Mizoram Technocrats Company (P) Ltd. v. State of Mizoram
2013-02-07
P.K.SAIKIA
body2013
DigiLaw.ai
JUDGMENT P.K. Saikia, J. 1. UPON hearing the parties and on the basis of the afore findings in various issues, the defendants are directed to pay compensation amounting to Rs. 1,00,000/- (Rupees one lakh) in respect of preparation of detailed estimate and drawing for the development of Indo-Myanmar Border Trade Centre at Melbuk and Zokhawthar dated 20th September, 2010 submitted by the plaintiff company to them with an interest rate @ 6% per annum with effect from 18th July, 2011 (the date of institution of the suit) till realization. No order as to costs. Being aggrieved by and dissatisfied with the aforesaid judgment, the plaintiff approached this Court on preferring present appeal praying for setting aside the judgment and order dated 8.11.2012, passed in Civil Suit No. 58/2011 citing many infirmities in the judgment which are incorporated in the memo appeal. 2. The facts necessary for disposal of this appeal, in short, are that the appellant (hereinafter referred to as plaintiff which is private limited company) and respondent No. 3 (hereinafter referred to as defendant No. 3) had signed an agreement on 7.5.2008 which was to be in force for a period of two calendar years from the date of agreement. As per the Agreement, the appellant was to prepare drawing and estimate of all buildings, road etc. as well as execution and internal electrification of all buildings proposed to be constructed at Zokhawthar and Melbuk by the Department of Trade and Commerce, Govt. of Mizoram. One of the conditions in the agreement aforesaid was that plaintiff could charge consultancy fees @ 4% on the estimated value. 3. For ready reference, the relevant part of the deed of agreement is reproduced below:- THE POINTS OF AGREEMENT (i) That the requirement of the said works shall be mutually discussed and agreed by the two parties. (ii) That every building works etc. proposed by Trade & Commerce Department and constructed by the Department itself at Zokhawthar and Melbuk, the Department shall award preparation work of Drawing and Estimate including Internal Electrification work (including material procurement) and Work Execution of all buildings, etc.
(ii) That every building works etc. proposed by Trade & Commerce Department and constructed by the Department itself at Zokhawthar and Melbuk, the Department shall award preparation work of Drawing and Estimate including Internal Electrification work (including material procurement) and Work Execution of all buildings, etc. to MTC Ltd. (iii) That MTC Ltd. consultancy fees would be 4% of the total estimated cost of the work assigned and work execution would be charged to 6% of the total estimated cost of the project executed by MTC Ltd. (iv) That after submission of completed Drawing and Estimate by MTC Ltd., Trade & Commerce Department shall release MTC Ltd. consultancy fee in full payment within two months counting from the date of submission of final Drawing and Estimate. (v) That before starting construction of work, Trade & Commerce Department shall release 50% of the Work Execution Fees charged by MTC Ltd. and after which MTC Ltd. shall start work execution according to the work order issued by the Department. The remaining 50% of Work Execution Fees shall be released on receipt of 2nd installment released by the funding Agency of the project. (vi) That the Contractor's final bills shall be released to the Contractor by the Department on satisfactory completion of works and according to the recommendation of MTC Ltd. for release of final payment. (vii) That the Agreement is signed for a period of two calendar year starting from the date of execution of the Deed of Agreement or, until the completion of works taken up with ASIDE Scheme Fund, 2007-2008 and under the supervision of MTC Ltd. (viii) That irrespective of the period of Agreement, the engagement of MTC Ltd. may be terminated if the works executed under the supervision of MTC Ltd. are found to be of sub-standard quality and do not meet the requirement of the Department. (ix) That subject to requirement, a technical assessment team, comprising of experts in their respective field may be formed by the two parties to monitor, assess and review the works executed by MTC Ltd. The report and recommendation of the team shall be binding on both the parties. The above agreed points between the two parties cannot be altered/changed unless or until mutually informed and agreed by both parties. Signed the Agreement Deed on the 7th day of May, 2008." 4.
The above agreed points between the two parties cannot be altered/changed unless or until mutually informed and agreed by both parties. Signed the Agreement Deed on the 7th day of May, 2008." 4. In the pursuance to said agreement, the defendant No. 3 asked the plaintiff to prepare detailed estimate and drawing for development of Indo-Myanmar Border Trade Centre at Melbuk and Zokhawthar, vide work order dated 27.6.2010. On 27.07.2010, the plaintiff submitted the defendant No. 3 the draft plans and estimates. In the meantime, the defendant No. 3 issued another letter dated 23.7.2010 whereby he had informed the plaintiff that agreement dated 7.5.2008 had expired. 5. Meanwhile, respondent No. 3 paid a visit to the site and he verbally gave instruction to the plaintiff to make some modifications to the draft plans and estimates, submitted on 27.07.2010. The plaintiff accordingly modified the draft plans and estimates aforesaid and submitted new draft plans and estimates for the development of Indo-Myanmar Border Trade Centre at Melbuk and Zokhawthar. According to plaintiff, the revised draft plans and estimates was accepted and passed by the State Level Export Promotion Committee, headed by its Chairman the Chief Secretary, Govt. of Mizoram (in short 'SLEPC') on 4.8.2010. 6. Sometime thereafter, the defendant No. 3 sent to the plaintiff another letter dated 18.8.2010 whereby the plaintiff was informed that the agreement dated 7.5.2010 had expired and that they could no longer work with them. However, the plaintiff having completed his detailed plans, estimates and drawings as per the directions of the defendant No. 3 submitted necessary papers to the defendant No. 3 on 20.9.2010 along with his bill amounting to Rs. 8,48,120/- vide annexure IV (Ext P-5) to the plaint and such bill was drawn in the terms of the revised draft plans and estimates. 7. However, in spite of submitting the bills, the defendant remained silent and refused to pay the plaintiff the consultancy fees at the agreed rate for which the plaintiff issued a notice under Section 80 CPC, as required under the law urging the defendants to clear the bill, submitted, within the period specified therein. However, the said notice was not responded to by the respondents for which, the plaintiff approached the Court seeking a decree for realization of Rs. 8,48,120/- along with interest at the rate of 12% per annum from the defendants. 8.
However, the said notice was not responded to by the respondents for which, the plaintiff approached the Court seeking a decree for realization of Rs. 8,48,120/- along with interest at the rate of 12% per annum from the defendants. 8. The defendants entered appearance and contested the suit having filed written statement. In their common written statements, they have contended that the suit is not maintainable in its present form and style, that the suit has no cause of action and that the suit is bad for not complying the provisions of Section 80 CPC. It has also been contended that on the basis of Deed of Agreement dated 7.5.2008, the plaintiff cannot claim consultancy fees @ 4% on the estimated cost of the work since the plaintiff prepared the plans, estimates etc. beyond the period of agreement. 9. Their further case was that the Deed of Agreement, involved, was not registered in accordance with the rules and procedures. As such, said agreement is required to be treated as null and void. For ready reference, the relevant part of the WS containing further case of the defendants is reproduced below-- 6. That with regard to para 2 of the plaint, it is submitted that the alleged 'Deed of Agreement' had not been registered at the appropriate forum, and that the same may be treated null and void. Moreover it is submitted that the said agreement was for a period of two calendar years i.e. 7th May, 2008 till 7th May, 2010 and the validity of the said agreement was expired and the same was intimated to the plaintiff by the defendant No. 3 vide memo No. B. 11011/11/2008-DTC/Loose dated 23rd July, 2010. A copy of the said memo No. B. 11011/11/08-DTC/Loose dated 23rd July, 2010 is annexed herewith and marked as Annexure-A. 7. That with regard to paras 4, 5 the plaintiff is put to strict proof of the contents made under, in fact, the plaintiff failed to show a documentary proof of the contents made under. It is also submitted that the plaintiff promised and assured that he would not demand a fee for the said draft estimates. 8. That with regard to paras 6, 7, 8, 7 it is submitted that the plaintiff was not allotted work order to prepare detailed estimate and drawings or detailed project report.
It is also submitted that the plaintiff promised and assured that he would not demand a fee for the said draft estimates. 8. That with regard to paras 6, 7, 8, 7 it is submitted that the plaintiff was not allotted work order to prepare detailed estimate and drawings or detailed project report. The plaintiff was not allotted a work order by the defendant No. 3 to prepare detailed project report as the works were likely to change by higher authority, and the same was eventually changed and the newly created Engineering Cell prepared plan and estimate. The plaintiff, in spite of the expiry of the agreement and in spite of not being allotted work order, by turning a deaf ear simply submitted detailed estimate and drawings or detailed project report which was not used by the department. Moreover as can be seen clearly in second para of the said SLEPC meeting minute, only a sum of Rs. 178.00 lakhs was sanctioned by the Ministry of Commerce and Industry as first installment and that there is no question of allotting work order for a sum of Rs. 234.00 lakhs by the defendants to the plaintiff. 10. The defendants, therefore, urge this Court to dismiss the suit with costs. On hearing the parties and on going through the materials on record, the learned trial court framed the following issues:- 1. Whether the suit is maintainable in its present form and style. 2. Whether the plaintiff has cause of action and locus standi on the basis of the Deed of Agreement dated 7/5/2008 by and between the plaintiff and defendant No. 3 claiming 4% of the total estimated cost of the work as consultancy fees. 3. Whether the plaintiff and the defendants executed any valid agreement apart from Deed of Agreement dated 7/5/2008 for detailed estimate and drawing for the development of Indo-Myanmar Border Trade Centre at Melbuk and Zokhawthar dated 20th September, 2010 submitted to the defendant No. 3. 4. Whether the plaintiff is entitled to the reliefs claimed or not. If so, to what extend. 11. Both the sides adduced evidence to support their respective stands. They produced some documents as well in support their cases. The documents adduced by the plaintiff was proved as Ext. P-1 to Ext. P-7 while the documents adduced by the defendants were proved as Ext. D-1 and Ext. D-2.
If so, to what extend. 11. Both the sides adduced evidence to support their respective stands. They produced some documents as well in support their cases. The documents adduced by the plaintiff was proved as Ext. P-1 to Ext. P-7 while the documents adduced by the defendants were proved as Ext. D-1 and Ext. D-2. On the conclusion of the trial, and on hearing of the parties, the learned trial court answered all the issues against the plaintiff but decreed the suit partly as aforesaid. It is that judgment and order which has been assailed in the present appeal. 12. The learned counsel for the appellant/plaintiff arduously contends that the lower court committed grave error in law and fact in not granting the decree, sought for, that it committed grave error in holding that the suit, filed by the plaintiff, lacks cause of action, that its decision that plaintiff is not entitled to any decree for his not doing the work within the period of agreement, that the decision of the trial court to grant the plaintiff compensation to the tune of Rs. 1,00,000/- despite holding that the suit had no cause of action is perverse and as such, liable to be set aside. 13. It has further been contended that the learned trial court could not read the evidence on record in proper perspective since the trial court totally ignored the admitted fact that it is defendant No. 3 who issued work order in favour of the plaintiff requiring the later to execute the work, mentioned in the work order dated 17.06.2010 on the terms and conditions stated in the date of agreement dated 07.05.2008. Since the work order was issued outside the period, stated in the agreement, aforementioned and since the plaintiff agreed to execute the work on the terms and conditions, mentioned in the agreement, above, the term of aforesaid agreement stood extended automatically in view of subsequent conduct of the parties to the aforesaid agreement. 14. Since the plaintiff executed the work, specified in the order dated 27.06.2010 and since such work has been accepted by the defendants including the State Level Export Promotion Committee (in short SLEPC), it does not lie in the mouth of the defendants, now, to say that the plaintiff is not entitled to claim consultancy fees @ 4% on the estimated value.
However, in spite of there being a clear case in favour of the plaintiff and despite concluding that hard work done by the plaintiff was accepted by the defendants, the learned trial court, on wrong appreciation of evidence on record as well as law which hold the field, disposed of the suit in the manner aforementioned. The plaintiff/appellant therefore, urges this Court to decree the suit as prayed and set aside the judgment of the trial court. 15. On the other hand, learned counsel for the defendants has argued that the learned trial court should not have awarded any amount in favour of the plaintiff since the plaintiff miserably failed to prove his case. The fact that he had undertaken to execute the work well beyond the period, mentioned in the deed of agreement, is a clear testimony to the fact that the plaintiff is not entitled to any amount from the defendants, much less their being entitled to claim consultancy fees at the rate specified in the deed of agreement aforementioned. 16. Referring to Section 55 of the Contract Act, it has been stated that in the agreement in question, time was very essence of the contract and since the plaintiff did not execute the work in the time, specified in the agreement, the plaintiff is not entitled to claim any fees even if he had done something in pursuance to work order dated 27.06.2010. It was also his contention that the learned trial court has committed grave error in awarding compensation to the tune of Rs. 1,00,000/- to the plaintiff in spite of its conclusion that the suit in question lacks cause of action. He, therefore submits this Court to dismiss the appeal. 17. I have very carefully considered the rival submissions having regard to the contention made in the memo of appeal as well as evidence on records and I first propose to consider issue Nos. 2 and 3 together since they are closely interrelated. On the perusal of the records, I have found that there is no dispute over the fact that a deed of agreement was executed between the plaintiff and the defendant No. 3 on 07.05.2008. It is also not in dispute that as per the said agreement (Ext P-1), the plaintiff was to prepare draft plan and estimate etc.
On the perusal of the records, I have found that there is no dispute over the fact that a deed of agreement was executed between the plaintiff and the defendant No. 3 on 07.05.2008. It is also not in dispute that as per the said agreement (Ext P-1), the plaintiff was to prepare draft plan and estimate etc. of all the buildings, roads as well as the execution and internal electrification of all the buildings proposed to be constructed at Zokhawthar and Melbuk by the Department of Trade and Commerce. 18. On my further perusal of the evidence on record, I have found that the defendant No. 3 after the expiry of the period of deed of agreement, asked the plaintiff to prepare detailed estimate and drawing for development of Indo-Myanmar Border Trade Centre at Melbuk and Zokhawthar vide his letter dated 29.06.2010 (Ext P-2). In response such letter, the plaintiff prepared draft plans and estimates and submitted the same to the defendant No. 3 on 27.07.2010 for doing further needful from the side of the defendants. 19. In the meantime, vide his letter dated 23.7.2010 (Ext D-2), the defendant No. 3 informed the plaintiff that the agreement dated 07.05.2008 expired. But then, as stated above, the plaintiff admittedly submitted draft plans and estimates to the defendant No. 3 only on 27.07.2010. Now, the question is whether by executing the work outside the period of agreement (Ext. P-1), the plaintiff forfeited his right to claim consultancy fees @ 4% on the estimated value of the work. In order to find an answer to the above query, I have once again perused the evidence on record. 20. On such exercise, I have found that though the period, mentioned in the deed of agreement was two years w.e.f. 07.05.2008 and although the aforesaid period presumably came to an end on 06.05.2010, yet there is clear evidence to show that on 29.06.2010, the defendant No. 3 asked the plaintiff to execute the work specified in the work order dated 29.06.2010 (Ext. P-2). There is also evidence on record to show in compliance of such request, made in the above work order, the plaintiff had actually prepared the plans and estimates in the terms of work order under consideration.
P-2). There is also evidence on record to show in compliance of such request, made in the above work order, the plaintiff had actually prepared the plans and estimates in the terms of work order under consideration. This speaks loud and clear that the period specified in the agreement dated 07.05.2008 stood extended due to conduct of the parties thereto, more particularly the defendant No. 3. 21. The evidence on record further reveals that on 02.08.2010, the defendant No. 3 visited the site and asked the plaintiff to make some modifications to the draft estimates, submitted to the defendant No. 3 on 27.07.2010. It is also found well apparent that in pursuance to such instructions from the defendant No. 3, the plaintiff actually made modifications to the original draft plan and estimates to meet the revised demand of the defendant No. 3. The evidence rendered by the plaintiff as PW 1 which remains totally unchallenged makes it more than clear that modifications to the original draft estimates were made at the behest of the defendant No. 3. 22. What is equally important to note is that the plaintiff case, on this count, has drawn unfettered corroboration from the testimony rendered by DW 1 Mr. Lalringthuanga in his cross-examination, for, in his cross-examination, he, in no uncertain terms, admitted that on 29.06.2010, the plaintiff prepared draft plans, estimates and drawings in the terms of the direction made in the work order dated 27.06.2010 and that the defendant No. 3 required the plaintiff to modify the aforesaid draft plans, estimates etc. when the former visited the site. 23. Thus, the evidence on record which I have discussed hereinabove without any shadow of doubt demonstrates that the period specified in the agreement dated 07.05.2008 stood extended in view of various conduct of the parties thereto. The admitted fact that the SLEPC, headed by an authority as high as Chief Secretary of the State, in its meeting held on 04.08.2010 chose to approve the modified plans and estimates prepared by the plaintiff doubly confirms that the period, specified in the agreement, above, stood extended well beyond the period mentioned therein. 23A. A It is worth nothing here as per agreement dated 07.05.2008, the work mentioned therein were to have executed under ASIDE Scheme. On the other hand, the work order also states that the work assigned pertains to aforesaid scheme.
23A. A It is worth nothing here as per agreement dated 07.05.2008, the work mentioned therein were to have executed under ASIDE Scheme. On the other hand, the work order also states that the work assigned pertains to aforesaid scheme. This is one more testimony of the period in agreement in question being extended well beyond the period specified in the agreement above. Being so, in my considered opinion, the plaintiff is entitled to claim the consultancy fees at the rate specified in the agreement dated 07.05.2008 for its rendering work first in the terms of the work order dated 27.06.2010 and then on the demands of defendant No. 3, made on 02.08.2010. 24. The learned counsel for the respondents/defendants has argued that though the defendant No. 3, as per the work order dated 27.06.2010, requested the plaintiff to execute certain work, mentioned therein, the plaintiff did not execute the work in the terms of aforesaid work order and as such, the plaintiff is not entitled to claim any charge for the work, he rendered to the defendants. In that connection, it has been pointed out that work order dated 27.06.2010 and work, mentioned in minutes of meeting of SLEPC at Srl. No. 5-15, did not tally meaning thereby that the plaintiff did not execute the work in the terms of work order (Ext. P-2). 25. I have very carefully considered the above contention, advanced from the side of the respondents/defendants having regard to the materials on record. On the perusal of the evidence of the witnesses, more particularly, PW 1 (Chairman of the plaintiff Company), I have found that though the defendants originally asked them to execute the work as specified in work order and although they have executed the work in the terms of the work order, yet subsequently, the defendant No. 3 required them to modify the work, mentioned in Srl. Nos. 1, 4 & 6 under Head-1 as well as the work at Srl. Nos. 1, 3 & 4 under Head-2 of the work order aforesaid. 26. It is also in the evidence that although the estimated value of the work, as per original work order, stood at Rs. 178 lakhs, same was increased to 234 lakhs due to modification of work, sought for by the defendant No. 3.
Nos. 1, 3 & 4 under Head-2 of the work order aforesaid. 26. It is also in the evidence that although the estimated value of the work, as per original work order, stood at Rs. 178 lakhs, same was increased to 234 lakhs due to modification of work, sought for by the defendant No. 3. These testimonies on record remain totally unchallenged meaning thereby that defendants are averse to those claims made by the plaintiff. On the perusal of the evidence, so tendered from the side of plaintiff in their entirety, it would appear clear that the modified work totally tallied with work as specified in Srl. Nos. 5-15 in minutes of the meeting of the SLEPC held on 04.08.2010. Being so, the contention that there was disparity between the work executed by the plaintiff and that the work, specified in the work order in question and as such, plaintiff is not entitled to claim any fees for the work rendered to defendants are found to be totally without any substance. 27. One aspect that deserves discussion here is that the defendants have issued a letter dated 23.07.2010 intimating the plaintiff that the period mentioned in the agreement dated 07.05.2008 expired. By another letter dated 18.08.2010, it has been contended that the agreement between the parties expired on 07.05.2010. A question, therefore, arises if aforesaid letters come in the way of claiming charge by the plaintiff on the basis of agreement dated 07.05.2008. My very emphatic answer to the above query is 'No'. 28. On the perusal of the record, I have found that there is absolutely no evidence on record to show that aforesaid letters, particularly letter dated 23.07.2010, had ever been received by the plaintiff before his submitting the draft plans, estimates etc. to the defendants on 27.07.2010. Being so, in my very firm view, those letters cannot come in the way of plaintiff claiming consultancy fees at the agreed rate from the defendants for the work, he rendered to the later. 29. Even we assume for the sake of argument for a moment that the plaintiff received the letter aforesaid before his submitting the draft plans, estimates etc. to the defendant No. 3 on 27.07.2010 yet in view of a clause, contained in the deed of agreement dated 07.05.2008, the letters aforesaid could no way come in the way of plaintiff's claiming the charge for his work.
to the defendant No. 3 on 27.07.2010 yet in view of a clause, contained in the deed of agreement dated 07.05.2008, the letters aforesaid could no way come in the way of plaintiff's claiming the charge for his work. This is because of the reason that period in agreement dated 07.05.2008 stood extended well beyond period mention therein due conduct of the parties. 30. I have already found that such work order was in operation when the work order in question was issued and such work order was executed. The aforesaid agreement had a clause which stated that none of the parties thereto could alter/change the conditions in the agreement unless such alterations/changes agreed to by both the parties to the agreement. Since the work order was in operation at all the relevant time, the clause in the work order would certainly prevent the defendants from withdrawing from such agreement unilaterally. 31. Learned counsel for the defendants/respondents further contends that since the work, under consideration, was to have executed under and funded from ASIDE Scheme during the period between 2007-2008, since the work was not executed during the period, above and there is no fund at the moment, the defendants cannot be asked to pay the consultancy fees to the plaintiff, more so, when the work rendered by the plaintiff was not at all utilized by the defendants. Those contentions from the side of learned State counsel, however, could cut no ice in demolishing the case of the plaintiff. 32. It is found evident from the record that the work, rendered by the plaintiff, had been accepted and utilized by the defendants. Even the learned trial court had held so and quite rightly for which it granted the plaintiff an amount to the tune of Rs. 1,00,000/- only as compensation for the work rendered by the plaintiff towards the defendants. In the teeth of above revelations, the defendants cannot be allowed to take shelter under the plea that they have no funds at the moment to satisfy claims in the bill at Ext. P-5, and that too, in violation of the terms and conditions, contained in the agreement dated 07.05.2008. 33.
In the teeth of above revelations, the defendants cannot be allowed to take shelter under the plea that they have no funds at the moment to satisfy claims in the bill at Ext. P-5, and that too, in violation of the terms and conditions, contained in the agreement dated 07.05.2008. 33. For the foregoing reasons and discussion, I have found that the plaintiff despite his executing the work, specified in work order dated 27.06.2010 outside the period mentioned in the deed of agreement dated 7.5.2008, is entitled to claim its consultancy fees at the rate specified in the agreement aforementioned. As such, the query in paragraph 20 is answered in favour of plaintiff affirmative. For the same reasons, issue Nos. 2 and 3 are decided in favour of the plaintiff. 34. In view of our foregoing discussion, I am also of the opinion that the suit under is maintainable in the form and style in which it was presented. That being so, the plaintiff entitled to claim consultancy fees for his revised work valued work at Rs. 234 lakhs at the agreed rate. Issue Nos. 1 & 4 are accordingly decided in affirmative and in favour of the plaintiff. ORDER 35. In the result, I have decreed the suit with costs declaring that the plaintiff is entitled to claim Rs. 8,48,120/- from the defendants. However, considering the special facts and circumstances, recorded hereinbefore, I allowed the plaintiff to claim simple interest @ 1% from the date of judgment rendered by the trial court till the realization of entire decreetal amount. 36. Consequently, the judgment rendered by the trial court stands reversed. A decree be drawn accordingly. Return the LCR immediately.