Bangalore District Court
Submitted The Bid vs The Plaintiff Was Prevented From ... on 11 June, 2021
1
Com.O.S.No.5178/2005
IN THE COURT OF LXXXII ADDL.CITY CIVIL & SESSIONS
JUDGE, AT BENGALURU (CCH.83)
THIS THE 11th DAY OF JUNE 2021.
PRESENT:
SRI.DEVARAJA BHAT.M., B.COM, LL.B.,
LXXXII ADDL.CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Com. O.S. No.5178/2005
BETWEEN:
M/s Nagarjuna Construction
Company Ltd., No.301,
Batavia Chambers, 8,
Kumara Krupa Road, Kumara
Park East, Bengaluru -560
001, represented by its
Chief General
Manager(Tech), Mr. C.
Premachandar Reddy.
: PLAINTIFF
(Represented by Sri. Ajay J.
Nandalike - Advocate)
AND
Sri Jayadeva Institute of
Cardiology, Bannerghatta
Road, 9 Block, Jayanagar,
th
Bengaluru - 560 069,
represented by its Director. : DEFENDANT
2
Com.O.S.No.5178/2005
(Defendant is Represented
by Sri. P.D. Surana-
Advocate)
Date of Institution of the suit 11.07.2005
Nature of the suit (suit on
pronote, suit for declaration & Suit for Damages
Possession, Suit for injunction
etc.)
Date of commencement of 09.06.2010
recording of evidence
Date of First Case-Not held - (transferred case)
Management Hearing
Time taken for disposal 57 days
from the date of conclusion
of arguments
Date on which judgment was 11.06.2021
pronounced
Total Duration Year/s Month/s Day/s
15 11 00
(DEVARAJA BHAT.M),
LXXXII Addl. City Civil & Sessions Judge,
Bengaluru.
JUDGMENT
This is a suit filed by the Plaintiff for recovery of a sum of Rs.5,32,93,067/- from the Defendant with interest thereon at 3 Com.O.S.No.5178/2005 the rate of 12% per annum from the date of suit till the date of realization.
2. The contentions of the Plaintiff, in brief, are as follows:-
That the Defendant proposed to construct a Main Hospital Campus, invited bids through their Architects, M/s Kothari Associates Private Limited, New Delhi, that on 02.04.1993 the Plaintiff submitted the bid, that the estimated value of the Project at the time of floating of the Tender was Rs.1168 Lakhs while the value of the bid submitted by the Plaintiff was Rs.1750 Lakhs, that after negotiation, the Defendant reduced the scope of work to the extent of Rs.710 Lakhs, that the Plaintiff's bid for such reduced scope of work was Rs.1322 Lakhs and the duration of the Contract was 36 months from the date of handing over of site, that the Defendant by their letter dated 25.05.1994, had accepted the bid of the Plaintiff and handed over the site for commencement of work, that thereafter they entered into an Articles of Agreement dated 25.08.1994 accepting the terms and conditions, that the Plaintiff mobilized their men, machinery and materials commensurate with the value and duration of the Contract and also duly commenced work on 10.07.1994, that in terms of the Contract the completion date was 09.07.1997, that for reasons beyond the 4 Com.O.S.No.5178/2005 control of the Plaintiff and directly attributable to the Defendant, the Plaintiff was prevented from completing the work within the stipulated time, that the Defendant also effected several variations to the work, which again adversely affected the progress, that the Plaintiff finally completed the work on 31.03.2002 which was 92 months after commencement as against the stipulated period of 36 months and defects liability obligation ended on 30.03.2003, that the Defendant had issued Virtual Completion Certificate dated 02.04.2003, that as a consequence of the several lapses, defaults and breaches of Contract of the Defendant, the Plaintiff was compelled to and had suffered heavy losses, damages and expenses, that the Plaintiff during pendency of the Contract, had sent several letters requesting the Defendant to issue appropriate approvals/decisions, release of working drawings and other related acts to enable the Plaintiff to complete the work within the scheduled time, that the Defendant failed to perform their part of the Contract on account of which the Plaintiff could not complete the work within the stipulated period, that the Defendant on numerous occasions had admitted that the delay was on account of inaction on the part of the Defendant and no fault was found on the part of the Plaintiff, that the Plaintiff by a letter dated 18.08.1998 had intimated the Defendant the loss being suffered on account of the delay caused and claimed 5 Com.O.S.No.5178/2005 compensation for the same, that by virtue of the fact that the Defendant not settling the Claims which the Plaintiff had been periodically raising, the Plaintiff as per letter dated 13.12.2001 submitted a consolidated Statement of Claims to the Defendant and called upon the Defendant to settle at the earliest, that the Defendant had in turn forwarded the same to the Architects, M/s Kothari Associates Private Limited for Certification as per their letter dated 02.01.2002, that the said Architect as per letter dated 15.02.2002, sought certain clarifications from the Plaintiff with regard to the Claims in question, that the Plaintiff as per their letter dated 23.02.2002 had provided all the clarifications sought for by the Architects, that on 12.07.2002, after detailed consideration, the Architects made their recommendation/Certification in respect of the Claims of the Plaintiff, that in terms of such Certification and as against the total Claims of the Plaintiff to the extent of Rs.7,34,89,433/-, the Architects had certified Claims to the extent of Rs.3,62,08,171/-
excluding the interest, that the Defendant for the reasons best known to them, sought to once again refer the claim which had been certified by the Architects, to one Sri. K.S. Anantaramaiah, who is a Retired Chief Engineer, that the said Sri. K.S. Anantaramaiah held meeting with the representatives of the Plaintiff, the Defendant and the Architects on 05.05.2004 and 17.05.2004 and had also sought clarifications from all the three 6 Com.O.S.No.5178/2005 parties with regard to the Claims, that the Plaintiff had duly provided all the clarifications sought for by him, that while the said Sri. K.S. Anantaramaiah appears to have submitted his recommendation on the Claims to the Defendant, the Defendant had not communicated the same to the Plaintiff in spite of the fact that the Plaintiff has been repeatedly requesting the Defendant to do so, that the Defendant has also unjustifiably failed to effect payments of the amounts certified by the Architect and/or recommended by Sri. K.S. Anantaramaiah and therefore, the Plaintiff was constrained to issue repeated reminders to the Defendant in this regard and calling upon the Defendant to effect payments, that the Plaintiff issued a Legal Notice on 15.01.2005, that the Defendant issued an interim reply on 08.02.2005 and followed up the same by a further Reply on 15.03.2005 thereby the Defendant surprisingly sought to contend that the Plaintiff had delayed the work and also sought to deny the several claims made by the Plaintiff, that therefore the Plaintiff passed a rejoinder on 04.05.2005 pointing out how the Defendant was unjustifiably refusing to settle the Plaintiff's Claims and called upon the Defendant to effect payment within 10 days, that the Defendant neither responded nor has effected the payment and hence, the Plaintiff has filed this suit for the above-mentioned reliefs.
7Com.O.S.No.5178/2005
3. The contentions of the Defendant in its Written Statement are as follows :-
That the suit is bad for non-joinder of the State of Karnataka, that the total extent of work entrusted to the Plaintiff by virtue of the Contract is Rs.26,27,30,525/- inclusive of escalation paid, that the suit is not properly instituted by a competent person, that no document pertaining to any authorization is filed to show that the signatory is the authorized person of the Plaintiff to verify and institute the suit, that the suit is based on the Claims that are non-existing in the terms and conditions of the Agreement, that the Plaint is without any cause of action and multiple claims independent of each other are clubbed together, that some of the Claims were rejected by the Defendant in 1998 itself, that the suit is bad in the Law of Limitation in view of the fact that the construction was completed by the Plaintiff on 31.3.2002, that even as on September 1994, the Plaintiff was doing preliminary work like surveying, marking out block levels and central lining work etc., that the extent of variations of the work at the commencement time was most minimal and they only helped the Plaintiff in securing additional scope of work and leading in undue advantage of the Agreement under Clause 15.1.1 to 15.7 for 8 Com.O.S.No.5178/2005 the benefit of the Plaintiff, hence, the Plaintiff cannot have any grievance or claim any loss in respect of the same, that there has been increase in the scope of work from 13.22 Crores to Rs.22.21 Crores due to the additions and alterations and introduction of Extra item of work, that the total cost of Extra item of Works executed is Rs.673 Lakhs, that the Plaintiff executed total cost of Non-tendered/extra item of work up to 31.07.1997 is Rs.72.69 lakhs, that the total executed cost against non-tendered/ extra item of work after stipulated period of contract till the completion of work is Rs.599.75 Lakhs, that the average monthly shortfall of progress during contract period i.e., up to 31.07.1997 is 9.57 lakhs, that the stipulated 36 months period of contract has been increased to 88 months, that the Plaintiff was requested and informed in various meetings to increase the progress from the inception of the project and the Architects also pointed out regularly poor progress of the Plaintiff, that the delay in execution of the work was mainly due to the inability of the Plaintiff to mobilize men, machinery and materials, that the Plaintiff has used substandard materials resulting in rejection of the material and the work carried out by the Plaintiff, that due to the extension of time, the Defendant was in no way beneficial, on the contrary the Plaintiff enjoyed the escalation clause by prolonging and protracting the work, that the Plaintiff has suppressed the fact 9 Com.O.S.No.5178/2005 that penalty was imposed upon the Plaintiff due to slow work progress, that the Plaintiff having obtained extension of time for executing additional work for additional payment, now cannot have a grievance that additional time was required to complete the project, that the value of the contract increased to two fold from Rs.13.22 Crores to Rs.26.27 Crores, the Plaintiff is estopped from making claims, that there are no lapses, default or breach of contract by the Defendant, that the Defendant had at no point of time admitted any delay and there was no inaction or fault of Defendant in hindering the progress of work, that the Plaintiff having raised grievance in 1998, which were outside the purview of the contract and the running account bills, cannot maintain a suit as it is a time barred claim, that the very nature of the claims made by the Plaintiff is diluted and in view of making wrongful gain, the Plaintiff has filed this suit, that the recommendations of the Architects did not repose any confidence in the Defendant to make payment to the Plaintiff as the Plaintiff had won over the architects by being hand in glove in assisting the Plaintiff to make a wrongful gain and the Architect had committed breach of trust by colluding with the Plaintiff and recommending the payment much contrary to their own correspondences, that the Plaintiff failed to take any action against the architects for having delayed the recommendation of the claims in July 2002, which establishes that the Plaintiff 10 Com.O.S.No.5178/2005 has taken certain time to win over the Architect in getting the recommendations, that there is no existing clause in so far as the payment of interest by the Defendant in the Contract and hence, the question of payment of interest at any rate is not permissible and legally tenable and hence, prayed to dismiss the suit.
4. Based on the above pleadings, the following Issues are framed by my learned Predecessor in Office:-
1.Whether the Plaintiff is entitled for the suit claim from the Defendants ?
2. Whether the Plaintiff is entitled for interest at 12% per annum on the suit claim ?
3. Whether the Plaintiff is properly represented ?
4. Whether the suit is barred by limitation ?
5. What Decree or Order ?
Additional Issues Dated 31.03.2010:-
1. Whether the Plaintiff proves that the duration of Contract was prolonged and the Defendant granted extension of time up to the completion of the work as alleged ?
2. Whether the Plaintiff further proves that there was increase in rates of minimum wages of workers, 11 Com.O.S.No.5178/2005 material and fuel during the currency of the contract as alleged ?
3. Whether the Plaintiff further proves that there was a delay in payment of bills on the part of the Defendant as alleged ?
4. Whether the Plaintiff further proves that there was idling of men, machinery, equipments overloads and establishment as alleged ?
5. Whether the Plaintiff further proves that they followed the procedure for settlement of disputes as alleged ?
6. Whether the Defendants prove that they had taken any action on the Architects recommendations as alleged ?
5. In order to prove the contentions of the Plaintiff, the Manager (QS) of the Plaintiff Company got examined himself as P.W.1 and got marked documents as Exs.P.1 to Ex.P.68.
6. In order to prove the contentions of the Defendant, the Asst. Engineer of the Defendant has got examined himself as D.W.1 and got marked Exs.D.1 to Ex.D.46.
7. I have heard arguments of the learned Advocate for Plaintiff Sri. Ajay J. Nandalike and the learned Advocate for Defendant 12 Com.O.S.No.5178/2005 Sri. P.D. Surana. Besides their oral arguments, they have also submitted detailed written arguments.
8. My findings on the above issues are as follows:-
Issue No.1 :- In the Affirmative Issue No.2 :- In the Affirmative Issue No.3 :- In the Affirmative Issue No.4 :- In the Negative Addl.Issue No.1 :- In the Affirmative Addl.Issue Nos.2 to 4 :- In the Affirmative Addl.Issue No.5 :- In the Affirmative Addl.Issue No.6 :- In the Negative Issue No.5 : - As per the final Order for the following reasons.
REASONS
9. Issue No.3:- For the sake of convenience, I discuss this Issue first of all. As per the contentions of the Defendant, the Plaintiff is not properly represented. As per the Cause Title of the Plaint, the Plaintiff Company is represented by its Chief General Manager (Tech), Sri. C. Prema Chander Reddy. The learned Advocate for the Defendant has argued that neither resolution nor any documents are produced to show that he was entitled to represent the Plaintiff Company and hence, the 13 Com.O.S.No.5178/2005 Plaintiff is not properly represented. The Ex.P.1 is the Certified Copy of the Resolution passed at the Meeting of the Executive Committee of the Board of Directors of the Plaintiff Company held on 28.05.2010 authorizing the PW.1 to give evidence and to do all other acts necessary in this suit. The learned Advocate for the Defendant has argued that it is only an authorization to the PW.1 to give evidence in this suit and no authorization is filed to file and verify the Plaint on behalf of the Plaintiff Company by Sri. C. Prema Chander Reddy.
10. Order XXIX Rule 1 of the Civil Procedure Code uses the term "Corporation" which will naturally include Companies within its definition.
11. The Hon'ble Supreme Court in the decision reported in 1996 (6) - S.C.C. - 660 = A.I.R. - 1997 - S.C. - 3 (United Bank of India vs. Naresh Kumar) has held at Para No.10 as follows :-
"It cannot be disputed that a company like the bank can sue and be sued in its own name. Under Order VI Rule 14 of the Civil Procedure Code a pleading is required to be signed by the party and its pleader, if any. As a company is juristic entity it is obvious that some person has to sign the pleadings on behalf of the company. Order XXIX Rule 1 of the Civil Procedure Code, therefore, provides that in a suit by or against a 14 Com.O.S.No.5178/2005 corporation the Secretary or any Director or other Principal Officer of the corporation who is able to depose to the facts of the case might sign and verify on behalf of the company. Reading Order VI Rule 14 together with Order XXIX Rule 1 of Code of Civil Procedure it would appear that even in the absence of any formal letter of authority or power of attorney having been executed a person referred to in Rule 1 of Order XXIX can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation. In addition thereto and dehors, Order XXIX Rule 1 as a company is a juristic entity, it can duly authorise any person to sign the plaint or the written statement on its behalf and this would be regarded as sufficient compliance with the provisions of Order VI Rule 14. A person may be expressly authorized to sign the pleadings on behalf of the company, for example by the Board of Directors, passing a resolution to that effect or by a power of attorney being executed in favour of any individual. In absence thereof and in cases where pleadings have been signed by one of its officers a Corporation can ratify the said action of its officer in signing the pleadings. Such ratification can be expressed or implied. The Court can on the basis of the evidence on record, and after taking all the circumstances of the case, specially with regard to the conduct of the trial, come to the conclusion that the corporation had ratified the act of signing of the pleading by its officer"
12. Even the Hon'ble Supreme Court in the aforesaid judgment has used the terms "Company" and "Corporation" interchangeably. Hence, in view of the said ratio and in view of Ex.P.1, there is an implied ratification of the act done by Sri. C. 15 Com.O.S.No.5178/2005 Prema Chander Reddy by the Plaintiff Company. Hence, I cannot accept the said arguments of the Advocate for the Defendant. Further, in the written statement, the Defendant has contended that the suit is not maintainable since the State of Karnataka is not made as a party to the suit. The Defendant is an autonomous institution of the State of Karnataka. When such being the case, as per the ratio of the decision reported in A.I.R. - 1983 - KAR - 7 = 1982 (2) - K.L.J. - 146 (Dasarao vs. Thungabhadra Board & Others), the State of Karnataka need not be made as a party to the suit and hence, the said contention of the Defendant cannot be accepted. Therefore, I answer this Issue in the "Affirmative".
13. Addl.Issue No.1 : - The contract work of the construction of new Hospital Complex was entrusted to the Plaintiff by the Defendant under an Agreement dated 25.08.1994 as per Ex.P.2.
14. The Defendant entrusted the work in favor of the Plaintiff with the following particulars:-
(1) Accepted amount of work : Rs.1322 Lakhs. (2) Date of Commencement : 10.07.1994.
(3) Date of Completion : 09.07.1997.
(4) Date of Articles of Agreement : 25.08.1994.
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Com.O.S.No.5178/2005
(5) Finally completed on: 31.3.2002.
(6) Defects Liability Period ended on : 30.03.2003.
15. As per the stipulations of the contract, the entire work was to be completed within 36 months from the date of commencement of work. The work was started on 10.07.1994 and as per the contract conditions it was to be completed by 09.07.1997. However, the work could not be completed within the period stipulated in the contract and hence, certain extensions of time for completing the work were necessitated. The work was finally completed on 31.03.2002 with a delay of 92 months. It is not in dispute that the Defendants granted extensions of time up to this date for completion of the work. The Plaintiff raised certain claims against the Defendant, 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.
16. According to the contentions of the Plaintiff, the main reasons for delay in the project were:-
(i) The Defendant took a decision regarding the resting level of footings only on 13.08.1994 and therefore, it was only after that date the Plaintiff could proceed with the foundation work. In support of said contention, he has produced Ex.P.4/ the 17 Com.O.S.No.5178/2005 Letter dated 03.06.1995, wherein the Plaintiff has explained various delays in the progress of work and the idleness of resources. As per the Plaintiff, the Defendant has taken belated decision regarding the resting levels of footings and hence there was delay in foundation work. The Defendant at Para No.12(i) of the Written Statement has contended that it is only minor modification and did not affect the work at large in any manner. From the said contentions, the Defendant has more or less admitted the said fact.
(ii) According to the Plaintiff, there were hindrances in the form of water main in the North Diagnostic Block foundation and the high tension line of the electrical sub-station which affected the progress of work. In support of the said contention, he has produced Ex.P.12/ the Letter dated 05.04.1996, wherein the Plaintiff has requested the Defendant to arrange for early decisions of the matters detailed in the said Letter, which were not resolved in the Meetings of the Monitoring Committee held on 07.03.1996, 08.03.1996 and 09.03.1996 and hence there was delay in the progress. In the said Letter, the Plaintiff has requested as follows:-
"With stoppage of work directed by you on all the above areas, it has become extremely uneconomical for us to continue maintaining our establishment, resulting in possible of time extension of the project also."18
Com.O.S.No.5178/2005 From the contents of Ex.P.12, it is clear that the Defendant has directed to stop the work and the Plaintiff has requested the Defendant to take decisions on the matters detailed in the said Letter. The Defendant at Para No.12(xiv) of the Written Statement has not specifically denied the said contention of the Plaintiff and has only contended that the Plaintiff is put to strict proof in what manner the decision regarding column section affected the progress of its work. From the said contention, the Defendant has deemed to have admitted the same also.
(iii) The Defendant cleared an additional floor in the Ward Block only on 29.05.1996, as a result of which the originally contemplated 6 floors was increased to 7 floors thus necessitating extra time being required for carrying out such work. This fact is evident from the Ex.P.9, which is a Letter written by the Defendant to the Plaintiff on 29.05.1996. The Defendant has contended at Para No.12(viii) of the Written Statement that for the said additional works, extra payment has been made as per the rates agreed by the representative of the Plaintiff, that the extension of time was also provided by the Defendant for the additional work and hence, the contention of the Plaintiff is not supportive of the prayer made in the Plaint. Therefore, the said contention is also deemed to have been admitted by the Defendant.
19Com.O.S.No.5178/2005
(iv) The Defendant temporarily suspended the work between 06.03.1996 and 13.07.1996 and stated that "no work was to be undertaken till receipt of revised Architectural/Structural Drawings" and the said time was lost to the Plaintiff. Therefore, the Plaintiff in the Ex.P.10/Letter dated 25.06.1996, requested the Defendant to arrange to certify the joint measurements of the brick work, before taking up to dismantling to take up brick wall construction as per the latest approved drawings. The Defendant has contended at Para No.12(ix) of the Written Statement that even though certain modifications were effected with the consultation of the Architect, it was obvious that the revised drawings were to be submitted, but the work was always available for the Plaintiff to execute on other fronts. Therefore, the stoppage of work during the said period is also deemed to have been admitted by the Defendant.
(v) The Defendant further effected seven different modifications in the layout of the Ward Block and the final decision in this regard was given by the Defendant on 13.07.1996, that the modifications effected by the Defendant included lowering of the foundation of the Ward Block as a result of which the work which had already been executed by 20 Com.O.S.No.5178/2005 the Plaintiff had to be substantially re-done. This is evident from Ex.P.6/Letter written by the Plaintiff to the Defendant dated 23.07.1996 and Ex.P.7/Letter dated 28.11.1996. The Defendant at Para No.12(iv) of the Written Statement has contended that it was obvious that subject matter of construction was a complex construction, which was bound to have changes in the internal layout and were for the betterment of the design, that the same resulted in additional work for the Plaintiff, that being the fact the Plaintiff having sufficient work pending at other work fronts, cannot harp upon other certain specific modifications. Therefore, the said fact is also deemed to have been admitted by the Defendant.
(vi) The Defendant failed to ensure matching progress from other agencies such as M/s Voltas Ltd (Air Conditioning, ducting) Fire alarm, Nurse Call System etc., as a result of which the Plaintiff's ceiling work was delayed by 11 months. This is also evident from Para 7 of the Ex.D.25/Ex.P.57/the Joint Inspection Notes dated 04.01.1997. The Defendant has not specifically denied the said fact in the Written Statement.
(vii) The Defendant inordinately delayed providing details on the type of flooring to be laid at various locations which again had its impact in delaying the work. This is evident from Ex.P.13/ Letter 21 Com.O.S.No.5178/2005 dated 14.04.1997. The Defendant has not denied the said fact specifically in the Written Statement.
(viii) The Defendant effected radical changes in the designs of the aluminium doors and windows which required color anodizing and friction hinges for which considerable amount of extra work had to be performed by the Plaintiff and consequently extra time was required. This is evident from the Ex.P.11/Letter dated 04.06.1997. The Defendant has contended that as per the Agreement Clause-11(i) and 11(ii), the Plaintiff was supposed to provide the anodized aluminium doors and windows of the specified finish with anodizing for a minimum 20-25 microns thickness and matt finish to all structures and hence, the contention of the Plaintiff that he undertook extra work is not tenable. In support of said contentions, the Defendant has relied on Ex.D.31/Letter dated 16.07.1997 written by the Architect M/s Kothari Associates to the Defendant with reference to anodizing aluminium windows. The said contentions of both parties will be discussed later while discussing the claims of the Plaintiff.
17. In view of above-mentioned contentions, evidence and documents, it reveals that the delay was caused on account of various reasons as discussed earlier which are solely attributable to the Defendant only. Therefore, the Agreement period was 22 Com.O.S.No.5178/2005 extended for the reasons not attributable to the Plaintiff. Hence, I answer this Issue in the "Affirmative".
18. Addl.Issues No.2 to 4 framed on 31.03.2010 :- All these issues are interlinked with each other and I discuss the same together in order to avoid repetition of facts.
19. The Plaintiff has claimed the damages under various heads. Under law, there are three distinct heads of damages which a Contractor can claim legally; which are claims for idle machinery/labour, escalation and loss of profits, subject to the same being duly established where the work gets prolonged due to the fault of the employer. As discussed by me while answering Additional Issue No.2 above, the work was prolonged due to the fault of the employer/Defendant. 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. However, in this case, the Plaintiff is not making a mere calculation without any evidence, but he is relying on the Reports marked as Exs.P.37 & P.38.
23Com.O.S.No.5178/2005
20. Almost all the claims of the Plaintiff are based on the Reports marked as Ex.P.37 and P.38. The Learned Advocate for the Defendant has argued that the Ex.P.38 was obtained by the Plaintiff under Right to Information Act on 17.11.2012, after institution of this suit, however, the Plaintiff has given all the details in the said Report in the Plaint itself, which indicates that M/s Kothari Associates put their signature perhaps to the Report prepared by the Plaintiff. Thereby the Defendant has casted a doubt about the integrity of the said Report itself. In order to appreciate the said arguments of the Learned Advocate for the Defendant, the evidence of the D.W.1 during his cross- examination is to be considered. The D.W.1 has deposed that the Architects M/s Kothari Associates was appointed by the Defendant before preparation of tender documents, that they furnished the drawings, that the work entrusted to them was to provide Architectural drawings, structural details and Project Management Consultancy, that they should be present during the time of construction at all times and to supervise the work of contractor. Therefore, it is very clear that the said Architect was appointed by the Defendant and he supervised the works of the contractor/Plaintiff all along the work being completed and on the reference of the claims of the Plaintiff by the Defendant to him, he submitted the said Report. Further, the Plaintiff was aware of the 24 Com.O.S.No.5178/2005 said Report even prior to the filing of this suit as evident from various documents produced in this suit. On 11.09.1996, the architect, M/s Kothari Associates has written Ex.D.24/Letter to the Plaintiff stating that Hospital is a complex construction and there will be changes in the internal layouts and requested the Plaintiff to increase the manpower and materials to complete the work on time. This Letter was issued on behalf of the Defendant and produced by the Defendant himself, which shows that the said Architect was supervising the work of the Plaintiff on behalf of the Defendant. The learned Advocate for the Plaintiff has argued that the Plaintiff has brought out the inconvenience and delay caused due to frequent changes for a number of times by the building committee, monitoring committee etc., and the Defendant has brought to the notice of Plaintiff that such changes are normal for large and complicated works and the Plaintiff was asked to take it in its stride. The contention of the Plaintiff that it has caused delay was unequivocally denied by the Defendant stating that there were sufficient works pending on other fronts which were not carried out. The Architect as per Ex.D.24 requested the Plaintiff to increase manpower and material to complete the work on time. On 16.07.1997, the architect, M/s Kothari Associates has written Ex.D.31/Letter to the Defendant with reference to anodizing aluminium windows. On 29.04.2003, M/s. Kothari Associates has written Ex.P.16/ Letter to the Plaintiff regarding the 25 Com.O.S.No.5178/2005 recommendations given to the Defendant with regard to the claims of the Plaintiff. From this Letter, it is very clear that the Plaintiff was aware of the same even before filing this suit. Further, as could be seen from Ex.P.40, on 15.03.2004 itself the Plaintiff requested the Defendant to reconsider certain claims which were not considered by M/s Kothari Associates and to release the claimed amount at an early date. Therefore, the said arguments of the Advocate for the Defendant cannot be accepted at all.
21. The D.W.1 has deposed during his cross-examination that on 06.04.2004, the Defendant referred the claims of the Plaintiff and Ex.P.38 to the Retired Chief Engineer, Sri. K.S. Anantharamaiah, for opinion along with relevant records, that accordingly he submitted the Report to the Defendant as per Ex.P.37 on 05.07.2004. He admits that the Ex.P.67 and Ex.P.68 are the two files submitted by the Plaintiff to said Sri. K.S. Anantharamaiah, after serving its copies to the Defendant.
22. So far as the Report of Sri. K.S. Anantharamaiah is concerned, the Learned Advocate for the Defendant has argued that the P.W.1 during his cross-examination has deposed that the Page Numbers to the said Report were written by him and that the Pages 26 to 29 were prepared in the office of the Plaintiff and 26 Com.O.S.No.5178/2005 hence he doubts about the integrity of the said Report. However, the D.W.1 has repeatedly deposed in his cross-examination that after verifying the Architect's Report at Ex.P.38 and after conducting several hearings of the parties, Sri. K.S. Anantharamaiah submitted Ex.P.37/Report, that he had participated in the hearing conducted by Sri. K.S. Anantharamaiah and produced all the materials before him and assisted him in defending the Defendant, and that there is no records to show any decision taken by the Defendant either accepting or rejecting the Ex.P.37/Report. He has categorically deposed that there are no records to show that the Plaintiff had obtained the Reports at Ex.P.37 and Ex.P.38 in collusion with Architects and Sri. K.S. Anantharamaiah. In view of the said evidence of the D.W.1, the said arguments of the Advocate for the Defendant cannot be accepted.
23. Under the said circumstances, now it is to be considered the evidentiary value of such reports. In this aspect, the Learned Advocate for the Plaintiff has relied on a decision reported in 1985 (Supp) - S.C.C. - 17 (Hirachand Kothari vs. State of Rajasthan). In the said case, it was the claim of the plaintiff/appellant that the State of Rajasthan, in relation to a dispute as to valuation of a piece of land, had agreed to appointment of the Town Planning Officer as the Assessor to 27 Com.O.S.No.5178/2005 assess the value of the land and submit his report. The Town Planning Officer valued the land at Rs.35,826.50p. However the State of Rajasthan disputed the said valuation. The plaintiff/appellant instituted the suit for recovery of the amount at which the Town Planning Officer had assessed and determined the valuation of the land, pleading that the State of Rajasthan was bound thereby. The State of Rajasthan contested the said suit inter alia pleading that it had never agreed that the assessment or valuation made was to be final and binding on them and that there was an error in principle in the assessment done/valuation made. In the said circumstances, it was held as follows: -
"6. The main question raised is whether the report of the assessor (Ext. 5) was "information" within the meaning of Section 20 of the Evidence Act and therefore considered to be an admission of the parties as to appraisement or valuation of the disputed land at Rs 35,826.50 p. and such an admission must operate as estoppel. Admissions may operate as estoppel and they do so where parties had agreed to abide by them. The word "information" occurring in Section 20 is not to be understood in the sense that the parties desired to know something which none of them had any knowledge of. Where there is a dispute as regards a certain question and the Court is in need of information regarding the truth on that point, any statement which the referee may make is nevertheless information within the purview of Section 20. The contention on behalf of 28 Com.O.S.No.5178/2005 the State Government on the word "information"
occurring in this Section is that the parties did not stand in need of obtaining any information from D.N. Gupta and that at any rate the State Government never agreed to abide by the valuation made by him and therefore they were not bound by the same inasmuch as the valuation made by him was not conclusive as to the value of the subject-matter as between the parties.
7. Section 20 of the Evidence Act reads as follows:
"20. Admissions by persons expressly referred to by party to suit: - Statements made by persons to whom a party to the suit has expressly referred for information in reference to a matter in dispute are admissions."
Section 20 is the second exception to the general rule laid down in Section 18. It deals with one class of vicarious admissions that demand of persons other than the parties. Where a party refers to a third person for some information or an opinion on a matter in dispute, the statements made by the third person are receivable as admissions against the person referring. The reason is that when a party refers to another person for a statement of his views, the party approves of his utterance in anticipation and adopts that as his own. The principle is the same as that of reference to arbitration. The reference may be by express words or by conduct, but in any case there must be a clear admission to refer and such admissions are generally conclusive".
24. However in the facts of the said case, it was found that the State of Rajasthan had not consented to the valuation.
29Com.O.S.No.5178/2005
25. In various cases pertaining to the valuation made by the Surveyor in respect of the dispute relating to insurance claims, it is held that once the surveyor has taken one particular method, and that method is one of the methods possible in law, unless and until grave reasons are found to dispute the surveyor's report, or it is found to be completely illegal or illogical, courts normally do not interfere with the valuation fixed. It is also held that the surveyor's report is a cogent piece of evidence and cannot be ignored lightly without any evidence contrary to it. The Hon'ble Supreme Court in the decision reported in (2009) 8 - S.C.C. - 507 (SRI VENKATESWARA SYNDICATE vs. ORIENTAL INSURANCE COMPANY LTD & ANR) has held as under:-
"There is no disputing the fact that the Surveyor/Surveyors are appointed by the insurance company under the provisions of Insurance Act and their reports are to be given due importance and one should have sufficient grounds not to agree with the assessment made by them. We also add, than, under this Section the insurance company cannot go on appointing Surveyors one after another so as to get a tailor made report to the satisfaction of the concerned officer of the insurance company, if for any reason, the report of the Surveyors is not acceptable, the insurer has to give valid reasons for not accepting the report. Scheme of Section 64-UM particularly, of Sub-sections (2), (3) and 30 Com.O.S.No.5178/2005 (4) would show that the insurer cannot appoint a second surveyor just as a matter of course. If for any valid reason the report of the Surveyor is not acceptable to the insurer may be for the reason if there are inherent defects, if it is found to be arbitrary, excessive, exaggerated, etc., it must specify cogent reasons, without which it is not free to appoint second Surveyor or Surveyors till it gets a report which would satisfy its interest.
Alternatively, it can be stated that there must be sufficient ground to disagree with the findings of Surveyor/Surveyors. There is no prohibition in the Insurance Act for appointment of second Surveyor by the Insurance Company, but while doing so, the insurance company has to give satisfactory reasons for not accepting the report of the first Surveyor and the need to appoint second Surveyor."
26. It has been held by the Hon'ble Apex Court in the decision reported in 2009 (7) - S.C.C. - 777 (SIKKA PAPERS LIMITED vs. NATIONAL INSURANCE COMPANY LTD. & ORS) that Surveyor Report is not the last word but there must be legitimate reasons for departing from such reports for not taking into cognizance.
27. A matter very akin to the present facts of the case came up for consideration before the Hon'ble High Court of Delhi in the case of M/S Alkarma vs, M/S Mohan Lal Harbans Lal 31 Com.O.S.No.5178/2005 Bhayana in CS (OS) No. 2122A of 1999 & IA 8382 of 2000, which was decided on 29.08.2012, wherein during the course of the proceedings before the Hon'ble High Court of Delhi in OMP No. 33 of 1995, one Shri A.C. Panchdhari, retired Director General of Works, CPWD was appointed as Local Commissioner for conducting the measurements of the interim work done by ALK on the twin tower complex and he submitted his report on 19th April 1995. In the said case, the Learned Arbitrator has passed his Award based on the said Report and the said Award was upheld by the Hon'ble High Court of Delhi as per the Judgment dated 29.08.2012.
28. The ratio/principles laid down in the above-mentioned decisions are clearly applicable to the facts of the present case, with reference to Section 20 of the Indian Evidence Act. When the Plaintiff has made a claim before the Defendant, the Defendant had referred the same to the architect, M/s Kothari Associates. They recommended for payment of the claims to the Plaintiff in their Report, Ex.P.38. Having dissatisfied about the said Report, the Defendant referred the matter to Sri. K.S. Anantharamaiah. As admitted by the D.W.1, he made an elaborate enquiry, wherein the D.W.1 participated and defended the Defendant and thereafter, he submitted the Report, as per Ex. P.37. As per the 32 Com.O.S.No.5178/2005 evidence of the D.W.1, there are no records to show that any decision taken by the Defendant either accepting or rejecting the Ex.P.37/Report. The DW.1 has also admitted that there are no records to show that the Plaintiff had obtained the Reports at Ex.P.37 and Ex.P.38 in collusion with Architects and Sri. K.S. Anantharamaiah. When such being the case, the said Reports are binding on the Defendant.
29. The Hon'ble Supreme Court has in the decision reported in A.I.R. - 1962 - S.C. - 366 (M/S. Murlidhar Chiranjilal vs. M/s. Harishchandra Dwarkadas) clearly laid down the principles for grant of damages under Section 73 of the Contract Act as follows :-
"The two principles on which damages in such cases are calculated are well settled. The first is that, as far as possible, he who has proved a breach of a bargain is to supply what he contracted to get is to be placed, as far as money can do it, in as good a situation as if the Contract had been performed; but this principles is qualified by a second, which imposes on a 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 33 Com.O.S.No.5178/2005 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."
30. The learned Advocate for the Defendant has relied on a decision reported in A.I.R. 1975 - S.C. - 763 (Bombay Housing Board (now The Maharashtra Housing Board) vs. M/s. Karbhase Naik & Co., Sholapur). In the said case, in view of Clause-14 of the said Contract, it was open to the Respondent to make claim on the basis of the rates quoted. The Hon'ble Supreme Court has held that the Respondent there being contractor, was not bound to carryout additional or altered work and there was no reply to the notice stating the rates intended to be charged and the Respondent there was not free to commence and complete the work on the basis that since the rates quoted were not accepted, it would be paid at such rates to be fixed by the Engineer-in-charge and that if it was dissatisfied with the rate or rates fixed by the Engineer-in- charge, it could raise a dispute before the Superintending 34 Com.O.S.No.5178/2005 Engineer and that the time limit for completion would be extended in all cases. The Hon'ble Supreme Court observed that only the rates were settled by the Agreement. However, the ratio of the said decision cannot be applied here since the Hon'ble Supreme Court in the said decision has held that non- payment of money as damages for breach of contract is not an act done or purporting to have been done in pursuance of Section 64 of the Bombay Housing Board Act, 1948.
31. The learned Advocate for the Defendant has relied on a decision reported in 1976 (4) - S.C.C. - 763 (Devi Sahai Palliwal vs. Union of India & Anr.), wherein it is held that suit is not maintainable when there is no allegation in the Plaint to support any pleading under Section 70 of Indian Contract Act. However, such a finding was given in the said suit by determining the liability for mesne profits by the Defendant of the said suit. The facts and circumstances of the said decision and the present suit are entirely different and hence, the said decision is not applicable to the present case.
32. One of the landmark judgement in India that deal with loss of profits is the decision reported in (1984) 4 - S.C.C. -59 (Brij Paul & Bros. vs. State of Gujarat). It was held that in 35 Com.O.S.No.5178/2005 works contract, where the contractor suffers a loss on account of breach by the employer, he is entitled to claim compensation for the expected profit of the balance of work.
33. The learned Advocate for the Defendant has relied on a decision reported in A.I.R. - 1988 - S.C. - 1126 =1988 (3) - S.C.C. - 82 (Continental Construction Company Limited vs. State of Madhya Pradesh). In the said decision, the question involved was with regard to extra cost and in view of the specific clause of the Agreement; the appellant therein was entitled to claim for extra cost. The clauses in the contract in the said case stated that a Contract had to complete work in spite of rise in the price of materials and also rise in labour charges at the rates stipulated. As the work of the construction would not be contemplated in time by contractor on account of delay on the part of the State, Contractor claimed extra cost which was refused, matter was taken to the court and an Arbitrator was appointed in terms of the Contract. Arbitrator passed the Award and was sent to Court. On which basis, the Decree in terms of Award was passed. On appeal, the case was remanded to the lower court for fresh decision. Lower Court accepted the objections and set aside the Award. On appeal, Hon'ble High Court also dismissed it. Then, the Special Leave Petition was filed to the Hon'ble Supreme Court. While 36 Com.O.S.No.5178/2005 discussing the facts of the case, the Court in Para No.5 has laid down that pre-legal issues were referred to the Arbitrator and the State raised legal issues before the Arbitrator which he did not decide. In such circumstances of the case, the Court held that the Award given by the Arbitrator, the Appellant was not entitled to claim extra cost in view of the terms of the Contract and the Arbitrator mis-conducted himself in not considering this objection of the Respondent State before giving Award. It is further held that it was not open to the Appellant to claim extra cost towards rise in prices of material and labour. It is to be noted that the above-mentioned decision reported in (1984) 4
- S.C.C. -59 (Brij Paul & Bros . vs. State of Gujarat), deals with loss of profit and not the extra cost towards rise in prices of materials and labour charges. However, this decision deals with rise in prices of materials, labour charges and not loss of profit. These two claims are distinct and separate.
34. In the decision reported in A.I.R. - 1990 - A.P. - 294 (State of Andhra Pradesh v. M/s.Associated Engineering Enterprises), a Division Bench of Hon'ble Andhra Pradesh High Court in Paragraph 20 has held as follows: -
"20. The first aspect to be noticed in this behalf is that the contractor did not choose to terminate the contract on account of the Government's delay in handing over the sites. He requested for, and agreed to 37 Com.O.S.No.5178/2005 extension of the period of contract, and completed the work. It is not the respondent's case that while agreeing to extension of the period of contract he put the Government on notice of his intention to claim compensation on that account."
35. In Paragraph No.21 it is held as follows: -
"21. According to this Section, it was open to the respondent to avoid the contract on account of the Government's breach of promise to deliver the sites at a particular time; but, he did not choose to do so, and accepted the delivery of sites at a time other than what was agreed upon between them earlier. If so, he is precluded from claiming compensation for any loss occasioned by such delay, unless, of course, at the time of such delayed acceptance of the sites, he had given notice to the Government of his intention to claim compensation on that account. It must be remembered that this provision of law was specifically referred to, and relied upon in the counter filed by the Government to the respondent's claim before the arbitrator. But, it is not brought to our notice that the contractor had given such a notice (contemplated by the last sentence in Section 55). We must make it clear that we are not entering into the merits of the decision of the arbitrator. What we are saying is that such a claim for compensation is barred by law, except in a particular specified situation and inasmuch as such a particular specified situation is not present in this case, the claim for compensation is barred. It is well settled that an arbitrator, while making his award, has to act in 38 Com.O.S.No.5178/2005 accordance with law of the land, except in a case where a specific question of law is referred for his decision."
36. The learned Advocate for the Defendant has relied on a decision reported in 1999 (9)- S.C.C. - 449 (Arosan Enterprises Limited vs. Union of India & Anr.), wherein the Hon'ble Supreme Court has discussed only about whether the time was essence of the contract and whether there was extension of time and effect of such extension.
37. The most important judgement that sets the tone of India's legal jurisprudence is the decision reported in (2004) 5
- S.C.C. - 109 (Bharat Coking Coal Ltd . vs. L K Ahuja), where it was held by the Hon'ble Supreme Court that in absence of any proof or evidence of loss of profit or possibility of alternate use, compensation for loss of profit cannot be provided. The relevant portion of the judgement is as follows:-
"It is not unusual for the contractors to claim loss of profit arising out of diminution in turn over on account of delay in the matter of completion of the work. What he should establish in such a situation is that had he received the amount due under the contract, he could have utilized the same for some other business in which he could have earned profit. Unless such a plea is raised and established, claim for loss of profits could not have been granted. In this case, no such material is available 39 Com.O.S.No.5178/2005 on record. In the absence of any evidence, the arbitrator could not have awarded the same." (Para 24)
38. In the 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 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 40 Com.O.S.No.5178/2005 breach of Section 55 or Section 73 of the Indian Contract Act."
39. In the decision reported in (2007) 10 - S.C.C. - 195) (State of Kerala and another vs. M.A.Matha i), it is held as follows: -
"8. If, instead of avoiding the contract accepts the belated performance of reciprocal obligation on the part of the employer, the innocent party i.e. the contractor, cannot claim compensation for any loss occasioned by the non-performance of the reciprocal promise by the employer at the time agreed, "unless, at the time of such acceptance, he gives notice to the promisor of his intention to do so". Thus, it appears that under the Indian law, in spite of there being a contract between the parties whereunder the contractor has undertaken not to make any claim for delay in performance of the contract occasioned by an act of the employer, still a claim would be entertainable in one of the following situations:
(i) if the contractor repudiates the contract exercising his right to do so under Section 55 of the Contract Act,
(ii) the employer gives an extension of time either by entering into supplemental agreement or by making it clear that escalation of rates or compensation for delay would be permissible,
(iii) if the contractor makes it clear that escalation of rates or compensation for delay shall have to be made by the employer and the employer accepts performance by the contractor in spite of delay and such notice by the contractor putting the employer on terms."41
Com.O.S.No.5178/2005
40. The learned Advocate for the Defendant has relied on a decision reported in 2010 (3) - K.C.C.R. - 2265 (DB) (Venkatesh Construction Company, Bangalore vs. Karnataka Vidyuth Karkhane Limited (KAVIKA), Bangalore). However, the said Judgment of the Hon'ble High Court was challenged before the Hon'ble Supreme Court and the Hon'ble Supreme Court has reversed all the findings given in the said case in the decision reported in A.I.R. - 2016 - S.C.
- 553 = 2016 (4) - S.C.C. - 119 (Venkatesh Construction Company, Bangalore vs. Karnataka Vidyuth Karkhane Limited (KAVIKA), Bangalore) and hence, the ratio of the decision relied on by the learned Advocate for the Defendant cannot be accepted. Further, in the said decision, the Hon'ble Supreme Court at Para No.17 has held as follows:-
"17. Trial Court directed the Respondent to pay a sum of Rs.3,23,000/- to the Appellant with interest at the rate of 12% per annum from the date of suit till the date of realization. To award interest from the date of suit to date of decree and from the date of decree till the date of realization is entirely discretionary. The terms of the contract do not specify any rate of interest. In the facts and circumstances of the case and having regard to the fact that the matter is pending for over two decades and in the interest of justice, it is appropriate that the interest of 12% per annum awarded by the Trial Court is reduced to 6% per annum."42
Com.O.S.No.5178/2005
41. In view of the said findings of the Hon'ble Supreme Court, in the present case also, even if the rate of interest is not specified in the terms of the contract, since the amount involved is huge sum, by exercising my discretion, I am of the opinion that the Plaintiff is entitled for interest at the rate of 12% per annum as prayed by him.
42. Further, the learned Advocate for the Defendant has vehemently argued that the PW.1 has made certain admissions during his cross-examination. However, the DW.1 has also made various admissions during his cross-examination, which are fatal to the contentions of the Defendant. I have mentioned and discussed about said admissions of DW.1, wherever it is necessary, in this Judgment. In the said background, the following findings of the above-mentioned decision of the Hon'ble Supreme Court reported in A.I.R. - 2016 - S.C. - 553 = 2016 (4) - S.C.C. - 119 (Venkatesh Construction Company, Bangalore vs. Karnataka Vidyuth Karkhane Limited (KAVIKA), Bangalore) is reproduced here for better understanding.
"14. The High Court took note of Clause-11 of the contract dated 12.02.1992 which states that the 43 Com.O.S.No.5178/2005 Contractor is not authorized to do any extra work or make any alteration without the previous consent in writing of the Respondent. High Court set aside the finding recorded by the Trial Court holding that the parties are governed by the terms of the written contract and any variation with the terms of the Agreement was required to be done strictly adhering to Clause-11 of the Contract. While saying so, the High Court brushed aside the admission by DW.1 that extra work was done by the Appellant and the High Court was not right in ignoring the same to hold that the admission of DW.1 cannot have the effect on the contractual obligation of the parties. It is to be pointed out that the Respondent has not raised the plea relying upon Clause-11 of the Contract. Further by perusal of Ex.P.2 dated 20.12.1991, a letter addressed by the Appellant to the Respondent informing the Respondent about the extra work which needs to be done and the fact that PW.4 was engaged by the Respondent to prepare the new design for the work, it is evident that the Respondent was aware of the fact of the change in the nature of work and there is alteration in the work done by the Appellant. When the evidence and material clearly depict the change of nature of work involved and when the extra work to be done was also admitted by DW.1, parties cannot be expected to go for a revised Agreement/Contract. Moreover, having regard to the fact that the work was to be completed within a specified time-frame, the parties cannot be expected to go for a second round of negotiation and reframe the terms and conditions of the work. Quite so, the High Court was not right in placing reliance upon Clause-11 of the Contract to reverse the findings of the fact recorded by Trial Court.44
Com.O.S.No.5178/2005
15. So far as the claim of the appellant that it suffered loss due to loss of stock of material, PWs 1 and 3 have stated that they have stocked the material of worth about rupees six lakhs at the work site. The appellant also produced several letters (Exs. P5, P6 and P7) by which the appellant has informed the respondent that there was no progress in the work and that the building material are lying waste. Apart from these letters, the appellant has also produced photographs (Exs.P18 to P28) to substantiate their claim that the building material like bricks, size stones and other materials were stocked at the work site. Even though the appellant has claimed rupees six lakhs on account of loss of the material stocked, as the appellant had not produced any bill relating to purchase of material nor produced authentic trip sheet, the trial court rightly awarded rupees one lakh only on account of loss of building material. As noticed earlier, based on the evidence of PWs 1 and 3 and other documents, the trial court has awarded amount on various other heads viz., the amount payable in respect of:- (i) extra earth work;
(ii) embankment work; (iii) extra soiling work; (iv) extra bed concrete work and (v) extra stone masonry work.
The amount so awarded by the trial court under various heads is based on evidence and material on record."
43. The contentions, evidence and documents in the present case are more or less similar to the findings of the above- mentioned decision. Hence, based on the said findings of the said decision, the Plaintiff in the present suit has also proved his contentions as discussed by me in this Judgment.
45Com.O.S.No.5178/2005
44. 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 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 46 Com.O.S.No.5178/2005 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."
45. In the decision reported in 2015 - S.C.C. Online - Bom - 1412 (Ajay Singh vs. Suneel Darshan), a Division Bench of the Hon'ble Bombay High Court has held that if a party has not suffered any loss, even if the Defendant has committed a breach, it cannot be awarded compensation under Section 73 of the Contract Act.
46. In the decision reported in 2016 - S.C.C. Online - Bom
- 9697 (Essar Procurement Service Ltd. vs. Paramount Constructions), the Hon'ble Bombay High Court has held that Sections 73 & 74 of the Contract Act requires actual damage or 47 Com.O.S.No.5178/2005 loss to be proved and the proof cannot be dispensed with. When the loss is in terms of money, the same would have to be proved and only when it is shown that the party has suffered an injury or a loss can it be awarded the claim of loss of profit.
47. Keeping in my mind about the above-mentioned legal principles, I now propose to discuss about various claims put forth by the Plaintiff.
48. Claim No.1 - Loss incurred due to increase in the rates of labour, material, fuel etc.:-
Initially, the Plaintiff had submitted its claim to the Defendant for Rs.4,20,96,463/- under this head. However, after verification the Architect recommended to make payment for Rs.2,34,33,608/- towards this claim. Hence, the Plaintiff has restricted his claim for Rs. 2,34,33,608/-. The details of the said Claim are at Ex.P.45. Sri. K.S. Anantharamaiah also in Ex.P.37, has recommended for payment of Rs. Rs.2,34,33,608/-. In view of my discussions about the validity, genuineness and binding nature of Ex.P.37 and Ex.P.38, I need not prolong my discussion about the entitlement of the Plaintiff on this Claim. Further, the DW.1 has admitted that the Defendant had submitted the materials to Sri. K.S. Anantharamaiah, which shows that the average rate of increase of cost of labour, materials, fuel etc., 48 Com.O.S.No.5178/2005 was around 35%, that the total value of the work can be extended up to 125% under the contract, that the contract period of 36 months and it was completed after 88 months, that Defendant gave KPWD and CPWD standard rates to Sri. K.S. Anantharamaiah and he calculated the escalation on the basis of said rates for the period beyond the contract period of 36 months, that the extension of contract period came about at the instance of the Defendant seeking extra items of work, that Ex.D.6 is a statement prepared by the Defendant indicating all the extra items of work which were executed by the Plaintiff, that in Ex.D.6, the rates mentioned for the cost of extra item of work determined by the Defendant and the said rates were fixed as per market rate as on the date, that the contractual clauses for escalation did not apply beyond the contract period. In order to ascertain this claim, the said evidence of DW.1 is to be appreciated in a proper manner. If the same is analysed and appreciated, the Defendant cannot deny the said claim of the Plaintiff as certified by the Architect on any grounds. Originally the duration of the contract was for 36 months which was extended up to 92 months. During the delayed period, the price of material and labour increased in the market. It became impractical and un-economical for the Plaintiff to execute the work within the accepted/quoted rates. It is pertinent to note here that the rates quoted by the Plaintiff were prevailing at the 49 Com.O.S.No.5178/2005 time of the tender. But the Plaintiff was made to complete the work at the same rates even after 92 months. The Defendant is liable to make good the loss incurred by the Plaintiff on this account before the completion of the work and after the originally stipulated date of completion. The Claim of the Plaintiff is also considered and recommended for payment in Ex.P.37 and P.38. Therefore, the Plaintiff is entitled for the said Claim as prayed by him for the said amount.
49. Claim No.2 - Loss incurred on construction of Site Office:-
The Plaintiff has claimed the payment of Rs.4,80,440/-. The details of calculations of the said Claim are at Ex.P.46. As per Clause 3.8 of the terms and conditions of the Contract at Ex.P.64, the Plaintiff has to construct the said Site Office free of cost. According to the Plaintiff, at the time of construction of such Site Office, the Defendant required the Plaintiff to effect certain modifications to such site and in view of the said modifications, the Plaintiff had to incur an extra expenditure of Rs.6,30,852/-, but restricted to Rs.4,80,440/- as certified by the Architect in this regard. The D.W.1 has admitted during his cross-examination that the specifications of the Site Office were mentioned in the agreement. He has deposed that the site 50 Com.O.S.No.5178/2005 office was constructed with "some improvisation" and that the Plaintiff has voluntarily done it in free of cost. The Architect, M/s Kothari Associates in Ex.P.38 has recommended for payment of Rs.4,80,440/-. The D.W.1 has admitted that the said Architect certified for payment of the said amount to the Plaintiff. According to the D.W.1 the said certification was unscientific. He has admitted that the Defendant has not taken any action against the Architect for making such unscientific certification. The said evidence of the D.W.1 itself shows that the Plaintiff has carried out some extra work, to which he is entitled for the amount as certified by the Architect. Sri. K.S. Anantharamaiah in Ex.P.37, has recommended for payment of Rs.4,25,250/- after examining the actual cost and making some deductions. In view of my discussions about the validity, genuineness and binding nature of Ex.P.37 and Ex.P.38, I need not prolong my discussion about the entitlement of the Plaintiff on this Claim to the extent of the amount Rs.4,80,440/-, as certified by the Architect.
50. Claim No.3 - Loss due to Colour-coating of anodizing aluminium doors and windows:-
The Plaintiff has claimed the payment of Rs.4,26,663/-. The details of calculations of the said Claim are at Ex.P.47. The 51 Com.O.S.No.5178/2005 Learned Advocate for the Defendant has argued that Ex.P.47 is only an unsigned sheet of paper and not supported by any purchase bills/invoices and hence the same is not admissible in evidence. The Hon'ble Apex Court in the decision reported in A.I.R. - 1998 - S.C. - 1406 = 1998 - Crl.L.J. - 1905 (S.C.) (Central Bureau of Investigation vs. V.C. Shukla) (know as Jain Hawala Case) analyzed the position of law with regard to the loose sheets/diary in which some noting has been made by the person other than the persons searched and clearly held that the said document do not have any value in the eyes of law. Further entries in the Diaries, note books and file containing loose sheets paper not in the form of "Books of Accounts" and has held that such entries in loose papers/ sheets are not relevant and not admissible under Section 34 of the Evidence Act. Further as to value of the entries in the books of account, that such statement shall not alone be sufficient evidence to charge any person with liability, even if they are relevant and admissible and that they are only corroborative evidence. Even then independent evidence is necessary as to trustworthiness of those entries which is a requirement to fasten the liability. Therefore, the Ex.P.47 can be considered if the same is corroborated by other oral and documentary evidence.52
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51. As per the Bill of Quantity annexed to the terms and conditions of the contract at Ex.P.64 at Sl.No.4.01 provides for the specifications. As per the specifications the aluminium doors, windows and ventilators are to be anodised as per the approved drawings and directions. It also provides that the entire frame as well as the shutters should be anodised and matt finished or glassy finish as required. The Clause 11 (i) and (ii) it is provided that anodising shall be minimum 20 to 25 microns thickness of matt finish texture shall be as per the drawings or as directed by the architect. According to the Plaintiff during actual execution of this item, the Defendant specifically ordered that the andoised aluminium frames and other accessories are to be finished with deep brown colour with matt finish in respect of the item, thus requiring the Plaintiff to carry out extra work and that the Plaintiff had to incur additional expenditure to the tune of Rs.13,60,183/-, but restricted it to Rs.4,26,663/- as certified by the Architect. For this aspect, the Plaintiff referred to a Letter of the Defendant dated 02.06.1997. Though the said Letter is not produced, the Plaintiff has produced Ex.P.11/Letter dated 04.06.1997, wherein the Plaintiff acknowledged the order of the Defendant as per the Letter dated 02.06.1997 for colour coating of anodized aluminium doors and windows. The D.W.1 during the cross-examination has admitted that the Defendant asked the Plaintiff for changes in the specification of the colour of aluminium doors and that the 53 Com.O.S.No.5178/2005 Defendant asked the Plaintiff to fix the aluminium frames and accessories with deep brown colour and matt finish and that the Defendant has not sent any reply to Ex.P.11.
52. The D.W.1 has during his cross-examination has deposed that under the contract, if any extra work is to be done, contractor has to furnish rate analysis for the extra item of work and that the procedure of Clause 15.7 has not been followed relating to aluminium doors and windows colouring. He has also admitted that the Plaintiff had to procure Himex hinges of deep brown colour as approved by the Defendant, that this requirement was in excess of tender specifications, that the expenses for deep brown colour coating for aluminium doors, windows and ventilators has not been paid to the Plaintiff.
53. On 16.07.1997, the architect, M/s Kothari Associates has written Ex.D.31/Letter to the Defendant that electrolytic anodizing should be carried out by the Plaintiff on the aluminium doors and windows and they should not be paid anything extra for the same and hence the earlier letter dated 02.06.1997 is to be treated as canceled. The D.W.1 has admitted that the copy of Ex.D.31 was not sent to the Plaintiff. Thereafter, in Ex.D.33/Letter dated 16.06.1998 the Defendant has refused to pay any additional rates 54 Com.O.S.No.5178/2005 for providing deep brown colour while carrying out the anodizing work.
54. The Architect, M/s Kothari Associates in Ex.P.38 has recommended for payment of Rs.4,26,663/-.The D.W.1 admitted that the said Architect certified for payment of the said amount to the Plaintiff and that the same was not paid to the Plaintiff. In view of the said oral evidence of the D.W.1, the Ex.P.47 can be considered, since the same is corroborated by the oral evidence of the D.W.1 himself.
55. Sri. K.S. Anantharamaiah in Ex.P.37, has recommended for payment of Rs.4,26,663/- with an observation that no extra payment needs to be made for colour anodising, but extra payments had to be made towards friction hinges. In view of my discussions about the validity, genuineness and binding nature of Ex.P.37 and Ex.P.38, I need not prolong my discussion about the entitlement of the Plaintiff on this Claim to the extent of the amount of Rs.4,26,663/-, as certified by the Architect.
56. Claim No.4 - Loss due to delay in running account bill payments including escalation bills and secured advance bills:-
55Com.O.S.No.5178/2005 The Plaintiff has claimed the payment of Rs.24,45,226/-. The details of calculations of the said Claim are at Ex.P.48. Clause 18 of the Contract deals with certificates and payments. Clause 18.1 provides that a bill has to be submitted by contractor on or before 15th of every month for the items of work executed in the previous month. The other clauses provides for scrutiny of the bills and approval to be made by the Director. Clause 18.8(ii) and 18.10 states that all intermediate payments shall be regarded as payments by way of advance against the final payments. Based on the said terms, the Plaintiff has contended that the payment of running account bills would be released by the Defendant within 15 days of the submission of bills, that the agreement envisages the submission of running bills every month and therefore it would necessarily follow that the Defendant would release payments every month, that the Plaintiff submitted 112 bills periodically, that the Defendant inordinately delayed payment of the said bills varying up to 3 months beyond the agreed period of 15 days and hence claimed the interest on belated payment.
57. The Learned Advocate for the Defendant has argued that there is no agreement to pay interest, that the Plaintiff has not furnished any details in the Plaint or in the evidence of P.W.1 about the dates on which the bills were scrutinised and about 56 Com.O.S.No.5178/2005 the dates on which the payments were released, that the running account bills raised from month to month do not create any debt on the Defendant to demand interest, that all the payments made on account of running bills are treated as advances as per the terms of the contract, that under the circumstances the question of claiming interest by the Plaintiff on the allegations that the running bills were paid belatedly does not arise.
58. The Learned Advocate for the Plaintiff has drawn my attention to Agenda No.6 of Ex.P.58/Proceedings of the Monitoring Committee held on 30.09.1997 and has argued that since there was no funds with the Defendant, such a Resolution was made to request the Government for release of funds. He has also drawn my attention to Agenda 10 of the Ex.P.59/Proceedings of the Monitoring Committee held on 20.06.1998 wherein it is resolved that the review brought out the fact that there are pending bills to an extent of Rs.8.00 Crores and unless these are cleared further progress will get drastically affected and it would not be possible to keep up that targeted date. By relying on the said Agenda, the Learned Advocate for the Plaintiff has argued that there was no fund with the Defendant, delay was caused by the Defendant in 57 Com.O.S.No.5178/2005 releasing the Bill amount and therefore the Defendant is liable to pay interest on the delayed payment of the bill amount.
59. In the present case, the combined effect of the Clauses and the agenda in Ex.P.58 and P.59 set out above is that if the Defendant does not procure funds, it is not liable to even pay the Contractor any interest and the Contractor has no remedy. This by itself would mean that such a Clause could be read as leading to a contract without consideration and hence unlawful under Section 23 of the Contract Act. The Defendant being an instrumentality of State, such a contract would also be opposed to public policy under Section 23 of the Contract Act. Section 46 of the Contract Act is also clear that if no time for performance of a contract is specified, it has to be performed within a reasonable time. Reading these provisions together, it is clear that the contention of the Defendant is as good as that the payment shall be made at an undetermined time in the future, subject to availability of funds, which is wholly unreasonable and such a contention would also be unfair.
60. Though the D.W.1 has denied such suggestions during the cross-examination, as evident from the above-mentioned aspect, the Defendant in fact seeks to justify the non- payment 58 Com.O.S.No.5178/2005 on the ground of non-availability of funds. Running the Defendant Corporation is not the business of the Contractor. It is for the Defendant Corporation to manage its affairs as per the funds available with it and it cannot be a defence that the Contractor should bear the brunt of non-payment for years of works executed by him.
61. I wish to refer a decision reported in A.I.R. - 1964 - P&H - 123 (Mrs. I.K. Sohan Singh vs. State Bank of India), involved a transaction of a sale deed wherein the balance sale consideration was to be paid "as soon as possible"
but at a time when the vendee is in a position to make the payment. The question arose as to whether the time prescribed for making the payment of balance consideration was reasonable. The Punjab & Haryana High Court, following the dicta of Justice Warrington in Watling vs. Lewis (1911 1 Ch.
414), held the balance sum ought to be paid within a reasonable time in view of Section 46 of the Contract Act. The Court held as under:-
"9. The words "as soon as possible" which preceded the words "but at a time when the former is in a position to make the payment" also relate to the time of payment. It was neither pleaded nor was it the case of the defendant that if she never had the financial resources or the means to make the payment of the amount of Rs. 25,000, she was to be altogether 59 Com.O.S.No.5178/2005 absolved from all liability to make payment of the balance amount of sale consideration. While construing the disputed contract embodied in the sale deed, the real covenant cannot be so construed that an absolute obligation arising under it can be allowed to be destroyed by a subsequent clause contained in the same deed. In re Tewkesbury Gas Company Tysoe v. The Company 1911 2 Ch.279, a company had issued a series of debentures each of which contained a covenant by the company that it would 'on or after' January 1, 1898, pay to' the registered holder of the debenture the principal sum thereby secured. The debenture then stated as follows: "The debentures to be paid off will be determined by ballot, and six calendar months' notice will be given by the company of the debentures drawn for payment." The company never paid off any of the debentures or held any ballot. In an action by one of the debenture-holders, it was held that on the construction of the covenant and in the events that had happened the principal money secured by the debenture was presently due and payable, and that, if the provision as to balloting and notice meant that the company was never to be bound to pay off any debenture unless it elected to do so and balloted and gave notice accordingly, the provision was void for repugnancy on the principle stated in Sheppard's Touchstone, p. 273, and illustrated in Watting v. Lewis 1911 1 Ch. 414. In the latter case Warrington, J., came to the following conclusion:-
"The result is, I think, that first there is a covenant to pay the money and to indemnify, and then the parties have attempted to qualify that covenant by using words the effect of which, if effect is to be given to them, would be to destroy the personal liability. That being so, 60 Com.O.S.No.5178/2005 the words they have used can have no effect at law and the liability remains".
10. Consequently there is a good deal of force in the submission of Mr. Kapur that the true import of the stipulation in the sale deed with regard to payment of the amount of balance consideration of Rs. 25,000 was that the same would be payable within a reasonable time by virtue of the application of Section 46 of the Contract Act as it must be deemed that no time for performance had been specified. It may be mentioned that this view justifiably commended itself to the Court below."
62. A similar view is echoed in the decision reported in A.I.R.
- 1972 - S.C. - 1826 (Hungerford Investment Trust Ltd. vs. Haridas Mundhra and others) wherein it was held that though no specific time was provided for payment of purchase money, it has to be construed as reasonable time under Section 46 of the Contract Act. The Court, however, held that what is reasonable is a question of fact. The observation of the Hon'ble Supreme Court reads as under: -
"25. It was contended on behalf of Mundhra that he was always ready and willing to pay the purchase money but since the decree did not specify any time for payment of the money, there was no default on his part. In other words, the contention was that since the decree did not specify a time within which the purchase money should be paid and, since an application for fixing the time was made by the appellant and dismissed by the Court, Mundhra cannot be said to have been in default 61 Com.O.S.No.5178/2005 in not paying the purchase money so that the appellant might apply for rescission of the decree. If a contract does not specify the time for performance, the Law will limply that the parties intended that the obligation under the contract should be performed within a reasonable time. Section 46 of the Contract Act provides that where, by a contract a promissory is to perform his promise without application by the promisee and no time for performance is specified, the engagement must be performed within a reasonable time and the question "what is reasonable time" is, in each particular case, a question of fact. We have already indicated that the contract between the parties was not extinguished by the passing of the decree, that it subsisted notwithstanding the decree. It was an implied term of the contract and, therefore, of the decree passed thereon that the parties would perform the contract within a reasonable time. To put it in other words, as the contract subsisted despite the decree and as the decree did not abrogate or modify any of the express or implied term of the contract, it must be presumed that the parties to the decree had the obligation to complete the contract within a reasonable time."
63. Therefore, the contract has to be construed as per the principles contained in Section 46 of the Contract Act. Further, in the present case, there is a stipulation in the Agreement itself that R.A. Bills have to be paid within 15 days. Therefore, even if there are no terms for the payment for interest, the Plaintiff is entitled for the interest on delayed payment of R.A. Bills.
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64. The Defendant has relied on Ex.D.32/Letter dated 08.05.1998 wherein the Defendant has intimated the Plaintiff that R.A.Bill dated 06.05.1998 has been prepared and submitted without cross-checking the actual measurement of work with the representatives of the Defendant and Architect and hence, the said Bill is returned. However, the Architect, M/s Kothari Associates in Ex.P.38 has recommended that the Plaintiff can be paid interest at 18% per annum for net value of bills but the amount of claim under the head must be recalculated and suggested for submission of revised claim. In view of said fact in Ex.P.38, the Ex.D.32 looses its significance. Accordingly the Plaintiff has revised the claim and claimed Rs.6,66,655/- and the same was certified by the Architect. Thereafter, Sri. K.S. Anantharamaiah in Ex.P.37, has recommended for payment of Rs.6,66,655/-. In view of my discussions about the validity, genuineness and binding nature of Ex.P.37 and Ex.P.38, I need not prolong my discussion about the entitlement of the Plaintiff on this Claim to the extent of the amount Rs.6,66,655/-, as certified by the Architect.
65. Claim No.5 - Loss due to idle scaffolding materials:-
According to the Plaintiff the scaffolding was erected to the tower block on 28.04.1997 and the decision about painting work was taken on 20.03.1998 and hence the entire scaffolding 63 Com.O.S.No.5178/2005 was lying idle for 395 days and therefore he is entitled for loss of profit on this ground. The Learned Advocate for the Defendant has drawn my attention to the cross-examination of the P.W.1 on various days about the brick work and plastering work which was executed by Plaintiff in ward block and other blocks and argued that since the said brick work and plastering work was not completed during the said period, the question of executing the painting work and the question of scaffolding lying idle during the said period on account of belated decision, does not arise and hence the said claim itself is a fake one. Further, the learned Advocate for the Defendant has relied on Ex.D.26, letter written by the Defendant to the Plaintiff on 28.01.1997, wherein the Defendant has informed the Plaintiff that the fabrication/concreting of RCC works of ward block, external plastering works, internal plastering/line rendering works etc., are to be carried out and called upon the Plaintiff to mobilize men and materials to complete the said works. By relying on the said document, he has argued that the Plaintiff has not carried out the work as per the program and hence, he is not entitled for this claim.
66. Of course, during the cross-examination of the P.W.1, in respect of the said aspect, there are some admissions. However, the said cross-examination has to be read carefully in 64 Com.O.S.No.5178/2005 order to ascertain the correct picture, because in this case, there is a lengthy cross-examination. The cross-examination of the P.W.1 was made in piecemeal on several days. The cross- examination was commenced on 18.10.2010. It was completed after 9 years, on 01.04.2019. Most of the questions were repeated several times on several intervals. It is to be noted that on 06.03.2013, this Court has passed an Order to appoint a Court Commissioner to record further cross-examination. The Defendant has challenged the said Order before the Hon'ble High Court of Karnataka in W.P.No. 15386/2013(GM-CPC). The said Writ Petition was disposed off on 11.11.2013, with following observations:-
"3. It is seen that the cross-examination of P.W.1 was commenced in the year 2010 as per the order sheet produced. Before the trial court, P.W.1 has been cross- examined on many occasions. But the same is not yet completed. Hence, the said application is came to be filed.
4. The suit is of the year 2005. It is the suit filed for damages claiming Rs. 5,32,93,067/- together with the interest on the principal amount of Rs.3,96,86,032/-.
5. On going through order of the trial court I am of the opinion that the trial court has rightly allowed the application filed by the Plaintiff who is interested in disposal of the suit/case early.
6. However, Sri. P.D.Surana, learned counsel for the Petitioner sumits that there are voluminous records 65 Com.O.S.No.5178/2005 which have to be referred and cross-examination has to be continued though already 80 Pages of cross- examination has been recorded from P.W.1. In view of the same it would be in the interest of justice to put a dead line for completion of cross-examination of P.W.1.
7. Sri.Krishnamurthy, Y.N., learned counsel for the respondent submits that if a time bound direction is given, the petitioner would be satisfied with such a direction.
Hence, this writ petition is allowed. The order dated 06.03.2013 issuing direction for appointing the commissioner is hereby set aside. The trial court is directed to complete the cross-examination of P.W.1 on or before 30.06.2014. The trial Court is requested to dispose of the suit as expeditiously as possible."
67. However, the cross-examination was not completed on the said timelines fixed by the Hon'ble High Court. This led to seeking extension of time by the then Presiding Officers of this Court. Thereafter, the Plaintiff has approached the Hon'ble High Court in W.P.No. 12311/2016(GM-CPC). The said Writ Petition was disposed off on 06.10.2016, with following directions:-
"The grievance of the petitioner is that he has appeared before the Trial Court on more than 120 occasions and has been subjected to cross-examination on more than 45 occasions. Further, the cross- examination of P.W.1 exceeds 170 pages. In the circumstances of the case, it is appropriate to direct the 66 Com.O.S.No.5178/2005 trial court to conclude the cross-examination of P.W.1 at the earliest without granting adjournments."
68. In spite of the same, the Learned Advocate for the Defendant has further cross-examined the P.W.1 on several occasions. By making such a marathon cross-examination, now the Advocate for the Defendant has argued that there are certain admissions in the cross-examination of the P.W.1, and based on such alleged admissions, the Plaintiff is not entitled for any compensation/damages on any of the grounds. The Learned Advocate for the Plaintiff has criticised the manner in which the P.W.1 has been cross-examined and has argued that admissions if any in the evidence of the P.W.1 are due to lengthy cross-examination conducted on several dates. In support of his above arguments, the Learned Advocate for the Plaintiff has relied on a decision reported in 2005 (9) - S.C.C. - 788 (Jai Shree Yadav vs. State of U.P), wherein the Hon'ble Supreme Court has held as follows:-
"When PWs are subjected to lengthy cross-
examination over a period of time, there is always a possibility of the witnesses committing mistakes which can be termed as omission, improvements and contradictions and such infirmities will have to be appreciated in the background of ground realties which 67 Com.O.S.No.5178/2005 makes the witnesses confused because of such tactics of the cross-examining counsel".
69. In the present case, as discussed by me earlier, if such a lengthy cross-examination of the P.W.1 is taken into consideration in the background of the ratio of this decision, along with above-mentioned orders passed in two Writ Petitions, I cannot give so much importance to the said alleged admissions in the cross-examination of the P.W.1. In fact, in order to determine this Claim, the evidence of D.W.1 on the said point is very important. The D.W.1 has deposed that the scaffolding for the tower block was erected on 28.04.1997 for bricks work, that under the contract the Plaintiff was supposed to put snowcem finish for external surfaces, that the Defendant asked the Plaintiff to do a trial painting with texture graffitho trowel finish of different colours before finally arriving at a decision, that the final decision was taken by the monitoring committee in the year 1999, that the Plaintiff had to proceed to procure painting materials after the final decision was taken by the monitoring committee, that only after the approval of the rates to texture graffitho trowel finish, Defendant gave instructions to the Plaintiff to procure the materials. He has also deposed that the Plaintiff erected scaffolding for the brick works 68 Com.O.S.No.5178/2005 and retained it for plastering and also for painting. In the said evidence of the D.W.1 it is very clear that in view of the delay in taking decision by the Defendant the Plaintiff had to keep idle the scaffolding materials for 395 days.
70. For this aspect, I wish to refer a decision reported in 2001 (1) - Arb. L.R. - 289 (Delhi) (Delhi Development Authority vs. S.S. Jetley). That was also a case where the contractor had made two claims, one for payment of sums under Clause 10CC of the agreement and the other on account of compensation for idle labour, staff, machinery, centering, shuttering etc. during the extended period of work. The arbitrator had awarded the said claim which the Hon'ble High Court found to be legally permissible under Sections 73 and 74 of the Contract Act which entitles the aggrieved party to claim damages for losses suffered due to a breach of the contract by the opposite party. The relevant portion is as under: -
"It was the case of the respondent that because of prolongation of the Contract due to the fault on the part of the appellant, the respondent was made to incur the expenditure on idle labour, staff, machinery centering, shuttering and other ancillary requirements like electricity, water, petroleum, etc. It was the case of the respondent that it was necessary for the respondent to keep regular establishment including graduate engineer 69 Com.O.S.No.5178/2005 at site till the work is completed as required under Clause 36 of the agreement. The Arbitrator found that the respondent had in fact incurred expenditure on the aforesaid grounds and awarded the claim @5,000 per month for the period of delay which was 44 months and on this basis a sum of Rs. 2,20,000 was awarded. It was clear, therefore, that Claim No. 17 was for damages on account of prolongation of Contract inasmuch as respondent was made to incur unnecessary expenditure due to the fault of the appellant in prolonging the Contract. This claim is, therefore, maintainable as per Sections 73 and 74 of the Contract Act which gave entitlement to the respondent to claim damages/loss suffered due to breach of contract by the appellant."
71. The question is, however, one of determining the loss which the contractor had suffered on the said ground. The Architect, M/s Kothari Associates in Ex.P.38 has recommended for payment of Rs.5,20,195/-. In view of said Certification, at this moment, Ex.D.26 became insignificant. The D.W.1 admitted that the said Architect certified for payment of the said amount to the Plaintiff. According to the D.W.1 the said certification was baseless and unscientific. He has admitted that the Defendant has not taken any action against the Architect for making such unscientific certification. The said evidence of the D.W.1 itself shows that the Plaintiff is entitled for the amount as certified by the Architect. Sri. K.S.Anantharamaiah in Ex.P.37, has 70 Com.O.S.No.5178/2005 recommended for payment of Rs.5,00,000/- . In view of my discussions about the validity, genuineness and binding nature of Ex.P.37 and Ex.P.38, I need not prolong my discussion about the entitlement of the Plaintiff on this Claim to the extent of the amount Rs.5,20,195/-, as certified by the Architect.
72. Claim No.6 - Loss due to idle Plant & Machinery :-
According to the Plaintiff, since the Defendant had delayed giving decisions, designs and drawings etc., and was also guilty of several other lapses as a result of which, several working days were lost to the Plaintiff and the Plant & Machinery mobilized by the Plaintiff were also rendered idle, thereby causing loss to the Plaintiff on account of such idle mobilization. As per Page No.21 of the Plaint, in Sub-Para No.2, it is stated by the Plaintiff that as on 10.08.1996, clearly 456 working days were lost on difference disciplines of works. Ex.D.7 is the letter written by the Plaintiff showing details of Plant & Equipment available on site as on 14.11.1994. In the said letter, it was pointed out that sufficient machinery and excavator was present on site and major excavation work was completed in record time. It was also pointed out that delay was due to factors beyond control of the Plaintiff as in the Service Block, 71 Com.O.S.No.5178/2005 the Defendant wanted to examine a new termite treatment which can only happen when the soil is dry which was not possible due to rain, storms and cyclonic conditions. The Plaintiff acknowledged that all clearances are given by the Defendant as on 14.11.1994 and hope to pick up progress of work from January 1995 onwards. The calculation about the said loss is at Ex.P.50. The only defence of the Defendant is that some R.A. Bills were submitted during the alleged period of 130 days and it is indicative of the fact that there was sufficient progress of work during the said period. However, the DW.1 during his cross-examination has deposed that the claim under this head does not relate to the period of the work covered in the 25th R.A. Bill. Hence, the said contention of the Defendant cannot be accepted. Initially the Plaintiff has claimed Rs.57,47,787/- under this head. But, it is to be noted that the Architect in his Report at Ex.P.38 has stated that the loss for idle machinery should be Rs.38,19,790/-. The Plaintiff has claimed the same amount. In Ex.P.37 it is reported that the claim under this head is to be considered along with other claims of idleness and the total claim amount for all the heads be reduced to Rs.5 Lakhs. However, since the Architect has certified for Rs.38,19,790/-, the Plaintiff is entitled for the same amount under this head.72
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73. Claim No.7 - Loss due to idle labour force :-
According to the Plaintiff, since the Defendant had delayed giving decisions, designs and drawings etc., and was also guilty of several other lapses as a result of which, several working days were lost to the Plaintiff and the labour force was mobilized by the Plaintiff was also rendered idle, thereby causing loss to the Plaintiff on account of such idle mobilization. According to the Plaintiff, there were loss of 130 working days for non-availability of work fronts and hence, the labour force was kept idle for the said period. The calculation about the said loss is at Ex.P.51. The only defence of the Defendant is that there was work progress in some or the other fronts even though it was slow, there were various complaints with reference to the shortage of men and material, that the question of providing payment for a person not having worked in the labour class in the existing system of practice and hence, the Plaintiff is not entitled for any amount under this head. However, it is to be noted that the Architect in his Report at Ex.P.38 has stated that the loss suffered on account of additional wage payment to work force during the idle period should be Rs.40,04,776/-. The Plaintiff has claimed the same amount. In Ex.P.37 it is reported that the claim under this head is to be considered along with other claims of idleness and the 73 Com.O.S.No.5178/2005 total claim amount for all the heads be reduced to Rs.5 Lakhs. However, since the Architect has certified for Rs.40,04,776/-, the Plaintiff is entitled for the same amount under this head.
74. Claim No.8 - Loss due to idle overheads and establishment:-
A Contractor is entitled to claim extra expenditure incurred on establishment and overhead charges, if the period of contract is prolonged due to breaches of contract on the part of the Employer. In the present case, as discussed earlier, the delay was caused due to the Employer/Defendant. The Plaintiff has claimed overhead and establishment which includes the following:-
(a) Head Office expenses
(b) Regional Office expenses
(c) Site Office expenses
(d)Expenses towards infrastructural facilities (maintenance)
75. According to the Plaintiff, the Contract Value of the work was about Rs.13.22 Crores and the duration was 36 months, that the value of the work increased to Rs.22 Crores, that because of the increase in the Value of work, it was imperative for the Plaintiff to maintain overheads and establishment over an additional period of 24 months which was proportional to the 74 Com.O.S.No.5178/2005 increase in the value of work and hence, the entire expenditure of Rs.58,89,800/- incurred by the Plaintiff towards overheads and establishment for extra 32 months were completely loss to the Plaintiff. The calculation for the said ground is at Ex.P.52. The Plaintiff has claimed Rs.33 Lakhs under this head. However, as per Ex.P.38, the Architect has recommended for payment of Rs.30 Lakhs. Further, in Ex.P.37/Report, it is stated that the recommendations made by the Architect for payment of Rs.30 Lakhs to be reasonable and recommended payment of the same.
76. Under law, a Contractor is entitled to claim extra expenditure incurred on establishment, overhead charges, machinery, shuttering and scaffolding if the period of contract is prolonged due to breaches of contract on the part of the Employer as discussed above. The Contractor is entitled for damages on account of increase in the cost of construction material or extra expenditure on overheads and establishment charges. Because, these are damages which a Contractor suffers due to lengthening of the period of performance beyond the time originally fixed in the Contract.
77. In the above mentioned decision reported in (2006) 11 - S.C.C. - 181 (McDermott International Inc vs. Burn 75 Com.O.S.No.5178/2005 Standard Co. Ltd), 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 call 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 afore-mentioned formulae 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 formulae or the other. In a given case, a Court of Law or an Arbitrator may even prefer one formulae as against another. But only because the learned Arbitrator in the facts and circumstances of the case has allowed MYI to prove its claim relying on or on the basis of Emden formulae, 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."
78. There are three popular formulae which calculates loss of profit along with loss of overhead. They are (i) the Hudson Formulae, (ii) the Emden Formulae and (iii) the Eichleay 76 Com.O.S.No.5178/2005 Formulae. In the above-mentioned decision, the Award of loss of profit was challenged on the basis that instead of using the Hudson formulae, the Emden formulae was used.
79. Hudson in his treatise has summed up the law on the subject in the following manner:-
"At this point it may assist if an indication is given of the types of consequential damage which Contractors are likely to or may suffer when Contract is monetarily affected by an Employer breach, the heads of damage (apart from the direct damage immediately suffered on some individual work process, which will obviously vary from case to case) are likely to be as follows:-
(a) When delay in completion of the whole project results, a Contractor will usually suffer :-
(i) a loss owing to the fact that his off-site overheads, which was partly be independent of the actual site expenditure or even the period the Contract takes to complete (such as Head office rents) and partly may be dependent (such as administrative expenditure in relation to a dislocated and longer Contract) will have either increase in the latter case, or need to be recovered from a small annual turnover than that budgeted in the former case ;
(ii) a loss of the profit earning capacity of the particular contract organisation affected, due to its being retained longer on the contract in question without any corresponding increase in the monetary benefit earned and without being free to move elsewhere to earn the profit which it otherwise might do;77
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(iii) ban increase of cost in his running-on site overheads, that is to say those elements of costs directly attributable to the contract which are governed by time and which are independent of the amount of work carried out, for instance supervisory cost, costs of permanent Plant such as site huts, and certain special Plants needed throughout the work;
(iv) In a contract, without an applicable fluctuations clause, the inflationary or other increases in the cost of labour or materials (less any decreases) which he would not have incurred but for the delay.
(b) Whether or not delay in completion results, the disturbance of a contractor progress or planning may also result in lower productivity from the contractor's plant or labour.
All these heads of damages can be conveniently discussed under the following four paragraphs :-
(a) "Overheads" are usually known as in the industry as "head office overheads". It is convenient to deal with these together with profit, because it is the practice of most contractors of any substance in major contracts, after making their best estimate of the prime cost of the whole project, to add a single percentage thereto for both the above items. In bill contracts, the total cum calculated from prime cost may be distributed across the bill rate or the contractors may have built up the tender sum by estimating bill rates for particular processes, adding the same percentage to cost when calculating each rate, and in really important contracts two teams of estimators may each estimate separately by the two methods as a cross-check before finally producing the tender sum. Other things being equal, the contractor's laws from an extended contract period must bear proportionate extension of this percentage of 78 Com.O.S.No.5178/2005 his contract sum, and the loss calculated in this way is a real loss (provided the true percentage used can be determined) and is quiet independent of the extent to which his contract prices may have been profitable or unprofitable, which depends on the accuracy of this estimates of costs on that particular contract and not on the profit percentage (this is not, of course, the case where an extended contract period is not involved, and the contractor sues for loss of profit on work which he has not done, as where the contract has been wrongly terminated by the employer. There he must prove that he would have made a profit in fact - i.e., that his contract prices were an accurate estimate, or an over estimate, of cost.) The percentage used in the United Kingdom in pricing for head office overheads and profits obviously varies from contractor to contractor, and is usually a closely guarded secret, but evidence given in litigation on many occasions suggests that it is usually, in a major contract subject to competitive tender on a notional basis, between 3% and 7%, of the total prime cost, including P.C. and provisional sum figure for nominated sub-contractors. It should be remembered that these percentages which may seem small in relation to turnover, in fact represent a return on capital employed of several times that percentage per annum (it is, in effect, this very high "gearing" element in the pricing of building and engineering contracts, due to the high ratio between turnover and capital employed, that means that a very small difference in pricing or estimating may produce very heavy losses or very large profits". Some contractors do consciously apply a break-down of the percentage as between head office and profit, but for the purpose of assessing the loss due to delay in completion, the division is not theoretically important. The formula usually used is as follows:-79
Com.O.S.No.5178/2005 H.O./Profit percentage X Contract Sum x Period of Delay (in weeks) 100 Contract Period (e.g.) in weeks) A Caveat should, however, be entered in regard to the profit element in the above formula. The formula assumes that the profit budgeted for by the contractor in his prices was in fact capable of being earned by him elsewhere had the contractor been free to leave the delayed contract at the proper time. This itself involves two further assumptions, namely that on average the contractor did not habitually under estimate his costs when pricing, so that the profit percentage was a realistic one at that time, and secondly, that there was thereafter no change in the market, so that work of at least same general level of profitability would have been available to him at the end of the contract period. There is no doubt that satisfactory evidence on these matters is necessary, and the case of Sunley vs. Cunard White Star (1940) and a number of cases involving wrongful detention of ships, and consequential loss of charter- party profits, indicate that in the absence of such evidence, a contractor who has been delayed will only be entitled to interest on Capital employed, and not on loss of profit.
(b) Site overheads :- These will include items like supervision (including, perhaps, part of the time of a contract's manager as well as a full time site agent or general foreman), hutting, permanent gantries or hoists, certain types of pumping or de-watering in engineering contracts and standing time of plant required to be retained on the site. Some of these will not necessarily be present for the whole period of delay.
The "standing time" of unproductive Plant, is frequently claimed by contractors on the basis of hire-rates, which may result in the capital value of a new piece of Plant being claimed over a relatively short period of time.
80Com.O.S.No.5178/2005 Hire-rates may sometimes be adopted by Courts, where satisfied that a loss of profit has occurred, and where evidence of that particular loss exists, but in the absence of evidence of profit opportunity, only depreciation and maintenance may be allowed.
(c) Rises in cost of materials and labour :- these call for little comment, except that it may be very difficult exercise, for which careful examination of the contractor's likely program will be required, to decide when materials would have been ordered, or labour engaged, but for the delay.
(d) Loss of productivity :- As stated, this may not necessarily be associated with any overall delay. This damage is usually very hard to assess. In many cases where there has been delay, a delaying factor may cause little or no loss under this head, because the extent and duration of the delay can be forecast with reasonable notice the contractor can postpone engaging, or reduce, his Plant and labour force during the period when the delaying factor is operating, so that they bear the similar ratio to out-put to that during period when progress is more rapid. In other cases, he may not be able to do this, and in inflationary times, a contractor will have good reason not to disperse his labour force once he has organized it, for fear that he will not be able to get it back later. Bonus schemes can also be seriously upset, whether or not there is overall delay. In assessing claims for loss of productivity of Plant, such Plant, if hired, will be paid for by the contractor at "standing" rates. Plant not in this category should be valued on a depreciation basis and loss of profit should not be allowed upon it in the absence of evidence of an available profitable use elsewhere. It is unusual, in the 81 Com.O.S.No.5178/2005 absence of any more precise method, to claim this type of loss as an arbitrary percentage on total labour or Plant expenditure during the period of dislocation."
80. The above-mentioned principle is to be read with the decision reported in A.I.R. - 2015 - S.C. - 1282 (M/s. Construction and Design Services vs. Delhi Development Authority), wherein the Hon'ble Supreme Court has considered the issue of Liquidated Damages, proof required etc. in the light of the earlier decision of the Hon'ble Supreme Court reported in (2003) 5 - S.C.C. - 705 (Oil and Natural Gas Corporation Ltd vs. Saw Pipes). When such being the case, the Plaintiff need not prove the actual loss suffered by him as argued by the learned Advocate for the Defendant when he claimed damages for the loss due to idle overheads and establishment like head office expenses etc. Therefore, the Plaintiff is entitled for the said claim also as certified by the Architect.
81. Claim No.9 - Loss due to infructuous procurement of Rajnagar White Marble :-
According to the Plaintiff, the Agreement provided for Terrozo flooring and mozaic flooring, that the Defendant decided to adopt marble flooring for corridors, rooms, lift 82 Com.O.S.No.5178/2005 lobbies etc., instead of terrozo flooring. The DW.1 during his cross-examination has admitted that the original tender certification required terrozo flooring and mozaic flooring and the Defendant sought for marble flooring for corridors, rooms, lift lobbies etc., instead of terrozo flooring. Therefore, the said aspect is admitted by DW.1. According to the Plaintiff, the Agreement did not have an item covering the provision of Rajnagar marble floor and therefore, the Plaintiff submitted the extra item rate of marble flooring. The DW.1 during his cross- examination admitted that Plaintiff sought for Rajnagar white marble for approval as extra item. Therefore, the said aspect is also admitted by DW.1. According to the Plaintiff as the Defendant had approved the rates, the Plaintiff had purchased and mobilized to site Rajnagar white marble of total quantity of 5390sq.mtrs. The DW.1 has deposed that it may be true that Plaintiff had procured total quantity of Rajnagar white marble measuring about 5,390sq.mtrs. According to the Plaintiff, the Plaintiff commenced the marble flooring work in 1 st and 2nd floor of the ward block with such marble, that when the work was in progress, the Defendant decided to discontinue further marble flooring work and decided to execute granite flooring instead of marble flooring at the ground floor of ward block and other areas, that by that time the Plaintiff had executed 1490sq.mtr. of marble flooring and nearly 3900sq.mtr. of marble were lying 83 Com.O.S.No.5178/2005 at the site due to change in specification and such quantity had become surplus requirement and hence, the Plaintiff had incurred infructuous expenses on loading, unloading, transportation and handling charges and there was a wastage of idle investment for three months. The DW.1 has deposed during his cross-examination that Plaintiff had installed 1,490sq.mtrs. of Rajnagar white marble as on 07.01.1997, due to decision taken for change of marble, uninstalled Rajnagar white marble of 3,900 sq.mtrs., which was already procured by the Plaintiff, became unnecessary, that Plaintiff had incurred expenses for load, unloading, transportation and handling of said marble, that the Defendant decided for alternative type of marble for achieving better finishing. Hence, all these contentions pleaded by the Plaintiff is more or less admitted by the DW.1.
82. However, according to the Defendant, it was mutually agreed upon to switch between terrazo flooring and mozaic flooring and the fact that terrazo flooring required lot of work like laying, grinding, polishing etc., that in order to accommodate and to have a better appearance for the Defendant, it was decided that the marble flooring could be used, that the responsibility of securing the marble in accordance to the sample was with the Plaintiff, that 84 Com.O.S.No.5178/2005 accordingly the Plaintiff secured the marble and carried out certain works, that subsequently the Architect verified that the marble did not confirm to the sample approved and rejected more than 50% of the materials procured, that the Plaintiff has been paid for whatever the work which was executed without effecting any discount. The Defendant has contended that Clause No.11.5 of Ex.P.64 discloses that the rejected material must be removed from the site at free of cost by the Plaintiff. According to the Defendant, as per Ex.D.25/Ex.P.57 Joint Inspection Notes dated 04.01.1997, the Plaintiff is not entitled for damages under the said head.
83. The DW.1 has deposed that after installation of Rajnagar white marble in levels 99.10, 103.30 and 107.50 in South Ward Block, inspection by the Defendant's representative was made on 04.01.1997 and it was decided to change the marble to be installed in rest of the portions, as per Ex.D.25/P.57 and that after decision as per Ex.D.25/P.57 was taken, defendant's representatives, Architects and Plaintiff's representatives visited different show-rooms of marble and selected particular type of marble to be installed for remaining portions, that payment for the procured Rajnagar white marble of 3,900 sq.mtrs. was not made to the Plaintiff, since it was bad quality and as per the instructions of the Architect, the said payment was not made.
85Com.O.S.No.5178/2005 The DW.1 has further deposed that except Ex.D.25/P.57, there is no other correspondence made by the Architect with the Defendant stating that Rajnagar white marble procured by the Plaintiff is of bad quality and there is no need to make payment for it. There is no dispute that the Defendant has made payment to the Plaintiff relating to the already installed Rajnagar white marble of 1,490 sq.mtrs.
84. The Plaintiff has made claim for payment under this head for payment of Rs.2,53,500/- initially. However, in Ex.P.38, after deducting the sale proceeds of the unused Rajnagar white marble by the Plaintiff, the Architect recommended for payment of Rs.1,22,304/-. The same is again recommended in Ex.P.37/Report also. Hence, the Plaintiff is entitled for the said amount of Rs.1,22,304/- under this head.
85. Claim No.10 - Loss due to extra expenses towards collection of additional Earnest Money Deposit :-
According to the Plaintiff, he submitted offer for Rs.17.50 Crores, that at the time of tender, the estimated value of the project was Rs.11.68 Crores, that in terms of the Agreement, the Plaintiff has submitted Earnest Money Deposit of Rs.17.50 Lakhs (i.e., 1% of Project cost). As per Ex.D.8, the Defendant 86 Com.O.S.No.5178/2005 has specifically asked to furnish Bank Guarantee of Rs.17.50 Lakhs. The DW.1 during his cross-examination has admitted that under the Contract, the Defendant was supposed to collect 1% of the Contract from the Plaintiff towards earnest money deposit in the form of Bank Guarantee. According to the Plaintiff during negotiations, the scope of work was reduced and the estimated cost of the reduced scope of work was Rs.7.10 Crores, that the Plaintiff submitted revised offer for a value of Rs.13.22 Crores for the reduced scope of work, that the Defendant finalised the Agreement for the said amount, that the Defendant retained the full Earned Money Deposit to the extent of Rs.17.50 Lakhs instead of Rs.13.22 Lakhs and thereby retaining the balance Rs.4.27 lakhs which caused extra loss to the Plaintiff, that the Defendant has not refunded the said excess amount and hence, the Plaintiff incurred financial losses on account of non-release of balance Earnest Money Deposit amounting to Rs.1,00,395/- which the Defendant is bound to compensate.
86. According to the Defendant, Plaintiff never wrote the request letter for releasing the Bank Guarantee, that the Plaintiff on securing the contract, slept over the matter, after a prolonged period, he made this claim and hence, the same is to be rejected.
87Com.O.S.No.5178/2005
87. However, the DW.1 during his cross-examination has admitted that original contract value was Rs.13.22 Crores, that 1% of this Contract Value comes to Rs.13.22 lakhs, that the Defendant has collected Rs.17.50 Lakhs from the Plaintiff towards EMD. As per the evidence of DW.1, under the Contract, in Clause-4.2, Defendant was supposed to collect extra EMD from the Plaintiff for extra items of work to be operated, that immediately after entering into the Contract, Defendant knew that it had Rs.4.27 Lakhs as extra EMD, that Defendant knew at the time of entering of contract that there would be extra items of work. However, all these contentions of the Defendant was rejected by the Architect in Ex.P.38 and he recommended to pay Rs.1,00,395/- to the Plaintiff. Hence, the Plaintiff is entitled for Rs.1,00,395/- under this head.
88. Claim No.11 - Interest :- The Plaintiff has claimed interest at 12% per annum on the delayed payment of certified amount. The Defendant has contended that there is no agreement to pay interest. However, I have already discussed above the said contentions of the learned Advocate for the Defendant while dealing with Claim No.4. Therefore, for the same reasons, the Plaintiff is entitled for interest at the rate as prayed by him. However, as per my calculation, the Plaintiff is 88 Com.O.S.No.5178/2005 entitled to Rs.3,65,74,826/- on Claim Nos.1 to 10 above. On the said amount only, he is entitled for interest at 12% per annum from 13.07.2002.
Therefore, I answer all these Issues in the "Affirmative".
89. Addl.Issue No.5 framed on 31.03.2010 : - The Plaintiff submitted its claim to the Defendant in terms of Clause- 19.6.1 of Ex.P.64 and the same was forwarded to the Architect and later to Sri. K.S.Anantharamaiah. No other decision of the Defendant has been put forth in the present case. Hence, it would follow that the decision that the decision of Sri. K.S.Anantharamaiah at Ex.P.37 would amount to be the decision of the Director of the Defendant as the Director has delegated the power of adjudication to Sri. K.S. Anantharamaiah. Hence, Ex.P.37 is the adjudication of the claims submitted by the Plaintiff and binding on the parties as discussed by me earlier. Hence, the Plaintiff has followed the Dispute Resolution Clause and therefore, I answer this Issue in the "Affirmative".
90. Addl.Issue No.6 framed on 31.03.2010 :- The Defendant has not produced any documents to prove that they have taken any action on Exs.P.37 and P.38. It is to be noted that the Ex.P.38/Report was submitted on 12.07.2002. The 89 Com.O.S.No.5178/2005 learned Advocate for the Plaintiff has argued that after receipt of Ex.P.38, on 17.08.2002, the Defendant has sought some clarification from the Plaintiff. He has drawn my attention to Ex.P.44/Letter of the Plaintiff dated 23.09.2002, wherein the Plaintiff has submitted particulars of pending payments in reply to the above-mentioned letter dated 17.08.2002. After realising that the Architect has certified the payment, by way of Ex.P.25/Letter dated 23.09.2002, the Plaintiff requested the Defendant to release the compensation. The defendant did not comply with the said request and not sent any Reply to the said letter. Again the Plaintiff has requested the Defendant to release the compensation as per Ex.P.26/Letter dated 11.12.2002. The defendant did not comply with the said request at this time also and not sent any reply. Again the Plaintiff has sent another letter as per Ex.P.27 on 04.02.2003 requesting the Defendant to release the claimed amount. The defendant did not comply with the said request and has not sent any reply. The Plaintiff sent another similar letter on 15.03.2003 as per Ex.P.29. Thereafter, on 04.04.2003, the Defendant has sent Ex.P.3/Letter accepting the request of the Plaintiff to issue revised virtual completion certificate only. However, the Defendant has still not replied on the claims of the Plaintiff. Thereafter, the Architect M/s Kothari Associates Private Limited has written a letter to the Plaintiff on 29.04.2003 as per Ex.P.16 90 Com.O.S.No.5178/2005 intimating about their recommendations given to the Defendant with regard to the claims of the Plaintiff. Thereafter on 28.05.2003, the Plaintiff has sent Ex.P.30/Letter to the Defendant informing about the submission of the Final Bill on 03.03.2003 along with corresponding escalation bill and requesting the Defendant to clear 75% of their total Final Bill. Thereafter on 11.11.2003, the Plaintiff again sent Ex.P.39/Letter to the Defendant requesting for payment of pending bills. It is to be noted that the work was completed and the defect liability period was also completed at that time. Thereafter on 15.03.2004, as per Ex.P.40 the Plaintiff requested the Defendant to reconsider certain claims which were not certified in Ex.P.38 and to release the claimed amount at an early date. Thereafter on 23.03.2004, the Plaintiff again requested the Defendant as per Ex.P.41/Letter to release 50% of payment against the Final Bill. Thereafter, as could be seen from Ex.P.37, the Defendant has written a letter to Sri. K.S. Anantharamaiah, referring the 18 claims of the Plaintiff for his opinion and settlement. The said Sri. K.S. Anantharamaiah has filed his Report as per Ex.P.37 on 05.07.2004. As discussed earlier, the Defendant has not informed the Plaintiff about the recommendations made by Sri. K.S. Anantharamaih as per Ex.P.37 immediately. The Plaintiff got issued a Legal Notice as per Ex.P.17 on 15.01.2005. The DW.1 during his cross-examination has admitted that the 91 Com.O.S.No.5178/2005 Plaintiff had raised Final Bill claiming Rs.24,11,207/-. As per DW.1, this amount was not paid to the Plaintiff since several cracks were developed in the walls of the structure, that the Architects had instructed to withhold money payable to the Plaintiff. However, he has clearly admitted that the certification made by the Architect and Project Engineer was not communicated to the Plaintiff. In Ex.P.17, the Plaintiff has claimed total amount of Rs.3,92,86,033/- with interest at 12% per annum from 13.12.2004. The Defendant has sent a Reply as per Ex.P.18 stating that the subject matter contained in Ex.P.17/Legal Notice was being placed in an Agenda before the ensuing Monitoring Committee Meeting to be held on 10.02.2005 and further, the Defendant had requested the Plaintiff not to persuade any legal proceedings till a detailed Reply is issued. However, the documents in respect of the proceedings held on 10.02.2005 are not produced before this Court. Thereafter on 15.03.2005, the Defendant has issued a detailed Reply as per Ex.P.19 denying all the claims of the Plaintiff for the first time. It is to be noted that after submission of Ex.P.38/Report, the Plaintiff has been sending several letters requesting to release the payments, but the Defendant has not issued any Reply. After a long time and after issuance of Legal Notice, the Defendant repudiated the claim of the Plaintiff for the first time as per Ex.P.19 on 15.03.2005. In Ex.P.19, it was 92 Com.O.S.No.5178/2005 informed to the Plaintiff for the first time that Ex.P.37 & P.38 Reports were not acceptable. The DW.1 has deposed that there are no records to show any decision taken by the Defendant either accepting or rejecting the said Reports. He has also admitted that the Defendant never informed the Plaintiff till issuance of Ex.P.19 that the Report at Ex.P.37 has been rejected. In view of said correspondence and the evidence of DW.1, it is proved that the Defendant have not taken any action on the recommendations of the Architect & Sri. K.S. Anantharamaiah as per Exs.P.37 & P.38. Hence, I answer this Issue in the "Negative".
91. Issue No.4 :- As per the Defendant, all the claims are barred by time as they relates to claim of damages and for additional payments for the additional work alleged to have been done, that Article 18 of the Limitation Act is not applicable to the facts of the present case and that Article 55 of the Limitation Act applies, that the three years period has to be taken from the date when the contract is broken, that the work is completed before 31.03.2002, that the suit filed after three years is not maintainable and hence, the suit is barred by time. He has also argued that in case of claim arising out of any additional work executed outside the purview of contract, the 93 Com.O.S.No.5178/2005 Residuary Article 113 is applicable (Article 120 of Old Act) and he has relied on a decision reported in A.I.R. - 1970 - S.C. - 1433 (Gannon Dunkerley & Co.Ltd. vs. Union of India).
92. It is to be noted that the Project was completed before 31.03.2002. The DW.1 has deposed during his cross- examination that the Plaintiff had made its claims to the Defendant, that the Defendant referred those claims to the Architect and on 12.07.2002, the said Architect submitted his Report as per Ex.P.38. He has further deposed that on 06.04.2004, the Defendant referred the said claims of the Plaintiff along with Ex.P.38/Report to Sri. K.S. Anantharamaiah and he submitted a Report as per Ex.P.37 on 05.07.2004. It is to be noted that the Defendant has not communicated about the Report marked as Ex.P.37 to the Plaintiff and that he has not complied with the recommendations in the Reports marked as Exs.P.37 & P.38. For the first time, the claim of the Plaintiff was rejected in Ex.P.18/the detailed Reply Notice of the Defendant on 15.03.2005. I wish to refer to a decision reported in I.L.R. - 2004 - KAR - 1152 (MYSORE MINERALS LIMITED vs. TAM- TAM PEDDA GURUVA REDDY), wherein the Hon'ble High Court of Karnataka by following the judgment of the Delhi High Court reported in (1987) 2 - A.L.R. - 73 (RAM DITTA MAL vs. FOOD CORPORATION) has held that the period of 94 Com.O.S.No.5178/2005 limitation will not start running from the date of completion of work or the non-payment of running bills and that the cause of action will arise only after the Defendant intimated about the preparation of the final bill or his having accepted the payment. In another recent decision reported in 2018 (12) - S.C.C. - 393 (Aries & Aries vs. Tamilnadu Electricity Board), it is held that the suit is to be filed within the limitation from the date of rejection of the claim by the Defendant and the said suit is governed by the Article 113 of the Limitation Act. In the said suit, after receipt of final payment, the Plaintiff demanded further payment on 16.05.1981, which was rejected by the Defendant on 06.11.1981. The Hon'ble Supreme Court has held that cause of action in respect of said rejected claim arose on 06.11.1981 and the suit filed was well within limitation. The fact of the said case is applicable to the present case also and hence, the said ratio is also applicable to the present case. Hence, in view of the ratio of the above-mentioned decisions, this suit is within limitation. Therefore, I answer this Issue in the "Negative".
93. Issue Nos. 1 & 2 :- The total amount of Claim Nos.1 to 10 as calculated by me as per the Certification of the Architect is Rs.3,65,74,826/-. Further, at Claim No.11, as discussed by me earlier, he is entitled for interest at 12% per annum on 95 Com.O.S.No.5178/2005 Rs.3,65,74,826/- from 13.07.2002. As could be seen from Ex.P.30, the Plaintiff has submitted Final Bill on 28.05.2003. As admitted by the DW.1, during his cross-examination, Plaintiff had raised the said Final Bill for Rs.24,11,207/-. As discussed by me earlier, the said Final Bill has not been paid to the Plaintiff. At Para No.37 of the Affidavit filed in-lieu of oral Examination-in- Chief of DW.1, he has stated that the claim of the Final Bill at Rs.24,07,207/- is barred by time. As per my finding on Issue No.4, the said claim is not barred by time. The DW.1 has further deposed in the said Para that no payments were made to the Plaintiff after 31.03.2002 and all payments were made to the Plaintiff before 31.03.2002. When such being the case, since the Final Bill was submitted on 28.05.2003, admittedly the amount of the said Final Bill was not paid to the Plaintiff. Hence, the Plaintiff is entitled for the said amount also with interest at 12% per annum from 04.07.2003 to 07.07.2005 as calculated by the Plaintiff for Rs.5,81,861/- with current and future interest at 12% per annum on Rs.24,11,207/-.
94. Before proceeding further, I wish to mention few words about the conduct of the Defendant while appreciating the award costs on him. As discussed by me at Para No.66 above, in spite of the direction of the Hon'ble High Court in W.P.No.15386/2013 (GM-CPC), the learned Advocate for the 96 Com.O.S.No.5178/2005 Defendant has not complied with the same and cross-examined the PW.1 for years together. Similarly, as discussed by me at Para No.67 above, the learned Advocate for the Defendant has not complied with the direction of the Hon'ble High Court of Karnataka in W.P.No.12311/2016 (GM-CPC) and cross-examined the PW.1 further on several occasions. The learned Advocate for the Defendant has put the same questions to PW.1 on several occasions on several intervals and when the DW.1 was cross-examined, he had made several admissions and thereby the entire cross-examination of PW.1 lost its importance. Therefore, the learned Advocate for the Defendant not only wasted the time of PW.1 but also wasted the precious time of this Court. Further, by relying on the decision reported in 2010 (3) - K.C.C.R. - 2265 (DB) (Venkatesh Construction Company, Bangalore vs. Karnataka Vidyuth Karkhane Limited (KAVIKA), Bangalore), though the same was reversed by the Hon'ble Supreme Court in the decision reported in A.I.R. 2016 - S.C.C. - 553 = 2016 (4) - S.C.C. - 119 (Venkatesh Construction Company, Bangalore vs. Karnataka Vidyuth Karkhane Limited (KAVIKA), Bangalore), as discussed by me at Para No.40 above, without disclosing that the same was reversed by the Hon'ble Supreme Court, the learned Advocate for the Defendant has tried to mislead this Court, which practice is highly deprecated.
97Com.O.S.No.5178/2005 Therefore, apart from the actual litigation cost incurred by the Plaintiff, the Defendant is directed to pay additional cost of Rs.1,00,000/- to the Plaintiff within two months from the date of this Judgment, as per Section 35 of Civil Procedure Code as amended under Section 16 of the Commercial Court Act. Accordingly, I answer these Issues in the "Affirmative".
95. Issue No.5:- , I proceed to pass the following Order.
ORDER The Suit of the Plaintiff is decreed.
The Defendant is directed to pay a sum of Rs.3,65,74,826/- (Rupees Three Crores Sixty Five Lakhs Seventy Four Thousand Eight Hundred and Twenty Six Only) with interest at the rate of 12% per annum from 13.07.2002 till realisation.
The Defendant is directed to pay a sum of Rs.24,11,207/- (Rupees Twenty Four Lakhs Eleven Thousand Two Hundred and Seven Only) with interest of Rs.5,81,861/- on the said amount and also the current and future interest at 12% per annum.
The Defendant is hereby directed to pay cost of this suit along with the cost of Rs.One Lakh as detailed at Para No.94 of this Judgment to the Plaintiff within two months.
98Com.O.S.No.5178/2005 The Advocate for the Plaintiff is directed to file Memorandum of litigation Cost before the Office within 5 days from today as required under Rule 99 and 100 of Karnataka Civil Rules of Practice.
Draw up Decree accordingly.
The Office is directed to send copy of this Judgment to Plaintiff and Defendant to their email ID as required under Order XX Rule 1 of the Civil Procedure Code as amended under Section 16 of the Commercial Courts Act.
(Dictated to the Judgment Writer, typed by her, corrected and then pronounced by me in open Court on this the 11th day of June, 2021).
(DEVARAJA BHAT.M), LXXXII Addl. City Civil & Sessions Judge, Bengaluru.
ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF THE PLAINTIFF P.W.1 Sri. J. Survatendra 99 Com.O.S.No.5178/2005 LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE PLAINTIFF Ex.P.1 Certified Copy of Resolution/Authorization Letter Ex.P.2 Articles of Agreement entered into between the Plaintiff and Defendant dated 25.08.1994. Ex.P.3 Letter dated 04.04.2003 by the Defendant to the Plaintiff accepting the request to issue revised virtual Completion Certificate.
Ex.P.4 Letter dated 03.06.1995 written by the Plaintiff to the Defendant regarding progress of work, delays and idle resources Ex.P.5 Copy of Letter dated 10.08.1996 written by the Plaintiff to the Defendant Ex.P.6 Copy of Letter dated 23.07.1996 written by the Plaintiff to the Defendant Ex.P.7 Copy of Letter dated 28.11.1996 written by the Plaintiff to the Defendant Ex.P.8 Copy of Letter dated 19.06.1997 by the Plaintiff to the Defendant Ex.P.9 Letter dated 29.05.1996 issued by the Defendant to the Plaintiff Ex.P.10 Copy of Letter dated 25.06.1996 written by the Plaintiff to the Defendant Ex.P.11 Copy of Letter dated 04.06.1997 written by the Plaintiff to the Defendant Ex.P.12 Copy of Letter dated 05.04.1996 written by 100 Com.O.S.No.5178/2005 Plaintiff to the Defendant Ex.P.13 Copy of Letter dated 14.04.1997 written by the Plaintiff to the Defendant Ex.P.14 Copy of Letter dated 31.07.1997 written by the Plaintiff to the Defendant Ex.P.15 Letter dated 19.02.2002 written by the Defendant to the Plaintiff Ex.P.16 Copy of Letter dated 29.04.2003 issued by M/s Kothari Associates to the Plaintiff Ex.P.17 Office Copy of Legal Notice dated 15.01.2005 issued by the Plaintiff to the Defendant Ex.P.18 Reply Notice dated 08.02.2005 issued by the Defendant to the Plaintiff Ex.P.19 Reply Notice dated 15.03.2005 issued by the Defendant to the Plaintiff Ex.P.20 Letter dated 31.12.1997 issued by the Defendant to the Plaintiff Ex.P.21 Letter dated 20.07.1998 written by Defendant to the Plaintiff Ex.P.22 Copy of Letter dated 20.06.1998 written by the Plaintiff to the Defendant Ex.P.23 Copy of Letter dated 26.06.1999 written by Plaintiff to Defendant Ex.P.24 Rejoinder issued by the Plaintiff dated 04.05.2005 Ex.P.25 Letter dated 23.09.2002 by the Plaintiff to the Defendant 101 Com.O.S.No.5178/2005 Ex.P.26 Letter dated 11.12.2002 by the Plaintiff to the Defendant Ex.P.27 Letter dated 04.02.2003 by the Plaintiff to the Defendant Ex.P.28 Copy of Letter dated 27.01.1997 written by Plaintiff to Defendant Ex.P.29 Copy of Letter dated 15.03.2003 by the Plaintiff to the Defendant Ex.P.30 Copy of Letter dated 28.05.2003 written by the Plaintiff to the Defendant Ex.P.31 Copy of Letter dated 07.01.1997 written by the Plaintiff to the Defendant Ex.P.32 & 33 Postal Receipts Ex.P.34 & 35 Postal Acknowledgments Ex.P.36 Copies of Documents signed by the Director of the Defendant stating details of the construction, estimated amount on CPWD, total tender amount, rebate amount, net amount after repair and percentage over the estimated amount and general abstract of work.
Ex.P.37 Report of Sri. K.S.Anantharamaiah dated 05.07.2004 with covering Letter Ex.P.38 Copy of Report dated 12.07.2002 of M/s Kothari Associates Ex.P.39 Copy of Letter dated 11.11.2003 written by Plaintiff to Defendant Ex.P.40 Copy of Letter dated 15.03.2004 written by 102 Com.O.S.No.5178/2005 Plaintiff to Defendant Ex.P.41 Copy of Letter dated 23.03.2004 written by Plaintiff to Defendant Ex.P.42 Copy of Letter dated 14.08.2003 written by Plaintiff to Defendant Ex.P.43 Copy of Letter dated 01.03.1997 written by the Plaintiff to the Defendant Ex.P.44 Copy of Letter dated 23.09.2002 written by Plaintiff to Defendant Exs.P.45 to 55 File containing calculation of statements of Claims Ex.P.56 Certificate under Section 65-B(4) of Evidence Act Ex.P.57 Copy of proceedings of the 1st Joint Inspection/Co-
Ordination Meeting held on 04.01.1997 Ex.P.58 Copy of proceedings of the Building Committee Meeting dated 30.09.1997 Ex.P.59 Copy of proceedings of the Monitoring Committee Meeting dated 20.06.1998 Ex.P.60 Copy of proceedings of the Monitoring Committee Meeting dated 24.09.1998 Ex.P.61 Copy of proceedings of the Monitoring Committee Meeting dated 29.03.2000 Ex.P.62 Copy of Letter dated 31.12.1997 written by the Defendant to the Plaintiff (same is also marked as Ex.P.20) Ex.P.63 Copy of Letter dated 20.07.1998 written by the Defendant to the Plaintiff (same is marked as 103 Com.O.S.No.5178/2005 Ex.P.21 also) Ex.P.64 Copies of entire Contract documents pertaining to construction of new hospital complex for Sri Jayadeva Institute of Cardiology at Bannerghatta Road Ex.P.65 Copy of proceedings of the Monitoring Committee Meeting dated 29.03.2000 obtained under the RTI Act Ex.P.66 Copy of proceedings of the Monitoring Committee Meeting dated 19.10.2001 obtained under the RTI Act Ex.P.67 & P.68 Compilation of two files containing documents submitted by the Plaintiff before Sri.K.S.Anantharamaiah LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENDANT D.W.1 Sri. N.K. Prasad LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE DEFENDANTS Ex.D.1 Running Bill No.13 for the period from 01.12.1995 to 31.12.1995 Ex.D.2 Running Bill No.14 for the period from 01.01.1996 to 31.01.1996 104 Com.O.S.No.5178/2005 Ex.D.3 Running Bill No.15 for the period from 01.02.1996 to 29.02.1996 Ex.D.4 Running Bill No.16 for the period from 01.03.1996 to 31.03.1996 Ex.D.5 Contract Certificate dated 18.10.1997 Ex.D.6 Statement showing extra items of works containing 11 sheets Ex.D.7 Letter dated 14.11.1994 written by the Plaintiff.
Ex.D.8 Letter written by defendant dated 03.11.1994 to the Plaintiff requesting to submit progress of work Ex.D.9 Letter dated 18.10.1995 written by the Defendant to the Plaintiff Ex.D.10 Official Memorandum (Authorization Letter) dated 27.06.2019 Ex.D.11 Proceedings of Review Committee Meeting dated 08.12.1994 Ex.D.12 Proceedings of Review Committee Meeting dated 15.12.1994 Ex.D.13 Proceedings of Review Committee Meeting dated 06.04.1995 Ex.D.14 Letter dated 24.06.1995 written by Defendant to the Plaintiff stating that progress of work was poor Ex.D.15 Inspection Note dated 29.06.1995 105 Com.O.S.No.5178/2005 Ex.D.16 Letter dated 05.07.1995 written by the Defendant to the Plaintiff proposing to have a review meeting on 06.07.1995 Ex.D.17 Letter dated 02.08.1995 written by Architect Kothari Associates to the Plaintiff Ex.D.18 Letter dated 02.08.1995 written by the Defendant to the Plaintiff regarding weekly progress of construction Proceedings of Review Committee Meeting dated 10.10.1995 Ex.D.19 Proceedings of Review Committee Meeting dated 25.09.1995 Ex.D.20 Proceedings of Review Committee Meeting dated 10.10.1995 Ex.D.21 Inspection Report dated 20.07.1996 Ex.D.22 Letter dated 02.08.1996 written by the Defendant to the Plaintiff Ex.D.23 Letter dated 10.09.1996 written by the Defendant to the Plaintiff Ex.D.24 Letter dated 11.09.1996 written by Kothari Associates to the Plaintiff Ex.D.25 Proceedings of the First Joint Inspection/Co-ordination Meeting dated 04.01.1997 Ex.D.26 Letter dated 28.01.1997 written by 106 Com.O.S.No.5178/2005 Defendant to the Plaintiff Ex.D.27 Letter dated 04.02.1997 written by the Defendant to the Plaintiff Ex.D.28 Letter dated 05.05.1997 written by the Defendant to the Plaintiff Ex.D.29 Letter dated 22.05.1997 written by the Defendant to the Plaintiff Ex.D.30 Letter dated 12.08.1997 written by Defendant to Plaintiff Ex.D.31 Letter dated 27.02.1998 written by Kothari Associates to Defendant Ex.D.32 Letter dated 08.05.1998 written by the Defendant to the Plaintiff Ex.D.33 Letter dated 16.06.1998 written by the Defendant to the Plaintiff Ex.D.34 Letter dated 21.07.1998 written by the defendant to the Plaintiff Ex.D.35 Letter dated 30.10.1998 written by the Defendant to the Plaintiff Ex.D.36 Letter dated 05.11.1998 written by the Defendant to the Plaintiff Ex.D.37 Letter dated 18.12.1998 written by the Defendant to the Plaintiff Ex.D.38 Letter dated 12.03.1999 written by the Defendant to the Plaintiff Ex.D.39 Letter dated 26.04.1999 written by 107 Com.O.S.No.5178/2005 the Defendant to the Plaintiff Ex.D.40 Confirmation Letter of Phonogram dated 02.07.1999 sent to Plaintiff by Defendant citing that program at work site was unsatisfactory Ex.D.41 Confirmation Letter of Phonogram dated 27.09.1999 sent to Plaintiff by the Defendant Ex.D.42 Letter dated 27.09.1999 written by Defendant to Plaintiff Ex.D.43 Letter dated 07.10.1999 written by Defendant to Plaintiff Ex.D.44 Confirmation Letter of Phonogram dated 16.11.1999 sent to Plaintiff by Defendant Ex.D.45 Letter dated 09.12.1999 written by Defendant to Plaintiff Ex.D.46 Letter dated 10.03.2000 written by Defendant to Plaintiff (DEVARAJA BHAT.M), LXXXII Addl. City Civil & Sessions Judge, Bengaluru.
108 Com.O.S.No.5178/2005 ORDER The Suit of the Plaintiff is decreed.
The Defendant is directed
to pay a sum of
Rs.3,65,74,826/- (Rupees
Three Crores Sixty Five Lakhs
Seventy Four Thousand Eight
Hundred and Twenty Six Only)
with interest at the rate of
12% per annum from
13.07.2002 till realisation.
The Defendant is directed
to pay a sum of Rs.24,11,207/-
(Rupees Twenty Four Lakhs
Eleven Thousand Two
Hundred and Seven Only) with
interest of Rs.5,81,861/- on
the said amount and also the
current and future interest at
12% per annum.
The Defendant is hereby
directed to pay cost of this
suit along with the cost of
Rs.One Lakh as detailed at
Para No.94 of this Judgment
109
Com.O.S.No.5178/2005
to the Plaintiff within two
months.
The Advocate for the
Plaintiff is directed to file
Memorandum of litigation
Cost before the Office within 5
days from today as required
under Rule 99 and 100 of
Karnataka Civil Rules of
Practice.
Draw up Decree
accordingly.
The Office is directed to
send copy of this Judgment to
Plaintiff and Defendant 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.
(vide my separate detailed
Judgment dated 11.06.2021).
(Typed to my dictation).
LXXXII ACCJ, B'LURU.