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2014 DIGILAW 1732 (MAD)

P. Ramankutty v. Government of Tamilnadu

2014-06-26

G.M.AKBAR ALI

body2014
JUDGMENT 1. The civil suit is filed under Order IV rule 1 of the Original Side Rules with Order VII Rule 1 and Order IV Rule 1 of the Code of Civil Procedure to (a) direct the defendants to pay to the plaintiff a sum of Rs.53,83,048/-together with interest at 18% per annum on the sum of Rs.22,90,655/- from the date of plaint till realisation (b) to pay the cost of the suit and (c) grant such further reliefs. 2. The case of the plaintiff is as follows: (a) The defendants called for a tender for the work of north extension of Inner Ring Road and the bid by the plaintiff was accepted by the defendants and agreement was entered into between the plaintiff and the defendants on 21.4.1992. The total value of the contract was Rs.4,65,65,000/-(Rupees four crore sixty five lakhs and sixty five thousand only). The period of contract was 30 months from the date of handing over the site. (b) The defendants could not hand over the entire site, as the land acquisition proceedings were not completed. The site was only handed over partially on 2.5.1992, therefore, their portion of the work was delayed. The defendants have also caused various interruptions which also prolonged the original period contemplated under the agreement, various disputes arose between the parties and the plaintiff invoked the clause for appointment of Arbitrator to decide the disputes in C.S.No.140 of 1994. The Arbitration Tribunal of three retired Chief Engineers was constituted. The plaintiff filed his claim before Arbitral Tribunal on 20.6.1994, claiming a sum of Rs.1,33,74,810/- (Rupees one crore thirty three lakhs seventy four thousand eight hundred ten only). (c) The defendants filed their counter statement on 20.1.1985 and made counter claims. Pending arbitration, the defendants terminated the contract on 23.2.1986. The Tribunal passed an Award dated 31.3.1997. As per the award, the Tribunal held that the termination of contract was illegal. A sum of Rs.51,72,502/- (Rupees fifty one lakh seventy two thousand five hundred two only) was awarded to the plaintiff. A sum of Rs.22,96,000/-(Rupees twenty two lakhs ninety six thousand only) was awarded to the defendants. Therefore, the plaintiff is entitled to a sum of Rs.28,76,502/- with interest at the rate of 18% per annum. The plaintiff filed O.P No.423 of 1999 to receive the award and pass a decree. A sum of Rs.22,96,000/-(Rupees twenty two lakhs ninety six thousand only) was awarded to the defendants. Therefore, the plaintiff is entitled to a sum of Rs.28,76,502/- with interest at the rate of 18% per annum. The plaintiff filed O.P No.423 of 1999 to receive the award and pass a decree. The defendants instituted OP No.852 of 1999 to set aside the award. By judgment and decree dated 11.12.2000, OP No.852 of 1999, filed by the defendants, was dismissed. The defendants preferred an appeal in OSA No.64 of 2000 and the OSA was dismissed on 19.12.2007. However, the defendants have not settled the final bill, which is calculated at Rs.5,00,000/- (Rupees five lakhs only) and also a sum of Rs.17,90,655/-(Rupees seventeen lakhs nineteen thousand six hundred fifty five only) as being withheld by the defendants. Therefore, the present suit. 3. The case of the defendants is as follows: (a) The plaintiff has not raised any plea before the Arbitral Tribunal regarding the claim of Rs.5,00,000/-(Rupees five lakhs only) due from the final bill and the sum of Rs.17,90,655/-, being the withheld amount. (b) The Tribunal, passed the award on 31.3.1997, declaring the termination as illegal. Therefore, the limitation starts from 31.3.1997. The claim should have also been made within three years from date of termination, which is 20.3.1996. Even assuming that the termination was held illegal on 31.3.1997, a suit ought to have been filed on or before 29.3.2000, but the suit filed in the year 2003 is hopelessly barred by limitation. (c) The suit is also not maintainable as the same claim was not made before the Arbitration Tribunal. 4. Based on the above averments, the following issues were framed: 1. Whether the suit is maintainable in law? 2. Whether the suit claim is barred by limitation? 3. Whether the defendants are liable to pay the suit claim? 4. Whether the plaintiff is entitled to interest? 5. To what other reliefs the plaintiff is entitled to? 5. The admitted facts are also follows: (i) On 21.4.1992, an agreement was entered into between the plaintiff and the defendants for the work of forming Northern Extension of Inner Ring Road Phase I in TPP Road, Chennai City, excluding major bridges. 4. Whether the plaintiff is entitled to interest? 5. To what other reliefs the plaintiff is entitled to? 5. The admitted facts are also follows: (i) On 21.4.1992, an agreement was entered into between the plaintiff and the defendants for the work of forming Northern Extension of Inner Ring Road Phase I in TPP Road, Chennai City, excluding major bridges. It was for the value of 465.65 lakhs and the contract period was 30 months from date of handing over of possession of site; (ii) On 2.5.1992, only a partial site was handed over and therefore, the project was delayed. The plaintiff invoked the Arbitration clause in the agreement and filed a claim statement before the Arbitrary Tribunal on 20.6.1994. On 20.1.1995, the defendants filed their counter statement before the Tribunal. On 23.2.1996, the defendants terminated the contract. The said issue was also raised before the Arbitrary Tribunal. (iii) On 31.3.1997, the Tribunal passed an Award declaring the termination as illegal and also determined the claim amounts. The said Award was challenged by the defendants in OP No.852 of 1999. The plaintiff also filed OP No.423 of 1999 to pass a decree in terms of the Award. On 11.12.2000, the court dismissed the petition filed by the defendants in OP No.852 of 1999 and allowed the petition filed by the plaintiff in OP no.423 of 1999. The defendants preferred an appeal before the Division Bench in OS Nos.64 and 65 of 2002. (iv) Both the appeals were dismissed by the Division Bench on 19.12.2000. However, the present suit was filed in June 2003 after the dismissal of OP No. 852 of 1999 filed by the defendants. The suit has been filed for payment of Rs.5,00,000/-due under the final bill and for return of Rs.17,90,655/- retained by the defendants under various bills. The said claims are challenged as not maintainable and barred by limitation. 6. To prove the case of the plaintiff, the plaintiff examined himself as P.W.1 and Exs.P.1 to P.6 were marked. Two witnesses were examined on the side of the defendant side and D.1 was marked. Issues 1 and 2: 7. Mr.M.K. Kabir, Learned Senior Counsel for the plaintiff submitted that the amounts due on the final bill and the retention amount are not disputed by the defendants. Two witnesses were examined on the side of the defendant side and D.1 was marked. Issues 1 and 2: 7. Mr.M.K. Kabir, Learned Senior Counsel for the plaintiff submitted that the amounts due on the final bill and the retention amount are not disputed by the defendants. The learned Senior counsel submitted when there is no dispute about the final bill amount and the retention amount, there is no Arbitral Issue and therefore, a civil suit is necessary for recovery of the amount. He also pointed out that the suit is maintainable and not barred by limitation. 8. The learned counsel would further submit that when the dispute arose before Arbitration in the year 1994, the plaintiff had made as many as five claims and the defendants made counter claims. He also submitted that pending arbitration proceedings, the defendants have terminated the contract on 23.2.1996 and such termination was held illegal by an award dated 31.3.1997. 9. The said award was challenged and this court has confirmed the award by order dated 11.12.2000. Therefore, the suit was filed in June 2003 for the recovery of amount due and payable and the following case laws are relied to show that the limitation is not attracted. i) 2002 (4) RAJ 353(Bom) (Municipal Corporation of Greater Bombay vs Kulkarni & Co) ii) 2001 (3) RAJ 304 (Del) Unity Engineers vs ITPO iii) 2002 (4) RAJ 309 (Del) (Continental Construction Ltd vs Food Corporation of India & Ors) iv) ALR 1993 (1) 30 (S.M. Sareen vs State and Others) v) ALR 1989 (2) 204(Radhey Shyam Gupta vs Municipal Corporation of Delhi) vi) ALR 1988 (2) 270 (Major (Retd.) Inder Singh Rekhi vs Delhi Development Authority vii) AIR 1981 Ori.172 (Executive Engineer R.E. Division, Dhenkanal and another vs J.C. Budharaj) 10. On the other hand, Mr.M. Venugopal, the learned Special Government Pleader would submit that the contract was terminated on 23.2.1996 and the Tribunal has held such termination as illegal on 31.3.1997. Therefore, the suit ought to have been filed either three years from 23.2.1996, which will be on 22.2.1999 or from 31.3.1997 which expired on 30.3.2000. The learned counsel further submitted that the claim was not made before the Arbitral Tribunal therefore the suit is not maintainable and barred by limitation and relied on a decision reported in 2008 (2) MLJ 589 (K.S. Mohamed Ibrahim & Others vs Mohamed Habibullah). 11. The learned counsel further submitted that the claim was not made before the Arbitral Tribunal therefore the suit is not maintainable and barred by limitation and relied on a decision reported in 2008 (2) MLJ 589 (K.S. Mohamed Ibrahim & Others vs Mohamed Habibullah). 11. Heard and perused the materials available on record. 12. The suit is filed for payment of Rs.5,00,000/-due under final bill and for a sum of Rs.17,90,655/-, being the amount retained by the defendants on various bills. 13. Ex.P.1 is the Award dated 31.3.1997. Pending contract, the plaintiff has made five various claims, which was disputed by the defendants, who have filed counter claims. The Tribunal had accepted three of the claims of the claimants and two of the department's claims. Pending Arbitration, the contract was terminated on 23.2.1996. But the award was passed only on 31.3.1997. The termination was held illegal. 14. There is no dispute regarding the quantum of suit claim. Therefore, the present claim would not be the subject matter of the arbitration and the only remedy available to the plaintiff is to approach the Civil Court for recovery of amount due and payable. Therefore, the suit is maintainable. 15. In ALR 1989 (2) 204 (Radhey Shyam Gupta vs Municipal Corporation of Delhi), the High Court of Delhi held as follows: “Where limitation to file an application under Section 20 starts from the date of intimation to the contractor of preparation of the final bill and no such intimation has been given, the suit is not barred by limitation. Several causes of action between the same parties may be joined in a suit.” 16. IR 1981 Ori.172 (Executive Engineer R.E. Division, Dhenkanal and another vs J.C. Budharaj) it is held that in a case final measurements has not been effected for many years, the court held that the claim is not barred by limitation. The Orissa High Court held as follows: “4. Contention (i) :- Section 37 of the Arbitration Act provides that the provisions of the Limitation Act would apply to arbitration as they apply to proceedings in court. In the instant cases, final bills have not been drawn up and dispute arose when the contractor's claims were not accepted in toto and he was not offered payment according to his satisfaction. In the instant cases, final bills have not been drawn up and dispute arose when the contractor's claims were not accepted in toto and he was not offered payment according to his satisfaction. Though the work in respect of Miscellaneous Appeals Nos.29 and 30 of the 1981 had been completed either in 1974 or 1975 and the work in Miscellaneous Appeal No.62 of 1981 was completed as early as 1967 or so, final measurements had not been effected for many years and when the public officers took measurement which was not to the satisfaction of the contractor dispute arose. There can be no doubt that dispute would arise in these cases when final measurement was done and plaintiff's claims were not being admitted in toto. In fact, in each of these cases, as rightly stated by Mr.Rath for the contractor the dispute arose in relation to the work done which was not being reflected in the final measurement. That being the position in none of these cases the claim could be barred by limitation. 17. In ALR 1993 (1) 30 (S.M. Sareen vs State and Others), the High court of Himachala Pradesh held as follows: “Where a claim for compensation is made by one person against another under Section 70 of the Contract Act, it is not based on subsisting contract between the parties but the juristic basis of the obligation is a quasi contract or restitution that something was done by the party for another and the said work so done has been voluntarily accepted by the other party. As the claim is not based on contract, Art.18 of Limitation Act does not apply. It is covered by the residuary Art 137 and the Limitation commences when the right to sue accrues. In such a case right to sue accrues when the payment is refused. In the present case it will commence from the date when this court held the contract to be void. Suit is within limitation”. 18. The limitation starts from the day when the amount becomes due and payable. In the present case, admittedly, the final bill has not been prepared and the measurement as contemplated was also not prepared. The learned senior counsel for the plaintiff would submit that when the final bill has not been prepared the limitation will not rise. 18. The limitation starts from the day when the amount becomes due and payable. In the present case, admittedly, the final bill has not been prepared and the measurement as contemplated was also not prepared. The learned senior counsel for the plaintiff would submit that when the final bill has not been prepared the limitation will not rise. The learned counsel would further submit that the defendants have not filed any document to show that they have called upon the plaintiff to be present for taking final measurements subsequent to the act of termination; The measurement book (M Book) has not been filed as an exhibit; Unless the final measurements are taken and the employer refuses to pay the amount due, the period of limitation will not commence; As regards the retention amount the same becomes payable after the expiry of the Defects Liability Period; Consequently, the contention of the Defendants that the claims are barred by limitation is unsustainable. 20. This court is of the considered view that there is a force in the contention of the learned Senior counsel for the plaintiff. The limitation starts only after the award has become final which is in the year 2000 as only thereafter the final bill has to be prepared. But the final measurements were not taken to prepare the final bill for the commencement of the limitation. The limitation is to be calculated only from the finality of the Arbitration proceedings. The suit claim includes the retained amount. Therefore, the suit filed in the year 2003 is within limitation. Issues 1 and 2 are decided accordingly. 21. Issue No.3 and 4. The defendants have not disputed the final bill amount of Rs.5,00,000/-and the retention amount of Rs.17,19,655/-. The only defence is that the claims are barred by limitation and the issues Nos.1 and 2 have been decided holding that the suit is not barred by limitation. Therefore, the defendants are liable to pay the suit claim. 22. The plaintiffs have claimed a sum of Rs.30,92,383/- and a sum of Rs.22,90,655/- as interest from 23.2.1996 till filing of the suit on 23.8.2003 and future interest on the principal. 23. There is no contract fixing the rate of interest. However, the Arbitral Tribunal had awarded 18% interest for the claim amount. Therefore, the plaintiffs are entitled for 18% interest on Rs.22,90,655/-. The plaintiffs have calculated this amount from 23.2.1996. 23. There is no contract fixing the rate of interest. However, the Arbitral Tribunal had awarded 18% interest for the claim amount. Therefore, the plaintiffs are entitled for 18% interest on Rs.22,90,655/-. The plaintiffs have calculated this amount from 23.2.1996. However, the plaintiffs cannot say that it has become payable from the year 1996 as the limitation is calculated only from the confirmation of the Arbitration Award in the year 2000. Therefore, 18% interest could be payable only from 11.12.2000. 24. In the result, the suit is decreed directing the defendants to pay a sum of Rs.22,90,655/-(Rupees twenty two lakh ninety thousand six hundred fifty five only) with 18% interest from 11.12.2000 till realisation with costs.