NEUTRAL CITATION
C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 816 of 2003
With
R/FIRST APPEAL NO. 817 of 2003
With
R/FIRST APPEAL NO. 1439 of 2003
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE ASHUTOSH SHASTRI : Sd/-
and
HONOURABLE MR. JUSTICE DIVYESH A. JOSHI : Sd/-
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1 Whether Reporters of Local Papers may be NO allowed to see the judgment ?
2 To be referred to the Reporter or not ? NO
3 Whether their Lordships wish to see the
fair copy of the judgment ? NO
4 Whether this case involves a substantial
question of law as to the interpretation of the Constitution of India or any NO order made thereunder ?
======================================================= STATE OF GUJARAT & 1 other(s) Versus PATEL CONSTRUCTION CO.
======================================================= Appearance:
MR JAYNEEL PARIKH AGP for the Appellant(s) No. 1,2 MR JV JAPEE(358) for the Defendant(s) No. 1 ======================================================= CORAM:HONOURABLE MR. JUSTICE ASHUTOSH SHASTRI and HONOURABLE MR. JUSTICE DIVYESH A. JOSHI Date : 03/11/2023 CAV JUDGMENT (PER : HONOURABLE MR. JUSTICE DIVYESH A. JOSHI) Page 1 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined
1. As the issue involved in all these appeals and as all these appeals are arising out of the selfsame common judgment and award passed by the learned trial court, all these appeals are heard together analogously and are being disposed of by this common order.
2. First Appeal No.816/2003 has been filed by the appellant - State of Gujarat under Section 96 of the Code of Civil Procedure, 1908 (hereinafter referred to as "the Code" for short) challenging the judgment and decree dated 30.11.2002 passed by learned Civil Judge (SD), Patan in Regular Civil Suit No.136/1994, by which, the suit filed by the respondent - M/s. Patel Construction Co. came to be partly allowed and thereby ordered to pay an amount of Rs.11,26,924.94 ps. along with interest from the appellant - State.
3. First Appeal No.817/2003 has been filed by the appellant - State of Gujarat under Section 96 of the Code challenging the judgment and award dated 30.11.2002 passed by learned Civil Judge (SD), Patan in Regular Civil Suit No.55/1996, by which, the suit filed by the appellant - State of Gujarat came to be rejected.
4. First Appeal No.1439/2003 has been filed by the appellant - M/s. Patel Construction Company under Section 96 of the Code challenging the judgment and decree dated 30.11.2002 passed by learned Civil Judge (SD), Patan in Regular Civil Page 2 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined Suit No.136/1994, by which, the suit filed by the appellant - M/s. Patel Construction Co. came to be partly allowed and thereby ordered to recover an amount of Rs.11,26,924.94 pk. from the respondent - State and thus, the present First Appeal has been filed for enhancement of the claim to the tune of Rs.29,28,561.00.
5. The short facts given rise to the present appeal can be summarized as under:-
5.1 M/s. Patel Construction (the respondent -
Company) is a Registered Contractor and is registered under the Public Works Department and also registered and approved under various departments and is carrying on its business as Engineering and Contractor in entire State of Gujarat.
5.2 The Executive Engineer, Dantiwada Modernization Division No.1, Patan, District : Mehsana invited tenders for the work providing earthwork and C.C.1:3:6 Pre-cast block, lining, Group No.5, Banas Left Bank Main Canal of Dantiwada, Reservoir Project and in pursuance thereto, the respondent - Company applied for the said tender and after the scrutiny of the process, the respondent - Company found L1 and, hence, the respondent - Company was given work order on 31.12.1982 for the work valued at Rs.30,83,303.42 ps. and thus as per the said Page 3 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined work order, the respondent - Company was required to complete the work within 15 months i.e. on or before 31.03.1984, however because of some unavoidable circumstances as narrated in the plaint, the said work could not be completed within stipulated time and it was completed on 30.10.1984.
5.3 Thereafter on completion of the work, the respondent - Company prepared bill for an amount of Rs.29,28,561.00 and submitted before the authority on 30.09.1989, however, the authority did not clear it nor raised any query.
5.3 Because of the above facts, the respondent -
Company issued notice under Section 80 of the Code to the authority and thereby requested to clear the bill amount of Rs.29,28,561.00 but despite giving notice, the authority did not make the payment.
5.4 Being aggrieved by the aforesaid action on the part of the authority, the respondent - Company was constrained to file Special Civil Suit No.301/1990 before the court of the learned Civil Judge (SD) at Mehsana for the recovery of the amount of Rs.29,28,561.00 from the authority towards the outstanding bill, which was later on transferred to the court of the learned Civil Judge (SD), Patan, where it was Page 4 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined registered as Special Civil Suit No.136/1994.
5.5 On filing of the plaint, notice was issued upon the authority and in pursuance thereto, the authority appeared through their advocate and filed their written statement, Exh.8 and denied the claim of the respondent
- Company.
5.6 Later on, the authority filed Special Civil Suit No.55/1996 before the court of the learned Civil Judge (SD), Patan against the respondent - Company claiming an amount of Rs.2,79,593.05 towards the damages. In the said plaint, the respondent - Company appeared and filed their written statement, Exh.55.
5.7 Thereafter both the suits were ordered to be consolidated and treated to be heard together. In both the suits, the parties have led their oral as well as documentary evidence.
5.8 At the end of trial, as stated above, the suit filed by the respondent - Company came to be partly allowed, whereas the suit filed by the authority came to be dismissed.
6. Heard learned Assistant Government Pleader, Mr. Jayneel Parikh appearing for the State and learned advocate, Nr. J.V. Japee for the respondent - Company in all matters.
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7. Learned advocate, Mr. Japee appearing on behalf of the respondent - Company has submitted that the respondent - Company is a registered and approved Contractor of the Public Works Department and various other departments of the Statement Government also. It is submitted that the for the purpose of providing earth work and block lining work in Banas Left Bank Main Canal of Dantiwada Reservoir Project, a tender was floated by the Government authority in the newspapers and in pursuance thereto, the respondent - Company had applied and the respondent - Company stood at L1 and, hence, the tender was given to the respondent - Company and as per the terms and condition, the respondent - Company deposited the amount towards security deposit and, thereafter, an agreement came to be executed between the parties and on 31.12.1982, the work order was issued in favour of the respondent - Company by the appellant - State. It is submitted that it is clearly stated in unequivocal terms that the contractual work is required to be completed within stipulated period of 15 months i.e. on or before 31.03.1984 from the date of work order and the aggregate value of the contract was to the tune of Rs.30,83,303.42 ps. and both the parties have to strictly adhere with the terms and conditions of the contract and the said contract was entered Page 6 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined into between the parties on the basis of the principal of mutual, bilateral, reciprocal, contractual obligations and before the terms and conditions of the contract, certain obligations were to be performed by the parties. It is also stated in the said contract that on failure on the part of either parties to perform their contractual obligations as per the terms and conditions of the contract, either party is entitled to recover it by raising their rights in legal way. Learned advocate submitted that the appellant - State had not strictly adhered with the terms and conditions of the contract and failed to fulfill their contractual obligations in time and resultantly, the respondent - Company could not able to complete the work within stipulated period i.e. on or before 31.03.1984, therefore, the respondent - Company had written a letter to the appellant - State by narrating certain factual aspects for extension of time and considering the genuineness of the request of the respondent - Company, the appellant - State had extended the period of completion of work upto June, 1984, however, as the respondent could not be able to complete the work by that period, another letter of extension was written to the authority but the appellants have not given any response to the said letter, in that event, under the Page 7 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined provision of the principal of deemed acceptance, as work of the respondent was not stalled or discontinued by the appellants, they have proceeded further. Learned advocate submitted that as per the extended period of time, the respondent - Company has to complete its work on or before June, 1984 but due to non-submission of the work material and further direction of work, said work could not be completed, therefore, the respondent was also allowed to continue with the work. It is submitted that as per the condition of the contract, the respondent - Company has also timely submitted running bills, which were eventually allowed and paid by the appellants and as stated above, the request for further extension was under consideration in the meantime. It is submitted that the respondent - Company has successfully completed the work on 31.10.1984, therefore, the work completed seven months after the stipulated date of completion mentioned in the contract and the said delay occasioned on account of various acts and omissions on the head of the appellant
- State. Learned advocate submitted that after the completion of the work, the respondent has already intimated to the department concerned but the appellants have failed to record measurement of the work done inspite of the request made by the respondent - Company from Page 8 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined time to time. It is submitted that during subsistence of the contractual work, the respondent had submitted total 24 running bills, which were already paid to the respondent - Company. It is submitted that the respondent - Company had prepared final bill for an amount of Rs.29,28,561/- for the financial loss suffered by the respondent - Company due to various acts and omissions on the part of the appellants resulting into delay in completion of work and as a consequential effect, the respondent - Company has to do additional work but the aforesaid final bill was not paid and, therefore, statutory legal notice under Section 80 of the Civil Procedure Code, 1908 was issued, which was duly served to the appellants but despite that, they have not acted upon, therefore, the respondent - Company was constrained to file Special Civil Suit No.136/1984 for the purpose of recovery of an amount of Rs.29,28,561/- along with interest.
8. Learned advocate, Mr. Japee has submitted that the respondent has put reliance upon Clauses 32, 46, 50 and 54 of the tender conditions, more particularly, Page No.126 and 150-151 of the tender manual, which provides for the breach of minor conditions, which are required to be compensated (Rule 4) and the reasons for delay in performance of the contract work and the Page 9 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined reasons attributable to the department (Rule 6). Learned advocate submitted that after considering and evaluating all the material available on record, the learned Judge has partly allowed the suit filed by the respondent
- Company, therefore, the present appeal is filed assailing the said judgment and award passed by the learned Judge. Learned Judge has committed an error by not appreciating the material and evidence available on record in its true spirit and by doing so, learned Judge has committed grave mistake.
9. Learned advocate, Mr. Japee has further submitted that the appellants have also filed separate suit being Special Civil Suit No.55/1996 against the respondent - Company to recover an amount of Rs.2,79,583.05 ps. by raising various financial claims out of the aforesaid contract. It is submitted that since both the aforesaid suits i.e. one filed by the respondent - Company and second filed by the appellant - State are arising out of the contract by and between the same parties, the concerned learned Judge ordered to club and consolidate both the suits and at the end of trial, decided them by common judgment and award.
10. Learned advocate, Mr. Japee submitted that the learned Judge has failed to appreciate Clause -
Page 10 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined 50 of the tender document, which provides that if the Contractor fails to complete the work within stipulated period due to fault on the part of the Government by non-supplement of the materials and equipment, which the Government machinery has undertaken to supply under the contract or due to delay in handing over the sites or from increase of the quantity of work to be done under the contract or force majeure and additional work is assigned to be carried out by giving oral instructions, an appropriate extension of time will be given, therefore, the extension of time can be granted only for the purpose of delay attributable to the concerned department and time cannot be extended for the delay due to fault on the part of the Contractor. If the work is not completed in time and delay has caused due to fault on the part of the Contractor, in that event, as per the provision of Clause - 46 of the tender conditions, the appellants can be entitled to levy of penalty under the head of liquidated damages. The Government had already granted first extension upto 31.06.1984 and second extension was already applied by the Contractor by raising many grounds but the request of the respondent - Company has not decided by the Government till the year 1993, copies of the documents of rejection of second extension was Page 11 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined produced on record, which clearly shows that the application was rejected only on 29.04.1993. The reason for delay of seven months for completion of the contractual work, for which, the extension application was submitted, are as under, (1) The appellants were required to supply material to the respondents as per Schedule
- A and due to non-supply of the aforesaid material in time, the work was required to be stopped from time to time and resultant effect was delay in completion of work, which ultimately attributed to the loss to the respondents;
(2) The appellants constantly used to release the water in the canal from time to time and due to presence of water in canal, the work was required to be suspended during that period and the respondent had to wait for 20 days for drying of the water to enable to carryout further work. Thus due to sudden and irregular release of water as per the demand made by the local farmers, the work was interrupted resulting into loss of time and also damage to the work already done, which was required to be redone and due to this, there was delay in completion of work, which ultimately resulted into financial loss to the respondent - Company;
Page 12 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined (3) The work was required to be executed as specified in the contract as per the terms and conditions of the contract during midst of execution of the work, the appellant had changed the pattern of the manufacturing of block. The respondent - Company was permitted to keep the moulds concrete filled for 24 hours. The said instructions were not in conformity with the conditions of the tender agreement. Not only that, the respondent - Company was directed to provide additional moulds for copying up with 15 months' time limit for completion of work, which ultimately resulted into delay and financial loss to the respondent - Company. (4) During the midst of commissioning of the contractual work, the respondent was orally directed to carry out extra work, which was not contemplated in the contract by directing to provide extra mortar for block lining i.e. 11 mm instead of 6 mm mortar and, therefore, to carry out the work in that direction, delay was occasioned and no extra payment was made for the said extra work. The respondent had worked and completed various other extra work, which was not contemplated in the contract and resultlantly, delay had occasioned and ultimately, the respondent has suffered loss Page 13 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined on financial aspects also;
(5) It is stated that due to transfer of work from one sub-division to another sub- division and consequently want of further instructions from transferred sub-division, the work was delayed for about 2 months; (6) The officers of the appellants have failed to maintain contractual obligations in stricto sensu manner as they had not timely given required line and levels, which ultimately resulted into disruption of the work.
11. Pointing out all above reasons, learned advocate, Mr. Japee has submitted that all above stated reasons are for non completion of the contractual work in stipulated time, which directly attributable to the concerned department and, therefore, the application tendered for extension of time would squarely fall under Clause 50 of the tender document.
12. Learned advocate, Mr. Japee submitted that at the time of rejecting the suit filed by the appellant about the recovery of the liquidated damages, the concerned trial court has given adequate and ample reasons. The concerned trial court has arrived at particular finding that the appellants had allowed the respondent - Company to carry out work even after the expiry of the time limit of first extension period and the Page 14 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined department had also continuously paid running bills submitted by the respondents. The appellant had not made any attempt by issuing notice to stop to carry out further work. Not only that, the officers of the office of the Executive Engineer had recommended for extension of time to the higher officers. Not only that, the application for extension had also remained undecided till the completion of work and, therefore, it can safely be said that the impliedly time has been extended by the appellants. The trial court has also arrived at final conclusion that belatedly rejection of application for extension of time in the year 1993 was not justifiable and it is contrary to the conditions of the tender document and by giving reasons and finding to that effect and reached to the conclusion that the claim for liquidated damages raised by the department is not in consonance with the terms and conditions of the contract. The said finding and conclusion derived by the concerned trial court proves that there was a valid extension of time till completion of the contract work on 31.10.1984. The said conclusion of the trial court is not challenged in the memo of appeal or during the course of oral submissions on behalf of the Government. Learned advocate has submitted that as per the terms and conditions of the contract, Page 15 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined more particularly, Clause 50 of the tender conditions, extension of time can be granted. The reasons for delay in completion of the work are directly attributable to various acts and omissions on the part of the department and there is no fault on the part of the Contractor for that delay and, therefore, the financial claims by the Contractor in the suit clearly goes on to show that they are directly connected with the delay in completion of the contract work, such as escalation of price, labour, material, establishment cost, stoppage of work, extra work required to be done, maintenance of the approach road for longer period etc. ought to have been granted by the trial court but the trial court has not considered it and by doing this, the learned trial court has committed grave error.
13. Learned advocate, Mr. Japee has submitted that the learned trial court has committed an error by not considering the claim of Rs.5,96,894/- towards the price rise in the labour and material due to extension of time for completion of work as delay has caused in completion of work solely attributable to various acts and actions and the decisions of the appellant and, therefore, the appellants were required to compensate for the rise of price due to extension of time period as per tender Page 16 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined condition.
14. Learned advocate, Mr. Japee has submitted that despite the fact that the respondent - Company has led evidence to prove and substantiate their claim raised in the claim petition to the tune of Rs.2,00,000/- for the repair of the approach road, it was not considered by the Learned trial court. Learned advocate submitted that the work could have been executed in piecemeal manner and for longer period than scheduled time as contemplated in the contract and delay is solely attributable on the part of the appellants as since they had not taken certain administrative decision in time, as a consequential effect, work could not have been executed as per the terms and conditions of the contract. It is submitted that the respondent - Company has already constructed the approach road for the purpose of carrying out the work of canal. It is submitted that the work is not completed as per the time scheduled mentioned in the contract due to fault on the part of the appellants and the respondent - Company has to maintain approach road constructed by them for longer period of time than what was contemplated at the time of execution of the contract and, therefore, the respondent - Company is entitled to claim Rs.2,00,000/- for repairing and maintenance of the approach road. It is an admitted position of Page 17 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined fact that the contractual work could not have been performed without approach road and during existence of the work contract, the respondent - Company had seen two seasons of monsoon and on account of heavy rain in season, approach road constructed by the respondent - Company was damaged, which was required to be repaired. It is clearly mentioned in Clause - 32 of the tender condition that extra work is required to be carried out by the Contractor as per mutual agreed rates as the Contractor could ascertain the actual financial loss for the purpose of carrying out extra work only at the end of day after completion of work. The respondent - Company has led sufficient evidence to prove such claim made in the claim petition but it was not considered by the learned trial court and, therefore, the said view adopted by the learned trial court is not just, fair and reasonable. Learned advocate, Mr. Japee has further submitted that the learned trial court has substantially erred in disallowing the claim of Rs.2,81,008/- towards the additional desilting work and dressing work, which was required to be done by the respondent - Company. It is submitted that the appellant had released water in the canal all of sudden without prior intimation and at regular interval, as a resultant effect, the work carried out by the Page 18 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined respondent - Company was damaged and required to be carried out again. The respondent - Company has to carry out desilting work after the release of water from the canal from time to time and again and again.
It is an admitted position of fact that the contractual work could not be completed as per the scheduled plan as contemplated in the contract on account of interruption of the work as well as assigning extract work by the appellant, which was required to be done. The witness examined on behalf of the respondent - Company has deposed in a very crystal manner and established the said fact by leading cogent and convincing evidence. The said fact was clearly established from the deposition of said witness examined on behalf of the respondent - Company, which had remained uncontroverted. Not only that, in support of it, the respondent - Company has produced on record the evidence with regard to the release of the water in canal and also admission on the part of the defence. It is submitted that the respondent - Company had already given intimation to the appellant by writing letter on 31.09.1989 specifically stating that he had carried out additional desilting work and due to all of sudden release of water in canal, the respondent - Company had to incur additional expenditure.
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15. Learned advocate, Mr. Japee submitted that the correspondences made between the appellant and the respondent clearly goes to show that due to irregular and sudden release of water, the respondent - Company has to carry out desilting and dressing work, therefore, the respondent - Company could not be able to complete the contractual task as per the scheduled time and, therefore, the respondent - Company has written letter to the authority and sought extension of time period, which was eventually considered by the authority considering the ground reality of the matter. It is submitted that the aforesaid extension of time for the first time is also required to be considered at the time of grant of further extension and as per Clause 50 of the condition of the tender, time can be extended for delay in handing over the site and from increase of the quantity of work to be carried out under the contract.
16. Learned advocate, Mr. Japee submitted that it is clearly stated in unequivocal terms in Clause 32 of the tender condition that if any extra work is to be made, in that event, the said extract work is required to be compensated.
It is also stated in the provision of tender manual that if such eventuality would occur, which amounts to breach of the condition, in that event, the respondent - Company is Page 20 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined required to be compensated by the department. Thus, the respondent - Company has successfully proved that the department has failed to give site work to the Contractor for carrying out contractual work as per the scheduled program. It is submitted that as per the terms of the contractor, the department was supposed to give the site work to the appellant without any interruption and if the department fails to give site work, same is required to be compensated and the said aspect is clearly stated in Rule 4 of the tender manual specifically under the head of "breach of minor condition" and, hence, the department is required to be directed to pay amount of compensation to the respondent - Company.
17. Learned advocate has further submitted that the learned trial court has committed an error by not considering the payment of Rs.1,33,565/- for the expenditure carried out by the respondent - Company for procuring additional trays during the midst of the work. It is clearly stated in the terms and conditions of the contract as well as provision made in the items for manufacturing of blocks, the respondent - Company needs to keep 200 numbers of trays but during the midst of work due to change in the specification, the respondent - Company had to keep the concrete for 24 hours in a trays and, therefore, just Page 21 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined with an intention to cop up with the conditions of the work, the respondent - Company was required to bring additional trays to the tune of 4000 numbers, the size and specification of the trays are different than normal trays and, hence, once it is used, it cannot be reused again in another work. It is submitted that for the purpose of procuring of 4000 numbers of trays, the respondent - Company had to spend the additional amount of Rs.2,80,000/- and as per different size and specification of the trays, immediate after the completion said work, those set of trays are required to be disposed of as size of the trays is special one and different than regular trays, which are used to carry out regular work, therefore, the respondent - Company has no other option but to sale the said trays in scrap after completion of the work and due to which, the respondent - Company has suffered huge loss of Rs.1,33,565/- and such expenditure is born out by the respondent - Company at the instance of the appellants. It is submitted that the aforesaid fact is clearly found out from the evidence available on record but despite having clear, clinching and reliance evidence led by the respondent - Company, the said fact has not been considered by the learned trial court and the learned trial court has wrongly disallowed the claim of the respondent -
Page 22 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined Company as per Clause 32 of the tender condition. It is submitted that the financial claim would fall under the said clause and the respondent - Company is entitled to seek compensation from the appellant. It is clearly found out from the terms and conditions of the contract that procuring of extra trays as well as retention of concrete for 24 hours, is not at all contemplated in the contract and due to which, delay has caused in completion of work, which clearly attributable on the part of the appellant.
18. Learned advocate, Mr. Japee has further submitted that the respondent - Company has to execute and carry out the work within stipulated time period as per the terms and conditions but on account of various act, actions, directions and omissions on the part of the appellant, there was delay of 7 months for completion of work and due to which, the respondent - Company had to keep machinery on account of interruption in the work created by the appellant, for which, no fault can be found on the part of the respondent - Company. It is submitted that the respondent - Company has claimed an amount of Rs.3,59,718/- towards the establishment cost and the cost of machinery lying ideal at the site but the said claim of the respondent - Company has not been considered by the Learned trial Page 23 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined court. The said view adopted by the learned trial court is erroneous one and is required to be corrected.
19. Learned advocate, Mr. Japee has submitted that for prolonging the period, the respondent - Company has to keep instruments, tools, machinery at the place of plant and due to which, the respondent - Company has to incur additional expenditure and thus, as per Clause 32 of the tender condition, the respondent - Company is entitled to recover the additional expenditure carried out by them under the head of extra work and the present claim is also directly connected and associated with the delay in completion of contractual work and for which, the department is solely responsible. The quantum of the claim has remained uncontroverted as not a single question was asked in that regard and, therefore, the respondent - Company is justified in claiming the aforesaid amount for maintaining the establishment for prolonged period.
20. Learned advocate, Mr. Japee has further submitted that to prove the substantial claim made by the respondent - Company before the Learned trial court, the respondent - Company has led oral as well as documentary evidence in support of the claims. The respondent - Company had specifically quantified the financial claims Page 24 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined and oral evidence of the respondent - Company has remained uncontroverted in the cross- examination. The evidence available on record clearly shows that the appellant has never disputed the quantum of financial claims made by the respondent - Company. The appellant has even failed to controvert the entitlement of the respondent - Company and the said fact clearly found out from the evidence available on record, more particularly, perusing the cross- examination of the said witness. Learned advocate, Mr. Japee has submitted that considering the evidence available on record, the respondent - Company has successfully proved all the bills of the amount claimed in the suit by leading cogent and convincing and reliable evidence. Those set of evidences are also in consonance with the provision of the terms and conditions of the contract of agreement, therefore, the appeal be allowed upto to that extent.
21. Learned advocate, Mr. Japee has submitted that immediately after the completion of work, the respondent - Company has informed to the appellant and also submitted running bill, The respondent - Company has made various financial claims in the year 1989.
It is the fact on record that the respondent - Company could not have completed Page 25 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined the work as per the time scheduled as contemplated in the contract due to certain unavoidable circumstances, therefore, the respondent - Company has sought extension in writing describing the reasons of delay. The said aspect was considered by the appellant and extension was granted but the respondent - Company could not be able to complete the contractual work within the said extended period of time, therefore by narrating actual factual aspects for the cause of delay in carrying out work within time framed schedule, the respondent
- Company has sought extension upto 31.10.1984. The said application was recommended by the office of the Executive to the Government to grant extension to the respondent - Company but due to reasons best known to the appellant, they have not decided the said application upto year 1993 as the respondent - Company has already completed the work on or before 31.10.1984 and under the bonafide belief that the extension application sought for at earlier point of time was considered sympathetically and in the same manner, fate of extension application would be considered and as per the terms and conditions of the contract, if at all, the appellants are aggrieved with the said extension, in that event, they would have stalled the construction activities by giving notice in writing as the Page 26 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined respondent - Company did not receive any response from the respondents, therefore under the bonafide belief that the deemed consent is there to carry out further work. Learned advocate, Mr. Japee has referred the evidence available on record and submitted that with a sole intention to defeat the financial claim of the respondent - Company as those claims are directly connected with the delay in completion of contract work, the appellant has rejected the extension application preferred by the respondent - Company in the year 1993. Not only that, thereafter subsequently at belated stage as a counterblast, suit for damages was filed by the appellant in the year 1996 being Special Civil Suit No.55/1996. Learned advocate, Mr. Japee has submitted that sequence of events of incidents clearly goes on to show that the respondent - Company has filed suit for the recovery of the claim amount from the appellant by filing Special Civil Suit No.136/1994 and as a counterblast, the appellant has filed aforesaid Special Civil Suit No.55/1996 by raising false and frivolous claim in the year 1996. Not only that, second extension application preferred by the respondent - Company was also rejected belatedly in the year 1993. It is, therefore, submitted that cumulative effect of the above action clearly Page 27 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined goes on to show that there was malafide intention to frustrate the suit filed by the respondent - Company.
22. Learned advocate, Mr. Japee has submitted that being aggrieved by and dissatisfied with the judgment and award passed by the learned trial court in Special Civil Suit No.136/1994, the appellant - the State of Gujarat has filed aforesaid First Appeal No.816/2003 on manifold grounds. It is, however, submitted that the appellant - State of Gujarat has not set out any specific ground to challenge the judgment and decree passed by the learned trial court and the grounds mentioned in the memo of appeal are general and vague in nature without specifying any reason for challenging the findings given by the learned trial court and, therefore, the respondent - Company stands by and support the judgment and decree passed by the learned trial court without prejudice to their rights and contentions in the First Appeal preferred by the respondent - Company and the judgment and award passed by the learned trial court to the extent of granting certain amount of financial claim as claimed by the claimant is just, legal and proper and based upon sound principle of law.
23. Learned advocate, Mr. Japee has submitted that so far as the arguments pertaining to First Appeal No.817/2003 is concerned, the appellant -
Page 28 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined State of Gujarat has filed the suit for the recovery of the amount from the respondent - Company by preferring Special Civil Suit No.55/1996 to recover an amount of Rs.2,79,593.05 ps. by raising various financial claims, however, the said civil suit preferred by the appellant - State of Gujarat is rejected by the learned trial court by common judgment and award and, therefore being aggrieved by the said judgment and award, the aforesaid First Appeal No.817/2003 is preferred by the appellant
- State of Gujarat and at the time of preferring the said appeal, the appellant - State have not set out any specific ground and reason to challenge the said judgment and award passed by the learned trial court and only general and vague contentions were raised in the memo of appeal without specifying any reason for challenging the finding given by the learned trial court and in that event, the respondent - Company stands by and supports the judgment and award passed by the Learned trial court. It is submitted that the learned trial court has appreciated and evaluated the evidence available on record in its true spirit and proper perspective and after considering the material available on record, just, fair and reasonable judgment and award of dismissal of the suit is passed and the said award is not required to be Page 29 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined interfered at the hands of this Court at this juncture.
24. Learned advocate, Mr. Japee submitted that as per the tender condition, more particularly, as mentioned in Schedule - A, the contractor was under an obligation to return at-least 90% of empty bags of cement to the approved bag collecting agents, however, the contractor has not returned those empty cement bags to the approved contractor collecting agency, therefore, the recovery claim was preferred by the appellant - State, which was rightly rejected by the Learned trial court. Learned advocate has submitted that as per the condition of the contract, the contractor has to submit certificate of return of bags to the bag collecting agents and the department can only recover the cost of the bags returned below 90%. It is submitted that the cost of empty begs are required to be retained by the contractor and in fact, there was no any specific terms in the contract about the adjustment of said amount in running bills. Learned advocate submitted that the Contractor has already returned the bags to the Approved Collecting Agents and, therefore, the appellant - State is not entitled to demand any claim for the same against the contractor. Learned advocate has further submitted that in the recovery suit, they have also demanded Page 30 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined charge of supply of water but the said amount was already recovered and adjusted in regular running bills by the appellant and the contractor has also produced copy of running bill, which clearly shows that the said amount was already recovered. It is further stated that the contractor has also produced receipts for the return of the tools and machinery and after considering and appreciating the evidence available on record, the learned trial court has given detailed reasons and justifiable finding to reject the financial claim of the department. It is also fact on record that with a sole intention to recover the financial bill, the suit was preferred and, therefore, it was rightly rejected by the Learned trial court. Learned advocate, Mr. Japee has submitted that considering the above stated factual aspects as well as evidence available on record, the learned trial court has passed just, fair and reasonable award, which does not require any interference at the hands of this Court at this juncture.
25. Learned AGP Mr. Jayneel Parikh appearing for the appellant - State of Gujarat has submitted that the impugned judgment and award passed by the learned trial court is not just, fair and reasonable and based upon sound principle of law. Learned AGP has submitted that the learned Page 31 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined trial court has not considered the evidence available on record in true spirit and proper perspective. learned trial court has committed grave error by giving undue waightage to the evidence produced by the contractor of the respondent - Company, whereas the evidence produced by the appellant - State, has not been properly considered and by doing so, the learned trial court has committed grave error, which is required to be rectified by this Court. Learned AGP submitted that the Executive Engineer has invited tenders on behalf of the Government of Gujarat for execution of the work concerning to providing earthwork and CC 1:3:6 precast block lining of Group No.5 at the estimated cost of Rs.29,37,454/- and in pursuance of the said tender, the respondent - Company had submitted tender for the said project, which was eventually allowed as per the specific terms and conditions prescribed in the tender notice for an amount of Rs.30,83,202.42 ps., which was 4.97% of the estimated cost. After execution of the agreement between the parties, the work order was issued on 31.12.1982 and as per the terms and conditions of the contract, the respondent has to complete the work on or before 31.03.1984.
26. Learned AGP has submitted that the agreement executed between the parties created certain Page 32 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined mutual, bilateral, reciprocal, contractual obligations to be performed by the respondent - Company vis-a-vis by the appellant. It is the specific case of the appellant - State that the respondent - Company did not perform their part of the contractual obligation as per the terms and conditions stipulated in the contract and thereby committed breach of the contract, therefore, the appellant are entitled to recover the amount of claim as mentioned in the suit from the respondent - Company.
27. Learned AGP has referred certain documents and submitted that as per the terms and conditions of the contract, they have already complied with all contractual obligations and issued various communications to the respondent - Company for completion and execution of work as per the time mentioned in the contract. The work related to the line levelling, drawing, designing and other infrastructures are required to be provided by the appellant well within time and admittedly the appellant - State had already given all the instruments in time but the reasons best known, the respondent - Company failed to comply with their contractual obligation. Not only that, their approach, conduct, act, action and behavior was totally negligent and, therefore, they could not be able to yield testing result in time. It is submitted that the record clearly Page 33 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined goes on to show that the respondent - Company failed to coordinate in time and execute the plan for completion of the work resulting into lagging behind the scheduled program assigned to the respondent - Company. It is submitted that though specific time limit was given to the respondent - Company to carry out work, they have not proactively acted to execute the work in time and made any attempt to adhere with the condition of the contract clearly states that the time is the essence of the contract and as per the requirement of the appellant, the respondent has to complete the work as per the time frame scheduled and due to non-execution of the project work in time, the appellant has to suffer huge loss and inconvenience is caused to the State administration and public at large.
28. Learned AGP further submitted that the appellant has already assigned the work to other Contractor for other area which exactly situated within the vicinity of the present work, which is to be carried out. It is submitted that work assigned to other agencies already executed similar nature of work of Group Nos.7 and 8 of the command have completed the work within the time frame scheduled as per the time fixed in the contract, whereas the respondent - Company could not be able to fulfill their contractual obligation despite the fact that all necessary Page 34 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined coordination were extended to the Company by the officers of the appellant. It is submitted that the respondents have failed to execute the work well within time framed schedule as mentioned in the written agreement but on the contrary, they have sought extension of time again and again.
29. Learned AGP Mr. Parikh has submitted that the Contractor has left out the work project and failed to turn up even for the purpose of taking financial measurement despite the fact that number of occasions, he was intimated to remain present at the place of site for the purpose of work of measurement to be carried out. It is submitted that number of communications were sent to him that the officers of the department would be personally remained present at the time of recording final measurement, however, neither the Contractor nor representative of the Company remained present, therefore, the appellant have no other option left except to record the final measurement in absence of the officers of the Contractor - Company and they have recorded the measurement after fulfilling the necessary procedure and during recording of the actual measurement at the place, it was found that the department has already paid surplus of Rs.36,874/- to the Contractor, which was required to be recovered from him. Learned AGP has submitted that during the course of Page 35 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined execution of the work project, various machinery and articles were provided to the Contractor only for the temporary use but after completion of the work, various communications were made by the office of the appellant to resubmit those material and articles to the office but the respondent failed to return those articles and machinery back to the office. The Office has already prepared the inventory of the articles, which are required to be recovered from the custody of the respondent - Company, details of which are as under, Rs.1,500 C.G.I. Sheet 10' long 30 Nos. Rs.500 G.I. Moulids 15x15x15 cm 5 Nos.
Rs.300 -do- 2"x2"x2" 3 Sets
Rs.150 -do- 3"x3"x3" 1 Set
Rs.50 Navtal Lock No.1 1 No.
Rs.9,250 Surface Vibrator 1 No.
Rs.14,750 Total
30. Learned AGP has submitted that it is fact on record that the Contractor could not be able to complete his work as per the time frame scheduled, therefore, he has sent letter to the appellant specifically stating that the work could not be completed as per the time frame schedule, therefore, time is required to be extended and the said application was considered sympathetically and time was extended for 79 days. It is submitted that as per the agreement of the contract, the respondent has to complete Page 36 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined the work project on or before 31.03.1984 and, therefore, the appellants are entitled for the liquidated damages charge at the rate of 1,007.72 per day as the department has already considered the request of the respondent - Company and granted first extension to him, in that event, for the remaining period of 135 days (excluding extension of time granted), an amount of Rs.1,36,042.20 ps. is due and recoverable. It is also admitted position of fact that the Contractor has already utilized canal water for the purpose of work to be carried out and as per the water price mentioned in the contract, the appellants are entitled to recover the water charges of Rs.5,004.85 proposed to be recovered in the final bill and as per the calculation of amount as mentioned in the measurement-sheet, the appellants have to recover an amount from the Contractor as there is minus payment in the final bill and water charges are required to be recovered from the contractor in cash.
31. Learned APP has further submitted that as per the terms and conditions of the contract, the work is required to be completed on or before 31.03.1984 but due to mismanagement on the part of the respondent - Company, they could not be able to complete the work in time, therefore, as per Clause 40 of the contract, the liquidated damages are required to be recovered from Page 37 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined running bill of the Contractor. It is submitted that it is true that the respondent - Company has submitted an application for extension of time and the said application was eventually considered by the office of the appellant - State and 79 days' extension was granted, event though, they could not be able to complete the task assigned to them within that extended stipulated time and they have preferred another application, which was pending for adjudication but they have continued with the work and finally they have completed their contractual work on 30.10.1984. It is submitted that it is an admitted evidence available on record and it was not disputed by the respondent - Company. In short, the respondent - Company has completed their work after lapse of 135 days than the time extended to it. It is also found out from the record that due to fault on the part of the mismanagement of the respondent - Company, the task could not be achieved, therefore, the respondent - Company would be required to be held solely responsible for the delayed work but the said evidence was not properly considered and appreciated by the learned trial court and, hence, the said finding and reason assigned by the learned trial court is against the evidence on record and, therefore, same may be quashed and set aside and consequent effect as per the Page 38 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined terms and conditions of the contract, the appellant - State is entitled to get liquidated damages.
32. It is submitted that detailed schedule was already given to the Contractor and at the time of submission of the schedule, it was mutually agreed between the parties that they will scrupulously follow the terms and condition of the contract and adhere with all the conditions mentioned in the schedule but the Contractor did not follow the same and could not complete the work as per the stipulated time as mentioned in the schedule and, therefore, there was delay in completion of work due to fault on the part of the Contractor and, therefore, all the liability of wrongful act and negligence committed by the respondent - Company cannot be fastened on the head of the appellant - State.
33. Learned AGP has further submitted that it is specifically and expressly stated in the operative part of the contract that 90% empty cement bags are required to be handed over back to the Government Approved Authorized Agents by the Contractor, however, the respondent - Company has not handed over empty cement bags to the authorized agents, therefore as per the terms of the contract, the appellant - State is entitled to recover the price value of the said 90% empty cement bags from the Contractor.
Page 39 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined
34. Learned AGP has submitted that as per Clause 17 of the contract, the Contractor was duty bound to make request in advance at-least three months prior for the purpose of procurement of machinery, however, same was not done by the respondent - Company and, therefore, the said liability cannot be fastened on the head of the appellant - State. Learned AGP further submitted that it is also an admitted position of fact that the appellant - State has time and again requested the Contractor to remain present at the time of measurement of the final work, however the reason best known to the respondent
- Company, they could not make any arrangement and because of which, none of the representative of the respondent - Company was present, therefore, the appellant - State was constrained to take measurement in absence of the respondent and/or its representative. It is submitted that the correspondences in that regard made by the appellant - State is part and parcel of the record, which clearly goes on to show that the respondent - Company behaves adamantly and the Hon'ble Court would have to take judicial notice about the conduct of the respondent - Company at the time of appreciation of the evidence.
35. Learned AGP has further submitted that as per the terms and conditions of the contract, the work was required to be completed on or before Page 40 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined 31.03.1984 but record shows that the said work had been completed in the month of October, 1984 and the present suit is filed in the year 1993, therefore, there was gross delay in preferring the suit for recovery of the amount and, therefore only on this count, the suit is not required to be entertained by this Court because principle of law of limitation would come in picture at the time of institution of the suit. Therefore considering the above factual aspects and considering evidence available on record, the appellant - State has successfully proved the case beyond reasonable doubt however the said evidence was not properly considered by the Learned trial court, therefore, the appellant has meritorious case. The appeal requires consideration and same be allowed by quashing and setting aside the impugned judgment and awarded.
36. We have heard learned advocates appearing for the parties. We have also gone through the evidence on record. We have perused the depositions of the witnesses.
37. As the issue involved in the present appeals hinges upon the terms and conditions of the contract, as both the parties have raised their claims on that basis, therefore, before dwelling into the issue involved in the matter, Clauses 32, 33, 46, 47 and 50 of the contract are Page 41 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined reproduced hereunder, "31. EXTRA ITEMS:
Extra items of work shall not vitiate the contract. The Contractor shall be bound to execute extra items of work as directed by the Executive Engineer. The rates for extra items are to be mutually agreed.
33. PAYMENTS AND CERTIFICATES:
Payment for the work done by the Contractor will be based on measurements recorded at various stages of the work. The Contractor or his authorized agent or representatives shall be present at the time of recording of each set of measurements and sign the measurement book or level field book in token of their acceptance.
If for any reason the Contractor of his authorized agent is not available, and the work is suspended by the Executive Engineer are in excess of the value of the work credited to the Contractor, the difference shall be paid by the Contractor to the Government. He shall also be liable for the liquidated damages under the contract.
The Executive Engineer may direct that a part or the whole of such plant, equipment and materials be removed from the site within a stipulated period. If the Contractor fails to do so, the Executive Engineer may cause them to be sold, holding the net proceeds of such sale to the credit of the Contractor. After Page 42 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined completion of the works and settlement of amounts the lien by the Government on the Contractor's plant equipment and balance of materials shall be released.
Termination of the contract either in whole or in part shall be adequate authority for the Executive Engineer to demand discharge of the obligation from the guarantors of the security for performance.
46. LIQUIDATED DAMAGES:
If the Contractor fails to complete work or a designated part thereof by stipulated completion date for the work or for the part he shall pay liquidated damages at one-tenth of the percent of contract value for each incomplete part per day of delay in completion and handing over the Government. The amount of liquidated damages shall, however be subject to a maximum limitation of ten percent of contract value.
47. FORCE MAJEURE:
Neither party shall be liable to the other for any loss or damage occasioned by or arising out of acts of God such as unprecedented flood volcanic eruption, earthquake or other convulsion of nature and other acts such as but not restricted to invasion the act of foreign countries, hostilities or warlike operations before or after declaration of war, rebellion military or usurped power which prevent performance of the contract and which could not have been foreseen or avoided by a prudent Page 43 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined person.
50. EXTENSION OF TIME:
Time shall be considered as the essence of Contractor. If, however, the failure of the Contractor to complete the work as per the stipulated dates referred to above arises from delay on the part of Government in supplying the materials or equipment it has undertaken to supply under the contract or from delays in handing over sites, or from increase in the quantity of work to be done under the Contract, or Force Majeure an appropriate extension of time will be given. The Contractor shall request such extension within one month of the cause of such delay and in any case before expiry of the contract period."
38. From the aforesaid clauses quoted hereinabove, it would emerge that Clause 46, which provides for Liquidated Damages and Clause 50, which provides for Extension of Time both are mutually connected individually and separate with each other. The language employed in above two clauses clearly goes on to show that if the time of work period is extended due to failure of contractor to complete the work as per the stipulated dates and if delay occasioned on the part of the Government in supplying the material or equipment, it has undertaken to supply under the contract. In short, the extension of time can be sought by the Contractor due to fault on Page 44 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined the part of the Government, where the Government machinery could supply line of work and intimate in time. In the present case, though the machinery was supposed to have been supplied to the Contractor within particular time, the Government fails to adhere to the said terms and conditions to supply the articles, materials, machinery and line of the work, but as stated above due to fault on the part of the Government, the contractual work could not be completed and resultant effect would be that the time was required to be extended to the Contractor to complete the work scheduled in contract. Whereas the clause of liquidated damages charge would show that if the Contractor fails to complete the work or a designated part thereof by stipulated completion date for the work or for the part, he shall pay liquidated damages at one-tenth on the percentage of the contract value for each incomplete part for day of in delay in completion or handing over the Government. In short, the said clause clearly goes on to show that despite the Government had provided all the essential articles, ingredients and line work to the Contractor, the Contractor could not be able to yield and achieve the result as per the prescribed scheduled of the contract, in that event, the Contractor is liable to pay liquidated charges to the Page 45 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined Government because there was delay in executing the work on the part of the Contractor. The above two clauses are interconnected with each other. If both clauses are read in juxta position, in that event, it is found out that if there was fault on the part of the Government to submit line work and in support of that, the connected articles and machinery are not supplied within time framed scheduled, in that event, the Contractor cannot be held liable and the Government is bound to extend the time period to execute the work. Whereas on the contrary, if there was expressly fault on the part of the Contractor, in that event, the Government is entitled to recover the liquidated damages from the Contractor, therefore, by applying the ratio of above clauses clearly goes on to show that if the contractual work could not be completed within time frame scheduled, in that event, there could be fault on the part of the Government or the Contractor and if there was fault on the part of the Government, in that event, the Government has to extent time duration and if applied, there was fault on the part of the Contractor, in that event, the Contractor is required to pay liquidated damages to the State Government.
39. At this juncture, we would also like to discuss the factual aspect of the matter as to how Page 46 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined problem had been cropped up between the parties.
40. The respondent - Company filed suit for recovery of an amount of Rs.29,28,561.00 from the appellant - State before the court of the Principal Senior Civil Judge, Mehsana on 08.07.1990, then after, the said suit was transferred to the Court at Patan in the year 1994, where it has been registered as Special Civil Suit No.136/1994 and then, the said suit disposed of on 30.11.2002. It is also found out from the record that the appellant - State has also filed suit for the recovery of an amount of Rs.2,79,583.05 ps. before the Gujarat Public Works Contract Tribunal, Ahmedabad as per the arbitration clause mentioned in the contract and as per the terms and condition of the contract, if any dispute developed and/or cropped up between the parties, in that event, the said dispute is required to be resolved by approaching the said Tribunal and the said Tribunal is meant for that. The Government has preferred the said suit before the said Tribunal then after, the respondent - Company had preferred an application pending the said suit specifically stating that the Gujarat Public Works Contract Tribunal, Ahmedabad Tribunal has been constituted by the Government and the claim is more than of Rs.50,000/-, in that event, the said suit cannot be adjudicated by the civil Page 47 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined court as pecuniary territorial jurisdiction of the civil court is upto Rs.50,000/- only, therefore, the present suit proceedings are required to be transferred to the Arbitration Tribunal and considering the arguments canvassed by learned advocates for the parties, the concerned civil court transferred the said suit before the Arbitration Tribunal as the appellant
- State has also filed recovery claim and pursuant to the said suit, which was pending for adjudication before the said Tribunal, both the suits were placed together before the Arbitration Tribunal and once again the application was submitted by the parties specifically stating that the civil court is competent enough to decide the issue involved in the matter as Arbitration Tribunal has certain limitations and, therefore considering the arguments of the parties, the Tribunal has referred the matter to the court of the learned Principal Civil Judge, Patan for adjudication. Therefore, both suits have been transferred to the Court of the learned Principal Civil Judge, Patan, where the parties have submitted their written statements and after completion of pleading, evidence were led, thereafter, closing purshis were submitted by the parties and arguments were canvassed and considering the material and record, the learned trial court has Page 48 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined thought it fit to partly allow the suit filed by the respondent - Company, whereas the suit filed by the appellant - State came to be rejected and being aggrieved by the said decision, aforesaid First Appeal No.817/2003 has been been filed. It is admitted position of fact that the suits preferred by the respondent - State and appellant - State were consolidated by the concerned trial court and common evidence was led in both the suits, therefore, the issue involved in the matter are based upon same set of evident and three appeals have been filed by the parties challenging the said judgment and order. We have decided to dispose of these appeals together.
41. It is the case of the respondent - Company that as per the terms and conditions of the contract, the respondent - Company has to complete the said work on or before 31.03.1984. Both the parties are mutually agreed to adhere with the terms and conditions of the contract, despite the fact that on number of occasions, written communications were being sent to the appellant
- State by the office of the respondent - Company specifically stating that due to non- taking of administrative decisions, therefore, delay caused in assigning the line of work to the respondent - Company and, therefore, they could not be able to execute work as per the Page 49 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined time scheduled mentioned in the contract. The respondent - Company has already produced the said evidence at the time of leading evidence and learned advocate for the respondent - Company had emphatically submitted that the said set of evidence clearly goes on to show that the respondent - Company was vigilant enough to complete the task given to them as per the terms and condition of the contract within time frame scheduled but they could not be able to get line of work's order from the office of the appellant
- State in time. The respondent - Company made written communication to the Government authority and raised grievances in writing and those letters are part and parcel of the record. If the Hon'ble Court would go through the contents of those letters, in that event, the picture would be crystallized that due to fault on the part of the officers of the appellant - State by non issuing the administrative order in time, to carry out the work in certain manner and in absence of any certain direction, the the workers of the respondent - Company have to sit in an idle position at the place of site and, therefore, the respondent - Company has to pay wages to the workers without doing nothing and also has to pay additional charge of the rent of machinery, which ultimately enhanced the burden on the head of the Contractor. The evidence Page 50 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined available on record shows that the Contractor could not get success to complete and carry out the work as per the time scheduled in the contract.
42. The Contractor has written a letter specifically stating that due to irregular release of water in the canal at the instance of the farmers to cultivate the land, diselting work and other work is affected and because of which, certain work, which was already done by the respondent - Company has got damage due to constant release of water and incessant flow of water rushing from the canal, therefore once again, after drying of the water from the canal, they have to carry out work. Not only that, for drying of the water in canal, they have to wait upto certain days and during that period, they need not have to do any job, which ultimately enhanced burden on the head of the Contractor. The contractor has made allegations against the authority specifically stating that it is the duty of the office of the Executive Engineer that well in advance, they have to inform to the Contractor that on particular date and time as per the programme, they will release water in canal but instead of informing to the Contractor, the office of the Executive Engineer used to release the water all of sudden. Had the respondent - Company been informed well in advance about the Page 51 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined release of water, in that event, the Contractor would have got time to manage it and accordingly, they would have taken appropriate measures to protect the work but due to all of sudden release of water, the plan executed between the team of the Contract has to suffer a lot and which ultimately enhance the burden on the head of the Contractor. The said set of evidence is not challenged by the appellant - State rather they have accepted that it is true that during the pendency of the work during certain period of time, as per the fixed time scheduled, they have to release water in the Canal for irrigation purpose, therefore, the said set of evidence, which was placed by the respondent - Company, has not been challenged and we are of the opinion that the evidence, which was produced has not been challenged by other side, in that event, the respondent - Company has successfully proved the said charge in evidence. It is settled proposition of law that in criminal matters, the prosecution has to prove its case beyond reasonable doubt, whereas in civil matters, burden of proof lies on the head of the person, who used to claim damage and during the course of proceeding, if the party proves the said claim, in that event, automatically burden shifts on the head of other party to disprove it by leading evidence. In Page 52 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined short, in civil matter, burden always shifts to other parties, where first party proves its case by leading cogent, convincing and reliable evidence. Admittedly here in this case on hand, the concerned Company has successfully proved its claim by leading cogent and reliable evidence, which was not challenged by the appellant - State. Rather, it was candidly admitted by the appellant - State in the deposition of the witness that as per the advance programm fixed in the schedule, they have to release the water from the canal and only objection is raised to the effect that the said programm was not informed to the Contractor but except denial of the said evidence, no evidence was produced. Therefore, we are of the opinion that the respondent - Company has successfully proved that during the pendency of the work, irregularly water was released by the office of the appellant - State, which took considerable time to dry water lying in the canal.
43. Another facet of submission raised by the respondent - Company is that during the pendency of the execution of the work, certain additional work was assigned by the office of the appellant
- State, which was not contemplated in the contract by directing to provide extra mortar for block lining i.e. 11 mm instead of 6 mm Page 53 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined mortar and, therefore, to carry out said work in that direction, delay has occasioned. Not only that, no extra payment was made for the said extra work. The respondent - Company had worked and completed various other extra work, which was in fact not contemplated in the terms and conditions of the contract and to fulfill the said oral work instructed to the respondent - Company, delay has occasioned and with sole purpose to complete the said oral instruction issued by the office of the Executive Engineer, the respondent - Company has to invest extra time and services of labourers, which ultimately suffered loss on financial aspect also. Learned advocate has vociferously submitted that the respondent - Company has prepared running bill and submitted before the Executive Engineer, which was not considered by the office, however even otherwise also, they are duty bound to pay the said amount as per the terms and conditions of the contract. We have gone through the record and proceedings and we have not found anywhere in the entire compilation of the paper book that to substantiate the said claim, the respondent has not produced any set of documentary evidence except oral evidence. It is the duty on the head of the party, who is claiming such relief to prove certain facts on record by leading cogent documentary evidence in support of oral Page 54 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined evidence. If the respondent - Company has used 11 mm mortar instead of 6 mm mortar, in that event, they might have purchased the said articles from the market or alternatively received those materials from the office of the Executive Engineer but the respondent - Company has miserably failed to show us about the said set of evidence. We have also gone through the record and proceeding. The learned Judge has discussed the said issue in great detail in a very exhaustive manner at the time of assigning reasons upon the said issue and we are not found any infirmity in the said findings and on the contrary, we are in complete agreement with the said findings given by the learned Judge at the time of deciding the said issue.
44. It is specifically stated that the claim of the respondent - Company for an amount of Rs.3,69,700/- has been disallowed by the learned trial court so far as the issue of establishment cost and rent of machinery is concerned, which had remained idle. It is specifically stated that on account of various acts and omissions on the part of the appellant - State, the respondent - Company could not be able to execute the work within stipulated time period, therefore, there was delay of 7 months in completion of work. The respondent - Company had maintained establishment for execution of the Page 55 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined work for the aforesaid period and during that period, the machinery were remained idle and the respondent - Company has to keep the tools, machinery, plants etc. for the aforesaid longer period and for which, the respondent - Company had to incur additional expenditure. The said claim was covered under Clause 32 of the tender conditions, which provides for extra work. The quantum of the claim has remained uncontroverted and the respondent was justified in claiming the aforesaid amounts for the maintenance of the aforesaid machinery. We have gone through the record and proceedings and found that the respondent has taken certain materials from the appellant to carry out work and as per the terms and conditions of the contract, the respondent is duty bound to pay the amount of rent of the said machinery. It is the fact on record that the respondent could not be able to fulfill the work as per the time mentioned in the contract. It is the specific case of the appellant that identical nature of work was assigned by the authority to another contractor and they had completed their contractual task within time frame scheduled and there was dilatory tactic on the part of the respondent - Company to fulfill their contractual obligations and ultimately, failed to adhere with the time period given by the appellant as per the terms and conditions of Page 56 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined the contract. It is the specific say of the appellant that the delay has occasioned to complete the work and, therefore, extension was sought by the respondent - Company. The said application was recommended by the office of the Executive Engineer to the Government and after considering and evaluating the documents annexed with the said application, the State Government has come to a conclusion that once the extension was granted due to untimely release of water, the respondent - Company could not be able to complete their work done but then after, due to fault on the part of the respondent - Company, they could not be able to complete the work and, therefore, the extension application was rejected and as per the conditions of the contract, if the extension application is rejected, in that event, the respondent is entitled to pay liquidated damages to the appellant. As per the evidence available on record, the respondent - Company could not be able to complete the work as per the terms and conditions of the contract and there was delay in completion of the task and the said delay of 79 days was considered by the department. The respondent - Company has not completed its work in the said extended period then after, once again the respondent - Company has submitted an application for extension of time and the said Page 57 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined application was not considered by the Government and, therefore at the time of considering the running bill, the appellant has deducted Rs.4,000/- under the head of liquidated damages. It is the specific say of the appellant that the respondent - Company had not completed its work during the stipulated period and did not remain present at the time of measurement of the work carried out by the Company and, therefore, the respondent - Company is not entitled to seek any other price rise or the administrative expenses for the damages as well as keeping the instruments idle at the place of plants. It is the responsibility of the respondent to fulfill the contractual obligations and complete the work. It is the obligation on the part of the parties to fulfill the terms and conditions of the contract and also have to strictly adhere with the same. Admittedly, the respondent could not be able to complete their work as per the scheduled program. It is clearly mentioned in the contract itself that at the time of execution of the work, the respondent has to bring all the articles and apparatus to complete the work. The record clearly goes on to show that there was breach of conditions on the part of both the parties. The respondent has given an application for extension of time, which was partly considered by the appellant and, Page 58 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined therefore rightly the learned trial court has considered Issue No.2 in the negative. We have gone through the record and proceedings and also appreciated the evidence available on record and we have not found any perversity in the findings assigned by the learned Judge at the time of deciding the said issue and we are of the opinion that the respondent - Company is not entitled to get any amount as claimed under the said head.
45. One another issue was raised by the respondent -
Company is that the respondent - Company has to face loss due to certain oral instructions, which were issued by the office of Executive Engineer, which were quite contrary to the instructions mentioned in the contract and due to which, they have suffered huge loss. It is the specific say of the respondent - Company that at the time of commissioning of the work, different size of pre-cast cement blocks were given to them and as per the terms and conditions of the contract, the respondent - Company needs only 200 number of trays, whereas as per oral instructions of the appellant -
State, the respondent - Company has to obtain round about 4000 trays to carry out the said task assigned to them and during the midst of the work, the said additional size was assigned and, therefore, the respondent - Company had to Page 59 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined incur expenditure behind preparing of the trays to the tune of Rs.2,80,000/-. Not only that, the size was odd in nature, therefore, after completion of work, the respondent - Company has to sale the said trays in scrap and earned Rs.1,46,435/-. In short, the respondent - Company has suffered loss of Rs.1,33,565/- due to change of size of blocks given by the appellants. The respondent has orally led the evidence to the effect but in support of the said claim, they have not produced any documentary evidence. The said claim of the respondent - Company was denied by the appellant specifically stating that the appellant had provided trays to the respondent and the said amount was also mentioned in the running bill and rent was deducted in favour of the appellant. Not only that, during the pendency of work, if extra trays are prepared or obtained by the respondent, in that event, the respondent - Company has to inform the appellant but there was no correspondence in that regard between the appellant and the respondent. Not only that the said fact has also subsequently developed during the pendency of the proceedings by the respondent. In fact, there was no change in pre- cast blocks. It is clearly stated in the contract itself that the size and design of the tray was tested by the Engineer at the time of Page 60 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined commission of work. The department has not given any instruction orally to use vibrator machine to settled the cement blocks cement plats in the block. Except oral version narrated by the respondent about the execution of the work and change in size of trays, the respondent has not produced any material to substantiate its claim. It is the specific denial by the appellant that there was no agreement to that effect. Not only that, it is specifically stated in the contract itself that neither party is allowed to make any change in the terms and conditions of the contract and if at all, any changes are to be made in the terms and conditions of the contract on behalf of the appellant in that case, the respondent has to inform to the appellant in writing but not a single piece of evidence in that regard is produced by the respondent. It is the specific say of the respondent that after completion of the work, the respondent - Company has sold the said articles to scrap dealer but not a single piece of evidence was produced. It is the duty of the respondent that he has to lead evidence to that effect when the respondent has come with specific case that he has sold the said trays to scrap dealers and received an amount of Rs.1,46,435/-. Not only that, the respondent - Company has not produced any receipt and the bill and thus, the respondent -
Page 61 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined Company has miserably failed to lead evidence to that effect. The said trays were sold to whom, where and on what price is also conspicuously silent in the evidence available on record. The learned trial court has considered the evidence available on record in its true spirit and proper perspective and discussed each and every aspect in detailed and also in exhaustive manner. Not only that, in absence of any concrete evidence, the learned trial court has rightly considered the said evidence and decided the said issue properly and we do not find any infirmity or perversity or illegally in the said finding.
46. The appellant has come with specific case that there was gross delay in preferring the suit as as per the terms and conditions of the contract, the respondent - Company completed the work on 31.10.1984 and submitted report to the department and on the basis of the record available with them, the respondent prepared final bill and sent to the office of the appellant on 03.05.1988 for approval. There was gross delay in preferring the suit as per the provision of law of limitation as well as terms and conditions, the respondent - Company is entitled to prefer the suit within a period of three years from the date of completion of the work. Admittedly, the said work was completed on Page 62 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined 31.10.1984 and the suit was filed in the year 1990. There was delay in preferring the suit and solely on this count, the suit of the plaintiff is required to be dismissed. The learned Judge has considered all the material available on record and has come with specific opinion that as per Section 113 of the Limitation Act, the cause of action would start to be commenced from the date of institution of the suit. Final bill has not been considered and approved till 31.09.1989 by the appellant and on the contrary, on 05.12.1989, final bill given by the respondent - Company has been rejected. The respondent - Company has filed suit on 05.07.1990, therefore, the suit is filed within a period of limitation. We are in complete agreement with the finding given by the learned Judge and we have not found any perversity, illegal and impropriety in the said finding of the learned Judge.
47. It is an admitted position of the fact that the respondent has filed the suit for the purpose of recovery of the amount of running bill along with cost and damaged charges with specific case that the respondent has to incur huge loss due to fault on the part of the Government machinery, whereas quite contrary claim was raised by the Government with specific claim that the delay has occasioned due to fault on Page 63 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined the part of the respondent - Company and the respondent - Company could not be able to execute the work as per the terms and conditions mentioned in the contract and due to such approach on the part of the respondent - Company, the work could not be completed as per the time frame scheduled. In short, both the parties have filed suit for the recovery of the damages against each other. Along with the claim, they have sought 18% interest as per the contractual terms. After considering and appreciating the material available on record, the learned trial court has partly allowed the suit filed by the respondent - Company and also rejected the suit filed by the appellant and at the time of allowing the suit, the learned trial court has awarded interest @ 10% in favour of the respondent - Company. We have gone through reasoning given by the learned trial court in the impugned award while considering the issues of interest and we have also gone through the terms and conditions of the contract. However considering the facts of the case and the findings given by the learned trial court, we are of the opinion that the interest awarded by the learned trial court can be said to be just, proper and reasonable and it does not require any interference from this Court.
48. For the purpose of recovery of the amount of Page 64 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined damage caused to the appellant - State as the respondent - Company could not be able to complete their work within time, the appellant - State has preferred suit as stated above and for the purpose of proving the charges leveled against the respondent - Company, in pleadings, the appellant - Government has come with specific case that as per the terms and conditions of the contract, after the usage of the cement bags, empty cement bags have to be given to the Government Approved Authorized Agents at the price of Rs.2/-. The appellant - State has given number of cement bags to the Contractor at the time of execution of the work but the Contractor has not given back those 1400 number of empty cement bags to the Government Approved Authorized Agents and, therefore, the Government is entitled to recover the said amount from the respondent - Company. The office of the Executive Engineer has also made correspondences to the said effect with the respondent but for the reasons best known, the respondent - Company did not pay any heed to the request made by the Government. Whereas the respondent - Company has come with the specific case that for the purpose of calculating the empty bags, they informed to the office of Shmaji Kalyanji Pedhi in writing, the Government authorized agent but none has come to collect Page 65 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined empty cement bags and/or responded to the letter of the respondent - Company and as per the settled terms and condition of the contract, if the authorized representative of the Government Approved Agent would not come to collect the empty bags, in that event, the respondent - Company is entitled to sale the said empty bags in the open market. The respondent - Company has tried their level best to sale the said empty bags to the Government Approved Authorized Agents as suggested by the office of the Executive Engineer but could not get success in their attempts and, therefore, the respondent - Company has sold the said empty bags to another agency, which is also Government Approved Agent, therefore, it cannot be said that there was express breach of terms and conditions of the contract on the part of the respondent - Company. At the time of deciding the said issue, the learned Judge has clearly opined that to prove the said issue, the Government authority has to examine the representative of Samji Kalyanji Pedhi as a witness and in absence of any evidence in that regard, the liability cannot be fastened on the head of the respondent
- Company. It was further opined that the respondent - Company has sold the empty bags to the authorized agent viz., Dilipkumar & Co. and also produced documents purportedly showing that Page 66 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined the said agency is also Government approved agency, therefore, it cannot be said that there was express breach of the terms and conditions of the contract on the part of the respondent - Company and decided the said issue against the Government. We have gone through the finding given and reasoning assigned by the learned Judge and also verified the evidence in the form of record produced by the parties. The said evidence is also found to be in consonance with the deposition of the respondent - Company and fully supports the version narrated by the respondent - Company and, therefore, we are of the opinion that the judgment and order passed by the learned Judge is just, fair, reasonable and based upon evidence available on record and, therefore, does not require any interference.
49. The second claim raised by the Government is that at the time of initiation of the construction, the office of the Executive Engineer had given 30 number of galvanize sheets to the Contractor for the purpose of creating dwelling houses (rooms) for the labourers but the labourers of the Contractor were not ready to stay at the site and at that point of time, the Executive Engineer has made a request to the Contractor that the Contractor has to construct the room for the purpose of preservation of the cement bags and for that, the respondent -
Page 67 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined Contractor needs 85 sheets, therefore, Contractor made request to the officer to give those galvanize sheets and the said request was considered by the office of the Executive Engineer. After completion of the work at that particular site, the Contractor shifted to another place and have also shifted labourers along with them, at that time, the Contractor has sought permission from the department and also given an undertaking in the form of chit to the Government that as and when the work would be completed, the respondent - Company will given it back the said sheets to the Government and to sustain the said claim, the Government has to produced the copy of the said chit by leading evidence, whereupon Contractor has endorsed by making signature. The Government has orally deposed the said fact but in support of the same, they have not produced any evidence and in absence of any concrete evidence, simply on the basis of the oral evidence, the said claim cannot be approved. Same way, the Government has sought charge of Rs.500/- for the value of material and Rs.50/- for the lock but could not be able to produce any supporting piece of evidence. Therefore, the said evidence of the Government has not been rightly considered by the learned Judge by giving detailed reasons for not considering the said Page 68 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined claim of the Government.
50. The Government has also demanded an amount of Rs.9,250/- from the Contractor for the purpose of utilization of the vibrator machine but in support of the same, the appellant - Government has not examined single witness in support of their claim. In short, for the purpose of recovery of the above stated claim, the appellant - Government has raised claim but to prove the said claim, they have not produced any supporting material except oral evidence of the witnesses. It is the settled proposition of law that when the contract is executed between the parties and with adherence with the terms and conditions of the contract, the work has been executed and all small and minor incident executed between the parties during the execution of the work is required to be documented in the form of evidence/ communication by either parties, therefore as per the express terms and conditions of the contract, for the purpose of doing extra and additional work, the parties are entitled to claim value of the work. The Government has come with specific case and raised certain claims to recover the amount under the head of liquidated damages, in that event, the Government has to prove it by leading cogent and convincing evidence in support of oral evidence and at the Page 69 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined time of leading evidence, the witnesses concerned deposed in a very categoric terms that they have executed certain documents and then after, provided articles to the Contractor in execution of the work, in that event, it is the duty on the part of the Government to produce the said set of evidence, whereupon they are putting reliance. We have gone through the record and proceedings. Not only that, at the time of deciding the said issue, the learned Judge has discussed the evidence and expressed his opinion in a very categoric terms that the Government has miserably failed to lead evidence in support of their claim and in absence of any document simply on the basis of the oral version, the liability cannot be fastened on the head of the Contractor. We are in complete agreement with the said view adopted by the learned Judge and do not find any infirmity, illegality and/or irregularity in the said findings.
51. Another claim is raised by the Government is that as per terms and conditions of the agreement, the Contractor has to complete their work on or before 31.03.1984 and the said work could not be completed as per the time frame scheduled. There was delay of 7 month in completion of the work and during the said 7 month's period, price of the cement was Page 70 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined escalated and said delay was due to fault on the part of the Contractor, therefore, the Government is entitled to recover the differences of the price of the cement. The said amount is around about Rs.31,666/-. It is clearly observed in the operative part of the order by learned Judge specifically stating that as per the terms and conditions of the contract, the Government is duty bound to supply the cement bags to the Contractor at particular place in a particular price and it was not expressly stated in the tender condition that the Government is entitled to recover the enhanced price of the cement bags and further observed that the Government has already extended 79 days' period to the Contractor as delay was caused due to irregular release of the water in the canal and in that event, it is the duty on the part of the Government to come with the specific case that the price of the cement bags have been increased from a particular period of time and admittedly the Government has not produced any piece of evidence in support of the same and in absence of any specific evident, the Approved Government cannot claim that during the interregnum period, price of the cement bags have been increased and, therefore, in absence of any clear evidence, the Government is not entitled to recover the said amount from the Page 71 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined Contractor. It is further observed that from the record, it is revealed that there was some delay on the part of the Government to supply the cement begs to the Contractor and, therefore, considering the above stated ground reality, the learned Judge has come with definite conclusion that the Government is not entitled to recover the said amount from the respondent - Company and gave answer of the said issue in negative. Same way, the Government has sought Rs.5,404.80 ps. for the utilization of the water at the time of execution of the work. We have gone through the record and it is found out from the evidence that the Government has also deducted Rs.500/- from running bill nos.11 & 13 and Rs.300/- from running bill no.14. When the appellant - Government has come with specific case that the Contractor has utilized the water during particular period, in that event, the appellant
- Government has to produce document to the effect that during that period, the Contractor has used particular volume/litres of water and as per the express terms and conditions of the contract, the Contractor is entitled to pay the said amount to the Government by deducting the said amount from running bill. The documents produced on record clearly goes on to show that the appellant - Government has already deducted the amount of water charges from the running Page 72 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined bill. It is also found from the contract that the Contractor is entitled to use the water of the Government when the water is available but in absence of water available at the place of site, the Contractor has to manage to bring water to carry out their construction work. Admittedly, to prove the said set of evidence, except oral evidence of usage of water, not a single piece of document in the form of evidence is produced by the Government, which would substantiate their claim. The Government has to come with specific measurement about the usage of particular volume of water by the Contractor during particular period with correct chart of mathematical calculation. Admittedly except oral evidence, no evidence is produced by the Government. Therefore in absence of any supporting document, the learned Judge has not considered the said evidence. We have also gone through record and proceedings and are of the opinion that the judgment and order passed by the learned Judge is just, fair, reasonable and we do not find any infirmity, irregularity and perversity in the said finding. Therefore, we concur with the view adopted by the learned Judge at the time of deciding the issue and while assigning reasons.
52. At this stage, it would be apposite to refer to the judgment in the case of Venkatesh Page 73 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined Construction Company Vs. Karnataka Vidyuth Karkhane Ltd., reported in (2016) 4 SCC 119, wherein the Hon'ble Apex Court has observed in Paragraph No.20 as under, "20. The Appellate Court may not interfere with the finding of the trial court unless the finding recorded by the trial court is erroneous or the trial court ignored the evidence on record. The High Court reversed the decree passed by the trial court without discussing oral and documentary evidence and several grounds raised before the trial court. The High Court veered away from the main issue and went on to elaborate on the law of arbitration and the mode of setting aside the arbitral award under Section 34 of the Arbitration Act, which in our view, was not warranted. Without considering the oral and documentary evidence, the High Court erred in interfering with the factual findings recorded by the trial court and the impugned judgment is liable to be set aside."
53. At this stage, it would be apposite to refer to the judgment in the case of V. Prabhakara Vs. Basavaraj K. (Dead) by Legal Representatives & Ors., reported in (2022) 1 SCC 115, wherein the Hon'ble Supreme Court has observed in Paragraph Nos.22 and 24 has observed as under, "Section 96 Page 74 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined
22. The first appellate court while exercising power under Section 96 can re-do the exercise of the trial court. However, such a power is expected to be exercised with caution. The reason being, the trial court alone has the pleasure of seeing the demeanor of the witness. Therefore, it has got its own advantage in assessing the statement of the witnesses which may not be available to the appellate court. In exercising such a power, the appellate court has to keep in mind the views of the trial court. If it finds that the trial court is wrong, its decision should be on the reasoning given. A mere substitution of views, without discussing the findings of the trial court, by the appellate court is not permissible. If two views are possible, it would only be appropriate to go with the view expressed by the trial court. While adopting reasoning in support of its findings, the appellate court is not expected to go on moral grounds alone.
23. The aforesaid views expressed by us are nothing but a reiteration of the settled principle of law as could be seen through the following paragraphs of the decision rendered by this Court in the case of Jagdish Singh v. Madhuri Devi, (2008) 10 SCC 497:
"27. It is no doubt true that the High Court was exercising power as first appellate Page 75 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined court and hence it was open to the Court to enter into not only questions of law but questions of fact as well. It is settled law that an appeal is a continuation of suit. An appeal thus is a re-hearing of the main matter and the appellate court can re- appraise, re- appreciate and review the entire evidence - oral as well as documentary and can come to its own conclusion.
28. At the same time, however, the appellate court is expected, nay bound, to bear in mind a finding recorded by the trial court on oral evidence. It should not forget that the trial court had an advantage and opportunity of seeing the demeanor of witnesses and, hence, the trial court's conclusions should not normally be disturbed. No doubt, the appellate court possesses the same powers as that of the original court, but they have to be exercised with proper care, caution and circumspection. When a finding of fact has been recorded by the trial court mainly on appreciation of oral evidence, it should not be lightly disturbed unless the approach of the trial court in appraisal of evidence is erroneous, contrary to well- established principles of law or unreasonable.
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29. Before more than a century, in Coghlan v. Cumberland [(1898) 1 Ch 704 (CA)] Lindley, M.R. pronounced the principle thus;
"Even where the appeal turns on a question of fact, the Court of Appeal has to bear in mind that its duty is to rehear the case, and the Court must reconsider the materials before the Judge with such other materials as it may have decided to admit. The Court must then make up its own mind, not disregarding the judgment appealed from, but carefully weighing and considering it; and not shrinking from overruling it if on full consideration the Court comes to the conclusion that the judgment is wrong. When, as often happens, much turns on the relative credibility of witnesses who have been examined and cross-examined before the Judge, the Court is sensible of the great advantage he has had in seeing and hearing them. It is often very difficult to estimate correctly the relative credibility of witnesses from written depositions and when the question arises which witness is to be believed rather than another; and that question turns on manner and demeanour, the Court of Appeal always is, and must be, guided by the impression made on the Judge who saw the Page 77 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined witnesses. But there may obviously be other circumstances, quite apart from manner and demeanour, which may shew whether a statement is credible or not; and these circumstances may warrant the Court in differing from the Judge, even on a question of fact turning on the credibility of witnesses whom the Court has not seen."
(See also observations of Lord Thankerton in Watt v. Thomas, [1947 AC 484])
30. In Sara Veeraswami v. Talluri Narayya [AIR 1949 PC 32] the Judicial Committee of the Privy Council, after referring to relevant decisions on the point, stated (Quoting from Watt v Thomas, [(1947) 1 All ER 582, pp.583 H-584 A]):
"...but if the evidence as a whole can reasonably be regarded as justifying the conclusion arrived at the trial, and especially if that conclusion has been arrived at on conflicting testimony by a tribunal which saw and heard the witnesses, the appellate court will bear in mind that it has not enjoyed this opportunity and that the view of the trial Judge as to where credibility lies is entitled to great weight. This is not to say that the Judge of first instance can be treated as infallible in determining which side is telling the Page 78 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined truth or is refraining from exaggeration. Like other tribunals, he may go wrong on a question of fact, but it is a cogent circumstance that a Judge of first instance, when estimating the value of verbal testimony, has the advantage (which is denied to courts of appeal) of having the witnesses before him and observing the manner in which their evidence is given."
31. This Court also, before more than half a century in Sarju Pershad v. Jwaleshwari, Pratap Narain Singh [AIR 1951 SC 120] stated: (AIR p. 121, para 7) "7. The question for our consideration is undoubtedly one of fact, the decision of which depends upon the appreciation of oral evidence adduced in the case. In such cases, the appellate court has got to bear in mind that it has not the advantage which the trial Judge had in having the witnesses before him and of observing the manner in which they deposed in court. This certainly does not mean that when an appeal lies on facts, the appellate court is not competent to reverse a finding of fact arrived at by the trial Judge. The rule is and it is nothing more than a rule of practice that when there is conflict of oral evidence of the parties on any matter in issue and the decision hinges Page 79 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined upon the credibility of the witnesses, then unless there is some special feature about the evidence of a particular witness which has escaped the trial Judge's notice or there is a sufficient balance of improbability to displace his opinion as to where the credibility lies, the appellate court should not interfere with the finding of the trial Judge on a question of fact."
32. Referring to several cases on the point, the Court concluded: (Sarju Pershad case, AIR p. 123, para 15):
"15. ...The duty of the appellate court in such cases is to see whether the evidence taken as a whole can reasonably justify the conclusion which the trial court arrived at or whether there is an element of improbability arising from proved circumstances which, in the opinion of the court, outweighs such finding."
(emphasis supplied)
33. After about a decade, in Radha Prasad v.
Gajadhar Singh [AIR 1960 SC 115] this Court reiterated: (AIR p. 123, para 15) "14. The position in law, in our opinion, is that when an appeal lies on facts it is the right and the duty of the appeal court to consider what its decision on the question of facts should be; but in coming to its own decision it Page 80 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined should bear in mind that it is looking at the printed record and has not the opportunity of seeing the witnesses and that it should not lightly reject the trial Judge's conclusion that the evidence of a particular witness should be believed or should not be believed particularly when such conclusion is based on the observation of the demeanor of the witness in court. But this does not mean that merely because an appeal court has not heard or seen the witness it will in no case reverse the findings of a trial Judge even on the question of credibility, if such question depends on a fair consideration of matters on record. When it appears to the appeal court that important considerations bearing on the question of credibility have not been taken into account or properly weighed by the trial Judge and such considerations including the question of probability of the story given by the witnesses clearly indicate that the view taken by the trial Judge is wrong, the appeal court should have no hesitation in reversing the findings of the trial Judge on such questions. Where the question is not of credibility based entirely on the demeanor of witnesses observed in court but a question of inference of one fact from Page 81 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined proved primary facts the court of appeal is in as good a position as the trial Judge and is free to reverse the findings if it thinks that the inference made by the trial Judge is not justified."
34. In T.D. Gopalan v. Commissioner of Hindu Religious & Charitable Endowments [(1972) 2 SCC 329], this Court said: (SCC p. 333, para 9):
"9. The High Court next proceeded to reproduce a summary of the statement of each of the witnesses produced by the defendants. No attempt whatsoever was made to discuss the reasons which the learned District Judge had given for not accepting their evidence except for a general observation here and there that nothing had been suggested in the cross- examination of a particular witness as to why he should have made a false statement. We apprehend that the uniform practice in the matter of appreciation of evidence has been that if the trial court has given cogent and detailed reasons for not accepting the testimony of a witness the appellate court in all fairness to it ought to deal with those reasons before proceeding to form a contrary opinion about accepting the testimony which has been rejected by the trial court. We are, therefore, not in a Page 82 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined position to know on what grounds the High Court disagreed with the reasons which prevailed with the learned District Judge for not relying on the evidence of the witnesses produced by the defendants."
35. Yet in another decision in Madhusudan Das v. Narayanibai [(1983) 1 SCC 35], this Court said: (SCC pp. 39-40, para 8): "8. ...At this stage, it would be right to refer to the general principle that, in an appeal against a trial court decree, when the appellate court considers an issue turning on oral evidence it must bear in mind that it does not enjoy the advantage which the trial court had in having the witnesses before it and of observing the manner in which they gave their testimony. When there is a conflict of oral evidence on any matter in issue and its resolution turns upon the credibility of the witnesses, the general rule is that the appellate court should permit the findings of fact rendered by the trial court to prevail unless it clearly appears that some special feature about the evidence of a particular witness has escaped the notice of the trial court or there is a sufficient balance of improbability to displace its opinion as to where the credibility lies. ...The Page 83 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined principle is one of practice and governs the weight to be given to a finding of fact by the trial court. There is, of course, no doubt that as a matter of law if the appraisal of the evidence by the trial court suffers from a material irregularity or is based on inadmissible evidence or on a misreading of the evidence or on conjectures and surmises the appellate court is entitled to interfere with the finding of fact." (emphasis supplied)
36. Three requisites should normally be present before an appellate court reverses a finding of the trial court:
(i) it applies its mind to reasons given by the trial court;
(ii) it has no advantage of seeing and hearing the witnesses; and
(iii) it records cogent and convincing reasons for disagreeing with the trial court.
37. If the above principles are kept in mind, in our judgment, the decision of the High Court falls short of the grounds which would allow the first appellate court to reverse a finding of fact recorded by the trial court. As already adverted earlier, the High Court has 'virtually' reached a conclusion without recording reasons in support of such conclusion. When the court of Page 84 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023 NEUTRAL CITATION C/FA/816/2003 CAV JUDGMENT DATED: 03/11/2023 undefined original jurisdiction has considered oral evidence and recorded findings after seeing the demeanour of witnesses and having applied its mind, the appellate court is enjoined to keep that fact in mind. It has to deal with the reasons recorded and conclusions arrived at by the trial court. Thereafter, it is certainly open to the appellate court to come to its own conclusion if it finds that the reasons which weighed with the trial court or conclusions arrived at were not in consonance with law."
23. Thus, we have no hesitation in holding that though the first appellate court is the final court of fact and law, it has to fall in line with the scope and ambit of Section 96 of the Code."
54. Thus keeping in view the aforesaid decisions and in view of the aforesaid observations, we are of the view that the impugned judgment and award passed by the learned trial court does not require any interference as we are in complete agreement with the findings given and conclusion arrived at by the learned trial court. Therefore all above three first appeals stand dismissed with no order as to cost.
(ASHUTOSH SHASTRI, J.) (DIVYESH A. JOSHI, J.) Gautam Page 85 of 85 Downloaded on : Mon Nov 06 20:38:36 IST 2023