Jharkhand High Court
The Food Corporation Of India Through ... vs Arvind Kumar Sinha on 11 June, 2025
Author: Anubha Rawat Choudhary
Bench: Anubha Rawat Choudhary
2025:JHHC:16098
IN THE HIGH COURT OF JHARKHAND AT RANCHI
F.A. No. 49 of 2020
The Food Corporation of India through Partha Pratim Goswami, aged
about 37 years, Son of Prakash Goswami, presently posted and
working as the District/Divisional Manager, Food Corporation of
India, District Office at Usha Kunj Chiragora, Hirapur, P.S. Hirapur,
P.O. & District Dhanbad, Pin No. 826001 (Formerly District Office
Hazaribagh) ... ... Plaintiff No.1/Appellant
-Versus-
1. Arvind Kumar Sinha, aged about 53 years, son of Late Rajendra
Prasad, resident of Ramnagar, Behind Green Academy School,
P.S. Sadar, P.O. & District Hazaribagh
... ... Defendant/Respondent
2. The Senior Regional manager, Food Corporation of India,
Regional Office Arunachal Building Exhibition Road, P.O. & P.S.
Gandhi Maidan, District- Patna (Bihar).
3. The District Manager, Food Corporation of India, District Office
Barkagaon Road, P.O. Hazaribagh, P.S. Sadar, District
Hazaribagh, now Divisional office at Usha Kunj, Chiragaon,
Hirapur, P.O. & P.S. Dhanbad, District Dhanbad, Pin No. 826001
... ... Plaintiff No.2 & 3/Proforma Respondents
---
CORAM: HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY
---
For the Appellant : Mr. Nipun Bakshi, Advocate
For the Respondents : Mr. Awnish Shankar, Advocate
---
34/11.06.2025 The learned counsels for the parties are present.
2. This first appeal has been filed against the Judgment and decree dated 13.06.2019 (Decree signed on 26.06.2019) passed by learned Civil Judge (Sr. Division)-II, Hazaribagh in Money Suit No.10 of 1999 whereby the suit filed by the plaintiffs (appellant and Proforma Respondent Nos.2 and 3) for a money decree of Rs.25,67,354.16 with interest has been dismissed on contest, not only on merits, but also on the point of limitation. The case arises out of alleged breach of contract and the plaintiffs claimed damages.
3. The learned trial court framed the following issues for adjudication in this suit:-
(i) Is the suit as framed and filed in its present form maintainable?
(ii) If the plaintiff valid cause of action for the suit?1
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(iii) Whether Sri Satyadeo Prasad and thereafter M/s Suriya Shramik Sahyog Samiti Ltd. was appointed as regular contractor at the risk and cost of the defendant?
(iv) Whether the plaintiffs are entitled to a decree with Rs.25,67,354.16 paise with interest pendente lite of future interest as claimed for?
(v) To what other relief or reliefs plaintiffs are entitled to?
(vi) Is the plaintiffs' suit is barred under the law of limitation?
4. The learned trial court took up the Issue Nos.(iii) and (iv) together and decided the same against the plaintiffs and in favour of the defendant and also decided the Issue No.(vi) on the point of limitation against the plaintiffs. The learned trial court decided all the issues against the plaintiffs and dismissed the suit on contest. Arguments of the Appellant
5. The learned counsel for the appellant while challenging the impugned judgment has submitted that the defendant participated in tender process and executed an agreement which was valid for a period of 2 years by quoting the rate 181% above schedule of rate (ASOR) and he was appointed as regular Handling and Transport Contractor vide letter dated 22.05.1995/24.05.1995. The defendant joined on 27.05.1995 and therefore his contract started from 27.05.1995 which was schedule to expire on 26.05.1997.
6. The learned counsel has submitted that there was no fixed quantity as per the contract and the agreement was a rate contract for handling and transportation of foodgrains. He submitted that suddenly the defendant suddenly stopped the work w.e.f. 19.10.1995 and a notice dated 19.10.95/21.10.95 was sent to the defendant through registered post by the plaintiff and another notice was also sent on 06.11.1995 by the Depo In-charge asking the defendant to pay wages to the labourers. It was the case of the plaintiff that there was a breach of contract and in spite of notices, the defendant did not perform his 2 2025:JHHC:16098 work which led to termination of the contract vide letter dated 13.02.1996 with a clear stipulation that the remaining work will be done at the risk and cost of the defendant apart from other recoveries under the contract.
7. The learned counsel has submitted that consequently steps were taken for the purpose of performance of the contract for the remaining period and initially ad hoc arrangement was made vide Exhibit 8 dated 19.10.1995 and subsequently through limited tender notice dated 23.11.1995. Thereafter, one Satyadeo Prasad was appointed as contractor at the risk and cost of the defendant vide letter dated 01.12.1995. Another contractor namely Suraiya Shramik Sahyog Samiti Limited was appointed as a regular contractor vide letter dated 30.05.1996 (Exhibit 11) which was for a period of 2 years and the rate was 351% above the schedule rate. While referring to exhibits 8, 9 and 10, the learned counsel has submitted that exhibit 8 was 361% above the schedule rate; Exhibit 9 was the tender notice; exhibit 10 was appointment of Satyadeo Prasad at 341% above the schedule rate and exhibit 11 was the appointment of Suraiya Shramik Sahyog Samiti Limited at 351% above the schedule rate.
8. The learned counsel has submitted that the defendant was appointed at 181% above the schedule rate and therefore the remaining work was performed at the risk and cost of the defendant at much higher rate and ultimately, a demand notice dated 02.01.1999 (Exhibit 14) was issued giving the details under different heads with regard to the damages suffered by the plaintiff which included damages towards shortage of stock, accrual of demurrage charges accrual of wharfage charges, unpaid wages to labourer, certain payments made to the defendant, amount in connection with the work done at the risk and cost of the defendant for the period from 20.10.1995 to 26.07.1997 and the demand was reduced/adjusted by the admitted entitlement of the defendant for the work done w.e.f. 01.07.1995 to 19.10.1995 for which no bill was even raised by the defendant and consequently the demand stood at Rs.25,67,354.16 as per the demand notice.
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9. The learned counsel has submitted that the records of the case clearly reveal that the defendant was appointed as a contractor and he had abandoned the work but the trial court did not frame any issue as to whether the defendant had abandoned the contract or not. He has submitted that had the said issue been framed, then under the facts and circumstances of this case, the entitlement of the plaintiff to receive payment on account of work done at the risk and cost of the defendant and other charges as per demand notice would naturally flow and therefore the suit was fit to be decreed.
10. The learned counsel has also referred to the contract i.e. Exhibit 16 and has submitted that as per clause X (c) there is clear provision that the decision of Sr. Regional Manager shall be final and binding on the contractors and therefore the demand notice by itself was binding on the defendant and consequently the same would be enough to decree the suit. The learned counsel has submitted that clause X (c) of the contract has not been properly appreciated by the court rather the same clause has not even been referred to by the court which may be considered in this first appeal.
11. The learned counsel has submitted that so far as the point of limitation is concerned, it will be governed by Section 23 of the Limitation Act as it is a case of special damages and the damages would naturally accrue and could be computed on the basis of subsequent event when the work was got done by the plaintiff through 3rd parties at the risk and cost of the defendant and therefore the period of limitation would not commence from the date of termination of the contract but would commence from the last date of the term of contract and considering the last date of the term of contract, the suit was certainly within the period of limitation. He submitted that this aspect of the matter has not been properly considered by the learned court and therefore the point of limitation has been wrongly decided.
Arguments of the Respondent No.1 (defendant)
12. The learned counsel appearing on behalf of the contesting respondent on the other hand has opposed the prayer and has 4 2025:JHHC:16098 submitted that the plaintiff was claiming damages which was required to be proved through evidence which the plaintiff has miserably failed to prove. He has submitted that none of the original documents were exhibited before the court and only photocopies were submitted. The learned counsel has submitted that the learned court has considered the documents as produced by the plaintiff and has recorded a clear finding that Exhibit 8 could not be related to the decision of getting the work performed at the risk and cost of the defendant. The learned counsel has also submitted that in fact Exhibits 8 to 11 do not demonstrate that they were arising out of execution of work at the risk and cost of the defendant.
13. The learned counsel has also submitted that there was no proof that the demand notice was ever served upon the defendant and merely because a demand notice is said to have been issued, the same cannot be a conclusive proof of the damages suffered by the plaintiff. The damages are required to be proved through evidence. Even the demand and payment of wharfage and demurrage to railways have not been proved by the plaintiff. He has also submitted that the plaintiff has only given the rates in the contract as contained in exhibits 8 to 11 but has not proved the actual volume of work done and the payment made to the concerned persons. The learned counsel has submitted that the impugned judgment is a well-reasoned judgement considering every aspect of the matter and the same does not call for any interference.
14. So far as the point of limitation is concerned, the learned counsel submitted that since the foundational fact in connection with payment of demurrage/wharfage, payment to labourer, payment to the third party at the risk and cost of the defendant were not proved by the plaintiff, therefore no cause of action was actually disclosed by the plaintiff after the date of termination of contract and therefore the learned trial court has rightly taken the date of termination of contract as a trigger point for commencement of limitation and recorded that the last cause of action was the date of termination i.e. 13.02.1996 and 5 2025:JHHC:16098 the suit having been filed on 24.12.1999, the same was barred by limitation.
15. The learned counsel submitted that the appeal be dismissed being devoid of any merits.
Points for determination.
16. The learned counsel for the appellant has submitted that one of the issues which ought to have been framed by the learned trial court was as to whether the defendant had abandoned the contract or not. This Court is of the considered view that the conduct of the parties with respect to the contract was included in the issue nos. (iii) and (iv) framed by the learned trial court essentially dealing with the case of the appellant regarding appointment of other contractors at the risk and cost of the defendant and consequent claim of damages and no separate issue was required to be framed.
17. Considering the arguments and the case of the respective parties, the following points for determination arise in the present case:
(a) Whether the suit is barred by limitation?
(b) Whether the defendant had abandoned the work on 19.10.1995 by refusing to perform and consequently whether Sri Satyadeo Prasad and thereafter M/s Suriya Shramik Sahyog Samiti Ltd.
and then Ramesh Kumar Agarwal were appointed as regular contractors at the risk and cost of the defendant for performing the remaining work of the defendant?
(c) Whether the plaintiffs are entitled for a decree of Rs.25,67,354.16 with interest pendente lite and future interest as claimed for in the suit?
Findings of the Court
18. Case of the plaintiffs A. The plaintiffs had issued tender notice dated 22.07.1994 for the appointment of handling and transport contractor (hereinafter referred as H&TC) at Rail head Hazaribag Road; FSD, Sariya 6 2025:JHHC:16098 as well as CWE, Hazaribag within the jurisdiction of the District Manager, FCI, District Officer, Hazaribag. B. The defendant submitted his tender and executed an agreement dated 22.07.1994 by quoting the rate of 181% Above Schedule Of Rate (hereinafter referred as ASOR) and was appointed as regular H&TC vide letter dated 22.05.95/24.05.95 and the contract was awarded for a period of 2 years from the date of joining. The defendant joined on 27/05/95 and his contractual period of 2 years started from 27/05/95 and was to expire on 26/05/97.
C. It has been alleged that the defendant stopped work all of a sudden with effect from 19/10/95 and therefore, a notice was sent to defendant through registered post by the plaintiffs vide letter dated 19.10.95/21.10.95. Another notice was also issued on 06.11.95 by the Deport In-charge FSD, Sariya to the defendant to pay wages to the labour vide letter dated 06.11.95. The plaintiffs have pleaded that in spite of all these notices, the defendant did not respond and consequently, on account of the breach of contract by the defendant, the contract was terminated by Plaintiff No.2 vide letter dated 13/02/96.
D. It is the case of the plaintiffs that the Plaintiff No.3 appointed Sri Satyadeo Prasad as contractor on ad-hoc basis at the risk and cost of the defendant vide his letter dated 19.10.95 itself and further invited limited tender vide notice dated 23.11.95 and Satyadeo Prasad was appointed as contractor at the risk and cost of the defendant vide letter dated 01.12.95. The plaintiffs issued another tender notice for the appointment of regular H&TC and thereafter, M/s. Suriya Shramik Sahyog Samiti Limited was appointed at regular H&TC at the risk and cost of the defendant vide letter dated 30.05.96 and this new regular H&TC too stopped work, Plaintiff No.2 and 3 had to appoint one Ramesh Kumar Agrwal as Ad-hoc H&TC vide letter dated 16.10.1996.
72025:JHHC:16098 E. It is the case of the plaintiffs that in all such processes, the plaintiffs suffered heavy financial loss because of extra expenditure incurred by the engagement of new handling and transport contractors at the risk and cost of the defendant, for which the defendant is solely responsible. Plaintiff's case is that on account of the negligence, inability and Un-workmanship of the defendant by not performing his contractual obligation, the plaintiffs incurred losses and damages and thereby entitled to recover net recoverable amount of Rs.25,67,351.16 paise and for this demand notice was also issued to the defendant by Plaintiff vide letter dated 01/01/99.
F. The plaintiffs stated that the cause of action for the suit arose on 26/05/97, when the contractual period of two years of the defendant expired and on 02/01/99, when the final demand notice was issued to the defendant by Plaintiffs.
19. Case of the Defendant I. The defendant submitted written statement taking the preliminary plea of suit being not maintainable, as it being devoid of any cause of action and the suit is barred by the law of limitation, and the principles of acquiescence, estoppel and waiver. Defendant has further challenged the maintainability of the suit by stating that the suit suffers from vagueness and ambiguity as the plaintiffs have not given the break-up of the details of alleged loss and damage incurred while claiming a money decree of Rs.25,67,354.16 paise.
II. Defendant has pleaded that the plaintiffs acted with malafide and fraudulent intent entered into a contract to transport goods on the basis of tender notice dated 12/07/94 during the period, when Satyadeo Prasad was a contractor and was working on the terms and conditions by quoting the rate of 211% ASOR; Satyadeo Prasad had a monopoly in the plaintiff's department and got his contract period extended from time to time and also got the rate of ASOR enhanced to 240%, whereas the defendant's tender was accepted @181% ASOR and in such 8 2025:JHHC:16098 circumstances, even if the plaintiffs suffered any damage, it was suffered on account of allowing Satyadeo Prasad to continue to work on the enhanced rate of ASOR.
III. The defendant further stated that when he submitted his tender the transportation was to be done at 15 M.T. per truck and therefore, defendant had submitted his tender quoting the lowest rate, which was to be accepted or rejected within the period of 30 days, but to put loss to the defendant and to accommodate Satyadeo Prasad, defendant was issued work order after a lapse of 8 months and in the meantime, government banned transportation of 15 M.T. per truck and permitted transporting of only 9 M.T. per truck. The defendant pleaded that had the work order been issued within the stipulated time, defendant would have earned certain profit. Since during that period, the plaintiffs allowed Satyadeo Prasad to work, that too at enhanced rate, defendant himself suffered loss and damage. It has been pleaded that even in such circumstances, the defendant joined the contract work and undertook to execute the contractual work but the plaintiffs did not cooperate in handling transportation.
IV. According to the defendant, the railway free time for unloading wagon starts from 6 A.M. and continues till 6P.M. and in terms of the contract, the defendant was to handle the contract work under the supervision of plaintiffs or their authorized person, who was expected to remain present at the railway siding while unloading the wagon but since office work of the plaintiffs used to start from 10 A.M. the authorized persons of the plaintiffs used to start from 10 A.M., the authorized persons of the plaintiffs never attended the railway siding at 6 A.M., rather, they used to come at the railway siding at 10:30 A.M. and as such during the period from 6 A.M. to 10:30 A.M., the defendant could not execute the work of unloading and the aforesaid acts of omission and commission on the part of the plaintiffs caused heavy financial loss to the defendant.
92025:JHHC:16098 V. The defendant further stated that these acts of omission and commission by the officials of the plaintiffs was done in connivance with Satyadeo prasad, which was apparent from the fact that when the defendant had offered to work @181% ASOR, Satyadeo Prasad was appointed ad-hoc H&TC on 19.10.95 at the enhanced rate of 221% ASOR and thereafter, plaintiffs stopped allotting work to the defendant, rather time to time enhanced the rate of work of Satyadeo Prasad from 221% ASOR to 241% ASOR and finally, the contract agreement of the defendant was illegally and arbitrarily terminated with a motive to accommodate and give favour to Satyadeo Prasad. VI. The defendant pleaded that he executed the contract work till 2 P.M. on 19/10/95. However, in the second half, his contract agreement was terminated without complying the terms of the contract agreement as it was stipulated in the contract agreement that in the case plaintiffs were desirous to terminate the contract agreement, the plaintiffs were to serve one-month prior notice of such termination.
VII. In reply to the statements made in para 11 and 12 of the plaint, the defendant has submitted that the plaintiff's in violation of the terms of the contract agreement with the defendant called for ad-hoc tender on 19/10/95 and appointed Satyadeo Prasad on ad-hoc basis and got contractual work done by him and as such defendant was not guilty and liable to pay any damage to the plaintiffs. Defendant also denied the plaintiff's assertion that the demand notices dated 30/07/98 and 02/01/99 were issued and served upon the defendant. Defendant has submitted and asserted that the contract work of the defendant got terminated with effect from 19.10.95 and for the work required to be done by the defendant, plaintiffs appointed Satyadeo Prasad as ad-hoc contractor but the suit has been filed on 24.12.99 and therefore the same is barred by limitation.
20. It is not in dispute that the defendant was appointed as contractor for handling and transportation services vide letter dated 10 2025:JHHC:16098 22/24.05.1995 who joined on 27.05.1995 and the contract was for a period of 2 years which was to end on 26.05.1997. It is also not in dispute that the defendant worked till 19.10.1995. It is the case of the plaintiffs that the defendant stopped work all of a sudden with effect from 19/10/95 and therefore, a notice was sent to defendant through registered post by the plaintiffs vide letter dated 19.10.95/21.10.95; another notice was also issued on 06.11.95 to the defendant to pay wages to the labour and in spite of all these notices, the defendant did not respond and consequently, on account of the breach of contract by the defendant, the contract was terminated by Plaintiff No.2 vide his letter dated 13.02.1996. It is further case of the plaintiffs that in the meantime the plaintiffs appointed Sri Satyadeo Prasad as contractor on ad-hoc basis at the risk and cost of the defendant on 19.10.1995 itself, through letter dated 19.10.95 and thereafter invited limited tender vide notice dated 23.11.95 and Satyadeo Prasad was appointed as contractor at the risk and cost of the defendant vide letter dated 01.12.95. Thereafter, the plaintiffs again issued tender notice for the appointment of regular contractor and M/s. Suriya Shramik Sahyog Samiti Limited was appointed as regular contractor at the risk and cost of the defendant vide letter dated 30.05.96 who also stopped work. Thereafter, the plaintiffs had to appoint one Ramesh Kr. Agrwal as Ad-hoc H&TC vide letter dated 16.10.1996. The alternative arrangement was made at much higher rate and hence the plaintiffs suffered loss and damages and the differential amount paid to the other contractors was said to be recoverable. The claims for damages were shown in the demand notice dated 01.01.1999 under different heads after adjusting the work done by the defendant till 19.10.1995 which was said to have been issued to the defendant but no payment was made and then the suit was filed for realization of the demand mentioned in the demand notice.
21. On the other hand, the case of the defendant was that the plaintiff with malafide and fraudulent intention entered into a contract for transporting goods with the plaintiff on the basis of tender notice as back as dated 12/07/94 and during the period, when Satyadeo 11 2025:JHHC:16098 Prasad was working on the terms and conditions by quoting the rate of 211% ASOR who had a monopoly in the plaintiff's department and got his contract period extended from time to time and also got the rate of ASOR enhanced to 240%, whereas the defendant's tender was accepted @181% ASOR and in such circumstances, even if the plaintiffs suffered any damage, it was suffered on account of allowing Satyadeo Prasad to continue to work on the enhanced rate of ASOR. Further case of the defendant was that when he submitted his tender the transportation was to be done at 15 M.T. per truck and the work order was to be issued within 30 days but it was issued after 8 months to accommodate Satyadeo Prasad and only when the government permitted transportation to the maximum extent of only 9 M.T. per truck and the defendant suffered losses and even in such circumstances, he joined the contract work and undertook to execute the contractual work but the plaintiffs did not cooperate in handling transportation and they never turned up in time to supervise loading and handling of the goods. The defendant had offered to work @181% ASOR, Satyadeo Prasad was appointed ad-hoc H&TC on 19.10.95 at the enhanced rate of 221% ASOR and thereafter, plaintiffs stopped allotting work to the defendant and time to time enhanced the rate of work of Satyadeo Prasad from 221% ASOR to 241% ASOR and finally, the contract agreement of the defendant was illegally and arbitrarily terminated with a motive to accommodate and give favour to Satyadeo Prasad. The defendant pleaded that in spite of the aforesaid hindrances; the defendant executed the contract work till 2P.M on 19/10/95. However, in the second half of 19/10/95, his contract agreement was terminated without complying with the terms of the contract agreement; in the contract agreement, it has been stipulated that in the case plaintiffs were desirous to terminate the contract agreement, the plaintiffs were to serve one-month prior notice of such termination. The defendant denied receipt of all the notices / communications said to have been issued by the plaintiffs including the demand notices from the side of the plaintiffs. It was asserted that the suit filed on 24.12.1999 was barred by limitation.
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22. It is the case of the plaintiffs that the defendant stopped work all of a sudden with effect from 19/10/95 and it is the case of the defendant that he executed the contract work till 19/10/95 at 2.00 P.M and the plaintiffs terminated the contract on 19/10/1995 itself without notice to the defendant by suddenly stopping to take work from the defendant; Satyadeo Prasad was already working at the time of grant of contract to the defendant and the plaintiffs acted in a manner so as to get the work done through Satyadeo Prasad who was already working at much higher price. The plaintiff claimed the amount, interalia, on account of remaining work done at the cost and risk of the defendant and the defendant also claimed that he suffered losses on account of acts and omissions of the plaintiffs but neither any counter claim as such was filed by the defendant nor the losses were quantified by the defendant.
23. The plaintiffs examined two witnesses and produced certain documentary evidences in order to prove and substantiate their case, which are as under: -
Oral evidence on behalf of plaintiffs P.W.-1 Manoj Kumar P.W.-2 Chandra Sekhar Anand Documentary evidences exhibited by the plaintiffs (all photocopies and marked with objection from the defendant) Exhibit-1 Copy of tender notice dated 12.07.94 Exhibit-2 Appointment letter dated 22.05.95/24.05.95 Exhibit-3 Joining report as regular H&TC dated 27.05.95. Exhibit-4 Letter for appointment of authorized representative dated 29.05.95 Exhibit-5 Letter dated 19.10.95 issued to defendant by FCI, district Manager.
Exhibit-6 Letter dated 06.11.95 issued to defendant by FCI, Assistant Deport Manager Exhibit-7 Termination letter dated 13.02.1996 Exhibit-8 Appointment letter of adhoc H&TC issued to Satyadeo Prasad dated 19.10.95 13 2025:JHHC:16098 Exhibit-9 Limited tender notice dated 23.11.95 Exhibit-10 Letter address to Satyadeo Prasad by District Manager FCI dated 23.12.95 Exhibit-11 Appointment of regular H&TC vide letter dated 30.05.96 Exhibit-12 Letter for awaiting H&TC contract to Ramesh Kumar Agrawal through quotation dated 16.10.96 Exhibit-13 Letter dated 30.07.98 Exhibit-14 Demand notice dated 02.01.99 Exhibit-15 Authorization letter in legal matter dated 01.12.99 Exhibit-16 Tender form-cum-agreement
24. On the other hand, defendant in order to prove and substantiate his case has produced and examined himself as witness and also produced certain documentary evidences which are as under: -
Oral evidence on behalf of defendant.
D.W.-1 Arvind Kr. Sinha Documentary evidences produced by the defendant Exhibit-A Work done certificate dated 06.11.95 issued by Assistant Dipo Superintendent, FCI, Sariya Exhibit-B Bill submitted with approved to the District Manager by Assistant Dipo as Superintendent dated 05.10.95 Exhibit-C Letter dated 17.10.95 Exhibit-D Letter dated 10.11.95 Exhibit-E Letter dated 18.10.95 informing Ajay Kumar Sinha regarding placing of Sugar Wagon at rail head, Hazaribag.
25. P.W.-1 is the Manager of the plaintiffs posted at Dhanbad district office and he has stated that the district namely Hazaribagh, Giridih, Koderma, Chatra, Ramgarh and Bokaro come under his jurisdiction. He has stated that at the time of filing of the suit, all the documents were handed over to one Advocate namely Sant Sahay, whose photocopies were filed along with the plaint, but the said Advocate never returned the original to the plaintiffs and for that purpose, the plaintiffs have informed the Hon'ble Jharkhand High 14 2025:JHHC:16098 Court. However, from perusal of the records, no such letter issued to the High Court has been exhibited. He has further stated that photocopies of altogether 15 documents were filed and he has deposed that the documents filed with the plaint are the photocopies of the original. He has exhibited all the documents one by one and those documents have been marked exhibit with objection. All the documents have been exhibited vide paragraph nos.5 to 21. Upon perusal of the evidences filed on affidavit, P.W. 1 has not stated anything further over and above the fact that those documents have been copied by mechanical process and has disclosed the name of the typist etc. but nothing has been mentioned in connection with the facts and circumstances of the case. From paragraph 22 onwards, he was examined in court and the documents were exhibited one by one with objection from the side of the defendant. It is important to note that this witness has stated nothing as to how and under what circumstances the contract with the defendant was terminated and no evidence in connection with dispatch of one or the other documents either photocopy or otherwise has been exhibited by this witness. This witness has been cross-examined and he has stated that he has prepared the evidence on the basis of available documents and it was prepared by his Advocate under his instructions. During his cross- examination, he has stated that the demand is of the year 1995 and the defendant was the contractor in 1997 and the agreement is of the year 1997 and that the defendant was appointed as a contractor in the year 1997. He has clearly stated that he had never participated in the preparation of any of the documents which he has produced and he had never seen the letters which he had proved. He was not present at the time of photocopy of the documents. He has also stated that at the time of filing of the case, he was not present. He could not remember as to who had got the photocopies done; he has stated that since he was asked to give evidence, he came to give evidence and he had no concern whatsoever with the case or with the documents. He has stated that the evidence in chief was prepared by the Advocate and he had put his signature on the same. He has stated that just one week 15 2025:JHHC:16098 prior to evidence, he had seen the documents and when he had seen the documents, the originals were not available.
26. So far as P.W. 2 is concerned, he is the Area Manager in the office of the plaintiffs in Dhanbad district. He has stated that the district office was in Hazaribagh till 2010 which was transferred to Dhanbad and the districts Hazarbiagh, Giridih, Chatra, Koderma, Ramgarh, Bokaro and Dhanbad fall within his jurisdiction. He has also stated that the original documents were handed over to the Advocate Sri Sant Sahay, who had filed photocopy along with the plaint, but the originals were never returned to the plaintiff and an information to this effect was given to the Hon'ble Chief Justice of Jharkhand High Court. However, even this witness has not produced any such letter. He has stated that the tender notice was taken out on 12.07.1994 for appointment of handling and transport contract and tender-cum-agreement running into 57 pages which was filled in and submitted by the defendant and he exhibited the photocopy of the said document. He has further stated that the defendant was appointed as contractor vide letter dated 23.05.1995 and he submitted his joining on 27.05.1995 itself. The contract was for a period commencing from 27.05.1995 to 26.05.1997. He has further stated that the defendant had suddenly stopped working from 19.10.1995 and on 19.10.1995/21.10.1995, notices were sent to the defendant through registered post and a letter dated 06.11.1995 was also issued asking the defendant to make labour payment. No proof of dispatch or receipt of aforesaid notices was filed/exhibited and even the postal receipts or even its photocopy of postal receipts was not exhibited. However, this witness goes on to say that in spite of notice, the defendant did not take steps which was violation of the terms and conditions of the agreement and on this account, the contract was terminated vide letter dated 13.02.1996. P.W-2 has further stated that on account of violation of terms and conditions by the defendant, the plaintiffs suffered losses and on ad hoc basis and at the risk and cost of the defendant the work was resumed by appointing another contractor. He has then stated that the plaintiff suffered loss to the extent of 16 2025:JHHC:16098 Rs.25,67,354.16 for which a demand notice dated 02.01.1999 was issued to the defendant, but in spite of service of demand notice, the defendant did not pay the amount of loss and consequently the suit was filed. However, he has not exhibited the dispatch proof or service proof of the demand notice dated 02.01.1999. He has also denied the allegation made by the defendant that Satyadeo Prasad exercised some kind of monopoly with the organization of the plaintiffs and he also denied the allegation that under the influence of Satyadeo Prasad, the contract was wrongly given to the defendant and also denied the allegation that the contract was wrongly / illegally terminated. It was asserted that the plaintiffs had acted in accordance with the terms and conditions of the contract and it was wrong to say that the plaintiffs did not co-operate with the defendant. This witness has been cross- examined and he has stated that he is in service of the plaintiffs since January 2012 and since then he has been looking after the cases of the plaintiffs; he has no personal knowledge with regard to the case and he has deposed on the basis of the records. He has also stated that the documents which he has exhibited are photocopy and he had not seen the original. He has stated that he has not worked with R.N. Gupta, S.K. Vishwas and P.N. Lehri, who all have attained the age of superannuation, and he had no idea as to when did they retire and he has also stated that he has never worked with them and therefore he does not identify their signatures and he only identifies the signature in the record. So far as the defendant is concerned, this witness identifies his signature on the basis of record, but he has not seen the original documents. He has stated that all the statements have been made on the basis of record and no work was executed in his presence. He has also stated that the documents relied upon by him were never prepared in his presence and that there was also a case filed against Satyadeo Prasad. He has further stated that the case relates to 1995 and he is not aware about any communication with regard to the work and that the contract of the defendant has been terminated in February 1996.
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27. The defendant has been examined as D.W.-1. He has stated in his evidence that the plaintiffs have suppressed material facts. He has stated that Satyadev Prasad has been working as contractor since last 30 years for execution of the work, and therefore, the entire department was under his influence. In the meantime, the defendant was appointed on account of value quoted in the tender, but the defendant was not being allocated any work and instead the period of Satyadev Prasad was extended from time to time. He has also stated that in order to favour Satyadev Prasad, the defendant was issued appointment letter after expiry of 10 months from the date of tender and when the government stopped permission to carry load more than 9 metric ton and at the time of filling the tender, as per the government norms, 15 metric ton could be carried per truck. On account of such reduction in the maximum capacity which could be carried per truck, Satyadev Prasad stopped doing the work and then the appointment letter was issued to the defendant so that the defendant would suffer losses and would not be able to do the work and Satyadev Prasad could be allocated work at higher rate and could benefited. He has also stated that the loading and unloading was to be done in the presence of the authorities of the plaintiffs who used to come after 10:30 a.m. and used to leave prior to 5 p.m. due to which the defendant was not given appropriate time to perform the work and they were conducting in this manner under the influence of Satyadev Prasad so that the defendant was unable to do the work and his contract was cancelled. He asserted that he worked till 19.10.1995 and also exhibited a certificate regarding the work done issued by the competent authority which was dated 06.11.1995 and he has also exhibited other related documents in connection with the work done. He has also asserted that in spite of duly performing his work till 19.10.1995, Satyadev Prasad was wrongly appointed on ad-hoc basis at higher rate as 361% ASOR although he was earlier working at ASOR 211% and the defendant was working at ASOR 181% as per the contract. The authorities of the plaintiffs had acted in connivance with each other. He has also stated that when the defendant asked for 18 2025:JHHC:16098 enhancement of labour charges and expenses of transportation, the authorities of the plaintiffs without application of mind gave his work to Satyadev Prasad so that the defendant would suffer loss and the defendant was asked not to perform work. He has asserted that the defendant is not liable to pay the demand raised by the plaintiffs as during the subsistence of contract with the defendant, the plaintiffs had appointed Satyadev Prasad due to which the defendant had suffered losses. He has also stated that he continued to work till 19.10.1995 and without any written notice, the defendant was asked to discontinue his work from 20.10.1995 and Satyadev Prasad was appointed with effect from 20.10.1995 itself which revealed that the appointment of Satyadev Prasad was to make more payment to him. He has alleged that there was violation of terms and conditions on the part of the plaintiffs and not on the part of the defendant. He has denied receipt of notices. He asserted that there was no cause of action and the suit was barred by limitation and he is entitled to receive Rs.1 lakh as security deposit and Rs.5 lakh for the work done. This witness (the sole defendant) has been duly cross-examined and he has stated that Satyadev Prasad was an old contractor of the plaintiffs and he has no proof that the authorities had acted in connivance with Satyadev Prasad to benefit him in an illegal manner. He has reiterated that he was discontinued from doing the work from 19.10.1995. He has admitted that there was an agreement between the plaintiffs and the defendant by virtue of which he was supposed to unload goods from railways and was to be transported to Hazaribagh, CWC. He has also stated that the engagement of number of trucks was dependent upon the quantity received and he was supposed to arrange the trucks and transport the goods. He has stated that on one day around 40 trucks were used but could not disclose the name of the owners of the trucks. He has stated that it has been wrongly stated that the defendant discontinued the work and caused loss to the plaintiffs. He has denied that any such letter was ever issued by the plaintiffs asking the defendant to do the work and that the plaintiffs were suffering any losses. He has denied his liability to pay the amount 19 2025:JHHC:16098 demanded by the plaintiffs through the money suit. He has exhibited following documents: Exhibit A is the work certificate; Exhibits B, C, D and E are the letters dated 06.10.1995, 17.10.1995, 10.11.1995 and 18.10.1995 respectively. All the documents of the defendant have been marked with objection.
28. Upon perusal of the evidence of the witnesses P.W-1 and P.W- 2 produced by the plaintiffs, it is clear that none of these witnesses have any personal knowledge about the case nor they have ever seen the defendant or Satyadeo Prasad performing any work nor they have witnesses performing any work. Further, they have never seen the originals nor the photocopy from the originals were prepared in their presence. Both the witnesses have stated that the documents were given to the previous advocate, who filed the case along with photocopies of the documents, but none of them are witness to such handing over of the documents to the previous advocate. Moreover, in spite of stating that they have made some complaint before the High Court, but no such letter of complaint has been exhibited. Both the witnesses have also stated that they have deposed on the basis of photocopy of the documents and both these persons have no personal knowledge in connection with grant of contract to the defendant and other allegations and counter allegations relating to the performance of work and the termination of the contract and the facts under which the contract was terminated and they were neither present at the time of photocopies were made from the original documents nor they had seen the original documents. In such circumstances, the oral evidences led by the plaintiffs are not of much significance. The documentary evidences were claimed to be photocopy of the originals which were marked with objection from the side of the defendant and this court as aforesaid has rejected the plea taken by the plaintiffs regarding loss of documents. Even if the photocopies of the documents are considered then the letters which are claimed to have been issued to the defendant through registered post on and from 19.10.1995 (the last day when the defendant had admittedly worked), this Court finds that even photocopy of the receipt of dispatch through registered post has also 20 2025:JHHC:16098 not been exhibited and there is no evidence regarding receipt of such communications.
The P.W-1 has mechanically exhibited the documents and he has no knowledge much less any personal knowledge with respect to the facts and circumstances of the case. Admittedly, the original documents were not exhibited and only photocopies were exhibited and this Court is of the considered view that there is no proper explanation regarding loss of documents and the photocopies were also not taken in presence of this witness and he had never seen the originals. The communications on and from 19.10.1995 (the last day on which the defendant had performed the work) to the defendant was said to have been sent through registered post but even these photocopies of documents do not include any photocopy of the registry receipt showing dispatch of the documents. No evidence has been produced to show dispatch of the documents to the defendant much less any evidence of service to the defendant. There is no dispatch proof or service proof of even the termination letter or even the demand notice to the defendant. The plaintiff claimed that alternative arrangements were made at the risk and cost of the defendant but none of the documents relating to alternative appointment at the risk and cost of the defendant has been intimated /served to the defendant as there is neither any dispatch proof nor any proof of service to the defendant. Even the tender notice dated 23.11.1995 said to have been issued to take work at the risk and cost of the defendant does not reveal that the tender was issued for taking work at the risk and cost of the defendant and it is not the case of the plaintiff that the defendant was the only contractor for the work of loading, unloading and transportation of goods of the plaintiff for which the plaintiff had appointed the defendant. Rather it is the case of the defendant that the Satyadeo prasad was already working as a contractor with the plaintiff but at much higher rate as compared to the defendant. Even the appointment letter issued to M/s Suriya Shramik Sahyog Samiti Ltd. does not reveal that he was appointed for taking unfinished work at the risk and cost of the defendant and the 21 2025:JHHC:16098 document reveals that he was appointed on 30.05.1996 for a period of two years and certainly the period would extend beyond the contract period of the defendant which was to end 26.05.1997. All the documents which are said to be dispatched to the defendant without any proof of dispatch or proof of service to the defendant cannot be used against the defendant to substantiate the case of the plaintiff that the defendant abruptly discontinued the work on and from 19.10.1995 and other contractors including Satyadeo Prasad and thereafter M/s Suriya Shramik Sahyog Samiti Ltd. and thereafter Ramesh Kumar Agarwal were appointed at the risk and cost of the defendant. No oral evidence has been adduced by the plaintiff of the persons who were available at the relevant point of time to even state that the remaining work was taken from other contractors at the risk and cost of the defendant. There is no proof of dispatch or service of the termination letter dated 13.02.1996 and also the letter of demand dated 01.01.1999 and accordingly it is apparent that the defendant was faced with aforesaid letters for the first time only through the suit. The only admitted fact regarding execution of work which stands admitted is that the work was taken from the defendant till 2.00 P.M. of 19.10.1995 and it is the case of the plaintiffs that the defendant suddenly refused to perform work and it is the case of the defendant that the plaintiff abruptly and without any notice as per the contract abruptly discontinued to take work from the defendant. The plaintiff has neither produced any oral evidence of the persons who were concerned with taking work from the defendant at the relevant point of time to even say as to how and why the work was not performed/taken from the defendant on and from 2.00 P.M. of 19.10.1995 and the photocopy of the documentary evidence of the plaintiffs which were marked with objection from the side of the defendant does not reveal dispatch much less receipt of the documents/letters on and after 19.10.1995 by the defendant. This is over and above the fact that there is no cogent or acceptable explanation of non-production of original documents on account of alleged loss of documents and the evidence of the person who had 22 2025:JHHC:16098 photocopied from the original documents at the relevant point of time and was well versed with the facts and circumstances of the entire events and incidents at the relevant point of time has not been produced. It is also important to note that there is no letter from the side of the plaintiffs making any grievance with regard to the execution of the work by the defendant prior to abrupt discontinuation of work after 2.00 P.M. of 19.10.1995. It is equally important to note that even the demand notice, Exhibit-14, reveal that the plaintiff suo- moto adjusted the payment for the work done for the period from 01.07.1995 to 19.10.1995 and the records do not show any complaint prior to 19.10.1995 regarding the performance of the work by the defendant. The plaintiffs have claimed that some labour payment was pending from the end of the defendant and a letter was issued but with respect to this also there is no evidence with regard to issuance or receipt of the letter and no evidence regarding labour payment by the plaintiffs on account of alleged default by the defendant. Considering the evidence placed on record, this Court is of the considered view that the plaintiff has failed to prove that the defendant had refused to perform the work and also failed to prove that they had appointed Satyadeo Prasad and thereafter M/s Suriya Shramik Sahyog Samiti Ltd. and thereafter Ramesh Kumar Agarwal at the risk and cost of the defendant. Rather, the records reveal that not even one notice was issued to the defendant regarding any complaint prior to 19.10.1995 (the last day on which the defendant had admittedly performed the work) regarding any dissatisfaction with regard to the work being executed by the defendant and on 19.10.1995 itself the plaintiffs claimed to have engaged Satyadeo Prasad that too without any notice to the defendant and even the notices dated 19.10.1995 and onwards regarding acts and omissions of the defendant to support execution of work through other persons at the risk and cost of the defendant could not be shown to have been dispatched much less served upon the defendant. This Court is of the considered view that the appellant (plaintiffs) has miserably failed to prove that the defendant had abandoned the work on 19.10.1995 by refusing to perform and has 23 2025:JHHC:16098 also miserably failed to prove that Sri Satyadeo Prasad and thereafter M/s Suriya Shramik Sahyog Samiti Ltd. and then Ramesh Kumar Agarwal were appointed as regular contractors at the risk and cost of the defendant for performing the remaining work of the defendant.
29. This Court has gone through the judgement passed by the learned trial court and finds that the learned trial court has rightly arrived at the finding after considering the materials on record that the plaintiffs have miserably failed to prove that the defendant had suddenly stopped the work on 19.10.1995. Neither any witness including the officials dealing with the work of the defendant at the relevant point of time has been examined to prove that the defendant had suddenly stopped the contractual work on 19.10.1995 nor any document evidencing the fact of any refusal on the part of the defendant to perform the contractual obligation has been brought on record by the plaintiffs. On the other hand, it was the case of the defendant that Satyadeo Prasad was performing work prior to joining of the defendant at much higher rate and the defendant was stopped from performing the work and allotted the work on the same day i.e. 19.10.1995. The finding of the learned trial court is recorded in paragraph 10 and 12 as under: -
" 10......... Defendant has also contended that he continued to perform his contractual obligation till the afternoon of 19/10/95, when suddenly the officials of FCI instructed him to stop the work and at the same time appointed Satyadeo Prasad at higher rate of ASOR through spot tender in order to accommodate and give favour to Satyadeo Prasad. In order to substantiate this fact, the defendant has proved work done certificate issued by Assistant Depot Superintendent FCI, FSD, Sariya marked as Ext. A. Upon the perusal of this work done certificate issued for H&TC Arvind Kr. Sinha for the period of 01/10/95 to 19/10/95, it appears that defendant had performed the work of unloading and transporting the food grains till 19/10/95. Defendant's another document marked as Ext. C & Ext. E are letter dtd. 17/10/95 issued by Assistant Depot Superintendent and letter dtd. 18/10/95 issued by District Manager, and these letters show that defendant was informed 24 2025:JHHC:16098 by the officials of the plaintiffs regarding placing of 10 BCN sugar wagon Ex-GRMT at Hazaribag Road on 17/10/95 at 3:00 P.M. Through a letter dtd. 18/10/95, it appears that District Manager had directed Arvind Kr. Sinha contractor to unload stock and transport the same to FSD, Sariya/ CWC, Hazaribag within railway free time. Work done certificate marked as Ext. A establishes that contractor Arvind Kr. Sinha was performing his duty of unloading and transporting on 19/10/95 and in such circumstances, I find that the plaintiffs have not been able to prove by cogent evidence that it was the defendant who had refused to unload the sugar wagon placed at Rail head, Hazaribag on 17/10/95 at 3:00 P.M. Plaintiff's Ext. 8 is the letter of appointment of Satyadeo Prasad and this letter shows that Satyadeo Prasad was appointed as ad-hoc H& TC for handling and transporting at Rail head Hazaribag/ FSD Sariya and for transporting stocks from FSD Sariya at the rate of 361% ASOR. This plaintiff's document shows that plaintiffs got accomplished work of handling and transporting sugar from the sugar wagon placed at Rail head, Hazaribag on 17/10/95 at 3:00 P.M. by appointing ad-hoc H&TC Satyadeo Prasad on 19/10/95 but this document is not an evidence of the fact that Satyadeo Prasad was appointed as ad-hoc H&TC on account of any UN-workmanship of the defendant or on account of refusal by the defendant to unload and transport sugar from 10 wagons of sugar placed at rail head, Hazaribag. There is nothing in the appointment letter dtd. 19/10/95 (Ext. 8) to show that the appointment of ad-hoc H&TC was occasioned on account of refusal to perform the contractual obligation by the regular H&TC Arvind Kr. Sinha. All the documents proved and exhibited by the plaintiffs show the unilateral declaration of the officials of FCI that the work of regular H&TC Arvind Kr. Singha was not found satisfactory. On behalf of the plaintiffs, two witnesses have been examined to prove that defendant was negligent and was not performing the contractual work properly during the period for which he was appointed as regular H&TC. The witnesses examined are PW1 Manoj Kumar, who at the date of examination was posted as Manager at District Office, FCI, Dhanbad. He has proved documents exhibited on behalf of the plaintiffs but during cross- examination, he has admitted in unequivocal terms that he himself had not participated in the preparation or issuance of any such documents. He also admitted in para 13 that all the letters proved by him were submitted by FCI in connection with this case but he had not personally seen any originally document before proving those documents in the court as the 25 2025:JHHC:16098 same were presented before him for the first time. His evidence goes to establish that he himself was not posted either at FSD, Sariya or at District office Hazaribag during the period, when the defendant was performing the contractual work and during the period when defendants contractual work was not found satisfactory by the department. Therefore, it appears that this witness has got no personal knowledge of the occurrence or the happening during the period, when the defendant was performing his contractual work as regular H&TC at FSD Sariya or Rail head Hazaribag. Hence, this witness is not competent to prove that plaintiffs suffered any loss or damage on account of UN-workmanship or negligence on the part of the defendant. PW2 Chandra Sekhar Anand is the District Manager posted at District office FSD, Dhanbad and during his cross-examination, he fairly admitted that he has joined the service in the months of January, 2012 and came to know about the details of this case through the document maintained in the office. This statement of this witness goes to show that he too has got no personal knowledge as to what transpired in the year 1995, when the defendant was performing his duty as regular H&TC for handling and transporting at FSD, Sariya and Rail head, Hazaribag...
12................ It has been submitted on behalf of the plaintiffs that defendant was appointed as regular H&TC for the work of handling and transport during the period from 27/05/95 to 26/05/95 but defendant all of sudden stopped performing contractual obligation on 19/10/95 and therefore, the defendant is liable to pay to the plaintiffs all the extra expenditure incurred by the plaintiffs by getting accomplished the work by appointing some other contractor during the period when the defendant was required to perform his contractual obligation. However, I find that the plaintiffs have miserably failed to prove that it was the defendant, who had stopped work suddenly on 19/10/95. Neither any witness including the officials dealing with the work of the defendant at the relevant time has been examined on behalf of the plaintiffs to prove that the defendant had suddenly stopped contractual work on 19/10/95 nor any document evidencing the fact of any refusal on the part of the defendant to perform contractual obligation has been brought on the record by the plaintiffs. On the other hand, the defendant's case is that the officials of FCI were in connivance with one Satyadeo Prasad performing the contractual work before the joining of the defendant as regular H&TC and therefore, under such connivance, in order to give favour to Satyadeo Prasad, officials suddenly stopped allotting 26 2025:JHHC:16098 work to the defendant and appointed Satyadeo Prasad as ad- hoc H&TC in the afternoon of 19/10/95. Defendant's document marked as ext. A, which is work done certificate issued by Assistant Depot Superintendent and the plaintiff's document marked as ext. 8, which is the appointment of Satyadeo Prasad as ad-hoc H&TC by the District Manager, District Office Hazaribag, if not sufficient to prove the allegation of connivance between the officials of the plaintiffs and the ad-hoc H&TC Satyadeo Prasad, is sufficient to prove the fact that till 19/10/95, the defendant continued to perform his duty of handling and transporting as regular H&TC and suddenly in his place an ad-hoc H&TC was appointed by the District Manager at the enhanced rate of 361% ASOR, whereas the defendant was performing the contractual obligation at the rate of 181 % ASOR. There is no evidence on the record to prove that it was the defendant who refused to continue to perform this contractual obligation but the appointment of ad-hoc H&TC on 19/10/95 would have automatically suspended the contract between the plaintiffs and the defendant as the officials would not have allotted any work of handling and transportation to the defendant, rather such work would have been accomplished through ad-hoc H&TC. Hence, in such facts and circumstances, this court is of the considered opinion that the plaintiffs have failed to prove that the defendant was responsible for breach of any contract by suddenly stopping work on 19/10/95 and that on account of such breach, the plaintiffs had to appoint Satyadeo Prasad and M/s Suriya Sahyog Shramik Samiti Ltd, as contractors at the risk and cost of the defendant."
30. This Court finds no illegality or perversity in the aforesaid findings recorded by the learned trial court and the learned counsel for the appellant has failed to point out any illegality, error or omission by the learned trial court in the matter of appreciation of evidence and the materials on record to arrive at the aforesaid findings. This Court has also independently appreciated the materials on record and has arrived at the findings that the plaintiffs have failed to prove that the defendant had abandoned the work on 19.10.1995 by refusing to perform and also failed to prove that Sri Satyadeo Prasad and thereafter M/s Suriya Shramik Sahyog Samiti Ltd. and then Ramesh Kumar Agarwal were appointed as regular contractors at the risk and 27 2025:JHHC:16098 cost of the defendant for performing the remaining work of the defendant.
31. In view of the aforesaid discussions and findings, the point of determination no. (b) is decided against the appellant and in favour of the respondent (defendant).
The point of determination no. (C)
32. The further point for determination is whether the plaintiffs are entitled to a decree of Rs.25,67,354.16 as damages with interest on account of the claim quantified by them in their demand notice dated 02.01.1999 (Exhibit 14). This would depend upon answer as to whether after last date of performance of work by the defendant, i.e 19.10.1995 till 2.00 pm, the plaintiffs got the remaining work done by other contractors namely Sri Satyadeo Prasad and thereafter M/s Suriya Shramik Sahyog Samiti Ltd. and then by Ramesh Kumar Agarwal at the risk and cost of the defendant. As per the plaintiffs, termination of contract in the month of February 1996 was followed by issuance of a demand notice in the year 1999 which included forfeiture of security deposit, and even the amount payable by the plaintiffs to the defendant for the work done by the defendant as per the calculation made by the plaintiffs themselves, was also sought to be adjusted.
33. Exhibit 1 is a tender notice dated 12.07.1994; Exhibit 2 is the letter of appointment of the defendant dated 22.05.1995/24.05.1995 appointing the defendant as the contractor at 181% ASOR for a period of two years upon deposit of security amount, and the terms and conditions of the contract have been enumerated therein. The perusal of the appointment letter of the defendant reveals that the appointment was by way of rate contract for a period of two years for the purposes of executing the work. The quantity of work as such has not been mentioned; Exhibit 3 dated 27.05.1995 is the date of commencement of work showing joining of the defendant on HTC on 27.05.1995 as per the approved rate of 181% ASOR and Exhibit 4 relates to 28 2025:JHHC:16098 appointment of authorized representative of the defendant. These facts and documents are not in dispute.
34. Exhibit 5 is the document addressed by the plaintiffs to the defendant alleging non-performance of work and not following the instructions issued vide earlier letters dated 13.10.1995, 16.10.1995 and 18.10.1995 and also alleging that the defendant did not receive those letters. However, letters dated 13.10.1995, 16.10.1995 and 18.10.1995 have not been exhibited from the side of the plaintiffs and there is also no proof of dispatch or service of Exhibit 5 upon the defendant. Exhibit 6 is the letter issued by the plaintiffs to the defendant dated 06.11.1995 regarding payment of wages of handling labourers since July, 1995 for which also there is no proof of dispatch/service upon the defendant. There is no proof of dispatch or service of any letters by which the aforesaid three contractors were appointed one after another alleged to have been appointed at the risk and cost of the defendant for the remaining work of the defendant and even their appointment is not coextensive with the period of remaining contract of the defendant. There is nothing on record to even suggest as to the quantity of work performed by the three contractors so appointed and there is no evidence of making any payment to the said three contractors. Exhibit 7 is the letter of termination dated 13.02.1996 stating that the plaintiffs recalled from doing the work midway on 07.08.1995 and that the contract stands terminated and any extra expenditure incurred/suffered by corporation arising out of due to risk and cost arrangement for the period from 04.08.1995 to 26.05.1997 [i.e. the remaining period of contract] will also be recovered from the defendant and Exhibit-13 and 14 are the demand notices dated 30.07.1998 and 02.01.1999. This Court finds that there is no evidence to show that the aforesaid communications, were ever issued and/or served upon the defendant and even the original of these documents were not produced without any cogent explanation for non-production of the originals as fully discussed above while deciding point of determination no. (b). Accordingly heavy reliance on the demand notices, which was never served upon 29 2025:JHHC:16098 the defendant, is completely misplaced and misconceived. However, it is admitted that the defendant worked till 2.00 p.m. on 19.10.1995 by stating that the demand notice dated 02.01.1999 (Exhibit-14) itself takes care of the value of work done by the defendant from 01.07.1995 to 19.10.1995 although as per the demand notice dated 02.01.1999 (Exhibit-14) itself the defendant had not even raised any bill for the work for the said period. There is no document to show service of the demand notices dated 30.07.1998 and 02.01.1999 were ever issued/served upon the defendant whose receipt was also denied by the defendant. Accordingly, the defendant had no occasion to respond to the demand notices and the defendant came across the demand notices only through the suit.
35. The letter of demand notice is dated 02.01.1999 but the plaintiffs have not proved dispatch or service of demand notice to the defendant. The breakup of the claim in the demand notice is as under:
(A) Towards shortage of stock - Rs. 32,139.67
(B) Towards accrual of DC - Rs. 2,14,299.00
(C) Towards accrual of WC - Rs. 33,348.00
(D) Towards unpaid wages to the
cont. labour covered by you &
paid as a debt on your behalf - Rs. 1,61,038.55
(E) Towards unadjusted on A/C of
payment received by you in 3
(three) different spells - Rs. 2,00,000.00
(F) Extra expenditure towards
works got done at your risk &
cost w.e.f. 20.10.95 to 26.5.97 - Rs. 24,28,819.93
Rs. 30,69,645.15
(G) Value of work done by you
w.e.f. 1.7.95 to 19.10.95 but bill
not preferred by you (-) Rs. 4,45,570.99
Rs. 26,24,074.16
(H) E.D./S.D. less (-) Rs. 56,720.00
30
2025:JHHC:16098
Rs. 25,67,354.16
(Rupees Twenty-five lacs sixty-seven thousand three hundred fifty-four & paise sixteen) only.
36. The perusal of the demand notice reveals that demand was raised under different heads, but no document was produced with respect to one or the other item. With respect to demand on account of shortage of stock, payment of demurrage charges, payment of wharfage charges and towards non-payment to labourers, no documentary proof or details have been furnished by the plaintiffs. With respect to incurring extra expenditure towards work done at the risk and cost of the defendant w.e.f. 20.10.1995 to 26.05.1997, the consolidated amount has been mentioned without any break-up and without referring to quantum of work done and the rate at which such work was done. The plaintiffs have not even proved any bills and vouchers showing payment to 3rd party arising out of work done at the risk and cost of the defendant so as to substantiate their claim regarding getting the work done at the risk and cost of the defendant. The quantum is completely vague in terms of rate and also in terms of quantity and the damages actually suffered by the plaintiffs, if any. The plaintiffs have further not been able to prove that this demand notice dated 02.01.1999 was ever served upon the defendant.
37. The defendant, as per their written statement, had completely denied the receipt of demand notice and had questioned its correctness and also demanded its break-up, but in spite of such objection having been raised from the side of the defendant, no proof or break-up has been furnished by the plaintiffs and consequently, the plaintiffs have completely failed to prove the quantum of damages actually suffered by them on account of alleged acts and omission of the defendant.
38. This Court finds that apart from trying to exhibit the documents (photocopy), with respect to the rate by which various contracts with aforesaid three contractors were entered into with different persons at rate much higher than that of the defendant, no evidence has been placed on record to show as to how much work was undertaken so as 31 2025:JHHC:16098 to quantify the loss/damages as claimed. The plaintiffs though, interalia, raised demand on account of work got done by other contractors at the risk and cost of the defendant, but only the period from 10.10.1995 till the end of the contract period of the defendant has been mentioned and there is no mention of the quantity of work actually undertaken on account of so-called work got done by other contractors at the risk and cost of the defendant so as to quantify the losses, if any arising therefrom. This Court is of the view that the quantum of work having neither been pleaded nor proved by any oral or documentary evidence, the plaintiffs have failed to prove quantum of damages suffered in order to claim damages on this head.
39. Further, the plaintiffs have claimed damages under other heads, namely, demurrage charges and wharfage charges, but no evidence was produced to substantiate any component of the demand notice dated 02.01.1999 (Exhibit-14). The plaintiffs did not produce any document to show payment of demurrage charges or wharfage charges or payment of any amount to the contractors who were alleged to have been appointed vide Exhibit-8 to 12 or to any labour payment or payment to the labour department on account of any acts and omissions of the defendant. In absence of any evidence to substantiate or support the claim as raised in the demand notices, this Court is of the considered view that the plaintiffs have miserably failed to prove damages, if any, suffered by them on account of acts/omissions/termination/discontinuation of the contract with the defendant. It was for the plaintiffs to support the quantum of damages by leading evidence, but no such evidence was led.
40. The plaintiffs have relied upon clause X(c) to submit that the decision of Senior Regional Manager is final and binding on the contractors and therefore it has been submitted that the quantification of amount as per demand notice was final and was binding on the defendant. This Court is of the considered view that such an argument is devoid of any merit, inasmuch as, the said clause is only dealing with the discretion of Senior Regional Manager to engage other labour, scales, truck, cart etc. at the risk and cost of the contractor 32 2025:JHHC:16098 without terminating the contract and in that regard decision of the Senior Regional Manager shall be final and binding on the contractors. In the present case, the plaintiffs were seeking damages and therefore it was for the plaintiffs to prove the losses suffered. In order to claim damages, the plaintiffs were required to lead cogent evidence and also substantiate the same by quantifying the damages which the plaintiffs have miserably failed to prove in the present case.
41. Considering the totality of the facts and circumstances, this Court is of the considered view that the plaintiffs have failed to prove the damages suffered and accordingly they are not entitled for the money decree as prayed for in the suit. This is over and above the findings recorded while deciding point of determination no. (b) that the plaintiffs failed to prove that the defendant abandoned or refused to perform work on and from 19.10.1995 from 2.00 P.M. so as to entitle the plaintiffs to get the work done at the risk and cost of the defendant.
42. This Court has gone through the impugned judgement also and finds that the learned trial court has come to a correct finding that the plaintiffs have failed to prove their claim of damages in accordance with law. The finding in paragraph 11 and 12 is quoted as under :-
"11. As already mentioned in the preceding paras that the plaintiffs have sought relief of money decree of Rs. 25,67,354.16 Paise but have not given the complete break up or the details of different head, in which the plaintiffs have incurred loss and damage on account of any negligence and latches on the part of the defendant. However, I find that the plaintiffs demand notice dtd. 07/01/99 issued to Arvind Kr. Sinha marked as Ext. 14 gives the details of the calculation of loss and damage. This Ext. 14 is claimed to have been issued to Arvind Kr. Sinha on 02/01/99 as a demand notice of the financial loss of Rs. 25,67,354.16 Paise, but there is nothing on the record to suggest that this demand notice was ever served upon the defendant. On the other hand, upon the perusal of Ext. 14, it appears that the plaintiffs have demanded the loss as accrued on account of payment of DC (Demmurrage Charges) and WC (Wharfage Charges) to the tune of Rs. 2,14,399/- and Rs.33,348/- respectively but the plaintiffs have not produced any documents of payment of such DC or WC to the Railway department and thus failed to prove that plaintiffs 33 2025:JHHC:16098 incurred loss on account of such payment and that such charges were levied on account of any negligence or latches on the part of the defendant. It will not be out of place to mention that the Demmurage charges are the charges, which are levied by the customs or the railway, when the goods are stored and not cleared within the specified time i.e. these are charges for excess period of storage of goods. "Demmurage" means the charges levied for the detention of any rolling stock after the expiry of free time, if any, allowed for such detention. Here, in this case, there is no such case of the plaintiffs that charges were levied by the railway for the detention of wagons loaded with sugar placed on 17/10/95 at 3PM at railway siding and that the FCI in fact paid such amount to the railway. Only on account of bare assertion by the plaintiffs that the railway wagon were placed on 17/10/95, which were not unloaded by the defendant and as a result of which, the plaintiffs have sustained heavy financial loss towards demmurage cost, the defendant cannot be held liable. Rather, the plaintiffs are required to prove that the railways in fact charged the plaintiffs such amount as demmurage and the plaintiffs had paid that amount and as a result suffered the loss for which liability of contractor can be fixed.
According to the demand notice, the plaintiffs have also demanded Rs.1,61,032.55 Paise as unpaid wages to the contract labours engaged by the defendant and as paid by the plaintiffs on behalf of the defendant. However, the plaintiffs have again failed to prove by any document that such amount was ever paid by the Plaintiffs to the contract labours engaged by the defendant. Rs. 2,00,000/- has been demanded claiming that the defendant had received this amount in three installments, but the plaintiffs have again failed to prove this payment by bringing on the record any such document of payment of such unadjusted amount to the defendant. I further find that Rs. 24,38,819.93 has been claimed by the plaintiffs as extra expenditure towards work done by other contractor with effect from 20/10/95 to 26/07/97 at the risk and cost of the defendant but I find that the plaintiffs have failed to prove by relevant documents that any such extra expenditure was incurred by plaintiffs on account of negligence and latches on the part of the defendant.
12........................Here, it is important to mention the provision of Section 73 of the Contract Act. This section says that the party who suffers by the breach of contract is entitled to receive from the defaulting party, compensation for any loss or damage caused to him by such breach, which naturally arose in usual course of things from such breach, or which the two parties knew when they make the contract to be likely the result of the breach of contract.34
2025:JHHC:16098 This provision makes it clear that such compensation is not to be given for any remote or indirect loss or damage sustained by reason of such breach. The underlying principle enshrined in this section is that a mere breach of contract by defaulting party would not entitle other side to claim damages unless said party has in fact suffered damages because of such breach. Loss or damage which is actually suffered as a result of breach has to be proved and the plaintiff is to be compensated to the extent of actual loss or damage suffered. However, here in this suit as discussed above, I find that the plaintiffs have failed to prove and substantiate their entitlement of a decree for Rs. 25,67,354.16 Paises by bringing any documents evidencing the fact of such actual loss and damage or by brining sufficient evidence on the record for the exact assessment of such loss or damage. Accordingly, both these issues are decided against the plaintiffs and in favour of the defendant."
43. This Court finds that the plaintiffs have miserably failed to establish their case and also the claim of damages by producing evidence to substantiate their claim before the court. The decision of the learned trial court is well reasoned and upon consideration of materials placed on record and the findings do not call for any interference. Thus, the point of determination no. (c) is also decided against the appellant and in favour of the respondent (defendant). The point of determination no. (a)
44. So far as the point of determination no. (a) relating to the point of limitation is concerned, as per the case of the plaintiffs, the agreement was terminated on 13.02.1996 and the period of contract was till 26.05.1997 and they were entitled to get the work done at the risk and cost of the defendant after the defendant refused to perform on 19.10.1995. As held above, the plaintiffs have failed to prove that the defendant had refused to perform on 19.10.1995 and were neither entitled to engage anyone to perform work at the risk and cost of the defendant and the plaintiffs have also failed to prove that the three contractors were appointed to perform remaining work at the risk and cost of the defendant. This Court finds that the plaintiffs have miserably failed to prove any cause of action after 19.10.1995 (the day on which the plaintiffs had lastly taken work from the defendant). The 35 2025:JHHC:16098 plaintiffs have miserably failed to prove that defendant had breached the contract and also failed to prove that the plaintiffs had undertaken any work at the risk and cost of the defendant. Further, the plaintiffs failed to prove that any work actually done at the risk and cost of the defendant and also failed to prove cause of action for any loss or damages allegedly suffered by the plaintiffs on account of one or the other component of damages as claimed vide demand notice dated 02.01.1999. The plaintiffs also failed to prove that any communication after 19.10.1995, relating to the work being executed at the risk and cost of the defendant, including dispatch/service of termination letter dated 13.02.1996 and the demand notices dated 30.07.1998 and 02.01.1999. This Court is of the considered view that even if the letter of termination of contract alleged to have been issued on 13.02.1996 is taken into consideration, the suit was beyond the period of limitation of 3 years. The reliance on Section 23 of the Limitation Act, 1963 by the appellant is misplaced as the plaintiffs have failed to prove any injury arising out of alleged breach of contract by the defendant, rather this Court as well as the learned trial court have recorded a finding that the plaintiffs have miserably failed to prove their case that the defendant refused to work after 19.10.1995 and on the face of such finding, there is no cause of action to claim damages under any head which claim have been rejected by this Court as well as by the learned trial court. This Court is of the considered view that the end of the period of contract by itself does not give rise to any cause of action even under Section 23 of the Limitation Act, 1963. In view of the aforesaid findings, this Court is of the considered view that the suit was barred by limitation. The findings of the learned trial court on the point of limitation are as under:
"Issue no. VI- Ld. Lawyer appearing for the defendants has also disputed the plaintiff's claim contending that the claim is time barred in view of the provisions of the Limitation Act 1963. Ld. Lawyer has submitted that the period of limitation for recovery of the amount, which the plaintiffs had to pay to the railways as demmurage cost or to the contract labours is three years from the date of such payment. Here, in this case, 36 2025:JHHC:16098 since the plaintiffs have not brought on the record any document in the shape of letter of Railway Department of levying demmurage cost or the receipt of payment of such demmurage cost by the plaintiffs to the railway Department and the payment of wages to the contact lobour, it is not clear as to from which time the period of limitation had begun to run and in such circumstances, if it is to be construed that it is a suit for compensation for the breach of a promise to do anything at specified time, or upon the happening of specified contingency then Article 27 of the Limitation Act, 1963 provides that the period of limitation is three years from the time specified or the contingency happens on account of the breach. Here, in this case, it is the specific case of the plaintiffs that the breach of a promise to do anything at a specified time was 19/10/95, when the defendant was expected to join the work of unloading and transporting sugar from the sugar wagon placed at railway siding, Hazaribag and on account of non turning of the defendant for that work, the plaintiffs had to suffer the financial loss. In such circumstances, the time from which period of limitation begins to run is either 19/10/96 or the date on which the railway levied/charged demmurage cost from the plaintiffs but since here in this case, plaintiffs have not brought on the record any such document of levying the demmurage cost or the payment made to the labours, transporter on behalf of defendant or any document of appointment of other contractor at the risk or cost of the defendant or any payments made to such contractors, the date from which the limitation begins to run will be reckoned as 19/10/95 and thus this suit should have been brought in the court on or before 08/10/98. According to the plaintiff's assertion in their plaint, the cause of action for the present suit arose on 26/05/97, when the defendant's contractual period was to expire. But I find that although the contractual period was to end on 26/05/97, but the plaintiffs in the agreement entered with the defendant had reserved their right to terminate the regular contract, if the performance of the contractor was not found to be satisfactory and using that right, the plaintiffs had in fact terminated the regular contract with the defendant by issuing letter No. S&C 13/1/(2)/94 dtd. 13/02/96 (Ext.-7). Hence, in such facts and circumstances, all the contractual relationship of the plaintiffs with the defendant ceased from the date of issuance of letter of termination dated 13.02.1996 and therefore, there cannot be any cause of action after this date of termination of contract. I find that this suit has been filed 37 2025:JHHC:16098 on 24.12.99 i.e. even if the last cause of action for the suit is considered to be 13.02.1996, the plaintiff's claim is time barred. Accordingly, this issue is also decided against the plaintiffs."
45. This Court has also gone through the findings of the learned trial court holding that the suit was barred by limitation and finds no reasons to interfere with the findings. Accordingly, the point of determination no. (a) is also decided against the appellant and in favour of the respondent (defendant).
46. All the points of determination having been answered against the appellant and in favour of the defendant, this Court finds no reason to interfere with the impugned judgment and decree dismissing the suit for damages. This Court is of the considered view that the learned trial court has rightly held that the plaintiffs have failed to prove that the defendant was responsible for breach of any contract by suddenly stopping work on 19.10.1995 and that on account of such breach, the plaintiffs had to appoint other contractors at the risk and cost of the defendant. The learned trial court has further rightly held that the plaintiffs have also failed to prove and substantiate their entitlement of a decree for Rs.25,67,354.16 by bringing any evidence of loss and damage and for its assessment and quantification. Further, the claim of damages has also been rightly held to be barred by limitation.
47. Accordingly, this First Appeal is dismissed.
48. Pending interlocutory application, if any, stands dismissed as not pressed.
(Anubha Rawat Choudhary, J.) Saurav/ 38