V. M. JOG CONSTRUCTION PVT. LTD. COMPANY v. MAHARASHTRA STATE ROAD TRANSPORT CORPORATION
1992-11-13
M.G.CHOUDHARI, V.P.TIPNIS
body1992
DigiLaw.ai
JUDGMENT V. P. Tipnis, J. - This is an appeal by the original plaintiffs against the judgment and decree passed by the learned Civil Judge, Senior Division, Pune on 19th March, 1985, whereby he dismissed the suit of the plaintiffs with costs. 2. The plaintiffs are Civil Contractors. They filed a Special Civil Suit No. 604 of 1982 against the Maharashtra State Road Transport Corporation. (hereinafter referred to as the Corporation), claiming an amount of Rs. 1,39,000/- by way of price of the steel purchased by the plaintiffs and the interest thereon. The plaintiffs averred that it is a registered firm and tenders were invited for construction of a permanent bus stand at Wai by the Corporation. The plaintiffs submitted their tender and ultimately after some negotiations the tender submitted by the plaintiffs were accepted and the work of construction of permanent bus stand at Wai was awarded to the plaintiffs on the terms and conditions mentioned in the contract between the parties. It is the case of the plaintiffs that though there was no stipulation under the written contract for supply of steel free of costs by the Corporation to the plaintiffs, as a matter of fact there was an oral agreement with the top authority of the Corporation, i.e. Shri V. T. Chari, Vice-Chairman of the Corporation, under which it was orally agreed that the entire quantity of the steel will be supplied by the Corporation free of costs. The plaintiffs ultimately completed the job. They also accepted the payment of the final bill. However, as the Corporation had not supplied the entire quantity of the steel for the project, the plaintiffs were required to purchase a large quantity of steel from the local market and it is the submission of the plaintiffs that they are entitled to the price of the said steel purchased by them in the market. The plaintiffs contended that the entire quantity of steel used in the project was about 55 metric tonnes out of which about 13 metric tonnes of steel was supplied by the Corporation to the Plaintiffs and the plaintiffs had to purchase 42 metric tonnes of steel from the market. The plaintiffs accordingly claimed Rs. 92,400/- by way of the amount paid by the plaintiffs for the purchase of the steel in the open market and also an amount of Rs.
The plaintiffs accordingly claimed Rs. 92,400/- by way of the amount paid by the plaintiffs for the purchase of the steel in the open market and also an amount of Rs. 3,151/- towards purchase of steel in the open market as also interest on the said amount. The total claim of the plaintiffs thus came to Rs. 1,39,090/-. 3. Admittedly initially the suit was decreed ex-parte. However the decision was challenged in the higher court and ultimately it was tried on merits. The Corporation filed written statements and raised several issues like non-maintainability of the suit. However, on merits it was specifically contended that a consolidated rate of Rs. 3,200/- per metric tonne inclusive of material and all other charges was accepted under the tender. There is no provision under the tender for charging separately for the steel. The plaintiffs have accepted all the running bills and the final bill and without any protest and, therefore, there is no question of any oral alleged agreement. It was therefore prayed that the suit be dismissed. 4. At the trial one Shri V. M. Jog on behalf of the plaintiffs was examined who had entered into the contract with the Corporation. On behalf of the defendants-Corporation two witnesses were examined i.e., Shri M. S. Shinde, who was the Executive Engineer of the Corporation and Shri V. N. Vaidya, who was Divisional Accountant working in the Corporation. The original tender which was accepted and which was made into a binding contract was produced. Various correspondence was also produced and upon scrutiny of the oral as well as the documentary evidence, the learned trial Judge held that the suit is not maintainable on the ground that admittedly the suit partnership, which entered into the contract, was dissolved and the new private limited company by name Shri V. M. Jog Construction Pvt. Ltd. Company, has not shown that either there was any amalgamation or all the rights and liabilities of the dissolved firm were taken over by the private limited company. The learned Judge therefore held that the suit is not maintainable. The learned trial Judge further held that the plaintiffs have failed to prove that there was any oral agreement as alleged modifying the terms of the written contract.
The learned Judge therefore held that the suit is not maintainable. The learned trial Judge further held that the plaintiffs have failed to prove that there was any oral agreement as alleged modifying the terms of the written contract. The learned trial Judge on the basis of the findings recorded held that under the contract material was also to be supplied by the contractor and that the plaintiffs failed to prove any oral agreement modifying the terms of the original terms and therefore ultimately by his judgment and decree, dated 19th March, 1985, the learned trial Judge was pleased to dismiss the suit with costs. In this appeal we have heard, Shri Sali, the learned Counsel appearing for the plaintiffs and Shri Rane, the learned Counsel for the Corporation. With the assistance of the learned Counsel on both sides, we have gone through the entire oral as well as the documentary evidence on record. 5. Coming to the submission of Shri Sali, it requires to be mentioned that along with the appeal, Civil Application No. 293 of 1986 has been filed for additional evidence and alongwith the application, memorandum of Association of V. M. Jog Construction Pvt. Ltd. Company is also annexed. Several other documents are also filed alongwith the said application and we find it unnecessary to make any specific reference for deciding the present appeal. However, we are granting the civil application for the additional evidence only so far as the memorandum of association and the deed of dissolution is concerned. After hearing both sides we are inclined to allow the civil application only in respect of the memorandum of association as well as the deed of dissolution. Though undoubtedly these documents were not placed before the trial court and therefore, the trial court could have been justified in holding against the plaintiffs on that count, from these two documents it is crystal clear that after the partnership firm was dissolved and the private limited company was constituted and the rights and liabilities of the dissolved partnership firm were taken over by the private limited company. It is also clear from the record that as a matter of fact in the trial court the learned Judge had allowed amendment of the plaint by permitting substitution of V. M. Jog Construction Pvt. Ltd. Company in place of original plaintiff, i.e. M/s. V. M. Jog Company, partnership firm.
It is also clear from the record that as a matter of fact in the trial court the learned Judge had allowed amendment of the plaint by permitting substitution of V. M. Jog Construction Pvt. Ltd. Company in place of original plaintiff, i.e. M/s. V. M. Jog Company, partnership firm. For all these reasons we are unable to confirm the findings of the learned trial Judge that the suit is not maintainable for the reasons given by the learned trial Judge. Hence we hold that the suit is maintainable. 6. Shri Sali brought to our notice several documents indicating that there was simultaneous or subsequent oral agreement between the parties adicating that the steel was to be supplied by the Corporation free of cost. Shri Sali in that behalf brought to our notice Ext. 23 page 76 which is a letter dated 28th October, 1980 written by the Divisional Engineer Satara to the plaintiffs. This letter in fact refers to the effect that the M.S. Steel required for A and A work will be supplied by ST department free of cost. In the light of the evidence on record it is clear that this letter has reference to the additional contract for executing the work of difference and alterations to the permanent bus stand at Wai valued at Rs. 40,000/-. As such not only this letter does not help the plaintiffs assertions but on the contrary it is suggestive of the fact that when steel was to be supplied by the Corporation, such specific agreement was referred to. The second letter on which Mr. Sali relies is Ext. 29 which is a letter, dated 31.7.1980 written by the plaintiffs to Shri V. T. Chari, Vice Chairman of the Corporation. This letter merely reiterates plaintiffs assertions that there were negotiations and unless steel is supplied free of costs, plaintiffs would suffer huge loss and urging the Corporation that the amount paid by the contractors for the purchase of steel should be given to them or at least the steel should be supplied. We are unable to accept the submission of the learned Counsel that merely because the plaintiffs went on written letters and asking for free supply of steel, that is sufficient to infer any such oral contract modifying the terms of the written contract-tender accepted by the Corporation.
We are unable to accept the submission of the learned Counsel that merely because the plaintiffs went on written letters and asking for free supply of steel, that is sufficient to infer any such oral contract modifying the terms of the written contract-tender accepted by the Corporation. Shri Sali also relied upon and referred to a letter, dated 25.3.1980 written by the Contractors to the Executive Engineer, the reply given by the Executive Engineers to the contractors and further rejoinder given by the Contractors to the Executive Engineer. Though in these letters contractors have asserted the alleged oral agreement with the top authority, it is relevant to notice that the Executive Engineer has strongly denied all these allegations. Even from these correspondence we find it impossible to come to the conclusion that there was any such alleged oral agreement. Shri Sali then referred to the running bills submitted by the contractors. He emphasised that the steel brought and fixed by the agency is charged at Rs. 3,200/- whereas there is an item of steel supplied by the department and fixed by the contractors. He also referred to the mentionings in the bills that 18 metric tonnes of steel was supplied free of costs. We are not at all impressed by these several documents because in our opinion that is hardly sufficient to infer as modification of the agreement. 7. As against this it is relevant to note that admittedly in so far as the written contract between the parties is concerned, there is no stipulation that the steel will be supplied by the Corporation. On the contrary, the plaintiffs in their evidence have clearly admitted that all material to be given by the department free of costs or at costs is given in the schedule A to the tender. It is further admitted by the plaintiffs that the schedule B to the tender given items to be done by the contractors. The plaintiffs have further admitted that it is correct that as per item 33, the main work of the contractors is to bring 42 metric tonnes of steel. The plaintiffs also admitted that there is no documentary evidence regarding supply of steel free of costs.
The plaintiffs have further admitted that it is correct that as per item 33, the main work of the contractors is to bring 42 metric tonnes of steel. The plaintiffs also admitted that there is no documentary evidence regarding supply of steel free of costs. They have further admitted that there is no mention of steel to be supplied free of costs in the final bill and that they have not accepted the payment of the final bill under protect. The plaintiffs have also admitted that after accepting the final bill they did not write any letter complaining about the final bill. In the evidence of Shri Vaida, it is clearly stated that there is no condition mentioned in the tender form that the steel will be supplied free of costs. With reference to the tenders which ultimately became contract after acceptance, Shri Vaidya has stated that the tender consists of two parts, part 1 and part 2. In part 1, all the items which are to be supplied by the Corporation either at price or price, are mentioned and in that part there is no mention of steel to be supplied free of costs at all. Shri Vaidya further pointed out that as per item 33, the quotation at the rate of Rs. 3,200/- per metric tonne is for providing and fixing the steel. After seeing the original tender and the evidence, we are clearly of the opinion that under the written contract it was the plaintiffs who were supposed to provide the required quantity of steel and that is how rate of Rs. 3,200/- per metric tonne, which included costs of the steel and also other labour charges etc. was agreed upon. It is also clear that the plaintiffs never raised any dispute either at any time of running bills or at the time of final bill. On the contrary the bills submitted by the plaintiffs themselves show that the plaintiffs were to bear the costs of the steel. For example the final bill on which Shri Sali heavily relied upon, itself shows that so far as 39.1865 metric tonnes work is concerned, as the steel was bought and fixed by the agency, the agreed rate of Rs.
For example the final bill on which Shri Sali heavily relied upon, itself shows that so far as 39.1865 metric tonnes work is concerned, as the steel was bought and fixed by the agency, the agreed rate of Rs. 3,200/- per metric tonne, was applied for preparation of the bill whereas in respect of other work where the steel was supplied by the department, the rate applied was only Rs. 400/- per metric tonne. This clearly shows that where the department supplied the steel, costs thereof was deducted from the bill and only labour charges were claimed by the plaintiffs themselves. This fact clinches the issue that the parties understood the terms and conditions of the contract clearly and as per the tender which was accepted by them. The contract clearly contemplates that the entire quantity of steel was to be supplied by the contractors and in fact whenever it was supplied by the Corporation costs of the steel was deducted. In view of these glaring facts, it is impossible to find any merit in the claim of the plaintiffs that there was any oral agreement. In fact such oral agreement could not have been pleaded, in view of the clear express terms in the written contract between the parties. 8. Shri Sali relied upon certain citations. The first citation is Chaturbhuj Vithaldas Jasani v. Moreshwar Parashram and others ( AIR 1954 SC 236 ), Shri Sali specifically relied upon the following observations of the Supreme Court in the aforesaid case: "Held that the Chairman of the Board of Administration acted on behalf of the Union Government and his authority to contract in that capacity was not question. There can equally be no doubt that both sides acted in the belief and on the assumption, which was also the fact, that the goods were intended for Government purposes, namely amenities for the troops. The only flaw was that the contracts were not in proper form and so, because of this purely technical defect, the principal could not have been sued. But that is just the kind of case that Section 230(3) Contract Act is designed to meet.
The only flaw was that the contracts were not in proper form and so, because of this purely technical defect, the principal could not have been sued. But that is just the kind of case that Section 230(3) Contract Act is designed to meet. It would be disastrous to hold that the hundreds of Government Officers who have daily to enter into a variety of contracts, often of a petty nature, and sometimes in an emergency, cannot contract orally or through correspondence and that every petty contract must be effected by a ponderous legal document couched in a particular form. It may be that Government will not be bound by the contract in that case, but that is a very different thing from saying that the contracts as such are void and of no effect. It only means that the principal cannot be sued, but there would be nothing to prevent ratification, especially if that was for the benefit of Government. When a Government Officer acts in express of authority Government is bound if it ratifies the excess. The contracts in question were not void simply because the Union Government could not have been sued on them by reason of Article 239(1), (8 Moo Ind App 529 (PC) Rel on Case Law discussed. (paras 40, 41) Anno: Contract Act, Section 230 No. 6." The second case on which Shri Sali relied upon is State of Rajasthan v. Western India Motor Pvt. Ltd. (1987 (Supp.) SCC 64). In that case, the original tender itself mentioned that special unit price applicable to the orders from Government departments and the Director General of Supplies and Disposals, ex-factory, Jamshedpur, will be chargeable. In the letter of acceptance from the Executive Engineer, Rajasthan Underground Water Board, it was stated, that the price is according to the Director General of Supplies and Disposals rate contract and a certificate from the Director General may be obtained before making payment. In the facts before the Apex Court the Director General of Supplies and Disposals revised the rates, and the Contractor wrote a letter claiming the rates fixed by the Director General of Supplies and Disposals. The Executive Engineer in reply did not take the contrary stand. Under the circumstances the Apex Court held that the contractor was entitled to the revised rates by confirming the decision of the High Court holding so.
The Executive Engineer in reply did not take the contrary stand. Under the circumstances the Apex Court held that the contractor was entitled to the revised rates by confirming the decision of the High Court holding so. Shri Sali also relied upon the decision of the Single Judge of this court reported in Messrs Deviprasad Khandelwal v. The Union of India India (LXX BLR 364), wherein it was held as under: "Where parties to a contract through forgetfulness or through bad drafting fail to incorporate into the contract terms which, had they adverted to the situation they would have inserted to complete the contract, the court in order to give efficacy to the contract will imply into the contract terms which the parties have not expressly inserted. The implied terms must however always be based on the presumed intention of the parties and upon reason". 9. As in the present case the term of the written contract expressly states that the rates agreed are for providing and fixing the steel and as the plaintiffs have miserably failed to make out a case of any modification in that behalf, none of the cases cited by Shri Sali in support of his submission are of any help to the plaintiffs. 10. In the result we find no substance in the appeal and accordingly dismiss the same. In the circumstances of the case there shall be no orders as to costs. Appeal dismissed.