P. Janakiraman v. State of Tamil Nadu Rep. by the Superintending Engineer, Highways Chennai
2012-08-24
P.R.SHIVAKUMAR
body2012
DigiLaw.ai
Judgment :- The plaintiff has filed the suit on the following plaint averments:- i) Plaintiff is engaged in the business of undertaking contracts for laying of roads, construction of bridges and culverts and other allied civil works. He has also been registered as a Class-I contractor in the Highways Department (State Level) in the State of Tamil Nadu. The State of Tamil Nadu, represented by the Superintending Engineer, Highways, Chennai Circle, invited tenders for the work of widening and strengthening of the road branching from K.M.11/8 of Sadras-Chengalpattu-Kancheepuram-Arakkonam-Thirutani Road to Pudupattinam (via) Vitalapuram K.M.0/0 -17/0. In the usual course of business, plaintiff submitted his tender on 29.05.2003 for the said work. The said work was allotted to the plaintiff accepting the lowest negotiated value of Rs.4,38,53,228/-under an agreement bearing No.Nil/2003-2004 dated 27.08.2003. As per the agreement, work was to be commenced on 27.08.2003 and targeted to be completed by 26.11.2004. However, due to unavoidable reasons, the work could be completed only on 04.04.2005. ii) The agreement contains four schedules designated as schedules A to D. Schedule 'A' contains description of items to be executed by the plaintiff, the quantity to be executed, the relevant 'MOST' clauses and the rates for which the work is to be executed. In Sl.No.4 of Schedule 'A' of the agreement the description of the item of work has been noted as "granular sub base (S.G.Mix)/providing, laying and compacting well graded material on prepared sub grade in accordance with the requirements of the specifications. The material shall be laid in one or more layer as sub-base or lower subbase and upper sub-base as necessary according to the lines, grades and cross sections shown in the drawing or as directed by the Engineer." The relevant 'MOST' numbers for the same have been mentioned as 111, 112, 401 and 900. Granular sub base and the S.G.Mix sub base are different types of items and they require different types of execution. Granular sub base contains earth excavated from hilly region and it will contain mixture of stones (both big and small), variety of sand particles and various other things. S.G.Mix is only a mixture of sand and gravel. Both granular sub base and S.G.Mix cannot be laid together. Sub base has to be laid with either granular sub base or S.G.Mix. For maintaining good quality of road Granular sub base, shall be preferred.
S.G.Mix is only a mixture of sand and gravel. Both granular sub base and S.G.Mix cannot be laid together. Sub base has to be laid with either granular sub base or S.G.Mix. For maintaining good quality of road Granular sub base, shall be preferred. iii) As there was ambiguity in Sl.No.4 regarding the nature of material to be used for laying the sub base, the plaintiff sought a clarification from the Divisional Engineer, Highways, Chengalpattu, by a letter dated 10.11.2003 regarding the type of sub-base to be provided - whether granular sub base or S.G.Mix sub base. A further clarification was also sought for as to the grading (grading-1, grading-2 pr grading-3), if granular sub base was to be used for laying the sub base. The Divisional Engineer, Highways, Chengalpattu issued a clarification in his letter No.4640/2003/JDO dated 19.11.2003 informing that the design traffic is more than 2 M.S.A. (Million Standard Axle) and granular sub base should be provided as per the 'MOST' specification 401 grading 1 to satisfy the minimum CBR (California Bearing Ratio) value of 30 to receive base over it. The plaintiff was requested to complete the laying of granular sub base as per the provisions contained in the MOST specification and was directed to produce the test results. In pursuance of the clarification issued, the plaintiff carried out the laying of granular sub base grading 1. Plaintiff also arrived at a rate analysis for granular sub base grading 1 as per table 400-1 as per MOST & H specifications for roads and bridges as well as rate analysis under Chapter IV - Sub-base, Bases (non bituminous) and shoulders-4-1(B) by mix in place method to carry out the granular sub base grading 1. The rate for the above specifications worked out at Rs.482.45 per cubic meter as per the model rate analysis published by the Ministry of Surface Transport and Highways, Government of India. However, the rate mentioned in the agreement for item 4 of granular sub base (S.G.Mix) was Rs.165.24 per cubic meter. As he was ordered to provide granular sub-base grading 1 by the letter of the Divisional Engineer dated 09.11.2003, the said item should be treated as a new item of work.
However, the rate mentioned in the agreement for item 4 of granular sub base (S.G.Mix) was Rs.165.24 per cubic meter. As he was ordered to provide granular sub-base grading 1 by the letter of the Divisional Engineer dated 09.11.2003, the said item should be treated as a new item of work. Since the plaintiff was ordered to carry out a new item of work, he addressed a letter to the Divisional Engineer, claiming Rs.482.45 per cubic meter as the rate for the new work entrusted. But the Divisional Engineer, by his letter bearing No.4640/2003/JDO-1 dated 15.12.2003, rejected the revision of rates on the ground that it would not come under the purview of National Highways work. Again the plaintiff addressed a letter dated 23.12.2003 for the approval of the new rate claimed by him to carry out the work of laying granular sub base, but the said letter was not replied. iv) Apart from the issue regarding the rate for laying of granular sub base, both sides of the road, throughout the entire length, were fully covered by bushes, leaving the riding space of the road with the width of 3.75 meters. During an inspection made by the defendant, plaintiff was directed to remove the bushes and accordingly, the plaintiff cleared the bushes. The same should also be treated as a new item requiring separate payment. The same works out to 10 K.M. x 10M = 10,000M x 10M = 1,00,000 square meter. By a letter dated 28.02.2004, the plaintiff requested payment for the said item based on 2003-2004 schedule of rates. There was no reply for the said letter also. v) In addition, the stretch between K.M.8/0 -17/0, was found with lot of undulations. To make good the undulations, it had to be filled up with gravel to the extent of 500 cubic meters. The same was also an additional item of work, for which the plaintiff has to be paid at the rate of Rs.94.04 per cubic meter.
v) In addition, the stretch between K.M.8/0 -17/0, was found with lot of undulations. To make good the undulations, it had to be filled up with gravel to the extent of 500 cubic meters. The same was also an additional item of work, for which the plaintiff has to be paid at the rate of Rs.94.04 per cubic meter. When the plaintiff submitted the final bill dated 28.07.2005 by including the excess cost incurred by him on account of the additional items of work carried out by him as directed by the defendant, the Divisional Engineer by his letter No.23/2003-04/A4 dated 19.08.2005 denied payment for the following items of work:- vii) In addition, the Divisional Engineer had also stated in the said letter that the final payment for the said work contract would be settled soon after the receipt of budget allotment under the relevant head of account. The plaintiff gave a reply to the said letter on 04.10.2005 and marked a copy of the same to the defendant. The defendant gave a reply in letter No.8845/2003-04/D4 dated 26.09.2005 informing the plaintiff that the claim made by the plaintiff could not be approved, since he had agreed for the conditions and clauses of MORTH while signing the agreement for the work and stating that the information furnished by the Engineer in his letter dated 19.08.2005 would hold good and the same required no revision. However, the defendant has approved the excess cost for the excess quantity of bitumen utilised as per job mix formula for the following items:- (i) DBM 50mm thick, (ii) BC 40mm thick and (iii) SDBC 25mm thick, totally amounting to Rs.6,72,782/-. Though the same was approved, vide defendant's letter No.1148/2002/D2 dated 18.02.2005, the amount was paid only on 15.03.2010. However, the plaintiff has not been paid for the other three claims made by him. viii) In addition, the plaintiff is also entitled to claim loss of profit and overheads due to prolongation of the contract for no fault on the part of the plaintiff. Plaintiff assesses the same at Rs.32,03,111/-. Though the final measurement of the work was made on 04.04.2005, final bill was settled only on 15.03.2010. Even while making payment on the final bill, 2.5% retention money was retained by the department. As per the final bill the balance amount comes to Rs.16,87,130/-.
Plaintiff assesses the same at Rs.32,03,111/-. Though the final measurement of the work was made on 04.04.2005, final bill was settled only on 15.03.2010. Even while making payment on the final bill, 2.5% retention money was retained by the department. As per the final bill the balance amount comes to Rs.16,87,130/-. As the same was paid with a delay of four years 11 months 11 days, the plaintiff is entitled to claim a sum of Rs.15,02,609/-as interest for the belated payment calculated @ 18% per annum. Similarly, the 2.5% retention money amounting to Rs.11,11,443/-should have been refunded to the plaintiff one year after the completion of the work. It should have been paid on 04.04.2006, but was paid only on 30.03.2010. For the said belated payment also plaintiff is entitled to receive interest for the period from 04.04.2006 to 30.03.2010(3 years 11 months and 20 days) at the rate of 18% per annum, which works out to Rs.7,98,047/-. ix) Since his claim was not settled, the plaintiff issued a notice under section 80 of the Civil Procedure Code to the defendant and the Divisional engineer on 01.08.2008 calling upon them to pay the plaintiff the amount claimed by him with interest, but the same evoked no response. Thereafter, the plaintiff chose to address a consolidated letter dated 27.04.2010 showing all the claims to the Engineer and a copy of the same was marked to the defendant. Though the said claim was made by the plaintiff in his letter dated 27.04.2010, there was no response either from the defendant or from the Engineer till 09.06.2010. Under the said circumstances, plaintiff issued a statutory notice under section 80 of the Civil Procedure Code on 10.06.2010 to the defendant and the Engineer calling upon them to pay the legitimate dues of the plaintiff. But there was no reply for the same. As such, the plaintiff is constrained to file the suit for the recovery of the amount due to him. The following are the claims made by the plaintiff: Plaintiff prays for a decree directing the defendant to pay a sum of Rs.1,97,61,768/-together with an interest at the rate of 18% per annum on Rs.1,08,28,149/-, being the principal component of the said amount, from the date of plaint till the date of realisation and also directing the defendant to pay the cost of the suit. 2.
2. The suit is resisted by the defendant with the averments found in the written statement, which are as follows: i) The defendant denies all the allegations made by the plaintiff in the plaint, except those that are specifically admitted. It is true that the defendant invited tender for the work of widening and strengthening of the road branching from KM.11/8 of Sadras -Chengalpet - Kancheepuram - Arakonam -Tirutani Road to Pudupattinam via Vitalapuram KM.0/0 - 17/0. The plaintiff being a first class contractor and his tender being the lowest among others, the defendant concluded the agreement in favour of the plaintiff for a total value of Rs.4,83,53,328/-. The period for completion of entire work was 15 months from the date of signing the agreement and as such the plaintiff ought to have completed the work on or before 26.11.2004. Time was essence of the contract and the plaintiff should have completed the contract within the said period. As per the condition found in the agreement, the plaintiff has deposited a sum of Rs.2,15,500/-as earnest money deposit in the form of a fixed deposit receipt issued by State Bank of India, Kancheepuram. Further an amount of Rs.6,00,500/-was also furnished by way of Security Deposit by the plaintiff. ii) As per the agreement, the expected rate of progress of work in each quarter is as follows: As per the schedule of work, the plaintiff ought to have completed the entire work on or before 26.11.2004. However, the plaintiff completed the work only on 04.04.2005. The contract is governed by PS to SSRB Rules and MOST specifications apart from MORT. It is a fact admitted by the plaintiff that for providing granular sub-base, the specification was granular sub base (SG Mix), which is for providing, laying and compacting well graded material for preparing sub grade in accordance with the requirements of the specification. The materials shall be made in one or more layers as sub-base or lower sub-base and upper sub-base as necessary according to lines, grades and cross sections shown in the drawing or as directed by the Engineer. As per MOST specification 111, 112, 401, 900, the granular sub-base (SG Mix) was rated by the plaintiff at Rs.165.24P per cubic meter and the plaintiff valued the entire contract at Rs.26,81,019.00.
As per MOST specification 111, 112, 401, 900, the granular sub-base (SG Mix) was rated by the plaintiff at Rs.165.24P per cubic meter and the plaintiff valued the entire contract at Rs.26,81,019.00. It is true that the agreement has four schedules as stated by the plaintiff which forms part of the contract wherein schedule-A contains the description of the items to be executed by the contractor, the quantity to be executed along with the relevant MOST specification and the rates for the work as filled in by the contractor to be executed. The schedule -C contains the descriptive specification report. Finally schedule-D contains the rules for provision of health and sanitary arrangements for the workers. It is an admitted fact that in schedule-A, different items of work with different description were to be carried out by the plaintiff, which included the granular sub-base (SG Mix) as item No.4 with MOST specification. However, the rate quoted for the item based on relevant MOST specification is also inscribed in the schedule - A wherein the contractor has accepted and quoted the rate as Rs.165.24/-per cubic meter. It is not true that granular sub-base and SG Mix are different types of items, which would require different types of execution. As per MOST specification, the granular sub-base (SG Mix) is only the descriptive synonym used for providing, laying and compacting well graded material to prepare sub-base in accordance with the requirements of the specification. The MOST specification also describes that the materials for granular sub-base (SG Mix) shall be made in one or more layers as sub-base or lower sub-base and upper sub-base as necessary in accordance with the lines, grades and cross sections shown in the drawing. Knowing all these, it was the plaintiff who quoted the rate for the above item at Rs.165.24 per cubic meter. The plaintiff even during the pre-bid process had inspected the documents and satisfied himself and only thereafter participated in the bid. iii) It is true that the plaintiff by letter dated 10.11.2003 sought for a clarification in respect of granular sub-base (SG Mix) and the defendant by letter dated 19.11.2003 clarified and directed the plaintiff to complete the granular sub-base (SG Mix) work as per MOST specification and to produce the test result accordingly.
iii) It is true that the plaintiff by letter dated 10.11.2003 sought for a clarification in respect of granular sub-base (SG Mix) and the defendant by letter dated 19.11.2003 clarified and directed the plaintiff to complete the granular sub-base (SG Mix) work as per MOST specification and to produce the test result accordingly. The defendant further required the plaintiff to complete the granular sub-base (SG Mix) work as per the provision, since the design traffic was more than 2 MSA for the above road. The granular sub-base should be provided as per MOST specification grading-1 of table 400-1 in order to satisfy the minimum CBR value of 30 to receive base over it. In furtherance of the directions from the defendant made on 11.11.2003, the plaintiff carried out the work of granular sub-base item grading-1 and arrived at a rate analysis of Rs.482.45 per cubic meters and claimed it as an additional work. The plaintiff sought for revision of rate in this aspect. In fact it is not a new item of work as claimed by the plaintiff. The rate could not be granted for the reason that the data furnished by the plaintiff seeking revision of rate was in accordance with the data followed by the National Highways Work approved by MORT and Highways, New Delhi, as per the standard data book and analysis of rates and the rates published in June 2003. However, for the work other than National Highways Work, it is the general rate which has to be followed and since the work executed by the plaintiff does not come under the National Highways Work standards, revision of rates as sought for by the plaintiff in his letter dated 24.11.2003, cannot be granted. For the work other than National Highways work, the rate approved by the Data Committee and Chief Engineer (Highways) General alone are followed and hence the request made by the plaintiff for the revision of rate was not accepted. Plaintiff had also quoted the rate only for granular sub base MOST clause 401. Accordingly, plaintiff had furnished the job mix formula to the defendant satisfying MOST specification for nearly 5 Km. As per the job mix formula the plaintiff executed granular sub base.
Plaintiff had also quoted the rate only for granular sub base MOST clause 401. Accordingly, plaintiff had furnished the job mix formula to the defendant satisfying MOST specification for nearly 5 Km. As per the job mix formula the plaintiff executed granular sub base. It was also advised that the work had to be executed by the plaintiff for the rest of the kilometers also as per the mix-formula at the rate quoted by him in the agreement. As per the agreement, the Engineer had got the prerogative to direct the contractor to use any formula of job mix. The rate quoted by the plaintiff was uniform throughout the entire stretch of the contract. The plaintiff has not executed any new work and hence the revision of rate sought for by the plaintiff was rightly rejected. iv) As per clause 103.03, the examination of plan specification (special provision) and site of work should have been done by the bidder before submission of the bid. It shall be construed that the bidder had investigated and satisfied with the conditions to be encountered in performing the work as scheduled. The submission of tender shall be considered conclusive evidence that the bidder had made such examination and satisfied with regard to the conditions and contingencies. Having agreed and signed the document, the plaintiff, cannot claim variation on the ground of any hindrance on those aspects at a later point of time. Further there was no inspection report entered by the engineer about the presence of jungles for the removal of which the plaintiff had claimed additional payment. The final bill for payment was prepared only as per the rate quoted by the plaintiff at the time of bid. As no new work was carried out by the plaintiff, his claim for an exorbitant amount as additional amount was rightly rejected. So far as the request for payment of loss of profit and overheads due to prolongation of contract, the defendant submits that the contract was signed on 27.08.2003 fixing a period of 15 months for completion of work. Time was the essence of the contract and the plaintiff ought to have completed the work on 26.11.2004. Since 80% of the work alone had been completed, fine could have been imposed at that time. Finally the plaintiff completed the work only on 04.04.2005.
Time was the essence of the contract and the plaintiff ought to have completed the work on 26.11.2004. Since 80% of the work alone had been completed, fine could have been imposed at that time. Finally the plaintiff completed the work only on 04.04.2005. The cause for delay in completing the work has to be attributed to the plaintiff. Hence the claim for loss of profit and overheads due to the prolongation of contract cannot be granted. v) The plaintiff has also prayed for interest @ 18% per annum for delayed payment of final bill amount. Interest @ 18% per annum for the delayed release of 2-1/2% of retention money of Rs.11,11,443/-has been claimed from 03.03.2010 instead of 04.04.2005. On several occasions, the defendant had informed the plaintiff that proposal had been sent to the government for necessary allotment of fund and issuance of letter of credit. Since the allotment of fund was pending approval, the plaintiff was informed properly that the amount would be settled at the earliest. Even on 16.07.2007, a letter was addressed to the plaintiff regarding the same. However, the entire amount was settled to the plaintiff and no money is now due from the defendant. In view of the above said contentions, the defendant prays for the dismissal of the suit with heavy cost and for other order or reliefs as this Hon'ble court may deem fit and necessary. 3. In the light of the above said pleadings, the following issues have been framed. " 1. Whether the plaintiff is entitled to receive Rs.47,020/-for the additional quantity of 500 per M3 gravel filling work done by the plaintiff at the agreement rate of Rs.94.04 per M3? 2. Whether the plaintiff is entitled to receive an amount of Rs.1,60,000/- from the defendant for the jungle clearance work done by the plaintiff for 1,00,000 M2 @ Rs.1.60/- per M2 ? 3. Whether the plaintiff is entitled to receive an amount of Rs.51,17,362/-as the difference in cost for the granular sub base work carried out instead of sand gravel mix item of work as directed by the engineer? 4. Whether the plaintiff is entitled to claim Rs.32,03,111/-against the defendant towards loss of profit and overheads due to prolongation of contract? 5.
3. Whether the plaintiff is entitled to receive an amount of Rs.51,17,362/-as the difference in cost for the granular sub base work carried out instead of sand gravel mix item of work as directed by the engineer? 4. Whether the plaintiff is entitled to claim Rs.32,03,111/-against the defendant towards loss of profit and overheads due to prolongation of contract? 5. Whether the plaintiff is entitled to receive a sum of Rs.15,02,609/- as interest at the rate of 18% per annum from 04.04.2005 to 15.03.2010 due to delayed payment of final bill and retention money of Rs.16,87,130/-? 6. Whether the plaintiff is entitled to receive an amount of Rs.7,98,047/- for 2 1/2% retention money of Rs.11,11,443/-? 7. Whether the plaintiff is entitled to payment of interest on one or more of the claims? If so, what rate and from which rate? 8. Whether the plaintiff is entitled to cost? 9. To what relief if any the plaintiff is entitled?" 4. PW-1 was examined and Exs.P1 to P30 were marked on the side of the plaintiff. No witness was examined and no document was marked on the side of the defendant. 5. The plaintiff got the work contract for widening and strengthening of the road branching from K.M.11/8 of Sadras - Chengalpattu - Kancheepuram - Arakkonam -Thirutani Road to Pudupattinam (via) Vitalapuram K.M.0/0 -17/0 as he happened to be the successful bidder having quoted a sum of Rs.4,38,53,328/-, which was 6.90% above the estimated cost and the said amount was to be paid to him for the said work. Pursuant to the acceptance of the tender submitted by the plaintiff, an agreement was signed by the plaintiff and the Superintending Engineer (Highways), Chennai-6 on behalf of the State of Tamil Nadu, on 27.08.2003. As per the clauses of the contract, the work should be commenced on 27.08.2003 and the period for completion of the work was agreed as 15 months. Hence the work ought to have been completed on or before 26.11.2004. But due to some reasons, the work could be completed only by 04.04.2005, with a delay of a little above four months. After such completion, the preparation of the final bill and payment of the amount was delayed for about five years and it was paid only on 15.03.2010.
But due to some reasons, the work could be completed only by 04.04.2005, with a delay of a little above four months. After such completion, the preparation of the final bill and payment of the amount was delayed for about five years and it was paid only on 15.03.2010. Claiming additional payment for alleged new works executed by the plaintiff and escalation charges for the delay caused in executing the work and also interest for the delayed payment, the plaintiff received the final bill payment on 15.03.2010 under protest. Similarly, interest was claimed for the retention amount retained by the defendant as security for rectification of defects found within a period, as the said amount was also paid with a delay on 30.03.2010. Since the plaintiff's claim for such additional payment and interest was turned down by the defendant, plaintiff has approached this court by filing the present suit claiming a total sum of Rs.1,97,61,768/-. Issue No.3 6. The main contention of the plaintiff is that as per sl.No.4 of Schedule-A of the agreement, the description of work was mentioned as granular sub-base (SG Mix) for providing, laying and compacting well graded material sub base in accordance with the requirement of specifications. The material shall be laid in one or more layers as subbase or lower sub-base and upper sub-base as necessary according to lines, grades and cross-sections shown in the drawing or as directed by the Engineer. As against the said item, MOST Nos.111, 112, 401 and 900 have been noted. According to the plaintiff, granular sub-base and SG Mix are different types of items and they need different types of execution. Granular sub-base contains earth, which is excavated from the hills and the same would contain mixture of stones, both small and big, variety of sand particles and various other things, whereas SG Mix shall be a simple mixture of sand and gravel. For good quality of road, granular sub-base will be preferred. Since Sl.No.4 was ambiguous, which did not specify whether granular sub-base or SG MIx should be used for laying the sub-base, lower sub-base and upper sub-base before the surface is laid with blue metal, the plaintiff sought for a clarification from the Divisional Engineer (Highways), Chengalpattu by his letter dated 10.11.2003. Copy of the said letter has been marked as Ex.P2.
Copy of the said letter has been marked as Ex.P2. Pointing out the ambiguity, the plaintiff seems to have sought a clarification as to whether granular sub-base item or SG Mix item for laying the sub-base should be used. In the said letter, he has not stated anything about the variation of cost when he was asked to carry out the execution of the work of laying the sub-base using granular sub-base. The said letter was replied under Ex.P3-letter dated 19.11.2003 sent by the Divisional Engineer (Highways). In the said reply, the Divisional Engineer directed provision of the granular sub-base as per MOST specification 401 granular sub-base grading-1 of table 400-1 in order to satisfy the minimum CBR value of 30 to receive base over it. After such a letter was received, the plaintiff chose to address a letter dated 24.11.2003, which has been marked as Ex.P4, contending that as per the table 400-1 of MOST and H specifications for roads and bridges and rate analysis under chapter 4, for granular sub-base grading-1, the rate shall be Rs.482.45 per cubic meter, whereas under the relevant clause in the agreement, a rate of Rs.165.24P per cubic meter. The plaintiff had further requested the Divisional Engineer that he must be paid at the rate of Rs.482.45P instead of Rs.165.24 per cubic meter as found in the relevant clause of the agreement for the laying of granular sub-base. The said letter was responded by the Divisional Engineer (Highways), Chengalpattu, by a reply dated 05.12.2003, marked as Ex.P5. In the said reply, it has been stated that for the works other than National Highways work, the rate approved by the Data Committee and the Chief Engineer (Highways) General alone shall be followed and hence the standard data book for analysis of rates applicable to National Highways shall not have any relevance; that as per the agreement, the plaintiff had quoted a rate for the granular sub-base under MOST clause 400-1; that the plaintiff also executed the granular subbase work for a length of nearly 5 Km as per the mix formula furnished by him and that hence the request made by him for the revision of the rate could not be entertained.
The said reply totally turned down the plaintiff's request for upward revision of the rate and directed execution of the work as per the specifications and for the rate quoted in the agreement. Despite receipt of such a reply, the plaintiff again seems to have sent a letter on 23.12.2003, a copy of which has been marked as Ex.P6, insisting upon upward revision of rate and to fix the rate at Rs.482.45P per cubic meter. There seems to have been several subsequent communications between the plaintiff and the Divisional Engineer (Highways), Chengalpattu Division regarding the nature of work to be executed for widening and strengthening of the road at various stretches depending upon the quality of the side earth. The said communications have been produced and marked as Exs.P7 to P16. Throughout, the defendant was maintaining that the payment claimed at a higher rate for providing the sub-base with either granular sub-base or SG Mix, could not be accepted and the plaintiff had to execute the work as specified in the agreement and in accordance with the instructions and to the specifications of the Engineer. 7. It is the contention of the plaintiff that the plaintiff submitted the tender quoting a lesser amount per M3 for providing the sub base on the assumption that he had to prepare the sub base beneath blue metal layer, with SG Mix alone and not granular sub base and that was the reason why he had quoted a sum of Rs.165.24P per M3 and that if at all he had a clear idea that he had to lay the sub base with granular sub base grading-1, then he would have specified the rate at Rs.482.45P per M3 as per the rate analysis for granular sub-base grading-1 under chapter 4 provided by the model rate analysis produced by the Ministry of Surface Transport and Highways, Government of India.
The defendant all along was maintaining that the contract was for executing the work with granular sub base item or SG Mix depending upon the requirement of the particular stretch and only after verifying the same and making a spot visit, the plaintiff submitted his tender quoting a lump sum rate of Rs.4,38,53,328/-on the understanding that the payment should be made on the lump sum basis or as per the final measurement at unit prices and that the unit prices for various items have also been specified in the schedules annexed to the agreement, which has been produced as Ex.P1. When the plaintiff wanted upward revision of the rate for providing the sub-base below blue metal base for expansion of the road on both sides, the same was promptly turned down by the Divisional Engineer stating that the contract was a lump sum contract controlled by the requirement of payment on item-wise measurement at the rates specified in the schedule. It was made clear by the Divisional Engineer of the defendant that the claim of the plaintiff for payment at the rate of Rs.482.45P per M3 for providing the sub base below the blue metal base with granular sub base was turned down and he was informed that he had to execute the work for payment at the rate of Rs.165.24P per M3 as per Ex.P1-agreement. If at all the plaintiff had quoted a lesser amount under a misconception and his request for upward revision of the payment was wrongly declined, he ought not to have started execution of the work unless and until the said difference of opinion was removed or dispute was resolved. On the other hand, the very fact that the plaintiff chose to go ahead with the execution of the work providing granular sub base as directed in the reply of the Divisional Engineer in which it was stated in clear terms that the plaintiff had to execute the work for the rate quoted in the agreement, namely Rs.165.24P per M3, will go to show that the plaintiff was agreeable for execution of the said work at the above said rate without claiming a higher rate.
It should also be noticed that the plaintiff had not sought the permission of the defendant to proceed with the execution of the work on condition that the rate for such execution would be settled at a later point of time through negotiation, arbitration or by approaching the court. Since the plaintiff has not chosen to do so, as rightly contended on behalf of the defendant, he is estopped from claiming a rate higher than the one found in the agreement for the laying of the sub base. Therefore, this court comes to the conclusion that the claim of the plaintiff for a sum of Rs.51,70,362/- for the granular sub base item of work carried out instead of SG Mix item of work, at the rate of Rs.482.45P per M3 instead of Rs.165.24P per M3 was rightly rejected by the defendant and the said claim of the plaintiff cannot be sustained by this court. 8. It should also be noticed that if such a claim of the plaintiff is accepted, it will pave way for malpractice defeating the very purpose for which quotations are called for and contracts are finalised based on the acceptance of the selected quotation. If the department of the government is allowed to make an upward revision of the rate for the execution of the work after the execution of the agreement, the same will result in an anomaly whereby a person, who would have quoted a lesser amount than the amount now claimed by the plaintiff, would have been unreasonably denied the contract. Had the plaintiff quoted the rate, which he now claims by way of filing the suit, for the execution of the work of granular sub base item, then any other person who is also qualified and able to do the work for a lesser rate, and quoted lesser rate, would have been preferred to the plaintiff for being selected as the contractor for the execution of the said work. In view of the same, public interest also requires the rejection of such a claim made by the plaintiff. Therefore, as stated above, the claim made by the plaintiff for a sum of Rs.51,17,362/-, for the granular sub base item instead of SG Mix item of work as the sub base over which blue metal base had to be laid, is bound to be rejected as untenable. Issue No.3 is answered accordingly.
Therefore, as stated above, the claim made by the plaintiff for a sum of Rs.51,17,362/-, for the granular sub base item instead of SG Mix item of work as the sub base over which blue metal base had to be laid, is bound to be rejected as untenable. Issue No.3 is answered accordingly. Issue Nos.1 and 2: 9. The next claim of the plaintiff is for a sum of Rs.47,020/-towards the alleged additional quantity of gravel filling work done at the rate of 94.04 per M3 on the basis of the claim that such additional quantity of gravel filling was done for 500 M3. The said claim was also negatived on the ground that there was no additional item of work of gravel filling over and above the quantity noted in the final measurement taken as revealed by the measurement book and that hence the same was liable to be rejected. There is no proof on the side of the plaintiff to show that any such additional work was undertaken. It is true that by a letter dated 28.02.2004, a copy of which has been marked as Ex.P7, the plaintiff had claimed that between Km 8/0 -17/0, there were lot of undulations and to make good the undulations, the same ought to be filled with gravel and that the quantity of gravel required to cover up the undulations worked out to 500 M3 and claimed additional payment for the said alleged additional work at rates specified in the agreement. He had also asked for the removal of the silt and soil with clay to fill the space with gravel at an early date. A total sum of Rs.7,52,490.75P was also claimed as cost of additional work, including the excess quantity of bitumen to be used or additional materials to be used for execution of the work, under a letter dated 28.02.2004, a copy of which has been marked as Ex.P8. By a memo of the office of the Superintending Engineer (Highways), a sum of Rs.6,72,782/-was arrived at as excess expenditure on excess quantity of bitumen proposed to be used based on the job mix formula adopted.
By a memo of the office of the Superintending Engineer (Highways), a sum of Rs.6,72,782/-was arrived at as excess expenditure on excess quantity of bitumen proposed to be used based on the job mix formula adopted. The said excess claim based on the alleged requirement of excess quantity bitumen alone was accepted by the defendant and the plaintiff's claim for a sum of Rs.47,020/- towards excess gravel used for filling up the undulations measuring 500 M3 was rightly turned down on the ground that the measurement taken did not show such additional work undertaken. The said claim was promptly rejected by the Divisional Engineer under his letter marked as Ex.P13 and also by the Superintending Engineer under his letter marked as Ex.P14. In fact, under Ex.P13, the plaintiff was informed that the plaintiff should desist from repeatedly addressing the Engineer for one and the same matter. Therefore, this court comes to the conclusion that the claim of Rs.47,020/- towards the alleged additional quantity of gravel filling work cannot be sustained and the same deserves to be rejected. 10. The next claim of the plaintiff is for a sum of Rs.1,60,000/-towards the clearance of the jungle (bushes) on both sides of the road, to carry out the road expansion work, at the rate of Rs.1.60 per square meter. The said claim was made by the plaintiff at the first instance under Ex.P7 dated 28.02.2004. The said claim was again and again made under Ex.P10 dated 28.07.2005, Ex.P12 dated 30.08.2005, Ex.P18 dated 17.12.2005, Ex.P19 dated 26.05.2006 and Ex.P29 dated 27.04.2010. In this regard, the attention of the court is drawn to Ex.P11-reply addressed by the Divisional Engineer to the plaintiff relating to the alleged additional work of gravel filling of 500 per cubic meter and jungle (bushes) clearance on both sides of the road. Besides rejecting the claim, the same was reiterated in Ex.P14 letter dated 26.09.2005 sent as a reply to the further communications made by the plaintiff making the very same claim.
Besides rejecting the claim, the same was reiterated in Ex.P14 letter dated 26.09.2005 sent as a reply to the further communications made by the plaintiff making the very same claim. It should also be noted that it was made clear that the work undertaken under the suit contract included the clearance of small bushes on both sides of the road and only on verification of the extent of work, the contractors were expected to submit their quotations and that the plaintiff, who did so, cannot be allowed to contend that for the clearance of the bushes on both sides of the road separate payment should be made, claiming the same to be not forming part and parcel of the work allotted under the contract for a lump sum payment. This court is of the considered view that the stand taken by the defendant is based on sound principle and the claim made by the plaintiff seems to be an attempt to get excess amount citing alleged additional work. If at all there was any such additional work, which was not covered by the contract, then before executing the same, he ought to have entered into a separate or supplemental contract for the same. He had not even contended that he should be paid with an excess amount at a particular rate for the alleged extra work of clearance of jungle (bushes), before the alleged accomplishment of the work. Therefore, the said claim of the plaintiff also deserves to be rejected as unsustainable. Accordingly, issue Nos.1 and 2 are answered against the plaintiff holding that the plaintiff is not entitled to a sum of Rs.47,020/- and Rs.1,60,000/- towards filling of the undulations with gravel and for clearance of the jungle/bushes on both sides of the road respectively. Issue No.4 11. The plaintiff has also made a claim of Rs.32,03,111/-towards the alleged loss of profit and overheads, due to the prolongation of the contract beyond the expected period of completion. In this regard, it is obvious that the agreement was entered into on 27.08.2003. The work site was handed over to the plaintiff on 10.09.2003 as found in Ex.P2 - letter addressed by the plaintiff to the Divisional Engineer. Ex.P1 - agreement was entered into on 27.08.2003. The time for completion of the work has been fixed as fifteen months.
In this regard, it is obvious that the agreement was entered into on 27.08.2003. The work site was handed over to the plaintiff on 10.09.2003 as found in Ex.P2 - letter addressed by the plaintiff to the Divisional Engineer. Ex.P1 - agreement was entered into on 27.08.2003. The time for completion of the work has been fixed as fifteen months. If fifteen months period is calculated from the said date, the targeted date of completion of work would be 26.11.2004. However, in Ex.P2 - letter addressed by the plaintiff to the Divisional Engineer, he has stated that the work site was handed over to him on 10.09.2003. The agreement (Ex.P1) also says that the fifteen months period for completion of the work shall be counted from the date of handing over the site to the plaintiff. As such, the date of expected completion as per the agreement shall be 09.12.2004. Admittedly, the work was not completed before the said period of fifteen months. A further period of less than five months has been taken by the plaintiff for completing the work undertaken by him under Ex.P1-agreement. Contending that due to the prolongation of the work for the said period of nearly five months, the plaintiff had suffered loss of profit and overheads and he has claimed a sum of Rs.32,03,111/-. At the outset, it is quite obvious that the prolongation of the work was only a small period of less than five months. In the absence of any concrete evidence showing that during the said period, the prices of commodities used for carrying out the work and the labour cost had gone up considerably, the plaintiff cannot be heard to say that he had suffered loss of profit due to prolongation of the work beyond the expected period of completion.
In the absence of any concrete evidence showing that during the said period, the prices of commodities used for carrying out the work and the labour cost had gone up considerably, the plaintiff cannot be heard to say that he had suffered loss of profit due to prolongation of the work beyond the expected period of completion. It should also be noticed that even though there might have been prolongation of the work, if the same is attributable to the slow pace at which the work was carried out by the contractor and the delay in completion occurred not due to any act or omission on the part of the respondent or else due to unforeseen contingencies like natural calamities holding up of the work which the plaintiff could not have avoided, there cannot be any justification for the plaintiff to claim such an amount towards loss of profit and overheads due to prolongation of the contract period. In this case, the various communications between the plaintiff and the defendant would show that the plaintiff himself delayed the starting of the work by addressing repeated communications seeking clarifications and also claiming payment of additional charges for providing granular sub base at a rate, which is much higher than the rate agreed between the parties as per Ex.P1-agreement. The little delay of less than five months could very well be attributed to the said attempt made by the plaintiff. Therefore, there is substance in the contention raised on behalf of the defendant that the plaintiff is not justified in claiming any additional amount than what has been agreed to between the parties in Ex.P1-agreement. In the light of the above said facts and circumstances of the case, this court comes to the conclusion that the claim of Rs.32,03,111/-towards loss of profit and overheads due cannot be sustained and the said claim also deserves rejection. 12. In this regard, it shall not be out of context to point out the fact that the agreement was for doing the work according to the specifications found in the annexures to the agreement for a fixed lump sum amount. However, wherever the estimated quantity of the material to be used exceeded and it could be ascertained by the department, the department had chosen to accept the claim for additional payment for such quantity of materials exceeding the estimated quantity.
However, wherever the estimated quantity of the material to be used exceeded and it could be ascertained by the department, the department had chosen to accept the claim for additional payment for such quantity of materials exceeding the estimated quantity. The department has not disputed the fact that if at all any additional work or new work, which has not been included in the contract is asked to be carried out by the contractor, then for such additional work, in accordance with the rates applicable are being paid. But, such additional work should not be totally disconnected with the original work for which the tender was floated and the agreement was entered into. Otherwise the same will lead to abuse of power on the part of the officials by floating tenders for one kind of work and assigning a new work without following the procedure prescribed for such engagement of the contractors, under the guise of implementing the terms of the contract for which the tender had been floated. If the same is allowed, it will also offend the equality clause found in Article 14 of the Constitution of India. Where a contract is for doing something and the department is to make the ground work preparing the property fit for execution of the work entrusted to the contractor under the agreement and the department wants to do it by a separate contract for which separate payment is to be made, then before ever entrusting such matter, necessary administrative sanction should be obtained for assigning that contract also to the very same contractor for an amount to be specified or else a separate tender should be floated for such work. In the absence of any such duty cast on the department to have the ground cleared and hand it over to the contractor for doing the work, it shall be inferred that the property as found on the date of agreement was agreed to be handed over to the contractor for executing the work and in such an event, contractor cannot claim any additional payment contending that the preparatory ground work should be taken as a new or additional work.
Before submitting his tender and before entering into the agreement, the plaintiff had inspected the entire stretch of the road and assessed the quantity of work to be carried out by him and only thereafter, he chose to quote an amount and enter into an agreement under Ex.P1 for executing the said work for the amount and the rates quoted therein. In the above said background of facts, it shall be unethical on the part of the plaintiff to seek payment of additional amount towards the alleged extra cost incurred by him for providing granular sub base below the blue metal base for widening and strengthening the road, for filling the undulations with gravel and for clearing the bushes found on either side of the road. The department has rightly declined to accept the claim made by the plaintiff on those grounds. However, regarding that part of the contract requiring the execution of the work of black topping the widened road, the department admitted the fact that the quantity of bitumen required to be used exceeded the estimated quantity and on that basis, for the excess quantity of bitumen used alone, the plaintiff was paid Rs.6,72,782/-. As such the claim of the plaintiff for additional payment towards loss of profit and overheads due to prolongation of the contract beyond the expected period is bound to be rejected and accordingly Issue No.4 is answered against the plaintff. Issue Nos.5 to 9 13. Though the claims pertaining to issue Nos.1 to 4 are held to be unsustainable, this court finds substance in the contention of the plaintiff that there had been a delay in the settlement of final bill amount and that unnecessarily the retention amount was retained by the department for quite a long period, which can be even termed unreasonable. Let us take up the claim of the plaintiff for interest on the retention money for belated payment of the same. As per the agreement 2.5% percent of the total value of the work shall be retained for one year as security for making good any defect in the execution that would be found during that period. Though the total contract amount as per Ex.P1-agreement was Rs.4,38,53,328/-. However, under Ex.P28-final bill the total cost of the work including the cost of additional bituminous items of work was arrived at Rs.4,44,49,823/- as found in Ex.P28.
Though the total contract amount as per Ex.P1-agreement was Rs.4,38,53,328/-. However, under Ex.P28-final bill the total cost of the work including the cost of additional bituminous items of work was arrived at Rs.4,44,49,823/- as found in Ex.P28. Out of the said amount, a sum of Rs.4,15,45,068/-had been paid in October 2005 itself as evidenced by the memorandum of payment annexed to Ex.P28-final bill. The balance amount of Rs.16,87,130/- was paid on 15.03.2010. The plaintiff has claimed interest for the belated payment of the said balance amount of Rs.16,87,130/- from 04.04.2005 to 15.03.2010, the date on which the said balance amount was paid. This claim was made on the basis that the final measurement was taken on 04.04.2005. The delay from the date of final measurement till the finalisation of the final bill is only about 4½ months and the same cannot be termed unreasonable. Therefore, this court deems it fit to disallow the claim of interest from 04.04.2005 to 31.10.2005, the date on which the interim payment of Rs.4,15,45,068/- was made. For the subsequent period, namely from 01.11.2005 to 15.03.2010, the defendant does not have any justification for denial of liability to pay interest for the belated payment. Therefore, the plaintiff's claim for interest on the belated payment of the balance amount of Rs.16,87,130/- is partly allowed and the interest is allowed from 01.11.2005 to 15.03.2010. 14. As per clause 3.1 of the agreement, the plaintiff was responsible to make good and remedy at his own cost any defect which might develop or might be noticed and intimation would be sent to the contractor by a letter signed by hand delivery or by registered post before the expiry of 36 months from the date of completion of the entire work, which period has been termed as defects liability period. But clauses 3.1 to 3.4 do not enable the department to retain any amount more than 2.5% of the total value of the work as retention amount as security towards the responsibility of the contractor to make good and remedy any defect which may develop within three years from the date of completion of work. Of course it is true that the contractor agreed to be held liable to make good and remedy at his own cost any defect which might develop within three years (36 months) from the date of completion of the work.
Of course it is true that the contractor agreed to be held liable to make good and remedy at his own cost any defect which might develop within three years (36 months) from the date of completion of the work. Clause 3.2 also empowers the department to rectify the defect within the said period if the contractor does not make good and remedy such defect at his own cost and recover the cost as damages from the contractor. However, as per clause 3.3, the department was allowed to retain only 2.5% of the total value of the work done which has to be refunded on the expiry of one year reckoned from the date of completion of work. For better appreciation, clause 3.3 is reproduced here under. "3.3 At the time of making final payment for minor/major works like formation of road including metalling and black topping 2 1/2% of the total value of work done shall be retained by the department. This amount will be refunded to the contractor on the expiry of one year reckoned from the date of completion of work provided that the contractor execute an indemnity bond for a further period of two years indemnifying the government against any loss of expenditure incurred to rectify any defect noticed due to faulty workmanship by the contractor or substandard materials used by the contractor." The said clause does not empower the department to retain the retention money of 2.5% of the total value of the contract beyond the period of one year from the date of completion of the work in case no defect in the execution of the work or damage in the road laid is found within that period of one year. Admittedly, no defect in the execution of the work was found within the period of one year, not only from the date of completion of the work, but also from the date of finalisation of the final bill. Therefore, there cannot be any justification for the defendant for the retention of the amount, equivalent to 2.5% of the total value of the contract, beyond the period of one year from 30.10.2005, the date on which final measurement was accepted and final bill was drawn. That takes us to 31.10.2006. A sum of Rs.11,17,625/-being the retention amount, equivalent to 2.5% of the total value of the work, was retained as per caluses of Ex.P1-agreement.
That takes us to 31.10.2006. A sum of Rs.11,17,625/-being the retention amount, equivalent to 2.5% of the total value of the work, was retained as per caluses of Ex.P1-agreement. (Though the issue has been framed as the retention money is Rs.11,11,443/-, it is obvious from the final bill that a little more than said amount, namely Rs.11,17,625/- was retained as the retention money). For the said amount, the plaintiff is entitled to a reasonable interest from 01.11.2006 till payment. 15. The next question that arises for consideration is what shall be the reasonable rate at which the plaintiff can claim as to the interest for the said amount. Plaintiff has claimed interest at the rate of 18% per annum. There is no contractual clause prescribing the rate at which the interest is to be paid in the event of belated payment. There is also no clause in the contract as to what shall be the rate of interest at which the department would be entitled to collect interest from the contractor in case of expenditure incurred by the department to rectify the defects when the contractor would fail to do so. Under such circumstances, this court feels that the rate of interest claimed by the plaintiff is slightly on the higher side and it shall be quite reasonable and justifiable to allow interest only at the rate of 12% per annum. The interest on the belated payment of balance amount of the final bill, namely Rs.16,87,130/- calculated at the rate of 12% per annum from 01.11.2005 to 15.03.2010 works out to Rs.8,85,743/-. Interest on the belated payment of the retention amount, namely Rs.11,17,625/-from 1.11.2006 to 30.03.2010, the date on which the retention amount was paid, at the rate of 12% works out to Rs.4,52,638/-. Hence the total amount for which the plaintiff is entitled to get a decree is Rs.41,43,136/-. The details are given below: 16. Since the claim was not settled within a reasonable time as per the requirement found in section 80(1) CPC, the plaintiff has issued a notice under Ex.P25. The same was received by the defendant as per the acknowledgements found annexed to Ex.P25. Even after such receipt of notice, the admissible portion of the claim was not settled. After the expiry of the waiting period prescribed in section 80 CPC, the suit came to be filed.
The same was received by the defendant as per the acknowledgements found annexed to Ex.P25. Even after such receipt of notice, the admissible portion of the claim was not settled. After the expiry of the waiting period prescribed in section 80 CPC, the suit came to be filed. As such, the defendant is held liable to pay interest to the plaintiff on the admissible portion of the claim. So far as the pendente lite interest is concerned, section 34 of CPC provides that the court can award interest at a rate which the court deems it reasonable. So far as the post decree interest is concerned, a cap of 6% has been provided with the exception that in case the liability has arisen out of a commercial transaction, then such interest can exceed 6%, but shall not exceed the contractual rate of interest. In case there is no contractual rate of interest, then such interest shall not exceed the rates at which the nationalised banks lend money. No doubt it is true that the liability has arisen out of a commercial transaction and the post decree interest can exceed 6%. But there is no contractual rate of interest agreed between the parties. So far as the alternative clause, namely bank rate of interest is concerned, the court itself cannot search for the bank rate of interest and it is for the plaintiff to lead evidence and prove the same. In the absence of any such evidence and proof, the interest shall be limited to 6% prescribed in section 34 CPC. Therefore, this court comes to the conclusion that though the interest from the date of filing of the suit upto the date of decree is allowed at the rate of 12%, the post decree interest is fixed only at the rate of 6% per annum. The plaintiff shall also be entitled to recover proportionate cost from the defendant. 17.
Therefore, this court comes to the conclusion that though the interest from the date of filing of the suit upto the date of decree is allowed at the rate of 12%, the post decree interest is fixed only at the rate of 6% per annum. The plaintiff shall also be entitled to recover proportionate cost from the defendant. 17. For all the reasons stated above, the suit is decreed in part and a decree is passed directing the defendant to pay a sum of Rs.41,43,136.00 together with an interest @ 12% per annum on Rs.28,04,755/-being the principal component of the decreed amount, (consisting of Rs.16,87,130/-being the balance amount of final bill + Rs.11,17,625/- being the retention money) from the date of plaint till the date of decree and thereafter with a further interest at the rate of 6% per annum from the date of decree till the date of payment. Defendant shall also pay proportionate cost to the plaintiff.