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Gujarat High Court · body

2013 DIGILAW 621 (GUJ)

BD SORATHIA v. STATE OF GUJARAT

2013-10-10

R.D.KOTHARI

body2013
JUDGMENT : 1. This is yet another case wherein the dispute between the parties relates to contract of construction work. What is breach of contact? Incidentally, this case is also an illustration of plaintiff’s failure to prove the damages claimed by him for breach of contract. 2. The plaintiff claims damages mainly under the three heads. The plaintiff has summarized these claims thus: (1) Rs. 1,37,202/: “on account of illegal recovery, extra expenditure, damages to the materials, unnecessary shoring and strutting, work done but not paid, diversion, security deposit etc.” (2) Rs. 5,72,408/: “on account of loss of profit and idle establishment, over stay of machinery, overhead etc.” (3) Rs. 2,00,238/: “on account of interest over damages” (from 14.12.1987 to 24.4.1990) _________________ Total Rs. 9,09,848/ __________________ 3. Before referring to brief facts of the case, two words i.e. “abutment” and “pier” may be explained. In construction of bridge, pillars on each side/corner of bridge is known as “abutment”, while pillars placed in middle of the bridge are known as “piers”. 4. The defendant State had invited tenders for construction of bridge on Ankleshwar Hansot Highway on Amalkhadi. The plaintiff’s tender was accepted and initial deposit of Rs. 19,762/was deposited by the plaintiff towards security deposit. The contract was for Rs. 10,87,867/and the period of contract was from 21.3.1987 to 20.3.1988. The contract is known as B/1/37 of 198687. The work order was issued on 21.3.1987. It is the say of the plaintiff that as the work had delayed, he had called upon the defendant to revise the rates and to extend the period of contract. As the defendant did not pay any heed, the plaintiff had given a notice to the defendant on 25.5.1989 reiterating the aforesaid demands. Then, notice under Section 80 of CPC was given on 5.11.1989. Thereafter, Special Civil Suit No. 94/1990 was instituted praying decree for the above referred damages. The learned trial Court was pleased to dismiss the Suit. Hence, the present appeal. 5. The defendant filed Written Statement at Exh.25 denying all the assertions made by the plaintiff in the plaint. It is contended by the defendant that the contract could not be completed because of negligence and irregularity on the part of the plaintiff. 6. The parties have produced voluminous documentary evidence before the trial Court. It is exchange of correspondence. 5. The defendant filed Written Statement at Exh.25 denying all the assertions made by the plaintiff in the plaint. It is contended by the defendant that the contract could not be completed because of negligence and irregularity on the part of the plaintiff. 6. The parties have produced voluminous documentary evidence before the trial Court. It is exchange of correspondence. The plaintiff has produced 99 documents vide list Exh.99 and the defendant has produced 42 documents vide list Exh.209. The plaintiff has deposed at Exh.187 and one Mr. Patel, Deputy Engineer, has deposed on behalf of the defendant at Exh.215. No other oral evidence is led by the parties. 7. The findings of the learned trial Court may be summarized as under: (1) The plaintiff is a registered contractor and is duly registered with the Public Works Department of the Government of Gujarat. (2) Unless and until it is shown that the defendant has committed breach, the defendant cannot be directed to pay damages. (3) From the voluminous documentary evidence, it is not possible to infer that the defendant has committed breach of contract. (4) Quoting certain part of the cross-examination of the plaintiff, it has held that the plaintiff has miserably failed to prove, how much damages he has suffered. (5) The say of the plaintiff about default committed by the defendant in handing over the site, design, drawings etc., is not possible to believe because the plaintiff could not have started the work of construction if such default is really committed by the defendant. (6) The above submissions are in the nature of advancing contradictory theory by the plaintiff. (7) Clause (13) of the agreement does support the say of the plaintiff that maps, drawings etc. are to be supplied by the defendant. (8) In extension of time application/letter, the plaintiff also claims for price escalation. Clause (6) of the agreement does not provide for price escalation. (9) By asking for price rise along with extension of contract period, the plaintiff himself has made contract standstill. If the plaintiff had asked for extension of time, the same could have been granted. (10) AIR 1988 SC 607 and AIR 1980 NOC 47 on price escalation do not apply to the facts of the present case. (11) Blame for nonperformance of the contractual obligations cannot rest solely on the defendant’s shoulder. If the plaintiff had asked for extension of time, the same could have been granted. (10) AIR 1988 SC 607 and AIR 1980 NOC 47 on price escalation do not apply to the facts of the present case. (11) Blame for nonperformance of the contractual obligations cannot rest solely on the defendant’s shoulder. (12) Open foundation work failed because of the plaintiff’s default and negligence. Court agrees with the submission of the defendant in this regard. (13) Open foundation failed because instead of taking care to make diversion, the plaintiff had started excavation work and, therefore, water rushed in due to sandy strata. (14) Demand of price rise by the plaintiff is unreasonable. (15) Since the defendant has not committed breach of contract, the defendants are entitled to forfeit the security deposit. (16) AIR 1977 SC 1481 , AIR 1984 SC 1703 , AIR 1952 Punjab 234, and AIR 1963 Calcutta 163, relied upon by the plaintiff in support of his submission that how to measure damages are not applicable to the present case, as the plaintiff has committed breach of contract. (17) If the plaintiff had worked as per the terms and conditions of the contract, open foundation would have worked very well and there would not have been need to switch over to well sinking foundation method. It is only on account of negligence of the plaintiff the well sinking foundation method was resorted to. 8. Learned advocate Shri K.G. Sukhwani for the appellant submitted that the learned trial Court has seriously erred in dismissing the plaintiff’s suit. Shri Sukhwani has submitted that contrary to the contract agreement, defendants had changed their design and the plaintiff was called upon to execute the work of well sinking foundation instead of open foundation method as provided in the contract agreement. Shri Sukhwani further submitted that at the time of execution of agreement, the defendants had selected mode of foundation, that was unsuitable to the site, then the defendants/respondents had decided to carry out the work by well sinking foundation method by taking decision at leisure. It was submitted that the plaintiff has incurred heavy loss because good quantity of material was damaged and washed away in monsoon on account of default on the part of the defendants. It was submitted that the plaintiff has incurred heavy loss because good quantity of material was damaged and washed away in monsoon on account of default on the part of the defendants. On the other hand, the plaintiff has to incur huge unnecessary expenses on labourers and has also suffered loss of profit in the process. Shri Sukhwani submitted that the appellant plaintiff’s Suit ought to have been decreed by the trial Court. 9. On the other hand, learned A.G.P. Mr. Hajare supported the judgment of the trial Court and submitted that no error has been committed by the trial Court. 9.1 The learned advocate for the appellant Mr. Sukhwani has submitted brief written submissions. 10. The plaintiff has developed his case on the line that the defendant has adopted unsuitable design of foundation, viz., pier foundation on account of which at initial stage itself, the plaintiff had faced difficulty and later on, defendant had switched over to well foundation design and this material alteration in design has caused him above referred loss. 11. The nature of difficulty faced by the plaintiff, in the words of the learned trial court is, “... sandy strata was met sandy subsoil water rushing in huge quantity into foundation and excavation was almost impossible...” 12. It would appear that plaintiff had hardly worked for more than couple of months under the agreement in question. In letter dated 13.3.1988 (Exh.137), the plaintiff says that work is discontinued since last one year. It is his say, therein, that this is due to change in site design and also because of the rainy season in the intervening period. 13. There is considerable force in the say of the Department that change in site design was necessitated as the plaintiff did not observe the instructions given by the Department for the execution of the work. The plaintiff was first required to divert the water. After diversion of water, he was supposed to do only pier foundation work and it is only thereafter abutment foundation work was to be taken up. Instead of that, what the contractor had done is, he had started pier and abutment foundation work simultaneously. The plaintiff admits in his cross-examination that he had commenced pier and abutment foundation work simultaneously. After diversion of water, he was supposed to do only pier foundation work and it is only thereafter abutment foundation work was to be taken up. Instead of that, what the contractor had done is, he had started pier and abutment foundation work simultaneously. The plaintiff admits in his cross-examination that he had commenced pier and abutment foundation work simultaneously. Digging and excavating soil in this fashion, as per the say of the PWD – without being conscious of diversion of water, had forced the plaintiff to put off the work. 14. At the time of hearing, learned advocate Mr.Sukhwani has also drawn attention to letter written by the plaintiff. It is dated 10.11.1987. Therein, the plaintiff has pointed out the issuance of public notice by the Department in the newspaper for carrying out the work in question, now by well sinking foundation. This notice is said to have been published on 5.10.1987. This letter of plaintiff is at Exh.109. It is in support of the submission of the plaintiff that change in design of foundation has caused him loss, learned advocate has drawn attention to this letter. Plea of the appellant is not possible to accept. The well foundation work is a subject of separate contract. To this, namely, it is subject of separate contact, I shall refer in a moment, but why the change in design of foundation was necessitated is a question and answer to plaintiff’s claim lay in answer to that question. 14.1 The plaintiff has conveniently not referred the fact of entering into second contract in his pleading. It would appear from the exchange of correspondence that plaintiff too had applied for carrying out this “another work” by well sinking foundation (Exh.132 and Exh.136). The plaintiff’s tender was accepted. The letter of acceptance is dated 11.2.1988 (Exh.142). The parties had entered into another agreement during the pendency of the agreement in question. The second agreement is numbered as “B 1/74”. Its period is from 25.2.1988 to 24.8.1988. It is the say of the plaintiff that he has completed the work as per the second agreement. The plaintiff has no grievance in respect of the second agreement. 15. The plaintiff claims damages as referred in the opening paragraph of the judgment. In order to succeed in his claim, the plaintiff has to establish breach of contract by the defendant. The plaintiff has no grievance in respect of the second agreement. 15. The plaintiff claims damages as referred in the opening paragraph of the judgment. In order to succeed in his claim, the plaintiff has to establish breach of contract by the defendant. When party can be said to have committed breach of contract? When party fails or refuses to perform his part of contract, he commits breach of contract. 16. Is it possible to say in the facts of the present case that the defendant has committed breach of contract? What Department was expected to do is to make timely payment to the plaintiff of the work carried out by him. The work was to be carried by the plaintiff / contractor. The plea of not giving line out or design by the defendant did not weigh with the learned trial Court. This plea has not much substance. As to the payment, it is the say of the plaintiff that he has carried out work of Rs.70,810/. He was paid Rs.42,092/and thus, Rs.28,718/is due. This assertion in the examination-in-chief cannot be held to be sufficient. Attention was not drawn to any other material in this regard at the time of hearing. Further, dues perse does not amount to breach of contract, assuming for the sake of argument that say of the plaintiff is true. The breach of contract is something distinct and wider. It would include dues but the plaintiff is not required to go that extent, viz., breach of contract only to recover the dues. Alleged loss of suit amount, which in the opinion of the plaintiff, flows from change in design of foundation has no substance. Change in design, as observed above, was not on account of any fault or breach committed by the defendant, but it was necessitated, as plaintiff commenced the work erroneously. Further, change in design, i.e. well sinking foundation, is subject matter of another contract as referred above. The plaintiff has no grievance about the second agreement. For the suit claim, reference may be made to the following correspondence. Further, change in design, i.e. well sinking foundation, is subject matter of another contract as referred above. The plaintiff has no grievance about the second agreement. For the suit claim, reference may be made to the following correspondence. 16.1 The Executive Engineer/department in fairly detail letter dated 27.6.1989 (Exh.251) has, interalia, stated mainly following four points : (i) First you should have complete the work of pier foundation and thereafter, you should have started the work of abutment because the design R.L. of the pier foundation is lower than the design R.L. Of abutment foundation. … Instead of doing pier foundation work, you have not followed the above instructions of the department and have intentionally started the work of abutment foundation first. (ii) It is due to this, the department was forced to change the design of pier foundation from open foundation to well foundation. (iii) You have not suffered any damage or loss as alleged by you. If you have followed the instructions, the work would have completed easily within the time. (iv) The department has never asked to go deeper beyond the limit mentioned in the contract (9 mtrs.). 17. It is the say of the plaintiff that he has terminated the contract by letter dated 4.7.1989 (Exh.160). In the said letter, the plaintiff/contractor says that since the defendant/PWD has failed to accept, ‘genuine demand’ of revision of rate, we hereby put an end to the contract. 18. Along with above letter by department (Exh.251), reference may be made to another letter dated 12.10.1989 (Exh.255) by the Executive Engineer, wherein it is pointed out that complaint about non-acceptance of due and genuine demand is not proper as the delay is occurred, “... due to your side, hence question of accepting yours due demand does not arise.” It is also pointed out that, “you had not obeyed first instruction of this office and continued to work haphazardly, hence question of giving further detail program does not arise.” 19. The contractor was quick to reply the above letter. He has replied by letter dated 16.10.1989 (Exh.179). He says that the work in question could not be completed solely on account of default on the part of the defendant. Secondly, he says that question of taking action against him (contractor) under various clauses of the contract does not arise, as the contract now does not remain in force. He has replied by letter dated 16.10.1989 (Exh.179). He says that the work in question could not be completed solely on account of default on the part of the defendant. Secondly, he says that question of taking action against him (contractor) under various clauses of the contract does not arise, as the contract now does not remain in force. 19.1 It would appear that in the above letter, contractor avoids to be specific. The say of the defendants that the instruction issued by them was not followed by the contractor and that the contractor, “continued to work haphazardly” is not replied by the contractor. There is only general denial. He says that say of the defendant is not acceptable. 19.2 It would appear from the relevant correspondence that each side attributes default to other side. In these circumstances, the plaintiff in order to succeed in his claim has to establish breach of contract by the defendant. 20. In this context, it would be relevant to note that the contractor is not illiterate or even semiliterate person. He is literate person. There are number of correspondence that has taken place between the parties. Many of them, i.e. letters by the contractor, are in English. Tone of the contractor, at least some of the letters, gives impression that the contractor is reasonably well versed in law. In one of the letters, he says that “time is not essence of contract”. In another letter, he says that there is no question of taking action against him under the contract, as the contract in question does not remain in force. In similar other letter he says that no action can be taken under the relevant clause of the agreement, as contract has come to an end by afflux of time. Yet in another letter, he asserts that the Executive Engineer has no right to take legal action and that the Superintending Engineer has not given him opportunity of hearing. Besides this, in more than couple of letters, department has asked him not to indulge in unnecessary correspondence (Exh.141, Exh.222, Exh.243, Exh.246 etc.). In fact, in the letter dated 14.12.1989 (Exh.257), department gives list of 29 letters of the contractor that were replied by the department. This aspect, viz. Besides this, in more than couple of letters, department has asked him not to indulge in unnecessary correspondence (Exh.141, Exh.222, Exh.243, Exh.246 etc.). In fact, in the letter dated 14.12.1989 (Exh.257), department gives list of 29 letters of the contractor that were replied by the department. This aspect, viz. The contractor being reasonably versed in law, would certainly enter into consideration when one goes through the correspondence for the purpose of appreciating the case of the parties. 20.1 Is it possible to hold that the plaintiff has established commission of breach of contract by the defendant ? In the facts and circumstances of the case, it is not possible to hold so. The exchange of number of correspondence that had taken place between the parties, shows that the parties, more particularly the plaintiff, had loved much to keep himself/themselves busy in writing letters than to engage in the work. As stated above, the plaintiff had commenced the work erroneously and change in design was mainly necessitated by that, and prior to that, the plaintiff had to discontinue the work on that count. In short, it is not possible to hold that the defendant has committed breach of contract, nor the material on record shows that item of damage claimed by the plaintiff in pleading is established by him. Thus, the plaintiffs have neither established breach of contract nor damage. On the other hand, there is sufficient material on record (Exh.218 to 222, 233) to disbelieve the say of the plaintiff. The material on record shows that there is panchnama carried out by the department, wherein it is found that no plant or machinery is lying on the site. Further, it is also pointed out by the defendants that except watchman, no staff members or labourers are found at the site. In this regard, reference may also be made to Exhs.179, 128 & 248 21. The suit, therefore, fails. The judgment of dismissal of the suit is affirmed, though for different reasons. The suit is dismissed. In the circumstances of the case, no order as costs. Appeal dismissed.