Delhi High Court
K.R.Builders Pvt. Ltd. vs Dda on 19 March, 2012
Author: Pradeep Nandrajog
$~R-36
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved on : March 14, 2012
Judgment Pronounced on: March 19, 2012
+ RFA(OS) 81/2007
K.R.BUILDERS PVT. LTD. ..... Appellant
Represented by: Mr.Raman Kapur, Senior Advocate
instructed by Mr.R.P.Singh, Advocate
versus
DDA ....Respondent
Represented by: Ms.Sangeeta Chandra, Advocate.
CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
HON'BLE MS. JUSTICE PRATIBHA RANI
PRADEEP NANDRAJOG, J.
1. We are concerned in the instant appeal with the
correctness of the judgment and decree dated September 28,
2007, disposing of CS(OS) No.142/2003 filed by the appellant;
not in full, but only in relation to items of claim at serial No.(e),
(h), (i) and (n) of para 11 of the amended plaint, which have
been rejected by the learned Single Judge. We highlight that
the claims decreed by the learned Single Judge have not been
challenged by DDA and not all claims rejected have been
questioned in the instant appeal.
2. Claim vide para 11(e) in sum of `1,38,245/- pertains
to the grills affixed by the appellant and the factual setting of
the claim is that the contract required, vide item No.6.6 of the
description of items, to provide and fix MS grills of required
pattern fabricated with MS flat square or round bar, and the
claim of the appellant is that this description conforms to
ordinary grills. The appellant claims that when the drawing
was furnished to it the same pertained to an ornamental grill
and hence the differential claim over and above the item rate,
as per the contract, which has been paid for. The claim as per
para 11(h) of the plaint in sum of `43,504.10 pertains to
amount not paid in terms of clause-10(cc) of the contract and
to understand the claim it needs to be highlighted that the
appellant had, vide para 11(g), a claim in sum of `80,795.45
alleging that this amount was wrongly withheld
notwithstanding the appellant having rectified the defective
works on account of which the said sum was deducted from
the running bills. The claim in para 11(h) pertained to the
material and labour escalation pertaining to the said work i.e.
the work carried out towards rectification of the defects. Claim
vide para 11(i) was with respect to clause-10(cc) of the
contract and was not that no money was paid under clause-
10(cc) nor was the dispute pertaining to the quantum of work
executed each quarter or the relevant index or indices applied,
but was to the manner in which the clause had to be
interpreted and applied. Claim vide para 11(n) was on account
of damages due to work being prolonged by about 48 months,
over and above the 18 months contract stipulated time;
damages were claimed on account of idle establishment, idle
tools, plant and machinery at site. `7,20,000/- has been
claimed under this head.
3. Parties are not at variance that as against 18
months period stipulated in the contract for work to be
completed, the overrun period was 48 months. We highlight
that at some places there is a reference in the pleading and
the evidence that the overrun period was 66 months, but we
find that in the pleading relating to claim No.11(n), the overrun
period is stated to be 48 months. It appears that the confusion
has arisen on account of contract stipulated period being 18
months and overrun period being 48 months: equaling 66
months and thus probably it has got referred at certain places
that the overrun period was 66 months.
4. The discussion by the learned Single Judge
pertaining to the claim as per para 11(e) is to be found in para
63 and 64 of the impugned decision. Rejecting the claim the
learned Single Judge has held that the appellant, not having
produced any drawing, could not substantiate the claim that
as against the contract describing the grill work as pertaining
to an ordinary grill, the respondent required the appellant to
affix ornamental grills.
5. It was urged by learned counsel for the appellant
that in response to appellant‟s pleading in para 11(e) of the
plaint, in the written statement filed, the respondent had not
denied that the grill affixed was ornamental and thus no
evidence was led, except for the witness to state that the grill
was ornamental.
6. Respondent‟s reply to sub-para (e) of para 11 of the
plaint reads as under:-
"(e) The contents of sub para (e) are wrong and
denied. It is stated that the drawings for the grill
were issued to the plaintiff on 28/06/1994 and the
grill was made accordingly. The payments
pertaining to the same were made to the plaintiff in
the running bills.
It is submitted that as per clause 8-A of the
agreement, the plaintiff must object within seven
days after receipt of the payment if there is any
dispute, otherwise, the measurements taken by the
Engineer-in-Charge or the defendant shall be final
and binding on both the parties and no objections
raised by the plaintiff at a later stage shall be
entertained.
It is further submitted that the claim of the
plaintiff is baseless and is an afterthought. The
plaintiff never challenged the running bills and the
plaintiff duly accepted the payments. Hence, the
present claim merits rejection."
7. At the outset we must note that there is a denial of
the averments made in para 11(e) of the plaint and this denial
is to be found in the very first sentence of para 11(e) of the
written statement.
8. It is not in dispute that neither party has brought on
record the drawing of the grills which were required to be
installed by the appellant and there is no evidence as to what
constitutes an ornamental grill.
9. The onus is on the plaintiff to prove the case.
10. That apart, it is not in dispute that as and when
grills were installed in the flats constructed by the appellant,
after measuring the work, the respondent made payment as
per contract stipulated price and there is no evidence that the
appellant ever protested that less payment was being
released. Further, when the final bill Ex.D-14 was prepared by
DDA, the payment determined as payable was accepted by the
appellant by writing: „Final Bill and measurements accepted.‟
It is only thereafter that the appellant started raising the issue.
11. We agree with the view taken by the learned Single
Judge that the appellant has not discharged the onus of
proving that it had installed ornamental grills.
12. Pertaining to claim No.11(h), the basis for the claim
has already been noted by us in para 2 above.
13. The reasoning of the learned Single Judge to deny
the claim is to be found in paragraph 80 to 82 of the impugned
decision.
14. Learned counsel for the appellant urged that once
claim under sub-para (g) was allowed, the claim under sub-
para (h) followed automatically.
15. The argument is fallacious. The reason is that for
substandard works executed, DDA deducted `80,759.45 from
the running bills. In the teeth of evidence that before handing
over possession of the flats the appellant removed the
defective substandard works i.e. carried out the necessary
rectifications, the learned Single Judge correctly held that the
cause or the reason for not making the payment was no longer
existing and hence decreed the claim. But, denying payment
on account of escalation, which we find would be payable
under the clause-10(cc) of the contract, the learned Single
Judge declined the relief holding that subsequent rectification
would not entitle the appellant to the said claim.
16. We need to expand a little on the reasoning of the
learned Single Judge. The work had to be completed as per a
plan which was an integral part of the contract. As per clause-
10(cc), escalation on material and labour had to be paid as per
the terms of the said clause, which required work to be
measured each quarter and with reference to the applicable
indices, the escalation had to be worked out. If a contractor
executes defective works and then at a much later stage
rectifies the defect, it would not be entitled to any escalation
pertaining to the rectification work, for the reason this would
not relate to the applicable time when the work had to be
otherwise executed. Besides, the clause is to recompense the
contractor the price rise in the cost of material and labour for
the work properly executed and not defectively executed but
subsequently rectified.
17. Claim under clause-10(cc) i.e. vide para 11(i) of the
contract was in sum of `16,01,007.53 and for which we find
that DDA had made the payment to the contractor, who was
wanting more; and the bone of contention was the manner in
which the clause had to be applied.
18. We thus begin our discussion with respect to the
rival contentions urged by noting clause-10(cc) of the contract.
It reads as under:-
""Clause 10(cc). If the prices of materials (not being
materials supplied or services rendered at fixed
prices by the department in accordance with Clauses
10 & 34 hereof) and/or wages of labour required for
execution of the work increase, the contractor shall
be compensated for such increase as per provisions
detailed below and the amount of the contract shall
accordingly be varied, subject at the condition that
such compensation for escalation in prices shall be
available only for the work done during the stipulated
period of the contract including such period for which
the contract is validly extended under the provisions
of clause 5 of the contract without any action under
clause 2 and also subject to the condition that no
such compensation shall be payable for a work for
which the stipulated period of completion is 6
months or less. Such compensation for escalation in
the prices of materials and labour, when due, shall
be worked out based on the following provisions:
1. The base date for working out such escalation shall
be the last date on which tenders were stipulated to
be received.
2. The cost of work on which escalation will be payable
shall be reckoned as 85% of the cost of work as per
the bills, running or final, and from this amount the
value of materials supplied under clause 10 of this
contract or services rendered at fixed charges as per
clause 34 of this contract, and proposed to be
recovered in the particular bill, shall be deducted
before the amount of compensation for escalation is
worked out. In the case of materials brought to site
for which any secured advance is included in the bill,
the full value of such materials as assessed by the
Engineer-in-Charge (and not the reduced amount for
which secured advance has been paid) shall be
included in the cost of work done for operation of this
clause. Similarly when such materials are
incorporated in the work and secured advance is
deducted from the bill, the full assessed value of the
materials originally considered for operation of this
clause should be deducted from the cost of work
shown in the bill, running or final. Further, the cost of
work shall not include any work for which payment is
made under clause 12 or 12(a) at prevailing market
rates.
3. The components of materials, labour, P.O.L., etc.
shall be pre-determined for every work and
incorporated in the conditions of contract attached to
the tender papers and the decision of the Engineer-
in-Charge in working out such percentage shall be
binding on the contractor.
FLY LEAF NO.10:
The component of materials, labour and P.O.L. as
indicated in para-3 of the sub-clause 10 (CC) have
been pre-determined as below:
a) Material Seventy five Percent 75
b) Labour Twenty five Percent 25
c) P.O.L. NIL Percent X
4. The compensation for escalation for materials and
P.O.L. shall be marked out as per the formula given
below:-
(i) VM = W x X x (MI-MIo)
----- ----------
100 MIo
VM = Variation in material cost i.e. increase
or decrease in the amount in rupees to
be paid or recovered
W = Cost of work done worked out as
indicated in sub-para 2 above.
X = Component of materials expressed
as percent of the total value of work.
MI & MIo = All India whole sale index for all
commodities for the period under
reckoning as published by the Economic
Advisor to Government of India, Ministry of
Industry and Commerce, for the period
under consideration and that valid at the
time of receipt of tenders, respectively.
ii) VF = Wx Z x (FI -FIo)
------ ---------
100 FIo
VF = Variation in cost of fuel, oil and
lubricants, increase or decrease in
rupees to be paid or received.
W = Value of work done, worked out as
indicated in sub-para 2 above.
Z = Component of P.O.L. expressed as a
percent of total value of work is
indicated under the special
conditions of contract.
FI & FIo = Average index number of wholesale
price for groups (fuel, power, light &
lubricants) as published weekly by
the Economic Adviser to Govt. of
India Ministry of Industry for the
period under reckoning that valid at
the time of receipt of tenders,
respectively.
The following principles shall be followed while
working out the indices mentioned in para above.
(a) The compensation for escalation shall be
worked out at quarterly intervals and shall be with
respect to the cost of work done during the three
calendar months of the said quarter. The first
such payment shall be made at the end of three
months after the month (excluding) in which the
tender was accepted and thereafter at three
months‟ interval. At the time of completion of the
work, the last period for payment might become
less than three months, depending on the actual
date for completion.
(b) The index (MI/FI etc.) relevant to any
quarter for which such compensation is paid shall
be the arithmetical average of the indices relevant
to the three calendar months. If the period up to
date of completion after the quarter covered by
the last such installment of payment, is less than
three months, the index MI and FI shall be average
of the indices for the months falling within that
period.
(c) The base index, MIo FIo etc. shall be the one
relating to the month in which the tender was
stipulated to be received.
6. The compensation for escalation for labour shall
be worked out as per the formula give below:-
i) VL = Wx Y x LIo
------ ---------
100 LIo
VL = Variation in labour cost i.e. amount of
increase or decrease in Rupees to be paid
or recovered.
W = Value of work done, worked out as
indicated in sub-para 2 above.
Y = Component of labour expressed as a
percentage of the total value of the work.
LIo = Minimum daily wage in Rupees of an
unskilled adult male mazdoor, as fixed
under any law, statutory rule or order as on
the last date on which tenders for the work
were to be received.
LI = Minimum wage in rupees of an unskilled
adult male mazdoor, as fixed under any
law, statutory rule or order as applicable on
the last day of the quarter previous to the
one during which the escalation is being
paid.
7. The following principles will be followed while
working out the compensation as per sub para 6
above.
a) The minimum wage of an unskilled male
mazdoor mentioned in Sub-para 6 above shall be
the higher of the following two figures: namely,
those notified by Government of India, Ministry of
Labour and those notified by the local
administration, both relevant to the place on work
and the period of reckoning.
b) The escalation for labour also shall be paid at
the same quarterly intervals when escalation due
to increase in cost of materials and/or P.O.L. is
paid under this clause. If such revision of
minimum wages takes place during any such
quarterly intervals, the escalation compensation
shall be payable for work done in all quarters
subsequent to the quarter in which the revision of
minimum wages takes place.
c) Irrespective of variations in minimum wages of
any category of labour, for the purpose of this
clause, the variation in the rates for an unskilled
adult male mazdoor alone shall form the basis for
working out the escalation compensation payable
on the labour component.
8. In the event the price of materials and/or wages
of labour required for execution of the work
decrease/s, there shall be downward adjustment of
the cost of work so that such price of materials
and/or wages of labour shall deductable from the
cost of work under this contract and in this regard
the formula herein stated under this clause 10 (cc)
shall mutatis mutandis apply, provided that:-
(i) No such adjustment for the decrease in
the price of materials and/or wages of labour
aforementioned would be made in case of
contracts in which the stipulated period of
completion of the work is six months or less.
(ii) The Engineer-in-Charge shall otherwise be
entitled to lay down the principles on which the
provision of this sub-clause shall be implemented
from time to time and the decision of the
Engineer-in-Charge in this behalf shall be final
and binding.
Provided always that the provision of the proceeding
clause 10(c) shall not be applicable for contracts
where provisions of this clause are applicable but in
cases where provisions of this clause are not
applicable, the provisions of clause 10 (c) will
become applicable."
19. We first note the contention urged before the learned
Single Judge, which was repeated before us, by the appellant.
The contention was that vide para 2 of the clause, the cost of
work on which escalation had to be paid was 85% of the total
cost of the work. Vide para 3, Fly Leaf Condition No.10 was
incorporated, as per which the component of material and
labour was: Material - 75% and Labour - 25%. Thereafter, vide
para 4 and para 6, compensation for escalation towards
material and labour had to be determined by applying the
formula and the applicable indices listed therein. Counsel
urged that as per para 2, the price of secured materials had to
be deducted. We highlight that under the contract, DDA was
supplying three items, namely; cement, steel and bricks at a
fixed price and while raising the bill the contractor would be
charging for cement, steel and bricks and then deduct the
price thereof as per the price at which DDA was supplying the
three items. The appellant was claiming that since 85% of the
cost of work included the price of material and labour and
since of this 85% cost of work, 75% thereof was attributable to
the material and 25% to labour, while applying the para, firstly
from the value of the work 85% had to be treated on which
material and labour escalation had to be paid. Thereafter 75%
of this cost i.e. of the 85% cost, had to be apportioned towards
material and from this price the price at which material was
supplied by DDA had to be deducted and escalation paid on
the balance and on the 25% of the 85% cost of the work,
labour escalation had to be determined and paid.
20. As per DDA this was not the method to apply clause-
10(cc) and that the escalation for material had to be as per the
formula in para 4(i) of clause-10(cc) and for labour as per para
4(ii) of the clause.
21. The reasoning of the learned Single Judge is to be found
in paragraphs 84 to 102 of the impugned decision.
22. After discussing the arguments, in para 98, the learned
Single Judge has held that at first blush the argument
advanced by the appellant appears to be logical, but has gone
on to hold that once the parties have agreed to a formula to
work out escalation, the same had to be determined as per the
formula and not on any other logic.
23. We agree. If a price, whether by way of escalation or
otherwise is agreed to be determined by the parties in the
contract on the application of a given formula, it is the formula
which would govern and not what may otherwise be logical.
24. It is true that clause-10(cc) treats 15% of the price of
work as allocable to the contractor‟s profit and overheads and
85% towards material and labour. Thus, where the contract
requires that 85% of the cost of work to be relatable towards
material and labour with 75% thereof to be apportioned
towards material and balance 25% thereof towards labour, by
ordinary plain logic, it would mean that of the 100% cost of
work, 85% would be towards material and labour and inter-se
material and labour, the division would be 75% of 85% towards
material and 25% of 85% towards labour. Or to put it
differently, the contract price could be appropriated: 15%
towards overheads profits, 63.75% towards material and
21.25% towards labour; and in this way we reach the figure 15
+ 63.75 + 21.25 = 100. Now, it stands to logic and reason
that where the owner of the work has supplied some
component of the material at a fixed price, no escalation
thereon would be payable to the contractor. It also stands to
logic and reason that horses have to be traded with horses and
cows have to be traded with cows, and thus while determining
the escalation, the cost of material supplied by the owner of
the work has to be deducted with reference to the cost of the
material consumed and not with reference to the cost of
labour input in the execution of the contract.
25. But, this logic would have no place where the parties
have agreed to a formula, on basis whereof the escalation on
material consumed has to be determined. We extract the
formula from clause-10(cc), pertaining to escalation for
material. It is to be found in para 4(i) of the clause and reads
as under:-
(i) VM = W x X x (MI-MIo)
----- ----------
100 MIo
VM = Variation in material cost i.e. increase
or decrease in the amount in rupees to
be paid or recovered
W = Cost of work done worked out as
indicated in sub-para 2 above.
X = Component of materials expressed
as percent of the total value of work.
MI & MIo = All India whole sale index for all
commodities for the period under
reckoning as published by the Economic
Advisor to Government of India, Ministry of
Industry and Commerce, for the period
under consideration and that valid at the
time of receipt of tenders, respectively.
26. Suffice would it be to state that the index „X‟ in the
formula refers to the component of material, expressed as
percent of the total value of the work, and thus the index „X‟
would be the 75% component of the 85% component of the
work. The index „W‟ represents the cost of work done, worked
out as indicated in para 2, and this would be 85% of the cost of
work. The indexes MI & MIo represent the All India Wholesale
Index for Commodities at the time of execution of the work
and receipt of tender respectively. Thus, the variable „V M' has
to be determined by applying the indices as they stand and
not by tinkering with the indices on a theory of logic.
27. This is the reasoning of the learned Single Judge with
which we agree.
28. The submission that the learned Single Judge could not
disagree with the view taken by another learned Single Judge
of this Court in the decision reported as 70 (1997) DLT 521
P.C.Sharma & Co. v. DDA, needs a word to be spoken by us in
appeal.
29. The learned Single Judge has noted the said decision in
paragraph 92 of the impugned decision, but has held that in
construing a document, the Court is bound by the language
used by the parties and this we understand to mean that if a
formula is stipulated, it governs the charter relationship. The
learned Single Judge has held that the decision in P.C.Sharma‟s
case (supra) had to be understood in the context of the
decision being by way of a challenge to an award and
therefore the view of the Single Judge that if an interpretation
by an arbitrator was plausible, the Court would not interdict.
30. We agree with the view taken by the learned Single
Judge that a decision pertaining to the acceptance of an award
would stand on a totally different footing with reference to a
primary adjudication by a Court. Secondly, we find the view
taken by the learned Single Judge in P.C.Sharma‟s case (supra)
to be an incorrect view, for the reason it is settled law that an
arbitrator, being the creation of a contract, the terms of the
written contract are his Bible and he cannot sing or script his
own psalms. While deciding P.C.Sharma‟s case (supra), the
learned Single Judge has ignored the fact that if on the issue of
arriving at a sum, the contract stipulates a formula, it is the
formula which governs and the application thereof has to be of
the given indices and not what the arbitrator feels to be logical
and reasonable, howsoever logical or reasonable be the view
taken by the arbitrator. We thus overrule the view taken in
P.C.Sharma‟s case (supra).
31. With reference to the claim for damages due to work
being prolonged by 48 months and the basis thereof being idle
tools, plants and machinery as also site overhead expenses,
the learned Single Judge has negated the claim as per reasons
in paragraphs 112 and 113 by noting that the contractor had
been compensated for escalation towards cost of material and
labour, a reasoning which may not stand the scrutiny of law for
the reason, it is settled law that loss to the contractor when
there is a delay in performance of the work not attributable to
the contractor but to the owner may subsume various counts;
being: (1) loss of profits; (2) contribution to fixed heads; (3)
increase in prime cost which includes components of material,
plant, labour and salaries to the staff; and (4) off site and on
site overheads. Thus, if a clause in the contract compensates
the contractor escalation in the price of material and labour
during execution of the work, this would not mean that the
contractor has been recompensed fully.
32. The subject at hand finds a good mention in Hudson‟s
Building and Engineering Contracts 11th Edn. and one of us
(Pradeep Nandrajog, J.), who authored the decision on
November 30, 2011 in RFA(OS) No.55/2011 „DDA v.
J.S.Chaudhary‟ had opined in paras 36 to 38 thereof as under:-
"36. Loss of a contractor‟s profit as a
head of damage in a terminated contract requires
to be distinguished from a quite different claim
which contractors may be able to establish in cases
where an owner‟s breach can be shown to have had
the effect of delaying completion by the contractor.
In a delayed contract the basis of the contractor‟s
loss is the postponement of the time when the
contractor‟s organization, viewed as a profit-
earning entity, is free to move on and earn
elsewhere in the market, the combined profit and
necessary contribution to fixed overheads of which
it is reasonably capable. A construction contractor‟s
enterprise as a whole will incur a range of off-site
expenditure which by its nature will not vary or be
affected by the delay in performance of an
individual contract, or the degree to which that
contract may have been delayed, as a result of
owner‟s breach of contract. This class of
expenditure is commonly referred as „fixed
overhead‟ expenses. A contractor pricing an
individual project, therefore, after providing for the
estimated total „prime-cost‟ of all kinds which will
be required to carry out the contract itself must
then additionally estimate for a combined operating
margin which will not only produce his required net
or „pure‟ profit, but will also serve to make an
appropriate contribution, together with that from
his other projects, to the fixed overheads of the
enterprise as a whole. In case of a delayed contract,
where the concern is to ascertain the „profit‟ which
the contractor might have expected to earn
elsewhere in the market on other contracts, it is
this necessary combined operating margin of profit
and fixed overhead, which in appropriate market
conditions, the contractor‟s enterprise will have lost
as a consequence of the period of owner-caused
delay on the individual project, and to which he will
be entitled as damages. However, in this regards, a
distinction needs to be drawn, on the one hand,
small contractors having few (and indeed
sometimes no) overheads other than those of the
„jobsite‟ itself, and on the other, large contractors
with centralized offices, transport systems, yards
and depots; and while again some main contractors
may operate as little more than employers of sub-
contractors, with virtually no overheads of their
own. (See Articles 8-176-79, pages 1072-74,
Hudson‟s Building and Engineering Contracts, XIth
Edition).
37. Delay in performance of contract due to
owner‟s breach may also, of course, increase the
contractor‟s prime costs or his site overhead costs.
The contractor‟s various items of prime-cost for a
project will themselves break down into some or all
of the four prime-cost components of materials,
plant, labor and salaries (including supervisory and
other staff) and sub-contracts. Some items of cost
will be obviously referable to individual parts of the
constructed cost, such as the prime-cost elements
of plant, labor and materials or sub-contracts for
constructed concrete or brickwork, and so relatively
easily applied to any additional permanent work
directly necessitated by a breach of contract.
Others, however, usually referred to as „site
overheads‟, may not be conveniently referable to
any particular part of the permanent work (for
example, supervision, access roads, site huts or
tower cranes etc), but will themselves contain some
or all of the four elements. (See Articles 8-180 and
8-190, pages 1074-76 and 1080-81, Hudson‟s
Building and Engineering Contracts, XIth Edition).
38. From the aforesaid, it is clear that in case
of a delayed contract caused due to owner‟s breach
the contractor can claim damages under following
heads: - (i) loss of profits; (ii) contribution to fixed
overheads; (iii) increase in prime cost which
includes components of materials, plant, labor and
salaries and sub-contracts and (iv) increase in off-
site and on-site overheads caused due to delay in
performance of contract."
33. But, at the same time, in another decision penned by one
of us (Pradeep Nandrajog, J.) after noting the aforesaid
paragraphs, it was further noted that the learned Author had,
with reference to Hudson‟s formula, opined further, and this
further was noted in paragraph 16 of the decision dated
February 08, 2012 in FAO(OS) No.667/2006 „DDA vs.
M/s.Associate Builders‟ wherein it was opined:-
"16. On the applicability of the HUDSON‟s
formula, we are noticing that in many judgments
the same is being applied mechanically ignoring
certain important passages from the commentary
and especially para 8.201, 8.209 and 8.211 from
the 11th Edition of the Book in question. In para
8.201 the learned Author opines that the formula
should be applied „provided proper site records
have been kept, a total cost basis of claim can be
justified, it is submitted; and it is hard to see how a
plaintiff, whether owner or contractor, who has
failed to keep records should be in a better position
to subject the defendant and the Tribunal to the
difficulties of assessment and the reversal of the
particular onus of proof, which total cost involves,
unless it can be convincingly shown that the
keeping of useful or relevant record was in the
circumstances impractical or impossible.‟ In para
8.209 the learned Author opines „Arbitrators in
particular should treat their own ability to insist on
proper particularization and to carry out a detail
and critical analysis and separation of quantum as
a very important part of their role in construction
litigation, where the presentation of highly
exaggerated or theoretical complaints, by owners
and contractors alike, is a common feature.‟ At
para 8.211 the learned Author has noted „It seems
to be the practise in the construction industry to
employ consultants to prepare a claim almost as
soon as the ink on the contract is dry.‟"
34. In the instant case we find no evidence led of the number
of tools, plant and machinery stationed at the site when the
work got prolonged. There is no evidence of site overhead
expenses. Mere statement on oath of the witness of the
appellant is of no value. We find that in the affidavit by way of
examination-in-chief the witness of the appellant has simply
parroted the language of para 11(n) of the plaint and has not
stated a word about the number of tools, plant and machinery,
the capital value thereof or the hire charges for the same (if
they were taken on hire); the number of non-workmen
personnel deployed at the site or even to a site office.
35. Thus, the claim must fail, not on the reasoning of the
learned Single Judge, but due to there being no evidence.
36. The appeal fails and is dismissed but we leave the parties
to bear their own costs.
(PRADEEP NANDRAJOG)
JUDGE
(PRATIBHA RANI)
JUDGE
March 19, 2012
dk
