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2003 DIGILAW 266 (KER)

Dinesh v. Pai VS The Chief Engineer

2003-04-01

M.RAMACHANDRAN

body2003
Judgment :- By letter dated 24.2.2003, the petitioner had requested the Chief Engineer, NAVAC, the first respondent herein to permit him to remove one Hyundai Excavator 210 LC, from the site of work of the Naval Academy, Ezhimala. He had pointed out that the earth-moving equipment, had been engaged in connection with the work done by Saravana Constructions Pvt. Limited, the fourth respondent herein. He understands that the contract between the first and fourth respondent stands cancelled. Being owner of earth-moving equipment, since they had to meet other commitments at other work sites, such permission had been sought for, but there was no response and recourse to remedy under Article 226 of the Constitution of India had been resorted to. ‘He has already suffered colossal loss for no fault of his, and unless this Court interferes he is likely to be greatly prejudiced. 2. A counter affidavit has been filed. The first respondent had awarded a contract in favour of the fourth respondent, for providing external water supply, electrification etc., concerning the project at Ezhimala. The period stipulated for completion of the work was 24 months, which was to expire on 9th February 2003. The fourth respondent had failed to show sufficient progress and on 13.2.2003, by Ext. R1 (a), the work order had been cancelled. It is not seriously disputed that the excavator referred to earlier belongs to petitioner, that he is engaged in the business of hiring of moving equipment, and the fourth respondent had hired the equipment from him on 25.11.2002. The conditions under which such entrustment was made could be seen from Ext.P2. 3. The conduct of the first respondent was sufficient to make it clear that they were not prepared to hand over the equipment as requested for. The counter affidavit shows that in spite of expiry of the period of contract, less than 20 per cent of the work had been carried out by the fourth respondent and there were proposals to retender the work, at the risk and loss of the fourth respondent, which they were entitled to, according to them, under the terms of contract. In answer to the claim urged the terms of contract. In answer to the claim urged the terms of contract. In answer to the claim urged by the petitioner which has led to these proceedings, the additional Central Government Standing Counsel had made particular reference to Ext.R1 (b), which are extracts of general conditions of contract between the first respondent and the fourth respondent. The stand adopted by the first respondent was that it should have been permissible for them to retain all materials tackle and machinery which had been brought to the site by the fourth respondent and they had a lien over such materials as in all probability, the loss suffered by the Department would have been substantial which the fourth respondent was liable to compensate. The materials that were brought to the site at the instance of the fourth respondent therefore would not have been released in view of the lien held by them under terms of contract. 4. Since heavy reliance is placed on the terms of the contract, I think it would be necessary to extract the provision, so relied. This is para 54 of Ext.R1(c):- “54. Cancellation of Contract in part or in full for Contractor’s Default – If the contractor (a) makes default in commencing the works within a reasonable time from the date of the handing over the Site, and continues in that state after a reasonable notice from G.E. or (b) in the opinion of the GE, at any time, whether before or after the date or extended date for completion, makes default in proceeding with the works, with due diligence and continues in that state after a reasonable notice from G.E. or (c) fails to comply with any of the terms and conditions of the contract or after reasonable notice in writing with orders properly issued there under, or (d) fails to complete the Works or Work order and items of works, with individual dates of completion and clear the Site on or before the date of completion The Accepting Officer may without prejudice to any other right or remedy which shall have accrued or shall accrue thereafter to Government, cancel the Contract as a whole or only such Work Order(s) or items of Work in default from the contract. Whenever the Accepting Officer exercises his authority to cancel the Contract as a whole or in part under this Condition he may complete the Work by any means at Contractor’s risk and cost, provided always that in the event of cost of completion or after alternative arrangements have been finalized by the Government to get the Works completed, estimated cost of completion (as certified by G.E.) being less than the Contract cost, the advantage shall accrue to the Government. If the cost of completion or after alternative arrangements have been finalized by the Government, to get the Works completed, estimated cost of completion (as certified by G.E.) exceeds the moneys due to Contractor under this Contract, the Contractor shall either pay the excess amount ordered by G.E. or the same shall be recovered from the Contractor by other means. The Government shall also be at liberty to hold and retain in their hands materials, tackle, machinery and stores of all kinds on Site as they may think proper and may at any time sell any of the said materials, tackle, machinery and stores and apply the proceeds of sale in or towards the satisfaction of any loss which may arise from the cancellation of the Contract as aforesaid. The Government shall also be at liberty to use the materials, tackle, machinery and other stores on Site of the Contractor as they think proper in completing the work and contractor will be allowed the necessary credit. The value of the materials and stores and the amount of credit to be allowed for tackle and machinery belonging to the Contractor and used by the Government in completing the work shall be assessed by the G.E. and the amount so assessed shall be final and binding. The value of the materials and stores and the amount of credit to be allowed for tackle and machinery belonging to the Contractor and used by the Government in completing the work shall be assessed by the G.E. and the amount so assessed shall be final and binding. In case the Government completes or decides to complete the Works or any part thereof under the provision of this Condition, the cost of such completion to be taken into account in determining the excess cost to be charged to the Contractor under this Condition shall consist of the cost or estimated cost (as certified by G.E.) of materials purchased or required to be purchased and/or the labour provided or required to be provided by the Government as also the cost of the Contractor’s materials used with an addition of such percentage to cover superintendence and establishment charges as may be decided by the C.W.E., whose decision shall be final and binding”. 5. On going through the terms of the contract, I do not think that as matters presently stand, the first respondent will be entitled to enforce the claim for retention of a third party’s equipment, which accidentally happened to be in the work site. In fact, the time for taking action, as has been contemplated by para 54 has not yet arrived since there is no case put up by the first respondent that the contract has been awarded in favour of another person, or that the first respondent has suffered a loss because of the short fall committed in the contract arrangement that had been entered into by them with the fourth respondent. Apart from the above, on general principles also, I think, the retention of the equipment by the first respondent cannot be permissible or legal. 6. Of course, the learned Standing Counsel submits that this is a matter not coming under the purview of the jurisdiction of this Court, and it may perhaps justify the petitioner to proceed against the first respondent as well as the fourth respondent for damages, on the basis of breach of contract. I have to disagree with the preliminary objection that has been so raised by the Standing Counsel. 7. I have to disagree with the preliminary objection that has been so raised by the Standing Counsel. 7. As held by the Honourable Supreme Court in State of M.P. v. Pradeep Kumar [(2000)(7 SCC 372)], “the effort of the Court should not be of finding means to pull down the shutters of adjudicatory jurisdiction but to see whether it is possible to entertain his grievance”. Again as observed by the Supreme Court in M.V.A1 Quamar v. Tsavliris Salvage (International) Limited [(2000) 8 SCC 278], the flexibility in the matter of approach essentially has to be the watch word. The global changes of outlook in commerce and trade, requires changes, from sticking on to a pedantic approach. 8. It appears that the facts of the case, are rather unique. Here is an arrangement wherein the excavator had been entrusted to the first respondent. Perhaps, normally it would have come within the purview of bailment, referred to in the Indian Contract Act. However, one of the characters of the bailment is absent here. Bailment is defined under Section 148 of the said Act. There is to be essentially delivery of goods by one person to another, for some purpose, upon a contract, that they shall, when the purpose is accomplished, will be returned or otherwise disposed of, according to the directions of the person delivering them. 9. But, in this case, the terms of the contract, indicate that even though the excavator was in use of the work of the fourth respondent and for the purpose of his contract with the first respondent the equipment continued within the legal possession of the petitioner. The employees of the petitioner were in exclusive ‘control thereof and there was no parting of possession. Payment had to be made on hourly basis and at minimum payment for a day. Such payment included the element of wages that were payable and fuel expenses. On frustration of the contract, therefore it was a case where the petitioner was entitled to remove his earth-moving equipment. There could not have been any lien on the same at the hands of the first respondent. Petitioner’s properties were technically under his control and never came to be within the jurisdiction or authority of the first respondent. At the most, therefore there was a constructive bailment, but this did not confer any rights as such to the stranger. 10. There could not have been any lien on the same at the hands of the first respondent. Petitioner’s properties were technically under his control and never came to be within the jurisdiction or authority of the first respondent. At the most, therefore there was a constructive bailment, but this did not confer any rights as such to the stranger. 10. A reference is made in the counter affidavit that there was an unauthorized sub contract given to the petitioner at the hands of the fourth respondent. However, this appears to be a mis-conception of facts. The fourth respondent had hired the equipments on special terms. Neither the fourth respondent nor the first respondent had any right at any time to detain the excavator, the lawful possession and ownership of which always was resting with the petitioner. 11. I may in this context further refer to Ext.R1 (b) once again. The rights that had been reserved if at all could be considered as the right of the principal to detain the properties of the contractor. In view of the circumstances that the ownership of the equipment has not been disputed and since the petitioner has been able to show that he is the owner of the vehicle coupled with circumstances that he had never parted with the possession at all, there is no justification in not releasing the equipment as had been requested for in Ext.P4. 12. I direct the first respondent to release the equipment referred to in Ext.P4 to the petitioner on proper receipt forthwith. The release may be made on the petitioner making a request formally. I make it clear that nothing mentioned in the judgment is intended to deal with any other matters, relating to the contract, as the exclusive enquiry here was about the right of the petitioner for release of his equipments. The Original Petition stands allowed. Parties will suffer their respective costs.