Madras High Court
K & K Contech Engg Pvt Ltd vs / on 15 April, 2015
C.S.No.308 of 2015
and A.Nos.4605 & 4606 of 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on: 18.02.2020 Pronounced on: 27.02.2020
Coram::
The Honourable Dr.Justice G.Jayachandran
C.S.No.308 of 2015
& A.Nos.4605 & 4606 of 2018
K & K Contech Engg Pvt Ltd.,
Represented by Mr.Cheol ho Kim,
Executive Director,
No.3203, 1st Floor, U.K.Towers,
Mount Poonamalle Road,
Kattupakkam, Chennai – 600 056. ... Plaintiff
/versus/
M/s.Madha Construction of Properties Pvt Ltd.,
Represented by Managing Director,
Dr.S.Peter having its administrative Office at
No.1A, Chari Street, North Usman Road, T-Nagar,
Chennai – 600 017. ... Defendant
Prayer: Plaint is filed under Order IV Rule 1 of Original Side Rule read with Order
VII Rule 1 of C.P.C., 1908.
a. Direct the defendant to pay the plaintiff a sum of Rs.3,18,33,708/- (Rupees
Three Crores Eighteen Lakhs Thirty three Thousand and Seven Hundred and Eight
Rupees only) together with interest 18% per annum of the amount of
Rs.2,59,86,700/- (Two crores fifty Nine Lakhs Eighty Six Thousand and Seven
Hundred only) from the date of the plaint to till date of payment.
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b. The Hon'ble court may pleased to grant a charge decree for the suit claim on
the site described in the schedule hereunder upon which the plaintiff erected and
construction of buildings.
c. For permanent injunction restraining the defendant, its men, agents or others
acting on its behalf or any other builder from in any manner interfering with the
plaintiff possession of the buildings erected on the site belonging to the owner till the
entire suit amount as prayed for is paid to the plaintiff.
d. For permanent injunction not to alienate or create encumbrances in site
described in the schedule hereunder without paying the suit claim amount of
Rs.3,18,33,708/- (Rupees Three Crores Eighteen Lakhs Thirty Three Thousand and
Seven Hundred and Eight Rupees only).
e. Directing the defendants to pay the plaintiff the cost of the suit and;
f. Pass further order or orders as this Hon'ble Court may deem fit and proper in
the circumstances of the case and thus render justice.
For Plaintiff : Mr.S.Sivashanmugam
For Defendant : Ms.Rita Chandrasekar
for M/s.Aiyar & Dolia
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JUDGMENT
The suit is filed by the contractor for recovery of money due towards the construction of the building in the defendant's land and pursuant to the contract dated 15.04.2015.
2. The plaintiff has also prayed for permanent injunction restraining the defendants and their men and agents, anyway interfering or encumbering the suit property, which is in possession of the plaintiff, till the suit claim is paid.
3. The plaintiff case in detail is as under:-
(i). The plaintiff states that the defendant is the owner of the site situated in Survey No.S2644/2B1, 2B2 & 2B3 at Alapakkam Road, Maduraivoyal Chennai.
On 06.06.2012, the defendant got the plan approval from CMDA for Construction of Office/Residential building vide planning permit No.V-SPL-VLGD-224AE-2012 with intention to construct a building block measuring approximately 45000 sq.ft with stilt area measuring approximately 8500 sq.ft and 4 floors all measuring approximately 36500 sq.ft.
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(ii). On 15.04.2015, the plaintiff and defendant entered into a agreement for construction of the aforesaid project. As per the agreement, the plaintiff should have to start the work, complete the same and hand over the constructed building within 1 year from 15.04.2013.
(iii). The payments are to be made in a phased manner, as per the rate set out hereunder:-
ANNEXURE-1 Rate Schedule Area in Sq.ft Rate Rs. Amount (approximate) Stilt 8538.00 850.00 72,57,300.00 First Floor 9175.76 Second Floor 9175.76 Third Floor 9175.76 Fourth Floor 9175 Total Floor area 36703.04 1600.00 5,87,27,864.00
(iv). Rate inclusive of all materials, labour charges and also it includes elevation work, painting work, headroom work, water tank, weathering course, waterproof work, sump & STP and 2 lifts.
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(v). The defendant was allowed to retain 3% of each bill as retention money and the same shall be refunded by the defendant after the completion of the project. As per the terms of the agreement, the plaintiff shall start the work on 23.04.2013 and has to hand over keys within one year from the date of agreement i.e.,15.04.2014.
(vi). The plaintiff states that clause 16 of the aforesaid agreement stipulate that if the defendant at any time dissatisfied with the progress of work or quality of material or workmanship, he may depute an engineer to inspect the work. Clause 20 of the agreement provides that the owner and the contractor shall adhere to the rate and payment schedule as per Annexure 1 of the agreement.
PAYMENT SCHEDULE
WORK DONE PERCENTAGE AMOUNT
Excavation/PCC Completion 8% 52,78,573.00
Basement completion 10% 65,98,216.00
G.Floor roof completion 9% 59,38,395.00
1st Floor roof completion 9% 59,38,395.00
2nd Floor roof completion 9% 59,38,395.00
3rd Floor roof completion 9% 59,38,395.00
4th Floor completion 9% 59,38,395.00
1st and 2nd floor brick completion 5%+2% 32,99,108.00
3rd and 4th Floor brick completion 5%+2% 32,99,108.00
1st and 2nd Floor title completion 5%+2% 32,99,108.00
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WORK DONE PERCENTAGE AMOUNT
3rd and 4th Floor title completion 5%+3% 32,99,108.00
Painting and elevation work 7%+1 46,18,751.00
completion
Handing over 10% 62,98,216.00
Total 100% 6,59,82,164.00
(vii) The plaintiff submits that the defendant has to make the payments as per annexure within 7 working days from the receipt of plaintiff bill for the particular stage. The plaintiff should also give a photographs of completion of the particular stage along with the bill. The defendant has to deduct TDS, service taxes on the payments made to the plaintiff. Annexure No.2 of the agreement provides for specification in structure, wall finishings, ceiling. Floor and common are a finishing Doors and windows etc.,
(viii). The plaintiff submits that on 23.05.2013, the plaintiff entered into an agreement with his sub-contractor namely M/s.Kumaran Constructions for carrying out construction and erection of the building in the suit property.
(ix). On 24.12.2013, the plaintiff and defendant have entered into another agreement partially modifying the payment schedule of their earlier 6/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018 agreement dated 15.04.2013. Accordingly, plaintiff raised the invoices and bills and required payment by the defendant. The invoice details are as follows:-
Invoice Date Invoice Amount Service Tax Total Nos.
001 11th June 2013 5278573 260973 5539545 002 3rd August 2013 6598216 326215 6924431 003 19th October 2013 5938395 293594 6231989 004 24th December 2013 5938395 293594 6231989 005 21st February 2014 5398395 293594 6231989 006 20th March 2014 5398395 293594 6231989 007 2nd May 2014 5938395 293594 6231989 008 12th June 2014 2484116 122815 2606931 44052880 2177972 46230852
(x). By this time, the plaintiff has completed 8 stages of construction and was requesting the defendants to make payments. On 10.06.2014, the plaintiff sent a letter requesting the defendant that invoice Nos.005 dated 21.02.2014, 006 dated 20.03.2014, 007 dated 02.05.2014 are still over due for payment as per the terms of the agreement to the defendant requesting early payments of the dues. Since the payments are not forthcoming the plaintiff was forced to lodge a police complaint on 16.06.2014 with the Ambattur Police Station. According to the plaintiff, the value of the completed project was Rs.4,62,30,852/-. The plaintiff has thus far 7/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018 received Rs.1,85,61,119/-. The plaintiff has made a claim for Rs.3,18,33,708 being the sum total of the amount due with interest @ 18%.
4. The defendant case in detail is as under:-
(i). The defendant filed the written statement denying all the averments and allegations raised in the plaint. The defendant is the co-owner of the property situated at Alapakkam Main Road, Maduravoyal Village measuring an extent of 19 grounds. As per the agreement dated 15.04.2013, the plaintiff agreed to use the best quality materials in accordance with the building plans and specifications. The plaintiff also undertook to complete the construction to the satisfaction of the defendant. The supervision of the construction activity was entrusted to a Structural consultant and the said consultant pointed out several defects in the execution of works by the plaintiff. The said defects were noted by the Structural Consultant and by the letter dated 22.07.2014, the consultant certified that the construction activities has not been carried out by the plaintiff in accordance with the specifications and drawings.
(ii). During August 2014, the plaintiff abandoned the site without the knowledge of the defendant and removed all its building materials from the work site including a Container in the Office room. As the plaintiff left the site without any 8/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018 intimation, the defendant in terms of Clause 16 of the agreement entered upon the site and engaged another contract labourer to continue with the work left unfinished by the plaintiff.
(iii). The plaintiff with a view to unjustly enrich itself lodged a complaint with the Joint Commissioner of Police – West Ambattur on 16.06.2014.
In the said complaint, it was mentioned that the plaintiff had done work for a sum of Rs.4,62,30,852/- but received payment to the extent of Rs.2,92,10,721/-. But in the documents filed by the plaintiff, while enclosing the complaint dated 16.06.2014, has altered the amount specified therein stating that it had received only a sum of Rs.1,85,61,119/- from the plaintiff. In the complaint given by the plaintiff on 17.06.2014 to the Assistant Commissioner (Law and Order) Kundrathur Police Station, the plaintiff had stated that it had received a sum of Rs.2,32,72,326/-. This itself would go to prove that the plaintiff has failed to approach the Court with clean hands.
(iv). The defendant submits that the plaintiff never agreed for nominating a common valuer to assess the work done, as it knew very well that the appointment of a common valuer will go against it and the poor quality of construction will come to limelight. Apprehending the same, the plaintiff never gave 9/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018 consent for appointing a common valuer.
(v). The defendant was constrained to proceed with the construction work by engaging another contractor after the plaintiff abandoned the site. To get the work done, the defendant had spent a sum of Rs.50.00 lakhs (approx) which was left in lurch by the plaintiff.
(vi). The plaintiff committed breach of the agreement by Sub- Contracting the works to another contractor who was unqualified and the Sub- Contracting issue was never brought to the knowledge of the defendant. If really this defendant had to pay money to the plaintiff, the plaintiff would not have left the site without prior intimation.
(vii). The defendant has paid a sum of Rs.2,92,10,721/- to the plaintiff despite the fact that it had done works to the tune of Rs.1,53,95,879/- only. In fact, it is the defendant who should have filed a suit for recovery of money from the plaintiff. On the other hand, the plaintiff just to cover their shortcomings and deficiencies had shifted the blame on the defendant and had raised a false claim. 10/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018
5. Based on the pleadings, this Court framed the following issues.
“1. Whether the defendant was making payments as per payment schedule as per the construction agreement dated 15.04.2013, and later, partially modified through another agreement dated 24.12.2013?
2. Whether the defendant is estopped from raising the issue of sub-contract, when the same was well within its knowledge and not disputed during the currency of the agreement?
3. Whether the defendant was making statutory dues that were deducted from the payments made to the plaintiff?
4. Whether the defendant's stand that the plaintiff had breached the terms of agreement is legally sustainable when it had not made any payments for the bills raised by the plaintiff on the works done by it?
5. Whether the action of the plaintiff in demobilizing from the site without completing the works by removing the materials of the defendant from the work site without the knowledge of the defendant is justified?
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6. Whether the plaintiff is entitled for the amount claimed in the suit when the value of work done by it is only for a sum of Rs.1,59,95,879/-.
7. Whether the plaintiff is entitled to the relief sought for in the suit when it had completed only a part of the structural works?
8. To what relief the parties to the suit are entitled to?”
6. On the plaintiff's side its Manager HR and Admin Mr.Rameshwaran and the Court appointed valuer Mr.N.D.Elango were examined as PW.1 and PW.2 respectively. Ex.P.1 to Ex.P.41 and Ex.C.1 were marked through these witnesses. On the defendant's side Mr.Peter was examined as D.W.1 through him Ex.D1 to Ex.D15 were marked.
7. The Learned Counsel for the plaintiff submit that, as per the agreement dated 15.04.2013, Ex.P.2, the plaintiff has completed upto 8th stage i.e., 1st and 2nd floor brick completion. The payment schedule was not adhered by the defendant. There was delay in payment of the first three invoices (Ex.P.4, Ex.P.6 and Ex.P.10). At that juncture, the plaintiff and the defendant entered into the 12/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018 agreement on 24.12.2013 (Ex.P.14), a partial modification of the earlier agreement dated 15.04.2013.
8. Accordingly, when 5th invoice Ex.P.16 dated 21.02.2014, for net value Rs.61,31,989/- was raised, the defendant issued cheque marked as Ex.P.19 for a sum of Rs.25,00,000/- towards part payment. On presentation of the cheque for collection, the said cheque returned with an endorsement “insufficient of fund”. The cheque was represented but again bounced. The failure to honour this cheque not denied by the defendant. For the invoices 6 & 7, the defendant never released the payment. The defendant breached the payment schedule therefore, the plaintiff was forced to give police complaint (Ex.P.30).
9. As against the work value of Rs.4,62,30,852/-, the defendant has paid only Rs.1,85,61,119/-. While making payment towards invoices 1, 2 and 3, the statutory dues such as TDS was deducted by the defendant but same not remitted to the authority. The defendant has not adduced any evidence to prove, it has remitted the statutory dues deducted from the plaintiff duly remitted to the concern authorities.
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10. Regarding the sub-contract to M/s.Kumaran construction, the learned Counsel for the plaintiff would submit that, under Ex.P.2 entered between the plaintiff and the defendant, there is no restriction for sub-contracting. The sub- contract agreement Ex.P.3 was entered on 23.05.2013 soonafter, Ex.P.2. The work upto 8 stages was done through the Sub-contractor and the defendant did not raised objection. Even during the modification agreement on 24.12.2013 (Ex.P.14) the defendant did not protest or objected for the work being carried through Sub- contractor. After committing breach of the agreement and default in payment, the defendant resort to a fake defence, which is not legally sustainable. Even prior to the contract Ex.P.2, the defendant and the Sub-Contractor Balasubramanian are known to each other. D.W.1 in his deposition has admits about it that the payments arising under this contract had been paid by the defendant to the sub-contract directly as per the instruction of the plaintiff. Ex.D5, Ex.D6, Ex.D7, Ex.D8 and Ex.D.17 documents proves the payment made to the sub-contractor, knowing and acknowledging the sub-contract.
11. The Learned Counsel for the plaintiff would plead that, as per the agreement the plaintiff has completed upto 8th stage. The payments were made only upto 4th stage that too belatedly without adhering the payment schedule. Due to non- 14/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018 payment and the bouncing of the cheque given towards the due, the plaintiff was forced to stop construction. The defects pointed out by the site Engineer of the defendant in Ex.D.10, letter is vague and without any specific reference to defects. No materials placed by the defendant to establish the value of the work done by the plaintiff is worth less than Rs.4,62,30,852/-. DW.1 admitted in his cross examination that, Ex.P.10 is bereft of particulars. Contrarily, through the Court appointed valuer. PW.2, the plaintiff has independently established the value and stages of the construction put up by the plaintiff. Hence, the suit is to be decreed as prayed.
12. Per contra, the learned counsel for defendant would submit that, as per the terms of agreement entered between the plaintiff and defendant on 23.04.2013, the work should have been completed within one year and based on the progress of the work, the defendants agree to pay to the plaintiff. Violation to the terms of the agreement, the plaintiff failed to complete the work within the time prescribed. He abandoned the site without completing the work and also removed the construction materials from the site. A joint inspection was conducted by the plaintiff and the defendant and revised modified agreement was entered. The plaintiff not only failed to complete the work but also fail to rectify the defects noted during the joint inspection. The defendant sent a letter on 22.07.2014 to the plaintiff stating that, the construction activity has not been carried out in accordance with the 15/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018 specification and drawing. The plaintiff, instead of rectifying the defects filed a criminal complaint on 16.06.2014 in order to harass the defendant. In the said complaint, the plaintiff has admitted that, he has received Rs.2,92,10,721/- as against the work done to a tune of Rs.4,62,30,852/-. However, in the present suit, he has altered the stand saying that, only a sum of Rs.1,85,69,119/- was received from the defendant. This itself shows that, the plaintiff has not come with clean hands. In fact, the plaintiff has executed work to a tune of Rs.1,53,95,879/- but had received Rs.2,92,10,721/-. The defendant wanted the plaintiff to co-operate and suggested to appoint a valuer for assessing the work done. However, the plaintiff refused to co- operate. Without intimation he left the site, removing the materials. In the said circumstances, the defendant was constrain to proceed by engaging labourers on weekly basis under the supervision of qualified engineer and complete the work.
13. The learned Counsel appearing for the defendant would submit that, the plaintiff has committed breach of agreement by sub-contracting the work to an unqualified person, when there is no clause permitting the petitioner to sub-contract the work to the third parties.
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14. Pending suit, application for appointing common valuer was filed in which, the Court has appointed Mr.N.D.Elango, (P.W.2), to inspect the work and submit detailed report about the nature, quality of construction and value construction. However, the report of the valuer is objected by the defendant on the ground that the report submitted by the valuer on 18.03.2019. Ex.C.1 is very vague and failed to mention the value and quality of construction. Also the counsel for defendant would state that, during the cross examination, Mr.N.D.Elango, (PW.2), valuer, has given a vague and irrelevant answer, which renders his report void.
15. Summing up this argument, the learned counsel would submit that,
(a). The plaintiff breached the terms of the agreement dated 15.04.2003 when it had sub-contracted the work to a third party.
(b). The plaintiff abandoned the site without prior intimation to the defendant and the said act of the plaintiff is once again against the terms of the Agreement dated 15.04.2003.
(c). The plaintiff never took steps to rectify the poor construction which was performed by them was noted and informed to them after periodical inspection conducted by the Structural Consultant.
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(d). The plaintiff deliberately has been changing the amounts which its alleges as due from the defendant. In the plaint, in Paragraph No.10, its been mentioned that it had received only a sum of Rs.1,85,61,119/-, where as in the complaint dated 17.06.2014 lodged with the AC, Kundrathur Police Station, it has been stated that it had received a sum of Rs.2,32,72,326/-.
(e). The third party surveyor who was appointed by this Hon'ble Court, admitted during his cross examination that there was defects in the construction and filed photographs along with his report. On the other hand, he deliberately failed to admit that the said construction was done by the plaintiff.
(f). The plaintiff's claim is not supported by proper documentary evidence. On the other hand, it is the admitted case of the plaintiff that they have left the site without prior intimation to the defendant and further they have also sub- contracted the work to a third party which is again breach in the terms of the agreement.
(g). The report of Mr.N.D.Elango dated 18.03.2019, as per the order passed in Application No.4606 of 2018 is biased and incomplete in all aspects. The photographs filed in the report would show that the construction is incomplete and the presence of various structural defects are clearly visible to the naked eye. On the other hand, the valuer/surveyor had arrived at conclusion that the construction is good and minor repair works 18/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018 are required. This itself will go to show that the entire report has contradictory features and was made ready only at the instance of the plaintiff.
(h). In the report of the valuer/surveyor, it has been mentioned that the work completed by the plaintiff is to the tune of Rs.4,27,68,764/-, whereas, the rectification amount required is only Rs.8,46,580/-. The said observation is not supported by any proper calculation or documentary evidence. On the other hand, the photos in the report itself will go to show that to repair or rectify the same will cost a huge sum and the amount quoted in the report is paltry and unrealistic.
(i). The report is contrary to the joint inspection conducted on 16.06.2014 and this itself will go to show that the report of the valuer/surveyor cannot be relied upon. The objections filed by the defendant to the report filed by the Surveyor is more elaborate and clear.
16. Ex.P.2 is an agreement between the plaintiff and defendant dated 15.04.2013. In this agreement, the parties have agreed to complete the construction as per the specification in the annexures enclosed along with the agreement. The rate as well as payment schedule also specifically mentioned in the said agreement. As per the payment schedule, 13 stages has been envisaged for payment and the percentage of payment is also fixed. For easy reference, the said payment schedule is 19/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018 extracted below:-
WORK DONE PERCENTAGE AMOUNT
Excavation/PCC Completion 8% 52,78,573.00
Basement completion 10% 65,98,216.00
G.Floor roof completion 9% 59,38,395.00
1st Floor roof completion 9% 59,38,395.00
2nd Floor roof completion 9% 59,38,395.00
3rd Floor roof completion 9% 59,38,395.00
4th Floor completion 9% 59,38,395.00
1st and 2nd floor brick completion 5% 32,99,108.00
3rd and 4th Floor brick completion 5% 32,99,108.00
1st and 2nd Floor title completion 5% 32,99,108.00
3rd and 4th Floor title completion 5% 32,99,108.00
Painting and elevation work 7% 46,18,751.00
completion
Handing over 10% 62,98,216.00
Total 100% 6,59,82,164.00
17. The case of the plaintiff is that the payment was made only upto 4th stage. Whereas, he has completed the work upto to 8th stage. From the payment schedule, 4th stage is 1st floor roof completion, till that stage on completion of the work, the defendant liable to pay 36% of the total work value (8%+10%+9%+9%). The plaintiff contention is that, for the next four stages which end upto 1 st and 2nd floor brick completion, the defendant ought to have paid a further 33% of the work value. While the payment upto 8th stage is around Rs.4,62,30,852/-, the plaintiff has 20/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018 paid only Rs.1,85,61,119/-. The balance was not paid by the defendant. The cheque given by the defendant for a sum of Rs.25 Lakhs was also bounced.
18. It is further contention of the plaintiff that, when there was default in payment on the part of the plaintiff, even in respect of the 1st three invoices, the parties agreed for a partial modification and entered into an agreement dated 24.12.2013. This agreement is marked as Ex.P.14. In the partial modified agreement, the payment schedule is refixed as below:-
Sl. Work done % Amount Rs. Remarks/modification Nos.
1. Excavation/PCC 8% 52,78,573.00 Paid Rs.49,09,073.00
2. Basement Completion 10% 65,98,216.00 Paid Rs.6136341.00
3. G.Floor Roof Completion 9% 59,38,395.00 Pending as the GF is not completed and this 9% is added in the payment % of S.Nos.8 to 12 as 2%, 2%, 2%, 2% and 1% respectively.
4. 1st Floor Roof Completion 9% 59,38,395.00 After deduction of TDS @ 0.75% and Retention amount @3% Rs.10,00,000/- is paid on 24.12.2013 vide cheque No.529483/BOB dated 30.12.2013. This cheque will be honoured only after the supply of required steel at the site) An amount of Rs.47,15,705/- is paid on 24.12.2013 vide Chq. No.841752 dated 15.01.2014 and this cheque will be honoured only after successful completion of first floor roof
5. 2nd Floor Roof completion 9% 59,38,395.00 -
6. 3rd Floor Roof Completion 9% 59,38,395.00 -
7. 4th Floor Roof Completion 9% 59,38,395.00 - 21/38
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8. 1st and 2nd Floor Brick 5% 32,99,108.00 -
Completion (+2%) +13,19,643.00
9. 3rd and 4th Floor Brick 5% 32,99,108.00 -
Completion (2%) + 13,19,643.00
10. 1st and 2nd Floor title 5% 32,99,108.00
Completion (2%) + 13,19,643.00
11. 3rd and 4th Floor Title 5% 32,99,108.00 -
completion (2%) + 13,19,643.00
12. Painting and Elevation 7% 46,18,751.00 -
work completion (+1%) +
6,59,82,164.00
13. Handing over 10% 65,98,216.00 -
Total 100% 6,59,82,164
19. Under the remarks column, the amount received by the plaintiff is also mentioned. The said remarks in respect of the cheque given by the defendant it is indicated that, the cheque dated 30.12.2013 for a sum of Rs.10,00,000/- lakhs will be honoured only after supply of steel at the site. The said cheque is marked as Ex.P.15. The other cheque for a sum of Rs.47,15,705/- dated 15.01.2014 it is stated that it will be honoured only after successful completion of 1 st floor roof. This revised payment schedule dated 24.12.2013 reveals that, the defendant has paid only a sum of Rs.49,09,073/- towards the 1st stage, evacuation, PCC completion and Rs.61,36,341/- during the 2nd stage namely basement completion. In this modified agreement in Ex.P.14, the parties have agreed for deduction of TDS and retention 22/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018 amount. This agreement has been arrived between the parties on 24.12.2013, after various correspondence between the parties between 24.12.2013 and 30.10.2013. These correspondence are marked as Ex.P.9 to Ex.P.13. In the said context, Ex.P.19 cheque issued by the defendant for a sum of Rs.25,00,000/- lakhs dated 15.03.2014 gains significance to hold that the defendant, who has consented for partial modification for completion of work and had issued cheque for a sum of Rs.25,00,000/- on 15.03.2014 has failed to honour the cheque. He has not given any valid explanation for not honouring the cheque. The defendant rely upon certain cheques and vouchers which are marked as Ex.D.1 to Ex.D.8 to show he has paid sufficiently to the plaintiff. Ex.D.1 is the cheque dated 14.09.2013 for a sum of Rs.61,36,341/-. This payment is not denied by the plaintiff and in fact, this payment is mentioned and admitted in Ex.P.14 which is the partial modification agreement itself. Ex.D.2 is the vouchers dated 24.12.2013 for cheques Rs.47,15,705/- and Rs.10,00,000/ respectively. The photocopy of the cheque is marked as Ex.D.3. Whether this cheque was realised are not has not been proved. Similarly, regarding the voucher and cheques which are marked as documents Ex.D.5 to Ex.D.8, the learned Counsel for the plaintiff would submit that, the vouchers and cheque though in the name of the plaintiff, it has been received by G.Balasubramanian, who is none other than the sub-contractor with whom the plaintiff has entered into an agreement Ex.P.3 on 23.05.2013.
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20. The learned counsel for the plaintiff would contend that, while the defendant conveniently rely upon the vouchers received by Balasubrmanaian, cannot question the sub contractor agreement between the plaintiff and Balasubramanaian. This Court agrees in toto with the above submission of the plaintiff counsel.
21. The defendants rely upon the series of cheques vouchers vide marked as Ex.D.12 to emphasis that, they have engaged private contractor to complete the construction work, which was abandoned by the plaintiff. These vouchers are between 07.10.2014 to 11.03.2015. Similarly, Ex.D.13 series are receipts of materials suppliers. The suppliers have not been examined and whether the supply and labourer was for the completion of the work of the building under dispute is not spoken by any witness, except the self serving statement of the Mr.S.Peter (D.W.1), which has been denied and subjected to cross examination. In this regard, certain portion of the deposition of Mr.S.Peter (D.W.1) during the cross examination required to be noted to understand the worthiness of the witness. When the witnesses was confronted with Ex.D.5, Ex.D.6, Ex.D.7, Ex.D.8, & Ex.D.17 which are vouchers signed by Balasubramanian, the witness has conveniently answered that, he do not remember whether the person who has signed the voucher and received the cheque is the Bala @ Balasubramanian Sub-Contractor, mentioned 24/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018 in his proof affidavit.
22. To another question, on what basis, he has paid the money to Bala @ Balasubramanian, the defendant admits that, he used to get telephonic instruction from the plaintiff and based on them, he disperse the money. This would clearly go to show that, the plea of the defendant that the plaintiff breached the terms of agreement by sub-contracting the work to the third party falls to ground.
23. Regarding the money dues, the Learned Counsel for the defendant would harp on the criminal complaint given by the plaintiff to the Joint Commissioner of Police, which is marked as Ex.D.9, wherein, the plaintiff has stated that, they have completed the work of Rs.4,62,30,852/- but received only Rs.2,92,10,721/- and a sum of Rs.1,70,20,132/- is pending for more than 120 days. While the plaintiff referring the payment schedule and the admitted documents asserted that only a sum of Rs.1,85,61,119/- has been paid as against Rs.4,62,30,852/-. The defendant who wants to prove the contrary, cannot rely upon the statement in a police complaint as an admission, he has to produce documents, regarding payments made for the construction.
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24. The Learned Counsel for the defendant heavily harp on Ex.D.10 which is a letter dated 22.07.2014 sent by one Mr.S.P.S.Inbarajan, Chief Consultant, Bourna Consultant Engineers. In this letter, the said Mr.S.P.S.Inbarajan has informed the defendant as under:-
“I have been entrusted with the work of supervising the construction activity in the property situate at S.No.264/2B1, 2B2 and 2B3, Alapakkam Main Road, Maduravoyal which has been entrusted to M/s.K & Contech Engineering Pvt. Ltd., Accordingly, I conducted periodical inspection and found that the construction activities has not been carried out in accordance with the specifications and the drawings. The same was orally informed to the Contractor and I had also made a complaint to your good self. This is for your kind information.”
25. Ex.D.10 has no evidentiary value for multiple reasons:-
(i). The author of the letter not been examined.
(ii). The content of the letter also does not disclose any detail about the inspection conducted by the author of this letter.
(iii). There is no reasoning furnished by him why he found the construction activity has not been carried out in accordance with the specification and drawing. 26/38
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(iv). This letter alleged to have been written on 22.07.2014 much after the plaintiff's lodge a police complaint on 16.06.2014 vide Ex.D.9.
26. It is not difficult to conclude that Ex.D.10 is a make believe document without any credence to rely upon. It is created by the defendant subsequent to the police complaint in order to get rid from the criminal action.
27. During the cross examination of P.W.1, when pointed question was put to him, regarding the periodical inspection of the construction activity. D.W.1 has stated that, the inspection was minimum on monthly basis but admits that, he has not submitted any of the inspection report to the Court. When Ex.D.1 is the silent about the nature of the defect and the defendant has not produced any other documents to show that, they were actually defect in the construction and that was rectified by him subsequently. No amount of plead without evidence can be taken in favour of the defendant.
28. Pending suit, this Court has appointed a common valuer who has inspect the site and submitted the report. This report is marked as Ex.X.1. The valuer has also been examined by the plaintiff as P.W.2. Though the defendant has objected 27/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018 to the valuer's report as a lopsided report and it does not contain quality of construction, his report indicates that, he has perused the agreement dated 15.04.2013 which contains details of quality and quantity of work and he has inspected the building and found that the value of the work done in the building is Rs.4,27,68,764/-. The rectification work such as removal of old carving floor, plastic and packing in the RCC column, removal of debris, cleaning, water etc. He has fixed a sum of Rs.8,46,580/-. So from his report the fact proved is the plaintiff has constructed the building in the land of the defendant which worthy Rs.4,27,68,764/-, as per the valuer. Whereas, the plaintiff says that the total worth of the work is Rs.4,62,30,82/-. The plaintiff admitted that he has received Rs.1,85,61,119/-. Though the defendant claims they paid Rs.2,92,10,721/- to the plaintiff, he has not produced any documents for such payment. When there is no clause in the contract that the plaintiff should not sub-contract the work and the evidence available go to show that the defendant has acquiescence to the sub-contractor, the defendant estopped from raise a plea that, by sub-contracting, the plaintiff has breached the terms of contract when there is no term in the contract prohibiting sub-contract. The dishonour of cheque Ex.P.19 clearly indicates that, soonafter the modified agreement, the defendant has again defaulted and dishonoured the cheque paid for the construction work. Thereafter, the defendant has not paid any money. Whereas, the plaintiff has proved through the invoice and through Commissioner's report that, 28/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018 the building stands 4th floor roof work completion, which according to the site inspection report (Ex.X.1). 63% of the total work.
29. In the light of the above facts and evidence discussed above, the issue framed are answered as below:-
Issue No.1 The defendant has failed to make payment as per the payment schedule drawn under the agreement Ex.P.2 dated 15.04.2013. This has forced the parties to enter upon the modified agreement on 24.12.2013. Despite the modified agreement, which has fixed the revised schedule for payment, the defendant has patently failed to honour the commitment. Bouncing of cheque Ex.P.19, for Rs.25,00,000/- is one such evidence for the breach. Hence, issue no.1 is held as the defendant. Issue No.2 The plaintiff, soon after the agreement with the defendant on 15.04.2013 under Ex.P.2 has entered into a sub-contract agreement on 23.05.2013, the defendant admits that, to Balasubrmanaian, he has made payment for the construction work carried on by the plaintiff at the instance of the plaintiff. The issue of sub-contract was not raised by the defendant when the revised modification in the payment schedule agreed under Ex.P.14.
29/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018 The defendant states that, the work was supervised by him regularly through the independent supervisors. If really he was aggrieved by the sub-contract, he should have opposed it at the earliest, not after construction of work worth around Rs.5.4 crores carried by the plaintiff through his sub-contractor and after failed to pay the plaintiff. Hence, the defendant is estopped from raising the issue of sub- contract. Hence, issue No.2 is held against the defendant. Issue No.3 The invoice of the communication including the agreement indicates that, the defendant for the payment should deduct TDS and remit it to the authority. While the plaintiff has specifically alleged that the defendant has failed to remit the statutory duty, the defendant is silent about it both in the written statement as well as in his deposition. The fact not denied has to be presumed to be admitted. Hence, issue No.3 held against the defendant.
Issue No.4 In a work contract, when the payment not made as per the schedule, breach is not committed by the contractor but by the other party. In this case, breach is committed by the defendant. He has not paid the bills as per the payment schedule. After the criminal complaint and exchange of notice, he has invented reason for non- payment. Therefore, the stand of the defendant alleging breach on the part of the 30/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018 plaintiff is not sustainable. In the light of the overwhelming evidence placed by the plaintiff to prove the contrary. Issue No.4 is held in negative. Issue No.5 The defendant has stopped the work and had removed the materials from the defendant's site only after the breach committed by the defendant in respect of the payment. A violator of the contractor cannot except that the materials in the site should be left unutilised or allowed to be utilised by the person who has defaulted to pay the money. The removal of materials, if any, from the site by the plaintiff, cannot be faulted. Hence, issue No.5 is answered accordingly. Issue No.6 The defendant though claim that the value of the work done by the plaintiff is only Rs.1,59,95,879/- The evidence available proves contrary. The plaintiff claims that the value of the works is Rs.4,62,30,852/-. The valuer appointed by the Court says it worth Rs.4,27,68,764/-. The plaintiff has raised invoice upon to 8th stage. The payment schedule and the stage mentioned in the contract indicates that, the work found completed as on date of inspection by the valuer is around 65%. The total value of the contract as per Ex.P.2 is Rs.6,59,82,164/-. The defendant has made a random assessment without any basis and had contended that the value of the construction made by the plaintiff is Rs.1,59,95,879/-. Whereas, the contract schedule, evidence including the invoice and the revised agreement indicates that the 31/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018 value of the building constructed should be more than Rs.4 crores. Hence, issue No.6 is answered accordingly.
Issue No.7 Applying the principle of preponderance of probability, the plaintiff who has taken the contract as a commercial pursuit is entitled for a profit margin besides the value of the material. Therefore, the plaintiff is entitled for the suit claim. Issue No.7 is answered accordingly.
Prayer (a):-
The defendant is directed to pay a sum of Rs.3,18,33,780/- to the plaintiff with interest at the rate of 18% for the amount of Rs.2,59,86,700/- till the realisation of the decree amount.
Prayer (b):-
There shall be a charge over the suit property till the realisation or full satisfaction of the suit claim.
Prayer (c):-
The defendant his men and agents are restrained from interfering the plaintiff's possession of the building constructed by him in the site co-owned by the defendant.32/38
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The defendant is restrained from alienating or creating any encumbrance over the suit property, till the realisation of the decree amount.
Prayer (e):-
The plaintiff is entitled for the costs.
30. Accordingly, the Suit is decreed as prayed for. Consequently, connected Applications are closed.
27.02.2020
Index :Yes/No.
Internet :Yes/No.
Speaking order/Non-speaking order.
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C.S.No.308 of 2015
and A.Nos.4605 & 4606 of 2018
List of Witness examined on the side of the Plaintiffs:-
1. Mr.D.Rameshwaran (P.W.1)
2. Mr.N.D.Elango (PW.2) List of Witness examined on the side of the Defendants :-
1. Mr.S.Peter (DW.1) List of the Exhibits marked on the side of the Plaintiff:-
Sl. Exhibits Description of documents
Nos.
1. Ex.P.1 Original plaintiff's Board Resolution authorizing the deponent dated 06.06.2019
2. Ex.P.2 Original Agreement between plaintiff and defendant dated 15.04.2013
3. Ex.P.3 Xerox copy of the Agreement between the plaintiff and his Sub-Constractor – M/s.Kumaran Construction dated 23.05.2013
4. Ex.P.4 Original 1st Invoice raised by the plaintiff to Defendant dated 11.06.2013
5. Ex.P.5 Original 2nd Invoice raised by the plaintiff to Defendant dated 03.08.2013
6. Ex.P.6 Xerox copy of the Receipt issued by the defendant to plaintiff for 2nd invoice dated 14.09.2013
7. Ex.P.7 Xerox copy of the cheque issued by the defendant to the plaintiff for 2nd invoice dated 14.09.2013
8. Ex.P.8 Xerox copy of the TDS Remission Certificate issued by the plaintiff to defendant dated 23.09.2013
9. Ex.P.9 Xerox copy of the plaintiff's covering letter for TDS Remission Certificate dated 24.09.2013
10. Ex.P.10 Original 3rd invoice raised by the plaintiff to the defendant dated 19.10.2013 34/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018
11. Ex.P.11 Xerox copy of the reminder letter issued by plaintiff to defendant for 3rd invoice and service tax 06.11.2013
12. Ex.P.12 Xerox copy of the E-Receipts issued to plaintiff for paying central service tax dated 15.11.2013 13 Ex.P.13 Xerox copy of the receipts issued by the defendant for 4th invoice dated 30.10.2013
14. Ex.P.14 Xerox copy of the Agreement between plaintiff and defendant for partial modification dated 24.12.2013
15. Ex.P.15 Xerox copy of the cheque issued by defendant for invoice no.4, dated 30.12.2013
16. Ex.P.16 Original 5th invoice raised by the plaintiff to the Defendant dated 21.02.2014
17. Ex.P.17 Xerox copy of the cash voucher issued by the defendant for cash received by the Sub-contractor of the plaintiff dated 25.02.2014
18. Ex.P.18 Xerox copy of the cheque voucher issued by the defendant to plaintiff received by the Sub-contractor of the plaintiff against 5th invoice dated 15.03.2014
19. Ex.P.19. Original cheque issued by the defendant to the plaintiff against 5th invoice dated 15.03.2014
20. Ex.P.20 Original 1st cheque return memo issued by the plaintiff's bank dated 17.03.2014
21. Ex.P.21 Xerox copy of the cash voucher issued by defendant to plaintiff's sub-contractor against 5th voucher dated 19.03.2014
22. Ex.P.22 Xerox copy of the 6th invoice issued by the plaintiff to defendant dated 20.03.2014
23. Ex.P.23 Original 2nd cheque return memo issued by plaintiff's bank dated 10.04.2014
24. Ex.P.24 Cash vouchers issued by the defendant to plaintiff's sub-
contractor against invoice no.5 dated 12.04.2014
25. Ex.P.25 Xerox copy of the cash voucher issued by defendant to plaintiff's sub-contractor against invoice no.5, dated 15.04.2014 35/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018
26. Ex.P.26 Xerox copy of the cash voucher issued by defendant to plaintiff's sub-contractor against invoice No5, dated 22.04.2014
27. Ex.P.27 The 7th invoice raised by the plaintiff to the defendant dated 02.05.2014
28. Ex.P.28 Xerox copy of the reminder letter issued by plaintiff to defendant dated 10.06.2014
29. Ex.P.29 Original 8th invoice raised by the plaintiff to defendant dated 12.06.2014.
30. Ex.P.30 Xerox copy of the plaintiff's complaint to Joint Commissioner of Police Ambattur dated 16.06.2014
31. Ex.P.31 Xerox copy of the plaintiff's complaint to Inspector of Police Kundrathur Police Station dated 16.06.2014
32. Ex.P.32 Xerox copy of the CSR issued by Kundrathur Police Station dated 17.06.2014
33. Ex.P.33 Xerox copy of the Reply given by defendant to Joint Commissioner of Police Ambattur dated 18.06.2014
34. Ex.P.34 Xerox copy of the plaintiff complaint to consulate General of South Korea, Chennai – dated 08.07.2014.
35. Ex.P.35 Xerox copy of the Photograph of the building showing construction status.
36. Ex.P.36 Xerox copy of the High Court of Madras – Order dated 15.08.2014
37. Ex.P.37 Xerox copy of the plaintiff's letter to Inspector of Police, Kundrathur Police Station-enclosing High Court Order dated 16.09.2014.
38. Ex.P.38 Xerox copy of the plaintiff letter to commissioner of police, Chennai enclosing High Court Order dated 19.09.2014.
39. Ex.P.39 Original Letter by Defendant to the plaintiff dated 10.11.2014
40. Ex.P.40 Xerox copy of the reply by plaintiff to defendant dated 15.11.2014
41. Ex.P.41 Xerox copy of the break up of account details. 36/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018 List of the Exhibits marked on the side of the Defendants:-
Sl. Exhibits Description of documents
Nos.
1. Ex.D.1 Photocopy of the cheque dated 14.09.2013
2. Ex.D.2 Photocopy of the voucher dated 24.12.2013
3. Ex.D.3 Photocopy of the Cheque dated 30.12.2013
4. Ex.D.4 Photocopy of the Cheque dated 15.01.2014
5. Ex.D.5 Photocopy of the cash vouchers dated 15.03.2014 and 12.04.2014
6. Ex.D.6 Photocopy of the cash voucher dated 19.03.2014
7. Ex.D.7 Photocopy of the cash voucher dated 15.04.2014
8. Ex.D.8 Photocopy of the cash voucher dated 22.04.2014
9. Ex.D.9 Photocopy of the complaint letter dated 16.06.2014
10. Ex.D.10 Photocopy of the letter dated 22.07.2014 terms of clause 16 of the agreement entered into between the parties.
11. Ex.D.11 Photocopies of the invoices dated 10.10.2014, 28.10.2014, (series) 08.11.2014, 03.12.2014, 19.12.2014, 21.01.2015, 07.02.2015 and 20.02.2015 raised by India Cement Limited.
12. Ex.D.12 Photocopies of the cash vouchers dated 07.10.2014 etc (series) issued to Muthu Maistry
13. Ex.D.13 Photocopy of the Delivery challan issued by Sri Thirumalai Agencies towards delivery of river sand at the construction site.
14. Ex.D.14 Photocopy of the Delivery challan issued by S.Muthu towards delivery of river sand at the construction site.
15. Ex.D.15 Photocopy of the Delivery Challan dated 18.12.2014 issued by General plywoods towards delivery of plywoods at the construction site.
Ex.X.1 is the site Inspection Report.
37/38 http://www.judis.nic.in C.S.No.308 of 2015 and A.Nos.4605 & 4606 of 2018 Dr.G.Jayachandran,J.
bsm Pre-delivery judgment in C.S.No.308 of 2015 & A.Nos.4605 & 4606 of 2018 27.02.2020 38/38 http://www.judis.nic.in