Madras High Court
Lita Srinivasan vs S.V.Jayaraman on 1 November, 2010
Author: M.Venugopal
Bench: M.Venugopal
?IN THE HIGH COURT OF JUDICATURE AT MADRAS %DATED: 01/11/2010 *CORAM THE HONOURABLE MR.JUSTICE M.VENUGOPAL +AS.171 of 2001 #Union of India $R.S.Venkataraman !FOR PETITIONER : Lita Srinivasan ^FOR RESPONDENT : S.V.Jayaraman :ORDER
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 01.11.2010 CORAM THE HONOURABLE MR.JUSTICE M.VENUGOPAL A.S.No.171 of 2001 Union of India represented by the General Manager, Southern Railway, Chennai-600 003. ... Appellant Vs. M/s.R.S.Venkataraman, Engineering Contractor, No.8, Sokkanatha Gounder Street, Erode. ... Respondent Appeal Suit filed under Section 96 of the Code of Civil Procedure, against the Judgment and Decree dated 07.03.2001 made in O.S.No.105 of 1969 on the file of the Principal Sub Court, Erode.
For Appellant : Mrs.Lita Srinivasan For Respondent : Mr.S.V.Jayaraman, Senior Counsel For M/s.V.Rama Jagadeesan JUDGMENT The Appellant/Defendant has filed this present Appeal as against the Judgment and Decree dated 07.03.2001 in O.S.No.105 of 1969 on the file of Principal Sub Court, Erode.
2.The trial Court, while passing the Judgment in the main suit in O.S.No.105 of 1969 on 07.03.2001, has, among other things, observed that 'the Respondent/Plaintiff has performed 9,81,000 cubic feet work and for that the Appellant/Defendant has to pay a proper amount and further it has also held that the Respondent/Plaintiff has proved his case clearly and has prayed for by the Respondent/Plaintiff, the Appellant/Defendant has to pay a sum of Rs.2,78,604/- for 9,81,000/- cubic feet work along with interest at 12% per annum from 17.4.66 to 1968 and resultantly, passed a decree directing the Appellant/Defendant to pay a sum of Rs.3,24,246.69 paise to the Respondent/Plaintiff and also directed the Appellant/Defendant to pay 12% interest for Rs.2,78,604/- from the date of filing of the suit till date of passing of the decree and further to pay 6% interest per annum from the date of passing of the decree till date of realisation together with costs.'
3.Before the trial Court, 1 to 8 issues have been framed for adjudication in the main suit. On behalf of the Respondent/Plaintiff, witnesses P.W.1 and P.W.2 have been examined and Exs.A.1 to A.27 have been marked. On the side of the Appellant/Defendant, witness D.W.1 has been examined and Exs.B.1 to B.18 have been marked.
4.Being aggrieved against the Judgment and Decree passed by the trial Court in O.S.No.105 of 1969 dated 07.03.2001, the Appellant/ Defendant as an aggrieved person has projected this Appeal before this Court.
5.The points that arise for determination in this Appeal are:
(1)To what extent the rock stones, jellies and sand have been removed?
(2)Whether the Appellant/Defendant has agreed to pay Rs.284/- for 1000/- cubic feet?
(3)Whether a sum of Rs.46,153.31 paise has been paid to the Respondent/Plaintiff in full settlement of the claim in respect of the additional work performed?
(4)Whether the Respondent/Plaintiff is entitled to claim a sum of Rs.2,78,604/- with future interest at 12% per annum from 17.4.66 [less the amount paid under 12th and part bill]?
(5)Whether the suit filed by the Respondent/Plaintiff is liable to be dismissed as per Section 79 of Civil Procedure Code?
(6)Whether the suit filed by the Respondent/Plaintiff is against Article 299 of the Constitution of India?
Contentions, Discussions and Findings on Point Nos.1 to 4:
6.The Learned Counsel for the Appellant/Defendant submits that the trial Court has decreed the suit filed by the Respondent/Plaintiff without considering the oral and documentary evidence available on record and that the Executive Engineer, Olavakkot as per letter dated 26.5.65 has clearly stated that for additional work, payment would be only according to the Basic Schedule of Rates and as per terms of Annexure V to the Agreement, the Respondent/Plaintiff has seen the location and having received the communication is deemed to have accepted the rates since after receiving them the Respondent/Plaintiff went ahead and complete the work and there is no express or implied agreement to pay Rs.284/- per 1000 cubic feet.
7.The Learned Counsel for the Appellant/Defendant urges that the basic rates as per Item IV Schedule B, in respect of similar work is Rs.25/- per 10 cubic metres, upto a lead of 1 kilometre and Rs.29/- per 10 cubic metres upto a lead between 1 to 2 kilometres a total of Rs.46,153.31 has been calculated to be the amounts due in respect of the additional work and the same has also been paid and accepted by the Respondent in full settlement and after receiving the same, the Respondent/Plaintiff is estopped from claiming any further amounts and moreover, the alleged assurance given by the Executive Engineer is not binding on the Administration nor a conclusive one and that the interest is also not payable and the actual quantity removed is only 617816 cubic feet and not 981000 cubic feet.
8.According to the Learned Counsel for the Appellant/Defendant, the measurement made by the Engineer in charge is final as per the General Conditions of Contract and there is also an arbitration clause in the General Conditions of Contract which forms part of the Agreement and as such, the suit filed by the Respondent/Plaintiff is not maintainable.
9.It is the further contention of the Learned Counsel for the Appellant/Defendant that D.W.1 is a responsible officer of the Appellant, who is competent to speak from the records and his evidence has to be given due weight by the trial Court, but the same has not been done and his evidence being rejected summarily is not a correct one.
10.The contention of the Appellant/Defendant is that the administration is measured the work done by the Respondent/Plaintiff and in fact, Ex.B.3-Agreement for the main job dated 14.4.65, Ex.B.6 sketch and Ex.B.7-sketch substantiate the actual quantity of work done by the Respondent and indeed, the Plaintiff has not chosen to attend the final measurement nor signed the document thereof and as per the General Conditions of Contract which forms part of the suit agreement, if after due notice, the contractor failed to attend the measurement, then the measurements as taken by the Engineer of the Administration is to be treated as final and binding on him and after due intimation, measurements have been done and the work of excavation done by the Respondent/Plaintiff has been plotted in the graph sheet and arrived as 617816 cubic feet.
11.The Learned Counsel for the Appellant/Defendant submits that the two Measurement Books along with other documents have been produced in the year 1973 pursuant to the notice given by the Respondent/Plaintiff and that the Measurement Books are missing from the Court Records and the trial Court has not taken any efforts to trace the same.
12.The Learned Counsel for the Appellant/Defendant contends that P.W.2-Executive Engineer as per Schedule of Powers is not competent to fix the rate for the additional work done by the Respondent/Plaintiff and as such, the evidence of P.W.2 is to be ignored.
13.On the side of the Appellant/Defendant, the Learned Counsel contends that the trial Court should have seen that P.W.2 being a Retired Officer of the Administration ought not to have given evidence to substantiate their case of the contractor and against the interest of the Administration.
14.Expatiating the arguments, the Learned Counsel for the Appellant/Defendant submits that the evidence of P.W.2 is against the provisions of the Official Secret Act and also as per Sections 123 and 124 of the Evidence Act and as a matter of fact, P.W.2 has deposed about the various inter-department notes and correspondence.
15.Continuing further, it is the submission of the Learned Counsel for the Appellant/Defendant that the Respondent/Plaintiff as P.W.1 has clearly deposed that there is no written document to substantiate his contention that the rate of Rs.284/- per 1000 cubic feet has been accepted by the Administration.
16.Proceeding further, it is the contention of the Learned Counsel for the Appellant/Defendant that the trial Court failed to appreciate Ex.A.27-Letter dated 20.9.1965 of the Administrative Engineer [Works], Olavakkot is not admissible in evidence when he is not competent to accept the rates and the said Ex.A.27-Letter has been produced only at the time of trial.
17.The Learned Counsel for the Appellant/Defendant projects a plea that the Respondent/Plaintiff, after receiving Exs.B.11 and B.12 Letters of the Administrative Engineer, Olavakkot addressed to the Plaintiff dated 26.5.65 and 1.7.65 respectively, has gone ahead and completed the additional work without protest which would clearly imply that he had accepted the rates agreed by the Administration and after accepting the rates and completed the work, the Respondent/ Plaintiff is estopped from making any further claim much less Rs.284/- per 1000 cubic feet.
18.The Learned Counsel for the Appellant submits that 12% interest per annum awarded by the trial Court to the Respondent/ Plaintiff is an exorbitant one because of the fact that the Respondent/ Plaintiff is not entitled to legally claim any interest and that apart, the trial Court has no jurisdiction to award interest at 12% per annum because of the fact that Civil Procedure Code has been amended in the year 1976 which has come into force with effect from 1.2.1977 and by virtue of Section 97(e) of the Amending Act, it has been made clear that the provision of S.34 shall not affect suits filed prior to 1.2.1977 and in the instant case, the suit has been filed in the year 1969 and in reality, there is no agreement to pay interest.
19.Another contention put forward on the side of the Appellant/ Defendant is that the trial Court has not appreciated Ex.B.6-Sketch in a proper perspective and when the Respondent/Plaintiff himself has admitted in his evidence tacitly that he has not produced any document to substantiate his contention in regard to the quantum of work, then, it is not appropriate for the trial Court to accept the case of the Respondent/Plaintiff that he has done the work to an extent of 981000 cubit feet.
20.The Learned Counsel for the Appellant submits that the trial Court ignored the Judgment of the Supreme Court in Civil Appeal No.921 of 1976 and the High Court, Madras in Civil Revision Petition No.2903 of 1973 and the trial Court ought to have considered I.A.No.910 of 2000 filed by the Appellant raising objections under Sections 123 and 124 of the Evidence Act and Official Secrets Act and the dismissal of I.A.No.910 of 2000 by the trial Court is an arbitrary one.
21.Lastly, it is the contention of the Learned Counsel for the Appellant that the trial Court has committed an error in casting the burden of proof lies upon a party claiming the compensation and in the absence of acceptable evidence, no damages can be awarded.
22.In short, it is the submission of the Learned Counsel for the Appellant/Defendant that the trial Court has not looked into the factual and legal position of the present case in a clear perspective, which has resulted in miscarriage of justice and therefore, prays for allowing the Appeal in the interest of justice.
23.In the instant case on hand, the evidence of P.W.1, P.W.2 and D.W.1 assume significance based on the facts and circumstances of the case.
24.The evidence of P.W.1 (Plaintiff) is to the effect that he has applied for construction of Diesel Shed in Erode and on 17.3.1965 the same has been approved by the Railway Board and on 14.4.1965 an Agreement has been entered into and before entering into an Agreement, the Engineers have come and inspected the place and on 22.3.1965 the Officers have come and inspected and at that time, for the first time in Railways Diesel Engine has been introduced and in short period before getting drenched due to rain, he has been directed to complete the work and in that place viz., at the building construction place jelly, sand have been lying to an extent of 10,00,000 cubic feet and without removing this matters, work cannot begin and the Officers have come and inspected the same and they decided to remove this articles by putting in the pit and directed him to commence the work and because of putting these materials in the pit, the money of the Railway getting saved and this job, remained as an additional one subject to the Agreement and he has been asked by the Chief Engineer to do this work and Balaraman is the Executive Engineer and thereafter, he has been asked to do the main job and he has informed them that he cannot do this work and by calling the other contractors they asked them to do this work but no one has come forward to do the same.
25.It is the further evidence of P.W.1 that boulders, sand and jelly to an extent of 10,00,000 cubic feet will have to be removed and the Executive Engineer has asked him to do this work because other contractors on being asked have refused to do the same and he informed him that he will do the work and he demanded an amount of Rs.600/- to Rs.700/- for 1000 cubic feet without deduction and they agreed to pay Rs.400/- on an average and for boulders Rs.500/-, for sand and jelly Rs.300/- and in this, they agreed to pay Rs.400/- on an average and he has sent a letter dated 5.4.65, for which no reply has been received and they did the work on their own and on testing the same for them an amount of Rs.330/- has come and for removing the boulders skilled people services have been required and a lorry opening on three sides has been in need of and the rent of lorry has been high and the boulders will have to be equally placed and the lorry will move only in the first gear for which additional expense will have to be incurred and boulders cannot be taken in bullock carts and Executive Engineer-Balaraman has seen the same and during last week of March 1995 a test/check has been conducted and they informed that what he has said is correct and they agreed to pay one rate for which they asked him to agree and they directed him to commence the work and they agreed to pay the rate demanded by him and from 3.4.1965 he directed him to commence the work and accordingly, he commenced his work and completed the same and at that time, the Railway Officials have been present all along and they will note down the measurement in their books and in that book the entire job details will be there.
26.It is the further evidence of P.W.1 that through telephone and letter they have agreed for Rs.284/- and only in that respect he has put his signature and given the same and he has finished the additional work and in the summons they have obtained the signature for Rs.284/- and they informed him unilaterally that they will pay one rate and Exs.A.1 to A.26 are the letter correspondence between him and the Railways and they sent an information after agreeing to pay the same for which he has given his consent letter and that he has finished the additional work to an extent and that final bill has not been prepared by him and they fixed one rate to their liking and they have not put the bill amount as per agreed amount.
27.Added further, it is the evidence of P.W.1 (in cross examination) that while doing the additional work the Assistant Engineer has been present all along and looked after the same and further once in a week Balaraman-Engineer used to come and once in two weeks, Deputy Engineer used to visit and for Rs.284/- they have agreed and obtained his signature and accordingly, he has done the work but bill has not been prepared accordingly and they put a resolution by putting a flat rate and asked him to do the work, for which he has not agreed and also not done the work and later Engineer-Balaraman has come and inspected and at that time the work has been stopped and again they informed that they will pay the rate amount of Rs.284/- as claimed by him and Balaraman informed him that after conducting the trial, he has agreed to pay the same and in his presence the trial has been conducted and by keeping a lorry the trial has been conducted and for 1000 cubic feet without deducting voids the flat rate of Rs.314/- has been worked out and since it is on the high side they asked him to agree for old rate of Rs.284/- for which he has not agreed and for this he sent a reminder and they have refused and he has been informed that the negotiation rate Rs.284/- has been recommended and sent and they asked him to work for the said rate and since in Andra at Goody place the engine to come for Erode Diesel Shed has been there and therefore, he has been asked to finish the work quickly and that he has worked day and night in lorry and > work he has been finished and again a dispute has been raised and once again he stopped his work and the General Manager and the Chief Engineer have come to the spot and in his presence they have decided to pay at the negotiation rate and he has received a letter through the Department and in that they have informed that they have agreed for the rate stated by him and that letter has come from Palghat Olavakkot Engineer-Balaraman and he has finished his work and till date no final bill has been prepared and part bill only has been prepared and in that said bill they have not mentioned Rs.284/- and he has received the amount under protest and he has written like this and affixed his signature in the Defendant's bill viz., Ex.B.1 and he has finished the main and additional works.
28.P.W.1 in his further evidence has deposed that he has to be paid at the rate of Rs.284/- for 1000 cubic feet without deducting the void and he has not filed the account statistics details and further he has not filed a document for Rs.284/- and he is keeping an accounts expenses incurred for additional work which he has not filed and Exs.B.2 and B.3 are the Agreement and Ex.B.4 is the B.S.R. Book and he has record for providing jellies, sand etc. to an extent of 1,00,000/- cubic feet and he has a record for doing the work to an extent of 9,81,000 cubic feet and it is incorrect to state that he has done the work to an extent of 17494 cubic metre and it is not correct to state that 30.4.65 as per Book No.1089 from page 1 to 7, from page 10 to 13 he has done the work to an extent of 6,17,816.
29.P.W.2 [Retired Chief Engineer of Southern Railways] in his evidence has deposed that in the year 1965 he has served in Palghat he has been entrusted with the work of Diesel Shed and for carrying out this work Venkatraman-Plaintiff has been the contractor and though the said work has to be completed within a specified time the higher officials informed to finish the work quickly and above the place of work a high tension electric wire has been passing through and there have been many boulders at Olavakkot Division and only if the said boulders are removed/displaced, the work can be done and also that a telephonic wire has been passing through and the Deputy Engineer and Chief Engineer have come and inspected the place and he has informed them of the details and instructed him to remove the boulders.
30.It is the further evidence of P.W.2 that if tender is invited for the work, then, there will be a delay of two or three months and therefore, it has been decided to give this work additionally to the Respondent/Plaintiff and if the work is given to another agency, then, there will be an inordinate delay because at a depth of 18 feet the foundation/base has to be made and initially the price has been fixed at Rs.320/- and they directed the Respondent/Plaintiff to do the work for Rs.284/- per 1000 cubic feet and since they compelled the Respondent/Plaintiff, he has agreed to pay a sum of Rs.284/- and completed the work and Ex.A.27 is the Letter dated 20.9.1965 written by him to the Respondent/Plaintiff and the Respondent/Plaintiff has agreed to complete the job without deducting voids at Rs.284/- for 1000 cubic feet.
31.P.W.2's evidence [in cross examination] is to the effect that removal of boulders is an additional work and at the Loco Shed work is the main work and the work commenced after his arrival at Erode and only after removing the boulders, the basement for the building can be put and only later the work can be commenced and till the completion of building work, he has not remained at Erode and he cannot say in which year he has been transferred but after the completion of additional work, and after the commencement of basement work, he has gone to transfer and before the commencement of work, the inside and outside measurements of boulders have been measured and written.
32.Continuing further, P.W.2 in his evidence has also deposed that he has not taken any notes separately at the time of doing the work and above him there have been higher officials and one Srinivasan, Assistant Engineer has helped him and his head office has been at Olavakkot and Exs.A.1 to A.6 are all his proceedings and he has sent the copies of Exs.A.4 to A.6 to the Assistant Engineer and it is his duty to send the copies to them and his job is to recommend the document given to him to the Chief Engineer and he cannot determine the rate and a rate can be fixed only if the higher official asks him to do so and only upon the orders of the higher officials for the additional job, he has determined the rate and send it.
33.Apart from the above, it is the evidence of P.W.2 that it is not correct to state that Ex.A.27-Letter dated 20.9.1965 has not been typed in the paper supplied by the Railway Department and signature in Ex.A.27-Letter belongs to him.
34.The evidence of D.W.1 [Section Engineer/works] is to the effect that he is serving in the Southern Railway as Section Engineer in Erode [Works Office] from the year 1995 and the presence of work at the time of progression of the work are not in employment and they have retired and the suit documents pertaining to the year 1972-73 have been filed before the Court and besides this documents there are no other documents and that Ex.B.6 is the Plan pertaining to the suit place and by keeping a copy the work turned out by Respondent/ Plaintiff can be calculated and the suit property tender has been approved by the Chief Engineer and the Committee has approved the same in which the Respondent/Plaintiff has signed and in the Agreement, the boulder performed by the Respondent/Plaintiff has been removed and additional work has been done for which separate rate is available and B.S.R. rate has been fixed and Ex.B.4 is the related document of the year 1961 and after taking the boulder and dumping the same, the measurement already in existence and the measurements after dumping the boulders are mentioned in Ex.B.7-Plan.
35.Also, it is the evidence of D.W.1 that Ex.B.8 is the Chief Engineer's Inspection Report and that the Deputy Engineer's letter is Ex.B.9 addressed to S.G.Iyer and in that the B.S.R. Rate has agreed to be paid and the letter of Engineer-Balaraman addressed to the Assistant Engineer dated 19.4.65 is Ex.B.10 and Ex.B.11 is the letter written by the Administrative Engineer dated 26.5.65 addressed to the Plaintiff and Exs.B.12 and B.13 are the letters dated 30.6.65 sent to the Plaintiff and Ex.B.14 is the letter of the Plaintiff dated 1.4.60 addressed to the Administrative Engineer and Ex.B.15 is the letter addressed by the Plaintiff to the Assistant Engineer and Ex.B.16 is the reply letter dated 30.3.66 sent by the Engineer to the Plaintiff and on 30.6.65 the Engineer has sent Ex.B.17-Letter to the Plaintiff.
36.Added further, it is the evidence of D.W.1 that in Ex.B.3-Original Agreement in Annexure IV in Serial Nos.3 and 4 of B Schedule the condition has been mentioned for the same job Agreement and that the contractor for 10 cubic metre has mentioned the rate of Rs.27/- and that he has mentioned the said rate for bringing the sand from outside and that the Administrative Engineer-Balaraman has no power to fix the rate and in Salem-Namakkal Section the same job has been ordered to be carried out and for 10 cubic metre presently a sum of Rs.27/- has been paid as coolie and as per Ex.A.27 no letter has been sent and even in that letter there is no mention of copy being sent and the contractor is claiming Rs.99.50 as per his calculation for 10 cubic metre to remove nearby sand belonging to the Railway and this rate is an higher one.
37.In his cross examination, D.W.1 has stated that the suit work is an additional work and the Agreement for the additional job is No.J/W/493/1965 and except the additional work in respect of other work bill has been prepared. In Ex.B.4 document at page 165 in Serial No.1832 the rate has been mentioned and for this rate the work is proceeding in Namakkal.
38.In the Plaint, the Respondent/Plaintiff has, among other things, averred that the Appellant/Defendant called for tenders for the construction of Broad Gauge Diesel Loco Shed at Erode and his tender has been accepted on 17.3.1965 and has been followed up by the execution of usual agreement and 13.4.1966 has been fixed as the target for completion of work and before commencement of the construction, it has been discovered that over 5 lakhs cubic feet of boulders, stone jelly and sand have been heaped and become set and consolidated on the site for construction of the diesel shed and that the construction work could not be commenced and the construction completed according to Schedule unless the stached up boulders, stone jelly and sand have been totally removed another place as quickly as possible and this major piece of work has not been contemplated, and not coming under the tender and not covered by the written agreement that followed or by any single item of work in the Basic Schedule of rates.
39.Further, the Respondent/Plaintiff in Plaint in para 6 has, inter alia, mentioned that 'the Executive Engineer by express declaration and the Deputy Chief Engineer and Chief Engineer by their conduct of their inspecting the work have impressed upon the contractor that it was all essential that this work has to be completed within the targeted date and that the Railway Administration by its conduct of their responsible officials in their course of official duty have led the Respondent/Plaintiff into a bonafide belief that if they employ special labour and engaged a fleet of lorries they will be paid at a reasonable rate of Rs.284/- per 1000 cubic feet and therefore, the Railway is bound in law and equity to pay the above rate.'
40.Importantly, the Respondent/Plaintiff in paragraph 8 of the Plaint has averred the following:
"8.The Chief Engineer had come for site inspection on 29.3.1965 before commencement of the construction work of the Diesel Shed under the contract. The Chief and Executive Engineer confronted with the above problems and difficulties in the way of the commencement of the contract work. The plaintiff was pitched upon to be entrusted with and to complete the new and additional work by the Executive Engineer under the directions of Chief Engineer. After considerable discussion, the plaintiff was persuaded to accept the said work on an assurance of payment of a flat rate of Rs.284/- per 1000 cubic feet without deducting voids on the aggregate work done in terms of measurement of the external volume of the embankment to be formed and of stone jelly and sand transported and stacked. The plaintiff had to agree to this unwillingly though the payment promised was meagre with little or no chance for any profit. It was under such auspices that the plaintiff was induced to commence the new and additional work on the basis of the plan or cross section sheet already prepared and shown to him at the time."
41.Furthermore, in paragraph 9 of the Plaint, the Respondent/ Plaintiff has stated among other things that '... On plaintiff's refusal to do the work of filling up the pits, a fresh plan or cross section sheet was prepared by the Assistant Engineer Sri S.Srinivasan under the directions of the Executive Engineer marking the pits with measurements. The plaintiff was asked by the Executive Engineer to do the work of covering up the pits also promising to pay for that work also at the same rate as for the embankment. In fact, the plan or cross section sheet under the signature of the Assistant Engineer and counter signature of the plaintiff has been sent to the Executive Engineer giving particulars of the quantity of work done under that head namely one lakh and seven thousand cubic feet.'
42.The case of the Respondent/Plaintiff is that consequent upon a letter dated 3.5.1965 by him to the Executive Engineer and the Correspondence that followed, the Executive Engineer, the Deputy Chief Engineer and the Chief Engineer have approved and affirmed the fairness and reasonableness of his claim for Rs.284/- for 1000 cubic feet without deduction for void at a flat rate without reference to the schedule of rates in B.S.R. or the agreement for the construction of the Diesel shed and believing in such encouragements and promises, he has been allowed to be induced and persuaded to carry on and completed the new and additional work not covered and envisaged by the tender and agreement for the construction of the loco shed and further he continued with the work and completed the same by January 1966.
43.According to the Respondent/Plaintiff, the payment for the new and additional work got stuck up on account of disagreement between the Engineering and Accounts Sections, the letter objecting the payment at the flat rate of Rs.284/- per 1000 cubic feet and further that the Executive Engineer has written a letter to him on 30.3.1966 that the Deputy Chief Engineer, South Madras has been pleased to offer the rate of Rs.29/- per 10 cubic metre for a lead between 1 kilometre and 2 kilometres and Rs.25/- per 10 cubic metre for a lead not exceeding 1 kilometre and wanted his acceptance to enable the competent sanction being obtained for the same.
44.The stand taken by the Respondent/Plaintiff is that the Appellant/Defendant is not entitled to reopen the concluded matter and resurrect the matter to a stage of offer and acceptance pretending as though the work was gratuitously done without any stipulation for payment and that the quantity of work done by him is 9,81,000 cubic feet for which he is entitled to claim a sum of Rs.2,78,640/- on and from the date of completion etc.
45.In paragraph 17 of the Plaint, the Respondent/Plaintiff has stated that 'he is entitled to claim a sum of Rs.3,92,400/- with interest at 12% from January 1966 on the principle of quantum merit, but limits his claim to Rs.2,78,604/- less the amount paid under 12th and Part Bill with interest at 12% from 17.4.1966.'
46.In the written statement, the Appellant/Defendant has pleaded that the Respondent/Plaintiff has been notified by the Executive Engineer, Olavakkot, in his communication dated 26.5.1965 that for the additional work of removal of materials, payment will be allowed only according to Basic Schedule of Rates for the actual quantity done including the lead and hence, no negotiated rate was considered necessary and that he should execute the additional work in terms of Annexure V to the agreement and further the Executive Engineer in his letter dated 1.7.1965 has reiterated that only the Basic Schedule of Rates will be paid and that he should not quote any rates and there is no question of negotiating any special rate.
47.In the written statement, the Appellant/Defendant has averred that though the additional work of removal of boulders etc. may not come under the Basic Schedule of Rates, there are guiding principles in it for similar items and in the Agreement executed by the Plaintiff under Item IV of Schedule B, they have quoted a rate of Rs.27/- per 10 cubic metre for earth work by coal ashes (cinder) in forming bank including loosening with all lead and lift, consolidation and watering etc. complete from Erode Yard limits. (Contractor has to make necessary path way for movement of lorry or vehicles at his own cost if required) etc.
48.The stand taken by the Appellant/Defendant is that a sum of Rs.46,153.31 paise has been paid to the Respondent/Plaintiff in full settlement of his claim for the additional work done by him and the same is mentioned as follows:
1.Lead upto 1 Kilometre 11452.36 CUM at the rate of Rs.25/- per 10 CUM .. Rs.28630.90
2.Lead between 1 and 2 Kms.
6042.21 CUM at the rate of Rs.29/- per 10 CUM .. Rs.17522.41
-----------------
Total 46153.31 -----------------
49.According to the Appellant/Defendant, the actual quantity of work done by the Respondent/Plaintiff is only 6,17,816 cubic feet as per Measurement Book No.1089, pages 1 to 7 and 10 to 13 as recorded on 30.4.1965 and signed by him and moreover, the Plaintiff cannot drawn inference from the letter dated 27.11.65 of the Chief Engineer and in fact, the said letter only states that his claim is being considered and it cannot be taken that the rate quoted by him has been accepted.
50.In the Reply Statement, the Respondent/Plaintiff has stated that the payment of Rs.46,153.31 paise is not a full quit or final settlement of his claim and that apart, a sum of Rs.40,000/- has been recovered from the 12th and Part Bill and Rs.15,124/- has been recovered from the Security deposit.
51.The Learned Counsel for the Appellant/Defendant cites the decision of Honourable Supreme Court in Bhikraj Jaipuria V. Union of India AIR 1962 Supreme Court 113 at page 114 wherein it is held as follows:
"Where a statute requires that a thing shall be done in the prescribed manner of form but does not set out the consequences of non-compliance, the question whether the provision was mandatory or directory has to be adjudged in the light of the intention of the legislature as disclosed by the object, purpose and scope of the statute. If the statute is mandatory, the thing done not in the manner of form prescribed can have no effect or validity: it if is directory, penalty may be incurred for non-compliance, but the act or thing done is regarded as good."
Also, in the aforesaid decision at page 114 in paragraph 35 it is held thus:
"Hence, where a contract between the Dominion of India and the private individual is not in the form required by S.175(3), it cannot be enforced and therefore, the Dominion of India cannot be sued by the private individual for compensation for breach of contract."
52.She also relies on the decision of Honourable Supreme Court Mulamchand V. State of M.P. AIR 1968 Supreme Court 1218 at page 1219 it is laid down as follows:
"The provisions of S.70 can be invoked by the aggrieved party to the void contract. The first condition to be satisfied under the section is that a person should lawfully do something for another person or deliver something to him; the second condition is that in doing the said thing or delivering the said thing he must not intend to act gratuitously; and the third condition is that the other person for whom something is done or to whom something is delivered must enjoy the benefit thereof. If these conditions are satisfied S.70 imposes upon the latter person the liability to make compensation to the former in respect of, or to restore the thing, so done or delivered.
In a case falling under S.70 the person doing something for another or delivering something to another cannot sue for the specific performance of the contract, nor ask for damages for the breach of the contract, for the simple reason that there is no contract between him and the other person. So where a claim for compensation is made by one person against another S.70, the juristic basis of the obligation is not founded upon any contract or tort but upon a third category of law, namely, quasi-contract or restitution. 1943 AC 32 and (1948) 1 KB 339, Ref. to.
Applying these principles, it is manifest that a person whose contract is void for non-compliance with Art.299(1) of the Constitution would be entitled to compensation under S.70 of the Contract Act if he had adduced evidence in support of his claim."
53.She also invites the attention of this Court to the decision State of Maharashtra and others V. Saifuddin Mujjaffarali Saifi AIR 1994 Bombay 48 wherein it is held thus:
"On the completion of tender as above and the communication of its acceptance to the contractor, a valid and legal contract comes into force. Filing of tender is in the form of lodging a proposal and acceptance of the tender and the rates mentioned therein is the acceptance of tender which brings into existence the concluded contract between the parties. A term which is not actually included in a written contract cannot be implied unless the Court comes to a clear conclusion that both the parties must have intended that the term should be implied. However, it must be emphasized that a very important question arises as to whether and in what circumstances a contract between the parties can be implied. The contract can be implied and it is clear from Section 9 of the Indian Contract Act, but it is the fundamental principle of law that the Court should not make a contract for the parties. It follows that a clear case must be made out before doing so. A contract implied in fact requires meeting of minds. The Court should refuse to read an implied term into a contract which is silent on the point or did not clearly indicate the nature of term. However, when the stipulations are clear and in contemplation of the parties or which necessarily arise out of the contract between the parties, they will be implied i.e. stipulations on the part of the employer to allow the builder to do the work and to give possession of the site, to supply plans, etc."
54.However, the Learned Counsel for the Respondent/Plaintiff in support of the contention that the Appellant/Defendant receiving the benefits in regard to the completion of the additional work from the Plaintiff, is bound to pay the reasonable amount claimed by the Respondent/Plaintiff in the suit and in support of the contention, he relies on the decision of this Court in The Superintending Engineer, Suruliyar Hydro Electric Project, Madurai and others V. The Green Lands New India Construction Company and others 1993 (II) MLJ 228 wherein it is held thus:
"The direction given by the second defendant (Executive Engineers) to plaintiffs to collect sand from other quarries was certainly with a view to continue the work with suitable sand of required quality and not to stop the same because the required quality and not to stop the same because the required quality was not available from Chinnamannur quarries. Even if the second defendant had acted beyond his powers in giving such a direction, it is certainly binding on the defendants as it has been given in the larger interests of the defendants. The plaintiffs are certainly entitled to claim the cost for bringing sand from such distant quarries on the basis of the principle embodied in Sec.70 of the Contract Act. The plaintiffs never intended to transport sand from a distant quarry on any concessional rate or free of costs. When the contract was entered into the plaintiffs submitted the tender on the basis that sand could be brought from Chinnamannur quarry. They worked out the cost only on that basis. When it was found that it was not possible to give effect to that part of the contract and when the officer-in-charge of the works authorised the plaintiffs to bring sand from other approved quarries in order to continue and complete the work, the plaintiffs were justified in law to insist upon payment of the additional cost involved by complying with the directions given by the benefit of the plaintiffs transporting sand from the newly approved quarries and continuance of their work are bound in law to pay the extra cost incurred thereby."
55.He also relies on the decision of Honourable Supreme Court Deepa Bhargava and another V. Mahesh Bhargava and others (2009) 2 Supreme Court Cases 294 at page 295 wherein the Honourable Supreme Court has held hereunder:
"Interest becomes leviable either under a statute or under a contract. The stipulation to pay interest at the rate of 18% per annum cannot, by itself, be said to be unreasonable. No legal principle has been adverted to by the executing court in reducing the rate of interest to 14% and the High Court in further reducing the same further to 9%. There are a large number of decisions where interest has been directed to be paid even at the rate of 18 % or 21% per annum."
56.He invites the attention of this Court to the decision of Honourable Supreme Court Ghaziabad Development Authority V. Union of India and another AIR 2000 Supreme Court 2003 at page 2004 wherein it is held that 'If payment of interest is not provided for in contract, yet interest can be awarded on equitable grounds and in a case where the breach committed by the Development Authority of contract to allot developed plot the Award of 12% interest per annum was held to be justified.'
57.At this stage, the Learned Counsel for the Respondent/ Plaintiff by pointing out that as per Section 70 of the Indian Contract Act, 1872 even if there is no contract between the parties, if the Plaintiff has done the work and not intending to do so gratuitously and the Defendant has enjoyed the benefits of the works, then, the Defendant is liable to pay the compensation to the Plaintiff over the value of the work done by him and further, Section 70 of the Indian Contract Act applies as much to individuals as to Corporations and Government and therefore, the Appellant/Defendant is not outside the purview of Section 70 of the Contract Act.
58.Also, it is the contention of the Learned Counsel for the Respondent/Plaintiff that there is no bar as per Article 299 of the Constitution of India for the Respondent/Plaintiff to claim compensation in terms of Section 70 of the Indian Contract Act.
59.The Learned Counsel for the Respondent/Plaintiff relies on Clause 39 in Ex.B.3-Agreement dated 14.4.65 for the main job which refers to Rates for extra items of works and the same runs as follows:
"39.Any item of work carried out by the Contractor on the instructions of the Engineer which is not included in the accepted schedule of rates shall be executed at the rates set forth in the "Schedule of Rates, Southern Railway" modified by the tender percentage and where such items are not contained in the latter at the rates agreed upon between the Engineer and the Contractor before the execution of such items of work and the Contractor shall be bound to notify the Engineer atleast seven days before the necessity arises for the execution of such items of work that the accepted schedule of rates does not include a rate or rates for the extra work involved. In the event of such agreement not being come to, the Railway shall be entitled to execute the extra works by other means and the Contractor shall have no claim for loss or damage that may result from such procedure. Provided always that if the Contractor shall commence work or incur any expenditure in regard thereto before the rates shall be determined as lastly heretofore mentioned, then and in such a case the Contractor shall only be entitled to be paid in respect of the work carried out or expenditure incurred by him prior to the date of determination of the rates as aforesaid according to the rates as shall be fixed by the Engineer."
60.The Learned Counsel for the Appellant/Defendant submits that the Respondent/Plaintiff before the trial Court has filed I.A.No.114 of 1972 in O.S.No.1056 of 1969 under Order 11 Rule 14 of Section 151 of Civil Procedure Code praying for issuance of an Order in directing the Appellant/Defendant to produce the documents 1 to 11 mentioned therein and in default thereof to strike out the defence and that the trial Court on 29.4.1972 has passed an order holding that the Appellant/Defendant is entitled to claim privilege in respect of Documents 2 to 7 and ordered the petition accordingly without costs.
61.The Learned Counsel for the Appellant contends that as against the order passed in I.A.No.114 of 1972 in O.S.No.105 of 1969 dated 29.4.1972 passed by the trial Court, the Respondent/Plaintiff has filed C.R.P.No.2903 of 1973 before this Court and this Court has dismissed the Civil Revision Petition without costs holding that there is no error of jurisdiction in the order of the courts below and as against the order of this Court passed in C.R.P.No.2903 of 1973 dated 6.2.1976, the Respondent/Plaintiff filed Civil Appeal No.921 of 1976 before the Honourable Supreme Court of India and the Honourable Supreme Court on 18.4.1990 has dismissed the Civil Appeal holding that on the facts and in the circumstances of the case there is no reason to interfere with the impugned order of the High Court and this has not been taken note of by the trial Court, while passing an order on 29.08.2000 in I.A.No.910 of 2000 in O.S.No.105 of 1969 filed by the Appellant/Defendant [praying for passing of an appropriate order restraining Shri.Balaraman, Retired Executive Engineer, Southern Railway for disclosing any information or interdepartmental communications confidential matters relating to the contract given to M/s.R.S.Venkataraman, Railway Contractor (Respondent/Plaintiff) for construction of Diesel Loco Shed and additional work in connection with the said contract or give evidence contrary to the written statement filed in the above suit by Railway Administration] to the effect that Mr.Balaraman is the competent person to depose about the contract. He is entitled to give evidence on behalf of the Plaintiff without prejudice to the order of the Supreme Court and the Appellant/ Defendant in law is entitled to canvass about the orders passed by the trial Court in I.A.No.910 of 2000 dated 29.8.2000 in the present Appeal filed by it and the trial Court while passing the order in I.A.No.910 of 2000 and permitting the P.W.2-Balaraman to adduce evidence and marking Ex.A.27-Letter dated 20.9.1965 of Southern Railway, Divisional Office, Works Branch, Olavakkot in J/W.148/360 addressed to the Respondent/Plaintiff has not borne in mind the ingredients of Section 123 and 124 of the Evidence Act and therefore, the entire Judgment passed by the trial Court in the suit is non est in law.
62.A perusal of I.A.No.114 of 1972 in O.S.No.105 of 1969 filed by the Respondent/Plaintiff shows that Ex.A.27-Letter of Southern Railway Office, Works Branch, Olavakkot dated 20.9.1965 in J/W.148/360 addressed to Respondent/Plaintiff does not find a place in the list of documents to be produced. However, the prayer of the Appellant/Defendant in I.A.No.910 of 2000 filed under Official Secrets Act, 1923, Sections 123 and 124 of Evidence Act and Section 151 of Civil Procedure Code refers to the relief being sought by the Appellant/ Defendant restraining one Balaraman, Retired Executive Engineer, Southern Railway, for disclosing any information or interdepartmental communications, confidential matters relating to the contract given to the Respondent/Plaintiff for construction of Diesel Loco Shed and additional work etc.
63.The Learned Counsel for the Appellant/Defendant relies on the decision of Honourable Supreme Court The State of Punjab V. Sodhi Sukdev Singh AIR 1961 Supreme Court 493 wherein it is held as follows:
"Reading Ss. 123 and 162 together the Court cannot hold an enquiry into the possible injury to public interest which may result from the disclosure of the document in respect of which privilege is claimed under S.123. That is a matter for the authority concerned to decide; but the Court is competent, and indeed is bound, to hold a preliminary enquiry and determine the validity of the objections to its production, and that necessarily involves an enquiry into the question as to whether the evidence relates to an affair of State under S.123 or not.
In this enquiry the Court has to determine the character or class of the document. If it comes to the conclusion that the document does not relate to affairs of State then it should reject the claim for privilege and direct its production. If it comes to the conclusion that the document relates to affairs of State it should leave it to the head of the department to decide whether he should permit its production or not.
In exercising his discretion under S.123 in many cases the head of the department may have to weigh the pros and cons of the problem and objectively determine the nature and extent of the injury to public interest as against the injury to the administration of justice. That is why it is not unreasonable to hold that S.123 gives discretion to the head of the department to permit the production of a document even though its production may theoretically lead to some kind of injury to public interest. While constructing Ss.123 and 162, it would be irrelevant to consider why the enquiry as to injury to public interest should not be within the jurisdiction of the Court, for that clearly is a matter of policy on which the Court does not and should not generally express any opinion.
It is perfectly true that in holding an enquiry into the validity of the objection under S.123 the Court cannot permit any evidence about the contents of the document. It the document cannot be inspected its contents cannot indirectly be proved; but that is not to say that other collateral evidence cannot be produced which may assist the Court in determining the validity of the objection."
Also, in the aforesaid decision at page 496 the Honourable Supreme Court has observed as follows:
"Where a privilege is claimed at the stage of inspection and the Court is required to adjudicate upon its validity, the relevant provisions of the Evidence Act under which the privilege is claimed as well as the provisions of S.162 which deal with the manner in which the said privilege has to be considered are equally applicable; and if the Court is precluded from inspecting the privileged document under the second clause of S.162 the said prohibition would apply as much to a privilege claimed by the State though its witness at the trial as a privilege similarly claimed by it at the stage of inspection. The provisions of O.11 R.19(2), Civil P.C., must therefore be read subject to .162 of the Evidence Act."
64.The Learned Counsel for the Appellant also cites the decision of Honourable Supreme Court Mange Ram V. Brij Mohan and others AIR 1983 Supreme Court 925 wherein it is observed as follows:
"where the party wants the assistance of the Court to procure presence of a witness on being summoned through the Court, it is obligatory on the party to file the list with the gist of evidence of witness in the Court as directed by sub-rule (1) of Rule 1 and make an application as provided by sub-rule (2) of R.1. But where the party would be in a position to produce its witnesses without the assistance of the Court, it can do so under Rule 1-A of O.16 irrespective of the fact whether the name of such witness is mentioned in the list or not."
65.It is to be pointed out that for applicability of Section 123 of the Indian Evidence Act, 1872 which deals with 'Evidence as to affairs of State' the following are the necessary conditions for the applicability of the Section.
(a) The evidence should relate to affairs of State;
(b) The evidence must be derived from unpublished official records relating to such affairs;
(c)disclosure of information so derived is not permissible except with the permission of the head of the department concerned;
(d)It is for the head of the department to give or withhold such permission as he deems fit.
66.It is to be noted that a Court of Law by an order under Section 91 of the Criminal Procedure Code cannot set at naught the ingredients of Section 123 or Section 124 of Indian Evidence Act as per decision Chandbhai V. State AIR 1962 Guj 290. Further, it cannot be said that Section 123 of the Indian Evidence Act gives discretion to the head of the Department to permit the production of a document even though its production may theoretically lead to some kind of injury to public interest as per decision S V. Sodhi AIR 1961 SC 493.
67.Section 124 of the Indian Evidence Act, 1872 speaks of 'Official Communications'. As per this Section, a public officer cannot be compelled to disclose communications made to him in official confidence, if he considers that the public interests would suffer by disclosure. Just like Section 123 of the Act, the basis of Section 124 is regard for public welfare. Equally, one has to bear in mind that there is no room to employ Section 124 of the Act as a cloak to shield the truth from the Court. A privilege can be claimed as per Section 124 of the Act only when the evidence to be given is a communication made to a public officer in official confidence. The requirements of Section 124 of the Act are:
(1)A communication must have been made to a public officer in official confidence; and (2)The officer in question must consider that public interests would suffer by the disclosure of the communication in question.
68.It is needless to state that it is for the Court and not for the public officer to decide whether the document containing communication is a privilege one. The claim of privilege will fall through if the Court comes to the conclusion that the communication has not been made in official confidence. However, if the finding is just the reverse, it is to be seen whether public interest will suffer by its disclosure. Generally, a communication is said to be made in official confidence, when one official communicates with another official in confidence as per decision B.R.Srinivasan V. Bramhatantra Parakalaswamy AIR 1960 Mysore 186. The term 'Communication in official confidence' includes generally all matters communicated by one officer to another in the performance of their duties and that the question whether such communication has been made in the course of such performance is for the Court to decide as per decision Nagaraja Pillai V. Secretary to State ILR 39 Mad 304.
69.However, in S V. Appanna 1962 Madras Criminal Law journal 280 it is held that the words 'Official Confidence' indicates that the section applies to communications from one public offer to another public officer in the discharge of their official duties and not the communications to such officers by outsiders. Also, in another decision S V. S.M.Subramanium 1967 Criminal Law Journal at page 1232 Madras, it is held that there may be a case in which a private person may make a communication to the public officer in official confidence and in any event, the said public officer can also claim privilege under this Section.
70.In Bhal Chandra V. Chandvassappa AIR 1939 Bom 237 it is held hat 'the communication visualised by Section 124 of the Indian Evidence Act necessarily involves the wilful confiding of secrets with a view to avoiding publicity by a reason of the official position of the person in whom trust is reposed.
71.In short, even as per Sections 123 and 124 of the Indian Evidence Act, the Court of Law is to judge whether the document in respect of which privilege is claimed pertains to the affairs of the State.
72.It is not out of place for this Court to make a relevant mention that a valid claim for privilege as per Section 123 of the Indian Evidence Act proceeds on the footing that the production of a document in issue will cause injury to public interest, and in a case where a conflict arises between public interest and private interest, the private interest must yield to the public interest, as opined by this Court. It is also to be seen that interests other than the interest of the public do not masquerade in the garb of public interest and take undue advantage.
73.In State of Bihar V. Kripalu Shankar AIR 1987 Supreme Court 1554 the Honourable Supreme Court has observed as follows:
"A Government functions by taking decisions on the strength of views and suggestions expressed by the various officers at different levels, ultimately getting finality at the hands of the Minister concerned. Till then, conflicting opinions, views and suggestions would emanate from various officers at the lower level. There should not be any fetter on the fearless and independent expression of opinions by officers on matters coming before them through the files. This is so even when they consider orders of Courts. Officers of the Government are often times confronted with orders of Courts, impossible of immediate compliance for various reasons. They may find it difficult to meekly6 submit to such orders. On such occasions they will necessarily have to note in the files, the reasons why the orders cannot be complied with and also indicate that the Courts would not have passed those orders if full facts were placed before them. The expression of opinion by the officers in the internal files are for the use of the department and not for outside exposure or for publicity. To find the officers guilty for expressing their independent opinion, even against orders of Courts in deserving cases, would cause impediments in the smooth working and functioning of the Government. These internal notings, in fact, are privileged documents. Notings made by the officers in the files cannot be made the basis of contempt action against each such officer who makes the notings. If the ultimate action does not constitute contempt, the intermediary suggestions and views expressed in the notings, which may sometimes even amount ex facie disobedience of the Courts orders, will not amount to contempt of Court. These notings are not meant for publication."
Also, in the aforesaid decision at page 1555 it is held as follows:
"State communications or acts of State in public interest, enjoy privilege and if that be so, disclosure in such communications made to the Court will not constitute either contempt or defamation. However, this does not mean that absolute privilege can be claimed of its exposure and protection from the view of Courts. The general principle on which confidentiality of State documents should be protected is that if a person is involved in litigation, the Court can order him to produce all the documents he has which relate to the issues in the case. Even if they are confidential, the Court can direct them to be produced when the party in possession does not produce them, for the other side to see or at any rate for the Court to see. When the Court directs production of those documents there is an implied understanding that they will not be used for any other purpose. The production of these documents in ordinary cases is imposed with a limitation that the side for whose purpose documents are summoned by the Court cannot use them for any purpose other than the one relating to the case involved. 1986 Pat LJR (HC) 319, Reversed."
74.This Court aptly points out the decision In re Suryanarayana Naidu, 66 Madras LW 927, it is held that 'the privilege claimed was in respect of statements made by the Defendants in the suit to the Taluk Supply Officer and it is held that the communications sought to be disclosed were in the nature covered by Section 124 of the Evidence Act and the privilege claimed was upheld.'
75.In K.S.Venkatesam Naidu and Sons Madras V. State of Madras AIR 1959 Madras 335 this Court has held thus:
"A communication made by one Secretary to the Government to another Secretary to the Government is a communication in respect of which privilege can be claimed. Such inter-departmental correspondence cannot be compelled to be produced. But any correspondence which passed between an officer of the State and the petitioners must be produced when summoned."
76.In The Madras Port Trust V. Hymanshu International by its Proprietor V. Venkatadri (dead) by L.Rs. AIR 1979 Supreme Court 1144 the Honourable Supreme Court has laid down as follows:
"We do not think that this is a fit case where we should proceed to determine whether the claim of the respondent was barred by S.110 of the Madras Port Trust Act (II of 1905). The plea of limitation based on this section is one which the court always looks upon with disfavour and it is unfortunate that a public authority like the Port Trust should, in all morality and justice, take up such a plea to defeat a just claim of the the citizen. It is high time that governments and public authorities adopt the practice of not relying upon technical pleas for the purpose of defeating legitimate claims of citizens and do what is fair and just to the citizens. Of course, if a government or a public authority takes up a technical plea, the Court has to decide it and if the plea is well-founded, it has to be upheld by the Court, but what we feel is that such a plea a government or a public authority, unless of course the claim is not well-founded and by reason of delay in filing it, the evidence for the purpose of resisting such a claim has become unavailable. Here, it is obvious that the claim of the respondent was a just claim supported as it was by the recommendation of the Assistant Collector of Customs and hence in the exercise of our discretion under Art. 136 of the Constitution, we do not see any reason why we should proceed to hear this appeal and adjudicate upon the plea of the appellant based on S. 110 of the Madras Port Trust Act (II of 1905)."
77.In State of Madhya Pradesh V. Sardarmal AIR 1987 Madhya Pradesh 156 at page 158 in paragraph 8 it is observed as follows:
"The other ground, which remains to be considered is regarding non-production of documents by the appellant State and an adverse inference drawn by the lower appellate court for such non-production. So far as the State is concerned, now that it has been held to be a virtuous litigant See Madras Port Trust V. Hymanshu International, AIR 1979 SC 1144, it does not behove the Sate Government to keep back even any such document, the production of which may possibly not be in its own interest, yet necessary for a just decision of the case. Withholding of documentary evidence for a litigant, professed and held to be a virtuous, can hardly be said to be desirable."
78.As far as the present case is concerned, even though on the side of the Appellant/Defendant, a plea is raised that I.A.No.114 of 1972 filed by the Respondent/Plaintiff under Order 11 Rule 14 of Section 151 of Civil Procedure Code praying for issuance of an Order in directing the Appellant/Defendant [Respondent therein] to produce the documents 1 to 11 filed therein has been ordered by the trial Court as per Order 11 on 29.4.1972 wherein the Appellant/Defendant is entitled to claim privilege in respect of Documents 2 to 7 mentioned therein against which C.R.P.No.2903 of 1973 has been filed by the Respondent /Plaintiff and the same being dismissed by this Court on 6.2.1976 and later the Civil Appeal No.921 of 1976 filed by the Respondent/Plaintiff has been dismissed by the Honourable Supreme Court. In I.A.No.910 of 2000 in O.S.No.105 of 1969 filed by the Appellant/Defendant praying the trial Court to pass appropriate orders to restrain Balaraman (P.W.2), Retired Executive Engineer, Southern Railway for disclosing any information or interdepartmental communication confidential matters pertaining to the contract given to the Respondent /Plaintiff for construction of Loco Shed and additional work etc., the trial Court on 29.08.2000 has held that the said Balaraman (P.W.2) is the competent person to depose about the contract and that he is entitled to give evidence on behalf of the Respondent/Plaintiff without prejudice to the order of the Supreme Court. As against the said order of the trial Court, the Appellant/Defendant has not preferred any Appeal before the higher forum and as such, the order passed in I.A.No.910 of 2000 has become final and binding between the parties, in the considered opinion of this Court.
79.Though Ex.A.27-Letter dated 20.9.1965 of the Divisional Office, Works Branch, Olavakkot addressed to the Respondent/Plaintiff in J/W.148/360 by the Executive Engineer/Works viz., P.W.2 and also as spoken to by him in his evidence and that as per Ex.A.27 for them no letter has been sent, even in Ex.A.27 there is no mention as to the copy of the letter has been sent, as spoken to by D.W.1 in his evidence, this Court is of the considered view that it is not open to the Appellant/Defendant to object to the production or marking of the said document or to keep back the document the production of which may possibly not be in its own interest, yet necessary for a just decision of the case and also it is to be borne in mind that the Appellant/ Defendant cannot employ Section 124 of the Indian Evidence Act as a cloak to shield the truth from the Court of Law and moreover, a perusal of Ex.A.27-Letter dated 20.9.1965 of the P.W.2, Executive Engineer/Works, Divisional Office, Works Branch, Olavakkot viz., the Respondent/Plaintiff shows that the same has emerged out of the commercial transaction and once it has been marked as an exhibit the question of claiming in a privilege does not arise in the considered opinion of this Court and apart from the above, even by Estoppel by Conduct the Appellant/Defendant is precluded from raising any objection as to Ex.A.27-Letter dated 20.9.1965 because of the fact that the order of the trial Court in I.A.No.910 of 2000 dated 29.8.2000 permitting P.W.2-Balaraman to be the competent person to depose about the contract has become a final and conclusive one between the parties and therefore, the objections raised on behalf of the Appellant/ Defendant is not accepted by this Court.
80.In regard to the plea of the Appellant/Defendant that the Respondent/Plaintiff has not complied with the mandatory provision of Order 16 Rule 1 of Civil Procedure Code, it is to be pointed out that Order 16 Rule 1 of Civil Procedure Code provides for list of witnesses being filed and summons being issued to them for being present in Court for recording their evidence. Rule 1-A, on the other hand, refers to production of witnesses without summons where any party to the suit may bring any witness to give evidence. If Order 16 and Order 18 are read conjointly, it would appear that Order 18, r4(1) of Civil Procedure Code will necessarily apply to a case visualised by Order 16, r 1-A of Civil Procedure Code. Order 16 Sub-rule (3) of C.P.C. reduces the rigour of sub-rule (1) and grants discretion to the Court to call a witness by summoning him through a Court, or otherwise, although his name does not figure in the list to be presented under the sub-rule (1). Where if the Court does so, it is required to record reasons.
81.In the instant case on hand, in I.A.No.910 of 2000 filed by the Appellant/Defendant, the trial Court has categorically observed in its order dated 29.8.2000 that Mr.Balaraman (P.W.2) is the competent person to depose about the contract and is entitled to give evidence on behalf of the Plaintiff etc. and that order has become final, conclusive and binding between the parties inter se as per Section 43 of the Evidence Act and therefore, this Court opines that it is not open to the Appellant/Defendant to contend that the Respondent/Plaintiff has not complied with the mandatory provision of Order 16 Rule 1 of Civil Procedure Code and consequently, the same is negatived by this Court.
82.The Learned Counsel for the Appellant/Defendant submits that the Executive Engineer, Olavakkot as per Letter-Ex.A.3 dated 26.5.1965 addressed to the Respondent/Plaintiff has clearly stated that in respect of the additional work, payment will be allowed to according to the Basic Schedule of Rates and as per terms of Annexure V to the Agreement, the Respondent/Plaintiff has seen the location having received the Ex.A.3-Letter of the Executive Engineer/Works, Southern Railway, dated 26.5.1965, the Respondent/Plaintiff is deemed to have accepted the rates since after receipt of the said letter he has gone ahead and completed the work and there is no expressed or implied Agreement on the part of the Appellant/Defendant to pay Rs.284/- per 1000 cubic feet.
83.Expatiating her arguments, the Learned Counsel for the Appellant/Defendant contends that the basic rates as per Item IV Schedule 'B' in respect of similar work is Rs.25/- per 10 cubic metres, upto a lead of 1 kilometre and Rs.29/- per 10 cubic metres upto a lead between 1 kilometre and 2 kilometres and that a total sum of Rs.46,153.31 has been calculated to be the amounts due in regard to the additional work and the same has also been paid and accepted by the Respondent/Plaintiff in full settlement and in short, the alleged assurance given by the Executive Engineer is not binding on the Administration nor conclusive and further, the actual quantity removed is only 6,17,816 cubic feet and not 9,81,000 cubic feet as averred by the Respondent/Plaintiff.
84.Ex.A.1 is the Letter dated 29/30.3.1965 of Executive Engineer/Works, Divisional Office, Works Branch, Olavakkot addressed to the Respondent/Plaintiff, Engineering Contractor, Erode. In the said letter, the Executive Engineer of Southern Railway has stated that even though the Respondent/Plaintiff has been informed by phone on 26.3.65 to attend the Divisional Office on Monday the 29th March '65 in order to finalise the phasing of the programme of the above work, it is regretted that he has not turn up today and this has resulted in non-finalisation of the phasing of his portion of work and as the programme made out for the execution of the work is required by CE by 31.3.65, he is anxious that the programme is chalked out before that day and requested the Respondent/Plaintiff to send him the programme of work made out by him by return and in the meantime, the Executive Engineer has directed the Respondent/Plaintiff to meet him at any time when he is in office.
85.Ex.A.2 is the Letter dated 15.5.1965 of Executive Engineer/ Works, Southern Railway addressed to the Respondent/Plaintiff in Ref.No.J/W.148/360. In the said letter, it is mentioned that 'the Respondent/Plaintiff has stopped concreting since the last 4 days which results in delay in the progress of the work thereby upsetting the programmes and targets fixed and also it is further mentioned that if the Respondent/Plaintiff has no concrete mixers, the mixers available with Railway may be made use of for which recovery as per BSR will be made and the Executive Engineer has also requested the Respondent/Plaintiff to ensure that the said work is proceeded with and if delay is caused on his account, then, he will be held responsible for the same.
86.In Ex.A.3-Letter dated 20/26.5.1965 of Executive Engineer/ Works, Olavakkot addressed to the Respondent/Plaintiff, it is stated that for removal of the goods spoils BSR item 1832 only can be allowed and that the Respondent/Plaintiff will be paid for, for the actual quantity done including the lead and hence, no negotiated rate is considered necessary and also the Respondent/Plaintiff has been required to see Annexure V to the Agreement under which he is expected to carry out this additional work on the same accepted rate.
87.In Ex.A.4-Letter dated 27.5.1965 of the Executive Engineer/ Works, Southern Railway addressed to the Respondent/Plaintiff, it is mentioned that the Respondent/Plaintiff has stopped the work completely after his last inspection at Erode and has not done any concreting of the columns and the foundations for DME's Office under the protext that his negotiated rates have not been accepted and further, it is also stated that this excuse cannot be accepted and during his last inspection, it has been observed that sufficient steps have not been taken by him for procuring building materials, though 1 = months have been passed after signing the Agreement and the Respondent/Plaintiff has been expected to show considerable progress in another week's time etc.
88.In Ex.A.5-Letter dated 20.6.1965 of Executive Engineer/ Works addressed to the Respondent/Plaintiff, it is stated that the Respondent/Plaintiff has not been addressed to quote rates for the removal of boulders etc. as stated by him in his letter dated 18.6.65 and moreover, CE in his inspection Note dated 22.3.65 has advised to pay only BSR rate for the removal of boulders and in reply to his letter dated 3.5.65, the Respondent/Plaintiff has been advised that BSR rate only will be paid as per this Office letter of even No. dated 20/26.6.65 and that apart, the Respondent/Plaintiff has been informed that since there is BSR rate for operating an item, no negotiated rate can be sanctioned and hence, the question of addressing higher authorities does not arise.
89.In Ex.A.6-Letter dated 10.9.65 of Executive Engineer/Works, Olavakkot addressed to the Respondent/Plaintiff on the progress of works in respect of proposed diesel loco shed at Erode, it is mentioned inter alia that 'on the whole, the overall progress of the work is not satisfactory and that special report to the Head quarters Office on 15.9.65 and 20.9.65 will have to be submitted submitted with reference to the improvement in the work etc.' Also, in the said letter, the Executive Engineer/Works has added that the Respondent/Plaintiff will be able to give him an assurance to complete the works by the target date by 1.10.65 for running the diesel engines, as well as for the major portion of the project by 31.12.65 and also directed the Respondent/Plaintiff to send a reply which should reach his office by 14.9.65 with detailed programme about how he is going to tackle the works.
90.In Ex.A.7-Letter dated 7.10.65 of the Assistant Engineer/ Sp.ED., Erode addressed to the Respondent/Plaintiff (Railway Contractor), it is among other things mentioned that 'Regarding bills, he is in a position to prepare a further bill of about 60,000 Rs., which covers all the works so far done, exempting the filling in the MAS end and pending negotiation, if he is agreeable for for accepting under protest, the BSR item for the above work, it will be billed etc. and the statement of the Respondent/Plaintiff that is stopping work from 6.10.65 onwards for want of bills, is not justified.
91.Ex.A.8 is the Letter of Assistant Engineer, Special Works, Erode dated 25.10.65 addressed to the Respondent/Plaintiff wherein it is mentioned that the old boulders were originally stack measured in Respondent/Plaintiff's presence and the measurements have been noted down by him for his reference also and further, the measurements have been taken with AEN/ED and PWI/ED also separately, so that AEN/ED may transfer his boulders to his account and as per the above measurements, the AE/ED has transferred 4.9 lakhs cft. to him on challan and as per the Respondent/Plaintiff's statement, the quantity by lorries, is more than the quantity of 4.9 lakhs, which is correct, since the Respondent/Plaintiff's lorry measurements is with voids varying between 20% to 40% whereas, the quantity of 4.9 lakhs mentioned by the Assistant Engineer is the net quantity after deducting for voids and that the cross section and the levels have been signed by the Respondent/Plaintiff on his own accord on 19.10.65 and after checking for himself the whole quantities involved, with the Assistant Engineer and with IOW/D/ED and the Respondent/Plaintiff has expressed so to XEN/W/OJA the same day at 20.30 hours etc. and that the Respondent/Plaintiff has signed the cross section and the level book of his own accord and that he has not mentioned in the cross section in the level book that he is signing under protest.
92.In Ex.A.9-Letter dated 27.11.1965 of Southern Railway, Headquarters Office, Works Branch, Park Town, Madras-8 addressed to the Respondent/Plaintiff, it is among other things mentioned that the Respondent/Plaintiff will realise the urgency and the importance of the Erode Diesel Shed work and further it is hoped that he will not allow anything to stand in the way of its completion within the targetted date.
93.Ex.A.10 is the Letter of Executive Engineer of Southern Railway, Divisional Office, Works Branch, Olavakkot addressed to the Respondent/Plaintiff wherein it is mentioned that with reference to the letter dated 3.5.65 of the Respondent/Plaintiff, Deputy Chief Engineer, (South)/Madras has been pleased to advise that it has been decided to offer the Respondent/Plaintiff a rate of Rs.29/- per 10 cum. for a lead between 1 KM and 2 KMs and Rs.25/- per 10 cum. for a lead not exceeding 1 KM and the Respondent/Plaintiff acceptance to this rate is required by the Deputy Chief Engineer to enable competent sanction being obtained for the same and hence, the Respondent/Plaintiff has been directed to signify his acceptance at the earliest date etc.
94.Ex.A.11 is the Letter dated 16.5.1967 of Executive Engineer of Divisional Superintendent's Office, Works Branch, Olavakkot addressed to the Respondent/Plaintiff, it is mentioned that the list of claims submitted by the Respondent/Plaintiff have been discussed with him on 11.4.67 and 4.5.67 in the presence of AEN/SW/ED jointly and decided that action on the following items alone will be taken since the other items are untenable.
(1) Clearing the site of the proposed Erode Diesel Loco Shed by removing the old boulders etc. Negotiated rate.
(2) Recovery regarding cost of binding wire supplied to him.
and further, it is informed that the measurements have been technically checked and if it is not signed by him before 23.5.67, it may be please noted that the same will be passed and the amount kept under deposit.
95.In Ex.A.12-Letter dated 27.3.1968 of the Executive Engineer, Divisional Superintendent's Office, Works Branch, Olavakkot addressed to the Respondent/Plaintiff, it is mentioned that further to this Office letter dated 1.8.67 it has been decided to convert the final bill prepared from the above work as 'on account' bill and the Respondent/ Plaintiff has been directed to attend the office on 1.4.68 for signing the measurements and bill.
96.In Ex.A.13-Letter of the Headquarters Office, (Works Branch), Madras 3 of Southern Railway dated 1.6.68 a copy to which has been marked to the Respondent/Plaintiff wherein it is mentioned as follows:
"Depute the following to be at Erode for the period 10th and 12th for taking measurements in respect of founds, masonry, mix etc. in connection with the above work. All the necessary records should be made available to the following Railway Officials for their work at ERODE on 10th-12th.
1.Sri Passagne AEN/CP/OJA Division.
2.Sri Sundaram IOW/Spl.works/CAN.
3.Sri Kesavan AIOW/OJA Division.
The contractor is being asked to present himself on the dates mentioned above. You may also issue suitable instructions on the lines indicated in this office letter even No. of date.
The IOW and AIOW be directed to attend this office on the 13th along with the relevant records to examine the claims put up the contractor."
97.Added further, in the said letter, the Respondent/Plaintiff, Contractor has been directed to be present at Erode and he has been directed to show to the Railway Official details of his claim and if he asks for any dismantling, he has to arrange labour at his cost and it should be noted that any dismantling done should be made good also at his cost.
98.In Ex.A.14 is the letter of the Respondent/Plaintiff addressed to the Executive Engineer, Special Works, Southern Railway, Olavakkot wherein it is among other things mentioned that 'the Respondent/ Plaintiff offered their rates of Rs.500/- for clearing 1000 c.ft. of boulders and jelly and Rs.300/- for sand without voids. The average rate is Rs.400/- only and after seeing the difficult condition at which they have been working, he has agreed to pay at this rate and so on the assurances given by the Executive Engineer for the rate, they are proceeded with the work etc.
99.In Ex.A.15-Letter of the Respondent/Plaintiff dated 26.4.65 addressed to the Executive Engineer, Southern Railway, it is inter alia stated that the Respondent/Plaintiff has been asked by the Executive Engineer to work hard in clearing the boulders etc. quickly and start the construction of the shed and further, he has insisted them to sign the revised rate of Rs.284/- per 1000 cubic feet for clearing boulders, sand and jelly etc. without deducting for voids and no lead will be given (flat rate).
100.In Ex.A.16-Letter dated 1.5.1965 of the Respondent/Plaintiff addressed to the Executive Engineer, Special Works, Southern Railway, Olavakkot, it is mentioned that the Executive Engineer has contacted him on administrative control phone and requested him to accept the rate of Rs.284/- for removing the boulders, jelly etc. (flat rate) without voids and due to heavy pressure given by him only they have accepted this rate with great difficulties and they will sign the typed letter of acceptance sent to them by him as told through phone today and therefore, requested the Executive Engineer to make out a part bill for removing the boulders, jelly, sand etc. at the rate of Rs.284/- which he has fixed and negotiated with him.
101.In Ex.A.17-Letter dated 28.5.65 of the Respondent/Plaintiff addressed to the Executive Engineer, Works, Southern Railway, Olavakkot, it is stated that he cannot accept the BSR rates for the work of removing the boulders and this is a new item not covered by the Agreement and if the Executive Engineer cannot sanction the rate asked for by him, the matter may kindly be referred to the General Manager (Works), Madras, who has accepted the tender and also that he has already invested a good amount on the particular item etc. Also a copy of the Ex.A.17 letter dated 28.5.1965 has been marked to the Chief Manager (Works), Southern Railway, Madras wherein it is mentioned that the Respondent/Plaintiff has been asked by the Executive Engineer, Olavakkot to remove the boulders, cut spoils etc. which were not covered by agreement and he is doing it at the actual cost of Rs.284/- per 1000 cf. But after doing the work, XEN is saying that only BSR items will be operated for this and as this is outside his agreement and amount quoted above is the actual cost incurred by him, he cannot accept the BSR rates.
102.In Ex.A.18-Letter dated 5/6.7.1965 of the Respondent/ Plaintiff addressed to the Executive Engineer, Special Works, Southern Railway, Olavakkot, it is mentioned that after accepting the negotiated rate of Rs.284/- for removing the boulders, jelly, sand etc. they are signed the acceptance (typed) letter sent to them by the Executive Engineer on 3.5.65 in which he has only arrived at a rate of Rs.284/- for removing the boulders, jelly, sand etc. and he has only forced them to sign the letter and further, he has been forced to sign the letter especially when the work was done more than 70% and after completing the work, the Executive Engineer has again went back from his original promise and has intimated him that for clearing old boulders etc. the rate contemplated in the BSR rates only will be paid and the negotiated rate cannot be sanctioned and this has been communicated to them only after they have carried out for this additional work, which is highly irregular and improper and again strongly they write this letter to them that the negotiated rate Rs.284/- for 1000 cft. without voids should be paid and they insisted the part bills should be made out at the negotiated rate as Rs.284/- only etc.
103.In Ex.A.19-Letter dated 7.9.1965 the Respondent/Plaintiff has informed the Executive Engineer (Works), Southern Railway that the rate of Rs.284/- /1000 cft. without deducting voids quoted by him for clearing the cut spoils, includes, loading , leading and forming bank, including spreading, consolidating and sectioning.
104.In Ex.A.20 is the letter of the Respondent/Plaintiff dated 20.10.65 addressed to the Assistant Engineer (Sp./W.), Diesel Loco Shed, Erode wherein it is inter alia mentioned that the two cross sections prepared by the the Assistant Engineer, have been signed under protest at 6 p.m. on 19.10.65, on the pressure of the necessity carrying out earthwork etc. and he has signed in the measurements and cross sections only under protest.
105.In Ex.A.21-Letter dated 21.10.65 the Respondent/Plaintiff addressed to the Assistant Engineer, Diesel Loco Shed, Erode has stated that he has written specifically in that cross sections sheets LESS VOIDS and the quantity arrived at about six lakhs cft arrived etc. and he has requested to supply the copies which he has signed under protest also on 19.10.65 at 6 p.m.
106.In Ex.A.22-Letter dated 29.10.65 addressed to the Assistant Engineer, Southern Railway, Special Works, Erode, the Respondent/ Plaintiff has stated that the quantities checked by him with the Assistant Engineer and IOW/D/ED are just approximate and were not done fully and as he insisted on signing the measurement being part bill and final checking can be done any time later, the same has been signed to avoid delay and when the subject matter came up during the meeting with XEN, it was only the Assistant Engineer who represented to XEN, that the Respondent/Plaintiff signed only after checking etc. and as the levels were not taken in the Respondent/Plaintiff's presence and pressure was given on him, the levels recorded by the Assistant Engineer were not signed as Under Protest at that time and he has to record the same through the letter on the next day.
107.In Ex.A.23-Letter dated 22.11.1965 addressed to the Chief Engineer, Southern Railway, Madras-3, the Respondent/Plaintiff has requested the Chief Engineer to look into the matter and arrange for the outstanding amounts to be paid before the end of November and thus help in preventing slackening of progress on current works.
108.In Ex.A.24-Letter dated 9.4.1966 of the Respondent/Plaintiff addressed to the Executive Engineer, Works, Olavakkot, it is mentioned that he has requested the Executive Engineer to kindly approve the rate which he has already submitted to him viz., Rs.284/- for 1000 c. ft without voids for clearance of boulders etc. and that he has already carried out the above work as per the then XEN and AEN's personal orders on the understanding that the negotiated rate that will be submitted by him will be approved and that he will be paid for at this rate for this item.
109.In Ex.A.25-Letter dated 4.4.1966 of Executive Engineer addressed to the Respondent/Plaintiff, the Respondent/Plaintiff has been required to signify its acceptance to the rates given in the letter No.J/W.148/360 dated 30.3.66 so as to enable him to take further action in the matter.
110.In Ex.A.26-Letter dated 1.4.1968 addressed to the Executive Engineer (Works), Southern Railway, Olavakkot, the Respondent/Plaintiff has stated that he has signed the 12th and Part Bill and measurements (Level books, cross sections, M. Book etc.) today with the remarks "UNDER PROTEST" for all the quantities and rates etc.
111.Ex.B.1 is the 12th Part Bill dated 4.4.1969. In Ex.B.2-Annexure I Tender (for works contract) dated 17.3.1965 the Respondent/Plaintiff addressed to the President of India through the CE, Southern Railway has stated that he has read the conditions of tender attached hereto and agree to abide by such conditions and has offered to do the works for "Erode Proposed B.G. Diesel Shed (in metric unit)" at the rates shown in the printed Basic Schedule of rates (B.G. & M.G.) 1961 for DEN-I portion of Olavakkot Division as corrected by and up to Correction Slip No.2 of 18.9.64 / Enhanced 7% [seven percent above] in respect of Schedule of 'A' (Items covered by B.S.R.) and at the rates quoted by him/us in respect of Schedule 'B' (Items not covered by B.S.R.) etc. and has signed the same on 25.1.1965.
112.In Ex.B.2 the Chief Engineer on behalf of the President of India under the caption Acceptance of Tender has stated that he accept the Tender and agree to pay the rates as per Basic Schedule of Rates 1961 (in metric units) as corrected by and Correction Slip No.2 of 18.9.64 enhanced by seven percent (+7%) in respect of Schedule 'A' and at the rates as entered in the Schedule B for all items except item 29, 32, 39, 49, 56 and 58. For item 29, 32, 39, 49 56 and 58 the rate of Rs.16/- per 10 sq. m. quoted for item 25 will apply and accordingly has affixed his signature in the presence of witnesses on 17.3.65 at Madras.
113.In Ex.B.3 is the Contract of Agreement for the main job dated 14.4.1965 executed by the Respondent/Plaintiff to and in favour of the Appellant/Defendant. On the same conditions as mentioned in Ex.B.2-Agreement for main work.
114.Ex.B.4 is the Schedule of Rates fixed for broad gauge and Meter gauge 1961 (in metric units). Ex.B.5 is the Book pertaining to Schedule of Powers of Southern Railway in other than established matters.
115.Ex.B.8 is the Report of Chief Engineer dated 20.3.65. In Ex.B.9-Letter dated 28.3.66 of Deputy Chief Engineer/South, Madras-3 addressed to the S.G.Iyer XEN/W/OJA, it is stated that he has advised him that it has been decided to offer to the contractor a rate of Rs.29/- per 10 cum for a lead between 1 KM and 2 KMs and Rs.25/- per 10 cum for a lead not exceeding 1 KM and also a request has been made to arrange for obtaining the Contractor's acceptance to this rate and send the same to the Headquarters Office together with full details of quantity and amount involved to enable competent sanction being obtained for the same.
116.In Ex.B.10-Letter dated 19.4.65 of the Divisional Office, Works Branch, Olavakkot addressed to P.W.1/SW/ED an advise is sought for by return the quantity of spoils to be cleared by the contractor with the relevant BSR items under which the work is carried out to enable him to consider the question of executing a rider agreement etc.
117.In Ex.B.11 the Executive Engineer (Works), Olavakkot dated 20/26.5.1965 addressed to the Respondent/Plaintiff has stated that for removal of the cut spoils BSR item 1832 only can be allowed and that he will be paid for, for the actual quantity done including the lead and hence, no negotiated rate is considered necessary and further, the Respondent/Plaintiff has directed to see Annexure V to the Agreement under which he is expected to carry out the additional work on the same accepted rate.
118.Ex.B.12 is the letter of Executive Engineer dated 30.6.1965 addressed to the Respondent/Plaintiff wherein it is among other things mentioned that CE in his Inspection Report dated 22.3.65 has advised to pay only BSR rate for the removal of boulders and in reply to the Respondent/Plaintiff's letter dated 3.5.65, he is advised that BSR rate only will be paid as per office letter dated 26.5.1965 etc.
119.Ex.B.13-Letter dated 20/26.5.65 addressed to the Respondent/Plaintiff, the Executive Engineer has stated that as per Annexure V (special condition) to the Agreement, the Respondent/ Plaintiff is expected to carry out this additional work on the same accepted rate.
120.In Ex.B.14-Letter dated 1.4.68 the Respondent/Plaintiff has informed the Executive Engineer (Works), Southern Railway, Olavakkot that he has signed the 12th and Part Bill and measurements (Level Books, cross sections, M. Book etc.) today with the remarks "UNDER PROTEST" for all the quantities and rates etc.
121.In Ex.B.15-Letter dated 20.10.65 the Respondent/Plaintiff has informed the Assistant Engineer (Sp./W.) Diesel Loco Shed, Erode that he has signed the measurements under protest. Ex.B.18 is the page 86 of the Level Book of the Appellant/Defendant.
122.The Learned Counsel for the Respondent/Plaintiff submits that in view of the correspondence that followed between the Respondent/Plaintiff to the Executive Engineer, the Executive Engineer, Deputy Chief Engineer and the Chief Engineer have approved and affirmed the Respondent/Plaintiff's reasonable claim for Rs.284/- per 1000 cubic feet without deduction for voids at a flat rate without reference to the Schedule of Rates in BSR or the Agreement for the construction of the Diesel Shed and the Appellant/Railway is estopped in taking a contra plea in this regard and also that the Chief Engineer by means of Ex.A.9-Letter dated 27.11.65 addressed to the Respondent/Plaintiff has stated that the matter is engaging the attention of the administration and everything possible will be done towards early disposal and called upon the Respondent/Plaintiff to expedite the work mentioning the urgency and the importance of Erode Loco Shed that the Respondent/Plaintiff should allow anything to stand in the completion of the work by the targetted date and that the Respondent/Plaintiff has done the work in good faith and in law, the acceptance of an offer cannot only be in express terms but also by conduct and it is not open to the Appellant/Defendant to take a different plea that the rate quoted by the Respondent/Plaintiff is not accepted and sanctioned by the Competent Authority etc. and even assuming without admitted that there is no promise to pay at the rate claimed by the Respondent/ Plaintiff still the Respondent/Plaintiff is entitled to be paid a reasonable fair for the work turned out and completed without an express agreement, the benefit of which has been accepted and enjoyed by the Appellant/Defendant.
123.In this connection, this Court pertinently points out that Section 70 of the Indian Contract Act, 1872 speaks of 'Obligation of person enjoying benefit of non-gratuitous Act'. It is to be borne in mind that a claim for compensation by one individual against another as per Section 70 of the Act is not based on any subsisting contract between the parties and its basis is that something has been done by one party for the other, which the other side has accepted voluntarily. Indeed, Section 70 and Part 3 of Section 73 of the Indian Contract Act are based on the principle of Restitution which prevents unjust enrichment by retaining anything received by a party which does not belong to him and he should return it to the person from whom he received it and if action is not possible, pay him in its money value as per decision Great Eastern Shipping Company Limited V. Union of India AIR 1971 Calcutta page 150, 155.
124.The compensation as per Section 70 of the Act is based on implied conduct of the parties viz., the Supply of Goods by the Plaintiff and accepted by the Defendant who has no right to retain as per decision Mathura Mohan Saha V. Ramkumar Saha (1916) 43 Cal 790, 827.
125.The 3 vital conditions for the applicability of Section 70 of the Indian Contract Act are:
(a)The Goods are to be delivered lawfully or something has to be done for another person lawfully;
(b)The thing done or the goods delivered must be done or delivered without intention to do so gratuitously;
(c)The person to whom goods are delivered enjoins the benefit thereof, as per decision Damodara Mudaliar V. The Secretary for State in India (1894) 18 Madras 88, 91-93.
126.Section 70 of the Act visualised a case where initially at the time of the doing of the act or the delivery of the thing, there is no 'Proposal' or 'Promise' as defined in Section 2 and therefore, there is no Agreement. Section 70 of the Act clearly envisages a case where an act has been done or a thing delivered without request, but not gratuitously as per decision R.Gangapathi Pillai V. P A Irudayasamy Nadar AIR 1968 Madras 345 (Request not necessary).
127.This Court aptly recalls the decision R.Gangapathi Pillai V. P A Irudayasamy Nadar AIR 1968 Madras 345 (V 49 C 90) wherein this Court has held as follows:
"It is not necessary that there should be a request proceeding from one party to the other before the work was undertaken or done to enable a resort to S. 70.
In order to effectuate the lease transaction itself, certain constructions were necessary to the leased premises. The defendant-lessor had agreed to put up these constructions, though later he was unable to spare the time or the money necessary for the purpose. The plaintiff put up the constructions:
Held that as the benefit of the constructions would subsequently accrue to the defendant, the owner of the premises, the plaintiff was entitled to be reimbursed under S.70 the constructions not having been put up gratuitously by him.
In such a case even if the claim for compensation was based on a contract for re- imbursement which was not proved the claim could be decreed under S.70. 1961-1 Mad LJ (SN) 30 (SC), Rel. On AIR 1933 Mad 344 and AIR 1951 Nag 431, held to be no longer good law."
128.Also, this Court recalls the decision Haji Abdulla Haji Adam Sait Dharmasthapanam V. T.V. Hameed AIR 1985 Kerala 93 it is observed as follows:
"13.The learned counsel for the respondent further submitted that in the circumstances of the case, particularly in view of the fact that the appellant-plaintiff has voluntarily accepted the benefit of the work done by the defendant on the building, the defendant is entitled to lay his claim on the doctrine of "unjust enrichment" also. This principle presupposes three things: first, that the defendant has been enriched by the receipt of a benefit; secondly, that such enrichment has occurred at the expense of the plaintiff; thirdly, that it would be unjust for the defendant to retain that benefit. (Anson's Law of Contract, 25th edition, page 649). We are of the opinion that the above principle squarely apply to the facts of the case."
129.In M/s.Dinshaw and Dinshaw and others V. Indowse Engineers Pvt. Ltd., AIR 1995 Bombay 180 at page 188 in para 21 it is held as follows:
"21.Therefore, the settled position is that even it there is no contract between the parties, if the Plaintiff had done the work and not intending to do so gratuitously and the Defendant has enjoyed the benefits of the works, the Defendant is liable to pay the compensation to the Plaintiff over the value of the work done by him. In the present case, there is no defence either in the written statement or in the evidence that Plaintiff had done this work gratuitously. On the other hand, the conduct of the Plaintiff shows that he never intended to act gratuitously. On the other hand, he has been showing the additional work in the running bills for which the Defendant has gone on making payments without any objection. Even though the Managing Director of the Defendant Company and its officials used to visit the site frequently, they had never raised any objection over any piece of work on the ground that it was not entrusted. Joint measurements taken clearly show that Defendant had no objection to this additional work. Hence by applying the principle underlined under Section 70 of the Contract Act, the Plaintiff is certainly entitled to the value of the work. Unfortunately the trial Court Judge has not considered this aspect at all. He rejected the claim of the Plaintiff almost summarily with one sentence with the observation that the Plaintiff is not entitled to this amount since there was no contract. Hence, the finding of the trial Court Judge on this point is erroneous and liable to be set aside."
130.In Pallonjee Eduljee & Sons V. Lonavala City Municipality AIR 1937 Bombay 417 it is held that 'The applicability of S. 70, Contract Act, cannot therefore be excluded by the mere fact that there is no enforceable contract by reason of the requirements of Ss.48 and 49, Bombay Municipal Boroughs Act not having been follows.'
131.One cannot ignore an important fact that a person who does work or supplies goods under a contract, if no price is fixed, is entitled to be paid a reasonable amount for his labour and the goods supplied. However, if the work is outside the contract, the terms of the contract can have no application. The contractor is entitled to be paid a reasonable price for such work as so done by him as per decision State of Punjab V. Hindustan Development Board Limited AIR 1960 Punjab 585.
132.As per Section 70 of the Indian Contract Act a person can claim the payment for work done beyond the terms of contract and the benefit of the work has been availed of by the Defendant, as opined by this Court. Also, the liability as per Section 70 of the Indian Contract Act arises on equitable basis even though an express agreement or a contract is not proved.
133.The ingredients of Section 70 are very wide and can be applied the discretion of a Court of Law to enable it to do substantial justice as per decision Gouri Shankar Misra V. Fakir Mohan Dash AIR 1989 Orissa 201, 208.
134.As per Section 70 of the Indian Contract Act, the Plaintiff must prove that the Defendant actually derived the benefit, and not that the Defendant would derive a benefit if the Defendant chose to do some more acts as per decision Bommadevara Satyanarayana Varaprasada Rao Naidu V. Dasika Sriramulu AIR 1916 Mad 157.
135.As far as the present case is concerned, even though there is no written agreement/contract between the Appellant/Defendant and the Respondent/Plaintiff in regard to the additional work like removing the boulders, stone, jelly and sand, yet, Ex.A.27-Letter of Executive Engineer/Works viz., P.W.2 dated 20.9.1965 addressed to the Respondent/Plaintiff throws light to the effect that he has requested the Respondent/Plaintiff many times to accept the negotiated rate of Rs.284/- per 1000 cubic feet without deducting voids etc. and further, a reading of contents of Ex.A.27-Letter goes to show that he has come to know about the difficulties of Respondent/ Plaintiff in removing the boulders, jelly and sand from the Factory area of Diesel Loco Shed and that he has accepted the rate of Rs.284/- per 1000 cubic feet without deducting voids and that the Respondent/ Plaintiff has accepted the same and moreover, the target date for the completion of the work has been fixed as 31.12.1965. As a matter of fact, P.W.2-Executive Engineer has accepted the rate of Rs.284/- per 1000 cubic feet without deducting voids, but the higher officials of the Appellant/Defendant has not accepted the same. But the Appellant/ Defendant through Deputy Chief Engineer (South), Headquarters Office, Work Branch, Madras-3 by its Letter-Ex.B.9 dated 28.3.1966 has advised Shri. S.G. Iyer XEN/W/OJA that it has been decided to offer the Respondent/Plaintiff (Contractor) a rate of Rs.29/- per 10 cubic feet for a lead between 1 KM and 2 KMs and Rs.25/- per 10 cubic feet for a lead not exceeding 1 KM etc. However, the Appellant/Defendant has taken a stand that though the additional work of boulders etc. may not come under any single item of Basic Schedule of Rates, there are guiding principles in it for similar items and in the Agreement executed by the Respondent/Plaintiff under item IV of Schedule B, they have quoted a rate of Rs.27/- per 10 C.U.M. for earth work by coal ashes (cinder) in forming bank including loosening with all lead and lift, consolidation and watering etc. complete from Erode Yard limits.
136.However, in Ex.B.3-Agreement for main job dated 14.4.1965 Clause 39 which speaks of 'Rates for Extra Items of Works' refers to any item of work carried out by the Contractor on the instructions of the Engineer which is not included in the accepted schedule of rates shall be executed at the rates set forth in the 'Schedule of Rates, Southern Railway' modified by the tender percentage etc. On the side of the Respondent/Plaintiff, a heavy reliance is placed on Ex.B.3-Main Job Agreement Clause 39 which goes on to say that 'In the event of such agreement not being come to, the Railway shall be entitled to execute the extra works by other means and the Contractor shall have no claim for loss or damage that may result from such procedure and Provided always that if the Contractor shall commence work or incur any expenditure in regard thereto before the rates shall be determined as lastly heretofore mentioned, then and in such a case the Contractor shall only be entitled to be paid in respect of the work carried out or expenditure incurred by him prior to the date of determination of the rates as aforesaid according to the rates as shall be fixed by the Engineer."
137.Further, Ex.B.3-Main Job Agreement, Clause 41 and 42 refers to Variations in Extent of Contract which run as follows:
"41.In the event of any of the provisions of the contract requiring to be modified after the contract documents have been signed, the modifications shall be made in writing and signed by the Railway and the Contractor, and no work shall proceed under such modifications until this has been done. Any verbal or written arrangement abandoning, modifying, extending, reducing or supplementing the contract or any of the terms thereof shall be deemed conditional and shall not be binding on the Railway unless and until the same is incorporated in a formal instrument and signed by the Railway and the Contractor, and till then the Railway shall have the right to repudiate such arrangement.
42.(1)The Engineer on behalf of the Railway shall be entitled by order in writing to enlarge or extend, diminish or reduce the works or make any alterations in their design character,position, site, quantities, dimensions or in the method of their execution or in the combination and use of materials for the execution thereof and to order any additional works to be done or any works not to be done and, save as provided in sub-clause (2) of this Clause, the Contractor will not be entitled to any compensation for any reductions but will be paid only for the actual amount of work done and for approved materials furnished against a specific order.
(2)The enlargements, extensions, diminutions, reductions, alterations or additions referred to in sub-clause(1) of this clause shall in no degree affect the validity of the contract but shall be performed by the Contractor as provided therein and be subject to the same conditions, stipulations and obligations as if they had been originally and expressly included and provided for in the specifications and drawings and the amounts to be paid therefor shall be calculated in accordance with the accepted schedule of rates and for extra items of works at the rates determined under Clause 39 of these conditions; provided that if the nature of amount of any variation relative to the nature or amount of the whole of the works or to any part thereof shall be such that in the opinion of the Engineer the rate for any item in the accepted schedule of rates is by reason of such variation rendered unreasonable or inapplicable, the Engineer shall fix such other rate as in the circumstances he shall consider reasonable and proper."
138.Even though the Appellant/Defendant has not agreed to pay Rs.284/- per 1000 cubic feet with the Respondent/Plaintiff directly or personally, yet, as per Ex.A.27-Letter of P.W.2 dated 20.9.1965 addressed to the Respondent/Plaintiff as suggested by him the rate of Rs.284/- per 1000 cubic feet without deducting voids has been accepted by the Respondent/Plaintiff and the act of the P.W.2 in accepting the rate of Rs.284/- per 1000 cubic feet without deducting voids has persuaded the Respondent/Plaintiff to carry on and complete new and additional work not covered and visualised under the Tender and Agreement for the construction of Loco Shed and that the Respondent/Plaintiff has completed the additional work by January 1966 and accordingly, the Respondent/Plaintiff is to be paid for the work done by him beyond the terms of the contract and it is held by this Court that the Appellant/Defendant has been benefitted by the said work completed by the Respondent/Plaintiff and availed by it and viewed in that perspective, the Respondent/Plaintiff is entitled to the compensation, in the considered opinion of this Court.
139.It is the contention of the Learned Counsel for the Appellant/ Defendant that the burden of proof is upon the party claiming compensation and in the absence of acceptable evidence, no damages can be awarded as per decision Ratanlal Hiralal V. Chandradutt Ramprasad Gupta AIR 1951 Nagpur page 431 wherein it is held as follows:
"A relief, to be available, need be founded on pleadings and in the absence of a pleading it cannot be granted." I have therefore no hesitation where a case based upon an express agreement fails, a relief based upon an implied agreement, which is not pleaded by either side, cannot be granted."
140.Also, it is the submission of the Learned Counsel for the Appellant/Defendant that a party claiming damages should strictly prove the same and further, the quantum of loss ought to be proved as per decision Maharashtra State Electricity Board V. Sterlite Industries (India) Ltd. and etc., AIR 2000 Bombay 204.
141.The Respondent/Plaintiff contends that the total quantity of work turned out by him is 9,81,000 cubic feet and that the Appellant/ Defendant has expressly and by conduct promised him to pay at the rate of Rs.284/- per 1000 cubic feet without deducting voids and got the work executed and as such bound to pay at the promised rate of a sum of Rs.2,78,604/- at the rate of 12% interest per annum from the date of demand by the notice dated 17.4.1966. Countering the contention of the Respondent/Plaintiff, the stand of the Appellant/ Defendant is that there is no express or implied Agreement between the Respondent/Plaintiff and the Railway Administration at any time that it will pay at the rate of Rs.284/- per 1000 cubic feet for the additional work done by the Respondent/Plaintiff and further, the averments made in the Plaint by the Respondent/Plaintiff that the Engineers have stated that after inspection of work done by the Plaintiff, the reasonable rate should be at Rs.284/- per 1000 cubic feet is not correct or the same will not be a valid and a binding one on the Railway Administration.
142.Proceeding further, it is the contention of the Appellant that taking into consideration the several details of the work the Appellant/ Defendant has decided to pay the Respondent/Plaintiff at the rate of Rs.25/- per 10 cum upto a lead of 1 KM and Rs.29/- per 10 cum upto a a lead between 1 and 2 KMs and for a sum of Rs.46,153.31 paise has been paid to the Respondent/Plaintiff and added further, the actual quantity of work done by the Respondent/Plaintiff is 6,17,816 cubic feet as per the Measurement Book No.1089 pages 1 to 7 and 10 to 13 as recorded on 30.4.1965 and signed by the Plaintiff and moreover, Exs.B.3, B.6 and B.7 substantiated the actual quantity of work turned out by the Respondent/Plaintiff and as measured by the Administration and the contra plea taken by the Respondent/Plaintiff that he has done the work for 9,81,000 cubic feet is incorrect and that the amount claimed is also not a correct one.
143.It is the evidence of P.W.1 that he has not received any letter directly from the Railways that they have agreed for the rate of Rs.284/- and that he has proved for turning out the work for 9,81,000 cubic feet and that it is not correct to state that he has done work for 17,494 cm.
144.However, P.W.1 in his evidence has stated that it is not correct to state that on 30.4.65 as per Book No.1089 from pages 1 to 7 and 10 to 13 he has done the work for 6,17,816 cubic feet. Furthermore, he has also in his evidence stated that it is not correct to state that he has signed in the Book and added further, he has raised objection and signed the same and also that in regard to measurements 4 Kuzhi has been left out.
145.The evidence of P.W.2 (Retired Chief Engineer) [Executive Engineer/Works at the time of Erode Diesel Loco Shed work] is to the effect that the Deputy Engineer and Chief Engineer have inspected the place and he informed them about the details and they asked him to remove the boulders and since if they called for tender, it will take two or three months time, it has been decided to entrust the work additionally to the Respondent/Plaintiff and if the work is delayed, it will result in loss to the Railways and if the work is entrusted to a different agency, then, it will be further delayed and the reason being at a depth of 18 feet foundation has to be raised and initially it has been decided for Rs.330/- and since they compelled the Respondent/ Plaintiff to work for Rs.284/- for 1000 cubic feet and since compelled the Respondent/Plaintiff, the Respondent/Plaintiff has accepted for the said amount and completed the job. The evidence of P.W.2 is in favour of Respondent/Plaintiff and even though the Appellant/Defendant has not addressed letter directly to the Respondent/Plaintiff in regard to the acceptance of the rate of Rs.284/- per 1000 cubic feet; it cannot be denied that the Respondent/Plaintiff has been compelled to do the additional work at the rate of Rs.284/- per 1000 cubic feet, as seen from the evidence of P.W.2 and inasmuch as the Appellant/Defendant has been benefitted by the completed additional work made by the Respondent/Plaintiff, this Court holds that the Appellant/Defendant is liable to pay for the additional work (not included in the main agreement) at the rate of Rs.284/- per 1000 cubic feet.
146.The Respondent/Plaintiff claims that he has done the work for 9,81,000 cubic feet. But the Appellant/Defendant contends that after due intimation, measurements have been done and the work of excavation performed by the Respondent/Plaintiff has been plotted in the graph sheet and arrived as 6,17,816 cubic feet and that the Measurement Books along with other documents have been produced before the trial Court in the year 1973 and that has been missing from the Court Records. Even though the Respondent/Plaintiff takes a stand that the Appellant/Defendant has not taken the measurements properly by placing reliance Ex.A.7-Letter dated 7.10.1965, Ex.A.8-Letter dated 25.10.1965, Ex.A.13-Letter dated 1.6.1968 and Ex.A.20-Letter dated 20.10.1965 exchanged between the Respondent/Plaintiff and the Appellant/Defendant's officials, this Court at this stage pertinently points out that it is for the Respondent/Plaintiff when he comes to a Court of Law, it is for him to prove his case to its satisfaction and in the instant case on hand, except the unilateral self-serving statement of P.W.1 (Plaintiff) that he has done the work for 9,81,000 cubic feet, there is no documentary evidence to substantiate his contention that he has done work to an extent of 9,81,000 cubic feet to the subjective satisfaction of this Court and per contra, the Appellant/Defendant has clearly stated that the actual quantity of work turned out by the Respondent/Plaintiff has been arrived at 6,17,816 cubic feet as per the Measurement Book No.1089 pages 1 to 7 and 10 to 13 as recorded on 30.4.65 and signed by the Respondent/Plaintiff which according to the Appellant/Defendant is plotted in the graph sheet and in view of the candid admission of the Appellant/Defendant, it is held by this Court that the Respondent/Plaintiff is entitled to claim a sum of Rs.284/- for 1000 cubic feet without deducting voids for the work done of 6,17,816 cubic feet [less a sum of Rs.46,153.31 paid as part payment] and that the Appellant/Defendant is to pay the same to the Respondent/Plaintiff accordingly.
147.According to the Appellant/Defendant that the Respondent/ Plaintiff has been sanctioned a little more than the Basic Schedule of Rates items which amounts to Rs.46,153.31 paise and the same as a full settlement of the claim made by the Respondent/Plaintiff in respect of the additional work done by him. However, it is the evidence of P.W.1 that Ex.B.1-12th Part is the Part Bill and according to the Respondent/Plaintiff, he has received the same under protest on 26.4.1968.
148.D.W.1 in his evidence has stated that in Ex.B.1 (series) No.10/New/118, 15/New/107, 11/New/118, 16/New/104 and likewise other items have been mentioned as done at page 4 to 59. There is no proof that a sum of Rs.46,153.31 paise paid by the Appellant/ Defendant to the Respondent/Plaintiff is a full and final settlement. Even D.W.1 has accepted that it is a Part Bill, therefore, this Court holds that a sum of Rs.46,153.31 paise which has been paid by the Appellant/Defendant to the Respondent/Plaintiff is only a Part Payment and not a full and final settlement of the claim in respect of the additional work performed by the Respondent/Plaintiff.
149.The Respondent/Plaintiff claims interest at 12% per annum for the suit amount. It is the case of the Appellant/Defendant that there is no jurisdiction to award interest at 12% per annum and awarding interest at 12% from 1966 is not a just one. The contention of the Appellant/Defendant is that the suit is filed in the year 1969 prior to amendment of Section 34 (Proviso) of Civil Procedure Code in 1976 and as per Section 34 (Proviso) which has come into force from 1.2.1977 and Section 97(e) of the Amending Act states that the Section 34(Proviso) has no retrospective effect even prior to 1.2.1977 and therefore, the claim of interest made by the Respondent/Plaintiff is to be negatived by this Court.
150.At this stage, this Court pertinently points out that the Respondent/Plaintiff has not done the additional work to the Appellant/ Defendant gratuitously. Even in the absence of any Agreement between the Appellant/Defendant and the Respondent/Plaintiff in regard to the quantum of interest to be paid for the amount due, yet, this Court is of the considered view that a Court of Law has a discretion to award a particular quantum of interest viz., before the amendment of 1976, the maximum interest which can be awarded is 6% per annum and accordingly, for the suit transaction, this Court awards a Fair, Reasonable and Equitable percentage of interest at 6% per annum to meet the ends of justice. Viewed in that perspective, the Respondent/Plaintiff is entitled to claim the interest at 6% per annum from 17.4.1966 till the date of realisation for the additional work of 6,17,816 cubic feet turned out by him to the Appellant/Defendant at the rate of Rs.284/- per 1000 cubic feet without deducting voids from the Appellant/Defendant together with proportionate costs [Excluding the period of stay, if any in C.R.P.No.2903 of 1973 on the file of High Court, Madras and in Civil Appeal No.921 of 1976 before the Honourable Supreme Court of India from 19.8.1976 to 18.4.1990] and the Appellant/Defendant is directed to pay the same less a sum of Rs.46,153.31 paise paid as part payment. Thus, in the light of detailed discussions in earlier paragraphs and in this paragraph, the Point Nos.1 to 4 are answered by this Court accordingly.
Point No.5:
151.In the written statement filed by the Appellant/Defendant a plea is taken that no suit lies against the General Manager and the suit is liable to be dismissed in limini as per Section 79 of the Civil Procedure Code.
152.It is to be pointed out that a suit to enforce a claim against the Railway Administration can be properly laid against the Government or the State without impleading the Railway as per decisions State of Kerala V. G.H.S. Railway Madras 1965 Kerala page 277 and Natwarlal Gowardhan Das V. Union of India AIR 1957 MP 157.
153.As per Section 79 of Civil Procedure Code in a suit by or against the Government, the authority to be named as Plaintiff or Defendant, as the case may be, shall be (a) in the case of a suit by or against the Central Government, the Union of India, and (b) in the case of a suit by or against the State Government, the State. Section 79 of the Civil Procedure Code is a Procedural Section and a substantial compliance with the requirements thereof is a sufficient one as per decision Ganesh Chandra Das V. Chief Secretary to the State of Assam AIR 1990 Gou 74.
154.As far as the present case is concerned, the Respondent/ Plaintiff has sued the Southern Railway by arraying the Union of India represented by General Manager, Southern Railway and as such, the suit filed by the Respondent/Plaintiff is perfectly maintainable and the same cannot be dismissed as per Section 79 of the Civil Procedure Code and the Point is answered accordingly.
Point No.6:
155.In the written statement, the Appellant/Defendant has taken a plea that if the suit is based on a contract or agreement, it is opposed to Article 299 of the Indian Constitution and as such, the suit filed by the Respondent/Plaintiff is to be dismissed in limini.
156.On the side of the Respondent/Plaintiff, it is contended that the plea of the Appellant/Defendant that the suit is opposed to Article 299 of the Constitution of India and as such, the same is to be dismissed, has not a tenable one in the eye of law.
157.It is to be borne in mind that the object behind Article 299 of the Constitution of India [which deals about all contracts made in the exercise of the executive power of the Union or of a State shall be expressed to be made by the President, or by the Governor of the State etc.] is that there ought to be a definite procedure in and by which contracts must be made by its agents, in order to bind the Government. Otherwise, the public funds may be depleted by clandestine contracts made by any and every public servant as per decision Chaturbhuj Vithal Das Jasani V. Moreswar Parashram AIR 1954 SC at page 236.
158.At this stage, it is useful to refer to Article 299 of the Constitution of India which runs as follows:
"(1)All contracts made in the exercise of the executive power of the Union or of a State shall be expressed to be made by the President, or by the Governor. The words "or Rajpramukh" have been omitted by the Constitution (7th Amendment) Act, 1956 of the State, as the case may be, and all such contracts and all assurances of property made in the exercise of that power, shall be executed on behalf of the President or the Governor The words "or Rajpramukh" have been omitted by the Constitution (7th Amendment) Act, 1956 by such persons and in such manner as he may direct or authorise.
(2)Neither the President nor the Governor The words "or Rajpramukh" have been omitted by the Constitution (7th Amendment) Act, 1956 shall be personally liable in respect of any contractor or assurance made or executed for the purposes of this Constitution, or for the purposes of any enactment relating to the Government of India heretofore in force, nor shall any person making or executing any such contract or assurance on behalf of any of them be personally liable in respect thereof."
159.The words 'Expressed to be made" and the word "Executed" suggest that there must be a deed for a formal written contract executed by a person duly authorised under this Article as per decision of Honourable Supreme Court Bhikraj Jaipuria V. Union of India AIR 1962 SC at page 113.
160. It is true that a contract by a correspondence or an oral contract is accordingly, not binding upon the Government as per decision Karamshi Jethabhai Somayya V. State of Bombay AIR 1964 SC 1714 (1721).
161.If the agreement is not written, there is a risk of the other party resiling from the contract or may arise disputes about the terms and conditions of the agreement. If there is a written instrument, it will avoid the scope of uncertainty and leaves no room for speculation about the terms and conditions of a contract as per decision R.Balakrishna Pillai V. State of Kerala (2003) 9 SCC 700, 722.
162.As a matter of fact, Article 299(1) applies only to a contract made in exercise of the executive power of the Union or of a State as per decision Lalji Khimji V. State of Gujarat (1993) Supp. (3) SCC at page 567 (para 9) and would not include
(a)Where it is made by a specified statutory authority, in exercise of his powers conferred by a statute, e.g., under the Punjab Excise Act, 1914 [State of Haryana V. Lalchand, (1984) 3 SCC 634]; or the Bombay Irrigation Act, 1879 or the M.P. Land Revenue Code, 1959 [Steel Authority of India Ltd., V. State of M.P., (1999) 4 SCC 76 (para 24)].
(b)Where a compromise is entered into by the parties during the pendency of a suit even though one of the parties to it was the Government or a Government Officer [State of Haryana V. Lalchand, (1984) 3 SCC 634].
163.Article 299 of the Constitution of India does not prescribe any particular method in which the authority must be conferred by the President or the Governor. However, it may be conferred either by a general order or by an ad hoc order upon a particular officer for the purpose of a particular contract. Such order may be notified in the Official Gazette [Timber Kashmir Pvt. Ltd. V. Conservator of Forests, Jammu AIR 1977 SC 151] or established by other evidence [Bhikraj Jaipuria V. Union of India AIR 1962 SC 113].
164.It is not out of place for this Court to make a significant mention that the Rule of Estoppel by the representation of a public official is applicable against the Government, even though the promise has not recorded by means of a contract as per Article 299 of the Constitution of India as per decision Union of India V. Indo-Afghan Agencies, AIR 1968 SC 718 (727).
165.The Doctrine of Promissory Estoppel is applicable against the Government, as against a private person, even though there has been no contract according to the requirements of Article 299 of the Constitution of India as per decision Century Spinning and Manufacturing Company Limited V. Ulhasnagar Municipal Council AIR 1971 SC 1021 (1024). Further, non-execution of the contract in terms of Article 299 of the Constitution does not militate against the applicability of the doctrine of promissory estoppel against the Government as per decision Food Corporation of India V. Babulal Agrawal (2004) 2 SCC 712, 719-21 (para 7). Acting upon the promise or assurance is enough to apply the doctrine and actual prejudice need not be proved by the promise as per decision Delhi cloth and General Mills Ltd. V. Union of India AIR 1987 SC 2414 (paras 18, 24-27).
166.The meaning is if the Government or some other public body or its officials makes a representation or a promise and an individual acts upon such promise and alters his position, Government or the public body must make good that promise as per decision Union of India V. Indo-Afghan Agencies, AIR 1968 SC 718 and shall not be allowed to fall back upon the formal defect in the contract.
167.Apart from the above, where an agreement is not referable to Article 299 of the Constitution it cannot be invalidated for not satisfying the essential requirements of Article 299 of the Constitution of India as per decision Lalji Khimji V. State of Gujarat (1993) Supp. (3) SCC at page 567.
168.In regard to the plea on the side of the Appellant/Defendant that there is also an arbitration clause in the General Conditions of Contract which forms part of the Agreement and therefore, the suit is not maintainable, it is to be pointed out that the additional work is not covered and envisaged by the Tender and Agreement for the construction of Loco Shed and in the absence of any written contract being executed in regard to the additional work for removal of boulders, jelly and sand etc. between the parties within the meaning of Article 299 of the Constitution of India and in the instant case on hand, [the parties blame each other] the arbitration clause in the General Conditions of Contract cannot be pressed into service or relied upon by the Appellant/Defendant, as opined by this Court and as such, the plea that the suit is not maintainable, is negatived by this Court.
169.Be that as it may, as far as the present case is concerned, even though the Appellant/Defendant has not agreed to pay Rs.284/- per 1000 cubic feet without deducting voids with the Respondent/ Plaintiff directly or personally, yet, as per Ex.A.27-Letter dated 20.9.1965 addressed to the Respondent/Plaintiff as suggested by him, the rate of Rs.284/- per 1000 cubic feet without deducting voids has been accepted by the Respondent/Plaintiff on the basis of representation made by P.W.2 [The Executive Engineer at the relevant point of time in carrying out the additional work], and as such the Appellant/Defendant must may good the promise or the representation made by P.W.2 to the Respondent/Plaintiff and in the instant case, the Respondent/Plaintiff has acted upon the promise of P.W.2 and other officials of the Appellant and in all fairness, this Court opines that it is not open to the Appellant/Defendant to fall back upon the formal defect in the contract and instead the Respondent/Plaintiff has acted upon the said promise or assurance which is quite sufficient to apply the principle of Doctrine of Promissory Estoppel and the non-compliance of Article 299 will not bar the enforcement of right of Respondent/Plaintiff [in regard to the additional work turned out by the Respondent/Plaintiff] to claim the monetary sum in the suit and that the Respondent/Plaintiff is entitled to seek relief against the Appellant /Defendant on the basis of benefit of service received by it as per Section 70 of the Indian Contract Act which is based on the equitable principles of Restitution as per decision Mulamchand V. State of M.P. AIR 1968 Supreme Court 1218 and the present suit filed by the Respondent/Plaintiff for claiming the amount in regard to the additional work done is perfectly maintainable in the eye of law and viewed in that perspective, the suit filed by the Respondent/Plaintiff seeking relief against the Appellant/Defendant on the footing of benefit of service received is perfectly just and valid one, even though in the present case, the representation/promise of the public official/officials has or have not been recorded in the form of contract as per Article 299 of the Constitution of India and even though the terms of Section 115 of the Evidence Act have not been fulfilled and the point is answered accordingly.
In the result, the Appeal is allowed in part, leaving the parties to bear their own costs. Resultantly, the Judgment and Decree of the trial Court viz., the Principal Sub Judge, Erode dated 07.03.2001 in O.S.No.105 of 1969 stands modified. The Respondent/Plaintiff is entitled to claim the interest at 6% per annum from 17.4.1966 till the date of realisation for the additional work of 6,17,816 cubic feet turned out by him to the Appellant/Defendant at the rate of Rs.284/- per 1000 cubic feet without deducting voids from the Appellant/Defendant together with proportionate costs [Excluding the period of stay, if any in C.R.P.No.2903 of 1973 on the file of High Court, Madras and in Civil Appeal No.921 of 1976 before the Honourable Supreme Court of India from 19.8.1976 to 18.4.1990] and the Appellant/Defendant is directed to pay the same less a sum of Rs.46,153.31 paise paid as part payment within a period of three months from the date of receipt of copy of this Judgment.
01.11.2010
Index : Yes
Internet : Yes
sgl
To
1.The Principal Sub Court,
Erode.
2.The General Manager,
Union of India, Southern Railway,
Chennai-600 003.
M.VENUGOPAL, J.
Sgl
Judgment in
A.S.No.171 of 2001
01.11.2010