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2014 DIGILAW 220 (KER)

Joseph, S/o. Mapranathukaran Ouseph v. Executive Engineer, Additional Irrigation Division

2014-03-07

P.BHAVADASAN

body2014
JUDGMENT : P. Bhavadasan, J. The plaintiff who had his suit decreed by the trial court but which was reversed by the lower appellate court whereby the suit was dismissed is the appellant before this Court. 2. The plaintiff tendered for the work 'Protecting the left bank of Manali River on the upstream of N.H. Bridge at Manali' and his bid was accepted. The probable amount of contract was fixed at Rs. 1,74,802/-. The agreement was entered into on 28.12.1990 and the work was to be completed within two years of handing over of the site. According to the plaintiff, he commenced the work, but soon labour problems crept in and added to this was the vagaries of nature and the change of course of the river. Even though the plaintiff brought the above aspects to the notice of the first defendant, the first defendant paid little heed. According to the plaintiff, due to the change of the course of the river, it was impossible to complete the work. However, he was later served with Ext.A2 notice calling upon him to pay a sum of Rs. 2,90,927/- towards damages. That was challenged by the plaintiff in O.P.23465 of 1998. While the original petition was pending, revenue recovery proceedings were initiated. Therefore the original petition was disposed of directing the plaintiff to seek such remedies as are available under the Revenue Recovery Act. Though the plaintiff objected to the conduct of the defendants, they continued with the proceedings. Therefore, the plaintiff filed W.A.465 of 1999 which was disposed of by judgment dated 24.2.1999 directing the plaintiff that if he is so aggrieved, he may approach the civil court for redressal of his grievances. Pointing out that there is no reason to call upon him to pay the amount mentioned as above, he sought for injunction against enforcement of Ext.A2 notice. 3. The defendants resisted the suit. They pointed out that the suit is not maintainable. It is contended that the plaintiff did not commence the work. He had committed breach of contract and therefore the contract was terminated. The contract is clear in its terms that the problems that may arise are the worry of the contractor and the defendants had nothing to do with the matter. It is contended that the plaintiff did not commence the work. He had committed breach of contract and therefore the contract was terminated. The contract is clear in its terms that the problems that may arise are the worry of the contractor and the defendants had nothing to do with the matter. They pointed out that as a result of the breach of the contract committed by the plaintiff, the Department had suffered loss to the tune of Rs. 2,90,927/- which under the terms of contract the plaintiff is bound to make good. The writ petition filed by the plaintiff was dismissed and there is no reason to grant any relief to the plaintiff. They prayed for a dismissal of the suit. 4. Issues were raised by the trial court. The evidence consists of the testimony of P.W.1 and documents marked as Exts.A1 to A7 from the side of the plaintiff. The defendants had D.W.1 examined and Exts. B1 and B2 marked. 5. On an appreciation of the evidence in the case, the trial court came to the conclusion that in spite of best efforts made by the defendants, they were not able to substantiate the quantum of damages and that they have no power to recover the same. Accordingly the suit was decreed. 6. The department carried the matter in appeal. Relying on Clauses 42 and 43 of the contract, the court below found that the plaintiff was liable to bear the loss and the quantification was proper. Holding so, the appeal was allowed and the suit was dismissed. 7. Appeal was admitted on the following substantial questions of law: "(1) Whether on the facts and in the circumstances of this case, was not the learned District Judge in error in non-suiting the appellant for not having sued for quantification of liability or declaration? Is it necessary for a person facing revenue recovery steps to sue for adjudication of his liability? (2) Can a party to a contract adjudicate the breach thereof by the opposite party and assess damages thereby?" 8. Shri. K.G. Balasubramanian, learned counsel appearing for the appellant contended that the lower appellate court fell into an error in dismissing the suit without adverting to the facts and the evidence in the case. (2) Can a party to a contract adjudicate the breach thereof by the opposite party and assess damages thereby?" 8. Shri. K.G. Balasubramanian, learned counsel appearing for the appellant contended that the lower appellate court fell into an error in dismissing the suit without adverting to the facts and the evidence in the case. It is pointed out by the learned counsel that even assuming that as per the contract he is liable to make good the loss, the department is duty bound to establish that they had actually suffered loss by re-tendering the work and that had to be borne by the plaintiff. It has come out from the records, according to the learned counsel, that it was long after the termination of the contract that the work was re-tendered. Learned counsel drew the attention of this Court to the decision reported in Build Tech. India v. State of Kerala (2000 (2) K.L.J. 142) and contended that when there is dispute regarding the question of breach of contract or termination of contract, that has to be first determined and unilateral decision of the department to impose penalty cannot be sustained. 9. In the case on hand, according to the learned counsel for the appellant, the appellant had informed the department that due to the change of the course of river, the work could not be completed and there was no response from the department. At any rate, according to the learned counsel, the notice served on the appellant, namely, Ext.A2, does not disclose the heads under which the amounts have been assessed or in other words, it does not give the details of the quantification. Learned counsel also drew the attention of this Court to clause 3 of the agreement in Ext.B1 file and pointed out that the only circumstance under which even assuming that the plaintiff was in default, loss could be recovered as mentioned in the clause. That contingency has not arisen and therefore viewed from any angle, Annexure A2 notice could not be enforced against him. 10. Learned Government Pleader on the other hand contended that as per the terms of the contract entered into between the parties, any loss sustained by the department has to be borne by the plaintiff. In the case on hand, there is clear evidence to show that he abandoned the work and that forced the department to re-tender the work. 10. Learned Government Pleader on the other hand contended that as per the terms of the contract entered into between the parties, any loss sustained by the department has to be borne by the plaintiff. In the case on hand, there is clear evidence to show that he abandoned the work and that forced the department to re-tender the work. At the time of issuing Ext.A2 notice, the department was only in a position to anticipate the loss and not the actual loss. That anticipated loss was assessed on the basis of the rates then available with the department. Later the work was re-tendered and as per the statement filed on 7.3.2014, according to the learned Government Pleader, a sum of Rs. 12,13,249/-is due from the plaintiff. The lower appellate court, according to the learned Government Pleader was justified in relying on clauses 42 and 43 to non-suit the plaintiff. Accordingly, it is contended that no grounds are made out to interfere with the judgment and decree of the lower appellate court. 11. The plaintiff has a case that due to reasons beyond his control, he could not carry on with the work. He claims labour problems, vagaries of nature and change of course of the river which affected the work. There was frustration of the contract and therefore, he resiled from performing the contract. In the plaint in paragraph 3, these facts are specifically pleaded by the plaintiff. Those averments do not seen to have been specifically controverted by the department. Even assuming that the decision on the point whether there was frustration of the contract may not be necessary in this case, the question still remains as to whether the plaintiff can be made liable. 12. There is considerable conflict regarding the question whether there is breach of contract on the part of the plaintiff or whether the work could not be carried on due to any laches on the part of the department. The plaintiff put the blame on the department while the department would say otherwise. Whatever that be, the fact remains that the work was not carried on and completed. It seems that the Assistant Executive Engineer exercising the powers in terms of the contract terminated the contract. Thereafter Ext.A2 notice was issued. The said document only mentions that on termination, the liability is now tentatively fixed as Rs. 2,29,924/-. Whatever that be, the fact remains that the work was not carried on and completed. It seems that the Assistant Executive Engineer exercising the powers in terms of the contract terminated the contract. Thereafter Ext.A2 notice was issued. The said document only mentions that on termination, the liability is now tentatively fixed as Rs. 2,29,924/-. It does not disclose the details or the manner of assessment or how the quantification has been made. Revenue Recovery proceedings were sought to be initiated and the plaintiff has approached this court and as already stated in the statement of fact various proceedings followed. 13. The definite stand of the plaintiff is that he has not committed any breach of contract and even if it is assumed that there is breach on his part, unless the work is re-tendered and loss is quantified by the department, there is no question of recovering anticipated loss from the plaintiff. 14. The lower appellate court relied on clauses 41 and 42 of the agreement. They read as follows: "41. The contractor shall be liable for any loss caused to the Government on account of the above work including any that may arise due to non-fulfilment of the contract. He should comply with the rules laid down in the Central P.W.D. Contract regulations regarding fair wages. 42. The work shall be completed in all respects and also at the rate of progress within the time limit stipulations in the Form No.83-Notice inviting tender-Failing which the contractor is liable to be fined as stipulated in special condition No.49." 15. of course, a reading of the above clauses enables the Government to recover the loss. But one cannot omit to notice the clauses in the agreement seen in Ext.B1 file. of course, a reading of the above clauses enables the Government to recover the loss. But one cannot omit to notice the clauses in the agreement seen in Ext.B1 file. The relevant clause reads as follows: "If the contractor does not come forward to execute the original agreement after the said work is awarded and selection notice issued in his favour or commits breach of any of the conditions of the contract as stipulated in clause 13 of the notice inviting tenders as quoted above within the period stipulated them the Government may rearrange the work otherwise or get it done departmentally at the risk and cost of the contractor and the loss so sustained by the Government can be realised from the contractor under the Revenue Recovery Act as if arrears of land revenue as assessed, quantified and fixed by an adjudicating authority consisting of the Secretary (Public Works), Chief Engineer (Arbitration) and Chief Engineer (Administration) or any other officer or officers authorised by Government in this behalf, taking into consideration the prevailing Public Works Department rates and after giving due notice to the contractor. The decisions taken by such authority, officer or officers shall be final and conclusive and shall be binding on the contractor." That is a specific clause which relates to the assessment of loss and recovery of loss. A reading of the said clause shows that the department is entitled to recover loss on re-tender of the work or on the department carrying out the work at the risk and cost of the contractor who is alleged to have committed breach of the contract. In Ext. A2 document there is no mention of any re-tender or any mention of the department having carried out the work at the risk and cost of the contractor who committed breach of the contract by which they sustained any loss which the plaintiff is liable to pay. 16. In the statement filed on 7.3.2014, it is seen that the work was re-tendered only in 2008. It is also mentioned that though the work was tendered twice, there were no bidders. This would in fact give strength to the claim made by the plaintiff that due to the change of course of river, the work became difficult to be completed. It is also mentioned that though the work was tendered twice, there were no bidders. This would in fact give strength to the claim made by the plaintiff that due to the change of course of river, the work became difficult to be completed. Even assuming that the work could not be re-tendered immediately, there is nothing to show that the department had attempted to carry out the work on its own at the risk and cost of the plaintiff. What is now claimed is the anticipated loss which is not covered by the term of the contract between the parties. What is contemplated by the agreement between the parties is the actual loss suffered on re-tender or the loss suffered by the department on carrying out the work at the risk and cost of the plaintiff. There is no case for the department that the amount under Ext.A2 fall under any of the above category. 17. In the decision relied on by the learned counsel for the appellant, it is mentioned that the unilateral assessment of damages is not possible in a case where there is a disputed question of fact. Moreover, it is also observed that in the said decision that re-tender or reallocation of the work has to be done within a reasonable time. There is no reason why the principle in the decision referred to above may not be applied to the facts and circumstances of the present case. In the light of the defence taken by the State, it is not necessary for this court to consider the question as to whether the plaintiff had actually committed breach of the contract or not. So long as the defendants are not able to justify their demand, the plaintiff has to succeed. For the above reasons, this appeal is allowed, the decree and judgment of the lower appellate court are set aside and that of the trial court is restored. The plaintiff is entitled to his costs in this appeal.