Bangalore District Court
M.Keshava Raju vs Government Of Karnataka on 25 October, 2019
IN THE COURT OF THE LXXXIII ADDITIONAL CITY CIVIL
AND SESSIONS JUDGE AT BENGALURU CITY[CCH-84]
PRESENT: Sri S.A. HIDAYATHULLA SHARIFF,
B.A., LL.M.,
LXXXIII Additional City Civil and
Sessions Judge
Dated this the 25th day of October 2019
COM.O.S.No.24/2019
(O.S.No.9/2018 & OS 42/2017)
PLAINTIFF: M.Keshava Raju, aged about 66
years, S/o late M. Narayana Raju,
Engineering Contractor, No.7, I.T.I
Layout, R.M.V. II Stage, Bangalore
560094.
[By Sri.KMM/PHR, Advocate]
/v e r s u s/
DEFENDANTS: Government of Karnataka, Public
Works Department.
Represented by its
1. The Secretary,
Public Works Department,
Government of Karnataka,
3rd Floor, Vikasa Soudha,
Bangalore560001.
2. The Chief Engineer (C&B) South,
K.R.Circle, P.W.D,
Bangalore560001.
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3. The Executive Engineer,
P.W.D. Division, Chikkaballapur,
Chikkaballapur District.
[By District Government Pleader]
Date of institution of the : 26/02/2019(02/2/2017)
suit
Nature of the suit : Recovery of money
Date of commencement of : 30/10/2017
recording of the evidence
Date on which the : 25/10/2019
Judgment was
pronounced.
: Year/s Month/s Day/s
Total duration
02 08 23
(S.A. Hidayathulla Shariff)
LXXXIII ACC & SJ: Bengaluru
Plaintiff has filed this suit against defendants for
recovery of money. This suit was originally filed before
the II Addl. Senior Civil Judge & JMFC, Chikkaballapur
and suit was numbered as OS No.42/2017. Thereafter,
the suit was transferred to 1st Addl. District & Sessions
Judge, Chikkaballapur and suit was numbered as OS
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No.09/2018. After establishment of this court to try
commercial disputes, on the point of territorial
jurisdiction, the suit is transferred to this court and it
was renumbered as Commercial OS No.24/2019.
2. The case of the plaintiff in brief is that he is a
Class I contractor having experience in contract works.
He submitted tender in response to the tender
notification issued by the Government of Karnataka for
the work of "Construction of First Grade College at
Sidlaghatta, Kolar District" presently Chikkaballapur
District. He being the lowest tenderer was awarded the
above mentioned construction work vide Agreement
No.16/9293 dated 26/3/1993. The cost of the work
under the above mentioned tender was Rs.38,91,629/.
The 3rd defendant Executive Engineer, PWD Division,
Kolar has issued work order on 06/04/1993. As per the
terms of the contract, the monthly stipulated progress
was Rs.2,16,200/. As per the work order the date of
commencement of the work was 26/3/1993 and the date
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of completion was 26/3/1995. The contract contains
schedule of quantities in which rates for each of various
individual items of work are entered in Schedule B along
with a copy of agreement, the letter of acceptance, work
order etc.
3. It is further case of the plaintiff that immediately
after receiving the work order, he started the work in
portion of the site made available by the Assistant
Executive Engineer in the portion which was clear
without obstructions. He has mobilized the resources
including men, machinery, establishment and other
matching equipments and camped at site to execute the
work. The site was not clear as the electric and
telephone lines were obstructing the work. Immediately
after receiving of the work order he had made all
arrangements and camped at site to execute the work.
The defendant has supplied foundation details on
3/5/1993 with a delay of about two months in the
beginning itself. The foundation works were completed
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immediately after receiving the foundation details. He
continued with the work with the same establishment
and resources in the stipulated and prolonged period
upto 29/6/2001 and executed the work in excess of the
contract value of amount of Rs.38,91,629/ to the tune of
Rs.46,02,146/, but could not complete the minor items
of the work due to following reasons:
4. The construction of buildings of any magnitude
requires detailed approved working drawings, designs
showing the details of foundations, basement,
superstructures with all items. The defendant was
bound to fulfill his obligations of supplying approved
working drawings / designs which is basic need to
execute the construction work. The defendant totally
failed to supply these drawings, designs and details in
the prescribed time. He has mentioned the delays of
supplying drawings in his letters dated 2/7/1993,
10/6/1994, 24/10/1994, 16/2/1995, 27/7/1995 and
16/10/1995 addressed to the defendants. The delay in
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supply of working drawings has caused huge delay in
executing the work. Even at the time of cancellation of
the contract, defendant has not taken action to complete
water supply, sanitary and electric works. Without
completing the water supply, sanitary and electric works,
it was not possible for him to complete the construction
work relating to laying tiles and flooring works. Inspite of
the repeated letters dated 6/11/1996, 16/4/1997 and
3/4/2000 addressed by him to the defendants, the
defendants have failed to get the above works completed.
5. It is further case of the plaintiff that electric lines
and telephone lines were crisscrossing the work site. It
was very difficult to execute the work under the electrical
and telephone lines. Inspite of his repeated requests, the
defendants have abnormally delayed in clearing the site
by removing the electrical and telephone lines. This fact
of delays were brought to the knowledge of the defendant
through letters dated 25/11/1993, 27/7/1995. The
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delay in fixing the electric and telephone lines has caused
substantial delay in executing the work.
6.It is further case of the plaintiff that the essential
building materials were not available at a reasonable
distance. He had to go in search of the building
materials since the same were not available at the
distance shown by the defendant at the time of
tendering. This caused further delay in executing the
work and required much more investments by him.
7. It is further case of the plaintiff that the interim
payments for the work done were very irregular. The
contract agreement provided payment for the work done
in each month. There were inordinate delay in preparing
and payment of the bills. In some occasions, the
defendant took 6 to 8 months for making one running bill
payment due to shortage of funds. This created
unbalanced working conditions and delayed the
completion of the work. Even at the time of cancellation
of the contract, there were substantial pending
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payments. Any construction work requires prompt
payments to complete the work and to avoid financial
loss to him. The delay in making payments was brought
to the knowledge of the defendants through letters dated
25/11/1993, 11/5/1994, 10/6/1994, 16/2/1995 &
16/10/1995
8. It is further case of the plaintiff that inspite of
above mentioned impediments, he continued the
execution of the work under most trying circumstances.
Inspite of nonsupply of approved working drawings,
irregular payments and noncompletion of water supply,
sanitary and electrical works, the work was kept in
progress by him and he has successfully completed more
than the tender value of work to the tune of
Rs.46,02,146/ as per the bills paid by the defendant,
whereas, the tender value of the work was only
38,91,629/. In the mean time, the defendant has
illegally canceled the contract with a threat to execute the
balance work at plaintiff risk and cost though the delays
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attributable to the defendant. The defendant has not
even fixed further period for performance of the contract
to make the time essence of the contract after expiry of
the period of contract on 26/3/1995. Inspite of his
repeated requests for extension of time, before expiry of
original contract period, the defendant has illegally
canceled the contract without fixing period for extension
of contract. The final accounts pertaining to contractor
yet to be settled by the defendants. The defendants have
committed breach of contract since they have failed in
fulfilling contractual obligations of providing working
drawings, making prompt payments, completing the
water supply, sanitary and electric works and also failing
in fixing further period of performance of contract.
9. It is further case of the plaintiff that after
cancellation of the contract, he has given a consolidated
claims letter dated 5/9/2002 to the 3 rd defendant for
settlement as per clause 29 of the conditions of the
contract. As there was no reply to the above letter, he
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approached the 2nd defendant by letter dated 7/11/2002
for settlement as per the conditions of the contract. Even
the 2nd defendant has not replied the said letter for
settlement of claims. Thereafter, he has approached the
Hon'ble High Court of Karnataka by filing CMP
No.48/2003 for appointment for arbitrator as per the
conditions of the contract. The Hon'ble High Court of
Karnataka by its order dated 11/7/2003 has rejected the
above mentioned CMP on the ground that clause 29 of
the contract is not an arbitration clause. Aggrieved by
the order dated 11/7/2003 passed by the Hon'ble High
Court of Karnataka, he has filed WP No.40897/2003 for
appointment of arbitrator and the said writ petition was
also dismissed on 6/11/2003. Aggrieved by the above
mentioned order, he has approached the Hon'ble
Supreme Court of India by filing SLP in Civil Appeal
No.16117/2004 for appointment of arbitrator. The Apex
Court of the Land by its order dated 25/10/2013 held
that clause 29 of the contract is not an arbitration clause
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and has given liberty to him to recover the dues through
legal remedy. Further he has filed review petition against
the common judgment passed in SLP No.1586/2004
before the Apex Court of the Land and the said review
petition also came to be dismissed on 16/9/2014.
10. It is further case of the plaintiff that in
connection with breach of contract dated 26/3/1993 by
the defendants, following claims have arisen to him,
which he has sought for settlement in the present suit.
11. Claim I : to declare that the cancellation of
contract is illegal and wrongful and to desist from
applying cost and risk action of completing the
balance work as he has already executed more than
the contract value and entitled for damages.
With regard to above mentioned claim No.1, it is the
case of the plaintiff that the stipulated period of contract
expires on 26/3/1995, as per the terms of contract. He
continued the execution of the work even beyond the
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stipulated period till cancellation of the contract. The
defendant also accepted and permitted him to continue
the execution of work beyond the contract period. The
value of the contract was Rs.38,91,629/ and he has
exceeded the work by completing the work of
Rs.46,02,146/ by the time of cancellation of the
contract. The defendant has not even bothered to
approve the extra cost incurred which was under
execution where the approval was essential in terms of
the contract. Completion of the work was delayed due to
the failure on the part of the defendant to perform
contractual obligations. He has repeatedly requested the
defendants through writing several letters for grant of
extension of time since he had already established at site
with required organization by completing the work more
than tender value. The defendants have taken wrongful
action by canceling the contract without fulfilling their
contractual obligations, such as, supply of approved
working drawings / designs, prompt payments,
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completing the water supply, sanitary and electrical
works. The question of cancellation of the contract by
the defendant was illegal as the defendants have failed to
perform their obligations in terms of the contract and the
cost of the work completed by him had already exceeded
the contract value. Had the defendants made proper
payments, made available required drawings and taken
action to complete water supply, sanitary and electrical
works and allowed him to continue the work, he would
have completed the same in all respects in a reasonable
time. The breach of contract is on the part of the
defendants as all the delays in performance of the
contract are totally attributable to the defendants only.
The defendants opted for illegal cancellation of work
without fulfilling their obligations and without settling
the dispute in terms of clause 29 of the contract.
Without deciding the aspect of the breach of contract, the
cancellation of the contract by defendants is illegal.
Hence, the cancellation of the contract on 29/6/2001 by
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the defendants is illegal and wrongful. Hence, defendant
required to refund a sum of Rs.3,76,639/ towards
refund of EMD, FSD and NSC recovered in bills and
defendants are liable to pay him a sum of Rs.7,04,315/
as interest @ 12% per annum on the above mentioned
amount and liable to pay him totally a sum of
Rs.10,80,954/ towards the claim No.1 and close the
contract as it is and where it is basis without application
of risk and cost of completing the balance work.
12. Claim 2 : Payment of idle charges of men and
machinery suffered during stoppage period of
execution of work in contract period.
With regard to the above mentioned second claim,
it is the case of the plaintiff that the execution of the
work was stopped on several occasions for want of
designs / drawings and due to obstruction at work site
and lack of payments. The total period of stoppage was
308 days, during the period of execution of work from
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commencement of work to the cancellation of contract.
Due to various defaults and breaches committed by the
defendant, he has suffered damages in the form of idle
charges of men and machinery, due to the default
committed by the defendant, which resulted in stoppage
of work. The stoppage of work was intimated to the
defendant in letters dated 24/10/1994 and 16/10/1995.
He has kept separate men and machinery for the
performance of the work pertaining to contract in
dispute. He has no chance to mitigate the damages
suffered during the idle period and there was no other
opportunity to utilize the establishment made at this
work and was always ready at work site for instruction of
the defendant to execute the work. The idle charges per
day works out to Rs.3,600/ including labours and
machinery. The defendant required to compensate him
for the idle charges @ Rs.3,600/ per day for 549 days,
which amounts to Rs.11,16,000/. Defendant required
him to pay a sum of Rs.20,87,107/ as interest @ 12%
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per annum on the above mentioned amount from
29/6/2001 upto 2/2/2017. With regard to claim 2 the
defendant required to pay him a total sum of
Rs.32,03,107/ as payment of damages of idle charges of
men and machinery suffered by him.
13. Claim 3 : Payment of equitable revised rates
for the work done beyond the stipulated period of
contract.
With regard to above mentioned claim No.3,
plaintiff has stated that the period of performance was
prolonged beyond the stipulated date of completion due
to several defaults and breaches of contract committed by
the defendants. Consequently, he was forced to execute
the work in the prolonged period beyond the stipulated
period of completion, facing the burnt of all around
increase in the market prices during the period. There is
no justice in insisting him to do the contract at tendered
rates, since the delay in completing the work was not at
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all attributable to him. He is entitled for payment of
equitable revised rates for the work done beyond the
stipulated period taking into consideration of the
changed market conditions and circumstances under
which the work was executed. The defendants are
required to pay equitable revised rates for the quantities
of work executed beyond the stipulated date of
completion of 26/3/1995. Plaintiff has claimed a sum of
Rs.28,15,725/ towards equitable revised rates for the
work done beyond the stipulated period of contract and
also sought for a sum of Rs.52,65,405/ as interest on
the above mentioned amount at 12% per annum from
29/6/2001 upto 2/2/2017, totally amounting to
Rs.80,81,130/.
14. Claim 4 : reimbursement of expenses of
monthly over head charges for longer stay at the
work site for the purpose of executing the work
beyond the contract period.
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With regard to above claim 4, it is the case of the
plaintiff that delay in completion of the work is only
attributable to the defendants and the execution of the
work beyond the stipulated date of completion has
resulted in incurring extra expenditure on additional
monthly overhead charges by him. He had intimated
about the over head charges to the defendants through
letters dated 6/11/1996, 16/4/1997 and 5/9/2002.
But the defendants have never disputed the said charges
nor replied the letters which amounts to acceptance. He
had taken 10% of the cost of work at his quoted rates
viaaviz stipulated period of contract as the cost of
overhead charges to meet the overheads both at head
office and site office which included payment towards
watch and ward, managerial, consultancy, legal advise,
engineering, supervision, accounts, stores and traveling.
The overhead charges are fixed in each and every month
and will not increase or decrease in proportion to the
quantum of work executed in each month. The
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establishment engaged on the works cannot be
retrenched or reduced till the completion of the work.
The expenditure on monthly overheads continued from
the date of contract period from 26/3/1995 till the
cancellation of the contract on 29/6/2001. He has
enclosed certificate of the Chartered Account pertaining
to the over head charges incurred by him. Plaintiff has
claimed a sum of Rs.29,42,100/ towards reimbursement
of monthly over head charges for longer stay at the work
site and also claimed a sum of Rs.55,01,727/ as interest
on the above mentioned amount from 29/6/2001 upto
2/2/2017 @ 12% per annum Plaintiff has totally
claimed a sum of Rs.84,43,827/ towards this claim
No.4.
15. Claim 5 : Payment of interest @ 12% on all
the claims.
With regard to the above mentioned claim No.5, the
plaintiff has sought for interest @ 12% per annum on all
the amounts claimed in the present suit and sought for
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future interest @ 18% per annum on the suit claim from
the date of the suit to the date of payment. It is further
case of the plaintiff that the claim amount quantified by
him is valid, legitimate and he is entitle for the same in
terms of the agreement conditions and the
correspondences from the time of awarding the contract
till its cancellation of work and thereafter. That he has
issued a legal notice to the defendants under Section 80
of CPC for settlement of claims vide letter dated
19/12/2014 and defendants have not taken any action
even after the decision of Apex Court of the Land for
settlement of the claim raised by him. Plaintiff further
contended that this court is having territorial jurisdiction
to try the suit and the suit is filed within the period of
limitation. On these grounds, the plaintiff has sought for
recovery of a sum of Rs.2,08,09,018/ from the
defendants towards the amount of claims made by him
with respect to contract No.16/9293 dated 26/3/1993
together with costs and future interest @ 18% per annum
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from the date of filing of the suit till the date of realization
of the amount.
16. In response to the suit summons, the
defendants No.1 to 3 have contested the suit by filing
their joint written statement. The defendants in their
written statement have contended that the suit of the
plaintiff is not maintainable either in law or on facts and
same is liable to be dismissed. Defendants further
contended that the plaintiff has filed a false, frivolous and
vexatious suit against them with a malafide intention of
harassing them. The suit of the plaintiff is speculative in
nature and misconceived one and liable to be dismissed.
Plaintiff has not properly instituted the suit as required
U/S.79(b) and Section 80(i)(c) of CPC.
17. Defendants further contended that the suit
claim of the plaintiff is hypothetical and illogical. The
plaintiff has caused substantial delay of 4 years in
constructing the building, as such, he could not claim
the overhead charges, labour charges, establishment and
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maintenance of labourers and machinery. Due to poor
performance in construction activity and financial
activity, the contract was terminated by them. Since the
plaintiff has failed to discharge the terms and conditions
of the agreement, he is not entitle for any relief sought
for.
18. The defendants in the written statement have
not disputed the fact that the plaintiff was a class I
contractor and he being the lowest tenderer, he was
awarded the work of construction of First Grade College
at Sidlaghatta vide contract agreement No.16/9293
dated 26/3/1993. The defendants have also not
disputed the plaint averments with regard to cost of the
contract work, date of issuance of work order, date of
commencement of the work and date of completion of the
work stipulated in the above mentioned contract. The
defendants have denied the plaint averment that final bill
of the contract has not been prepared. The defendants
have contended that plaintiff has not come forward to put
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his signature and received the same. The defendants
have denied the plaint averments that the plaintiff has
started the construction work immediately after receiving
the work order in a portion of the site made available to
him and in the portion which was cleared without any
obstruction. The defendants further contended that the
plaintiff has not started his work after receipt of the work
order and he has delayed the to commencement of the
work at site. The defendants have also denied the plaint
averments with regard to mobilization of the resources
and camping of the plaintiff at the site to execute the
work and also denied the plaint averments that the site
was not clear as the electric and telephone lines
obstructing the work. The defendants have also denied
the plaint averments that since the electric and telephone
lines were not shifted, there was stoppage of construction
work for a major period during the stipulated period of
performance. Defendants further contended that the
plaintiff has not complied the terms of the agreement
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dated 26/3/1993. When the site was handed over to the
plaintiff, they have remitted a sum of Rs.9,893/ vide
cheque No.965438 dt. 14/6/1993 to shift the electric
lines and poles and also sum of Rs.8,192/ was
transferred to BSNL account vide M.B.No.5572 shift the
telephone lines and poles. After receipt of the said sum
by the above departments, they have shifted the poles
and lines from the site. There was no obstructions for
commencement of the work by the plaintiff and there is
no latches on their part.
19. The defendants in their written statement have
also denied the plaint allegations with regard to the
alleged reasons shown by the plaintiff for non completion
of the work within the stipulated period of time. The
defendants have denied the plaint allegations that there
was delay by the defendants in supply of approved
working drawings, which resulted in non completion of
the work in the contract period. Defendants further
contended that the entire drawings upto the roof level
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has been given to the plaintiff on 9/12/1993 vide letter
No.EE/JE3 dated 9/12/1993.
20. The defendants in the written statement have
also denied the plaint allegations with regard to non
shifting of high tension electric line, telephone line and
Municipal water line from the site made against them as
reasons for delay in construction work. Defendants
further contended that they have given respective
amount to the concerned departments for shifting of
electric lines and telephone lines on 14/6/1993 and
inspite of it, the plaintiff has made false allegations
against them.
21. The defendants have also denied the plaint
allegations that non availability of essential building
materials at a reasonable distance as one of the reason
for delay in construction work. Defendants further
contended that the plaintiff being class I contractor has
to look after the supply of building materials and he
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cannot depend upon the defendants for collecting the
building material to complete the tender work.
22. The defendants have also denied the plaint
allegations that they were irregular in payment for the
work done by the plaintiff. Defendants further contended
that the amount for the work done by the plaintiff has
been disbursed to him as per the allocation of funds
made by the government. There was no any inordinate
delay in preparing the bills on their side. Defendants
have also denied the plaint allegations that even at the
time of canceling the contract there was substantial
pending payment to the plaintiff. The defendant further
contended that as on the date of cancellation of work,
plaintiff has received more than the amount which was
shown in the contract agreement. On 12/6/2001, an
amount of Rs.47,60,006/ has been disbursed on the
basis of work slip. The work slip has been prepared by
them on 9/12/1993 and the same was in the knowledge
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of the plaintiff. Such being the case, the question of
delayed payments by them will not arise.
23. The defendants in the written statement have
also denied the plaint allegations that the delayed interim
payments, delayed supply of working drawings, abnormal
delay in completing the water supply, sanitary and
electrical work has created unbalanced working
conditions and delayed the completion of the work. That
the above mentioned delays were brought to the
knowledge of the defendants. Defendants further
contended that the alleged notices issued by the plaintiff
to them was after lapse of contractual agreement dated
26/3/1993. As the contract was expired on 26/3/1995
itself the notices issued by the plaintiff is against the
contract and hence those notices does not have any
sanctity in the eye of law. Defendants further contended
that the plaintiff had received more than the tender
amount from them on the basis of clause 13(b) of the
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schedule of the contract form. As such, the claim made
by the plaintiff is unsustainable in the eye of law.
24. The defendants in the written statement have
also denied the plaint allegations that inspite of severe
impediments, the plaintiff was executing the work under
most trying circumstances and work was kept in
progress and he has successfully completed more than
the tender value work. Defendants further contended
that the plaintiff had received the amount to the tune of
Rs.46,02,146/ as per bills paid by them, whereas the
tender value work was only Rs.38,91,629/. Hence,
plaintiff is estopped from taking any contention with
regard to the above mentioned aspects. The defendants
have also denied the plaint allegation that they have
illegally canceled the contract with a threat to execute the
balance work at plaintiff's risk and cost. The defendants
further contended that there is no threat on their side to
the plaintiff. They were discharging their duties within
the frame work of law and the guidelines issued by the
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government from time to time. The defendants have also
denied the plaint allegations that they have failed to fix
further period for performance of the contract to make
time essence of the contract after the original contract
period expired on 23/3/1995. Defendants further
contended that the original agreement date was expired
on 26/3/1995, by that time there was huge work
pending from the site of the plaintiff. Inspite of the said
fact the work was continued upto 28/6/2001. Finally on
29/6/2001, the contract was rescinded by them due to
delay caused by the plaintiff in completing the
construction work. Plaintiff without any justifiable
reasons has issued notices to them. They have allowed
the plaintiff to continue the tender work upto 26/8/2001
in the interest of public at large. Their sole intention is to
see that the tender work should be completed and the
building was made available to the use of students.
There was no delay on their part in making the tendered
amount. The plaintiff deliberately misused the leniency
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given by them for completion of the entrusted contract
work. The plaintiff has made false allegations against
them alleging that the delay in performing the contract
was attributable to them.
25. The defendants in the written statement have
admitted about the receipt of notice on 5/9/2002 and on
7/11/2002 from the plaintiff and further contended that
they have suitably relied the said notice. The defendants
have also admitted the proceedings between the plaintiff
and defendants that took place before the Hon'ble High
Court of Karnataka and Hon'ble Supreme Court of India
and the orders passed in the said proceedings.
26. The defendants in the written statement have
denied the claim No.1 of the plaintiff seeking cancellation
of contract as illegal and desisting them from applying
risk and cost action of completing the balanced work.
Defendants further contended that the plaintiff making
false allegations against them to over come from the
action to be taken by them against him for causing loss
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and inconvenience to the public at large. The plaintiff
has no right to make claim against them under the law.
They have not taken any illegal action against the
plaintiff in canceling the contract. Defendant further
contended that after expiry of the contract period on
26/3/1995, plaintiff continued the work till cancellation
of the contract and he had continued the work beyond
the contract period and the tendered work of
Rs.38,91,629/ has exceeds upto Rs.46,02,146/. The
excess amount has been paid by them to the plaintiff on
the basis of work slip which was stipulated in schedule
contract form No.13(b). The defendants have also denied
the plaint allegations that there was no approval given by
them for extra cost incurred for execution of the work.
Defendant further contended that the approval for extra
cost incurred for execution of the work was given by the
Superintendent Engineer on 5/1/1994. The plaintiff has
caused inordinate delay in executing the tender work and
caused loss to the state. In view of the noncompletion of
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the tender work, they have canceled the contract of the
plaintiff on 12/6/2001. Thereafter, they have called
tender for balance work and entrusted the balance work
to one Sri.C.S.Chandregowda, who is a lowest quoted
tenderor for a sum of Rs.9,46,000/. The subsequent
tenderor has completed the balance contract work and
handed over the building. The plaintiff has to bear the
said loss with penal interest prevailed as on that date.
There is no illegality on their part in cancellation of the
contract. Since the plaintiff has failed to complete the
tendered work and committed breach of contract as per
clause 29 of the contract they have issued notice to the
plaintiff and since plaintiff has not properly responded to
the notice, they have canceled the contract dated
26/3/1993 on 29/6/2001 by forfeiting the EMD, FSD &
NSCs. Since they have canceled the contract in terms of
the contract and forfeited the above mentioned amount,
the question of considering the claim made by the
plaintiff for a sum of Rs.10,80,954/ will not arise.
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Defendants further contended that there was no
contractual obligations on their part to pay 12% interest
on the above mentioned amounts. Once the forfeiture
clause is opened by them, the question of considering the
claim No.1 of the plaintiff will not arise.
27. With regard to the second claim of the plaintiff
pertaining to payment of idle charges of men and
machinery suffered by him, defendants have contended
that since there was no stoppage of work by them at any
stage during subsistence of contract, plaintiff cannot
make any claim for compensation as per clause 15 of the
schedule of contract form. They reserves the right to take
action against plaintiff for the delay in execution of the
work. The plaintiff has not maintained the men and
machineries in the site during the subsistence of
contract. There is no defaults and breaches committed
by them. Plaintiff unnecessarily making false allegations
against them. The claim of plaintiff for a sum of
Rs.32,03,107/ as damages for idle charges of men and
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machineries is an imaginary claim. At no point of time
the plaintiff has not shown the idle of men and
machinery at the site during the subsistence of
agreement. Plaintiff has not made any representation in
this regard. Plaintiff has not produced a single piece of
document to substantiate the above mentioned claim.
28. With regard to claim 3 of the plaintiff pertaining
to payment of equitable revised rates for the work done
beyond the stipulated period of contract is concerned, the
defendants have contended that there is no legal base for
the plaintiff to make said claim. Plaintiff without any
valid reasons has made false allegations of breach of
contract against them. Defendants further contended
that the plaintiff has received a sum of Rs.47,60,006/
and not Rs.46,02,146/ on the basis of the work slip and
extra item rate list. It is further contended that schedule
B of the contract is not applicable to the case in hand,
since plaintiff has not used any extra item for executing
the work at site. Plaintiff has not produced any
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documents to substantiate the said claim and there is no
provision under the contract for payment of interest @
12% per annum. The vouchers produced by the plaintiff
are all self serving documents. At no point of time, the
plaintiff has produced any single voucher before them
certifying the said amount. In view of the clause 44 of
the contract, the claim No.3 of the plaintiff seeking
payment of equitable rates for the work done beyond the
stipulated period of contract is required to be rejected.
29. With regard to claim No.4 pertaining to
reimbursement of expenses for longer stay at the work
site for the purpose of executing the work claim made by
the plaintiff, the defendants have contended that the said
calculation made by the plaintiff is self serving. There
was no need for them to reply the notices issued by the
plaintiff claiming over head charges after expiry of the
contract period. Non reply of the notices of the plaintiff
does not amount to acceptance of claim by them. The
documents produced by the plaintiff claiming over head
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charges are fabricated documents, do not have any
evidenciary value under law. The contract dated
26/3/1993 includes all the expenses of the plaintiff
pertaining to over head charges for the purpose of
executing the work. The claim of the plaintiff towards
reimbursement of alleged monthly over head charges for
longer stay at the work site for the purpose of executing
the work beyond the contract the period do not arise for
consideration, since plaintiff himself has failed to reach
the stipulated tender work.
30. With regard claim No.5 of the plaintiff pertaining
to payment of interest @ 12% per annum on all the
claims is concerned, defendants have contended that
since there is no contractual obligations with regard to
the interest, plaintiff is not entitle for payment of interest
@ 12% per annum on all the claim sought for by him.
31. Defendants in their written statement have
further contended that they are government authorities
and they are discharging their duties under the public
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works department as per the statutory norms and
guidelines issued by the government, they are engaging
the civil work through out the state as and when
government called for. Since the plaintiff has quoted
lowest rate in his tender pertaining to construction of
First Grade College at Sidlaghatta in the year 1993, he
was awarded the above mentioned construction work in
terms of contract agreement No.16/9293 dated
26/3/1993. As per the terms of the above mentioned
agreement, the construction work should have been
started on 26/3/1993 and should have been completed
in all respects on or before 26/3/1995 with a monthly
stipulated progress of Rs.2,16,202/. The contractor -
plaintiff has not completed the work as per the schedule
and delayed very badly. Consequently, the 2 nd defendant
- Chief Engineer has canceled his contract as per the
rules applicable by his order dated 12/06/2001 and
same was communicated to the plaintiff by the 3rd
defendant by letter dated 29/6/2001. After termination
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of the contract, plaintiff has written a letter to 3 rd
defendant on 5/9/2002 by making several claims and
the said letter was suitably replied on 22/11/2002. On
3/9/1998 a final notice was issued to the plaintiff for
noncompletion of the work at site and a clause was
inserted regarding cancellation of the contract. In the
said notice reference was also made with regard to
initiation of disciplinary action for non completion of the
work by the plaintiff. The said facts have been
mentioned in notice dated 24/3/2001. On receipt of the
above mentioned notice, plaintiff has undertaken to
complete the work at the earliest, but failed to complete
the work. For non completion of the work as per the
undertaking of the plaintiff, he has to be penalized for the
delayed work at site.
32. Defendants further contended that there is no
cause of action for the plaintiff to file the present suit
against them. Defendants further contended that the
court fee paid by the plaintiff is not sufficient and suit of
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the plaintiff is barred by time. On these grounds the
defendants have sought for dismissal of the suit.
33. Based on the above pleadings of the parties and
documents produced on record, this court has framed
following :
ISSUES
1) Whether the plaintiff proves that defendants have
failed to perform their part of contractual
obligations of the contract dated 26/3/1993 entered
between him and the defendants?
2) Whether the plaintiff proves that the cancellation of
the contract dated 26/3/1993 made by defendants
on 29/6/2001, is illegal and wrongful?
3) Whether the plaintiff proves that defendants are not
entitle to apply risk and cost action of completing
the balance work of the contract against him?
4) Whether the plaintiff proves that defendants are
liable to pay him a sum of Rs.10,80,954/ towards
return of EMD, FSD & NSC made by him?
5) Whether the plaintiff proves that defendants are
liable to pay him a sum of Rs.32,03,107/ towards
payment of idle charges of men and machinery
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suffered during stoppage period of execution of the
work in contract period?
6) Whether the plaintiff proves that defendants are
liable to pay him a sum of Rs.80,81,130/ towards
payment of equitable revised rates for the work done
beyond the stipulated period of contract?
7) Whether the plaintiff proves that defendants are
liable to pay him a sum of Rs.84,43,827/ towards
reimbursement of monthly overhead charges for
longer stay at the work site for the purpose of
executing the work beyond the contractual period?
8) Whether defendants prove that suit of the plaintiff is
not properly valued for the purpose of payment of
court fees?
9) Whether defendants prove that suit of the plaintiff is
barred by limitation?
10) Whether the plaintiff is entitle for the suit
claim sought for?
11) Whether the plaintiff is entitle for future
interest @ 18% per annum as sought for?
12) What order or decree?
34. Parties have entered into trial. In proof of the
case of the plaintiff, the plaintiff got himself examined as
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PW.1 and tendered Ex.P.1 to P.18 documents in
evidence. On behalf of the defendants, initially the 3 rd
defendant - Executive Engineer of PWD Division,
Chikkaballapur District was examined as DW.1.
Thereafter, the learned ADGP has filed a memo to discard
the evidence of DW.1 on the ground that he was
transferred to some other department. Thereafter, on
behalf of the defendants, the present Executive Engineer,
PWD Division, Chikkaballapur was examined as DW.2
and Ex.D.1 to D.17 documents were marked in his
evidence. On the application filed by the counsel for the
plaintiff, the defendants have produced the schedule of
contract form pertaining to Ex.P.1 contract, which
contains the terms and conditions of Ex.P.1 contract and
for the purpose of convenience of the reference of the
court, the said document is marked as Ex.P.1(a).
35. Written arguments filed on behalf of the plaintiff
and also on behalf of the defendants.
36. Perused the materials placed on record.
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37. My findings on the above framed issues are as
follows:
Issue No.1 : In the negative.
Issue No.2 : In the negative.
Issue No.3 : In the negative.
Issue No.4 : In the negative.
Issue No.5 : In the negative.
Issue No.6 : In the negative.
Issue No.7 : In the negative.
Issue No.8 : In the negative.
Issue No.9 : In the negative.
Issue No.10: In the negative.
Issue No.11: In the negative.
Issue No.12: As per final order for the following:
38. ISSUES No.1 & 2 : Since these two issues are
interconnected with each other, to avoid repetition of
facts and findings, both issues are taken up together for
consideration.
39. There are certain undisputed facts pertaining to
the parties to the present suit. The fact that the plaintiff
who was a Class I Contractor has submitted tender in
response to the tender notification issued by government
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of Karnataka for the work of construction of First Grade
College at Sidlaghatta, Kolar District is not in dispute.
Further fact that since the plaintiff was the lowest
tenderer, he was entrusted the above construction work
vide contract No.16/9293 dated 26/3/1993 is also not
in dispute. Ex.P.1 is the contract dated 26/3/1993
executed between the plaintiff and defendants. Ex.P.1(a)
is the schedule of contract forms which contains the
terms of Ex.P.1 contract. Further fact that the cost of the
construction work under the contract was
Rs.38,91,629/ is also not in dispute. Further fact that
the date of commencement of the construction work
stipulated in the contract was 26/3/1993 and the
stipulated date of completion of the work was on
26/3/1995 is also not in dispute. Further fact that in
the contract the monthly stipulated progress of
construction was fixed at Rs.2,16,200/ is also not in
dispute. Further fact that on 6/4/1993, the 3rd
defendant Executive Engineer has issued work order to
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the plaintiff is also not in dispute. Further fact that on
the allegation that the plaintiff has failed to achieve the
stipulated progress in terms of the contract and failed to
complete the construction work, the 2nd defendant Chief
Engineer has rescinded the contract on 12/6/2001 and
communicated to the plaintiff on 29/6/2001 is also not
in dispute. Further fact that till the rescission of the
contract, the value of the construction work done by the
plaintiff was Rs.46,02,146/ against the value of work of
the contract was Rs.38,91,629/ is also not in dispute.
Further fact that subsequent to the communication of
rescission of the contract, plaintiff has filed CMP
No.48/2003 before the Hon'ble High Court of Karnataka,
Bangalore for appointment of an Arbitrator in terms of
the conditions of the contract and said CMP No.48/2003
was dismissed by the Hon'ble High Court of Karnataka,
Bangalore by its order dated 11/7/2003 on the ground
that Clause 29 of the contract do not contain an
arbitration clause is also not in dispute. Further fact
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that thereafter, the plaintiff has filed WP No.40897/2003
before the Hon'ble High Court of Karnataka, Bangalore,
seeking appointment of an arbitrator and the said writ
petition also came to be dismissed by the Hon'ble High
Court of Karnataka, Bangalore by its order dated
6/11/2003. Thereafter, the plaintiff has filed SLP in Civil
Appeal No.1586/2004 before the Hon'ble Supreme Court
of India, seeking appointment of an Arbitrator and said
SLP also came to be dismissed on 25/10/2013. Further,
the review petition filed by the plaintiff against the
common judgment passed in connected SLP leave
petitions were also dismissed by the Hon'ble Supreme
Court of India by its order dated 16/9/2014 is also not in
dispute. Ex.P.6 is the certified copy of the judgment
passed by the Hon'ble Supreme Court of India in Civil
Appeal No.1586/2004.
40. The plaintiff has filed this suit for recovery of
money against the defendants, on the allegations that
they have failed to perform their part of the contractual
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obligations of the contract dated 26/3/1993 entered
between him and the defendants and rescission of the
contract dated 26/3/1993 made by the defendants on
12/6/2001 is illegal and and wrongful. Based on the
above mentioned allegations, plaintiff has sought five
claims in the present suit. On the other hand,
defendants have contested the suit by denying the plaint
allegations with regard to non performance of their part
of contractual obligations of contract dated 26/3/1993
and also denied the plaint allegations that the rescission
of contract dated 26/3/1993 made by them on
12/6/2001 is illegal and wrongful. In view of the rival
contentions taken by the parties to the suit, the burden
of proof is that plaintiff to prove that defendants have
failed to perform their part of the contractual obligations
of the contract dated 26/3/1993 and also to prove that
rescission of contract dated 26/3/1993 made by the
defendants on 12/6/2001 is illegal and wrongful.
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41. A perusal of the pleadings and evidence of the
plaintiff discloses that it is the case of the plaintiff that
immediately after receiving the work order, he has started
the construction work in portion of the site made
available to him, which was clear without any
obstructions. He has mobilized the resources including
men and machinery, establishment and other matching
equipments and camped at site to execute the work. The
defendants have supplied foundation details on
3/5/1993 with a delay of about two months in beginning
itself. A foundation work was completed immediately
after receiving the foundation details. He continued with
work with the same establishment and resources in the
stipulated and prolonged period upto 29/6/2001 and
executed the work in excess of contract value amount of
Rs.38,91,629/ to an extent of Rs.46,02,146/, but could
not complete the minor items of the work.
42. A perusal of the pleadings and evidence of the
plaintiff discloses that the plaintiff has mainly highlighted
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the following alleged four contractual obligations, which
the defendants alleged to have failed to perform which
are the alleged reasons for the plaintiff for non
completion of the work within stipulated period of
contract.
(1) delay in supply of approved working drawings.
(2) delay in shifting of electric and telephone lines (3)
non availability of essential building materials at a
distance shown by the defendants at the time of
tendering. (4) irregular interim payments for the work
done by him under the contract.
43. With regard to the first reason pertaining to the
alleged delay in supply of approved working drawings by
the defendants is concerned, it is the case of the plaintiff
that defendants have failed to supply the working
drawings, designs and details in time. He has brought
the delay in supply of drawings to the knowledge of the
defendants through letters dated 2/7/1993, 10/6/1994,
24/10/1994, 16/2/1995, 27/7/1995 & 16/10/1995.
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The delay in supply of approved working drawings has
caused huge delay in executing the work.
44. To prove the alleged delay in supply of approved
working drawings by the defendants, the plaintiff has
mainly relied on Ex.P.5 which contains 15 letters dated
2/7/1993, 25/11/1993, 11/5/1994, 10/6/1994,
24/10/1994, 30/12/1994, 16/2/1995, 23/3/1995,
27/7/1995, 16/10/1995, 6/11/1996, 16/4/1997,
14/10/1998, 3/4/2000 & 18/4/2001, which were
addressed by the plaintiff to the 3rd defendant - Executive
Engineer. A perusal of these letters discloses that in
letter dated 2/7/1993, plaintiff has alleged that he had
received approved drawings for foundation after a lapse
of about 1 month 7 days. In letter dated 11/5/1994,
plaintiff has alleged that there was some delay on the
part of defendants in supplying approved drawings. In
letter dated 10/6/1994, plaintiff has alleged that there is
delay on the part of the defendants to supply working
drawings about the plinth level. In letter dated
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24/10/1994, the plaintiff has alleged that the contract
work above the plinth beam was delayed due to delay in
supplying of working drawings by the defendants.
Plaintiff has further alleged that the construction work
was stopped for want of working drawings for lintel
beams, roof beams and slab. In letters dated 16/2/1995,
27/7/1995, 16/10/1995, 16/4/1997, 14/10/1998,
plaintiff has alleged that the defendants have failed to
supply designs, drawings and other technical particulars
pertaining to different components of the work.
45. On the other hand, the defendants have pleaded
and lead evidence by denying the allegations of non
supply of working drawings and designs to the plaintiff in
time and the alleged inordinate delay caused in supply of
the working drawings and designs to the plaintiff. The
defendants have pleaded and lead evidence stating that
the entire drawing work upto the roof level has been
given to the plaintiff on 9/12/1993 vide letter No.EE/JE
3/dated 9/12/1993 and there is no delay on their part in
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supplying working drawing and designs showing the
details of foundation, basement, superstructure with all
items.
46. In support of their defence, the defendants have
mainly relied on Ex.D.6 letter dated 14/5/1993. A
perusal of contents of Ex.D.6 letter dated 14/5/1993
addressed by the 2nd defendant - Chief Engineer to the 3 rd
defendant Executive Engineer discloses that the
structural drawings No.CBS/SD/FGC.SDG1, 2,3,4/
199293 showing the details of excavation combined
footings, isolated footings and RC footing columns were
supplied to the 3rd defendant - Executive Engineer
pertaining to the construction in dispute.
47. A perusal of the contents of Ex.P.1(a) schedule
of contract form discloses that clause 2(b) of the contract
provides for preparation of program of work. Clause 2(b)
of the contract provides that the time allowed for carrying
out of the work as entered in the tender shall be strictly
observed by the contractor. It shall be reckoned from the
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date of handing over to the contractor not less than 75%
of the work site area comprising a contiguous block. It
provides that the work through out the stipulated period
of the contract be proceeded with all due diligence. It
provides that to ensure good progress during the
execution of the work, the contractor shall be bound to
comply with the time schedule according to the program
of execution of the work as agreed upon and enclosed to
the contract.
48. A perusal of the materials on record discloses
that as per clause 2(b) of the schedule of contract form,
which provides for preparation of program of work, the
contractor was required to carry out the work of tender
within the stipulated period of time and to ensure good
work progress during the execution of the work and to
comply with the time schedule contractor was required to
prepare program of execution of the work. However, a
perusal of materials on record discloses that the plaintiff
has neither pleaded nor lead any evidence with regard to
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the preparation of program of work pertaining to the time
schedule of supplying working drawings by the
defendants required for construction work. In the
absence of producing any program of work agreed upon
by the plaintiff and defendants pertaining to supply of the
working drawings, the contention of the plaintiff that
defendants have failed to provide him necessary working
drawings within the stipulated period of time and there is
inordinate delay on the part of the defendants to furnish
the working drawings cannot be accepted.
49. A perusal of the evidence on record discloses
that in letter dated 2/7/1993, which was the first letter
addressed by the plaintiff to the 3rd defendant marked as
one of the letter in Ex.P.5 bunch of letters, plaintiff has
admitted about the receipt of approved working drawings
for foundation on 3/5/1993. In the letter dated
24/10/1994, plaintiff has admitted about the receipt of
working drawings for plinth beam in the month of April &
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May 1994. Plaintiff also admits about the receipt of
drawing for roof slab and beams during September 1994.
50. A perusal of the above mentioned letters
addressed by the plaintiff to the 3rd defendant discloses
that he had received almost all the major working
drawings by September 1994. It is pertinent to note that
the working order for construction was issued to the
plaintiff on 6/4/1993. The stipulated date for completion
of the contract was 26/3/1995. Ex.P.1 contract was
rescinded by the defendants on 12/6/2001 for non
completion of the contract work by the plaintiff. The very
fact that by September 1994, plaintiff has admittedly
received all the major working drawings and designs
falsifies the contention of the plaintiff that due to failure
on the part of the defendant to furnish working drawings
and designs, he was unable to complete the construction
work within stipulated period of time.
51. The second ground urged by the plaintiff for
non completion of the construction work within the
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stipulated period of time by him is the alleged failure on
the part of the defendants to get the hightension electric
lines & telephone lines shifted from the construction site
in time. With regard to this alleged failure of the
defendants to perform their part of contractual
obligations is concerned, plaintiff has pleaded and lead
evidence stating that the electric lines and telephone
lines were crisscrossing the work site. It was very
difficult to execute the work under the electrical and
telephone lines. Inspite of his repeated request,
defendants have abnormally delayed in clearing the site
by removing the electrical and telephone lines. By his
letter dated 25/11/1993 and 27/7/1995, he has brought
to the knowledge of the defendants about the delay
caused in clearing the site by removing the electrical and
telephone line. The delay caused by the defendants in
clearing the site has caused substantial delay for him to
execute the work. Further, the defendants have also not
taken any action to complete the water supply, sanitary
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and electric works which were essential for completing
the civil work by him. By his letters dated 6/11/1996,
16/4/1997, he has requested the defendants to complete
the water supply, sanitary work, but the defendants have
failed to complete the work which they had taken up to
some other agencies.
52. To prove the alleged delay caused by the
defendants in clearing the obstruction in the work site
and also the alleged failure on the part of the defendants
to complete the water supply, sanitary and electrical
works which were not connected to the plaintiff, plaintiff
has mainly relied on Ex.P.5 15 letters addressed by him
to the 3rd defendant. A perusal of the contents of Ex.P.5
letters discloses that in letters dated 2/7/1993,
25/11/1993, 11/5/1994, 10/6/1994, 24/10/1994,
30/12/1994, 16/2/1995, 23/3/1995, plaintiff has not
whispered the fact that there was delay on the part of the
defendants in clearing the work site and delay in
completion of the water supply, sanitary and electrical
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works as alleged by him in the present suit. Only in
letters dated 27/7/1995, 6/11/1996, 16/4/1997,
14/10/1998, the plaintiff has alleged that there is delay
on the part of the defendants in shifting telephone lines
crossing the work site.
53. On the other hand the defendants in their
pleadings and evidence have denied the allegations of
inordinate delay on their part in shifting the electric
lines, telephone line and water supply lines from the
work site. Further the defendants have pleaded and lead
evidence stating that when the site was handed over to
the plaintiff, they have remitted a sum of Rs.9,893/ vide
cheque No.965438 dated 14/6/1993 to shift the electric
lines and poles and also remitted a sum of Rs.8,192/ to
BSNL Account No.MB 5572 to shift the telephone lines
and poles. After receipt of the said sum by the above
mentioned two departments, they have shifted the poles
and lines from the site. There was no obstruction for the
commencement of the work by the plaintiff. There is no
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latches on their part in getting the electric and telephone
lines shifted from the work site.
54. A perusal of the materials on record discloses
that the plaintiff who has made allegations of inordinate
delay against the defendants for shifting electric lines,
telephone lines and water supply lines has not produced
the program of work as required under clause 2(b) of the
Ex.P.1(a) schedule of contract form, wherein, the agreed
time stipulated for the defendants to get the electric lines,
telephone lines and water supply lines shifted from the
construction site and to get the site clear was stated. In
the absence of production of program of work before the
court, the contention of the plaintiff that there was
inordinate delay on the part of the defendants to get the
electric lines, telephone lines and water supply lines
shifted cannot be accepted.
55. By perusing the materials produced on record,
this court is of the opinion that the plaintiff has failed to
prove that there is abnormal delay on the part of the
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defendants in fixing the high tension electric lines,
telephone lines and Municipal water supply lines, which
has resulted in delay in completion of the contract work,
thereby, there is breach of contractual obligations on the
part of the defendants in performing their part of the
contract.
56. The third alleged reason stated by the plaintiff
for non completion of the work within the stipulated
period of time is non availability of building materials at
the distance shown by the defendants at the time of
tendering. With regard to this reason, the plaintiff has
pleaded and lead evidence stating that the essential
building materials were not available to him at a
reasonable distance and he had to go in search of the
building materials, since same were not available at the
place shown by the defendants at the time of tendering,
which has caused further delay in executing the work
which incurred extra cost and required much more
investments by him. On the other hand the defendants
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in their written statement and evidence have denied this
allegation and further contended that plaintiff being a
classI contractor has to look after all the things, he
cannot depend upon the defendants for collecting
material to complete the tender work.
57. A perusal of the evidence on record discloses
that plaintiff has not produced any document to show
that the defendants have assured him about availability
of building materials at a reasonable distance when he
has entered into contract with the defendants. Even in
Ex.P.1 tender document there is no clause stating that
defendants have assured the plaintiff about availability of
building materials at a reasonable distance from the work
site. Apart from that the plaintiff has not produced the
program of work to show that the defendants have
assured him about availability of essential building
materials at a reasonable distance at the time of
tendering. In the absence of production of any
documentary evidence to show that the defendants have
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assured the plaintiff about availability of essential
building materials at a reasonable distance, the
contention of the plaintiff that the essential building
materials were not available at a reasonable distance
shown by the defendants which has caused further delay
in execution of the work by him incurring extra cost and
making more investment by him cannot be accepted.
58. The fourth reason stated by the plaintiff for non
completion of the work within stipulated period of time is
the alleged irregular interim payments made by the
defendants with regard to the construction work done by
him. With regard to this reason, the plaintiff has pleaded
and lead evidence stating that the contract provided for
payment for the work done in each month. There were in
ordinate delays in preparing and payment of bills by the
defendants. In some occasion, the defendants took 6 to 8
months for making one running bill payment. The
irregular payments made by the defendants has created
unbalance working condition and delayed the completion
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of the work. Even at the time of cancellation of the work
there were substantial pending payments. The delay in
making payments were brought to the knowledge of the
defendants through various letters addressed by him to
the defendants.
59. On the other hand the defendants in their
written statement and also evidence have denied the
allegations of irregular payments made by them with
regard to the work done by the plaintiff. Defendants
further contended that the amount for the work done by
the plaintiff has been disbursed as per the allocation of
funds made by the government and there was no
inordinate delay in preparing the bills on their side.
Defendants further contended that as on the date of
cancellation of the contract, plaintiff had received more
than the amount which was shown in the contract
agreement. As on 12/6/2001, a sum of Rs.47,60,006/
has been disbursed to the plaintiff on the basis of the
work slip. The work slip has been prepared by them on
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9/12/1993, the same was in knowledge of the plaintiff.
Such being the case, the question of delayed payments
by them will not arise.
60. A perusal of the pleadings and evidence of the
plaintiff discloses that except stating the fact that the
defendants were irregular in interim payments for the
work done by him, plaintiff has not stated the details
about the preparation of the running bills and the date of
alleged delayed payments made by the defendants
pertaining to the running bills. Admittedly, on the date
of rescission of the contract on 12/6/2001, plaintiff has
received the amount which was more than the value of
the work as per the contract. In the absence of
production of reliable documentary evidence the
contention of the plaintiff that there is inordinate delay
on the side of defendants in preparing and payment of
running bills and the interim payment for the work done
by him were very irregular by the defendants cannot be
accepted.
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61. A perusal of the materials on record discloses
that Ex.P.1 contract was entered between the plaintiff
and defendants on 26/3/1993. Date of commencement
of the work under Ex.P.1 contract was fixed on
26/3/1993. Work order was issued on 6/4/1993. Date
of completion of the work as per Ex.P.1 contract was
26/3/1995. A period of 24 months was fixed for
performance of contract under Ex.P.1 contract. The
defendants have rescinded the contract only on
12/6/2001 i.e. after 98 months of entering into the
contract.
62. In the present case, the plaintiff has pleaded the
alleged delay in supply of working drawings, alleged delay
on the part of the defendants to get the hightension
electric lines, telephone lines and Municipal water supply
lines as the main reasons for non completion of the work.
However, in Ex.P.5 letters addressed by the plaintiff to
the defendants, he has admitted about the receipt of
major working drawings by the month of September 1994
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and shifting of telephone lines and electric lines in the
year 1995. Under the facts and circumstances of the
case, the alleged reasons shown by the plaintiff for non
completion of the work within stipulated period of time
cannot be accepted.
63. A perusal of the pleadings and evidence of the
plaintiff discloses that plaintiff has alleged that delay on
the part of the defendants in supply of approved working
drawings, delay in shifting of hightension electric lines,
telephone lines and Municipal water supply lines from
the working site, non availability of construction
materials at the distance shown by the defendants at the
time of tendering, irregular interim payments made by
the defendants for the work done by him as the reasons
for non completion of the contract work within the
stipulated period of time. However, a perusal of Ex.P.1
schedule of the contract form discloses that clause 29 of
the contract provides for settlement of dispute or
difference that arose between the 3 rd defendant -
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Executive Engineer and the Contractor - plaintiff
regarding any dispute arose with regard to the execution
of the work during the progress of the work to be referred
to the 2nd defendant - Chief Engineer, who has
jurisdiction over the work. In the present case, a perusal
of materials on record discloses that the plaintiff who has
made allegations of non performance of contractual
obligations by the 3rd defendant during the period of
execution of the contract has admittedly not referred the
said dispute to the 2nd defendant - Chief Engineer. The
very fact that the plaintiff has not referred the settlement
of the dispute in terms of the clause 29 of the contract is
another circumstance which goes against the case of the
plaintiff with regard to alleged failure of the defendants to
perform their part of the contractual obligations as the
reason for the plaintiff for non completion of the
contractual work within the stipulated period of time.
64. With regard to recession of Ex.P.1 contract by
the defendants on 12/6/2001 is concerned, the plaintiff
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had pleaded and lead evidence stating that inspite of non
performance of contractual obligations by the defendants
which has caused delay in execution of the work, he was
executing the work under most trying circumstances and
successfully completed more than the tender value of the
work to the tune of Rs.46,02,146/ as per the bills paid
by the defendants, whereas the tender value of the work
was only Rs.38,91,629/. Meantime, the defendants
have chosen to take illegal, wrongful and unwarranted
action of canceling the contract with a threat to execute
the balance work at his risk and cost, though the delay in
execution of the work were attributable to the
defendants. The defendants were not even bother to fix
further period for performance to make time essence of
the contract, after original contract period expired on
26/3/1995. Inspite of repeated requests made by him
for extension of time before the expiry of the contractual
period, the defendants have not extended the period for
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performance of the contract and illegally and wrongfully
canceled the contract on 29/6/2001.
65. On the other hand, the defendants in their
written statement and their evidence have denied the
plaintiff's allegation that the cancellation of the contract
on 12/6/2001 by them was illegal and wrongful. On the
other hand, the defendants have pleaded and lead
evidence stating that plaintiff has received the amount to
the tune of Rs.46,02,146/ against the tender value work
of Rs.38,91,629/. Even after expiry of the stipulated
period of completion of the contract on 26/3/1995, there
was huge work pending from the side of the plaintiff. In
the interest of public at large and to make the building
completed and available to the students, they have
allowed the plaintiff to continue the contract work, even
after expiry of the contractual period upto 28/6/2001.
On 29/6/2001, they have rescinded Ex.P.1 contract due
to delay caused by the plaintiff in completing the work.
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66. A perusal of the pleadings and evidence of the
plaintiff discloses that the main grievance of the plaintiff
with regard to recession of the contract dated 26/3/1993
by the defendants on 12/6/2001 is that due to failure on
the part of the defendants to perform their part of the
contract, he could not able to complete the construction
work within stipulated period of time, as a result of
which, he has addressed several letters to the defendants
before expiry of the period of contract seeking extension
of time to perform his part of the contract and defendants
have not bothered to extend the time for performance of
the contract to make time essence of the contract, after
expiry of original period of contract have illegally
rescinded the contract.
67. A perusal of the pleadings and evidence of the
plaintiff discloses that he claims that time was not the
essence of Ex.P.1 contract and the action of the
defendants to rescind the contract without giving
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extension of time to perform his part of the contract is
illegal.
68. At this juncture, it is relevant to consider a
decision of the Apex Court of the Land reported between
State of Maharastra & another V/s. Digambar Balwant
Kularni reported in AIR 1979 Supreme Court 1339,
wherein, the Apex Court of the Land has held that :
"Contract Act (9 of 1872), Ss.39 and 55 - Works
contract - Time mentioned as of essence of contract - But
contract enforceable till completion of work or its
abandonment - Rescission of contract and consequent
forfeiture of security deposit held proper within terms of
contract. Appeal No.534 of 1969, dt. 11/7/1968 (Bom),
Reversed."
69. In the above cited decision the Apex Court of the
Land has interpreted the clauses of a work contract
similar to that of Ex.P.1 contract and held that time was
essence of the contract in the limited sense that the
contract will be continued to be in force till the
completion of the work or its abandonment. In the said
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decision by interpreting the clauses of the work contract
similar to that of Ex.P.1 contract, the court held that the
rescission of the contract and forfeiture of the security
deposit by the Executive Engineer on the failure of the
part of the Contractor to achieve the work progress was
valid.
70. The aspect as to whether the time was the
essence of Ex.P.1 contract or not has to be considered by
going through clauses of Ex.P.1(a) schedule of the
contract form.
71. A perusal of clause 2(b) of Ex.P.1(a) schedule of
contract form discloses that the same provides that the
time allowed for carrying out the work as entered in the
tendering shall be strictly observed by the Contractor. It
further provides that the work shall through out the
stipulated period of the contract be proceeded with all
dues diligence (time being deemed to be the essence of
the contract on the part of the contractor). It also
provides that to ensure good progress during the
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execution of the work, the contractor shall be bound to
comply with the time schedule according to the program
of execution of work as agreed upon enclosed to the
contract.
72. A perusal of clause 2(d) of the contract which
provides for penalty for delay discloses that it provides
that in respect of shortfall in progress assessed due to
the delay on the part of the contractor as per clause 2(b)
& (c), the contractor shall be liable to pay as penalty an
amount equal to 1% of the estimated cost of the balance
work assessed according to the program for every day
that the due quantity of work remains incomplete.
Further clause 3 of the contract provides that in any case
in which under any clause or clauses of the contract, the
Contractor shall have rendered himself liable to pay
compensation or penalty amounting to the whole of his
security deposit including the amount deducted in
installments from his bills as further security deposit, the
Executive Engineer on behalf of the Governor of
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Karnataka shall have power to adopt the recourses, such
as, forfeiture of security deposit, recession of the
contract. Clause 3(e) of the contract provides that in the
event of the Executive Engineer taking recourses with
regard to forfeiture of security deposit of the contract and
for recession of the contract, the Contractor shall have no
claim to compensation for any loss sustained by him.
73. A perusal of the above mentioned provisions of
Ex.P.1 contract stated in Ex.P.1(a) schedule of the
contract form, if read together and interpreted with
reference to each other provision and read as single
whole closely goes to show that the contract was to
continue to be in force till the completion of the work or
its rescission. The time was the essence of the contract
only for the limited sense that if the plaintiff completed it
within the original contractual period, he would not be
liable to pay any compensation, but in case of non
completion of the contract within the contractual period,
plaintiff has to compensate the defendants for non
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completion of the work and right of recession of the
contract would accrue to the defendants on non
completion of the work by the plaintiff. Hence, the
contention of the plaintiff that under Ex.P.1 contract
dated 26/3/1993 the time was not the essence of the
contract and the act of the defendants to rescind contract
without extending period of time for performance of the
contract is illegal cannot be accepted.
74. With regard to the grievance of the plaintiff
pertaining to non extension of time to perform contract
by the defendants is concerned, a perusal of clause 5 of
the schedule of contract discloses that the same deals
with grant of extension of time. Clause 5(a) of the
contract provides that :
" If the contractor shall desire an extension of the
time for completion of the work on the ground of his
having been unavoidably hindered in its execution or on
any other ground, he shall apply in writing to the
Executive Engineer before the expiration of the period
stipulated in the tender or before the expiration of 30
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days from the date on which he was hindered as
aforesaid or on which the cause for asking for extension
occurred, whichever is earlier and the Executive Engineer
or other competent authority may, if in his opinion, there
are reasonable grounds for granting an extension, grant
such extension as he thinks necessary or proper. The
decision of such competent authority in this matter shall
be final."
75. A perusal of the clause 5(a) of the schedule of
contract form discloses that the aspect of extension of
time with regard to performance of the contract was in
the discretion of the 3rd defendant - Executive Engineer.
The decision of the 3rd defendant - Executive Engineer in
the extension of time is final. In the light of the clause
5(a) of the contract, a perusal of the materials on record
discloses that on the letters addressed by the plaintiff to
the defendants seeking extension of time to perform his
part of the contract, the defendants though have not
extended the time for performance of contract in writing,
but have impliedly granted extension of time till recession
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of the contract. However, the 2nd defendant considering
the fact that the plaintiff has failed to achieve the
required work progress has issued Ex.D.7 to D.17 notices
dated 28/6/1993, 3/8/1993, 2/6/1994, 7/6/1994,
30/8/1994, 13/9/1996, 2/2/1995, 5/7/1995, to the
plaintiff on various dates calling upon him to make up
the shortfall of the work progress and on failure of the
part of the plaintiff to make up the shortfall of the
stipulated work progress has issued Ex.D.1 final notice
dated 3/9/1998 stating that since the plaintiff has failed
to make up the shortfall of the work progress and on the
failure of the plaintiff to complete the work have decided
to rescind the contract and called upon the plaintiff to
present at the work site on 11/9/1998 to take the final
measurement of the work completed. Further through
Ex.D.5 letter dated 12/6/2001, Ex.P.1 contract was
rescinded by the 2nd defendant on cost and risk basis of
the plaintiff for failure on the part of the plaintiff to
complete the construction work.
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76. On the aspect of recession of Ex.P.1 contract is
concerned, a perusal of the contents of Ex.P.1(a)
schedule of the contract form discloses that clause 2(d) of
the contract deals with penalty for delay in respect of
shortfall in progress assessed due to the delay on the
part of the Contractor in completing the work. Clause
2(d) of the contract provides for payment of penalty by
the Contractor in case of shortfall in progress an amount
equal to 1% of the estimated cost of the balance work
assessed according to the program for every day that the
due quantity of work remains incomplete.
77. A perusal of clause 3 of the contract discloses
that it provides that in any case in which under any
clause of the contract, the Contractor shall have rendered
himself liable to pay compensation / penalty, the
Executive Engineer under clause 3(a) of the contract have
right to rescind the contract by issuing a written notice to
the Contractor.
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78. In light of the above mentioned provision of
clause 2 and 3 of the Ex.P.1 schedule of contract form a
perusal of the materials on record discloses that the
Assistant Executive Engineer, PWD Department,
Chikkaballapura has issued Ex.D.7 to D.17 notices dated
28/6/1993, 3/8/1993, 2/6/1994, 7/6/1994,
30/8/1994, 13/9/1996, 2/2/1995, 5/7/1995, calling
upon the plaintiff to make good the shortfall in the
progress of the work and to achieve the work progress in
terms of the contract. In Ex.D.7 notice dated 28/6/1993
issued by the 3rd defendant to the plaintiff a penalty of
Rs.32,430/ was imposed on the plaintiff for the shortfall
in the progress of the work within the stipulated period.
A perusal of contents of Ex.D.1 final notice dated
3/9/1998 issued by the 3rd defendant - Executive
Engineer to the plaintiff discloses that in the said notice
it is alleged that since plaintiff has failed to complete the
construction work, the defendants have decided to
rescind the contract and to take measurement of the
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construction work. Thereafter, ExP.1 contract was
rescinded on 12/6/2001 under Ex.D.5 letter dated
12/6/2001 addressed by the 2nd defendant to the 3rd
defendant.
79. A perusal of the materials on record discloses
that the fact that under Ex.P.1 contract dated 26/3/1993
the agreed monthly stipulated progress fixed was
Rs.2,16,200/ is not in dispute. Further fact that even
after completion of the stipulated period of contract on
26/3/1995 and upto recession of the contract on
12/6/2001, plaintiff failed to achieve the agreed work
progress and failed to complete the construction work is
not in dispute. As per the contents of Ex.D.15 notice
issued by the 3rd defendant to the plaintiff dated
2/2/1995, there was shortfall of work progress of
Rs.10,39,468/. Admittedly, after completion of the
contractual period on 26/3/1995 or thereafter till
rescission of the contract on 12/6/2001, the plaintiff has
failed to reach the stipulated work progress and failed to
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complete the construction work. Plaintiff who has alleged
that the alleged defaults on the part of the defendants in
performing their part of the contractual obligation as
reasons for non completion of the work within the
stipulated period of time has failed to prove the same.
On the other hand, the defendants on the ground that
the plaintiff has failed to achieve the required stipulated
progress of work have issued Ex.D.1 final notice dated
3/9/1998 stating that they have decided to rescind the
contract in terms of Ex.P.1 contract for non completion of
the contract work have rescinded Ex.P.1 contract
through Ex.D.5 letter dated 12/6/2001 on the ground
that plaintiff has failed to complete the construction work
in terms of Ex.P.1 contract. Since the defendants have
rescinded the contract in terms of Ex.P.1 contract for
failure on the part of the plaintiff to achieve the required
progress of the work and to complete the construction in
terms of the contract, the contention of the plaintiff that
the recession of the contract dated 26/3/1993 by the
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defendants on 12/6/2001 is illegal and arbitrary, cannot
be accepted.
80. The learned counsel for the plaintiff in his
written arguments and further written arguments filed
before the court has mainly relied on Section 52 to 55 of
the Indian Contract Act and argued that since the
defendants have failed to fulfill their promise in terms of
the Ex.P.1 contract, the plaintiff could not able to
complete the construction work within stipulated period
of time. It is further argued that inspite of failure on the
part of the defendants to perform their part of the
contract, the plaintiff was executing the work under most
trying circumstances and kept the work in progress and
was successfully completed more than the tender value of
the work to the tune of Rs.46,02,146/ against the tender
value of the work of Rs.38,91,629/. Inspite of it,
defendants have chosen to take illegal, wrongful and
unwarranted action of cancellation of the contract with a
threat to execute balance work at his risk and cost,
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though the delays and defaults were attributable to the
defendants. It is further argued that the defendants were
not even bothered to fix further period of performance to
make time essence of the contract after expiry of original
contract period. It is further argued that in view of the
breach of contractual obligations by the defendants,
plaintiff is entitle for the damages which the plaintiff has
sought for as suit claims in the present suit.
81. On issues No.1 and 2 are concerned, the
learned counsel for the plaintiff in his written arguments
and additional written arguments has relied on following
citations, which will be considered one by one.
(1) In Hind Construction Contractors V/s. State of
Maharastra reported in AIR 1979 page 720, wherein, the
Apex Court of the Land has stated about the tests for
deciding if the time was essence of the contract when
Contractor has not completed the contract within
stipulated period of time and when no term in contract
making the time essence of contract.
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82. I have perused the ratio of the above cited
decision. However, unlike cited decision in the present
case in hand in clause 2(b) of Ex.P.1 schedule of contract
form, it was specifically stated that time being deemed to
be the essence of the contract on the part of the
Contractor. Hence, the ratio of the above cited decision
is not helpful for the plaintiff to prove that time is not the
essence of the contract under Ex.P.1 agreement.
83. The learned counsel for the plaintiff has also
relied on a decision reported between State of Karnataka
V/s. Sree Rameshwara Rice Mill, Theerthahalli, reported
in 1987 AIR 1359, wherein, the Apex Court of the Land
has held that in case of breach of agreement amount of
assessment of damages is to be made by the independent
body and not by parties to the contract.
84. I have perused the ratio of the above cited
decision also. However, unlike cited decision in the
present case, plaintiff has failed to prove that defendants
have committed breach of condition of agreement and he
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is entitle for damages. Hence the ratio of the above cited
decision is also not helpful for the plaintiff.
85. The plaintiff's counsel has also relied another
decision reported between J.J.Engineers Private Limited
V/s. Union of India and another reported in 2011(2)
ARB.LR.84(SC), wherein the Apex Court of the Land held
that the question whether the other party committed
breach cannot be decided by the party alleging breach. A
Contractor cannot provide that one party will be the
Arbitrator to decide whether he committed breach or the
other party committed breach, the question can only be
decided by an adjudicatory firm i.e. a Court or an Arbitral
Tribunal.
86. I have perused the ratio of the above cited
decision. However, considering the fact that the Ex.P.1
contract do not provide for arbitration clause for decide
breach of contract by the defendants themselves who are
the parties for the contract, the ratio of the above cited
decision is also not helpful for the plaintiff.
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87. The learned counsel for the plaintiff has also
relied on another decision reported in Municipal
Corporation of Delhi V/s. Jagannath Ashok Kumar
reported in Arbitrators Law Reporter 1987(2) page 344,
wherein, the Apex Court of the Land has held that if the
contract has a provision for extension of time or
compensation then it cannot be said that time was
essence of the contract.
88. I have perused the ratio of the above cited
decision. Unlike cited decision in Ex.P.1(a) schedule of
contract form it was specifically stated that time was the
essence of the contract. The provision for extension of
time for performance of contract was given at the
discretion of the defendants. Considering the fact that in
Ex.P.1 contract it was specifically stated that time was
the essence of the contract and contractor plaintiff was
required to perform his part of the contract strictly within
the specific period of time, the ratio of the above cited
decision is also not helpful for the plaintiff.
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89. By perusing the oral and documentary evidence
produced on record and over all assessment of the same,
I hold that plaintiff has failed to prove that defendants
have failed to perform their part of contractual
obligations of the contract dated 26/3/1993 entered
between him and the defendants. Plaintiff has also failed
to prove that cancellation of contract dated 26/3/1993
made by defendants on 12/6/2001 is illegal and
wrongful. With these observations, I answer issues No.1
and 2 in the negative.
90. ISSUE NO.3 : With regard to issue No.3 is
concerned, the plaintiff has pleaded and lead evidence
stating that the stipulated period of contract expired on
26/3/1995. Inspite of several delays and default
committed by the defendants, he continued the execution
of the work even beyond the stipulated period. The
defendants have also implied and permitted him to
complete the execution of the work. He has successfully
completed more than the tender value of work to the tune
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of Rs.46,02,146/ against the tender value of the work of
Rs.38,91,629/. The defendants not even bothered to
approve the extra cost incurred, which was under
execution where the approval was essential in terms of
contract. His repeated request for grant of extension of
time to perform part of the contract was kept in silent by
the defendants and made him to continue the work. All
of a sudden the defendants have taken illegal action of
canceling the contract by applying cost and risk action of
completing the balance work. The question of
cancellation of the contract work by the defendant do not
arise, since they have failed to perform their part of the
obligation in terms of contract and also the contract work
has already exceeded the contract value. The defendants
opted for illegal cancellation of the work, without fulfilling
their obligations and without opting for settlement for
dispute in terms of clause 29 of the contract without
deciding the breach of contract either by an award or
decree.
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91. On the other hand, the defendants have pleaded
and lead evidence stating that even after expiry of the
contract period on 26/3/1995, plaintiff continued the
construction work beyond the contract period and the
work of the plaintiff exceeded upto Rs.46,02,147/
against the tender contract work of Rs..38,91,629/.
They have already paid the excess amount to the plaintiff
on the basis of work slip which was stipulated in
schedule contract form 13(b). The approval was given by
the Superintendent Engineer with regard to payment of
the excess amount on 5/1/1994. Since, plaintiff has
failed to execute the tender work and there was
inordinate delay on the part of the plaintiff in completing
the tender work, they have canceled the contract of the
plaintiff on 12/6/2001. Thereafter, they have called
tender for balance work and entrusted the balance work
to one Sri.C.S.Chandregowda, who is the lowest quoted
tenderer for a sum of Rs.9,46,000/. The above
mentioned contractor has completed the balance
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construction work and handed over the building to them.
The plaintiff has to bear the loss caused to the
defendants pertaining to completion of balance work by
another contractor.
92. In the present case in hand, the plaintiff has
failed to prove that cancellation of the contract dated
26/3/1993 made by the defendants on 12/6/2001 is
illegal and wrongful. On the other hand, perusal of
evidence on record discloses that admittedly the plaintiff
has failed to achieve monthly stipulated progress of the
work in terms of the contract and there was inordinate
delay on the part of the plaintiff in completing the
construction work. A perusal of clause 2(d) of the
contract discloses that it provides for payment of penalty
by the contractor in respect of shortfall in progress due to
delay on the part of the contractor as per clause 2(b) & (c)
of the contract. Clause 3 of the contract provides that in
cases in which under any clause of the contract, the
Contractor shall have rendered himself liable to pay
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penalty, the Executive Engineer have power to rescind
the work under clause 3(a) of the contract and cancel the
contract on risk and cost basis as per clause 3(c) of the
contract.
93. A perusal of the materials on record discloses
that since the plaintiff - Contractor has failed to reach
the stipulated work progress and the shortfall in work
progress and inordinate delay in completion of the
contract work was assessed due to delay on the part of
contractor plaintiff, defendants rescinded the contract of
the plaintiff on cost and risk basis as per clause 3(b) & (c)
of the schedule tender. Since Ex.P.1(a) schedule of
contract form provides for recession of the contract on
cost and risk basis and since the defendants have
rescinded the contract on cost and risk basis in terms of
the Ex.P.1(a) schedule of contract form, the contention of
the plaintiff that the defendants cannot apply the cost
and risk action for completing the balance work against
him in case of recession of contract cannot be accepted.
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With these observations, I answer issue No.3 in the
negative.
94. ISSUE NO.4 : With regard to issue No.4 is
concerned, the plaintiff has pleaded and lead evidence
stating that due to several delays and defaults committed
by the defendants, he was unable to complete the
construction work within stipulated period of time. The
defendants instead of granting extension of time to him
to complete the construction work have wrongfully
rescinded the contract. That the defendants are liable to
refund EMD of Rs.40,000/, FSD recovered under bills
amounting to Rs.2,99,139/ and NSC recovered in bill
amounting to Rs.37,500/, totally amounting to
Rs.3,76,639/. Plaintiff has claimed interest @ 12% per
annum on the above mentioned sum of Rs.3,76,639/
amounting to Rs.7,04,315/. Plaintiff has sought for
total claim of Rs.10,80,954/ on the above mentioned
amounts.
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95. On the other hand, the defendants have pleaded
and lead evidence stating that since the plaintiff has
failed to complete the work within stipulated period of
time, they have canceled the contract on cost and risk
basis as per clause 3(b) & (c) of the schedule of contract
and security deposit has been forfeited to the
government. Hence, the question of considering the
claim made by the plaintiff for a sum of Rs.3,76,639/
and interest of Rs.7,04,315/ will not arise. Once the
forfeiture clause is opened by them, the question of
considering the above claim of the plaintiff will not arise.
96. In the present case in hand, the plaintiff has
failed to prove that recession of the contract dated
26/3/1993 on 12/6/2001 by the defendants is illegal
and wrongful. On the other hand, since the plaintiff has
failed to reach the stipulated work progress in terms of
the contract and failed to complete the construction
work, the defendants by invoking clause 3(a) of the
contract have rescinded the contract and forfeited the
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security deposit of the plaintiff - Contractor. Since the
defendants have forfeited the amount deposited by the
plaintiff in term of clause 3(a) of the contract, the
contention of the plaintiff that defendants are liable to
pay him claim of Rs.10,80,954/ on the forfeited security
deposits cannot be accepted. With these observations, I
answer issue No.4 in the negative.
97. ISSUE NO.5 : As claim No.2 plaintiff has sought
for payment of damages of Rs.32,03,107/ from the
defendants towards payment of damages of idle charges
for men and machinery suffered by him during stoppage
period of execution of the work in contract period. With
regard to this claim is concerned, the plaintiff has
pleaded and lead evidence stating that the execution of
the work was stopped on several occasions for want of
design details and due to obstruction on work site and
lack of payment. The total period of stoppage was 308
days during the period of execution of the work from
commencement of the work to the cancellation of the
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contract due to various defaults and breaches committed
by the defendants, as a result of which, he has suffered
damages in the form of idle charges for men and
machinery. He had written various letters to the
defendants by intimating the stoppage of the work before
the expiry of the contract period. He has kept separate
men and machinery for this work. He has no chance to
mitigate the damages suffered during the idle period and
there are no other opportunity to utilize the
establishment made by this aspect and he was always
ready at work site waiting for instructions of defendants
to execute the work. The idle charges per day works out
to Rs.3,600/ including labourers machinery. The
defendants are required to compensate him for idle
charges at the rate of Rs.3,600/ per day for the period of
308 days. The idle charges were calculated for the
construction period when the stoppage was occurred. On
this claim, the plaintiff has sought for payment of
damages of Rs.11,16,000/ plus interest of
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Rs.20,87,107/ @ 12% per annum, totally amounting to
Rs.32,03,107/.
98. With regard to the above mentioned alleged
claim No.2 of the plaintiff is concerned, the defendants
have pleaded and lead evidence stating that the payment
of damages by them for the idle charges of men and
machinery alleged to have been suffered by the plaintiff
do not arise, since there was no stoppage of work ordered
by them at any stage during the subsistence of the
contract. The Contractor cannot made any claim for
compensation as per clause 15 of the schedule of
contract form. They reserved their right to take action
against the plaintiff for the delay in execution of the
work. Plaintiff has not maintained the men and
machinery in the site during the subsistence of the
contract. There is no default and breach committed by
them. Plaintiff unnecessarily making false allegations
against them and has sought for imaginary amount of
compensation on this claim. At no point of time, plaintiff
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has shown the idle of men and machinery at the site
during the subsistence of agreement and plaintiff has
not made any representation in this regard.
99. With regard to claim No.2 pertaining to payment
of alleged idle charges for men and machinery suffered
during stoppage period of execution of the work, plaintiff
has mainly relied on Ex.P.11 statement showing the
payments made by him with regard to skilled and
unskilled labourers with regard to idle charges of men
and machinery suffered during the stoppage period of
execution of the work. Further, plaintiff has also relied
on Ex.P.14 totally 51 vouchers under which plaintiff
alleged to have made payment of Rs.10,200/ under each
voucher on various dates to one Kuppuswamy.
100. It is pertinent to note that except producing
Ex.P.11 self prepared statement and Ex.P.14 vouchers
before the court, plaintiff has not proved the contents of
Ex.P.11 statement or Ex.P.14 vouchers by examining the
above mentioned D. Kuppuswamy to prove that he had
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made any payments to him with regard to the labourers
as alleged in the said vouchers. Hence mere production of
Ex.P.11 statement and Ex.P.14 vouchers are not helpful
for the plaintiff to claim any compensation towards idle
charges of men and machinery, alleged to have been
suffered by him.
101. A perusal of the evidence on record discloses
that the plaintiff has failed to prove that the stoppage of
work of construction was ordered by the defendants at
any point of time. No documentary evidence produced on
record by the plaintiff to show that the total period of
stoppage of the work was 308 days. Plaintiff has not
produced any documentary evidence to show that he has
kept separate men and machinery for this work and as a
result of the alleged stoppage of the work he has suffered
any damages. Plaintiff has also not produced any
documentary evidence to show that he had incurred
expenses of Rs.3,600/ per day as idle charges for
stoppage of the work. On the other hand, a perusal of
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the evidence on record discloses that admittedly, plaintiff
has failed to reach the stipulated work progress in terms
of the contract. Inspite of issuance of repeated notices by
the defendants to the plaintiff, he has failed to make up
the shortfall of the work and there was inordinate delay
on the part of the plaintiff to complete the construction
work, as a result of which, defendants have rescinded the
contract of the plaintiff in terms of the contract. A
perusal of Ex.P.1(a) schedule of contract form discloses
that clause 3 (d) of the contract provides that if the
contractor does not maintain the rate of progress as
required under clause 2 of the contract and failed to
maintain the rate of progress even after taking action
under clause 2(c) & (d) by the Executive Engineer, then
the contractor will have no claim for compensation for
any loss sustained by him owing to such actions.
102. Since the plaintiff has failed to prove that due
to various defaults and breaches committed by the
defendants, he has suffered damages in the form of idle
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charges for men and machinery and since clause 3 (b) of
the contract provides that the plaintiff will have no claim
for compensation for any loss sustained by him due to
failure on his part to maintain the rate of progress as
required under the contract, plaintiff is not entitle for
payment of damages of idle charges for men and
machinery alleged to have been suffered by him. With
these observations, I answered issue No.5 in the negative.
103. ISSUE No.6 : With regard to issue No.6
pertaining to claim No.3 sought for by the plaintiff is
concerned, the plaintiff claimed a sum of Rs.80,81,130/
as payment of equitable revised rates for the work done
by him beyond the stipulated period of time.
104. With regard to this claim is concerned, the
plaintiff has pleaded and lead evidence stating that the
period of performance of the contract was prolonged
beyond the stipulated date of completion of 26/3/1995,
due to several defaults and breach of contract committed
by the defendants. Due to the defaults committed by the
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defendants he was forced to execute the work in the
prolonged period beyond the stipulated period of
completion facing the burnt of all round increase in the
market price during that period. There was no justice in
insisting him to do the work at tender rates, since the
delay in completing the work was not at all attributable
to him, he is entitle for payment of equitable revised rates
for the work done beyond the stipulated period taking
into consideration of the changed market conditions and
circumstances under which the work was executed. He
has requested the defendants to pay the equitable revised
rates for the quantity of work executed beyond the
stipulated period of completion of 26/3/1995, but the
defendant has kept silent and not made payment at
equitable revised rates for the work done by him beyond
the stipulated period of contract. On this claim, plaintiff
has sought for a sum of Rs.28,15,725/ and interest of
Rs.52,65,405/ from 29/6/2001 upto 2/2/2017, totally
amounting to Rs.80,81,130/.
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105. On this alleged claim of the plaintiff, the
defendants have pleaded and lead evidence stating that
the alleged payment of equitable revised rates for the
work done beyond the stipulated period of contract does
not fall under the schedule of contract form. The plaintiff
by making false allegations has claimed huge amount
from them according to his whims and fancies and the
claim of the plaintiff is hypothetical and illogical.
106. With regard to this claim of plaintiff seeking
payment of equitable revised rates for the work done
beyond the stipulated period of contract, plaintiff has
mainly relied on Ex.P.12 & P.13 statements prepared by
him showing the details of quantities of the work
executed beyond he contract period along with claimed
rates, amounts and also deduction of the amount paid to
him.
107. However, a perusal of the evidence on record
discloses that except disclosing Ex.P.12 & P.13, the self
interested statements prepared by the plaintiff, he has
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not made any attempt to prove the contents of the
statements. Mere production of Ex.P.12 & P.13 self
interested statements prepared by the plaintiff is not
helpful for him with regard to the alleged claim.
108. In the present case in hand, the plaintiff has
failed to prove that the period of completion of work was
prolonged beyond the stipulated date of contract due to
several defaults and breaches committed by the
defendants. On the other hand, a perusal of the evidence
on record discloses that admittedly it is the plaintiff who
has failed to reach the stipulated work progress in terms
of the contract and inspite of issuance of number of
notices by the defendants, the plaintiff has failed to make
up the shortfall of the work. Further, there was
inordinate delay on the part of the plaintiff in completing
the construction work, which resulted in rescission of
Ex.P.1 contract by the defendants. Further, a perusal of
the Ex.P.1(a) schedule of contract form discloses that
there is no provision for payment of equitable revised
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rates for the work done beyond the stipulated period of
contract as claimed by the plaintiff particularly when the
plaintiff has failed to prove that the period of performance
of the contract was prolonged beyond the stipulated date
of completion due to defaults and breach of contract
committed by the defendants. Since the plaintiff has
failed to prove that the period of performance was
prolonged beyond the stipulated date of completion due
to defaults and breach of contract committed by the
defendants, plaintiff is not entitle for any payment for
equitable revised rates for the work done beyond the
stipulated period of contract. With these observations, I
answer issue No.6 in the negative.
109. ISSUE No.7 : With regard to issue No.7
pertaining to claim No.4 of the plaintiff is concerned, the
plaintiff has sought for a sum of Rs.84,43,827/ as
reimbursement of expenses for longer stay at the work
site for the purpose of executing the work. With regard to
this claim is concerned, the plaintiff has pleaded and lead
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evidence stating that as a result of defaults and breach of
contract committed by the defendants, the execution of
the work prolonged beyond the stipulated date of
completion due to which he was made to incur extra
expenses and additional monthly overhead charges. He
had taken 10% of the cost of work at quoted rates visa
vis stipulated period of contract as the cost of over head
charges to meet the overhead both at head office and site
office, which included payment towards managerial
consultancy, legal advise, Engineering, Supervision,
Account stores and traveling overhead charges are fixed
in each and every month and will not increase or
decrease in proportion to quantum of work executed in
each month. The establishment engaged on the works
cannot be retrenched or reduced till the completion of the
work. Hence the expenses on monthly overhead
continued from the date of contract period dated
26/3/1993 till the cancellation of the contract on
12/6/2001. On this claim, plaintiff has sought for a
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reimbursement of Rs.29,42,100/ along with interest of
Rs.55,01,727/, totally amounting to Rs.84,43,827/ as
reimbursement expenses from 29/6/2001 upto
2/2/2017 for longer stay at the work site for the purpose
of executing the work.
110. With regard to this claim is concerned, the
defendants have pleaded and lead evidence stating that
there is no base for the plaintiff to claim a sum of
Rs.84,43,827/ as reimbursement expenses for the
longer stay at the work site for the purpose of executing
the work. The plaintiff on assumptions has calculated
the amount. Since the plaintiff has not reached the
monthly tender work, which prescribed under the
agreement, the plaintiff is not entitle for the said claim.
111. With regard to the above claim No.4 pertaining
to reimbursement of monthly over head charges for
longer stay at the work site for the purpose of executing
the work beyond the contract period, plaintiff has mainly
relied on Ex.P.15 certificate issued by a Chartered
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Accountant certifying that as per their knowledge and
information, plaintiff had incurred the expenditures
stated in the said certificate pertaining to expenditure on
over heads for executing the work of construction of First
Grade College, Shidlaghatta, Kolar District vide
Agreement No.16/9293 dated 26/3/1993.
112. A perusal of the evidence on record discloses
that except producing Ex.P.15 certificate in evidence,
plaintiff has not examined the author of the said
certificate to prove the contents of the said certificate. In
the absence of examination of the author of Ex.P.15
certificate and in the absence of proving the contents of
Ex.P.15 certificate mere production of the said certificate
is not helpful for the plaintiff to claim reimbursement of
monthly over head charges in the rate stated in Ex.P.15
certificate.
113. A perusal of the evidence on record discloses
that the plaintiff has failed to prove that the construction
work prolonged beyond the stipulated date of completion
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due to defaults and breach committed by the defendants.
The alleged breach of contract and the alleged defaults
committed by the defendants resulting into delay in
performance of the contract work is base for the plaintiff
to make this claim. In the absence of proving the alleged
defaults and breach of the contract by the defendants
resulting into longer stay of the plaintiff at work site,
plaintiff is not entitle for this claim.
114. With regard to issue No.7 is concerned, the
learned counsel for the plaintiff has relied on a decision
reported between Government of Karnataka V/s
Sudhakar Reddy reported in ILR 1992 Karnataka 3276,
wherein, with regard to the tender agreement it was held
that whatever be the quantity of work that remains over,
the Contractor should have been in readiness to complete
the work and for that purpose he should keep his entire
establishment and machinery idle for the entire period. In
that view of the matter, it cannot be said that overhead
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charges should have been calculated only on the quantity
of work that remains over beyond the period in question.
115. I have perused the ratio of the above cited
decision. Unlike cited decision, in the present case in
hand the plaintiff has failed to prove that the defendants
have ordered for stoppage of the construction work. On
the other hand, due to the inability of the plaintiff -
Contractor to reach the stipulated work progress the
contract was rescinded by the defendants. Hence the
question of defendants paying overhead charges with
respect to the balance of the construction work will not
arise. Hence the ratio of the above mentioned decision is
not helpful for the plaintiff.
116. Plaintiff's counsel has relied on another
decision between Mcdermott International Inc. V/s burn
standard co. Ltd. & others reported in 2006(2) Arb.Lr 498
(SC), wherein the Apex Court of the Land has held that in
case of challenge of the arbitration award, the scope of
intervention of the court is envisaged in few
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circumstances only like in case of fraud or bias by
arbitrators, violation of natural justice where arbitrator
has gone contrary to or beyond expressed law of contract
or granted relief in matter not in dispute would come
within purview of Section 34. When Arbitrator quantified
claim by taking recourse to Emden formula which is
widely accepted one. Arbitrator cannot be committed an
error warranting interference by court.
117. I have perused the ratio of the above cited
decision. Since the plaintiff has failed to prove that the
recession of the contract by the defendants is illegal, the
question of defendants paying any compensation to the
plaintiff towards reimbursement of expenses for longer
stay at work site will not arise. Hence, even the ratio of
this decision is also not helpful for the plaintiff.
118. Plaintiff's counsel has also relied on another
decision reported between M/s. National Highways
Authority of India Vs. M/s. TantiaTBL (JV) rendered in
OMP 482 of 2009 dated 16/2/2012, wherein the Hon'ble
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High Court of Delhi has upheld the finding of the arbitral
tribunal that when the contractor issued early warning
notices to the National Highways Authority of India
seeking extension of time and when National Highways
Authority of India had notified with compensation event,
the contractor has not committed breach of contract.
The Delhi High Court has also upheld the finding of the
Tribunal that when the construction work undertaken by
the contractor prolonged because of indecisiveness on the
part of the NHAI it had resulted in loss and damage to
the contractor.
119. I have perused the ratio of the above cited
decision. Unlike cited decision, in the present case in
hand the plaintiff has failed to prove that the contract
work was prolonged because of indecisiveness on the
part of the defendants. On the other hand, the contract
was rescinded due to inordinate delay on the part of the
plaintiff to complete the construction work. Hence, the
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ratio of the above cited decision is also not helpful for the
plaintiff.
120. The learned counsel for the plaintiff has relied
on another decision between M/s. National Highways
Authority of India V/s. M/s. ElsamexTWSSNCJV
rendered in OMP 789 of 2012, wherein, the Hon'ble High
Court of Delhi has rejected the petition filed by the
National Highways Authority of India challenging the
award passed by the Arbitral Tribunal by awarding
compensation to the Contractor on the breach of the
contract.
121. I have perused the ratio of the above cited
decision. Unlike cited decision in the present case in
hand, the plaintiff has failed to prove that the delay in
execution of the work was not due to the reasons
attributable to him. On the other hand, the contract was
rescinded by the defendants for failure on the part of the
plaintiff to complete the construction work in terms of the
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contract. Hence, the ratio of this decision is also not
helpful for the plaintiff.
122. The plaintiff's counsel has relied on another
decision reported between U.P.State Electricity Board
V/s. Om Metals and Minerals (Pvt) Ltd, reported in
Arbitration Law Reporter 1994(2), wherein Allahabad
High Court has upheld the finding of the arbitral
Tribunal granting compensation to the contractor where
delay of construction work was resulted due to obstacle
created by the U.P.State Electricity Board in providing
suitable site.
123. I have perused the ratio of the above cited
decision. Unlike cited decision in the present case in
hand, the plaintiff has failed to prove that due to
obstacles created by the defendants, he could not able to
complete the construction work within stipulated period
of time. Hence, the ratio of this decision is also not
helpful for the plaintiff.
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124. The learned counsel for the plaintiff has also
relied on another decision reported between Government
of Karnataka V/s. K. Sudhakar Reddy reported in ILR
1992 Karnataka 3276, wherein, while interpreting the
clause of tender agreement it was held that over head
charges not confined only to balance of quantity of work,
entire establishment and machinery kept idle by the
plaintiff.
125. I have perused the ratio of the above cited
decision. However, unlike cited decision in the present
case the plaintiff has failed to prove that due to defaults
on the part of the defendants to perform their part of the
contract, he has failed to complete the construction work
within stipulated period of time. Hence the question of
payment of over head charges by the defendants to the
plaintiff will not arise. Hence the ratio of this decision is
also not helpful for the plaintiff.
126. The learned counsel for the plaintiff in his
arguments has also relied on a decision reported between
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Rail India Technical and Economic Services Limited, New
Delhi V/s. Ravi Constructions, Bangalore and another
reported in 2001 (Suppl) Arb. LR 436 Karnataka (DB),
wherein, the Division Bench of Hon'ble High Court of
Karnataka has held that parties are bound to strictly
abide by the appointment procedure pertaining to the
Arbitral Tribunal.
127. I have perused the ratio of the above
mentioned decision. The ratio of the above mentioned
decision is not helpful for the plaintiff.
128. By perusing the materials produced on record,
I hold that the plaintiff has failed to prove that the
defendants are liable to pay him a sum of Rs.84,43,827/
towards reimbursement of expenses for longer stay at the
work site for the purpose of executing the work. With
these observations, I answer issue No.7 in the negative.
129. ISSUE No.8 : The defendants in the written
statement have taken a defence that the court fee paid by
the plaintiff is insufficient. However, a perusal of the
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evidence on record discloses that the defendants have not
lead any specific evidence to prove that the plaintiff has
not properly valued the suit for the purpose of payment
of court fee and court fee paid by him is insufficient. On
the other hand, a perusal of the materials on record
discloses that on the suit claim of Rs.2,08,09,018/, the
plaintiff has paid proper court fee of Rs.3,11,170/ as per
clause 79 and schedule (1) Article (1) of the Karnataka
Court Fees & Suits Valuation Act, 1958. By considering
the materials produced on record, I hold that defendants
have failed to prove that the suit of the plaintiff is not
properly valued for the purpose of payment of court fees.
With these observations, I answer issue No.8 in the
negative.
130. ISSUE No.9 : The defendants in the written
statement have taken another legal defence that the suit
of the plaintiff is barred by limitation. However, a
perusal of the pleadings and evidence of the defendants
discloses that they have not lead any specific evidence to
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prove that the suit of the plaintiff is barred by limitation.
Further no arguments were addressed on the aspect of
limitation by the counsel for defendants. In the absence
of specific pleadings and evidence to prove that the suit
of the plaintiff is barred by limitation, a stray sentence in
the written statement of the defendants is not sufficient
to come to the conclusion that the suit of the plaintiff is
barred by limitation. By perusing the materials placed
on record, I hold that the defendants have failed to prove
that suit of the plaintiff is barred by limitation. With
these observation, I answer issue No.9 in the negative.
131. ISSUE No.10 : Since plaintiff has failed to
prove that the defendants have failed to perform their
part of the contractual obligations of contract dated
26/3/1993 entered between him and the defendants as
the reasons for non completion of the contract work
within the stipulated period of time and also failed to
prove that rescission of the contract dated 26/3/1993
made by the defendants on 12/6/2001 is illegal and
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wrongful, plaintiff is not entitle for the suit claims sought
for. With these observations, I answer issue No.10 in the
negative.
132. ISSUE No.11 : In the present suit, plaintiff has
sought for future interest @ 18% per annum. The
learned counsel for the plaintiff on the aspect of payment
of future interest has relied on number of decisions in his
written arguments. However, since the plaintiff has
failed to prove that he is entitle for suit claims sought for,
the question for awarding future interest on the suit
claims sought for by the plaintiff do not arise. Hence, I
answer issue No.11 in the negative.
133. ISSUE No.12 : In view of my findings on issues
No.1 to 11 and the reasons assigned thereon, I proceed
to pass the following:
ORDER
Suit of the plaintiff is dismissed. Parties are directed to bear their costs. 118
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[Dictated to the Judgment Writer; transcript thereof corrected, initialed and then pronounced by me, in the Open Court on this the 25th day of October 2019] [S.A.Hidayathulla Shariff] LXXXIII Additional City Civil Judge.
BENGALURU.
1. List of witnesses examined on behalf of the Plaintiff/s:
PW.1 Sri. M. Keshava Raju
2. List of witnesses examined on behalf of the
Defendant/s:
DW.1 : Sri. H.P.Ajith (discarded) DW 2 : Manjunatha L.N
3. List of documents marked on behalf of the Plaintiff/s:
Ex.P 1 Agreement.
.
Ex.P.1(a) Schedule of contract form.
Ex.P 2 Schedule B - 33 sheets.
Ex.P 3 Note
Ex.P 4 Note of schedule A.
Ex.P.5 Correspondence - 52 sheets.
Ex.P.6 C.C of Civil Appeal No.1587/2004.
Ex.P.7 Notice U/S.8 of CPC.
Ex.P.8 to 10 Postal receipts.
Ex.P.11 Statement of idle charges 119 CT 1390_Com.O.S.242019_Judgment .doc Ex.P.12 Statement of quantization executed beyond contract.
Ex.P.13 Rate Analysis.
Ex.P.14 to Copy of Ex.P.13, two certificates and 18 two letters of defendants.
4. List of the documents marked for the defendant/s:
Ex.D.1 Letter of correspondence by the defendant for taking measurement. .
Ex.D.2 Postal Acknowledgement Ex.D.3 Mahazar dt. 11/9/1998 Ex.D.4 Contract certificate dt. 25/6/2003.
Ex.D.5 Rescind Order dt. 12/6/2001.
Ex.D.6 Letter addressed to S.E. Bangalore Circle.
Ex.D.7 Letter dt. 28/6/1993 addressed to the plaintiff by the EE,Kolar Division.
Ex.D.8 Letter dt. 3/8/1993 addressed by the EE to the plaintiff.
Ex.D.9 Letter dt. 2/6/1999 addressed by the AEE to the plaintiff.
Ex.D.10 Notice dt. 7/6/1994 addressed to the plaintiff.
Ex.D.11 RPAD Acknowledgement.120
CT 1390_Com.O.S.242019_Judgment .doc Ex.D.12 Notice dt. 30/8/194 addressed to the plaintiff.
Ex.D.13 RPAD Acknowledgement.
Ex.D.14 Notice dt. 30/9/1994 addressed to the plaintiff.
Ex.D.15 Notice dt. 2/2/1995 addressed to the plaintiff.
Ex.D.16 RPAD acknowledgement.
Ex.D.17 Notice dt. 5/7/1995 addressed to the plaintiff.
[S.A.Hidayathulla Shariff] LXXXIII Additional City Civil Judge.
BENGALURU.
1 CT 1390_Com.O.S.242019_Judgment .doc 2 .
1 CT 1390_Com.O.S.242019_Judgment .doc 2 .