Bangalore District Court
For Discussions And Negotiations And ... vs Wrote A Letter Reiterating What Has Been ... on 29 March, 2022
63
Com.O.S.No.8870/2011
IN THE COURT OF LXXXII ADDL.CITY CIVIL & SESSIONS
JUDGE, AT BENGALURU (CCH.83)
THIS THE 29TH DAY OF MARCH 2022.
PRESENT:
SRI.DEVARAJA BHAT.M., B.COM, LL.B.,
LXXXII ADDL.CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Com.O.S.No.8870/2011
BETWEEN:
M/s. Ram Construction
Company, Registered
Partnership Firm,
having its Office at No.
653/1, 5th Cross,
Banashankari 1st
Stage, 2nd Block,
Bengaluru - 560 050,
represented in these
proceedings by its
Managing Partner, Sri.
S. Ramachandra
Naidu.
: PLAINTIFF
(Represented by Sri.
M. Venkataramanappa
- Advocate)
AND
63
Com.O.S.No.8870/2011
1. Karnataka State
Road Transport
Corporation,
Constituted under the
Road Transport
Corporation Act, 1950,
having its office at
Central Office
Shanthinagar,
Bengaluru - 560 027,
represented by its
Chairman/ Managing
Director.
2. Bangalore
Metropolitan Trnasport
Corporation, A Division
of the Karnataka State
Road Transport
Corporation, Central
Office, Shanthinagar,
Bengaluru - 560 027,
represented by its
Vice Chairman &
Managing Director.
3. The Chief
Engineer (Civil), BMTC,
Central Office,
Shanthinagar,
Bengaluru - 560 027.
4. The Executive
Engineer, BMTC,
Central Office,
63
Com.O.S.No.8870/2011
Shanthinagar,
Bengaluru - 560 027.
: DEFENDANTS
(Defendants are
represented by Sri. P. D.
Surana - Advocate)
Date of Institution of the 15.12.2011
suit
Nature of the suit (suit on
pronote, suit for Suit for recovery of money
declaration & Possession,
Suit for injunction etc.)
Date of commencement of
28.07.2015
recording of evidence
Date on which judgment 29.03.2022
was pronounced
Date of First Case - Not held - (transferred case)
Management Hearing
Time taken for disposal 7 days
from the date of
conclusion of arguments
Total Duration Year/s Month/s Day/s
10 03 14
(DEVARAJA BHAT.M),
LXXXII Addl. City Civil & Sessions Judge,
Bengaluru.
63
Com.O.S.No.8870/2011
JUDGMENT
This is a suit filed by the Plaintiff to direct the Defendant to pay a sum of Rs.1,68,69,680/- at the rate of 18% per annum from the date of suit till realization.
2. The contentions of the Plaintiff in brief are as follows:-
That the Plaintiff is a Registered Partnership Firm having its office at Bengaluru, that he is carrying on business of construction and allied activities, that the Defendant No.2 in order to meet its requirements and cater to the needs of the travelling public decided to construct bus terminals and passenger amenity centers at Banashankari, that the Defendant No.2 invited tenders for the said purpose on 22.05.2007, that the Plaintiff uploaded the tender document on 27.07.2007 on the website of BMTC and handed over the D.D. towards the Earnest Money deposit of Rs. 3,21,000/-, that the Plaintiff was lowest tenderer, that the 2nd Defendant upon receipt of the said tender documents and the earnest money deposit, invited the Plaintiff for discussions and negotiations and accordingly discussions took place on 21.09.2007 between the Plaintiff and the Tender Committee of the 2nd Defendant, that the Plaintiff wrote a letter to the 2nd Defendant on 26.09.2007 and offered to give rebate of 6.35% on Civil works and 19% on Electrical works 63 Com.O.S.No.8870/2011 on the quoted rates on all the items of works, that the Plaintiff was asked and persuaded to reduce the rate at 14% above the S.E.R. vide letter dated 23.10.2007, that the 2nd Defendant issued work order on 17.12.2007 to the Plaintiff and requested them to take the line out for the said work and complete the work as per the specifications and time limit, that the work was required to be completed within a period of 9 months from the date of commencement of the work excluding the monsoon period, that after receipt of the work order, the Plaintiff constructed the Site Office, Store Rooms, Tool Room. Bathrooms, Toilets, equipment's etc., that the 2nd Defendant supplied 9 drawings including layout drawings on 23.02.2008, with a request to take up the work immediately, that the site is in a low lying area and there is a provision for a stilt floor, that the foundation drawings which were supplied on 23.02.2008 were not sufficient to put up the column foundation and retaining wall, the 2nd Defendant did not allow the Plaintiff to proceed with the work, that they did no give any instructions for the construction to come up in terms of the contract, that the Plaintiff brought to the notice of Defendant No.3 on 28.03.2008, that the price of steel had increased considerably and urged the officials to consider the original quotation, that the Plaintiff further pointed out that the Agreement was signed on 63 Com.O.S.No.8870/2011 14.12.2007 and the work order was issued on 17.12.2007 but despite his various efforts to approach the authorities for designs, working drawings and instructions to begin the main work, there was a note from the Managing Director to the Chief Civil Engineers to the effect that the work would only begin upon the sanction from BBMP, that the Plaintiff also stated that if the project was executed at the price agreed upon, then there would be a loss to an extent of Rs. 27,000 per Mt steel used in the project, that on 17.04.2008, the 2nd Defendant notified the Plaintiff as per the directions of the Managing Director, there was no bar to start the construction work pending approval of plan by BBMP and that the Plaintiff was required to begin construction based on the plans already provided to him, that the 2nd Defendant directed the Plaintiff to execute a revised Agreement to give a rebate of 3% in the Bills dated 24.04.2008, that the 2nd Defendant informed the Plaintiff that it has issued a line-out for construction in terms of the Agreement dated 14.12.2007 and to complete the work within the agreed period, dated 29.05.2008, that the 2nd Defendant supplied the good for construction drawings only on 21.07.2008 after about 7 months of the issue of the work order, that the 2nd Defendant ought to have extended the time up to 16.06.2009, by revising the rates as contained in the General Rules and Directions for the 63 Com.O.S.No.8870/2011 Guidance of the Contractor signed in Form No. PWG 65 in Paragraph 167 (1) of the KPWD Code, that the 2nd Defendant asked the Plaintiff to remove all the filled up loose soil to enable proper soil investigation being taken up, that the Plaintiff excavated and removed the soil up to a depth of 6 meters from ground level, that the Defendants entrusted the work of soil investigation to a private agency which submitted different reports, from time to time and the final report was submitted in the month of July 2008, that only after getting the Third Soil Investigation Report the consultants prepared and submitted "Good for Construction" drawings, that by that time, the cost of all construction materials and also the labour increased abnormally, that the work which was supposed to be completed within a period of 9 months could not be commenced for over 7 months, that there was a delay of 8 months on the part of the Department in supplying the drawings, on 04.08.2008 the Plaintiff brought to the notice of the 2nd Defendant the delay in supplying the execution drawings and the soil investigation reports, that the Plaintiff requested the 2nd Defendant to consider Clause 15 D of the Contract Agreement dated 14.12.2007 and thereby consider the current KPWD schedule rates plus premium of 14% and also to admit the difference in cost of steel and cement as per the prevailing market rates for 63 Com.O.S.No.8870/2011 various ingredients, that the Plaintiff reiterated the same in a letter dated 12.08.2008 to the 2nd Defendant, that on 16.08.2008 the Plaintiff received a letter dated 11.08.2008 from the 2nd Defendant, that the Department is not in a position to consider and apply Clause 15 D of the contract in the instant case, that the Plaintiff to go ahead with the work as per the work order issued earlier, that the Plaintiff wrote another letter to the 2nd Defendant on 19.08.2008 notifying that there was no delay on his part in the commencement of the work re-stating the reasons and lack of approved drawings, that thereby seeking an assurance from the 2nd Defendant for revision of rates as demanded earlier, that on 21.01.2009, the 2nd Defendant wrote a letter reiterating what has been said by him earlier on 11.08.2008, that the Plaintiff again wrote a letter on 02.03.2009 to the 2nd Defendant bringing to his notice about the delay in supplying the drawings and also not taking any decision in regard to the revised rates in regard to completing the work, the agreement between the Plaintiff and the Defendant Corporation was to be honored in letter and spirit, that the Plaintiff is entitled for the revised rates in terms of contract, that the Plaintiff is entitled for the revised rates as there is an enormous delay in supplying the drawings and also in getting the soil test report done to undertake the 63 Com.O.S.No.8870/2011 construction work, that the Plaintiff is not entitled for revised rates is unreasonable and not correct, that the Plaintiff is willing to continue and complete the work as per the agreed programme provided the revised rates are agreed upon in terms of the Clause 15 D of the terms and conditions of the contract, that the Defendant issued an untenable notice dated 18.07.2009 wrongly attributing to the Plaintiff the delay in completing the work, that the Defendant issued a "Final Notice" dated 18.07.2009 to the Plaintiff regarding expediting the construction work knowing full well that the Plaintiff could not do so unless the Defendant revised the rates and knowing full well the reasons for the delay in the constructions work, that the Plaintiff issued a notice to the counsel on 27.07.2009 and brought to the notice of the Defendants No. 2 and 3 about the three main important issues, that the Defendant are well aware that on 15.10.2007, the Defendants requested the Plaintiff to execute the agreement and immediately, that the Plaintiff approached the Defendants to sign the said Agreement and enquired about the drawings were not ready in the Defendants office, that the Plaintiff though that no useful purpose would be served by signing the agreement and also by taking the work order when the drawings were not ready, the delay between 25.10.2007 and 14.12.2007 cannot be attributed to the Plaintiff 63 Com.O.S.No.8870/2011 at all, therefore even if there is a delay between 25.10.2007 to 14.12.2007, the Plaintiff signed the agreement only on 14.12.2007 keeping in view that the drawings were not ready and believing that the Department would supply the same shortly, that the Defendants issued some useless drawings on 23.02.2008 which were not sufficient to commence the foundation work along with the construction of the retaining wall, that the Defendants aware that the drawings furnished on 23.02.2008 would not be sufficient and to undertake and complete the foundation work, that the Defendants are now trying to allege that the Plaintiff has delayed in commencing the work, that on 29.08.2008 Defendants gave the marking and line out details, that the Plaintiff removed the soil and marked the footings, that the Defendants consultants visited the work site and expressed their doubts about the soil investigation report which was done in 2006, that on 07.07.2008 and 08.07.2008 the third soil investigation report was obtained by the Department, that based on the said third investigation report, the Defendants consultants designed plans and delivered it to the Defendants who supplied the same to the Plaintiff on 21.07.2008, that the Plaintiff made every possible effort to request the Defendants to expedite their procedural duties, but the Defendants bombarded the Plaintiff with repetitive letters 63 Com.O.S.No.8870/2011 and a complete denial to address the grievances raised by the Plaintiff, that the Plaintiff therefore called upon the Defendants to withdraw the final notice dated 18.07.2009 and requested them to consider the claim of the Plaintiff in terms of the contract, that the Defendants acted unilaterally to put an end to the contract in favour of the Plaintiff and it was cancelled by the Defendants on 23.07.2009, that the Plaintiff received the same on 27.07.2009, that the Defendant called upon the Plaintiff to be present at the spot on 29.07.2009 to take final measurement, that in the mean while the Plaintiff withdrew the labour force from 26.07.2009 and further removed the centering material, shuttering material and shifted the same to its godown, as the same were lying all these days in the site and had rusted, that the Plaintiff called upon the Defendant No. 2,3 and 4 on 29.07.2009 and brought to the notice to the Defendant No.2,3 and 4 that they have not visited the spot as stated by them in their letter dated 27.07.2009 and therefore the final measurement were taken on 29.07.2009, that the Department did not furnish drawings duly authenticated and certified prior to 21.07.2008 and by any stretch of imagination the Defendant cannot attribute breach, to the Plaintiff, that the Plaintiff would not have incurred losses and suffered damages but for the breach committed by the Defendant, that the 63 Com.O.S.No.8870/2011 defendants are bound to pay the amount in a sum of Rs.
1,68,69,680/- that is due and outstanding, that the Defendants are also liable to pay the said amount along with interest @ 18% per annum from the date of suit till the date of realization and hence, the Plaintiff has filed the present suit for the above- mentioned reliefs.
3. The contentions of the Defendants in its Written Statement, in brief, are as follows:-
That it is true the Defendant invited a tender and in the said process the work to construct a bus stand and a passenger amenity centre at Banashankari was entrusted to the Plaintiff by the 2nd Defendant as the Plaintiff was the lowest bidder, that after the completion of the bidding process the Plaintiff was invited for the discussion and in the discussion Plaintiff offered to reduce the rates quoted by it at 6.35% on Civil works and at 19% on electrical works, that the decision of the Defendant accepting the offer was communicated the Plaintiff on 23.10.2007, that the Plaintiff was required to execute the contract work at the agreed rate of Rs. 3,65,75,950/- inclusive of the electrical works, that the Plaintiff caused a delay of nearly two months in execution of the agreement to enable the Defendant to issue the work order, that the Plaintiff executed 63 Com.O.S.No.8870/2011 the agreement on 14.12.2007 though communication was issued to the Plaintiff by this Defendant accepting his tender as per the revision of rates offered by him on 23.10.2007, that thereafter also the Plaintiff did not show any inclination to commence the work and the Plaintiff collected the structural drawings of the work from the Defendant on 25.02.2008, that the Plaintiff cause delay of nearly 2 months 11 days in collecting the drawings, that the Plaintiff caused the delay from 23.10.2007 to 25.02.2008 in executing the agreement and collecting the drawings fully being aware of the fact that the work has to be completed within a period of 9 months excluding the monsoon season, that the allegation, that the Plaintiff has constructed site office, store rooms, tool room etc., that all allegations are invented by the Plaintiff to mislead the court and the claim of the Plaintiff that the said constructions are made is totally false, that the temporary constructions of insignificant money value made by the Plaintiff are noted down in the mahazar drawn by the officials of the Civil Engineering Department of the 2nd Defendant in the presence of the Plaintiff on 29.07.2009, that the work done by the Plaintiff are of insignificant nature and it does not relate to the contract, that the work done by the Plaintiff relating to the contract are only excavation of soil and drilling of bore well, that the allegation in 63 Com.O.S.No.8870/2011 Para No. 11 that the drawings furnished to the Plaintiff on 23.02.2008 were not sufficient to put up column foundation and the construction of retaining wall is false, that the drawings received by the Plaintiff on 25.02.2008 were sufficient and adequate to commence the work, at that time of doing the earth work if any loose and filled up soil is encountered necessary changes in designs are required for the safety of the building under construction, that there was no impediment for the Plaintiff to commence the structural work of laying concrete footing and raising of pillars in the area where filled up and loose soil is not encountered, that the Plaintiff had commenced the earth work at the earliest point of time and on noticing the filled up and loose soil in the given area necessary revision of structural drawing for that area would have been carried out for the safety of the building, that the Plaintiff did not commence the excavation work though he delayed in receiving the structural drawings till 25.02.2008, that even after receiving the drawings the Plaintiff took the line out from the engineers on 29.05.2008 and commenced the earth work, that the averments in Para No. 12 that the Engineers of the 2 nd Defendant did not allow the Plaintiff to proceed with the work is absolutely false, that it is further false to say that the Engineers of the 2 nd Defendant had not given instructions for construction to come 63 Com.O.S.No.8870/2011 up in terms of contract, that the Engineers of the 2 nd Defendant had always insisted on the Plaintiff to commence the work without loosing any time and to complete the work as per the contract, that the Plaintiff showed no inclination to commence the work, that the Plaintiff had deliberately delayed commencing of work with the set mind that by adopting such tactics he will be able to obtain the revision in the rates, that it is absolutely false to say that the Plaintiff made efforts to approach the authorities of the Defendant seeking designs, working drawings and instructions to begin the work, that the drawings collected by the Plaintiff though belatedly on 25.02.2008 were sufficient to commence the work to lay the footing concrete and to raise the pillars and other structures, that the Plaintiff is not concerned with the inter departmental communication between the Chief Engineer and the Managing Director about seeking approval from BBMP, that the Plaintiff referred to the said note in its letters dated 28.03.2008, that it was made clear to the Plaintiff that he is not concerned with the obtaining of the approval from the BBMP in the letter written by the Defendant dated 17.04.2008, that the Plaintiff had been raising this kind of quarries to cover up the delay accrued on its part in commencing the work, that it was optional for the contracts of BMTC to receive immediate payment pending 63 Com.O.S.No.8870/2011 finalization of bill submitted by the contract as a special measure, that the contractor desires to opt such method to receive the payment he was required to give a rebate of 3% of the bill amount, that the letter dated 24.04.2008 and the letter dated 21.05.2008 are written to the Plaintiff to exercise his option to receive immediate payment on bill being submitted for the work done, the said letters has noting to do with the commencement of work by the Plaintiff, that the Plaintiff commenced work on 29.05.2008, for commencement of work the line out for construction was drawn at the spot in the presence of the officials of the Civil Engineering Department of BMTC, that the letter dated 29.05.2008 is written to the Plaintiff as a matter of record of the said fact and nothing else, that the Executive Engineer supplied the drawings good for construction only on 18.07.2008, that the Plaintiff is twisting the facts and trying to cover up the enormous delay on its part in commencing the work, the earth work was commenced after the line-out at the spot was taken by the Plaintiff, that on 29.05.2008 while doing the earth work in a portion of the construction area loose and filled up soil was notices, that this required further excavation to reach the natural ground of the soil, that as a result of which the foundation designs for the area where the loose and filled up soil was found were required 63 Com.O.S.No.8870/2011 to be modified, that the structural drawings were redrawn taking note of the fact of finding the loose and filled up soil in a portion of the area, that in view of the same the modified drawings of the footing work were supplied to the Plaintiff on 24.06.2008, that the earth work was in progress even on 24.06.2008, that the Plaintiff should have continued the work of laying the base concrete and erection of pillars as per the footing drawings supplied to it on 24.06.2008, that in case of construction of huge buildings soil test is done at few places by drilling a bore hole, that in between the two bore holes many a times loose and filled up soil is notices, that the Plaintiff commenced excavation work only after 29.05.2008 and after taking into consideration the condition of the soil at a given place changes were necessary and they were carried by revising the drawings, that the revision would have been done on earlier point of time itself, had the Plaintiff commenced the excavation work, that the plea at the Plaintiff that the good for construction drawings was supplied to him on 18.07.2008 as suggested by the Plaintiff is absolutely false, that it is false to say that there was a delay of seven months in supplying the working drawings to the Plaintiff, that the Plaintiff itself delayed in receiving the drawings, that the say of the Plaintiff that the time to complete the work should have been extended up to 63 Com.O.S.No.8870/2011 16.06.2008 does not hold water, that the Plaintiff was requested to commence the work and complete it, that the Plaintiff had commenced the work and further time was required the same would have been extended depending upon the stage of the work at which extension is sought for, that the contentions of the Plaintiff that rates are required to be revised as per Clause 15 (D) of Form PWG 65 is misconceived one, that the said clause has no application in this case, that the work is ordered to be stopped by the Executive Engineer or the competent authority beyond six months, that the work so stopped is deemed to be deleted as per the Clause extracted by the Plaintiff, that the work which gets deleted as said above is required to be re-executed in that event only the said provision would apply, that the Plaintiff deliberately delayed the commencement of the work under the misconception that he can invoke the said clause to get revision of rates, that the Plaintiff cannot think to taking advantage of the said clause for his own faults, that when the excavation of the soil was commenced after 29.05.2008 and during the progress of excavation of earth loose and filled up soil was noticed and therefore the investigation was sought to be done at that point of time, that the Defendant is concerned about the safety of the building proposed to be constructed and Plaintiff cannot find 63 Com.O.S.No.8870/2011 a fault to go for soil investigation when loose and filled up soil was found in a particular area of construction, that the say of the Plaintiff that the report was submitted in July 2008 and therefore delay has occurred in obtaining the soil investigation report on the part of the Defendant is absolutely false, that the report which was obtained relating to soil investigation after 29.05.2008 could have been obtained at earlier point of time had the Plaintiff had commenced the earth work, that the Plaintiff delayed the commencement of earth work, that the Plaintiff who is at fault cannot blame the Defendant merely because the soil test was carried out on noticing loose and filled up soil, that the Executive Engineer of this Defendant issued 14 structural drawing which were good for construction vide letter dated 18.07.2008 which the Plaintiff received on 21.07.2008 to enable the Plaintiff to start the work, that the Plaintiff is trying to twist the truth and the Plaintiff is trying to take shelter of its own defaults in commencing the work, that the revision of drawings were made only after the earth was excavated, that there was no impediment for the Plaintiff to commence the work even as on 23.02.2008 when he received the drawings or even earlier to the said date by receiving the drawings from the Civil Engineering Department, that the Plaintiff was not able to commence the work over a period of seven months for want of 63 Com.O.S.No.8870/2011 good for construction drawings, that the Plaintiff participated in the Mahazar conducted at the spot after the revocation of the agreement, that the Plaintiff is also aware that the work is entrusted to another contractor after calling for fresh tenders and the work is carried out, that the question of Plaintiff's willingness to continue the work if the rates are revised as contended by the Plaintiff does not arise at all, that the plea of the Plaintiff has suffered a damages of Rs. 1,68,59,500/- is false, that the final notice dated 18.07.2009 issued by the Defendant is based on true facts, that the Defendants have not committed any breach, that it is false to say that the Defendant are liable to pay a sum of Rs. 1,68,69,680/- to the Plaintiff, that it is false to say that Defendants are liable to pay interest at the rate of 18% per annum as alleged by the Plaintiff, and hence, the Defendants have prayed to dismiss the suit.
4. Based on the above pleadings, the following Issues are framed by my learned Predecessor in Office on 29.11.2013:-
1. Whether the Plaintiff proves that he has brought to the notice of Defendant No.3 vide letter dated 28.03.2008 that the price of steel had increased considerably and urged the officials to consider the original quotation ?63
Com.O.S.No.8870/2011
2. Does he prove that if the project was executed at the price agreed upon, then there would be a loss to an extent of Rs.
27,000/- per metric ton of steel used in the project ?
3. Does he prove that on 17.04.2008, BMTC notified that there was no bar to start the construction work pending approval of plan by BBMP ?
4. Does he proves that Managing Director of BMTC Executive Engineer directed him to execute a revised agreement to give a rebate of 3% in the bills vide letter dated 24.04.2008?
5. Does he prove that Executive Engineer supplied the good for construction drawings only on 21.07.2008 after about 7 months of issue of the work order as pleaded in para- 18 of the plaint ?
6. Does he prove that he has incurred damages on account of breach of contract committed by BMTC as per annexure attached to plaint and as pleaded in para- 22 ?
7. Does he prove that he is not responsible for any delay in commencement of the main construction work of the project for the reasons stated in para - 29 of the plaint ?
63Com.O.S.No.8870/2011
8. Does he prove that he has suffered damages on account of breach committed by Defendants on various heads as pleaded in para-23 ?
9. Does he prove that he is entitled to recover a sum of Rs. 1,68,69,680/- with interest at the rate of 18% per annum from the date of suit till realization ?
10. Whether the 2nd Defendant proves that as per letter dated 04.08.2008, Plaintiff made it clear that he will not be executing the work unless the rates are revised ?
11. Does he prove that Plaintiff did not re- commence the work of construction even after receipt of letter dated 11.08.2008 as contended in para-8 of the written statement ?
12. Does he prove that work executed by Plaintiff as on 29.07.2009 and the materials found at the spot as on the said date as stated in para-9 of the written statement?
13. Does he prove that the Plaintiff had agreed to complete the work as per the agreement dated 14.12.2007 at Rs. 3,65,75,950/- for all the works including the electrical works ?
14. Does he prove that according to the contract, Plaintiff was required to complete the agreed work within a period of 9 63 Com.O.S.No.8870/2011 months excluding the monsoon season of 3 months as contended in para-12 of the written statement ?
15. Does he prove that in view of the default on the part of the Plaintiff in executing the work as per the contract, defendant has suffered a net loss of Rs.77,11,275/-
16. Does he prove that as the Plaintiff has failed to execute the work and caused delay even in commencing the earth work and after doing some earth work, he has abandoned the work which necessitated the revocation of the work contract executed between the Plaintiff and himself ?
17. Does he prove that under the circumstances fresh tenders were called at the risk of the Plaintiff and the work is entrusted to the new contractor at Rs.
4,42,87,225/- thereby incurred a net loss of Rs. 77,11,275/- ?
18. Does he prove that 2nd Defendant is entitled to recover Rs. 77,11,275/- from Plaintiff in counter claim with interest at the rate of 18% per annum from the date of counter claim till realization ?
19. For what reliefs, the parties to the suit are entitled to ?
63Com.O.S.No.8870/2011
20. What order and decree ?
Additional Issue framed on 02.03.2022:-
1. Whether the Plaintiff proves that it is a Registered Firm of Partners and that the Plaintiff has complied with the requirement of Section 69 (2) of the Indian Partnership Act, to enable to Plaintiff to maintain the suit or not ?
5. During the course of Trial, PW.1 to PW.5 are examined.
Ex.P.1 to Ex.P. 66 are marked. On behalf of the Defendants DW.1 and DW.2 are examined. Ex.D.1 to Ex.D.13 are marked.
6. I have heard the arguments of the learned Advocate for the Plaintiff Sri. M. Venkataramanappa. I have heard the arguments of the learned Advocate for the Defendants, Sri. P.D. Surana. The Advocate for the Plaintiff has filed his written arguments on 19.03.2022. The Advocate for the Defendants has filed his written arguments on 19.03.2022.
7. My findings on the above Issues are as under:
Issue No.1 :- In the Negative.
Issue No.2:- In the Negative.
Issue No.3 :- In the Negative.
Issue No.4:- In the Negative .63
Com.O.S.No.8870/2011 Issue No.5 :- In the Negative.
Issue No.6:- In the Negative.
Issue No.7:- In the Negative.
Issue No.8 :- In the Negative.
Issue No.9 :- In the Negative.
Issue No.10 :- In the Affirmative.
Issue No.11 :- In the Affirmative.
Issue No.12 :- In the Affirmative.
Issue No.13 :- In the Affirmative.
Issue No.14 :- In the Affirmative.
Issue No.15 :- In the Negative.
Issue No.16 :- In the Negative.
Issue No.17 :- In the Negative.
Issue No.18 :- In the Negative.
Issue No.19:- In the Negative.
Issue No.20:- As per the final Order for the following reasons.
Additional Issue No. 1:- In the Affirmative.
REASONS
8. Additional Issue No.1 framed on 02.03.2022 :- The Advocate for the Defendants has argued that the Plaintiff is a Firm and hence, without furnishing the details of Partners and 63 Com.O.S.No.8870/2011 the Registration Certificate as required under Section 69 of the Partnership Act, the suit is not maintainable. It is to be noted that though the Plaintiff has not produced such a Registration Certificate while filing the suit, but during the course of evidence, he has produced the same as Ex.P.1. Further it is to be noted here that as per the terms of the Contract, at Ex.P.59, at Clause-5 the Firm is eligible to bid and the said Firm should be registered before entering into Contract Agreement. When such being the case, before entering into Ex.P.59 and Ex.P.60, the Plaintiff should have registered with appropriate authorities. When the Defendants entered into Contract Agreement as per Ex.P.59 and Ex.P.60 with the Plaintiff Firm, they cannot contend that the Plaintiff Firm is not a registered Firm. Further, when the Plaintiff has produced Ex.P.1, he has proved that the same is a Registered Firm. In view of the terms of contract as per Ex.P.59 and Ex.P.1, the suit is maintainable. Hence, the Additional Issue No.1 is answered Affirmative.
9. Issue No.1 to 3 :- Since these three issues are inter- linked with each other, in order to avoid repetition, I discuss the same jointly.
10. The contract work of construction of Bus Terminals and Passenger Amenity Centre at Banashankari 3 rd Stage was 63 Com.O.S.No.8870/2011 entrusted to the Plaintiff by the Defendants under Ex.P.60/Agreement dated 14.12.2007.
11. The Defendants have issued Work Order in favor of the Plaintiff on 17.12.2007 as per Ex.P.38.
12. As per the stipulations of the contract, the entire work was to be completed within 9 months from the date of line out excluding monsoon season. However, the work could not be completed within the period stipulated in the contract.
13. As per the contentions of the Plaintiff, the main reasons for delay in the project was that the Defendants supplied the Ex.P.45/ good for construction drawings only on 21.07.2008, after about 7 months of the issue of Ex.P.38/ Work Order.
14. According to the Plaintiff all delays to the Project were occasioned by the Defendants. The Plaintiff raised certain claims against the Defendants, mainly arising out of the delay in completion of the works, and when the Defendants refused to pay the claimed amount to the Plaintiff, he has filed this suit.
63Com.O.S.No.8870/2011
15. In order to appreciate the contentions in respect of this issue, I now propose to study the following documents, by arranging them in chronological order.
(1) On 22.05.2007 the Defendant No.2 invited Tenders for the said construction as per Ex.D.10. Clause 21 of the Ex.D.10 is as follows:-
"The Tenderer shall study specifications, detailed drawings carefully and visit the work spot, quarries, before quoting his tender rates. Any requests or claims for any reasons will not be entertained. Quoted rates are binding on the contractor".
The Clause No. 26 of Ex.D.10 is as follows:-
"The estimate rates are derived from PWD SR of Bangalore Circle, along with lead charges based on PWD lead charge. The rates quoted shall be inclusive of all cost of all materials, labour charges, all lead & lift, transportation and finishes. Any escalation in quoted rates for any reasons will not be entertained."
(2) On 26.09.2007 the Plaintiff wrote a letter to 4 th Defendant and offered to give rebate of 6.35% on Civil Work and 19% on Electrical Works on the quoted rates on all the items of works as per Ex.P.36.
63Com.O.S.No.8870/2011 (3) On 23.10.2007 the Defendants issued reply and asked the Plaintiff to reduce the rate at 14% above the S.E.R. as per Ex.P.37/Ex.D.3.
(4) On 30.11.2007, the Defendant sent Ex.D.3/Phonogram requesting the Plaintiff to execute the Agreement.
(5) On 10.12.2007 the Plaintiff sent Ex.D.2/Letter requesting the Defendant to recover the freak rate amount in 6 installments from the running bills.
(6) Thereafter, on 14.12.2007, the Ex.P.60/Agreement was entered into between the Plaintiff and Defendants. Ex.P.59 is the General Rules and Direction for the guidance of Ex.P.60. The Clause No. 44 of the Ex.P.59 deals with price escalation, wherein it is specifically stated that no price escalation is available to the Plaintiff as the duration to complete the work is only 9 months. According, to the said Clause price escalation is applicable only if the duration of contract is more than 2 years.
(7) The Defendants issued Ex.P.38/ Work Order on 17.12.2007.
63Com.O.S.No.8870/2011 (8) On 13.02.2008, Ex.D.5/ Letter was addressed to the Plaintiff to collect the drawings/ line out.
(9) On 23.02.2008, the Defendants issued another letter for the same purpose as per Ex.D.6/Ex.P.39. As could be seen from the same on 25.02.2008, the Plaintiff has collected 9 drawings.
(10) On 28.03.2008, the Plaintiff issued Ex.P.40/Letter to the Defendants, that the price of steel had increased considerably and urged the Defendants to consider the original quotation. In the said Letter, the Plaintiff has informed the Defendants to withdraw his offer of giving the rebate in the rates quoted by him as per Ex.P.36.
(11) On 17.04.2008, the Defendant issued Ex.P.41/Letter in reply to Ex.P.40 and stated that there is no provision to allow to withdraw the rebate as per the terms of the contract.
16. It is the contentions of the Plaintiff/PW.1 that after execution of Ex.P.60 and after issuance of Ex.P.38, despite his various efforts to approach the Defendants for designs, working drawings and instructions to begin the main work, there was a note to the effect that the work would only begin upon the 63 Com.O.S.No.8870/2011 sanction from BBMP, that if the project was executed at the price agreed upon, then there would be a loss to an extent of Rs. 27,000/- per Mt of steel used in the project.
17. The learned Advocate for the Defendants has drawn my attention to the cross-examination of PW.1, wherein he has deposed that it was possible for him to execute the work as per the reduced rates and that he was required to execute the work and he will execute the work.
18. Therefore, the request of the Plaintiff to revise the rates is contrary to the agreed terms of the contract, i.e., Clause 21 and 26 of Ex.D.10 and Clause 44 of the Ex.P.59.
19. Further, as per Ex.P.41, the Defendants have informed the Plaintiff that there was no bar to start the construction work pending approval of plan by BBMP and that the Plaintiff was required to begin the construction based on the plans already provided to him. The DW.2, during his cross-examination has deposed that they are exempted to obtain any such approved plan by the BBMP under Karnataka Municipal Corporations Act. The learned Advocate for the Defendant has drawn my attention to Section 342 (3) of the Karnataka Municipal Corporations Act, wherein such an exemption is provided for 63 Com.O.S.No.8870/2011 erection of bus stands. Therefore, the said contentions of the Plaintiff cannot be accepted. Therefore, the Plaintiff has failed to prove these issues. Hence, I answer these issues in the Negative.
20. Issue No.4:- As per the contentions of the Plaintiff, the Defendants directed the Plaintiff to execute a revised Agreement to give a rebate of 3% in the bills as per Ex.P.42/Letter dated 24.04.2008. A similar letter was also issued by the Defendant on 21.05.2008 as per Ex.P.43. It is the contention of the Defendants that it was optional for the contractors to receive immediate payment pending finalization of bill submitted by the contractor as a special measure and that if the contractor desires to opt such method to receive the payment he was required to give the rebate of 3% of the bill amount. It is the contentions of the Defendants that Ex.P.42 and Ex.P.43 were written to the Plaintiff in the said circumstances to exercise his option to receive immediate payment on bill submitted for the work done and that the said letters have nothing to do with the commencement of the work by the Plaintiff. However, no agreement is executed by the Plaintiff in this behalf. Though the Plaintiff has proved the contentions about this issue, the same has no bearing on the 63 Com.O.S.No.8870/2011 merits of the contentions of the Plaintiff. Hence, I answer this issue in the Negative.
21. Issue No.5:- From the above discussions, it is very clear that after repeated requests by the Defendants, the Plaintiff collected 9 drawings on 25.02.2008 as per Ex.P.39/ Ex.D.6. The Plaintiff was required to commence the construction work by taking line out as per the said drawings. According to the contentions of the Defendants the Plaintiff did not commence the work. The learned Advocate for the Plaintiff has vehemently argued that unless the line-outs were not furnished, the Plaintiff could not commence the work and that the Defendants have not furnished the line-out along with Ex.P.39/Ex.D.6 and that the Defendants have delayed in handing over the line-outs to the Plaintiff, and the same were furnished only on 29.05.2008. According to the learned Advocate for the Plaintiff the delay was occurred due to the Defendants only and not by the Plaintiff.
22. The learned Advocate for the Defendants has drawn my attention to Clause F of Ex.P.60, wherein the time limit of 9 months was fixed from the date of issuing line-outs, excluding monsoon period. He has drawn my attention to Para No. 9 of the Plaint and Para No. 9 of the Affidavit filed in-lieu of oral 63 Com.O.S.No.8870/2011 Examination-in-Chief of PW.1 wherein he has contended that the monsoon period is from 15 th June to 16th September. When such being the case, when the line-outs was taken by the Plaintiff on 29.05.2008, 17 days were available for the Plaintiff till 15.06.2008 and that thereafter the Plaintiff had time of 8 months 13 days from 16.09.2008 onwards, and hence the time period extends up to 28.05.2009.
23. The PW.1 during his cross-examination has deposed as follows:-
"It is true to suggest that the drawings were furnished to me on 23.02.2008. Except those drawings, no other drawings were furnished till 29.05.2008. It is true to suggest that the line-out was given to me as per the drawings supplied on 23.02.2008. I do not remember the exact date on which excavation work was started after line-out taken on 29.05.2008. It is true to suggest that the excavation work was started as per the drawings supplied on 23.02.2008."
24. It is to be noted that even before calling of tender notification, a soil investigation was conducted and the said 1 st Soil Investigation Report was submitted during November 2006 as per Ex.D.11. As admitted by both parties, after commencement of the earth work, it was noticed that in a portion of the area loose soil was encountered. In view of the 63 Com.O.S.No.8870/2011 same further soil investigation was conducted. Ex.D.12 is the 2nd Soil Investigation Report submitted during June 2008. It is the contentions of the Plaintiff that he excavated entire site up to depth of 6 meters and shifted the earth to a distance of 30 kms away from the site. At that time, on 07.07.2008 and 08.07.2008, the 3rd Soil Investigation was conducted. Ex.D.13 is the 3rd Soil Investigation Report.
25. After submission of Ex.D.13, the Defendant submitted structural drawing for construction as per Ex.P.45/ Letter dated 18.07.2008. The same received by the Plaintiff on 21.07.2008. The learned Advocate for the Plaintiff has vehemently argued that since the revised drawings were issued only on 21.07.2008, there was delay of 7 months in furnishing the drawings by the Defendants and hence the delay was occasioned by the Defendants only. Per contra, the learned Advocate for the Defendants has argued that had the Plaintiff commenced the excavation work immediately on receipt of Ex.P.39/Ex.D.6 drawings on 23.02.2008, the loose soil which was encountered could have been noticed at the earliest point of time, that after noticing the said loose soil only the necessity of preparing revised drawings arose and hence the delay was occurred due to the Plaintiff only. Even if, there is a delay in 63 Com.O.S.No.8870/2011 submitting the revised drawings, the Plaintiff had sufficient time excluding the monsoon period up to 16.09.2008 till 28.05.2009, i.e., 8 months 13 days. Hence, though the Plaintiff proved that the Defendants supplied the said revised drawings only on 21.07.2008, after about 7 months of issue of Ex.P.38/Work Order, he had sufficient time to complete the project and hence the same has no bearing on merits of the case. Therefore, I answer this issue in the Negative.
26. Issue Nos.6 to 11 :- Since these issues are inter- linked with each other, in order to avoid repetition of facts, I discuss the same jointly.
27. From the contentions of the Plaintiff and from the evidence adduced by the Plaintiff, it is very clear that the main grievance of the Plaintiff is that the prices of steel and cement were increased and his request for revision of the rates was not considered by the Defendants.
28. The Defendants have contended that even after furnishing of the revised drawings as per Ex.P.45 on 18.07.2008, the Plaintiff has not commenced the work. The learned Advocate for the Plaintiff has argued that at that time there was monsoon period and as per the terms of the contract 63 Com.O.S.No.8870/2011 during monsoon period, the work is to be stopped. It is to be noted that the Plaintiff wrote Ex.P.46/Letter on 04.08.2008, wherein he has stated that the early decision is required to be made in regard to revision of rates and the delay in conveying the decision will further delay the completion of the work. He has also requested to consider Clause No.15 (d) of the contract. The learned Advocate for the Defendant has tried to impress me that the wordings in the Ex.P.46 indicated that unless the rates are revised the Plaintiff will not be re-commencing the work. It is to be noted that the Plaintiff has again sent a letter similar to that of Ex.P.46 on 08.08.2008, as per Ex.P.47.
29. The Clause No. 15 (d) of Ex.P.59 is as follows :-
"The period of stoppage ordered by the Executive Engineer or other competent authority should not ordinarily exceed six months. Thereafter, the portion of works stopped may be treated as deleted from this agreement, if a notice in writing to that effect is given to the Executive Engineer or other competent authority by the contractor within seven days after the expiry of the above period."
30. The Defendants sent a reply to Ex.P.46 and Ex.P.47, on 11.08.2008 as per Ex.P.48 stating that there was no provision under the contract for revision of rates and calling upon the Plaintiff to re-commencing the work and intimating the Plaintiff 63 Com.O.S.No.8870/2011 that he will be responsible for all consequences for delay and action will be taken as per the agreement.
31. The learned Advocate for the Defendants has argued that the above-mentioned Clause 15 (d)of the Ex.P.59 cannot be invoked, that the same can be invoked only if the Defendants suspends the work beyond six months and that in that event only the work so suspended gets deleted and for doing such work rates have to be worked out in terms of Clause No. 15 (d)of the contract. He has further argued that at no point of time the Defendants had suspended any work and therefore there was no occasion to invoke Clause No. 15 (d)of the Ex.P.59.
32. The learned Advocate for the Plaintiff has pointed out that the Ex.P.48 was also issued during monsoon period and as per the terms of the contract, no work would be commenced during monsoon period.
33. Thereafter, the Plaintiff issued a reply to Ex.P.48 as per Ex.P.49/Letter dated 19.08.2008, wherein he has contended that he requires some assurance from the Defendant to revise the rates. The learned Advocate for the Defendants has argued that the said conduct of the Plaintiff shows that he has failed to 63 Com.O.S.No.8870/2011 commence the work even after Ex.P.48.
34. Thereafter, the Defendants issued Ex.P.50/Notice on 21.01.2009, for completion of the work within stipulated time. At this stage, the Plaintiff issued Ex.P.52/ Letter dated 02.03.2009 and again insisted to consider the issue of revising the rates and if any action is not taken, he will take necessary legal action against the Defendants. Further in Ex.P.52, he has contended that he has spent more than Rs. 35,00,000/-.
35. The contentions of the Defendants is that even thereafter, the Plaintiff did not commence the work and hence they issued a final notice on 18.07.2009 as per Ex.P.51. Thereafter, on 23.07.2009 the Defendants terminated the contract as per Ex.P.53.
36. It is to be noted that on the same day, i.e., on 23.07.2009 the Plaintiff has issued a Legal Notice to the Defendants as per Ex.P.56. He has also issued a reply to the Ex.P.51 by way of a Legal Notice marked as Ex.P.57 on 27.07.2009. Thereafter he has also issued a reply to Ex.P.53 by way of a Legal Notice marked as Ex.P.56 dated 27.07.2009.
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37. After termination of the contract as per Ex.P.53, a final measurement of the works done by the Plaintiff was recorded as per Ex.P.54/ Ex.D.1 on 29.07.2009. According to the Defendants the said measurement was taken in the presence of the Plaintiff. However, the Plaintiff is disputing about the said measurement as per Ex.P.55/Letter dated 29.07.2009.
38. From the above contentions, it is the allegation of the Plaintiff that the delay was occurred by the Defendants only and that the Defendants are liable to pay the compensation/damages to the Plaintiff, on account of the said delay. The Defendants have contended that the Plaintiff has not interested to re-commence the works after submission of revised drawings as per Ex.P.45.
39. In order to prove the said damages/compensation, the Plaintiff has produced Ex.P.2 to 6, Ex.P.10 to P.14/Payment vouchers, Ex.P.16 to 19/Bills, Ex.P.20 to Ex.P.25/Inovices, Ex.P.29 to Ex.P.33/ Memorandum of Understandings.
40. The learned Advocate for the Defendants has argued that all the said documents are created documents. He has drawn my attention to Ex.P.10. The PW.1 has contended that the same are payment vouchers issued for Engineers and office 63 Com.O.S.No.8870/2011 staff's salaries in all for a sum of Rs. 17,24,000/- dated 08.08.2009. PW.2 is a project Engineer. However, during the course of his evidence Ex.P.10 was not drawn his attention. Further, he has deposed during his cross-examination that he never issue receipts to the Plaintiff for having received the salary from the Plaintiff and that there are no records to show that he was working with the Plaintiff and that the Plaintiff used to pay salary to him. Therefore, the Ex.P.10 to 14 are not proved by the Plaintiff.
41. As per the contentions of the Plaintiff, the PW.3/Sri. S. Raju has entered into Ex.P.30/ Memorandum of Understanding with the Plaintiff on 18.02.2008, for providing the tipper Bearing No. KA 05 AB 1943. It is to be noted that the PW.3 is the son-in-law of the Brother of the Plaintiff. During his cross- examination he has deposed that he has no records to show that he was the owner of the said tipper during 2008 and 2009, and that there are no records to show about giving the said tipper on hire to the Plaintiff. He has also not produced any records to show that the Plaintiff had paid Rs. 3,00,000/- to him as per Ex.P.30. Therefore, the Plaintiff has not proved the contents of Ex.P.30.
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42. As per the contentions of the Plaintiff, the PW.4/Sri. C. Padmanabha Naidu has entered into Ex.P.33/ Memorandum of Understanding with the Plaintiff on 18.02.2008, for providing construction workers to the Plaintiff. During his cross- examination he has deposed that he has no records to show that he had supply labours to the Plaintiff and Plaintiff had made payment to him towards labour supplied. Therefore, the Plaintiff has not proved the contents of Ex.P.33.
43. As per the contentions of the Plaintiff, the PW.5/Sri. C. Sudhakar has entered into Ex.P.31/ Memorandum of Understanding with the Plaintiff on 18.02.2008, for providing the tipper Bearing No. GJ 12 W 5346. As per the contentions of the Plaintiff, the wife of PW.5/Sri. C. Sudhakar, i.e., Smt. N. Rajalakshmi has entered into Ex.P.32/ Memorandum of Understanding with the Plaintiff on 18.02.2008, for providing the tipper Bearing No. KA 05 AB 2145. It is to be noted that the PW.5 is the son-in-law of the Brother of the Plaintiff. During his cross-examination he has deposed that he has no records to show that his wife and himself were the owners of the said tippers, and that there are no records to show about giving the said tippers on hire to the Plaintiff. He has also not produced any records to show that the Plaintiff had paid any amount to 63 Com.O.S.No.8870/2011 him or his wife as per Ex.P.31 and Ex.P.32. Therefore, the Plaintiff has not proved the contents of Ex.P.31 and Ex.P.32.
44. The Plaintiff has claimed the damages under various heads, in Para No. 32 of the Plaint. Under law, there are three distinct heads of damages which a Contractor can claim legally; which are claims for idle machinery/labour, escalation and loss of profits, subject to the same being duly established where the work gets prolonged due to the fault of the employer. But what is important is that a contractor will be entitled to these claims only if the same are duly established. Loss of profits is a claim in the form of damages under Section 73 of the Indian Contract Act. In order to seek a claim under any of the three heads, the Contractor has to lead evidence and establish the claim. A mere calculation without any evidence on record would not be enough for the Court to grant these Claims.
45. The Hon'ble Supreme Court in the decision reported in A.I.R. - 1962 - S.C. - 366 (M/S. Murlidhar Chiranjilal vs. M/s. Harishchandra Dwarkadas) has clearly laid down the principles for grant of damages under Section 73 of the Contract Act as follows :-
63Com.O.S.No.8870/2011 "The two principles on which damages in such cases are calculated are well settled. The first is that, as far as possible, he who has proved a breach of a bargain is to supply what he contracted to get is to be placed, as far as money can do it, in as good a situation as if the Contract had been performed; but this principles is qualified by a second, which imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to take such steps: (British Westinghouse Electric and Manufacturing Company Limited v. Underground Electric Ry.Co. of London (1912) AC 673. at P.689). These two principles also follow from the law as laid down in Section 73 read with the Explanation thereof. If, therefore, the contract was to be performed at Kanpur it was the Respondents duty to buy the goods in Kanpur and rail them to Calcutta on the date of the breach and if it is suffered any damages thereby because of the rise in price on the date of the breach as compared to the contract price, it would be entitled to be reimbursed for the loss. Even if the Respondent did not actually buy them in the market at Kanpur on the date of breach it would be entitled to damages on proof of the rate for similar canvas prevalent in Kanpur on the date of breach, if that rate was above the contracted rate resulting in loss to it."
46. One of the landmark judgment in India that deal with loss of profits is the decision reported in (1984) 4 - S.C.C. - 59 (Brij Paul & Bros. vs. State of Gujarat). (which is relied on by the Advocate for the Plaintiff), It was held that in works 63 Com.O.S.No.8870/2011 contract, where the contractor suffers a loss on account of breach by the employer, he is entitled to claim compensation for the expected profit of the balance of work.
47. I wish to refer a decision reported in (2006) 11 - S.C.C. - 181 (McDermott International Inc vs. Burn Standard Co. Ltd), wherein the Hon'ble Supreme Court has held as under: -
"Sections 55 and 73 of the Indian Contract Act do not lay down the mode and manner as to how and in what manner the computation of damages or compensation has to be made. There is nothing in Indian law to show that any of the formulae adopted in other countries is prohibited in law or the same would be inconsistent with the law prevailing in India.
As computation depends on circumstances and methods to compute damages, how the quantum thereof should be determined is a matter which would fall for the decision of the arbitrator. We, however, see no reason to interfere with that part of the award in view of the fact that the aforementioned formula evolved over the years, is accepted internationally and, therefore, cannot be said to be wholly contrary to the provisions of the Indian law.
A court of law or an arbitrator may insist on some proof of actual damages, and may not allow the parties to take recourse to one formula or the other. In a given case, the court of law or an arbitrator may even prefer one formula as against another. But, only because the 63 Com.O.S.No.8870/2011 learned arbitrator in the facts and circumstances of the case has allowed MII to prove its claim relying on or on the basis of Emden Formula, the same by itself, in our opinion, would not lead to the conclusion that it was in breach of Section 55 or Section 73 of the Indian Contract Act."
48. In the decision reported in (2007) 10 - S.C.C. - 195) (State of Kerala and another vs. M.A.Mathai), it is held as follows: -
"8. If, instead of avoiding the contract accepts the belated performance of reciprocal obligation on the part of the employer, the innocent party i.e. the contractor, cannot claim compensation for any loss occasioned by the non-performance of the reciprocal promise by the employer at the time agreed, "unless, at the time of such acceptance, he gives notice to the promisor of his intention to do so". Thus, it appears that under the Indian law, in spite of there being a contract between the parties whereunder the contractor has undertaken not to make any claim for delay in performance of the contract occasioned by an act of the employer, still a claim would be entertainable in one of the following situations:
(i) if the contractor repudiates the contract exercising his right to do so under Section 55 of the Contract Act,
(ii) the employer gives an extension of time either by entering into supplemental agreement or by making it clear that escalation of rates or compensation for delay would be permissible,
(iii) if the contractor makes it clear that escalation 63 Com.O.S.No.8870/2011 of rates or compensation for delay shall have to be made by the employer and the employer accepts performance by the contractor in spite of delay and such notice by the contractor putting the employer on terms."
49. In the decision reported in (2015) 4 - S.C.C. - 136 (Kailash Nath Associates vs. Delhi Development Authority and Anr.) the Hon'ble Supreme Court has held as under:-
"43. On a conspectus of the above authorities, the law on compensation for breach of contract under Section 74 can be stated to be as follows:
1. Where a sum is named in a contract as a liquidated amount payable by way of damages, the party complaining of a breach can receive as reasonable compensation such liquidated amount only if it is a genuine pre-estimate of damages fixed by both parties and found to be such by the court. In other cases, where a sum is named in a contract as a liquidated amount payable by way of damages, only reasonable compensation can be awarded not exceeding the amount so stated. Similarly, in cases where the amount fixed is in the nature of penalty, only reasonable compensation can be awarded not exceeding the penalty so stated. In both cases, the liquidated amount or penalty is the upper limit beyond which the court cannot grant reasonable compensation.
2. Reasonable compensation will be fixed on well-
known principles that are applicable to the law of 63 Com.O.S.No.8870/2011 contract, which are to be found inter alia in Section 73 of the Contract Act.
3. Since Section 74 awards reasonable compensation for damage or loss caused by a breach of contract, damage or loss caused is a sine qua non for the applicability of the section.
4. The Section applies whether a person is a plaintiff or a defendant in a suit.
5. The sum spoken of may already be paid or be payable in future.
6. The expression "whether or not actual damage or loss is proved to have been caused thereby" means that where it is possible to prove actual damage or loss, such proof is not dispensed with. It is only in cases where damage or loss is difficult or impossible to prove that the liquidated amount named in the contract, if a genuine pre-estimate of damage or loss, can be awarded."
50. Keeping in my mind about the above-mentioned legal 50inciples, I now propose to discuss about various claims put forth by the Plaintiff.
51. The Claim No.1 is for Rs. 71,82,080/- towards alleged idle charges on Men and Machinery during the agreement period.
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52. To claim idleness of men and machinery, the Plaintiff has to prove that there was existence of an opportunity to deploy the said machinery for gainful employment at another site which was not done. The idle charges are not supported by any data of actual idling hours also. Hence, the Plaintiff is not entitled for the said claim.
53. The Claim No.2 is for Rs.16,35,000/- towards alleged cost incurred in the work executed at site.
54. A Contractor is entitled to claim expenditure incurred by him at site, only if the period of contract is prolonged due to breaches of contract on the part of the Employer. In the present case, as discussed earlier, the delay was caused due to the contractor/Plaintiff himself. The Plaintiff will be entitled to these claims only if the same are duly established. In order to seek a claim under this head, the Plaintiff has to lead evidence and establish the claim. A mere calculation without any evidence on record would not be enough to grant the said claim. Hence, the damages as claimed by the Plaintiff under this head cannot be granted.
55. The Claim No.3 is for Rs. 39,77,400/- towards alleged loss 63 Com.O.S.No.8870/2011 on account of idle charges for a technical staff labour and other staff. The Claim No. 4 is for Rs.1,25,200/- towards alleged cost of materials purchased. The Claim No.5 is for Rs. 39,50,000/- towards expenses incurred by the Plaintiff.
56. Though a final measurement is recorded at site of work on 29.07.2009 as per Ex.P.4/Ex.D.1, and it reflects the works done by the Plaintiff up to that date, the Plaintiff is not entitled for any damages on these three grounds on account of his subsequent conduct. From the evidence of witnesses of both sides, it is revealed that even after termination of the contract in favour of the Plaintiff and even after re-tendering of the works, the Plaintiff on the guise of sub-contractor under the fresh tenderer, completed the work. The PW.1 has admitted that he has completed the work by entering into a sub-contract agreement with Sri. B. Y. Perummaiah who was the successful bidder after termination of the contract with the Plaintiff. The PW.1 has also admitted that he has done the work as sub- contractor under Sri. B.Y. Perummaiah in respect of the same work which he was earlier contractor. Therefore, it is very clear that the said Sri. B.Y. Perummaiah is only a name-lender and the real person who completed the work is the Plaintiff and he has received the said fresh contract amount of Rs. 4,42,87,225/-
63Com.O.S.No.8870/2011 from Sri. B.Y. Perummaiah after giving some percentage of amount to him in each bill of work, as admitted by the Plaintiff/PW.1 during his cross-examination. Therefore, the said conduct of the Plaintiff dis-entitles him claiming any damages under these heads. Therefore, he is not entitled for any damages under these heads.
57. In addition to the same, the Plaintiff is not entitled for any of the Claims for the following reasons:-
The Plaintiff has not terminated the contract on account of the alleged delay by the defendants.
The Plaintiff himself has requested for extension of period of contract and though the same was rejected and the contract was terminated, he completed the work after fresh tender on the guise of sub-contractor.
58. Therefore, I answer Issue No.6 to 9 in the Negative and Issue No. 10 and 11 in the Affirmative.
59. Issue No. 12 :- This issue relates to Ex.P.54/Ex.D.1. I have already discussed about Ex.P.54/Ex.D.1. I need not prolong my discussion about the same. Therefore, the Defendants have proved the Issue No.12. Hence, I answer this issue in the 63 Com.O.S.No.8870/2011 Affirmative.
60. Issue No. 13 :- This issue relates to Ex.P.59 and Ex.P.60. I have already discussed about Ex.P.59 and Ex.P.60. I need not prolong my discussion about the same. Therefore, the Defendants have proved the Issue No.13. Hence, I answer this issue in the Affirmative.
61. Issue No. 14 :- This issue relates to the time period mentioned in Ex.P.60 read with Ex.P.38/Work Order. I have already discussed about the said documents and the time period fixed in the contract. I need not prolong my discussion about the same. Therefore, the Defendants have proved the Issue No.14. Hence, I answer this issue in the Affirmative.
62. Issue No. 15 to 18 :- As discussed by me earlier, that the Plaintiff himself has delayed the execution of work and demanded the revision of rates. As mentioned earlier, as per Clause No. 21 & 26 of Ex.D.10, the tenderer should study specifications, detailed drawings and he has to quote the tender rates and that any requests or claims for escalation of rates in quoted tender rates will not be entertained and that the quoted rates are binding on the contractor. Further, as per Clause No. 44 of the Ex.P.59, there was no scope for escalation of price is available for the contractor as the work is only for period of 9 63 Com.O.S.No.8870/2011 months. As discussed by me earlier, even after termination of the contract and even after fresh tender was called for and entrustment of work to the new contractor, the Plaintiff himself has continued the work on the guise of sub-contractor under new contractor and completed the work. Since, the new tender was excepted for Rs. 4,42,87,255/- as against the price agreed by the Plaintiff at Rs. 3,65,75,950/-, the Defendants have claimed that the difference amount of Rs. 77,11,275/- as loss suffered by the Defendant and the same is to be recovered from the Plaintiff, by invoking Clause 3 (a) and (b) of Ex.P.59. However, the Defendants allowed the Plaintiff to complete the work even after termination of the contract on the guise of sub- contractor under the new contractor. Further, even if the measurements took place as per Ex.P.54/Ex.D.1, no payments were made to the Plaintiff. Under the said circumstances, the Defendants are not liable to claim any amount from the Plaintiff. Hence, all these issues are answered in Negative.
63. Issue No. 19 :- In view of my discussions, observations and findings on the above issues, the Plaintiff is not entitled for any relief as claimed by him in this suit. Similarly, the Defendants are also not entitled for the amount claimed in the counter-claim. Hence, I answer this Issue in the Negative.
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64. Issue No. 20: -Therefore, I proceed to pass the following Order.
ORDER The Suit of the Plaintiff is dismissed.
The Counter-Claim of the Defendants is also dismissed.
Under the said circumstances, both parties are directed to bear their respective costs.
Draw up Decree accordingly.
The Office is directed to send copy of this Judgment to Plaintiff and Defendants to their email ID as required under Order XX Rule 1 of the Civil Procedure Code as amended under Section 16 of the Commercial Courts Act.
(Dictated to the Stenographer, typed by her directly on computer, verified and then pronounced by me in open Court on this the 29th day of March, 2022).
(DEVARAJA BHAT.M), LXXXII Addl. City Civil & Sessions Judge, Bengaluru.
63Com.O.S.No.8870/2011 ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF THE PLAINTIFF:
PW.1 Sri. S. Ramachandra Naidu PW.2 Sri Vijay Kumar J PW.3 Sri. S. Raju PW.4 Sri. C Padma Nabha Naidu PW.5 Sri. C. Sudhakar
LIST OF DOCUMENTS MARKED ON BEHALF OF THE PLAINTIFF:
Ex.P.1 Copy of Partnership Registration Certificate dated 23.06.2016.
Ex.P.2 71 Payment vouchers issued for Pump operator's weekly payment in all for a sum of Rs. 63,300/- dated 21.08.2009.
Ex.P.3 82 Payment vouchers issued to Sri. Muni
Reddy, Carpenters and others weekly
labour payment in all for a sum of Rs.
5,51,690/- dated 08.08.2009.
Ex.P.4 76 Payment vouchers issued to Sri. C.
Padmanabha Naidu regarding Group labour payment in all for a sum of Rs. 10,88,250/-
dated 01.08.2009.
Ex.P.5 74 Payment vouchers issued for weekly 63 Com.O.S.No.8870/2011 Medical expenses in all for a sum of Rs.
1,82,500/- dated 01.08.2009.
Ex.P.6 18 Payment vouchers issued for monthly Mobile Charges for Engineers and Office Staff in all for a sum of Rs. 1,08,000/- dated 08.08.2009.
Ex.P.7 18 Payment vouchers issued for monthly Office maintenance expenses in all for a sum of Rs. 2,70,000/-
Ex.P.8 82 Payment vouchers issued for weekly sundry expenses in all for a sum of Rs.
2,47,418/-
Ex.P.9 10 Payment vouchers issued for temporary electricity charges in all for a sum of Rs. 42,000/-
Ex.P.10 178 Payment vouchers issued for Engineers and Office Staff Salaries in all for a sum of Rs. 17,24,000/- dated 08.08.2009.
Ex.P.11 34 Payment vouchers issued for Securities personnel payments in all for a sum of Rs. 1,63,200/- dated 08.08.2009.
Ex.P.12 141 Payment vouchers issued to Sri. Keshavulu Naidu for weekly group labour payments in all for a sum of Rs. 10,92,750/- dated 01.08.2009.
Ex.P.13 141 Payment vouchers issued to Sri. Raju for weekly payment for Tippers in all for a sum of Rs. 10,82,500/- dated 25.07.2009.
Ex.P.14 141 Payment vouchers issued to Sri. C. Sudhakar for weekly payment for Tippers in all for a sum of Rs. 10,85,000/- dated 63 Com.O.S.No.8870/2011 25.07.2009.
Ex.P.15 76 Payment vouchers issued to Smt. N. Rajalakshmi for weekly payment for Tippers in all for a sum of Rs. 10,82,500/- dated 01.08.2009.
Ex.P.16 Bill for a sum of Rs. 40,970/- issued by ALF Enterprises Private Limited dated 14.07.2008.
Ex.P.17 Bill for a sum of Rs. 1,10,000/- issued by KPR Earth Movers and Enterprises for Earth Work Excavation dated 03.06.2008.
Ex.P.18 Bill for a sum of Rs. 61,350/- issued by Sundaram Borewells dated 26.04.2008. Ex.P.19 Bill for a sum of Rs. 90,000/- issued by Sundaram Borewells dated 26.04.2008. Ex.P.20 Invoice for a sum of Rs. 10,010/- issued by Sri. Shakthi filling Station dated 24.05.2008. Ex.P.21 Invoice for a sum of Rs. 10,883/- issued by Sri. Shakthi filling Station dated 10.05.2008. Ex.P.22 Tax Invoice for a sum of Rs. 36,000/- issued by Manjunatha Agencies, Cement Dealer dated 16.02.2008.
Ex.P.23 Invoice for a sum of Rs. 12,594/- issued by Sri. Shakthi filling Station dated 19.04.2008. Ex.P.24 Invoice for a sum of Rs. 10,920/- issued by Sri. Shakthi filling Station dated 12.04.2008. Ex.P.25 Invoice for a sum of Rs. 9,063/- issued by Sri. Shakthi filling Station dated 27.03.2008. Ex.P.26 40 Payment vouchers issued for labour payment, Diesel, Borewell JCB charges and 63 Com.O.S.No.8870/2011 Tipper charges.
Ex.P.27 Letter issued by Sri. J. Vijay Kumar (Project Engineer) to S.R. Naidu for payment of balance salary amount of sum of Rs.
3,60,000/- from Feb 2008 to Feb 2009 dated 15.12.2009.
Ex.P.28 Letter issued by Sri. J. Vijay Kumar (Project Engineer) to S.R. Naidu for payment of balance salary amount of sum of Rs.
1,60,000/- from Feb 2008 to Feb 2009 dated 10.03.2009.
Ex.P.29 Memorandum of understanding entered into between Plaintiff and Sri. C. Keshavulu Naidu dated 18.02.2008.
Ex.P.30 Memorandum of understanding entered into between Plaintiff and Sri. S. Raju dated 18.02.2008.
Ex.P.31 Memorandum of understanding entered into between Plaintiff and Sri. C. Padmanabha Naidu dated 18.02.2008.
Ex.P.32 Memorandum of understanding entered into between Plaintiff and Smt. N. Rajalakshmi dated 18.02.2008.
Ex.P.33 Memorandum of understanding entered into between Plaintiff and Sri. C. Keshavulu Naidu dated 18.02.2008.
Ex.P.34 Original labour attendance book. Ex.P.35 Original labour account dairy. Ex.P.36 Letter issued by the Plaintiff to the Defendant dated 26.09.2007.
63Com.O.S.No.8870/2011 Ex.P.37 Reply Letter issued by the Defendant to the Plaintiff dated 23.10.2007.
Ex.P.38 Work Order issued by the Defendant to the Plaintiff dated 17.12.2007.
Ex.P.39 Letter issued by the Defendant dated 23.02.2008.
Ex.P.40 Letter issued by the Plaintiff to the Defendant dated 28.03.2008.
Ex.P.41 Letter issued by the Defendant to the Plaintiff dated 17.04.2008.
Ex.P.42 Letter issued by the Defendant to the Plaintiff dated 24.04.2008.
Ex.P.43 Letter issued by the Defendant to the Plaintiff dated 21.05.2008.
Ex.P.44 Letter issued by the Defendant to the Plaintiff dated 29.05.2008.
Ex.P.45 Copy of Letter issued by the Defendant to the Plaintiff for submission of structural drawing for construction dated 18.07.2008.
Ex.P.46 Copy of Letter issued by the Plaintiff to the Defendant for revision of the rates dated 04.08.2008.
Ex.P.47 Letter issued by the Plaintiff to the Defendant for revision of the rates dated 08.08.2008. Ex.P.48 Letter issued by the Defendant to the Plaintiff for completion of the work within stipulated time dated 11.08.2008.
Ex.P.49 Letter issued by the Plaintiff to the Defendant for revision of the rates dated 19.08.2008. Ex.P.50 Notice issued by the Defendant to the Plaintiff 63 Com.O.S.No.8870/2011 for completion of the work within stipulated time dated 21.01.2009.
Ex.P.51 Final Notice issued by the Defendant to the Plaintiff dated 18.07.2009.
Ex.P.52 Letter issued by the Plaintiff to the Defendant for revision of the rates dated 02.03.2009. Ex.P.53 Termination Notice dated 23.07.2009. Ex.P.54 Proceedings of the final measurement recorded at site of work on 29.07.2009. Ex.P.55 Copy of letter issued by the Plaintiff dated 29.07.2009.
Ex.P.56 Legal Notice issued by the Plaintiff to the Defendant dated 23.07.2009.
Ex.P.57 Legal Notice issued by the Plaintiff to the Defendant dated 27.07.2009.
Ex.P.58 Postal acknowledgment. Ex.P.59 General rules and direction for the guidance of
contract entered into Plaintiff and Defendant dated 14.12.2007.
Ex.P.60 Agreement entered into between Plaintiff and Defendant dated 14.12.2007.
Ex.P.61 Office Copy of Legal Notice along with Annexure.
Ex.P.62 Three Postal Receipts Ex.P.63 to Courier Reciepts. Ex.P.65 Ex.P.66 Office Copy of Legal Notice dated 27.07.2009.
LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENDANT:
63Com.O.S.No.8870/2011 D.W.1 Sri. S. Rudra Prasad D.W.2 Sri. T.R. Uma Shankar LIST OF DOCUMENTS MARKED ON BEHALF OF THE DEFENDANT:
Ex.D.1 Proceedings of the final measurement recorded at site of work on 29.07.2009. Ex.D.2 Request Letter issued by the Plaintiff for issue of work order dated 10.12.2007.
Ex.D.3 Intimation letter for approval of tender dated 23.10.2007.
Ex.D.4 Phonogram dated 30.11.2007.
Ex.D.5 Letter return by Defendant to Plaintiff on
12/13.02.2008.
Ex.D.6 9 Drawings dated 25.02.2008.
Ex.D.7 & 8 9 drawings dated 25.02.2007.
Ex.D.9 Rebate Calculation Sheet dated 26.09.2007.
Ex.D.10 E-tender notification dated 22.05.2007.
Ex.D.11 1st Soil investigation report dated November
2006.
Ex.D.12 2nd Soil investigation report dated June 2008.
Ex.D.13 3rd Soil investigation report dated August
2008.
(DEVARAJA BHAT.M.),
LXXXII Addl. City Civil & Sessions Judge, 63 Com.O.S.No.8870/2011 BENGALURU.