Research › Search › Judgment

Gauhati High Court · body

2025 DIGILAW 1029 (GAU)

State of Mizoram v. P. C. Malsawmdawngliana

2025-06-13

MARLI VANKUNG

body2025
JUDGMENT : MARLI VANKUNG, J. 1. Heard Mrs. Mary L. Khiangte, learned Government Advocate for the State appellants. Also heard Mr. Vanlalnghaka, learned counsel for the sole respondent. 2. This is an appeal filed against the judgment order and decree passed by the learned Senior Civil Judge-IV, Aizawl Judicial District in Civil Suit No. 48/2010 dated 07.04.2021, wherein the learned Trial Court had directed the present appellants to pay the amount of Rs. 56,02,112/- (Rupees Fifty Six Lakhs Two Thousand One Hundred and Twelve) to the respondent for the materials that he had collected in respect of construction of pavement works from Mamit to Bairabi road (24.00 - 36.00 kmp) Group-III with an interest @ 9% per annum w.e.f. 15.03.2010 which is the date of institution of the suit until realization in full. 3. Facts of the case in brief is that the Civil Suit No. 48/2010 was initially filed by a Mr. P.C. Lalramthanga (late) who died during the pendency of the suit and was substituted by the present respondent Mr. PC Malsawmdawngliana, against Smt. Lalengmawii/defendant No. 1, Sh. Sangkima/defendant No. 3, Sh. K. Denghluna/defendant No. 3 and defendant Nos. 4 to 7/present State appellants, defendant No. 8/ Prem Chand Gulgulia and defendant No. 9/State Bank of India for payment of the loss suffered by him in the work executed by him for the upgradation of the pavement works from Mamit to Bairabi. The genesis of the case is that Smt. Lalengmawii/defendant No. 1, being a registered Contractor under PWD was assigned the contract work by defendant No. 6, Senior Engineer, PWD Western Circle, Aizawl vide letter dated 08.02.2007 for the up-gradation of Mamit to Bairabi road (pavement works between 24.00 - 36.00 kmp) Group-III, estimate amount being Rs. 4,58,11,910/- (Rupees four crore fifty eight lakhs eleven thousand nine hundred and ten) only which was tendered on 05.10.2006. Smt. Lalengmawii/defendant No. 1 was requested to furnish performance security within 21 days. Accordingly, the performance guarantee dated 27.07.2007 was issued by the Field Officer, State Bank of India, Aizawl Branch and thereafter, Smt. Lalengmawii/defendant No. 1 signed an agreement with the defendant No. 6 dated 19.03.2007, for the execution and completion of the said works contract. 4. It is the case of the respondent /plaintiff that Sh. Accordingly, the performance guarantee dated 27.07.2007 was issued by the Field Officer, State Bank of India, Aizawl Branch and thereafter, Smt. Lalengmawii/defendant No. 1 signed an agreement with the defendant No. 6 dated 19.03.2007, for the execution and completion of the said works contract. 4. It is the case of the respondent /plaintiff that Sh. Sangkima/defendant No. 2 claimed that he represented Smt. Lalengmawii/defendant No. 1 being her son- in-law and had asked the present respondent/plaintiff in the month of November, 2007 to invest in the contract. Accordingly, Smt. Lalengmawii/defendant No. 1 then executed a power of attorney in favour of the respondent/plaintiff which was said to be accepted and approved by SE, PWD, Western Circle on 12.11.2007. Later, the respondent/plaintiff and Smt. Lalengmawii/defendant No. 1 in the civil suit, signed an agreement on 08.01.2008 for sub- contracting the works contract to the respondent/plaintiff. The respondent/plaintiff paid Rs. 20,00,000/- to Sh. K. Denghluna/defendant No. 3, who is the father of defendant No. 2 for the contract work on 04.11.2007. The respondent/plaintiff then proceeded with the works in the area included in 31.00 - 36.00 kmp from January, 2008, by transporting the necessary equipments and other materials to the work site. It was agreed between the respondent/plaintiff and Smt. Lalengmawii/defendant No. 1, that both of them would jointly take all necessary action to procure bills and payments from the PWD regarding the works contract. 5. It was also the case of the respondent/plaintiff that he had borrowed money from different people for obtaining the necessary equipments, however, due to some hindrances and unforeseen circumstances like bad weather, labour problem, etc and owning to the abnormal unprecedented rainfall in the year 2007/2008, work could not progress. Accordingly, the plaintiff applied for time for extension of work on 18.09.2008 and the same was allowed and extended to 31.05.2009 for the completion of the work. The said defendants/appellants had also conducted inspection of the works and made a weekly report. Since the plaintiff/respondent had not completed the work within the stipulated time period, show cause notices were issued to Smt. Lalengmawii/defendant No. 1. However, since there was no completion of the work, the contract work was cancelled by defendant No. 6 vide letter dated 28.05.2009. Aggrieved by the cancellation of the works, the respondent/appellant had accordingly filed the Civil Suit No. 48/2010, to pass a decree against defendant Nos. However, since there was no completion of the work, the contract work was cancelled by defendant No. 6 vide letter dated 28.05.2009. Aggrieved by the cancellation of the works, the respondent/appellant had accordingly filed the Civil Suit No. 48/2010, to pass a decree against defendant Nos. 1 to 3 to pay Rs. 20,00,000/- along with interest @ 9% per annum from November, 2001 till final payment and for the defendant Nos. 4 to 7 to pay Rs. 56,02,112/- along with interest @ 9% per annum from November, 2007 till payment. Defendant No. 9 to pay Rs. 22,90,596/- along with interest @ 9% per annum from 27.07.2007 till final payment and for declaring the defendants jointly to pay damages of Rs. 20,00,000/- to the respondent/plaintiff. 6. The Civil Suit No. 48/2010, was contested by the appellants, by stating that the PWD had no knowledge of what transpired between the plaintiff/respondent and Smt. Lalengmawii/defendant No. 1, who was the Contractor. It was stated by the appellants/defendant Nos. 4 to 7 that the contract agreement was signed between PWD and Smt. Lalengmawii/defendant No. 1 (Contractor) and that they were not aware of the sub contract between the plaintiff/respondent and defendant No. 1/Smt. Lalengmawii and that there was no approval for sub contracting a contract. It was also stated that the respondent/plaintiff had not completed any item of work except leveling of a few stretches of the road for his own purpose for the plying of his vehicle. That the extension of time was applied for and granted to the Contractor Smt. Lalengmawii/defendant No. 1 and that there was no necessity to contact or communicated with the respondent/plaintiff since the State appellants/defendant Nos. 4 to 7 in the Civil Suit, was not aware of the sub contracting of the work to the present respondent/plaintiff in the Civil Suit. It was also submitted that they were not liable make any payment to the respondent/plaintiff since there were no measureable items of completed works as per the terms of bills of quantity in the contract agreement and there was no provision for payment of any material collected separately and that the respondent/plaintiff is liable for liquidated damages for failing to complete the contract within the stipulated time. The defendant Nos. The defendant Nos. 4 to 7 also stated that there was arbitration clause in the contract between the state defendants and Smt. Lalengmawii/defendant No. 1 and the matter was referred to the District Judge, Aizawl to refer the matter for arbitration. However, on 26.10.2016 the same was endorsed back to the learned Trial Court for trial and therefore, no arbitration was initiated. 7. On the basis of the pleadings of the parties, the following issues were framed by the learned Trial Court:- i) Whether the present suit is maintainable in its present form and style; ii) Whether the contract work was terminated by the Defendant Nos.4,5,6 & 7 due to slow progress of work done by the contractor; iii) Whether the sub-contracting of the said work was approved by the PWD (Defendant Nos.4-7); iv) Whether the Defendants Nos. 4-7 have accepted the Plaintiff as the legal attorney of power holder of Defendant No.1; v) Whether the performance bank guarantee is valid or not? If invalid, whether the SBI is liable for damage caused by the said performance Bank Guarantee? vi) Whether the Defendant Nos. 1-3 knowingly and with intention prepared alleged invalid Bank Guarantee and submitted it to the Defendants Nos. 4-7 with a view to defraud them; vii) Whether the Defendants Nos. 1-3 are liable to pay Rs.20 lakhs to the Plaintiff with reasonable interest as prayed; viii) Whether the Defendants Nos. 4-7 are liable to pay Rs. 56,02,112/- to the Plaintiff due to cancellation of the contract work; ix) Whether Defendant No.9 is liable to pay Rs. 22,90,596/- to the Plaintiff along with reasonable interest; x) Whether the Plaintiff and Defendant No.1 have agreed not to make any complaint against each other by executing Agreement dt. 8.1.2008; 8. The respondent/plaintiff examined as many as 4 (four) witnesses including himself and the defendant Nos. 4 to 7 produced as many as 3 (three) witnesses. The defendant Nos. 1 to 3 also produced one witness namely, Sh. Lalsangkima to prove their case. 9. The evidence adduced by the parties before the learned Trial Court in brief is that PW1 PC Lalramthanga in his examination-in-Chief deposed that DW1 Smt. Lalengmawii was awarded Contract works "Upgradation of Mamit - Bairabi road (Pavement works between 24.00 36.00 kmp) Group - III" amounting to Rs. 4,58,11,910.00 (Rupees four crores fifty eight lakhs eleven thousand nine hundred and ten only) (Ext P3). 4,58,11,910.00 (Rupees four crores fifty eight lakhs eleven thousand nine hundred and ten only) (Ext P3). On being approached by Defendant No.2 who is the son-in-law of DW1 and after carefully perusing all materials available including Performance Bank Guarantee dt.27.7.07 issued by Field Officer, Personal Banking Division, SBI, Aizawl Branch (Ext P4). PW1 then executed Power of Attorney (Ext P-5) and Deed of Agreement (Ext P-7) with DW2 and handed over a sum of Rs.20 lakhs to K. Denghnuna (DW No.3) father of DW-2. The same was accepted by DW-6 vide Office memo no. B.- 18013/30/2006/SE(WC)/10 dt. 12.11.2007 (Ext P-6). Thereafter, after borrowing money from different persons amounting to Rs. 20,00,000/- (Rupees twenty lakhs only), PW1 proceeded to the contract site and started working. Due to rainfall and labour problems, he could not finish work on time and prayed for extension of contract period which was allowed by PW-6. PW1 stated as calculated by PWD, he had collected materials valuing Rs. 54,52,066.35 and works amounting to Rs.1,50,046.15 had already been completed by him at the time of cancellation of the contract work by DW-6 vide memo no.B.- 16012/16/2007/SE(WC)/123 Dated Aizawl, the 28th May, 2009 (Ext-11) which further stated 'Bid security and Performance Security stands absolutely forfeited to the Government' while Ext P-4 which is a copy of the Performance Bank Guarantee dt. 27.7.2007 had already stated vide letter No.SME/27/23/ dt. 28.3.2009 (Ext P-10) that Performance Bank Guarantee is invalid. Plaintiff stated that he was present for joint measurement vide letter No. B- 16012/16/2007/SE(WC)/123 dated 28th May 2009 (Exbt.P-11) but claimed DW 4-7 were not present when he was at the site. On cross examination by AGA for Def 4-7, PW1 stated he had made an agreement with Sangkima (Def No.2) and that Performance Bank Guarantee was made by Smt. Lalengmawii (Def No.1) and that there was no contract agreement between him and PWD. PW1 stated that he was not a registered contractor under PWD and that the tender was notified to Class I contractors. He denied the contract was cancelled due to negligence of Contractor or false Performance Bank Guarantee. On cross examination by Counsel for DW 1-3, he re-iterated he had signed agreement with them regarding the contract work (Ext 7) and also executed Power of Attorney (Ext P-5) and commenced with the contract work from April 2008. He denied the contract was cancelled due to negligence of Contractor or false Performance Bank Guarantee. On cross examination by Counsel for DW 1-3, he re-iterated he had signed agreement with them regarding the contract work (Ext 7) and also executed Power of Attorney (Ext P-5) and commenced with the contract work from April 2008. He also stated the main reason of cancellation of the contract work is mentioned in the cancellation order (Ext-P11) and that he was unable to complete the contract work within stipulated period. 10. PW-2 PC. Malsawmdawngliana in his examination-in-Chief deposed that PW-2 is the son of the Plaintiff and stated he was present when the Def No.2 approached his father and was also present when Rs. 20 lakhs was handed over to Def. No. 3. He further stated that he used to accompany his father in the contract work site and as the contract was not completed in the stipulated period, his father had applied for time extension which was approved by DW-6 (Ext P-8). PW2 claimed his father the Plaintiff was present at the site on the day appointed for verification. On cross examination by AGA, Counsel for Def.4-7, PW-2 stated his father had purchased the work order from Def.No.1 and that his father was unable to complete the contract work in the stipulated period, the reason of cancellation being negligent and slow progress in construction work. Also stated DW-1 did not immediately inform his father of the cancellation order. On cross examination by counsel for DW 1-3, PW-2 replied that Power of Attorney (Ext P- 6) was accepted by PWD. He further stated he had personally seen the contract work but did not see all the documents connected with the contract work. 11. PW-3 Lalhmangaiha in his examination-in-Chief deposed that Shri Lalhmangaiha is an employee of the Plaintiff in the contract work for "Upgradation of Mamit - Bairabi road (Pavement works between 24.00 - 36.00 kmp) Group - III". In his examination, PW-3 stated the Plaintiff was accepted as the contractor by the Defendant and that heavy dressing/leveling of the road was completed and that due to rainfall and labour problems the Plaintiff was allowed time extension. He stated he had heard from J.E that the contract was cancelled due to fake Performance bank Guarantee. In his examination, PW-3 stated the Plaintiff was accepted as the contractor by the Defendant and that heavy dressing/leveling of the road was completed and that due to rainfall and labour problems the Plaintiff was allowed time extension. He stated he had heard from J.E that the contract was cancelled due to fake Performance bank Guarantee. He further stated the Plaintiff suffered financially due to cancellation of the contract work due to non-payment of cost of materials collected and work done at the site. On cross examination by AGA, Counsel for Def 4-7, PW-3 stated he could not recall the exact dates when he was employed by the Plaintiff and also stated the construction work of the contract work was not completed in stipulated time due to unforeseen circumstances. Further, he stated he personally did not know the reason why the contract work was cancelled. On cross examination by Counsel for Def 1-3, PW-3 stated he was engaged by the Plaintiff at the camp of the work site for various chores mainly household work including preparing food for the others and did not work at the actual contract work site. 12. PW-4 David C. Vanengmawia in his examination-in-Chief deposed that Shri David C. Vanengmawia was employed by the Plaintiff in the contract work for "Upgradation of Mamit - Bairabi road (Pavement works between 24.00 36.00 kmp) Group III". He stated that Def.4-7 accepted the Plaintiff as the contractor. He also stated heavy dressing/leveling of the road was completed by the Plaintiff but due to bad weather and labour problems the Plaintiff was unable to complete the contract work within time and the Plaintiff was given time extension. He further stated the plaintiff suffered financial losses due to cancellation of the contract work and non-payment of cost of materials collected and work done at the site. On cross examination by AGA, Counsel for Def. 4-7 PW-4 stated he did not know the meaning of Performance Bank Guarantee and also had no knowledge why the contract was cancelled except through his fellow co-workers. Upon cross examination by Counsel for DW 1-3, PW-4 replied that he used to do any work which was required and was employed by the Plaintiff for almost one year. He stopped working only after some issues cropped up. Upon cross examination by Counsel for DW 1-3, PW-4 replied that he used to do any work which was required and was employed by the Plaintiff for almost one year. He stopped working only after some issues cropped up. He stated he did not know the reasons for cancellation of the contract nor why problems arose between the Plaintiff and the defendants. 13. Defendant Witness No. 1 for Defendants 4-7 Shri R. Dawngsangliana, EE, PWD Mamit Division deposed that PWD had no knowledge of contract agreement between Plaintiff and Def.1-3 and that the Plaintiff was not present when joint measurement was to be taken on 1.6.2009. He deposed that the works done by the Plaintiff is not at a stage where PWD can take measurements for any payment in accordance with the contract agreement between PWD and the contractor. On cross examination, the DW stated his knowledge is based on official records as he was not posted art Mamit during the relevant time. He also remarked some amount of work was done at the contract site which was not much. Defendant Witness-No. 2 for Defendants 4-7 B.Vanlalhruaii, Under Secretary, PWD deposed that she represented Def. Nos. 4-7 and that the written statements submitted in favour of Defendants No. 4-7 are signed by her predecessor Shri Lalhrangliana through Govt. Advocate. On cross examination, DW-2 stated her depositions are based on official records and not her personal knowledge. 14. Defendant Witness-No. 3 for Defendants 4-7 Shri Anthony CJ, SDO, Mamit Sub-division, PWD deposed that PWD had no knowledge of the contract agreement between the Plaintiff and Defendants No.1-3 and that the cancellation of the contract work is due to slow progress and poor performance of the work done by the contractor. The sub- contracting of the contract work without prior approval of PWD is not permitted and any agreement between Def.No.1 and the Plaintiff is illegal. He further stated the work done in the contract work is not measurable in terms of the contract agreement between PWD and the Def. No.1 and as such, no payment can be given for any work or materials collected by the Plaintiff. He also stated the Plaintiff is liable to pay for liquidated damages. On cross examination, he stated he was posted at Mamit only after 19.3.2010 i.e., after cancellation of the contract work on 28.05.2009. No.1 and as such, no payment can be given for any work or materials collected by the Plaintiff. He also stated the Plaintiff is liable to pay for liquidated damages. On cross examination, he stated he was posted at Mamit only after 19.3.2010 i.e., after cancellation of the contract work on 28.05.2009. He also stated the contract work was awarded legally to the Def. No.1. Also stated he has no personal knowledge of the matter during the time the Plaintiff was working on the contract. He further stated they had called the Contractor for measurement only as a formality and had no intention of paying the plaintiff any measurable work. The DW deposed the contract work was cancelled before the expiry of the extended period granted to the contractor as it was felt the contractor would not be able to finish the contract work within time and the contract was re-tendered and awarded to another contractor in the last part of 2009.The same which was completed in 2012. 15. Defendant Witness for Def.1-3 K.Lalsangkima is the son-in-law of Def No.1 as well as the son of Defendant No.3. He deposed that he executed Power of Attorney with Def No.1 he represented Defendant. No.1 as well as himself and that he also executed an agreement (Ext P-7) with the Plaintiff in relation to the contract work (Upgradation of Mamit - Bairabi road (Pavement works between 24.00 -36.00 kmp) Group - III") on 8.1.2008, the same being signed by witnesses and registered before the Notary, Aizawl. Also stated the Def.1-3 have nothing to do with the cancellation of the contract work and no cause of action lies against them. On cross examination, the DW accepted Ext P-4 is Performance Bank Guarantee and that the same was accepted by PWD authorities. 16 . During the pendency of the case, the plaintiff/respondent had made an application to strike out the names of defendant Nos. 1, 2, 3, 8 & 9, which was allowed by the learned Trial Court and the case had proceeded only against the State defendant Nos. 4 to 7. 17. Thereafter, the learned Trial Court heard both the parties and decided issue No. 1 in favour of the plaintiff. It also decided issue No. 2 by observing that the reason for determination of the contract work was due to the slow progress of the work done by the Contractor. 4 to 7. 17. Thereafter, the learned Trial Court heard both the parties and decided issue No. 1 in favour of the plaintiff. It also decided issue No. 2 by observing that the reason for determination of the contract work was due to the slow progress of the work done by the Contractor. In issue Nos. 3 & 4, the learned Trial Court held that the defendant Nos. 1 to 7 have impliedly accepted the plaintiff as the legal power of attorney holder of Smt. Lalengmawii/defendant No. 1 and observed that the documents exhibited as Exhibit D-3G(h)(i)(j)(k) showed that defendant Nos. 4 to 7 have acknowledge the plaintiff in respect of the contract work.by addressing the contractor through the plaintiff. 18. Regarding issue Nos. 5, 6, 7, 9 & 10, the learned Trial Court observed that these issues were no longer valid, since the court vide its Order dated 09.11.2017 had struck off the names of defendant Nos. 1 to 3, 8 & 9. 19. In issue No. 8, the learned Trial Court had observed that it is not disputed that some materials were collected and some amount of work was done in connection with the contract work. A local commission appointed by the learned Trial Court recorded the existence of materials collected by the plaintiff/respondent, however, the exact quantity was not calculated by the commissioner as the inspection was done almost 2 years after the cancellation of the contract work. The learned Trial Court then relied on the bills of quantities defined in Clause 1.1 of the conditions of contract, Clause 37, Clause 37.1 and 37.2 by observing that the conditions of contract bills deals with bills of quantities. The learned Trial Court also relied on the judgment of the Apex Court in Food Corporation of India & Ors. Vs. Vikas Majdoor Kamdar Sahkari Mandli Ltd, reported in 2007 13 SCC 544 , wherein the Apex Court had observed that principle of quantum meruit is to be applied where for some technical reason a contract is held to be invalid. Thereafter, the learned Trial Court observed that the State was a welfare state and had certain duties and certain norms of behavior when it associated with individual and had directed the defendant Nos. 4 - 7/appellants to pay the plaintiff/respondent the sum of Rs. Thereafter, the learned Trial Court observed that the State was a welfare state and had certain duties and certain norms of behavior when it associated with individual and had directed the defendant Nos. 4 - 7/appellants to pay the plaintiff/respondent the sum of Rs. 56,02,112/- for the materials he had collected in respect of collected in respect of construction of pavement works from Mamit to Bairabi road (24.00 - 36.00 kmp) Group-III with an interest @ 9% per annum w.e.f. 15.03.2010 which is the date of institution of the suit until realization in full. Aggrieved by the judgment and order, the instant appeal is filed by the State. 20. Mrs. Mary L. Khiangte, learned Government Advocate for the State appellants submitted that the said Power of Attorney purported to be executed by Smt. Lalengmawii appointing Mr. P.C. Lalramthanga (L), father of the present respondent dated 25.11.2007 was not accepted by the State appellants. She submitted that the letter dated 12.11.2007 was signed by the Superintendent Engineer PWD who did not have the power to accept the said Power of Attorney. Further the Power of Attorney was dated 25.11.2007 and the letter which is the alleged acceptance the Power of Attorney is dated 12.11.2007, which is before the execution of the said Power of Attorney, since it was signed by the Executant and Mr. P.C. Lalramthanga on 25.11.2007, even though the Power of Attorney was said to be executed on 05.11.2007. 21. The learned Government Advocate further submits that the contract was signed between the State appellants and Smt. Lalengmawii and if Smt. Lalengmawii had sub contracted the work to the present respondent, it has to be approved by the State as provided in the condition of contract at para 7.1 She submitted that sub- contracting without the approval of the State Government is not binding upon the State Government and the sub contracting is between the respondent and the Contractor wherein the sub contracting will not alter the Contractor’s obligation. 22. 22. The learned Government Advocate further submitted that the evidence on record shows that the work was not started by the Contractor Smt. Lalengmawii or even by the respondent and therefore, notice was given to the Contractor on 08.10.2008 and on the application made by Smt. Lalengmawii on 18.09.2008, the time for completion of the works was extended up to 31.05.2009 by the S.E,PWD, Western Circle, on 06.12.2009.The learned Government Advocate submitted that it can be seen that from the documents placed on record that weekly report of the material collection for GSD and WMM by the Contractors from Mamit to Bairabi road was done by the Sub-Divisional Officer, PWD, Mamit Sub-Division. The weekly report is from 12.01.2009 to 03.05.2009 wherein the remarks show that ‘not much work was done within the said stretch of land’. The weekly report is also supported by photographs of the said stretch of land, which show that no work was done by the Contractor within the said stretch of land. The final notice was issued on 28.05.2009, addressed to Smt. Lalengmawii, Contractor rescind the contract which rescission bid security and performance security stood forfeited to the Government. The Contractor was also informed that the work executed, if any, by her will be measured up on 01.06.2009, for which she was asked to attend the joint measurement failing which the work will be measured by the Department in her absence. Thereafter, a fresh tender dated 07.07.2009 was issued by the appellant for the up-gradation of the Mamit to Bairabi road. 23. The learned Government Advocate submitted that the learned Trial Court had held that bill of quantity shall be paid for the work done. However, the weekly report exhibited before the court clearly indicated that no work was done by the Contractor or by the respondent in the up-gradation of the Mamit to Bairabi road. She further submitted that the learned Trial Court had erred in relying on the judgment of the Apex Court in Food Corporation of India & Ors. Vs. Vikas Majdoor Kamdar Sahkari Mandli Ltd. 2007 (13) SCC 544 since the Apex Court had also not applicable in the instant case. She submitted that there was no contract between the respondent and the appellants and further no work was done by the Contractor or by the respondent. Vs. Vikas Majdoor Kamdar Sahkari Mandli Ltd. 2007 (13) SCC 544 since the Apex Court had also not applicable in the instant case. She submitted that there was no contract between the respondent and the appellants and further no work was done by the Contractor or by the respondent. She further submitted that the principle of quantum of meruit is not applicable in the instant case for the reason that no work was done by the Contractor or the respondent. She submitted that the learned Trial Court had also erred in relying on the local report of the local commission which was not comprehensive and was based only on what was stated by the respondent. She further submitted that this report was also not exhibited in the court. 24. The learned Government Advocate further submitted that if there was an agreement between the Contractor Smt. Lalengmawii/defendant No. 1 in the Civil Suit No. 48/2010 and the present respondent then the agreement between those parties should be given effect. However, the learned Trial Court had struck off the names of the private defendant Nos. 1 to 3, 7 to 8. She submitted that the striking or cancellation of the names of the defendant Nos. 1 to 3 and 7 to 8 was done in a very casual manner with no application made by the said defendants in the civil suit nor is there any reason given for the cancellation of the names of the said defendants. 25. The learned Government Advocate submitted that the judgment and order of the learned Trial Court is liable to be set aside, wherein the learned Trial Court is trying to make the payment to the respondent through the State exchequer only on the grounds that the State is a welfare state, while the State is not liable to pay any amount to the respondent being not aware of the sub contract made between the Contractor Smt. Lalengmawii and the respondent. She further submitted that there is an arbitration clause in contract agreement between the Contractor Smt. Lalengmawii and the State appellants and if any dispute arises with regards to the work to be done by the Contractor, the matter should have been referred to arbitration. The learned Government Advocate further submits that the said amount of Rs. She further submitted that there is an arbitration clause in contract agreement between the Contractor Smt. Lalengmawii and the State appellants and if any dispute arises with regards to the work to be done by the Contractor, the matter should have been referred to arbitration. The learned Government Advocate further submits that the said amount of Rs. 56,02,112/- to be paid by the State appellants in the impugned Judgment is not based on any reasonable ground with no basis in the calculation of the said amount wherein no explanation is given to how the said amount was arrived at by the respondent. 26. Mr. Vanlalnghaka, learned counsel for the respondent, on the other hand submitted that the said calculated amount of Rs. 56,02,112/- was never objected by the State before the learned Trial Court. He further submitted that the State Appellants are wrong in saying that no work was done by the respondents and that it is also not true that the only work done by the respondent was for his personal use. The learned counsel further submitted that the weekly inspection shows that some materials was collected by the respondent for the improvement of their work and that the photograph exhibited was taken after 2 years of the work done by the respondent. The learned counsel for the respondent further submitted that because of the bad weather, he could not progress with the work and further there was also a gossip going around at the work site that the contract was going to be cancelled because of which the workers refused to work properly. 27. The learned counsel for the respondent further submitted that the respondent was not made aware of the fact that the sub - contracting did not have the approval of the State appellants. He further submitted that the Power of Attorney executed by Smt. Lalengmawii was accepted by the State appellant as can be seen in their letter dated 12.11.2007, even though it may have been signed by the Attorney holder or the Executant of the Power of Attorney at a later date on 25.11.2007, however, the contents of the Power of Attorney was already made on 5.11.2007. 28. 28. The learned counsel further submitted that he had made an application to the State Bank of India enquiring about the performance guarantee and he was informed by the State Bank of India vide letter dated 28.03.2009 exhibited as Exhibit P-10, that the security amount of Rs. 22,90,596/- against the said performance guarantee does not appear to have been deposited by Smt. Lalengmawii into the Bank on 27.02.2007. That the performance guarantee which was issued in favour of the Chief Engineer, PWD (Road) Aizawl by one of their Field Officer is not on record in the book and that the State Government in a very casual manner and being prejudice against the respondent had simply stated that the performance guarantee amount was collected by them in their letter dated 28.05.2009, exhibited as Ext-P-11, addressed to Smt. Lalengmawii, which is a notice on Final Action under clause 3 of the Agreement Upgrading of Mamit – Bairabi road, that the contract is rescinded and as aforesaid upon which rescission the Bid Security and Performance Security stands absolutely forfeited to the Government. He submitted that there was some conspiracy or fraud going between Smt. Lalengmawii and the State or the bank with regards to the performance guarantee amount which the State appellants submitted was received by them. 29. The learned counsel for the respondent further submitted that the respondent is pursuing the matter for the recovery of Rs. 56,02,112/- to pay-off his debts for the works done since there was an agreement/contract was signed between Smt. Lalengmawii and his late father Mr. P.C. Lalramthanga. He further submitted that the State appellant cannot deny knowledge regarding the sub contracting of the work because in the letters address to Smt. Lalengmawii, exhibited as Exhibit D-3(g) to Exhibit D-3(k) the letters though sent to Smt. Lalengmawii, was addressed as ‘C/o P.C Lalramthanga, and address is shown as ‘Jail Veng, Dawrpui’. However, the final order of cancellation of the contract was addressed to Smt. Lalengmawii, Addressed ‘Zarkawt’, and therefore he was never informed of the cancellation order. The learned counsel submitted that the attitude of the State Government towards the respondent was bias and unfair, while all along the respondent thought he was a part of the contract and now they are denying him the payment to the amount spent by him for the works done and the equipments and materials collected by him. The learned counsel submitted that the attitude of the State Government towards the respondent was bias and unfair, while all along the respondent thought he was a part of the contract and now they are denying him the payment to the amount spent by him for the works done and the equipments and materials collected by him. He therefore submits that the respondent is still entitled to payment for at least the materials collected by him and further submitted that the work had progressed very slowly because of the circumstances which was being beyond his control and that the Government cannot say that he should forfeit the amount spent by him for the execution of the works in the up-gradation of road from Mamit to Bairabi. 30. In rebuttal, the learned Government Advocate for the State appellants submitted that even if some materials was stock or piled by the respondent, such materials should have been immediately collected by the respondent on the cancellation of the contract. The learned Government Advocate also submitted that as per Section 65 of the Indian Contract Work, the Government is not benefitting anything from the said contract between Smt. Lalengmawii and the State respondents knew nothing about the contract executed between Smt. Lalengmawii and the respondent. Therefore, the State is not liable to pay any amount to the respondent. She further submitted that if at all the respondent felt aggrieved, he should be pursuing the matter against Smt. Lalengmawii and not the State appellants. 31. I have considered the submissions made by the learned counsel for both the parties and I have also perused the evidence adduced by the parties and the documents on record. 32. The main points for determination in the instant appeal are; i) whether the appellants had acknowledged the respondent in respect of the contract work by addressing the contractor through the plaintiff and had also acceptance that the power of attorney executed by Smt. Lalengmawii in favour of P.C. Lalramthanga (L) father of the present respondent. ii) Whether the learned trial court had erred in deciding that the appellants were liable to pay Rs.56,02,112/- to the respondent due to cancellation of the contract work; 33. ii) Whether the learned trial court had erred in deciding that the appellants were liable to pay Rs.56,02,112/- to the respondent due to cancellation of the contract work; 33. From the evidence adduced by the parties before the learned trial court, this Court finds that it is an admitted fact that Smt. Lalengmawii, defendant No. 1 in Civil Suit No. 48/2010 was assigned the contract work by the appellants for the up-gradation of Mamit to Bairabi road (pavement works between 24.00 - 36.00 kmp) Group-III which was estimated for an amount of Rs. 4,58,11,910/-. The agreement was made between the appellants and Smt. Lalengmawii on 19.03.2007 which is exhibited as Exhibit P-2. Notice was also issued to Smt. Lalengmawii to proceed with the work on 28.02.2007. 34. It is also seen that it is an admitted fact that this work was sub- contracted to P.C. Lalramthanga (L) father of the present respondent by Smt. Lalengmawii by executing an agreement dated 08.01.2008. However, on perusal of the ‘Instruction To Bidders (ITB)’, this court finds that at para 7.1, under the heading Sub-Contracting, it provides as herein under:- “7.1 The contractor may sub contract any portion of work, upto a limit specified in Contract Data, with the prior approval of the Engineer but may not assign the Contract without the approval of the Employer in writing. Subcontracting does not alter the Contractor's obligations”, Thus, it is seen from the evidence adduced that no prior approval of the State/appellant was taken before the sub- contracting the work to the respondent. It is also the case of the respondent that he was not aware that the approval of the employer in writing was required before the sub -contracting of the work, nor was he aware that the approval was not taken before the sub- contracting of the works. This court also finds that all the communications by the appellants are addressed to Smt. Lalremmawii in all the documents exhibited. It is therefore clear that the sub -contracting of the works was not done as per the requirement at para 7.1 of the ‘Instruction To Bidders (ITB)’. 35. This court also finds that all the communications by the appellants are addressed to Smt. Lalremmawii in all the documents exhibited. It is therefore clear that the sub -contracting of the works was not done as per the requirement at para 7.1 of the ‘Instruction To Bidders (ITB)’. 35. This Court has also perused the Power of Attorney exhibited as Ext P-5, which was executed by the Contractor Smt. Lalengmawii/defendant No. 1 in Civil Suit No. 48/2010, nominating P.C. Lalramthanga (L) father of the present respondent, wherein the Executant Smt. Lalengmawii and P.C. Lalramthanga had signed the Power of Attorney on dated 25.11.2007. However, the letter of acceptance exhibited as Ext P-6 is dated 12.11.2007 before the execution of the Power of Attorney and therefore, this letter of acceptance cannot be considered a valid acceptance. 36. It is also seen that it was not disputed by the parties in the evidence adduced that not much work was done towards the construction/up-gradation of (pavement works between 24.00 - 36.00 kmp) of the Mamit to Bairabi road. The respondent has also stated that the work could not progress due to bad weather and also because of the non-corporation of the workers due to a gossip that the contract was going to be cancelled. This Court has also perused the weekly report of the works executed for the up-gradation of the road from Mamit to Bairabi (pavement works between 24.00 - 36.00 kmp) which was attached to the Exhibit P-9. The attached documents show that the weekly report of the work done was from 12.01.2009 to 03.05.2009, wherein in the remarks column, it was generally noted that the works in the site was with regards to the laborers employed and where boulders were normally removed to the crusher site wherein the boulders were crushed by the laborers. The last report between 27.04.2008 to 03.05.2009 also showed that not much work was done that week as their crushers were not working and boulders were crushed by their laborers. The above weekly report does not indicate any works done towards the up-gradation of the Mamit to Bairabi (pavement works between 24.00 - 36.00 kmp). 37. The last report between 27.04.2008 to 03.05.2009 also showed that not much work was done that week as their crushers were not working and boulders were crushed by their laborers. The above weekly report does not indicate any works done towards the up-gradation of the Mamit to Bairabi (pavement works between 24.00 - 36.00 kmp). 37. A perusal of the documents exhibited as Ext P-9 dated 08.10.2008, addressed to Smt. Lalengmawii Zarkawt Aizawl, show that it is the reports of site inspection on 1.10.2008 by the Superintending Engineer, PWD, Western Circle, Aizawl which is as follows: “1) While your requirement of GSB material is 9042m3 (compact volume), you have only 1370m3 stored at the site. This is the only work done from your end that I have witnessed within 18 months. From now onwards, you are required to collect 80% of GSB materials within December 2008. If this is the case, your daily requirement for procurement of GSB is as follows:- Total requirement 9042m3 Already collected 580m3 Balance 8462m3 Nos. of day: October 2008 15 days November 2008 30 days December 30 days Total Day 75 days Total of working days i.e Required daily collection 8462=112.83m3 (compacted volume) 75 = 144.42m3 (loose volume) 2) While the required WMM compacted volume is 9900m3 you have not yet stocked any material. You are also informed to procure and store 80% of the required material within December 2008. Your daily requirements are as follows:- Total requirement 9900m3 Already collected NIL Balance 9900m3” A perusal of the attached weekly report also indicate that the upto date collection between 27.04.2009 to 03.05.2009 is GSB-555.00 and crushed stone 400.00m3. Besides the above report and the attached weekly reports this Court also finds that the plaintiff /respondent has not led any evidence before the trial court to prove or substantiate his claim that he suffered a loss amounting Rs. 56,02,112/- (Rupees Fifty six lakhs, two thousand one hundred and twelve) only. 38. It is seen that the learned trial court had relied on the decision of the Hon’ble Apex Court in Food Corporation of India & Ors. Vs. Vikas Majdoor Kamdar Sahkari Mandli Ltd. (Supra) wherein it was held that:- “19. The principle of quantum meruit is often applied where for some technical reason a contract is held to be invalid. 38. It is seen that the learned trial court had relied on the decision of the Hon’ble Apex Court in Food Corporation of India & Ors. Vs. Vikas Majdoor Kamdar Sahkari Mandli Ltd. (Supra) wherein it was held that:- “19. The principle of quantum meruit is often applied where for some technical reason a contract is held to be invalid. Under such circumstances an implied contract is assumed, by which the person for whom the work is to be done contracts to pay reasonably for the work done, to the person who does the work. The provisions of this section are based on the doctrine of quantum meruit, but the provisions of the Contract Act admit of a more liberal interpretation; the principle of the section being wider than the principle of quantum of meruit. The principle has no application where there is a specific agreement in operation. A person who does work or who supplies goods under a contract, if no price is fixed, is entitled to be paid a reasonable sum for his labour and the goods supplied If the work is outside the contract, the terms of the contract can have no application; and the contractor is entitled to be paid a reasonable price for such work as was done by him.” Thus, it is seen that the theory of quantum meruit is based on the idea that it is fair to compensate someone for the value of their services, even if there was no prior legal agreement in place. It is often used in cases where one party has performed a service for another, and there is no written contract between the two parties. However, in the instant case, it is clearly seen that no work was done by the respondents and therefore, there appears to be no reason he should be paid by the appellants for no work done by the respondent and therefore, the above cited case cannot be applicable in the instant case. This court also finds that the bills of quantities defined in Clause 1.1 of the conditions of contract, Clause 37, Clause 37.1 and 37.2 are also in reference to the work done by the contractor, which is not so in the case 39. This court also finds that the bills of quantities defined in Clause 1.1 of the conditions of contract, Clause 37, Clause 37.1 and 37.2 are also in reference to the work done by the contractor, which is not so in the case 39. It is also seen that Section 65 of the Indian Contract Act that there is an Obligation of person who has received advantage under void agreement, or contract then any person who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it to the person from whom he received it, however in the instant case no such advantage of gain is shown to have been received by the appellants. 40. This Court also finds that the learned cousel for the respondent has suggested some foul play or conspiracy between the appellant and the Bank or the Smt. Lalengmawii wherein Rs. 22,90,596/- was to be deposited by Smt. Lalengmawii to the State Bank of India. However, it is seen that the Field Officer, Personal Banking Divisional, State Bank of India, Aizawl Branch had executed a letter of Performance Bank Guarantee in a Non-Judicial Stamp Paper address to the Chief Engineer-PWD- dated 27.07.2007 exhibited as Exhibit P-4 and if such an amount was not deposited, it is Smt. Lalengmawii who is at fault. This court finds that even if the appellants had mentioned in their letter dated 28.05.2009, exhibited as Ext-P-11, addressed to Smt. Lalengmawii, which is a notice on Final Action under clause 3 of the Agreement Upgrading of Mamit – Bairabi road, that upon the rescission of contract the Bid Security and Performance Security stands absolutely forfeited to the Government , however this cannot be said to substantiate the suggestion of any conspiracy between Appellant and the Bank and the same can always be rectified if found appropriate from Smt. Lalengmawii 41. Thus, considering the above findings in its entirety, this Court is constrain to hold that the learned Trial Court had erred in passing the impugned judgment and order, wherein the State appellants were held liable to pay the amount of Rs. Thus, considering the above findings in its entirety, this Court is constrain to hold that the learned Trial Court had erred in passing the impugned judgment and order, wherein the State appellants were held liable to pay the amount of Rs. 56,02,112/- (Rupees Fifty Six Lakhs Two Thousand One Hundred and Twelve) to the respondent for the materials that he had collected in respect of construction of pavement works from Mamit to Bairabi road (24.00 - 36.00 kmp) Group-III with an interest @ 9% per annum w.e.f. 15.03.2010. 42. Accordingly, RFA No. 25/2022 stands allowed and disposed of by setting aside the judgment and order of the learned Trial Court in Civil Suit No. 48/2010. TCR to be returned.