Bangalore District Court
M/S Sri.Lakshmi Srinivasa ... vs The Chairman & Managing Director on 28 January, 2017
IN THE COURT OF THE III ADDL.CITY CIVIL & SESSIONS
JUDGE, BENGALURU CITY (C.C.H.No.25).
Dated: This the 28th day of January 2017
Present: Sri.Ron Vasudev, B.Com. LL.B, (Spl),
III Addl. City Civil & Sessions Judge,
Bengaluru.
O.S.No:1055/1994
Plaintiff M/s Sri.Lakshmi Srinivasa Constructions
Private Limited., Engineers & Contractors,
No.I, 'B' Block, C.I.L. Layout, Sanjaynagar,
Bangalore-560 024.
A Private Ltd. Company Regd, under
Companies Act 1956 Represented by its
Managing Director S.Srinivas Prasad.
(By Sri.CGS, Advocate)
V/S
Defendant The Chairman & Managing Director,
Karnataka State Police Housing
Corporation, No.60, Richmond Road,
Bangalore-560 025.
A Government of Karnataka Enterprise
Represented by its Managing Director.
(By Sri.KVR, Advocate)
Date of Institution : 21.2.1994
Nature of Suit : Suit for money based on
contract
Date of Commencement of : 29.11.2001
evidence
Date of pronouncement of : 28.1.2017
Judgment
2 O.S.No:1055/1994
Total Duration : Year/s Month/s Day/s
22 11 7
(Ron Vasudev),
III Addl. City Civil & Sessions Judge,
Bengaluru.
JUDGEMENT
This is a suit for money based on contract.
2. The summary of the plaint averments is as under; that the plaintiff is a Private Limited Company incorporated under The Companies Act, 1956 and is engaged in civil construction and contract work and is also a Registered Class-I Contractor under the State of Karnataka. That the plaintiff submitted it's tender for construction of 24 police quarters at Ramanagara, then Bangalore District in response to the tender notification issued by the defendant and as it was the lowest bid it was accepted and work order was issued on 23.5.1986. The estimated cost put to tender as per tender notification was Rs.8,91,401-26 and contract was for Rs.10,60,667-90, which was 18.99% above the CSR of 1985-86. The stipulated time for completion of work was ten months from the date of issue of commencement order excluding the monsoon period. That on account of five months delay on the part of the defendant in handing over the site the plaintiff could not commence the 3 O.S.No:1055/1994 work in time. The said contract besides being bilateral was mainly reciprocal in nature and unless the defendant performed it's part of the contract by discharging it's obligation, the plaintiff could not have proceeded with construction. The defendant failed and neglected to comply any one of the reciprocal obligation contained in that contract and thereby committed breach of each and every condition enshrined there, which went to the root of contract, thus this plaintiff was exonerated from executing work in terms and conditions of said contract and rendering the defendant liable for damages. Inspite of all these things after handing over of the site on 16.10.1986 the plaintiff was keen to proceed with the construction, but the defendant did not furnish the foundation designs until first week of 1988, the main cause for the same was the soil testing. Without obtaining the test report of soil, designs could not have been finalized. Later the defendant belatedly entrusted the soil testing to a private lab and report was received from it on 11.11.1986 and by that time the stipulated period mentioned in the contract was already over and the contract was running under extended period, but still the plaintiff continued with the work based on the oral assurances of defendant that it would compensate for any loss suffered by the plaintiff and by that time 1985-86 SR rates had become wholly unworkable. As per the contract the defendant was obliged to supply construction materials like steel, cement and other things, but the defendant could not supply enough quantity of cement bags and moreover cement supplied by it 4 O.S.No:1055/1994 was of inferior quality. When this fact was brought to it's notice through letter dt.18.5.1987 it directed the plaintiff to stop the construction work forthwith until it communicates. Thereafter also the defendant did not supply enough quantity of cement and thereby caused delay in carrying out the contract work. The defendant never supplied the drawings and designs of doors, windows, shutters in time and it never made any survey regarding the availability of bricks in and around Ramanagara. Finally the engineers of the defendant approved the bricks from a kiln, but when huge quantity of said bricks were procured and stored at the work place, the defendant rejected them on the ground that they are of poor quality and directed the plaintiff to obtain table moulded bricks (TMB) from Bangalore. The plaintiff did obey the instruction of defendant and secured the TMB from Bangalore and used them for construction. Since the said TMBs were not part of the tender notification, the defendant was liable to pay the difference of price. Infact the contract provided that whenever materials were procured by the plaintiff and price of such materials vary from the estimated rates compared with the CSR 1985-86 such freak rate shall have to be retained by the defendant till particular part of work is completed and to release the same thereafter. Using the said clause and ignoring the actual position on the ground that delay has occasioned, the defendant recovered Rs.75,000/- as the freak rate charges from the running bills of plaintiff, but did not release that amount even after completion of portion of that work. The said act of the defendant was in clear violation 5 O.S.No:1055/1994 of the terms of contract. The terms of contract also provided that in the event of any extra work carried out by this plaintiff the defendant was liable to pay for the said extra works by fixing up the workable rates. Accordingly the defendant extracted several extra works and the plaintiff also carried them out without any demur, however the defendant failed to fix the workable rates resulting loss of Rs.12,000/- to the plaintiff. Inspite of all these odds work could not be completed within ten months and the machineries, tools, centering materials, the permanent workers deployed there by plaintiff were kept idle resulting loss to the plaintiff. Moreover every time the Director and Engineers of the plaintiff had to travel from Mysore to Ramanagara to receive instructions from officers of the defendant, but it's officers were use to remain absent causing further loss to the plaintiff. The plaintiff has suffered loss of more than Rs.1 lakh and many time this plaintiff has mitigated the loss by working to the best of it's ability, otherwise the defendant would have liable to pay more than Rs.6,50,000/-. The plaintiff continued to work braving all hindrances on the fond hope that the defendant will settle the account in a proper perspective, but to it's shock and surprise through their letter dt.22.1.1991 the defendant illegally terminated the contract, but before doing so it has not exhausted the remedies that are available under the agreement, as a result the plaintiff has to suffer set back in their business apart from humiliation and torture. The plaintiff has also suffered heavy loss on account of unproductive additional overhead charges, loss of expected 6 O.S.No:1055/1994 profit, loss by way of loss of turn over on the amount which was illegally withheld by the defendant. Wherefore the plaintiff prays for declaration to declare that the letter dt.21.2.1991 terminating the contract as null and void; consequently to direct the defendant to refund full amount of earnest money; to pay Rs.15,000/- towards value of work executed till the date of termination; to refund Rs.60,000/- deducted towards freak rate charges; to pay Rs.12,000/- illegally recovered from running bills on the ground of penalty; to pay Rs.10,000/- towards extra and additional work executed; to pay Rs.1 lakh towards idling charges of machineries, labourers, tools, plant and centering materials; to pay Rs.15,000/- towards un-recovered expenses like providing preliminary works, amenities such as cement, shed, steel, storage yard, labour amenities, watchman shed, water tank etc.; to pay Rs.1,60,000/- towards loss of expected profit; to pay another sum of Rs.1,60,000/- towards additional overhead charges at the rate of 15% on the value of contract; to pay Rs.60,000/- towards increased cost of construction during the extended period of contract; to pay Rs.18,000/- towards loss caused by rejecting locally available bricks and to pay 21% interest p.a. on suit claim till it's complete realization.
3. The defendant appeared and filed written statement and summary of it is as under;
that suit is hit by Order 27 Rule 5(A) of CPC since Government is not made as a party and it is also bad for non- joinder of necessary parties i.e., as the executants of the 7 O.S.No:1055/1994 agreement are not arrayed as additional defendants. It is true that the plaintiff is a private limited company established under the provisions of The Companies Act and it is a Class-I Contractor engaged in civil engineering and contract work and it's bid was accepted by the defendant and work order was issued to it, however it is denied that there was a delay in issuing the said order. The true fact is that several reminders were issued to the plaintiff through AEE to start work as per the schedule and the agreement entered in to, but the plaintiff himself was slow in mobalizing the materials and men. It is stoutly denied that there was any kind of breach of reciprocal obligation or terms of agreement by this defendant. It is also denied that the designs and drawings were not furnished to the plaintiff well in advance resulting in delay in the construction work. As a Class-I contractor of Government, the plaintiff was expected to know the procedure as to how, when and where the said drawings and designs have to be finalized and collected. Since it was the duty of the defendant to supervise the quality of work and to give instructions to the plaintiff as per Schedule-B to the Agreement, it oftenly visited the site and noticed the use of poor quality materials. No-doubt the bricks were certified by the defendant in the kiln shown by the plaintiff, but without lifting the said quality bricks immediately as plaintiff delayed, the other batch of bricks were procured and they were of inferior quality, therefore they were came to be rejected. The question of soil testing arises only after excavation, so his allegation that there was delay in furnishing 8 O.S.No:1055/1994 foundation design is absolutely false. Immediately after receiving the soil testing report the foundation design was furnished to him. The plaintiff was in the habit of commencing and stopping the work whenever it wished. Since the plaintiff was very much aware of the nature of construction and also that the said construction was in respect of quarters, there was no need to furnish designs and drawings of windows, shutters and door. It is specifically denied that an inferior quality cement was supplied to it and many time materials were not supplied at the expected quantity. It was the plaintiff who has to put indent for the materials and enough stock was maintained by the defendant to supply them as and when the plaintiff indented. Infact the plaintiff did not start the work as per the agreement, only after issuing several notices he commenced his work. It is denied that freak rate charges were illegally retained by the defendant and they were not released after completion of particular work. When the schedule to the agreement provided the rate of materials, payment was made by the defendant in accordance with it and as and when bills were raised by the plaintiff. That there was no delay on the part of defendant in paying the amount to plaintiff. As there was a delay on the part of plaintiff himself, it was wrong on his part to claim rates in excess of CSR rate. Even after entering into supplementary agreement and having discussion with the plaintiff, as it was unable to complete the construction within that extended period, having no other option it's contract was terminated and it was rightly done as per Clauses-3(a) to (d) of 9 O.S.No:1055/1994 the tender agreement by a competent officer. It is unfortunate that after lapse of 3½ years also plaintiff was not able to complete the work, as a result the defendant was forced to terminate the tender and it was compelled to entrust the work to some other agency forcing it to suffer financially. Apart from that the constables forced to stay in rented houses by paying heavy rent and they were deprived of the accommodation. That no amount is due to the plaintiff, wherefore the so many claims made by it are wholly illegal and are unsustainable. Hence the defendant prays to dismiss the suit with costs.
4. Based on the said pleadings, my predecessor in office has framed the following issues;
ISSUES
1. Whether the plaintiff prove that the termination of contract of construction by the defendant dated 21.2.1991 is illegal?
2. Whether the defendant prove that the suit is bad for non-joinder of necessary parties?
3. Whether the plaintiff is entitled to a declaration as prayed?
4. Whether the plaintiff is entitled to a suit claim amount as prayed for?
5. What order or decree?
10 O.S.No:1055/19945. In support of it's case plaintiff examined it's Managing Director as PW1 and Chairman as PW2. In all 53 documents are marked on it's behalf. On the other hand the defendant examined AEE as DW1 and since that officer was transferred later, it examined incumbent AEE as DW2, but this latter witness is wrongly ranked as "DW1" on the reason that evidence of earlier witness was discarded. In all 38 documents are marked on it's behalf. Heard the arguments of Sri.CGS, Advocate for plaintiff. There was no representation for defendant.
6. My findings on the above issues are as under:
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 - As per final order, for the following;
REASONS Issue No.2:
7. In para-2 and 3 of his written statement the defendant contended that the Government is not made as a party in the case and also the AEE, who signed the tender agreement on behalf of the Corporation, wherefore the suit is hit by the provisions of Order 27 Rule 5(A) of CPC and for non-joinder of necessary party. Based on the said pleading my predecessor in office has framed this issue. Since this issue goes to the root of 11 O.S.No:1055/1994 the dispute and also the maintainability of the suit, in preference to other issues, I have taken it at the beginning.
8. During his arguments Sri.CGS, advocate contended that the defendant is admittedly a Corporation constituted under the Companies Act, wherefore as required U/O 29 Rule 1 of CPC it is sued and it is represented by the Managing Director. It was his submission that merely some of the police officers are office bearers of the said Corporation or that AEE of PWD is the office of the State, it cannot be said that the defendant is a wing of Government department necessitating to implead the Government as a necessary party. Thus he prayed to answer this issue in the negative. As I said earlier though more than enough time was granted to the defendant it did not turn up to address it's arguments, in this back ground I have gone through the relevant provisions of CPC and the undisputed facts.
9. It is not in dispute that the defendant is a Housing Corporation established under the provisions of Companies Act in order to cater to the need of police department to provide shelter to them. When it is a Corporation i.e., a creature of legislation, as required under Order 29 Rule 1 of CPC when it is sued, the Director or the Managing Director of the company shall represent it and accordingly while describing the defendant in the plaint cause title the plaintiff has properly stated that the defendant is represented by it's Chairman and Managing Director and it is a Government of Karnataka 12 O.S.No:1055/1994 Enterprises. Just because it is mentioned that it is an enterprises wherein Government holds majority stake, it cannot be treated as another wing of Government so as to attract Order 27 of CPC. Hence I reject the contention of defendant that Government is a necessary party in the case.
10. With regard to it's further contention that AEE, who is signatory to the tender agreement, not made as a party, I again say that the said official entered into an agreement with plaintiff as evidenced by Ex.D2, yet he was discharging his function as an employee of the defendant and not as a representative of State of Karnataka, wherefore if the company sued is represented by it's Managing Director or the Chairman, it is enough to constitute that the defendant is validly sued and there is no need to implead the AEE or other officials as additional defendant in the case in hand, accordingly I answer this issue in the negative.
Issue No.1, 3 and 4:
11. Since these issues are interwoven I have taken them simultaneously.
12. In his marathon plaint while seeking 13 kinds of reliefs plaintiff pictures that absolutely there was no lapse on it's part in execution of the contract work and the delay, if any, was occasioned by defendant as it did not hand over the site in time, did not make payment of RA bills, unnecessarily withheld the freak rate charges, did not supply the construction 13 O.S.No:1055/1994 materials in time at required quantity and even if the materials were supplied, they were less than what it had indented and were of inferior quality and all of sudden having approved the quality of ordinary bricks after shifting them to the site they were rejected by the defendant etc., etc. Definitely if one reads the plaint and the so-called grievances of the plaintiff there is every likelihood that such reader would be eluded by those contentions, however refuting all these allegations the defendant attributes total negligence and lack of preparedness and inadequacy of finance on the part of plaintiff, so after providing enough opportunity to it to correct itself, it was forced to rescind the contract. In this background I would like to say one thing, when a dispute is based on undisputed written contract and the parties exchange the communications in writing, it is the documentary evidence that prevails over the oral evidence. The one more crucial point is that the plaintiff as well as the defendant are juridical persons and they are represented by their respective office bearers. In such an event when such juridical persons enter into a contract and discharge their reciprocal obligations, unlike in the case of an individual, it is the documents that help the court in arriving an effective finding in the matter. In other words the oral evidence which would naturally be forthcoming from the office bearers of the such juridical persons, who obviously depose based on the documents, takes to the back seat. There is a reason to make this observation. Case file shows that initially the plaintiff examined it's Managing Director as PW1, but he was not made 14 O.S.No:1055/1994 available for cross-examination. Later it examined it's Chairman as PW2 and adopted the very documentary evidence which were produced by PW1 and in addition to that few more documents were marked through PW2, but surprisingly he was not cross-examined by the defendant. It does not mean that based on that un-controverted oral evidence court can altogether ignore the documentary evidence forgetting the basic principle that in a suit for declaration it is the plaintiff who has to stand or fall on the strength or weakness of his case. In the decision reported at AIR 2009 SC 2966, in the case of T.K.Mohammed Abubucker (D) Thr. L.Rs & Ors. Vs P.S.M.Ahamed Abdul Khader & Ors referring to Sec.101 of The Evidence Act at Head Note(C) Hon'ble Supreme Court held that in a suit for declaration of title and possession, burden of proof is on the plaintiff to make out his title and entitlement to possession and he cannot succeed on any alleged weakness in the title or possession of the defendant. Similarly in another decision reported at (2014)2 SCC 269, in the case of Union of India and others Vs Vasavi Co-Operative Housing Society Limited and Others, again reiterating it's earlier view Hon'ble Court held that in a suit for declaration of title and possession it is the burden of the plaintiff, who has to establish his case, irrespective of whether defendants prove their case or not. It was further held that in the absence of establishment of his title, the plaintiff must be non-suited even if title set up by the defendants is found against them. It was further held that weakness of case set up by defendant cannot be a ground to 15 O.S.No:1055/1994 grant relief to the plaintiff. Purpose of referring to these decisions is that it is always the plaintiff who has to prove his case with all it's probability before the defendant is called upon to prove it's defence. No-doubt the suit in hand is not for declaration of title in relation to an immovable property and for recovery of possession, but the basic trite of civil jurisprudence cannot be overlooked. In the case in hand while seeking to declare the termination of contract as illegal, null and void, the plaintiff is seeking innumerable reliefs in terms of monetary value, so it is for it to prove it's case before the defendant can be called upon to discharge it's onus. With this discussion now I will examine whether the plaintiff is able to discharge it's solemn burden by placing convincing documentary evidence. Before I proceed to deliberate on the documents I would like to remind one more thing that all these issues throw burden on plaintiff.
13. As borne from the record the plaintiff has produced 53 documents and the defendant has produced as many as 38 documents. Though the defendant exhibited it's negligence in not cross-examining the PW2, but the plaintiff was vigilant and it has cross-examined DW2, of-course the cross-examination or non-examination has very little role to play when the documents are admitted by the parties. Among these documents selecting chronologically I would start how things took turn and who is to be blamed for delay. Among those documents, the letter of defendant dt.1.8.1986 produced at Ex.D3 shows that after accepting the bid of plaintiff and having 16 O.S.No:1055/1994 issued the work order to it as per Ex.P2 the defendant wrote that letter on 1.8.1986 i.e. three months of issue the work order inviting it's attention to it's earlier letter dt.23.5.1986 and directed it to start the work immediately as per the instructions of the AEE, No-2 Sub-Division, KSPHC Ltd., Bangalore. It is further conveyed in that letter that though several communications were sent to the plaintiff by AEE, it did not turn up for marking out to start the construction work. Thus in the last paragraphs slightly warning the plaintiff the Executive Engineer, KSPHC Ltd., Bangalore stated that if within seven days from receipt of that letter if necessary arrangements are not made by the plaintiff to start the work, suitable action would be taken against it as per the tender agreement. So it is the first letter which was shot by defendant attributing negligence to the plaintiff. Regarding these developments through it's letter dt.17.3.1987 produced at Ex.D9 under it's letterhead explaining the causes for delay in carrying out the work not only at Ramanagara even at Channapatna, where also the plaintiff had taken contract to construct similar number of quarters, stated that it has already completed earth work i.e., excavation for foundation construction for both units long back, but as it is carrying on work in irrigation department, Mandya and ESI building at Bangalore, it's Rs.3 lakh amount is blocked there as State Government is not making payment of RA bills due to the financial stringency and once the said bills are cleared by the said departments, it will proceed with the construction work positively in the first week of April 1987 and 17 O.S.No:1055/1994 it will lay bed concrete soon. It also assured that the short fall in the progress of work will be made good and will be completed within period. It is material to note that in the said letter, which came after almost ten months of issuing work order, no grievance was raised by the plaintiff attributing negligence on the part of defendant or delay in payment of it's bills. It's whole grievance was against the PWD and other departments, which did not pay it's bills in respect of some other contracts it had undertaken.
14. Perhaps having waited enough, on 14.9.1987 the defendant wrote one more letter produced at Ex.P43, which came to be marked during the cross-examination of DW1, and under the said letter the Executive Engineer again cautioned the plaintiff that the defects noticed at Ramanagara work site are not rectified by the plaintiff so far and regretting for the same, he further wrote that there was no attempt by the plaintiff to achieve the targeted progress, which will reveal that plaintiff is not interested in completing the work. Till that day it had completed only bed concrete without proceeding further in construction work even after four months of time. The said letter further conveyed that plaintiff did not commence the brick work at Channapatna. Here I may add that in addition to taking up the construction work at Ramanagara, the plaintiff also simultaneously took the construction of similar such quarters at Channapatna from the defendant on the same day and having faced the wrath of defendant resulting in termination of said contract, has filed suit at O.S.1059/1994 18 O.S.No:1055/1994 seeking very similar reliefs and that suit is also pending on the file of this court. Nevertheless both suits were not clubbed, they were proceeded simultaneously, arguments of plaintiff were heard at a time and it also stands posted for judgement on today's board. Since the plaintiff and the defendant in both cases are one and the same, while pointing out the negligence of plaintiff in carrying out the work at Ramanagara, which is under consideration in this case, in Ex.P43 the defendant also pointed out the lapses on this plaintiff in respect of Channapatna work also. Further in that Ex.P43 the defendant stated that already is has issued the release order for 1000 cement bags and plaintiff is liable to complete the work within the time frame. He further alleged that without taking the things seriously the plaintiff is simply dragging on the work without any reason and that kind of attitude of Class-I Contractor is highly unsatisfactory. Thus stating that a last chance is given to the plaintiff to resume both works before 20th September 1987 failing which recommendation will be made to the higher authorities to cancel the contract and to take further action as per the terms and conditions of contract, the defendant clarified it's stand and expressed it's deep displeasure, for slow progress in the construction works. When the plaintiff did not realize the seriousness of the letter at Ex.P43, the defendant wrote one more letter on 2.12.1987 produced at Ex.P41 stating that even after previous communications the building has not come up to the plinth level though required quantity of cement was supplied to the 19 O.S.No:1055/1994 plaintiff and it called upon the plaintiff to complete the work up to plinth level within a week's time and to send the brick samples immediately for getting them tested and for according their approval. Thus it is seen that almost after 1½ year of issuing of work order, no considerable progress was made by the plaintiff and the construction was not come up to the plinth.
15. One more detailed letter of the plaintiff dt.18.5.1988 produced at Ex.P15 shows the stage of construction and reason for the delay in carrying out the work. Through the said letter confessing on it's own the plaintiff wrote that though site was handed over to it to commence the work on 16.10.1986 it is able to make work only to the extent of Rs.2.5 lakhs instead of completing the work by that time and delay has occasioned due to financial problem of Government which is beyond it's control. It was also stated that from 1986 it is engaged in construction and contract work of PWD and Irrigation Department and since the said departments are not getting proper payments from the Government many of it's bills are held up and after taking the work at Ramanagara, it is able to complete only earth work and infrastructure for the said site, but because of blocking of it's funds in respect of the works carried out, belonging to PWD and Irrigation Department, it is unable to continue the work in Ramanagara site. It also stated that in the Bombay High Court matter is pending in respect of a Textile Mill, which work it carried out, and soon that matter may come to an end and it may get funds and from that funds it would commence the 20 O.S.No:1055/1994 work. On page no.3 of the said letter further stating that it has already stocked enough materials for the progress of the work and in respect of some raw-materials it is unable to get them on credit basis because of their low key repayment capacity, finally sought time till the end of December 1988. It requested the defendant not to levy fine, against it as things are beyond it's control.
16. Then through another letter dt.24.5.1988 produced at Ex.P16 again reiterating it's poor financial ability to carry out the work the plaintiff openly and boldly stated that due to it's financial problem, it is not able to complete the project and again it blamed PWD and Irrigation Departments for withholding it's payments and assured that it will restart the work by 26.5.1988 and stated that it is sending sample brick for testing and requested the defendant not to impose penalty for delay in completion of work and once again it undertook to complete the work by the end of December 1988.
17. Being fed up with these correspondences and requests of the plaintiff, the defendant sent another letter on 3.8.1988 as per Ex.P44 expressing it's displeasure in the pace of work and directed the plaintiff to use TMB instead of ordinary bricks as they were of poor quality. It also reminded the plaintiff regarding imposing of Rs.3,905/- penalty previously for inordinate delay and gave one week time to resume the work and achieve the targeted progress, failing which action will be taken to rescind the contract as per rules. Soon after 21 O.S.No:1055/1994 receipt of that letter on 18.8.1988 the plaintiff sent one more letter as per Ex.D12, but this time giving some other reason for delay. According to the tenor of that letter plaintiff was unable to complete the work within time since both directors of the company are affected with Madras Eye disease and are unable to come out and are advised to take bed rest and requested the defendant to kindly co-operate with them. Again an undertaking was given stating that it will positively start the work by 22.8.1988 and assigned one more reason that due to rainy season the effective progress was not achieved, but it will fulfill the said shortfall soon. Once again by sending another letter dt.22.9.1988 produced at Ex.P19 as usual plaintiff groaned attributing delay due to heavy monsoon and it's inability to procure enough number of bricks and once again requested the defendant to co-operate with it by assuring that it will make good of the short fall soon.
18. When the defendant realized that plaintiff is a hard to bend a supplementary agreement was entered on 10.2.1989 as per Ex.D8 and in the said agreement plaintiff agreed that it took the contract work on 14.5.1986 agreeing to complete the same on 13.6.1987, but it could not commence the work for long time even though necessary details for foundation, cement and steel were supplied to it in time. It further stated that inview of the fact that it is in difficult financial position as it's bills are held up elsewhere (Clause-vi of the agreement). Then again requesting to give last and final chance to complete the work by the end of 30.8.1989 it affirmed that work will be 22 O.S.No:1055/1994 completed in all prospects and keep ready the construction on or before 30.8.1989 (Clause-viii). Apart from that it also undertook that in the event of default on it's part henceforth, it will not claim (a) price escalation (b) claiming in excess of schedule rates (c) to stick of to quoted rates only (Clause-ix) and in the event it failed to adhere to the time limit as aforesaid in completing the work the defendant may (a) take action in terms of contract (b) to penalize it to the maximum extent (c) to recommend it's name for black list (d) to recover the exact cost that would be involved in case the work is taken up through different agency (e) to forfeit EMD, FSD and other reserves if any and (f) any other action as deem fit to do so by defendant.
19. Inspite of all these things when plaintiff did not mend his behavior and show progress in the work, the defendant wrote another letter on 20.7.1989 as per Ex.P45 complaining the lapses on the part of plaintiff in providing brick masonry walls with moulded bricks and it's failure to keep the words which it had assured during inspection by Chairman and Managing Director on 29.6.1989 and again directed the plaintiff to execute supplementary agreement and to start the work within three days of receipt of that letter otherwise matter will be reported to the higher authorities to rescind the contract as it is incapable of completing the work.
20. May be realizing it's own fault in carrying out the work within time frame and to avoid the rescinding of contract 23 O.S.No:1055/1994 plaintiff gave details of work as per Ex.D17 on 23.10.1989 showing the date and progress it has to do within that period and lastly it undertook and authorized the defendant to take any action against it if work is not completed as per that schedule. Under that schedule it was expected to complete the work by 31.3.1990. According to me the most suicidal letter that totally washes out it's claim is at Ex.P27 viz; the letter of the plaintiff dt.23.1.1990. For the sake of convenience I would extract the same as it is;
"
SRI LAKSHMI SRINIVASA CONSTRUCTIONS PRIVATE LIMITED ENGINEERS & CONTRACTORS No.16, First Floor, 'B' Block, C.I.L. Layout, Sanjaya Nagar, Bangalore-560 024.
Date.23/1/90 To:
The Chairman & Managing Director, K.S.P.H.C. Limited, BANGALORE-25.
Sir, Sub: 1) Construction of 24 police constable quarters at Ramanagaram.
2) Construction of 24 police constable quarters at Channapatna.
---
We write to state that, we are aware that the Executive Engineer, K.S.P.H.C.Limited, Bangalore Division, Bangalore has 24 O.S.No:1055/1994 recommended for rescinding the contract for the above works at Ramanagaram and Channapatna, as we have failed to adhere to the programme. We affirm that the required materials have been supplied to the works from the Corporation in time.
Due to personal difficulties we could not adhere to the programme so far. We humbly request you Sir, kindly consider our cases and give us a final chance to proceed with the work on humanitarian grounds.
We assure you Sir, that the first floor roof of both works at Ramanagaram and Channapatna will be laid before 20th February 1990. If we fail to adhere to the final programme we will stand responsible for any consequence and will abide by your decision without any protest.
We once again, appeal to you to kindly consider our request sympathetically.
Yours faithfully, for SRI.LAKSHMI SRINIVASA CONSTN.(P) LTD., Partner.
1) Copy submitted to the Superintendent Engineer, K.S.P.H.C. Ltd., Bangalore for information and needful.
2) Copy submitted to the Exe. Eng. K.S.P.H.C.Ltd., B'Lore for information and needful. "
The contents of the said letter are self-explanatory and one need not explain or discuss on the same.25 O.S.No:1055/1994
21. When I made so many references to the plaintiff's letters containing it's confessions, a question may also arise whether the defendant was totally immune from committing any fault. In this regard I refer to Ex.D6 dt.23.2.1990, another letter of the plaintiff wherein it alleged that there was delay in supervising the work by defendant for five days, the delay in supply of cement by 19 days and the delay in supply of steel by 25 days. Even if the contents of these letters are taken as true, one cannot agree for the long delay occasioned by the plaintiff in completing that work.
22. There is one more letter of plaintiff at Ex.D4 and it is dt.28.2.1990 and it is in respect of Channapatna Project. It is relevant to show that plaintiff was facing problem in getting the supply of jelly due to power shortage and continues shutdown in jelly crushing machines. Ex.P47 is the letter of the defendant dt.22.6.1990 informing that plaintiff has completed only first floor roof of the slab of both blocks in Ramanagara and instructing it to start the second floor brick machinery work without further delay by employing more men and material, otherwise action will be taken to rescind the contract.
23. So time and again the defendant had communicated that it would rescind the contract, but it was not taken serious note by the plaintiff. By producing the certified copy of the judgment and decree at Ex.P51 i.e., the judgment and decree in O.S.955/1992 plaintiff openly admitted that Vysya Bank Ltd., Bangalore had filed suit against it for recovery of Rs.5 lakhs 26 O.S.No:1055/1994 plus and it came to be decreed on 11.12.1991. It proves beyond shadow of doubt that plaintiff had become bankrupt and for that reason it was assigning one or the other cause and seeking mercy of the defendant and was praying for extension of time, therefore fed up with the go-slow attitude of plaintiff and it's precarious financial condition through impugned order dt.21.2.1991 produced at Ex.P3 the defendant terminated the contract. As available from record plaintiff was entrusted to construct 24 quarters in ground, first and second floor and at the time of it's termination it had completed only first floor, that too by taking more than 3½ years. So one cannot find fault for rescinding of contract.
24. The said attitude of the plaintiff continued even in filing this suit. It may be noted that when the contract was terminated by causing letter dt.21.2.1991 (Ex.P3) protesting against the same plaintiff sent legal notice 1½ year thereafter i.e. on 14.8.1992 (Ex.P4) and when reply was sent to it on 9.10.1992 (Ex.P5) having kept quite till February 1994 suit was filed on 21.2.1994. I think this will explain more than enough how plaintiff is serious in seeking the relief. Before I wind up my discussion I would like to refer Clause-3 of Ex.D30. It is nothing but schedule of contract form to which both plaintiff and defendant agreed before work was entrusted to the plaintiff. As per Clause-3(d) of the said schedule of contract if the contractor does not maintain the rate of progress as required under Clause-2 or if the progress of any particular portion of work is unsatisfactory the Executive Engineer or 27 O.S.No:1055/1994 Superintending Engineer shall be entitled to take action under clause 3(b) or 3(c) at his discretion in order to maintain the rate of progress after giving the contractor 10 days notice in writing whereupon the contractor will have no claim for any compensation for any loss sustained by him owing to such actions. In the event of any one or more of the above courses being adopted by the Executive Engineer, or Superintending Engineer the contractor shall have no claim to compensation for any loss sustained by him by reason of his having purchased, or procured any materials, or entered into any engagements, or made any advance on account of, or with a view to the execution of the work or the performance of the contract. And in case the contract shall be rescinded under the provision aforesaid the contractor shall not be entitled to recover or be paid any sum for any work thereof actually performed by him under his contract, unless and until the Executive Engineer shall have certified in writing the performance of such work and the amount payable in respect thereof, and he shall only be entitled to be paid the amount so certified. Further Clause-3(a) enabled the Executive Engineer in addition to rescinding the contract to forfeit the lumpsum deposited by such erring contractor. In view of the said terms and conditions of Schedule of contract and when by giving enough opportunity to the plaintiff to pick up the pace and complete the project was not adhered by it, now it cannot stake it's claim on various grounds as urged in the plaint that too without any basis for them. Therefore viewed from any 28 O.S.No:1055/1994 angle without any second opinion I hold that suit is frivolous, vexatious and not maintainable to the knowledge of plaintiff. Accordingly I conclude that plaintiff has failed to prove that termination of contract was illegal, null and void and it is entitled for declaration and consequential monetary reliefs as prayed. Accordingly I answer all these issues in the negative.
Issue No.5:
25. In the result, I proceed to make the following:
ORDER Suit is dismissed.
Parties shall bear their own costs.
Draw decree accordingly.
(Dictated to the Judgement Writer, transcription computerized, then corrected and pronounced by me in open court this the 28th day of January 2017).
(Ron Vasudev), III Addl. City Civil & Sessions Judge, Bengaluru.
ANNEXURE List of witnesses examined for the plaintiff side:
PW1 Srinivas Prasad.S. PW2 T.V.Srinivasaiah
List of documents exhibited for the plaintiff side:
Ex.P1 Tender Ex.P2 Work order and tender agreement 29 O.S.No:1055/1994 Ex.P3 Approval Ex.P4 Notice dt:14.8.02 Ex.P5 Notice Ex.P6 Copy of letter dt.6.4.87 Ex.P7 Copy of letter dt.10.8.88 Ex.P8 Undertaking letter dt.25.1.90 Ex.P9 Copy of letter Ex.P10 Copy of letter Ex.P11 Copy of letter Ex.P12 Statement Ex.P13 Letter Ex.P14 Handing over certificate Ex.P15 & 16 Office copy letter Ex.P17 Reply notice Ex.P18 Letter of Executive Engineer dt.16.6.88 Ex.P19 Letter dt.22.9.88 Ex.P20 Letter dt.2.7.89 Ex.P21 Letter dt.2.9.89 Ex.P22 Letter dt.19.9.89 Ex.P23 Letter dt.4.10.89 Ex.P24 Letter dt.11.10.89 Ex.P25 Letter dt.16.10.89 Ex.P26 Letter dt.6.11.89 Ex.P27 Letter dt.23.1.90 Ex.P28 Letter dt.22.2.90 Ex.P29 Letter dt.28.3.99 Ex.P30 Letter dt.21.5.90 Ex.P31 Letter dt.6.7.90 Ex.P32 Letter Ex.P33 Letter Ex.P34 Letter Ex.P35 to 37 Letters Ex.P38 Request letter Ex.P39 Request letter Ex.P40 Letter to Executive Engineer Ex.P41 Letter Ex.P42 Plan Ex.P43 Letter Ex.P44 Letter Ex.P45 Letter Ex.P46 Letter 30 O.S.No:1055/1994 Ex.P47 Letter Ex.P48 Letter Ex.P49 Letter Ex.P50 Letter of plaintiff Ex.P51 Certified copy of the judgement in O.S.955/92 Ex.P52 Letter of plaintiff Ex.P53 Letter
List of witness examined for the defendant side:
DW1 Shankar.T. DW2 Shafiulla Hussain
List of documents exhibited for the defendant side:
Ex.D1 Authorization letter
Ex.D2 Letter
Ex.D3 Letter
Ex.D4 Letter
Ex.D5 Letter
Ex.D6 Letter
Ex.D7 Letter
Ex.D8 Agreement dt.10.2.99
Ex.D9 Letter
Ex.D10 Letter
Ex.D11 RPAD cover
Ex.D12 Letter
Ex.D13 Postal cover
Ex.D14 Letter
Ex.D15 Tender agreement
Ex.D16 Letter
Ex.D17 Statement for completion of work
Ex.D18 Letter
Ex.D19 to 24 Running bills
Ex.D25 Tender agreement
Ex.D26 Specification
Ex.D27 Bill
Ex.D28 Bills
Ex.D29 Bills
Ex.D30 Contract schedule
Ex.D31 Layout schedule
Ex.D32 Foundation drawing letter
31 O.S.No:1055/1994
Ex.D33 Foundation drawing letter
Ex.D34 Foundation drawing letter
Ex.D35 Letter
Ex.D36 Letter
Ex.D37 Letter
Ex.D38 Letter
(Ron Vasudev),
III Addl. City Civil & Sessions Judge,
Bengaluru.