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2001 DIGILAW 796 (JHR)

Tata Iron and Steel Company Limited v. C. R. Mukherjee

2001-12-05

GURUSHARAN SHARMA

body2001
JUDGMENT Gurusharan Sharma, J. - Sri C. R. Mukherjee, a civil construction contractor was carrying on business under the name and style of M/s. C.R.Mukherjee and was registered as Class A unlimited contractor under M/s. Tata Iron and Steel Company Limited from 1953. 2. On 13.10.1975, by a letter (Exhibit 6) Controller of Purchase and Stores determined all contracts of Sri Mukherjee with immediate effect and intimated him that Company's departmental staff shall take measurement of works performed by him for preparation and finalisation of the bills. He was directed to surrender gate passes forthwith, as a result of which his god owns and stores became inaccessible to him Final bills were thereafter prepared and passed for payment. 3. On 22.7.1983 Sri Mukherjee filed Money Suit No. 135 of 1983 against M/s. Tata Iron and Steel Company Limited for realisation of Rs. 13,17,699.48 paise with pendente lite and further interest @ 6% per annum. 4. According to plaintiff, no reason was assigned for determining his all contracts suddenly, which was in flagrant violation of the terms of contract and a breach of terms of contract was committed and as such defendant-Company was liable to pay compensation by way of damages. 5. Plaintiff had godown and depots in protected enclosures of the Company at the work-sites of various contract for storing building materials, implements, cement and iron rods issued by defendant-Company. Entry in the protected enclosures was regulated by gate-passes which were surrendered by him on defendant's direction. 6. Plaintiff's further case was that his final bills amounting to Rs. 11,89,259.46 paise have remained un-paid, which he was entitled to recover. Further, plaintiff was also entitled to recover damages for illegal termination of his contracts with interest @ 18% per annum. Amount claimed by way of damages and interest were shown in Schedule to the plaint against each item and total amount recoverable from defendant-Company was Rs. 13,17,699.48 paise. 7. Defendant-Company denied plaintiff's claims and asserted that plaintiff did not show entire quantity of materials supplied to him for particular job by way of deduction in the bill submitted by him and he was found obtaining illegal financial advantage and putting the Company in financial loss. 13,17,699.48 paise. 7. Defendant-Company denied plaintiff's claims and asserted that plaintiff did not show entire quantity of materials supplied to him for particular job by way of deduction in the bill submitted by him and he was found obtaining illegal financial advantage and putting the Company in financial loss. It was on account of this as also for doing sub-standard job and not using the materials required to be used for a particular job, but claiming amounts as if required quantity were utilised, that his contracts were terminated. Termination of contract was just and proper. Plaintiff gracefully accepted the decision of defendant Company for such termination and as such he was not entitled to claim damages. 8. According to defendant, plaintiff failed to return 130 gate-passes inspite of requests and demands. 9. Defendant-Company supplies materials like steel, cement etc. to the contractor who is to show in his bill deduction of the amount of the value of materials supplied by way of recovery by him. In case materials supplied to him is not consumed, contractor is entitled to realise the same in subsequent execution of job. 10. It was alleged that plaintiff did not show the entire quantity of materials supplied to him for a particular job by way of deduction of the bill submitted by him. Defendant-Company was, therefore, entitled to deduct by way of recovery value of the materials supplied, advances made, Income Tax credited or to be credited or any other amount recoverable by the Company. Plaintiff's entire claim was vague, indefinite and incorrect. 11. Trial court decreed the suit in part holding that plaintiff was entitled to get Rs. 9,57,058.84 paise with pendente lite and future interest till payment @ -6% per annum and he was further entitled to Rs. 2,17,500.98 paise on account of estimated profit of 17% for the works terminated and interest thereon @ 6% per annum from the date of decree till realisation. 12. Mr. Debi Prasad, Senior counsel for appellant submitted that trial court erred in law in applying Article 26 of the Limitation Act, 1963; whereas in the facts and circumstances of the case, Article 55 of the said Act was applicable and the suit was barred by time. 13. Mr. 12. Mr. Debi Prasad, Senior counsel for appellant submitted that trial court erred in law in applying Article 26 of the Limitation Act, 1963; whereas in the facts and circumstances of the case, Article 55 of the said Act was applicable and the suit was barred by time. 13. Mr. Prasad further submitted that defendant-Company was entitled to adjust and realise cost of materials supplied to the plaintiff-contractor for different items of job from his bills and it was found that on such adjustment nothing was payable to the plaintiff. 14. It was also submitted that trial court ought not to have granted interest on the amount of loss of profit, which plaintiff claimed by way of damages. 15. Plaintiff's claim was in two parts: First part related to amount of final bills prepared by the Company to the tune of Rs. 9,57,058.84 paise. The period of preparation of those bills after final measurement was between 22.7.1980 to 16.7.1981 and the suit was filed on 22.7.1983. So, in my opinion, for filing the suit for recovery of the aforesaid claim amount, Article 26 of the Act was applicable and the suit was filed in time. Second part of plaintiff's claim related to the estimated loss of profit for the works which were not completed before 13.10.1975, when the contracts were terminated. Loss of profit could have been calculated only after final measurement of the works done were made, so that aforesaid claim could have been made only for the remaining works, which were not completed by that time. So, in my opinion, plaintiff's claim on account of loss of profit was also not barred by time on the date of filing of the suit. 16. I do not find any substance in the submission of Mr. Prasad that Article 55 of the Act was applicable and the suit was barred by time. 17. Defendant did not examine any witness and inspite of notice it also not produced the measurement book. Defendant-Company failed to substantiate that on the measurement taken by the staff of the Company, cost of materials was adjusted and thereafter it was found that nothing was due from the defendant to the plaintiff. It was also not the defendant's case that any amount towards the seven bills in question was paid to the plaintiff. 18. Defendant-Company failed to substantiate that on the measurement taken by the staff of the Company, cost of materials was adjusted and thereafter it was found that nothing was due from the defendant to the plaintiff. It was also not the defendant's case that any amount towards the seven bills in question was paid to the plaintiff. 18. Exhibit 6 does not disclose any of the amounts mentioned in the written statement for termination of contracts. Defendant relied upon Exhibit 15 relating to the procedure of termination of contract and specifications for civil engineering works to show that in case of sub-standard work contractor is required to be asked in writing to dismantle the same at his own expenses. But surprisingly defendant did not produce any document to show that plaintiff was directed to dismantle any particular work at his own expenses. 19. Defendant further relied on Exhibit A, the first on account bill dated 7.5.1974 in respect of the job in item nO.2 of the Schedule. On the other hand, plaintiff pointed out from 3rd and final on account bill, Exhibit 5/A, that out of 640 MT of cement supplied, 584.422 MT were consumed by him as shown at page No. 5 thereof. In my opinion, defendant failed to prove that plaintiff was causing any financial loss to the defendant-Company on account of sub-standard work. 20. On termination of contracts, plaintiff was directed to surrender gate-passes, which was complied with and thereafter he had no access to his godowns and stocks. He therefore, became unable to remove or otherwise deal with the materials kept therein. It was established that plaintiff was not allowed to go to his godown at various sites within the Company premises, as a result of which he could not retrieve his own materials, nor could he be made responsible for the materials issued by defendant-Company to him for execution of different jobs and left in the site godowns at the time of termination of contracts. Defendant Company failed to establish its entitlement to adjustment, as claimed. 21. On persual of the Schedule to the plaint, it appears that in Column 6, plaintiff claimed estimated profit of 17% for works contract. A sum of Rs. 1,28,440.02 paise was claimed as interest for six years @ 18% per annum. Defendant Company failed to establish its entitlement to adjustment, as claimed. 21. On persual of the Schedule to the plaint, it appears that in Column 6, plaintiff claimed estimated profit of 17% for works contract. A sum of Rs. 1,28,440.02 paise was claimed as interest for six years @ 18% per annum. The aforesaid amount in Column 6 was only estimated profit and interest was payable only after determination of the sum payable in item no. 6. The suit was not for realisation of damage on account of breach of contract. Hence, plaintiff was not entitled to claim interest for the aforesaid six years. In my opinion, court below rightly granted only pendente lite and future interest till realisation of the decretal amount @ 6% per annum. 22. In the aforesaid circumstance, I find no reason to interfere with the impugned judgment and decree passed by the court below. 23. In the result, this Appeal is dismissed, have no merit. There shall be no order as to costs. Lower court records may be sent down.