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2008 DIGILAW 142 (ORI)

STATE OF ORISSA v. KAMAL LOCHAN MOHAPATRA

2008-02-15

SANJU PANDA

body2008
JUDGMENT : Sanju Panda, J. - The unsuccessful Plaintiffs are the appellants in this First Appeal against the judgment and decree dated 25.1.1994 and 5.2.1994 respectively passed by the learned Civil Judge (Senior Division), Keonjhar in Money Suit No. 1 of 1989 filed by the Plaintiffs for realization of Rs. 9,16,767.20 p. from the defendant along with pendente lite interest and future interest in the shape of damage at the rate of 12% per annum till realization. 2. The case of the Appellants-Plaintiffs, in short, is that an advertisement was made by them for Job No. 525/Rastriya Sadak No. 6 for construction of High Level Bridge over river Baitarani on National Highway No. 6. After following ail legal formalities including execution of agreement No. 1F-2(CE) of 1983-84, the job-work was entrusted to the Respondent-Defendant, who is an 'A' Class Contractor. The Respondent-Defendant started construction work from 12.5.1983 and as per the agreement, he was to complete the work by 31.12.1983. Since he did not complete the work within the stipulated period, time was extended and he continued the work till February, 1984. But, thereafter, he did not proceed with the construction to complete the job-work entrusted to him. Hence, show-cause notice was given to him on 13.6.1984 as to why his contract should not be rescinded and the work entrusted to other Contractor, or taken up departmentally at the extra cost to be borne by him as per the agreement. The defendant gave an evasive reply. So, a fresh tender was invited for execution of the incomplete work left by the defendant. But, thereafter, the department decided to take up the incomplete work by itself for the interest of general public and dealt with the work. Hence, on 31.12.1985 rescission order was passed and the incomplete work was completed on 31.12.1986. The plaintiffs spent a sum of Rs. 7,04,678/- to complete the incomplete work left by the defendant. The plaintiffs further assessed the stock materials kept by the defendant at Rs. 3,09,977/-. Thus, the total came to Rs. 10,14,655/- and against the said amount, the earnest money and the initial security deposits made by the defendant, totalling to Rs. 43,399.80 p. was adjusted and after deducting the said amount, there was an amount of Rs. 9,71,255.20 p. outstanding against the defendant. The defendant's security deposit of Rs. 25,468/- and withheld amount for sanction of extension of time Rs. 10,14,655/- and against the said amount, the earnest money and the initial security deposits made by the defendant, totalling to Rs. 43,399.80 p. was adjusted and after deducting the said amount, there was an amount of Rs. 9,71,255.20 p. outstanding against the defendant. The defendant's security deposit of Rs. 25,468/- and withheld amount for sanction of extension of time Rs. 3,000/- and final bill of Rs. 26,020/- totalling to Rs. 54,488/- was also adjusted towards the claim of the Plaintiffs. Thus, a sum of Rs. 9,16,767.20 p. is still due to be recovered from the defendant. The cause of action arose within the jurisdiction of the Court on 31.12.1985 when the rescission order was passed and on 31.12.1986 when the work was completed by the department. Hence, the plaintiffs filed the suit. 3. The defendant contested the suit traversing the Plaintiffs' allegation. In his written statement, he stated that the suit was not maintainable for non-joinder of necessary and proper parties and it was barred by law of limitation. Further, the suit was also filed beyond the scope of agreement and the claim of the Plaintiffs was not covered under the said agreement. The rescission of contract was bad in law and also the plaintiffs did not disclose the time consumed by them to complete the incomplete work departmentally. The defendant could not complete the work due to non-cooperation of the plaintiffs because the machinery and materials were not supplied in time, for which the authority was responsible. Hence, the suit was liable to be dismissed with cost. 4. On the basis of the above pleadings of the parties, the learned Civil Judge framed as many as five issues and both the parties adduced oral and documentary evidence in support of their respective plea. After analyzing the evidence and materials on record, the learned Civil Judge recorded the following findings: (1) The case is covered under Article 27 of the Limitation Act and the suit is barred by law of limitation as the defendant was executed an agreement to complete the work by 31.12.1983, but he has not done so. Thus, the suit should have been filed by 31.12.1986. But, the suit was filed on 2.1.1989 after expiry of three years from 31.12.1983. Thus, the suit should have been filed by 31.12.1986. But, the suit was filed on 2.1.1989 after expiry of three years from 31.12.1983. (2) It is held that the rescinding of work is not bad in law as the defendant had not applied for further extension of time to complete the work. (3) The defendant is not entitled to get back the security money and pending bill as per the agreement dated 31.12.1983. With the above finding, the learned Civil Judge dismissed the suit as barred by limitation. 5. The learned counsel appearing for the appellants vehemently argued that the finding of the Court below are sustainable in law as the cut off date in the agreement for completion/executing the entire work by the respondent-defendant was on 31.12.1983. The work was executed by the defendant slowly. The last item of work executed by the respondent-defendant was in February, 1984. The bill was prepared by the appellants and the respondent-defendant accepted the said bill on 9.2.1985. The work of inventory was completed on 31.11.1985 in reference to Ext. 12 and rescission order was passed on 31.12.1985 with reference to Ext. 8. As the department completed the residual portion of the work by 31.12.1986, the cost of extra expenditure incurred by it was assessed on the said date. Hence, the Appellants-Plaintiffs are entitled to recover the expenditure incurred due to non-completion of work by the Respondent-Defendant and the suit was within time when it was filed on 2.1.1989. Further, it was argued that the learned Civil Judge did not apply his judicial mind to the above facts and came to an erroneous conclusion which needs to be interfered with by this Court. 6. In the present appeal, though notice was issued to the respondent and he entered appearance through lawyer, at the time of hearing, nobody appeared on his behalf. 7. The appellants as plaintiffs entrusted the work to the respondent-defendant and a contract was executed on 12.5.1983 between the respondent-defendant and appellant-plaintiff No. 2-the Executive Engineer, N.H. Division, Keonjhar and the relevant portion of the said Contract reads as follows: Clause 3. 7. The appellants as plaintiffs entrusted the work to the respondent-defendant and a contract was executed on 12.5.1983 between the respondent-defendant and appellant-plaintiff No. 2-the Executive Engineer, N.H. Division, Keonjhar and the relevant portion of the said Contract reads as follows: Clause 3. In any case in which under any clause or Action when clauses of contract the contractor shall have rendered whole security himself liable to pay compensation amounting to the deposit is whole of his security deposit in the hands of Government forfeited (whether paid in one sum or deducted by instalments) Executive Engineer on behalf of the Governor of Orissa, shall have pay to adopt any of the following courses, as he may deem best suited to the interests of Government. (a) & (b) xxx xxx xxx (c) To measure up the work of the contractor, and to take such part of the work of the contract as shall be unexecuted out of his hands and to give it to Anr. contractor to completed, in which case any expenses which may be incurred in excess of the sum which would have been paid to the original contractor if the whole work had been executed by him (of the amount of which excess the certificate in writing of the Executive Engineer shall be final and conclusive) shall be borne and paid by the original contractor and may be deducted from any money due to him by Government under the contract or otherwise, or from his security deposit or the proceeds of sale thereof, or a sufficient part thereof. 8. From the above, it is clear that the contractor-Defendant entered into the agreement with the above condition and as per the aforesaid Clause 3, the Respondent-Defendant is not entitled to recover or be paid any sum for any work or part thereof actually performed under this contract, unless and until the Executive Engineer certifies in writing regarding the performance of such work and the value payable in respect thereof, and he shall only be entitled to be paid the value so certified. Hence, the learned Civil Judge has rightly come to a finding that the defendant was not entitled to any amount from the plaintiffs for the work he has completed and the earnest money, the initial security deposit and the stock materials have to be lapsed to the plaintiffs, as the respondent-defendant has not completed the work within the stipulated time. 9. So far as filing of the suit is concerned, it appears that the plaintiffs completed the incomplete work departmentally in December, 1986. After the work was left incomplete by the respondent, they raised the expenditure to complete the incomplete work and thereafter calculated the loss sustained. It's a claim of the State Government. As per Article 112 of the Limitation Act, 1963, the period of limitation begins to run like a suit by a private person and it relates to any suit filed by or on behalf of the Central Government or any State Government and the period of limitation of 60 years provided under the old Article 149 has been reduced to 30 years. For better appreciation, the extract of the said Article is given hereunder: Articles Description of suit Period of Time from which period limitation begins to run 1 to 111 xxx xxx xxx Any suit (except a suit When the period of before the Supreme limitation would begin to Court in the exercise run under this Act against of its original a like suit by a private 112 jurisdiction) by or on Thirty person. behalf of the Central years Government or any State Government, including the Government of the State of Jammu and Kashmir 113 to 137 xxx xxx xxx 10. Article 112 applies only to the suit by or on behalf of the Government. Since the present suit was filed by the Government, who is plaintiff No. 1, the period of limitation is 30 years. The main intention behind this Article is to promote public interest, namely, the conservation of revenue due to the State, and this Article will be applicable to any suit where it should be in relation to recovery of money pure and simple, or for recovery of property or for enforcement of period or for any one of these to be species of litigation generally described of period or for any one of these to be species of litigation generally described in the Schedule of the Limitation Act. And what the Court should examine is whether the property or the benefit sought in the suit belongs to wholly and solely to the State. Article 27 of the Limitation Act reads as follows: Articles Description or suit Period of Time trom which period limitation begins to run 1 to 26 xxx xxx xxx For compensation for When the time specified breach of a promise to arrives or the contingency 27 do anything at a specified Three happen. time, or upon the years happening of a specified contingency 26 to 137 xxx xxx xxx The said article is general in character and Article 55 of the Limitation Act is a residual Article. Article 55 reads as follows: Articles Description of suit Period of Time from which period limitation begins to run 1 to 54 xxx xxx xxx For compensation for When the contract is the breach of any broken or (where there 55 contract, express or Three are successive breaches) implied not herein years when the breach in respect specially provided of which the suit is instituted occurs or (where the breach is continuing) when it ceases. 55 to 137 xxx xxx xxx 11. Article 55 is applicable when Article 27 is not applicable to a case. Where the two Articles can be attracted to a suit, the more specific Article excludes the general Article. Article 27 is not applicable unless there is an agreement between the parties to pay the loss immediately on it being assessed. It applies in general to all contracts which are to be performed at a specified future date on the happening of the specified contingency. The word "specified" implies that there should be some particularity in the contract itself as to the time when the contract is to be performed or as to the contingency which is to happen. In view of the aim and intention of Article 27, as aforesaid it is a general Article and the same is not applicable when there is Article 112, a specific provision for filing of a suit by or on behalf of the State. Had the respondent-defendant filed the suit against the Government, Article 27 or Article 55 would have been applicable. Since the suit was filed by the State as a plaintiff, this Article has no application and Article 112 is applicable and as such, the suit was not barred by limitation. 12. Had the respondent-defendant filed the suit against the Government, Article 27 or Article 55 would have been applicable. Since the suit was filed by the State as a plaintiff, this Article has no application and Article 112 is applicable and as such, the suit was not barred by limitation. 12. In the result, the finding of the learned Civil Judge (Senior Division), Keonjhar on the question of limitation is reversed and his other findings are confirmed. 13. The suit is decreed against the defendant and the plaintiffs are entitled to 6% interest on the amount from the date of the suit till realization. Accordingly, the appeal is allowed. No costs. Final Result : Dismissed