHNA) LXXXIX ADDL.CITY CIVIL & SESSIONS JUDGE, BENGALURU.
(CCH-90)
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Digitally signed
SJ by S J KRISHNA
KRISHNA Date: 2024.02.02
02:48:05 -0500