S. M. SAREEN v. STATE — 1991 DIGILAW 153 (HP)

JUDGMENT V. K. Mehrotra, J. - A learned single Judge of this Court (C. R. Thakur, J.) decided civil suit No. 6 of 1975 on March 5, 1979. He dismissed it. Plaintiff Surinder Mohan Sareen has assailed that decree in the present regular first appeal. 2. The case with which plaintiff Sareen came to this Court was that he was a Government contractor and submitted an item rate tender, in response to a notice issued by the Executive Engineer, HP PWD, Mandi Division, Mandi, calling for tender for the construction of R.C.C. Tee Beam Bridge over Suketi Khad (270 feet span) on Shimla-Mandi road. This tender was accepted by the Chief Engineer, HP, PWD, through his letter dated March 22, 1955 addressed to the Superintending Engineer, First Circle, Shimla, saying : "... As recommended by you, the item rate lowest tender of Shri S. M. Sareen is hereby accepted at Rs. 2,30,172.13 i.e. 7.45% above the rate put to tender ..." The acceptance of the tender was conveyed to the plaintiff through the Executive Engineer. The case of the plaintiff is that he entered into an agreement with the President of India on March 23, 1955 for the work aforesaid through the Executive Engineer, Mandi Division, Mandi. This agreement, it was subsequently discovered, had not been signed by the Chief Engineer HP PWD. The case of the plaintiff is that the work was executed by him according to the specifications and the conditions of the contract during the stipulated time and to the satisfaction of the PWD authorities. The measurements had been made by the Engineer-in-charge of the work on September 29, 1959 which had been signed, in token of its correctness, both by the Engineer-in-charge as well as by the plaintiff. The plaintiff, according to his case, had executed the work for the Union of India of the value of Rs. 9,40,062/- out of which, from time to time, the plaintiff had been paid a total sum of Rs. 6,20,312.97 including cash and in the form of price of material supplied to him. An amount of Rs. 3,24,049/- remained due to the plaintiff from be Union of India, including the security amount and earnest money deposited by him. The plaintiff says that extra items of work were got executed by the PWD as per terms of the tender. 6,20,312.97 including cash and in the form of price of material supplied to him. An amount of Rs. 3,24,049/- remained due to the plaintiff from be Union of India, including the security amount and earnest money deposited by him. The plaintiff says that extra items of work were got executed by the PWD as per terms of the tender. He has submitted his quantity and rates which have been approved by the Superintending Engineer of the First Circle through letter dated January 14, 1958 and also through a subsequent letter dated June 14, 1960. These extra items were incorporated in the measurement book. The plaintiff had not been paid, according to the rate submitted by him, for the extra items. The case of the plaintiff is that initially the PWD had invited tenders for sinking of twin wells upto 20 feet depth below the subsoil water level as marked on the drawings attached with the tender. However, during the course of sinking of these wells it was found that in some cases wells had to be sunk to a greater depth in excess of the original designed depth of 20 feet. The plaintiff had submitted his quotations for further sinking beyond 30 feet which limit was 50 per cent in excess of the anticipated and designed depth of 20 feet. The defendants were under a legal obligation to pay to the plaintiff as per the quotations given by the plaintiff dated September 3, 1956 for sinking of twin wells beyond 20 feet which they were not doing. 3. The first defendant in the suit is the State of Himachal Pradesh. The other defendants No. 2 to 10 are different officers who were in some manner or the other connected with the work. The first defendant alone has filed a written statement. The others, though served, did not put in appearance nor filed written statements. What has, in essence, been pleaded by the first defendant is that the plaintiff after acceptance of tender and execution of the agreement, completed the work in accordance with the specifications or the conditions enumerated in the structural drawings handed over to the plaintiff, to the satisfaction of the P.W.D. authorities. The plaintiff had voluntarily signed all the 26 running bills as also the measurement book which had also been signed by the defendant's Engineer-in-charge in token of the correctness of the final measurements. The plaintiff had voluntarily signed all the 26 running bills as also the measurement book which had also been signed by the defendant's Engineer-in-charge in token of the correctness of the final measurements. The plaintiff did not sign the final bill. According to the defendants, work had been executed by the plaintiff of the value of Rs. 5,64,197.70 inclusive of the extra items said to have been executed by the plaintiff and further that in fact the plaintiff had received an amount of Rs. 6,72,330.30. Thus, Rs. 1,08,330.13 had been over-paid to the plaintiff by inadvertence. After adjusting the credit for steel and also for security amount etc. the plaintiff owed to the defendants a sum of Rs. 27,522.57. The plaintiff was not entitled to any amount from the defendants. It was denied that the plaintiff did the work of a total amount of Rs. 9,40,062/- or that he was entitled to any interest. Apart from the aforesaid plea the defendant also pleaded that the suit filed by the plaintiff was barred by limitation. 4. We may notice at this stage some more facts, as put forward by the plaintiff. What he says is that the defendants failed to settle the accounts, the plaintiff had to apply to the Senior Sub-Judge, Mandi, calling upon the first defendant to file the arbitration agreement under Section 20 of the Arbitration Act on account of an arbitration clause in the agreement. During the pendency of the application, jurisdiction of Delhi High Court was extended to Himachal Pradesh and the pecuniary jurisdiction of the Senior Sub-Judge was limited to Rs. 25,000/-. The proceedings which were pending before the Senior Sub-Judge, were therefore, withdrawn by the Delhi High Court Himachal Bench. An objection was taken by the defendants that the agreement was not enforceable as it did not conform to the requirements of Article 299 of the Constitution. This plea was accepted by the High Court in its judgment dated July 22, 1968 whereunder the agreement was held to be void. The plaintiff then served notice under Section 80 CPC on March 31, 1969 and in reply to that notice the defendants wrote to the plaintiff that : "... you are requested to submit the details of Rs. This plea was accepted by the High Court in its judgment dated July 22, 1968 whereunder the agreement was held to be void. The plaintiff then served notice under Section 80 CPC on March 31, 1969 and in reply to that notice the defendants wrote to the plaintiff that : "... you are requested to submit the details of Rs. 3,24,049/- which you have claimed in your notice as claim along with an attested copy of of your letter No. SMS/401, dated 3rd of September, 1956 and M.D. II-1/57-7572 dated 14th of June, 1960. You are requested to submit the rates demanded by you along with the quantity executed to enable this office to examine in detail the claims submitted by you for further action. When the efforts of the plaintiff to recover the suit amount from the defendants failed he had to file the suit. He made an application for permission to sue in forms pauperis which was granted to him by the High Court vide its order dated December 26, 1974. The relief which has been sought is that a decree be granted in favour of the plaintiff for a sum of Rs. 5,37,921/- which included a sum Rs. 3,24,049/- being the difference between the value of the work executed by the plaintiff and the amount actually paid to him by the defendants as well as the amount of the earnest money with-held by the defendants. Further, damages at 6 per cent per annum on the aforesaid sum amounting to Rs. 2,13,872/- for the period between July 10, 1959 and July 10, 1970 have also been claimed. The claim is founded on the plea that the plaintiff had law fully done the work for the first defendant and had not done so gratuitously and since the Union of India enjoyed the benefit thereof, it was bound to pay compensation and costs of the suit together with the damages at the rate of 6 per cent per annum for the period between July 10, 1959 and July 10, 1970 for the wrongful retention and use and withholding of money which was due to the plaintiff from the Union of India. The plaintiff was entitled to payment for the work executed by him, under Sections 65 and 70 of the Contract Act, albeit, under a void agreement. 5. The plaintiff was entitled to payment for the work executed by him, under Sections 65 and 70 of the Contract Act, albeit, under a void agreement. 5. On the pleadings of the parties the learned trial Judge framed the following eleven issues. "1. Whether the tender of the plaintiff for the construction of the R.C.C. Tee Beam Bridge over Suketi Khad on Shimla-Mandi Road, which was accepted by the Chief Engineer, vide his letter of 23.3.1955 cannot form basis of the suit and cannot be given effect to ? OPD-1. 2. Whether the plaintiff has done work for defendant No. 1 worth Rs. 9,40,062/- and out of that he received only a sum of Rs. 6,20,312.77 paise, thus leaving a balance of Rs. 3,24,049/- recoverable from defendant No. 1 ? OPP 3. Whether defendant No. 1 has made over payment of Rs. 1,08,133.13, as alleged in para 4 of the written statement. If so, its effect ? OPD-1. 4. Whether defendant No. 1 is under legal obligation to pay the plaintiff for sinking the wells beyond 20 feet, as alleged in para 5 of the plaint ? OPP 5. What is the effect of the Judgment of the Delhi High Court, dated 22.7.1968 on the present case ? O.P. Parties. 6. Whether the work undertaken by the plaintiff was executed by him within the stipulated period. If so, what is its effect ? OPP 7. Whether the plaintiff is entitled to Rs. 2,13,972/- as damages, as alleged in para 6 of the plaint ? OPP 8. Whether the suit of the plaintiff is within time ? OPP 9. Whether defendant No. 1 is estopped from denying the claim of the plaintiff ? OPP 10. Whether notice under Section 80 CPC is valid ? 11. Relief." Of them, the counsel for the plaintiff admitted before the learned Judge that Issue No. 6 was redundant. He did not press for a decision on Issue No. 9. Counsel for the defendants did not press Issue No. 10. The learned Judge took up for consideration Issue No. 8 relating to the plea of limitation in the first instance and recorded a finding on it against the plaintiff. He, therefore, dismissed the suit without going into any other issue. Is the Suit Barred by Limitation 6. We have noticed various dates earlier. The learned Judge took up for consideration Issue No. 8 relating to the plea of limitation in the first instance and recorded a finding on it against the plaintiff. He, therefore, dismissed the suit without going into any other issue. Is the Suit Barred by Limitation 6. We have noticed various dates earlier. Of them we may recapitulate February 14, 1965 as the date when the application under Section 20 of the Arbitration Act was moved by the plaintiffs. Also, July 22, 1968, when the said application was disposed of by the Himachal Pradesh Bench of the Delhi High Court which then had jurisdiction over this area. 7. What has been urged on behalf of the plaintiff is that the period between the aforesaid two dates deserved to be excluded under Section 14 of the Limitation Act which was applicable to the proceedings aforesaid on account of Section 37 of the Arbitration Act. Let us see if this submission can be upheld. The relevant part of Section 37 of the Arbitration Act 1940 says : "37. Limitation. (1) All the provisions of the Indian Limitation Act ... shall apply to arbitrations as they apply to proceedings in Court : (2) ....... (3) For the purposes of this section and of the Indian Limitation Act ... an arbitration shall be deemed to be commenced when one party to the arbitration agreement serves on the other parties thereto a notice requiring the appointment of an arbitrator, or where the arbitration agreement provides that the reference shall be to a person named or designated in the agreement requiring that the difference be submitted to the person so named or designated. (4) ........ (5) Where the Court orders that an award be set aside or orders, after commencement of an arbitration, that the arbitration agreement shall cease to have effect with respect to the difference referred, the period between commencement of the arbitration and the date of the order of the Court shall be excluded in computing the time prescribed by the Indian Limitation Act ......, for the commencement of the proceedings (including arbitration) with respect to the difference referred." 8. Proceedings under Section 20 can reasonably be treated as 'a proceeding related to the arbitration proceedings'. This view was taken by the Allahabad High Court in Sundareal Haveliwala v. Smi. Proceedings under Section 20 can reasonably be treated as 'a proceeding related to the arbitration proceedings'. This view was taken by the Allahabad High Court in Sundareal Haveliwala v. Smi. Bhagwati Devi and anothers (AIR 1967 All 400), where it was observed that : "... Under Section 20 of the Act the Court decides whether the arbitration agreement be or not be filed, and thereafter the matter is referred to an arbitrator for arbitration. Consequently, the proceeding taken by the Court under Section 20 of the Act though not an arbitration proceeding akin to the proceeding to be taken by the arbitrator during arbitration, is a step leading to arbitration proceeding and is consequently a proceeding related to the arbitration proceeding. The action taken by, the Court under Section 20 of the Act is thus in relation to an arbitration proceeding ... A similar view was expressed in Nagarchand Goenka v. Surendra Nath (AIR 1946 Pat 70), and certain observations made in Budhu Lal v. Jagan Nath (AIR 1949 All 70), corroborate the view." A similar view was taken by the Jammu and Kashmir High Court in Jammu Forest Co. v. State of Jammu and Kashmir (AIR 1968 J&K 86), when it was observed that : "... In other words, the case will be deemed to be proceeding before the Court right from the time that an application under Section 20 is made in a particular case up to the time the Court finally disposes of the matter either by accepting the award or setting it aside ..." The time taken in proceedings before the Court, in the circumstances aforesaid, may, therefore, be excluded under Section 14(1) of the Limitation Act which reads : "14. Exclusion of time of proceeding bona fide in Court without jurisdiction. (1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it." 9. The time taken in the disposal of the application under Section 20 of the Arbitration Act, in the circumstances of the instant case, is to be excluded under Section 14(1). The decision of the Allahabad High Court in Chaman Lal v. State of U.P. (AIR 1980 All 308), supports this view. In that case an application under Section 20 of the Arbitration Act was filed in the Court of the Second Civil Judge, Kanpur, on August 24, 1965. It was allowed and the matter was referred to an arbitrator before whom the proceedings went on for some time but later, on an objection based upon a decision of the Allahabad High Court that the clause of the agreement under which the arbitration proceedings were being held was not an arbitration clause and the arbitrator had no jurisdiction in the matter, the proceedings had to be dropped. Thereafter, the plaintiff had to seek remedy from the civil court. It was held, in these circumstances, that the time taken between August 24, 1965 and July 19, 1968 when the arbitrator dropped the proceedings on the ground aforesaid, was to be excluded while computing the period of limitation for the suit, which was for the recovery of certain amount of money by the plaintiff from the defendant. In taking the view aforesaid the learned Judge deciding the case of Chaman Lal relied upon two earlier decisions of the Allahabad High Court in Firm Behari Lal Baij Nath Prasad v. Punjab Sugar Mills Co. Ltd. (AIR 1943 All 162) and Mohammad Maqsood Ali Khan v. Hoshiar Singh (AIR 1945 All 377) in which it was said that : "... the operation of Section 14 should not be restricted. Its principle should be followed in suitable cases even in proceedings which cannot strictly be called proceedings in a court of law. Ltd. (AIR 1943 All 162) and Mohammad Maqsood Ali Khan v. Hoshiar Singh (AIR 1945 All 377) in which it was said that : "... the operation of Section 14 should not be restricted. Its principle should be followed in suitable cases even in proceedings which cannot strictly be called proceedings in a court of law. If the conduct of the person claiming its benefits has been bona fide, that is, he has established his good faith, if he has been prosecuting with due diligence another civil proceeding, he is entitled to its benefits ..." A similar view had been taken by the Allahabad High Court in State of U.P. v. Satya Prakash (1978 All Law Journal 560), wherein the time taken by the plaintiff in the arbitration proceedings, the Award made wherein was set aside on the ground that 'the contract bond was vague and there was no fresh duly executed agreement between the parties for the appointment of .... an arbitrator and thus there was no arbitration agreement between the parties', was held liable to be excluded in computing the limitation for the suit under Section 14(1) of the Limitation Act. 10. In the present case the application under Section 20 of the Arbitration Act remained pending before this Court between February 14, 1965 and July 22, 1968. That is not in dispute for it has been so mentioned even in the written statement filed in the case on behalf of the first defendant. 11. On exclusion of the time aforesaid the suit instituted after serving a notice under Section 80 of the Code of Civil Procedure on March 30, 1969 and in forma paupris for which permission was granted to the plaintiff by this Court vide its order dated December 26, 1974, would be within limitation under Article 113 of the Schedule to the Limitation Act, 1963. 12. Article 113 is the residuary Article and provides for a limitation of three years for any suit for which no period of limitation is provided in the Schedule, which period begins to run 'when the right to sue accrues'. The right to sue, in the instant case, would not accrue until there is an accrual of the right asserted in the suit, and its infringement, or at least a clear and unequivocal threat to infringe that right by the defendant against whom the suit is instituted. The right to sue, in the instant case, would not accrue until there is an accrual of the right asserted in the suit, and its infringement, or at least a clear and unequivocal threat to infringe that right by the defendant against whom the suit is instituted. Bolo v. Koklan (AIR 1930 PC 270), Gannon Dunkerley and Co. Ltd. v. The Union of India (AIR 1970 SC 1433). The question "whether a particular threat gives rise to a compulsory cause of action depends upon the question whether that threat effectively invades or jeopardizes the said right which can be determined on the facts of each case ... the threat must be unequivocal in clear terms and the plaintiff must have knowledge of his right and ... invasion thereof by the defendants. The emphasis on clear and unequivocal threat is relevant as that would furnish cause of action to the plaintiff for filing the suit." Delhi Cloth and General Mills Ltd. Delhi v. Union of India and another (AIR 1983 All 381). 13. The repudiation of the claim made by the plaintiff in the instant case, according to paragraph 9 of the written statement filed by the first defendant, would be on December 25, 1965 when the 'minus accounts of the plaintiff were made known to him in the final bill as also on August 11, 1966, the date of filing of the reply to the petition under Section 20 of the Arbitration Act'. 14. The case of the defendants is that the cause of action accrued to the plaintiff on May 9, 1959 which was the actual date of completion of work by the plaintiff. This would not be correct in law. The effort of the defendants has been to say that the period of three years should be computed from that date because the limitation in the case would be governed by Article 18 of the Schedule. That Article provides for a limitation of three years for a suit" for the price of work done by the plaintiff for the defendant at his request, where no time has been fixed for payment" and the period begins to run "when the work is done". 15. The stand of the defendants does not appear to be correct. Part-II of the Schedule, whereunder Article 18 occurs, pertains to 'suits relating to contracts'. 15. The stand of the defendants does not appear to be correct. Part-II of the Schedule, whereunder Article 18 occurs, pertains to 'suits relating to contracts'. It would only be available in a case where there is a valid contract. It would not cover the case of a contract which has been found to be void. Besides, Article 18 would only apply in a case where no time limit has been fixed for payment under the contract. It would not apply to a case, like the present, where final payment is not to be made until the entire work has been completed and a certificate of 'completion of work' has been given. In other words, a time for payment has been provided for in the contract. 16. Another aspect of the matter is that the claim in the suit relates to payment for the extra work done by the plaintiff. There is no dispute between the parties, as was stated by their learned counsel before us on May 9, 1991, that extra work beyond the quantity agreed to in the contract was done by the plaintiff and that there was no dispute about the measurement of the work done. On this consideration also it cannot be said that the suit related to a claim for price of work done by the plaintiff for the defendant at his request under a control. 17. The claim of the nature made by the plaintiff in the suit cannot be said to be covered by and specific Article of the Schedule except the residuary one, namely, Article 113. 18. Where, as in the present case, a contract is void for non-compliance with Art. 299(1) of the Constitution of India, a person can base his claim on Section 70 of the Contract Act if the conditions therefor are satisfied. 19. The conditions, according to the Supreme Court in Mulamchand v. State of Madhya Pradesh (AIR 1968 SC 1218), are that : (1) a person should lawfully do something for another person or deliver something to him. (2) in doing so, he must not intend to act gratuitously; and (3) the person for whom something is done must enjoy the benefit of the same. (2) in doing so, he must not intend to act gratuitously; and (3) the person for whom something is done must enjoy the benefit of the same. Also, that where a claim for compensation is made by one person against the other under Section 70, it is not based on subsisting contract between the parties but the juristic basis of the obligation upon a quasi contract or restitution. A Constitution Bench of the Supreme Court had ruled earlier in State of West Bengal v. M/s. B. K. Mondal and Sons (AIR 1962 SC 779) that what Section 70 prevents is unjust enrichment and it applies as much to individuals as to corporations and Government. Also, that "Where a claim for compensation is made by one person against another under Section 70, it is not on the basis of any subsisting contract between the parties, it is on the basis of the fact that something was done by the party for another and the said work so done has been voluntarily accepted by the other party". If what is done, in pursuance of the contract, is for the benefit of the Government and for their use and enjoyment and is otherwise legitimate and proper, Section 70 of the Contract Act would step in and support a claim for compensation notwithstanding the fact that the contract had been found void under Section 299(1) of the Constitution. The foundation for a claim under Section 70 of the Contract Act has been laid by the plaintiff in paragraph 6 of the plaint where it says that : "... As the plaintiff has lawfully done the work of Suketi Bridge at the total cost of Rs. 9,40,062/- for defendant No. 1, Union of India, and he has not done so, gratuitously and as the Union of India enjoys the benefit thereof, therefore, the Union of India is bound to pay compensation and pay his costs and expenses, as submitted in his bills and in this notice together with damages ..." In paragraph 6 of the written statement filed by the first defendant, it has, inter alia, been said that : "... It is also admitted that the said work was got executed by defendant No. 1 through the HP PWD officials. It is also admitted that the said work was got executed by defendant No. 1 through the HP PWD officials. It is also admitted that defendant No. 1 was liable to compensation for the actual work done by the plaintiff in connection with the Suketi Bridge but it is denied that the plaintiff did the work at a total cost of Rs. 9,40,062/- ..." 20. From these pleadings too it is obvious that the suit of the plaintiff is in respect of a claim for which no period of limitation is expressly provided in the Schedule to the Limitation Act. It would, thus, be governed by the residuary Article 113 thereof. The right to sue would accrue to the plaintiff upon the repudiation of his claim and the time would, in any case, start running after July 22, 1968 when this court came to the conclusion that the agreement was void. The plea of limitation deserves to be and is answered in favour of the plaintiff. Now on Merits 21. The counsel for the parties, as noticed earlier, stated before us on May 9, 1991 that there was no dispute between the parties that the plaintiff had done extra work beyond the quantity agreed to in the contract and further that there was no dispute the measurements of the work done. They had told the court that decision may be recorded by us only in respect of Issue No. 2 in this regard. The further statement which was made by Shri A. K. Goel, appearing for the plaintiff, on June 14, 1991 was that there was no dispute about the quantity of the contracted and extra work done between the parties and that the extra work pertained to the items mentioned in the Schedule of quantities (Ex. D1/A). The dispute, according to Shri Goel, was with regard to the rates at which the extra work was to be paid for by the defendants. 22. The extra items in regard whereto there is dispute between the parties now were : (a) Sinking of wells beyond the depth of 20 feet; (b) Steining of these wells beyond the depth of 20 feet; and (c) 13 items mentioned in the Schedule of quantities (Ex. D1-A) under the heading 'extra items'. 22. The extra items in regard whereto there is dispute between the parties now were : (a) Sinking of wells beyond the depth of 20 feet; (b) Steining of these wells beyond the depth of 20 feet; and (c) 13 items mentioned in the Schedule of quantities (Ex. D1-A) under the heading 'extra items'. (a) In respect of the first item, namely, sinking of wells beyond 20 feet, counsel for the parties say that payment at a fiat rate of Rs. 300/- per running foot beyond 20 feet, has been made to the plaintiff. They also say that if it is found by this court that the plaintiff was to be paid only at that rate, the amount mentioned therefor in the final bill prepared by P.W. 2. Shri H. C. Bhardwaj (Ex. PW2/0/1) would be the amount that could be claimed by the plaintiff. What has, however, been urged on behalf of the plaintiff is that he should be paid for the sinking of wells beyond 20 feet at the rates at which a claim was made by the plaintiff in the chart which was filed before the learned single Judge and is at pages 168-169 of the documents file. A look at this chart shows that a claim has been made by the plaintiff for payment at progressively higher rates for different depths in respect of each well. For example, for digging beyond 20 feet upto 30 feet, the rate claimed is Rs. 425/- per foot; from 30 feet to 40 feet it is Rs. 700/- per foot; from 40 feet to 50 feet is Rs. 1,400/- per foot and thereafter it is claimed at Rs. 1,400/- per foot. The plaintiff rests his claim for such higher payment on clause 12 of the agreement Ex. PB which, inter alia, provides that the contractor shall be bound to carry out the additional work if directed by the Engineer-in-Charge on the same conditions in all respects on which he agreed to do the main work and at the same rates as are specified in the tender for the main work. But if the additional work is not entered in the schedule of rates, the contractor shall then, within seven days of the date of his receipt of the order to carry out the work, inform the Engineer-in-charge of the rate which it is his intention to charge for such work. But if the additional work is not entered in the schedule of rates, the contractor shall then, within seven days of the date of his receipt of the order to carry out the work, inform the Engineer-in-charge of the rate which it is his intention to charge for such work. Further, that if the Engineer-in charge does not agree to the rate indicated by the contractor, he shall be at liberty to cancel his order to carry out the additional work in such a manner as he considered advisable. The clause also says that if the additional work includes any class of work for which rate is specified in the contract, then such class of work shall be carried out at the rates entered in the Schedule of rates with some percentage of addition indicated in the clause. 23. An identical clause, in a similar contract, came up for consideration before the Calcutta High Court in Union of India v. Khetra Mohan Banerjee (AIR 1960 Cal. 190). It was decided by a Division Bench which took the view that from the words used in the clause it was reasonable to conclude that the intention of the parties was that if the Engineer-in-charge did not indicate that the rates quoted by the contractor were not acceptable, they would be presumed to have been accepted by the Engineer-in-charge entitling the contractor for payment of rates quoted by him. The decision of the Calcutta High Court was affirmed by the Supreme Court in Civil Appeal No. 206 of 1961 (Union of India v. Khetra Mohan Banerjee) decided on November 22, 1962. The Supreme Court held that under the terms of Clause 12 if the Engineer did not refuse the claim within a reasonable time, he would be deemed to have agreed to the claim made by the contractor. 24. It is true that on a proper construction of Clause 12 the contractor would be entitled to be paid at the rates claimed by him in respect of the additional work where the Engineer had not intimated its non-acceptance within a reasonable time. But it is noticeable that a contractor can ask for rates other than those mentioned in the Schedule of rates only where the additional work required to be done by him is of a class which is not provided for in the contract. Mr. But it is noticeable that a contractor can ask for rates other than those mentioned in the Schedule of rates only where the additional work required to be done by him is of a class which is not provided for in the contract. Mr. Advocate General is plainly right that Clause 12 can only apply if the additional work is of a nature of which 'class of work' is not entered in the Schedule of rates. He rightly points out that in the present case the class of work, namely, sinking of wells beyond 20 feet is provided for in the Schedule of rates at a flat rate of Rs. 300/- per running foot. The contractor cannot claim any amount at a rate in excess thereof. (b) In respect of the second category of the plaintiff's claim, namely, steining, the case of the contractor is that the extra work is liable to be paid for at the agreed rate of Rs. 4/- and Annas 14 per running foot and that the reduction of this rate to Rs. 3.13 paisa by the defendant in respect of extra quantity was arbitrary. There was no term in the agreement, nor was there anything in the documents exchanged between the parties, which permitted the reduction of these rates. In this connection our attention was drawn by the learned counsel for the plaintiff to the various running bills, being Ex. P.W. 2/E to Ex. P.W. 2/H, in which steining was allowed at the full rates of Rs. 4 Annas 14. 25. After we had gone through the documents on the record, during the course of the hearing of the appeal, Mr. Advocate General fairly stated that it was not possible for the defendant to justify the reduction of rates from Rs. 4 Annas 14 to Rs. 3.13 paisa in respect of extra work of steining. We, therefore, need not discuss this aspect any further. (c) In regard to the minor items of extra work it was reiterated by the learned Advocate General that the final bill Ex. 4 Annas 14 to Rs. 3.13 paisa in respect of extra work of steining. We, therefore, need not discuss this aspect any further. (c) In regard to the minor items of extra work it was reiterated by the learned Advocate General that the final bill Ex. P.W. 2/0/1 prepared by Shri H. C. Bhardwaj (P.W. 2) contains the calculations on the basis of the contracted rates, about which alone was the plaintiff entitled, in respect of the entire work including the extra work, done by him and that even it was accepted that the plaintiff was to be paid at the contracted rate in respect of the entire work (including the extra work) done by him, the total payment to which he would be entitled (as per Ex. P.W. 2/0/1) will be Rs. 6,234.34. He would, in addition, be entitled to refund of the amount of security. 26. Towards the conclusion of the hearing, Shri Goel, appearing for the plaintiff, acknowledged that in case it was held that on its true construction the provisions contained in Clause 12 of the agreement did not enable the plaintiff to claim a rate different from the contracted rate in respect of any category of extra work done by him, the aforesaid amount indicated by the learned Advocate General would be the amount payable to the plaintiff even on assumption that for the extra work of 'steining' the amount was calculated at the rate of Rs. 4-14 Annas. 27. Since we have come to the conclusion that the plaintiff was not entitled to anything more than the contracted rates in respect of the extra quantity of work done by him in respect of sinking of the well, steining and the minor items, we hold, without discussing the oral and documentary evidence in any detail, that the plaintiff is entitled to a decree for Rs. 6,234.34 paisa only for the extra done work by him. He would be, in addition, entitled to the refund of the amount of security deposit of Rs. 70,517.01 (or say Rs. 70,517/-) as is clear from the statement of D.W. 1, Shri Pravin Chander Shandil, Executive Engineer HP PWD. The amount aforesaid, deducted from the running bills of the plaintiff towards security amount is found mentioned in Ex. D4 and also in Ex. P.W. 6/N and is in measurement book No. 601. This amount is mentioned at page 100 thereof. 70,517/-) as is clear from the statement of D.W. 1, Shri Pravin Chander Shandil, Executive Engineer HP PWD. The amount aforesaid, deducted from the running bills of the plaintiff towards security amount is found mentioned in Ex. D4 and also in Ex. P.W. 6/N and is in measurement book No. 601. This amount is mentioned at page 100 thereof. We may add that according to P.W. 2 Shri H. C. Bhardwaj made during his cross-examination the security deposit of the contractor is deducted at the rate of 10% of the estimated value of the work to be done, put to tender, till the full amount has been recovered. This is the general practice. When Shri Bhardwaj was being examined, counsel for the defendants admitted the measurement books Ex. P.W. 2/K to Ex. P.W. 2/N and the entries made therein to be true copies as the same had been certified to be so by the officials of the Public Works Department. 28. The plaintiff has also claimed interest at the rate of 6% per annum on the amount found payable to him. The claim in this respect is contained in paragraph 8 of the plaint. He is entitled to it. Relief 29. In conclusion, the suit of the plaintiff is decreed for a sum of Rs. 6,234.35 (say Rs. 6,234/-) as well as a sum of Rs. 70,517/-, in deposit with the defendant towards security amount, along with interest at the rate of 6% per annum with effect from July 18, 1959 (the date of the final bill) till the date of payment. Suit decreed.