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2003 DIGILAW 160 (SC)

Bharat Dynamics Limited v. Khody Engineering Limited

2003-01-30

B.N.AGRAWAL, S.N.VARIAVA

body2003
ORDER : S.N. Variava and B.N. Agrawal, JJ. - This appeal is against the judgment dated 10-12-1997. Briefly stated, the facts are as follows: on 14-6-1988, the appellants placed on Respondent 1 a work order to carry out some civil work for the Konkur Township Project. One of the clauses of the work order was that the work was to be completed within 9 to 12 months. The clause further provided that in the event of delay, there would be liquidated damages at the rate of 1% of the total contract price for every week or part thereof subject to a maximum of 10%. 2. As there was delay in completion of the work, the appellants terminated the contract on 27-9-1989. On 3-10-1989, Respondent 1 filed a suit before the District Munsif at Sangareddy. The suit was simpliciter for an injunction restraining the appellants from engaging any other person or agency whatsoever for completing the balance work without settling the dues. As the suit was filed only for an injunction, court fee was paid accordingly. 3. On 17-10-1989, a compromise was entered into which was reduced in the form of memo which reads as under: MEMO In pursuance of the first defendant's letter dated 13-10-1989 issued to the plaintiff, the parties are agreeable to be present on 23-10-1989 at 10.00 a.m. for taking joint measurement of the work executed by the plaintiff and the materials left on site, and complete the same by 23-11-1989 to enable the preparation of the plaintiff's final bills and settlement in accordance with the terms and conditions of the work order issued to the plaintiff in respect of the subject contract. In terms of this memo, on the same day a judgment and a decree were also passed which merely state that the suit is disposed of without costs as per the terms and conditions of the compromise memo. 4. A plain reading of the aforesaid compromise memo shows that the parties agreed to take joint measurement of the work executed by the respondent and the material left on site. This has admittedly been done. The joint measurement was to be completed by 23-11-1989. This was also done as per the memo. As per the joint measurement, the first respondent was to raise final bills. This the respondent has done. This has admittedly been done. The joint measurement was to be completed by 23-11-1989. This was also done as per the memo. As per the joint measurement, the first respondent was to raise final bills. This the respondent has done. The only further stipulation of the memo is that only the above was to be done to enable settlement in accordance with the terms and conditions of the work order. There is no agreement or provision that amounts as per the final bills are to be paid. It is pertinent to note that the settlement was not to be "as per the final bills" prepared by the respondents. The settlement was to be "as per the terms and conditions of the work order". This necessarily meant that after the final bills were raised, the parties were to sit together and determine not just the claims of Respondent 1 but also such claims that the appellant may have as per the terms and conditions of the work order. A plain reading of the terms shows that the memo does not deal with a situation where in the process of settlement there was a dispute between the parties. The clear implication is that such a dispute, if any arose, was to be determined either by mutual agreement or by way of an independent suit. It must also be remembered that the suit was for injunction simpliciter. There was no claim for money in that suit. This also showed that no money decree was being passed. 5. Admittedly, between the parties there was a dispute as to what was the amount payable. The first respondent claims that a sum of Rs. 1,14,90,885.20 paise is due and payable to him, whereas according to the appellants they have to recover a sum of Rs. 9,05,554 from the first respondent. The appellants have already deducted this sum from the cost of material of the first respondent which was in the custody of the appellant. As the memo was silent and did not deal with what was to happen in the event of a dispute/difference on a settlement "as per the terms and conditions of the work order" the only option left, in the absence of an arbitration clause, was for the aggrieved party to file a suit. 6. Surprisingly, the first respondent filed an execution application. 6. Surprisingly, the first respondent filed an execution application. This was done by way of filling in a typewritten form. The appellants filed their counter-objection to the execution application. In their counter they pointed out that there was no executable decree as there was a dispute between the parties. They contended that such a dispute could not be determined in execution proceedings. The executing court dismissed the execution proceedings on the ground that it did not have pecuniary jurisdiction. The first respondent filed a revision before the High Court which was allowed on 9-3-1993. The High Court held that the executing court could not go into the question of pecuniary jurisdiction. The High Court held that the executing court had to decide maintainability of the execution proceedings. The High Court then remanded the matter back to the executing court. 7. The executing court now held that the decree was executable. It directed payment of Rs. 80,41,453.14 paise. The appellants filed a revision. The revision court gave a finding that the decree was executable but held that the executing court had not properly considered the rival claims of the parties. The High Court thus remanded the matter back to the executing court for the purposes of determining what the amount payable was. 8. The executing court by its order dated 10-2-1997 went into the figures given by both the parties and held that a sum of Rs. 61,79,885.28 was payable. The appellant filed a revision to the High Court which has been disposed of by the impugned judgment. 9. In the impugned judgment the High Court held that the decree was not executable. It held that at the highest the decree could be said to be a preliminary decree. The High Court, however, felt constrained by the earlier order of the High Court which had held that the decree was executable. The High Court held that propriety demanded that it should follow the earlier decision. Therefore, the High Court considered the merits of the claim and dismissed the revision petition. 10. So far as this Court is concerned, it is not bound by the finding given by the High Court in its order dated 5-9-1994. This Court has to decide on its own whether the memo amounts to an executable decree. Therefore, the High Court considered the merits of the claim and dismissed the revision petition. 10. So far as this Court is concerned, it is not bound by the finding given by the High Court in its order dated 5-9-1994. This Court has to decide on its own whether the memo amounts to an executable decree. As has been set out above, the memo only indicates that measurements were to be taken by a particular date, and that final bills were to be prepared. Thereafter, the settlement was to be as per the terms and conditions of the work order. The memo did not deal with a situation where in such settlement there was no agreement or unanimity. Therefore, there is no executable money decree. The executing court cannot decide disputes not covered by this decree. As stated above the only course open to the first respondent was to file a separate suit. We are unable to accept Mr. Ganesh's submission that the appellants are precluded by their conduct in not challenging the High Court's order holding the decree as an executable decree. The appellants have all along contended that there was no executable decree. This Court cannot sustain a patently wrong order. To be remembered that even in the impugned order the High Court was of the opinion that there is no executable decree. The High Court may have been bound by the earlier order, but this Court is not. Thus, it is not possible to sustain the impugned order or any of the orders which hold that there is an executable decree. In this view of the matter, all the earlier orders which hold that there is an executable decree are set aside. 11. Mr K.K. Venugopal, learned Senior Counsel has made a statement, which we record, that in the suit which the first respondent will now file, the appellants will not take up a contention that the suit is barred by limitation. We also clarify that the first respondent will be entitled to the benefit of the time spent by them in litigating in these various courts. Thus, the period from the date of the filing of the execution till today will have to be excluded in computing limitation. 12. We also clarify that the first respondent will be entitled to the benefit of the time spent by them in litigating in these various courts. Thus, the period from the date of the filing of the execution till today will have to be excluded in computing limitation. 12. Considering also the fact that the claim is of the year 1989, we express a hope that the trial court shall dispose of the suit as expeditiously as possible and preferably within a period of two years of the same being filed. We also clarify that the trial court shall be uninfluenced by any observation made regarding maintainability or otherwise of any of the claims of the parties. The trial court shall dispose of the suit on its own merits. The appeal stands disposed of accordingly. There will be no order as to costs.