Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 11
CASE NO.:
Appeal (civil) 6885-86 of 2003
PETITIONER:
K.C. Skaria
RESPONDENT:
The Govt. of State of Kerala & Anr.
DATE OF JUDGMENT: 10/01/2006
BENCH:
Arijit Pasayat & R V Raveendran
JUDGMENT:
J U D G M E N T
R.V. RAVEENDRAN, J.
This is a plaintiff’s appeal against the common judgment and
decree dated 12.11.2002 of the High Court of Kerala in Appeal Suit
No.481/1992 filed by the defendants, and Appeal Suit No.697/1991
filed by the plaintiff both against the judgment and decree dated
16.2.1991 in O.S. No.24/1990 on the file of the Subordinate Court,
Muvattupuzha.
2. The plaint averments, in brief, were as follows :
2.1) The second respondent (The Superintending Engineer, PWD,
Central Circle, Alwaye, Kerala) invited tenders for execution of a
construction work (Improvements to Thalakkad to Mularinad Road).
The appellant’s offer was accepted and an agreement dated
7.6.1982 was executed between the State of Kerala as the
employer (represented by second respondent), and the appellant
as the contractor. The estimated cost of the work was Rs.
11,28,595/- and the security deposit payable by the appellant was
Rs.22,600/-. The contract required the work to be completed within
18 months from the date of handing over of the site. As the site
was formally handed over on 17.8.982, the work had to be
completed on or before 16.2.1984. According to the appellant, on
account of delays, defaults and breaches committed by the
Department, he could not complete the work.
2.2) The appellant submitted an on account bill for Rs. 5,36,800/-
on 25.8.1984. It was not paid. In spite of the delay in payment and
other breaches by the department, the Appellant proceeded with
the work and completed substantial portion of the work. He also
sent various letters seeking payment. The Executive Engineer by
letters dated 4.7.1985 and 18.10.1985 informed the Chief Engineer
(B&R) that the appellant had executed work worth about Rs.10 lacs
and the delay in payment was affecting the progress of the work.
In spite of it, the payment was delayed and ultimately
Rs.4,04,628/- was belatedly released on 26.3.1986 after making
certain deductions (that is 10% towards errors in measurement,
Rs.40,463/- as retention amount etc.). No further payments were
made by the Department.
2.3) The appellant alleged the following breaches by the
respondents :-
(i) Delay in issuing cement and steel required for the work which
was the Department’s responsibility (delay of 16 months in
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 11
issuing cement and delay of 26 months in issuing steel);
(ii) Default in releasing further cement and MS rods thereby
preventing him from completing the work (two bridges);
(iii) Failure to finalise the formation level of the road, thereby
preventing him from metalling the road (delay in approving
initial levels tentatively being 9 months);
(iv) Delay in making on account payments for the work done as
required by the contract terms (delay of 19 months in
releasing the payment towards first part of bill);
(v) Requiring him to do more than 25% in excess of the agreed
quantities in regard to certain items of work;
The appellant contended that in view of the expiry of the
contract period as also the extended period and the breaches
committed by the Department preventing him from completing the
work within the extended period, he was not liable to execute the
balance work and that the Department cannot foist any liability on
him in regard to any extra cost in getting the balance work
completed through another agency.
The appellant filed O.S. No.691/1987 on the file of the Sub-
ordinate Judge, Ernakulam (later transferred and renumbered as
O.S. No.24/1990 on the file of Sub-Judge, Moovattupuzha) against
the respondents, for the following reliefs:
(i) For recovery of Rs. 2 lacs towards the amount due for
work done, with interest at 18% per annum. (The
appellant also claimed proper accounting and prayed
that if the amount due for the work done was in excess
of Rs.2 lacs estimated by him, he may be permitted to
pay additional court fee in regard to the actual amount
found due);
(ii) For recovery of Rs.1,000/- as damages and breach of
contract with interest at 18% per annum thereon;
(iii) For a declaration that he was not liable to execute the
remaining part of the work and that the completion of
the remaining work shall not be at his risk and cost,
and for a consequential direction to refund the entire
security deposit and retention money with interest at
18% per annum;
(iv) For costs and such other reliefs as the court may deem
fit to grant in the circumstances of the case.
3. The appellant valued the suit, for the purposes of court fee,
as follows, under the Kerala Court Fees and Suits Valuation Act,
1959 (’CF Act’ for short) and paid court fee accordingly :-
S. No.
Relief
Valuation
CF paid
(a)
Relief (i) under Section 35 of
CF Act
Rs.2,00,000
Rs.19,980
(b)
Relief (ii) under Section 22 of
C.F. Act
Rs. 1,000
Rs. 100
(c)
Relief (iii) under Section
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 11
25(d)(ii) of the Act
Rs. 300
Rs. 30
Total
Rs.2,01,300
Rs.20,110
4. The suit was resisted by the State, inter alia, on the ground
that there was no breach on its part. It was alleged that the work
consisted of (a) cross drainage works, (b) Earth-work for forming
the roadway, (c) protective works and (d) supply of materials like
stone, metal etc. The respondents stated that cement was issued
on 9.11.1983 when the appellant made arrangements for cross
drainage works. It was also alleged that a part of steel rods were
issued on 26.10.1984 and balance as and when the work
progressed. It was contended that major items of work (like
earthwork for road formation, supply of stone/metal for soling and
metalling work) did not involve cement and steel and nothing
prevented the appellant from proceeding with those works pending
issue of cement and steel. It was also alleged that any delay in
supply of materials by the Department would entitle the appellant
only to extension of time and not to any extra payment. It was
alleged that time was extended from 16.8.1984 to 31.3.1985 and
again up to 31.12.1985 with fine of Rs.100/- and the appellant did
not complete the work in spite of such extensions and in spite of
final notice dated 11.11.1986. The respondents contended that
they would get the unfinished work completed at the risk and cost
of the appellant and recover any extra cost in completing the work
as also the cost of unreturned material from the security and
retention amounts and other amounts due to the appellant.
5. During the pendency of the suit, the Department passed an
order dated 31.5.1989 terminating the contract at the risk and cost
of the appellant and ordering forfeiture of the security deposit
amount of Rs.22,600/-.
6. The trial court framed the following issues :
1. Whether the defendants committed breach of
contractual obligation and if so, what is the amount
due to the plaintiff as damages for breach of
contractual obligations?
2. Whether the plaintiff is entitled to get the value of the
work done and, if so, what is the amount due to him ?
3. Whether the plaintiff is entitled for a declaration that
the balance work shall not be arranged at the risk and
costs of the plaintiff and consequently directing the
defendants to release security deposit and retention
amount?
4. Whether the plaintiff is entitled to get 18% interest per
annum on the amount due to him from the date of the
suit 16-7-1987 till the date of realization.
5. Cost and other reliefs."
7. After appreciating the oral and documentary evidence led by
the parties, the trial court by a judgment and decree dated
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 11
16.2.1991 decreed the suit, in part. It held that as per the
measurements contained in the Measurement Book (Ex. B-2)
maintained by the Department, the total value of the work done by
the appellant was Rs.10,05,466.42 and as Rs.4,36,963.29 had
already been paid, the balance due for the work done was
Rs.5,68,487.13, and after deducting the cost of the material
supplied by the Department, the amount due to the appellant was
Rs. 5,33,560/-. The trial court also found that the Department
committed breach by causing delays on various counts, thereby
preventing the appellant from completing the work. The trial court
held that though the amount due towards the work done was
Rs.5,33,560/-, as the appellant had claimed only a sum of Rs.2 lacs
on that count and paid court fee thereon, the appellant was entitled
to a decree for Rs.2 lacs only towards value of work done. As a
consequence of its findings, the trial court decreed the suit against
the respondents as follows :-
(i) A decree for Rs. 2 lacs towards the cost of the work
done with 12% interest per annum from the date of suit
till the date of decree and, thereafter, at 6% per annum
till the date of realization;
(ii) A decree for Rs.1,000/- as damages for breach of
contract with interest as above;
(iii) A declaration that the appellant was not liable to execute
the remaining part of the work and the execution of the
balance work shall not be at the risk and cost of the
appellant; and
(iv) A direction to the respondents to refund the security
deposit amount and retention money within six months
to the appellant.
8. The appellant filed an appeal in A.S. No.697/1991 contending
that the suit ought to have been decreed for Rs.5,33,560/- which
was found due, instead of Rs.2,00,000/- (towards the value of the
work done) by permitting him to pay the deficit court fee in
regard to the balance amount.
9. The respondents also filed an appeal in A.S. No.481/1992,
being aggrieved by the reliefs granted by the trial court. The
respondents contended that the appellant, who was an
independent contractor, was not entitled to maintain a suit for
rendition of accounts and, therefore, the trial court ought to have
dismissed the suit in entirety, as not maintainable. It was also
contended that the trial court ought to have held that the appellant
was in breach and that there was no breach on the part of the
respondents.
10. A Division Bench of the Kerala High Court by a common
judgment dated 12.11.2002 dismissed the appellant’s appeal and
allowed the respondents’ appeal thereby dismissing the suit in
entirety. It held that a suit by an independent contractor for
rendition of accounts by the employer, was not maintainable and,
therefore, there could not be a decree for Rs.2 lacs towards cost of
work done, or for any other relief. It also held that there was no
breach on the part of the Department and, consequently, the trial
court could not have granted a declaration that the Department
was not entitled to get the balance work executed at the risk and
cost of the appellant.
11. Feeling aggrieved, the appellant has filed these appeals by
special leave. On the contentions raised, the following points arise
for our consideration :
(i) Whether the appellant as an independent
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 11
contractor engaged by the State Government for
execution of construction work, is entitled to
maintain a suit for rendition of accounts by the
employer?
(ii) Even if the prayer for accounts was not
maintainable, whether the suit could have been
dismissed in entirety by the High Court?
(iii) Whether the respondents (employer) committed
breach of its obligations under the contract ?
(iv) To what amounts, if any, the appellant is entitled
to?
Re : Point (i) :
12. The relationship between the first respondent and the
appellant was that of an employer and an independent contractor
engaged to execute certain work in terms of the contract. The
contract was an item-rate contract and payment for the work done
had to be made by the employer to the contractor as per the
measurements recorded in the Measurement Book maintained by
the Department. It is also not in dispute that while the appellant as
the contractor would approximately know the quantum of work
done by him, the exact quantities for purpose of payment could be
ascertained by him only by actually measuring the work done or by
having access to the measurement book maintained by the
Department. In the circumstances, the question that arises for
consideration is whether the remedy of the appellant, engaged as
an independent contractor to execute a construction work (in a
item-rate contract where payment is to be made as per the
measurements recorded in the measurement book maintained by
the employer) in the event of non-payment for the work done, is
only to file a suit for the cost of the work done quantifying the
amount due, or whether he could file a suit for rendition of
accounts against the employer with a further prayer for a decree
for the amount due.
13. Order 21 Rule 13 CPC provides that in administration suits, a
preliminary decree directing accounts can be made. Order 21 Rule
15 provides that in a suit for dissolution of partnership or taking of
partnership accounts, the court before passing a final decree may
pass a preliminary decree declaring the proportionate shares and
directing accounts to be taken. Order 21 Rule 16 provides that "in a
suit for an account of pecuniary transactions between a principal
and an agent, and in any other suit not hereinbefore provided for,
where it is necessary, in order to ascertain the amount of money
due to or from any party, that an account should be taken, the
court shall, before passing its final decree, pass a preliminary
decree directing such accounts to be taken as it thinks fit." We may
clarify that Order 20 Rule 16 does not create or confer any
substantive right to seek rendition of accounts in any particular
type of cases, nor in all types of cases. It merely refers to a rule of
procedure and would apply where there is an existing right to seek
rendition of accounts having regard to the relationship between the
parties.
14. It is now well-settled that the right to claim rendition of
accounts is an unusual form of relief granted only in certain specific
cases and to be claimed when the relationship between the parties
is such that the rendition of accounts is the only relief which will
enable the plaintiff to satisfactorily assert his legal right [vide
Jowahar Singh v. Haria Mal (1899) 60 P.R. 1899, followed in
Gulam Qutab-ud-din Khan v. Mian Faiz Bakhsh (AIR 1925
Lahore 100), State of Jammu & Kashmir v. L. Tota Ram (AIR
1971 J&K 71), Triloki Nath Dhar v. Dharmarath Council (AIR
1975 JK 76)]. The right to seek rendition of accounts is
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 11
recognized in law in administration suits for accounts of any
property and for its administration, suits by a partner of a firm for
dissolution of the partnership firm and accounts, suits by
beneficiary against trustee/s, suits by a member of the joint-family
against the Karta for partition and accounts, suits by a co-sharer
against other co-sharer/s who has/have received the profits of a
common property, suits by principal against an agent, and suits by
a minor against a person who has received the funds of the minor.
15. Even where there is no specific provision for rendition of
accounts, courts have recognised an equitable right to claim
rendition of accounts. In Narandas Morardas Gajiwala v.
S.P.A.M. Papammal (AIR 1967 SC 333), this Court considered
the maintainability of a suit by an agent against the principal for
accounts. Negativing the contention that only a principal can sue
the agent for rendering proper accounts and not vice versa, (as
Section 213 of the Contract Act provided that an agent is bound to
render proper accounts to his principal on demand without a
corresponding provision in the Contract Act enabling the agent to
sue the principal for accounts), this Court held :
"In our opinion, the statute is not exhaustive and the right of
the agent to sue the principal for accounts is an equitable right
arising under special circumstances and is not a statutory right.
............. Though an agent has no statutory right for an
account from his principal, nevertheless there may be special
circumstances rendering it equitable that the principal should
account to the agent. Such a case may arise where all the
accounts are in the possession of the principal and the agent
does not possess accounts to enable him to determine his claim
for commission against his principal. The right of the agent may
also arise in an exceptional case where his remuneration
depends on the extent of dealings which are not known to him
or where he cannot be aware of the extent of the amount due
to him unless the accounts of his principal are gone into."
16. To summarise, a suit for rendition of accounts can be
maintained only if a person suing has a right to receive an account
from the defendant. Such a right can either be (a) created or
recognized under a statute; or (b) based on the fiduciary
relationship between the parties as in the case of a beneficiary and
a trustee, or (c) claimed in equity when the relationship is such
that rendition of accounts is the only relief which will enable the
person seeking account to satisfactorily assert his legal right. Such
a right to seek accounts cannot be claimed as a matter of
convenience or on the ground of hardship or on the ground that
the person suing did not know the exact amount due to him, as
that will open the floodgates for converting several types of money
claims into suits for accounts, to avoid payment of court fee at the
time of institution.
17. Let us now examine whether a contractor engaged to execute
a particular work, can file a suit for accounts against the employer
in regard to payment for the work done. Such a right is not created
or recognized by any statute. The independent contractor is not an
agent of the employer. Nor is the employer in the position of a
trustee with reference to the independent contractor. Can the claim
be supported in equity by stating that where the relationship is
such that rendition of accounts is the only relief which will enable
the contractor to satisfactorily assert his legal right ? A contractor
who is engaged to execute a work, is expected to maintain his own
accounts. At all events, there is no bar for a contractor to keep an
account of the work done. Even where the contract between the
employer and independent contractor may provide for payment on
the basis of measurements to be recorded by the employer,
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 11
nothing prevents the contractor from measuring the work done by
him and then suing for the value of the work done. The contractor
may also demand joint-measurements to determine the quantum
of work done. If the employer for some reason does not co-operate
or prevents the contractor from taking a physical measurements,
the contractor can seek appropriate legal remedy which will enable
him to take measurements or to secure the information from the
measurement book in the custody of the employer. Therefore,
either the fact that the measurement book is maintained by the
employer, or the fact that the contractor does not possess the
exact measurements, will not entitle the contractor to file a suit for
rendition of accounts against the employer.
18. In this case, the appellant could have either himself
measured the work done by him or secured the information from
the respondents. The appellant has neither made out a right under
a statute nor any fiduciary relationship nor any right in equity by
establishing that except by calling upon the defendants in the suit
to render accounts, it is not possible for him to get relief. The
appellant has sued for Rs.2 lakhs and paid court fee thereon.
Nothing prevented him from suing for Rs.5,33,000/-. In para 5 of
the plaint, he states that the total value of work done by him was
Rs.10,00,000/-. He knew that he had been paid only Rs.4,04,628/-
. He also knew the value of material supplied by the employer. In
the circumstances, the prayer for rendition of accounts is not
maintainable.
19. The appellant next attempted to press into service Section
149 of CPC to contend that he ought to have been given an
opportunity to pay the deficit court fee on the total amount due for
the work done. Section 149 provides that where the whole or any
part of court fee prescribed for any document has not been paid,
the court may, in its discretion, at any stage, allow the person by
whom such fee is payable, to pay the whole or part as the case
may be, of such court fee, and upon such payment, the document
in respect of which such fee is payable, shall have the same force
and effect as if such court fee had been paid in the first instance.
Section 4 of the Court Fee Act bars the court from receiving the
plaint if it does not bear the proper court fee. Section 149 acts as
an exception to the said bar, and enables the court to permit the
plaintiff to pay the deficit court fee at a stage subsequent to the
filing of the suit and provides that such payment if permitted by the
court, shall have the same effect as if it had been paid in the first
instance. Interpreting Section 149, this Court in Mannan Lal v.
Chhotka Bibi (AIR 1971 SC 1374) held that Section 149 CPC
mitigates the rigour of Section 4 of the C.F. Act, and the courts
should harmonise the provisions of the C.F. Act and the CPC by
reading Section 149 as a proviso to Section 4 of the C.F. Act, and
allowing the deficit to be made good within the period to be fixed
by it. This Court further held that if the deficit is made good, no
objection could be raised on the ground of bar of limitation, as
Section 149 specifically provides that the document is to have
validity with retrospective effect.
20. A careful reading of Section 149 shows that it would apply
only in respect of the court fee payable at the time of institution of
the suit. If the court fee due on the plaint when instituted, is not
paid wholly or partly by the person instituting the suit, the court in
its discretion, may allow him to pay the court fee or deficit court
fee within the period fixed by it. Section 149 has no application
where the court fee, due on the plaint as per the valuation of the
suit, is fully paid, but subsequently it is found that a larger amount
is due to the plaintiff. For example, if the plaintiff values the suit at
Rs.2 lacs and the court fee payable is Rs.20,000/- and the plaintiff
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 11
pays a court fee of Rs.10,000/-, on his request time for payment of
balance of Rs.10,000/- can be extended by the court at its
discretion under Section 149 CPC. But where the claim was Rs.2
lacs and full court fee on Rs.2 lacs was paid at the time of
institution of the suit, and during evidence it transpires that the
amount due to plaintiff is actually Rs.5 lacs and not Rs.2 lacs, the
question of permitting the plaintiff to pay deficit court fee at that
stage by calling in aid Section 149, does not arise as no court fee
becomes payable at that stage. Plaintiff can increase the claim only
by seeking amendment of the plaint and paying additional court fee
on the amended claim. In regard to such amended claim also,
Section 149 may be pressed into service. But then amendment
would depend on limitation and may not be permitted after the
period of limitation. Where there is no deficit in court fee at the
time of institution and when there is no amendment to plaint
increasing the suit claim, there is no occasion for pressing Section
149 into service in regard to court fee payable on plaints.
Re : Point No.(ii) :
21. The High Court treated the suit as one for accounts. In view
of its finding that a suit for accounts by a contractor is not
maintainable, it held that the suit in entirety ought to be dismissed
as not maintainable.
22. The plaint contains all averments necessary for the plaintiff to
sue for the value of the work done. He estimated the amount due
towards work done at Rs.2 lakhs and paid court-fee on the said
Rs.2 lakhs. If the plaintiff-appellant has established that the work
could not be completed on account of the breaches on the part of
the employer, and also establish that the value of work done by
him exceeded Rs.2 lakhs, we find no reason why he should be
denied a decree for at least Rs.2 lakhs. Merely because the plaintiff
also chose to seek accounting, he cannot be non-suited. This is not
a case where the plaintiff had sued only for accounts, paying court
fee on a mere Rs.1,000/- under section 35 of the Court Fee Act.
The prayer in the suit is for recovery of Rs.2 lakhs towards the
value of the work done with an additional prayer for accounting and
several other reliefs. In fact, plaintiff did not even seek in the
prayer column, a decree for any higher amount, if the amount
found due on accounting was found to be more than Rs.2 lacs. If
the prayer in regard to accounting was found to be not tenable,
that prayer could not be granted. But nothing could come in the
way of plaintiff getting a decree for the amounts claimed towards
value of the work done for which he has paid the court fee, by
proving that such amount was due for work done and by proving
that he was not at breach. Having regard to the frame of the suit,
we are of the view that the High Court was not justified in
dismissing the suit as not maintainable, ignoring the other prayers.
The second point is answered accordingly.
Re : Point No.(iii) :
23. The trial court after exhaustive reference to the evidence and
the rights and obligations of the parties under the contract,
recorded clear findings of fact that there was inordinate delay on
the part of the respondents in supplying steel and cement, in
finalizing the formation levels which was a condition precedent for
further progress of work, and in making on account payment for
the work done. It consequently held that the employer
(respondents) was at breach and the contractor was not at breach.
The High Court however reversed the said findings and held that
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 11
the respondents were not in breach merely on the following
reasoning, not based on evidence:
"There is definite contention by the defendants that
department had made all arrangements to supply the
departmental materials and that the departmental materials
were issued only according to the progress of the work at site
in order to safeguard the interest of the Government. ..... As
contended by the defendants, supply of departmental
materials would have become necessary, only if there was
progress in the work done by the plaintiff. The defendants
submit that departmental materials were issued only in
accordance with the progress of the work at site. On the basis
of the materials available on records it is not at all possible to
say that there was breach of contract by the defendants."
24. The contract work even according to the respondents,
consisted of four parts, namely, (i) cross drainage work, (ii)
earthwork for forming the roadway, (iii) protective works and (iv)
supply of material like soling stone, metal etc. The cross-drainage
work required cement and steel and under the contract, it was for
the Department to issue those materials. The site was delivered on
17.8.1982 and the work had to be completed within 18 months i.e.
by 16.2.1984. The schedule prescribed for progress/executions
required the cross-drainage work to be carried out first. But,
strangely, the first batch of cement was issued only on 9.11.1983
and the first batch of steel was issued only on 26.10.1984. When
the period stipulated for completion was 18 months and if the first
supply of cement is made after 15 months and first steel supply
was made after 26 months, very little is required to conclude that
there was inordinate delay and consequential breach on the part of
the Department, in supplying the material. The question is about
the initial delay in supplying the cement and steel. The High Court
has only referred to subsequent progressive supply of steel and
cement and is strangely silent about the enormous delay in
commencing the supply of steel and cement. The evidence
discloses that the appellant had written several letters (Ex. A5
dated 13.10.1982, A3 dated 8.12.1982, A4 dated 6.4.1983, A6
dated 10.8.1983 and A7 dated 17.8.1983 among others)
requesting for issue of steel and cement and pointing out that he
had collected the materials like rubble, metal, sand etc. for cross-
drainage work and unless the Department issues cement and MS
rods, he cannot start the cross-drainage work. In spite of it, issue
of cement was commenced only on 9.11.1983. The delay of 16
months in issuing cement and 26 months in issuing steel is clearly
established by oral and documentary evidence. The fact that after
the initial delay, steel and cement were progressively supplied will
not wipe out the breach on account of the initial delay in supply.
25. The Department contended that even though there was delay
in supply of cement and steel, the contractor could have
commenced the earthwork for road formation and metalling work
which did not involve cement and steel. But the various letters
exhibited by the contractor (referred to above) show that the
cross-drainage and road work were inter-connected and that
though he had collected the material for cross-drainage work
immediately after the site was handed over to him, earthwork for
the road could not be completed until the cross-drainage work was
executed. Further, as per the schedule for progress of work, cross-
drainage work had to be done first. Ignoring this evidence and
ignoring the findings by the trial court on the basis of the evidence,
the High Court has concluded that there was no delay on the part
of the Department by holding that the departmental material was
to be issued only in accordance with the progress of the work and
that the Department had progressively issued the material and,
therefore, there was no breach. But what has been lost sight of is
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 11
the fact that there was an initial delay of as many as 16 months in
regard to issue of cement and 26 months in regard to issue of steel
and until cement and steel were issued, the contractor could not
start the cross drainage work and the cross-drainage work was
linked to completion of the earthwork.
26. The contractor has also established by evidence that there
was inordinate delay on the part of the department in approving
the levels (approved only on 2.6.1983) in spite of requests in Ex.
A5/13.10.1982, Ex. A3/8.12.1982 and A4 dt. 6.4.1983 and that
until levels were approved, road formation work could not be
carried out. The contractor has also clearly established that there
was inordinate delay in making payment for the work done. The
first bill was submitted on 25.8.1984 for Rs.5,36,800/-. After
certain deductions, a sum of Rs.4,04,628/- towards the said bill
was released only on 26.3.1986 i.e. after 19 months. This delay
remains unexplained.
27. The trial court has examined the evidence in detail and has
recorded clear findings of fact about the delays and the breach
committed by the Department. The finding of the High Court
without consideration of the evidence cannot be sustained. We
therefore restore the finding of the trial court that respondents
committed breach of their obligations and the appellant was
justified in refusing to complete the work, and the consequential
finding that the respondents could not therefore recover the extra
cost in getting the work completed from the appellant.
Re : Point No. (iv) :
28. It is not in dispute that as per the measurements recorded by
the Department (in Ex. B2), the value of the work done was Rs.
10,05,466.42 and the amount due in regard to the work done after
deducting the part payment and value of the material supplied, was
Rs.5,33,560/-. The plaintiff had estimated the amount due for work
done as Rs.2 lakhs and paid the court-fee therefor. He did not
amend the suit claim nor pay any additional court fee. The claim
for accounting has been rejected as not maintainable. Therefore,
the plaintiff is entitled only to a decree for Rs.2 lakhs towards the
value of the work done, even though he has established that the
amount due in that behalf was Rs.5,33,560/-.
29. As the appellant has established breach by the respondents,
the award of Rs.1,000/- as damages for breach by the trial court is
also upheld. As a consequence of the finding that the breach is on
the part of the respondents and not the appellant, the trial court
was justified in giving a declaration that the respondents were
entitled to recover any extra cost involved in getting the work
completed from the appellant. But it could not have granted the
further relief of directing the respondents to refund the security
deposit amount and retention deposit amount, as the appellant had
neither quantified the said security deposit/retention deposit nor
paid court fee thereon. Therefore, the decree granted by the trial
court, to the extent it directs refund of the security deposit and
retention amount, cannot be sustained. The fourth point is
answered accordingly.
Conclusion :
30. In view of our aforesaid findings, we allow this appeal, in
part, set aside the order of the High Court and restore the decree
granted by the trial court for Rs.2 lakhs plus Rs.1,000/- with
interest thereon as per the decree of the trial court. The appellant
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 11
will be entitled to costs on the amount decreed throughout.