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2006 DIGILAW 1018 (RAJ)

State of Rajasthan v. M/s. Sahiram Ram Chandra

2006-03-29

MANAK MOHTA

body2006
Judgment Manak Mohta, J.-This appeal is directed against the Judgment and decree dated 210.1984 passed by the learned Additional District Judge, Sri Ganganagar whereby the learned Judge has partly decreed the suit to the tune of Rs. 8,342.50 in favour of the plaintiff -firm and dismissed the rest of the suit and the counter claim filed by the defendant-State. It was also held that the plaintiff will be entitled to decretal amount of Rs. 8,342.50 with interest @ 12% per annum from the date of receipt of the legal notice under Section 80, CPC. 2. Brief facts giving rise to the present appeal are that the plaintiff firm M/s Sahiram Ram Chandra filed a suit against the defendant-State for recovery of Rs. 1,11,000/-(Rs. 1,02,901.68 principal + 8,098.32 interest). The plaintiff-firm carries the work of contract with the Public Works Department (B & R). The plaintiff -firm is a registered firm under the Indian Partnership Act, 1932 and Sahiram is one of the partners in the said firm. The plaintiff -firm took a contract for making “Sangaria-TB” road from 15/5 Kms to 23/0 Kms (incomplete work) which was in the jurisdiction of the Executive Engineer, Public Works Department (B & R), Sri Ganganagar but at present, it comes in the jurisdiction of the Executive Engineer, Public Works Department (B & R), Rajasthan Nahar Pariyojna, Hanumangarh Division. Thereafter, Agreement No. 5 1976-77 was executed between the plaintiff and the defendant at Sri Ganganagar. According to the Agreement, the contractual work was to be started from 15.08.1976 and the same was to be completed by 24.02.1978. The time was essence of contract. 3. It was further alleged in the plaint that for the purpose of construction of road, manufacturing of “bricks” and “Jhamma Ballast” was to be done in addition to the work as mentioned in the work contracts. Before executing the contractual work, the PWD (B & R) was under an obligation to provide suitable land for installing “Bhatta Bricks-Kiln” and supply of requisite quantity of coal. After allotment of contractual work, the plaintiff -firm, in its letter dated 18.09.1979, requested the Executive Engineer, PWD Sri Ganganagar regarding allotment of suitable land for installing the “Bhatta”. On 29.09.1976, the plaintiff -firm gave a reminder by registered post. After allotment of contractual work, the plaintiff -firm, in its letter dated 18.09.1979, requested the Executive Engineer, PWD Sri Ganganagar regarding allotment of suitable land for installing the “Bhatta”. On 29.09.1976, the plaintiff -firm gave a reminder by registered post. On 212.1976, the information with regard to permission of the Collector, was given to the plaintiff -firm by the Executive Engineer, PWD Sri Ganganagar vide communication No. EG/Acctt/76/122/26 dated 03.01.1977. Thus after 03.01.1977, the plaintiff -firm could start manufacturing of bricks on the “Bhatta”. It was alleged that the plaintiff-firm was bound to execute the work within stipulated period upto 24.02.1978 but the Assistant Engineer, PWD (B & R) Sub-Division, Hanumangarh sent a Telegram to the plaintiff -firm on 07.05.1977 to stop the operation of work due to scarcity of Government fund/Budget. In compliance, the plaintiff -firm stopped the work. The plaintiff-firm again wrote a letter on 22.07.1977 to the Executive Engineer, PWD (B & R) Sri Ganganagar requesting him that in case, there was no possibility to start the work in near future, then according to Clause 32 of the Agreement, the rest of the work be withdrawn and a final sanction be given to the work as it existed. The defendant did not give reply to the letter dated 22.07.1977 for about two months and did not give any direction to re-start the work, then, the plaintiff -firm by its letter dated 19.09.1977 again brought in the knowledge of the Executive Engineer regarding stoppage of operation of the firm since May, 1977. Thereafter one more letter was given to them but of no avail. Vide letter No. 1012 dated 28.01.1978, the Executive Engineer asked to re-start the work but it was not possible to complete the work as only one month was remained in hand for completing the contractual work as per agreement. Thus, the plaintiff submitted his final bill of Rs. 1,020.50/-on 20.03.1978 in accordance with measurement book No. 1718/EXG at pages 34 to 42. It was also alleged in the plaint that out of five running bills the amount of security Rs. 7,322/-was deducted but the payment of last bill alongwith security amount was not made. It was also stated that the estimated cost of the rest of the work was Rs. 6,30,394.50/-and on its completion, the plaintiff -firm would have got atleast profit @ 15% i.e., Rs. 7,322/-was deducted but the payment of last bill alongwith security amount was not made. It was also stated that the estimated cost of the rest of the work was Rs. 6,30,394.50/-and on its completion, the plaintiff -firm would have got atleast profit @ 15% i.e., Rs. 94,559.18 but the work was not completed due to defendant’s direction. Thus, he suffered loss of profit. The defendant has violated the terms and conditions of the contract and on giving letters to withdraw the contract. The Chief Engineer, PWD (B & R) Rajasthan, Jaipur vide its letter No.F. 5(4) PL/322-D/2583 dated 07.09.1978 has imposed a penalty @ 10% amounting to Rs. 59,213/-for not completing the work, that was totally illegal, unjust and against the terms of contract. The plaintiff-firm has preferred its claim to recover amount as under : 1. Amount of final bill Rs. 1,020.50/- 2. Amount of Security deducted Rs. 7,322.00/- 3. Amount of loss of profit Rs. 94,559.98/- Rs. 1,02,901.68/- 4. Amount of interest (+) Rs. 08,098.32/- Rs. 1,11,000.00/- 4. It was also stated in the plaint that this amount was demanded by giving notice under Section 80 CPC to the defendant but no payment was made thereafter the suit was filed praying that the suit may be decreed in favour of the plaintiff . 5. On behalf of the defendant-State, a written statement to the suit was filed. The execution of Agreement No. 5 1976-77 was admitted and stated that the time was not the essence of contract. In the written statement, the defendant denied all the averments made in the plaint. It was stated that the plaintiff did not complete the work as per Agreement. Thus, he was defaulter. A penalty of Rs. 59,213/ -was also imposed on him and the same was recoverable from the plaintiff -firm. The defendant further stated in his written statement that for the purpose of manufacturing the bricks, the defendant-State supplied 277 tonnes of coal on 01.04.1977 and 268 tonnes of coal on 12.04.1977 total costing of Rs. 1,05,847.56 but the coal was not used by the plaintiff-firm for manufacturing the bricks and the same was sold in the open market in black @ Rs. 300/-per tonne prevailing at that time, therefore, the defendant is entitled to recover the amount of coal at that rate Rs. 1,61,415/-from the plaintiff -firm. 1,05,847.56 but the coal was not used by the plaintiff-firm for manufacturing the bricks and the same was sold in the open market in black @ Rs. 300/-per tonne prevailing at that time, therefore, the defendant is entitled to recover the amount of coal at that rate Rs. 1,61,415/-from the plaintiff -firm. In this way, the defendant claimed by way of counter claim, the cost of coal Rs. 1,61,415/-plus penalty amount @ 10% Rs. 59,213/-total Rs. 2,20,628/-and after adjusting the amount of final bill Rs. 1,020/-and amount of security Rs. 7,322/-total Rs. 8,362, net amount remained due Rs. 2,11,266/-against the plaintiff -firm. The defendant prayed that the claims of the plaintiff may be dismissed and the counter claim of the defendant may be decreed. 6. The plaintiff -respondent filed rejoinder to the written statement and denied the allegation made against him. It was asserted that firstly, the land was not made available to the plaintiff as per Agreement and secondly, the work was stopped by the defendant, therefore, he cannot be blamed for delaying the work as per the Agreement but it was delayed by the defendant-State. Further, in the rejoinder, the supply of coal on different dates were also denied and stated that the question of payment of coal does not arise. It was prayed that the counter claim may be dismissed. 7. On the pleadings of the parties, the following issues were framed : 8. During the trial, on behalf of the plaintiff -firm PW. 1 Sahiram and PW. 2 Phool Chand in rebuttal were examined and on behalf of the defendant, DW. 1 Rajpal and DW. 2 Avinash Chandra were examined. From the plaintiffs side, documents Exh. 1 to Exh. 19 were exhibited and from defendant’s side, document Exh. A/1 to Exh. A/6 were exhibited. The oral arguments were heard. 9. After hearing of both the parties, the learned trial Court decided the Issues No.1 and 4 in favour of the plaintiff holding that the plaintiff-respondent is a registered partnership firm under the provisions of the Indian Partnership Act, 1932 and the plaintiff is entitled to recover the amount of the final bill Rs. 1,020.50/-and security amount Rs. 7,322/-total Rs. 8,342.50/-from the defendant under Issue No. 4 but dismissed the claim of the plaintiff with regard to loss of profit under Issue No. 2. 1,020.50/-and security amount Rs. 7,322/-total Rs. 8,342.50/-from the defendant under Issue No. 4 but dismissed the claim of the plaintiff with regard to loss of profit under Issue No. 2. The counter claim of the defendant-appellant with regard to price of coal and penalty amount was also dismissed under Issues No. 3 and 5. Thus, finally the suit was partly decreed in favour of the plaintiff and against the defendant for a sum of Rs. 8,432.50/-plus interest @ 12% per annum from the date of receipt of the notice vide Judgment and decree dated 210.1984. 10. The defendant-appellant being aggrieved by the Judgment and decree dated 210.1984 preferred the instant appeal before this Court. The plaintiff -respondent being aggrieved with the finding on Issue No. 2 also filed cross-objections under Order 41 Rule 22 CPC. 11. I have heard the learned Counsel for the parties and have carefully gone through the record of the case. 12. During the course of argument, the learned Government Advocate appearing for the appellant submitted that the learned Court below has not properly considered and appreciated the facts of the case and gave erroneous findings on the relevant issues. It was further submitted that the plaintiff -respondent was not interested in performing the contract works. The plaintiff was directed to re-start the work within the contractual period and time was not the essence of contract. If the plaintiff would have applied for extension of time, the same would have been extended but he was not keen to start the work and left the work incomplete. Thus, the penalty was rightly imposed but the learned Court below without considering the facts decided Issue No. 3 against the defendant-appellant. The finding is not sustainable. It was also submitted that the learned Court-below also committed a grave error in not believing that the coal costing of Rs. 1,05,847.56 was supplied to the plaintiff -respondent. In this respect, DW. 1 Rajpal has deposed that Issues Notes Exh. A/1 and Exh. A/2 were given to the plaintiff and on that basis, the plaintiff-respondent received a huge quantity of coal from the concerned depot. The plaintiff -respondent has also admitted the receipt of these Issues Notes. DW. 1 Rajpal has further deposed that he verified from the Gate-keeper that the coal has been taken away by the plaintiff-respondent. A/1 and Exh. A/2 were given to the plaintiff and on that basis, the plaintiff-respondent received a huge quantity of coal from the concerned depot. The plaintiff -respondent has also admitted the receipt of these Issues Notes. DW. 1 Rajpal has further deposed that he verified from the Gate-keeper that the coal has been taken away by the plaintiff-respondent. The learned Counsel for the appellant also urged that the coal was not utilized by the plaintiff-respondent as the Bricks Kiln was not started and he sold the coal in the open market in black at the rate of Rs. 300/-per tonne prevailing at that time. Thus, the defendant-appellant was entitled to recover the amount of coal from the plaintiff -respondent but the learned Court-below has not appreciated the facts in right perspective and decided Issue No. 5 against the defendant-appellant. The finding is not sustainable. Likewise, as the plaintiff was not willing to complete the work, his amount of final bill and security amount were rightly adjustable towards dues standing against the plaintiff-respondent but the learned Court-below has wrongly concluded that the defendant-appellant is not entitled to adjust the same. It was also contended that the plaintiff-respondent was not entitled for any interest as no dues were standing. It was prayed that the findings on issues may be quashed and set aside and the counter claim may be decreed in their favour, the appeal may be allowed. 13. On the contrary, the learned Counsel for the plaintiff -respondent refuted the contentions raised by the learned Counsel for the defendant-appellant and submitted that the findings on the concerned Issues No. 3, 4 and 5 are based on well established reasons and that deserve to be maintained. It was urged that from the material available on record, the plaintiff was not in a position to start Brick-Kiln before 03.01.1977 as the land was allotted at a very late stage. Likewise the work was stopped by the defendant just after allotment of the land for manufacturing of bricks and that is admitted by the defendant, therefore, the plaintiff -respondent cannot be blamed for not completing the contractual work, to that extend, the Court-below has rightly dis-allowed the amount of penalty claimed by the defendant-appellant. It was further contended by the learned Counsel for the plaintiff -respondent that the plaintiff-respondent never took the delivery of the coal. PW. It was further contended by the learned Counsel for the plaintiff -respondent that the plaintiff-respondent never took the delivery of the coal. PW. 1 Sahi Ram has deposed before the learned Court-below that Issue Note Nos. 1 and 2 were issued but no delivery of coal was taken. It was upon the defendant-appellant to prove that in fact, the delivery of coal was made. In this respect, DW. 1 Rajpal has admitted in cross-examination that total delivery of coal was not made in his presence and no other witness has been produced nor any documentary evidence like record of the supply of coal or Gate Pass etc. has been placed by the defendants’ side. Thus, the conclusion on Issue No. 5 by the learned Court-below is not suffering from any illegality or infirmity that should be maintained. It was further contended that the amount of final bill and the amount of security have not been disputed and no amount was due against the plaintiff -respondent. Thus, the defendant-appellant was not entitled to adjust the said amount against dues. The learned Court-below decided Issue No. 3 alongwith interest in right perspective. No inference is required. In this way, it was prayed that the appeal of the defendant-appellant may be disallowed. 14. The learned Counsel for the plaintiff -respondent further submitted his contentions with regard to cross-objection filed under Order 41 Rule 22, CPC. It was urged that the plaintiff -respondent was always ready and willing to perform the contractual work and he had worked during that period till the defendant-appellant directed to stop the work due to scarcity of funds, for that, the plaintiff -respondent cannot be made responsible. The plaintiff -respondent was writing to defendant-appellant again and again for proper direction but no reply was given in time. Thus, it was prayed that the plaintiff-respondent was entitled to receive loss of profit @ 15% on the remaining contractual work for that the plaintiff -respondent has claimed Rs. 94,559.18 but the learned Court-below has not concluded the relevant Issue No. 2 in right perspective and wrongly decided against the plaintiff-respondent. It was urged that the learned Court-below held that the plaintiff -respondent was not defaulter and penalty imposed by the defendant was not maintained but contrary to that, under Issue No. 2 disallowed the claim with regard to loss of profit, that is not sustainable. It was urged that the learned Court-below held that the plaintiff -respondent was not defaulter and penalty imposed by the defendant was not maintained but contrary to that, under Issue No. 2 disallowed the claim with regard to loss of profit, that is not sustainable. It was prayed that cross-objection may be allowed and to that extend, the suit may be decreed with interest as well as with costs. 15. The learned Counsel for the defendant-appellant opposed the contentions and submitted that the plaintiff -respondent did not complete the contractual work, thus, he was not entitled to claim any loss of profit. Further loss of profit has been demanded on mere assumption and presumption, but that is not proved. Thus, the learned Court-below has rightly rejected his claim. It was prayed that cross-objection may be disallowed. 16. I have considered the rival contentions of both the parties and perused the finding on each issue and the conclusions drawn thereon by the learned Court-below. With regard to Issue No. 1, there is no dispute between the parties. The plaintiff has produced Exhs. 1 and 2 registration of firm and copy of the register of the firm showing the name of the plaintiff as partner. I have seen the finding on Issue No. 1 and that is to be maintained. From the side of the defendant-appellant mainly the dispute has been raised with regard to rejection of the claim of penalty amount imposed for non-completion of the work and price of coal which was said to be supplied by the defendant-appellant. It is also clear that the burden of proving these issues was on the defendant-appellant. In this respect, on behalf of the defendant-appellant, DW. 1 Rajpal and DW. 2 Avinash Chandra witnesses have been examined. These two witnesses have nowhere stated that how the plaintiff-respondent was defaulter. The defendant-appellant has admitted that the land for installation of Bricks Kiln was allotted after 4 ½ months of the contract and after that on 09.05.1977, all of a sudden, the works were stayed vide telegram Exh. 7. For ready reference, the message given by the Assistant Engineer by way of Telegram dated 09.05.1971 is reproduced below : “Work stop Sangaria Tibi immediately”. 17. During that period, the plaintiff was requesting again and again for proper direction but no reply was given. After seven months, vide letter Exh. 7. For ready reference, the message given by the Assistant Engineer by way of Telegram dated 09.05.1971 is reproduced below : “Work stop Sangaria Tibi immediately”. 17. During that period, the plaintiff was requesting again and again for proper direction but no reply was given. After seven months, vide letter Exh. 11 the plaintiff was directed to restart the work from 21/0 Kms to 23/0 Kms of the said road but by that time, the scheduled time as per Agreement was short. Thus, the plaintiff -respondent was having good reasons not to start the work. From the side of the defendant-State, no proper evidence was produced. I have seen the finding on Issue No. 3. There is no infirmity and illegality in deciding the same against the defendant-appellant and that is to be maintained. With regard to supply of the coal from the side of the defendant-appellant, no documentary evidence like issuing register of the stock and Gate-pass have been placed and proved. DW. 1 Rajpal who was Store-keeper at Sri Ganganagar has been produced but he has only stated that Issue Notes No. 1 and 2 were issued by him at Sri Ganganagar and coal was to be given by the Depot at Hanumangarh. He has further stated that in-charge of the Depot was Phool Chand at that time and in his presence, first day four trucks were loaded but admitted that no Gate-pass was issued. No entries in the stock register were made. Further in his statement, he has not stated that total coal was taken away by the plaintiff in his presence. For ready reference, the relevant portions of the statement of DW. 1 Rajpal are reproduced below : 18. DW. 2 Avinash Chandra has appeared but he is no relevant witness of this fact. In Cross-examination, he has said that he knew nothing about the disputed work. PW. Sahi Ram has denied his signatures on the Issue Notes Exh. A/1 and Exh. A/2. 19. PW. 2 Phool Singh, Gate-keeper Hanumangarh Depot whose name has been referred DW. 1 Rajpal with reference to supply of coal has be produced in rebuttal from the side of the plaintiff respondent and he has denied that any coal was supplied to the plaintiff-firm. A/1 and Exh. A/2. 19. PW. 2 Phool Singh, Gate-keeper Hanumangarh Depot whose name has been referred DW. 1 Rajpal with reference to supply of coal has be produced in rebuttal from the side of the plaintiff respondent and he has denied that any coal was supplied to the plaintiff-firm. He has further stated that the Gate-pass of supply and entries thereof in the register were made at the time of supply of the coal and record is kept in the office. The relevant portions of the statement of PW. 2 Phool Singh are reproduced below :- 20. Thus, mere production of Issue Notes Exh. A/1 and Exh. A/2 cannot prove the actual supply of coal by the defendant-appellant. No responsible witness or other linking material has been produced which is presumed to be maintained at the time of supply of coal. Further more, after the so-called supply of a huge quantity of coal, when the work was stopped, what further steps were taken with regard to coal stock, has not been stated. Thus, the finding of learned Court-below that actual delivery of coal is not proved and therefore, the defendant-State is not entitled to recover the cost of the coal, calls for no interference. The defendant-appellant has not been able to prove any dues against the plaintiff -respondent. The adjustment of amount of the final bill and security amount are not disputed, the defendant-State was not authorised to adjust the same. The finding on Issue No. 3 is also not suffering from any infirmity. On this basis, the counter claim of the defendant-State has been rightly rejected by the learned Court-below and the findings and conclusions drawn thereon are to be maintained. 21. I have also considered the contentions placed with reference to cross-objection filed by the plaintiff -respondent. The plaintiff-respondent was directed to restart the work vide letter dated 28.01.1978 (Exh. 11) by the defendant-State to complete the work from 21/0 Kms to 23/0 Kms within the contractual time mentioned in the Agreement but the contractor did not start the work on the count that the time was very short but in this respect, it is not the case of the plaintiff -respondent that he applied for extension of time stating bona fide reasons to the defendant-State though there were grounds for extension of time. Further there were other works also, which were to be completed by the plaintiff-respondent but no work was re-started and in the meantime, he requested to give final sanction and final bill be prepared. It is also clear that Bricks Kiln was not started and works were stayed by Telegram dated 09.05.1971. The plaintiff -respondent has claimed 15% loss of profit on the basis of Income-tax Assessments but the actual loss has not been proved. The learned Court-below, after taking all aspects of the case disallowed the claim of loss of profit. I have seen the finding on Issue No. 2. The learned Court-below has concluded that the plaintiff -respondent is not entitled to recover the loss of profit @ 15% on the amount of remaining work, which is not suffering from any illegality and infirmity and that should be maintained. 22. In the result, the appeal filed by the defendant-appellant and cross-objection filed by the plaintiff -respondent, both are liable to be dis-allowed and they are hereby disallowed. The Judgment and decree dated 210.1984 passed by the learned Additional District Judge, Sri Ganganagar is confirmed. Appeal and cross-objection are disposed of accordingly. Looking to the facts and circumstances of the case, there shall be no order as to costs.