Gujarat High Court
Chairman/ Secretary vs Naranpura Mazdoor Kamdar Sahkari ... on 20 October, 2015
Author: Akil Kureshi
Bench: Akil Kureshi
C/FA/2988/2013 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
FIRST APPEAL NO. 2988 of 2013
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MS JUSTICE SONIA GOKANI
================================================================
1 Whether Reporters of Local Papers may be allowed to see
the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law as
to the interpretation of the Constitution of India, 1950 or any
order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
================================================================
CHAIRMAN/ SECRETARY....Appellant(s)
Versus
NARANPURA MAZDOOR KAMDAR SAHKARI Mandli LTD....Defendant(s)
================================================================
Appearance:
MR PJ KANABAR, ADVOCATE with MR. BHAUMIK DHOLARIYA,
ADVOCATES for the Appellant
MR DEVAN PARIKH, SR. ADV. for NANAVATI ASSOCIATES, for the
Opponent
================================================================
CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
Page 1 of 49
HC-NIC Page 1 of 49 Created On Wed Oct 21 02:54:25 IST 2015
C/FA/2988/2013 CAV JUDGMENT
HONOURABLE MS JUSTICE SONIA GOKANI
Date : 20/10/2015
CAV JUDGMENT
(PER : HONOURABLE MS JUSTICE SONIA GOKANI)
1. This First Appeal arises from the judgment and order dated 9.5.2013 passed by learned 7th Additional Senior Civil Judge, Vadodara in Special Civil Suit No.380 of 1990, whereby the Court directed the appellant Gujarat State Warehousing Corporation to pay sum of Rs.41,28,774/- (Rupees forty one lakhs twenty eight thousand seven hundred seventy four only) to the respondent with interest at the rate of 12% per annum from the date of filing of the suit till realization of the amount with cost. This judgment and decree has aggrieved the appellant and, therefore, this appeal.
2. In the present appeal, the appellant and respondent shall be addressed respectively as defendant Corporation and plaintiff as they originally were in the Special Civil Suit for the sake of convenience.
(Plaintiff's version)
3. Brief facts necessary to understand the Page 2 of 49 HC-NIC Page 2 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT controversy are as follows:-
3.1 The plaintiff (respondent) is an engineer and contractor registered under 'A''A' Class as per the list maintained by the State of Gujarat. The defendant (appellant) the Gujarat State Warehousing Corporation through its Executive Engineer invited the tenders publicly for the work of construction of godowns at Dashrath in the district of Vadodara. The plaintiff Mandli's tender was found quite competitive and, therefore, was accepted by the defendant Corporation.
On such acceptance, it was called upon to pay initial security deposit and after such requirement was fulfilled, a regular agreement was entered into between the plaintiff Mandli and the defendant Corporation. Subsequent thereto, the work order for executing the said work was issued and the plaintiff Mandli was to commence its work from 25.5.1988 and the same was to be completed within 9 months i.e. on or before 25.2.1989. The total work to be executed was to the tune of Rs.66,58,990/- (Rupees sixty six lakhs fifty eight thousand nine hundred ninety only). 3.2 Certain mutual, bilateral and contractual obligations were to be performed by the parties as per Page 3 of 49 HC-NIC Page 3 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT the said agreement. According to the plaintiff Mandli, on account of certain delay and breaches on the part of the defendant Corporation, the work could not be completed within the stipulated period i.e. upto 25.2.1989 and the same was completed instead on 18.8.1989. Extension of such period was also granted by the defendant Corporation. Moreover, extra work not contemplated under the work agreement also was performed. Resultantly, a claim letter raising the demands of various claims was sent to the respondent, however, when the same was not paid heed to, a notice was issued to the defendant Corporation on 22.3.1990, which was never replied to. Therefore, the plaintiff Mandli filed a special civil suit for recovery of the money raising the following claims, namely, (1) Loss of interest on account of non-converting the security deposits into FDR or NSC (2) Expenses incurred on account of extra work not being part of the agreement. (3) Claim for fixing of Sarbandi (4) Anti-termite treatment given in the foundation, plinth and superstructure (5) Price rise in material labour and petroleum products due to prolonged period of work (6) The extra expenditure of overhead, overstay, unutilisation of labourers etc. and(7) interest on the Page 4 of 49 HC-NIC Page 4 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT amount of Rs.45,99,731/- i.e. the total sum of claims No.1 to 6.
B. Defendant's version
3.3 Written statement came to be filed by the
defendant Corporation where it has not disputed the expenses of the tender and the work to be executed for the Corporation. However, according to the defendant Corporation, the cause of action has not arisen within the jurisdiction of the Court of Ahmedabad and hence, the suit would be barred for want of jurisdiction. It is also the stand of the defendant that the plaintiff Mandli is not registered and, therefore, also the legal suit is not maintainable under the law. It is denied categorically that on account of any delay or laches on the part of the defendant Corporation the work could not be executed within the stipulated period. Extension of time, sought for by the plaintiff Mandli, had been granted only on account of department taking a sympathetic view towards the plaintiff. Time though was essence of their agreement, non-execution of the work within the stipulated time period had led the defendant Corporation to incur huge loss. It was contended further that for extra work there is a Page 5 of 49 HC-NIC Page 5 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT specific clause in the contract. No prior permission, as was required, was sought for by the plaintiff Mandli or granted by the defendant Corporation and hence no amount could have been given. It is also the say of the defendant Corporation that nothing has come on record to substantiate carrying out of extra work and the suit is the result of an after thought. It is firmly denied that handing over of the site was belated and that generated a cascading effect on the rest of the aspects.
4. The trial Court, culling out the issues, recorded the evidence of both the sides and on hearing the rival contentions of parties partly allowed the suit of the plaintiff Mandli directing the defendant Corporation to pay sum of Rs.41,28,774/- together with interest at the rate of 12% per annum from the date of filing of the suit till realization of decretal amount.
5. Aggrieved defendant Corporation has preferred the present First Appeal under section 96 of the Code of Civil Procedure.
Oral Submissions:
6 We have heard Mr.P.J.Kanabar, advocate appearing Page 6 of 49 HC-NIC Page 6 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT with Mr.Bhaumik Dholariya, learned advocate for the defendant Corporation, who urged that the plaintiff Mandli could not have filed the suit, as it is not a registered Cooperative Society. The work under the contract was executed on 25.5.1988 and was to be completed on 25.2.1989.
6.1 Learned advocate further urged that obligations of parties were mutual, bilateral and reciprocal. Mainly, four aspects were harped upon with further urge that only one witness had been examined by the petitioner. He also urged on the issue of price escalation that no item was required to be provided by the department. The final bill also had been prepared on 23.8.1989.
6.2 He has also urged that the final bill was paid towards full and final settlement without a murmur.
He sought to rely upon the following authorities to substantiate his say:-
(1) Ramji Mandir Narsinhji vs. Narsinh Nagar @ Tekri Coop Housing So.Ltd., 1979 GLR 801.
(2) Chitrakut Dham Co-operative Housing Society Ltd., Mahuva vs. Kharak Haribhai Ravjibhai Bhalariya and Ors., 2010(1) GLR 430.
(3) Anil Rai vs. Stat of Bihar, AIR 2001 SC 3173. Page 7 of 49
HC-NIC Page 7 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT
7. Per contra, learned Senior Advocate Mr. Devan Parikh appearing for the the plaintiff has urged fervently that the plaintiff is an unregistered cooperative society, but, that has nothing to do with any debarment of filing of the suit. He urged that Schedule-B of the Agreement speaks of the nature of work to be carried out, whereas Schedule-A has no connection with Schedule-B. Schedule-B which makes it obligatory to work with material and in some of the cases, the Corporation needed to provide the material. He also has urged that Schedule-B will have to be looked at in isolation. He has taken this Court through each claim to emphasize that the trial Court was absolutely justified in allowing the suit to a substantial extent.
7.1 He has sought to rely upon the following decisions of the Apex Court.
(1) Mcdermott International Inc. vs. Burn Standard Co.Ltd. And others, (2006) 11 SCC 181.
(2) Associate Builders vs. Delhi Development Authority, 2014 (13) SCALE 226.
(3) Ram Bali vs. State of U.P., (2004) 10 SCC 598. (4) M/s. Associated Construction vs. Pawanhans Helicopters Pvt. Ltd., AIR 2008 SC 2911. (5) Food Corporation of India vs. M/s. A.M.Ahmed and Co. and Anr., AIR 2007 SC 829.
Page 8 of 49 HC-NIC Page 8 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT Issue of Maintainability:
8. On thus hearing both the sides and on thorough examination of the material on record firstly, the question of suit not being maintainable on account of the plaintiff Mandli being an unregistered society requires to be attended by this Court.
8.1 Taking law on the subject into consideration, the decision of this Court rendered in the case of Ramji Mandir Narsinhji vs. Narsinh Nagar @ Tekri Coop Housing So.Ltd.(supra), if is regarded, it is held and observed that the contract with non-existent society, on whose behalf, someone purports to act is a nullity and gives rise to no cause of action.
Section 37 of the Gujarat Cooperative Societies Act provides that according to this decision, the cooperative society becomes a legal person, after it is registered and only after the registration, it would acquire the capacity to enter into contracts. 8.2 In yet another decision of this Court in the case of Chitrakut Dham Co-operative Housing Society Ltd., Mahuva vs. Kharak Haribhai Ravjibhai Bhalariya and Ors. (supra), the agreement of sale of land in favour Page 9 of 49 HC-NIC Page 9 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT of the proposed unregistered cooperative society was held by this Court not enforceable as such society was not a legal entity.
8.3 In both these judgments, it has been made clear that under section 37 of the Gujarat Cooperative Societies Act, a cooperative society becomes a legal person on its registration and after such registration, a society can enter into contracts. Any contract by non-existent cooperative society with other party is held to be a nullity, with further finding that the same does not give rise to cause of action for the society.
8.4 This objection does not appear to have been insisted upon by the defendant before the trial Court. It is apparent from the record that the trial Court did not treat it as an issue as the same is absent in the issues framed. Plaintiff is an Engineer and Contractor and is registered under 'A''A' Class under the list maintained by the Government of Gujarat.
Be that as it may, being a mixed question of law and facts, it has been raised before this Court for the first time, is considered and not entertained. Page 10 of 49 HC-NIC Page 10 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT
9. Coming to the question of various claims made by the plaintiff Mandli needed to establish the claims it had made by issuing a demand notice which concerns averments of defendant Corporation committing delay, hindrance and breaches by not providing (1) material (2) timely instructions along with detailed work drawings, (3) Delay in handing over the site due to non-acquisition of premises and final execution of deed of not-providing approachable road to the site and (5) cropping up of extra quantity of work etc.
10. It would be essential to reproduce at this stage the issues framed by the trial Court and the replies given to them.
"(3) Issues in the suit:-
On the pleadings of the parties my predecessor has framed the issues vide Ex.-8, which were subsequently re-casted, are as under:- (1) Whether the plaintiffs proves the suit claim?
(1-A) Whether plaintiff proves that defendant has committed breach of conditions of contract?
(1-B) Whether the defendant proves that on payment of Final Bill, the entire suit contract stood finally settled by reason of accord and satisfaction?
(1-C) Whether the defendant proves that this Hon'ble Court has no jurisdiction to hear and try the present suit?
Page 11 of 49 HC-NIC Page 11 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT (2) Whether the plaintiff is entitled for interest as prayed for?
(3) What order and decree?
(4) My findings to the above issues are as under:
(1) Partly affirmative.
(1-A) In affirmative.
(1-B) In negative.
(1-C) In negative.
(2) Partly affirmative.
(3) As per final order."
11. The plaintiff Mandli, as can be noted from the issue itself, needed to prove the suit claim made under different heads. Predominantly, the burden was on the plaintiff Mandli to prove the claim. On its failure to adduce the evidence in relation to any of the claims made, naturally, such claim would fail. The onus continued to be on the plaintiff Mandli to prove such facts even if at certain stage, the liability of the burden would shift to the defendant Corporation.
Law on Burden of Proof:
12. Essentially, the terms and conditions of the contract between the parties would govern the entire contract and so would be the compensation that may flow from such terms.
Burden of proof under section 101 of the Indian Evidence Act lies on the person, who desires any Court Page 12 of 49 HC-NIC Page 12 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT to give judgment as to any legal right or liability dependent on the existence of the facts which he asserts and he himself must prove that those facts exist. The burden of proof as per section 102 of the Evidence Act lies on that person, who would fail, if no evidence at all were given on either side.
13. In civil matter, whenever it is necessary to prove any fact in order to render evidence or any other fact admissible, the burden of proof of that is on that person who wants to establish such facts.
14. Section 3 of the Evidence Act defines word "proved". Onus of proof is the duty to establish a case. It is the duty to adduce evidence. The party on whom onus of proving a fact exists needs to produce sufficient evidence and once done, then shifts this burden on other side to rebut the same. As the Supreme court held in the case of Anil Rishi vs. Gurbaksh Singh reported in AIR 2006 SC 1971. "Initial burden of proof would be on plaintiff in view of Section 101. The elementary rule is Section 101 is inflexible. In terms of section 102 initial onus is always on plaintiff and if he discharges that onus and makes out a case which entitles him to a relief, the onus shifts Page 13 of 49 HC-NIC Page 13 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT to the defendant to prove those circumstances, if any, which would disentitle the plaintiff to the same." It states "A fact is said to be proved when after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists."
15. As per the Privy Council in the case of Hames and another vs. Hinkson reported in AIR 1946 PC 156 "the strict meaning of the words 'onus probandi' is that if no evidence is given by the party on whom the burden is cast the issue must be found against him." 15.1 Phipson on Evidence (13th Edition, page 44, Para 4-03), observes: "The phrase, burden of proof, has three meanings(1) the persuasive burden, the burden of proof as a matter of law and pleading the burden of establishing a case, whether by preponderance of evidence or beyond a reasonable doubt, (also referred to as "legal burden") (2) the evidential burden, the burden of proof in the sense of adducing evidence and (3) the burden of establishing the admissibility of evidence. It would Page 14 of 49 HC-NIC Page 14 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT be apt to quote Halsbury, Column 17 page 11, at this stage:-
"There are at least two distinct senses in which burden of proof is used, and clarity over which sense is relevant at any given time is essential. The legal burden is the burden of proof which remains constant throughout a trial. This is the preferable view. The incidence of the burden on different issues may lie in different places, and issues may rise or fall according to the facts proved, but on the analysis of issue the legal burden will not change it is the burden of establishing the facts and contentions which will support a party's case. If at the conclusion of the trial he has failed to establish these to the appropriate standard, he will lose. The incidence of this burden is usually clear from the pleadings, it usually being incumbent upon the plaintiff to prove what he contends. The evidential burden, however, may shift from one party to another as the trial progresses according to the balance of evidence given at any particular stage; this burden rests upon the party who would fail if no evidence at all, or no other evidence, as the case may be, was adduced by either side."
15.2 The Apex Court in the case of Commissioner of Trade Tax, U.P. and another vs. Kajaria Ceramics Ltd., 2005(11) SCC 149 has held that "proof" means that "matter" from which the Court either believes the existence of fact or considers its existence so probable that a prudent man should act upon the supposition that it exists". Onus to prove a fact is on the person, who asserts it. Section 101 defines Page 15 of 49 HC-NIC Page 15 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT burden of proof and proceeds to state in positive manner as to the person on whom the burden of proof lies, whereas section 102 is couched in negative terms. Both of them lay down general prepositions, whereas sections 103 to 113(B) are exceptions to general rules".
Term "onus probandi" means that, if a fact has to be proved, the person whose interest it is to prove, should adduce some evidence, upon which the Court could find the fact. This also would not mean that all conceivable or available evidence are required to be called for. Thus the sum total of this discretion would be that the burden of proof lies on the party which substantially asserts the fact and not on the party which denies it. The affirmation is capable of admitting direct and simple proof. However, the negative is impossible to prove. The party, on which the onus lies to prove the facts on its failure to so do it, can never take advantage of weakness of adversary's case. The party succeeds or fails on its own strength.
16. In wake of discussion above it can be said in the Page 16 of 49 HC-NIC Page 16 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT matter on hands, burden was essentially on the plaintiff to prove existence of facts it had asserted and it was also necessary for it to prove those facts by adducing evidence, oral and documentary.
17. Firstly, the issue of breach of condition of supply of material requires adjudication predominantly because it is the case of the plaintiff Mandli that all throughout the supply of material needed to be made by the defendant Corporation, and the same has not been done as was otherwise contemplated under the contract.
Terms of contract:
18. Before further dweling into the rival claims, the terms of the contract which are relevant for deciding this matter would be necessary to be referred to at this stage. " It is trite that the terms of the contract can be express or implied. The conduct of the parties also would be relevant factor in the matter of construction of a contract. Interpretation of a contract is a matter to determine even if it gives rise to determination of question of law (Mcdermott International Inc. vs. Burn Standard Co.Ltd. And others (supra)) Page 17 of 49 HC-NIC Page 17 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT Tender was meant for construction of godown at Dashrat, District: Vadodara. Initially for the security deposit, the tenderer needed to pay to the tune of Rs.2,67,000/-. It mentions that in the event of any discrepancy, several documents forming the contract as one document, in the following order of precedence shall apply:-
(a) dimension and qualities
(i) drawings (ii) Schedule-B of the tender form.
(iii) Specification.
The contractor would not be permitted to take advantage by any apparent error or omission in drawings and specifications and the Engineer-in-Charge is permitted to make such corrections and interpretations as is necessary to fulfill the intent of plans and specifications.
18.1 The declaration form speaks of pledge of completing the work within the prescribed time limit. (1) the work was to be completed within 10 months reckoning from the date of order to commence the work. The general specifications of the materials also were part of this document, which included specification of cement, fine aggregates, course aggregates, water, Page 18 of 49 HC-NIC Page 18 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT cement mortar, bricks, brick bats, timber, mild steel, paints and general.
18.2 Heading General specifications specifies that all the material not specified in this specifications shall be conforming to relevant specification in PWD Handbook and I.S.S. as approved by the Engineer In-charge. All necessary tests as and when directed by the Engineer In-charge was necessary to be carried out as per I.S.S. requirement for the suitability of the material at the contractor's cost in the Government Engineering College Laboratory, which would be binding to the parties and the decision of the Engineer In-charge or his authorised agent regarding the quality of material is said to be final.
The additional instructions to the tenderer speaks of the payment terms where it is specified that rates quoted are for completed work and include all costs as follows:-
"3.Payments:- The Tenderer must understand clearly that the rates quoted are for completed work and include all costs due to labour scaffolding, plant supervisor, service work power royalties, and octrois etc and to include all extras cover the cost of night work if and when required and no claim for additional payments and the prices or rates quoted will be entertained and the tenderer will not be entitled subsequently to make any claim on the fraud of misrepresentations or on the ground Page 19 of 49 HC-NIC Page 19 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT that he was supplied with informations or given any person (Whether the member is the employee of public Works Department or not) as any failure on his part to obtain all necessary information for the purpose of making his tender and filling the several prices and rates therein shall not receive him from any risk on liabilities arising out of consequent upon the submission of tender."
"1. Rate of items in Schedule 'B' must be given in words and figures. Amount of each item must be also entered in col and grand total of the amount must be struck out by the tenderers.
xxx xxx xxx
xxx xxx xxx
xxx xxx xxx
4. Any person who submits a tender shall fill up the usual printed form stating at what percentage above or below the rates specified in Schedule B (memorandum showing items of work to be carried out) he is willing to undertake the work. Only one rate or such percentage on all the Estimated rates Scheduled rates shall be named. Tenders which propose any alteration in the works specified in the said form of invitation, to tender, or in the time allowed for carrying out the works, or which contain any other condition will be liable to rejection. No printed form of tender shall include a tender for more than one work. But if contractors wish to tender for two or more works they shall submit a separate tender for such. Tenders shall have the name and number of the work to which they refer written outside the envelope.
xxx xxx xxx xxx xxx xxx xxx xxx xxx
10. Under no circumstances shall any contractors be entitled to claim enhanced rates for any items in this contract.
Page 20 of 49 HC-NIC Page 20 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT xxx xxx xxx xxx xxx xxx
12. All corrections and additions or pasted slips should be initialed.
xxx xxx xxx
xxx xxx xxx
xxx xxx xxx
Clause 21. The contractor shall supply at his own cost all materials (except such special materials, if any, as may be in accordance with the contract, be supplied from the Public Works Department Stores). Plant, also appliances, implements, ladders, cordage tackle, scaffolding, and temporary works requisite or proper for the proper execution of the work, whether, in the original, altered or substituted from, and whether included in the specifications, or other documents forming part of the contract or referred in these conditions or not and which may be necessary for the purpose of satisfying or complying with requirements of the Engineer-in-charge as to any matter as to which under conditions or not and which may be necessary for the purpose of satisfying or complying with requirements of the Engineer-in-charge as to any matter as to which under these conditions he is entitled to be satisfied, or which he is entitled require together with carriage therefor, to and from the work. The contractor shall also supply without charge the requisite number of persons with means and materials necessary for the purpose of setting out works and counting, weighing and assisting in the measurement or examination at any time and from time to time of the work or the materials, Failing this the same may be provided by the Engineer-in-charge at the expense of the contractor and the expenses may be deducted from any money due to the contractor under the contract or from the security deposit or the proceeds of sale thereof, or of a sufficient position thereof." Page 21 of 49
HC-NIC Page 21 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT
19. This needs to be read with Schedule-A which "specifies that "No material will be supplied by the Corporation". This is a schedule showing the material to be supplied from the Corporation for works contracted ,and the rate at which they are to be charged for.
Schedule-B is the memorandum showing items of work to be carried out as per the statement that has been attached to it.
The dispute is raised with regard to Items No.3,4,4A,4B,5,6 and 9. The specifications given for such work, if are looked at, they are as follows:
Item No.3 is B.B. Masonry in cement mortar 1:6 including striking the joints for foundation and plinth.
Item No.4 is filling in foundation and plinth with yellow earth to be brought from outside.
Item No.4A speaks of filling the plinth with river sand brought from outside. It specifies that the sand shall be obtained from the approved river portion and shall be of good quality, free from earth, dust, clay and other organic impurities. The work shall be approved by the Engineer-in-charge. Page 22 of 49 HC-NIC Page 22 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT Item No.4B is filling in plinth with rubble stone soiling including filling the voids with sand.
It says Rubble stone should be of approved quality, quarry should be brought on site and stacked properly for measurements by filling boxes of standard size. The rate for this items include collection, stacking, watering and ramming of sand, including all separations required to complete the job to the entire satisfaction of Engineer-in-charge.
20. Collective reading of these clauses and specifications and, in particular, on perusal of Schedule-A of the contract, it is amply clear that the entire material was to be purchased by the tenderer, no material was to be supplied by the Corporation. Even where the Corporation would supply such material insisting on a particular quality, it is provided that the cost would be recovered from the plaintiff. The amount thus was to be paid to the contractor. Hence, it is amply made clear from the terms of the payment also that all rates quoted were for complete work and were inclusive of included all costs. The specification of each material which was to be used for the construction of the godown not only had been Page 23 of 49 HC-NIC Page 23 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT specified in no uncertain terms but, reiteratively, the scrutiny of Engineer In-charge at every juncture is provided, pointing at the only conclusion that the onus was of the contractor to supply the material and defendant Corporation was in no manner obliged to so do it.
Had it been the responsibility of the defendant to supply the material, such minute detailing of specification was hardly a necessity, even if it is assumed that scrutiny for overall supervision was a must in either case. We are not in agreement with the version put forth by the plaintiff that both the schedules are to be read disjunctively.
Different heads of claims:-
21. With this premise, each claim of the respondent plaintiff Mandli shall need to be examined hereinafter. Before addressing to rival claims under each different head reference is needed of the decision of the Apex Court where it has extensively considered various methods for computation of damages to the claimant under the contract law. In Mcdermott International Inc. vs. Burn Standard Co.Ltd. And others(supra), the Apex Court held that the method Page 24 of 49 HC-NIC Page 24 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT used for computation of damages will depend upon the facts and circumstances of each case. In the assessment the Court is to see the strict legal obligation and not expectation, howsoever, reasonable.
The Apex Court noticed different formulas.
"A. In the Hudson Formula, the head office overhead percentage is taken from the contract. Although Hudson Formula has received judicial support in many cases, it has been criticized principally because it adopts the head office overhead percentage from the contract as the factor for calculating the costs, and this may bear little or no relation to the actual head office costs of the contractor.".
B. Emden formulae:
In Emden's Building Contracts and practice, Emden Formula is stated in the following terms:-
"Using the Emden formulae, the head office overhead percentage is arrived at by dividing the total overhead cost and profit of the contractor's organization as a whole by the total turnover. This formula has an advantage of using contractor's actual head office and overhead and profit percentage rather than those contained in the contract. This formula has been widely applied and has received judicial support Page 25 of 49 HC-NIC Page 25 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT in a number of cases..."
C. Eichleay Formula:-
It was evolved in America and derives its name from a case heard by the Armed Services Board of Contract Appeals, Eichleay Corporation. This formula is used where it is not possible to prove law of opportunity and the claim is based on actual cost. It can be seen from the formula that the total head office overhead during the contract period is first determined by comparing the value of work carried out in the contract period for the project with the value of work carried out by the contractor as a whole for the contract period. A share of head office overheads for the contractor is allocated in the same ratio and expressed as a lump sum to the particular contract....."
The Apex Court held that "we need not delve deep in the matter as it is accepted position that different formulae can be applied in different circumstances and as the question as to whether the damages should be computed by taking recourse to the formulae, having regard to the facts and circumstances of a particular case, would eminently fall within the domain of the Arbitrator. The Apex Court also held Page 26 of 49 HC-NIC Page 26 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT that "sections 55 and 72 of the Indian Contract Act do not lay down the mode and manner as to how and in what manner the computation of damages or compensation has to be made. There is nothing in Indian Law to show that any of the formulae adopted in other countries is prohibited in law or the same would be inconsistent with the law prevailing in India. As computation depends on circumstances and methods to compute damage how the quantum thereof should be determined as a matter which would fall for the decision of the Arbitrator." Of course, these observations have been made in reference to the arbitration awarded, they are relevant for a limited purpose as far as examining the determination of the claim in the instant case.
(i) Claim of Extra Work:-
22. Taking firstly the issue of extra work, it was the case of the plaintiff Mandli that as per the terms and conditions of the contract, the plaintiff Mandli was required to execute the item as narrated in Schedule-B. However, for Items No.3,4A,4B,5,6 and 9, no material was to be provided. Only for labour component, these items were narrated. As per the verbal instructions and the directions of the Page 27 of 49 HC-NIC Page 27 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT defendant Corporation, the work has been executed item-wise by the plaintiff Mandli along with the material, and therefore, the total amount of entitlement of the respondent plaintiff Mandli is of Rs.18,94,546/-.
22.1 While discussing the general terms of the contract hereinbefore, we have in unequivocal terms held that there is a complete absence of obligation of the Corporation to supply any of material in the entire contract except where the plaintiff Mandli was unable to procure such material or when the defendant Corporation so feels in certain eventualities. Rate of such supplied material was in any case to be paid by the plaintiff.
22.2 As discussion is to be made in respect of these claims under different heads, we are of the firm opinion that the plaintiff Mandli was not entitled to any of the amount under the head of extra work as per the specified Items No.3,4A,4B,5,6 and 9. 22.3 We are also of the firm opinion that in absence of any dependable evidence to hold that Items No.3,4,4A,4B,5,6 and 9, as specified in Schedule-B of Page 28 of 49 HC-NIC Page 28 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT the agreement, were to be supplied by defendant Corporation, is simply not acceptable. While considering this issue of supply of such material, while interpreting the written document, the intention of the parties needs to be regarded and that gets culled out emphatically from the documents on record as discussed hereinabove, and therefore, the claim of supply of material towards aforementioned items in Schedule-B is in no way sustainable.
(ii) Delay in handing over site and claim of overheads etc.:-
23. With regard to the delay in handing over the site and line out etc. it is the case of the plaintiff Mandli that mutual, bilateral, reciprocal and contractual obligations required of defendant Corporation to perform its part of contractual obligations, but it did not provide the site and the line outs within the stipulated period. It is also the say of the plaintiff Mandli that timely instructions were not issued along with detailed drawings and the sites also were not handed over. Due to the delay in Page 29 of 49 HC-NIC Page 29 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT carrying out its part of the obligations, the same has caused lots of hardship as continuity of the work in progress also has been hampered thereof. It is the say of the plaintiff Mandli that the work which was to be completed on or before 25.2.1989, could be completed only by 18.8.1989. The extension also had been granted. A registered notice dated 22.3.1990 was served upon the defendant Corporation demanding various amounts under different heads, which included the claim on account of overhead, overstay and unutilization of labour etc.
24. We notice that the trial Court, while deciding issue No.1(A) being the issue whether the defendant had committed breach of condition of the contract, noted that "the documents which are most relevant and important for the adjudication of the dispute between the parties are not produced by the defendant, though the notice for production of the same is served to them. Hence, the adverse inference is to be drawn against the defendant. Considering the submissions advanced by the parties and documents produced on record, it clearly suggests that the delay was caused due to the breaches committed on the part of the Page 30 of 49 HC-NIC Page 30 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT defendant and the delay was solely attributed on the part of the defendant. Moreover, the defendants have not produced any evidence to show that the delay was caused on account of the plaintiff and therefore, the evidence adduced by the plaintiff has not been contradicted by the defendant, and therefore, I do not agree with the submissions advanced by the learned advocate on behalf of the defendants. Hence I decide the issue No.1(A) in affirmative accordingly." 24.1 This order has not been challenged before this Court at any point of time by the plaintiff, and therefore, it can be said that the findings of the learned Judge are strictly not in consonance with the record.
24.2 Assuming that the defendant Corporation was already in receipt of the notice, mere non-production of documents on the part of the defendant Corporation would not ipso facto prove the case of the plaintiff Mandli as the onus is essentially on the plaintiff Mandli to discharge its burden of proving its case.
Without endorsing to the reasonings given by the learned Presiding Officer, its conclusion we endorse on appreciating independently the evidence of the Page 31 of 49 HC-NIC Page 31 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT plaintiff Mandli on this major claim. The only person, who has been examined for and on behalf of the respondent plaintiff Mandli is the office bearer of Mandali Shri Harishbhai Ravjibhai Patel, who according to the plaintiff from the beginning till the end, had been associated with this work. It is his say that the work order was issued on 26.5.1988 and the work was to be completed by 25.2.1989 within nine months and the total work completed was to the tune Rs.66,58,980/-. It is his say that from the beginning the delay was on account of defendant Corporation not having performed its part of contract by not providing necessary design, work drawings, instructions and decisions of the sites and line outs which were to be given at a time and not in piecemeal. It was virtually impossible, according to the plaintiff Mandli, to do progress in the work as continuity was completely hampered on account of such non-action on the part of the defendant Corporation. Moreover, the price rise also had affected because of such delay and laches, so much so that the work of acquisition of land where godown was to be constructed was also not as yet completed. Approach road was not provided, and therefore, during the monsoon season, no work could be Page 32 of 49 HC-NIC Page 32 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT done by them. While the work was in progress, the defendant Corporation had given extra items and excess quantity of work, due to which the work was delayed and not completed in time.
Moreover, every month the measurement of the work was to be carried out and bill and the payment thereof was not made by the defendant Corporation as per the contract, for not having so done it, their work had been affected. It is also further his say that in the last godown, the line out was water logged. No electricity connection was given. It was his say that 25% of the rate of the material had enhanced from the date of signing of the contract on account of such delay, and therefore, also that amount of Rs.8,57,750/- is required to be obtained from the Corporation.
24.3 In the cross-examination, this witness has not been dislodged from the version that he had given in the examination-in-chief. He also has further reiterated that periodical communications also have been addressed to the Corporation and, at no point of time, they had replied to the same nor had they performed their part of the contract as was stipulated Page 33 of 49 HC-NIC Page 33 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT under the contract.
24.4 It can be noticed from the documentary evidence which has been adduced where a request is made repeatedly by the plaintiff Mandli to the defendant Corporation for giving line out with a further request to give the payment for an extra item of digging godown No.3 more than the depth provided in the specification. Reference is also made of the line out of the last godown being given in January, 1989. Such communication dated 20.6.1989 is suggestive also of water logging of the site. Request is made for making an additional payment for the price rise. There was a further demand made for making use of sand at the instance of supervisor. With regard to anti-termite treatment also the intimation was given. While seeking the extension of time limit by communication dated 27.2.1989, the reason putforth is that while providing the line out of last two godowns, much time has been consumed by the Corporation.
While passing the order of giving extension, it has been recognized by the defendant Corporation that there was a kachchha road which had hampered the progress of work. The approach road also had mud Page 34 of 49 HC-NIC Page 34 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT resulting into discontinuation of work. Such defects at the site were personally experienced by the concerned officer who had deemed it fit to extend the time limit of two months instead of 4 months on 30.3.1989.
Once again an extension had been sought on 24.4.1989 of three months since no electric connection was provided in time. The endorsement is examined and put up by the Executive Engineer. The order permits such extension and the reasons noted include the issue of water logging in the line out of two godowns. The outer plaster and the colour work were also held to be causes for slow work, and therefore, the time limit had been extended upto 18.8.1989.
24.5 This entire correspondence and the orders passed periodically acceding to the request of the plaintiff Mandli by the defendant Corporation are clear indications of the delay in executing the work which was essentially due to the factors attributable directly to the defendant Corporation and when it had failed to perform its part of the contractual obligations within the stipulated time period, the claim of the plaintiff Mandli for such delay requires sustainability.
Page 35 of 49 HC-NIC Page 35 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT 24.6 As mentioned hereinabove, the oral evidence is unequivocally substantiated by the documentary evidence. This Court is not unmindful of the evidence adduced by witness Harishbhai in cross-examination, who had admitted of having gone through the terms and conditions of the tender and the scheduled time specified in the work order is of nine months. The stages of the work provided vis-a-vis the time taken by the plaintiff at each stage was also admitted by the witness where he had agreed on total time frame given in the contract. That, however, in no manner would lead this Court to accept the contention of the defendant Corporation that the work was delayed by the plaintiff Mandli and only on account of the sympathetic approach adopted by defendant Corporation, the same was continued.
24.7 In the case of Food Corporation of India vs. M/s. A.M.Ahmed and Co. and Anr.(supra), Arbitrator on the ground of delay in execution of contract due to conduct of FCI had held Corporation liable for consequences of delay, namely, increase in statutory wages, it allowed escalation though no escalation Page 36 of 49 HC-NIC Page 36 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT clause was present. High Court confirmed this. The Apex Court did not interfere except in the award of interest which was reduced to 9% as during the pendency of Appeal, FCI was asked to deposit 50% of the amount. Thus the claim of the plaintiff Mandli on account of over-head, over-stay and unutilization of the labour etc. for the prolonged period after 25.2.1989 till 18.8.1989 cannot be said to be based on no evidence. Claim No.6, therefore is acceptable to the tune of Rs.8,67,046/-.
25. From the record, we notice that the application was moved by the plaintiff Mandli for production of the document vide Exh.18 for the purpose of adjudication of disputes between the parties on the ground that the certified copy of the same were not available with the plaintiff Mandli and notice for production of original documents was already served by the plaintiff Mandli and yet, they were not produced by the defendant Corporation. The list consists of 14 documents in total. At the same time, we notice that the trial Court rejected such an application on the ground that the suit was of the year 1990 and after framing of issues also, various opportunities were Page 37 of 49 HC-NIC Page 37 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT made available to the plaintiff Mandli. However, the day on which the matter was fixed for recordance of evidence, such application was given which was nothing,but, an attempt to further delay the proceedings and on such ground as also on the ground that some of the documents were already in possession of the plaintiff Mandli, the Court rejected such a request.
(iii) Issue of price rise:-
26. With regard to the price rise in the labour
material and petroleum price due to the prolonged
period, all the materials as discussed hereinabove were to be supplied by the plaintiff Mandli. The total contractual work was to the tune of Rs.66,75,000/- as on 4.4.1998. All specifications of 19 items were provided and plaintiff had agreed to execute the work specified in the memorandum at 25% below the estimated rates entered in Schedule-B. However, whatever the price rise in labour material and petroleum during the time when the contract was delayed, the plaintiff Mandli would be entitled to get the claim made under this head. However, since the claim of Rs.8,57,750/- (Rupees Eight lakh fifty seven thousand seven hundred Page 38 of 49 HC-NIC Page 38 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT and fifty only) is found to be on higher side, keeping in mind the documentary evidence and the period of delay, in our opinion, the grant of the lumpsum amount of Rs.4,50,000/- (Rupees Four Lakh Fifty Thousand only) would be justifiable.
(iv) Claim of Anti-termite treatment:-
27. With regard to the claim No.4 of anti-termite treatment, it is the say of the plaintiff Mandli that as per Schedule-B Item No.19, the anti-termite treatment in foundation, plinth and superstructure was to be done. The operative part suggests that the bottom surface and the sides of the excavated foundation trenches were to be treated and further the treatment was to be given after earth filling was done. The third stage treatment was to be given in the external parameter of the building. The specification also provided that the measurement shall be provided in the plinth area and the superstructure in two stages.
One of the claims of the plaintiff Mandli was that it be paid for the measurement of plinth area for one stage. However, the foundation trenches and external parameters have not been paid. The witness Page 39 of 49 HC-NIC Page 39 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT also deposed about the treatment carried out in the foundation trenches carried out as well as the external parameters and the payment not made to the plaintiff Mandli. Accordingly, for the second stage of plinth area, foundation trenches and external parameters. Request was made respectively for payment of Rs.95,536/- for plinth area and Rs.29,602/- for the foundation trenches and Rs.10,765/- for external parameters respectively at the rate of Rs.11.25/- sq.meters. It was the say of the defendant that Schedule-B, Item No.19 referred to providing of anti- termite treatment in foundation plinth and superstructure. Specifications also laid down the contractual obligation of providing anti-termite treatment and at each stage complete payment has been made under Item No.19 which was never disputed by the plaintiff Mandli except in the notice given prior to the date of filing of the suit.
According to the defendant Corporation, the interpretation is against the liberal meaning of such item. At Item No.19 in the specification it is provided that at bottom surface and the sides of the excavated foundation trenches after the earth filling is done upto the plinth level and before floor Page 40 of 49 HC-NIC Page 40 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT concrete is laid, the entire floor was to be treated with chemical emulsion in the external parameter of the building upto depth of 30 cms, which was also to be treated. Walls of the superstructure were also to be spreaded with emulsion and all window frames were needed to be spreaded with emulsion before painting. 27.1 As rightly pointed out by the defendant Corporation, the anti-termite treatment in foundation plinth and superstructure are provided specifically. The total amount of quantity to be applied at the bottom surface and the sides of the excavated foundation trenches is also specified. After earth filling was done upto the plinth level and before the floor concrete was laid, the entire floor was also to be treated. The external parameter of the building upto the depth of 30 cms was also to be treated. It is the say on the part of the defendant Corporation that as per the measurement that was taken, this amount has already been paid. In the cross-examination, the plaintiff Mandli has admitted that whatever work had been carried out by it as per the tender agreement, the same had been measured in the measurement book. Such evidence, at no point of time, had been challenged by the plaintiff Mandli and when the Page 41 of 49 HC-NIC Page 41 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT payment also was issued, it had raised no dispute. Considering the specification in Item No.19 and the details of measurements given in second and third stage respectively, for second stage of plinth area and foundation trenches and extra parameter, it is not possible to accept the version of the plaintiff Mandli that the work of such magnitude was carried out for anti-termite treatment and yet, the same was neither noted in the measurement book nor was any challenge made at the time of payment. One can appreciate that it was an additional or extra work, which the plaintiff Mandli was asked to perform or was compelled to carry out. For the reasons best known to the defendant Corporation, production of the evidence was refused of the measurement book. Contrary to the law here when the work was carried out as per the specification and when all the measurements noted in the measurement book had been already paid to the plaintiff Mandli, the sum of this amount of Rs.1,35,903/- also deserves no sustainance.
(v) Claim for fixing of Sarbandi:-
28. In respect of fixing of Sarbandi Claim No.3, it Page 42 of 49 HC-NIC Page 42 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT was the say of the plaintiff Mandli that they have been paid less Sarbandi on the portion of gabble. It is the say of the plaintiff Mandli that the quantity actually executed was 649 rm. at the rate of Rs.25/- per rm. The payment had been tendered amounting to Rs.16,225/-, which has been asked for. In the written statement, it is the say of the defendant Corporation that whatever work was executed by the plaintiff Mandli, the same has been recorded and measured in measurement book. Such measurement, at no point of time, has been disputed. Therefore, the claim putforth, after the payment was made in respect of less measurement of Sarbandi work, is unsustainable. 28.1 In the oral version of the plaintiff Mandli, the same had been reported in the cross-examination. He agreed in the cross-examination that for such less amount of Rs.25/- per rm, no dispute was raised. No material is produced to sustain this claim of work of Sarbandi offered to have not been measured in the measurement book and, therefore, the claim based on no evidence would have no sustainability.
(vi) Claim of interest on security deposit:-
29. This claim is on account of amount of security Page 43 of 49 HC-NIC Page 43 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT deposit not having been fixed deposited. It was the say of the plaintiff Mandli in the plaint that the same was to be paid in the form of FDR or NSC or in the form of bank guarantee. The plaintiff Mandli paid initially the sum of Rs.4,00,000/- through cheque and thereafter, amount of Rs.2,67,000/- was also paid by way of cheque from the running account bills. The contract made it incumbent for the defendant Corporation to convert such amount of security deposit into interest bearing security deposit. However, on account of failure on the part of the defendant Corporation to convert such amount into fixed deposit receipt, the loss of Rs.89,541/- is made. It was also the request that the security deposit of Rs.6,67,571/- was to be released by the defendant Corporation on 26.5.1989 three months after the stipulated date of completion, and therefore, also the total sum of Rs.7,57,112/- has been asked for.
29.1 In the written statement, it has been contended that the defendant Corporation had given security deposit by way of cheque dated 1.12.1989 of Rs.4,00,000/- and Rs.2,67,571/- by way of two cheques of Rs.1,50,000/- and Rs.1,17,571/-, both dated Page 44 of 49 HC-NIC Page 44 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT 5.12.1989. Thus, the entire security deposit of Rs.6,67,571/-, according to the defendant Corporation, has been already paid. It is contended that the Corporation was ready to convert the amount paid in cash to interest bearing security deposit, however, such request was to come from the plaintiff Mandli and, therefore, any loss if has been incurred for want of request, the same is to be borne by the defendant Corporation.
29.2 According to the plaintiff Mandli, on looking at the examination-in-chief and cross- examination, it appears that the work was otherwise to be completed by 25.2.1989, which was not feasible on account of delay as was attributed to the act of the defendant Corporation, and therefore, the security deposits which plaintiff was to get by 25.5.1989, were given on 1.12.1989 and 5.12.1989 respectively.
If one looks at the time limit from the actual completion of work on 18.8.1989 the security deposit as per the tender agreement would have been returned by 18.11.1989, and therefore, only amount of interest that would be available to the plaintiff would be from 18.11.1989 to 1.12.1989, at the most. However, having Page 45 of 49 HC-NIC Page 45 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT held that the delay was attributable to the defendant Corporation, in handing over the site drawings, line out etc. for which there is no repetition which is necessary at this stage, the entitlement of the plaintiff will have to be referred back to the date of 25.2.1989, when in ordinary circumstances, the contract would have been completed. Therefore, the entitlement of the plaintiff to receive the security deposit back shall have to be considered from 15.5.1989 and not from 18.8.1989.
29.3 Corollary to this is the request to be made for converting the amount towards the fixed deposit. It is the word against the word and we deem it appropriate to grant the amount of interest for the late payment of the deposit at the rate of 12% from 25.5.1989 to 1.12.1989 on the total sum of Rs.6,67,571/-.
(vii) Claim of Interest:-
30. This brings us to the claim of interest of the plaintiff Mandli from 4.12.1989 till 4.5.1990 on the total amount of Rs.6,67,571/- from the Corporation, which allegedly withheld illegally the capital of plaintiff Mandli. It is urged that at the rate of 12% Page 46 of 49 HC-NIC Page 46 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT per annum on the sum of Rs.45,99,731/- from the date of payment i.e. from 4.12.1989 till the date of filing of the suit, the plaintiff Mandli is entitled for the amount of interest, being the total sum of Rs.2,23,811/-.
There does not arise any question of granting interest on the total claim of Rs.45,99,731/- made by the plaintiff Mandli in the notice dated 4.12.1989 as this Court has not found all the claims of the plaintiff Mandli sustainable. However, the amount which is found acceptable towards different claims of the plaintiff Mandli, the interest shall have to be paid from the date of the suit at the rate of 12%. The power, to award interest for pre-litigation stage, pendente lite and for post litigation period is well recognized. As also held in the case of Mcdermott International Inc. vs. Burn Standard Co.Ltd. And others(supra) whether the interest would be paid on whole or part of the amount or whether it should be awarded in pre-litigation stage would depend on facts and circumstances of each case.
30.1 Order 21 Rule 1 of Code of Civil Procedure is pressed into service by the defendant Corporation to question the payment of interest from the period Page 47 of 49 HC-NIC Page 47 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT where no time limit was adhered to by the trial Court, we do not sustain such challenge on the part of the defendant Corporation in absence of reason that this was intentional or deliberate.
Conclusion:-
31. Resultantly, this appeal is allowed partly.
Judgment and decree of the trial Court is upheld with following modifications. Claims No.(i),(iv) and
(v)under different heads of claims are not held acceptable and stand rejected. Claim (ii) delay in handing over site and claim of overheads etc., claim (iii) issue of price rise and claim (vi) interest on Security Deposit and claim (vii) claim of interest, are allowed in part to the extent that the plaintiff Mandli is entitled to Rs.8,67,046/- under Claim (ii), Rs.4,50,000/- under Claim (iii) and Rs.41,920/- under Claim (iv) respectively; and thus, the plaintiff Mandli is entitled to total amount of Rs.13,58,966/- from the Defendant Corporation. So far as the claim
(vii) is concerned, the Defendant corporation shall pay the total amount under these claims with 12% interest thereon to the plaintiff within twelve weeks of the receipt of copy of this order. Appeal stands disposed of in above terms.
Page 48 of 49 HC-NIC Page 48 of 49 Created On Wed Oct 21 02:54:25 IST 2015 C/FA/2988/2013 CAV JUDGMENT (AKIL KURESHI, J.) (MS SONIA GOKANI, J.) SUDHIR Page 49 of 49 HC-NIC Page 49 of 49 Created On Wed Oct 21 02:54:25 IST 2015