Bangalore District Court
Has Carried Out The Execution Of Works ... vs Did Not Finalize The Said Issues Till ... on 23 November, 2020
1
Com.O.S.No.3649/2011
IN THE COURT OF LXXXII ADDL.CITY CIVIL & SESSIONS
JUDGE, AT BENGALURU (CCH.83)
THIS THE 23rd DAY OF NOVEMBER 2020.
PRESENT:
SRI.DEVARAJA BHAT.M., B.COM, LL.B.,
LXXXII ADDL.CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Com. O.S. No. 3649/2011
BETWEEN:
M/s SSR - Shiva - RK (JV),
Hyderabad - 500 013,
represented through its
Lead Partner M/s SSR
Crest Engineers &
Constructions Ltd.,
Hyderabad, through its
Managing Director Sri.
Ch. Pavan, S/o Sri. Ch.
Yella Reddy.
: PLAINTIFF
(Represented by Sri. Ch.
Purnachandra Rao -
Advocate)
AND
1.The Managing Director,
Karnataka Road
Development Corporation
Ltd., 16/J, 1st Floor, Miller
Tank Bed Area, Bengaluru
- 560 052.
2
Com.O.S.No.3649/2011
2. The Chief Engineer,
Karnataka Road
Development Corporation
Ltd., 16/J, 1st Floor, Miller
Tank Bed Area, Bengaluru
- 560 052.
3. The Superintending
Engineer, Karnataka Road
Development Corporation
Ltd., 16/J, 1st Floor, Miller
Tank Bed Area, Bengaluru
- 560 052.
4. The Executive
Engineer, Karnataka Road
Development Corporation
Ltd., Office in the
premises of PWD
Executive Engineer,
Jewargi Road, Gulbarga,
Karnataka State - 585
102.
(Defendants are
Represented by DUA
Associates - Advocates.) : DEFENDANTS
Date of Institution of the 23.05.2011
suit
Nature of the suit (suit
on pronote, suit for
declaration & Money Suit
Possession, Suit for
injunction etc.)
Date of commencement
of recording of evidence 08.11.2012
3
Com.O.S.No.3649/2011
Date on which Judgment 23.11.2020
was pronounced
Total Duration Year/s Month/s Day/s
09 06 00
(DEVARAJA BHAT.M),
LXXXII Addl. City Civil & Sessions Judge,
Bengaluru.
JUDGMENT
This is a suit for recovery of Rs.13,90,70,758/- from the defendants with interest at the rate of 12% per annum from the date of suit till the date of realisation.
2. The contentions of the Plaintiff in brief are as follows:-
That the Contract Work of "Widening & Strengthening of existing Wadi-Raichur Road from Km. 0.00 to Km. 41.00 (Wadi to Yadgir)" was entrusted to the Plaintiff under an Agreement dated 23.02.2004 signed by the Defendants, that the Defendants had issued a Work Order in favor of the Plaintiff on 26.03.2004, that the Plaintiff has mobilized the required men and machinery to progress the work as per the construction programme, as per Clause-2.20.4 of General Conditions of Contract and has established major Plant and Equipment as per the Agreement at Page Nos.59 to 63 of the said Agreement, that 4 Com.O.S.No.3649/2011 the 2nd defendant has appointed Supervision Consultant viz., M/s Sir Owen Williams Innovestment Limited, Noida (SOWIL) and the Plaintiff has carried out the execution of works under their supervision, that the Plaintiff has submitted the Topographic Survey, Longitudinal Plan of the entire road with improvements in the alignment within ROW limits, that the Team Leader of the Consultants, in turn submitted them to the 3 rd Defendant for approval, but the 3rd Defendant instructed the Plaintiff to re-
submit them as per the directions of the Team Leader, that SOWIL entrusted the work of consulting services for Construction, Management and Supervision of Project of Road Improvement works to the Plaintiff, that the Consultants have conducted survey and investigation and submitted their Inspection Report during May, 2004 and a copy of the same was delivered to the Plaintiff, that the progress suffered due to difference of opinion among the Plaintiff, Engineer and the Consultants, a Review Meeting was conducted on 29.06.2004 at the camp of the Plaintiff and the Minutes of the Meeting was recorded on 30.06.2004, wherein several issues were discussed and the Contractor was instructed to expedite the C.D.Works, that the Plaintiff earnestly proceeded to fulfill its responsibilities under the Contract, more particularly, the issues discussed on 29.06.2004 in the Review Meeting and submitted a detailed representation dated 16.08.2004 to the 1 st Defendant wherein it was brought to the notice of the defendants, that the existing provisions are insufficient because of which the men and 5 Com.O.S.No.3649/2011 machinery of the Plaintiff were idle for last six months, that the Defendants did not finalize the said issues till October, 2004, but the Technical Committee had inspected the road and conducted Meeting during October 2004, that thereafter the Defendants allowed the Plaintiff to execute the work as per old designs for road, crust as contemplated in the bid documents excluding village/town portions and accordingly Plaintiff proceeded with the work till the end of Agreement period i.e., 22.02.2006, that the Plaintiff received the RA Bill Nos. 1 to 15 for a total sum of Rs.16,06,53,205/- up to 03.07.2006, that the total Contract Work could not be completed within the Agreement Period from 23.02.2004 to 22.02.2006 and it was extended up to 31.03.2007 as per E.O.T. Letter No. KRDCL/SE/2006-07/817 dated 09.06.2006 without any penalty for the reasons of delay in approval of Variations, delay in completion of work due to change from Flexible Pavement to Rigid Pavements for a length of Km. 2.00, Construction of Two Minor Bridges and Reconstruction in the Chainage from Km. 2.00 to Km. 15.00 etc., that in the Report dated 19.12.2005, the Consultants have pointed out various hurdles and bottlenecks responsible for the deletion and shortfall in the progress of works and thereafter has conducted Inspection on 04.04.2006 and submitted a Report to the Defendants 1, 4 and M/s SOWIL, wherein various issues involved in the contract work were discussed and recommended the 4th Defendant to send the proposal with all the additional estimates for being reviewed by the Technical Committee before 6 Com.O.S.No.3649/2011 recommending to the Defendants and thus, the shortfall in progress of the work is not attributable to the Plaintiff, that the 3rd Defendant conducted a Meeting on 29.5.2006 and instructed the execution of work for which the Plaintiff by its letter dated 29.05.2006 informed the 3rd Defendant that they are not agreeable to execute the said work at the agreement rates in view of major changes/variations proposed and as well as change in S.S.R. and requested to consider their offer given in the said letter, that the Defendants without communicating their decision on the representation of Plaintiff, granted Extension of Time (EOT) up to 31.03.2007 for the total work under Agreement by their letter dated 09.06.2006, that the Plaintiff though requested for increase of rates at the reach Km. 0.000 to Km. 15.000 through its letters dated 17.06.2006, 01.07.2006 and 21.07.2006, but the Defendant No.1 communicated his decision that the said work will be taken upon by calling fresh Tenders and requested the Plaintiff to complete the balance work of improvements to the Road from Km. 15.00 to Km 41.00 including construction of Minor Bridges at Km. 5.60 and Km. 6.60 as per the agreed rates and the Plaintiff has accordingly completed the works by 31.03.2007, that the Plaintiff claimed prevailing NH-SS Rates during the extended period of Agreement for execution of the "Extra Items" of work, but the payments were made as per B.O.Q. even without concluding the Supplemental Agreements for extra items of works and that the bills were received under financial duress, that the Plaintiff has 7 Com.O.S.No.3649/2011 completed the Road Works allowed to execute by 31.03.2007, the Defects Liability Period ended by 31.03.2008, that the payment of Final Bill was delayed, that the 21 st and Final Bill Pass Order was made for Rs.17,66,709/- on 19.09.2008, but the Cheque was issued on 21.04.2009, that the maintenance of Roads executed by them, continued up to 31.03.2010 as per Clause No.2.44 at Page No.40 of the Agreement and that the Plaintiff has incurred heavy expenditure towards maintenance for the reasons that the Designs and Drawings approved by the Department were defective, that the Plaintiff has submitted claims through the letter dated 12.11.2009 which was rejected by the 1st Defendant and hence issued a Legal Notice on 27.02.2010 and thereafter filed the present suit for damages under various heads.
3. The Defendants Nos.2 & 3 have filed their Written Statement, which is adopted by the Defendants No.1 and 4 and they have contended as follows:-
That the suit filed by the Plaintiff without producing Registration Certificate and furnishing the details of Joint Venture is not maintainable under Section 69 of the Partnership Act, that the Defendants No.2 to 4 are Officers of the 1 st Defendant and hence, they are neither necessary parties nor proper parties to the suit, that the suit is barred by limitation, that the work from 0.00 Km to 15.00 Km was withdrawn due to the fact that the Plaintiff refused to do the same at the agreed 8 Com.O.S.No.3649/2011 rate and demanded higher rates, that the reasons for the delay is due to frequent mechanical problems of the crusher, delay in clearance for quarry from mines, mineral revenue department etc., to which the Defendants cannot be held liable, that the Plaintiff agreed for extension of time without any reservations, that as the completion of contract work prolonged up to 31.03.2007, the recovery of interest as well as principal from the RA Bills of the Plaintiff continued up to payment of last bill i.e., 08.11.2006 and hence, Plaintiff cannot claim interest from the RA bills, that without there being any clause in the contract entitling the Plaintiff for the commission on Bank Guarantee, the Plaintiff is not entitled to claim the same and hence, they prayed to dismiss the suit.
4. Based on the above pleadings, the following Issues are framed by my learned Predecessor in Office:-
1. Whether the Plaintiff is entitled to file the present suit without registration under Section 69 of the Partnership Act?
2. Whether the agreement period was extended for the reasons not attributable to the Plaintiff as alleged?
3. Whether the deletion of road work from km 0.00 to km 15.00 is an authorized deletion and the entrustment of Minor Bridges at km 5.60 and km 6.60 are Authorized extras allowed in the contract work as alleged ?9
Com.O.S.No.3649/2011
4. Whether the Suit is barred by limitation as alleged ?
5. Whether Defendant No.1 failed to conduct meeting for one to one discussions for settlement of claims as per his letter dated 22.03.2010 addressed to the Plaintiff ?
6. Whether the Plaintiff is entitled for decree against Defendants to recover Rs.13,90,70,758/- towards settlement of Claim Nos. 1 to 8 ? If not, to what amount and from whom ?
7. Whether the Plaintiff is entitled for interest at 12% per annum on the suit claim from the date of suit till realization ?
8. To what relief, if any, the parties are entitled ?
5. In order to prove the contentions of the Plaintiff, the Managing Director of the Plaintiff Company got examined himself as PW.1 and got marked documents as Exs.P.1 to P.33.
6. In order to prove the contentions of the Defendants, the Defendants have got examined the authorized signatory of the First Defendant as DW.1 and got marked Exs.D.1 to D.32.
7. I have heard arguments of the learned Advocate for Plaintiff Sri.Ch.Poornachandra Rao, the learned Advocate for Defendants 1 to 4 Sri. B.M.Mohan Kumar. The Advocates for the Plaintiff and Defendants have submitted their separate Written Arguments.
10Com.O.S.No.3649/2011
8. My findings on the above issues are as follows:-
Issue No.1 : The Plaintiff is a Registered Firm and entitled to file this suit.
Issue No.2 : In the Negative Issue No.3 : In the Negative Issue No.4 : In the Negative Issue No.5 : In the Affirmative Issue No.6 : In the Negative Issue No.7 : Does not survive for my consideration.
Issue No.8 : As per the final Order for the following reasons.
REASONS
9. Issue No.1:- The Advocate for the Defendants has argued that the Plaintiff is a Joint Venture Firm and hence, without furnishing the details and the Registration Certificate as required under Section 69 of the Partnership Act, the suit is not maintainable. It is to be noted that though the Plaintiff has not produced such a Registration Certificate while filing the suit, but during the course of evidence, he has produced the acknowledgement of Registration of Firm dated 11.02.2004 as Ex.P.23. Further it is to be noted here that as per the terms of the Contract, at Ex.D.1, at Clause-1.2 the Joint Venture Firm is eligible to bid and the said Joint Venture should be registered before entering into Contract Agreement. When such being the 11 Com.O.S.No.3649/2011 case, before entering into Ex.D.1, the Plaintiff should have registered with appropriate authorities. When the Defendants entered into Contract Agreement as per Ex.D.1 with the Plaintiff Firm, they cannot contend that the Plaintiff Firm is not a registered Firm. Further, when the Plaintiff has produced Ex.P.23, he has proved that the same is a Registered Firm. In view of the terms of contract as per Ex.D.1 and Ex.P.23, the suit is maintainable. Hence, the Issue No.1 is answered accordingly.
10. Issue No. 2 :- The contract work of "widening and strengthening of existing Wadi to Raichur Road from Km 0.00 to Km 41.00 in Karnataka State (Wadi to Yadgir) was entrusted to the Plaintiff by the 1st Defendant under an Agreement dated 23.02.2004 as per Ex.D.1. This is an admitted document by both parties and marked through PW.1 during his cross-examination.
11. The Defendants have issued Work Order in favor of the Plaintiff on 26.03.2004 as per Ex.P.10 with the following particulars:-
(1) Accepted amount of work : Rs.24,21,93,155.54 (2) Date of Commencement : 23.02.2004 (3) Date of Completion : 22.02.2006 (4) Date of Work Order : 26.03.2004 (5) Defects Liability Period : Will be 12 months after completion of the Contract Period.12
Com.O.S.No.3649/2011 (6) Maintenance Period : will be 24 months after completion of the Defects liability Period.
12. SOWIL Company was appointed as Project Management & Supervising Consultancy of the Project Work awarded to the Plaintiff.
13. As per the stipulations of the contract, the entire work was to be completed within 24 months from the date of commencement of work. The work was started on 23.02.2004 and as per the contract conditions it was to be completed by 22.02.2006. However, the work could not be completed within the period stipulated in the contract and hence, certain extensions of time for completing the work were necessitated. The work was finally completed on 31.03.2007 with a delay of about 1 year 1 month. The case of the Plaintiff was that the Plaintiff stayed on the site for an extra period of 1 year 1 month. It is not in dispute that the Defendants granted extensions of time up to this date for completion of the work without imposition of any penalty on the Plaintiff. On completion of the work, the 4th Defendant issued the Completion Certificate as per Ex.P.17 and the Defect Liability Certificate as per Ex. P. 21 on 09.04.2009. The Plaintiff raised certain claims against the Defendants, mainly arising out of the delay in completion of the works, and when the Defendants refused to pay the claimed amount to the Plaintiff, he has filed this suit.
13Com.O.S.No.3649/2011
14. As per Ex.P.19, the main reasons for delay in the project were:-
(i) Delay in approval of variations,
(ii) Delay in completion of work due to change from the flexible pavement to rigid pavement for a length of 2.00 KM,
(iii) Construction of 2 minor bridges,
(iv) Reconstruction in the chainage from 2.00 KM to KM 15.00 etc.
15. According to the Plaintiff all delays to the Project were occasioned by the Defendants. The Learned Advocate for the Defendants has argued that the Plaintiff himself delayed the work and time for completion of the work was extended pursuant to the request of the Plaintiff and for the reasons attributable to the Plaintiff only. He has referred to various correspondences in order to show that the purported reasons for delay are not attributable to the Defendants.
16. In order to appreciate the said contentions, I now propose to study the following documents, by arranging them in chronological order.
17. The above-mentioned SOWIL Company submitted an Inspection Report to the Defendants in May 2004 as per Ex.P.25.
14Com.O.S.No.3649/2011 This document is an admitted document and the same is marked during the course of cross-examination of DW.1 by confronting the same.
18. On 09.06.2004, the 3rd Defendant has written a letter to the Plaintiff regarding establishment of manpower and machinery, as per Ex.D.3. This document is marked during the course of cross-examination of PW.1. It is to be noted that in Ex.D.3, the 3rd Defendant has informed the Plaintiff that as seen from the site inspection on 04.05.2004, he came to know that the mobilization of men and machinery is not to the required level and the preliminary arrangements for testing the materials is also not made. The 3rd Defendant requested the Plaintiff to start the work forthwith.
19. Thereafter, on 17.06.2004 the 4th Defendant has written a letter to the Plaintiff as per Ex.D.2, and has intimated that till that date the program of work, organization chart etc., were not furnished and requested to furnish the details of establishment. The said document is also marked through PW.1 during his cross-examination by confronting the same.
20. The PW.1 has admitted that he has not issued any reply to Ex.D.2 & D.3 and that before issuing Ex.D.2 & D.3; he had already submitted the detailed report to 3 rd party consultant appointed by Defendants.
15Com.O.S.No.3649/2011
21. On 29.06.2004, a progress review meeting was held at Contractor's Camp and the Minutes of the Meeting is marked as Ex.P.11. The same document is marked as Ex.P.18 also.
22. The Plaintiff has written a letter on 16.08.2004 to the 1 st Defendant as per Ex.P.1. In the said Ex.P.1, the Plaintiff has informed the Defendant that the Technical Committee inspected the entire road on 26.07.2004 and that the Plaintiff is kept idle for last six months and hence, requested to take decision at the earliest.
23. Thereafter, on 28.08.2004, the Plaintiff has written a letter to the 1st Defendant, as per Ex. D.4, informing progress of work and notified that some items are outside the scope of contract agreement.
24. The 2nd Defendant has replied to the said Ex.D.4 Letter to the Plaintiff as per Ex.D.5 on 07.09.2004. This is an admitted document by the Plaintiff and the same is marked during cross- examination of the Plaintiff/PW.1 by confronting the same. In Ex.D.5, it is informed to the Plaintiff that the Defendant had never directed the Plaintiff not to start the work, that the preparation of detailed shop and construction drawings is the responsibility of the Contractor/Plaintiff, that the said drawings shall be prepared in auto-cad in sizes not smaller than A.2, incorporating all site and information for approval by the Engineer, that as per Clause-3.6, the Contractor/Plaintiff shall 16 Com.O.S.No.3649/2011 establish working bench-marks, setting out the center-line etc., that if the topographical survey and levels are taken, it may not be an additional work out of the scope of the contract and requested the Plaintiff to submit a relevant construction program to suit the mile-stone requirements for approval.
25. Thereafter on 01.11.2004 the Team Leader, SOWIL Ltd., has written a letter as per Ex.D.26 to the Plaintiff regarding unsatisfactory progress of work and informed the Plaintiff to increase the number of technical staff and submit the monthly progress with details of equipments.
26. Thereafter on 11.11.2004 the Team Leader, SOWIL Ltd., has written another letter as per Ex.D.27 to the Plaintiff regarding slow progress of work.
27. The Plaintiff has got marked the Copy of the Government Order No. FD 59 PRO.CELL 2004, Bangalore dated 20.11.2004 as per Ex.P.20. As per the evidence of PW.1 in the said Order, the Government in super-cession of all standing rules and instructions in respect of price adjustment clause in Tender documents detailed new instructions issued for implementation throughout the State for all works costing Rs.100.00 Lakhs or more and period of completion is 12 months or more, the price adjustment clause and the Formula for adjustment shall apply and enumerated therein. In the said Government Order, it is 17 Com.O.S.No.3649/2011 specifically mentioned that the instructions issued under the said Order will only be applicable prospectively and shall not be applicable for contracts concluded in the past or being concluded presently or for tenders already invited. Further, the PW.1 during his cross-examination has admitted that the Ex.P.20 is prospective in nature and not applicable to the Contract already executed. Hence, the same is not applicable to the terms and conditions of the present work contract.
28. Thereafter on 28.12.2004 the Team Leader, SOWIL Ltd., has written another letter as per Ex.D.28 to the Plaintiff regarding slow progress of work.
29. Thereafter on 09.01.2005, the Plaintiff has written a letter to the 1st Defendant as per Ex.D.6 requesting not to deduct 15% of the billed amount towards mobilization advance and to deduct only the interest portion.
30. Thereafter on 15.04.2005 the Team Leader, SOWIL Ltd., has written another letter as per Ex.D.30 to the Plaintiff regarding inspection conducted on 02.03.2005.
31. Thereafter on 15.04.2005 the Team Leader, SOWIL Ltd., has written another letter as per Ex.D.31 to the Plaintiff regarding slow progress of work.
18Com.O.S.No.3649/2011
32. Thereafter on 02.05.2005, the Plaintiff has written a letter as per Ex.D.12 to the 2nd Defendant with a request to approve the revised work programme.
33. Thereafter on 02.05.2005 the Team Leader, SOWIL Ltd., has written another letter as per Ex.D.32 to the Plaintiff regarding slow progress of work.
34. Thereafter on 09.05.2005, the 1st Defendant has written a letter to the Manager, CITI Bank, N.A., ground floor, G.Pullareddy Building, Begumpet, Hyderabad, requesting to renew the currency of Bank Guarantee from 26.05.2005 to 26.05.2006.
35. Thereafter on 24.05.2005 the Team Leader, SOWIL Ltd., has written another letter as per Ex.D.29 to the Plaintiff regarding slow progress of work.
36. Thereafter on 16.07.2005 the Team Leader, SOWIL Ltd., has written another letter as per Ex.D.7 to the Plaintiff with a request to dispose off un-reusable soil from road side.
37. Thereafter on 03.11.2005, the Managing Director of the 1 st Defendant written a letter to the 4th Defendant as per Ex.P.31.
38. On 19.12.2005, the SOWIL Ltd. has written a letter to the 3rd Defendant stating that the design of the road made is faulty 19 Com.O.S.No.3649/2011 and requested to re-design as per Ex.P.26.
39. Thereafter on 29.12.2005 the 3rd Defendant has written a letter to the Project Manager of the Plaintiff regarding slow progress as per Ex.D.8.
40. Thereafter on 03.01.2006 the Plaintiff has written a letter to the 3rd Defendant as per Ex.D.9 in reply to Ex.D.8.
41. Thereafter on 10.01.2006, the SOWIL Ltd., has written a letter to the 3rd Defendant along with the details of physical and financial report as on 31.12.2005 with respect to K.M. 15 to K.M.41.
42. The 1st Defendant has written a letter to the Plaintiff on 16.01.2006 as per Ex.P.29/D.10 with a request to give consent for executing extra items mentioned therein.
43. Thereafter on 05.02.2006, the SOWIL Ltd., has written a letter to the Plaintiff as per Ex.D.16 regarding slow progress of work.
44. Thereafter on 23.02.2006, the Plaintiff has written a letter to 3rd Defendant as per Ex.D.11 furnishing the reasons for delay in executing the work and requested to consider extension of time up to May 2006 without any liquidated damages.
20Com.O.S.No.3649/2011
45. Thereafter on 24.03.2006 the 1st Defendant has written a letter to 4th Defendant as per Ex.P.27.
46. Thereafter on 29.03.2006 the SOWIL Ltd., has written a letter to the Defendant as per Ex.D.17 regarding inspection note.
47. Thereafter on 01.04.2006 the SOWIL Ltd., has written a letter to the Plaintiff as per Ex.D.18 regarding inspection note.
48. Thereafter on 17.04.2006 the SOWIL Ltd., has written letters to the Plaintiff as per Ex.D.19 & D.20 regarding slow progress of work.
49. The Technical Committee of the Defendant has submitted the Inspection Report dated 12.05.2006 as per Ex.P.28.
50. On 29.05.2006, the Plaintiff has written a letter to the 4 th Defendant as per Ex.P.2 requesting for extension of time of additional 12 months for completing the additional works.
51. On 09.06.2006 the 3rd Defendant has issued a Memorandum as per Ex.P.19 stating that the extension of time is approved up to 31.03.2007 without penalty and without any extra claims due to extension.
21Com.O.S.No.3649/2011
52. I have already mentioned various correspondences exchanged between the parties. From the said correspondence, the reasons for extension of the agreement period are as follows:-
(1) As per Clause 2.20.4 of Ex.D.1, the Contractor shall complete the work in three mile stones. The SOWIL Company submitted an Inspection Report to the Defendants in May 2004 as per Ex.P.25, wherein the said Company has reported that the Plaintiff did not adhere to the milestones specified in the said Clause.
(2) Thereafter, on 09.06.2004, as per Ex.D.3, the 3 rd Defendant has informed the Plaintiff that as could be seen from the site inspection on 04.05.2004, he came to know that the mobilization of men and machinery is not to the required level and the preliminary arrangements for testing the materials is also not made and the 3 rd Defendant requested the Plaintiff to start the work forthwith. Thereafter, on 17.06.2004 the 4 th Defendant has written a letter to the Plaintiff as per Ex. D.2, and has intimated that till that date the program of work, organization chart etc., were not furnished and requested to furnish the details of establishment. The PW.1 has admitted that he has not issued any reply to Ex.D.2 & D.3. Therefore, from Ex.D.2 and 3 it is very clear that the Plaintiff had not mobilized the required men and machinery to progress with the work in terms of the agreement and he had not furnished the Programme of the Work and Organization Chart, details of Plant 22 Com.O.S.No.3649/2011 and Machinery, erections etc, were not furnished and preliminary arrangements for testing of the materials was not made even after 4 months from the date of entering into the Agreement.
(3) In Ex.P.1, the Plaintiff has admitted that they were yet to start the execution of the said work. The Ex.P.1 was written on 16.08.2004. Hence, the Plaintiff himself admitted that he had not commenced the work till 16.08.2004. Further, he has also pleaded his financial constraints in Ex.P.1. The P.W.1 has admitted the said fact during his cross-examination, as follows:-
"It is true that in Ex.P.1, I have stated about having financial constrain to start the said road work."
It is very clear from the said evidence, the financial condition of the Plaintiff at that time and the same is also the reason for delay in completion of the project.
(4) Thereafter, on 09.01.2005 as per Ex.D.6, the Plaintiff has requested the Defendants to deduct only the interest amount on the mobilisation advance paid to it and not to deduct the 15% of the billed amount which evidences the financial condition of the Plaintiff at that time. It is very clear from the contents of Ex. D.6, the financial condition of the Plaintiff at that time and the same is also the reason for delay in completion of the project.
(5) On 15.04.2005, SOWIL has written a letter to the Plaintiff as per Ex. D.31, informing that the present stone 23 Com.O.S.No.3649/2011 crusher capacity is 100 TPH is not running in its full capacity due to one or other reasons. The same shows the breakdown of the machinery.
(6) Thereafter on 02.05.2005, the Plaintiff has written a letter to the Defendants, as per Ex.D.12, and requested to approve the revised work programme. The recitals of the said letter are as follows:-
"We have also informed regarding the frequent mechanical problems of the crusher causing inadequate yield of the required materials and subsequent delay in progress of the work. This problem we would like to solve by shifting our crusher from Devara Hipparagi work site to Yadagiri to supplement the deficiency in material production."
It is very clear from the said recital; there was mechanical problem in the crusher which led to delay in execution of work by the Plaintiff.
(7) In the letter dated 16.07.2005 as per Ex.D.7, the SOWIL has mentioned the reasons for slow progress of work are shortage of materials, manpower and machinery.
(8) The Plaintiff himself prayed for extension of time up to April 2006, as per the letter dated 03.01.2006 as per Ex.D.9.
(9) The Plaintiff again prayed for extension of time up to May 2006 without imposing liquidated damages, as per the letter dated 23.02.2006 as per Ex.D.11.
24Com.O.S.No.3649/2011 (10) The Plaintiff again prayed for extension of time of additional 12 months, as per the letter dated 29.05.2006 as per Ex.P.2.
53. A bare perusal of the above-mentioned correspondences exchanged between the parties shows that the delay was fully on account of the Plaintiff. In the said circumstances, I wish to rely a decision reported in 2008 (100) - D.R.J. - 112 = 2007 (4) Arb.L.R. - 323 (Delhi) ( Mecon Limited vs. Pioneer Fabrications (P) Ltd.,), wherein it is held that "if a party is responsible for the delay, it cannot avail of the benefit of the delay."
54. The Learned Advocate for the Plaintiff has referred to the Clause 2.21.1 of Ex.D.1, the Inspection Report marked as Ex.P.25, Minutes of Meeting dated 29.06.2004 marked as Ex.P.11 and has argued that the delay is attributable to the Defendants only. It is pertinent to note that in the written arguments, the learned Advocate for the Plaintiff has argued that the Plaintiff has submitted replies to all the letters marked as Ex.D.8, 16, 19 to 25, 27 to 29, 31 and 32, wherein it is alleged that the Plaintiff is responsible for delay/ slow progress of work, but has not produced the said replies for the reasons best known to the Plaintiff. Amongst the said letters, Ex.D.21 to D.25 were written after the extension of time as per Ex.P.19. In fact, by picking certain portions of the above documents and by selective reading of the said portions, he has argued that the 25 Com.O.S.No.3649/2011 delay is to be attributable to the defendants. He has also drawn the evidence of the D.W.1 to the question posed to him; he admitted that the reason for the delay was due to change of design of the work and changing the scope of work. In fact, the said alleged admission by DW.1 is not a clear admission and in view of putting such a question in the middle of the Cross Examination by confusing the DW.1 with other questions asked earlier to the said question. If all the documents are arranged in chronological sequence, and the evidence of P.W.1 and D.W.1 is read together in its entirety, it reveals that the delay was caused on account of various reasons as discussed earlier which are solely attributable to the Plaintiff only. Hence, it cannot be said that the agreement period was extended for the reasons not attributable to the Plaintiff. Therefore, I answer Issue No.2 in 'Negative'.
55. Issue No. 3:- After extension of time, on 17.06.2006, the Plaintiff has written a letter to the SOWIL Ltd., as per Ex.P.12, wherein it has informed that it has already demanded incorporation of N.H.S.S.R. rates and until and unless it is informed about the rates adopted for work at 00.00 KM to 15.00 KM, it will not be able to give its consent and make necessary arrangements to proceed with further work.
56. Thereafter on 22.06.2006, the SOWIL Ltd., has written a letter to the Plaintiff as per Ex.D.21 regarding slow progress of 26 Com.O.S.No.3649/2011 work.
57. On 01.07.2006 and 21.07.2006, the Plaintiff has written letters to the 1st Defendant as per Ex.P.3 & P.4 demanding N.H.S.S.R. rates plus original tender premium and payment of escalation for principal items of ingredients required for the work.
58. On 25.07.2006 the 1st Defendant has written a letter to the Plaintiff as per Ex.P.13 for deletion of work in KM 00.00 to KM 15.00 from the scope of the work.
59. Thereafter on 28.07.2006, 25.10.2006, 4.11.2006 and 20.11.2006 the SOWIL Ltd., has written letters to the Plaintiff as per Exs.D.22 to D.25 regarding slow progress of work.
60. The Defendants have contended that they constrained to delete the said work in view of the demand made by the Plaintiff as per Ex. P. 3 and 4, and hence he cannot take advantage of the same. In order to appreciate the said contention, it is relevant to note the portion of the cross- examination of P.W.1, wherein he has deposed as follows:-
"It is true that as per Ex.P.13, letter dated 25.07.2006 the scope of road work was deleted from 0 to 15 Kilometers. It is true that this deleted work of 0 to 15 kilometer is about 35% out of the entire road work. It is true that I was seeking for NHSR rates, i.e. higher rates than the rates agreed under Ex.D.1. It is true that the said work of 0 to 15 Kilometer was deleted due to 27 Com.O.S.No.3649/2011 my refusal to work as agreed under Ex.D.1. Witness volunteers that my refusal of due to change of design and also said decision was after 20 months of entrusting the initial work."
61. Whatever it may be, the P.W.1 has admitted that the said work was deleted due to his refusal to work as agreed under Ex.D.1. His explanation is contrary to the recitals in Ex.P.3 and P.4. It is to be noted here that during the cross-examination of DW.1, it is elicited that he has no personal knowledge about the Ex.D.1 Agreement and that he is deposing only on the basis of records available in the Office. Thereafter, he was asked about deletion of work from KM 00.00 to KM 41.00. After putting all questions about the deletion of the said work, the above- mentioned question about the delay caused in execution of the work was put to him and his answer is taken as admission and based on the alleged admission, the learned Advocate for the Plaintiff has argued that the DW.1 has admitted that the reasons for the delay are to be attributable to the Defendants only. The manner in cross-examining the witness asking some questions with regard to after extension of time as per Ex.P.19 and thereafter he was asked about the reasons for Ex.P.19 is quite confusing and such practice is highly deprecated. For the reasons mentioned above, the Plaintiff cannot take advantage of the said deletion of work.
62. The Plaintiff has contended that the entrustment of Minor Bridges at KM 5.60 and KM 6.60 are not in the scope of Ex.D.1, 28 Com.O.S.No.3649/2011 that the Defendant in his letter at Ex.P.29 asked the Plaintiff's consent for the construction of the said two minor bridges, that the Plaintiff has consented for it and the Defendants have failed to make payment as per B.O.Q.
63. The Defendant has contended that it has authority under Clause 2.28.3 at Ex.D.1 and there was no due towards the said work. Though the Plaintiff has tried to contend the said works authorized extra works, but has failed to prove the same. Therefore, I answer Issue No.3 in the 'Negative'.
64. Issue No. 4 :- As per Ex.P.21/Defect Liability Certificate, the Plaintiff has maintained the Project Road for a period contemplated therein. Even the Final Bill was received by the Plaintiff under protest as could be seen from Ex.P.33 on 28.04.2009. The maintenance period was for 24 months and the same was also completed as could be seen from the Maintenance Certificate dated 09.06.2010. Thereafter the Plaintiff has submitted a Claim Petition as per Ex.P.9 on 12.11.2009, which was rejected as per Ex.D.3 on 15.02.2010. Thereafter the Plaintiff issued a Legal Notice as per Ex.P.6 on 27.02.2010 and filed this suit on 23.05.2011.
65. However, the Advocate for the Defendant has argued that the contract period expired on 31.03.2007 and hence, the suit is barred by limitation under Article 55 of the Limitation Act. The learned Advocate for the Defendant has 29 Com.O.S.No.3649/2011 relied on a decision reported in 2016 (14) - S.C.C. - 761 (State of Gujarat vs. M/s Kothari & Associates), wherein it is held that the commencement of period of limitation in a case pertaining to the suit for damages based on breach of contract is under Article 55 of the Limitation Act.
66. Per contra, the learned Advocate for the Plaintiff has relied on the decision reported in 2018 (12) - S.C.C. - 393 (Aries & Aries vs. Tamilnadu Electricity Board), wherein it is held that the suit is to be filed within the limitation from the date of rejection of the Claim by the Defendant and the said suit is governed by the Article 113 of the Limitation Act. In that suit, after receipt of final payment, the Plaintiff demanded further payment on 16.05.1981, which was rejected by the Defendant on 06.11.1981. The Hon'ble Supreme Court has held that cause of action in respect of the said rejected claim arose on 06.11.1981 and the suit filed was well within limitation. The fact of the said case is applicable to the present case also and hence, the said ratio is also applicable to the present case. Hence, this suit is within limitation. Therefore, I answer Issue No.4 in the 'Negative'.
67. Issue No. 5:- The Defendant has issued a letter to the Plaintiff as per Ex.P.30 dated 22.03.2010, calling upon him to come to his Office for one to one discussions for the 30 Com.O.S.No.3649/2011 settlement of claim. The Plaintiff has contended he has visited the Office of Defendant No.1 several times and the said meeting could not take place for one or the other reasons. The Plaintiff has issued a letter as per Ex.P.7 on 04.02.2011 requesting the Defendants to fix a date within 15 days for the said one-to-one discussions, failing which he will approach the Civil Court. According to the Plaintiff since there is no positive response from the Defendants, he has filed the present suit. Further, the DW.1 has also admitted during his cross-examination that no such meeting took place till the filing of this suit. Hence, the Plaintiff has proved that the Defendants failed to conduct such a meeting and hence, I answer the Issue No.5 in the 'Affirmative'.
68. Issue No. 6:- The Plaintiff has claimed the damages under various heads. Under law, there are three distinct heads of damages which a Contractor can claim legally; which are claims for idle machinery/labour, escalation and loss of profits, subject to the same being duly established where the work gets prolonged due to the fault of the employer. But what is important is that a contractor will be entitled to these claims only if the same are duly established. Loss of profits is a claim in the form of damages under Section 73 of the Indian Contract Act. In order to seek a claim under any of the three heads, the Contractor has to lead evidence and establish the claim. A mere calculation without 31 Com.O.S.No.3649/2011 any evidence on record would not be enough for the Court to grant these Claims.
69. The Hon'ble Supreme Court has in the decision reported in A.I.R. - 1962 - S.C. - 366 (M/S. Murlidhar Chiranjilal vs. M/s. Harishchandra Dwarkadas) clearly laid down the principles for grant of damages under Section 73 of the Contract Act as follows :-
"The two principles on which damages in such cases are calculated are well settled. The first is that, as far as possible, he who has proved a breach of a bargain is to supply what he contracted to get is to be placed, as far as money can do it, in as good a situation as if the Contract had been performed; but this principles is qualified by a second, which imposes on a plaintif the duty of taking all reasonable steps to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to take such steps: (British Westinghouse Electric and Manufacturing Company Limited v. Underground Electric Ry.Co. of London (1912) AC 673. at P.689). These two principles also follow from the law as laid down in Section 73 read with the Explanation thereof. If, therefore, the contract was to be performed at Kanpur it was the Respondents duty to buy the goods in Kanpur and rail them to Calcutta on the date of the breach and if it is sufered any damages thereby because of the rise in price on the date of the breach as compared to the contract price, it would be entitled to be reimbursed for the loss. Even if the Respondent did not actually buy them in the market at Kanpur on the date of breach it would be entitled to damages on proof of the rate for similar canvas prevalent in Kanpur on the date of breach, if 32 Com.O.S.No.3649/2011 that rate was above the contracted rate resulting in loss to it."
70. One of the landmark judgement in India that deal with loss of profits is the decision reported in (1984) 4 - S.C.C.
-59 (Brij Paul & Bros. vs. State of Gujarat). It was held that in works contract, where the contractor suffers a loss on account of breach by the employer, he is entitled to claim compensation for the expected profit of the balance of work.
71. In the decision reported in A.I.R. - 1990 - A.P. - 294 (State of Andhra Pradesh v. M/s.Associated Engineering Enterprises), a Division Bench of Hon'ble Andhra Pradesh High Court in Paragraph 20 has held as follows: -
"20. The first aspect to be noticed in this behalf is that the contractor did not choose to terminate the contract on account of the Government's delay in handing over the sites. He requested for, and agreed to extension of the period of contract, and completed the work. It is not the respondent's case that while agreeing to extension of the period of contract he put the Government on notice of his intention to claim compensation on that account."
72. In Paragraph No.21 it is held as follows: -
"21. According to this Section, it was open to the respondent to avoid the contract on account of the Government's breach of promise to deliver the sites at a particular time; but, he did not choose to do so, and 33 Com.O.S.No.3649/2011 accepted the delivery of sites at a time other than what was agreed upon between them earlier. If so, he is precluded from claiming compensation for any loss occasioned by such delay, unless, of course, at the time of such delayed acceptance of the sites, he had given notice to the Government of his intention to claim compensation on that account. It must be remembered that this provision of law was specifically referred to, and relied upon in the counter filed by the Government to the respondent's claim before the arbitrator. But, it is not brought to our notice that the contractor had given such a notice (contemplated by the last sentence in Section 55). We must make it clear that we are not entering into the merits of the decision of the arbitrator. What we are saying is that such a claim for compensation is barred by law, except in a particular specified situation and inasmuch as such a particular specified situation is not present in this case, the claim for compensation is barred. It is well settled that an arbitrator, while making his award, has to act in accordance with law of the land, except in a case where a specific question of law is referred for his decision."
73. The most important judgement that sets the tone of India's legal jurisprudence is the decision reported in (2004) 5 - S.C.C. - 109 (Bharat Coking Coal Ltd . vs. L K Ahuja), where it was held by the Hon'ble Supreme Court that in absence of any proof or evidence of loss of profit or possibility of alternate use, compensation for loss of profit cannot be provided. The relevant portion of the judgement is as follows:-
34Com.O.S.No.3649/2011 "It is not unusual for the contractors to claim loss of profit arising out of diminution in turn over on account of delay in the matter of completion of the work. What he should establish in such a situation is that had he received the amount due under the contract, he could have utilized the same for some other business in which he could have earned profit. Unless such a plea is raised and established, claim for loss of profits could not have been granted. In this case, no such material is available on record. In the absence of any evidence, the arbitrator could not have awarded the same." (Para 24)
74. The Learned Advocate for the Plaintiff has relied on a decision reported in (2006) 11 - S.C.C. - 181 (McDermott International Inc vs. Burn Standard Co.
Ltd), wherein the Hon'ble Supreme Court has held as under: -
"Sections 55 and 73 of the Indian Contract Act do not lay down the mode and manner as to how and in what manner the computation of damages or compensation has to be made. There is nothing in Indian law to show that any of the formulae adopted in other countries is prohibited in law or the same would be inconsistent with the law prevailing in India.
As computation depends on circumstances and methods to compute damages, how the quantum thereof should be determined is a matter which would fall for the decision of the arbitrator. We, however, see no reason to interfere with that part of the award in view of the fact that the aforementioned formula evolved over the years, is accepted internationally and, therefore, cannot be said to be wholly contrary to the provisions of the Indian law.35
Com.O.S.No.3649/2011 A court of law or an arbitrator may insist on some proof of actual damages, and may not allow the parties to take recourse to one formula or the other. In a given case, the court of law or an arbitrator may even prefer one formula as against another. But, only because the learned arbitrator in the facts and circumstances of the case has allowed MII to prove its claim relying on or on the basis of Emden Formula, the same by itself, in our opinion, would not lead to the conclusion that it was in breach of Section 55 or Section 73 of the Indian Contract Act."
75. In the decision reported in (2007) 10 - S.C.C. - 195) (State of Kerala and another vs. M.A.Matha i), it is held as follows: -
"8. If, instead of avoiding the contract accepts the belated performance of reciprocal obligation on the part of the employer, the innocent party i.e. the contractor, cannot claim compensation for any loss occasioned by the non-performance of the reciprocal promise by the employer at the time agreed, "unless, at the time of such acceptance, he gives notice to the promisor of his intention to do so". Thus, it appears that under the Indian law, in spite of there being a contract between the parties whereunder the contractor has undertaken not to make any claim for delay in performance of the contract occasioned by an act of the employer, still a claim would be entertainable in one of the following situations:
(i) if the contractor repudiates the contract exercising his right to do so under Section 55 of the Contract Act,
(ii) the employer gives an extension of time either by entering into supplemental agreement or by making it clear that escalation of rates or compensation for delay would be permissible, 36 Com.O.S.No.3649/2011
(iii) if the contractor makes it clear that escalation of rates or compensation for delay shall have to be made by the employer and the employer accepts performance by the contractor in spite of delay and such notice by the contractor putting the employer on terms."
76. In the decision reported in (2015) 4 - S.C.C. - 136 (Kailash Nath Associates vs. Delhi Development Authority and Anr.) the Hon'ble Supreme Court has held as under:-
"43. On a conspectus of the above authorities, the law on compensation for breach of contract under Section 74 can be stated to be as follows:
1. Where a sum is named in a contract as a liquidated amount payable by way of damages, the party complaining of a breach can receive as reasonable compensation such liquidated amount only if it is a genuine pre-estimate of damages fixed by both parties and found to be such by the court. In other cases, where a sum is named in a contract as a liquidated amount payable by way of damages, only reasonable compensation can be awarded not exceeding the amount so stated. Similarly, in cases where the amount fixed is in the nature of penalty, only reasonable compensation can be awarded not exceeding the penalty so stated. In both cases, the liquidated amount or penalty is the upper limit beyond which the court cannot grant reasonable compensation.
2. Reasonable compensation will be fixed on well-
known principles that are applicable to the law of 37 Com.O.S.No.3649/2011 contract, which are to be found inter alia in Section 73 of the Contract Act.
3. Since Section 74 awards reasonable compensation for damage or loss caused by a breach of contract, damage or loss caused is a sine qua non for the applicability of the section.
4. The Section applies whether a person is a plaintif or a defendant in a suit.
5. The sum spoken of may already be paid or be payable in future.
6. The expression "whether or not actual damage or loss is proved to have been caused thereby" means that where it is possible to prove actual damage or loss, such proof is not dispensed with. It is only in cases where damage or loss is difficult or impossible to prove that the liquidated amount named in the contract, if a genuine pre-estimate of damage or loss, can be awarded."
77. In the decision reported in 2015 - S.C.C. Online - Bom - 1412 (Ajay Singh vs. Suneel Darshan), a Division Bench of the Hon'ble Bombay High Court has held that if a party has not suffered any loss, even if the Defendant has committed a breach, it cannot be awarded compensation under Section 73 of the Contract Act.
78. The Learned Advocate for the Defendants has relied on a decision reported in 2016 - S.C.C. Online - Bom - 9697 (Essar Procurement Service Ltd. vs. Paramount 38 Com.O.S.No.3649/2011 Constructions), the Hon'ble Bombay High Court has held that Sections 73 & 74 of the Contract Act requires actual damage or loss to be proved and the proof cannot be dispensed with. When the loss is in terms of money, the same would have to be proved and only when it is shown that the party has suffered an injury or a loss can it be awarded the claim of loss of profit.
79. Keeping in my mind about the above-mentioned legal principles, I now propose to discuss about various claims put forth by the Plaintiff.
80. The Claim No.1 is for Rs. 7,90,08,336/- towards alleged idle charges on Men and Machinery during the agreement period from 23.02.2004 to 22.06.2006 and Extended Period from 23.02.2006 to 31.07.2007.
81. To claim idleness of men and machinery, the Plaintiff has to prove that there was existence of an opportunity to deploy the said machinery for gainful employment at another site which was not done. The idle charges are not supported by any data of actual idling hours also. Hence, the Plaintiff is not entitled for the said claim.
39Com.O.S.No.3649/2011
82. The Claim No.2 is for Rs. 2,37,35,482/- towards alleged overhead charges and alleged loss of business suffered by the Plaintiff during the extended period.
83. A Contractor is entitled to claim extra expenditure incurred on establishment and overhead charges, if the period of contract is prolonged due to breaches of contract on the part of the Employer. In the present case, as discussed earlier, the delay was caused due to the contractor/Plaintiff himself.
84. Further, the Contractor/Plaintiff should establish that had it received the amount in terms of the contract, the contractor could have utilized the same for some other business in which he could have earned profit. Unless such a plea is raised and established, the claims for loss of profit could not be granted. The loss of profit is payable by applying the principles of Section 73 and 55 of the Contract Act to the additional costs. Since the Plaintiff failed to prove the actual overhead expenses, the said claim cannot be granted under Section 73 of the Indian Contract Act.
85. It is a settled law that a party claiming loss of profit will have to first prove the existing opportunity, and then its attempt to seize that opportunity and finally prove that by not availing the said opportunity, it has incurred a loss. The 40 Com.O.S.No.3649/2011 loss would have to be quantified and proved. None of these factors have been proved by the Plaintiff and there are no documents or any evidence on record in proof of loss of profit. The Plaintiff will be entitled to these claims only if the same are duly established. In order to seek a claim under this head, the Plaintiff has to lead evidence and establish the claim. A mere calculation without any evidence on record would not be enough to grant the said claim.
86. Further in the above-mentioned decision reported in (2004) 5 - S.C.C. - 109 (Bharat Coking Coal Ltd . vs. L K Ahuja), it is held that the Contractor has to prove loss of profit by producing evidence. In another decision reported in 2016 - S.C.C. Online - Delhi - 6112 ( National Highways Authority of India v. Hindustan Construction Co. Ltd .) it is held that a person claiming loss of profit must establish that he had the opportunity to deploy its resources in another venture and that those ventures would have yielded profit. The Court must also consider if the equipment were owned by the contractor or were to be hired from other contracts.
87. In support of the contention the Learned Advocate for the Plaintiff has relied upon the extracts from the book on Law on Building and Engineering Contracts, which also incorporates the Hudson's Formula. In the said book of Building and Engineering which is relied upon by the Learned 41 Com.O.S.No.3649/2011 Advocate for the Plaintiff, it is stated that satisfactory evidence on the aforesaid matters would be necessary and only on the basis of the same Hudson's Formula shall be applicable. Reference may be made to the decision reported in 2002 - S.C.C. Online - Del - 601 ( All India Radio vs. Unibros), where it is held that for assessing loss of profit Hudson's Formula cannot be straightway applied unless factors like capacity to earn the profit etc. are proved by the contractor. Therefore, the Plaintiff is not entitled for any claim under this head.
88. The Claim No.3 is for Rs. 20,18, 644/- towards alleged loss of account of removing and reconstruction of Bitumen Macadam Work (BMW) at the reaches pointed out by the Managing Director during his inspection.
89. It is to be noted that during cross-examination of the D.W.1, he denied the suggestion that this work was not part of contract and a separate item relating to extra work. When he denied the same, Ex.P.31 was confronted to him and got marked on behalf of the Plaintiff. In Ex.P.31, it is very clearly mentioned that the cost implications towards strengthening of weak portions is Rs. 15.57 lakhs, that for this, the payments will be made only for the sub-grade, GSB, and WMM layers and not for the Bituminous Macadam, since this is paid as part of strengthening.
42Com.O.S.No.3649/2011
90. In Ex. P. 31, when it is informed to the Plaintiff that the said work is a part of strengthening, the Plaintiff has not proved anything that it is not a part of strengthening and it is an extra work. He has not produced any contra document or evidence. Hence, he is not entitled for this Claim also.
91. The Claim No. 4 is for Rs.11,71,010/- towards refund of interest collected on mobilisation advance beyond original agreement period.
92. As already discussed the agreement period was extended as per the request of the Plaintiff also. When such being the case, the Plaintiff cannot contend that the interest collected on mobilisation advance is wrongful. Hence, the Plaintiff is not entitled for this Claim also.
93. The Claim No.5 is for Rs. 1,95,712/- towards Reimbursement of Bank Guarantee commission paid by Plaintiff for extending Bank Guarantee beyond Agreement period till the completion of the work.
94. As already discussed the agreement period was extended as per the request of the Plaintiff also. If the said extension was for the reasons solely attributable to the 43 Com.O.S.No.3649/2011 defendants, then only the Plaintiff is entitled for this claim. Hence, the Plaintiff is not entitled for this Claim also.
95. The Claim No.6 is for Rs. 10,30,143/- towards alleged losses suffered on establishment of Cone Crusher (125 TPH) due to deletion of road work from KM 00.00 to KM 15.00 from the scope of work.
96. It is to be noted that the Plaintiff himself has written a letter to the Defendants as per Ex. D.12 on 02.05.2005 stating that the problem of frequent mechanical problems of the crusher causing inadequate yield of the required materials and subsequent delay in progress of the work would like to solve by shifting the crusher from Devara Hipparagi work site to Yadagiri to supplement the deficiency in material production. The P.W.1 during his cross- examination has deposed that the crusher referred to in Ex.D.12, is JAW crusher, that subsequently apart from JAW crusher, they had supplemented with one more cone crusher which was at Jevargi, and utilized the same for 15 to 41 KM road work. The P.W.1 has further deposed that a work book which demonstrates the actual work turned out by the said crusher was maintained, but the same is not produced in this suit. In view of non-production of the said work book, and in view of the recitals in Ex. D.12 and the evidence of P.W.1, the Plaintiff is not entitled for this Claim.
44Com.O.S.No.3649/2011
97. The Claim No.7 is for Rs. 8,02,360/- towards interest on delayed payment of Final Bill.
98. First of all, there is no contract between the parties to that effect. Further, the P.W.1 during his cross-examination has deposed that subsequent to completion of work on 31.03.2007 probably the Plaintiff has submitted the Final Bill after 6, 4 or 5 months subsequent to completion of work. He admitted that some time is required to scrutinize and analyse the bills submitted by the Plaintiff to make payment. Therefore, on the said admission itself, the Plaintiff is not entitled for this claim. Further, the Learned Advocate for the Plaintiff has relied on a decision reported in 2015 (3) - A.L.D. - 97 (J.Devender Reddy vs. Kakathiya University). However, the fact of the said case is entirely different. In the said case, due to absence of the full time Registrar and the Vice-Chancellor, the administrative sanction for the Final Bill was not made and the Final Bill itself was not paid for years together. Hence, the ratio of the said decision is not applicable to the present case. Therefore, the Plaintiff is not entitled for the said claim.
99. The Claim for Rs. 3,11,09, 071/- towards payment of difference unpaid price Adjustment Bill.
45Com.O.S.No.3649/2011
100. This Claim is solely based on Ex.P.20. I have already discussed at Para No. 27 of this Judgment and held that the Ex. P. 20 is not applicable to the facts of the present suit. Hence, the Plaintiff is not entitled for this Claim.
101. In addition to the same, the Plaintiff is not entitled for any of the Claims for the following reasons:-
The Plaintif has not terminated the contract on account of the alleged delay by the defendants.
The Plaintif himself has requested for and agreed to extension of period of contract and completed the work.
While agreeing to extension of period, he has not informed the defendants about his intention to claim compensation on that account.
Therefore, I answer Issue No.6 in the Negative.
102. Issue No. 7:- In view of my finding as Negative for Issue No.6, this Issue does not survive for my consideration.
103. Issue No. 8: -Therefore, I proceed to pass the following Order.
46Com.O.S.No.3649/2011 ORDER The Suit of the Plaintif is dismissed.
The Plaintif is hereby directed to pay cost of this suit to the Defendants. The Advocate for the Defendants is directed to file Memorandum of Cost before the Office within 5 days from today as required under Rule 99 and 100 of Karnataka Civil Rules of Practice.
Draw up Decree accordingly.
The Office is directed to send copy of this Judgment to Plaintif and Defendants to their email ID as required under Order XX Rule 1 of the Civil Procedure Code as amended under Section 16 of the Commercial Courts Act.
(Dictated to the Judgment Writer, typed by her, corrected and then pronounced by me in open Court on this the 23rd day of November, 2020).
(DEVARAJA BHAT.M), LXXXII Addl. City Civil & Sessions Judge, Bengaluru.
ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF THE PLAINTIFF P.W.1 Sri. Ch.Pavan 47 Com.O.S.No.3649/2011 LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE PLAINTIFF Ex.P.1 Office copy of the letter dated 16.08.2004 addressed to the 1st defendant.
Ex.P.2 Office copy of the letter dated 29.05.2006 addressed to the 4th defendant.
Ex.P.3 Office copy of the letter dated 01.07.2006 addressed to the 1st defendant, Ex.P.4 Office copy of the letter dated 21.07.2006 written to the 1st defendant.
Ex.P.5 Office copy of the letter dated 12.11.2009 written to the 1st defendant.
Ex.P.6 Office copy of the Legal Notice dated 27.02.2010.
Ex.P.7 Office copy of the letter dated 04.02.2011 addressed to the 1st defendant.
Ex.P.8 Office copy of the letter dated 01.11.2009 addressed to the 1st defendant.
Ex.P.9 Office copy of the claim petition filed before
the 1st defendant
Ex.P.10 Work Order dated 26.03.2004
Ex.P.11 Minutes of the meeting dated 30.06.2004
Ex.P.12 Letter dated 17.06.2006 written to Team-
Leader Sowuil Limited, Yadgiri.
Ex.P.13 Letter dated 25.07.2006 issued by the 1 st
defendant to Plaintiff company
Ex.P.14 Postal acknowledgement
Ex.P.15 Postal Receipt
Ex.P.16 Postal acknowledgement
Ex.P.17 Work Completion Certificate dated
04.10.2007
Ex.P.18 Minutes of meeting dated 30.06.2004
Ex.P.19 Memorandum dated 09.06.2006 signed by
the Defendant No.3
Ex.P.20 Copy of Government Order dated 26.11.2004
Ex.P.21 Letter of ARDC Ltd., addressed to 2 nd
Defendant dated 09.04.2009
Ex.P.22 Maintenance certificate dated 09.06.2010
Ex.P.23 Acknowledgement of Registration of Firm
48
Com.O.S.No.3649/2011
Ex.P.24 Letter issued by the defendants dated
22.03.2010.
Ex.P.25 Copy of Report submitted by the SOWIL
Company to the Defendant.
Ex.P.26 Copy of the letter of SOWIL company dated
19.12.2005
Ex.P.27 Copy of the letter dated 24.03.2006 sent by
the 1st defendant to the 4th defendant
Ex.P.28 Copy of the Inspection Report of the
representatives of KRDCL Technical
Committee
Ex.P.29 Copy of the letter dated 16.01.2006 sent by
the 1st defendant to the Plaintiff
Ex.P.30 Copy of letter dated 22.03.2010 sent by the
M.D., KRDCL to the Plaintiff.
Ex.P.31 Copy of letter dated 03.11.2005 sent by the
1st defendant to the 4th defendant.
Ex.P.32 Copy of the letter dated 09.05.2005 sent by
the Defendant to the Manager of bank
requesting for extension of bank guarantee for one year from 26.05.2005 to 26.05.2006.
Ex.P.33 Letter dated 28.04.2009 LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENDANTS D.W.1 Sri. Dwarakanath LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE DEFENDANTS Ex.D.1 Copy of the agreement dated 23.02.2004 executed between the Defendant and Plaintiff firm.
Ex.D.2 Copy of letter dated 17.06.2004
Ex.D.3 Copy of the correspondence dated
09.06.2004
Ex.D.4 Detailed Report to 3rd party Consultant
appointed by the Defendant dated
28.08.2004.
Ex.D.5 Copy of the Reply by Defendant to Ex.D.4
dated 07.09.2004.
49
Com.O.S.No.3649/2011
Ex.D.6 Copy of a document dated 09.01.2005
Ex.D.7 Copy of letter dated 16.07.2005.
Ex.D.8 Copy of Letter issued by the Defendant on
29.12.2005
Ex.D.9 Copy of Reply dated 03.01.2006
Ex.D.10 Copy of letter issued by Defendant on 16.01.2006.
Ex.D.11 Copy of the letter dated 23.02.2006 issued by the Plaintiff to Defendant.
Ex.D.12 Copy of letter dated 02.05.2005 issued by the Plaintiff to the Defendant corporation. Ex.D.13 Copy of Reply letter given by Defendant dated 15.02.2010 towards Plaintiff's claim dated 12.11.2009 Ex.D.14 Letter of authorization dated 21.8.2019. Ex.D.15 Letter dated 10.1.2006 sent by team leader SOWiL, Yadgir.
Ex.D.16 Letter dated 5.2.2006 sent by team leader SOWiL, Yadgir to the Project Manager of the plaintiff regarding slow progress of work. Ex.D.17 Letter dated 29.3.2006 sent by team leader SOWiL, Yadgir to the Defendant regarding Inspection Note.
Ex.D.18 Letter dated 1.4.2006 sent by team leader SOWiL, Yadgir to the plaintiff regarding inspection note.
Ex.D.19 Letter dated 17.4.2006 sent by team leader SOWiL Yadgir to the plaintiff regarding slow progress of work.
Ex.D.20 Letter dated 17.4.2006 sent by team leader SOWiL Yadgir to the plaintiff regarding slow progress of work.
Ex.D.21 Letter dated 22.6.2006 sent by team leader SOWiL Yadgir to the plaintiff regarding slow progress of work.
Ex.D.22 Letter dated 28.7.2006 sent by team leader SOWiL Yadgir to the Defendant regarding slow progress of work.
Ex.D.23 Letter dated 25.10.2006 sent by team leader SOWiL Yadgir to the plaintiff regarding slow progress of work.
Ex.D.24 Letter dated 4.11.2006 sent by team leader 50 Com.O.S.No.3649/2011 SOWiL Yadgir to the plaintiff regarding slow progress of work.
Ex.D.25 Letter dated 20.11.2006 sent by team leader SOWiL Yadgir to the plaintiff regarding slow progress of work.
Ex.D.26 Letter dated 1.11.2004 sent by team leader SOWiL Yadgir to the plaintiff.
Ex.D.27 Letter dated 11.11.2004 sent by team leader SOWiL Yadgir to the plaintiff.
Ex.D.28 Letter dated 28.12.2004 sent by team leader SOWiL Yadgir to the plaintiff.
Ex.D.29 Letter dated 24.5.2005 sent by team leader SOWiL Yadgir to the plaintiff.
Ex.D.30 Letter dated 2.3.2005 sent by team leader SOWiL Yadgir to the plaintiff regarding inspection conducted on 2.3.2005.
Ex.D.31 Letter dated 15.4.2005 sent by team leader SOWiL Yadgir to the plaintiff regarding slow progress of work.
Ex.D.32 Letter dated 2.5.2005 sent by team leader SOWiL Yadgir to the plaintiff regarding slow progress of work.
(DEVARAJA BHAT.M), LXXXII Addl. City Civil & Sessions Judge, Bengaluru.
51Com.O.S.No.3649/2011 23.11.2020 P - SNP D1 to 4 - GTH SR For Judgement The Judgment is pronounced in Open Court. The operative portion of the said Judgment is as follows:-
ORDER The Suit of the Plaintif is dismissed.
The Plaintif is hereby
directed to pay cost of
this suit to the
Defendants. The Advocate
for the Defendants is
directed to file
Memorandum of Cost
before the Office within 5
days from today as
required under Rule 99
and 100 of Karnataka
Civil Rules of Practice.
Draw up Decree
accordingly.
The Office is directed
to send copy of this
Judgment to Plaintif and
Defendants to their email
ID as required under
Order XX Rule 1 of the
Civil Procedure Code as
52
Com.O.S.No.3649/2011
amended under Section
16 of the Commercial
Courts Act.
(vide my separate detailed
Judgment dated 23.11.2020).
(Typed to my dictation).
LXXXII ACCJ, B'LURU.