Jharkhand High Court
Bharat Coking Coal Limited vs M/S. At-Libra Bpl (Jv) on 8 August, 2024
IN THE HIGH COURT OF JHARKHAND AT RANCHI
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Commercial Appeal No. 18 of 2023
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1. Bharat Coking Coal Limited, a Company incorporated under the Companies Act, through its Chairman-cum-Managing Director, having its HQ at Koyla Bhawan, P.O.- Koyla Nagar, P.S. Saraidhela, District- Dhanbad, PIN 826005 (Jharkhand) also through its HOD (Legal) Sri Ved Prakash aged about 57 years, son of Late Radha Krishna Prasad, residing at Quarter No. D/14, Sector VIII Koyla Nagar Township P.O.- BCCL Township P.S.- Saraidhela District- Dhanbad (Jharkhand) who is also representing other appellants herein.
2. Director (Technical), Operation, Bharat Coking Coal Limited, Koyla Bhawan, P.O.- Koyla Nagar, P.S.- Saraidhela, District - Dhanbad, PIN 826005 (Jharkhand)
3. General Manager, Contact Management Cell, Bharat Coking Coal Limited, Koyla Bhawan, P.O. -Koyla Nagar, P.S.- Saraidhela, District Dhanbad, PIN 826005 (Jharkhand)
4. General Manager, Bastascolla Area, Bharat Coking Coal Limited, P.O. - Dhansar, P.S.- Jahria, District Dhanbad, PIN 828106 (Jharkhand)
5. Project Officer/Engineer Incharge, GOCP/KOCP, Kuiya Colliery, Bastacola Area, Bharat Coking Coal Limited, P.O.- Dhansar, P.S. Jharia, District- Dhanbad, PIN 828106 (Jharkhand) ... ... Defendants/ Appellants Versus M/s. AT-Libra BPL (JV), C/o. Libra Hyundai, K. Bank More, Dhanbad, Jharkhand represented through its Working Partner Sh. Rahul Singh, S/o Shri Sheo Narain Singh, aged about 45 years, by Category- General, R/o Jharia, P.O. and P.S.- Jharia, District- Dhanbad (Jharkhand) .. ... Plaintiff/Respondent CORAM: HON'BLE THE ACTING CHIEF JUSTICE HON'BLE MR. JUSTICE ARUN KUMAR RAI .....
For the Appellants : Mr. Amit Kr. Das, Advocate Mr. S.B. Upadhyay, Sr. Advocate Mr. Parijat Kishore, Advocate Mr. Abhishek Goel, Advocate For the Respondent : Mr. M.A. Niyazi, Advocate Mr. Shailesh Kr. Singh, Advocate Mr. Pankaj Prasad, Advocate .....
1 Commercial Appeal No. 18 of 2023
C.A.V. on 01.07.2024 Pronounced on 08/08/2024
Per Sujit Narayan Prasad, A.C.J.:
1. The instant appeal under section 13 of the Commercial Courts, Act is directed against the order/judgment dated 08.05.2023 passed by the District Judge-III-cum-Presiding Officer, Commercial Court No. III, Dhanbad, in Original Suit No. 09 of 2019, whereby and whereunder, the suit was decreed in favour of plaintiff/respondent with following directions:
"The suit is decreed without cost, both the parties shall bear their own cost. It is declared that the contract awarded to the plaintiff vide work order No. BCCL/IX/GM/PLNG/AT-LIBRA/H- HEMM/NC/WO/12/673, dated 08.02.2012 was terminated midway by the defendants illegally and unjustifiably; and It is further declared that the notice of proposed action against the plaintiff communicated vide letter bearing ref. no. BCCL/BA- IX/KOCP/64, dated 30.03.2018 signed on 02.04.2018 is void, illegal and invalid.
The defendants are directed to pay to the plaintiffs following amounts :-
(a) A sum of Rs. Rs.4,20,02,320/- as refund of bank guarantee and retention money combined; and
(b) A sum of Rs.1,80,40,014/- as reimbursement of difference in HPC 08th May 2023 Page No.-93 of 94 In the court of District Judge-cum-
Presiding Officer Commercial Court No.-III, Dhanbad Original Suit No.-09/2019 CNR No. - JHDH01-002164-2019 (U/s 26 C.P.C. r/w Sec. 6 & 12 Commercial Court Act) payment; and
(c) A sum of Rs.2,63,19,879/- illegally withheld money ; and
(d) A sum Rs. 2,43,07,069/- reimbursement of service tax; and
(e) A sum of Rs. Rs.4,98,45,047/- on account of correct Specific Gravity/Stripping Ratio; and
(f) A sum of Rs.1,93,83,855/- for work done in February 2018 and further sum of Rs. 1,34,23,451/- for work done in March, 2018; and
(g) A sum of Rs.13,41,16,526/- as opportunity cost ; and
(h) A sum of Rs.13,46,06,556.43/- as cost incurred in EMI etc.
(i) Interest on the amount as above on total monetary claim @ 10.5% p.a. pendent lite and further till date of realization of the said amount."
2. The facts leading to filing the aforesaid original suit being Original Suit No. 09 of 2019 which requires to be enumerated herein, reads as under:
The plaintiff (M/s. AT-Libra BPL (JV), respondent herein) has brought the suit being Original Suit No. 09 of 2019 for declaration, permanent injunction and recovery of money initially valued at Rs.19,33,71,635 and later by amendment it was enhanced to 2 Commercial Appeal No. 18 of 2023 Rs.46,86,08,851/- u/s 26 of Civil Procedure Code with Sections 6 & 12 of Commercial Court Act 2015.
The plaintiff is a joint venture partnership firm and engaged in the business of mining and coal /Over Burden and transport excavation in various parts of the country.
Notice Inviting Tender (NIT) being Tender No. BCCL/ GM (CMC)/F-HEMM-OS/2010/3844 was issued by the defendant no.3 (appellant herein) for hiring of HEMM and for removal of OB, extraction and transportation of coal from IV (TOP), IV (BOT), III (TOP) and III (BOT) seems of Golukdih NC Project (Northern Sector) of GOCP/KOCP of Bastacolla for and estimated cost of Rs. 282 crores.
In pursuance of said NIT the plaintiff/respondent had participated in the tender process and was declared successful bidder. On 07.11.2011, a Letter of Acceptance (LOA) was issued by the defendant no.1 for removal of 267 lakh cum OB, re-handling of 2.00 lakh cum loose OB and for extraction and transportation of 112.85 MT of coal from IV(Top), IV (Bot), III(Top) and III (Bot) seams of Golukdih NC project (Northern sector) of GOCP/KOCP of Bastacolla area with financial involvement of Rs. 252,01,39,290/- (Rs. Two Hundred Fifty-Two Crore One Lakh Thirty-Nine Thousand Two Hundred Ninety) only inclusive of all taxes and levies but exclusive of service tax at the diesel base price of Rs. 39.61 per liter.
Pursuant to such issuance of LOA on 07.11.2011, the plaintiff had duly furnished performance security/security Deposit of Rs.2,10,01,161/- from 28.11.2011 till 29.09.2018 which was a per- condition as mentioned in the LOA and on 08.02.2012 the work order was issued to the plaintiff by the defendant no. 4, which was for a value of Rs.252,01,39,290/- (Rs. Two Hundred Fifty-Two Crore One Lakh Thirty-Nine Thousand Two Hundred Ninety) inclusive of all taxes and levies but exclusive of service tax, at the diesel base price of Rs. 39.61/ Ltr., in accordance with the terms and conditions given in the notice inviting tender and in the bid documents.
3 Commercial Appeal No. 18 of 2023 The plaintiff thereafter initiated execution of work as per the terms and conditions mentioned in the work order. The tender was for a period of 72 months and was to expire on January 31,2018. On 02.04.2014 an amended work order was issued for re- appropriation/reallocation of quantities of coal and total value of work was reduced. Further, the plaintiff has informed the defendants that hindrance hours till January 2018 was 16658 (equivalent to 694 days) and as such it was requested to grant extension of the period. The defendant no.5 replied to the said letter vide reply date 17.01.2018 and granted additional 625 days of work and as such the new completion dated of contract was fixed on 25.10.2019.
The plaintiff thereafter, vide letter dated 31.01.2018 requested for early reimbursement of service Tax amount to the tune of Rs.58,37,603/-. Although, such demand was raised earlier also but same was not paid to the plaintiff. By a letter dated 19.02.2018 request was made for acceptance of amendment in the quantity of over burden to change the scope of work. The quantity of OB was reduced by 73.09 lakh to match the near estimation of stripping ratio in the Balance period of the contract. The plaintiff vide letter dated 23.02.2018 accepted such proposed amendment.
Thereafter, the CBI registered a criminal case bearing no.RC1(A)/2019-D, against the plaintiff and also some of the defendants on basis of some complaint by unknown about over reporting and excess payment to the tune of Rs. 22 Crore to the contractor on count of removal of OB. However, after investigation the C.B.I found that contractor is not guilty and recorded the finding that the "contractor was working at the rate much below the rate as prescribed in the contract. Thus, as per the NIT/ Contract, the contractor was not causing loss to the BCCL."
3. The case of the plaintiff is that the demands raised by the plaintiff were never met. The demands were as follows: (i) Payment/Reimbursement of difference of payment due to GPC (ii) Payment/Reimbursement of 4 Commercial Appeal No. 18 of 2023 service tax (iii) Determination of coal density from competent institution authority etc.
4. It is also the case of the plaintiff that for some ulterior motive and to obviate their liability some of the officials of the vigilance department of defendant no. 1 company in connivance with officials of CMPDIL and CBI caused to get the re-measurement of the excavated materials- coal, OB in utter violation of the contractual terms and condition.
The further case of the plaintiff is that another dispute arose in respect of conversion of coal quantity from tone to cubic meter and conversation factor from tone to cubic meter depends on specific gravity (Density) of coal. Regarding methodology of reserve calculation of coal by the CMPDIL, the project report was prepared on the basis of certain ash value to determine the specific gravity based on which Sp. gr. Should be 1.68 and thus conversion factor 1/1.68=0.59. It was therefore protested by the plaintiff. After about two years defendant changed Sp. gr. 1.33 to 1.55/1.56 this was again on the lower side, plaintiff protested again on the ground that correct volume of OB excavated cannot be arrived at unless Sp. gr. is correctly evaluated.
The further case of plaintiff is that against the actual production of coal as 95.23 Lte quantity of OB as per correct stripping ratio the work order should have been 95.23 x 2.38 = 226.65. The actual OB protection is 151,97,312 which is far less than the standard OB.
5. On 30.03.2018, the defendant no.5 issued show cause notice to the plaintiff for termination of the work and the defendant no. 5 further threatened to forfeit the security deposit due to alleged default in work under clause 9.5 of the general terms and conditions of Tender Document for making default in proceeding with work. In the meantime, the plaintiff issued a letter to the HOS, Testing Cell, CIMFER, Dhanbad for testing of samples of coal collected from the patch. The plaintiff had repeatedly asked the office to conduct a density test of the coal, which, according to the plaintiff was of low density.
5 Commercial Appeal No. 18 of 2023 But the defendant nos. 4 & 5 were never concerned with such issue. The report was received by the plaintiff on 04.05.2018. Seeing no other alternative, the plaintiff through its Advocate issued a demand for justice notice dated 12.10.2018 to the defendant no. 3 but same was also not responded.
6. The further case of plaintiff is that the defendants issued a notice dated 30.03.2018/02.04.2018 alleging therein that work was stopped suddenly on 01.02.2018 after obtaining the provisional period extension of the contract and explanation was called for from the plaintiff. The plaintiff replied to the said notice vide its reply dated 10.04.2018 wherein it was stated that the coal production performance post hindrance was more than 100% before 31.01.2018 itself. In the said reply the plaintiff also lodged its protest on extension of period only for 625 days instead of 694 days.
Further, the plaintiff came to know that the defendant no.4 has awarded a similar nature of work to other company with super imposed boundary on the western side of the area allotted to the plaintiff as shown in the plan as attached to the NIT. The said work order dated 18.06.2018 has been awarded to a Hyderabad based company namely, M/s BGR Mining and Infra Limited. The defendant no. 4, without waiting for the plaintiff's tenure to end and without settling it's dues, a part of its area has been awarded to a new agency.
7. The plaintiff made a representation before the General Manager of Bastacolla area of BCCL with copy to all concerned vide letter no. AT- LBL/517 dated 06.10.2018 and further another representation was made before the CMD BCCL vide ref.: AT-LBPL/519 dated 05.11.2018 giving previous reference but the defendant remained silent without giving any explanation.
8. It is the case of the plaintiff that due to wrongful actions of the defendants, those machines and equipment remained idle for the period from April, 2018 to October, 2019 and the plaintiff also incurred 6 Commercial Appeal No. 18 of 2023 establishment cost of worth Rs.64,14,134/- as depreciation cost on building and structures, security personnel, and dismantling and other misc. cost incurred in winding up of the infrastructure setup. The NC Patch Kuiya as per the above NIT was completed by the plaintiff as per schedule on 31.01.2018 and BG was extended from time to time as per described by the defendant. The BG was extended on 18.05.2018 and the same was valid till 29.05.2019 but, the plaintiff found from his bank statement that the defendant illegally encashed the entire BG amount of Rs. 2,10,01,161/- without any justification.
9. On the basis of aforesaid facts and premises, the plaintiff claimed following reliefs by way of filing Original Suit No.09 of 2019 in the Commercial Court which are as follows:
(a) A decree of declaration that the present contract awarded to the plaintiff vide work order No. BCCL/IX/GM/PLNG/AT-
LIBRA/H-HEMM/NC/WO/12/673, dated 08.02.2012 was terminated midway by the defendants illegally and unjustifiably.
(b) A decree of further declaration that the notice of proposed action against the plaintiff communicated vide letter bearing ref. no. BCCL/BA-IX/KOCP/64, dated 30.03.2018 signed on 02.04.2018 is void, illegal and invalid.
(d) A decree of direction to the defendants to pay a sum of Rs.
4,20,02,320/- (Rs. Four Crore Teenty Lakh Two Thousand Three Hundred Twenty) Only as refund of performance security (BG No.19/188) and retention money to the plaintiff along with interest of Rs.66,31,541/- (Sixty-Six Lakhs Thirty-One Thousand Five Hundred Forty-One only) till March 2021 and thereafter till realization of the same.
(e) A decree of direction to the defendants to pay a sum of Rs.
1,80,40,014/- (Rs. One Crore Eighty Lakhs Forty Thousand and Fourteen as differential amount paid by the plaintiff in compliance of HPC wages policy of the plaintiff.
7 Commercial Appeal No. 18 of 2023
(f) A decree of direction to the defendants to pay a sum of Rs.2,63,19,879/- (Rs. Two Crore Sixty-Three Lakh Nineteen Thousand Eight Hundred Seventy-Nine) the amount which has been illegally withheld by the defendants to the plaintiff.
(g) A decree of direction to the defendants to reimburse/make payment of Rs.2,43,07,069/- (Rs. Two Crore Forty-Three Lakh Seven Thousand Sixty-Nine) to the plaintiff as service tax paid by the plaintiff for period of December 2016 to June 2017.
(h) A decree of direction to the defendant to make payment of Rs. 4,98,45,047.88/- (Rs. Four Crore Ninety-Eight Lakhs Forty-Five Thousand Forty-Seven and Eighty-Eight Paise) payable on the basis of correct specific gravity coal density on the basis of report by CIMFR, Dhanbad to the plaintiff.
(I) A decree of direction to the defendant to make payment of work done for the month of February 2018 a sum of Rs. 1,93,83,855/- (Rs. One Crore Ninety-Three Lakhs Eighty-Three Thousand Eihgt Hundred Fifty-Five) to the plaintiff.
(j) A decree of direction to the defendant to make payment of Rs. 1,34,73,451/- (Rs. One Crore Thirty-Four Lakh Seventy-Three Thousand Four Hundred Fifty-One) for the work done of March 2018 but bill not settled to the plaintiff.
(j) (a) A decree of direction to the defendants to pay a sum of Rs.
13,41,16,526/- as the opportunity cost calculated @ 15% as more fully detailed in schedule "A" of the plaint".
(j) (b) A decree of direction to the defendants to pay a sum of Rs.
64,14,114/- to the plaintiff as establishment cost from 24.03.2018 till vacation of workshop and other establishment kept illegally by defendants."
(j) (c) A decree of direction to the defendants to pay as sum of Rs.
13,46,06,546.43/- to the plaintiff for the loss sustained on payment of equated monthly installment (EMI) towards 8 Commercial Appeal No. 18 of 2023 loan taken from various financial institutions by the plaintiff."
(j) (d) A decree of direction to the defendants to pay a sum of Rs.
66,31,541 as interest on Bank Guarantee illegally by the defendants."
(k) A decree for direction of payment of interest @ 14.5% pendant lite to the plaintiff.
10. On notice, the defendants have appeared and filed their written statements. According to their written statement, the suit instituted on behalf of the plaintiff is misconceived and instituted with ulterior motive for unjust enrichment of amount as claimed. It has further been stated that the plaintiff has already been paid for all bills as raised by plaintiff and as such the suit has been instituted by plaintiff in contravention of the terms and conditions of contract.
11. It is further stated by the defendants that the Plaintiff provided written consent for the deviation of re-appropriation/re-allocation of quantities of coal quantities and therein the defendants did not raise any objection and neither there was any mention of patch of area nor raised any objection and nor there was any mention of patch of area not being made available to plaintiff, on contrary first deviation for re- appropriation/re-allocation of quantities of coal quantities was done only to meet the demand of different consumers of defendants as the quantities of the coal was reappropriated/re-allocated by virtue of first deviation "from face to CK siding" to work element "from face to surface dump" .
12. As such the plaintiff failed to discharge liabilities as per terms and conditions of contract between the plaintiff and defendant and on contrary it was plaintiff who stopped the work completely from 23.03.2018 and failed to execute work as per contractual obligation despite repeated reminders of defendants hence, any claim of plaintiff is an attempt to misconceive the facts before the court.
9 Commercial Appeal No. 18 of 2023
13. Further, the statements made by the plaintiff that plaintiff paid a sum of Rs.13,46,06,556.43/- only to various financial companies which have been incurred by the contractor towards paying EMIs for machines and equipment and other expenses were not in knowledge of defendants, however, aforesaid averments must be put to the test of strict proof. Further, as per contract between the plaintiff and defendants the plaintiff cannot claim any such expense moreover when the plaintiff is guilty of abandoning work site and unable to complete work site and unable to complete work.
14. The learned original court had decided the aforesaid issue by framing altogether thirteen issues on which the evidence has been laid on behalf of the parties and accordingly, the court has decided the said original suit in favour of the plaintiff/respondent with the aforesaid direction as mentioned above in the preceding paragraphs. The defendants/appellants being aggrieved with the same, has preferred the instant appeal.
15. It is evident from factual aspect that for hiring of HEMM and for removal of OB extraction and transportation of coal from IV (TOP), IV (BOT), III (TOP) and III (BOT) sea, Golukdih NC Project (Northern Sector) of GOCP/KOCP of Bastacolla for an estimated cost of Rs. 282 crores, an NIT was issued by defendants/appellants.
The Plaintiff/respondent M/S AT Libra BPL (JV) participated and was declared successful bidder. Letter of Acceptance (LOA) dated 07.11.2011 was issued by Defendant no.1 in terms of Tender with financial involvement of Rs, 252,01,39,290/- (Rupees two hundred fifty-two crore one lakh thirty-nine thousand two hundred ninety) only inclusive of all taxes and levies but exclusive of service tax at the diesel base price of Rs. 39.61 per litre and on 08.02.2012, work order was issued to plaintiff.
The plaintiff thereafter initiated/commenced execution of work but the tender being for a period of 72 months and was therefore to expire on 31.01.2018, the amended work order dated 02.04.2014 was 10 Commercial Appeal No. 18 of 2023 issued whereby total value of work was reduced from Rs. 252,01,39,290/- only to Rs. 2,50,51,39,290/-.
16. It is further evident that the plaintiff informed the defendants about 16658 hours hindrance till January 2018 (694 days) and requested to grant extension of the period of contract and defendant no. 5 vide letter dated 17.01.2018 granted additional 625 days of work and as such the new date for completion of contract was fixed on 25.10.2019.
Later on, the quantity of OB was reduced by 73.09 lakh to match the near estimation of stripping ratio in the Balance period of the contract. The plaintiff vide letter dated 23.02.2018 accepted such proposed amendment.
Thereafter, the CBI registered a criminal case bearing no.; RC1(A)/2019-D, against the plaintiff and also some of the defendants on the basis of unknown complaints on account of excess payment to the plaintiff.
17. It is further evident as per the pleading in the plaint that the demands raised by the plaintiff were never met. The further case of the plaintiff is that another dispute arose in respect of conversion of coal quantity from tone to cubic meter. It is also evident that on 30.03.2018, the defendant no.5 issued show cause notice to the plaintiff for termination of the work and also intended to forfeit the security deposit due to alleged default in work under clause 9.5 of the General Terms and Conditions of Tender Document for making default in proceeding with work.
18. The plaintiff replied to the said notice vide its reply dated 10.04.2018 wherein it was stated that the coal production performance post hindrance was more than 100% before 31.01.2018 itself. In the said reply the plaintiff also lodged its protest on extension of period only for 625 days instead of 694 days. It is evident that defendant no.4 has awarded a similar nature of work to a company namely, M/s BGR Mining and Infra Limited.
11 Commercial Appeal No. 18 of 2023
19. It is alleged that the defendant authorities are acting in a manner which is contrary to the Terms and Conditions of the Notice Inviting Tender and also the General Conditions of the Contract and thus the plaintiff is being victimized by the defendant authorities and someone else has been favoured by the defendant authorities with the sole intention of depriving the plaintiff in total violation of contract subsisting between the defendant no.1 and the plaintiff.
20. It is also alleged that due to wrongful actions of the defendants, machines and equipment remained idle for the period from April, 2018 to October, 2019. The plaintiff also incurred establishment cost of worth Rs. 64,14,134/- as depreciation cost on building and structures, security personnel, and dismantling and other misc. cost incurred in winding up of the infrastructure setup and the defendant encashed the entire BG (bank guarantee) amount of Rs. 2,10,01,161/-.
21. It is evident that on the basis of aforesaid facts and premises the plaintiff claimed a decree of declaration against the defendants in the original suit no.09 of 2019 that the present contract awarded to the plaintiff vide work order No. BCCL/IX/GM/PLNG/AT-LIBRA/H- HEMM/NC/WO/12/673, dated 08.02.2012 was terminated midway by the defendants and a decree of further declaration that the notice of proposed action against the plaintiff communicated vide letter bearing ref. no.BCCL/BA-IX/KOCP/64, dated 30.03.2018 signed on 02.04.2018 is void, illegal and invalid.
22. On notice, the defendants have appeared and filed their written statements wherein it has been stated that the plaintiff has already been paid for all bills as raised by plaintiff and as such the suit has been instituted by plaintiff in contravention of the terms and conditions of contract.
23.It is evident that the defendants in written statement stated that the Plaintiff provided written consent for the deviation of for re- appropriation/re-allocation of quantities of coal quantities and therein the defendants did not raise any objection and neither there was any 12 Commercial Appeal No. 18 of 2023 mention of patch of area nor raised any objection and nor there was any mention of patch of area not being made available to plaintiff, on contrary first deviation for re-appropriation/re-allocation of quantities of coal quantities was done only to meet the demand of different consumers of defendants as the quantities of the coal was reappropriated/re-allocated by virtue of first deviation "from face to CK siding" to work element "from face to surface dump" .
24.It is further stated that the plaintiff failed to discharge liabilities as per terms and conditions of contract between the plaintiff and defendant and on contrary it was plaintiff who stopped the work completely from 23.03.2018 and failed to execute work as per contractual obligation despite repeated reminders of defendants hence, any claim of plaintiff is an attempt to misconceive facts.
25. It is further evident that in the said written statement the defendants protested the statements made by the plaintiff that plaintiff paid a sum of Rs. 13,46,06,556.43/- only to various financial companies which have been incurred by the contractor towards paying EMIs for machines and equipment and other expenses, were not in knowledge of defendants however, aforesaid averments must be put to the test of strict proof. It is further stated that as per contract between the plaintiff and defendants the plaintiff cannot claim any such expense moreover when the plaintiff is guilty of abandoning work site and unable to complete work site and unable to complete work.
26.The learned original court had decided the issue by framing altogether thirteen issues on which the evidence has been laid on behalf of the parties and accordingly, the court has decided the said original suit in favour of the plaintiff/respondent with the aforesaid direction as mentioned above in the preceding paragraphs.
27.The defendant/ appellant being aggrieved with the same, has preferred the instant appeal.
Argument on behalf of the defendants/Appellants:
13 Commercial Appeal No. 18 of 2023
28. Learned counsel for the appellant has taken the following grounds:
(i) Learned senior counsel appearing for the appellant has submitted that the instant Commercial Appeal under Section 13 of Commercial Courts Act 2015 does not arise from an order passed under section 34 of the Arbitration and Conciliation Act,1996 against an arbitral award rather it is a regular first appeal as envisaged under the Code of Civil Procedure and as such the Court in exercise of the power under Section 13(1-A), can reappreciate the evidence and record its independent findings. To buttress this limb of argument the learned counsel put his reliance on the judgment rendered by the co-ordinate Bench of this Court in the case of Deoraj Singh vs. CCL, 2023 SCC Online Jhar 1558.
(ii) The further ground has been taken that the contract has been entered for execution and completion of work within 72 months, the work since has not been completed within the stipulated period, hence, the period was extended for the further period of 625 days. According to the appellant, even beyond the extended period of 625 days over and above 72 months, the work has not been completed, hence, the contract was terminated and even the bank guarantee was encashed.
(iii) Further, there is no requirement under Clause 6 or anywhere in the NIT for providing a fresh revised work schedule for the balance remaining part of the work if the work had not been completed within the originally fixed time and additional time had been granted at the request of the contractor for executing the balance part of the work, the respondent has to execute the balance part of the work as per the existing work schedule.
(iv) The plaintiff (respondent herein) to the suit although even after the extension of the period since has not submitted the transportation schedule, hence, the work schedule had not been 14 Commercial Appeal No. 18 of 2023 issued, as such, it is lapses on the part of the respondent in not completing the work but the learned original court without taking into consideration the aforesaid aspect of the matter of non- submission of the transportation schedule and consequence thereof, the work schedule has not been furnished even though the appellant has been held liable for damages and interest over there, therefore, the judgment suffers from patent illegality and as such, not sustainable in the eyes of law.
(v) Since both the parties understood the contract clearly in its letter and spirit that for the remaining part of the work no revised work schedule is required during the extended period and the respondent has to execute the work accordingly as per the already existing work schedule and the respondent accordingly, executed the work during the extended period for 2 months i.e. February and March of 2018 and also raised the bills for the same (marked as EX 30 and 31).
(vi) Further, there is no averment in the plaint that the contractor was entitled to a revised work schedule for the extended period of work nor any issue was framed in this regard. Since there is no specific averment in the plaint of the requirement of the revised work schedule, no question arises for any specific denial. To buttress this limb of argument the learned counsel for the appellant has relied upon the judgment rendered by the Hon'ble Apex Court in the case of Kishor Kirtilal Mehta and Ors. v Lilavati Kirtilal Mehta Medical Trust and Ors, 2007 (10) SCC 21 and Bachhaj Nahar v Nilima Mandal and Anr. (2008) 17 SCC 491.
(vii) There is no material on record as to the actual loss suffered by the respondent nor any material as to what remedial measures the respondent had taken to mitigate the loss, if any, as required in the explanation attached to Section 73 of the Contract Act, 1872, still the original court while decreeing an amount of 15 Commercial Appeal No. 18 of 2023 Rs.13,41,16,526/- did not apply its mind to any of the requirements for the applicability of Section 73. Further, "sine qua non" of the loss of profit is proof of loss and if the respondent fails to prove any loss, no compensation can be granted as it would amount to unjust profit.
(viii) The grant of EMI/ Idling Cost of Rs. 13,46,06,556.43/- based on inadmissible third-party secondary evidence without any proof of actual payment, no such third-party documents had been admitted by the appellant, still the Original Court ignoring the provisions of Sections 34, 64, 65(g), and 102 of the Evidence Act allowed the claim equating such claims as equal to the proof.
(ix) The learned original court allowed the refund of the Bank Guarantee amount against the contractual provisions of Clause 4.6 of the contract.
(x) Original court ignoring the provisions of Sections 34, 64, 65(g), and 102 of the Evidence Act and allowed the claim equating such claims as equal to the proof.
(xi) The learned original court further allowed the reimbursement of differential of wages without there being any proof of payment of wages as required under office circular dt. 12/13.05.2021.
(xii) The Interest was allowed @10.5% contrary to the requirement of Section 2(b) and Section 3(b) of the Interest Act r/w Rule 2A of Order VII, CPC, 1908 as amended pursuant to the Commercial Courts Act, 2015.
29. On the aforesaid ground it has been submitted that the instant appeal, therefore, needs to be considered in the light of the re-appreciation of the evidence for the purpose of considering legality and propriety of the impugned judgment.
Argument on behalf of the Respondent:
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30. Learned counsel for the respondent has taken the following grounds in defending the impugned judgment:
(i) The ground as has been taken on behalf of the appellant that the case is to be considered as a regular first appeal is not worth to be considered in view of the fact that if the said contention will be accepted then the very object and purpose of the Commercial Courts Act will be redundant. The scope of appeal under the Commercial Courts Act, 2015 is summary in nature and the Court is not required to re-appreciate the evidence or return a finding on re-examination of the issues as it is done in a First Appeal Case under Section 96 of Code of Civil Procedure, 1908.
(ii) It has been argued that the very purpose and purport of the Commercial Courts Act is of expeditious disposal of the commercial disputes and that is the reason that the appeal is to be filed before a forum carved out under the provision of Section 13(1) and 13(1-A) of the commercial court acts.
(iii) It has been contended by making reference of the provision of Order VI rule 3-A of the Code (as amended in purview of Act 2015) wherein the strict rule of admission and denial of the pleading is required which would be evident from the amendment incorporated in the Order VII and VIII of the Code.
(iv) It has been contended that by making reference of the provision of Order VIII (3-A) that the denial by the defendant in suits before the Commercial Division of the High Court or the Commercial Court shall be in the manner provided in sub-rules (2), (3), (4) and (5) of this Rule.
As per the provision of sub-rules (2), (3) and (4) and (5), if any of the condition has not been followed then the consequence would be that the said pleading made shall be taken to be admitted except as against a person under disability. For ready reference, the provision of Order VIII as appended to Rule, 3-A 17 Commercial Appeal No. 18 of 2023 as amended and made applicable in view of the provision of Section 16 of the Commercial Courts Act is being referred as under:
"...
3A. Denial by the defendant in suits before the Commercial Division of the High Court or the Commercial Court--
(1) Denial shall be in the manner provided in sub-rules (2), (3), (4) and (5) of this Rule.
(2) The defendant in his written statement shall state which of the allegations in the particulars of plaint he denies, which allegations he is unable to admit or deny, but which he requires the plaintiff to prove, and which allegations he admits. (3) Where the defendant denies an allegation of fact in a plaint, he must state his reasons for doing so and if he intends to put forward a different version of events from that given by the plaintiff, he must state his own version.
(4) If the defendant disputes the jurisdiction of the Court he must state the reasons for doing so, and if he is able, give his own statement as to which Court ought to have jurisdiction. (5) If the defendant disputes the plaintiff's valuation of the suit, he must state his reasons for doing so, and if he is able, give his own statement of the value of the suit.";
(iii) in Rule 5, in sub-rule (1), after the first proviso, the following proviso shall be inserted, namely:--
''Provided further that every allegation of fact in the plaint, if not denied in the manner provided under Rule 3A of this Order, shall be taken to be admitted except as against a person under disability.";
..."
(v) The reference of the provision Order XI (4)(3) has also been made as per which reasons for denying a document under any of the above grounds and bare and unsupported denials shall not be deemed to be denials of a document and proof of such documents may then be dispensed with at the discretion of the Court. For ready reference, the said provision is being referred as under:
"...
(3) Each party shall set out reasons for denying a document under any of the above grounds and bare and unsupported denials shall not be deemed to be denials of a document and proof of such documents may then be dispensed with at the discretion of the Court.
..."
(vi) Learned counsel for the respondents has referred these provisions in support of his argument that the specific pleading with respect to the work schedule which is to be provided by the appellant 18 Commercial Appeal No. 18 of 2023 without insisting upon the transportation schedule but such pleading has simply been denied without specifying any reason, hence, the requirement as stipulated in the law since has not been followed, hence, such denial has got no meaning in the eyes of law.
(vii) The work schedule is a "sine qua non" for the execution of the contract. It also says that in other independent NITs/ Contracts, Ex-61 and 61/1 a revised work schedule was issued. Further DW-1, has admitted this fact that the work schedule is required for an extension period and finally it submits that since the Appellant did not provide the revised work schedule for the extended period, it has committed a fundamental breach of contract. According to the Respondent, the alleged fundamental breach of the reciprocal promises entitles the Respondent to be compensated u/s 51 and 52, 54, 67,70 and 73 of the Contract Act, 1872.
(viii) It has been contended that initially the transportation schedule was provided under the contract, based upon the same, the work commenced by virtue of the work order issued by the appellant for its completion within 72 months. When the work has not been completed within the period of 72 months, the request for extension of the said period has been made which has been allowed by extending the period for a further period of 625 days. The respondent/plaintiff, however, bonafidely has commenced the work in the month of February and March, 2018 but no work schedule has been given.
The contention has been made that repeatedly the requests were made to provide work schedule so that the work be completed within the extended period of 625 days but the work schedule has not been provided.
19 Commercial Appeal No. 18 of 2023
(ix) The plea has been taken that however, there is no such pleading with respect to the same that the work schedule can only be given subject to providing transportation schedule.
The contention has been made in that pretext that when the said pleading was not raised before the original court with respect to the condition precedent for providing work schedule subject to submission of the transportation schedule, hence, it cannot be allowed to be agitated in the appeal.
Further ground has been taken in this pretext that there is no requirement of any transportation schedule since the transportation schedule is to be given at the time entering into the contract initially.
(x) So far as the ground of having work schedule is not required to be provided is concerned, argument has been advanced by making reference of the exhibit by way of tabular chart wherein work schedule has been given during the month of October 2012 till January 2018, end of the period of 72 months.
(xi) The question of no relevance of work schedule during the extended period of contract cannot be said to be acceptable in view of the fact that in absence of work schedule which depends upon OB and stripping measurement there cannot be any measurement of coal to be entered into the measurement book for the dispute of payment in favour of the contractor.
(xii) The learned counsel for the respondent has further submitted by making reference of the work contract, the work as per the contract and the schedule of the works as referred in the agreement that it cannot be said that the work schedule was not required to be provided.
(xiii) The learned counsel has submitted that the appellants have taken the ground before the learned original court that there was no requirement to provide the work schedule but herein, the argument has been advanced that the work schedule was only to 20 Commercial Appeal No. 18 of 2023 be provided subject to providing the transportation schedule which itself suggest that the work schedule was mandatorily to be provided by the appellant but herein the stand is being taken subject to furnishing the transportation schedule.
(xiv) This stand which has been made herein suggest that the work schedule is to be provided but only in order to deny the claim the argument is being advanced herein, although the same was not agitated before the original court, that the work schedule was only to be provided subject to providing transportation schedule.
(xv) The contention has been raised by making reference of the contracts, but with respect to other transporter wherein in the similar facts and circumstances the work schedule was provided in their favour but in the case of the respondent the ground is being taken that the work schedule is not required to be provided rather as per the work schedule which was provided initially, the work was to be completed.
But, such argument cannot be said to be sustainable which itself is contradictory since on the identical nature of contract, the work schedule has been provided in favour of the other transporter by virtue of the contract and further on the ground that the work schedule is referred in the exhibit 4/1 which is a tabular chart and the same is for the purpose of measurement of the coal extracted and transported based upon the OB and stripping measurement so that the calculation of the amount which is to be paid in favour of the contractor is to be made.
(xvi) The submission has been made that in absence of any work schedule how the money will be disbursed and that is the reason for the two months, i.e., for the month of February and March, 2018, although the respondent had carried out the work in absence of the work schedule but the money has not been paid and that is the reason the petition was filed under Order 31 Rule 21 Commercial Appeal No. 18 of 2023 1 and 2 for measurement but even then, no cooperation was extended for measurement.
31. Learned counsel for the plaintiff/respondent has submitted on this argument that such non-cooperation is due to the obvious reason that the part of the mining area has been given on contract to the other contractor as would be evident from the map which has also been exhibited before the original court.
32. Learned counsel for the respondent has submitted that this Court is dealing with the commercial appeal which is only to be interfered with if there is perversity of finding without re-appreciating the evidence as regular first appellate court. The original court, on appreciation of the contract and testimonies of the witnesses, has passed the judgment.
33. Learned counsel has referred the testimony of D.W.1 who was the surveyor during the relevant time has been examined and has specifically stated that the work schedule is to be given even on the extended period.
34. On the aforesaid ground it has been submitted that the impugned order requires no interference.
Analysis:
35. Heard the learned counsel for the parties, considered the rival submissions of the parties along with the legal issues.
36. Before entering into merit of the instant appeal, this Court thinks fit to answer the contention of the appellants that since, the instant Commercial Appeal under Section 13 of Commercial Courts Act 2015 does not arise from an order passed under section 34 of the Arbitration and Conciliation Act,1996 against an arbitral award therefore it should be treated as a regular first appeal as envisaged under the Code of Civil Procedure and therefore, the Court in the exercise of the power under Section 13(1-A), can reappreciate the evidence and record its independent findings. To buttress this limb of contention the learned counsel puts reliance upon the judgment rendered by the co-ordinate Bench of this Court in the case of Deoraj Singh vs. CCL(supra).
22 Commercial Appeal No. 18 of 2023
37. Per contra, learned senior counsel for the respondent/plaintiff has submitted that the contention of the learned counsel for the appellant that the case is to be considered as a regular first appeal is not worth to be considered in view of the fact that if the said contention will be accepted then the very object and purpose of the commercial court act will be redundant and since the scope of appeal under the Commercial Courts Act, 2015 is summary in nature, as such, the Court is not required to re-appreciate the evidence or record a finding on re- examination of the issues as is done in a First Appeal Case u/s 96 of Code of Civil Procedure, 1908.
38. In the light of aforesaid rival contentions, it requires to refer herein that the Commercial Courts Act, 2015 has been enacted with the object to provide for the constitution of commercial courts mainly for the purpose to provide the forum for speedy disposal of high value commercial disputes. The purpose to achieve the very object of the high-level commercial dispute was the paramount consideration for enactment of the Act, 2015 and therefore, the forum has been carved out under the aforesaid statute under Chapter IV i.e. Section 13. For ready reference Section 13 is being referred as under:
"13. Appeals from decrees of Commercial Courts and Commercial Divisions.--(1) Any person aggrieved by the judgment or order of a Commercial Court below the level of a District Judge may appeal to the Commercial Appellate Court within a period of sixty days from the date of judgment or order.
(1A) Any person aggrieved by the judgment or order of a Commercial Court at the level of District Judge exercising original civil jurisdiction or, as the case may be, Commercial Division of a High Court may appeal to the Commercial Appellate Division of that High Court within a period of sixty days from the date of the judgment or order:
Provided that an appeal shall lie from such orders passed by a Commercial Division or a Commercial Court that are specifically enumerated under Order XLIII of the Civil Procedure Code, 1908 (5 of 1908) as amended by this Act and section 37 of the Arbitration and Conciliation Act, 1996 (26 of 1996).] (2) Notwithstanding anything contained in any other law for the time being in force or Letters Patent of a High Court, no appeal shall lie from any order or decree of a Commercial Division or Commercial Court otherwise than in accordance with the provisions of this Act."
23 Commercial Appeal No. 18 of 2023 Sub-section (1) of section 13 confers a right to the aggrieved party if he is aggrieved by the judgment or order of a Commercial Court below the level of a District Judge he may appeal to the Commercial Appellate Court while under sub-section (1A) a forum has been carved out to the person aggrieved if he is aggrieved by the judgment and order of the commercial court at the level of District Judge exercising original civil jurisdiction or, as the case may be, Commercial Division of the High Court may appeal to the Commercial Appellate Division of that High Court within the stipulated period.
39. Sub-section (2) of Section 13 starts from non-obstante clause by mandating therein that notwithstanding anything contained in any other law for the time being in force or Letters Patent of a High Court, no appeal shall lie from any order or decree of a Commercial Division or Commercial Court otherwise than in accordance with the provisions of this Act. Therefore, sub-section (2) of Section 13 is very explicit and clarifies the provision that what would be the forum to an aggrieved party as to whether it is the Letters Patent Appeal or the writ jurisdiction or any other remedy can be invoked but as per the aforesaid provision of sub-section (2) of Section 13 it has been provided that no appeal shall lie from any order or decree of a commercial division or commercial court, otherwise than in accordance with the provisions of this Act, meaning thereby, the appeal is to be filed only in accordance to the provisions of the Commercial Courts Act, 2015.
40. The insertion of sub-section (2) of Section 13 is only for the purpose of achieving the object and intent of the Act, 2015, i.e., for achieving the speedy disposal of high-stake commercial matters. Therefore, this Court is of the view on the basis of aforesaid legal position that any dispute arising out which is commercial in nature, if passed at the level of District Judge in the capacity of commercial court then the appeal is to be filed only within the framework of the Commercial Courts Act, 2015.
24 Commercial Appeal No. 18 of 2023
41. It is evident from the preamble of the Commercial Courts Act, 2015 which has been enacted only for the sole purpose of speedy disposal of the commercial disputes, which has also been taken into consideration by the Hon'ble Apex Court in the case of Jaycee Housing Private Limited and Ors v. Registrar (general), Orissa High Court, Cuttack and Ors, (2023) 1 SCC 549 as also in the case of Kandla Export Corporation and Anr. v. OCI Corporation and Anr. (2018) 14 SCC 715.
42. Now coming to the contention of the learned counsel for the appellant wherein it has been contended that the scope of Commercial Appeal for interference in the decree passed by Commercial Original Court has succinctly been observed, interalia, vide judgment dated 04.10.2023 by the Co-ordinate Bench of this Hon'ble Court in Commercial Appeal 02/2020 titled as M/s Deoraj Singh versus CCL. The learned counsel has put his reliance on the paragraph-13 of the aforesaid judgment which read as under:
"13.--- in exercise of the powers under Sub- Section (I-A) to Section 13, the High Court can reappreciate the evidence, record its independent findings, can affirm or interfere with the judgment under challenge. However, there is an implicit limitation on the exercise of the powers by the High Court under Section 13(I-A) that every error in law or of fact cannot be gone into and the High Court should not proceed in a manner as if it is on a mistake-finding mission in the judgment under challenge. After all, the Appellate Court shall also be guided by the same rule of preponderance of probability while assessing the evidences laid down by the parties."
43. It has further been contended by the learned counsel for the appellant that the aforesaid view has been a consistent view of this Hon'ble Court which can be taken note from the judgment rendered by this Court in the case of Indicon Westfalia Ltd. vs Yogendra Nath Tiwary 2023 SCC Online Jhar 558.
44. At this juncture, the question which arises herein is that whether the instant Appeal could be under CPC, as also appellants in written submission has submitted that the present appeal is under section 13 of Commercial Courts Act read with Section 96 of CPC which is in oblivion of section 13(2) of Commercial Courts Act, which provides 25 Commercial Appeal No. 18 of 2023 notwithstanding anything contained in any other law for the time being in force or Letters Patent of a High Court, no appeal shall lie from any order or decree of a Commercial Division or Commercial Court otherwise accordance with provisions of this Act.
The period of limitation is provided of sixty days unlike section 96 of CPC which does not provide any limitation, rather the same is governed by Limitation Act, 1963. Therefore, a distinction is there and the same has been clearly earmarked.
45. Further, applying the principles of expression unius est exclusion alterius, it can be inferred that the provision of section 96 of CPC has not been incorporated in the Commercial Courts Act which is in line with the object and reasons of the Act, although many other provisions of the CPC have been kept applicable. It clearly provides, to amend the Code of Civil Procedure, 1908 as applicable to the Commercial Courts and Commercial Divisions which shall prevail over the existing High Court Rules and other provisions of the Code of Civil Procedure, so as to improve the efficiency and reduce delays in disposal of commercial cases.
46. Further, the principles of preponderance of probability which have wider and deeper application under the Commercial Courts Act established from the provisions of Order XIII-A which deals with summary judgments read with Rule 3-A of Order VIII which deals with specific denial in written statement, reasons for denial and his different version if he has and provisions of Order XI relating to production of documents by the defendants and strict procedure of admission/denial of documents. Non- denial or evasive denial of either the pleadings or the documents by the defendants will make the pleadings and documents admissible in evidence in the trial.
47. It is alleged that the appellants in the present case did not specifically denied most of the contents of plaint and/or at maximum made evasive denial but did not give their version with relevant documents did not carry out admission/denial as prescribed amounting to 26 Commercial Appeal No. 18 of 2023 admission of documents, did not even deny any document of the plaintiff and just stated qua many documents of the plaintiff while being exhibited as "with objections" without disclosing what objections, objections to the mode or manner of proof or objection to the contents of the documents and no question in cross examination was put to the witnesses of the plaintiff on the mode/manner/veracity/existence/contents of any of the documents relied upon the plaintiff.
48. It needs to refer herein that "with objections" has no meaning under the Commercial Courts Act and it is not even equivalent to "evasive denial" and therefore it amounts to admission of documents in terms of Order XI(4).Further, it appears that the appellants raising objections with respect to pleadings and documents at the appellate stage which they are not permitted to do so because as per mandate of the Commercial Courts Act or even under the Code, re-trial of the case at the appellate stage is not possible.
49. Further, one of the significant provisions made applicable to commercial suit is provided under Order XI of CPC (as amended by the Commercial Courts Act) to allow both parties to file photocopies of documents and not the original documents as contemplated under ordinary suits. As a natural corollary, the mandate of Sections 62 and 63 of Evidence Act and their proofs by resorting to Sections 64 and 65 is not applicable unless and until there is a specific denial of the document's genuineness by the adversary in a suit. It appears that the appellants have obfuscated the law as applicable to the commercial suit while strenuously arguing on the point that documents were not proved in accordance with Section 65 of the Evidence Act.
50. In the present case, it appears that there is clear consent given for those documents recorded by the learned Original Court in order dated 29.07 2022. Only objection was raised without there being any denial.
Therefore, it is evident that the appellants are not only enlarging the scope of appeal in this Court but also, they are seeking to curtail the 27 Commercial Appeal No. 18 of 2023 procedural ambit brought by the Commercial Courts Act in the CPC vide Section 16 of the Act. Both, it may be said, is aimed to defeat the legislative intention.
51. Now coming to the judgment as rendered by the Division Bench of this Court in Deoraj Singh (supra) upon which reliance has been placed by the learned counsel for the appellant, wherein it has been observed that in exercise of the powers under sub-section (I-A) to Section 13, the High Court can reappreciate the evidence and record its independent findings, can affirm or interfere with the judgment under challenge. However, there is an implicit limitation in the exercise of the powers by the High Court under Section 13(I-A) that every error in law or of fact cannot be gone into and the High Court should not proceed in a manner as if it is on a mistake-finding mission in the judgment under challenge. After all, the Appellate Court shall also be guided by the same rule of preponderance of probability while assessing the evidences laid down by the parties.
52. Thus, it is evident from the aforesaid judgment that the High Court can reappreciate the evidence and record its independent findings but at the same time the limitation/rider has been carved out by the learned Division Bench by observing that every error in law or of fact cannot be gone into by the Court and further the Court should not proceed in a manner as if it is on a mistake-finding mission in the judgment under challenge.
53. Thus, from the aforesaid discussion it is evident that there is no quarrel on the issue that the main objective behind the enactment of Act 2015 is speedy disposal of the commercial dispute as per the mandate of Section 13 of the Act 2015 and therefore, at this stage the scope of appeal cannot be so enlarged, otherwise the purpose and legislative intent behind the enactment of the Act 2015 will be defeated.
28 Commercial Appeal No. 18 of 2023 Further the Division Bench in Deoraj Singh (supra) has also put the rider in reappreciating the evidence which is indicative of the fact that the Court has sole discretion in reappreciating the evidence with rider/limitation as per the fact and circumstances of each case.
54. Now adverting to the factual aspect of the instant case wherefrom it is evident that in the instant appeal, central to all issues is whether the non-issuance of work schedule (schedule of work) for the extended period of contract to the Respondent/Plaintiff by the Appellant/Defendants amounted to breach of the contract on the part of the Appellants.
55. The learned counsel for the appellants while referring the clause of NIT has contended that there is no requirement for providing a fresh revised work schedule for the balance remaining part of the work, if the work had not been completed within the originally fixed time and additional time had been granted at the request of the contractor for executing the balance part of the work and the respondent contractor has to execute the balance part of the work as per the existing work schedule.
56. It is further contended that since both the parties understood the contract clearly in its letter and spirit that for the remaining part of the work no revised work schedule is required during the extended period and the respondent has to execute the work accordingly as per the already existing work schedule and the Respondent accordingly, executed the work during the extended period for 2 months i.e. February and March of 2018 and also raised the bills for the same (marked as EX 30 and 31).
57. It has further been contended that the respondent/plaintiff to the suit although even after the extension of the period since has not submitted the transportation schedule, hence, the work schedule had not been issued, as such, it is lapses on the part of the respondent in not completing the work but the learned original court without taking into 29 Commercial Appeal No. 18 of 2023 consideration the aforesaid aspect of the matter of non-submission of the transportation schedule and consequence thereof, the work schedule has not been furnished even though the appellant has been held liable for damages and interest over there, therefore, the judgment suffers from patent illegality and as such, not sustainable in the eyes of law.
58. Further, it has been submitted that there is no averment in the plaint that the contractor was entitled to a revised work schedule for the extended period of work nor any issue was framed in this regard. Since there is no specific averment assertion in the plaint of the requirement of the revised work schedule, no question arises for any specific denial. To fortified his contention the learned counsel for the appellant has relied upon the judgment rendered by the Hon'ble Apex Court in the case of Kishore Kirtilal Mehta (supra) and Bachhaj Nahar v Nilima Mandal (supra).
59. Per contra, the learned counsel for the respondent vehemently opposed the contention of the learned counsel for the appellant and has submitted that the work schedule is a "sine qua non" for the execution of the contract and DW-1 has admitted this fact that the work schedule is required for an extension period and the appellant did not provide the revised work schedule for the extended period, even then the respondent/plaintiff, bonafidely has commenced the work in the month of February and March, 2018 but no work schedule has been given.
60. Further ground has been taken that there is no requirement of any transportation schedule since the transportation schedule is to be given at the time of entering into the contract initially.
61. The ground has also been taken that even accepting the aforesaid fact of submission of transportation schedule then when the request repeatedly has been made before the authority concern, no such order has been passed. The question of no relevance of work schedule 30 Commercial Appeal No. 18 of 2023 during the extended period of contract cannot be said to be acceptable in view of the fact that in absence of work schedule which depends upon OB and stripping measurement there cannot be any measurement of coal to be entered into the measurement book for the dispute of payment in favour of the contractor.
62. The learned counsel for the respondent has further submitted, by making reference of the word 'contract', the work as per the contract and the schedule of the works as referred under the agreement, it cannot be said that the work schedule was not required to be provided.
63. Thus, it is stated by the respondent that the 'work schedule' is a document of contract itself and Ext 4/1 is the work schedule that was prepared from the time of commencement to the time of completion of the contract. Work schedule is spirit of executory contract where performance of the contractor and his intermittent monthly payment vis-à-vis target achieved (running bill) is closely interlinked.
64. Therefore, in the aforesaid rival contentions, it is most essential to understand as to what is the meaning, scope and relevance of work schedule in the contract in question. It is evident that terms and conditions of Contract defines "contract", "work" and "contract documents" as under which schedule of work is mentioned.
65. As per the terms and condition the "contract" shall mean the notice inviting tender, the tender as accepted by the company and the formal agreement executed between the company and the contractor together with the documents referred to therein including general terms and conditions, special conditions, if any, schedule of quantities with rates and amounts, schedule of work. The "Work" shall mean the works required to be executed in accordance with the contract.
66. Further the Clause 8 is also relevant to refer herein which reads as under:
"Except where any general or detailed descriptions of the work in quantities provides otherwise, measurements of work done shall be taken in accordance with the relevant standard method of 31 Commercial Appeal No. 18 of 2023 measurement as applicable to schedule of quantities/schedule of work/specifications to the contract...
67. Further, the work schedule as given in the contract in question for 6 years (2012 to 2018) mentions the following headings: Month wise OB in Cumt., Month wise Re handled, Total Month wise OB + Re- handled, Progressive (OB+ Rehandled in current), Month wise Coal in to, progressive coal in te, Month wise Stripping Ratio etc. for Each of the contract Month from February 2012 to January 2018.
68. It is evident from the contract that at the time of commencing of work by virtue of the work order, the work schedule was provided month wise based upon the OB and stripping which would be evident from exhibit 4/1.
69. It would be evident from the tabular chart that the work has commenced based upon the work schedule as also the money was disbursed of measurement based upon the schedule of work on the basis of the work performed. It is evident from the condition stipulated which is the tabular chart of the contract that the submission has been made that the deduction is also to be made.
70. The aforesaid deduction based upon the percentile itself suggest that the work schedule is based on making disbursement of an amount as also the deduction if the work has not been performed as per the work schedule otherwise there was no occasion or reason to have the quantum of deduction based upon the percentile.
71. So far as the issue of transportation schedule is concerned, although the aforesaid ground has been taken for the first time before this Court which is evident from the pleading itself and also from the evidence of the witnesses.
72. Further, it is evident that there is provision for penalty up to 10% of the total contract value in the failure on the part of the contractor to comply with the progress in terms of the agreed time and progress chart, under clause 6.2 the contractor is liable for penalties as enumerated therein.
32 Commercial Appeal No. 18 of 2023
73. Thus, it appears that the importance of work schedule is all pervasive and goes to the root of the execution of the work under the contract.
74. Further, the fact about providing work schedule has been supported by the witnesses produced on behalf of the appellant, i.e., DW-1-Arvind Kr. Mahto, Suryever, BCCL. For ready reference, relevant paragraph of the said testimony is being referred as under:
"43. Witness after going through Exhibit 07 stated that it is correct that BOQ etc. are not mentioned in the said document and it was provisional.
"44, Witness after going through work order attached to Exhibit 04 Stated that in this, work schedule is mentioned till 2018."
45. I do not have information whether Defendant issued work Schedule with extension period or not."
46. It is correct to say that if any extension is given to a project, then work schedule for the extension period is also issued by BCCL." "47. Witness on being shown two documents dated 29-01-2020 and 29- 08-2020 issued by BCCL( with respect to work Schedule of extended period and for the further extended period in the already extended period) admitted the same and deposed that these are the work schedule of the extension period. Vol. On seeing the NIT of the said project-it can be said whether there was provision for work schedule for the extension period."
(The documents dated 29-01-2020 and 29-08-2020 have been exhibited as Exhibit 61 and Exhibit 61/1 respectively vide order dated 29-7-2022 by the Ld Original Court.
48. witness after going through page 21 of Exhibit 02 deposed that it in Correct that for doing any Work, BoQ and Finalized Work Programme are necessary and it is applicable on extension of Contract also
49. it is correct to say that work schedule is necessary for Progressive Payment and Target compliance."
50. It is also correct that whatever work is done in extended period of Contract, in that also, Progressive Payment and Target Compliance are seen. Witness stated this after going through Clause 15 at page number 45 of Exhibit 02.
75. It is thus evident that the witness of the appellant has supported the fact that the work schedule is to be given even for the extended period of contract. The admitted position herein is that the work schedule has not been provided.
76. From all the above which includes provisions of contract in question, definition and meaning of the word" contract", "work", " contract documents" and "work schedule" for the contract duration, it is clear that work schedule is required for progressive payment and target 33 Commercial Appeal No. 18 of 2023 compliance and thus, it is sine qua non for the execution of the contracted work and the same has been substantiated by the witness DW.1 also and also gets established by work schedule for the extended period of similar other contract(exhibits 61 and 61/1) which has the same NIT (exhibit 62) as that of the present NIT.
77. It is an admitted case that BCCL did not provide work schedule for the extended period of contract. It is evident that the Respondent/Plaintiff after demanding work schedule repeatedly and on the oral assurance of BCCL that it will be provided soon, contractor worked in the month of February 2018 and till 23 rd March, 2018.
78. Further, the appellants during arguments took the objections with respect to work schedule and it is contended that the plaint lacks pleadings with respect to work schedule and therefore it was not a relevant issue or consideration before the original court.
79. In the response of the aforesaid contention the respondent/plaintiff has submitted that the plaint mentions relevant clauses of the contract i.e. Clause 8 in which work schedule is mentioned. The term finalized work programme is nothing but 'work schedule".
80. It is further contended that all the letters/correspondences regarding demand of work schedule were filed along with the plaint and it is a settled connotation of law that all the documents which are attached to the plaint are part of the pleadings. Thus, the contention of the learned counsel for the appellants is not worth to consider.
81. In the light of aforesaid contention of the parties it is required to refer herein that it is settled connotation of law that the documents filed with the pleadings are considered part of the pleadings. Further, while deciding Order VII Rule 11 CPC application for rejection of plaint, it is the plaint along with the documents which are to be seen which further fortify the facts that documents with the plaint are always considered part of the plaint. Reference in this regard may be taken from the judgment of the Hon'ble Apex Court in Eldeco Housing and 34 Commercial Appeal No. 18 of 2023 Industries Limited vs. Ashok Vidyarthi and Ors, 2023 SCC Online SC 1612.
82. Further from the record it appears that the plaintiff has filed the documents with the plaint which substantiate the fact that issue of work schedule was being raised by the plaintiff from time to time. It is evident from Letter dated 27.03.2018 (Ext 6) that the plaintiff has raised the issue of work schedule and even asked for confirmed extension as the extension granted was provisional. Further from Letter dated 10.04.2018 (Ext 24) which was response to the earlier correspondences of BCCL/appellant including show cause notice dated 30.03.2018 read with stoppage of work notice dated 02.04.2018, it is indicative that that plaintiff was waiting for competent approval for the extension and work schedule to resume the work.
83. Further, it was the specific stand taken by the appellants that schedule of work was given in 2012 at the starting of the contract was sufficient and there is no provision in the NIT for giving a separate work schedule for the extension of work for 625 days. Therefore, appellants cannot take the plea that they were taken by surprise by this issue of work schedule and they cannot and have not pleaded any prejudice being caused on this account.
84. Even if it is presumed for the sake of argument that there is no pleading to this effect, the judgments of the Hon'ble Apex Court are very clear on this point if the parties knew the issue and that said issue is involved and evidences were led on the said issue, then in that case formal absence of pleadings is relaxed. Authority on this point is the judgment of Four Judges' Bench of Hon'ble Apex Court in Bhagwati Prasad versus Chandramaul (1966)2 SCR 286 and the relevant paras are as under:
"10. But in considering the application of this doctrine to the facts of the present case, it is necessary to bear in mind the other principle that considerations of form cannot over-ride the legitimate considerations of substance. If a plea is not specifically made and yet it is covered by an issue by implication, and the parties knew that the said plea was involved in the original, then the mere fact that the plea was not expressly taken in the pleadings would not necessarily 35 Commercial Appeal No. 18 of 2023 disentitle a party from relying upon it if it is satisfactorily proved by evidence. The general rule no doubt is that the relief should be founded on pleadings made by the parties. But where the substantial matters relating to the title of both parties to the suit are touched, though indirectly or even obscurely in the issue, and evidence has been led about them, then the argument that a particular matter was not expressly taken in the pleadings would be purely formal and technical and cannot succeed in every case. What the Court has to consider in dealing with such an objection is: did the parties know that the matter in question was involved in the original, and did they lead evidence about it? If it appears that the parties did not know that the matter was in issue at the original and one of them has had no opportunity to lead evidence in respect of it, that undoubtedly would be a different matter. To allow one party to rely upon a matter in respect of which the other party did not lead evidence and had had no opportunity to lead evidence, would introduce considerations of prejudice, and in doing justice to one party, the Court cannot do injustice to another."
"15. .....But cases may occur in which though a particular plea is not specifically included in the issues, parties might know that in substance, the said plea is being tried and might lead evidence about it. It is only in such a case where the Court is satisfied that the ground on which reliance is placed by one or the other of the parties, was in substance, at issue between them and that both of them have had opportunity to lead evidence about it at the original and the formal requirement of pleadings can be relaxed. In the present case, having regard to all the facts, we are unable to hold that the High Court erred in confirming the decree for ejectment passes by the original Court on the ground that the defendant was in possession of the suit premises as a licensee. In this case, the High Court was obviously impressed by the thought that once the defendant was shown to be in possession of the suit premises as a licensee, it would be built to require the plaintiff to file another suit against the defendant for ejectment on that basis. We are not prepared to hold that in adopting this approach in the circumstances of this case, the High Court can be said to have gone wrong in law."
85. While relying upon the judgment rendered in Bhagwati Prasad (supra), the Hon'ble Apex Court in Ram Sarup Gupta versus Bishun Narain Inter College and Ors. 1987 2 SCC 555 held, interalia, as under:
"6. .....The object and purpose of pleading is to enable the adversary party to know the case it has to meet. In order to have a fair original it is that the party should state the essential material facts so that other party may not be taken by surprise. The pleadings however should receive a liberal construction, no pedantic approach should be adopted to defeat justice on hair splitting technicalities. Sometimes, pleadings are expressed in words which may not expressly make out a case in accordance with strict interpretation of law, in such a case it is the duty of the Court to ascertain the substance of the plead-ings to determine the question. It not desirable place undue emphasis on form, instead the substance of the plead-ings should be considered. Whenever the question about lack of pleading is raised the enquiry should not be so much the form of the pleadings, Instead; the court must find out whether in substance the parties knew the case and the 36 Commercial Appeal No. 18 of 2023 issues upon which they went to original. Once it is found that in spite of deficiency in the pleadings parties knew the case and they proceeded to original on those issues by producing evidence, in that event il would not be open to a party to raise the question of absence of pleadings in appeal. In Bhagwati Prasad v. Shri Chandramaul, [1956] 1 SCR 286 Constitution Bench of this Court considering this question observed."
86. While referring to Ram Sarup Gupta versus Bishun Narain inter college(supra), the Hon'ble Apex Court in recent judgment Mohammed Abdul Wahid versus Nilofer (2024) 2 SCC 144 reiterated the same .
87. However, it was argued by the appellant by taking aid of the judgment rendered by the Hon'ble Apex Court in Bachhaj Nahar vs Nilima Mandal that judgment passed in Bhagwati Pd (supra) has been diluted.
88. In the light of aforesaid contention this Court revisits the judgment rendered by the Hon'ble Apex Court in Bhagwati Prasad (supra) and found that the judgment of Bhagwati Prasad (supra) is the judgment of Four Judges Bench and as such, it cannot be diluted/over ruled by Division Bench's judgment rendered in the case of Bachhaj Nahar (supra).
89. It is not out of place to quote para-17 of even Bachhaj Nahar judgment which says that in exceptional cases where the Court is fully satisfied that the pleadings and issues generally cover the case subsequently put forward and the parties being conscious of the issues, had led evidence on such issue. The said judgment of Bachhaj Nahar further observed in para-17 as under:
"17. ....Another aspect to be noticed, is that the court can consider such a case not specifically pleaded, only when one of the parties raise the same at the time of arguments by contending that the pleadings and issues are sufficient sufficient to make out a particular case and that the parties proceeded on that basis and had led evidence on that case"
90. The appellants also contented referring to Clause 6 of the General Terms of the Contract that issuance of work schedule for the extension period was depended upon the transportation schedule to be given by the contractor and as there was no transportation schedule given by 37 Commercial Appeal No. 18 of 2023 the contractor Plaintiff therefore, there was no occasion for issuing work schedule for the extension period of contract.
91. In the response of the aforesaid contention of the learned counsel for the appellant, the learned senior counsel for the respondent/plaintiff has contended that this new plea has been taken for the first time during the argument in appeal. It was not taken at any point of time before the original court and not even found in the memorandum of appeal. This is a blatant and brazen attempt to somehow deviate from the issues concerned and cover-up their lapses somehow. Had it really been the stand of the appellants/defendants, they would have written at the first instance in all the correspondences seeking transportation schedule or about alleged non-submission of transportation schedule by the plaintiff.
92. Further it has been submitted that in the application under Order 39 Rule 1 & 2 and its reply by appellant, the issue of work schedule has been discussed in detail and nowhere the appellant took the stand that appellant is not giving the work schedule because the respondent is not giving the transportation schedule. Further if they resort to transportation schedule, then they admit the relevance and necessity of work schedule being sine-quo non for the performance of the contract by the plaintiff contractor.
93. In the context of aforesaid contention of the parties this Court has again proceeded to the material available on record wherein it appears that there is no pleading, no document, no evidence or even no argument before the original court that transportation schedule was not given by the respondent, or appellant awaited transportation schedule for giving the work schedule.
94. Now coming to the meaning of transportation schedule which means programme of transportation and terms of the tender document and this clause 6 itself has to be given at the time of signing/conclusion of contract the work order issued and/or when site is handed over to the contractor. Therefore, as the work schedule was given on 27.04.2012, 38 Commercial Appeal No. 18 of 2023 so it is obvious that transportation schedule was given by the respondent.
95. In fact, transportation schedule was not required at the time of signing of contract or at the time of giving work schedule by the appellant, it was required to be maintained by the respondent throughout the contractual tenure in terms of Tender Document minimum number of equipment and vehicles required in the contract with their capacities were already defined therein being mandatory conditions.
96. Further, in terms of Special Terms and conditions for the contract as provided in the contract document the contractor was obliged to furnish the details of vehicles and equipment to BCCL before the start of the contract, those vehicles were not to be diverted for any other project without the approval of the General Manager, they were required to be deployed in adequate number for satisfactory execution of the work Transportation schedule (details of vehicles) was to be given by the respondent whenever asked by the Appellant on inspection or otherwise.
97. Therefore, transportation schedule on a piece of paper was regularly submitted by the respondent throughout the contract whenever asked by the appellant. It was given even multiple times in a year. It is not understood as to how the appellant making out a case that respondent did not give the transportation schedule and therefore, they did not give the work schedule.
98. From the aforesaid discussion it is evident that the transportation schedule is nothing but the details of vehicles including their numbers and capacities which were always available with the appellants given by the respondent. It was given thrice in 2017 and as late as in January, 2018, as such transportation schedule was never an issue and cannot be made an issue at this stage.
99. Further it is pertinent to mention here that work order and work schedule, both are totally different concepts. Work order is given once subject to amendment which was done twice in the present case 39 Commercial Appeal No. 18 of 2023 whereas work schedule (time and progress chart) was given on 27.04.2012 for the period from February 2012 till January, 2018. It was required for the extended period of 625 days (01.02.2018 till 25.10.2019) which can be substantiated from the deposition of the DW-2 in para 5 wherein he deposed which reads as under.
"That against the hindrances in Contract, in the extended period of contract, no new or revised work order is issued of any kind and in that extended period work is done as per the said work order only."
100. Thus, it is evident that the term "work order" and "work schedule"
(time & progress chart) cannot be interchangeable and both being totally different concepts. Work schedule is the fundamental to the performance appraisal of the contractor in any work contract where payment is made regularly at the end of the month vis-à-vis target achieved in terms of extraction of coal (weight), removal of OB (volume), their interrelation (stripping ratio) which further depends on blasting operation and explosives use. Without work schedule neither measurement is possible nor efficiency of contractor would be appraised.
101. Further, there is no doubt that time was of essence to the original contract so is the progress-in-work within time. If the argument of the appellants is taken to be correct, it would imply that they are seeking to dispense with the 'component of time and progress' from the contract during extended period of 625 days, which would amount to re-writing the contract.
102. Thus, herein the moot question is that can the employer be allowed to rewrite the contract. The answer is 'no' because the valuation of work is intertwined to "time" as well as 'quantity and any attempt to take out any one shall be defeating the whole edifice of the contract.
103. It is settled proposition of law that re-writing of the contract is not possible unilaterally. It means that in order to re-write the term of contract the consent of both of the parties is indispensable. Reference in this regard may be taken from the judgment rendered by the Hon'ble Apex Court in BSNL and Anr v. BPL Mobile Cellular Ltd.
40 Commercial Appeal No. 18 of 2023 and Ors., (2008) 13 SCC 597. The relevant paragraph of the aforesaid judgments is being quoted as under:
"42. Recently in DDA case [(2008) 2 SCC 672] this Court held :
"66. The stand taken by DDA itself is that the relationship between the parties arises out of the contract. The terms and conditions therefor were, therefore, required to be complied with by both the parties. Terms and conditions of the contract can indisputably be altered or modified. They cannot, however, be done unilaterally unless there exists any provision either in contract itself or in law. Novation of contract in terms of Section 60 of the Contract Act must precede the contract-making process. The parties thereto must be ad idem so far as the terms and conditions are concerned. If DDA, a contracting party, intended to alter or modify the terms of contract, it was obligatory on its part to bring the same to the notice of the allottee. Having not done so, it, relying on or on the basis of the purported office orders which are not backed by any statute, new terms of contract could (sic not be) thrust upon the other party to the contract. The said purported policy is, therefore, not beyond the pale of judicial review. In fact, being in the realm of contract, it cannot be stated to be a policy decision as such. ***
80. A definite price is an essential element of binding agreement. A definite price although need not be stated in the contract but it must be worked out on some premise as was laid down in the contract. A contract cannot be uncertain. It must not be vague. Section 29 of the Contract Act reads as under:
'29. Agreements void for uncertainty.--Agreements, the meaning of which is not certain, or capable of being made certain, are void.' A contract, therefore, must be construed so as to lead to a conclusion that the parties understood the meaning thereof. The terms of agreement cannot be vague or indefinite. No mechanism has been provided for interpretation of the terms of the contract. When a contract has been worked out, a fresh liability cannot be thrust upon a contracting party."
(See also New India Assurance Co. Ltd. v. Nusli Neville Wadia [(2008) 3 SCC 279 : (2007) 14 Scale 556] .)
44. If the parties were ad idem as regards terms of the contract, any change in the tariff could not have been made unilaterally. Any novation in the contract was required to be done on the same terms as are required for entering into a valid and concluded contract. Such an exercise having not been resorted to, we are of the opinion that no interference with the impugned judgment is called for.
52. We will assume that the contention of the learned Additional Solicitor General that the internal circulars are issued for their application by the local officers. If they have committed a mistake, the same could be rectified. Indisputably, mistakes can be rectified. Mistake may occur in entering into a contract. In the latter case, the mistake must be made known. If by reason of a rectification of mistake, except in some exceptional cases, as for example, where it is apparent on the face of the record, mistake cannot be rectified unilaterally. The parties that would suffer civil consequences by reason of such act of rectification of mistake must be given due notice. Principles of natural justice are required to be complied 41 Commercial Appeal No. 18 of 2023 with. The fact that there was no mistake apparent on the face of the records is borne out by the fact that even the officers wanted clarification from higher officers. The mistake, if any, was sought to be rectified after a long period; at least after a period of three years. When a mistake is not rectified for a long period, the same, in law, may not be treated to be one."
104. Thus, by denying the very necessity of the work schedule in the present case, the defendants/appellants denied the very process of certification which is the prime job of the engineer-in-charge as per the Clause 8 of General term of contract of NIT. It is due to this lack of certification for February and March 2018, that prevented the plaintiff/respondent from raising bill and presenting it to the BCCL.
105. Since work schedule is linked to measurement (clause 8) of GTC penalty and (clause 6.2) of General Term of Contract. The contract did not provide any provision of one-time measurement or payment or penalty so it is incorrect to say that work schedule was not necessary for the extended period. Hence, on this count, the BCCL committed breach of the contract.
106. The learned counsel for the appellants has further raised the various contentions which have already been taken note by this Court but in midst of the all the said issues the central issue is non-supply of work schedule and the learned original court has categorically held that non-supply of work schedule amounts to breach of the contract by the appellant and since the breach of contract was committed on behalf of the appellant/defendant therefore the plaintiff/respondent is eligible for damages. Accordingly, the learned court has allowed the claim with interest in favour of the plaintiff/respondent.
107. Thus, it requires to refer herein that since the central issue has already been decided by this Court which is in conformity of the finding of the original court, therefore the other issues which have been raised by the learned counsel for the appellant can only be entertained herein if there is perversity and non-consideration of the facts or law by the original court while passing the order of damages in favour of the plaintiff/respondent.
42 Commercial Appeal No. 18 of 2023
108. At this juncture this Court would like to discuss the meaning of perversity and active consideration which are very much relevant in addressing the issues as raised by the learned counsel for the appellants.
109. The definition of perversity has been taken note of in the judgment rendered in Arulvelu and Another v. State represented by the Public Prosecutor and Another [(2009) 10 SCC 206] at paragraph 27, which is quoted hereunder :-
27. The expression "perverse" has been defined by various dictionaries in the following manner:
1. Oxford Advanced Learner's Dictionary of Current English, 6th Edn.
"Perverse.--Showing deliberate determination to behave in a way that most people think is wrong, unacceptable or unreasonable."
2. Longman Dictionary of Contemporary English, International Edn. Perverse.--Deliberately departing from what is normal and reasonable.
3. The New Oxford Dictionary of English, 1998 Edn. Perverse.--Law (of a verdict) against the weight of evidence or the direction of the judge on a point of law.
4. The New Lexicon Webster's Dictionary of the English Language (Deluxe Encyclopedic Edn.) Perverse.--Purposely deviating from accepted or expected behavior or opinion; wicked or wayward; stubborn; cross or petulant.
5. Stroud's Judicial Dictionary of Words & Phrases, 4th Edn.
"Perverse.--A perverse verdict may probably be defined as one that is not only against the weight of evidence but is altogether against the evidence."
110. Further, the Hon'ble Apex Court in yet another judgment rendered in Kuldeep Singh v. Commissioner of Police and Others [(1999) 2 SCC 10] has held under paragraph 10 which reads as under :-
10. A broad distinction has, therefore, to be maintained between the decisions which are perverse and those which are not. If a decision is arrived at on no evidence or evidence which is thoroughly unreliable and no reasonable person would act upon it, the order would be perverse. But if there is some evidence on record which is acceptable and which could be relied upon, howsoever compendious it may be, the conclusions would not be treated as perverse and the findings would not be interfered with."
111. Further, the meaning of "perverse" has been examined in H.B. Gandhi, Excise and Taxation Officer-cum Assessing Authority, Karnal and Others v. M/s Gopi Nath & Sons and Others [1992 Supp (2) SCC 312] wherein, at paragraph 7, the Hon‟ble Apex Court has observed as under :
43 Commercial Appeal No. 18 of 2023 "7. ------. It is, no doubt, true that if a finding of fact is arrived at by ignoring or excluding relevant material or by taking into consideration irrelevant material or if the finding so outrageously defies logic as to suffer from the vice of irrationality incurring the blame of being perverse, then, the finding is rendered infirm in law."
112. Thus, it is evident that the perversity means if a decision is arrived at on no evidence or evidence which is thoroughly unreliable and no reasonable person would act upon it, the order would be perverse. But if there is some evidence on record which is acceptable and which could be relied upon, howsoever compendious it may be, the conclusions would not be treated as perverse and the findings would not be interfered with.
113. Further, the meaning of 'consideration' is the active application of mind of the factual aspect, as per the definition of 'consideration' given by the Hon'ble Apex Court in Chairman, Life Insurance Corporation of India & Ors. Vs. A. Masilamani, (2013) 6 SCC 530, wherein, at paragraph-19, it has been held by the Hon'ble Apex Court as under:-
―19. The word "consider" is of great significance. The dictionary meaning of the same is, ―to think over‖, ―to regard as‖, or ―deem to be‖. Hence, there is a clear connotation to the effect that there must be active application of mind. In other words, the term ―"consider" postulates consideration of all relevant aspects of a matter. Thus, formation of opinion by the statutory authority should reflect intense application of mind with reference to the material available on record. The order of the authority itself should reveal such application of mind. The appellate authority cannot simply adopt the language employed by the disciplinary authority and proceed to affirm its order.
114. From the interpretation made by the Hon'ble Apex Court with respect to meaning of "consideration", it would be evident that consideration can only be said to be proper consideration if there is active application of mind.
115. In the light of aforesaid settled legal proposition this Court has considered the finding recorded by the original court and found therefrom that the consideration has been given regarding casting accountability upon the appellant for non-supply of the work schedule for the extended period of the contract and that has led the learned 44 Commercial Appeal No. 18 of 2023 court to come to the conclusion and in passing the order dated 08.05.2023 in favour of the respondent/plaintiff.
116. Now coming to the order impugned dated 08.05.2023 by which damages has been awarded to the plaintiff. It is evident that learned original court has taken note of each and every factual aspect of the case, which are evident from the various paragraphs of the order impugned.
117. This Court thinks fit to take note of the paragraphs of the impugned order in coming to the conclusion as to whether the court has taken note of the entire evidence while deciding the issues involved in the case.
118. It is evident from record that in order to decide the issues involved in the case, the original court has framed 13 issues for adjudication which are as under:
"1. Whether the suit is maintainable in its present form?
2. Whether the suit is barred under Principals of estoppel, waiver, and acquiescence?
3. Whether the suit is barred by limitation?
4. Whether the suit is barred under the contract?
5. Whether the plaintiff is entitled to damages?
6. Whether defendant-employer failed to discharge its obligation to provide and specify specific gravity and stripping ratio for the suit mines and if yes? What figure can be taken thereof?
7. Whether defendant-employer discharged its obligation to provide coal mines available for the work as stipulated in the contract free of impediments and obstacles?
8. Whether the defendant is under obligation to reimburse the amount to plaintiff as per the Coal India Limited implemented special wages payment?
9. Whether the termination of contract by the defendant in the middle of the contract is illegal and unjustified?
10. Whether the plaintiff is entitled to get refund bank guarantee?
11. Whether the plaintiff is entitled to reimbursement for service tax paid?
12. Whether plaintiff is entitled to relief claimed in the suit?
13. Whether the plaintiff is entitled to interest or cost?"
119. From the perusal of impugned order it is evident that while deciding the issue of damages, the original court has taken note of various exhibits and categorically held that defendants did not give work schedule for the execution of contract of the extended contract period 45 Commercial Appeal No. 18 of 2023 and therefore, the breach of contract by the defendants stands proved, thus on the basis of available record and extension of work contract to be done, the plaintiff is entitled for the loss of profit to the tune of 15% (calculated/computed conservatively) totaling to Rs.134,116,526/- (Rupees Thirteen Crores Forty One lacs Sixteen Thousand Five Hundred and Twenty Six only). For ready reference the relevant paragraph of the impugned order is being quoted as under:
"Now from perusal of Exhibit 2 (NIT), Exhibit 4 (work order), Exhibit 6 (letter dated 27.03.2018), Exhibit 20 (notice dated 30.03.2018) Exhibit 26 and 26/1 (letter dated 06.10.2018 and 05.11.2018), Exhibit 24 (reply plaintiff dated 10.04.18 to the notice dated 30.03.18, I find that these documents clearly show that the plaintiff was ready and willing to resume work if the grievances of the plaintiff were addressed and work schedule was given to them by the defendants which was reciprocal promise to be performed by the defendants in terms of the contract) and Exhibits 45-58, 61, 61/1,62 and 63 as well as Schedule A to the plaint.
I further find that it is an admitted position that contract was a concluded contract between the parties and both the parties were bound to perform their parts of the contract. In this connection I further find from the evidences adduced on behalf of plaintiff and relevant documents filed on his behalf that defendants did not give work schedule for the execution of contract of the extended contract period and therefore, the breach of contract by the defendants stand proved as it failed to perform its reciprocal part of the performance as per section 49-53 of the Indian Contract Act 1872, which have been discussed herein before in the foregoing paragraph. In view of the fact that breach of contract by the defendants stand proved, question arises about the compensation/damages in terms of section 73 of the Contract Act, discussed herein before. On this point I find that on the basis of available record and extension of work contract to be done, the plaintiff is entitled for the loss of profit to the tune of 15% (calculated/ computed conservatively) totaling to Rs. 134,116,526/-( Rupees Thirteen Crores Forty One lacs Sixteen Thousand Five Hundred and Twenty Six only)-----.
I further find that various amount was paid by the plaintiff to various financial companies which have been incurred by the plaintiff towards payment of EMIs for machines and equipments which the plaintiff was supposed to use for the work to be done but could not be done because of non-performance of the reciprocal promise by the defendants by not providing work schedule to the plaintiff which was for resumption and conclusion of work. Due to breach of contract and wrongful actions done by the defendants, those machines and equipment's remained idle for the period April 2018 till October 2019( till the date of completion of extended contract) , which is crystal clear from exhibits 45 to 48, which are documents in the nature of EMI statement of the HDFC Bank for the relevant period, notice of appointment of arbitrator regarding outstanding loan with HDFC Bank and other financial institutions, legal notices, correspondences, EMI calculation chart, complaint cases etc. 46 Commercial Appeal No. 18 of 2023 Since as per contract performance security was obtained from contractor, the defendants were also under obligation to ensure utilization of the assets deputed on its mines. In this connection it is to say that if plaintiff was allowed to conclude the contract the aforesaid amount ought to have been adjusted to cost of work which the plaintiff ought to have received from the defendants. As such I find that plaintiff is also entitled for Rs. 13,46,06,546.43/- for the loss sustained on payment of equated monthly installment (EMI) towards loan taken from various financial institutions by the plaintiff for the period April 2018 till October 2019.
---- it is admitted fact that the plaintiff sought extension of time for completion of contract in lieu of the hindrance of 694 days for which admittedly the defendants granted 625 days extension of contract though without fresh work schedule which made impossible for the plaintiff to resume/complete the work. In fact after granting 625 days of extension, they on record were willing to extend further but without performing reciprocal promise of providing work schedule which was sine quo non. Therefore, they are guilty of breach of contract and therefore damages as detailed above. I further find that the hindrances occurred not on account of any fault of the plaintiff otherwise there was no occasion for the defendants to grant the time extension of 625 days which is almost equivalent to One year and Nine months. This is not even force majure and therefore attributable to the Defendants. The plaintiff even would have finished the work in the extended period of 625 days provided the defendants would have provided the work schedule, plaintiff ought to have incurred profitability loss as the plaintiff ought to have earned profit of 625 days if would have completed the contract without the hindrances of 625/694 days. This loss of profitably has been incurred by the plaintiff in the present scenario also as the plaintiff in order to complete the contract in the extended period kept on waiting through out keeping all its equipments/ machineries idle and kept on paying EMIs for all till October 2019. As such this hindrances further show that the defendants were negligent in dealing with the plaintiff failed to handover the site to the plaintiff without hindrances etc. Accordingly this issue is decided in favour plaintiff against the defendants.
----- Technically and formally the defendants never terminated the contract. However, they created a situation which was akin to termination as the plaintiff was put in a situation that it cannot execute the contract further. As late as 16-10-2019 (Exhibit 62), defendants informed and reminded the plaintiff that the contract will expire on 25-10-2019. Even in this letter, they allegedly reiterated that the plaintiff suspended the execution of the awarded work from 23-03- 2018 and did not resume the execution of the work despite several communications. Therefore, what is inferred from all the above that the defendants did not terminate the contract officially and kept on trying to impute upon the plaintiff that they abandoned the work from 23-03-2018 onwards. I further find that It was a cover up justification on the part of defendants who breached the contract in clear terms by not providing the work schedule of the extended period of contract and instead by action terminated the contract (by invoking bank guarantee) but formally never terminated the contract nor ever communicated to the plaintiff about any such alleged contract.
120. The learned original court while deciding the issue of termination of contract has categorically held that it is crystal clear that work 47 Commercial Appeal No. 18 of 2023 schedule for extended period was to be provided by BCCL but was intentionally and malafidely not given in the present case and further the justification of not providing the work schedule for the extended contract by the defendants gets self-contradictory and contrary to their similarly executed NIT and thus the defendants had breached the contract by not performing their part of contract i.e., by not providing the work schedule of the extended period of contract till 29.10.2019. For ready reference the relevant paragraph is quoted as under:
"From the above discussion, it is crystal clear that work schedule for extended period are provided by BCCL but was intentionally and malafide not given in the present case for the extended period of contract and further the justification of not providing work schedule for the extended Contract by the defendants gets self- contradictory and Contrary to their similarly executed NIT. It also becomes crystal clear that the defendants have concealed more than what they have revealed in this case and it is not a case of abandonment of contract by the plaintiff but creation of such situation by the defendants wherein the plaintiff has no choice but not to resume work as the defendants started working contrary to terms of Contract and in contradiction of their stand in similarly situated projects. In fact it were the defendants who breached the contract by not performing their part of contract i.e. by not providing the work schedule of the extended period of contract till 29-10-2019.
I further find that 'work schedule' as appears from the nomenclature is the month wise targets from the month when contract work commences till the same is completed. It was initially supplied by the defendant from month of February, 2012 till January, 2018 where the target is fixed for each month and also the cumulative target for each succeeding month (Exhibit 4). This work schedule is prepared jointly by the contractor and the employer.In the Contract Agreement (Ext.- 2) work schedule has been described as integral part of the contract. Practically, this is the planning of the contract work (removal of OB and extraction of coal) done before the beginning of the work. Hence, it is ridiculous and illogical to say that work schedule of the year 2012-18 could be followed in year 2018-19. Each progressive monthly target cannot become regressive. No one can travel back to past. Moreover, the extension in the case was provisional and defendants employer reserved right to impose penalty, so it is absurd on part of the employer to suggest that work could be performed without it, which is also clear from clause 14 of work (Ext. 4) which deals with penalty.In this clause it has been mentioned, "you shall be liable for the penalties as defined in the terms and condition of NIT/Tender Documents due to failure on your part, if any during execution of work." As such in the event of the contractor's failure to comply with the required progress in terms of the agreed time and progress chart or to complete the work and clear the site on or before the contract or the extended date of completion, he shall without prejudice to any other right or remedy available under the 48 Commercial Appeal No. 18 of 2023 law to the company on account of such breach, shall become liable to pay for penalty-------.
As such in the light of aforesaid discussion I came to conclusion that the termination of contract by the defendants in the middle of contract is illegal and unjustified which has been proved by the plaintiff. Therefore, this issue has also been decided in favour of plaintiff and against the defendants.
121. The learned original court while dealing with the issue of bank guarantee and the interest has taken note of statement of witnesses and has observed that the plaintiff was not doing the work after March 2018 due to defendants' failure to provide the work schedule which was the integral part of the contract and without which the extended contract period ought not have commenced and concluded. Hence, the act of defendants in enforcing performance guarantee is illegal and malafide and without giving opportunity the Bank guarantee was encashed secretly at the back of the plaintiff. For ready reference the relevant paragraph of impugned order is being quoted as under:
"Since relief with regard to bank guarantee and the interest on it, has been sought by the plaintiff, hence this issue has been casted on the pleading of plaintiff. As such the onus to prove this issue is upon the plaintiff. Before going to decide this issue I would like to mention some of the exhibits which are relevant for adjudication of this issue i.e. Exhibit 33, 36, 37, 38, 39, 40 and Exhibit 41. Exhibit 33 is photocopy of month wise retention money details, Exhibit 36 is photocopy of protest letter over BG encashment written by plaintiff to the defendant dated 15.04.2019, Exhibit 37 is photocopy of reply of BCCL dated 27.04.2019 to the letter of the plaintiff dated 15.04.2019, Exhibit 38 photocopy of letter of defendant to the SBI, SME Branch dated 02.04.2019 about encashment, Exhibit 39 photocopy of letter from SBI to the plaintiff dated 10.04.2019, Exhibit 40 is photocopy of letter dated 25.04.2019 of plaintiff to Branch Manager, SBI, Dhanbad regarding BG encashment and Exhibit 41 is certified copy of order sheet of R.C. Case No. 01(A)/2019 (D).
From perusal of the aforesaid exhibits quoted under this issue and the relevant portion of NIT and other material available on the record I find that NC Patch Kuya was completed by the plaintiff on 31.01.2018. Meanwhile the Bank guarantee was extended from time to time. Lastly on 18.05.2018 which was valid till 29.05.2019. Plaintiff came to know that Bank guarantee amount of 2,10,01,161/- was encashed by the defendant without any justifiable reason. I further find that PW-1 Rahul Singh has also stated with respect to bank guarantee and retention money which would be clear from para 26 and 28 of his examination in chief and even during cross examination, the defendants put no question to either PW-1 and PW-2 whatsoever and therefore the deposition of the plaintiff's witnesses remains unrebutted. I further find that PW-2 has also stated in para 25 of his examination in chief that amount of Rs. 2,10,01,161/- as Bank guarantee as realization money along with interest @ 15% is payable 49 Commercial Appeal No. 18 of 2023 to the plaintiff. In his cross examination no question was put to this witness on behalf of thedefendants. When I go through the deposition of DW-1 and DW-2 I find that both the witnesses did not say even a single word about the Bank guarantee and the retention money. I further find that a guarantee is a contract to perform the promise or discharge the liability of the third person in case of default. There are three parties namely- the principal debtor, creditor, and Debtor here plaintiff is the principal debtor and defendant is the creditor. The bank guarantee is a contract of secondary liability which arise only on the default of the principal debtor. The performance guarantee in question was executed by SBI Bank bearing No. BG 19/188[0654118BG000306] dated 18.05.2018 Rs. 2,10,01,161/-. The plaintiff wrote a letter dated- 15.04.2019 to the defendants which was marked as Exhibit- 36 in which the plaintiff protested about encashment of the BG without any notice to the defendants. The defendant replied to the said notice vide their letter dated- 27-07-2019 (Exhibit-37) .Para- 3 of this letter (Exhibit 37) the defendants referred to the case pending before CBI vide FIR No. RC. 1 (A)/2019-D dated- 03.01.2019. It has been further stated in para 4 of the said letter (Exhibit- 37) that the plaintiff has not completed awarded work and suspended the work and hence breached the condition. It has also been alleged that BCCL is continuously incurring losses in financial year 2019-2020 due to plaintiff's action. It is submitted that the State Bank of India vide this letter dated- 10.04.2019 (Exhibit-39) has intimated the plaintiff that full Bank guarantee amount has been credited to BCCL Accounts. It is interesting to note that defendant has written a letter dated 02.04.2019 for encashment of BG (Exhibit-38). The plaintiff wrote back to the State Bank of India vide letter dated- 25.04.2019 intimating about the total ignorance of the plaintiff about the bilateral correspondence between the Bank and the defendant.The contention of the defendant about the pendency of criminal case before CBI subsequently proved to be false in view of final report submitted by the CBI before the special Court, Dhanbad (Exhibit-44). I further find that in the aforesaid final report CBI has mentioned that "the contractor was working @ much below rate as prescribed in the contract. Thus as per the NIT/contract the contractor was not causing any loss to the BCCL". Hence the allegation of defendant coupled with their reliance of lodgment of CBI case clearly favours the case of plaintiff inview of final outcome of the said case whereby the allegation of over payment/ loss of BCCL was totally disbelieved. The plaintiff was not doing the work after March 2018 due to defendants failure to provide the work schedule which was the integral part of the contract and without which the extended contract period ought not have commenced and concluded. Hence the act of defendants in enforcing performance guarantee is illegal and malafide. I also find that there is no opportunity given to the plaintiff either by the Bank or defendants to present its case and the Bank guarantee was encashed secretly at the back of the plaintiff . I further find that there is no occasion for the defendants to liquidate the bank guarantee amount as the plaintiff had performed and discharged its duty as record under the contract.
As such I find that plaintiff has been able to prove this issue in his favour. Accordingly this issue also decided in favour of plaintiff and against defendants.----------.
I find that in this regard plaintiff has filed a letter detailing the total amount in the head of Service Tax. Although the said Exhibit 32 has been marked with objection there is no reason cited by the defendant 50 Commercial Appeal No. 18 of 2023 for such objection in the cross-examination. The defendants have put questions to this witness and all the replies were given by this witness which is crystal clear from para 60, 61 & 62 of this cross examination. I further find that defendants had not put any suggestion to the plaintiff in the cross examination. On the other hand, the defendant witness namely Arvind Kumar Mahato (D.W. 1) and Sanjiv Kashyap (D.W. 2) are totally silent in respect of service tax. I also find that no document has been filed by the defendants in support of their contention in as alleged in their written statement. I, therefore find that pleading of defendant was unsupported by the documentary and oral evidence and the pleadings unsupported by the documentary and oral evidence has no value in the eyes of law and plaintiff is entitled to claim of service Tax as put forth in Exhibit 32. Accordingly, this issue is decided in favour of plaintiff and against the defendants
122. It is evident that the learned original court has meticulously gone through the entire material available on record and the evidences adduced by both the parties, has found that the plaintiff has been able to establish its case successfully and proved its claim.
123. So far as the issue of interest is concern the original court has taken note of the fact that the plaintiff has suffered huge monetary loss without having any fault of its own and due to the whims and fancies of the defendants and therefore held that, the plaintiff is entitled for the pendente lite and interest @ 10.5% p.a.
124. Since, the rate of interest has emphatically been contended by the learned counsel for the defendants/appellants, therefore, this Court would like to revisit the issue of the interest.
125. The learned counsel for the appellant has contended that the interest was allowed by the learned original Court at the rate of 10.5% p.a. which is contrary to the requirement of Section 2(b) and Section 3(b) of the Interest Act read with Rule 2A of Order VII, as amended pursuant to the Commercial Courts Act, 2015.
126. It is evident that admittedly the suit has been adjudicated under the Commercial Courts Act as Commercial Suit. There is no contractual provision as to what would be the rate of interest in the contract.
127. It is contended that the pleadings in the plaint is not in terms of Rule 2-A (3) of Order VII, however it is considered view of this Court that the same will not lead to rejection of interest as given in the Commercial Suit for commercial transaction as the said provisions are 51 Commercial Appeal No. 18 of 2023 directory and not mandatory and there is no consequence provided in the Commercial Court Act for not adhering to the provisions of Rule 2-A. Therefore, the Respondent is entitled for interest for the commercial transaction.
128. The Hon'ble Apex Court has dealt with the issue that in which circumstances the provision of law will be directory and in which circumstances the same will be mandatory. Reference in this regard may be made to the judgment rendered by the Hon'ble Apex Court in the case of Dalchand vs., Municipal Corporation, Bhopal & Anr., (1984) 2 SCC 486, wherein, it has been held as under:-
".... .... ....There are no ready tests or invariable formulae to determine whether a provision is mandatory or directory. The broad purpose of the statute is important. The object of the particular provision must be considered. The link between the two is most important. The weighing of the consequence of holding a provision to be mandatory or directory is vital and, more often than not, determinative of the very question whether the provision is mandatory or directory. Where the design of the statute is the avoidance or prevention of public mischief, but the enforcement of a particular provision literally to its letter will tend to defeat that design, the provision must be held to be directory, so that proof of prejudice in addition to non-compliance of the provision is necessary to invalidate the act complained of. It is well to remember that quite often many rules, though couched in language which appears to be imperative, are no more than mere instructions to those entrusted with the task of discharging statutory duties for public benefit. The negligence of those to whom public duties are entrusted cannot by statutory interpretation be allowed to promote public mischief and cause public inconvenience and defeat the main object of the statute. It is as well to realise that every prescription of a period within which an act must be done, is not the prescription of a period of limitation with painful consequences if the act is not done within that period. Rule 9(j) of the Prevention of Food Adulteration Act, as it then stood, merely instructed the Food Inspector to send by registered post copy of the Public Analyst's report to the person from whom the sample was taken within 10 days of the receipt of the report. Quite obviously the period of 10 days was not a period of limitation within which an action was to be initiated or on the expiry of which a vested right accrued. The period of 10 days was prescribed with a view to expedition and with the object of giving sufficient time to the person from whom the sample was taken to make such arrangements as he might like to challenge the report of the Public Analyst, for example, by making a request to the Magistrate to send the other sample to the Director of the Central Food Laboratory for analysis. Where the effect of non-compliance with the rule was such as to wholly deprive the right of the person to challenge the Public Analyst's report by obtaining the report of the Director of the Central 52 Commercial Appeal No. 18 of 2023 Food Laboratory, there might be just cause for complaint, as prejudice would then be writ large. .Where no prejudice was caused there could be no cause for complaint. I am clearly of the view that Rule 9(j) of the Prevention of Food Adulteration Rules was directory and not mandatory. The decisions in Public Prosecutor v. Murlidhar [1977 Cr LJ 1634 (AP) : 1977 Andh LT 34 : 1977 MLJ (Cri) 205] and Bhola Nath v. State [1977 Cr LJ 154 (Cal) : (1977) 1 FAC 38] to the extent that they hold that Rule 9(j) was mandatory are not good law. The petition is dismissed.
129. Likewise, the Hon'ble Apex Court in the case of Patil Automation (P) Ltd. & Ors. vs. Rakheja Engineers (P) Ltd., (2022) 10 SCC 1, has held at paragraph-34, which reads as under:-
"34. In Bhikraj Jaipuria v. Union of India [Bhikraj Jaipuria v. Union of India, AIR 1962 SC 113] , a Bench of five learned Judges dealt with the question arising out of Section 175(3) of the Government of India Act, 1935. The Court, inter alia, had to deal with the question, whether enactment should be considered directory or obligatory : (AIR p. 119, para 17) "17. The question still remains whether the purchase orders executed by the Divisional Superintendent but which were not expressed to be made by the Governor-General and were not executed on behalf of the Governor-General, were binding on the Government of India. Section 175(3) plainly requires that contracts on behalf of the Government of India shall be executed in the form prescribed thereby; the section however does not set out the consequences of non-compliance. Where a statute requires that a thing shall be done in the prescribed manner or form but does not set out the consequences of non-compliance, the question whether the provision was mandatory or directory has to be adjudged in the light of the intention of the legislature as disclosed by the object, purpose and scope of the statute. If the statute is mandatory, the thing done not in the manner or form prescribed can have no effect or validity : if it is directory, penalty may be incurred for non-compliance, but the act or thing done is regarded as good. As observed in Maxwell on Interpretation of Statutes, 10th Edn., p. 376:
'It has been said that no rule can be laid down for determining whether the command is to be considered as a mere direction or instruction involving no invalidating consequence in its disregard, or as imperative, with an implied nullification for disobedience, beyond the fundamental one that it depends on the scope and object of the enactment. It may perhaps be found generally correct to say that nullification is the natural and usual consequence of disobedience, but the question is in the main governed by considerations of convenience and justice, and when that result would involve general inconvenience or injustice to innocent persons, or advantage to those guilty of the neglect, without promoting the real aim and object of the enactment, such an intention is not to be attributed to the legislature. The whole scope and purpose of the statute under consideration must be regarded.' 53 Commercial Appeal No. 18 of 2023 Lord Campbell in Liverpool Borough Bank v. Turner [Liverpool Borough Bank v. Turner, (1860) 30 LJ Ch 379 : 45 ER 715] observed : (ER p. 718) '... No universal rule can be laid down ... as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. It is the duty of courts of justice to try to get at the real intention of the legislature by carefully attending to the whole scope of the statute to be construed.' "
130. Further, the Hon'ble Apex Court in the case of Bhavnagar University vs. Palitana Sugar Mill (P) Ltd. and Others, (2003) 2 SCC 111, at paragraphs-42 and 43, has held as under:-
"42. We are not oblivious of the law that when a public functionary is required to do a certain thing within a specified time, the same is ordinarily directory but it is equally well settled that when consequence for inaction on the part of the statutory authorities within such specified time is expressly provided, it must be held to be imperative.
43. In Sutherland's Statutory Construction, 3rd Edn., Vol. 3, at p. 102 the law is stated as follows:
"... unless the nature of the act to be performed, or the phraseology of the statute is such that the designation of time must be considered a limitation of the power of the officer".
At p. 107 it is pointed out that a statutory direction to private individuals should generally be considered as mandatory and that the rule is just the opposite to that which obtains with respect to public officers. Again, at p. 109, it is pointed out that often the question as to whether a mandatory or directory construction should be given to a statutory provision may be determined by an expression in the statute itself of the result that shall follow noncompliance with the provision. At p. 111 it is stated as follows:
"As a corollary of the rule outlined above, the fact that no consequences of non-compliance are stated in the statute, has been considered as a factor tending towards a directory construction. But this is only an element to be considered, and is by no means conclusive."
131. Thus, from aforesaid discussion it is apparent that the original court has meticulously examined each and every evidence as available on record in order to allow the various claim in favour of the plaintiff, therefore, the order of original court has not suffered with any perversity. Further the original court while answering all the issues has actively considered each and every aspect of the instant case.
132. The learned original court, on consideration of the factual aspect, as has been answered hereinabove, based upon the testimony of the 54 Commercial Appeal No. 18 of 2023 witnesses, has answered all the issues, particularly regarding the non- furnishing of the work schedule by the appellants which has been taken as one of the grounds to compensate the respondent/plaintiff by way of damages.
133. Thus, the order impugned requires no interference by this Court.
134. Accordingly, the instant appeal fails and is dismissed.
135. Pending interlocutory application(s), if any, also stands disposed of.
I agree, (Sujit Narayan Prasad, A.C.J.)
(Arun Kumar Rai, J.) (Arun Kumar Rai, J.)
Saurabh / A.F.R.
55 Commercial Appeal No. 18 of 2023