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Madhya Pradesh High Court · body

1990 DIGILAW 390 (MP)

DEVI AHILYA SAHAKARI VIPANAN SANSTHA MARYADIT, INDORE v. JUGAL KISHORE AND SARDAR KHAN, PARTNERSHIP FIRM, INDORE

1990-10-01

A.G.QURESHI

body1990
A. G. QURESHI, J. ( 1 ) THIS is an appeal filed against the judgment and decree passed by the Fourth Additional District Judge, Indore in C. S. No. 7-B of 1978, dated 25-7-1979 by aggrieved defendant-appellant. The valuation of the appeal is Rs. 14,067. 20 p. ( 2 ) THE facts leading to this appeal, in short, are that the appellant is a registered Co-operative Society having its office at Indore. It invited tenders for labour rates for the construction of cold storage building at village Tejpur gadabadi on Bombay-Agra road, Indore. According to the terms of the contract the payment of 90 per cent of the bills was to be made within seven days after they were checked and the remaining amount of 10 per cent has to be paid on completion of the work. The plaintiff/respondent is a partnership firm which had filed the tenders in response to the invitation of tenders by the appellant. Along with the tender the respondent deposited Rs. 1000/-towards earnest money. The tenders of the labour rates were only for the ground floor of the building, but the height of the building being more than 32 ft. according to the plaintiff it was equivalent to a three storeyed building. After the tenders were finalised and contract entered into, the plaintiff firm requested the defendant to pay 25 per cent more than the tender rates for each floor, i. e. 25 per cent for the first floor, 50 per cent for the second floor and 75 per cent for the third floor. It was also the case of the plaintiff that the defendant Society had accepted the above request of the plaintiff and, therefore, the work was completed accordingly. The plaintiff's estimate of the work completed by it is worth Rs. 90,360. 90 p. but only Rs. 77,255. 70 p. had been paid by the defendant Society. As such a sum of Rs. 3989. 94 p. was due towards the 90 per ceat of the total amount of bills. Besides this a sum of Rs. 9027. 26 remains unpaid towards the 10 per cent deducted as security amount of each bill. The plaintiff also claimed the refund of the deposit amount of Rs. 1000/- of earnest money. Thus, the plaintiff filed a suit for recovering the principal amount of Rs. 14017. Besides this a sum of Rs. 9027. 26 remains unpaid towards the 10 per cent deducted as security amount of each bill. The plaintiff also claimed the refund of the deposit amount of Rs. 1000/- of earnest money. Thus, the plaintiff filed a suit for recovering the principal amount of Rs. 14017. 20 p. The plaintiff gave a notice for payment of the said amount to the defendant, but without any result. Hence the suit was filed. ( 3 ) THE defendant-Society denied the existence of the partnership firm it also raised an objection about the noa compliance of the terms of the tender form and the failure on the part of the firm to deposit Rs. 1000/- as earnest money. According to the defendant actually the earnest money was deposited by two individuals and not the firm. The claim of the plaintiff was resisted on the ground that as the tenders were invited for the whole of the building, the height of the building is immaterial and the defendant society never agreed to pay the charges of 25 per cent, 50 per cent and 75 per cent above the tender rate as claimed by the plaintiff. The Society never accepted the recommendation of its Engineer for the increase of the rates the bills were submitted by the Contractor from time to time and part payment was made, but the payments were never made at the higher rates the plaintiff submitted bills amounting to Rs. 90,360. 90 p. but the payment was made to the extent of Rs. 77,745. 35 p. to the two individuals. The amount was deducted in view of the fact that the Society never took dccision to make the payment at the enhanced rate. If any excess amount is paid it was paid under the threat of the contractor to stop the work and the anxiety of the Society to get the work completed at an early date. According to the Society the value of the work done by the Contractor is Rs 78 460 90 and, therefore, the contractor is entitled to get only Rs. 715. 55 p. from the defendant. In addition to this the Society has to refund Rs. 1000/- deposited as earnest money. The remaining claim made by the plaintiff was, therefore not acceptable to the defendant. 715. 55 p. from the defendant. In addition to this the Society has to refund Rs. 1000/- deposited as earnest money. The remaining claim made by the plaintiff was, therefore not acceptable to the defendant. ( 4 ) THE learned trial Court in view of the aforesaid pleadings raised as many as 9 issues and held that the plaintiff is registered partnership firm and the tenders were validly filed by the plaintiff and paid the tender fee and earnest money as pleaded by it. It was also held that the tenders were invited for the whole building, but thereafter in view of the height of the proposed construction, the defendants agreed to pay 25 per cent more than the tender rate for the first floor, 50 per cent for the second floor and 75 per cent for the third floor and, therefore, decreed the suit in favour of the plaintiff hence this appeal. ( 5 ) AN objection about the maintainability of the suit was taken before the trial Court by the defendant in view of the provisions contained in Section 64 read with Section 92 of the M. P. Co-operative societies Act, 1960, but the trial Court has held that the suit is maintainable. Before this Court also nothing has been brought to my notice to demonstrate that the suit was not maintainable in the Civil Court and, therefore, as regards the tenability of the suit I agree with the finding of the trial Court. ( 6 ) THE learned counsel for the appellant Shri Parihar has strenuously argued that the tender was called for constructing a godown of the height of 32 ft. and the respondent had given the rate after fully knowing the height and an agreement was also executed which is Ex. D-1 in pursuance of the tender. Therefore, there was no question of giving an enhanced rate to the contractor. Shri Parihar has also drawn my attention to the fact that the demand of the respondent to enhance the rate was made on 23-2-1974 and an agreement was executed on 30-5-1975. As such even if a demand was made, it was disallowed by the agreement itself wherein there is a specific condition that the work shall be done in accordance with the tender. As regards the payment of running bills, they were made without showing the rates. As such even if a demand was made, it was disallowed by the agreement itself wherein there is a specific condition that the work shall be done in accordance with the tender. As regards the payment of running bills, they were made without showing the rates. Therefore, if even a payment at the enhanced rate is made, it would not entitle the plaintiff to claim enhanced rates. The Manager Shri Pare had no power to sanction the enhanced rates and Shri Pare could not be examined as he was not available at the time of the suit. The other tenders Ex. D-3 and Ex. D-4 clearly show that the respondent was given the contract because their rates were lowest and, therefore, the variation in the agreement could not be made by any Authority. ( 7 ) ON the other hand Shri D. M. Shah, the learned counsel for the respondent argues that the Society had sought the sanction of the Deputy registrar for making the payment at the enhanced rates. This clearly shows that the Society was agreeable to pay the enhanced rates and it had decided to do so. But under a wrong impression that the sanction of the Deputy registrar of the Co-operative Society was necessary, the matter was sent to him who returned it back to the Society. As such, in view of the aforesaid recommendation the Society cannot say that it had not agreed to the payment at the enhanced rates. Furthermore the witnesses, who are the employees of the appellant themselves, state that the enhanced rates were agreed between the parties. ( 8 ) IN view of the aforesaid arguments, the only question which arises for determination is whether the Society had agreed to pay the enhanced rates as claimed by the plaintiff in respect of the labour contract of the work in question. Jugalkishore (P. W. 1) who is a partner of the respondent firm states that after completing the work of the building upto a height of 10 ft. he came to know that the height of the building was to be 32 ft. Therefore, he stopped the work and asked the Society to increase the labour rate after the height of 10 ft. ShriGhodake (P. W. 3) was the Engineer-in-charge of the building on behalf of the Society. he came to know that the height of the building was to be 32 ft. Therefore, he stopped the work and asked the Society to increase the labour rate after the height of 10 ft. ShriGhodake (P. W. 3) was the Engineer-in-charge of the building on behalf of the Society. Therefore, the plaintiff-respondent approached shri Ghodake who recommended the increase of the rates of labour contract as proposed by the contractor and on the recommendation of Shri Ghodake the rate of the labour contract was increased as claimed by the plaintiff. He has also stated that Shri Pare, the Manager of the Society had sanctioned the increased rate as recommended by Shri Ghodake. After the aforesaid sanction the plaintiff-firm started the work and running bills were also submitted at the increased rates which were paid from time to time by the defendant society. The bills were checked by the staff of the defendant and the defendant never objected to the enhanced rates ; instead the Society recommended the bills for payment. ( 9 ) P. W. 2 V. K. Mutthal who was an Overseer in charge of the work states that he used to check the bills submitted by the plaintiff firm according to the list of rates supplied by Shri Pare, Manager of the defendant-Society and then used to send the bills to Shri Ghodake for further checking. In his measurement book he also recorded the work done by the plaintiff. He has also proved Ex. P-17 to Ex. P-20 which are the statement of work. He also corroborates the plaintiff by saying that as per Ex. P-20 the plaintiff firm has to recover a sum of Rs. 9027. 26 p. and 10 per cent of the security deposit and Rs. 1000/- as earnest money. Shri Ghodake (P. W. 3) who was the engineer in charge on behalf of the Society also states that whea the plaintiff approached him for increasing the rates of the labour contract since the height of the building was equivalent to a three storeyed building, he recommended the increase in the rates, vide Ex. P-5 which bears his signature and he also admits that the used to check the bills prepared by P. W. 2 Shri mutthal. P-5 which bears his signature and he also admits that the used to check the bills prepared by P. W. 2 Shri mutthal. As such from the statements of these witnesses the trial Court has rightly drawn the conclusion that the running bills were prepared at the enhanced rates and payments were made in accordance with the enhanced rates on the instructions of the then Manager of the Society Shri Pare. Ex. P-17 to Ex. P-20 clearly go to show that they were the statements according to the revised rates and the payment of 90 per cent of the bills was made according to the revised rates. ( 10 ) NOW, as regards the stand of the Society in rejecting the revised rates of the plaintiff, Ex. D-10 has been proved before the Court to show that vide its resolution dated 15-9-1975 the proposal for revised rates was rejected by the Society. But it is manifest that the aforesaid resolution has been passed one month after the completion of the construction of the building. But this fact is of vital importance that the Society had submitted the case for allowing revised rates to the respondent-plaintiff to the Deputy registrar of the Co-operative Societies. As the sanction of the revised rates was within the competence of the Society, the Deputy Registrar informed the society that the sanction was not necessary. As such the resolution contained in Ex. D-10 becomes immaterial in view of the earlier request of the Society to the Deputy Registrar for sanctioning the revised rates during the pendency of the work. How, when a contractor is entrusted with a job to do some work and the supervisory staff and the person in charge of the Society assures that the contractor that his revised rates are sanctioned and the running bills are also passed according to the revised rates, then the whole conduct of the officers of the Society, who actually deal with the contractor, clearly conveys the sanction of the revised rates. Furthermore, the conduct of the Society in recommending the sanction of the revised rates to the Deputy registrar further confirms that the Society had also, at the time when it recommended the proposal of the revised rates to the Deputy Registrar, had agreed to the revised rates. Furthermore, the conduct of the Society in recommending the sanction of the revised rates to the Deputy registrar further confirms that the Society had also, at the time when it recommended the proposal of the revised rates to the Deputy Registrar, had agreed to the revised rates. Therefore, after the completion of the work if the Society refuses to honour the commitment of its officers and its own commitment at an earlier stage, it cannot deprive the plaintiff to claim the payment at the revised rates from the Society for the work done by them. ( 11 ) IN my opinion, the learned trial Court has rightly held that the plaintiff was entitled to the decree for the remaining payment, return of earnest money and payment of 10 per cent amount of the bills which was deducted at the time of the payment of the running bills. ( 12 ) IN the result this appeal fails and it is accordingly dismissed. In the circumstances of the case, however, parties shall bear their own costs as incurred. Appeal dismissed. .