Bangalore District Court
M/S P And C Projects Private Limited vs The Director Indian Institution Of ... on 16 February, 2026
KABC170030332023
IN THE COURT OF LXXXIV ADDL. CITY CIVIL &
SESSIONS JUDGE, AT BENGALURU (CCH-85)
(Commercial Court)
THIS THE 16th DAY OF FEBRUARY 2026
PRESENT:
SRI. ANAND T. CHAVAN. B.Com.,LL.B.(Spl.)
LXXXIV ADDL. CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Com.OS.No.1415/2023
Plaintiff:- M/s. P&C Projects Private Limited,
Having its registered office at:
P&C Towers, II Floor, No.140,
Perundurai Road, Erode,
Tamil Nadu-638011.
Rep by its Authorized Representative,
Mr. M Balamurugan,
(Rep by Mr. Nishanth A V & Sri R.Kiran- Advs.)
V/s
Defendants:- 1. The Director,
Indian Institution of Science,
2 Com.OS.1415/2023
Office at: Sri. C V Raman Road,
Malleswaram, Bengaluru-560 012.
2. The Registrar,
Indian Institution of Science,
Office at: Sri. C V Raman Road,
Malleswaram, Bengaluru-560 012.
3. Project Engineer Cum Estate
Officer, Indian Institution of Science,
Office at: Sri. C V Raman Road,
Malleswaram, Bengaluru-560 012.
(Rep by M/s Sundaraswamy & Ramdas -Advs)
Date of Institution of the 12.12.2023
suit
Nature of the suit (suit on
pro note, suit for Suit for recovery of Money.
declaration & Possession,
Suit for injunction etc.)
Date of commencement of 18.04.2024
recording of evidence
Date on which judgment 16.02.2026
was pronounced
Total Duration Year/s Month/s Day/s
02 02 04
LXXXIV Addl.City Civil & Sessions Judge,
Bengaluru.
3 Com.OS.1415/2023
JUDGMENT
The plaintiff has filed present suit against defendants seeking recovery of Rs.4,76,08,318/- towards Price Adjustment, Substitution of Lacquered Red & Black with Sadarahalli Grey Granites, interest @ 12% from 07.04.2021 till the date of filing the present suit and GST @ 18% along with interest at 18% pa., from the date of suit till realization.
2. The brief averments of plaint are that:
The plaintiff entered into an agreement dtd.13.01.2018 with defendants for the work of constructions of ladies hostel building with 500 rooms at Indian Institution of Science, Bengaluru, followed by Work order dtd.26.02.2018 issued by Project Engineer cum Estate Officer (Defendant No.3) for Rs.52,09,33,353/-. The said project comprised of three Blocks viz., A, B and C. The sites for construction of Block A and B were handed over to plaintiff on 26.02.2018 and site for Block C was handed over on 28.02.2019. All the three Blocks were completed and plaintiff handed over Block A on 4 Com.OS.1415/2023 19.09.2019, Block B on 04.02.2020 and Block C on 31.12.2020, respectively to defendant. The plaintiff sent a letter dtd.28.11.2022 to defendant No.1 in terms of condition No.13 mentioned in the certificate No.IN KA71551850808758Q in agreement Clause No.18 of General Rules and Directions to contractors, Clause No.3.1.5 of special condition and Clause No.23 of conditions of contract which was received by defendants, wherein plaintiff raised a dispute of Rs.2,82,56,146/- being the payment due to it towards price adjustment and Rs.30,60,419/-
towards substitution of Lacquered Red & Black Granites with Sadarahalli Grey Granites. The plaintiff has narrated the above details as under:-
Estimated cost in Rupees Rs.55,52,00,000/- Tendered Amount in Rupees Rs.54,56,41,937/-
Discount percentage 4.53% Contract Value in Rupees Rs.52,09,33,353/- Pre bid meeting 03.11.2017 Tendering Date 10.11.2017 Work Order Date 26.02.2018
Site Handed over date for Block 'A' 26.02.2018 & 'B' to plaintiff for construction Site Handed over date for Block 'C' 28.02.2019 5 Com.OS.1415/2023 to plaintiff for construction Block 'A' Handed over date after 19.09.2019 completion Block 'B' Handed over date after 04.02.2020 completion Block 'C' Handed over date after 31.12.2020 completion Submission and Certificate for the 08.07.2021 first and part Price Adjustment Bills for portions of work executed in RA Bills which were sent for CCMD.
Dispute No.1 Payment for the Price Rs.2,82,56,146/- Adjustment Bills as per the Clause No.8A for the value of work done in the execution of A, B and C Blocks of Ladies Hostel at IISE Bengaluru.
Dispute No.2- Payment for executing Rs.30,60,419/- the Substituted item as per Clause 3.4.6 & 3.4.8 of General Conditions and 10(ii) C under Conditions of Contract of Granite of Sadarahalli Grey Granite in lieu of the item No.168, 169, 170 & 171 in the B.O.Q of Lakared Red and Black Granites Latter sent to Defendant No.1 as per 09.12.2022 the Clause 23-C, SETTLEMENT OF DISPUTES of Agreement to resolve the dispute.
It is further averred that agreement dtd.13.01.2018 comprises of price adjustment clause in Clause 8A under condition no.6 of the contract. The price adjustment clause in Clause 8A is co-
6 Com.OS.1415/2023 related to Clause 40.1 of such conditions, which seeks to get guided by Government Order No.FD 59 PRO CELL 2004 dtd.26.11.2004 in which point No.2
(iii) states as under:-
(iii) for the purpose of working out price adjustment and star rates, the price index issued from time to time by the Ministry of Commerce and Industry, Government of India should be adopted.
Hence as per aforesaid Clause 8A and Clause 40.1 of the conditions, plaintiff is entitled for price adjustment of Rs.2,82,56,146/- and the details of arriving said amount is narrated by plaintiff as under:-
PRICE ADJUSTMENT VALUE in (Rs.) BLOCK 'A' Labour 11,09,394/-
Cement 12,08,053/-
Steel 84,58,406/-
Total 1,07,75,853/-
BLOCK 'B' Labour 11,02,292/-
Cement 10,09,313/-
Steel 58,21,460/-
Total 79,33,065/-
BLOCK 'C' Labour 25,68,692/-
Cement 12,16,046/-
7 Com.OS.1415/2023
Steel 57,62,490/-
Total 95,47,228/-
Grand Total 2,82,56,146/-
It is further averred that plaintiff is entitled for payment of aforesaid price adjustment since Clause No.2 of agreement dtd.13.01.2018 mandates the employer/ defendants to make payment, when it is payable as specified in conditions. It is further averred that tendered amount for the above work is Rs.54,56,41,937/- and plaintiff by quoting the price agreed to execute the said work for Rs.52,09,33,353/-, which is below 4.53% of tender amount. Since very commencement of contract, plaintiff executed the works in terms of Clauses of contract with a belief of getting compensated appropriately for uncertainity and unpredictability in the cost of materials, labour, fuel, lubricant and equipments. Further the ladies hostel rooms have been put in to use and it has got five star green building rating which is remarkable accomplishment.
8 Com.OS.1415/2023 Plaintiff sought to resolve the disputes in payment due on substitution of Red and Black Granites with Grey Granites, which is arrived at Rs.30,60,419/-. Plaintiff Provided and fixed substituted Grey Tiles in place of combination of Lacquered Granites (86%) and with Black Granite (14%) as stated in Item No.168, 169, 170 and 171 in BOQ in Agreement dtd.13.01.2018. As per Clause 10(i) and Clause 10(iii)(c) substituted item is adopted and the base value for its substitution is quoted rate of BOQ and not SR item. Therefore the BOQ rate of Rs.5280/- for Grey Granites should be considered and has to be paid accordingly. Further in the minutes of pre-bid meeting held on 03.11.2017 in the office employer, the following clarification was issued with regard to the questioned raised.
Sl.No. Questions Proposed to take decision for Prequalification's/ Contract 19 Price Escalation as requested by No. Price Adjustment the plaintiff to defendant to clause is as per Institute clarify whether price escalation norms. is applicable 9 Com.OS.1415/2023 After the said minute of meeting, plaintiff emerged as successful tenderer and was awarded the subject matter project under Agreement dtd.13.01.2018. Therefore legally the defendant institution is bound by terms of the agreement, which has provided Price Adjustment formula under condition No.6 of contract under Clause 8A of agreement and as per Clause 40.1 of COC in tendered document.
Further by substitution of Red and Black Granites with Grey Granites, plaintiff made defendant No.1 to save an amount of Rs.2,31,49,003.46 since the price of Lacquered Granite in BOQ agreement is Rs.7930/- per sq.m. and price of Grey Granite is Rs.5280/- per sq.m. The billing section while settling 12th RA Bill adopted different method and paid Rs.2047.72/- for 918.92 sq.m. instead of giving Rs.5115/- as per the tender, which caused loss of Rs.28,18,772/- in Block B. Further by giving Rs.5174.40/- for 2061.05 instead of Rs.5280/-, it caused loss of Rs.2,17,647/- to plaintiff. Thus 10 Com.OS.1415/2023 plaintiff suffered total loss of Rs.30,60,419/- due to said reason.
Further defendant No.3 issued a completion certificate regarding construction of 500 rooms of Ladies Hostel building on 07.04.2021 including civil, electrical, plumbing, fire fighting, solar PV, heat pump and life etc. Therefore plaintiff vide letter dtd.28.11.2022 bearing No.P&C/CCMD/IISc/PA/001 sought for payment of Rs.3,13,16,565/- towards payment of price adjustment and disputed payment for laying granites under above agreement dtd.13.01.2018 followed by work order dtd.26.02.2018. Though defendant received said letter on 12.12.2022, the demands of plaintiff are neither replied nor complied by defendants.
Hence plaintiff issued legal notice dtd.23.01.2023 to defendants seeking payment of aforesaid dues and same were served on 28.01.2023. Subsequently plaintiff issued legal notice through their counsel dtd.23.05.2023, which is also served upon defendants on 29.05.2023. The plaintiff 11 Com.OS.1415/2023 has been repeatedly reminding defendants to pay above dues, but defendants failed to pay such dues, despite they kept on promising to pay the same. Hence defendants are liable to pay Rs.1,06,54,771/- towards interest accrued at 12% from 07.04.2021 i.e., from date of issuance of completion certificate of above hostel building by defendant No.3 till filing of the suit. It is further averred that defendants are also liable to pay Rs.56,36,982/- towards GST at 18%. Hence considering the aforesaid claim of Rs.2,82,56,146/- towards price adjustment and amount towards replacement of granites being Rs.30,60,419/- with above interest and GST amount, defendants are liable to pay total amount of Rs.4,76,08,318/-. These amongst other grounds, it is prayed to decree the suit as prayed for.
3. The defendants have appeared before this court in pursuant to summons and defendant No.2 has filed his written statement, which has been adopted by defendant Nos.1 and 3 vide Memo of Adoption dtd.30.03.2024. It is specifically contended by 12 Com.OS.1415/2023 defendants that, the suit is wholly misconceived, abuse of process of court, completely false, concocted, baseless, untenable and liable to be dismissed. It is averred that, the plaintiff has not approached the court with clean hands and the suit is filed with sole intention of harassing defendants. It is further averred that the Price Adjustment Clause is not applicable to the contract of parties, as per the Agreement of parties evidenced by minutes of pre- bid meeting dtd.03.11.2017. Further, the plaintiff is not entitled for the price escalation and it has not submitted any documents or invoices to demonstrate the price escalation occurred and to justify calculations arrived by plaintiff. Hence the claim of plaintiff is incorrect and liable to be rejected. It is further averred that plaintiff has not completed the project within time period and it is not entitled for relief claimed in the suit. It is further specifically contended by defendants that, defendant No.1 Institute entered into an Agreement dtd.13.02.2018 with plaintiff for construction of a Ladies Hostel 13 Com.OS.1415/2023 Building with 500 rooms at its institute. The bid of plaintiff contractor was accepted by defendants and the Project Engineer cum Estate Officer i.e., defendant No.3 issued a Letter of Intent (LOI) dtd.20.12.2017 and a Work order dtd.26.02.2018 to the plaintiff for agreed sum of Rs.52,09,33,353/-. Plaintiff was under contractual obligation to complete the work within 18 months from the date of handing over the site and the time was essence of the contract, as no extension would be granted beyond said period. Further in case of delay, plaintiff was liable to pay penalty of amount equal to 1% of estimated cost of the balance work assessed for every day of delay. Further the said construction of Hostel building consisted of three Blocks i.e., Block A, Block B and C. Defendants handed over possession of Block A and B to plaintiff on 26.02.2018 and Block C on 28.02.2019. Construction of Block A, B and C was completed and handed over to defendant on 19.09.2019, 04.02.2020 and 31.12.2020 respectively. Thus B Block was handed over to 14 Com.OS.1415/2023 defendants after delay of about 06 months and thereby plaintiff violated the terms of agreement and caused inordinate delay without any justification.
4. It is further contended by defendants that after completion of the above project, a Certificate of completion (COC) dtd.07.04.2021 was issued by defendant No.3 and the outstanding amount was duly paid to plaintiff as per it's final bill. Hence there has been accord and due satisfaction of contract between parties and no further amounts can be claimed by plaintiff. It is admitted that, vide letter dtd.28.11.2022 plaintiff raised a dispute claiming an amount of Rs.2,82,56,146/- towards alleged payment due to it on account of alleged price adjustment and sum of Rs.30,60,419/- towards cost of substitution of Sadarahalli Grey Granite instead of Lacquered Red and Black Granite Slabs for flooring.
5. It is further averred that, price adjustment Clause is not applicable to the agreement of parties, which is recorded in minutes of pre-bid meeting 15 Com.OS.1415/2023 dtd.03.11.2017. Further plaintiff has not produced any documents or invoices to evidence alleged price escalation, for which price adjustment is being sought for. However defendant institute vide letter dtd.04.06.2020 had requested plaintiff to submit all the bills pertaining to purchase of steel and cement and entry records of the same, but plaintiff failed to produce the same.
6. It is further specifically contended by defendants that, while fixing granite, the required flooring of 86% Lacquered Granite with 14% black granite combination was substituted for Sadarahalli Grey Granites, which is permissible change order, that could be given under the agreement. The alteration clause is already mentioned in tender document under Clause 10(ii)(c) of Conditions of Contract. Accordingly in tender BOQ schedule of rates, no similar item for flooring was found and therefore rate quoted for Sadarahalli Grey Granites was as per similar item derived in schedule of rates of Karnataka Public Works Department (KPWD) prevalent at the 16 Com.OS.1415/2023 time of execution of the work. The plaintiff as per item No.160 in BOQ is claiming a substituted rate of Rs.5280/- per square meter which is given for wall cladding and same rate cannot be substituted as there is no similar item for granite flooring. Therefore similar item at the rate of Rs.2,047/- per square meter as per KPWD rates was taken into consideration by defendants institute and plaintiff was paid accordingly. It is further averred that plaintiff has also raised bills for Sadarahalli Grey Granites flooring at the rate of Rs.2047/- per square meters and now it cannot claim any higher rates. Hence rates mentioned in item No.161 to 163 of BOQ is expressly given only for wall cladding and not for flooring and said rates cannot be considered. It is further averred that as per said clause, for any dispute related to additional, substituted or altered items, the decision of central for campus management and development shall be final and binding on plaintiff contractor. Hence aforesaid clause is a part of tendered document and plaintiff was 17 Com.OS.1415/2023 aware of the same at the time of executing the agreement. Hence defendant is not required to pay any additional amount towards flooring and plaintiff has not provided any proof in support of its claim or other reliefs sought by it. Further plaintiff contractor has not maintained any order book as per requirements of agreement and since defendants institute is an autonomous body under Ministry of Education, Government of India, the orders of Government of Karnataka as claimed by plaintiff are not applicable to it. It is further averred that said price variations are calculated by using indices published by Government or Chamber of Commerce periodically as per formula apprehended to these rules under Apendix 11 of General Finance Rules 2017. No price variation will be admissible beyond the original schedule delivery for default on the part of supplier. Whenever advance or stage wise payments are made, they should be a further stipulation that no price variation will be admissible on such portions of price, after the dates of such 18 Com.OS.1415/2023 payment. The price variation clause should also specify the cut off dates for material and labor, as these inputs taper off well before schedule delivery dates. Since the project has been delayed by 06 months and stage wise payments have been made as a running account, price variation clause cannot be made applicable. It is further averred that there is Clause 8A of price adjustment, labor, steel and cement in the agreement, but plaintiff has not made any claim for price adjustment for these three items in any of RA bills or the final bill. Further no further claim of plaintiff, after submission and payment of final bill can be raised. Even if the plaintiff had dispute regarding settlement/ payment of final bill, agreement provides that it ought to have submitted list of disputes within 30 day of this allowances of any claim in final bill. The plaintiff has not done so and now raised frivolous claim after two years of handing over three blocks to defendant, which disentitles him to above relief. Hence it is averred that since the time was essence of contract, plaintiff 19 Com.OS.1415/2023 has failed to honor its obligations and violated the terms of agreement and therefore it does not deserve the relief sought in the suit.
7. In para wise remarks defendants have further contended that Clause 18 of General Rules and direction to the contractors, Clause 3.1.5 of special conditions are not applicable as they only an alternative dispute resolution, mechanism and plaintiff has not provided any bills to demonstrate price escalation of materials. It is further contended by defendants that, Clause 3.4.6 and 3.4.8 of General conditions cannot be invoked in view of non maintenance of order book by plaintiff contractor. It is further contended that the calculation arrived by plaintiff is incorrect and he has not produced any documents to demonstrate price adjustment. The defendants have denied rest of the averments of plaint, contrary to their aforesaid defence and these amongst other grounds, it is prayed to dismiss the suit with exemplary costs.
20 Com.OS.1415/2023
8. In view of pleadings of both parties, this court has framed following issues:
1. Whether the plaintiff proves that, it is entitled for Rs.2,82,56,146/-
from defendants towards price adjustment clause of agreement dtd.13.01.2018 for construction work of Ladies hostel building of Indian Institute of Science?
2. Whether the plaintiff proves that it is entitled for Rs.30,60,419/-
from defendants towards payment of substitution of Lakared Red & Black Granites with Sadarahalli Grey Granites?
3. Whether defendants prove that as per Clause 10(ii) (c) of the contract, plaintiff cannot claim any amount towards additional, substituted or altered items?
4. Whether defendant proves that the Price Adjustment Clause is not applicable as per the Minutes of Pre-Bid Meeting dtd.03.11.2017 and hence plaintiff is not entitled for the claim of Price Adjustment in above project?
21 Com.OS.1415/2023
5. Whether defendants proves that the plaintiff has failed to honour its obligations and violated terms of Agreement and as such, plaintiff is not entitled for relief sought in the suit?
6. Whether plaintiff is entitled for relief sought?
7. What order or decree?
9. In support of its case, plaintiff company has got examined its Authorized Representative as PW1 and got marked 26 documents as per Ex.P1 to Ex.P26. On the other hand, defendant institute has got examined its the Assistant Registrar as DW1 and got marked 03 documents as Ex.D1 to Ex.D3.
10. Heard arguments of learned counsels for the plaintiff and defendants. Perused evidence adduced by both parties and written arguments filed by counsel for plaintiff.
11. The followings are answers to above:
Issue No.1:- In the Negative.
Issue No.2:- In the Negative.
22 Com.OS.1415/2023 Issue No.3:- In the Affirmative.
Issue No.4:- In the Affirmative.
Issue No.5:- In the Affirmative.
Issue No.6:- In the Negative.
Issue No.7:- As per the final Order for the following;
REASONS
12. Issue Nos.1 to 4:- These issues are taken together for consideration as finding on one issue may have bearing on finding on other issues and in order to avoid repetition of facts and evidence of case. The averments of plaint and written statement are already narrated in detail in foregoing paras and same need not be repeated. In support of its case, plaintiff has got examined its Development Manager by name M. Balamurugan S/o Muniswamy as PW1, who has filed his chief examination affidavit by reiterating entire averments of plaint.
13. Further in view of admitting of certain documents by defendants, this court has got marked Minutes of pre-bid meeting held on 03.11.2017 in respect of suit project as per Ex.P1, Agreement 23 Com.OS.1415/2023 dtd.13.01.2018 entered into between plaintiff and defendants with regard to aforesaid project of construction of hostel as per Ex.P2, Copy of Work order dtd.26.02.2018 issued by defendant to plaintiff as per Ex.P3, Letters of handing over sites to plaintiff dtd.26.02.2018 as per Ex.P4 and 5, Copy of non- starter report and mediation order sheet issued by DLSA Bengaluru Urban in PIM No.1443/2023 as per Ex.P6.
14. PW1 has got marked Copy of email dtd.18.02.2022 and 07.12.2022 exchanged between both parties as per Ex.P7 and Ex.P8, copy of Price index for Mild Steel Long Products as per Ex.P9, Copy of wholesale price index for industrial workers applicable for Bengaluru as per Ex.P10, Copy of Consumer Price Index for industrial workers applicable to Bengaluru as per Ex.P11, Copy of Government Order of Government of Karnataka dtd.26.11.2024 with regard to price adjustments in contracts as per Ex.P12, Copy of Price adjustment details for labour, cement and steel prepared in 24 Com.OS.1415/2023 respect of suit schedule project as per Ex.P13, Copy of relevant page extract of KPWD SR 2017-18 as per Ex.P14, copy of Letter dtd.14.09.2020 issued by defendant No.3 as per Ex.P15, Copy of calculation of Price sheet delineating gain achieved by IISC on laying Sadarahalli Granites in lieu of Lacquered Granites as per Ex.P16, certificate of PW1 under Sec.65 B of Evidence Act as per Ex.P17 and Authorization letter dtd.15.11.2023 as per Ex.P18.
15. PW1 has further got marked the Acknowledgment of defendant to letter of plaintiff dtd.28.11.2022 as per Ex.P19, Copy of legal notice dtd.23.01.2023 as per Ex.P20, postal receipts as per Ex.P21, postal track records as per Ex.P22, Copy of Legal notice issued to defendants dtd.25.05.2023 as per Ex.P23, Additional postal receipt, track record document and another certificate under Sec.65B of Evidence Act as per Ex.P24 to Ex.P26.
16. PW1 has been subjected to elaborate cross examination by defendants side wherein he admits that, letter of intent was issued by defendants in 25 Com.OS.1415/2023 respect of above project on 20.12.2017 and said document is not produced, despite it is with plaintiff company. PW1 further admits that as per Ex.P2 the project ought to have been completed within 18 months and the sites of the projects were delivered as per Ex.P4 Letters. However though he admits timely delivery of A and B sites, he states that site C was delivered belatedly due to financial constraints of defendants and the work was delayed due to covid-
19. However no supporting materials are produced and nothing is pleaded by plaintiff in plaint with regard to above aspect.
17. PW1 further pleads ignorance to suggestions that, final bill was to be submitted by plaintiff within 30 days from the date of completion of work and he admits that such final bill is not produced by plaintiff. Though he asserts to have produced Ex.P13 copy of price adjustment details, he again admits that said document does not contain final bill. He further admits that as per final bill certain claims were rejected and thereafter remaining entire amount has 26 Com.OS.1415/2023 been paid to plaintiff. He further asserts that plaintiff is entitled for additional amount as per Ex.P13 price adjustment report and said amount is not mentioned in final bill. PW1 further admits that Ex.P5 copy of completion certificate was obtained by them from defendants and they have not issued any receipt to defendants towards receiving of entire payment of final bill. He further admits that at the time of preparing RA bills, defendants had retained 6.5% of the amount and subsequently said amount along with EMD of Rs.52.42 Lakhs has been refunded by defendants.
18. PW1 further admits that during 31.12.2020 to 07.04.2021 the value of granite flooring price adjustment and difference was asked in writing as per Ex.P7, Ex.P11 and Ex.P13 and he pleads ignorance about contents of para No.7 of the plaint with regard to calculations of price adjustment and replacement of granites.
19. Further though PW1 admits that as per Sl.No.19 of Ex.P1 price escalation is not permitted and price 27 Com.OS.1415/2023 adjustment depends upon norms, he has volunteered that PMC and Project Engineers have consented for the same on verification of said Clause. He further denies that there is no nexus between Clause No.8A and 40.1 of Ex.P2. Most importantly PW1 clearly admits that price adjustment is applicable only to labour, steel and cement and plaintiff has not produced any documents of purchasing said materials. He asserts that the Central Government has fixed such rates every month and as such there is no necessity of producing such documents. PW1 further admits that he is aware about the number of labor employed at the site, but plaintiff has not produced any documents in that regard. He further states that there is no necessity to produce documents of wages of such labours and hence same are not produced.
20. On confrontation of Ex.P12, PW1 admits that said document is applicable to institutes coming under KTPP Act and he asserts that defendant Nos.1 and 2 have carried on the project under the norms of 28 Com.OS.1415/2023 KPWD. Further PW1 has denied that Ex.P13 has been created for the purpose of this suit and he admits that the acknowledgment for having sent letter dtd.09.12.2022 to defendants is also not produced and plaintiff has not produced documents to show steps taken under Clause 23A and 23B (documents pertaining to settlement of disputes) of Ex.P2 Agreement. PW1 denies that there is no Clause in Ex.P2 with regard to imposing interest of 12% and as per Clause 10 of Ex.P2 defendants have got right to seek replacement of granite. He further admits that, rate of grey granite is mentioned as Rs.5,280/- as per Ex.P2 Item No.160 and denies that said rate is applicable only to wall cladding granites and not for flooring granites. He further admits that in Ex.P1 BOQ the rate of Sadarahalli Granites flooring was not fixed and denies that plaintiff and defendants had agreed for Rs.2,047/- per square meter for such granites. PW1 further denies that Ex.P20 and Ex.P23 notices were not served upon defendants and same are also created. The entire evidence of PW1 has 29 Com.OS.1415/2023 been denied by defendants side in toto and it is suggested to him that plaintiff has made false claim by creating Ex.P11 without basis of cogent materials.
21. Defendants have also got examined one Vasanthan A.A S/o Annaidorai A, Assistant Registrar of Indian Institute of Science as DW1, who has filed his affidavit in lieu of chief examination by categorically reiterating defence taken by the defendants in their written statement. DW1 has also got marked Minutes of pre-bid meeting held on 03.11.2017 as per Ex.D1, Authorization letter dtd.19.04.2024, which is issued in his name in respect of present case as per Ex.D2, Letter dtd.04.06.2020 sent by Defendant No.3 to plaintiff as per Ex.D3. The said letter issued by defendant No.3 clearly shows that, Indian Institute of Science in response to their letter dtd.24.10.2019 has stated that plaintiff has been requested number of times earlier in progress review meetings and also verbally to submit all the bills relating to purchasing of steel and cement to the works site of construction of 500 30 Com.OS.1415/2023 rooms of ladies hostel and the entry records of the same for reconciliation and in spite of it same have not been produced till date.
22. DW1 has been elaborately cross examined by plaintiff side, wherein he has not denied and disputed the date of Ex.P2 agreement, value of contract with agreed discount value at 4.53%. DW1 has admitted that defendants have to follow the rules and procedures regarding KPWD for some clauses and he does not dispute handing over of possession of A, B and C Blocks as admitted by both parties. DW1 has specifically denied the suggestion that delay of one year in handing over the site for Block C hampered and delayed the mile stones of the project and he has asserted that the site for Block C is nothing to do with delay in handing over the same to plaintiff.
23. DW1 further asserts that the time is essence of contract and same was not completed within 18 months as per agreement. Further though DW1 admits that as per Clause No.10(iii)(c) of Ex.P2 substitution of materials is allowed and he denies to 31 Com.OS.1415/2023 know about communication about substitution for grey tiles instead of red tiles. He has further asserted that as per Clause No.10(ii)(c) of Ex.P2 they have applied KPWD schedule rates to replaced tiles, though admits that there is no mention of Sadarahalli tiles in Ex.P2. DW1 further admits that it is their duty to pay for Sadarahalli tiles, but as per clause No.10(ii)(c) of Ex.P2. He further states that, their PMC has certified completion of construction to the Sadarahalli Tiles and further admits that Clause No.8-A of Ex.P2 gives to price adjustment clause. DW1 further states that regular meeting and visit to the sites are mechanism to monitor the progress of construction and BOQ does not have details about Sadarahalli Tiles flooring. The said witness has specifically asserted that defendants cannot admit the entire contents of Ex.P13 report prepared by plaintiff and price adjustments for labour, cement and steel are disputed by them. He has further asserted that defendant has right to ask source bills relating to purchasing of steel and cement when 32 Com.OS.1415/2023 there is BOQ provided in contract and there is no violation of contract terms. He has further stated that plaintiff has not submitted any bills for price adjustment for labour, steel and cement in any of RA bills or the final bill.
24. In his further cross examination DW1 has repeatedly asserted that there is no price escalation clause in pre-bid meeting dtd.03.09.2017 and Clause 8-A of Ex.P2 provides price adjustment for labour, steel and cement. He further asserts that as per Clause No.10(ii)(c) of Ex.P2, it is mentioned regarding the rate at Rs.2047/- per square meters and as per KPWD rates to be used for Sadarahalli Grey Granites flooring, instead of BOQ rate of Rs.5280/-. He has specifically explained the said clauses saying that the above BOQ rates is for wall cladding. Finally DW1 has stated that plaintiff has completed the project as per satisfaction of defendant, except for the delay and further admits as per General Financial Rules (GFR) 2017 the price variation Clause can only be a part of long terms 33 Com.OS.1415/2023 project where delivery period extends beyond 18 months. DW1 further admits that no penalty has been imposed for delay as mentioned in the agreement. He denies that defendant insisted for fixed prices for project despite plaintiff's claim for price adjustment due to fluctuations in material costs. The entire evidence of DW1 has been denied by plaintiffs side in toto.
25. With background of aforesaid oral and documentary evidence adduced by both parties, learned counsel for plaintiff has vehemently argued that, DW1 has admitted existence of Clause 8A of Ex.P2 Agreement which provides for price adjustment for labour, steel and cement and as such said admission supports the case of plaintiff with regard to Issue No.1 framed by this court. The relevant portion of Clause 8A of Ex.P2 relied upon by plaintiff is extracted as under:-
Clause 8A Price Adjustment Formula; [40] R= Value of work as defined in Clause 40.1 of Conditions of Contract.
34 Com.OS.1415/2023 Adjustment for labour component:
(i) Price adjustment for increase or decrease in the cost of labour shall be paid in accordance with the following formula:
VL= 0.85 X PL 100 X R X (Li - Lo) / Lo Where, VL= Increase or decrease in the cost of work during the quarter under consideration due to changes in rates for local labour;
Lo = The average consumer price index39 for industrial workers for ....... 40Centre for the quarter preceding the date of opening of tenders as published by the Labour Bureau, Ministry of Labour, Government of India; Li = The average consumer price index for industrial workers for ...... Centre for the quarter under consideration as published by Labour Bureau, Ministry of Labour, Government of India; PL = Percentage of labour component of the work.
26. The learned counsel for plaintiff has further argued that admission of DW1 as to conduct of choosing by its convenience between State Government Rules under KPWD and exercising their arbitrary decision stating that they are Central Institution and not bound by State Government rules amounts to blowing hot and cold simultaneously. He has further argued that as per Landmark case in case 35 Com.OS.1415/2023 law of Hon'ble Supreme Court in National Highways Authority of India V/s Progressive MVR (JV) reported in 2018 (4) SCC 688, price adjustment clause in Government contractors must be given effect to compensate for contractor increasing in cost during execution. The said counsel has further argued that, DW1 has clearly admitted that no penalty was imposed on plaintiff, which is also one of ground for its entitlement for aforesaid price adjustment.
27. As far as payment of additional amount of Rs.30,60,419/- towards replacement of Lacquered tiles with Sadarahalli grey tiles is concerned, the counsel for plaintiff has argued that substitution of Lacquered Tiles with Sadarahalli Grey Granites were not denied and disputed by defendants and as per Clause No.10(ii)(c) of the Agreement, the plaintiff is entitled for aforesaid amount towards replaced tiles. The relevant portion of aforesaid Clause is extracted as under:-
36 Com.OS.1415/2023 Clause 10: Alternations in quantity of work, specifications and designs, Additional Work, deletion of work
(i) ......
Orders for variations to be in writing
(ii) No such variations shall be made by the Contractor without an order in writing of the Project Engineer cum Estate officer; provided that no order in writing shall be required for increase or decrease in the quantity of any work where such increase or decrease is the result of the quantities exceeding or being less than those stated in the 'Schedule B' provided also that if for any reason the Project Engineer cum Estate officer shall consider it desirable to give any such order verbally, the Contractor shall comply with such order without any confirmation in writing of such verbal order given by the Project Engineer cum Estate officer, whether before or after the carrying out of the order, shall be deemed to be an order in writing within the meaning of the clause; provided further that if the Contractor shall within seven days confirm in writing to the Project Engineer cum Estate officer and if such confirmation is not contradicted in writing within fourteen days by the Project Engineer cum Estate officer, it shall be deemed to be an order in writing by the Project Engineer cum Estate officer.
28. Learned counsel for plaintiff has further argued that DW1 has admitted that plaintiff used Sadarahalli Grey Granites instead Lacquered granites as provided under clause 5.12 and 10(iii)(c) of contract, which 37 Com.OS.1415/2023 allows for substitution and payment based on KPWD rates. The said clauses are extracted as under:-
Labour Clause 5.12 Clause 12 A No labourers below the age of 15 years shall be employed on the work.
Clause 12 B Payments of wages of labourers.
The contractor shall pay not less than fair wage of labourers engaged by him on the work.
EXPLANATION:
(a) The contractor shall notwithstanding the provision of any contract to the contrary cause to be paid wages to labourers indirectly engaged for the work including any labour engaged by his sub-
contractors in connection with the same works if the labourers have been immediately employed by him.
(b) In respect of all labours directly or indirectly employed in the works for the performance of the contractor's part of this agreement, the contractor shall comply with or cause to be complied with Karnataka Public Works Department Contractors Labour Regulations from time to time, in regard to payment of wages. Wage period, deductions from wages recovery of wages not paid and deductions unauthorized made, maintenance of wage book, wage slips, publication of scale of wage and other terms of employment, inspection and submission of periodical returns and all other matter of a like nature.
38 Com.OS.1415/2023 The Project Engineer cum Estate officer or In-charge Engineer concerned shall have the right to deduct from the money due to the contractors any sum required for making good the loss suffered by a worker or workers by reason of non-fulfillment of the conditions of the contract for the benefit of the workers, non-payment of wages or of deductions made from his or her wages which are not justified by their terms of the contract or non-observance of the regulations.
(c) For payment of minimum wages the Contractor is bound to follow the relevant orders of Govt. of Karnataka from time to time.
(d) Vis-à-vis the Institute the contractor shall be primarily liable for all payments to be made under and for the observance of the regulations aforesaid without prejudice to his right to claim indemnity from his sub-contractors. The regulations aforesaid shall be deemed to be part of this contract, and any breach thereof shall be deemed to be a breach of this.
Clause 12(C): In respect of all labour directly or indirectly employed in the work for the performance of the contractor's part of this agreements the contractor shall at his own expense arrange for the safety provisions as per Karnataka P.W.D. safety code framed from time to time and shall at his own expense provide for all facilities in arrangements and provide necessary facilities as aforesaid he shall be liable to pay penalty of Rs.50/- for each default and 39 Com.OS.1415/2023 in addition the Project Engineer cum Estate officer in charge shall be at liberty to make arrangements and provide facilities as aforesaid, and recover the cost incurred in that behalf from the contractor....
Clause 10: Alternations in quantity of work, specifications and designs, Additional Work, deletion of work
(i) .....
(ii) ......
(iii) a) 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 same conditions in all respects on which he agreed to do the main work and same rates as are specified in the tender for the main work. However, change in the Undertaking rates tendered and accepted shall be considered in respect of items under which the quantity of work performed exceeds tendered quantity by more than 25 percent and this actual change in rate will be restricted only to such excess quantity (i.e. beyond 125 percent of the tendered quantity).
(b) Rate for excess quantity beyond 125 percent of tendered quantity The additional quantity which exceeds 125 percent of the tendered quantity shall be paid at the rates entered in or derived from Schedule of Rates prevalent at the time of executing additions and alterations plus or minus the overall percentage of the original tendered rates over the current Schedule of Rate's (KPWD) of 40 Com.OS.1415/2023 the year in which the tender is accepted (as per the comparative Statement prepared at the time of acceptance of the tender).
(c) Rates for additional, substituted, altered items of work If the additional, substituted or altered work includes any class of work for which no rate is specified in the contract, then such work shall be carried out at the rates specified for or derived from similar item of work in the agreement. In the absence of similar items in agreement, rate shall be as specified for or derived from similar items in the schedule of rates of KPWD prevalent at the time of execution of such additional substituted or altered items of works, plus or minus the overall percentage of original tendered rates over the current schedule of rates of (KPWD) the year in which tender is accepted as mentioned in sub clause (b) above. With regard to the question whether the additional, substituted or altered item/items of work/works is / are similar or not, to that/those in the agreement / in the Schedule of Rates of KPWD and the decision of the Center for campus management and Development shall be final and binding on the contractor.
(D) Determination of rates for items not found in Estimate or Schedule of Rates If the rates for additional, substituted or altered work cannot be determined in the manner specified in sub clauses (b) and (c) above, then the contractor shall within 7 days of the date of receipt by him of the 41 Com.OS.1415/2023 order to carry out the work, inform the Project Engineer cum Estate officer of the rates which it is his intention to charge for such class or work, supported by analysis of the rate or rates claimed. Thereupon the Project Engineer cum Estate officer shall determine the rate or rates on the basis of observed data and failing this, on the basis of prevailing market rates. Under no circumstances the contractor shall suspend the work on the plea of non-settlement of rates for items falling under this clause. In the event of any dispute regarding the rates for such items the decision of the Center for campus management and Development Committee shall be final.
29. It is further argued by learned counsel for plaintiff that, the failure to pay these substituted materials contravenes the contract terms and principles of justice as enunciated in Ircon International Limited v/s C.R. Sons Builders and Developers Case. It is further argued that, defendants are under obligation to consider the loss suffered by plaintiff in completion of aforesaid project by incurring additional prices towards basic materials like cement, steel, labour and as they are entitled for price adjustment along with consequential reliefs of GST and interest.
42 Com.OS.1415/2023
30. On the other hand, learned counsel for defendants has strongly rebutted the arguments of plaintiffs side and he has initially relied upon Ex.P1 and Ex.D1 minutes of pre-bid meeting dtd.03.11.2017 and specific query under Sl.No.19 of said meeting which reads under:-
19 Price Escalation We request No. Price adjustment you to clarify whether price clause is as per escalation is applicable Institute norms.
31. The aforesaid query and its answer clearly discloses that, defendants have strongly asserted that there shall be no Price escalation in above project and Price adjustment is strictly as per norms of defendants' institution norms. The above document clearly shows that, there is no scope for price escalation clause as per said document.
32. At the outset it is necessary to mention that, as rightly argued by counsel for defendants, it is undisputed between both parties that, as per Ex.P3 work order, the plaintiff had agreed to complete the work of aforesaid hostel buildings within 18 months 43 Com.OS.1415/2023 from date of delivery of possession of said blocks and the date of handing over the possession of A to C Blocks is not in dispute between both parties as per Ex.P4 and Ex.P5 Letters. The said aspect clearly shows that, there is delay of 25 days in completion of Block A, There is delay of 05 months 04 days in completion of Block B and there is delay of 04 months 03 days in completing the construction and handing over possession of Block C. Under such circumstances when there is delay on part of plaintiff to complete the project work, question of claiming price adjustment in its own default does not arise.
33. Further as rightly argued by counsel for defendants, Clause 3.3.2 of Ex.P2, clearly discloses that KPWD specification are limited to the works to be carried out or as directed by Engineer in charge in the absence of such specification. The said clause is extracted as under:-
Clause 3.3.2:-
All the works shall be carried out as per specifications prescribed by BIS, National Building code, KPWD specifications, relevant IS codes or as 44 Com.OS.1415/2023 directed by the Engineer-in-charge in the absence thereof.
34. Thus on plain reading of aforesaid clause, it clearly shows that it relates to quality of materials and it does not relate to any price adjustment or in determining any price of replaced Sadarahalli Granite as asserted by plaintiff.
35. Learned counsel for defendants has vehemently argued that, as per Clause 6 of Ex.P2 Agreement, plaintiff has to complete the entire work in order to avail the Final certificate and then bills of work will be completely scrutinized and thereafter said work will be measured by concerned Engineer in presence of contractor and his duly authorized agent. Further counter signature of contractor or their representative in measurement book shall be sufficient proof of correctness of the measurements with test certificates to be produced with the bills, which shall be binding on the contractor. The relevant portions of clause 6 and 7(b) are extracted as under:-
45 Com.OS.1415/2023 Clause 6: ISSUE OF FINAL CERTIFICATE-
CONDITIONS REGARDING:-
On completion of the work the contractor shall report in writing to the Project Engineer cum Estate officer the completion of the work. Then he shall be furnished with a certificate by the Project Engineer cum Estate officer of such completion, but no such certificate shall be given nor shall the work be considered to be complete until the contractor shall have removed from the premises on which the work shall have been executed, all scaffolding, surplus materials and rubbish, and shall have cleaned thoroughly all wood work, doors, windows, wall, floor or other parts of any building, in or upon which the work has been executed, or of which he may have had possession for the purpose of executing the work, nor until the works shall have been measured by the Project Engineer cum Estate officer or other competent authority, or where the measurements have been taken by his Engineer-in-charge until they have received the approval of the Project Engineer cum Estate officer or other competent authority, the said measurements being binding and conclusive against the contractor. If the contractor shall fail to comply with the requirements of this clause as to the removal of scaffolding, surplus materials and rubbish, and cleaning on or before the date fixed for the completion of the work the Project Engineer cum Estate officer or other competent authority may, at the expense of the contractor, remove such scaffolding, surplus materials and rubbish, and dispose of the same as he think fit and clean off such dirt etc., as aforesaid and contractor shall be liable to pay the amount of all expenses 46 Com.OS.1415/2023 incurred but shall have no claim in respect of any such scaffolding or surplus materials as aforesaid except for any sum actually realized by the sale thereof.
Note: CLOSURE OF CONTRACT PENDING COMPLETION OF MINOR ITEMS.
In cases where it is not desirable to keep the building contract open for minor items, such as flooring in the bath rooms, etc., which can be carried out only after installation of sanitary work the main contract may be finalized after getting a supplementary agreement executed in the prescribed form by the same contractor for doing the residual work.
Clause 7. Contractor to submit bills monthly in printed form:-
(a) .......
(b) Scrutiny of Bills and measurement of work:- The details furnished by the Contractor in the bill will be completely scrutinized and the said work will be measured by the Engineer-in-charge in the presence of the Contractor or his duly authorized agent. The countersignature if the contractor or the said agent in the measurement book shall be sufficient proof of the correctness of the measurements, along with the Test certificates to be produced with the bill shall be binding on the contractor in all respects.
36. Plaintiff does not dispute the above procedure and when completion of said procedure is not denied and disputed by plaintiff, question of any difference 47 Com.OS.1415/2023 amount incurred by plaintiff either towards Prince adjustment or towards replacement of Lacquered tiles does not arise. Further, by relying upon aforesaid clauses, the counsel for defendants has vehemently argued that, it has duly considered the completion of work and issued Final certificate to plaintiff, which has been accepted by plaintiff without any demur and as such at this stage after lapse of inordinate delay, the plaintiff is not entitled to claim any relief in the suit. Further the said counsel has relied upon submission of Final bill and settlement as narrated in Para 4 of Clause 8 of Ex.P2 Agreement, which is extracted as under:-
Submission of Final bill and its settlement. The contractor shall submit the final bill within one month from the date of actual completion of the work in all respects. His claims shall be settled within five months from the date of submission of the bill in complete acceptable form after duly checked and certified by concerned Engineer, under normal circumstances."
37. Thus the aforesaid clauses sufficiently disclose that the contractor has to submit the final bill within
48 Com.OS.1415/2023 one month from date of actual completion of work, which shall be settled within five months from the date of submission of bill in complete acceptable form after check and certification by concerned Engineer under normal circumstances. Further it also mandates that contractor shall submit a list of disputed items within 30 days from disallowance thereof and in case if he fails to do so, his claims shall be deemed to have been fully waived of and extinguish. Most importantly as already stated above In Para 7, Page 15 of cross examination, PW1 has clearly admitted that the amount mentioned in Ex.P13 details is not mentioned in final Bill and despite, rejection of certain claims by defendants, after submission of Ex.P5 Completion certificate, plaintiff has disposed off final bill. Further in Para 11 of his cross examination PW1 has further unequivocally admitted that they have not produced any documents with regard to purchase of Cement and Steel. Absolutely no explanation has been put forth by plaintiff for immediately approaching 49 Com.OS.1415/2023 defendants seeking his additional claim of price adjustment in pursuant to aforesaid clauses of final bill and settlement and delay in aforesaid claim, without any cogent materials, which disentitle plaintiff to seek relief claimed in the suit.
38. Thus as rightly contended by defendants side absolutely no documents are produced by plaintiff in order to show purchase of cement and steel and also to show payment of higher wages to labours in order to seek the claim of price adjustment. Further Ex.D3 Letter dtd.04.06.2020 addressed by defendant to plaintiff clearly shows that despite calling upon a plaintiff to produce all the bills relating to steel and cement of above project, it has not produced it. This aspect is also one of the strong ground to suspect whether plaintiff has really incurred any additional expenses towards aforesaid men and material warranting it to claim price adjustment that too after settlement of final bill.
39. As far as question of replacing of Lacquered Granites with Sadarahalli Grey Granites are 50 Com.OS.1415/2023 concerned, counsel for defendants has relied upon Clause No.10 of Ex.P2 which, is already extracted in foregoing Paras. The said clause clearly discloses that, there is a provision for alteration in quantity and quality of work and also deletion of work subject to aforesaid rules and specific price is also mentioned with regard to such altered items. However replacement of aforesaid Lacquered tiles for Sadarahalli grey tiles are not denied and disputed by defendants side. Further plaintiff has strongly relied upon 160 to 162 of Annexure-1 table of Ex.P2 Agreement, and asserted that, same are related to prices and nature of granites to be used for project. The relevant portion of Annexure 1 table of Ex.P2 are extracted as under:-
Providing & fixing of wall cladding using 20mm thick gang 160 saw water cut grey granite in CM Sqm 2140.84 5280.0 11303635.2 1:3 proportion cut to required shape pattern with paper joints, finished with cement mortal using white cement and colour pigments to match the colour of slab making through jointing with sealent, making holes 25mmx12mm grooves in joints
51 Com.OS.1415/2023 including curing etc, complete The rate shall be inclusive of all taxes and GST etc,. and work shall be carried out as per the technical specifications and instructions of Engineer in charge GROUND FLOOR Providing & fixing of wall cladding using 20mm thick gang 161 saw water cut grey granite in CM Sqm 2195.24 5280.0 11590867.2 1;3 proportion cut to required shape pattern with paper joints, finished with cement mortal using white cement and colour pigments to match the colour of slab making through jointing with sealent, making holes 25mmx12mm grooves in joints including curing etc, complete The rate shall be inclusive of all taxes and GST etc,. and work shall be carried out as per the technical specifications and instructions of Engineer in charge FIRST FLOOR Providing & fixing of wall cladding using 20mm thick gang 162 saw water cut grey granite in CM Sqm 2005.24 5280.0 10587667.2 1;3 proportion cut to required shape pattern with paper joints, finished with cement mortal using white cement and colour pigments to match the colour of slab making through jointing with sealent, making holes 25mmx12mm grooves in joints including curing etc, complete The rate shall be inclusive of all 52 Com.OS.1415/2023 taxes and GST etc,, and work shall be carried out as per the technical specifications and instructions of Engineer in charge- SECOND FLOOR
40. However On careful perusal of aforesaid Sl.No.160 to 162 of Annexure 1 Table of Ex.P2 and Clause 14.61 of Ex.P14 relevant page of KPWD SR for the year 2017-18, it shows that said rates are specifically provided for wall cladding Sadarahalli Granites and not for granites used for flooring purpose.
41. On careful and meaningful reading of Sl.No.14.60 of Ex.P14, it shows that said price of Rs.3695.00 per sq.meter of Lakared granite for cladding and it is not for flooring. Further Sl.No.14.61 of KPWD SR clearly shows that rates for flooring Sadarahalli grey granite is mentioned as Rs.1986/-, 1889/- and Rs.1085/- per square meter, which has differed in accordance with width of such tiles. Hence plaintiffs cannot seek price of Rs.5,280/- to Sadarahalli Grey flooring tiles at the higher price 53 Com.OS.1415/2023 which is purely meant for Wall cladding category. Thus, it clearly shows that the price of Rs.5280/- relied upon by plaintiff for calculating the aforesaid additional amount of Rs.30,60,419/- towards Sadarahalli Granites purely relates to the wall cladding granites and it does not relate to the flooring granites. Further despite entitlement of plaintiff to aforesaid prices of Rs.1986/-, 1889/- and Rs.1085/- per square meter, Page 7 of Ex.P19 notice issued by plaintiff to defendant no.1 dated 28.11.2022 clearly shows that defendants have paid Rs.2047.72 per sq.m. and Rs.2061.05 per sq.m., which appears to be more than what is prescribed under aforesaid clauses of Ex.P2 agreement.
42. Thus on overall perusal of the material placed by both parties, it shows that the plaintiff has solely relied upon Ex.P13 Self serving Report and Calculation, which is not supported with aforesaid various clauses of agreement of aforesaid project of hostel. Further the calculation and conclusion arrived by plaintiff with regard to price adjustment amount 54 Com.OS.1415/2023 of Rs.2,82,56,146/- is not based upon actual additional expenses incurred by plaintiff nor supported with necessary bills for labour, cement and steel as required for final settlement of dispute. However as rightly pointed out by defendants side, absolutely nothing is mentioned as to who is author of said Ex.P13 report and its enclosures whereas PW1 admits that he has not prepared it. Absolutely no efforts are made out by plaintiff in order to examine witness of said document or to name the signatory of said document, which bears seal of one Akaranubav Construction Private Limited.
43. It clearly shows that the entire claim of plaintiff with regard to price adjustment is based upon assumptions and presumptions, without furnishing any documents in order to prove that it incurred addition amount by purchasing aforesaid steel and cement for higher and escalated prices or by deploying the additional labours. Thus the entire case of plaintiff appears to be depends upon incomplete documents with regard to its entitlement of price 55 Com.OS.1415/2023 adjustment and to seek difference price for replacing Lacquered Granites with Sadarahalli Grey Granites. The evidence adduced by plaintiff does not inspire confidence of the court to believe that the plaintiff has incurred any additional amount in completion of aforesaid project for purpose of purchasing of cement, steel and by deploying labour as escalated prices and same warrants such price adjustment. Further plaintiff has failed to prove that he has incurred additional sum of Rs.30,60,419/- towards substitution of aforesaid Lacquered Granites with Sadarahalli Grey Granites. On the other hand defendants have sufficiently proved that as per Clause No.10(ii)(c) of Ex.P2 Contract, plaintiff cannot claim any amount towards additional or substituted item and they have also proved that as per various reasons mentioned in foregoing paras, they are not liable to pay anything to plaintiff towards the head of price adjustment for aforesaid project. Therefore plaintiff is not entitled to seek any amount towards aforesaid heads. Accordingly Issue No.1 and 2 56 Com.OS.1415/2023 are answered in the Negative and Issue Nos.3 and 4 are answered in the Affirmative.
44. Issue No.5:- Learned counsel for defendants has relied upon Clause 23(a) to (c) of Ex.P2 with regard to procedure in case of settlement of disputes and vehemently argues that no such procedure has been followed by plaintiff in seeking aforesaid claims. The aforesaid clauses are extracted as follows :-
Clause 23. SETTLEMENT OF DISPUTES -TIME LIMIT FOR DECISION
(a) If any dispute or difference of any kind whatsoever were to arise between the Project Engineer cum Estate officer and the contractor regarding the following matters namely,
(i) The meaning of the specifications designs, drawing and instructions herein before mentioned,
(ii) The quality of workmanship or materials used on the work and
(iii) Any other question, claim right, matter, thing whatsoever, in any way arising out of or relating to the contract, designs, drawings, specification, estimates, instructions, or orders, or those conditions, failure to execute the same whether arising during the progress of the work, or after the completion, termination or abandonment thereof, the dispute shall, in the first place, be referred to the Center for 57 Com.OS.1415/2023 campus management and Development who have jurisdiction over the work specified in the contract. The Center for campus management and Development shall within a period of fifteen days from the date of being requested by the Contractor to do so give written notice of its decision to the Contractor.
If the decision of the Center for campus management and Development is not acceptable to the contractor he may approach the Director, IISc within a period of 15 days for settlement.
(b) Director's decision final.
Subject to other form of settlement hereafter provided, the Director's decision in respect of every dispute or difference so referred shall be final binding upon the contractor. The said decision shall forthwith be given effect to and contractor shall proceed with the execution of the work with all due diligence.
(c) Remedy when Director's decision is not acceptable In case the decision of the Director is not acceptable to the contractor, he may approach the Law Court at Bangalore for settlement of dispute after giving due written notice in this regard to the Director within a period of ninety days from the date of receipt of the written notice of the decision of the Director. Further, the 58 Com.OS.1415/2023 Bangalore courts alone shall have the exclusive jurisdiction.
(d) Time limit for notice to approach Court of law by contractor If the Director has given written notice of his decision to the contractor and no written notice to approach the law court has been communicated to him by the contractor within a period of ninety days from receipt of such notice, the said decision of Director shall be final and binding upon the contractor.
(e) Time limit for notice to approach law court by contractor when decision is not given by Director, IISc as at (b).
If the Director fails to give notice of his decision within a period of ninety days from the receipt of the contractor's request in writing for settlement of any dispute or difference as aforesaid, the Contractor may within ninety days after the expiry of the first named period of ninety days approach the Law Courts at Bangalore giving due notice to the Director.
45. However absolutely no documents are produced by plaintiff in order to show that, he has approached concerned Center for Campus Management and Development within stipulated period of 15 days and thereafter he has approached concerned director of 59 Com.OS.1415/2023 defendants. Hence it is crystal clear that plaintiff has not exhausted aforesaid clause 23 of the agreement and he has directly filed the suit. This aspect is sufficient to believe that plaintiff has failed to honour it's obligations and violated terms of agreement and on this Count also plaintiff is not entitled for relief sought in the suit.
46. Further as rightly pointed out by defendants side, no explanation has been put forth by plaintiff side for delay in submitting aforesaid claim, whereas the certificate of completion has been issued by defendants Institution on 07.04.2021 itself to plaintiff. The plaintiff has not put forth any documents in order to show that said certificate was received by it under any demur or protest, which pre-suposses that plaintiff was aware that same could not be claimed due to delay on its part to complete the project. Further Ex.P19 Notice produced by plaintiff shows that, for the first time on 28.11.2022 it has raised aforesaid dispute of price adjustment by addressing the same to defendant 60 Com.OS.1415/2023 No.1 and absolutely no documents are produced in order to explain the delay in preferring said claim at belated stage. Further Ex.P20 Copy of legal notice said to have been issued by plaintiff to defendants dtd.23.01.2023 does not bear signature of concerned counsel and said document is also seriously denied and disputed by defendants side. Further as rightly pointed out by defendants side Ex.P15 letter said to have been issued by plaintiff to defendant No.3 dtd.14.09.2020 is also not signed by concerned signatory of plaintiff nor anything is put forth in order to prove service of said notice upon defendants. Further defendant has sufficiently proved that plaintiff has failed to complete the aforesaid project within stipulated time. By bringing aforesaid aspects to the notice of the Court, the defendants have sufficiently proved that, plaintiff has not honoured it's obligations and violated the timeline of the project in terms of agreement, which disentitles him from seeking relief claimed in the suit. Accordingly, Issue No.5 is answered in the Affirmative.
61 Com.OS.1415/2023
47. Issue No.6:- The plaintiff has utterly failed to prove its entitlement to claim any amount towards price adjustment clause and towards substitution of Lacquered Red and Black Granites with Sadrahalli Grey Granites as claimed in the suit. On the other hand, defendant has sufficiently proved that for the reasons elaborately discussed in foregoing Paras, it is not liable to pay anything to plaintiff towards the head of price adjustment for aforesaid project and any amount towards substitution of Lacquered Granites by Sadarahalli grey granites. For these reasons, plaintiff is not entitled for the reliefs as claimed in the suit. Accordingly, Issue No.6 is answered in the Negative.
48. Issue No.7:- For the reasons stated and finding given on Issue Nos.1 to 6, following is;
ORDER The suit of the plaintiff is dismissed with costs.
Draw decree accordingly.
62 Com.OS.1415/2023 Office to send soft copies of the judgment to the e-mail Id's of the both parties, if furnished.
[Dictated to the Stenographer Grade-III, directly on the computer, typed by her, then corrected and signed by me and pronounced in the Open Court, dated this the 16th day of February 2026] ANAND T Digitally signed by ANAND T CHAVAN CHAVAN Date: 2026.02.19 15:35:04 +0530 (ANAND T. CHAVAN) LXXXIV Addl.City Civil & Sessions Judge, Bengaluru.
ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF THE PLAINTIFF PW.1 Mr. M Balamurugan LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE PLAINTIFF Copy of Minutes of the Pre-bid meeting Ex.P1 dtd.03.11.2017.
Ex.P2 Copy of Agreement dtd.13.01.2018.
Copy of Work Order bearing CCMD/Tender-2017-
Ex.P3
18/505 dtd.26.02.2018
Ex.P4 Copy of email.
63 Com.OS.1415/2023
Copy of Completion Certificate issued by defendant Ex.P5 No.3 dtd.07.04.2021.
Ex.P6 Copy of PIM Report. Ex.P7 Copy of email dated 18.02.2022 Ex.P8 Copy of email dated 07.12.2022
Copy of wholesale price index for Mild Steel Long Ex.P9 Products Copy of the wholesale price index for ordinary port Ex.P10 land cement Copy of consumer price index for industrial Ex.P11 workers applicable for Benglauru Ex.P12 Copy of GO 26.11.2004 Copy of price adjustment for labour, cement and Ex.P13 steel Ex.P14 Copy of page extract of KPWD SR 2017-18 Copy of letter dated 14.09.2020 issued defendant Ex.P15 No.3 Calculation of price sheet delineating the gain Ex.P16 achieved IISE on laying of sadarally granite in lieu of lak-red Ex.P17 Certificate U/Sec.65B of the Evidence Act Ex.P18 Authorization letter dated 15.11.2023 Ex.P19 Copy of acknowledgment dtd.28.11.2022 Ex.P20 Copy of notice dtd.23.01.2023 Ex.P21 03 Postal receipts.
Ex.P22 Track report issued by Post Department.
64 Com.OS.1415/2023 Ex.P23 Copy of notice dtd.25.05.2023 Ex.P24 Postal receipt.
Ex.P25 Track report issued by Post Department. Ex.P26 Certificate U/Sec.65B.
LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENDANT DW1 Sri. Vasanthan A A LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE DEFENDANT Ex.D1 & Minute of Pre-Bidding meeting dtd.03.11.2017. Ex.D1(a) Ex.D2 Authorization Letter dtd.19.04.2024 Ex.D3 Letter dtd.04.06.2020 sent by D3 Digitally signed by ANAND T ANAND T CHAVAN CHAVAN Date: 2026.02.19 15:35:15 +0530 (ANAND T. CHAVAN) LXXXIV Addl.City Civil & Sessions Judge, Bengaluru.