Patna High Court
State Of Bihar vs Rama Bhushan Basu on 17 February, 1964
Equivalent citations: AIR 1964 PATNA 326
JUDGMENT Mahapatra, J.
1. The respondent, who is the proprietor of a construction firm Hindusthan Engineering and Construction Company, instituted a money suit on the 17th May 1957 against the State of Bihar through its Secretary in the Public Health Engineering Department for Rs. 1,08,299-1-3-0, as detailed in Schedules A to F of his plaint, and claimed interest thereon at the rate of 8 per cent per annum with pendente lite and future interest on the money that may be decreed in his favour.
He stated in his plaint that there was a contract in writing on the 25th of December 1947 between the plaintiff and the Superintending Engineer, Public Health Engineering Department, on behalf of the Governor of the State of Bihar for construction of a Raw Water Pump House and Intake Well for the Sindri Fertilizer Factory Supply. The plaintiff executed the contract work and received various payments on on-account bills. When the work was complete by September, 1950 a sum of Rs. 24,051-13-0 remained due to the plaintiff aad a final bill was submitted by him to the Construction Engineer, Public Health Division, Sindri. This amount was on account of difference in rates, measurements and recoveries. This bill, however, did not include the plaintiff's claim for iron and steel reinforcements rods supplied for construction work, claim for clearing debris that fell within the Intake Well as a result of the collapse, claim for excavation through soft rock, claim for cement brick revetment and cement brick steps to the Intake channel and claim for payment of sales-tax as those claims had already been made before the submission of the final bill and were pending before the Superintending Engineer. Schedules B, C. D, E and F given in the plaint related to these claims. Schedule A detailed the claim of Rs. 24,051-13-0.
All those works were done by the plaintiff as and when they became necessary during the execution of the contract work. Alternatively the plaintiff stated in his plaint that if those works were not part of the contract, or if the contract for execution of those works was found invalid, the plaintiff was entitled to receive the price of those works and supply of materials as the defendant enjoyed the benefit thereof.
About the claim for sales-tax, the plaintiff averred that in accordance with the contract and the dealings between the parties, he was entitled to add sales-tax on the amount of his dues and recover the same from the defendant as he had paid such tax from time to time during the execution of the contract. He further stated that the Chief Engineer, Public Health Engineering Department, by his letter dated the 21st May 1954 offered Rs. 5,000/- in over-all settlement of all the plaintiff's claim in an arbitrary manner and took an unreasonable stand that all the plaintiff's claims as decided by the Superintending Engineer were final and conclusive. He refused to submit the matter of dispute to the arbitration of Mr. B.N. Ghoudhary, who had been appointed by mutual consent of the parties, to settle other disputes regarding another contract work of infiltration gallery and appurtenances works at Sindri. The plaintiff gave notice under Section 80, Civil Procedure Code, to the defendant on the 27th September 1954 which was received by the defendant's Secretary in the Public Health Engineering Department at Patna on the 29th September 1954.
On the 22nd January 1957 a reply was received from the Chief Engineer to the plaintiff's solicitors' letter dated the 30th November 1956 asking the plaintiff to see the final bill in the Chief Engineer's office and to give an acquittance in full and final settlement of all demands made by him before any payment could be made to him. When the plaintiff went to the office of the Chief Engineer on the 12th February 1957 and inspected the final bill as prepared by the Public Health Engineering Department, he found that he could not agree to accept the sum of money offered to him. As there was no other alternative a suit had to be filed in Court for recovery of his dues.
2. A written statement on behalf of the defendant was filed in the trial Court on the 2nd of August 1957 to contend that the plaintiff's suit was barred by limitation and also the suit was not maintainable in Court in view of the provisions of Clause 25 of the agreement of contract meaning thereby that that clause was for arbitration of the disputes regarding the plaintiff's claim.
It was also pleaded that the execution of work by the plaintiff was slow and the department had relunctantly given several extensions of time for completion of the work and all the items of claim of the plaintiff had already been considered and decided by the Superintending Engineer in pursuance of Clause 25 of the agreement and according to that and also the final bill prepared by the department the plaintiff was entitled to only Rs. 5083-5-3 which the defendant had offered and were still willing to pay. Plaintiff's claim for interest was disputed. The different schedules of claim given in the plaint were referred in the written statement and I shall refer to them when I come to deal with different items of claim.
One more thing was clearly stated in the written statement about the final bill. The established practice of the department was that before the final bill was prepared all the claims of the contractors had to be settled and the contractors being satisfied about the claims and measurements of the whole work, had to give a certificate that they had no further claims on the work and that they had also agreed to the measurements given in the bill, and after the bill was passed and the money was paid, the contractors had to certify that the amount they had received was in full and final settlement of all demands concerning that work. The plaintiff, however, did not comply with this practice. The final bill that was prepared was in accordance with the decision given by the Superintending Engineer on the claims of the plaintiff but it was not accepted by the plaintiff unreasonably and that was how the amount shown due to the plaintiff on the final bill remained unpaid.
3. In support of his suit the plaintiff examined himself and a Civil Engineer (P. W. 2) who was in his service. On the defendant's side the Public Health Engineer who was in charge of the construction was examined besides another witness who was more or less a formal one. The agreement of contract and several correspondence between the parties were brought on record during the trial. The plaintiff's suit was decreed by the Additional Subordinate Judge, 3rd Court, Patna, on the 17th of July 1958 for a sum of Rs. 50,530/- with interest thereon at the rate of 6 per cent per annum, from the 17th of July 1958 (the date of the decree) to the date of realisation besides costs of Rs. 2048-12-0 with interest thereon at the same-rate.
The State of Bihar being aggrieved by this decree preferred the present appeal in this Court. The plaintiff also filed a cross-objection in regard to the portions of his claim which were disallowed by the trial Court. The cross-objection was valued at Rs. 41716-6-0 and the appeal at Rs. 58,645-12-0.
4. Before the different items of the decree were challenged, learned Government Pleader raised two main objections against the plaintiff's suit. He contended that in view of Clause 25 of the contract agreement the plaintiff's suit was not maintainable in the Civil Court and further his , suit was also barred by limitation. About the execution of the work for which claim was made in the suit there was no dispute by the defendant. The agreement of contract was also not questioned in any way. Parties, however, differed about the meaning and scope of Clause 25 of that agreement. According to the defendant, that was an arbitration clause for purpose of settlement of all claims raised by the plaintiff by the Public Health Engineer or Superintending Engineer. Learned Government Pleader argued that under the proviso given under Section 21 of the Specific Relief Act if any person who has made a contract to refer present or future difference to arbitration and has refused to perform it, sues in respect of any subject which he has contracted to refer, the existence of such contract shall bar the suit. As Clause 25 of the agreement is an arbitration clause by which the parties had agreed to refer the difference in respect of the subject-matter of the con-tract, the present suit could not be maintained' in the Civil Court.
Defendant's case was that all the differences between the parties arising out of the different claims made by the plaintiff had been decided by the Superintending Engineer as provided in Clause 25. His decision, therefore, could only be challenged within the limited scope of the Arbitration Act, 1940. I shall reproduce Clause 25 of the agreement:
"25, Decision of Public Health Engineer or Superintending Engineer to be final. -- Except where otherwise specified in this contract, the decision of the Public Health Engineer or Superintending Engineer for the time shall be final, conclusive and binding on all parties to the contract upon all questions relating to the meaning of the specifications, drawings and instructions hereinbefore mentioned and as to the quality of workmanship or materials used on the work, or as to any other question, claim, right, matter or thing, whatsoever in any way arising out of, or relating to the contract or drawings, specifications, estimates, instructions, orders or these conditions, or otherwise concerning the work or the execution or failure to execute the same, whether arising during the progress of the work or after the completion or the sooner determination thereof of the contract."
This clause was contained in the conditions of the contract which was a part of the printed form of agreement that was executed by the parties on the 25th of December 1947. Before that, the plaintiff submitted his tender for works in answer to the notice inviting sealed tenders and his tender was accepted by the defendant through the Superintending Engineer Mr. Whipp of the Public Health Engineering Department, Bihar. For another work at Sindri the plaintiff's tender was also accepted and an agreement came to be executed by the same both parties on the same day, 25th of December 1947. That is contained in Ext. H. Clause 24 of that agreement which is an agreement for reference of disputes to arbitration was in the following terms:
"24. That any dispute arising out of this contract shall be referred to the Superintending Engineer, and if either of the parties hereto is dissatisfied with the decision the dispute shall be referred to the decision of an arbitrator to be appointed by the President of the Institution of Engineers, India. The decision of such arbitrator shall be final and binding on both parties. The cost of such arbitration shall be borne by the party against whom the decision is given, provided that, if neither party succeeds on all points, such arbitrator may award costs in such proportion as he may think just."
A comparison of this clause with Clause 25 of the suit agreement will show the marked difference. Both the forms of agreement were printed forms used by the Government Department. There cannot be any doubt about Clause 24 Ext. H that it was for reference of contractor's claims to arbitration by the specified authority. But the language of Clause 25 of the suit agreement does not reveal such clear intention. Reference to arbitration is a departure from the ordinary and general course of seeking redress or enforcing claims through the Court of law. Under Section 28 of the Indian Contract Act every agreement by which any party thereto is restricted absolutely from enforcnig his rights under or in respect of any contract by the usual legal proceedings in the ordinary tribunals is void to that extent. There is, however, an exception to that provision. A contract by which j, two or more persons agree that any dispute arising between them in respect of any subject shall be referred to arbitration will not be void. Thus an agreement for reference of dispute or claim to arbitration is by way of an exception to the legal rights of a person to initiate legal proceedings in the Civil Court for seeking his remedies against another. In that view, such an agreement has to be scrutinised with care to be sure that the parties really intended and agreed to refer their disputes to arbitration. At more than one place the suit agreement provided for final decision on specific matters by the Public Health Engineer or Superintending Engineer or other engineers; for example, Clause 13 dealing with alterations, specifications and drawings mentioned that the Engineer shall have power to make any alterations in or addition to the original specifications, drawings and instructions that may appear to him to be necessary or advisable during the progress of the work, and the contractor shall be bound to carry out the work in accordance with any instructions which may be given to him in writing signed by the Engineer and such alteration shall not invalidate this contract; and any additional work which the contractor may be directed to do in the manner above specified as part of the work" shall be carried out by the contractor on the same conditions in all respects on which he agreed to do the main work and at the same rates as are specified in the schedule of rates marked 'A' for the main work. In that connection in the last line in that clause it was stated: "In the event of a dispute the decision of the Public Health Engineer or Superintending Engineer shall be final".
Similarly, in Clause 15 dealing with the action and compensation payable in connection of bad work, it was provided that in the event of contractor failing to rectify, remove, demolish or reconstruct any work specified by the Engineer at his own proper charge and cost within a period specified by the Engineer in his demand, the contractor shall be liable to pay compensation at the rate of one per cent or such small amounts as the Superintending Engineer may decide on the amount of the estimated cost of the whole work and that decision shall be final. Further in the same clause it was stated that a certificate by the Engineer as to the amount of the expenses incurred by the Department in doing the work which the contractor failed to do shall be final and binding upon the contractor. In Clause 19 dealing with the contractor's liability for damages for imperfect work, it was stipulated that if the contractor does not make good the imperfect work or the damage committed by him or his men during the operation of work, the Engineer may cause the same made good by other workmen and deduct the expenses from the contractor's dues. The certificate of such expenses by the Engineer shall be final.
In view of such provisions in the preceding-clauses, the opening words of Clause 25 "Except where otherwise specified in this contract" can only mean that the field of operation of that clause was to be exclusive of matters covered by the preceding clauses. If anything is determined under any of the clauses I have referred above by the officers mentioned therein and if the contractor is not satisfied with those decisions, he has no ramedy to refer the difference between him and the officers concerned for final arbitration to the authority specified in Clause 25.
Learned Government Pleader conceded that the finality mentioned in the preceding clauses about certain matters did not oust the rights of "the contractor to press his claims otherwise according to law which, in other words, means that he can include those matters in his reference to arbitration. How that can be in face of the opening words of Clause 25 because those matters are excepted from the operation of that clause. If there could be no reference to arbitration on those matters and there was no agreement for such a reference, the right of the plaintiff to seek his remedies in the Civil Court in respect of those matters cannot be questioned. This aspect, will have an important bearing upon the interpretation of Clause 25. The Superintending Engineer was in fact, one of the contracting parties. He was to supervise the work. For uninterrupted execution of work his instructions, orders or decisions were to be carried out by the contractor. For that purpose, the different terms of the suit agreement provided for the finality of such instructions, orders", decisions or certificates. Reading Clause 25, which I have already quoted in full, it appears that everything connected with the suit contract was brought in except what was already mentioned in the preceding paragraphs where the finality of orders, certificates "or decisions of the superintendeing Engineer was mentioned. This clause should be taken, therefore, in the same light as the preceding clause. The stage of arbitration comes when there is an assertion of something by one party and repudiation of that either in full or in part by the other party.
If we bear in mind Clause 24 of the agreement in Ext. II, we see that any dispute arising out of the contract was to be referred to the Superintending Engineer at the first instance and if either of the parties was dissatisfied with his decision., the dispute was to be referred to the decision of an arbitrator to be appointed by the President of the Institution of Engineers whose decision was to be final and binding on both the parties. The first reference to the Superintending Engineer was not a reference to arbitration but only a representation by the contractor and if such representation was acceptable to the Superintending Engineer, the matter would end there, but if he did not accede to the contractor's claim the stage was set for arbitration if any of the two parties chose that course. In Clause 25 of the present suit agreement neither of those two stages, an amicable settlement by the Superintending Engineer or a final reference of the dispute to the arbitrator is contained or, at the most, the first stage is provided there and not the second stage of arbitration.
It is significant that the word 'dispute' of 'arbitration' or 'arbitrator' is not at all mentioned in Clause 25. Absence of such words will not necessarily rule out an agreement for reference to arbitration. But such absence from a formal printed document, as the suit agreement is, cannot but be significant, particularly when another such form of agreement used by the parties on the same day for another work at the same place contained a clear arbitration clause. Learned Counsel's contention was that the word 'decision' of the Public Health Engineer or the Superintending Engineer was used in that clause to indicate the adjudication on a reference, That cannot be so. The same word 'decision' was also used in Clauses 13 and 15. Though the Governor of Bihar was the other party in the agreement, for all practical purposes, the Superintending Engineer was the contracting party. Ordinarily one of the disputing parties is not entrusted with the task of arbitration. The Superintending Engineer also was the supervising authority of the work and bills and claims of the contractor were to be passed by him. The difference can only arise when he differs with the contractor at the first instance about any claim or any other matter, connected with the contract. Subsequent to that only an occasion may arise for settlement of those differences. If any of the contracting parties is agreed upon to an arbitrator in a particular case, he will have to act in somewhat judicial manner and decide upon the claims of the other contesting party and review his own former decision there on. Actually that would be an act of review of one's own decision. Persons are free to enter, into any lawful agreement and in that view, an agreement to appoint one of the contracting parties as an arbitrator about matters arising out of the same contract may not be ruled out completely in theory but, in practice, that seldom happens, and if one of the contracting parties wants to set up a case of that nature, he has to prove it beyond any doubt. Clause 25 of the suit agreement does not at, all establish in any clear manner that the parties to that contract intended to bring into existence, a situation of that kind.
Learned Counsel sought assistance from the case of the London Tramways Co. Ltd. v. Bailey, (1877) 3 QB 217. There a conductor of a Tramway Company was to pay the Company £5 to be retained together with his wages for the current week as security for the discharge of duty and observance of the rules of the Company. That was under an agreement which was executed at the time he became a conductor. In case of any breach, of the rules, the Company had power to retain that money as liquidated damage for such breach. One of the conditions of the agreement was that the manager of the Company should be the sole judge between the Company and the conductor whether the Company was entitled to retain the whole or any part of that amount as the liquidated damage and the certificate given by the manager should be binding and conclusive evidence in a Court of justice, civil and criminal, and before all stipendiary and police Magistrates that the amount thereby certified was the true amount to be retained and should bar the conductor of all rights to recover it. When such money was retained by the Company the conductor summoned the Company before the Police Magistrate to recover his deposit and wages. It was held that the agreement by which the manager of the Tramway Company was to determine what amount was proper to be retained out of the deposit of the conductor and his current wages, was not illegal and the manager's certificate was conclusive evidence of the fact precluding the Magistrate from making any further enquiry.
The view taken by the Court was mainly based, upon the fact that the finality of the certificate to be given by the manager of the Company was agreed upon by the conductor in the form of an agreement in writing to which he had appended his signature. His plea that that agreement was read out so fast that he did not understand its full force and effect at the time of signing it was not accepted. The certificate of the manager was compared with the certificate of an architect or engineer, in a building contract, where the employer employs such engineer or architect. An employee or an officer of a company or of an employer is in a different position. He is not the person who is directly concerned with the payment of another employee or a contractor who has done: some work for the same employer. In such a case, submission to his arbitration is not extraordinary because such person is not involved in the decision of the dispute previous to his acting as an arbitrator. In the instant case the Superintending Engineer who had to first consider the plaintiffs claim in the usual course of his duties cannot be compared with the manager of the Tramway Company or an architect.
5. The case of Aghore Nauth Bannerjee v. Calcutta, Tramways Co. Ltd. ILR 11 Cal 232 was just like the above case. The conductor's agreement, to abide by the certificate in writing of the manager, of the Company about the amount to be retained out of his deposit and current" wages in case of a breach by him of the rules of the company was held to be a contract to refer to arbitration and, as such, came within the exception to Clause 28 of the Contract Act.
6. Another case decided by the Judicial Committee was placed before us: Arthur. Andrew Cipriani v. Macdonald Burnett,. AIR 1933 PC 91. A sweepstake was conducted by a racing club in Trinidad. Tickets bearing the serial letter, and the serial number were issued by the promoters and sold to the public and the winning tickets were subsequently ascertained by a draw. There was an apparatus of the draw with the help of which the winning tickets were determined. Among other things printed on the ticket, the following was there:
"This ticket is sold, subject to the condition that in the event of any dispute arising with respect to any matters connected with, drawing og the sweepstake or the awarding of the prizes, the decision of the Stewards of the Trinidad Turl Club, thereon shall be accepted as final.
Payment will be made on horses in the order of running as placed by the Judge, subject to the result of any objection that may be made within a fortnight of the races having been run.
The decimal method of drawing will be used."
The President at the draw which was held in public on and April, 1931, read out from right to left the figures which the pointers of four discs" placed on his table, indicated after the 'spinning of those discs. The letters and figures thus ascertained were B9351 which was the distinguishing mark of the ticket owned by Mr. Guevara. He was accordingly declared to be the winner of the first prize. If the President would have read the number from left to right the winning ticket would have been B1539 owned by one Mr. Burnett. Mr. Burnett's solicitors addressed a letter to the Secretary of the Turf Club claiming payment of the first prize on behalf of his client on the ground that at the draw the winning number had been incorrectly declared as B9351, owing to the figures haying been wrongly read from right to left whereas it should have been declared as B1539, as it would have been if the figures had been properly read from, left to right. The letter did not evoke any result.
Proceedings were subsequently taken in the Supreme Court of Trinidad by Mr. Burnett against the President of the draw and others as representing the Club in which he claimed a declaration that his ticket B1539 was the first prize ticket and that he was the holder of it and therefore asked that an order for payment to him of the amount of the first prize accordingly. Mr. Guevara was allowed to intervene as a co-defendant as he was the holder of the declared winning ticket. One of the defences raised in that action was that as the dispute which had arisen was one connected with the drawing of the sweepstake or the awarding of the prizes, there was no decision thereon by the Stewards, the condition precedent had not been satisfied and, therefore, the action in Court was not maintainable. The Court of first instance pronounced judgment declaring that the plaintiff being the holder of ticket B1539 was entitled to the first prize in sweepstake and ordered the defendants other than Mr. Guevara to make payment to him the amount thereof.
On appeal to the Judicial Committee their Lordships viewed that the question which was to be determined in the first place was whether the plaintiff (respondent before the Judicial Committeee) had, in the absence of a decision in his favour by the Stewards of the Trinidad Turf Club, any right of action at all, in view of the conditions printed on the ticket. They thought that the tickets which embodied the contract on which the plaintiff sued, expressly required him, as a condition of the sale to him of his ticket, to accept as final the decision of the Stewards of the Trinidad Turf Club on any dispute arising with respect to any matter connected with the drawing of the sweepstake or the drawing of the prizes. In the opinion of their Lordships he was not entitled to institute an action in Court for asking a judgment in substitution for that of the Stewards of the Turf Club.
Their Lordships considered the cases of Scott v. Avery (1856) 5 HL 811 and Brown v. Overbury, (1856) 11 Ex 715 and referred to the observations in the latter case which was also about the winner in a hourse race:
"Every contract must be determined according to the circumstances belonging to it. This is one of racing and the universal practice has been that in order to ascertain who is to have the stakes, it must first be determined who is the winner, not in the opinion of a jury, but of the per-sons appointed to decide it, viz. the judge or the stewards.....The judgment of the stewards in the case of a horse race must necessarily be conclusive; they are expressly appointed to decide the matter and there is no appeal from them. It is a condition precedent to the plaintiff's right to recover that he obtained the judgment of the stewards."
Applying those principles the Judicial Committee finally held that the condition on the ticket (which I have already mentioned), having regard to the circumstances belonging to it, was a condition precedent the fulfilment of which was essential before any action for the stakes could be entertained by the Court the judgment of the first Court was advised to be reversed.
The language of the condition on which the decision of that case depended was clearly to indicate that if any dispute arose with respect to any matters connected with the drawing of the sweepstakes or the awarding of the prize, it was to be referred to a third party-Stewards of the Turf Club and their decision was to be taken as final. That language can hardly be compared with Clause 25 of the suit agreement. Secondly, the practice that obtains generally in sweepstakes and horse laces was taken into account to determine the real meaning and merit of the agreement on which the ticket was purchased. On a comparison of the practice as evidenced by Clause 24 of another agreement in Ext. H, I have shown that the Superintending Engineer who was the contracting party on behalf of the Governor and was in charge of execution of the work was not and could not ordinarily be intended or agreed upon by the con-tractor to be the final arbitrator in respect of any dispute that may arise out of the contract or claims refused by him thereunder. Thus neither the language nor the practice can support the appellant's contention that Clause 25 is for a binding reference of a dispute for arbitration.
7. In the case of Secretary of State v. Saran Brothers and Co. AIR 1932 Oudh 265 the contractor instituted a suit for recovery of about Rs. 1500/- as due to him on account of part of the work done in a contract for repairs of some Government buildings in Lucknow district. The Deputy Commissioner had determined the value of the work done by the plaintiff as Rs. 2125-1-3 but according to the plaintiff, it was Rs. 3586-2-9. For the balance he brought the action in Court. In the agreement executed by the plaintiff for that work there were two Clauses 5 and 6 which laid down that if owing to breach of any condition of agreement, the work was taken away from the executant then the Deputy Commissioner would have the power to decide the amount to which the contractor was entitled in respect of the work already done and that he would have no objection to the decision of the Deputy Commissioner and the contractor would be bound by the Deputy Commissioner's decision in all matters relating to the contract. The first appellate Court held that these two conditions were hit by Section 28 of the Contract Act, but on appeal the High Court took the view that they were agreement for arbitration and as such came within the exception to Section 28.
From the report, it appears that the only point canvassaed against those two conditions was that the Deputy Commissioner having acted in that agreement on, behalf of the Secretary of State for India could not have been the arbitrator. I have already observed that in theory there was no legal bar against that though in practice that course is not usually adopted.
8. On a consideration of the language of Clause 25 and on a comparison of that with the preceding clauses in the suit agreement as well as with Clause 24 of the agreement in Ext. H, I am of the view that by that clause the parties did not agree to abide by the arbitration of the Public Health Engineer or the Superintending Engineer, and, therefore the suit brought by the plaintiff was not hit by the provisions of Section 21 of the Specific Relief Act. The trial Court's opinion that this Clause 25 came in conflict with Section 28 of the Contract Act is not correct, because the right of the parties to take legal proceedings in respect of their claims arising out of the contract were not excluded by that condition.
9. Learned Government Pleader contended that the suit was barred by limitation as it was filed on the 17th of May 1957 though the work was completed by September, 1950, and the final bill was prepared by the 27th of August 1951 and by the 10th of December, 1951 the plaintiff was intimated of the rejection by the Superintending Engineer of all his claims.
Learned Counsel relied upon Article 56 of the Indian Limitation Act:
"For the price of work done by the plaintiff for the defendant at his request where no time has been fixed for payment.
Three years When the work is done It is doubtful if in the present case it can be said that the work done by the plaintiff was at the request of the defendant. There was first a general invitation for tenders for the work. The tender was to be of the rates for specified items of work. The plaintiff like other contractors submitted his tender which was finally accepted by the defendant. Acceptance of the plaintiffs tender is the acceptance of an offer made by the plaintiff, in other words, the plaintiff requested that he may be entrusted with the work at specified rates and his request was accepted and he was allowed to execute the work. In that view it was not at the defendant's request that the plaintiff did the work but it was as the other way about.
There is another reason why this article cannot apply. In the suit agreement clause 8 provided for- the mode of payment to the contractor. Interim payments were ordinairly to be made monthly but the final payment was not to bo made until the whole of the works was completed and a certificate of completion thereof was given. All interim payments were to be regarded as payments by way of advance against the final payments only and not as payments for works actually done and completed. The final bill was to be submitted by the, contractor within one month of the date fixed for completion of the work, otherwise the Engineer's certificate of measurements, of which due notice was to be given beforehand to the contractor, and of the total amount payable for the works accordingly, was to be final and binding on all parties. This provision indicated the time for payment. There was a time limit for submission of the final bill by the contractor or final measurements by the Engineer for the whole work. Final payment was to be made thereafter. Thus it cannot be said to be a contract where there was no time fixed for payment.
Alternatively, learned Counsel referred to Article 120 where a period of sis years is provided for a suit and the period is to be computed from when the right to sue accrues. When did the right to sue accrue to the plaintiff in the present case has to be determined. Completion of work by the plain-till in September 1950 could not give him the right to sue for his dues which alone could be paid on submission of a final bill by him or on a certificate of final measurements by the Engineer according to Clause 8 of the suit agreement. In this case the plaintiff submitted his final bill on the 27th of August 1951 (refer to Ext. g-r) and revised the same on the 1st of September 1951. He could be entitled to payment on that and if he was not paid, he could commence an action in Court. Taking those dates as the time when the right to sue accrued, the suit was within six years of that. Learned Government Pleader pointed out that the final bill was prepared by the Department on the 30th of March 1951-vide Ext. 9(2) 12. He referred to the evidence of the plaintiff where lie said that according to the practice prevalent in the Department, they ..... (meaning the Department) used to prepare bills of his work and he had asked the Department to prepare the final bill in January and February 1951. In March 1950 the Department intimated him that the final bill was ready but he was not satisfied with that final bill. He submitted his final bill excluding the claims which had not been finalised. In the final bill prepared by the Department there were numerous discrepancies which the plaintiff added in his own final bill. The discrepancies were with regard to the measurements and amounted to Rs. 19,000/-. The final bill prepared by the Department and referred to in Ext. 9(z) 12 is not on record. That exhibit is a letter from the Construction Engineer to the plaintiff on the 30th of March 1951. If any final bill had been prepared as referred to in that letter that must have been done before that date, but D. W. 1 in his evidence referring to that letter and the final bill said as follows :
"The final bill of the plaintiff was drawn up under my supervision. From the letter Ext. 9(z}12. it appears, that a final bill had been prepared before 30-3-51. The final bill filed was prepared by me from 18-6-51 to 30-9-51. The final bill is not signed by the Superintending Engineer. The final bill is always prepared by the department. The signature of the contractor is taken on the final bill. The final bill Ext. 12 does not bear the signature of the plaintiff and the Construction Engineer. There are cuttings throughout in red ink which are not initialled. There are additions and alterations which are not intialled."
Thus it cannot be said there was any final bill prepared by the Department on or before the 30th of March 1951. Even Ext. 12 cannot be said to be a final bill prepared by the Department as it did not bear the signature either of the contractor or of the Executive Engineer or the Construction Engineer. Even if that is taken to be final bill to give rise to a cause of action for the suit, that bill was only complete on the 30th of September 1951, and the suit was within six years' of that which would comply with the requirements under Article 120.
10. There is also another difficulty in the way of the appellant. According to Clause 8, in case final bill is not submitted by the contractor, the engineer can make final measurements of the work and determine the dues of the contractor; but such measurement can only be done and will be binding upon the contractor only if previous notice of the date on which such measurement would be done is given to the contractor. In the present case no such notice was given.
Learned counsel contended that if the final bill by the contractor is to be taken as the accrual of the right to sue for the dues, the plaintiff can indefinitely postpone that to his advantage and that will defeat the salutary provision under Article 120. In that view, the right to sue should be deemed to arise as soon as the contract work is completed because it is then that the contractor would be entitled for the price of the work done by him. If the contracting parties agree upon a definite procedure in regard to the payment, I do not think that can be departed from in ascertaining the time when the right to sue commences in that respect. Secondly, if the contractor delays in submitting his final bill, an alternative course open to the Department is to give him notice of the date when the final measurement will be taken and thereafter determine the contractor's dues. That itself would commence the period of limitation against the contractor under Article 120.
11. Learned Counsel further urged that the final bill of the plaintiff as made on the 27th of August 1951 or revised on the 1st September 1951 only related to his claim appertaining to Schedule A of the plaint and not other claims. Limitation, if saved under Article 120 with reference to that date, will only relate to that schedule and not to the claims of other schedules.
In Ext. 9(r), a letter written by the plaintiff to the Construction Engineer on the 27th of August 1951, the plainiiff stated that the amount of the final bill did not include claims and appeals which the plaintiff had already forwarded to the Superintending Engineer and the total of which was Rs. 73,859-10-0. As the settlement of those claims and appeals might take some time the plaintiff requested for the payment of the final bill without any delay. Thus other claims of the plaint schedules had already been submitted by the plaintiff and they were not repeated in the final bill but were referred to in clear terms in the forwarding letter. The plaintiff could not be expected to institute one suit for Schedule A claim and another suit for the other claims. All the claims arise out of the same contract and were on the same footing.
Learned Counsel also urged that all those claims had already been rejected by the Superintending Engineer. He referred to Ext. 6(15) dated the 10th September 1950. That was a letter by the plaintiff to the Superintending Engineer in which he acknowledged receipt of the Superintending Engineer's letter dated the 14th of June 1950 rejecting the contractor's claim for the cost of steel for re-infercement in the work of the pump house and intake well (which relates to the claim under Schedule B of the plaint. The construction work was not completed before September 1950 and the final adjustment of all claims could only be made thereafter. During the progress of work only interim payment? could be received by the contractor on (sic) on account bills but all matters relating to the work were to be taken into account after the completion of the work in the final bill. If the Superintending Engineer did not accede to any claim of the contractor before the completion of the work, that is only to be taken as a tentative decision and the contractor was entitled to raise those claims in his final bill for final determination by the competent authority. Similarly, reference to the rejection of the plaintiff's claim about the matters contained in Schedules C, D and E in August 1950 cannot raise any bar against the plaintiff's suit. By Ext. 9(u), a letter from the Construction Engineer to the plaintiff on the 10th/11th of December 1951, the plaintiff was informed that his appeals and all his claims had been rejected by the Superintending Engineer. The last paragraph said:
"As your appeals on claims etc. have been finally disposed of by the Superintending Engineer, P. H. Engineering Department as shown above, you are now requested to submit your acceptance of final bill in full and final settlements of all demand to enable me to dispose of the bills and close the account for this contract finally."
That was after the submission of the final bill by the plaintiff and can be taken as giving the right to the plaintiff to sue on his demands. The suit is well within six years of that.
In another letter from the Chief Engineer to the plaintiff, Ext. 9(w), on the 21st May, 1954, he was told:
"In regard to the intake well and pump house, the matter is on a very different footing altogether as the Decision of the Superintending Engineer in the contract for this work is final and conclusive as per Clause 25 of the contract of 1947. You have, therefore, the option to receive Rs. 5,000/- in full settlement on this contract as offered to you already."
This appears to be a final repudiation and the suit was instituted on the 17th May 1957. In my view the suit is not barred by Limitation.
12-21. It now remains to consider the plaintiff's claims in Schedule A, B, C and F to which the present appeal relates. (His Lordship considered the claim and the cross objection and proceeded:)
22. The net result is that the appeal succeeds to the extent of Rs. 25,000/- (Schedule B) and the cross-objection succeeds to the extent of Rs. 4,590/11/- (Schedule A). The appeal and the cross-objection are thus allowed in part. The decree of the Court below will be modified to "the extent the appeal and the cross-objection have been allowed. The appellant will be entitled to costs in proportion to their success, and the respondent will be entitled to costs from, the appellant to the extent the cross-objection is allowed in the trial court, the plaintiff will be entitled to costs from the defendant proportionate to the total amount of his claim allowed in this appeal.
Tarkeshwar Nath, J.
23. I agree.