State Of Kerala Represented By The Secretary To Government, Water Resources Department v. P. P. Thomas
2024-08-22
JOHNSON JOHN, SATHISH NINAN
body2024
DigiLaw.ai
JUDGMENT : JOHNSON JOHN, J The appellants are the defendants in O.S. No. 35 of 2005 on the file of the Sub Court, Muvattupuzha. 2. The suit is for declaration and realization of unpaid value of works conducted by the plaintiff. The plaintiff is a Contractor who entered into an agreement with the defendants on 27.11.1995 for the construction of Mulakulam Branch canal from CH.4400 metres to 5650 metres, including cut and cover and cross drainage works. The agreement was executed after the acceptance of the tender on 25.11.1995. The agreement incorporated MDSS as the main part of the contract with the PWD Schedule of Rates of 1992. 3. As per the agreement, Rs.3,69,72,007/- was the probable amount of contract and the time fixed for performance was 12 months. Even though, the plaintiff made necessary arrangements for the execution of the work in time, the defendants failed to hand over the work site within two months as per the terms in the agreement. The time for handing over the work site expired on 27.01.1996 and the time fixed for performance expired on 27.01.1997. The defendants handed over possession of the work site to the plaintiff only on 17.10.1997 and the second defendant approved the initial level measurement of earth work excavation only on 23.12.1997. 4. Though, the defendants handed over possession of the work site on 17.10.1997, the standing trees, electric and telephone posts in the alignment of the canal were removed by the defendants only after 23.04.1998. The design, drawings and structural particulars were supplied to the plaintiff only during the last week of June, 1998. The initial measurements for blasting and removal of hard rock were approved by the second defendant only on 27.09.1998. The defendants failed to supply cement and steel items as agreed. The defendants also delayed payment of part bills and effected unauthorized and illegal recoveries from the bills. 5. As per clause 59 of MDSS, the plaintiff is entitled to claim damages for the delay caused by the defendants and for payment at market rates. Since the Government banned excavation of sands from the source of supply specified in the contract during 2001, the work was delayed and the plaintiff had to procure sand from distant places by incurring huge transportation expenses, and the same was not reimbursed by the defendants.
Since the Government banned excavation of sands from the source of supply specified in the contract during 2001, the work was delayed and the plaintiff had to procure sand from distant places by incurring huge transportation expenses, and the same was not reimbursed by the defendants. The work was completed on 30.12.2002, after 3 1/2 years from the coming into force of 1999 PWD Schedule of Rates. The defendants were withholding the payments due to the plaintiff and they exerted undue influence and coercion on the plaintiff to sign supplemental slips for extension of time. 6. It is stated that the supplemental slips are vitiated by undue influence, coercion and duress and were for unjust enrichment of the defendants and are unauthorized and illegal. It is stated that the plaintiff carried out the works beyond 27.01.1997 and therefore, the plaintiff is entitled for market rates as per 1996 and 1999 PWD Schedule of Rates. 7. The main contentions in the written statement of the defendants are that, the defendants are not responsible for the delay in completion of the work. Even though, the site was handed over to the plaintiff only after 23 months from the date of execution of the agreement, the plaintiff was ready to do the work as per the conditions in the original agreement and he did not raise any objection when the site was handed over on 17.10.1997. The measurements for earth work were taken and approved by the Department as per rules, and the Department was also prompt in supplying materials to the plaintiff. As per the agreement, the plaintiff is not entitled to claim any extra costs for purchasing materials from the open market. The payments were made to the plaintiff subject to the availability of letter of credit and funds considering seniority of bills. There was no illegal or unauthorized recovery as alleged by the plaintiff. It is stated that the plaintiff signed the supplemental agreements without any coercion or pressure from the defendants and there is no condition for any enhanced rate in the supplemental agreements. There was no compulsion on the plaintiff to undertake the work at a belated stage. Even though, the plaintiff was at liberty to withdraw from the contract, he has chosen to proceed with the contract and there was no coercion or undue influence on the plaintiff to sign the supplemental agreements.
There was no compulsion on the plaintiff to undertake the work at a belated stage. Even though, the plaintiff was at liberty to withdraw from the contract, he has chosen to proceed with the contract and there was no coercion or undue influence on the plaintiff to sign the supplemental agreements. The plaintiff alone was responsible for the delay in completing the work after taking possession of the site. 8. In the trial court, PWs 1 and 2 were examined and Exhibits A1 to A59 were marked from the side of the plaintiff. From the side of the defendants, DW1 was examined and Exhibits B1 to B7 were marked. The report filed by the Advocate Commissioner was marked as Exhibit C1. 9. After trial and hearing both sides, the trial court found that the defendants committed breach of the original agreement dated 27.11.1995 and that the supplemental agreements relied on by the defendants are void and not enforceable, as the plaintiff was compelled to sign the same, by the defendants illegally withholding payment of the bills. It was found that the plaintiff is entitled for the unpaid value of works claimed for the period between 01.11.1997 to 01.07.1999 at 1992 PWD Schedule of Rates and that the plaintiff is entitled for market rates of 1999 PWD Schedule of Rates for the unpaid value of works carried out between 01.07.1999 and 30.12.2002. The plaintiff was also allowed to realize the unpaid cost in conveyance and disposal of surplus soil and increased cost for the river sand procured between 26.3.2001 and 31.12.2002. The plaintiff was also allowed to realise unpaid cost of 3000 bags of cement and also the interest claimed for the unpaid amount with cost from the defendants. 10. Heard Sri. Sujith Mathew, the learned Special Government Pleader appearing for the appellants and Sri. K. Babu Thomas, the learned counsel for the respondent. 11. The learned counsel for the appellants argued that the plaintiff was ready to do the work as per the conditions in the original agreement and it was in that circumstance, he accepted the possession of the work site on 17.10.1997 without any objection. It is also argued that the plaintiff is responsible for the delay thereafter, in completing the work.
The learned counsel for the appellants argued that the plaintiff was ready to do the work as per the conditions in the original agreement and it was in that circumstance, he accepted the possession of the work site on 17.10.1997 without any objection. It is also argued that the plaintiff is responsible for the delay thereafter, in completing the work. In the absence of any condition for payment of enhanced rate in the supplemental agreement, the trial court ought to have found that the claim of the plaintiff for payment at enhanced rate is not legally sustainable. It is also argued that there was no coercion or duress from the side of the defendants and that the plaintiff voluntarily signed the supplemental agreements for extension of time to keep the contract alive as he could not complete the work within the time fixed. 12. The points that arise for determination are the following: 1. Whether the defendants committed breach of the original contract dated 27.11.1995? 2. Whether the supplemental agreements relied on by the defendants are valid and enforceable in law? 3. Whether the impugned judgment and decree are legally sustainable? Point No.1: 13. It is not in dispute that the defendants accepted the tender of the plaintiff on 25.11.1995. It is also admitted that the parties executed the agreement on 27.11.1995 and the same is marked as Exhibit B1. It is not in dispute that the time fixed for performance was 12 months and the defendants were bound to hand over the work site to the plaintiff within two months from the date of the agreement. Admittedly, the work site was handed over to the plaintiff only on 17.10.1997. 14. According to PW1, the standing trees, electric and telephone posts were not removed from the work site at the time of handing over the possession on 17.10.1997 and the same were removed only after 24.03.1998. The evidence of PW1 shows that the defendants committed default in finalization of the design and drawings of the structural particulars and they also failed to supply cement and steel as per the terms of the agreement. 15. DW1, Assistant Executive Engineer, admitted that time was the essence of the contract and that the second defendant approved the initial measurement of earth work excavation only on 23.12.1997.
15. DW1, Assistant Executive Engineer, admitted that time was the essence of the contract and that the second defendant approved the initial measurement of earth work excavation only on 23.12.1997. The copy of a letter from the Superintending Engineer to the Executive Engineer dated 23.12.1997 in this connection is marked as Exhibit A2. The evidence of DW1 further shows that the second defendant approved the initial measurement for blasting and removal of hard rock only on 21.07.1998. 16. In cross examination DW1 deposed as follows: 17. In cross examination, DW1 also admitted that the design, drawings and structural particulars of the cut and cover were approved by the Chief Engineer only on 13.05.1998. Letter dated 13.05.1998 from the Chief Engineer to the Chief Project-II, Thiruvananthapuram in this connection is marked as Exhibit B3(b). As per Exhibit B1 agreement, the defendants were bound to supply 30681 bags of cement and 230589 kgs. of steel to the plaintiff. According to PW1, the first supply of 1000 bags of cement was on 21.01.1998. DW1 admitted that 23000 kgs. of steel are required in a month for carrying out the work. The evidence of DW1 shows that the first supply of 1000 bags of cement was on 21.01.1998 and it was 3 months after handing over the possession of the work site and the first supply of steel items was on 31.03.1998. It is not in dispute that the time fixed for performance as per Exhibit B1 expired on 27.01.1997. 18. The specific case of the plaintiff is that he made all arrangements for starting the work as per Exhibit B1 agreement. But, he was unable to start the work as the defendants failed to hand over the work site as per the terms in Exhibit B1 agreement. As noticed earlier, the defendants are bound to hand over the work site to the plaintiff within two months from the date of the original agreement and admittedly, they handed over the work site only on 17.10.1997. The defendants failed to supply steel and cement as per the terms in the agreement. There was also delay in payment of the part bills and therefore, we find no reason to disagree with the finding of the trial court that it was the defendants who failed to perform their part of the agreement dated 27.11.1995 and thereby, committed the breach of contract. Point No.2: 19.
There was also delay in payment of the part bills and therefore, we find no reason to disagree with the finding of the trial court that it was the defendants who failed to perform their part of the agreement dated 27.11.1995 and thereby, committed the breach of contract. Point No.2: 19. The evidence of PW1 shows that immediately after signing the agreement on 27.11.1995, he made all requisite arrangements for men, machinery items, technical, supervisory personnel, capital etc. in order to carry out and complete the work within the period of contract. But, the defendants handed over the possession of the work site only on 17.10.1997. According to the defendants, the plaintiff was ready to do the work as per the conditions in the original agreement at the time of handing over the work site on 17.10.1997 and he has not claimed any enhanced rate. 20. The learned counsel for the appellants argued that the plaintiff could have withdrawn from the contract, if he was not ready to undertake the work as per the original terms and conditions in the agreement dated 27.11.1995. It is also pointed out that the plaintiff executed supplemental agreements for extension of time on various dates and there is no condition for enhancement of rates in the said supplemental agreements. The plaintiff has undertaken to carry out the balance works during the extended period at the rate already agreed upon. Copy of the supplemental agreement No. I dated 13.11.1998 for extension of time upto 31.05.1999 is marked as Exhibit A6. Copy of the supplemental agreement No.II dated 14.07.1999 for extension of time up to 31.03.2000 is marked as Exhibit A13. Copy of the supplemental agreement No.III dated 26.05.2000 for extension of time up to 30.09.2000 is marked as Exhibit A22. Copy of the supplemental agreement No.IV dated 04.12.2000 for extension of time up to 31.03.2001 is marked as Exhibit A25. Copy of the supplemental agreement No.V dated 27.09.2001 for extension of time up to 31.12.2001 is marked as Exhibit A29. Exhibit A31 is the copy of the supplemental agreement No.VI dated 18.01.2002 for extension of time up to 30.06.2002 and Exhibit A35 is the copy of the supplemental agreement No.VII dated 05.08.2002 for extension of time up to 31.12.2002. The evidence of PW1 shows that there was inordinate delay on the part of the defendants in effecting part payments. 21.
Exhibit A31 is the copy of the supplemental agreement No.VI dated 18.01.2002 for extension of time up to 30.06.2002 and Exhibit A35 is the copy of the supplemental agreement No.VII dated 05.08.2002 for extension of time up to 31.12.2002. The evidence of PW1 shows that there was inordinate delay on the part of the defendants in effecting part payments. 21. In the chief affidavit of PW1, the date of preparation and date of payment of the various part bills are tabulated as follows: Serial number of the bill Date of preparation Date of payment Gross amount in rupees Net amount paid in rupees C.C.I & part 26.12.1997 30.12.1997 62,68,442 53,15,681 C.C.II & part 24.1.1998 28.1.1998 26,32,661 22,32,661 C.C.III & part 24.3.1998 31.3.1998 43,63,823 17,07,916 C.C.IV & part 28.5.1998 30.5.1998 23,63,825 13,27,200 C.C.V & part 28.7.1998 22.9.1998 23,36,125 21,98,720 C.C.VI & part 22.9.1999 07.10.1999 24,94,744 8,21,240 recovered 12,49,387 C.C.VII & part 29.12.1999 04.1.2000 13,67,839 12,35,641 C.C.VIII & part 18.3.2000 2.6.2000 17,60,235 11,48,187 C.C.IX & part 21.7.2000 17.2.2001 24,22,063 4,93,742 C.C.X & part 31.12.2001 31.3.2002 34,60,999 15,96,328 recovered 11,73,437 C.C.XI & part 29.06.2002 16.1.2003 44,64,768 24,90,876 C.C.XII & part 25.03.2003 20.2.2004 38,25,627 32,49,386 22. The specific case of the plaintiff is that the defendants prepared unauthorized and illegal supplemental agreements and got them signed under undue influence, coercion and duress by withholding the part payment bills with an intention to defeat the claim of the plaintiff for payment at market rates for the works executed after the period fixed for performance. It is pertinent to note that DW1 has made admissions in cross examination regarding the delay in payment of the part bills and recoveries effected. It is not in dispute that as per the original agreement, monthly part payments of the works carried out are to be sanctioned within 10 days of the presentation of the bills. In cross examination, DW1 admitted that there was delay between 206 to 326 days in passing various part bills. It is also admitted by DW1 that it is keeping such payments pending that the supplemental agreements were got executed. 23. The specific case of the plaintiff is that the defendants withheld the part payment bills in order to compel the plaintiff to sign the supplemental agreements. Duress is a common law remedy to void a contract which has been induced by unlawful or other illegitimate forms of pressure. In Central Inland Water Transport Corpn.
23. The specific case of the plaintiff is that the defendants withheld the part payment bills in order to compel the plaintiff to sign the supplemental agreements. Duress is a common law remedy to void a contract which has been induced by unlawful or other illegitimate forms of pressure. In Central Inland Water Transport Corpn. v. Brojo Nath Ganguly [ (1986) 3 SCC 156 =AIR 1986 SC 1751], the Honourable Supreme Court held as follows: “..The Constitution was enacted to secure to all the citizens of this country social and economic justice. Article 14 of the Constitution guarantees to all persons equality before the law and the equal protection of the laws. The principle deducible from the above discussions on this part of the case is in consonance with right and reason, intended to secure social and economic justice and conforms to the mandate of the great equality clause in Article 14. This principle is that the courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power. It is difficult to give an exhaustive list of all bargains of this type. No court can visualize the different situations which can arise in the affairs of men. One can only attempt to give some illustrations. For instance, the above principle will apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It will apply where the inequality is the result of circumstances, whether of the creation of the parties or not. It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them. It will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rules may be.
This principle, however, will not apply where the bargaining power of the contracting parties is equal or almost equal. This principle may not apply where both parties are businessmen and the contract is a commercial transaction. In today's complex world of giant corporations with their vast infrastructural organizations and with the State through its instrumentalities and agencies entering into almost every branch of industry and commerce, there can be myriad situations which result in unfair and unreasonable bargains between parties possessing wholly disproportionate and unequal bargaining power. These cases can neither be enumerated nor fully illustrated. The court must judge each case on its own facts and circumstances.” 24. In National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd. [ (2009) 1 SCC 267 ], the Honourable Supreme Court held thus: “49. Obtaining of undated receipts-in-advance in regard to regular/routine payments by government departments and corporate sector is an accepted practice which has come to stay due to administrative exigencies and accounting necessities. The reason for insisting upon undated voucher/receipt is that as on the date of execution of such voucher/receipt, payment is not made. The payment is made only on a future date long after obtaining the receipt. If the date of execution of the receipt is mentioned in the receipt and the payment is released long thereafter, the receipt acknowledging the amount as having been received on a much earlier date will be absurd and meaningless. Therefore, undated receipts are taken so that it can be used in respect of subsequent payments by incorporating the appropriate date. But many a time, matters are dealt with so casually that the date is not filled even when payment is made. Be that as it may. But what is of some concern is the routine insistence by some government departments, statutory corporations and government companies for issue of undated “no-dues certificates” or “full and final settlements vouchers” acknowledging receipt of a sum which is smaller than the claim in full and final settlement of all claims, as a condition precedent for releasing even the admitted dues. Such a procedure requiring the claimant to issue an undated receipt (acknowledging receipt of a sum smaller than his claim) in full and final settlement, as a condition for releasing an admitted lesser amount, is unfair, irregular and illegal and requires to be deprecated.” 25. In Puri Construction P. Ltd. and Ors.
Such a procedure requiring the claimant to issue an undated receipt (acknowledging receipt of a sum smaller than his claim) in full and final settlement, as a condition for releasing an admitted lesser amount, is unfair, irregular and illegal and requires to be deprecated.” 25. In Puri Construction P. Ltd. and Ors. v. Larsen and Toubro Ltd. and Anr. [2015 SCC Online Del 9126], High Court of Delhi held thus: “88. The authorities discussed previously, especially recent judgments of the Supreme Court have dwelt upon circumstances where the parties are allowed to contend or take a position which is seemingly contradictory or in conflict with the earlier position if it can establish or prove that it was not a free agent. In other words, economic duress is now a recognized head answering the description of “coercion” entitling the contracting party to avoid the contract or some of its terms. This head of “economic coercion” would fall within the meaning of Section 16 of the Indian Contract Act, 1872 which defines “undue influence” as one where the relation subsisting between the parties is such that one of them is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other. Section 16(3) states that, where a person in a position to dominate the will of the other enters into a contract with him and the transaction appears on the face of it or on the evidence of it to be unconscionable, the burden of proving that there was no undue influence is on the person who is able to dominate the will of the other. Illustrations (c) and (d) particularly deal with cases of economic duress or undue influence. Given the nature of evidence, which was on the record before the Tribunal and the legal position as to economic duress being one of the factors that can successfully avoid a contract, there is no patent illegality in the findings recorded in the award. Likewise, it cannot be said that the Tribunal arrived at a finding which is contrary to the substantive law of the country or contrary to justice and morality. As a result, the findings of the learned Single Judge that Supplementary Agreement could not be characterized as the product of undue influence and economic duress, because both parties were corporate entities is unsustainable, is, therefore, set aside.
As a result, the findings of the learned Single Judge that Supplementary Agreement could not be characterized as the product of undue influence and economic duress, because both parties were corporate entities is unsustainable, is, therefore, set aside. ...” 26. In M/s. Associated Construction v. Pawanhans Helicopters Pvt. Ltd. [( AIR 2008 SC 2911 ], the Honourable Supreme Court held as follows: “...We have reproduced the correspondence in extenso to show that the contractor was compelled to issue a "No Dues Certificate" and in this view of the matter, it could not be said that the contractor was bound by what he had written. It is also clear that there is voluminous correspondence over a span of almost 2 years between the submission of the first final bill on 3rd June 1991 and the second final bill dated 2nd February 1993 and as such the claim towards escalation or the plea of the submission of a "No Dues Certificate" under duress being an afterthought is not acceptable. In M/s. Ambica Construction vs. Union of India (2006) 12 SCALE 149 it was observed as under: "A glance at the said clause will immediately indicate that a No Claim Certificate is required to be submitted by a contractor once the works are finally measured up. In the instant case the work was yet to be completed and there is nothing to indicate that the works, as undertaken by the contractor, had been finally measured and on the basis of the same a No Objection Certificate had been issued by the appellant. On the other hand, even the first Arbitrator, who had been appointed, had come to a finding that No Claim Certificate had been given under coercion and duress. It is the Division Bench of the Calcutta High Court which, for the first time, came to a conclusion that such No Claim Certificate had not been submitted under coercion and duress. From the submissions made on behalf of the respective parties, and in particular from the submissions made on behalf of the appellant, it is apparent that unless a discharge certificate is given in advance, payment of bills are generally delayed. Although, Clause 43(2) has been included in the General Conditions of Contract, the same is meant to be a safeguard as against frivolous claims after final measurement.
Although, Clause 43(2) has been included in the General Conditions of Contract, the same is meant to be a safeguard as against frivolous claims after final measurement. Having regard to the decision in the case of Reshmi Constructions's (supra), it can no longer be said that such a clause in the contract would be an absolute bar to a contractor raising claims which are genuine, even after the submission of such No Claim Certificate.” 27. In this case, the evidence of PW1 clearly shows that he executed the supplemental agreements under economic duress, when the defendants withheld the part payment bills. Exhibit A8 letter dated 03.12.1998 issued by the plaintiff to the second defendant shows that the plaintiff demanded payment at the current schedule of rates. Exhibit A14 letter dated 15.09.1999 shows that the plaintiff protested against the illegal and unauthorized supplemental agreement got signed under undue influence, coercion and duress and also insisted for payment at the current schedule of rates. When the parties are not on equal footing with respect to the bargaining power and when one party is in a position to exploit the other party, the supplementary agreements signed by the vulnerable party without free consent is not legally enforceable as the same is opposed to public policy and void in the eyes of law. Therefore, we find that the defendants cannot claim any benefit on the basis of the supplemental agreements. The point is answered against the defendants. Point No.3: 28. The trial court allowed the plaintiff to realize Rs.51,12,805/- from the defendants towards unpaid value of works carried out between 01.11.1997 to 01.07.1999. The said amount is calculated only at 1992 PWD Schedule of Rates even though the 1996 PWD rates had come into force. The trial court allowed the plaintiff to realize Rs.1,37,47,742/- towards unpaid value of works carried out between 01.07.1999 to 30.12.2002. The said amount is calculated as per 1999 PWD Schedule of Rates. The plaintiff is allowed to realize Rs.12,31,860/- towards unpaid cost in conveyance and disposal of surplus soil during the period from 07.10.1999 to 05.04.2004. Towards unpaid cost in additional leads and increased cost of river sand procured between 26.03.2001 and 31.12.2002, the plaintiff was allowed to realize Rs.8,23,917/-. Towards unpaid cost of 3000 bags of cement, the plaintiff was allowed to realize Rs.82,764/-.
Towards unpaid cost in additional leads and increased cost of river sand procured between 26.03.2001 and 31.12.2002, the plaintiff was allowed to realize Rs.8,23,917/-. Towards unpaid cost of 3000 bags of cement, the plaintiff was allowed to realize Rs.82,764/-. The trial court also allowed the plaintiff to realize Rs.7,47,120/- towards interest on the amounts withheld by the defendants. 29. Exhibits A57, A58 and A59 are true copies of PWD Schedule of Rates of 1992, 1996 and 1999 respectively. The bills for purchase of 3000 bags of cement between 07.11.2002 and 30.11.2002 from the open market are marked as Exhibit A52. The bills for procurement of sand from Valakom and Marady Panchayat kadvu between 07.11.2002 and 31.12.2002 are marked as Exhibit A53. Exhibit B1 original agreement dated 27.11.1995 would show that Madras Detailed Standard Specifications forms part of the contract and a copy of MDSS is marked as Exhibit A54. Clauses 58 and 59 in Exhibit A54 reads thus: “58. Date of Commencement and completion.--On notification of the possession of the site (or premises) being given to the contractor by letter registered for acknowledgment as provided in paragraph 10 supra, he shall forthwith begin the work, shall regularly and continuously proceed with them, and shall complete the same (except for painting or other work which, in the opinion of the Executive Engineer, it may be desirable to delay) by the date of completion, as defined in the “Articles of Agreement” subject, nevertheless, to the provisions of extension of time mentioned in the next clause. The contractor shall under no circumstance be entitled to claim any damages from Government if he incurs any expense or liabilities to payment under the contract before the date of commencement defined above. The contractor shall have the right to withdraw from the contract and obtain refund of the security deposit if such intimation of handing over the site is delayed more than two months from the date of acceptance of the agreement by the competent authority. 59. Delays and extension of time.--No claim for compensation on account of delays or hindrances to the work from any cause whatever shall lie, except, as hereinafter defined.
59. Delays and extension of time.--No claim for compensation on account of delays or hindrances to the work from any cause whatever shall lie, except, as hereinafter defined. Reasonable extension of time will be allowed by the Executive Engineer or by the officer competent to sanction the extension, for unavoidable delays, such as may result from causes, which, in the opinion of the Executive Engineer, are undoubtedly beyond the control of the contractor. The Executive Engineer shall assess the period of delay or hindrance caused by any written instructions issued by him, at twenty-five per cent in excess of the actual working period so lost. In the event of the Executive Engineer failing to issue necessary instructions and thereby causing delay and hindrance to the contractor, the latter shall have the right to claim an assessment of such delay by the Superintending Engineer of the Circle. The Contractor shall lodge in writing the Executive Engineer a statement of claim for any delay or hindrance referred to above, within fourteen days from its commencement, otherwise no extension of time will be allowed. Whenever authorised alterations or additions made during the progress of the work are of such a nature in the opinion of the Executive Engineer as to justify an extension of time in consequence thereof, such extension will be granted in writing by the Executive Engineer or other competent authority when ordering such alterations or additions.” 30. The Advocate Commissioner is examined as PW2 and the report of the Commissioner is marked as Exhibit C1. It is not in dispute that as per Exhibit B1 agreement, the time fixed for performance was 12 months and the same expired on 27.01.1997. In K.N. Sathyapalan v. State of Kerala [ (2007) 13 SCC 43 ], the Honourable Supreme Court held that even in the absence of any price escalation clause in the original agreement and despite the prohibitory clause in the supplemental agreement, the arbitrator was well within his jurisdiction in allowing the contractor's claims on account of escalation of costs under the said heads during the extended period. 31. The trial court calculated the value of works carried out during the period between 01.7.1999 to 30.12.2002 as per 1999 PWD schedule of Rates.
31. The trial court calculated the value of works carried out during the period between 01.7.1999 to 30.12.2002 as per 1999 PWD schedule of Rates. It is seen that the trial court calculated interest at the rate of 16% per annum for Rs.15,96,328/- which was withheld for a period of 292 days and Rs.32,49,386/- withheld for 329 days and allowed Rs.7,47,120/- towards interest to the plaintiff under relief (g). 32. Considering the prevailing rate of interest in Banking and commercial transaction, we find that the interest granted by the trial court is on the higher side and that the interest can be reduced to 9% per annum for the period during which the amounts are withheld. Therefore, we find that the plaintiff is entitled to realize only Rs.4,25,283/- towards interest of the amounts unauthorisedly withheld by the defendants. In that circumstance, relief (g) in the judgment of the trial court is modified to the effect that the plaintiff is entitled to realise Rs.4,25,283/- (Rupees Four Lakhs Twenty Five Thousand Two Hundred and Eighty Three only) towards interest. No interference is required with the other reliefs granted by the trial court. In the result, the appeal is disposed of with the above modification of relief (g) in the impugned judgment. Considering the facts and circumstances, we order no costs.