Bangalore District Court
By Force/Economic Coercion And Duress ... vs They Were Called For Negotiations And ... on 11 January, 2021
1
Com.O.S.No.720/2006
IN THE COURT OF LXXXII ADDL.CITY CIVIL & SESSIONS
JUDGE, AT BENGALURU (CCH.83)
THIS THE 11TH DAY OF JANUARY 2021.
PRESENT:
SRI.DEVARAJA BHAT.M., B.COM, LL.B.,
LXXXII ADDL.CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Com.O.S.No.720/2006
BETWEEN:
M/s CHINNA NACHI MUTHU
CONSTRUCTIONS,
Engineers and
Contractors, No.342, 7th A
Main Road, IVth Block, 3rd
Cross, Koramangala,
Bengaluru-560 095, a
Registered Partnership
Firm, represented by its
Managing Partner, Sri
Chinna Nachi Muthu
: PLAINTIFF
(Represented by Sri. G.
Subba Rao, Advocate.)
AND
The Karnataka Power
Corporation Limited,
Having its Registered
office at No.82, Shakthi
Bhavan, Race Course
Road, Bengaluru-560 001,
2
Com.O.S.No.720/2006
A Government of
Karnataka Enterprise
represented by its
Managing Director
: DEFENDANT
(Defendant represented by
Sri. Pramod Nair - Advocate)
Date of Institution of the 23.01.2006
suit
Nature of the suit (suit on Suit for Recovery of Money
pronote, suit for declaration
& Possession, Suit for
injunction etc.)
Date of commencement of 18.09.2008
recording of evidence
Date on which judgment 11.01.2021
was pronounced
Duration Years Months Days
14 11 18
(DEVARAJA BHAT.M),
LXXXII Addl. City Civil & Sessions Judge,
Bengaluru.
JUDGMENT
This is a Suit for the relief of recovery of Rs.25,00,00,000/- with interest at 20% p.a., from the Defendant and to declare 3 Com.O.S.No.720/2006 that the 2nd Agreement dated 06.08.1997 got signed from the Plaintiff by force/economic coercion and duress as illegal and not binding on the Plaintiff.
2. The Brief facts as narrated in the Plaint are as follows:-
During 1989, the Defendant invited Tenders for the construction of Power House and other appurtenant works of Gerusoppa Power Project under Sharavathi Tail Race Project and the Plaintiff having expertise and experience in such projects participated in the Tender and submitted its competitive Tender along with the required documents and earnest money on or about 28.06.1989 in accordance with the requirements of the Notice inviting Tenders. The Tender of the Plaintiff having become lowest among all the Tenders received by the Defendant, they were called for negotiations and after several rounds of discussions and after obtaining necessary clarifications wherever required and after being satisfied with the financial capacity and technical capabilities of the Plaintiff, the Defendant accepted the Tender and issued a Work Order on 15.09.1989. The formal Agreement containing general conditions of contract was signed and executed by and between the Plaintiff and Defendant on 12.10.1989. The Plaintiff deposited along with Tender the sum of Rs.16,50,000/- by way 4 Com.O.S.No.720/2006 of Bank Guarantee dated 23.06.1989, Bank Guarantee dated 12.10.1989 for Rs.1,63,60,000/- and Bank Guarantee dated 12.10.1989 for Rs.45,20,000/- issued by the Corporation Bank, Durgadabail Branch, Hubli, covered Bid Security, the Earnest Money Deposit and Performance Security as required by the Notice inviting Tender, valid for period of contract of 54 months plus additional 18 months of maintenance period totaling to 68 months have been furnished by the Plaintiff to Defendant.
These Guarantees have been discharged and released by the Defendant to the Plaintiff on 10.10.1995 but insisted the Plaintiff to furnish Bank Guarantee again covered Earnest Money and Security Deposit which the Plaintiff had to comply with by furnishing the Bank Guarantees dated 05.12.1995 for Rs.30,00,000/- and dated 16.10.1997 for Rs.37,26,000/-, both of which have been discharged and released only on 14.07.2003 after the defect liability period of 18 months from the date of virtual completion of the work declared by the Defendant on 13.12.2001. In effect, the above said Guarantees were kept current by the Plaintiff from October 1989 to December 2001 for more than 12 years by paying commission to the Bank at 3% p.a. The Plaintiff paid Rs.1,46,62,789/- towards Bank Commission on Bank Guarantees up to 14.07.2003. Out of total 63 Bank Guarantees furnished by the Defendant, some of them 5 Com.O.S.No.720/2006 were towards mobilization advance, which had to be granted by the Defendant in accordance with the terms of the Agreement. The above mobilization advance was required to be recovered by the Defendant from the Running Bills payable for the work executed during the initial period of contract of 54 months as agreed between the Plaintiff and Defendant. If only the Defendant had not prevented the Plaintiff from performing his part of the obligation as per the terms of the Agreement within the period of 54 months, Plaintiff was ready and willing to complete the full scope of work in which event the entire mobilization advance would have been repaid avoiding payment of commission on the Bank Guarantees furnished to the Defendant. Therefore, the Defendant is liable to refund the entire amount of commission, which is Rs.1,46,62,789/- paid by the Plaintiff to their Bankers. The Plaintiff has also paid interest in accordance with the Terms of Agreement at various rates ranging from 19.5% to 20% for different periods as charged and recovered by the Defendant from various payments that was due to be paid for the work executed by the Defendant. The total amount of interest recovered has not been intimated by the Plaintiff with the result, the Plaintiff is not in a position to furnish the exact figure of interest recovered by the Defendant. The Plaintiff has been requesting the Defendant 6 Com.O.S.No.720/2006 to waive the interest because of the delay in execution of the work due to the default and fraud committed by the Defendant through various letters. The Plaintiff came to know after the execution of Agreement on 12.10.1989, that the Defendant has not obtained from the appropriate authorities clearance for the project and also to cut the trees in the forest area as the entire project to be executed by the Plaintiff were situated within the deep forest. Some non-governmental organizations were protesting the execution of the Project on the ground that it will cause ecological imbalance in the area and also the nation would lose large areas of forest land and has approached the Hon'ble High Court of Karnataka in W.P.No.8170/1988 and sought for cancellation of the execution of the Project by the Defendant. They had also sought for stay of execution of the work. Therefore, it was illegal on the part of the Defendant to call for Tenders when the matter was in litigation. The Defendant had not notified the Plaintiff or other Tenderers about pendency of the litigation before the Hon'ble High Court of Karnataka. The Plaintiff was taken by surprise when they came to know that on 04.10.1989 the Hon'ble High Court of Karnataka had granted Temporary Injunction restraining the Defendant from felling any tree in the forest area where the contract work was to be executed. By suppressing the material 7 Com.O.S.No.720/2006 facts the Defendant played fraud on the Plaintiff. If the Plaintiff was informed about the order of Temporary Injunction granted by the Hon'ble High Court of Karnataka, he could not have signed the Agreement dated 12.10.1989. The Defendant on 12.10.1989 directed the Plaintiff not to commence the work until further orders. The Defendant in the Letter dated 17.01.1991 directed the Plaintiff to completely stop the work until further instructions. The Defendant in the Letter dated 11.11.1993 just four months before the period of 54 months stipulated for completion of the Contract, informed the Banker of the Plaintiff that he has obtained Environmental Clearance from the Government of India and all the Claims and other request of the Plaintiff for Power House Work will be approved by the K.P.C.L. Board. The Defendant in the letter dated 08.07.1994 has sought for revised program for completion of entire work along with the rate analysis and the justification for revised rates requested by the Plaintiff for the work to be executed beyond the initial period of contract. Until beginning of July 1994, the Plaintiff could not execute many work and had to remain at site of work with all the establishment men and machinery with the site facilities in the deep forest of Malnad area, causing severe damage to their machinery procured from the mobilization advance granted by the Defendant and from 8 Com.O.S.No.720/2006 Plaintiff's own finances availed from their Bankers. During the entire period of more than 5 years, the Plaintiff kept on paying their wages and labour benefits and facilities for the imported labourers waiting for the direction from the Plaintiff. The Defendants in the Letter dated 15.03.1991 expressed doubt about getting Clearance from the relevant departments and called the Plaintiff all the Claims arising out of or in connection with such a situation. Because of various hindrances, latches and delays committed by the Defendant from time to time, the Plaintiff kept on writing Letters pointing out the defaults by the Defendant and also at the same time placing the Claims arising out of every conduct of the Defendant with all relevant documents and particulars. The Defendant went on promising that the Claims will be settled amicably. The Defendant conveyed to the Plaintiff under the Letter dated 17.02.1994 stating that the Department of Forests has been approached to get the Forest Clearance by giving a detailed statement indicating the priority of clearance as required. Soon after the receipt of Work Order, even before execution of 1 st Agreement, the Plaintiff started shifting heavy machineries, equipments, tools and plants, erected labour camps, brought imported labour gangs and various artisan required for the execution of the work. The site of work situated in the deep forest, there 9 Com.O.S.No.720/2006 were no motarable roads available to the site of work. The Plaintiff had to make provision for movement of their way to the site of work and in the rainy season, it was totally impossible to execute any work because of difficulty in movement of vehicles. The Defendant had offered certain reliefs to the Plaintiff on 22.01.1997 for commencement of work after 08 years and also imposed certain conditions which were totally unacceptable to the Plaintiff. The Plaintiff replied on 27.01.1997. The Defendant in the Letter dated 04.02.1997 refused to reconsider the earlier offer of the package deal. The Plaintiff again replied on 08.02.1997 that the total package deal were totally unacceptable. Subsequently, several meetings were held with the Defendant. In the Minutes of the Meeting dated 02.08.1997 the Defendant threatened the Plaintiff that if on or before 06.08.1997 a fresh Agreement containing totally new conditions of contract and the meager package offered is not signed, the Defendant will resort to other recourses open to him. Left with no alternative, the Plaintiff succumbing to economic coercion and pressure tactics of the Defendant, signed the fresh Agreement on 06.08.1997. The Terms of the said Agreement were drafted by the Defendant and no opportunity was given to the Plaintiff to have any say in any one of the Clauses of the new Agreement. The Plaintiff was made to sign on the dotted 10 Com.O.S.No.720/2006 lines under duress and economic coercion. Hence the Plaintiff wrote a letter on 08.08.1997 informing the Defendant that they have got revised the agreement signed from Plaintiff against his wish by forcing him to sign on the same as the condition precedent to release the pending payments of over Rs.3,18,00,000/- for the work already executed over three years back. Hence, the revised agreement was not binding on him. Even though the 2nd agreement mentioned above waiver of interest on advances granted by the Defendant, he has recovered interest from the Plaintiff an amount of Rs.1,67,00,894/- illegally and hence the Plaintiff is entitled for refund of the said amount. While the matter stood thus, the Defendant agreed to pay for all the work to be executed from 01.08.1994 onwards till completion of the work. It was one of the conditions of the contract that the Defendant was to identify and provide stone quarry to the Plaintiff, which would yield sufficient quantity of various stony items required for the execution of the work. Initially in the agreement the Defendant had identified Mastihalla quarry which was at a distance of 7 Kilo meters. Subsequently this quarry had to be abandoned at the instance and directions by the National Highway Authorities due to damage caused to a bridge across Sharavathi river and all heavy vehicle traffic was stopped. The Defendant has 11 Com.O.S.No.720/2006 committed breach of terms of their own agreement. Hence, the Plaintiff has filed this suit for the above mentioned reliefs.
3. The Defendant has filed his detailed written statement and his contentions in brief are as follows:-
The suit is barred by limitation and for misjoinder of causes of action. The reliefs sought for are based on two separate and independent contracts. The Defendant had entered into an Agreement with the Plaintiff on 12.10.1989 for the construction of a Power House and such other ancillary and appurtenant works. Certain claims were made by the Plaintiff during the performance of the above contract work before the completion of the entire work detailed in the agreement. The claims of the Plaintiff were appropriately considered in terms of the said agreement and the surrounding circumstances. The other claims of the Plaintiff were rejected and it was duly intimated to the Plaintiff that the Plaintiff could approach the Court to seek redressal of its rejected claims. Based on this understanding the rejected claims of the Plaintiff were specifically de-linked from the execution of the balance work and a fresh agreement was entered into by the Defendant and the Plaintiff on 06.08.1997 for the execution of the work that remained to be executed with regard to the construction of the Power House. In view of the 12 Com.O.S.No.720/2006 same it is clear that the cause of action if any for instituting a suit for the said claims of the Plaintiff arose on the execution of the said agreement if not earlier. It is clear from the clauses that time is stipulated for a claim to be made and decided and more importantly the Plaintiff would have deemed to waive his claims if he did not approach the Courts within the stipulated time of 90 days after his claim has been decided or within a period of 90 days from the date of the request of the Plaintiff to consider the claim in the case where the Chief Engineer faced to render his decision regarding the same. Therefore, it can be seen that the parties to the contract have restricted the time and the limitation for filing a suit based on a claim that has been expressly or impliedly rejected under the contract and that there is a deemed waiver of any such claim which has not been challenged before a Court within the stipulated time. There is no continuing cause of action in this case for the purpose of computing the starting point of limitation under the provisions of the Limitation Act. Any cause of action for the alleged claims arising from the first agreement dated 12.10.1989 arise after the execution of the second agreement dated 06.08.1997. It is the Plaintiff's claim that actual date of completion of the work under the second agreement is 31.12.2001. It is the case of the Defendant that the actual date of completion of the work was 13 Com.O.S.No.720/2006 31.03.2002. Hence, the cause of action for the suit based on any claim under the second agreement would arise on 31.03.2002. The Defendant has not committed any breach of the contractual terms between the parties. The Defendant has only been compelled by the orders of the Courts to suspend the work intermittently. By denying various allegations in the plaint, the Defendant has prayed to dismiss the suit with costs.
4. Based on the above contentions of both parties, the then Presiding Officer of XXVII Addl. City Civil & Sessions Court, Bengaluru, has framed the following Issues on 31.05.2008.
1. Whether the Plaintiff proves that it has paid commission to its Bankers towards Bank Guarantee and also interest at 19.5% to 20% on mobilization advance recovered by the Defendant?
2. Whether the Plaintiff proves that it is entitled for waiver of interest on the mobilization advance paid in terms of Agreement to the Defendant?
3. Whether the Plaintiff proves that the Agreement executed by it with the Defendant was afflicted by fraud committed by the Defendant?
4. Whether the Plaintiff proves that the 2 nd Agreement got signed from it by the Defendant was under
threat, coercion and duress?14
Com.O.S.No.720/2006
5. Whether the Plaintiff proves that even before getting the Agreement signed from it by the Defendant there was Injunction Order running against it from 04.10.1989 itself from undertaking the project by the Defendant for not having environmental clearances and this aspect has been suppressed by the Defendant?
6. Whether the Plaintiff proves that it suffered idling charges during the period the work was held up by the Defendant for not taking the required clearances?
7. Whether the Plaintiff proves that the Defendant did not pay strictly in accordance with the Schedule of Rates by moderating the basic rates with additionalities admissible under it and thus, committed fraud on the Plaintiff?
8. Whether the Plaintiff proves that the Defendant committed fundamental breach of the Agreement and thus, liable for the payment of damages to the Plaintiff?
9. Whether the Plaintiff proves that it is entitled for the waiver of interest on various advances availed from the Defendant?
10. Whether the Plaintiff proves that the Defendant did not pay the Plaintiff even under the new Agreement properly the admissible rates and caused short payment?
11. Whether the Plaintiff proves that the Defendant failed to pay reasonable rates for all the extra items and additional items got executed from it?
15Com.O.S.No.720/2006
12. Whether the Plaintiff proves that it is entitled for unproductive additional overhead charges at 15% because of delay in the execution of the work caused by the Defendant?
13. Whether the Plaintiff proves that it is entitled for the loss of expected profit at 15% on the value of work remained incomplete at the end of initial contract period?
14. Whether the Plaintiff proves that it is entitled for the payment of incentive for achieving mile stones and the Defendant did not honour their commitment under the terms of the agreement?
15. Whether the Plaintiff proves that it is entitled for the Suit Claim with pre-suit, pendente-lite and future interest with court cost etc., as claimed in the Plaint?
16. Whether the Plaintiff proves that it is entitled for the refund of interest recovered by the Defendant?
17. Whether the Plaintiff proves that it is entitled for increased lead charges for bringing stony material from different quarry?
18. Whether the Defendant proves that the Plaintiff has not observed the terms of agreement during the execution of the work?
19. Whether the Defendant proves that the Plaintiff was very well aware of the pending litigation regarding Sharavati Tail-Race Project?
16Com.O.S.No.720/2006
20. Whether the Defendant proves that it did not commit any fraud by getting the agreement signed from the Plaintiff while the project itself was under
stay by the courts?
21. Whether the Defendant proves that it did not exercise any coercive methods in forcing the Plaintiff to sign the subsequent agreement in PWG-65 format while the original agreement was still subsisting for all practical purposes?
22. Whether the Defendant proves that it was not due in any amount to the Plaintiff on the date of obtaining the subsequent agreement executed by the Plaintiff?
23. Whether the Defendant proves that the rates offered in the subsequent agreement got signed from the Plaintiff was commensurate with the then prevailing local market rates?
24. Whether the Defendant proves that it did not cause any delay in identifying the alternative quarry for the Plaintiff to exploit and get material for the execution of the work?
25. Whether the Defendant proves that the Plaintiff was not required to remove any overburden in the new quarry and it could directly exploit the quarry?
26. Whether the Defendant proves that the Plaintiff did not suffer delay in the execution of the work because of dispute with regard to the Mastihall stone quarry and Bangaramakki stone quarry?
17Com.O.S.No.720/2006
27. Whether the Defendant proves that the suit is barred by limitation as contended in the written statement?
28. What Orders the parties are entitled to?
5. In order to prove the contentions of the Plaintiff, the partner of the Plaintiff Firm Sri. Chinna Nachi Muthu is examined as P.W.1 and Sri K.V.Shrinivasan is examined as P.W.2 and got marked Exs.P.1 to P.10.
6. In order to prove the contentions of the Defendant, Sri. C. Swaminathan is examined as D.W.1 and got marked Exs.D.1 to D.67.
7. The Advocate for the Plaintiff has submitted his Written Arguments on 07.01.2013. The Advocate for the Defendant has submitted his Written Arguments on 09.09.2015. The Advocate for the Plaintiff filed reply Written Arguments on 21.09.2015. When such being the case, on 14.01.2019, this case was transferred to this Court. Thereafter, the Advocate for the Defendant submitted his Supplementary Written Arguments on 31.08.2019.
8. My findings are as follows:-
Issue No.1 : In the Negative.18
Com.O.S.No.720/2006 Issue No.2 : In the Negative.
Issue No.3 : In the Negative.
Issue No.4 : In the Negative.
Issue No.5 : In the Negative.
Issue No.6 : In the Negative.
Issue No.7 : In the Negative.
Issue No.8 : In the Negative.
Issue No.9 : In the Negative.
Issue No.10: In the Negative.
Issue No.11 : In the Negative.
Issue No. 12 : In the Negative.
Issue No. 13 : In the Negative.
Issue No. 14 : In the Negative.
Issue No.15 : In the Negative.
Issue No.16 : In the Negative.
Issue No. 17: In the Negative.
Issue No.18 : In the Affirmative.
Issue No.19 : In the Affirmative.
Issue No. 20 : In the Affirmative.
Issue No.21 : In the Affirmative.
Issue No.22 : In the Affirmative.
Issue No.23 : In the Affirmative.
Issue No.24 : In the Affirmative.19
Com.O.S.No.720/2006 Issue No.25 : In the Affirmative.
Issue No.26 : In the Affirmative.
Issue No.27 : In the Affirmative.
Issue No.28 : As per the final Order for the following reasons.
REASONS
9. Issue No. 27: - Since this Issue is pertaining to limitation, I propose to discuss this Issue first of all.
10. The contract work of "Construction of Power House and other Appurtenant works of Gerusoppa Power Project in Karwar District under Sharavathi Tail Race Project" was entrusted to the Plaintiff by the Defendant under an Agreement dated 12.10.1989 as per Ex.D.39.
11. The basic particulars of the said Agreement are as follows:-
(1) Estimated Cost put to Tender : Rs.1,835 Lakhs (2) Amount of Contract : Rs.16,35,95,650/-
(3) Date of Commencement : 14.10.1989 (4) Period allowed for completion : 54 months including Monsoon Period.20
Com.O.S.No.720/2006 (5) Stipulated date of completion: 06.08.1997
12. As per the stipulations of the contract, the entire work was to be completed within 54 months from the date of commencement of work. As per the contract conditions it was to be completed by 30.04.1994. However, the work could not be completed within the period stipulated in the contract and hence, certain extensions of time for completing the work were necessitated. The work was finally completed on 13.12.2001 with a delay of about 07 years 07 months. The case of the Plaintiff was that the Plaintiff stayed on the site for an extra period of 07 years 07 months. It is not in dispute that the Defendant granted extensions of time up to this date for completion of the work. The Plaintiff raised certain claims against the Defendant, mainly arising out of the delay in completion of the works, and when the Final Bill was not settled by the Defendant, he has filed this suit.
13. According to the Plaintiff all delays to the Project were occasioned by the Defendant. The Learned Advocate for the Defendant has argued that the Plaintiff himself delayed the work and time for completion of the work was extended pursuant to the request of the Plaintiff and for the reasons attributable to the Plaintiff only. He has referred to various correspondences in order to show that the purported reasons for delay are not attributable 21 Com.O.S.No.720/2006 to the Defendant.
14. In order to appreciate the said contentions, I now propose to study the following documents, by arranging them in chronological order.
15. On 29.06. 1989, as per Ex.P.1, Tender was called and opened. The Tender of Plaintiff was accepted and communicated on 15.09.1989. The Hon'ble High Court of Karnataka granted a Temporary Injunction restraining the Defendant from felling trees in the forest area where work under the contract, the subject matter of the present suit, was to be executed, in W.P.No.8170/1988 on 04.10.1989 as could be seen at Page 14 & 15 of Ex.P.1.
16. The Original Agreement was executed between the parties on 12.10.1989 as per Ex.D.39.
17. The Defendant wrote to the Plaintiff informing them about the likelihood of issuance of stay order by the Hon'ble High Court of Karnataka and advised to wait for further Order to begin with the work at site as could be seen from Document No.3 at Ex.P.1.
22Com.O.S.No.720/2006
18. The Chief Engineer wrote a letter to the Plaintiff on 12.10.1989 as could be seen from Page 6 of Ex.P.1.
19. Thereafter, the Defendant instructed the Plaintiff to stop works on the project except as related to excavation for power house, as per letter written by Defendant on 28.12.1989, as could be seen from Page 9 of Ex.P.1.
20. Thereafter, the Defendant instructed the Plaintiff to continue the work on the project to the extent it could be carried out without cutting trees as per Ex.D.14 on 04.01.1990.
21. The Plaintiff informed the Defendant that it was facing problems from the Forest Department while conducting quarrying operations at the Bangaramakki quarry, as per Ex.D.16 on 17.12.1990.
22. Thereafter, the Hon'ble High Court allowed the W.P.No.8170/1988 and directed not to undertake the work in dispute on 15.01.1991 as could be seen at Page 79 of Ex.P.1.
23. Thereafter, the Defendant informed the Plaintiff about the likelihood of considerable delay in obtaining the 23 Com.O.S.No.720/2006 environmental clearance for resumption of work, and therefore, requested the Plaintiff to dispense with all non-essential labourers from the construction site of the project from 20.03.1991 and continue only essential staff, as per Ex.D.18/Letter dated 16.03.1991.
24. The Ex.D.43 is the Office Memo dated 28.01.1992 regarding the compensation of stoppage of works. Ex.D.44 is the Memo dated 11.02.1992 regarding compensation for stoppage of works. Ex.D.45 is the Office copy of the Profoma Bill No.2 towards to ad-hock payment to the Plaintiff dated 18.02.1992. Ex.D.42 is the Office copy of the Telegram sent to the Plaintiff dated 04.05.1992.
25. The Defendant informed the Plaintiff that necessary clearances have been obtained from the concerned Governments and accordingly instructed the Plaintiff to resume work on the project as per letter dated 11.11.1993, at Page 308 of Ex.P.2. The Defendant informed the Plaintiff that all the clearances have been obtained and directed them to start the work, as could be seen from Page 324 of Ex.P.2.
24Com.O.S.No.720/2006
26. The stipulated date of completion of work as per agreement dated 12.10.1989/Ex.D.39 came to an end on 13.04.1994.
27. The Defendant agreed to release Bank Guarantees to the tune of 163.60 Lakhs in return for the Plaintiff furnishing a fresh Bank Guarantee to the tune of Rs.50 Lakhs on account of inability to proceed with project as previously anticipated, as per Ex.D.24/Office Copy of the letter dated 04.12.1995 addressed to Senior Manager, Corporation Bank, Hubli.
28. In response to a number of claims made by the Plaintiff in this regard, the Defendant informed the Plaintiff that the request made for extra expenditure incurred for de-watering and de-silting were untenable, as per Ex.D.48/Office Copy of the letter dated 05.03.1996.
29. A meeting was held on 29.07.1997, between the Defendant and the Plaintiff in which the parties agreed to the Plaintiff's proposal for re-rates and to determine claims under the original contract separately before the Courts in Bengaluru, as could be seen from Page 690 & 691 of Ex.P.4.
25Com.O.S.No.720/2006
30. The Agreement dated 06.08.1997 as per Ex.D.2/Ex.P.4 Page 692 to 694, was entered into between the Plaintiff and the Defendant (the 2nd Agreement) to carryout work after the expiry of the original contract. According to the Plaintiff the Defendant forced and threatened the Plaintiff to sign a different set of agreement and to continue the work. The parties specifically agreed to de-link the issue of claims under the 1 st Agreement from 2nd Agreement and to settle the claims as previously agreed.
31. According to the Plaintiff, the 2nd agreement with totally different conditions got executed forcibly from Plaintiff. As per the letter dated 08.08.1997, the Plaintiff resiled from the 2 nd Agreement and informed the Defendant that it was not binding on the Plaintiff, as could be seen at Page 695 of Ex.P.4. At Page 696 of Ex.P.4, the Plaintiff informed the Defendant regarding the 2nd Agreement and reiterated his contention that it was not binding on Plaintiff. At Page 704 of Ex.P.4, the Plaintiff again reiterated his contention against 2nd Agreement and laid its claims.
32. The Defendant rejected the Plaintiff's suggestion that the 2nd Agreement was not valid. Further, the Defendant identified 26 Com.O.S.No.720/2006 various aspects in respect of which the Plaintiff's progress of work was unsatisfactory, as per Ex.D.52/Office Copy of the letter dated 24.07.1998.
33. The Defendant reiterated that the payment of Rs.73.25 Lakhs on 29.04.1997 was in final settlement of the Plaintiff's claims and if the Defendant wished to contest the same then it was at liberty to approach the Courts in Bengaluru, as per Ex.D.53/Office Copy of the letter dated 01.08.1998.
34. Thereafter, the Plaintiff issued a Notice under Section 80 and Order II Rule 2 of Civil Procedure Code to the Defendants on 24.08.1998 in terms of Clause-29 of Agreement as could be seen at Page No.716 of Ex.P.4.
35. Thereafter, the defendants issued a letter on 01.04.1999 and permitted the contractor to complete work by 25.03.2002 by giving unit wise targets without imposing any liquidated damages as could be seen from Page No.732 of Ex.P.4. The D.W.1 has deposed that In between 12.10.1989 and 25,03,2002, there is a gap of about more than 13 years and that the working condition with regard to said project must have 27 Com.O.S.No.720/2006 experienced vast changes during the 13 years period and that Ex, D.14 to 38 do not contain any imposition of penalty.
36. The Defendant identified to the Plaintiff various aspects on which the Plaintiff's progress of work under the 2 nd Agreement was unsatisfactory as per Ex.D.56/Office Copy of the letter dated 22.11.1999.
37. A Supplementary Agreement to the Second Agreement was executed on 14.02.2001 as per Ex.D.3. Another Supplementary Agreement to the Second Agreement was executed on 16.02.2001 as per Ex.D.4.
38. Ex.D.59 is the Office Memo dated 22.09.2001 regarding extension of time to Plaintiff Company. As per the evidence of D.W.1, as per Ex.D.59, time was extended up to 31.03.2002. It is to be noted that at the request of the Plaintiff an extension of time till 31.03.2002 was granted by the Defendant on the condition that provision relating to incentive should not be applicable as per Ex.D.35/ Letter dated 04.12.2001.
39. The Plaintiff declared the work as fully completed on 31.12.2001 as could be seen from Page 868 of Ex.P.5.
28Com.O.S.No.720/2006
40. The Ex.D.11 is the Certified Copy of the Minutes of the Technical Committee Meeting dated 10.04.2002.
41. The Defendant issued a work completion certificate dated 22.05.2002 confirming that the works under the 2 nd Agreement was completed on 31.03.2002 as per Ex.D.37/Page No.870 of Ex.P.5.
42. As per Ex.D.6, the Defendant requested the Plaintiff to submit the Final Bill. The Defendant computed incentive payments payable to the Plaintiff and provided the Plaintiff a sum of Rs.17.60 Lakhs as incentive payments as per letter dated 11.12.2002, marked as Ex. D.64.
43. Ex.D.38 is the Office Copy of the letter to release the bank guarantee dated 11.07.2003 addressed to the Manager, Corporation Bank, Hubli.
44. The Defendant issued Ex.D.9/Final Bill on 31.10.2003 setting out in consolidated manner the accounts pertaining to the 1st and 2nd Agreements. As per the evidence of D.W.1, this is 61st and Final Bill and the same was settled on or after 26.02.2005 after receipt of 170th Technical Sub-committee 29 Com.O.S.No.720/2006 approval and that as per Ex. D.9, whatever the defendant has to pay, it is adjusted.
45. As per the Page 882 to 887 of Ex.P.5/Letter dated 27.11.2003; the Plaintiff provided its computation of incentive payments payable under the terms of the 2 nd agreement. However, the Plaintiff provided no response to the Defendant's suggestion of delay being attributable to the Plaintiff.
46. The Ex.D.5 is the Supplementary Agreement dated 23.03.2004. Ex.D.40 is the Revised Escalation Bill No.32 and Final Bill dated 26.02.2005. The Defendant processed and adjusted the truncated Final Bill for the work completed by Plaintiff. The Plaintiff recorded his Protest on the Final Bill. The D.W.1 has deposed that Ex.D.40 is not the Final Bill for the work done by the Plaintiff and it is Final Escalation Bill consisting of both escalation bills of agreement dated 12.10.1989 and 06.08.1997.
47. Thereafter, this suit is filed on 23.01.2006.
48. However, the Advocate for the Defendant has argued that the extended period of Contract was expired on 25.03.2002 and hence, the suit is barred by limitation under Article 55 of 30 Com.O.S.No.720/2006 the Limitation Act.
49. The learned Advocate for the Plaintiff has relied on a decision reported in A.I.R. - 1988 - S.C. - 1007 (Inder Singh Rekhi vs. Delhi Development Authority), wherein the Hon'ble Supreme Court was dealing with a Petition under Section 20 of the Arbitration Act, 1940. In the said decision, the Hon'ble Supreme Court has held that on completion of the work a right to get payment would normally arise but where the final bills have not been prepared, the cause of action would arise from the date when the assertion of the claim was made. It was further observed that a party cannot postpone the accrual of cause of action by writing reminders or sending reminders but where the bill has not finally prepared, the claim made by the claimant is the accrual of cause of action.
50. I wish to refer a decision reported in I.L.R. - 2004 - KAR
- 1152 (MYSORE MINERALS LIMITED vs. TAM-TAM PEDDA GURUVA REDDY), wherein the Hon'ble High Court of Karnataka by following the judgment of the Delhi High Court reported in (1987) 2 - A.L.R. - 73 (RAM DITTA MAL vs. FOOD CORPORATION) has held that the period of limitation will not start running from the date of completion of work or the non-
31Com.O.S.No.720/2006 payment of running bills and that the cause of action will arise only after the Defendant intimated about the preparation of the final bill or his having accepted the payment.
51. The learned Advocate for the Defendant has relied on the decision reported in 2010 (168) - DLT - 15 (Satender Kumar vs. Muncipal Corporation of Delhi). In the said decision, the Hon'ble High Court of Delhi, after referring to the above- mentioned decision of the Hon'ble Supreme Court reported in A.I.R. - 1988 - S.C. - 1007 (Inder Singh Rekhi vs. Delhi Development Authority), inter alia, held as under:-
"16(iii) As regards contracts for execution of building work, Article 18 comes into play in that when no specific date for payment is fixed, limitation commences and the cause of action accrues for the purpose of limitation on the completion of work.
(iv) In its application, Article 18 will cause different dates for accrual of causes of action in building works when a time period is fixed for submitting of a bill by the contractor and to which there is no response to the owner. Where a final bill is submitted and liability under the same, even if, in part, is admitted or some payment is made then such actions extend limitation in terms of Section 18 of the Limitation Act."
52. From the ratio of the above-mentioned decisions, it is very clear that in a suit for price of work executed by 32 Com.O.S.No.720/2006 contractor, Article 18 of the Limitation Act would be the relevant Article, which provides a period of limitation of 3 years from the date when the work is done, where no time has fixed for payment. They also held that a party cannot postpone the accrual of cause of action by writing letters and reminders seeking payment from the other party and once the period of limitation starts running; mere sending reminders would not postpone the accrual of cause of action even if the Defendant does not dispute his liability in this regard.
53. In the decision reported in 2016 (14) - S.C.C. - 761 (State of Gujarat vs. M/s Kothari & Associates), it is held that the commencement of period of limitation in a case pertaining to the suit for damages based on breach of contract is under Article 55 of the Limitation Act.
54. I wish to refer a decision reported in 2018 (12) - S.C.C.
- 393 (Aries & Aries vs. Tamilnadu Electricity Board), wherein it is held that the suit is to be filed within the limitation from the date of rejection of the Claim by the Defendant and the said suit is governed by the Article 113 of the Limitation Act. In that suit, after receipt of final payment, the Plaintiff demanded further payment on 16.05.1981, which was rejected by the Defendant on 06.11.1981. The Hon'ble Supreme Court 33 Com.O.S.No.720/2006 has held that cause of action in respect of the said rejected claim arose on 06.11.1981 and the suit filed was well within limitation.
55. From the above discussion, it is very clear that in this suit, the Plaintiff has contended since the Final Bill is not settled by Defendant and not admitted by the Plaintiff, the Suit is within limitation. However, after referring all the documents discussed above, the said contentions of the Plaintiff cannot be accepted at all for the following reasons.
56. The Plaintiff has contended the First Agreement marked as Ex.D.39 dated 12.10.1989 was executed by suppressing the material facts by the Defendant that the Hon'ble High Court of Karnataka has already passed a Stay Order on 04.10.1989 and in violation of the said Stay Order, the said Agreement was executed. The stipulated date of completion of work as per Ex.D.39 came to an end on 13.04.1994. The Plaintiff has made several claims based on Ex.D.39 before the Defendant and the same was considered as per Ex.D.48 on 05.03.1996 and the Defendant informed the Plaintiff that the request made for extra expenditure incurred for de-watering and de-silting were untenable. When such being the case, after rejection of 34 Com.O.S.No.720/2006 Claim on 05.03.1996, this Suit filed on 23.01.2006, which is after about ten years, is completely barred by limitation.
57. Further, thereafter the Second Agreement was executed by the Plaintiff on 06.08.1997 as per Ex.D.2. This Agreement was executed after expiry of the Ex.D.39/Agreement. According to the Plaintiff, this Ex.D.2/Agreement was executed under economic coercion and duress by the Defendant.
58. During the cross-examination of D.W.1, he has admitted that at Page No.2, Para No.3, it is mentioned as follows:-
" and whereas the parties have agreed to de-link the issue of claims (including waiver of interest on advances) during the agreement period including the issue of interest waiver/recovery beyond agreement period up to 30.09.1997 and to settle the same separately as per agreemental stipulations".
59. The Plaintiff has also informed the Defendant that the Ex.D.2/ Agreement was not binding on him. However, on 24.07.1998, as per Ex.D.52, the Defendant rejected the Claim of the Plaintiff that the Ex.D.2/Agreement was not valid and binding on him. Again, on 01.08.1998, as per Ex.D.53, the 35 Com.O.S.No.720/2006 Defendant has reiterated that the payment of Rs.73.25 Lakhs on 29.04.1997 was in Final Settlement of the all Claims of the Plaintiff and that if the Plaintiff wished to contest the same, he is at liberty to approach the Court. In fact, the Defendant has directed the Plaintiff to approach the Court and get settled all the Claims as per Ex.D.53 on 01.08.1998 itself. When such being the case, the Suit filed on 23.01.2006 about the same Claims, is barred by limitation.
60. After receipt of Ex.D.53, the Plaintiff has issued a Notice under Section 80 & Order II Rule 2 of Civil Procedure Code and in terms of Clause-29 of the Agreement, on 24.08.1998, as could be seen from Page No.716 of Ex.P.4. However, the Plaintiff has not instituted any Suit in pursuance to the said Notice, immediately. He kept quiet after issuing the said Notice for eight years and on 23.01.2006 he has filed this suit in respect of very same Claims made in the said Notice. He has not explained about the reasons for such a long delay in filing the suit after issuance of said Notice either in the pleadings or in the evidence. Without the said explanation, all the Claims made in the said Notice are barred by limitation.
61. When such being the case, as discussed by me earlier, 36 Com.O.S.No.720/2006 all the Claims made by the Plaintiff are clearly barred by time and hence, I answer this Issue in the "Affirmative".
62. Issue No. 3, 4, 5, 8, 19, 20, 21, 22 & 23:- All these issues are related to same aspect and hence, in order to avoid repetition, I discuss the same jointly.
63. The Plaintiff/PW.1 has deposed at Para Nos.15 to 23 of the Affidavit filed in-lieu of oral Examination-in-Chief that after the execution of Ex.D.39/Agreement, the Defendant has not obtained the clearance for the Project from the concerned authorities, that a Writ Petition No.8170/88 was pending before the Hon'ble High Court of Karnataka, that on 04.10.1989 itself, the Hon'ble High Court of Karnataka has passed an interim Order in the said Writ Petition, that the Defendant suppressed the said fact, that on 12.10.1989 itself the Defendant directed the Plaintiff not to commence the work until further orders, that on 17.01.1991, the Defendant directed the Plaintiff to completely stop the contract work, that after 53 months of the entrustment of the work on 11.11.1993, the Defendant informed that they had obtained clearances from the Environmental Department, that on 08.07.1994, they sought for revised program for completion of entire work, that by keeping the men and machinery at the site of 37 Com.O.S.No.720/2006 work, the Plaintiff has suffered huge loss, that the Defendant went on promising the Plaintiff that the Claims will be settled amicably and that the Defendant went on extending the time for performance of contract by granting extension of time in accordance with the terms of agreement.
64. The Plaintiff has contended that the Ex.D.39 was vitiated by fraud committed by the Defendant. In order to establish a claim for fraud, a party must satisfy the requirement of Section 17 of the Indian Contract Act.
"Section 17. "Fraud‟ defined :- "Fraud‟ means and includes, any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:
(1) The suggestion, as a fact, of that which is not true, by one who does not believe it to be true;
(2) The active concealment of a fact by one having knowledge or belief of the fact;
(3) A promise made without any intention of performing it;
(4) Any other act fitted to deceive; (5) Any such act or omission as the law specifically declares to be fraudulent.
Explanation : - Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud, unless the circumstances of the 38 Com.O.S.No.720/2006 case are such that, regard being had to them, it is the duty of the person keeping silence to speak, or unless his silence is, in itself, equivalent to speech."
65. Whenever a Contract is attacked that the same is vitiated by fraud, the said contention is to be appreciated under Section 17 read with Section 19 of the Contract Act. Section 19 of the Contract Act reads as follows:-
"Section 19. Voidability of agreements without free consent: - When consent to an agreement is caused by coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused. A party to contract, whose consent was caused by fraud or misrepresentation, may, if he thinks fit, insist that the contract shall be performed, and that he shall be put in the position in which he would have been if the representations made had been true."
66. In the present case, having contended that Ex.D.39 was vitiated by fraud, the Plaintiff completed the project after executing a 2nd Agreement as per Ex.D.2 and thereafter three Supplementary Agreements marked as Ex.D.3 to 5. In the said circumstances, the Plaintiff has chosen not to avoid the contract immediately and hence, damages have to be quantified under part two of the above Section, namely, he shall be put in the position, in which he would have been if the representations 39 Com.O.S.No.720/2006 made had been true.
67. About the above-mentioned aspect, the learned Advocate for the Defendant has relied on the decision reported in A.I.R. - 1950 - All - 508 (Shiromani Sugar Mills Ltd., vs. Debi Prasad). In the said decision it is held that where a Contract is voidable, the party affected by the fraud must exercise his right to rescind the contract within a reasonable time or such right is lost.
68. He has also relied on a decision reported in A.I.R. - 1968 - S.C. - 956 (Ningawwa vs. Byrappa) . In the said decision, it is held that the fact that the contract has been induced by fraud does not make the contract void or prevent the property from passing, but merely gives the party defrauded a thought on discovering the fraud to elect whether he shall continue to treat the contract as binding or disaffirm the contract and resume the property. It is further held that if it can be shown that the party defrauded has at any time after knowledge of the fraud either by express words or by unequivocal acts affirmed the contract, his election determined forever and that the party defrauded may keep the question open so long as he does nothing to affirm the contract.
40Com.O.S.No.720/2006
69. He has also relied on another decision reported in A.I.R.
- 1976 - S.C. - 376 (Sri Krishnan vs. Kurukshetra University). In the said decision, it is held that where a person on whom fraud is committed is in a position to discover the truth by due diligence, fraud is not proved and that it was neither a case of suggestio falsi nor of suppressio veri.
70. The contention about the fraud by the Plaintiff is that the Defendant has suppressed the fact that the Hon'ble High Court of Karnataka passed an Order restraining the Defendant from felling trees in the forest area where work under the Ex.D.39/Contract was to be executed, while entering into the said Contract. However, the Defendant wrote a letter as per Document No.3 at Ex.P.1, i.e., Page No.6 of Ex.P.1, informing the Plaintiff about the said aspect on 12.10.1989 itself.
71. In this aspect, the P.W.1 during his cross-examination has deposed as follows:-
"It is true to suggest that there was no orders passed by the Hon'ble High Court of Karnataka in the aforesaid Writ Petition on 04.10.1989 staying the execution of contract work. Witness says that the people of the locality because of protection of 41 Com.O.S.No.720/2006 environment have hesitated to execute the contract work and stopped the work. It is true to suggest that there was permission granted by the Hon'ble High Court of Karnataka to carry on the construction of residential quarters and also to execute the administrative work. It is false to suggest that the Defendant by writing letter to me have informed me about the proceedings before the Hon'ble High Court of Karnataka by its letter dated 12.10.1989. It may be true that letter dated 12.10.1989 have been received by me. Now I see copy of the letter dated 12.10.1989. It is marked at Ex.D.1. It is true to suggest that on 12.10.1989, I have put my signature to the original agreement after receipt of Ex.D.1."
72. It is to be noted here that the above-mentioned letter dated 12.10.1989 was confronted to PW.1 during his cross- examination and marked as Ex.D.1, but inadvertently the authorization letter is also marked as Ex.D.1 at the time of evidence of DW.1. In view of the said admission by the PW.1 coupled with Ex.D.1/Letter dated 12.10.1989, it is very clear that the Plaintiff was aware about the proceedings before the Hon'ble High Court of Karnataka at the time of entering into Ex.D.39/Contract. Therefore, the Plaintiff has failed to prove the contentions about the fraud played by the Defendant while entering into Ex.D.39/Contract.
73. The Plaintiff has contended that the Ex.D.2/Contract was 42 Com.O.S.No.720/2006 executed under economic coercion and duress and hence, the same is not binding on the Plaintiff. However, thereafter, on 14.02.2001, the Supplementary Agreement to Ex.D.2 was executed as per Ex.D.3. Thereafter on 16.02.2001, another Supplementary Agreement to Ex.D.2 was executed as per Ex.D.4. On 23.03.2004, another Supplementary Agreement to Ex.D.2 was executed as per Ex.D.5. Having contended that the Ex.D.2 was not a valid Agreement and not binding on the Plaintiff, the Plaintiff had executed Exs.D.3 to D.5/Supplementary Agreements and thereby he has clearly given a go-bye to the his own contentions about Ex.D.2. Further it is to be noted that his said Claim that the Second Agreement was not valid, was already rejected by the Defendant on 24.07.1998 itself as per Ex.D.52.
74. The learned Advocate for the Plaintiff has relied on a decision reported in A.I.R. - 2003 - NOC - 150 (KERALA) (State of Kerala vs. T.M. Thampi Panicker) wherein it is held that mere fact that the Supplemental Agreements were executed by the Contractor under pressure due to delay caused in completing formalities of handing over the site to contractor, would not be bar for claiming compensation from the Contractor.
43Com.O.S.No.720/2006
75. By relying on the said decision, it is argued that the said Ex.D.2/Contract was executed under economic coercion and duress and hence, the same is not binding on the Plaintiff. Having contended like that, the Plaintiff has claimed several reliefs based on Ex.D.2/Contract also. As per the contentions of the Plaintiff at Para No.35 to 41 of the Plaint, it is very clear that the Ex.D.2/Contract was entered into after several meetings between the parties and exchange of correspondences between the parties. When such being the case, it is hard to believe that the Ex.D.2/Contract was entered into under any threat, coercion and duress as pleaded by the Plaintiff. It is to be noted here in executing work contract in commercial transactions, it is common to execute the Supplemental Agreements and whenever such Supplemental Agreements were entered into, the same cannot be considered as it is the out-come of threat or duress.
76. The Hon'ble Supreme Court has after referring various earlier decisions, dealt with all these aspects, in a recent decision reported in (2020) 3 - S.C.C. - 169 (Wapcos Ltd. vs Salma Dam Joint Venture & another) , wherein it is held as follows:-
44Com.O.S.No.720/2006 "34. It is not unknown in commercial world that the parties amend original contract and even give up their claims under the subsisting agreement. The case on hand is one such case where the parties consciously and with full understanding executed AoA whereby the contractor gave up all his claims and consented to the new arrangement specified in AoA including that there will be no arbitration for the settlement of any claims by the contractor in future. Having chosen to adopt that path, it is not open to the contractor to now take recourse to arbitration process or to resurrect the claim which has been resolved in terms of the amended agreement, after availing of steep revision of rates being condition precedent. We may usefully rely on the underlying principle expounded by this Court in (1974) 2 SCR 240 @ 243-244 (Damodar Valley Corporation vs. K. K. Kar), wherein the Court observed as follows: ".....As the contract is an outcome of the agreement between the parties it is equally open to the parties thereto to agree, to bring it to an end or to treat it as if it never existed. It may also be open to the parties to terminate the previous contract and substitute in its place a new contract or alter the original contract in such a way that it cannot subsist. In all these cases, since the entire contract is put an end to, the arbitration clause, which is a part of it, also perishes along with it. Section 62 of the Contract Act incorporates this principle when it provides that if the parties to a contract agree to substitute a new contract or to rescind or alter it, the original contract need not be performed. Where, therefore, the dispute between the parties is that the contract itself does not subsist either as a result of its being substituted by a new contract or by rescission or alteration, that dispute cannot be referred to the arbitration as the arbitration clause itself would perish if 45 Com.O.S.No.720/2006 the averment is found to be valid. As the very jurisdiction of the arbitrator is dependent upon the existence of the arbitration clause under which he is appointed, the parties have no right to invoke a clause which perishes with the contract."
In a subsequent decision in (2009) 1 - S.C.C. - 267 (National Insurance Company Limited vs. Boghara Polyfab Private Limited), in paragraph 52 this Court held as follows:
"52. Some illustrations (not exhaustive) as to when claims are arbitrable and when they are not, when discharge of contract by accord and satisfaction is disputed, to round up the discussion on this subject are:
(i) .... .... ....
(ii) A claimant makes several claims. The admitted or undisputed claims are paid.
Thereafter negotiations are held for settlement of the disputed claims resulting in an agreement in writing settling all the pending claims and disputes. On such settlement, the amount agreed is paid and the contractor also issues a discharge voucher/no claim certificate/full and final receipt. After the contract is discharged by such accord and satisfaction, neither the contract nor any dispute survives for consideration. There cannot be any reference of any dispute to arbitration thereafter.
(iii) .... .... ....
(iv) .... .... ....
46Com.O.S.No.720/2006
(v) A claimant makes a claim for a huge sum, by way of damages. The respondent disputes the claim. The claimant, who is keen to have a settlement and avoid litigation, voluntarily reduces the claim and requests for settlement. The respondent agrees and settles the claim and obtains a full and final discharge voucher. Here even if the claimant might have agreed for settlement due to financial compulsions and commercial pressure or economic duress, the decision was his free choice. There was no threat, coercion or compulsion by the respondent. Therefore, the accord and satisfaction is binding and valid and there cannot be any subsequent claim or reference to arbitration."
Further, in 1995 - Supp (3) - S.C.C. - 324 (Nathani Steels Ltd. vs. Associated Constructions), this Court observed as follows:-
"3......Even otherwise we feel that once the parties have arrived at a settlement in respect of any dispute or difference arising under a contract and that dispute or the difference is amicably settled by way of a final settlement by and between the parties, unless that settlement is set aside in proper proceedings, it cannot lie in the mouth of one of the parties to the settlement to spurn it on the ground that it was a mistake and proceed to invoke the Arbitration clause. If this is permitted the sanctity of contract, the settlement also being a contract, would be wholly lost and it would be open to one party to take the benefit under the 47 Com.O.S.No.720/2006 settlement and then to question the same on the ground of mistake without having the settlement set aside. In the circumstances, we think that in the instant case since the dispute or difference was finally settled and payments were made as per the settlement, it was not open to the respondent unilaterally to treat the settlement as non est and proceed to invoke the Arbitration clause. We are, therefore, of the opinion that the High Court was wrong in the view that it took."
77. From the ratio of the above decisions, it is very clear that in a commercial transaction, it is common to enter into Supplemental Agreements and whenever such Supplemental Agreements are executed, the same cannot be termed as out- come of fraud, coercion or duress. Further, as discussed above, the Plaintiff has also failed to prove the said aspects of economic coercion and duress as pleaded by him. Therefore, Issue Nos.3, 4, 5 & 8 are answered in the "Negative" and Issue No.19, 20, 21, 22 & 23 in the "Affirmative".
78. Issue No. 1, 2, 9, & 16:- All these issues are relating to the same aspect, in order to avoid repetition, I discuss the same jointly.
79. The Plaintiff/PW.1 has deposed at Para Nos.8 to 12 of the 48 Com.O.S.No.720/2006 Affidavit filed in-lieu of oral Examination-in-Chief that along with Tender, he had deposited the Bank Guarantee on 23.06.1989 towards security, that he had also furnished Bank Guarantees towards performance Guarantee and Security towards mobilization advances, that out of total 63 Bank Guarantees furnished by the Plaintiff, 40 Bank Guarantees towards mobilization advance, that the Defendant is liable to refund the entire amount of Commission paid by him to the Bank and that the Defendant is liable to refund the entire amount of interest recovered from the Plaintiff towards mobilization advance.
80. At Para No.99 of the said Affidavit, the Plaintiff/PW.1 has deposed that whenever the payments were due to be made by the Defendant for the work executed were not being paid, the Plaintiff went on writing letters to them and hence, the Plaintiff is entitled for payment of interest on belated payments of the bills from the dates on which the respective amounts became due and payable till the actual date of payment.
81. As per the terms of Ex.D.39/Agreement, the furnishing of Bank Guarantees for performance security lies with the Plaintiff. There is no corresponding liability/obligation on the Defendant. There is no such term that the Plaintiff can recover the cost of 49 Com.O.S.No.720/2006 the said Bank Guarantees from the Defendant. Further, as per the terms of the said Agreement, the Defendant was entitled to recover interest on the mobilization advance at the rate of 15%. Further, the Defendant has also relied on the condition of the Ex.D.2/Contract that the Plaintiff has no right to seek any escalation or additional amounts on any count.
82. The Defendant agreed to release Bank Guarantees to the tune of 163.60 Lakhs in return for the Plaintiff furnishing a fresh Bank Guarantee to the tune of Rs.50 Lakhs on account of inability to proceed with project as previously anticipated, as could be seen from Ex.D.24/Office Copy of the letter dated 04.12.1995 addressed to Senior Manager Corporation Bank, Hubli. Ex.D.38 is the Office Copy of the letter to release bank guarantee dated 11.07.2003 addressed to the Manager, Corporation Bank, Hubli. It is to be noted that the Plaintiff himself has suggested a question to the D.W.1 during his cross- examination, and he has answered the same as follows:-
" It is true to suggest that all bank guarantees which are 17 in number amount to Rs.228.26 lakhs have been released in favour of the Plaintiff on 11.07.2003".
83. Therefore, the Defendant has satisfied to that extent the said Claim of the Plaintiff. Though the Plaintiff has claimed Rs.1,67,00,894/- for refund of interest recovered from the 50 Com.O.S.No.720/2006 Plaintiff on the amount of several advances granted in terms of Ex.D.39/Agreement and Ex.D.2/Contract and Rs.1,46,62,789/- towards Bank Commission paid to keep the Bank Guarantees alive, the Plaintiff has not furnished any proof for such a huge claim.
84. As already discussed that the agreement period was extended as per the request of the Plaintiff also. If the said extension was for the reasons solely attributable to the defendant, then only the Plaintiff is entitled for this claim. Hence, the Plaintiff is not entitled for this Claim also.
85. Another Claim is towards refund of interest collected on mobilisation advance beyond original agreement period. The D.W.1 has deposed during his cross-examination as follows:-
"It is true to suggest that we have recovered the mobilization advance from the Plaintiff in installments subsequently. It is true to suggest that the said advance amount so recovered was charged with interest at the rate of 15% per annum.
As per Ex.P.2 Page 407 dated 10 th August 1994 the Defendant Corporation has released another Rs. 50 lakhs to the Plaintiff. We have charged 19.25% interest on the said advance".
86. As already discussed that the agreement period was 51 Com.O.S.No.720/2006 extended as per the request of the Plaintiff also. When such being the case, the Plaintiff cannot contend that the interest collected on mobilisation advance is wrongful. Hence, the Plaintiff is not entitled for this Claim also. Hence, I answer all these Issue Nos.1, 2, 9 & 16 in the "Negative".
87. Issue No.6:- The Plaintiff/PW.1 at Para No.25 to 28 of the said Affidavit has deposed that he had incurred substantial amount of money towards idle charges for the men & machinery, T & P, apart from payment of interest to the Bankers and on the mobilization advance availed from the Defendant. He has also contended that he had shifted heavy machineries, equipments, tools and plants to the place of work and erected labour camps, brought imported labour gangs and various artisan required for the execution of the work.
88. Under law, there are three distinct heads of damages which a Contractor can claim legally; which are claims for idle machinery/labour, escalation and loss of profits, subject to the same being duly established where the work gets prolonged due to the fault of the employer. But what is important is that a contractor will be entitled to these claims only if the same are duly established. Loss of profits is a claim in the form of damages 52 Com.O.S.No.720/2006 under Section 73 of the Indian Contract Act. In order to seek a claim under any of the three heads, the Contractor has to lead evidence and establish the claim. A mere calculation without any evidence on record would not be enough for the Court to grant these Claims.
89. The Hon'ble Supreme Court has in the decision reported in A.I.R. - 1962 - S.C. - 366 (M/S. Murlidhar Chiranjilal vs. M/s. Harishchandra Dwarkadas) clearly laid down the principles for grant of damages under Section 73 of the Contract Act as follows :-
"The two principles on which damages in such cases are calculated are well settled. The first is that, as far as possible, he who has proved a breach of a bargain is to supply what he contracted to get is to be placed, as far as money can do it, in as good a situation as if the Contract had been performed; but this principles is qualified by a second, which imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to take such steps: (British Westinghouse Electric and Manufacturing Company Limited v. Underground Electric Ry.Co. of London (1912) AC 673. at P.689). These two principles also follow from the law as laid down in Section 73 read with the Explanation thereof. If, therefore, the contract was to be performed at Kanpur it was the Respondents duty to buy the goods in Kanpur and rail them to Calcutta on the date of the breach and if it is suffered any damages thereby 53 Com.O.S.No.720/2006 because of the rise in price on the date of the breach as compared to the contract price, it would be entitled to be reimbursed for the loss. Even if the Respondent did not actually buy them in the market at Kanpur on the date of breach it would be entitled to damages on proof of the rate for similar canvas prevalent in Kanpur on the date of breach, if that rate was above the contracted rate resulting in loss to it."
90. One of the landmark judgment in India that deal with loss of profits is the decision reported in (1984) 4 - S.C.C. -59 (Brij Paul & Bros. vs. State of Gujarat). It was held that in works contract, where the contractor suffers a loss on account of breach by the employer, he is entitled to claim compensation for the expected profit of the balance of work.
91. In the decision reported in A.I.R. - 1990 - A.P. - 294 (State of Andhra Pradesh v. M/s. Associated Engineering Enterprises), a Division Bench of Hon'ble Andhra Pradesh High Court in Paragraph 20 has held as follows: -
"20. The first aspect to be noticed in this behalf is that the contractor did not choose to terminate the contract on account of the Government's delay in handing over the sites. He requested for, and agreed to extension of the period of contract, and completed the work. It is not the respondent's case that while agreeing to extension of the period of contract he put the Government on notice of his intention to claim 54 Com.O.S.No.720/2006 compensation on that account."
92. In Paragraph No.21 it is held as follows: -
"21. According to this Section, it was open to the respondent to avoid the contract on account of the Government's breach of promise to deliver the sites at a particular time; but, he did not choose to do so, and accepted the delivery of sites at a time other than what was agreed upon between them earlier. If so, he is precluded from claiming compensation for any loss occasioned by such delay, unless, of course, at the time of such delayed acceptance of the sites, he had given notice to the Government of his intention to claim compensation on that account. It must be remembered that this provision of law was specifically referred to, and relied upon in the counter filed by the Government to the respondent's claim before the arbitrator. But, it is not brought to our notice that the contractor had given such a notice (contemplated by the last sentence in Section 55). We must make it clear that we are not entering into the merits of the decision of the arbitrator. What we are saying is that such a claim for compensation is barred by law, except in a particular specified situation and inasmuch as such a particular specified situation is not present in this case, the claim for compensation is barred. It is well settled that an arbitrator, while making his award, has to act in accordance with law of the land, except in a case where a specific question of law is referred for his decision."
93. The most important judgment that sets the tone of 55 Com.O.S.No.720/2006 India's legal jurisprudence is the decision reported in (2004) 5
- S.C.C. - 109 (Bharat Coking Coal Ltd . vs. L K Ahuja), where it was held by the Hon'ble Supreme Court that in absence of any proof or evidence of loss of profit or possibility of alternate use, compensation for loss of profit cannot be provided. The relevant portion of the judgement is as follows:-
"It is not unusual for the contractors to claim loss of profit arising out of diminution in turn over on account of delay in the matter of completion of the work. What he should establish in such a situation is that had he received the amount due under the contract, he could have utilized the same for some other business in which he could have earned profit. Unless such a plea is raised and established, claim for loss of profits could not have been granted. In this case, no such material is available on record. In the absence of any evidence, the arbitrator could not have awarded the same." (Para 24)
94. In another decision reported in (2006) 11 - S.C.C. - 181 (McDermott International Inc vs. Burn Standard Co. Ltd), the Hon'ble Supreme Court has held as under: -
"Sections 55 and 73 of the Indian Contract Act do not lay down the mode and manner as to how and in what manner the computation of damages or compensation has to be made. There is nothing in Indian law to show that any of the formulae adopted in other countries is prohibited in law or the same would be inconsistent with the law prevailing in India.56
Com.O.S.No.720/2006 As computation depends on circumstances and methods to compute damages, how the quantum thereof should be determined is a matter which would fall for the decision of the arbitrator. We, however, see no reason to interfere with that part of the award in view of the fact that the aforementioned formula evolved over the years, is accepted internationally and, therefore, cannot be said to be wholly contrary to the provisions of the Indian law.
A court of law or an arbitrator may insist on some proof of actual damages, and may not allow the parties to take recourse to one formula or the other. In a given case, the court of law or an arbitrator may even prefer one formula as against another. But, only because the learned arbitrator in the facts and circumstances of the case has allowed MII to prove its claim relying on or on the basis of Emden Formula, the same by itself, in our opinion, would not lead to the conclusion that it was in breach of Section 55 or Section 73 of the Indian Contract Act."
95. In the decision reported in (2007) 10 - S.C.C. - 195) (State of Kerala and another vs. M.A.Mathai), it is held as follows: -
"8. If, instead of avoiding the contract accepts the belated performance of reciprocal obligation on the part of the employer, the innocent party i.e. the contractor, cannot claim compensation for any loss occasioned by the non-performance of the reciprocal promise by the employer at the time agreed, "unless, at the time of such acceptance, he gives notice to the promisor of his intention to do so". Thus, it appears that under the 57 Com.O.S.No.720/2006 Indian law, in spite of there being a contract between the parties whereunder the contractor has undertaken not to make any claim for delay in performance of the contract occasioned by an act of the employer, still a claim would be entertainable in one of the following situations:
(i) if the contractor repudiates the contract exercising his right to do so under Section 55 of the Contract Act,
(ii) the employer gives an extension of time either by entering into supplemental agreement or by making it clear that escalation of rates or compensation for delay would be permissible,
(iii) if the contractor makes it clear that escalation of rates or compensation for delay shall have to be made by the employer and the employer accepts performance by the contractor in spite of delay and such notice by the contractor putting the employer on terms."
96. In the decision reported in (2015) 4 - S.C.C. - 136 (Kailash Nath Associates vs. Delhi Development Authority and Anr.) the Hon'ble Supreme Court has held as under:-
"43. On a conspectus of the above authorities, the law on compensation for breach of contract under Section 74 can be stated to be as follows:
1. Where a sum is named in a contract as a liquidated amount payable by way of damages, the party complaining of a breach can receive as reasonable compensation such liquidated amount only if it is a 58 Com.O.S.No.720/2006 genuine pre-estimate of damages fixed by both parties and found to be such by the court. In other cases, where a sum is named in a contract as a liquidated amount payable by way of damages, only reasonable compensation can be awarded not exceeding the amount so stated. Similarly, in cases where the amount fixed is in the nature of penalty, only reasonable compensation can be awarded not exceeding the penalty so stated. In both cases, the liquidated amount or penalty is the upper limit beyond which the court cannot grant reasonable compensation.
2. Reasonable compensation will be fixed on well-
known principles that are applicable to the law of contract, which are to be found inter alia in Section 73 of the Contract Act.
3. Since Section 74 awards reasonable compensation for damage or loss caused by a breach of contract, damage or loss caused is a sine qua non for the applicability of the section.
4. The Section applies whether a person is a plaintiff or a defendant in a suit.
5. The sum spoken of may already be paid or be payable in future.
6. The expression "whether or not actual damage or loss is proved to have been caused thereby" means that where it is possible to prove actual damage or loss, such proof is not dispensed with. It is only in cases where damage or loss is difficult or impossible to prove that the liquidated amount named in the contract, if a genuine pre-estimate of damage or loss, can be 59 Com.O.S.No.720/2006 awarded."
97. In the decision reported in 2015 - S.C.C. Online - Bom - 1412 (Ajay Singh vs. Suneel Darshan), a Division Bench of the Hon'ble Bombay High Court has held that if a party has not suffered any loss, even if the Defendant has committed a breach, it cannot be awarded compensation under Section 73 of the Contract Act.
98. In the decision reported in 2016 - S.C.C. Online - Bom - 9697 (Essar Procurement Service Ltd. vs. Paramount Constructions), the Hon'ble Bombay High Court has held that Sections 73 & 74 of the Contract Act requires actual damage or loss to be proved and the proof cannot be dispensed with. When the loss is in terms of money, the same would have to be proved and only when it is shown that the party has suffered an injury or a loss can it be awarded the claim of loss of profit.
99. Keeping in my mind about the above-mentioned legal principles, I now propose to discuss about various claims put forth by the Plaintiff.
60Com.O.S.No.720/2006
100. The Plaintiff has claimed Rs.1,07,31,504/- towards alleged idling charges for Machinery, labour, T & P, site facilities etc., during the period of 2nd Agreement for 290 days in handing over of working area site.
101. To claim idleness of men and machinery, the Plaintiff has to prove that there was existence of an opportunity to deploy the said machinery for gainful employment at another site which was not done. The idle charges are not supported by any data of actual idling hours also. Further, during the cross- examination of PW.1, he has admitted that he used to execute number of contract works at different places with different contract works in a particular period, that he had sent back the non-essential workers from the present work site and that the Defendant has informed to commence the contract work after disposal of Writ Petition before the Hon'ble High Court of Karnataka. In view of the above discussion and the evidence of the Plaintiff/PW.1, the Plaintiff is not entitled for the said claim. Hence, I answer this Issue in the "Negative".
102. Issue Nos. 11, 17, 24, 25 & 26:- All these issues are related to same aspect and hence, in order to avoid repetition, I discuss the same jointly.
61Com.O.S.No.720/2006
103. According to the case of the Plaintiff, as per the terms of Ex.D.39/Agreement, the Defendant has to identify the quarry and that they identified Mastihalla quarry which was at a distance of 7 Kms. However, the said quarry was hardly enough for meeting the requirements of the entire contract work. Hence, the Plaintiff requested the Defendant to identify and handover stone quarry. Thereafter, the Defendant identified a small stone quarry at Bangarmakki. Ultimately, the said work was executed at Nidagodu quarry. In view of all these exercise, delay was caused and extra cost was also incurred by the Plaintiff.
104. As per the terms of the Ex.D.39/Agreement, the uniform rates quoted shall be for the final items of work and shall include cost of material, labour, machinery, batching, mixing, laying, finishing, repairs etc. with all leads and lifts etc., and no separate payment shall be made for these items on any account.
105. Further, the PW.1 during his cross-examination has admitted that before executing the contract work, every Contractor has to inspect the documents pertaining to the Contract work as well as place of contract work. He has also admitted that before submitting the Tender Form at the Office of 62 Com.O.S.No.720/2006 the Defendant, he inspected the quarry and place of contract. He has also admitted that in the Tender document, the lead and over-burden charges are also included.
106. It is to be noted that the Plaintiff is claiming lead charges for procuring material from Bangarmakki quarry. When the Plaintiff inspected the quarry at Mastihalla to ascertain its suitability and thereupon quoted a price, the alleged additional costs to remove the over-burden on the Mastihalla quarry cannot be accepted in view of the above-mentioned evidence of the Plaintiff/PW.1.
107. As already mentioned, ultimately the Nidagodu quarry was used for operations. In fact, as per Ex.D.12/R.A. Bill, the Defendant paid the Plaintiff a sum of Rs.1,23,492.89 on account of extra lead charges from Nidagodu Stone quarry. The PW.1 has admitted about the receipt of said amount. The relevant portion of his evidence is as follows:-
"It is true to suggest that the Defendants have made the payment towards bringing the stones from Nidagodu quarry....... It is true to suggest that the Defendants have paid Rs.2,90,876/- towards said charges as raised in the Running Bill."
108. The Plaintiff has alleged that the Defendant has paid 63 Com.O.S.No.720/2006 only part of the additional lead charges. However, he has not proved his contention that in spite of the payment under Ex.D.12, the Defendant is liable to pay an amount of Rs.1,65,94,200/- as claimed by the Plaintiff. The said claim is not supported by any documents. Hence, I answer Issue No.11 & 17 in the "Negative" and Issue Nos. 24, 25 & 26 in the "Affirmative".
109. Issue Nos. 12 & 13:- A Contractor is entitled to claim extra expenditure incurred on establishment and overhead charges, if the period of contract is prolonged due to breaches of contract on the part of the Employer. In the present case, as discussed earlier, the delay was caused due to the contractor/Plaintiff also.
110. Further, the Contractor/Plaintiff should establish that had it received the amount in terms of the contract, the contractor could have utilized the same for some other business in which he could have earned profit. Unless such a plea is raised and established, the claims for loss of profit could not be granted. The loss of profit is payable by applying the principles of Section 73 and 55 of the Contract Act to the additional costs. Since the Plaintiff failed to prove the actual overhead expenses, 64 Com.O.S.No.720/2006 the said claim cannot be granted under Section 73 of the Indian Contract Act.
111. It is a settled law that a party claiming loss of profit will have to first prove the existing opportunity, and then its attempt to seize that opportunity and finally prove that by not availing the said opportunity, it has incurred a loss. The loss would have to be quantified and proved. None of these factors have been proved by the Plaintiff and there are no documents or any evidence on record in proof of loss of profit. The Plaintiff will be entitled to these claims only if the same are duly established. In order to seek a claim under this head, the Plaintiff has to lead evidence and establish the claim. A mere calculation without any evidence on record would not be enough to grant the said claim.
112. Further in the above-mentioned decision reported in (2004) 5 - S.C.C. - 109 (Bharat Coking Coal Ltd . vs. L K Ahuja), it is held that the Contractor has to prove loss of profit by producing evidence. In another decision reported in 2016 - S.C.C. Online - Delhi - 6112 ( National Highways Authority of India vs. Hindustan Construction Co. Ltd.) it is held that a person claiming loss of profit must establish that he had the opportunity 65 Com.O.S.No.720/2006 to deploy its resources in another venture and that those ventures would have yielded profit. The Court must also consider if the equipment were owned by the contractor or were to be hired from other contracts.
113. In support of the contention the Learned Advocate for the Plaintiff has relied on Proforma for estimating minute rate of concrete used in mechanised construction of river valley projects. However, satisfactory evidence on the aforesaid matters would be necessary and only on the basis of the same the said parameters shall be applicable. The said Proforma is more or less equivalent to Hudson's Formula. Reference may be made to the decision reported in 2002 - S.C.C. Online - Del - 601 ( All India Radio vs. Unibros), where it is held that for assessing loss of profit Hudson's Formula cannot be straightway applied unless factors like capacity to earn the profit etc. are proved by the contractor. Therefore, the Plaintiff is not entitled for any claim under this head. Hence, I answer Issue Nos.12 & 13 in the "Negative".
114. Issue No. 7 & 10:- The Plaintiff has contended that several other extra items got executed by the Defendant during entire period of contract and no workable rates have been sanctioned prior to getting the item executed, but after the 66 Com.O.S.No.720/2006 execution of extra items, the Defendant sanctioned arbitrary and too low rates and caused the financial loss to the Plaintiff. The Plaintiff has referred to the K.P.C. Schedule rates for the year 1994-
95. However, the Defendant has contended that in view of the Supplementary Agreements Exs.D.3 & D.4, there is a revision of rates for miscellaneous items and in Ex.D.5/ Supplementary Agreement; there is a provision for rates for items not contained in Ex.D.2. When such being the case, there is no basis to refer the K.P.C. Schedule of rates 1994-95 and hence, the said claim of the Plaintiff is not tenable. Hence, Issue Nos.7 & 10 are answered in the "Negative".
115. Issue No. 14 & 18 :- The Plaintiff is claiming this relief based on Ex.D.2. In fact, he has contended that Ex.D.2 is not binding on him due to economic coercion and duress by the Defendant. Having contended that he has based his claim on Ex.D.2.
116. I have already mentioned various correspondences exchanged between the parties. From the said correspondence, there are allegations of short-fall by the Plaintiff for not maintaining the targeted programme/mile-stones. As per Ex.D.50, the said reasons are as follows:-
67Com.O.S.No.720/2006
(a) Stone quarrying
(b) Increasing masonry batches
(c) Increasing concrete laying batches
(d) Increasing carpenters and bar-benders
(e) Deployment of additional concrete mixtures
(f) Deployment of tower crane
(g) Deployment of technical persons
117. In Ex.D.51 also, the Defendant has informed the Plaintiff that the short-fall of progress is entire attributable to the Plaintiff due to the inadequate arrangements made at site. In Ex.D.52 also, the Plaintiff is informed that the efforts in achieving the targeted progress of work is very poor and reflects the inability of the Plaintiff to arrange to execute the work. In Ex.D.56, the Defendant has noted about the various short-falls during the inspection held on 19.11.1999.
118. A bare perusal of the above-mentioned correspondences exchanged between the parties shows that the delay was fully on account of the Plaintiff. In the said circumstances, I wish to rely a decision reported in 2008 (100) - D.R.J. - 112 = 2007 (4) Arb.L.R. - 323 (Delhi) (Mecon Limited vs. Pioneer Fabrications (P) Ltd.,), wherein it is held that "if a party is responsible for the delay, it cannot avail of the benefit of the delay."
68Com.O.S.No.720/2006
119. As per Clause-8 of Ex.D.2, if the Plaintiff achieves certain specified mile-stones before the date provided for achievement of that mile-stone, he is entitled for incentives. However, as mentioned above, the Plaintiff has not achieved the said target within the mile-stone. However, as per Ex.D.57, after examining all the aspects, the Defendant has concluded that the Plaintiff was entitled to receive an incentive payment of Rs.17.60 Lakhs. At the same time, as per Ex.D.57, the Defendant found that the Plaintiff is liable to pay a penalty of Rs.5.20 Crores for non-achieving the mile-stone and waived the said penalty on the Plaintiff. When such being the case, the Plaintiff is not entitled to any compensation under this head. Hence, I answer Issue No.14 in the "Negative" and Issue No.18 in the "Affirmative".
120. Issue No.15: - In view of the above-mentioned discussions, observations and findings on the above Issues, the Plaintiff is not entitled for any compensation under any heads. When such being the case, there is no question of awarding interest on the suit claim. Hence, I answer this Issue in the "Negative".
121. Issue No. 28: -Therefore, I proceed to pass the following Order.
69Com.O.S.No.720/2006 ORDER The Suit of the Plaintiff is dismissed.
The Plaintiff is hereby directed to pay cost of this suit to the Defendant. The Advocate for the Defendant is directed to file Memorandum of Cost before the Office within 5 days from today as required under Rule 99 and 100 of Karnataka Civil Rules of Practice.
Draw up Decree accordingly.
The Office is directed to send copy of this Judgment to Plaintiff and Defendants to their email ID as required under Order XX Rule 1 of the Civil Procedure Code as amended under Section 16 of the Commercial Courts Act.
(Dictated to the Judgment Writer, typed by her, corrected and then pronounced by me in open Court on this the 11th day of January 2021).
(DEVARAJA BHAT.M), LXXXII Addl. City Civil & Sessions Judge, Bengaluru.
70Com.O.S.No.720/2006 ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF THE PLAINTIFF:
PW.1 Sri. Chinna Nachi Muthu PW.2 Sri K.V.Srinivasan
LIST OF DOCUMENTS MARKED ON BEHALF OF THE PLAINTIFF:
Ex.P.1 Volume No.1 of Books Ex.P.2 Volume No.2 of Books Ex.P.3 Volume No.3 of Books Ex.P.4 Volume No.4 of Books Ex.P.5 Volume No.5 of Books Ex.P.6 Volume No.6 of Books Ex.P.7 Volume No.7 of Books Ex.P.8 Schedule of rates for the year 1994-95 Ex.P.9 Schedule of rates for the year 1997-98 Ex.P.10 Photographs
LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENDANT:
D.W.1 Sri. C. Swaminathan
LIST OF DOCUMENTS MARKED ON BEHALF OF THE
DEFENDANT:
Ex.D.1 Authorization Letter
Ex.D.2 Original Agreement dated 06.08.1997
71
Com.O.S.No.720/2006
Ex.D.3 Original Supplementary Agreement to the Second
Agreement dated 14.02.2001
Ex.D.4 Original Supplementary Agreement to the Second
Agreement dated 16.02.2001
Ex.D.5 Supplementary Agreement dated 23.03.2004
Ex.D.6 Office copy of the letter
Ex.D.7 Running Account Bills
Ex.D.8 Escalation Bill
Ex.D.9 Original Final Bill dated 31.10.2003
Ex.D.10 True copy of the 159th Boards Decisions Ex.D.11 Certified Copy of the Technical Committee Meeting minutes dated 10.04.2002 Ex.D.12 Running Account Bill dated 17.07.1996 Ex.D.13 Memo dated 17.12.2002 Ex.D.14 Office Copy of the letter dated 04.01.1990 Ex.D.15 Office Copy of the letter dated 31.08.1981 Ex.D.16 Office Copy of the letter dated 17.12.1990 Ex.D.17 Office Copy of the letter dated 08.12.1990 Ex.D.18 Office Copy of the letter dated 16.03.1991 Ex.D.19 Office Copy of the letter dated 31.11.1993 Ex.D.20 Office Copy of the letter dated 30.03.1994 Ex.D.21 Office Copy of the letter dated 19.04.1994 Ex.D.22 Office Copy of the letter dated 10.05.1994 Ex.D.23 Office Copy of the Bill dated 31.03.1995 Ex.D.24 Office Copy of the letter dated 04.12.1995 addressed to Senior Manager Corporation Bank, Hubli Ex.D.25 Office Copy of the Phonogram dated 06.11.1996 addressed to the Plaintiff Ex.D.26 Office Copy of the letter dated 02.12.1996 Ex.D.27 Office Copy of the letter dated 21.01.1998 72 Com.O.S.No.720/2006 Ex.D.28 Office Copy of the letter dated 25.03.1998 Ex.D.29 Office Copy of the letter dated 03.04.1998 Ex.D.30 Office Copy of the letter dated 23.04.1998 Ex.D.31 Copy of the Confirmation to the Phonogram dated 04.05.1999 Ex.D.32 Office copy of the letter dated 24.11.2000 Ex.D.33 Office Copy of the letter dated 19.03.2001 Ex.D.34 Office Copy of the letter dated 23.03.2001 Ex.D.35 Office Copy of the letter dated 04.12.2001 Ex.D.36 Office Copy of the letter dated 07.02.2002 Ex.D.37 Copy of the Completion Certificate dated 22.05.2002 addressed to the Plaintiff Ex.D.38 Office Copy of the release of bank guarantee dated 11.07.2003 addressed to the Manager, Corporation Bank, Hubli.
Ex.D.39 Original Agreement dated 12.10.1989 Ex.D.40 Original revised Escalation Bill No.32 and final bill. Ex.D.41 Orders of Government of Karnataka dated 20.05.1989 Ex.D.42 Office copy of the Telegram sent to the Plaintiff dated 04.05.1992 Ex.D.43 Office Memo dated 28.01.1992 regarding the compensation of stoppage of works Ex.D.44 Memo dated 11.02.1992 regarding compensation for stoppage of works Ex.D.45 Office copy of the Profoma bill No.2 towards to ad-
hock payment to the Plaintiff dated 18.02.1992 Ex.D.46 Office Copy of the letter dated 03.11.1995 Ex.D.47 Office Copy of the letter dated 04.03.1996 Ex.D.48 Office Copy of the letter dated 05.03.1996 Ex.D.49 Office Copy of the letter dated 11.04.1996 Ex.D.50 Office Copy of the letter dated 03.12.1997 73 Com.O.S.No.720/2006 Ex.D.51 Office Copy of the letter dated 20.04.1998 Ex.D.52 Office Copy of the letter dated 24.07.1998 Ex.D.53 Office Copy of the letter dated 01.08.1998 Ex.D.54 Office Copy of the letter dated 28.09.1998 Ex.D.55 Office Copy of the letter dated 18.11.1999 Ex.D.56 Office Copy of the letter dated 22.11.1999 Ex.D.57 Extract of 189 of Board Agenda of the Defendant Company Ex.D.58 Letter dated 01.06.2001 written by Plaintiff Ex.D.59 Office Memo dated 22.09.2001 regarding extension of time to Plaintiff Company Ex.D.60 Office Copy of the letter dated 04.12.2001 Ex.D.61 Office Copy of the letter dated 13.09.2004 Ex.D.62 Letter dated 06.07.2005 written by Deputy Commissioner of Income Tax.
Ex.D.63 Office Copy of the letter dated 18.07.2005 Ex.D.64 Extract of 71st Technical Meeting agenda of Defendant Ex.D.65 Extract of Minutes of meeting dated 28.09.1996 Ex.D.66 Measurement Book No.99 commencing from 31.03.1998 to 18.03.2002 maintained by Sub Division Office No.3 Ex.D.66(a) Page No.78 and 79 Ex.D.67 Measurement Book No.127 commencing from 01.03.2002 to 17.01.2002 Ex.D.67(a) Page No.122 (DEVARAJA BHAT.M.), LXXXII Addl. City Civil & Sessions Judge, BENGALURU.
74 Com.O.S.No.720/2006 The Judgment is pronounced in Open Court today. The operative portion of the said judgment is as follows:-
ORDER The Suit of the Plaintiff is dismissed.
The Plaintiff is hereby
directed to pay cost of this suit to
the Defendant. The Advocate for
the Defendant is directed to file
Memorandum of Cost before the
Office within 5 days from today as
required under Rule 99 and 100 of
Karnataka Civil Rules of Practice.
Draw up Decree accordingly.
The Office is directed to send
copy of this Judgment to Plaintiff
and Defendants to their email ID
as required under Order XX Rule 1
of the Civil Procedure Code as
amended under Section 16 of the
Commercial Courts Act.
(Vide my separate detailed
Judgment dated 11.01.2021)
(Typed as per my dictation).
(DEVARAJA BHAT.M.),
LXXXII ACC & SJ, Bengaluru.