Krishna Associates v. Gujarat State Electricity Corporation Limited
2021-03-25
A.C.RAO, N.V.ANJARIA
body2021
DigiLaw.ai
ORDER : N.V. ANJARIA, J. Heard learned advocate Mr. Apurv Vakil with learned advocate Mr.Ayaan Patel for the appellant and learned advocate Mr. Dipak Dave for the respondents. 2. The present First Appeal preferred by the original defendant No.1 is directed against judgment and decree dated 15.9.2018 passed by the Commercial Court, Vadodara in Commercial Civil Suit No.12 of 2016 (Old Special Civil Suit No.533 of 1993). 2.1 The suit filed by the respondent No.1original plaintiff was for recovery. Following prayers were made by the plaintiff. “(i) Pass a decree to favour of the plaintiff against the defendants for recovery of Rs.3,44,47,295.47 (Rs. Three Crores Forty Four Lacs Forty Seven Thousand Two Hundred Ninety Five and paise forty seven only). (ii) Award interest at the rate of 19% on the suit amount from date of the suit till realisation. (iii) Award the cost of the suit from the defendants.” 3. The basic facts as pleaded in the suit are inter alia that the plaintiff Gujarat State Electricity Corporation Limited is a statutory body constituted under the provisions of Indian Electricity Act. Defendant No.1 is a Partnership Firm. Defendant No.2 is partner who has been managing the affairs of the firm. It is the case of the plaintiff that during 1988 the plaintiff had invited tenders for the work of desiltation of Pond No.2 at Thermal Power Station at Dhuvaran, for the estimated costs of Rs. 2,03,75,000/. 3.1 The plaintiff had filled in the tender for Rs.1,17,00,000/-. The tender of the plaintiff was found lowest which was accepted at Baroda and the work was entrusted to the defendants by Work Order dated 7.8.1988. The work was required to be completed within 16 months from the date of Work Order or from handing over of site and the period of said 16 months was agreed to be excluding four months of monsoon. The progress of work was to be achieved strictly as per programmed target, it was stated.
The work was required to be completed within 16 months from the date of Work Order or from handing over of site and the period of said 16 months was agreed to be excluding four months of monsoon. The progress of work was to be achieved strictly as per programmed target, it was stated. 3.2 It is further the case of the plaintiff that the site was handed over to the defendants on 15.11.1988 and the target details were as under : Period Target Programme for the month Total target Actual Progress made 15.11.88 “ 62,500 M3 - 15.12.1988 to 14.1.1989 “ 125000 M3 576 M3 15.1.1989 to 12.2.1989 “ 187500 M3 8624 M3 15.2.1989 to 14.3.1989 “ 250000 M3 42598 M3 15.3.1989 to 14.4.1989 “ 312000 M3 14350 M3 15.4.1989 to 14.5.1989 “ 375000 M3 15730 M3 15.5.1989 to 14.6.1989 “ 437500 M3 10868 M3 3.3 The plaintiff stated that as the site was handed over to the defendants on 15.11.1988 on account of preceding monsoon season, the period of sixteen months was to be reckoned from 15.11.1988. It is the further case that the defendants were to execute the total work of 10,00,000 M3 according to the terms of contract. The plaintiff had to submit the final programme containing the progress within fifteen days from the date of Letter of Intent and thus, the time was an essence of the contract. It is the case of the plaintiff that the defendants were required to execute the work to the tune of Rs.62500 M3 every month and that the defendants lagged behind the target every month in the first working season and till 15.5.1989 as they had executed work of 93,728 M3 as against required 437,500 M3. It was the case that thereby the defendants were not able to arrange for and mobilize their sources so as to work according to schedule. 3.4 The defendants by their letter dated 15.6.1989 submitted programme of work for second season. However, the defendants could not and did not carry out their programme. As per the say of the plaintiff the defendants themselves admitted their liability and slow progress in their work in the first season and thus, the defendants could execute only 10% of total work in the first season and they failed to work as per the programme submitted by themselves even for the second season.
As per the say of the plaintiff the defendants themselves admitted their liability and slow progress in their work in the first season and thus, the defendants could execute only 10% of total work in the first season and they failed to work as per the programme submitted by themselves even for the second season. The time and the progress of work within time as per programme was pleaded to be the essence of contract. It is further the case of the plaintiff that there were no circumstances calling for extension of time that the defendants were not entitled to any extension of time since and that they had abandoned the work. As stated by the plaintiff the work was urgent and the defendants could not complete the same by 15.7.1990. 3.5 It was next stated that, in view of urgency, the plaintiff had invited the tender at the risk and costs of defendants for the balance work which was left undone by the defendants. The tender of M/s. G.K. Patel & Co., Ahmedabad was found lowest that is for Rs.3,39,71,500/- and therefore, the said party was entrusted the work who completed it within time granted to them. Rs.3,33,70,421.82 was paid to said M/s. G.K. Patel & Co. for the work done by them. The difference of the amount spent by the plaintiff is recoverable by the plaintiff from the defendants. It is also the case of the plaintiff that the defendants would have got the amount of Rs.1,04,42,768.44 had they not abandoned the work, however, they had done only 10% work and therefore, remaining 90% of the work was done by M/s. G.K. Patel & Co., which put plaintiff to sufferance of loss of Rs.2,29,26,652.38 being the differential payment. The plaintiff also claimed entitlement to 15% supervision charges. 3.6 On the above premise of facts and pleadings, the plaintiff prayed that he was entitled to amount as under, (1) Amount of difference between value of the work contracted from the defendant and cost of the work paid to G.K. Patel & Company Rs.2,29,26,652.38 (2) 13% supervision charges. Rs.34,38,997.90 (3) Loss of interest at the rate of 18% p.a. On the amount of difference from 25.6.1991 till filing of the suit Rs.80,81,645.19 TOTAL Rs.3,44,47,295.47 4. The suit was contested by the defendant No.1 by filing written statement Exhibit-17.
Rs.34,38,997.90 (3) Loss of interest at the rate of 18% p.a. On the amount of difference from 25.6.1991 till filing of the suit Rs.80,81,645.19 TOTAL Rs.3,44,47,295.47 4. The suit was contested by the defendant No.1 by filing written statement Exhibit-17. Various contentions were raised in the written statement which came to be recorded by learned Judge in the impugned judgment and decree in paragraph Nos.13 to 16. 4.1 The suit ultimately resulted into the following decree dated 15.9.2018. “The suit of the plaintiff is partly allowed. Accordingly, as per clause 3 of the Tender and Contract Works, the plaintiff is entitled to recover One percent of the total contracted value which shall not exceed 10% of the total contracted value along with interest at the rate of 9% p.a. From the date of filing the suit till its realisation from the defendants. Rest of the Claims of the plaintiff stands dismissed. The parties to bear their own costs. Decree sheet be drawn accordingly.” 5. A bare reading of the language in which the decree passed is couched, it will show that what is provided is that the plaintiff will be entitled to recover 1% of total contracted value which shall not exceed 10% of the total contract value with interest from the defendants. The working of the above direction necessarily means that it would not be possible to ascertain in terms of exact figure as to what amount the plaintiff is entitled to recover and what is the precise liability to pay for the defendants. 5.1 Such decree is incapable of being executed. This Court in order dated 13.11.2019 rightly observed that the impugned decree is confusing and there is no clarity in the nature of decree. When the Court considered and reconsidered the decree and the directions passed by the Court thereunder, we are of the view that the decree is vague, not capable of being translated into an ascertained amount and it does not have the virtue of executability. 5.2 In light of the above, the Trial Court is required to be directed to decide the case afresh. It was stated in the course of submissions that before the Court below both the sides have completed their respective leading of evidence.
5.2 In light of the above, the Trial Court is required to be directed to decide the case afresh. It was stated in the course of submissions that before the Court below both the sides have completed their respective leading of evidence. In that view, the Court below shall have to proceed afresh from the stage of arguments to conduct the trial and pass judgment and decree thereafter in accordance with law. 6. Accordingly, the Commercial Court of Vadodara is directed to proceed de novo with the trial of Commercial Civil Suit No.12 of 2016 (Old Special Civil Suit No. 533 of 1993) from the stage of hearing the arguments of both the sides. The Commercial Court below thereafter shall deliver fresh the judgment and decree on the basis of the merits and in accordance with law. 7. In order that the Commercial Court is enabled to undertake the exercise as above, the impugned judgment and decree dated 15.9.2018 passed by the Commercial Court, Vadodara in Commercial Civil Suit No.12 of 2016, is hereby set aside. 7.1 Such exercise shall be completed within a period of four months from the date of receipt of the writ of this order. 8. This Court has not entered into the merits of the case of the either side nor has expressed anything on the aspects of merits of the case. 9. The appeal stands disposed of as above. As the suit is directed to be decided afresh as per the above directions, the Cross Objections filed by the plaintiff would not survive. The Cross Objections stands disposed of accordingly.