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2024 DIGILAW 485 (AP)

State of Andhra Pradesh v. M. Sankara Reddy

2024-04-23

V.GOPALA KRISHNA RAO

body2024
JUDGMENT : V. Gopala Krishna Rao, J. 1. This Appeal, under Section 96 of the Code of Civil Procedure [for short 'the C.P.C.'], is filed by the Appellants/defendants challenging the Decree and Judgment, dated 24.04.2006, in O.S. No. 156 of 2001 passed by the Additional Senior Civil Judge, Ongole [for short 'the trial Court']. The Respondent herein is the plaintiff in the said Suit. 2. The Plaintiff filed the above said suit against the defendants for adjudication of claims and pass an award/decree for an amount of Rs. 4,73,256/- with interest at 36% p.a. from the date of respective claims in accordance with the arbitration act in the capacity of arbitrator, failing which a retired Chief Engineer to be appointed to decide the disputes arising out of the agreement No. 14/SE/88-89 with a direction to pass an award/decree and for costs of the petition. 3. Both the parties in the Appeal will be referred to as they are arrayed before the trial Court. 4. The brief averments of the plaint, in O.S. No. 156 of 2001, are as under: The plaintiff pleads that he is a special class contractor doing contract works for the last several years. He was the lowest tenderer for the work of "excavation of supply channel from k.m.4.94 to k.m.8 and construction of CM & CD works under Musi anicut scheme" near Thalamalla village, Podili Mandal, Prakasam District. He entered into an agreement with the second defendant on 08.04.1988. The value of the work was Rs. 3,19,765/-. As per the terms and conditions of the agreement he has to complete the work within 6 months from the date of handing over the site to him. The site was handed over to him on 25.07.1988. Ever since the site was handed over to him, he made all arrangements necessary to start the work immediately and to complete the same within the stipulated time by mobilizing the necessary machinery, equipment and labour. He paid advances to the labour contractors and to the suppliers of machinery and equipment. He also appointed required staff to execute the work in time. He constructed sheds to store the materials and for stay of labour and other establishments. Though the tender was accepted on 29.02.1988 the agreement was concluded on 08.04.1988 and the site was handed over to him on 25.07.1988. He also appointed required staff to execute the work in time. He constructed sheds to store the materials and for stay of labour and other establishments. Though the tender was accepted on 29.02.1988 the agreement was concluded on 08.04.1988 and the site was handed over to him on 25.07.1988. Thus, there was a delay of 5 months in handing over the site. The site was not in work-worthy condition when it was handed over to him. The land was not acquired by paying compensation to the owners. The owners therefore, objected and caused obstruction to the work. After putting special efforts and convincing some of the owners, he started the work in a small length after a long time. There were instances of land owners filling up the excavated land. During all these days, the labour, machinery and equipment etc., had to be kept idle for several spells and hence the full turnout could not be achieved. Thus, he was forced to prolong the work well beyond the agreement period. Even after completing some portion of the work depending upon the possibility, execution of balance work became impossible as the land owners became stubborn and did not permit him to enter into their lands, therefore, he requested the defendants to finalize his contract by paying the amounts due to him for the work done. But the defendants finalized the contract only on 21.09.1990. The plaintiff pleads that in the course of execution of work when disputes arose between him and the defendants, he put forth his legitimate claims from time to time to the defendants for consideration. But the defendants rejected his claims without any valid reason. 5. The third defendant filed a written statement, which was adopted by the defendants 1 and 2, by denying the averments mentioned in the plaint and further contended as under: - The plaintiff received final payment on 31.03.1990 under protest. As the plaintiff did not approach the Court in time, the suit is liable to be dismissed on point of limitation. The plaintiff completed 65% of value of work, for LS1 he was paid and final bill in full for LS2. Thus, the total value of the work done paid under contract was Rs. 4,97,554/-. Finally the work was completed under the extension of contract up to 30.11.1989 at his request by imposing of fine of Rs. The plaintiff completed 65% of value of work, for LS1 he was paid and final bill in full for LS2. Thus, the total value of the work done paid under contract was Rs. 4,97,554/-. Finally the work was completed under the extension of contract up to 30.11.1989 at his request by imposing of fine of Rs. 400/-, if there was any delay in handing over the site, the plaintiff had right to withdrew from the contract, but he did not do so and the present claims put forth by the plaintiff are not possible to recover and prayed the Court to dismiss the suit. 6. Based on the above pleadings, the trial Court framed the following issues: (i) Whether the plaintiff is entitled to recover the suit claims as against the defendants? (ii) Whether the suit is barred by limitation? (iii) To what relief? 7. During the course of trial in the trial Court, on behalf of the Plaintiff, PW1 was examined and Ex.A1 to Ex.A22 were marked. On behalf of the Defendants DW1 was examined and Ex.B1 to Ex.B8 were marked. 8. After completion of the trial and on hearing the arguments of both sides, the trial Court decreed the suit with costs vide its judgment, dated 24.04.2006, against which the present appeal is preferred by the appellants/defendants in the Suit questioning the Decree and Judgment passed by the trial Court. 9. Heard the learned Government Pleader for appeals appearing for appellants and Sri K.Srinivasa Rao, learned counsel for respondent. 10. The learned counsel for appellants would contend that the plaintiff has not filed the suit within 3 years from the date of settlement of final accounts i.e., 05.11.1990, the plaintiff initially filed O.P. No.141 of 1994 on the file of Subordinate Judge, Ongole in the year 1994, the same was later converted as a suit in O.S. No.156 of 2001, therefore, the suit claim is barred by limitation. He would further contend that the learned trial judge instead of dismissing the suit, decreed the suit and the appeal may be allowed by setting aside the decree and judgment passed by the trial Court. 11. He would further contend that the learned trial judge instead of dismissing the suit, decreed the suit and the appeal may be allowed by setting aside the decree and judgment passed by the trial Court. 11. Per contra, the learned counsel for the respondent would contend that on appreciation of entire evidence on record, the trial Court rightly decreed the suit and there is no need to interfere with the finding given by the Trial Court and the appeal may be dismissed. 12. Having regard to the pleadings in the Suit and the findings recorded by the trial Court and in the light of rival contentions and submissions made on either side before this court, the following points would arise for determination: I. Whether the trial Court is justified in decreeing the suit in favour of the plaintiff and against the defendants? II. Whether the decree and judgment passed by the trial court needs any interference, if so, to what extent? 13. Point Nos. 1 and 2: The case of the plaintiff is that he is a special class contractor doing contract works in a government departments for the last several years and he was the lowest tenderer for the work of excavation of supply channel from K.M.4.94 to K.M.8 in respect of suit contract work. It is also not in dispute that the plaintiff entered into Ex.A1 agreement with the second defendant on 08.04.1988 for attending the work of Rs. 3,19,765/-. It is also not in dispute that as per the terms and conditions in Ex.A1 agreement, the plaintiff has to complete the work within 6 months from the date of handing over the site to him and further the site was handed over to the plaintiff on 25.07.1988 and the plaintiff made all arrangements necessary to start the work immediately and to complete the same within the stipulated time by paying the advances to the labour contractors and to the supplies of machinery and equipment. It is also not in dispute for both sides that the plaintiff appointed required staff for attending the work in time and he also constructed sheds at the work spot to store the material and also stay of labour and other establishments. It is also not in dispute for both sides that the plaintiff appointed required staff for attending the work in time and he also constructed sheds at the work spot to store the material and also stay of labour and other establishments. It is not in dispute that the tender was accepted on 29.02.1988 and Ex.A1 agreement was concluded on 08.04.1988 and the site was handed over to the plaintiff on paper on 25.07.1988. It is not in dispute that there was a delay of 5 months in handing over the site itself to the plaintiff. It is the specific case of the plaintiff that even though the site was handed over to him on 25.07.1988 on paper only and there is a delay of 5 months in handing over the site and the site was not in work worthy condition when it was handed over to him and the land was not acquired by paying compensation to the owners and the land owners therefore objected and caused construction to work. It is also the specific case of the plaintiff that after putting special efforts and convincing the some of the owners he started work in a small length after a long time, during all the days the labour, machinery and equipment etc., has to be kept idle for several spells and that he could not receive full amount from the defendants. 14. In order to prove the case of the plaintiff, the plaintiff examined himself as PW1 and also relied on Ex.A1 to Ex.A22. Ex.A2 to Ex.A22 are the letters addressed by the plaintiff to the defendants from 12.06.1988 to 26.11.1992. Ex.A2 to Ex.A22 clearly goes to show that the plaintiff made several efforts right from the date of endorsement of work to the plaintiff till the date of completion of work. Ex.A2 to Ex.A22 goes to show that the plaintiff expressed his incapacity in proceeding with the contract work due to the laches on the part of the defendants, though they are laches on the part of the defendants, the plaintiff did not rescind the contract with an intention to complete the entire work entrusted to the plaintiff. The fact remains that the plaintiff completed the work with delay inspite of several obstacles which are not in his hands. The fact remains that the plaintiff completed the work with delay inspite of several obstacles which are not in his hands. It was specifically pleaded by the plaintiff that he was supplied material 6 months after the agreement period and that he is claiming suit amount as excess amount only for the actual work done by him due to the delay committed by the defendants, the quantity and price of the material are increased abnormally due to the delay in handing over the site including the estimates. It is also not in dispute that the pending acquisition proceedings were also one of the obstacles to the plaintiff for completing the contract work. 15. It is not in dispute that the plaintiff made claim within 2 years from the date of completion of the contract and received the amount from the defendants under the protest of Ex.A2 to Ex.A22. Ex.A2 to Ex.A22 clearly goes to show that the plaintiff wrote several letters to the defendants and the defendants did not dispute that the plaintiff completed the entire work and received the final payment under protest. The fact remains the plaintiff after exhausting all his remedies by way of addressing letters under Ex.A2 to Ex.A22 to the defendants filed O.P. No.141 of 1994 before the Court for appoint an arbitrator and he also filed O.P. No.7 of 1994 before the Court which was allowed on 18.02.1997. Aggrieved against the said order passed in O.P. No.7 of 1994 the government filed an appeal before the High of Andhra Pradesh and that the matter was remanded back to the trial Court to convert it as a suit. The fact remains that the plaintiff filed a petition before the Court below to convert the aforesaid petition as a suit and it was dismissed and the plaintiff once again preferred a revision before the High Court, wherein a direction was given to him to file a comprehensive suit along with petition to condone the delay. The material on record reveals that there are no laches or willful negligence on the part of the plaintiff and the plaintiff bonafidely prosecuting the entire proceedings right from the beginning to the end, therefore it is held that the plaintiff filed the suit within a time and the suit claim is not barred by limitation. 16. The material on record reveals that there are no laches or willful negligence on the part of the plaintiff and the plaintiff bonafidely prosecuting the entire proceedings right from the beginning to the end, therefore it is held that the plaintiff filed the suit within a time and the suit claim is not barred by limitation. 16. To prove the defense, the Deputy Chief Engineer of government department is examined as DW1. He admitted in his evidence in cross examination that as per the tender condition they have to handover the possession of the site without any obstructions in a working condition. He further admits that the Executive Engineer, Irrigation addressed a letter to the Sub-collector on 28.03.1990 stating that the site was not handover to the contractor by completing the acquisition proceedings. He further admits that the plaintiff addressed a letter to the Station House Officer concerned by informing that the farmers took away the contract material from the work spot and the farmers were refilling the excavated canal and the copy of the said letter was also communicated to the defendants. He further admitted that the plaintiff was unable to take up the contract work in time since by the time of calling tenders and entrusting the work the acquisition proceeding were not completed and the site was not handed over to the plaintiff. He further admits that the Executive Engineer recommended for extension of time for completion of contract to the plaintiff and as on the date of extension of time to complete the contract work there was no draft notification and draft declaration to acquire the contract site. DW1 further admits that as on the date of extension of contract work deviation proposals for classification of soils were pending. He also further admits that no action was taken against the plaintiff/ contractor by the date of recommendation of time extension for slow process of work. He further admits that even by the date of inspection there was standing crop in the work site and the farmers were agitating for compensation and it was also observed by the Chief Engineer that the work getting delay due to the aforesaid reason. He further admits that in the month of June/July, there was unexpected cyclone. He further admits that the agreement was concluded on 08.04.1988 but the site was handed over to the plaintiff on 29.07.1988 as per records. He further admits that in the month of June/July, there was unexpected cyclone. He further admits that the agreement was concluded on 08.04.1988 but the site was handed over to the plaintiff on 29.07.1988 as per records. He would also further admits that even by then the land acquisition proposals were not completed. He further admits that the plaintiff was not paid the dues due to lack of funds after preparation of bills. He further admits that there was a delay in payment of bills to the plaintiff after the bills were prepared. The above admissions of DW1 Deputy Executive Engineer in Mining Irrigation Department clearly supports the case of the plaintiff and the plaintiff completed entire work with the delay due to the laches on the part of the defendants. 17. The material on record reveals that the plaintiff completed the work satisfactorily beyond the agreement period. It is not in dispute that the plaintiff sustained loss due to increasing the cost of labour, material, transportation charges, thereby the plaintiff incurred extra expenditure and the plaintiff claimed Rs. 88,600/- under the said head, on appreciation of entire evidence on record, the trial Court rightly awarded the said amount, therefore, there is no need to interfere with the said finding given by the trial Court. 18. The case of the plaintiff is that he spent Rs. 53,300/- towards overhead charges for maintenance of site-office and establishments during the prolonged period and the same is not disputed by the defendants. It is not in dispute by the defendants that the plaintiff continued his site-office and also maintained establishment staff even beyond of agreement, the trial Court on appreciation of entire evidence on record rightly awarded Rs. 53,300/- under the said head, there is no need to interfere with the finding given by the trial Court 19. It is the further case of the plaintiff that he incurred extra expenditure to a tune of Rs. 68,400/- towards idle labour, idle machinery and towards advance paid to the labour and machinery on account of delay in handing over the site, delay in supply of material, delay in taking decisions on technical aspects, which aspects were not disputed by the defendants. 68,400/- towards idle labour, idle machinery and towards advance paid to the labour and machinery on account of delay in handing over the site, delay in supply of material, delay in taking decisions on technical aspects, which aspects were not disputed by the defendants. DW1 clearly admitted in his evidence in cross examination itself that there was a delay in handing over the site to the plaintiff that delay was not in within the hands of the plaintiff and he explains the reasons in his evidence in handing over the site with abnormal delay to the plaintiff. Since the site was not handed over to the plaintiff within the stipulated time, the plaintiff incurred several expenditure due to the delay committed by the defendants, the same is not at all disputed by the defendants. The trial Court on appreciation of the entire evidence on record rightly awarded an amount of Rs. 68,400/- under the said head, therefore, there is no need to interfere with the said finding given by the trial Court. 20. The plaintiff further pleaded that the defendants did not pay an amount of Rs. 15,700/- towards value of the work done. There is no evidence on record to show that the defendants failed to pay an amount of Rs. 15,700/- towards the value of the work done. It is the case of the plaintiff that he received the final amount under protest towards the value of work done. It is not in dispute that the defendants paid the agreed amount to the plaintiff as per contract, but the plaintiff failed to prove that he incurred Rs. 15,700/- towards the value of work done which was not paid by the defendants. Therefore, the plaintiff is not at all entitled the said amount. It is the further case of the plaintiff that he was forced to signed in supplemental agreements under coercive circumstances and for such supplemental work, the defendants have to pay an amount of Rs. 53,000/-, absolutely no evidence is produced by the plaintiff to show that he was forced to sign in other agreements under coercive circumstances and for such supplementary works, he incurred Rs. 53,000/- therefore, the plaintiff is not entitled the said amount of Rs. 53,000/- which was granted by the trial Court. 21. 53,000/-, absolutely no evidence is produced by the plaintiff to show that he was forced to sign in other agreements under coercive circumstances and for such supplementary works, he incurred Rs. 53,000/- therefore, the plaintiff is not entitled the said amount of Rs. 53,000/- which was granted by the trial Court. 21. It is the specific case of the plaintiff that in execution of the work, he had to resort controlled blasting within the village limits, for which he incurred the extra expenditure of Rs. 1,37,200/- and he is entitled for reimbursement of the same from the defendants. The defendants also admits that the plaintiff while doing controlled blasting in the village limits, he invested the extra amounts, the same is also not at all disputed by the defendants, on appreciation of the entire evidence on record, the trial Court rightly awarded an amount of Rs. 1,37,200/- under the said head. There is no need to interfere with the said finding given by the trial Court. 22. The plaintiff pleaded that he is entitled for Rs. 11,500/- towards damages for delayed payment of part bills and Rs. 40,500/- towards damages for delayed payment of final bills together with interest at 36% p.a. from the date of claim. The pleadings of the plaintiff itself goes to show that the defendants paid the payment but it was paid with delay, once he received the amount from the defendants, he is not entitled to recover the same amount towards damages again. The plaintiff further pleaded that the defendants recovered seigniorage and cess charges from his bills, though he paid the aforesaid sums to the material suppliers totally Rs. 5,056/-. Here, the defendants are not disputing about the quantum of seigniorage and cess charges recovered from the bills of the plaintiff. On appreciation of entire evidence on record, the trial Court rightly awarded an amount of Rs. 5,056/- under the head of seigniorage and cess charges. I do not find any illegality in the said finding in awarding an amount of Rs. 5,056/- under the said head by the trial Court. For the aforesaid reasons, in total, the plaintiff is entitled an amount of Rs. 3,52,556/- from the defendants. 23. The plaintiff claimed rate of interest at 36% p.a., the trial Court awarded the interest of 15% p.a. on the claim amount from the date of respective claims till the date of realization. For the aforesaid reasons, in total, the plaintiff is entitled an amount of Rs. 3,52,556/- from the defendants. 23. The plaintiff claimed rate of interest at 36% p.a., the trial Court awarded the interest of 15% p.a. on the claim amount from the date of respective claims till the date of realization. Admittedly, there is no contract in between the plaintiff and defendants in respect of payment of interest. 24. In a decision reported in D.D.A. vs. Joginer S.Monga and others 2003:INSC:717 : (2004) 2 SCC 297 , the Apex Court has reduced the post-lite interest from 18% to 9% p.a. In ascertaining the rate of interest, the Courts of Law can take judicial notice of both inflation and also fall in bank lending rate of interest. The steep fall in the bank lending interest can be considered grounds for reducing the post lite interest from 24% p.a., this Court views that if the interest rate is unconscionable and usurious, the appellate Court has power to reduce the interest rate from what was granted by the trail Court. By following the case law cited above, this Court is inclined to reduce the interest from 15% to 12%, accordingly, the plaintiff is not entitled the interest at 15% p.a. from the date of respective claims till the date of realization as granted by the trial Court. The plaintiff is entitled interest of 12% p.a. from the date of suit till the date of decree and thereafter 6% p.a. till the date of realization. 25. For the foregoing reasons, the plaintiff is entitled an amount of Rs. 3,52,556/- towards total amount with interest at 12% p.a. on Rs. 3,52,556/- from the date of suit till the date of decree and thereafter at 6% p.a. till the date of realization, accordingly the appeal is partly allowed. 26. In the result, the appeal is partly allowed, the decree and judgment passed by the trial Court is modified as the plaintiff is entitled an amount of Rs. 3,52,556/- with interest of 12% p.a. from the date of suit till the date of decree and thereafter at 6% p.a. till the date of realization on Rs. 3,52,556/-. Considering the circumstances of the case, I order that each party do bear their own costs in the appeal. As a sequel, miscellaneous petitions, if any, pending in the Appeal shall stand closed.