Ladola Construction Company vs Ahmedabad Jilla Panchayat President

R.D. Kothari, J.—The plaintiff, a construction company, had undertaken the work to construct Nala on behalf of the defendant. The dispute arose in respect of the said construction. That had led the plaintiff to institute Special Civil Suit No. 1963 of 1986 before the City Civil Court, Ahmedabad. In the said suit, the plaintiff had claimed damages from the defendant under following heads:

The above construction work is referred as- "Dekawada Chhaniyar Dhedasana Remoulding Drain Structure." The plaintiff was to construct Nala under the said work. The defendant has invited tender for the said work and the plaintiff''s tender was accepted on 7.1.1980. The work order was issued on the same date i.e. 7.1.1980. The plaintiff was to complete the work within 18 months i.e. on or before 6.6.1981. The contract was of Rs. 9,34,227/-.

The defendant had filed the written statement at Exh. 9 wherein all the assertions were denied by the defendant. It is the say of the defendant that plaintiff has failed to carry out the work as per the tender agreement. It is also asserted by the defendant that plaintiff has committed breach of contract and that the defendant has not committed any omission or breach.

The parties have produced relevant documentary evidence which mainly consist of exchange of correspondence between the parties. The plaintiff is examined at Exh. 31 and on behalf of the defendant, executive engineer is examined at Exh. 69. No other oral evidence was led by the parties.

Learned trial court in its fairly elaborated judgment has found that plaintiff had abandoned the work after March, 1983. It had also held that in the facts and circumstances of the case, the plaintiff is not entitled to the damages as claimed by it. Accordingly, the learned trial court was pleased to dismiss the suit.

Learned advocate Mr. Chirag Patel for the appellant has submitted that learned trial court has seriously erred in dismissing the plaintiff''s suit. It was submitted that in the fairly elaborate judgment, the learned trial court has mainly relied upon two documents, viz., Exh. 93 and Exh. 85 and relying on these two documents, learned trial court was pleased to dismiss the plaintiffs suit. Shri Patel has pointed out that Exh. 93 which is a letter written by the defendant to the plaintiff, is replied by the plaintiff vide Exh. 45. In the said reply, plaintiff had clearly explained about the delay caused in execution of the work. It was submitted by Mr. Patel that plaintiff has repeatedly written letters to the defendant to supply the line out. However, inaction shown by the defendant in this regard has prevented the plaintiff to complete the work. It was submitted that since the defendant has committed a breach of contract, the damages claimed by the appellant is just, proper and legal. The principal amount of damages i.e. loss of profit should be granted to the plaintiff as the defendant has committed breach of contract. Similarly, claim of the plaintiff under other heads also ought to have been allowed.

On the other hand, learned advocate Mr. H.S. Munshaw for the respondent has supported the judgment of the learned trial court. It was submitted that there is sufficient material on record to show that plaintiff has unilaterally abandoned the work. Learned advocate has drawn attention of the Court to relevant letters written by the defendant in this regard to the plaintiff. It was submitted that considering the conduct of the plaintiff and exercise of option by the plaintiff to abandon the work, this Court ought not to have interfered with the judgment under appeal. Referring to the relevant part of the judgment, learned advocate has supported the finding recorded by the learned trial court.

Exh. 93 is a letter written by Executive Engineer to the plaintiff. It is dated 26.7.1983. The Executive Engineer has drawn the attention of the plaintiff that till today, progress of its work is not satisfactory. It is pointed out that plaintiff has completed about 48% of work only. It is also pointed out to the plaintiff that it has discontinued the work since last four months. Saying so, the Executive Engineer calls upon the plaintiff to do the needful to complete the work by commencing the same within 10 days from the receipt of this letter. It concludes with the saying that in case plaintiff fails to act for completing the work, necessary steps will be taken in accordance with the terms of the contract.

In reply to above letter, Shri Patel has drawn attention to Exh. 45. It is a reply by the plaintiff to Exh. 93. In the detail reply, plaintiff opens his letter with clarification that he has already abandoned the work. It is the say of the plaintiff that it is on account of defendant, the work has been delayed. The plaintiff says that from the inception, line out was fairly delayed and the department has not given the line out for fairly long period. The plaintiff further says that line out of two work was given with intervening break in such a fashion that rhythm of work could not be maintained. The plaintiff points out that earlier he had written a letters dated 23.10.1980, 12.1.1981, 28.1.1981 and 13.3.1981 to give line out. Even then, till the end of March, he was not given the line out.

In his oral evidence, the plaintiff, beside referring the facts and the correspondence between the parties, maintains the complaint that line out was not given within time. Further, it is also pointed out that earth work was entrusted to another agency and since the said agency did not complete its work in time schedule, the present work was also delayed.

The learned trial court, after considering the documentary evidence and oral evidence led by the parties and appreciating the same, has concluded, thus;

This correspondence and evidence would clearly suggest that as admitted by the plaintiff himself in the letter at Exh. 41 dated 20.5.82 that he would stop the work. He has also stated in his letter ex. 23 dated 2.12.83 that the work has been stopped for various reasons and he can resume the work subject to the conditions that he may be given price rise and time may be given. He has also stated in this letter that otherwise the bill may be prepared for whatever work carried out by him and he may be relieved. Against this, the letter ex. 84 addressed by the defendant to the plaintiff dated 12.4.83 it has been specifically stated that the work has been totally stopped and thereafter in letter ex. 85 and 93, the plaintiff has been reminded to resume the work. This clearly suggests that the plaintiff has abandoned the work. Even if it is assumed that there was some delay in giving line out then as stated earlier it was only for one and half month. It is required to be mentioned here that according to the tender agreement or the contract the work was to be completed on or before 6.6.81 and as a matter of fact the letters ex. 80 to 84 were addressed by the defendant to the plaintiff for accelerating the progress and inspite of such notice ex. 93 dated 26.7.83 calling upon the plaintiff to resume the work failing which action shall be taken as per clause 2 and 3 of the tender agreement/contract the plaintiff had no resumed the work. Again thereafter a registered notice at ex. 85 dated 30.12.83 was served upon the plaintiff asking the plaintiff to resume the work failing which the work would be completed at the risk and costs of the plaintiff, the plaintiff had not carried out the work. Therefore, after communication at ex. 23 dated 2.12.83 from the plaintiff demanding price rise and extension of time this communication ex. 85 clearly suggests that the plaintiff has given opportunity to resume the work which would imply that the time was extended. However, there was no reason for the plaintiff to ask for price rise as it has not been provided in the tender agreement or the contract. Therefore, inspite of the notice at ex. 85, the plaintiff has failed and neglected to resume the work which he had admittedly abandoned. Therefore, it is established that the plaintiff has committed breach of the contract and it is also established that the plaintiff had abandoned the work after March 1983. At the same time even if it is assumed for the sake of argument that there was some delay on the part of the defendant in giving line out it could have delayed only for some time and plaintiff cannot justify such delay in execution of the work which was to be completed on or before 6.6.81. In fact the plaintiff has been given and reminder even after time limit was over which would imply that the extension has been granted to the plaintiff to complete the work but the plaintiff has failed to carry out the work inspite of such reminder. Therefore, it cannot be held that the defendants have committed any breach of the contract. As stated above, even if there was some delay it was only temporary which would not entitle or justify the plaintiff to abandon the work or not completed the work even after the time limit was over and inspite of the repeated reminders. As discussed hereinabove even this version of the plaintiff that there was delay in giving drawings or the line out has been disputed as can be seen from the letter at ex. 80 in which it has been specifically suggested to the plaintiff to take line out and carry out the work. This letter on the contrary suggests that there is no planning and progress of the work at the instance of the plaintiff. In any view of the matter even after the notice at ex. 93 and 85, the plaintiff could have completed the work which he has failed and neglected. Admittedly, the plaintiff has by letter at ex. 23 dated 2.12.83 suggested that as two conditions regarding price rise and extension of time may be accepted then only he can resume the work.

The complaint about the delay caused on account of earth work contract given to another agency, is misleading. The learned trial court has rightly disbelieved the same. In this regard, the Executive Engineer has explained in his evidence that nature of work entrusted to the plaintiff and the nature of earth work entrusted to another agency were distinct in the sense that causing of delay by the other agency qua their work would not have in any way delayed or affected the work of the plaintiff. This assertion of the witness in his evidence is not challenged by the other side i.e. plaintiff. The learned trial court has rightly accepted the same.

As to the principal grievance of the plaintiff, viz., failure to supply line out within time, it would appear from the finding of the learned trial court that there is a delay by the defendant in supplying the line out. But the delay was only for the period of one and half month. Shri Patel has drawn attention to Exh. 34, Exh. 37 to Exh. 40, Exh. 45 to Exh. 50. Of these letters written by the plaintiff, Exh. 33 and Exh. 34 are written in February, 1980, Exh. 37 in March, 1981, Exh. 38 on 8.4.1981, Exh. 49 on 23.10.1980 and Exh. 50 is dated 9.5.1981. The other letters are of 1983 and 1984. In most of these letters, the plaintiff has made complaint about non-supply of line out. As against this, learned advocate for the respondent has drawn attention to letter by Deputy Engineer dated 25.2.1981 wherein complaint is made about the slow progress of work. Referring to the one work, it is pointed out that line out is given. It is also pointed out that since over one month before line out is given, however, no satisfactory progress is made. The work abandoned in respect of other part of work known as "VRB" is also pointed out. Similarly, the defendant has written a letter dated 12.11.1981 calling upon the plaintiff to resume the work wherein it is also stated that since last three months, the work is abandoned by the plaintiff. In another letter dated 3.12.1981, similar assertion is made by the Deputy Engineer. In the same line, there are letters by defendant to the plaintiff at Exh. 80, Exh. 81 and Exh. 82.

In order to succeed in the claim for damages, the plaintiff has to show that other side has committed breach of contract. In the present case, the admitted fact is that the plaintiff has voluntarily abandoned the work. On the other hand, there are repeated letters by the defendant to resume the work. The plaintiff, in response to some of the letters, had prayed for extension of time-which was uncalled for in the circumstances of the case-and together with it, has claimed price rise. Extension of time was not necessary to ask inasmuch as even after the expiry of period of the contract, the defendant continued to make request to resume the work. The plaintiff opted to abandon the work. Having chosen to abandon the work, the plaintiff cannot claim loss of profit for the work unexecuted. The plaintiff can succeed for damages under this head only if it has shown successfully that defendant has committed breach of contract. Loss of profit cannot be claimed for the work he chooses not to work.

As to the security deposit, this aspect is also considered in detail by learned trial court in its judgment in Para. 16 and 17. I agree with the conclusion drawn by the learned trial court and forfeiture of security deposit is just and proper.

One of the submissions made by learned advocate Mr. Patel was that the defendant had abruptly revised the plan/design and therefore, the work was required to be abandoned. It was submitted that there is sufficient material on record in this regard. This submission is not possible to accept. The principal grievance of the plaintiff, as referred above, is about non-supply of line out within time. There is only passing reference in the cross-examination of the defendant about revised plan/design. No inference much less conclusion can be drawn about revised plan/design. The suit of the plaintiff is not based on that. This submission is not possible to accept.

To be precise, the plaintiff in his evidence says that he has completed the work of Rs. 4,50,957.98 ps. For the said work, he has received the amount. The incomplete work, says the plaintiff, is of Rs. 4,84,000/-. The plaintiff claims loss of profit on the said amount. For the above reason, the claim cannot be accepted. Similarly, claim under other heads in absence of any satisfactory material cannot be accepted.

In view of above, the appeal fails and same is dismissed. In the circumstances of the case, no order as to costs. R & P be sent back to the trial court concerned forthwith.