Madras High Court
P.P.Thomas vs The State Of Tamil Nadu on 13 July, 2022
Author: Senthilkumar Ramamoorthy
Bench: Senthilkumar Ramamoorthy
C.S.No.190 of 2012
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Judgment reserved on 26.04.2022
Judgment pronounced on 13.07.2022
CORAM
The Hon'ble Mr. Justice SENTHILKUMAR RAMAMOORTHY
Civil Suit No.190 of 2012
and
Application Nos.6042, 9635 and 9636 of 2018
P.P.Thomas,
Government Contractor,
Palannattil House, Kunnackal P.O.,
Muvattupuzha, Ernakulam District,
Kerala-682 316. ... Plaintiff
vs.
1. The State of Tamil Nadu
Rep. By the Secretary to the Government
PWD, Secretariat, Fort St. George,
Chennai-600 009.
2. Superintending Engineer, PWD,
Periyar Dam Special Circle, Madurai-625 002
Presently, at PWD, Water Resources Organization
Periyar Vaigai Basin Circle Near Central
Market, Madurai-625 001. ... Defendants
Civil Suit is filed under Order IV Rule 1 of the O.S Rules
read with Order VII Rule 1 of the C.P.C. 1908, praying to pass
judgment and decree in favour of the plaintiff seeking (A) for a
declaration that the Defendants committed breach of contract under
Agreement No.8/SE/PDC/1988-89 and prevented performance and
completion of the work within the period stipulated in the agreement,
which expired on 21.06.1992 and that the rejection of the claims for
payment of the unpaid value of the works carried out and other
https://www.mhc.tn.gov.in/judis
1/79
C.S.No.190 of 2012
amounts due to him notified on 11.07.1993 by the First Defendant on
05.06.1996 and 03.07.1993 is illegal, unjustified & invalid and
consequently, the First Defendant is liable for payment at the market
rates prevailed for the works delayed beyond 21.06.1990, by
disgorging the unjust enrichment obtained by non-payment of the
same, to compensate the losses caused to the Plaintiff, to restore his
position ante; (B) for a declaration that the penalty of Rs.80,000/-
(Rupees Eight Thousand only) imposed on the Plaintiff alleging slow
progress is illegal, unjustified & invalid and consequently, the First
Defendant is liable to compensate the loss by refund of the amount
illegally recovered along with interest thereon at 18% p.a. from the
date of suit till realization; (C)directing the First Defendant to pay
Rs.2,60,75,350/- (Rupees Two Crore Sixty Lakhs Seventy Five
Thousand Three Hundred and Fifty only), towards unpaid cost of
Rs.39,900 cum of broken stones obtained by blasting of hard rock in
the Reserved Forest in the Kerala State on obtaining permission for the
same on 23.12.1989, in liew of the buffer stock of blasted stones in
the dump yard near the Vents of the Additional Regulator of the
Periyar Dam, which was washed off in the flood as notified at
Rs.64,22,500/- including interest thereon at 18% p.a. till date of
payment by disgorging the unjust enrichment obtained by the
Defendants; (D) directing the First Defendant to pay Rs.4,31,04,780/-
(Rupees Four Crores Thirty One lakhs Four Thousand Seven Hundred
and Eighty only), towards unpaid market value of works carried out
between 21.07.1990 and 23.05.1994 notified a Rs.1,06,16,941/-
including interest thereon at 18% p.a. From 23.05.1994 onwards till
23.09.2011 and payable with interest at the same rate till date of
payment; (E) directing the First Defendant to pay Rs.94,55,740/-
(Rupees Ninety Four Lakhs Fifty Thousand Seven Hundred and Forty
only), towards unpaid hire/idling charges of the machinery items
valued Rs.68,00,000/- brought to the site which remained idle due to
delayed re-construction of Ghat road from Vallakkadavu to Dam site
https://www.mhc.tn.gov.in/judis
2/79
C.S.No.190 of 2012
after the flood occurred notified at Rs.17,000/day for 137 days
between 24.07.1989 and 28.12.1989 at Rs.23,29,000/- including
interest thereon at 18% from the date of plaint till realization; (F)
directing the First Defendant to pay Rs.3,24,000/-(Rupees Three Lakhs
Twenty Fourt Thousand and Eight Hundred only) by way of refund of
penalty of Rs.80,000 illegally imposed, including interest thereon at
18% from the date of plaint till realization; (G) directing the First
Defendant to pay Rs.47,800/- (Rupees Forty Seven Thousand and
eight Hundred only) by way of refund of compounding fee paid to Wild
Life Warden, Thekkady in Vallakkadavu Forest range in O.R.No.50 of
1989 for an offence under the Forest Act registered against the
Executive Engineer, Assistant Executive Engineer, Assistant Engineer,
Plaintiff and workman for blasting of hard rock in Reserved Forest in
Kerala including interest on Rs.10,000/- at 18% p.a. from 07.08.1990
till 07.12.2011 and payable with interest at the same rate till
realization; (H) directing the First Defendant to pay Rs.76,08,800/-
(Rupees Seventy Six Lakhs Four Thousand and Eight Hundred only)
towards unpaid hire/idling charges of cement concrete weigh batching
plant and stone crusher unit due to non-release of charge of
hypothecation created as directed in G.O.(Ms) No.862/PWD dated
17.06.1992 under supplemental Agreement No.1/SE/PDC dated
19.06.1992 for payment of machinery advance of Rs.15,00,000/-
between 09.01.1995 and 04.12.1995 notified at Rs.19,60,000/-
including interest thereon at 18% from the date of plaint till
realization; (I) directing the First Defendant to pay Rs.78,83,460/-
(Rupees Seventy Eight Lakhs Eight Three Thousand Four Hundred and
Sixty only), by way of reimbursement of the cost of the arterials
collected at the site washed off in the unprecedented flood caused by
high velocity flow of water let out from the Dam and submersion of the
site of work and losses reported on 11.07.1993 and illegally rejected
by the 1st Defendant on 05.06.1996 and 03.07.1996 with interest 18%
annum from 11.07.1993 onwards till date of realization; (J) directing
https://www.mhc.tn.gov.in/judis
3/79
C.S.No.190 of 2012
the First Defendant to pay future interest at 18% p.a. on whole of the
unpaid amounts specified above and costs incurred by the Plaintiff in
these proceedings till date of payment or realization; (K) directing the
First Defendant to pay the costs of this suit.
For Plaintiff : Mr.Babu Thomas
Mr.K.F.Manavalan
Mr.K.Bijesh Thomas
For Defendants: Mr.R.Shunmugasundaram,
Advocate General,
and Mr.A.Edwin Prabakar
[Special Government Pleader (CS)]
JUDGMENT
The plaintiff is a contractor whose services were engaged by the defendants to strengthen the Mullai Periyar Dam (the Dam) by providing RCC backing from EL (+) 75 feet to EL (+) 145 feet. In relation to the said contract, the plaintiff filed the suit and raised claims for escalation in the extended period, idling/disruption claims, claims towards unpaid work, refund claims, interest claims and costs. In the aggregate, a claim of Rs.9,46,96,730/- has been made by the plaintiff.
2. The plaintiff stated that a tender was floated by the defendants in relation to the work described above and that the plaintiff's bid was successful. Therefore, G.O.Ms.No.158/PWD/dated 25.01.1989 was issued, and by letter dated 01.02.1989, the acceptance of the bid was communicated to the plaintiff by also https://www.mhc.tn.gov.in/judis 4/79 C.S.No.190 of 2012 indicating the contract value of Rs.2,18,85,430/-. Thereafter, an agreement dated 03.03.1989 (the Agreement) was executed by the plaintiff and the defendants. The Agreement incorporated “the Madras Detailed Standard Specifications” and stipulated that the work should be completed within 15 months from the date of handing over possession of the site. In relation to execution of work, the plaintiff stated that the defendants were required to provide 40,225 cubic metres (cum) of cement concrete items, 169 metric tonnes (MT) of steel reinforcement, cement, steel items and super-plasticiser. In addition, according to the plaintiff, the defendants had stocked blasted stones at the dump yard of the valley portion below the regulator of the additional vents of the Periyar Dam (the blasted stones storage yard) and river sand from Vaigai River, and the plaintiff was entitled to make use of these materials for construction.
3. The plaintiff stated that a weigh batching plant was brought to site even before the Agreement was signed and other equipments such as a stone crushing unit, pump sets, etc. were brought to site within 17 days from the date of execution of the Agreement. The possession of the site was handed over to the plaintiff on 22.03.1989. Consequently, it was stated that the 15 month period was from 22.03.1989 till 21.06.1990.
https://www.mhc.tn.gov.in/judis 5/79 C.S.No.190 of 2012
4. Although the plaintiff had mobilized men and material to execute work, the plaintiff stated that the execution of work was delayed due to several reasons set out in paragraph 8 of the plaint. These reasons are: non-approval of design, drawings and structural particulars of the RCC batching until 28.06.1989; the delayed finalization of the design mix of concrete on 20.07.1989; the washing- off of the ghat-road access to the site of work in an unprecedented flood that occurred on 24.07.1989; raising of the water level in the dam to [+] 142.70 ft; non-supply of cement till 10.10.1989; the delay in reconstruction of the ghat-road from Vallakkadavu to the Dam site; instruction of the second defendant dated 16.11.1989 to postpone the commencement of works till the water level in the Dam was lowered; and absence of permission from the Forest Department of Kerala for blasting of rock in the reserved forest area until 3.12.1989. As a result of the above reasons, the plaintiff stated that work could be completed only on or about 23.05.1994. According to the plaintiff, the above reasons are attributable to the defendants.
5. Therefore, the plaintiff stated that he is entitled to escalation for the period subsequent to 21.06.1990 (the scheduled completion date). The plaintiff claimed that work of the value of Rs.2,99,55,216/- was executed between 21.06.1990 and 23.05.1994. At the PWD rates of 1994-95, a sum of Rs.2,99,55,216/- should have been paid, whereas only a sum of Rs.1,93,38,275/- was paid, thereby https://www.mhc.tn.gov.in/judis 6/79 C.S.No.190 of 2012 leaving an outstanding of Rs.1,06,16,941/- with interest thereon. The plaintiff also stated that clause 14(b) of the Agreement specified that blasted stones would be available at the blasted stones storage yard for use in construction. Therefore, the bid was submitted on the assumption that the said blasted stones would be available for construction. However, on 22.07.1989, in an unprecedented flood, the above mentioned materials were washed away. This was brought to the notice of the defendants by a communication dated 20.01.1990 and a claim was made towards cost incurred for blasting hard rock inside the reserved forest area. Such claim was made at rates ranging from Rs.68/- per cum to Rs.225/- per cum commensurate with the increase in cost of undertaking such work. Thus, the plaintiff stated that a principal claim of Rs.64,22,500/- was made for blasting rock from 30.08.1989 to 23.05.1994. By adding interest thereto, an aggregate claim of about Rs.2,60,75,350/- was made.
6. The plaintiff further stated that equipments mobilized for execution of work such as a compressor, two diesel vibrators, two tippers and one generator were kept idle at the site between 24.07.1989 and 28.12.1989 for reasons attributable to the employer/the defendants. By reckoning the cost of hiring the said equipments, a principal claim of Rs.23,29,000/- was made for the 137 day idling period. Similarly, as regards the cement concrete weigh batcher plant and stone crushing unit, the plaintiff stated that the said https://www.mhc.tn.gov.in/judis 7/79 C.S.No.190 of 2012 equipments were subject to hypothecation in favour of the defendants as security for the machinery advance of Rs.15 lacs. The plaintiff stated that the machinery advance with interest thereon at 18.5% was recovered by the defendants by making adjustments against amounts payable to the plaintiff towards running account bills. After the machinery advance was recovered fully as stated above, the plaintiff stated that he requested the defendants to release the equipments from hypothecation by issuing letters dated 09.01.1995, 28.03.1995 and 04.10.1995, but the defendants released the hypothecation only on 16.11.1995. Consequently, the plaintiff was unable to use the equipments between 09.01.1995 and 04.12.1995. On that account, a sum of Rs.19,60,000/- is claimed as idling charges along with interest thereon.
7. The plaintiff further stated that about 3000 bags of cement, bitumen pad, river sand, broken stones, etc. were stored by the plaintiff for use in construction. Between July and November 1992, on three separate occasions, these materials were washed away in heavy floods. In addition, the batching plant, stone crushing unit and manpower could not be put to use during a period of 76 days between July and November 1992. This was communicated to the defendants in a letter dated 18.11.1992 by making a disruption claim of Rs.78,01,400/- on this account.
https://www.mhc.tn.gov.in/judis 8/79 C.S.No.190 of 2012
8. The plaintiff also stated that a penalty of Rs.80,000/- was imposed on it by the defendants for delay although the delay was attributable to the defendants. This penalty was paid under protest by the plaintiff. According to the plaintiff, the defendants are not entitled to this penalty and the same is liable to be refunded with interest. Likewise, the plaintiff stated that it was constrained to pay compounding fees of Rs.10,000/- in relation to O.R.No.50 of 1989 for undertaking rock blasting work without permission from the Forest Department. Since the defendants were under an obligation to obtain such permission and failed to do so, the plaintiff stated that the defendants are liable to refund this amount with interest thereon. The suit was filed in respect of the above claims.
9. The second defendant filed a written statement dated 18.07.2012 and an additional written statement dated 10.03.2017. In these written statements, the principal contention of the defendants is that the suit is barred by limitation. According to the defendants, the plaintiff filed O.P.No.277 of 1998 under Section 11(5) of the Arbitration and Conciliation Act 1996 (the Arbitration Act). The said petition was dismissed by order dated 22.01.1999 on the ground that the petition is barred by limitation. The plaintiff filed OSA No.92 of 1999 against the said order, but withdrew the appeal on 23.11.1999. Thereafter, the plaintiff filed Review Application No.1779 of 2000 in respect of the order in O.P.No.277 of 1998. The Review Application was dismissed by https://www.mhc.tn.gov.in/judis 9/79 C.S.No.190 of 2012 order dated 14.08.2003. Thereafter, the plaintiff filed W.P.No.18737 of 2004. Initially, the writ petition was dismissed on 15.06.2011. Subsequently, pursuant to a miscellaneous petition, the writ petition was again disposed of by order dated 28.11.2011. According to the defendants, the order dated 28.11.2011 is contrary to the order of 15.06.2011 and also contrary to the order dated 22.01.1999 in O.P.No.277 of 1998.
10. Even otherwise, the defendants stated that the contract was awarded in early 1989 and the Agreement was executed on 03.03.1989. Although work was not completed within the scheduled time limit of 15 months, it was completed on 23.05.1994. Pursuant thereto, the final bill was prepared and amounts due and payable to the plaintiff were paid on 15.09.1994. As such, the defendants stated that the suit filed in February 2012 is hopelessly barred by limitation. Without prejudice, the defendants stated that the contract was awarded at a firm price and, therefore, the plaintiff is not entitled to escalation. The defendants also stated that the contractor was required to inspect the site and ascertain the availability of materials before undertaking work. The plaintiff was also required to take into account the fact that the work site is likely to be affected by monsoon. Since monsoon rains are reasonably foreseeable, according to the defendants, the plaintiff is not entitled to any claims on account of floods. The defendants further stated that the plaintiff failed to insure https://www.mhc.tn.gov.in/judis 10/79 C.S.No.190 of 2012 the equipment and materials against floods, fire and other accidents. Consequently, the plaintiff should bear the consequences and is not entitled to make a claim against the defendants.
11. On the basis of the pleadings, the Court framed the following issues:
“1.Whether the Defendants committed
breach of contract under the Agreement
No.8/SE/PDC/1988/89 and prevented performance and completion of the work within the period stipulated in the agreement, which expired on 21.06.1990?
2. Whether the rejection of the claim for payment of the unpaid value of works carried out and other amounts due to the Plaintiff and notified on 11.07.1993 by the First Defendant on 05.06.1996 and 03.07.1993 is illegal, unjustified & invalid and consequently, whether the First Defendant is liable for payment at the market rates prevailed for the works delayed beyond 21.06.1990, by disgorging the unjust enrichment obtained by non-payment of the same, to compensate the losses caused to the Plaintiff, to restore his position ante?
https://www.mhc.tn.gov.in/judis 11/79 C.S.No.190 of 2012
3. Whether the penalty of Rs.80,000/-
(Rupees Eighty Thousand only) imposed on the Plaintiff alleging slow progress is illegal, unjustified & invalid and consequently, whether the First Defendant is liable to compensate the loss by refund of the amount illegally recovered along with interest thereon at 18% p.a. from the date of suit till realization?
4. Whether the First Defendant is liable to pay Rs.2,60,75,350/- (Rupees Two Crores Sixty Lakhs Seventy Five Thousand Three Hundred and Fifty only), towards unpaid cost of 39,900 cum of broken stones obtained by blasting of hard rock in the Reserved Forest in the Kerala State on obtaining permission for the same on 23.12.1989, in liew of the buffer stock of blasted stones in the dump yard near the Vents of the Additional Regulator of the Periyar Dam, which was washed off in the flood as notified at Rs.64,22,500/-
including interest thereon at 18% p.a. till date of payment by disgorging the unjust enrichment obtained by the Defendants?
https://www.mhc.tn.gov.in/judis 12/79 C.S.No.190 of 2012
5. Whether First Defendant is liable to pay Rs.4,31,04,780/- (Rupees Four Cores Thirty One Lakhs Four Thousand Seven Hundred and Eighty only), towards unpaid market value of works carried out between 21.07.1990 and 23.05.1994 notified at Rs.1,06,16,941/- including interest thereon at 18% p.a. from 23.05.1994 onwards till 23.09.2011 and payable with interest at the same rate till date of payment?
6. Whether the First Defendant is liable to pay Rs.94,55,740/- (Rupees Ninety Four Lakhs Fifty Five Thousand Seven Hundred and Forty only), towards unpaid hire/idling charges of the machinery items valued Rs.68,00,00/- brought to the site which remained idle due to delayed re-
construction of Ghat road from Vallakkadavu to Dam site after the flood occurred notified at Rs.17,000/day for 137 days between 24.07.1989 and 28.12.1989 at Rs.23,29,000/- including interest thereon at 18% from the date of plaint till realization?
7. Whether the First Defendant is liable to pay Rs.3,24,800/- (Rupees Three Lakhs Twenty Four Thousand and Eight Hundred only) by way of https://www.mhc.tn.gov.in/judis 13/79 C.S.No.190 of 2012 refund of penalty of Rs.80,000/- illegally imposed, including interest thereon at 18% from the date of plaint till realization?
8. Whether the First Defendant is liable to pay Rs.47,800/- (Rupees Forty Seven Thousand and Eight Hundred only) by way of refund of compounding fee paid to Wild Life Warden, Thekkady in Vallakkadavu Forest range in O.R.No.50 of 1989 for an offence under the Forest Act registered against the Executive Engineer, Assistant Executive Engineer, Assistant Engineer, Plaintiff and workmen for blasting of hard rock in Reserved Forests in Kerala including interest on Rs.10,000/- at 18% pa. 07.08.1990 till 07.12.2011 and payable with interest at the same rate till realization?
9. Whether the First Defendant is liable to pay Rs.76,04,800/- (Rupees Seventy Six Lakhs Four Thousand and Eight Hundred only), towards unpaid hire/idling charges of cement concrete weigh batching plaint and stone crusher unit due to non-release of charge of hypothecation created as directed in G.O.(Ms) No.862/PWD dated 17.06.1992 under Supplemental Agreement https://www.mhc.tn.gov.in/judis 14/79 C.S.No.190 of 2012 No.1/SE/PDC dated 19.06.1992 for payment of machinery advance of Rs.15,00,000/- between 09.01.1995 and 04.12.1995 notified at Rs.19,60,000/-, including interest thereon at 18% from the date of plaint till realization?
10. Whether the First Defendant is liable to pay Rs.78,83,460/- (Rupees Seventy Eight Lakhs Eight Three Thousand Four Hundred and Sixty only), by way of reimbursement of the cost of the materials collected at the site washed-off in the unprecedented flood caused by high velocity flow of water let out from the Dam and submersion of the site of work and losses reported on 11.07.1993 and illegally rejected by the 1st Defendant on 05.06.1996 and 03.07.1996 with interest at 18% per annum from 11.07.1993 onwards till date of realization?
11. Whether this Court has territorial and pecuniary jurisdiction to entertain the suit?
12. Whether the suit is barred by limitation?
13. Whether the suit is liable to be dismissed on the ground of laches?
https://www.mhc.tn.gov.in/judis 15/79 C.S.No.190 of 2012
14. To what other reliefs is the Plaintiff entitled to?
12. The plaintiff examined himself as PW1. In course of the examination-in-chief of PW1, 190 documents were exhibited as Exs.P1 to P190. The defendants adduced evidence by examining R.Madhavan, Executive Engineer, as DW1. 9 documents were exhibited through DW1 as Exs.D1 to D9. Both parties cross-examined the witness of the counter party. Thereafter, parties filed written arguments. Oral arguments were advanced on behalf of the plaintiff by Mr.Babu Thomas and Mr.K.F.Manavalan, learned counsel, and on behalf of the defendants by the learned Advocate General, Mr.Shunmugasundaram and the learned Additional Government Pleader, Mr.Edwin Prabakar.
13. Learned counsel for the plaintiff submitted that the Mullai Periyar Dam was originally constructed in 1897. While the Dam is located in Kerala, it is under the administrative control of the State of Tamil Nadu. It facilitates irrigation in five districts of Tamil Nadu. The provision of “RCC backing for the Dam from EL (+) 75 feet to EL (+) 145 feet” is a major civil construction work.
14. At the outset, learned counsel for the plaintiff stated that the best evidence is available with the defendants and that in spite of the order dated 15.09.2014 in Application No.4824 of 2014 directing https://www.mhc.tn.gov.in/judis 16/79 C.S.No.190 of 2012 production of documents specified therein (Ex.P.187), the defendants refused to produce material evidence. Consequently, it was contended that an adverse inference should be drawn against the defendants. In particular, the plaintiff pointed out that work files, water level particulars, measurement books, the concurrence letter of the Government of Kerala, design drawings, structural particulars, particulars of the ghat road restoration contract, materials at site account, PWD schedule of rates for the years 1987-88 to 1994-95, the cheque forwarded to the Catholic Syrian Bank Ltd, etc. were called for from the defendants, who refused to produce the same.
15. Learned counsel for the plaintiff contended that the work was quoted at the 1985 PWD rates. Admittedly, the PWD rates were revised annually. In response to a specific question, DW1 admitted that PWD rates were revised annually (page 85 of Vol.I ). Learned counsel for the plaintiff further contended that the defendants committed breach of clauses 14, 17 and 18 of Ex.P2 Agreement by delaying the finalization of designs, drawings and structural particulars. Similarly, the defendants failed to approve the design mix of cement concrete until 20.07.1989. The defendants directed the plaintiff to postpone the commencement of work due to high water level on 16.11.1989. The defendants delayed restoration of the ghat road, which was washed-off by floods on 24.07.1989 and could not be accessed until 06.11.1989. Consequently, the plaintiff could not https://www.mhc.tn.gov.in/judis 17/79 C.S.No.190 of 2012 transport river sand from Vaigai River Basin, Kunnur village and cement, steel items and plasticizer from Gudalur to the site. Learned counsel also contended that the defendants delayed obtaining concurrence from the Government of Kerala for quarrying in the reserved forest until 23.12.1989, which, according to the plaintiff, violated clause 28 of Ex.P2.
16. As a result of the above acts of prevention on the part of the defendants, the plaintiff contended that completion of work was delayed and that the 1985 PWD rates are not applicable beyond 21.06.1990, which is the scheduled completion date. Therefore, the plaintiff became entitled to market rates. Since the defendants also admitted that PWD rates are revised annually, learned counsel contended that the plaintiff is entitled to payment at the PWD rates applicable during the extended period. If the PWD rates applicable at the relevant point of time are applied for work carried out by the plaintiff between 21.06.1990 and 23.05.1994, a sum of Rs.2,99,55,216/- was payable, whereas only a sum of Rs.1,93,38,275/- was paid. Learned counsel pointed out that the defendants were put on notice about the increase in rates by communications dated 02.07.1990 (Ex.P92), 15.03.1993 (Ex.P101) and 16.05.1994 (Ex.P119). Therefore, it was contended that the plaintiff was entitled to a sum of Rs.1,06,16,941/- and interest thereon, aggregating to a sum of Rs.4,31,04,780/- as on the date of https://www.mhc.tn.gov.in/judis 18/79 C.S.No.190 of 2012 plaint. By relying on the judgments of the Hon'ble Supreme Court in M/s.Tarapore & Co. v. State of Maharashtra (1994) 3 SCC 521, J.G.Engineering Private Limited v. Union of India (2011) 5 SCC 758, State of U.P. v. Ram Nath Constructions (P) Limited, (1996) 1 SCC 18, P.M.Paul v. Union of India (1989) Supp. (1) SCC 368, General Manager, Northern Railway v. Sarvesh Chopra (2002) 4 SCC 45, U.P.S.E.B v. Om Metals and Minerals (P) Limited (2002) 9 SCC 512 and Food Corporation of India v. A.M.Ahmed & Co. (2006) 13 SCC 779, it was contended that the rejection of the claim for payment at the applicable PWD rate was illegal and unjustified. The plaintiff also relied upon Sections 55 and 70 of the Indian Contract Act, 1872 (the Contract Act).
17. In addition to the events that are directly attributable to the defendants, learned counsel for the plaintiff also contended that there were many events such as floods, labour unrest, and other impediments which were not in the control of the plaintiff. With specific reference to floods, the plaintiff contended that an unprecedented flood occurred on 24.07.1989 and the water level in the Dam increased by 27.70 ft. As a result, materials stocked for purposes of construction, including 3200 cum of aggregates and 400 cum of river sand, were washed away.
https://www.mhc.tn.gov.in/judis 19/79 C.S.No.190 of 2012
18. Learned counsel for the plaintiff contended that clause 14(b) of the Agreement envisaged utilization of blasted stones from the blasted stones storage yard by the defendants. Upon the washing away of the stones in the floods on 24.07.1989, the plaintiff notified the defendants by communication dated 20.01.1990. According to the plaintiff, the rejection of the request for payment for blasting of stones by communication dated 09.03.1990 is unlawful. The plaintiff contended that clause 14(b) stipulates that no additional payment would be made if the contractor chooses to take stones from another source in spite of the availability of the stones in the blasted stones storage yard. To put it differently, learned counsel contended that the exemption against making additional payment does not apply if the stones are unavailable for use by the contractor. Learned counsel also pointed out that Kerala Forest Department granted approval for blasting of stones only on 23.12.1989 and the work was carried out between 30.08.1989 and 23.05.1994 at rates ranging from Rs.68/cum to Rs.225/cum, thereby aggregating to a claim of Rs.64,22,500/-.
19. On the disruption claim, learned counsel for the plaintiff stated that the compressor, diesel vibrators, tippers and generators of the plaintiff had been deployed at site shortly after the Agreement was executed. These equipments were idle and could not be utilized between 15.07.1989 and 23.12.1989 for various reasons set out earlier. Since all these reasons were attributable to the defendants, https://www.mhc.tn.gov.in/judis 20/79 C.S.No.190 of 2012 learned counsel contended that the plaintiff is entitled to idling charges of Rs.23,29,000/- along with interest thereon.
20. The cement concrete weigh batching plant and stone crusher were hypothecated to the defendants as security for the machinery advance of Rs.15 lacs. This sum was adjusted along with interest at 18.5% against the amounts payable to the plaintiff towards running account bills. In spite of recovering the entire amount along with interest, the defendants failed to release the hypothecation. By communications dated 09.01.1995 (ExP139), 28.03.1995 (Ex.P142), and 04.10.1995 (Ex.P143), the defendants were called upon to release the hypothecation. Eventually, the defendants released the hypothecation by communication dated 16.11.1995 (Ex.P144). Therefore, learned counsel for the plaintiff contended that the defendants are liable to pay the principal sum of Rs.19.60 lacs, which increased to a sum of Rs.76.04 lacs after adding interest accruals thereon.
21. Learned counsel for the plaintiff also submitted that about 3000 bags of cement, bitumen pad, river sand and broken stones were washed away during the floods between July and November 1992. By a claim letter dated 18.11.1992 (Ex.P92), the defendants were notified about this claim for a sum of Rs.78,01,400/-. Learned counsel contended that this claim was unlawfully and unjustly rejected by a communication dated 03.07.1996.
https://www.mhc.tn.gov.in/judis 21/79 C.S.No.190 of 2012
22. Learned counsel for the plaintiff also submitted that a penalty was unjustly imposed on the plaintiff for alleged delay. Therefore, the sum of Rs.80,000/- is liable to be refunded along with interest thereon at 18% p.a. Likewise, it was contended that the compounding fee of Rs.10,000/-, which was paid by the plaintiff in relation to the blasting of rocks, was liable to be reimbursed by the defendants along with interest thereon.
23. As regards the defence of limitation, learned counsel for the plaintiff submitted that the claims are not barred by limitation. He pointed out that the plaintiff did not submit to the final bill. The defendants endeavoured to make a payment on 15.09.1994 by describing it as a final payment. Immediately upon receipt thereof, the plaintiff communicated its protest under Ex.P.130,132,133,136 and
148. Learned counsel pointed out that Ex.P147 references the communication dated 02.06.1995 from the Chief Engineer, Irrigation, of the PWD Department by which he recommended the payment of claims of the plaintiff. Eventually, the claims were rejected only on 05.06.1996 and 03.07.1996 (Ex.P146 and 147). By relying upon the judgment of the Supreme Court in M/s.Aries & Aries v. Tamil Nadu Electricity Board AIR 2017 SC 1897, learned counsel contended that the period of limitation should be computed from 03.07.1996 and not from the date of final payment. Thereafter, the plaintiff issued a notice dated 19.05.1997 under Section 80 of CPC read with Section 11 of the https://www.mhc.tn.gov.in/judis 22/79 C.S.No.190 of 2012 Arbitration Act. This was followed by a petition under Section 11 of the Arbitration Act. The said petition was rejected on 22.01.1999. Since this was in the early years after enactment of the above mentioned statute, there was no clarity as to whether the order in the Section 11 petition is a judicial or an administrative order. Meanwhile, an appeal was filed against the order in the Section 11 petition. Even before the appeal was heard, the plaintiff reliably gathered that the Supreme Court concluded that the order is an administrative order and, therefore, an appeal does not lie. In those circumstances, the appeal was withdrawn. Instead, Review Application No.1779 of 2000 was filed. The Review Application was dismissed on 14.08.2003. Therefore, the plaintiff was constrained to file W.P.No.18737 of 2004. After the writ petition was filed, the legal position changed and the order in a Section 11 petition was interpreted as a judicial order. Consequently, the writ petition became unsustainable. Eventually, the High Court disposed of the writ petition by order dated 28.11.2011 by granting the plaintiff four weeks time from the date of receipt of the order to file a civil suit. The order specifically mentioned that the civil suit should be received and decided on merits if filed within the said four week limit. The copy of the order was received by the plaintiff on 02.02.2012 and the suit was filed on 17.02.2012. Therefore, learned counsel for the plaintiff submitted that the suit is within the period of limitation. It was also pointed out that the writ appeal and special leave petition against the order dated 28.11.2011 were rejected. As https://www.mhc.tn.gov.in/judis 23/79 C.S.No.190 of 2012 such, it was contended that the order dated 28.11.2011 had attained finality.
24. In response to these contentions, the defendants focused attention on the plea of limitation. The defendants contended that O.P.No.277 of 1998 was dismissed on the ground that the petition is barred by limitation because it was filed more than three years after the cause of action for reference of the dispute to arbitration arose. OSA No.92 of 1999 against the said order was withdrawn by the plaintiff. Thereafter, Review application No.1779 of 2000 against the order in O.P.No.277 of 1998 was dismissed on 14.08.2003. The plaintiff filed W.P.No.18737 of 2009 against the order dated 22.01.1999 in O.P.No.277 of 1998. The writ petition was dismissed on 15.06.2011 and, thereafter, revived through W.P.M.P No.22406 of 2004. Therefore, the defendants contended that the order dated 28.11.2011 is liable to be disregarded as contrary to the order dated 22.01.1999 in O.P.No.277 of 1998, which had attained finality, and the earlier order dated 15.06.2011 in W.P.No.18737 of 2004. In order to substantiate the contention that the rejection of the Section 11 petition on the ground of limitation was in conformity with the legal position, learned Advocate General relied on the judgment of the Hon'ble Supreme Court in Panchu Gopal Bose v. Board of Trustees for Port of Calcutta (1993) 4 SCC 338, where it was held that a reference for arbitration should be sought within three years from the cause of https://www.mhc.tn.gov.in/judis 24/79 C.S.No.190 of 2012 arbitration arising. By relying on the judgment in Geo Miller and Company Private Limited v. Chairman, Rajasthan Vidyut Utpadan Nigam Limited (2020) 14 SCC 643, learned Advocate General submitted that Article 137 of the Schedule to the Limitation Act prescribes the time limit of three years for seeking a reference to arbitration; this time limit runs from the date of payment of the final bill; and cannot be extended by mere correspondence. The more recent judgment of the Hon'ble Supreme Court in Bharat Sanchar Nigam Limited v. Nortel Networks India Private Limited (2021) 5 SCC 738 was also relied upon in this regard.
25. Learned Advocate General also contended that the institution of proceedings under Section 11 was not bona fide and that Section 14 of the Limitation Act is inapplicable because the petition was rejected on the ground of limitation and not on jurisdiction. By drawing reference to the communication dated 11.07.1993 from the plaintiff (Ex.P111), learned Advocate General pointed out that the plaintiff was fully aware that the Agreement provided for dispute resolution by a civil court since the value of the claims exceeded Rs.50,000/-. In spite of being aware of this contractual position, the plaintiff requested for the appointment of an arbitrator. Such request was rejected by communication dated 03.07.1996 (Ex.P147). Upon receipt of such communication, the plaintiff should have instituted a civil suit. Instead, the plaintiff filed O.P.No.277 of 1998 and proceeded https://www.mhc.tn.gov.in/judis 25/79 C.S.No.190 of 2012 to institute multiple proceedings to challenge the order passed therein. In these circumstances, it was submitted that the institution of proceedings under Section 11 of the Arbitration Act cannot be construed as bona fide. Consequently, the plaintiff is not entitled to the exclusion of time spent in prosecuting such proceedings. On a demurrer, learned Advocate General contended that the suit is barred by limitation even if the entire time taken by the plaintiff in prosecuting the petition under Section 11 is disregarded. In support of this contention, the judgment in Simplex Infrastructure Limited v. Union of India (2019) 2 SCC 455 was cited.
26. Without prejudice to the contention on limitation, the defendants submitted that the plaintiff is not entitled to any of the monetary claims. By drawing reference to specific terms of the contract, the defendants contended that the monetary claims are liable to be rejected. The defendants pointed out that the contract was supposed to be completed within 15 months and the consideration was on lump sum basis. In specific, the defendants were required to pay the plaintiff a lump sum of Rs.2,18,85,430/-All payments due as per the Agreement were paid to the plaintiff. By drawing reference to the lead statement and clause 14(b), the defendants contended that the contract specifies that no extra rates shall be allowed even if the contractor obtains rough stones or broken stones from any other source.
https://www.mhc.tn.gov.in/judis 26/79 C.S.No.190 of 2012
27. With specific reference to the note under clause 12, the defendants submitted that the contract prohibits escalation due to any cause whatsoever. With regard to the washing-away of the ghat-road, the defendants relied on clause 18 which mandates that the contractor should form his own approach to the work site for which no extra charges would be paid to him. With regard to the requirement of obtaining blasting licence, by drawing reference to clause 2 of the additional special conditions, the defendants contended that the contractor is required to obtain explosive licence and blasting licence for quarrying rocks. With specific reference to clause 5 of part - 1 general conditions, the defendants contended that the contractor is not entitled to make any claims due to unforeseen circumstances, such as floods, which cause suspension of work. The defendants also adverted to clause 21, which deals with risk insurance and pointed out that the plaintiff failed to insure itself against risk of loss due to floods, fire, etc. By drawing reference to the Madras Detailed Standard Specification, which were incorporated by reference in the contract, the defendants pointed out that clause 59 thereof provides that no claim due to any cause whatsoever shall lie, and that the contractor is only entitled to reasonable extension of time. In the light of the above clauses, the defendants submitted that none of the monetary claims made by the contractor are liable to be allowed. The defendants further contended that the Court cannot disregard contractual terms or re-write the contract by relying on Union Territory of Pondicherry v. P.V.Suresh https://www.mhc.tn.gov.in/judis 27/79 C.S.No.190 of 2012 (1994) 2 SCC 79. Even otherwise, it was submitted that the plaintiff did not prove the claims for damages in terms of Section 73 of the Contract Act. For this purpose, reliance was placed on State of Rajasthan v. Ferro Concrete Construction Private Limited (2009) 12 SCC 1.
Issue No.12
28. Upon considering the rival contentions, the first issue that should be examined is the issue of limitation. Issue No.12 pertains to limitation. The plaintiff submitted that the only applicable article is Article 113 of the Limitation Act, 1963 (the Limitation Act) which specifies a limitation period of three years from the date when the right to sue accrues. According to the plaintiff, the right to sue did not accrue until the claims were categorically rejected by communications dated 05.06.1996 and 03.07.1996 (Exs.P146 and P147) and that the plaintiff issued the notice dated 19.05.1997 thereafter. The said notice was issued both under Section 80(1) CPC and Section 11 of the Arbitration Act. Immediately upon receipt of the notice by the defendants, the arbitration proceedings commenced in terms of Section 21 of the Arbitration Act. The plaintiff also pointed out that that the order dated 28.11.2011 in the writ petition granted leave to the plaintiff to present a civil suit within four weeks from the date of receipt of a copy of that order. The order was received on 02.02.2012 and the suit was presented on 17.02.2012, which is within the https://www.mhc.tn.gov.in/judis 28/79 C.S.No.190 of 2012 specified time limit of four weeks. Therefore, the suit cannot be rejected on the ground of limitation.
29. The contention of the plaintiff that Article 113 is the applicable article should be examined first. The settled legal position is that Article 113 applies only if no other article is applicable since it is a residuary provision. Therefore, the claims of the plaintiff should be scrutinized. The claims of the plaintiff may be categorized into claims for: escalation, idling on account of disruption, unpaid work, loss of materials, refund, and interest. It is self-evident that all these claims arise out of performance of work under the Agreement. The escalation claim is not a claim founded on breach of contract inasmuch as it is founded on the basis that the firm price under the contract applies only during the original contract period and that an escalation claim is legitimate in the extended period if there is an increase in the prices of labour and materials. Therefore, Article 55 of the Limitation Act may not apply to such claim and even if it did, limitation would run from the date of breach. As stated earlier, the plaintiff's case is that the cause of action arose only when the escalation claim was rejected on 05.06.1996. The claim for disruption or idling certainly qualifies as a claim for damages for breach and that for the cost of washed-away materials probably does. While these claims were first made on 18.11.1992 (Ex.P100), in the absence of any exhibit evidencing express rejection, the plaintiff is justified in making a consolidated https://www.mhc.tn.gov.in/judis 29/79 C.S.No.190 of 2012 claim after the rejection of the escalation claim in June 1996. Although Article 18 of the Limitation Act may have been the appropriate article for the claim for unpaid additional work, if it were a standalone claim, it bears repetition that all these claims arise out of the contract for providing RCC reinforcement to the Mullai Periyar Dam, and the individual claims that were made contemporaneously were not responded to by the defendants. In this regard, it is apposite to refer to the judgment of the Hon'ble Supreme Court in Aries and Aries v. T.N.Electricity Board, (2018) 12 SCC 393, which was cited by the plaintiff, where the Supreme Court dealt with a substantially similar fact situation and held that limitation should be determined with reference to Article 113 of the Schedule to the Limitation Act by computing limitation from the date of categorical rejection of the claims of the contractor. Paragraphs 10 and 11 of the judgment are set out below:
''10. Article 18 of the Limitation Act, 1963 provides for filing of a suit for recovery of money for work done by the plaintiff, within three years from the date when the work is done, in a situation where no time has been fixed for payment. Article 55 of the Limitation Act, 1963, on the other hand, provides for limitation of three years from the date of breach of a contract in a case of a suit for compensation for damages arising out of such breach. Article 113 of the Limitation Act, 1963 is the residuary provision https://www.mhc.tn.gov.in/judis which provides for a suit to be instituted within 30/79 C.S.No.190 of 2012 three years from the date when the right to sue accrues.
11.In the present case, dehors the correspondences that had been exchanged by and between the parties after the date of final payment i.e. 13-1-1981, the aforesaid date of final payment would have been crucial for determination of the period of limitation for filing the instant suit. However, in the present case, from the correspondences that had been exchanged after the date of final payment, it clearly appears that the plaintiff after receipt of the payment on 13-1-1981, reiterated its claim for additional payment on different counts including escalation and for extra works done. The defendant instead of rejecting the said claim entertained the same and kept the matter pending. Finally, on 6-11-1981 (Ext. P-2) the said claims were rejected. If the claims raised by the plaintiff were entertained and rejected finally on 6-
11-1981, it would be reasonable to assume that the cause of action for the suit in respect of the said rejected claims arose on 6-11-1981 and the suit could have been filed at any point of time prior to the expiry of three years from the said date i.e. 6-11-1981 in view of Article 113 of the Limitation Act, 1963. The suit having been filed on 6-11-1984, the same, therefore, will have to be considered to be within the period of limitation. The High Court, therefore, was not justified in holding the contrary.'' In the circumstances, the contention of the plaintiff that Article 113 is https://www.mhc.tn.gov.in/judis 31/79 C.S.No.190 of 2012 the only applicable article for the consolidated suit claim is liable to be accepted.
30. Once Article 113 applies, the critical question would be:
when did the right to sue accrue? On examining the evidence on record, it is clear that the work was fully completed on 24.05.1994. Although payment was made on 15.09.1994 pursuant to a final bill prepared by the second defendant, such payment was received under protest by the plaintiff and without prejudice to his rights to payment of pending claims. This is evident from letters dated 30.08.1994(Ex.P130),19.09.1994(Ex.P135),28.09.1994(Ex.P136),etc. The defect liability period was continuing then as is clear from the communication dated 10.01.1995(Ex.P146). During the period running all the way to December 1995, the parties corresponded on the release of the security deposit and hypothecation over equipment. Eventually, the categorical rejection of the plaintiff's claims for escalation and arbitration was under communications of 05.06.1996 and 03.07.1996 (Exs.P.146 and 147). Therefore, 05.06.1996 could be construed as the date when the cause of action accrued. While on this issue, it should be noticed that Article 113 of the Limitation Act, unlike Article 58 thereof, does not prescribe that the limitation period would run from the date when the right to sue first accrues. Given that the request for arbitration was rejected only by communication of 03.07.1996, the limitation period should be reckoned from 03.07.1996.
31. Pursuant to such rejection, the notice under Section 80 https://www.mhc.tn.gov.in/judis 32/79 C.S.No.190 of 2012 CPC read with Section 11 of the Arbitration Act was issued on 19.05.1997. This notice was received by the defendants on 24.07.1997. As correctly contended by learned counsel for the plaintiff, if parties had proceeded with the arbitration, the date of receipt of this notice would be the date of commencement of arbitration proceedings as per Section 21 of the Arbitration Act. In other words, the limitation clock would have stopped in mid-1997. In such event, the proceedings would have certainly been within the prescribed period of limitation.
Instead, the petition under Section 11 was rejected and this was followed by appellate, review and writ proceedings. Eventually, the order dated 28.11.2011 came to be passed. The said order, in relevant part, is as under:
“3.The Petitioner is given a period of four weeks time from the date of receipt of a copy of this order to file a suit and as and when the Petitioner files the said suit before competent Civil Court, the competent Civil Court has to decide the suit on merits without going into the question of limitation.
Accordingly, the Writ Petition is disposed of. No costs.” The admitted position is that the writ appeal against this order was rejected by refusing to condone the delay in filing such appeal and the special leave petition challenging the order of dismissal was also https://www.mhc.tn.gov.in/judis 33/79 C.S.No.190 of 2012 rejected. As such, the order of 28.11.2011 attained finality.
32. Thus, if the order of 28.11.2011 governs, the suit presented on 17.02.2012, after receiving the order copy on 02.02.2012, would be within the four week limit fixed in the said order. However, the defendants contended that the order dated 28.11.2011 is in conflict with the order in the petition under Section 11 of the Arbitration Act. Therefore, I turn to the order dated 22.01.1999.
In paragraph 11 thereof, the Court held, in relevant part, as under:
“11....Therefore, it is very clear that the cause of action for the Petitioner to refer the dispute to arbitration has arisen as on 15.09.1994....Even though the cause of action has accrued as early as on 15.09.1994, the Petitioner has kept quiet and has filed this petition in the year 1998, which is hopelessly barred by limitation and the notice issued in 1997 will not save the limitation period....” Two aspects are conspicuous from the above extract. First, the Court decided that the petition under Section 11 was barred by limitation because it was filed more than three years after the cause of action to seek reference of the dispute for arbitration arose, but not that the claims were barred by limitation. In a recent judgement, Bharat Sanchar Nigam Limited v. Nortel Networks India Private Limited (2021) 5 SCC 738, which was cited by the defendants, the Hon'ble Supreme Court held that Article 137 of the Limitation Act is applicable https://www.mhc.tn.gov.in/judis 34/79 C.S.No.190 of 2012 to determine the period of limitation for a petition under Section 11 and contrasted this with the limitation period for initiating arbitration.
Besides, ordinarily, limitation is required to be decided by the receiving court and, in this case, issue No.12 was framed on limitation. Secondly, the Court did not take into account Section 21 of the Arbitration Act and its implications. Since the said order attained finality, it is unnecessary to dilate further on that aspect; instead, the discussion on this aspect may be concluded by holding that the order dated 22.01.1999 of this Court in O.P.No.277 of 1998 did not deal with or decide the question of limitation for filing the suit.
33. If the matter is not decided entirely on the basis of the order dated 28.11.2011, the question that would arise is whether the plaintiff is entitled to exclude the period between the date of receipt of the notice dated 19.05.1997 and the date of receipt of the order dated 28.11.2011 while computing the period of limitation. While the plaintiff contended that he is entitled to the benefit of Section 14 of the Limitation Act, the defendants contended that the Section 11 proceedings were not bona fide by referring to the plaintiff's communication of 11.07.1993(Ex.P111). On perusal of the communication dated 11.07.1993, it is clear that the plaintiff, upon examining the dispute resolution clause in the Agreement, had a doubt as to whether arbitration may be resorted to for resolution of the dispute with the defendants. Clause 3 of the Agreement, which deals https://www.mhc.tn.gov.in/judis 35/79 C.S.No.190 of 2012 with dispute resolution, is set out below:
“(3) The arbitrator for fulfilling the duties set forth in the arbitration clause of the Standard Preliminary Specification shall be Superintending Engineer of Madurai Circle Madurai up to Rs.50,000/- and claim above Rs.50,000/-
competent civil court.” On examining the above dispute resolution clause, without fear of contradiction, it may be said that it is neither elegantly drafted nor free from ambiguity. The same may be said of the relevant clause of the Standard Preliminary Specifications, which specifies competent civil court under the heading “Arbitrator” and is therefore equivocal. Cognizance should also be taken of the changes in the legal position:
in Konkan Railway Corpn. Ltd v. Rani Construction (P) Ltd., (2002) 2 SCC 388, it was held that an order in a Section 11 petition under the Arbitration Act is an administrative order, whereas, in S.B.P and Company v. Patel Engineering Limited and Another, (2009) 10 SCC 293, it was held that it is a judicial order. These changes, undoubtedly, adversely impacted the plaintiff and clearly interfered with the trajectory of the proceedings that followed after the order in the Section 11 petition. The admitted position is that no counter claims were made by the defendants and, therefore, the primary sufferer in case of delay is the plaintiff. It should also be noticed that the dispute arises out of a complex construction contract involving voluminous https://www.mhc.tn.gov.in/judis 36/79 C.S.No.190 of 2012 documentation. The request and endeavour to resolve the dispute through arbitration in these circumstances cannot be construed as unreasonable or not bona fide.
34. The defendants also contended that the Section 11 petition was rejected on the ground of limitation and not on the ground of lack of jurisdiction and that Section 14 of the Limitation Act is, consequently, inapplicable. The factual limb of this contention is borne out by the order passed in O.P.No.277 of 1998. However, the matter did not find end there and, eventually, the order dated 18.11.2011 was issued in the writ petition. This order refers to an earlier order of the Hon'ble Supreme Court in State of Andhra Pradesh v. Obul Reddy (2001) 10 SCC 30 interpreting a similar dispute resolution clause and concluding that only a civil court would have jurisdiction. Therefore, eventually, the plaintiff's request for arbitration was rejected on grounds of jurisdiction. Consequently, in my view, the plaintiff is entitled to the benefit of Section 14 of the Limitation Act by excluding the period commencing from 24.07.1997 (the date of receipt of the notice dated 19.05.1997) and ending on 02.02.2012 (date of receipt of order dated 28.11.2011). It was previously concluded that the period of limitation should be computed from 03.07.1996. If so computed, about one year elapsed from the said date to the date of receipt of the Section 11 notice. This period should be counted for limitation purposes. If this period is reckoned after excluding the period of https://www.mhc.tn.gov.in/judis 37/79 C.S.No.190 of 2012 prosecution of proceedings seeking arbitration, the suit is within time.
Thus, Issue No.12 is decided in favour of the plaintiff and against the defendants.
Issue No.13
35. Issue 13 relates to whether the suit is liable to be dismissed on the ground of laches. The plaintiff sued for recovery of money, which is an action for non-discretionary relief to which a party would be entitled provided such party proves all elements of the cause of action. Unlike the ground of limitation, which was decided in favour of the plaintiff, a suit for non-discretionary relief is not liable to be dismissed on the ground of laches. Nonetheless, it is a material consideration for purposes of deciding the interest claim on each claim, and this aspect is discussed next. As detailed above, the plaintiff filed O.P.No.277 of 1998 after issuing notice dated 19.05.1997. The proceedings arising out of or related to O.P.No.277 of 1998 were eventually concluded by order dated 28.11.2011. The present suit was filed thereafter. As correctly pointed out by learned Advocate General, the plaintiff was aware of the ambiguity in the contractual provision dealing with adjudication of disputes. This is clear from the letter dated 11.07.1993 (Ex.P111) seeking the defendants' consent for arbitration. In spite of the defendants rejecting the request for arbitration on 03.07.1996, the plaintiff proceeded to institute proceedings under Section 11 and multiple proceedings arising there https://www.mhc.tn.gov.in/judis 38/79 C.S.No.190 of 2012 from or relating thereto. Since the plaintiff opted for this course of action bona fide but consciously, the plaintiff was held to be entitled to the benefit of Section 14; otherwise, the suit would have been barred by limitation. In my view, even if it is concluded that the defendants are liable in respect of some or all of the monetary claims made by the plaintiff, the defendants are not liable to be mulcted with interest liability during the period when the above proceedings were pending. Consequently, notwithstanding the conclusions on the liability of the defendants to pay the principal amounts claimed by the plaintiff, the period running from 03.07.1996 (the date of rejection of the request for arbitration, Ex.P147) to 17.02.2012 (the date of institution of the present suit) shall be excluded while deciding the interest liability of the defendants.
Issue No.11:
36. Issue No.11 pertains to the territorial and pecuniary jurisdiction of this Court. The evidence on record discloses that many communications were received by the defendants within the jurisdiction of this Court. In addition, the defendants relied upon clause 18 and contended that the competent civil court has jurisdiction. In view of the fact that at least a part of the cause of action has arisen within the jurisdiction of this Court, Issue No.11 is decided in favour of the plaintiff.
https://www.mhc.tn.gov.in/judis 39/79 C.S.No.190 of 2012 Issues Nos.1 and 2:
37. Issue Nos.1 and 2 are interrelated. Issue No.1 raises the question whether the defendants committed breach of contract and prevented performance of work and Issue No.2 relates to whether the rejection of the claim of the plaintiff for payment at market rate for work executed after 21.06.1990 is illegal and unjustified. Before delving into these issues, by way of preamble, a few words on the nature of and rationale for an escalation claim are in order.
Construction contracts may be classified into three broad categories based on payment terms: fixed price, unit rate and cost-plus. Both in unit rate and cost-plus contracts, it is typical to annex a bill of quantities and specify the estimated quantity and unit rate for each item of work or incorporate by reference a schedule such as the TN PWD Schedule of Rates or the Delhi Schedule of Rates. Usually but not necessarily, such contracts contain a price variation clause with a prescribed formula. In most modern construction contracts, the label price variation is used in preference to escalation because prices may go up or down. This clause would get triggered whenever there is an escalation or deflation in cost of men and materials. Such clauses are also seen in fixed price contracts. If a fixed price contract prohibits a price variation claim, the implicit understanding is that the contractor assumes the risk of escalation over the term of the contract. Consequently, he has the option of submitting a bid that reckons potential escalation over the term of the contract. However, if work https://www.mhc.tn.gov.in/judis 40/79 C.S.No.190 of 2012 under the contract is executed over an extended period, it is unlikely that a reasonable contractor would have factored escalation over such extended period while making the bid. No doubt, it is open to a contractor to assume this risk while executing the contract but unambiguous language that unequivocally expresses the intention of the parties to keep prices firm until completion of work, including over the extended period, would be required. This would result in the employer receiving bids at higher prices and would not typically be preferred by an employer. I now proceed to examine these issues.
38. According to the plaintiff, the defendants, who were under several obligations under the Agreement, failed to perform the same and this caused delay. In order to evaluate the impact of prevention and delay in construction contracts, typically, critical path analysis is necessary because certain activities can only be performed sequentially whereas others may be performed concurrently. Anything that delays or prevents performance of activities on the critical path would cause delay in completion of the project, whereas activities outside the critical path may not have such impact. The person responsible for the delay could be the contractor or employer, or a third party, or a force majeure event. Concurrent delays by both the contractor and employer add a level of complexity and nuance although extension of time, if not compensation, is generally granted to the contractor in such event. For purposes of making the above https://www.mhc.tn.gov.in/judis 41/79 C.S.No.190 of 2012 assessment, the construction schedule, including the sequential activities and, ideally, an as-impacted schedule is required. Fortunately, the plaintiff has not not made a prolongation claim for which critical path analysis would have been critical but it is also material in the context of the escalation and disruption claims. Except the contract documents and correspondence, since the plaintiff was not in possession of documents, he called upon the defendants to produce documents. In spite of a Court order, the defendants failed to produce these documents. In these circumstances, conclusions have to be drawn on the basis of available records, including by drawing an adverse inference, wherever appropriate.
39. According to the plaintiff, one of the obligations of the defendants was the obligation to finalize the design, drawings and structural particulars of the RCC backing. The plaintiff asserted that the defendants finalized the same only on 28.06.1989. The plaintiff also stated that the defendants provided the approval for the cement contract mix on 20.07.1989 and directed the plaintiff to postpone commencement of works until 16.11.1989 in view of the high water level. Although the plaintiff made the above assertions, the plaintiff has not adduced any documentary evidence to establish the above assertions. In fact, the communications dated 04.07.1989 (Ex.P15) and 14.07.1989 (Ex.P84) from the plaintiff to the second defendant disclose that the Plaintiff's construction programme provided for https://www.mhc.tn.gov.in/judis 42/79 C.S.No.190 of 2012 concreting only in September 1989 both due to the expected monsoon and labour unrest. Thus, the alleged delay in finalisation of designs and drawings for the RCC backing and approval for the cement concrete mix, even if true, did not impact execution of work. The fourth reason cited by the plaintiff is that the ghat-road was washed-away and restored after considerable delay. As regards this contention, the plaintiff relied on communications dated 29.07.1989 (Ex.P85) and 30.8.1989 (Ex.P17) by which the defendants were informed that the approach road to the site road had been completely washed away and a subsequent communication dated 01.12.1989 (Ex.P88) where the Plaintiff informed the second defendant that he is forced to stop work because of the inconvenience caused due to lack of facilities for doing work. In response to this contention, the defendants stated that the contract provides that the access to the site is the responsibility of the plaintiff and that no claims are permitted in respect thereof. In particular, the defendants relied on clause -18, which is as under:
“18. The Contractor shall form his own approach to the works site for which no extra will be due to him. The Contractor is allowed to use the existing roads and he shall maintain them in good condition at his own cost throughout the period of the contract.”
40. Although the defendants relied on this clause, it should be noticed that this clause permits the contractor to use existing roads.
https://www.mhc.tn.gov.in/judis 43/79 C.S.No.190 of 2012 The undisputed position is that a ghat-road was in existence at the time of submission of the bid and that the said ghat-road was washed away in the floods in 1989. In communication dated 01.12.1989 (Ex.P88), the plaintiff stated that the Kerala Forest Department is preventing the repair work on the ghat road and that men and material are idling at site. By virtue of clause 18, the contractor would be responsible for building or forming any approach roads, other than the roads that existed on the date of submission of the bid. If roads, which existed on the date of submission of the bid and were recognised and permitted to be used for undertaking work, were subsequently damaged by floods or for any other reason not attributable to the contractor, the employer is responsible.
41. The plaintiff also cited the lack of consent from the Government of Kerala for quarrying in the reserved forest until 23.12.1989. In support of this contention, the plaintiff relied on the letter dated 23.12.1989 (Ex.P22) from the Government of Kerala granting permission for quarrying. This letter is addressed by the Government of Kerala to the Additional Conservator of Forests (Wildlife), Trivandrum. By this letter, the Tamil Nadu Public Works Department authorities were permitted to continue quarrying. Prior to this order, through communication dated 21.11.1989 (Ex.P87), the Plaintiff informed the second defendant that the Kerala Forest Department objected to the blasting of rocks from the quarry and by https://www.mhc.tn.gov.in/judis 44/79 C.S.No.190 of 2012 communication dated 01.12.1989 (Ex.P88), he further conveyed that one worker engaged in the quarrying work was arrested. By communication dated 14.12.1989 (Ex.P21), the defendants stated that the plaintiff was citing the absence of permission for blasting of rocks as an excuse for tardy progress in execution. However, the said communication discloses that arrangements were being made to get permission for blasting of rocks and Ex.P22 discloses that such permission was granted only on 23.12.1989.
42. The plaintiff has also placed on record several requests for extension of time for completion and the extensions granted in response thereto. These requests for extension were made citing a variety of reasons as would be evident from the following. The first extension request up to 30.06.1991 was made on 02.07.1990 (Ex.P92) citing reasons of labour dispute, damaged approach road to dam site and other damage due to rain. Considering the special circumstances, the second defendant granted an extension till 31.03.1991. The second extension request until 30.06.1991 was made on 25.02.1991 (Ex.P40) citing the additional reason of non-availability of diesel, and Ex.P41 reveals that the work stopped for a while due to diesel scarcity until the Madurai Collector allotted about 17900 litres of diesel for the resumption of work. The third extension request until 31.12.1991 was made on 25.05.1991 (Ex.P51) citing labour unrest, floods and high water level and resistance from the Forest Department https://www.mhc.tn.gov.in/judis 45/79 C.S.No.190 of 2012 as reasons. The fourth extension request till 31.03.1992 (Ex.P98) was made on 24.12.1991 citing the reasons cited earlier and poor electricity supply and acute shortage of blasted stones as additional reasons. By communication dated 06.03.1992 (Ex.P68), the defendant conveyed dissatisfaction over completion of only 55% of the work but granted the extension. Subsequently, a fifth extension until 30.06.1992 was given vide communication dated 26.03.1992 (Ex.P69). The communication dated 18.11.1992 (Ex.P100) from the plaintiff refers to the 1992 cyclone and conveys that the above had damaged the site and caused loss to the extent of Rs.78,01,400/-. Subsequent extensions were given until 31.12.1992 and 28.02.1993 (Ex.P80), the latter with a fine of Rs.500/-. Due to the indefinite strike announced by the labourers, an extension was granted till 30.04.1993 (Ex.P103) along with a show cause notice as to why the Agreement should not be terminated with forfeiture of E.M.D. for slow progress. Two further extensions were granted with a penalty of Rs.1000/- each. The final extension was till 30.05.1994.
43. Thus, it is evident that the time for execution was extended periodically for a variety of reasons until end-May 1994 and, eventually, the contract was fully executed on 23.05.1994. The documents discussed above lead to the inference that some reasons cited by the plaintiff such as the washing-away of the existing ghat road and the blasted stones were clearly not attributable to the https://www.mhc.tn.gov.in/judis 46/79 C.S.No.190 of 2012 plaintiff, certainly impeded execution of work by the plaintiff and the consequences thereof should be borne by the defendants. Other reasons such as scarcity of diesel or the floods in 1992, in which materials were washed away, were beyond the control of the plaintiff but are not attributable to the defendants. The third category of reasons such as labour unrest are attributable to the plaintiff. In the context of an escalation claim, as opposed to a prolongation claim, attribution to the defendants is not a necessary condition. As stated earlier, in spite of being called upon to provide material documents with regard to execution of work, such as the measurement book, materials supply book, construction schedule and progress, etc., all of which were in the custody of the defendants, these documents were not produced. Therefore, it is not possible to discern the critical path and evaluate the impact of the multiple delay events scientifically. But, it is clear that many of these delay events cannot be attributed to the plaintiff. The escalation claim warrants attention against this factual backdrop.
44. The critical question that arises for consideration is whether the plaintiff is entitled to claim escalation on account of increase in prices of materials and cost of man power. The Agreement specified the consideration of Rs.2,18,85,430/-. Although this consideration is on lump- sum basis, the contract also prescribes the scope of work, which is divided into 19 items, with the unit rate and https://www.mhc.tn.gov.in/judis 47/79 C.S.No.190 of 2012 quantity being specified in respect of each item. Thus, it appears that the sum of Rs.2.18,85,430/- was arrived at on the basis of the rates specified against each item in the scope of work. The plaintiff asserted that the rates indicated therein were drawn from the applicable PWD rates in 1985 and that these rates were intended to be applied during the original contract period. There is some confusion as to when the original contract period ended because the plaintiff asserted that possession of the site was handed over on 22.03.1989, whereas the communication dated 22.04.1989 (Ex.P7) indicates that it was handed over by the Tamilnadu Public Works Department officials to the Plaintiff on 22.04.1989. If calculated from 22.03.1989, the 15 month period would end on 21.06.1990, whereas, if calculated from 22.04.1989, it would end on 21.07.1990. Upon appraisal of the evidence on record, I conclude that the plaintiff failed to establish that possession was handed over on 22.03.1989. Therefore, the extended period would run from 22.07.1990. In order to substantiate the claim for escalation, the plaintiff produced the revised PWD rates and exhibited the same as Ex.P149. The plaintiff also relied on communication dated 02.07.1990 (Ex.P92) by which the plaintiff, while requesting for extension on the contract period until 30.06.1991, prayed for a suitable enhancement of not less than 40% above the rates prescribed in the Agreement. In addition, the plaintiff relied on the subsequent communication of 15.03.1993 (Ex.P101), whereby the Plaintiff again requested for price escalation citing increase in prices of materials and labour rate hike. https://www.mhc.tn.gov.in/judis 48/79 C.S.No.190 of 2012 On 11.07.1993, in a petition praying for price escalation to the Secretary to Government of Tamil Nadu (Ex.P110), the plaintiff claimed 100% more than the rates specified in the Agreement.
45. The plaintiff also relied upon the cross-examination of DW1 and, in particular, the following questions and answers:
Question: Is it not correct to say that the computation of value of work in Ex.P149 is consistent with the rates notified in Ex.P101?
Answer: Yes Question: Where do you get the rates of wages payable to the workers employed for carrying out the works.
Answer: PWD Department's Schedule of rates Question: I put it to you that the plaintiff as early as 02.07.1990 (Ex.P92) and 15.03.1993 (Ex.P101) had notified the market rates chargeable for the works delayed beyond the original period expired on 21.06.1990 and there is no reference in Ex.P146 to the same and hence the rejection is without any reason.
Answer: I do not know.
Question: The attention of the witness is drawn to Ex.P92 and P101. Is it not correct to say that the plaintiff has carried out the works delayed by the defendants beyond 21.06.1990 only after notifying market rates chargeable for the same including on 02.07.1990 (Ex.P92) and 15.03.1993 (Ex.P101) etc. https://www.mhc.tn.gov.in/judis 49/79 C.S.No.190 of 2012 Answer: I do not know. However, the rates demanded in Ex.P92 is (+) 40% over the rates in Ex.P2 agreement and in Ex.P101, it is mentioned that the defendants are accounting for only 50% value of the works at current schedule of rates.
Question: Is it correct to state that all the works carried out by the plaintiff and forming the subject matter of the suit was carried out under the instructions and direct supervision of the defendants.
Answer: Yes
46. These contentions were refuted by the defendants by relying upon the Agreement and on communication dated 05.06.1996 (Ex.P146). By communication dated 05.06.1996, the defendants rejected the claim for price escalation on the ground that there is no price escalation clause in the Agreement. In course of oral arguments, the defendants relied upon clause 59 of the “Madras Detailed Standard Specifications”, which, in relevant part, is set out below:
“59. Delays and extension of time:-
No claim for compensation on account of delays or hindrances to the work from any cause whatever shall lie, except, as hereinafter defined. Reasonable extension of time will be allowed by the Executive Engineer or by the officer competent to sanction the extension, for unavoidable delays, such as may result from causes, which, in the opinion of the Executive Engineer are undoubtedly beyond https://www.mhc.tn.gov.in/judis 50/79 C.S.No.190 of 2012 the control of the contractor. The Executive Engineer shall assess the period of delay or hindrance caused by any written instructions issued by him, at twenty- five per cent in excess of the actual working period so lost.”
47. The above clause prescribes that no claim for compensation on account of delay is maintainable, but provides for reasonable extension of time in such circumstances. One of the consequences of a contract being executed beyond the originally specified time limits is that the contractor is required to deploy men and material for a longer period of time at the same cost. This is particularly relevant in the context of fixed price contracts. A claim for compensation for the deployment of men and materials for a longer period is called a prolongation or extended stay compensation claim and is claimed on the basis of actual and entire site expenditure and actual and entire or proportionate off-site expenditure, as appropriate, during such period. In the present case, the work was originally scheduled to be completed by 21.07.1990, whereas it was executed until 23.05.1994. The contractor has not claimed compensation for deployment of men and material for a longer duration than that originally envisaged. To put it differently, the claim is not a prolongation claim. If it were a prolongation claim, clause 59 of 'Madras Detailed Standard Specification” would be relevant and would prohibit such claim.
https://www.mhc.tn.gov.in/judis 51/79 C.S.No.190 of 2012
48. Instead, the claim of the contractor is for escalation on account of the increase in PWD rates. In other words, it is for the difference between the PWD rates of 1985 and the applicable PWD rates when work was carried out. The defendants also relied on the Note to clause 12 to resist the claim for escalation, and the same is set out below:
“Note: No consideration shall be given for any fluctuation in the rates of materials or labour during the period of relevancy of the contract due to any cause whatsoever save as arising due to excepted risks vide clause of P.3 to TNCS” Unlike clause 59 of the Madras Detailed Standard Specifications, this clause clearly prohibits a claim for escalation during the original term of the contract, but does not expressly refer to or deal with the extended period. While it could be contended that the expression “relevancy of the contract” should be construed as covering the extended period, there is sufficient ambiguity to construe it contra proferentum because it is a contract drafted by the defendants. Therefore, the legal position should be examined. In cases such as Continental Construction Co. Ltd. v. State of Madhya Pradesh AIR 1988 SC 1166 and New India Civil Erectors (P) Ltd. v. Oil and Natural Gas Corporation (1997) 11 SCC 75 (New India Civil Erectors), the Supreme Court held that escalation cannot be granted if prohibited by https://www.mhc.tn.gov.in/judis 52/79 C.S.No.190 of 2012 the contract. In P.M.Paul v. Union of India (1989) Supp.(1) SCC 368, the Hon'ble Supreme Court held that escalation is the natural consequence of efflux of time and therefore may be granted even by an arbitral tribunal if the relevant contract does not prohibit the grant of escalation. In other words, it was held that escalation could be granted even if the contract does not contain provisions governing escalation. On the same lines are the judgments in T.P.George v. State of Kerala (2001) 2 SCC 758 and Tarapore and Co. v. State of M.P. (1994) 3 SCC 521. In K.N. Sathyapalan v. State of Kerala (2007) 13 SCC 43, the Supreme Court held that the contractor therein was entitled to escalation even though the relevant supplementary agreement prohibited a claim for escalation, albeit on evidence that such supplementary agreement was signed under protest.
49. The contract, in this case, prohibits escalation during the term thereof but does not deal with escalation in the extended period. In this connection, it should be noticed that it is reasonably common to see contracts that use expressions such as “the prices are fixed until completion of work, including during the extended period, and there shall be no claim for escalation for any reason whatsoever. For instance, the language used in New India Civil Erectors was “....until completion of work”. Since this contract does not contain such language, the escalation claim merits consideration. In Assam State Electricity Board v. Buildworth Private Limited (2017) 8 SCC 146, the https://www.mhc.tn.gov.in/judis 53/79 C.S.No.190 of 2012 Supreme Court concluded that an arbitral award in which the arbitrator interpreted the relevant escalation clause as not prohibiting escalation in the extended period as a conclusion that did not warrant interference. The admitted position is that the Tamil Nadu PWD rates of 1985 were adopted in this contract. It is also admitted by the parties and judicial notice may be taken of the fact that the PWD rates are revised annually. The plaintiff produced a computation based on the 1994-95 PWD rates. As regards the suit claim in respect of escalation, the plaintiff claimed that work of the value of Rs.2,99,55,216/- was executed between 21.06.1990 and 23.05.1994. The evidence of DW1 discloses that this claim is based on the revised PWD rates. DW1 also admitted that even the labour rates were fixed on the basis of PWD rates. Therefore, the plaintiff has established his entitlement to escalation at the appropriate revised PWD rates for the extended period between 22.07.1990 and 23.05.1994, i.e for 46 months. If the escalation claim of Rs.1,06,16,941/- is divided by the extended period (22.06.1990 to 23.05.1994), as per the plaintiff, in months(47 months), the proportionate claim per month would be Rs.2,25,892/-. Consequently, the plaintiff is entitled to Rs.2,25,892/- per month as escalation for 46 months and not 47 months. This aggregates to a sum of Rs.1,03,91,049/-. As regards interest, as already concluded, the plaintiff is entitled to interest on this amount from 23.05.1994 (as per plaint) till 03.07.1996 (date of rejection) and again from 17.02.2012 (date of suit) till the date of payment. Thus, https://www.mhc.tn.gov.in/judis 54/79 C.S.No.190 of 2012 issue Nos.1 and 2 are decided in favour of the plaintiff and against the defendants.
Issue No.4:
50. Issue No.4 pertains to the liability of the defendants to pay for 39,000 cum of broken stones obtained by the plaintiff by blasting hard rock in the reserved forest in Kerala State. The plaintiff contended that he was entitled to use the stones which were stored at the blasted stones storage yard by relying on clause 14(b) and the lead statement. The defendants, on the other hand, also relied on the above mentioned clause 14(b) and the lead statement to contend that the plaintiff is not entitled to any extra charge with regard to procurement of blasted stones. Since both parties rely upon clause 14(b) and the lead statement, the same are set out below:
Clause 14(b) is as under:
“(b) The broken stone and rough stone required for concrete and other works, should be obtained from the excavated stones preserved at dumping yard at “Additional Vents Regulator” site and the tenderer fully satisfy himself about the availability of excavated stones and using them for this purposes and no extra charges shall be allowed even if the tenderer is to obtain such rough stone or broken stone from any other source to his convenience or any other https://www.mhc.tn.gov.in/judis grounds.” 55/79 C.S.No.190 of 2012 Note (1) to the lead statement also deals with the same subject and is set out below:
Sl. Name of Lead Source Materials No.
1. Broken Stone 250 M.H.D + 1 (Blasted stones in dumping yard at site KCT GR of valley portion below regulator at Periyar Dam Additional vents site “Note: 1) The Rough stone for masonry (or) Broken stones for concrete shall be obtained by breaking the excavated stone reserved at sites and the contract should fully satisfy himself about the availability of excavated stones and using them for these purpose and no extract rates shall be allowed even if the Contractor happens to obtain such rough stone (or) broken stone from any other source to suit his convenience (or) on any other grounds.
(2) This site will be handed over as soon as the contract is concluded.”
51. On examining the above clause and the lead statement, it is evident that the contentious issue pertains to the circumstances under which no extra rates shall be allowed to the contractor.
According to the defendants, the prohibition against the grant of extra rates applies to the facts of this case inasmuch as the contractor made a claim for blasting of rock between 30.08.1989 and 23.05.1994 and such claim is not permissible under clause 14(b). On reasonable https://www.mhc.tn.gov.in/judis 56/79 C.S.No.190 of 2012 interpretation, in my view, this clause is applicable if the contractor chooses to source rough stone by blasting rocks or in any other manner in spite of the availability of excavated stone at the blasted stones storage yard. The admitted factual position is that the excavated stones, which were stored at the above mentioned site when the contract was awarded to the contractor, were washed away during the floods on 24.07.1989, albeit when it was under the custody of the Plaintiff. This was brought to the attention of the defendants by letter dated 20.01.1990(Ex.P90) and necessitated excavation of stones by undertaking blasting. Towards such end, letters dated 14.12.1989 and 23.12.1989 (Exs.P21 and P22) were exhibited evidencing that permission was required in this regard and that such permission was granted by the Government of Kerala on 23.12.1989. Although it could be contended that the blasted stones storage yard was in the possession of the plaintiff, it should be recognised that the site was chosen by the defendants and the materials were not washed-away due to the negligence of the contractor but on account of factors beyond the reasonable control of the plaintiff. As a result, the plaintiff could not use materials intended for use in construction and had to incur additional costs. In these circumstances, the rejection of the claim made by the plaintiff by communication dated 09.03.1990(Ex.P36) is not in accordance with the Agreement. https://www.mhc.tn.gov.in/judis 57/79 C.S.No.190 of 2012
52. The claim has been made at rates ranging from Rs.68/cum to Rs.225/cum. The justification appears to be on the basis of inflation in labour and material costs. An aggregate principal claim of Rs.64,22,500/- and, by adding accrued interest thereon, a consolidated claim of about Rs.2.64 crore has been made. The defendants have not contested this claim either with regard to the total quantity of blasted stones that were excavated by the plaintiff or with regard to the rates at which the plaintiff has made the claim. As stated earlier, the only defence raised by the defendants to this claim is on the basis of clause 14(b) and Note: I of the lead statement. As concluded earlier, the interpretation placed by the defendants on clause 14(b) and Note: 1 of the lead statement is unacceptable. Consequently, the plaintiff is entitled to the principal claim. As regards interest, the entitlement to interest is restricted to the permitted period after excluding the entire period during which the petition under Section 11 and other proceedings arising out of or relating thereto were prosecuted.
Issue Nos.6:
53. Both issues 6 and 9 relate to claims for alleged idling. The first idling claim of the plaintiff relates to the period between 24.07.1989 and 28.12.1989. According to the plaintiff, work was disrupted for 137 days during the above mentioned period as a result of causes attributable to the defendants. Consequently, the plaintiff https://www.mhc.tn.gov.in/judis 58/79 C.S.No.190 of 2012 was unable to utilize one compressor, two diesel vibrators, 20 tippers and one generator during the said period. The plaintiff asserted that work could not be carried out during this period because the only existing ghat-road had been washed-away and, therefore, there was no approach road to the site. The plaintiff relied upon communications dated 29.07.1989, 30.08.1989, 01.12.1989 and 08.01.1990 (Exs.P85,17,88 and 89, respectively) in support of this contention. The plaintiff also relied upon the following question and the answer thereto of DW1:
Question: the attention of the witness is drawn to exhibit Ex.P45. Kindly spell out the machinery and equipments deployed at site for carrying out the work.
Answer: Compressor – 1 No.1, Diesel Vibrator-2 No., Tipper – 20 No. and Generator No.1.
54. On perusal of the above exhibits, it is clear that Exs.P85 and P17 deal with the lack of an access road and the washing-away of materials of the value of Rs.4 lakhs. By communications dated 01.12.1989 (Ex.P88) and 08.01.1990 (Ex.P89), the plaintiff put the defendants on notice with regard to the idling of men and material.
The idling claim relates to the period extending from 24.07.1989 to 28.12.1989, and these communications were sent on 01.12.1989 and 08.01.1990, which is within a reasonable time after the impediment. https://www.mhc.tn.gov.in/judis 59/79 C.S.No.190 of 2012 The claim in the communication dated 08.01.1990 is at Rs.2503 per day (Rs.2119/- per day for equipments and Rs.384/- per day for staff wages) from 01.09.1989. By contrast, the claim in the notice dated 19.05.1997 is at Rs. 17000 per day for 137 working days from 15.07.1989 to 28.12.1989. While evaluating and assigning materiality and weight to evidence, greater credibility is attached to statements made contemporaneously. It is also pertinent to notice that the plaintiff had informed the defendants on 14.07.1989 (Ex.P84) that after making all arrangement until end-August, concreting would start in September. This communication is compatible with an idling claim from September 1989 but not July 1989. Ordinarily, an idling claim would be subject to the obligation to mitigate by demobilisation followed by remobilisation. Considering the limited idling period and the site location and conditions, however, it would not be reasonable to expect the contractor to undertake the above exercise in mitigation. As such, the the plaintiff is entitled to this claim at Rs.2503 per day from 01.09.1989 to 28.12.1989, which is about 118 days. Even without excluding non-working days, the amount payable would be Rs.2,95,354 instead of Rs.23,29,000. Therefore, claim (e) is partly allowed.
Issue No.9:
55. Issue No.9 deals with idling charges in respect of the cement weigh batching plant and stone crusher unit. This claim is for the period 09.01.1995 to 04.12.1995, which is the post-execution https://www.mhc.tn.gov.in/judis 60/79 C.S.No.190 of 2012 period. Therefore, atypically, this is an idling but not a disruption claim. The plaintiff contended that these equipments were hypothecated to the defendants as security for the machinery advance of Rs.15 lacs. The machinery advance was recovered by the defendants by making adjustments against the amounts due and payable to the plaintiff for work done. After the machinery advance had been fully recovered along with interest thereon at 18.5% p.a., the plaintiff issued letters dated 09.01.1995, 28.03.1995 and 04.10.1995 (Exs.P139, P142, P143) and requested the defendants to release the hypothecation. Eventually, the hypothecation was released by issuing letter dated 16.11.1995 (Ex.P144) but the plaintiff was permitted to shift the machineries by communication dated 04.12.1995(Ex.P189). The plaintiff asserted that the batching plant and stone crushing unit could not be put to use because of the hypothecation. The defendant has been unable to controvert these assertions. An aggregate principal claim of Rs.19.60 lacs has been made by claiming Rs.8000/- per day towards the batching plant and Rs.7000/- per day towards the stone crusher unit. The plaintiff is entitled to this sum. As regards interest, the plaintiff is entitled thereto from 23.05.1994 (the date of completion of work) till 03.07.1996 and thereafter from 17.02.2012 (the date of suit) till the date of realization. Issue Nos.6 and 9 are disposed of as above.
https://www.mhc.tn.gov.in/judis 61/79 C.S.No.190 of 2012 Issue No.10:
56. Issue 10 relates to the claim for reimbursement of the cost of materials washed away during the floods. According to the plaintiff, 3000 bags of cement, bitumen pad, river sand and broken stones had been stored at site. These materials were washed away during three spells of floods between July and November 1992. The plaintiff notified the defendants about the loss of materials on 18.11.1992 (Ex.P100) by making a claim of Rs.78,01,400/-. This sum includes idling charges for the batching plant and stone crushing unit at Rs.6.08 lacs and Rs.5.32 lacs, respectively, for 76 days. This claim was reiterated by communications dated 08.07.1993 and 11.07.1993(Exs.P109 and P111). In communication of 08.07.1993, the plaintiff did not quantify the claim. There do not appear to be any communications specifically dealing with and rejecting the said claim.
In course of oral arguments, the defendants contended that this claim is not maintainable in view of the express provisions of the Agreement. In particular, the defendants relied upon clause-5 of Part I - General Conditions of the Contract, which is set out below:
“5. The contractor shall have no claim for any loss due to unforeseen circumstances such as flood, slipping of earth, etc., including suspension of work due to any cause”.
https://www.mhc.tn.gov.in/judis 62/79 C.S.No.190 of 2012
57. On examining the above clause, it is evident that it precludes all claims for losses to the contractor on account of floods, including if work is suspended as a result thereof. While it could be contended that the contractor is not entitled to even the cost of extracting stones by blasting or idling due to non-availability of the ghat road by virtue of this clause, a material difference is that those claims related to materials and infrastructure provided to the contractor under the contract and reckoned while submitting the bid.
By contrast, this claim relates to the contractor's materials. In terms of this clause, if any damage is caused due to floods, no claim can be made. Therefore, the contractor is not entitled to reimbursement of the alleged cost of materials which were washed away. The last limb of this clause also covers suspension of work. Thus, it appears that even if work is suspended due to floods, the contractor is not entitled to make a claim towards idling. In view of the said clause, the claim for Rs.78,01,400/- towards the alleged price of washed-away materials and idling of batching plant and stone crusher is rejected.
Issue Nos.3, 7 and 8:
58. Issue Nos.3, 7 and 8 pertain to refund. While Issue No.3 deals with the legality of the penalty of Rs.80,000/- imposed on the plaintiff for slow progress, Issue No.7 deals with its refund claim and Issue No.8 deals with refund of compounding fee of Rs.10,000/, including interest. The plaintiff contended that these claims are https://www.mhc.tn.gov.in/judis 63/79 C.S.No.190 of 2012 maintainable and sustainable because the delay is either attributable to the employer or beyond the control of the contractor. On the other hand, the defendants contended that the delay is attributable to the contractor or is not attributable to the employer. The admitted position is that the contract was extended periodically and was eventually completed on or about 23.05.1994. The discussion on the requests for extension of time and the responses thereto indicate that some reasons for delay were not attributable to the contractor, such as the washing-away of the ghat road and the blasted stones, whereas the labour unrest and initial delay in undertaking work were causes for which the contractor is responsible. On balance and taking into account the quantum of penalty, the plaintiff is not entitled to refund.
59. Issue No.8 pertains to the compounding fee paid by the plaintiff. The plaintiff asserted that it is the responsibility of the defendants to obtain permission for blasting of rocks. On the contrary, the defendants relied upon clause–2 of the Additional Special Conditions and contended that the plaintiff is responsible for obtaining necessary licences. Clause-2 of the Additional Special Conditions is set out below:
“The contractor shall equip himself with explosive licence, blasting licence etc. required for quarrying work, failing which, he is liable to prosecution by the Kerala Government.
https://www.mhc.tn.gov.in/judis 64/79 C.S.No.190 of 2012
60. In this case, a prosecution was lodged against the plaintiff for undertaking quarrying without a blasting licence. In view of the above clause, the plaintiff is certainly not entitled to refund or reimbursement of the compounding fee which was paid. Issue Nos.3, 7 and 8 are disposed of as above.
61. In the result, C.S.No.190 of 2012 is partly decreed as follows:
(i) Prayer A and D are partly allowed by directing payment of a sum of Rs.1,03,91,049/- by the first defendant as escalation with interest thereon at 9% per annum from 23.05.1994(date of completion of work) until 03.06.1996(date of rejection of request for arbitration) and again from 17.02.2012(date of suit) until realisation.
(ii)Prayer C is partly allowed by directing payment of a sum of Rs.64,22,500/- by the first defendant towards cost of extracted stones by blasting with interest thereon at 9% per annum from 23.05.1994 (date of completion of work) until 03.07.1996(date of rejection of request for arbitration) and again from 17.02.2012 (date of suit) till the date of realization.
(iii) Prayer E is partly allowed by directing the first defendant to pay the sum of Rs.2,95,354 towards idling between 01.09.1989 and 28.12.1989 at Rs.2503 per day with interest thereon at 9% https://www.mhc.tn.gov.in/judis 65/79 C.S.No.190 of 2012 per annum from from 23.05.1994 (date of completion of work) until 03.07.1996(date of rejection of request for arbitration) and again from 17.02.2012 (date of suit) till the date of realization.
(iv) Prayer H is partly allowed by directing the first defendant to pay the sum of Rs.19,60,000/- towards idling of the concrete weigh batching plant and stone crusher unit between 09.01.1995 and 04.12.1995 with interest thereon at 9% per annum from 23.05.1994 (date of completion of work) until 03.07.1996(date of rejection of request for arbitration) and again from 17.02.2012 (date of suit) till the date of realization.
(v)Since the plaintiff has partly succeeded, the plaintiff is entitled to proportionate costs. The first defendant is directed to pay the plaintiff a sum of Rs.4 lacs towards court fees and a further sum of Rs.4 lacs towards lawyer's fees, witness and other expenses.
(vi) Prayers B,F,G and I are rejected.
(vii) Consequently, connected applications are closed.
13.07.2022
Speaking Order
Index : Yes
Internet : Yes
kal/rrg
Plaintiff's witnesses:
Mr. P.P.Thomas : P.W.1
Defendant's witnesses:
Mr.R.Mathavan : D.W.1
https://www.mhc.tn.gov.in/judis
66/79
C.S.No.190 of 2012
Documents exhibited by the Plaintiff:
Exhibi Date Particulars
ts
P1. 01.02.1989 Letter of acceptance of the tender submitted by the Plaintiff on 06.06.1988 for the work of Periyar dam – strengthening of Periyar Dam by providing RCC backing from EL (+) 75 feet to (+) 145 feet with contract of value of Rs.2,18,85,430/-. P2. 03.03.1989 True copy of Agreement No.8/SE/PDC/1988-89 dated 03.23.1989 executed between the Plaintiff & the 2nd Defendant for carrying out the works – security deposit of Rs.4,38,000/-. P3. 1951 True copy of the Preliminary Specifications in MDSS forming part of the contract agreement dated 03.03.1989 P4. 28.03.1989 Letter of Executive Engineer (EE) to the District Collector, Madurai, to issue permit for procurement of 22,360 cum of sand from Kunnur Village,Vaigai River basin for the work. P5. 28.03.1989 Letter of the EE to the Plaintiff to attend the office with monthwise program of work P6. 20.04.1989 Letter of the SE to the Plaintiff-acknowledged collection of materials, leveling of site, erection of plant & machinery items for commencement of work-direction to formally take over the site to explain away the delay caused.
P7. 22.04.1989 Acknowledgment for taking over possession of site of work for the 2nd time as directed on 20.04.1989.
P8. 06.05.1989 Letter of AEE to the Plaintiff admitting possession of site of work taken over on 22.03.1989 with instruction to forward program of work P9. 17.05.1989 True copy of letter of the Plaintiff to the EE-program of work with 13 personnel employed & machinery items at site. P10. 31.05.1989 Letter of EE to the Plaintiff – site possession on 22.04.1989 instead of 22.03.1989-collect materials-technical personnel not contacted site officers.
P11. 14.06.1989 Letter of EE to the Plaintiff-ought to have completed all preliminary arrangements & 5% of the work.
P12. 14.06.1989 Letter of EE to the Plaintiff to forward month-wise program P13. 30.06.1989 Letter of EE to Plaintiff to submit realistic program of work & to attend office to finalize the program.
P14. 30.06.1989 Letter of EE to Plaintiff to start the work immediately-cement not supplied till 10.10.1989.
https://www.mhc.tn.gov.in/judis 67/79 C.S.No.190 of 2012 Exhibi Date Particulars ts
P15. 04.07.1989 True copy of letter of Plaintiff to SE requesting permission to execute power of attorney in favour of Catholic Syrian Bank Ltd., Adur, Kerala to finance the work & letter dated 12.07.1989 for the same.
P16. 17.07.1989 Letter of Ee to the Plaintiff- only materials collected at the site for commencement of work P17. 30.08.4989 True copy of letter of Plaintiff to EE – no approach road to the site re-construct ghat road from Vallakkadavur to dam site washed off for chartable road for transportation of materials to the site.
p18. 05.09.1989 True copy of letter of the Plaintiff to AEE authorizing P.P.Paulose to receive departmental materials and A.K.Thampan, site manager.
P19. 04.10.1989 Letter of EE to the Plaintiff to produce original qualification certificate of technical personnel.
P20. 22.11.1989 True copy of letter of EE-slow progress alleged-penalty of Rs.5000/- imposed even without supplying cement & clearing the objection of Forest Department.
P21. 14.12.1989 Letter of EE to the Plaintiff – arrangements are being made to obtain permission for blasting of rock – materials washed off in the flood occurred on 24.07.1989 is admitted-penalty of Rs.5000/- illegally imposed falsely alleging slow progress. P22. 23.12.1989 True copy of letter No.26587/C2/89/F & WLD of Government of Kerala granting permission for blasting of rock in the reserved forest for carrying out the RCC backing for the dam. P23 31.01.1990 Letter of EE to the Plaintiff – Forest officials stopped work on 14.11.1989 materials washed off not liable for the losses No objection from Government of Kerala obtained on 23.12.1989 P24 08.02.1990 True copy of memorandum of settlement of rates of labour by Deputy labour Officer, Peermade, increasing rate even up to 25% of th existing rates, ie. From Rs.2.50/day.
P25 09.03.1990 Letter of the EE to the Plaintiff – procure stones from any other source – Rs.68/cum for obtaining blasted stones cannot be paid P26 04.04.1990 Letter of EE to Plaintiff to resume the work & to meet him for discussion for laying of truck lane for concrete. P27 10.05.1990 True copy of letter of the Plaintiff to EE to refund penalty illegally imposed & recovered with reference to letters dated 09.03.1990 & 22.03.1990.
https://www.mhc.tn.gov.in/judis 68/79 C.S.No.190 of 2012 Exhibi Date Particulars ts P28 06.09.1990 Letter of EE to the Plaintiff obstruction of forest department in
quarrying of stones removed-power supply failure-not liable
-diesel equipments may be provided for concrete mixers, crushers, welding set.
P29 24.07.1990 Letter of Assistant Wild Life Reservation Officer to the Plaintiff-
O.R.No.50 of 89 of Vallakkadavu range – against EE, AEE, AE Plaintiff & one K.Krishnan for blasting of rock on 14.11.1989 – compounded on subject to remittance of Rs.10,000/-. P30 07.08.1990 True copy of challan receipt for Rs.10,000/- by way of compounding fee for Forest Offence Act-OR No.50 of 1989 of the Wild Life Reservation Officer, Wild Life Division, Thekkady, Kerala.
P31 01.11.1990 Letter of EE to the Plaintiff-extension of time allowed up to 31.03.1991, resume the work.
P32 03.12.1990 True copy of letter of the Plaintiff to the EE, requesting to arrange supply of 1350 liters of diesle/day-Iraq invaded Kuwait- diesel not available in the market.
P33 22.12.1990 Letter of SE to the Plaintiff – progress of work slow- suppressing the fact of non-availability of diesel in the market due to invasion of Kuwait by Iraq & consequential suspension of work. P34 22.01.1991 Letter of EE to Plaintiff only 100 cum of cement concrete/day for 20 days in a month P35 28.01.1991 True copy of letter of Plaintiff to SE diesel not available – Iraq invasion of Kuwait-work remains suspended.
P36 28.01.1991 True copy of letter of Plaintiff to EE - diesel not available work stopped.
P37 29.01.1991 Letter of EE to the Plaintiff-diesel cannot be supplied for the machines.
P38 06.02.1991 Letter of EE to Plaintiff – Diesel cannot be supplied works remains suspended during the past 15 days.
P39 08.02.1991 True copy of letter of Plaintiff to EE/SE work remained suspended from 28.01.1991 onwards due to non-available of diesel in the market.
P40 25.02.1991 True copy of letter of Plaintiff to S/EE-non-availability of diesel – work remains suspended.
P41 07.03.1991 Letter of EE to Plaintiff-3400 liters of supplied & 12000 liters of diesel allotted by Collector, Madurai- works remained suspended from 18.01.1991 onwards-penalty of Rs.5000/- illegally imposed.
P42 21.03.1991 True copy of the letter of Plaintiff intimating prevention of work
https://www.mhc.tn.gov.in/judis
69/79
C.S.No.190 of 2012
Exhibi Date Particulars
ts
in approach road through the Reserved Forest of Kerala due to lack of concurrence from Government of Kerala.
P43 27.03.1991 True copy of CCVII & part bill - gross value of work Rs.38,13,522/- 2200 liters of diesel supplied recovery Rs.10.55/Litre as against Rs.5.05/liter prevailed on 06.06.1988. P44 01.04.1991 Letter of EE to Plaintiff as on 26.03.1991 only 3 Lorries are working i.e. One for conveying concrete & two for conveying metal to Batching Plaint- no lorry deployed from collection of sand from Kunnur Village, suppressing the fact of obstruction of revenue authorities of Seelayampatti check posts reported on 18.03.1991.
P45 03.04.1991 True copy of letter of Plaintiff to S/EE-non-availability of diesel – work remains suspended.
P46 25.02.1991 True copy of letter of Plaintiff to S/EE-non-availability of diesel – work remains suspended.
P47 22.04.1991 Letter of EE to Plaintiff to submit program of work to complete the same by 30.06.1991.
P48 24.04.1991 Letter of EE to Plaintiff-extension of time allowed up to 30.06.1991 – expedite progress.
P49 26.04.1991 Letter of AE to Plaintiff-at least 7 lorries are to be spared for collection of sand from Kunnur – collection of sand stopped for more than 15 days – sand should be in buffer stock at site. P50 30.04.1991 Letter of SE to Plaintiff to achieve the target of 320 cum of concrete/day P51 25.05.1991 True copy of letter of the Plaintiff to EE-Sri B.Venugopalan Potti, B.Sc Engineering is available at site.
P52 29.05.1991 Letter of SE to Plaintiff – Additional 4 lorries for conveyance of sand assured on 13.05.1991 work not expedited.
P53 27.06.1991 Letter of AE to Plaintiff – only 2 or 3 lorry loads of sand/day collected – 25 loads available at site-155 cum of concrete in 11 working days i.e. 14 cum against target of 320 cum/day fixed on 30.04.1991.
P54 10.07.1991 True coy of letter of Plaintiff to EE-Oomen Thomas appointed in substitution of Sri.Shamugham, B.Tech, who has gone abroad. P55 22.07.1991 Letter of EE to Plaintiff – only 150 cum /day as against 2922 cum of concrete programmed-penalty of Rs.10,000/- extension of time allowed from 30.06.1991 to 31.12.1991.
P56 ..07.1991 True copy of letter NO.SE/F.43/D.O.1 dated 7.91 of the EE to SE with reference to letter dated 28.05.1991 of the Plaintiff
-concurrence of government of Kerala has not yet been obtained https://www.mhc.tn.gov.in/judis 70/79 C.S.No.190 of 2012 Exhibi Date Particulars ts to carry on the work steps initiated for the same – works could not be taken up for want of concurrence from Government of Kerala – heavy losses are incurred by the Plaintiff. P57 30.08.1991 Letter of EE to Plaintiff to produce documents for purchase of 1987 model Sayaji Stone Crusher, 30/50 & 1987 model Millers weigh Batching Plait for grant of machinery advance. P58 06.09.1991 Letter of SE to the Plaintiff to ensure completion of work before 31.12.1991 without obtaining concurrence form Government of Kerala P59 09.09.1991 True copy of letter of Plaintiff to EE – invoice value of Stone Crusher Rs.14,85,120/- & back up Batching Plant is Rs.13,39,593/- totaling to Rs.28,24,713/- for machinery advance. P60 04.10.1991 Letter of EE to Plaintiff – only 728 cum laid instead of 2900 cum of concrete scheduled in September 1991 as against program of work of 320 cum/day fixed on 10.04.1991.
P61 07.10.1991 Letter of AEE to the Plaintiff to forward revised PERT chart prepared with particulars of technical personnel employed at site. P62 04.12.1991 Letter of EE to Plaintiff only 1660 cum of concrete in October,1991 as against 4000 cum programmed.
P63 06.12.1991 Letter of AEE to the Plaintiff to submit month wise & level wise program of work instead of date wise program of work submitted.
P64 13.12.1991 Letter of the EE to the Plaintiff – November 1991 program for 3000 cum of cement concrete but a only 855 cum – fine of Rs.5000/- from 01.09.1991 onwards.
P65 16.12.1991 True copy of letter of Plaintiff to EE-SriB.Venugopalan Potti B.Sc Engineering & Sri.Jose Scaria B.Tech are employed form 01.09.1991 onwards.
P66 31.12.1991 Letter of the EE to the Plaintiff – extensor of time up to 31.03.1992 is allowed to complete the works.
P67 23.01.1991 Letter of SE to the Plaintiff to procure 63 KVA generator for power requirement at site.
P68 06.03.1991 Letter of SE to the Plaintiff only 55% of work is carried out – extension of time from 31.12.11 to 31.03.1992 is allowed. P69 26.03.1991 Letter of the EE to the Plaintiff extension of time allowed up to 30.06.1992 P70 08.04.1992 True copy of letter of plaintiff to the EE-additional works in Blocks ) & 21 of the dam instructed to be carried out only at the market rates prevailed.
P71 08.04.1992 True copy of letter of the plaintiff to EE objecting levy of
https://www.mhc.tn.gov.in/judis
71/79
C.S.No.190 of 2012
Exhibi Date Particulars
ts
penalty of Rs.62,500/- levied requesting to release the amount for utilizing the same for the work.
P72 17.06.1992 True copy of G.O.(Ms.) No.862/PWD of the 1st Defendant granting machinery advance of Rs.15,00,000/- with interest at 18.50% p.a. on hypothecation of the construction plant, equipments, accessories & spare parts in favour of SE/PDC. P73 19.06.1992 True copy of supplemental Agreement No.1/SE/PDC/1992.93 for hypothecation of plant & machinery P74 13.08.1992 True copy of letter of the plaintiff to EE rains water level at (+) 137 feet to withdraw penalty-additional works in Blocks ) & 21 of the dam instructed to be carried out only at the market rates prevailed.
P75 19.08.1992 Letter of the EE to the Plaintiff to complete the works before 30.09.1992 mobilization advance of Rs.15,00,000/- paid. P76 25.09.1992 True copy of letter of the Plaintiff to Ee-heavy rains flood submersion of the site-power failure-for extension of time up to 31.01.1993.
P77 01.10.1992 True copy of representation submitted by the Plaintiff to the Defendants for appointment of an arbitrator for resolution of disputes.
P78 24.11.1992 Letter of the EE to the Plaintiff-extension of time up to 31.12.1992 to complete the works.
P79 01.12.1992 True copy of letter of the plaintiff to EE-unexpected rains & flood in November caused heavy losses reported in letter dated 18.11.1992.
P80 06.01.1993 Letter of the EE to the Plaintiff – extension of time up to 28.02.1993 for completing the works.
P81 20.02.1989 True copy of letter of plaintiff to the Superintending Engineer (SE)- concrete weigh batcher-30cum/hour, being brought to the site P82 20.03.1989 True copy of letter of the plaintiff to the AEE/AE-works started – materials collected – Batching Plant, crusher unit, pumps, etc. at site – provide 3 phase electric connection.
P83 10.04.1989 True copy of letter of plaintiff to the EE-possession of site of work taken over on 22.03.1989 & forwarded the acknowledgment for further action.
P84 14.07.1989 True copy of letter of plaintiff to SE-program to start concreting in the end of August, 1989.
https://www.mhc.tn.gov.in/judis 72/79 C.S.No.190 of 2012 Exhibi Date Particulars ts P85 29.07.1989 True copy of letter of plaintiff to EE-flood occurred-materials
valued Rs.4,00,000/- collected at site washed off in high velocity flow of flood water – existing ghat road washed off from Vallakkadavu to the dam site-reconstruct the approach road. P86 02.11.1989 True copy of letter of plaintiff to EE-lorries transporting sand to the site of work are intercepted in check posts-issue directions. P87 21.11.1989 True copy of letter of plaintiff to EE-earth work excavation completed blasting of rock from quarry proposed for work in reserved forest prevented by the Kerala Forest Department-work cannot be proceeded.
P88 01.12.1989 True copy of letter of plaintiff to EE/SE-Ghat road to the site of work from Vallakkadavu to dam site washed off not restored – Kerala Forest Officials arrested 1 worker engaged in quarry operations-materials cannot be transported to the site-men, machinery idling at site-hire/idling charges of the machinery items & idle wages of the personnel should be paid. P89 08.01.1990 True copy of letter of plaintiff to EE to pay idling charges at Rs.5006/day from 01.09.1989 onwards due to prevention of work caused by the failure to reconstruct the ghat road washed off in the flood.
P90 20.01.1990 True copy of letter of plaintiff to EE- Water level in the the dam was raised to (+) 142.70 feet on 25.07.1989 – broken stones stocked at dump yard of additional vent regulator at site by the department washed off-extra cost at Rs.68/cum be paid for blasting of rock for obtaining rubble for manufacture of aggregate.
P91 01.03.1990 True copy of letter of plaintiff to EE reasons for delay already reported on 9.07.1989, 30.08.1989, 01.12.1989, 08.01.1990,02.01.1990 & 15.02.1990-penalty of Rs.5000/- cannot be imposed-protest.
P92 02.07.1990 True copy of letter of plaintiff to the SE for extension of time up to 30.06.1991 with enhancement in rates by 40% for works without any prejudice to rights & claims against Defendants. P93 20.09.1990 True copy of letter of plaintiff to SE-forest clearance obtained in January 1990 water level risen to (+)142.70 feet in 1989 materials stocked washed off.
P94 18.03.1991 True copy of letter of plaintiff to EE-revenue authorities at Seelayampatty check posts are obstructing transportation of sand stating absence permit from the District Collector, Madurai for collection & transportation of sand.
https://www.mhc.tn.gov.in/judis 73/79 C.S.No.190 of 2012 Exhibi Date Particulars ts P95 02.05.1991 True copy of letter of the plaintiff to EE-Sri B.Venugopalan
Potti, B.Sc. Engineering is available at site.
P96 06.06.1991 True copy of letter of plaintiff to the Chief Engineer, to grant machinery advance of Rs.15,00,000/- for Stone Crusher Unit, concrete weigh Batching Plant etc erected at the site. P97 07.09.1991 True copy of letter of plaintiff to EE Sri.Jose Scaria, Technical Assistant substituted for Sri.Oomen Samuel.
P98 24.12.1991 True copy of letter of plaintiff to SE for extension of time of completion from 31.12.1991 to 31.03.1992.
P99 26.08.992 True copy of letter of plaintiff to SE-site submerged no tippers could be plied-water level in the reservoir is high. P100 18.11.1992 True copy of letter of plaintiff to Defendant reporting loss of Rs.78,01,400/- in washing off the materials in the floods/cyclone occurred between 28.07.1992 to 25.08.1992 to 25.10.1992 & on 13.11.1992 to 30.11.1992.
P101 13.05.1993 True copy of letter of the plaintiff to EE-explosives not available-power supply failure-for extension of time up to 31.07.1993.
P102 15.03.1992 True copy of letter of plaintiff to SE for reimbursement of increased cost in works delayed 100% over the rates in the agreement.
P103 27.05.1993 Letter of Ee t the Plaintiff-extension of time upto 10.06.4993 P104 07.06.1993 True copy of letter of plaintiff to CE/SE/EE for reimbursement of increased cost in works delayed P105 07.06.1993 True copy of letter of plaintiff to EE-Blocks 0 & 21 instructed are additional works – for extension of time up to 30.07.1993- land slides.
P106 08.06.1993 True copy of letter of plaintiff – extension of time up to 31.07.1993 with illegal levy of penalty of Rs.10,000/- P107 09.06.1993 Certified copy of judgment in O.P.No.6163/93 of the Hon. High Court of Kerala granting police protection ot carry on the work. P108 01.07.1993 True copy of letter of Plaintiff to EE, loss in transit, handling & re-handling, loading, unloading of cement, including that used for other works at site are to be accounted.
P109 08.07.1993 True copy of letter of plaintiff to Defendants requesting compensation of Rs.77,83,460/- for the losses caused. P110 11.07.1993 True copy of letter of plaintiff to the f1st Defendant demanding reimbursement of increased cost incurred in works delayed.
https://www.mhc.tn.gov.in/judis 74/79 C.S.No.190 of 2012 Exhibi Date Particulars ts P111 11.07.1993 True copy of letter of plaintiff to 1st Defendant to refer the matter to arbitration. P112 27.08.1993 True copy of letter of plaintiff to EE seeking directions for works
in Blocks 0 & 21 also simultaneously to minimize loss. P113 22.10.1993 Letter of the EE to the Plaintiff for extension of time upto 31.03.1994 with illegal levy of penalty of Rs.1,000/- P114 10.11.1993 True copy of letter of plaintiff to SE-site of work flooded from 08.11.1993 onwards.
P115 15.12.1993 True copy of letter of plaintiff to EE for extension of time up to 3103.1994 without prejudice to rights & claims. P116 31.12.1993 True copy of letter of plaintiff toSE seeking insructions for works in Blocks 0 & 21 of the dam..
P117 29.03.1994 Letter of the EE to the plaintiff-extension of time upto30.04.1994 with illegal levy of penalty of Rs.1,000/- P118 31.03.1994 True copy of letter of the plaintiff to EE for extension of time up to 30.05.1994 without prejudice to rights and claim P119 16.05.1994 True copy of letter of plaintiff to SE/EE requesting to pay Rs.4,700/- cum for concrete in gaps left over in outer face of the dam in Blocks 8 & 9 for fixing RTD thermometers up lift of 23/26 meters lead of 215 meters for concrete.
P120 30.05.1994 Attested true copy of the completion certificate issued by the 2nd defendant for the work, with appreciation for workmanship, etc. P121 15.07.1994 True copy of comparative statement of the quantities of work carried out with increase of 684 cum of cement concrete in item 9 instructed at site by the SE after 31.12.1993.
P122 18.07.1994 True copy of letter of plaintiff to SE/EE demanding payment for works completed by 24.05.1994-no payment after 09.11.1993 interest being paid.
P123 22.07.1994 Letter of the EE to the plaintiff in replly to his lette dated 18.07.1994 demanding payment that payment could be made only after signature in the measurement book for acceptance of measurement – sign the bill P124 28.07.1994 Letter of the SE to the plaintiff -refusal to pay Rs.4700/-cum demanded for filling gaps left over in the body wall for gallery etc instructed.
P125 01.08.1994 Letter of the EE to the plaintiff-in the event of failure to sign the bill before 18.08.1994, the same would be passed & the balance amount due would be kept in the P.W. Deposit P126 03.08.1994 Letter of SE to the plaintiff to contact the EE for signing of the bill for effecting payment for value of works carried out https://www.mhc.tn.gov.in/judis 75/79 C.S.No.190 of 2012 Exhibi Date Particulars ts P127 12.08.1994 True copy of letter of the plaintiff to EE for refund of the whole amount of Rs.80,000/- recovered towards penalty illegally imposed P128 12.08.1994 True copy of the letter of the plaintiff to the EE-more than Rs.25,00,000/- due no payment after09.11.1993. P129 29.08.1994 Letter of SE to plaintiff-denial of rate at Rs.4,700/- cum of concrete for filling of gaps after the works are completed. P130 30.08.1994 True copy of letter of protest sent to the EE/SE reserving rights to realize all other amounts not included in the last bill prepared- protest not allowed to be recorded P131 31.08.1994 Letter of EE to plaintiff-request for refund of the whole amount of penalty levied & illegally imposed is rejected. P132 02.09.1994 True copy of letter of plaintiff to EE for refund of the penalty illegally imposed & recovered.
P133 12.09.1994 True copy of letter of plaintiff to EE objecting penalty, requesting refund of the whole amount with interest. P134 15.09.1994 Letter of EE to the plaintiff directing either to attend office to receive cheque for payment or to furnish correct address of Catholic Syrian Bank Adoor, Kerala with pin code to forward the cheque.
P135 19.09.1994 Letter of EE to plaintiff-falsely claiming payment of last bill on 15.09.1994, willfully suppressing the fact that no payment was made & the cheque was forwarded to the financier bank directly only on 26.09.1994 which was received by the Bank on 28.09.194, directing to shift the hypothecated machinery items from the site, within 30 days thereof without releasing the charge of hypothecation.
P136 28.09.2004 True copy of letter of plaintiff to SE bill paid is not final huge amounts are due & payable-arrange payment.
P137 28.09.1994 True copy of letter of plaintiff to SE reporting work of retaining wall to be constructed at site & requirement of batching plant & crusher unit for the same seeking time by 3 months for shifting them from the site after the work of retaining wall. P138 12.12.1994 True copy of letter of the plaintiff to SE to release security deposit & retention amount.
P139 09.01.1995 True copy of letter of plaintiff to release charge of hypothecation created on Stone Crusher Unit & Weigh Batching Plant with all accessories & spare parts under Supplemental Agreement dated 19.06.1992 to shift the machinery items from the site.
P140 10.01.1995 Letter of the EE to the plaintiff-security deposit & withheld
https://www.mhc.tn.gov.in/judis
76/79
C.S.No.190 of 2012
Exhibi Date Particulars
ts
amount will be released after the lapse of defect liability period based on certificate of AEE -contact AEE.
P141 24.02.1995 Letter of AEE to plaintiff for carrying out additional work for arresting leakage.
P142 28.03.1995 True copy of letter of plaintiff to EE release the charge of hypothecation created on the Stone Crusher unit & Weigh Batching Plant to shift them from the site.
P143 04.10.1995 True copy of letter of the plaintiff to EE to release charge of hypothecation created on Stone Crusher unit & Weigh Batching Plant to deploy them elsewhere.
P144 16.11.1995 True copy of letter SE to EE charge of hypothecation created Under Supplement Agreement dated 19.06.1992 is released to shift Stone Crusher unit, Weigh Batching Plant, etc from the site. P145 20.12.1995 True copy of letter of plaintiff to EE charge of hypothecation Created on Stone Crusher unit & Batching Plant just released – daily hire charges would be levied & realized for the delay caused in release of the charge i.e from 09.01.1995 to 20.12.1995.
P146 05.06.1996 Letter of the 1st Defendant to the plaintiff – demand for reimbursement of price escalation for the works delayed is sought on 11.07.1993 & recommended by the CE on 02.06.1995 is declined.
P147 03.07.1996 Letter of the 1st Defendant to the Plaintiff declining demand for appointment of arbitrator, sought on 11.07.1993 & recommended by the CE on 02.06.1995 declined on the ground that the claim exceeds Rs.50,000/-.
P148 19.05.1997 True copy of notice caused to be sent under demanding appointment of Arbitral Tribunal for resolution of disputes. Section 80 of the CPC, interest Act, Sale of Goods Act demanding payment of Rs.3,80,78,015/- with interest. P149 19.05.1997 True copy of the data of cost incurred in completing the works at Rs.4,00,05m308/- at 1994-1995 PWD Schedule Rates. P150 19.05.1997 True copy of the statement containing dates & particulars of the penalty of Rs.80,000/- illegally imposed & recovered. P151 19.05.1997 True copy of the statement containing particulars of the last payment effected on 28.09.1994 for gross amount of Rs.2,04,51,392/- with since last amount of Rs.20,45,726/- & cheque for Rs.2,03,915/- issued to the Catholic Syrian Bank Ltd. Adoor.
P152 18.03.1998 True copy of O.P.No.277 of 1998 filed by the Plaintiff in the High Court of Judicature at Madras for appointment of Arbitrator https://www.mhc.tn.gov.in/judis 77/79 C.S.No.190 of 2012 Exhibi Date Particulars ts for resolution of disputes based on notice dated 19.05.1997. P153 20.10.1998 True copy of counter affidavit filed by the 2nd Defendant in O.P.No.277 of 1998.
P154 28.11.2011 Certified copy of judgment in W.P.No.18737 of 2004 passed by this Court allowing the Plaintiff to file a civil suit with direction to decide the suit on merits, without looking into the question of limitation in view of proceedings bona fides prosecuted.
P155 Acknowledgement cards for correspondence exchanged between
to the parties.
P185
P186 28.04.2015 The order in M.P.No.2 of 2015 in W.A.SR.No.97842 of 2015
P187 15.09.2014 The order in A.No.4824 of 2014 in C.S.No.190 of 2012
P188 True copy of Ex.P2 Ag
P189 04.12.1995 The letter
P190 28.11.1995 Telegram from defendant to plaintiff.
Documents exhibited by the Defendant:
Exhibi Date Particulars
ts
D1 22.01.1999 The order in O.P.No.247 of 1998
D2 Memo of Grounds in OSA No.92 of 1999
D3 The order in OSA No.92 of 1999
D4 The photocopy of the petition in W.P.No.18737 of 2004.
D5 The order in W.P.M.P.No.22406 of 2004 in W.P.No.18737 of
2004
D6 Letter of Authority to DW1 to adduce evidence. D6 also shown
as Registered PoA dated 22.08.1989 (Pl. see evidence of DW1 recorded on 21.01.2019) D7 15.09.1994 The attested copy of Final Bill D8 The attested copy of Cheque Memo Register D9 The attested copy of Cash Memo Extract.
SKRJ https://www.mhc.tn.gov.in/judis 78/79 C.S.No.190 of 2012 SENTHILKUMAR RAMAMOORTHY, J kal/rrg Pre-delivery Judgment in Civil Suit No.190 of 2012 13.07.2022 https://www.mhc.tn.gov.in/judis 79/79