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Karnataka High Court · body

2011 DIGILAW 954 (KAR)

Ramesh S. Rao v. Sudhir J. Kamat

2011-09-23

A.N.VENUGOPALA GOWDA, N.KUMAR

body2011
ORDER VENUGOPALA GOWDA, J.—1st defendant in the suit has filed this appeal questioning a decree for payment of Rs. 3,68,476.49 with interest at 6% p.a. from the date of suit till realization. The plaintiff has filed the cross-objection with regard to denial of interest on the principal amount for the period prior to institution of the suit and also in determining the rate of interest at 6% on the decree amount. For convenience, the parties would be refened to with reference to their rank in the suit. 2. Material facts of the case are: Plaintiff is a Structural Engineer by profession. Defendant No. 1 is the owner of property No. 41, 4th Main, 3rd Cross, AECS Layout, Sanjaynagar, Bangalore. He was working as Optometrist at Kuwait and appointed his brother-in-law/defendant No. 2, as a power of attorney holder to construct building at the said property. Defendant No. 2, as the General Power of Attorney Holder of defendant No. 1, entrusted to the plaintiff, the work of obtaining of sanction plan and construction of building on the said property of defendant No. 1. Plan prepared by the plaintiff was approved by the 2nd defendant and was submitted to the BDA on 25.7.1990. BDA sanctioned the plan on 22.8.1990. Construction commenced on 30.8.1990. Defendant No. 1 returned from Kuwait to Bangalore on 30.9.1990, whereafter he looked after the construction work. Plaintiff constructed the building and handed over the building to defendant No. 1 on 10.10.1991. House warming ceremony was performed by the defendant No. 1 on 18.10.1991. The plaintiff prepared a final bill on 7.11.1991 for Rs. 8,14,949.99 wherein the payment of Rs. 4,46,473.50 was deducted and the balance amount of Rs. 3,68,476.49 was claimed. On 12.4.1993, the plaintiff got issued a notice to the 1st defendant to make payment of the balance amount of Rs. 3,68,476.49. He also claimed interest at 18%, i.e., in all Rs. 4,86,227.44. The 1st defendant got sent a reply notice dated 29.4.1993, contending that, the original estimation of the work was only Rs. 2,00,000/-, which was revised to Rs. 3,50,000/- and as against the said amount, there was payment of Rs. 9,70,973/-. He claimed refund of Rs. 6,20,973/- with interest at 18%. After sending a rejoinder, the suit was instituted against the defendant No. 1 and his brother-in-law/General Power of Attorney Holder/defendant No. 2, to pass a decree for realization of Rs. 2,00,000/-, which was revised to Rs. 3,50,000/- and as against the said amount, there was payment of Rs. 9,70,973/-. He claimed refund of Rs. 6,20,973/- with interest at 18%. After sending a rejoinder, the suit was instituted against the defendant No. 1 and his brother-in-law/General Power of Attorney Holder/defendant No. 2, to pass a decree for realization of Rs. 3,68,476.49 and interest thereon amounting to Rs. 1,17,750.95 from 8.11.1991 till the date of institution of the suit and for consequential reliefs. 3. In the written statement filed by the 1st defendant, amongst others, it was stated that, the estimated cost of the building was Rs. 3,50,000/- and the plaintiff having received Rs. 6,01,473.50, returned Rs. 1,473.50 to make the figure Rs. 6,00,000/-. It was contended that, plaintiff has to render account and refund excess sum received, which was estimated at Rs. 1,00,000/-. A counter claim for the said amount was made. 4. The 2nd defendant in the written statement filed, admitted the claim of the plaintiff and submitted that, he is not liable to pay any money, since he is only a General Power of Attorney Holder of defendant No. 1. 5. Based on the material pleadings, the learned Trial Judge raised the following issues: (1) Whether the plaintiff proves that the prepared drawing specifications of the work to be carried out and the estimate in respect of the proposed construction, which is inclusive of his professional charges being Rs. 7,93,001.50? (2) Whether plaintiff proves that he handed over possession of the building to the 1st defendant on 10.10.1991? (3) Whether plaintiff proves that the 1st defendant was due to him Rs. 3,68,476.49 as on 7.11.1991? (4) Whether plaintiff proves that the defendant is liable to pay Rs. 1,17,750.95 being the interest at the rate of 18% p.a. as averred in para 8 of the plaint? (5) Whether plaintiff proves that defendant No. 1 is due Rs. 4,86,227.44 with interest at 18% p.a. from the date of suit till payment? (6) Whether defendant No. 1 proves that he was given to understand by the 2nd defendant that the cost of construction will come to Rs. 2 lakhs? (7) Whether the 1st defendant further proves that the 2nd defendant informed him that he got prepared a plan through the Architect and the estimated cost was Rs. 3.5 lakhs? (8) Whether 1st defendant proves that plaintiff received Rs. 2 lakhs? (7) Whether the 1st defendant further proves that the 2nd defendant informed him that he got prepared a plan through the Architect and the estimated cost was Rs. 3.5 lakhs? (8) Whether 1st defendant proves that plaintiff received Rs. 6,01,473.50 by cheques, drafts and Rs. 30,000/- by cash and that the plaintiff returned Rs. 1,473.50 to make it a round figure of Rs. 6 lakhs as averred in para No. 3 of his W.S.? (9) Whether 1st defendant further proves that by receiving payments by cheques, the plaintiff requested him for issuance of cheque in the names or different concerns in which he stated he was interested and also by way of cheques drawn on self? (10) Whether 1st defendant proves that he performed house warming ceremony on the day of Vijaya Dashami in 1991 even though the construction was incomplete? (11) Whether 1st defendant further proves that on 7.2.1992, the plaintiff came to the building and took measurements and noticed for himself the unfinished work and promised to settle the dues to the 1st defendant? (12) Whether 1st defendant further proves that no bill was submitted by the plaintiff to 1st defendant at any time much-less on 7.1.1991? (13) Whether 1st defendant proves that the work done by the plaintiff was very unsatisfactory and was incomplete? (14) Whether 1st defendant proves that the plaintiff has to refund after accounting for the excess amount received by him from the 1st defendant? (15) Whether defendant No. 1 proves his counter claim as against the suit claim and that the same is within limitation? (16) Whether defendant No. 1 proves that he is entitled for decree on counter claim as averred in para-7 of his W.S.? (17) Whether 2nd defendant proves that the 1st defendant assured him to meet all the expenses as averred in para-2 of his W.S.? (18) Whether plaintiff is entitled to the relief as prayed for? (19) What order/decree? 6. During trial, plaintiff got himself examined as P.W. 1 and got marked Exs. P1 to P17. Defendant No. 1 got himself examined as DW-1 and got marked Exs. D1 to D38. One C.K. Bhaskaran, a Civil Engineer and registered valuer was examined as DW-2. Since DW-2 did not appear for cross-examination, his evidence was ordered to be discarded on 23.11.2000. The learned Trial Judge, by answering issue Nos. P1 to P17. Defendant No. 1 got himself examined as DW-1 and got marked Exs. D1 to D38. One C.K. Bhaskaran, a Civil Engineer and registered valuer was examined as DW-2. Since DW-2 did not appear for cross-examination, his evidence was ordered to be discarded on 23.11.2000. The learned Trial Judge, by answering issue Nos. 1 to 3 and 17 in the affirmative and issue Nos. 4, 6 to 8 and 11 to 16 in the negative and issue and as a result, the impugned decree is liable to be set-aside and the counter claim having been established, is liable to be allowed. 7. Sri. Vishwanath R. Hedge, learned advocate appearing for the respondent/plaintiff, on the other hand contended that, the findings recorded in the judgment passed by the learned Trial Judge, except the one relating to the date from which and the rate of interest payable, are justified. Learned counsel submitted that, the defendant No. 1 has been taking inconsistent pleas from time to time. Learned counsel submitted that, in the reply notice Ex. D3, it was stated that, the estimation was revised to Rs. 3,50,000/- and the payment allegedly made was Rs. 9,70,973/-, which version was given a go by in the written statement filed, wherein it was contended that, the payment made was Rs. 6,01,473.50 and the revised estimated cost was Rs. 3.25 lakhs. Learned counsel contended that, the learned Trial Judge has correctly appreciated the evidence on record and the decree passed Nos. 5, 9, 10 and 18 partly in the affirmative, decreed the suit of the plaintiff in part, i.e., for Rs. 3,68,476.49 with proportionate costs. Interest at 6% p.a. on the decretal amount was allowed from the date of institution of the suit till realization. This appeal and cross-objection are directed against the said decree. 8. The 1st defendant/appellant, party in person, contended that, the learned Trial Judge has erred in decreeing the suit in part, without noticing that the defendant No. 2 has not adduced any evidence in support of the plea taken by him in the written statement. He further contended that, the material evidence on record has not been considered and appreciated by the learned Trial Judge. He contended that, the plaintiff is not entitled to a sum more than Rs. He further contended that, the material evidence on record has not been considered and appreciated by the learned Trial Judge. He contended that, the plaintiff is not entitled to a sum more than Rs. 3.25 lakhs and there being excess payment received, the suit being untenable, ought to have been dismissed and the counter claim ought to have been allowed. He further contended that, the findings in the impugned judgment are against the evidence on record for realization of Rs. 3,68,476.49 is justified. Learned counsel contended that, the transaction between the parties is a commercial transaction and the learned Trial Judge ought to have allowed the interest at 18% on the principal sum of Rs. 3,68,476.49, till realization. Learned counsel pointed out that, defendant No. 2 has not been impleaded as a party in this appeal and hence it is not open to the appellant to contend anything against the 2nd defendant in the suit or the findings recorded by the learned Trial Judge, i.e., insofar as the 2nd defendant is concerned. 9. We have perused the records. In view of the rival contentions, the points for consideration are: 1. Whether the plaintiff is justified in claiming the cost of construction, inclusive of his professional charges at Rs. 7,93,001.50? 2. Whether the defendant No. 1 has proved the payment of Rs. 6,01,473.50 to the plaintiff and in making the counter-claim for Rs. 1,00,000/-? 3. Whether the learned Trial Judged is justified in awarding interest at 6% p.a. on the decree amount from the date of institution of suit, till realization? Re-point No. 1: 10. Indisputedly, 2nd defendant is the brother-in-law of the 1st defendant. Ex. D1/General Power of Attorney (GPA) dated 11.9.1989 was executed by the 1st defendant, whereby, the 2nd defendant was appointed as his GPA holder to complete the sale transaction, which had been entered into by him under an agreement dated 1.9.1989 with G. Honnappa for purchase of residential property. The said deed also empowered the 2nd defendant to apply for and obtain sanction plan for construction of building or for addition to the existing building or for alterations, improvements etc., and to appoint Architect, Contractor and take steps and manage the construction of building. Ex. The said deed also empowered the 2nd defendant to apply for and obtain sanction plan for construction of building or for addition to the existing building or for alterations, improvements etc., and to appoint Architect, Contractor and take steps and manage the construction of building. Ex. D12 is a communication dated 15.12.1989 by the 1st defendant to the 2nd defendant, from which it is clear that, there being discussion between the defendants with regard to matters relating to construction, the 1st defendant informed the 2nd defendant as follows: “Please see that you discuss clearly the fees for Architect Mr. Sudhir Kamath. We do not want matters to be postponed only because we do not pay him as anticipated by him. The dealings should be clear whatever the deal is. Thanks.” Ex. D9 is a letter dated 6.7.1990 by the 1st defendant to the 2nd defendant, from which it would appear that, the 2nd defendant having informed the 1st defendant about the estimated cost of construction, the 2nd defendant was requested to try to complete the construction within Rs. 3.25 lakhs as estimated earlier. The 2nd defendant having entrusted the work of construction of building to the plaintiff, plan which was submitted for sanction to the BDA, was approved on 22.8.1990 and building licence was issued (Ex. D23). The specifications with regard to work as agreed to between the plaintiff and the 2nd defendant/GPA holder of 1st defendant is at Ex. P13. The estimate of the construction was submitted by the plaintiff to the GPA holder as per Ex. P14 and the same was approved and copy was received by the GPA holder [Ex. 14 (b) and (c)]. 11. Even according to the 1st defendant, the construction work commenced on 30.8.1990. 1st defendant returned from Kuwait to Bangalore on 30.9.1990 and visited the construction site on 1.10.1990 and found that old building was existing as it is and where it was in September, 1989. He found chemicals of industrial corporation, a company which belonged to his brother-in-law therein. After return from Kuwait on 30.9.1990, the 1st defendant remained in Bangalore and the construction work which was at the initial stage proceeded, and was completed by 1st week of October, 1991 and the possession of the constructed house was delivered by the plaintiff to the 1st defendant on 10.10.1991. House warming ceremony was performed by the 1st defendant on 18.10.1991. House warming ceremony was performed by the 1st defendant on 18.10.1991. The 1st defendant has admitted that, after his arrival in Bangalore, he took responsibility of overseeing of the plaintiff’s work. He has also admitted that from 18.10.1991 he has been in actual possession and enjoyment of the house without any interruption. Ex. P17, the final bill was submitted by the plaintiff to the 1st defendant on 7.11.1991, wherein, the total cost shown is Rs. 8,14,949.99. The amount received till then was Rs. 4,46,473.50. The balance amount due has been shown as Rs. 3,68,476.49. 12. From the record it is clear that, there was no dispute with regard to quality and quantity of construction made by the plaintiff, till the plaintiff issued notice-Ex. D2. The 1st defendant revoked the GPA executed by him earlier, on 12.11.1992 as per Ex. D5. Even Ex. D5 does not show that, any sub-standard materials having been used in the matter of construction nor the construction of house having not been made in accordance with sanction plan and as per the agreed specifications (Ex. P13). Ex. D5 shows that, GPA was revoked due to unlawful violations of the provisions of the GPA, which came to the notice of the 1st defendant. No deficiency of whatsoever nature on the part of the plaintiff was stated therein. The plaintiff got sent a notice through his advocate on 12.4.1993 as per Ex. D2 claiming that, there is dues of Rs. 3,68,476.49 and the payment having not been made, there being liability to pay interest at 18%, i.e., in all Rs. 4,56,910.85. 13. A reply as per Ex. D3 was got sent by the 1st defendant through his advocate on 29.4.1993, in which it was stated that, the original estimation for additions and alterations to the existing building as given was Rs. 2,00,000/- and, however, the estimation was revised to Rs. 3,50,000/-, which was agreed, on the basis of which, the execution of assigned construction work as per plan commenced. It was alleged that, the plaintiff deliberately postponed the construction work till he recovered more than the revised estimated cost and that, the plaintiff has received Rs. 9,70,973/-, as against the agreed revised estimate of Rs. 3,50,000/-. For the first time, the first defendant alleged that the plaintiff has not used materials as per the specifications agreed. Refund of Rs. 6,20,973/- was sought. 9,70,973/-, as against the agreed revised estimate of Rs. 3,50,000/-. For the first time, the first defendant alleged that the plaintiff has not used materials as per the specifications agreed. Refund of Rs. 6,20,973/- was sought. It was alleged that, the plaintiff and the GPA holder have not furnished the account or bill to the 1st defendant. 14. The 2nd defendant sent a reply dated 21.4.1993 as at Ex. P3, wherein, he agreed with the contents of the notice dated 12.4.1993 (Ex. D2) and also confirmed the balance amount due and assured to try his best to persuage the 1st defendant to settle the matter amicably. 15. From the exhibited documents and the evidence on record, it is clear that, the 1st defendant executed the GPA as per Ex. D1 on 11.9.1989 in favour of his brother-in-law, i.e., the 2nd defendant, to appoint an Architect, Contractor and take steps and manage the construction of the building. The correspondence as at Exs. D12 and D9 would show that, the 2nd defendant kept the 1st defendant informed about the plaintiff being the person entrusted with the work and the estimated cost. The GPA holder approved the specifications as per Ex. P13 and there is detailed estimate prepared on 25.8.1990, prior to the commencement of building, which is evident from Ex. P14, wherein the estimated cost of construction was arrived at Rs. 7,93,001.50. Even, according to the plaintiff, the construction had not made any headway when he returned from Kuwait and visited the site on 1.10.1990. The entire construction work was made and completed by the plaintiff in the presence of the 1st defendant and the possession of the completed house was delivered on 10.10.1991 and the house warming ceremony was performed by the defendant No. 1 on 18.10.1991. The estimate of the construction being Rs. 7,93,001.50 (Ex. P14), the possession of the completed house having been delivered on 10.10.1991, the final bill was submitted on 7.11.1991 (Ex. P17) wherein, the total cost was shown at Rs. 8,14,949.99. The GPA executed in favour of the 2nd defendant was revoked by the 1st defendant as per Ex. D5 on 12.11.1992, i.e., long after the construction work was completed by the plaintiff and possession was delivered to the 1st defendant on 10.10.1991. Even in Ex. D5, there is nothing alleged against the plaintiff nor the deficiency in the construction work made. D5 on 12.11.1992, i.e., long after the construction work was completed by the plaintiff and possession was delivered to the 1st defendant on 10.10.1991. Even in Ex. D5, there is nothing alleged against the plaintiff nor the deficiency in the construction work made. The plaintiff is bound by the approval accorded by the GPA holder with regard to estimated cost, i.e., Ex. D14. In the circumstances, the plaintiff is justified in claiming the construction cost, inclusive of his professional charge, at Rs. 7,93,001.50. Re-point No. 2: 16. According to the 1st defendant, he sent Rs. 1.9 lakhs to the 2nd defendant besides Rs. 2,00,000/-, which he had paid in September, 1989 and the 2nd defendant was not showing the progress done by him, as and when he remitted the amounts to the 2nd defendant from Kuwait. According to him, the 2nd defendant introduced the plaintiff in October, 1990 and told that the plaintiff has used the money sent by him from Kuwait for renovating the house of the plaintiff. According to DW1, the amount sent by him from Kuwait was paid to the plaintiff by the 2nd defendant. Indisputedly, the 2nd defendant did not depose. No proof of whatsoever nature with regard to payment made by the 2nd defendant to the plaintiff has been produced. The 1st defendant has admitted that, he made payment to the plaintiff by cheques and that the cheques were requested to be issued in the name of different payees, i.e., Diksha Engineering Works, Innovative Enterprises and Sri Sudhir Kamath and that, he issued to the plaintiff 3 self cheques and paid Rs. 30,000/- by cash. According to him, the cheques issued to the plaintiff was for Rs. 6,00,000/-. He has reiterated that, he personally paid Rs. 6,00,000/- to the plaintiff in Bangalore and that, he had paid Rs. 3.25 lakhs when he was in Kuwait. The burden of proof of payment to the plaintiff is on the 1st defendant. The 1st defendant has stated that, he has got document to show the payment made to the plaintiff earlier to 26.10.1990, but has not produced any evidence in that regard. The 1st defendant has admitted that, after his arrival in Bangalore, the payments made to the plaintiff was by the way of cheques and drafts and he paid Rs. 30,000/- by cash and that, he has receipt for having paid Rs. The 1st defendant has admitted that, after his arrival in Bangalore, the payments made to the plaintiff was by the way of cheques and drafts and he paid Rs. 30,000/- by cash and that, he has receipt for having paid Rs. 30,000/- to the plaintiff, which he claims to have placed on record. He has also stated that, he has got document to show encashment of self-cheques. He has admitted the payment of Rs. 65,000/- by cheque on 9.10.1991 and the handing over of 4 silver glasses to the plaintiff as gratitude/gift at the time of house warming ceremony. 17. The plaintiff has admitted the receipt of Rs. 4,46,473.50. There is dispute with regard to the payment allegedly made under 3 self-cheques, i.e., for Rs. 25,000/-, Rs. 40,000/- and Rs. 60,000/-. There is also dispute with regard to payment of Rs. 30,000/- by cash. The burden of proof being on the 1st defendant, except his self-serving testimony, no proof has been produced with regard to said payments. In the circumstances, the 1st defendant has failed to prove the payment of Rs. 6,01,473.50 to the plaintiff. 18. The cost of construction and inclusive of professional charges being Rs. 7,93,001.50 (Ex. P14), the claim made by the plaintiff that, total cost of construction inclusive of profession charges at Rs. 8,14,949.99 is untenable. The plaintiff is bound by the estimated cost as per Ex. P14, i.e., Rs. 7,93,001.50. The payment made by the 1st defendant to the plaintiff is Rs. 4,46,473.50. The balance payable is Rs. 3,46,528/-. Consequently, the counter-claim for Rs. 1,00,000/- made by the 1st defendant is untenable. The plaintiff has failed to place on record any evidence with regard to the payment made by the 2nd defendant to the plaintiff. The amount allegedly sent by the 1st defendant to the 2nd defendant cannot be taken into consideration in the matter of settlement of the claim of the plaintiff, since the 2nd defendant has not deposed and no proof of payment by the 2nd defendant to the plaintiff has been produced. Re-point No. 3: 19. The construction work having been completed, the possession of the house was delivered by the plaintiff to the 1st defendant on 10.10.1991. House warming ceremony was performed by the 1st defendant on 18.10.1991, whereafter, he has remained in possession and enjoyment of the house. The final bill Ex. P17 is dated 7.11.1991. Re-point No. 3: 19. The construction work having been completed, the possession of the house was delivered by the plaintiff to the 1st defendant on 10.10.1991. House warming ceremony was performed by the 1st defendant on 18.10.1991, whereafter, he has remained in possession and enjoyment of the house. The final bill Ex. P17 is dated 7.11.1991. The notice demanding payment of balance amount was sent on 12.4.1993 (Ex. D2). The suit was instituted on 17.8.1993. The trial and decision of the suit has taken more than 7 years 7 months. There being no agreement to pay interest, the claim made by the plaintiff for payment of interest on the balance amount prior to the institution of the suit, is untenable. Taking into consideration the record of the case, the learned Trial Judge is justified in directing payment of Rs. 3,46,528/- with interest at 6% p.a. from the date of institution of the suit till realisation. The cross-objection is untenable. 20. In the result, the appeal and the cross-objection being devoid of merit shall stand dismissed. 21. In the facts and circumstances of the case, parties are directed to bear their respective costs.