State of Goa vs C.M. Abdul Khadar

Z.A. Haq, J.—This appeal arises out of the judgment and decree passed by the learned IInd Ad-hoc Additional District Judge, Panaji in Civil Suit No. 31/2005 on 14-9-2006 by which part of the claim of the plaintiff is denied.

The case of the plaintiff is:

(i) The plaintiff, pursuant to the notice issued by the defendant no. 2-Executive Engineer, had submitted the tender for the work of construction of Ponda bypass between Km 121/950 to 126/2000 on National Highway 4A in Goa. The tender of the plaintiff was accepted and subsequently, the agreement was executed between the plaintiff and the defendant no. 2-Executive Engineer for and on behalf of the Government of Goa.

(ii) The contract contained a schedule giving all the necessary details relating to the work and the amount payable for the work. The contract contained the provisions for doing of the work involving minor variations and the reciprocal responsibilities of both the parties. The cost of the work based on schedule was of Rs. 2,01,18,464/- and the period stipulated for completing the contract was 30 months from 10th day of the issuance of the work order i.e. from 29-8-1999 to 28-2-2002. The defendants, immediately after the plaintiff started the work, instructed the plaintiff to execute additional work in large quantities and the deviations sought by the defendants were not of minor nature because of which the work could not be completed till 28-2-2002. The work was completed on 15-6-2002. After the completion of the work, final measurements of the work done by the plaintiff were taken and though the final bill was to be paid within six months from the date of completion of the work, the amount due towards final bill was not paid and the amount of Rs. 1,00,000/- was due to the defendants. The plaintiff has claimed interest at the rate of 18 % per annum on the amount of Rs. 1,00,000/- chargeable from 15-12-2002 till the payment is made to the plaintiff. The amount of security deposit of Rs. 5,00,000/- was also not released till 15-6-2003 though as per the contract, it should have been released on the expiry of one year i.e. maintenance period. The plaintiff has stated that 75% of this amount of security deposit was loan on which the plaintiff was required to pay interest in addition to the renewal charges of 3%. The plaintiff has claimed above mentioned amount of Rs. 5,00,000/- towards bank guarantee along with 18% interest per annum chargeable from 15-6-2003 and 3% renewal charges. The plaintiff had sent the letters dated 8-2-2002, 27-2-2002 and 13-3-2002 to the defendant no. 2 clarifying that the plaintiff was willing to continue and complete the work beyond the period of contract if he was paid the mutually agreed rates or equitable market rates. The plaintiff submitted that the defendants objected to pay the additional amount for additional quantity of work. However, they had neither objected nor refused to pay higher rates to the plaintiff for the works done after the expiry of the stipulated period of the contract. The defendants had tacitly agreed by the letter dated 19-1-2001 to pay market rates for the work done after the stipulated period of contract. The plaintiff has claimed the equitable market rates at GSR 97+20% for the work done after the stipulated period of the contract, by the letter dated 12-10-2004. The plaintiff has given the break up of his claim of Rs. 94,45,778.18.

(iii) The plaintiff has made the claim for Rs. 3,59,467/- which was deducted from the bills of the plaintiff towards the royalty for materials, though, according to plaintiff, he had not obtained the material from the Government Quarry, but had purchased it and therefore, was not liable to pay the royalty. The plaintiff had sent the notice u/s 80 of the CPC requesting for the payment of amount, however, it was not complied and therefore, the civil suit is filed praying for the decree for Rs. 1,54,25,077/- with interest at the rate of 18% per annum till the date of the payment to the plaintiff.

(iv) The defendants filed their written statement and opposed the claim made by the plaintiff. The case of the defendants is:

The defendant had conveyed the decision of additions/alterations in the work within five months from the execution of the contract by the letter dated 3-2-2000. The plaintiff was aware about the additions/alterations in the work since much earlier in 1999 and this is clear from the communication sent by the plaintiff to the defendant no. 2 on 22-11-1999. According to the defendants, the plaintiff should have planned his work accordingly and should have completed it within the stipulated period. According to the defendants, the delay in completing the work has occasioned because of non-planning by the plaintiff. The defendants have given the details of correspondence between the plaintiff and defendants from 11-4-2000 onwards. The defendants had made the payments regularly to the plaintiff and these payments were considered as interim advances and the final bill was to be paid after checking and final approval by the Directorate of Accounts. According to the defendants, the final bill of the plaintiff was not accepted by the Directorate of Accounts because of the protest of the plaintiff. The amount of security deposit given by the plaintiff could have been released only after final bill was passed and the amount of security deposit was not due for being released on 15-6-2003 as stated by the plaintiff. The defendants denied the liability to pay the amount of Rs. 5,00,000/- towards the security deposit and the interest and the renewal charges as claimed by the plaintiff. According to the defendants, the plaintiff continued to work after the stipulated period as he could not complete the work within the stipulated period. As per clause 25 of the agreement, the plaintiff was required to make the claim within 30 days from 19-1-2001 i.e. the date of rejection of claim of the plaintiff by the defendants and as the plaintiff had not made the claim within 30 days from 19-1-2001, the claim made by the plaintiff was time barred. The defendants prayed for dismissal of the suit with costs. The learned trial Judge framed the issues, recorded evidence and by the impugned judgment concluded that the plaintiff has proved that the defendants are liable to pay an amount of Rs. 9,38,849/- with interest at the rate of 6% per annum from 24-10-2004 till the date of actual payment of the amount to the plaintiff. The suit is accordingly partly decreed with costs.

The defendants, being aggrieved by the decree passed by the trial Court holding them liable to pay amount of Rs. 9,38,849/- with interest at the rate of 6% per annum from 24-10-2004 till the date of actual payment of the amount to the plaintiff, have filed this first appeal.

The plaintiff, being aggrieved by the rejection of the claim for the remaining amount, has filed the Cross Objection No. 26/2007.

Heard Shri Salkar, learned Government Advocate for the appellants/original defendants and Shri Padiyar, learned Advocate for the respondent/original plaintiff. With the assistance of the learned Advocates for the respective parties, we have examined the pleadings, documents and evidence on record. The following points arise for our determination.

Points

(1) Whether the finding of the trial Court upholding the claim of the plaintiff for the amount of Rs. 9,38,849/- is proper ?

(2) Whether the plaintiff is entitled for additional amount, than what is granted by the trial Court ?

The case of the plaintiff is that he had given the bank guarantee of Rs. 5,00,000/-. However, the learned trial Judge has committed an error in concluding that the plaintiff has deposited Rs. 5,00,000/- with the defendants towards the security deposit. Under this misconception, the learned trial Judge has concluded that the defendants are liable to pay the amount of Rs. 5,00,000/- deposited by the plaintiff as security deposit. This finding of the learned trial Judge is clearly under the misconception that the plaintiff has deposited the amount of Rs. 5,00,000/- overlooking the admitted fact that the plaintiff has not deposited Rs. 5,00,000/- with the defendants but has given the bank guarantee. In view of this, the findings given by the learned trial Judge that the plaintiff is entitled for refund of Rs. 5,00,000/- is unsustainable and has to be set aside.

The learned trial Judge had held that an amount of Rs. 3,59,467/- have been deducted from the amounts payable to the plaintiff, towards the royalty on the material used by the plaintiff. Shri Salkar, the learned Government Advocate has submitted that the plaintiff has to produce the voucher showing the payment of the amount of the royalty for the material used by him or the plaintiff is liable to pay the royalty on the material. The case of plaintiff is that he had procured the material from the private parties. However, the plaintiff has not produced the vouchers to show the payment to the private parties or the payment of amount of royalty. In the absence of the documentary evidence on record, the learned trial Judge has committed an error in concluding that the defendants could not have deducted the amount of royalty on the material used by the plaintiff. Consequently, the findings of the learned trial Judge holding the plaintiff entitled for the refund of the amount deducted towards royalty are set aside.

The learned trial Judge has found that the defendants have illegally deducted an amount of Rs. 79,382/-. According to the defendants, it was wrongly paid to the plaintiff, in excess of the amount for which the plaintiff was entitled.

The learned trial Judge has found that the defendants are liable to pay an amount of Rs. 79,382/- to the plaintiff towards the final bill. The plaintiff has claimed an amount of Rs. 1,00,000/- towards final bill. However, the defendants admitted that an amount of Rs. 82,000/- was outstanding towards the final bill and it was not paid. The learned trial Judge, after considering all the factual aspects, has concluded that the defendants are liable to pay an amount of Rs. 79,382/- to the plaintiff towards final bill. The learned Government Advocate has not been able to show that the finding given by the learned trial Judge regarding the entitlement of the plaintiff for the amount of Rs. 79,382/- towards the final bill, is contrary to the facts on the record and is vitiated. Consequently, we hold that the findings of the learned trial Judge regarding the entitlement of the plaintiff for an amount of Rs. 79,382/- towards the final bill are proper and are required to be maintained.

As far as the claim made by the plaintiff in the Cross Objection is concerned, the plaintiff has sought the modification of the decree passed by the learned trial Judge insofar as it rejects the claim of the plaintiff for the additional works done. The plaintiff has claimed an amount of Rs. 94,45,778/-.

After considering the pleadings, the documents and the evidence of the respective parties, we find that the plaintiff has not proved the details of the additional work alleged to have been done by him. However, it is undisputed that the plaintiff was required to complete the work according to the contract till 28-2-2002 and admittedly, the work was not completed till the stipulated date and it was completed on 15-6-2002.

The defendants have admitted in paragraph no. 7 of the written statement that the estimate according to the tender was of Rs. 3,66,60,300/- and the plaintiff while submitting his tender had quoted the amount of Rs. 2,01,18,464/- that is 45.12 % below the estimated amount of the tender. Shri Padiyar, learned Advocate for the plaintiff has submitted that the plaintiff by the communication dated 27-2-2002 (Exhibit P.W. 1/G) has informed the defendant no. 2, Executive Engineer that the plaintiff had fulfilled his contract obligation till that date and in case, the defendants wanted the plaintiff to continue the work further, the plaintiff should be paid for the work done after that date at equitable market rates. The submission on behalf of the plaintiff is that the defendants permitted the plaintiff to continue the work after 28-2-2002, after receiving the above mentioned communication dated 27-2-2002 and therefore, the defendants had accepted the conditions put forth by the plaintiff. It is submitted on behalf of the plaintiff that in this background, the plaintiff is entitled for the decree for the amount of Rs. 94,45,778/-, the details of which are given in paragraph no. 9 of the plaint. Shri Padiyar, learned Advocate for the plaintiff has submitted that learned trial Judge has committed an error in not considering the claim of the plaintiff for the above mentioned amount in the right perspective. Shri Padiyar, learned Advocate has relied on the judgment given in the case of Oil and Natural Gas Corporation Ltd. Vs. SAW Pipes Ltd.,

Shri Salkar, learned Government Advocate has submitted that the claim for the amount of Rs. 94,45,778/- as made by the plaintiff is on the basis of surmises that the defendants had agreed to the conditions of the plaintiff for payment of the additional amount at equitable market rates for the works done after 28-2-2002. It is submitted that the plaintiff has not proved the quantum of work done by him after 28-2-2002 and therefore, the claim as made by him on that account cannot be considered.

Shri Padiyar, learned Advocate for the plaintiff has submitted that the plaintiff has proved the quantum of work, the details of which are given in paragraph no. 9 of the plaint which he has done after 28-2-2002 i.e. the stipulated date. It is undisputed that the plaintiff has done the work after 28-2-2002 i.e. the stipulated date and even if the submissions on behalf of the defendants are to be accepted, the plaintiff will be entitled for the additional amount on the basis of the equitable market rates. In support of this submission, the learned Advocate for the plaintiff has relied on the judgments given in the following cases.

(i) F.T. Kingsley Vs. The Secretary of State for India in Council,

(ii) MSK Projects (I) (JV) Ltd. Vs. State of Rajasthan and Another,

(iii) Dwaraka Das Vs. State of Madhya Pradesh and Another, and

(iv Oil and Natural Gas Corporation Ltd. Vs. SAW Pipes Ltd.,

After considering the material on the record and the submissions made on behalf of the respective parties, we have no hesitation in accepting the submissions made on behalf of the defendants that the plaintiff has not proved actual quantum of work done by him after 28-2-2002 i.e. the stipulated date. However, considering the provisions of Section 73 and Section 74 of the Contract Act and the law laid down by the Supreme Court and the Kolkata High Court in the judgments referred above, we are of the view that, even if the plaintiff fails to prove the quantum of work done by him after the stipulated date i.e. 28-2-2002, it being an admitted position that the plaintiff has done work from 28-2-2002 till 15-6-2002, we have to make broad evaluation of the amount for which the plaintiff is entitled for the work done by him after 28-2-2002 i.e. stipulated date.

According to the terms of the contract, the plaintiff was required to complete the work for which he had submitted the offer, within 30 months and the plaintiff was to receive the amount of Rs. 2,01,18,464/- for that work. It is an admitted position that the plaintiff continued to work for three and half months more beyond the stipulated period. So, if it is considered that the plaintiff has done proportionately around 10% to 11% of the work in three and half months beyond the stipulated period, the plaintiff will be entitled for an amount around Rs. 20,00,000/- for the work done after 28-2-2002 till it was completed on 15-6-2002. The finding of the learned trial Judge that the plaintiff is entitled for the amount of Rs. 79,382/- towards the final bill is proper and is maintained. In addition, the plaintiff is entitled for the amount of Rs. 20,00,000/- for the work done by him after stipulated date i.e. 28-2-2002 till the work was completed on 15-6-2002. Thus, the plaintiff is entitled for the amount of Rs. 20,79,382/- from the defendants. Considering the nature of controversy, we are of the view that the plaintiff is entitled for interest at the rate of 6% per annum from the date of filing of the civil suit i.e. from 14-6-2005.

The judgment and decree passed by the learned trial Judge is, accordingly, modified.

In the circumstances, the parties to bear their own costs.