Gujarat High Court
State Of Gujarat vs Ghanshyam R Patel on 25 February, 2021
Bench: A. P. Thaker
C/FA/1400/1996 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 1400 of 1996
FOR APPROVAL AND SIGNATURE:
HONOURABLE DR. JUSTICE A. P. THAKER
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1 Whether Reporters of Local Papers may be allowed No
to see the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy No
of the judgment ?
4 Whether this case involves a substantial question No
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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STATE OF GUJARAT & 1 other(s)
Versus
GHANSHYAM R PATEL
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Appearance:
MR. SOAHAM JOSHI, AGP (1) for the Appellant(s) No. 1,2
MR BS PATEL(602) for the Defendant(s) No. 1
MRS RANJAN B PATEL(646) for the Defendant(s) No. 1
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CORAM: HONOURABLE DR. JUSTICE A. P. THAKER
Date : 25/02/2021
ORAL JUDGMENT
1. Being aggrieved and dissatisfied with the judgment and
decree passed by the learned Civil Judge (S.D.), Valsad on
16.12.1995 in Special Civil Suit No.16 of 1989, the defendant
has preferred this Appeal under Section 96 of the Civil
Procedure Code.
C/FA/1400/1996 JUDGMENT
2. For brevity and convenience the parties are referred to herein
as per their status before the trial Court.
3. The defendant has contended that the learned trial Judge has
erred in holding that noncarrying out of work of Pump house
amounts to breach of contract committed by the department.
It is stated that even without the Pump house, the plaintiff
could have carried out the other items in the contract in the
absence of pump house. It is also contended that the plaintiff
had not completed the work of fish Farm for which the site
was provided within the stipulated time. It is also contended
that the learned trial Court has erred in holding that the work
of rolling and watering was to be carried out by the
department. It is further contended that as per the terms of
the agreement, the plaintiff was to carry out the work of
watering and consolidation. It is also contended that the trial
Court has committed error in holding that the department
could not have imposed penalty under clauses 2 and 3 as well
as holding that the time was not the essence of the contract.
3.1 It is also submitted that error has been committed by the
learned trial Court in holding that the department has failed
to prove that the plaintiff did not complete the work within
the stipulated period due to its own fault. It is the contention
of the defendant that the learned trial Court has not properly
interpreted Exh55 letter dated 4.1.1988 written by the
plaintiff, which clearly indicates that the Contractor has
C/FA/1400/1996 JUDGMENT
abandoned the work and, therefore, he is not entitled to any
damage. The defendant has also stated that the observation
of the learned trial Court regarding entitlement of the
plaintiff to the tune of Rs.1,04,905/ towards overstay and
overhead account as well as Rs.52,000/on account of loss of
profit and Rs. 2 lakhs towards work done and not paid as
well as awarding interest at the rat of 15% to the plaintiff.
According to the defendant, the learned trial Court has failed
to appreciate that the plaintiff itself has committed breach of
the contract by not completing the work within stipulate
period mentioned in the contract agreement and, therefore,
he is not entitled to any compensation. According to the
defendant, the learned trial Court ought to have held that
that the plaintiff has abandoned the work as per letter Exh
55.
3.2 It is further contended that the learned trial Court has failed
to appreciate that Section 13 of the Gujarat Public Works
Contracts Disputes Arbitration Tribunal Act, 1992 puts a bar
on the Civil Court to deal with or decide any question, which
the Tribunal is empowered to deal with and decided uner the
said Act. It is contended that the learned trial Court has
committed jurisdiction error as well as did not appreciate oral
as well as documentary evidence in proper perspective and
wrongly passed the impugned judgment and decree in favour
of the plaintiff and against the defendant.
4. Heard Mr. Soaham Joshi, learned AGP for the Appellant and
C/FA/1400/1996 JUDGMENT
Mr. B.S.Patel, learned Senior Counsel with Mr. C.B. Patel,
learned advocate for the respondentoriginal plaintiff through
videoconferencing.
5. Mr. Joshi, learned AGP has vehemently submitted the same
facts which are narrated in the Appeal memo. While referring
to the oral evidence on record, he has submitted that there is
no dispute as to the execution agreement for carrying out the
work in question. He has submitted that the work was to be
completed in a stipulate period. However, the plaintiff has
not completed the same and has abandoned the work by
letter at Exh55. Mr. Joshi has also submitted that as the
plaintiff did not complete the work in stipulated period, the
Executive Engineer has issued letter for final measurement
and it was carried out. While referring to the original plaint
regarding the claim of money on various grounds and the
reasons of granting thereof by learned trial court, the learned
AGP has submitted that all these facts have not been properly
appreciated by the learned trial Court. He has also submitted
that the evidence clearly suggest that the breach of contract
was made by the plaintiff and the time was essence of the
contract. According to Mr. Joshi, learned AGP, as the plaintiff
has committed breach of contract, no decree ought to have
been passed against the defendant. He has also contended
that itemwise programme was to be fixed by the Contractor
and not by the defendant department. He has also contended
that approach road was to be prepared by the Contractor and
he did not do so. Mr. Joshi has also submitted that there was
C/FA/1400/1996 JUDGMENT
no extension of period of contract after 16.11.1986. While
referring to the letters by the plaintiff, he has submitted that
it does not mean that the defendant has not considered time
as an essence of the contract. According to him, the plaintiff
has abandoned the contract by stoppage of the work.
5.1 Mr. Joshi, learned AGP has further submitted that the entire
judgment of the trial Court is based on assumption and
presumption and there is overriding of the claim as the claim
was overhead charges and expectation of loss of profit is
already covered in other heads. According to him, even if it is
believed that he is entitled to damages for overhead and
overstay then there cannot be such amount granted for the
entire period of contract. Learned AGP has also submitted
that for arriving at decision on Claim 4, the learned trial
Court has made guess work, which cannot be resorted to for
granting damages. According to him, there must be some
cogent and convincing evidence for granting damages. He has
also submitted that the claim Nos. 6 and 7 would go hand to
hand and there cannot be any separate damages for over
head charges and expected loss of profit. He has also
submitted that the learned trial Court has not framed issue on
the ground of abandonment of the Contract and without
framing of such issue burden has been shifted on the
shoulders of the defendantdepartment. He has also
submitted that there is no iota of evidence for awarding Rs. 2
lakhs. The learned trial Court has awarded the same without
any basis. He has also contended that the interest component
C/FA/1400/1996 JUDGMENT
of 15% is on higher side. Learned AGP has vehemently
submitted that the impugned judgment and decree passed by
the learned trial Court is perverse and it requires to be
interfered with. He has prayed to allow the present Appeal
and setaside the judgment and decree and pass necessary
order for dismissing of the suit of the plaintiff.
6. Mr. B.S. Patel, learned Senior Counsel with Mr. C.B.Patel,
learned advocate for the respondentoriginal plaintiff has
vehemently submitted that there is no dispute regarding the
execution of the contract between the parties. He has also
submitted that the department has not prepared any detailed
programme and has not supplied itemwise programme to the
plaintiff. While referring to the agreement, he has submitted
that as per the clauses of the agreement, such itemwise
programme was to be approved by the department. He has
also submitted that at the relevant time no itemwise
programme was in existence. While referring to the
impugned judgment of the trial Court, he has submitted that
the trial Court has considered each and every aspect of the
matter and has arrived at right conclusion and there is no
need of interference by this Court.
6.1 Mr. Patel, learned Senior Counsel has also submitted that it
was the duty of the department to provide approach road for
carrying out the work but that approach road was not
provided by the defendant authority. He has also submitted
that there was legitimate expectation of the contractor to
C/FA/1400/1996 JUDGMENT
have profit and cooperation from the department. He has also
submitted that can department itself make the allged work
without any approach road. He has also submitted that the
contractor had applied for extension of time, but, it was not
decided by the defendant side though the same was
recommended by the local authority to the higher ups. He has
also submitted that pending the proposal for extension of
contract, the contract was terminated by the department. He
has also contended that the finding of the learned trial Court
as to whether time was essence of the contract, is proper one
and no factual and legal error has been committed by the
trial Court. He has also submitted that no measurement sheet
has been prepared in presence of the plaintiff by the
defendant in the matter. According to him, no such
measurement is also produced in the matter.
6.2 Regarding granting of Rs. 2 Lakhs is concerned, Mr. Patel
learned Senior Counsel has submitted that the version as has
been put up by the plaintiff has not been denied by the
defendant since no evidences as to final measurement is
produced. He has also submitted that so far as point
regarding "overstay" and "overhead" is concerned, the learned
trial Court has not committed any error in granting damages.
He has also submitted that considering the work contract,
rate of interest i.e. 15% is proper. He has also submitted that
profit is to be calculated after deduction of all the expenses
and, therefore, expenses cannot be treated as a profit.
According to him, there is no overlapping for damages for
C/FA/1400/1996 JUDGMENT
"profit" and "overhead" and "overstay". He has also contended
that the alleged suit of 1995 filed by the department before
other Civil Court has no consequences and pendency thereof
cannot affect this Suit filed by the plaintiff.
6.3 Mr. B.S. Patel, learned Senior Counsel has relied upon the
decison rendered in case of McDermott International Inc. v.
Burn Standard Co. Ltd. and Another, reported in (2006)
11 SCC 181, especially para no. 96, 97 and 98, which read as
under:
"96. The arbitrator has noticed that the claim of MII arose
only after it has been satisfactorily proved that the invoices in
respect of each of these claims were issued and had become
due for payment before reference to arbitrator. It furthermore
appears that para 23 of the partial award and the claim for
compensation on the aforementioned head are not identical.
Para 23 of the partial award dealt with the claim in respect of
WI9 to WIS pipeline laying. So far as para 24 of the said
award is concerned, the learned arbitrator noticed the specific
invoices issued against Change Order Nos. 2, 3 and 7 relating
to delay and disruptions. It is, therefore, in our considered
opinion, not correct to contend that the invoice is the only
base whereby and where under a claim can be made. There is
no legal warrant for the said proposition. A claim can also be
made through correspondence or in meetings.
97. A claim for overhead costs resulting in decrease in
profit or additional management costs is a claim for damages.
98. An invoice is drawn only in respect of a claim made in
terms of the contract. For raising a claim based on breach of
C/FA/1400/1996 JUDGMENT
contract, no invoice is required to be drawn".
6.4 Learned Senior Counsel has also submitted that though the
contractor plaintiff has approached the defendant authority
for extension of time period of the contract, the same was not
decided in time. He has also submitted that the plaintiff has
sent notice to the defendant, and therefore, there is no
question of any abandonment of contract by the plaintiff. He
has contended that for overhead and overstay expenses, 10%
is permissible as per the law and the rate of interest prevalent
at the time is proper.
7. On perusal of the pleadings before the trial Court, it
transpires that the dispute has arise between the parties for
nonperformance of the contract. According to the plaintiff,
he could not complete the work as no itemwise programme
and approach road and other ancillary item was provided by
the department to carry out the work. It is the case of the
plaintiff that he was ready and willing to perform his part of
contract and had also sought for extension of time. As alleged
by the plaintiff, the local authority had recommended for
extension of time but the higherups in the department had
not decided the same in time and ultimately the higherups
had directed the plaintiff for stoppage of the work. According
to the plaintiff, at the time of execution of contract, he has
paid security of Rs.21,420/ and thereafter remaining
amount of Rs. 21,420/ had also been deducted by the
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Government from the amount of running bills. It is also
contended that the contract between the parties create
reciprocal contractual obligation and in the present case, the
defendant fails to perform their part of contract agreement.
The allegations made by the plaintiff is to the effect that the
defendant have committed several breaches of the terms and
conditions of the agreement. According to the plaintiff, the
work of rolling and watering was to be done by the
department but the department failed to do so. It is also the
case of the plaintiff that approach road for the site was also
not made available to the plaintiff by the defendant and due
to that the plaintiff could not execute the work during
monsoon season. It is further the case of the plaintiff that the
Pump house work was to be carried out by the department
which they did not do so. He has also alleged that there was
shortage of funds and the department failed to make
payment regularly to the plaintiff. It is also contended that
the department has illegally imposed penalty under Clause 2
and 3 of the agreement and impliedly terminated the contract
illegally. The plaintiff has contended that due to the breach
committed by the department, he has suffered damages on
various accounts. The plaintiff has claimed Rs. 4,49,256/ on
account of work done not paid, Rs.50,000/ on account of
saving in tender quantity, Rs.42,840/ in form of security
deposit, Rs.1,04,905/ in the form of overstay and overhead,
Rs. 25,000/ towards the price of the materials at site,
Rs.65,000/ on account of extra items of gate, Rs.1,20,000/
towards the loss of profit and Rs. 32,137/ on account of
C/FA/1400/1996 JUDGMENT
interest and damages and thus in all Rs.8,89,138/ with
interest at the rate of 18% per annum and the costs of the
suit.
8. The suit has been resisted by the defendant by filing Written
statement wherein it has accepted the execution of
agreement between the parties and entrustment of the work
to the plaintiff. But it has been alleged that the work was to
be completed within 18 months and as contract was executed
on 17.5.1985 which was to be completed on 16.11.1986.
However, during this period, the plaintiff did not complete
the work. The defendant has also raised the contention that
the work of rolling and watering was to be done by the
plaintiff and the approach road was not to be made available
by the department as the plaintiff himself had visited the site
before placing the tender. According to the defendant, they
had given ground level to the plaintiff and on the basis of
that level and working plan, the plaintiff was in a position to
calculate the top level of the farm. It is also alleged that the
plaintiff had to execute so many items of the contract
agreement which had no relevancy with the pump house.
According to the defendant, as per the terms and conditions
of the agreement, the itemwise programme was to be
prepared by the Contractor which was to be approved by the
department but no such exercise was carried out by the
Contractor. It is further contended by the defendant that
progress of the work was very slow and the work executed by
C/FA/1400/1996 JUDGMENT
the plaintiff was also defective and inspite of instruction
given by the department, the plaintiff failed to improve the
defective work. It is further contended that the plaintiff could
not complete the work in stipulated time due to their own
fault and, therefore, the department has exercised its right
under Clauses 2 and 3 of the Agreement. It is also contended
that the action on the part of the department for terminating
the contract is legal and valid and the plaintiff is not entitled
to get any relief in form of security deposit or any other
amount as being claimed.
9. On the basis of the pleading of both the parties, learned trial
Court has framed the following issues:
1) Whether the plff proves that it could not complete the
work within stipulated period due to breaches committed by
the deft?
2) Whether the plff proves that the deft's action of levying
the compensation is illegal?
3) Whether the plff proves that its contract agreement is
illegally terminated by the defts?
4) Whether the plff proves that it is entitled to recover
Rs.8,89,138/ from the deft?
5) Whether the plff is entitled to get interest? Yes, at what
rate?
6) What is due to the plff?
7) What order and decree?
C/FA/1400/1996 JUDGMENT
10. It appears from the record that after perusal of the pleadings
of the parties as well as oral and documentary evidence
produced by both the sides and after hearing both the sides,
the learned trial Court has answered the aforesaid issues as
under:
1) In the affirmative.
2) In the affirmative.
3) In the affirmative.
4) Rs.3,90,406/.
5) Yes, 15% simple interest.
6) Rs.3,90,406/.
7) As per final order.
11. The following points arise for determination of the present
Appeal:
1) Whether the observation of the trial Court that breach
of contract has been committed by the defendant is proper?
2) Whether the contract agreement has been illegally
terminated by the defendant?
3) Whether the trial Court has committed error of facts
and law in awarding Rs.3,90,406/ as compensation?
4) Whether the trial Court has committed any error in
granting interest at the rate of 15% ?
5) What order and decree?
C/FA/1400/1996 JUDGMENT
12. My findings on the above points, for the reasons given below,
are as under:
1) In the affirmative.
2) In the affirmative.
3) Partly in affirmative.
4) In the affirmative.
5) As per final order.
REASONS
13. Since all the issues are interconnected, instead of discussing
point wise, all are discussed herewith together.
14. It is admitted fact that the plaintiff has not challenged the
impugned judgment and decree though his suit is partly
allowed and no damages is allowed (i) on account of saving
in tender quantity; (ii) claim on account of extra item and
(iii) claim on account of material on site. Thus, the decision
of the learned trial Court on this count is accepted by the
original plaintiff.
15. At this stage, it is pertinent to note that one of the grounds
raised in the Appeal by the defendant regarding availability
of the remedy under the Gujarat Public Works Contracts
Disputes Arbitration Tribunal Act, 1992 is concerned, the
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same is not applicable in the present case. Admittedly, the
said tribunal Act has come into existence in the year 1992
whereas the agreement to execute the work in the present
matter is of 1985 and the Suit has been filed in the year
1989. Therefore, when the Suit was filed, there was no such
tribunal in existence.
16. On perusal of the impugned Judgment and decree, the
particulars regarding itemwise relief of amount by the
plaintiff coupled with the facts of granting amount on those
heads may be shown in the tabular form as under:
Item Amount claimed by Amount awarded by
the plaintiff the trial Court
Claim on account Rs.50,000.00 Nil
of saving in
tender quantity
Claim on account Rs.42,840.00 Rs.17,751.00
of security
deposit
Claim on account Rs.1,04,905.00 Rs.1,04,905.00
of overstay and
overhead
Claim on account Rs.65,000.00 Nil
of extra item
Claim on account Rs.1,20,000.00 Rs.52,734.30
of expected loss
of profit
On account of Rs.25,000.00 Nil
material on site
On account of Rs.4,49,256.00 Rs. 2,00,000.00
what work done
but not paid
C/FA/1400/1996 JUDGMENT
On account of Rs32,137.00 Rs.15015.70
interest as
damages
Total:8,89,138.00 Total:3,90,406.00
17. On perusal of the Record and Proceedings of the suit it
appears that the plaintiff Ghanshyambhai R. Patel has
examined himself at Exh44 and he has also produced certain
documents at Exh45, 46, 49 to 68. Whereas defendant has
examined one Shri Shankerbhai Khemabhai Patel at Exh91.
The defendant has produced the documentary evidence at
Exh74 to 83. On perusal of the entire evidence on record, it
transpires that in view of the pleadings the issue as to who
has breached the contract is involved in the matter. Now, it is
alleged by the plaintiff that defendant has committed breach
of contract and, therefore, it was for the plaintiff to prove this
fact. It appears from the record that the plaintiff has
categorically stated in his deposition that burden lies on the
plaintiff to prove this fact. At the same time, the defendant
has also contended that the plaintiff has committed breach of
contract. In view of this fact, on perusal of the evidence on
record, it transpires that essentially work for Pump House
Bore was to be carried out by the department. But it has
failed to carry out the same work within the period of
contract and, therefore, the plaintiff failed to complete the
said work.
18. The other dispute is regarding the item wise programme.
C/FA/1400/1996 JUDGMENT
Both the sides have contended that the other side had to
provide the itemwise programme. Now, in view of the
pleadings of the parties, essentially WS of the defendant at
Exh14, there is acceptance on the part of the defendant
department that no itemwise programme had been given by
the department to the plaintiff. This fact is also narrated by
the witness Shankarlal in his deposition and also during his
crossexamination that no itemwise programme was
provided to him by the department is established. However,
according to the defendant as per Clause 2 of the tender
agreement, the itemwise programme was to be fixed by the
contractor and the department had to approve such itemwise
programme. At this stage, it is worthwhile to note that as per
Clause2 of the Tender Agreement Exh50, it is mentioned
that in the event if the contractor failed to comply that
condition, then he shall be liable to pay as compensation the
amount equivalent to 1% of such smaller amount as the
Superintendent Engineer may decide of the said estimated
cost of the whole work for everyday with due quantity of the
work remained incomplete. It also appears from the
ScheduleB at Page59 which provides that the quantity item
wise and this quantity are to be bifurcated into the work to be
carried on daytoday so that on its work it can be compared
with the work done actually on site and any incomplete un
executed quantity in that particular item on the site. It can be
compared and linked with clause2 for working out
insufficient quantity compared with the itemwise programme
to be provided. Thus, it is crystal clear that it was for the
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department to provide itemwise programme to the plaintiff.
Therefore, non preparing itemwise programme and not
approving and supplying to the contract, the itemwise
programme by the department, is the fault of the department.
Under this circumstance, the department is at fault and this
fact has directly affected the execution of the contract
agreement. Therefore, there was breach of contract of the
department.
19. Regarding the work of rolling and watering is concerned, it is
alleged by the plaintiff that work of rolling and watering was
to be carried out by the department. Whereas it is
submission of the defendant department that same work was
to be carried out by the plaintiff. Now, on perusal of the
evidence on record which includes letters written by the
plaintiff dated 17.2.1986, 14.11.1986, 14.4.1987, 4.1.1988,
etc. (Exh52, 62, 63 and 55) for nonsupplying of roller and
tanker at the relevant time and when this fact has not been
controverted by the defendant the version of the plaintiff
could be believed. However, it appears that the defendant
department has first time raised such contention in their
pleadings. It is admission on the part of witness of the
department (Exh91) that rolling and watering in respect of
the work of Item No.3 was to be carried out by the
department. Thus, on this count also the department has
committed breach of contract agreement.
20. So far as the dispute regarding approach road is concerned, it
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appears that there is no provision made in the tender
agreement regarding the approach road. However,
considering the contract, it is on the part of the department to
provide approach road to the plaintiff, but, so far as the
internal road is concerned, it was for the plaintiff to carry out
the same. Considering the evidence on record, it is clearly
evident that due to nonproviding of approach road the
plaintiff could not execute the work in monsoon season.
21. So far as the pont of shortage of funds is concerned, it
appears from the oral as well as documentary evidence which
consist of letters (Exh55, 56, 64 and 67) written by the
plaintiff to the department, it clearly appears that the
defendant failed to make the payment of the work done by
him. Thus, the department has failed to make payment
regularly and due to that reason the plaintiff could not
complete the work within time.
22. It is pertinent to note that there is also dispute regarding
providing design and drawing by the defendant to the
plaintiff. It appears especially from Clause 13 of the
Agreement which provides that defendant department was
bound to supply three sets of the work drawings, etc. to the
contractor i.e. plaintiff free of cost along with work order. It
also appears from the record that the plaintiff has written
many letters to the department, however, it appears that in
those letters the plaintiff has not raised the point regarding
nonsupply of design and drawing. It also appears that the
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plaintiff has carried out work as per the contract. It shows
that he has with him the drawings and design otherwise, he
might not have carried out any work as per the contract.
Therefore, the point of providing of design and drawing by
the defendant is not established by the plaintiff by leading
cogent evidence.
23. It also appears from the record that there was dispute
regarding the top level of the farm and the plaintiff has
alleged that the same was not given to the plaintiff for
executing the work and it is admitted by the defendant in its
W.S. that ground level of the farm had already been given by
the department to the plaintiff and the plaintiff could easily
calculate the top level by adding necessary levels given in the
plan, drawings, etc. Now the plaintiff's witness has admitted
in his crossexamination at Exh44 that the department had
given ground level of the farm to him and on that basis the
plaintiff was in a position to know the top level of the farm.
Now, as per the provisions of tender agreement the
department has to record the level in the Field Book dayto
day during the execution of the work. Now, no such Field
Book has been produced in the present case though written
notice was issued by the plaintiff to the defendant for
producing the said Field Book. Considering this ground and
other grounds as discussed hereinabove, this point is also one
of the reasons for breach of contract.
24. The main contention raised by the defendant in this matter is
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regarding that the time was essence of the contract. At this
stage it is worthwhile to refer to the decision of the Hon'ble
Apex Court in case of M/s. Hind Construction Contractors v.
State of Maharashtra, reported in AIR 1979 SC 720 has
specifically observed in Para7 and 8 that the question
whether or not time was essence of contract would essentially
be a question of the intention of the parties to be gathered
from the terms of the contract. Even where the parties have
provided that time is essence of the contract, such a
stipulation have to be read along with other provisions of the
contract and such other provisions may, on the construction
of the contract, exclude the inference that the completion of
the work by a particular date was intended to be
fundamental, for instance, if the contract were to include
clause provided for extension of time in certain contingency
or for payment of fine or penalty for every day or week the
work undertaken remains unfinished on the expiry of the
time provided in the contract such clauses would be
construed as rendering ineffective the express provision
relating to the time being of the essence of contract.
25. But now considering the decision of the Hon'ble Supreme
Court to the effect when there is provision in the Contract
agreement regarding extension of time then it would be not a
case that time was essence of the contract. In the present
case, considering the facts and circumstances and
documentary evidence on record, especially contract
agreement, it is crystal clear that time was not the essence of
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the contract. It also appears from the record that due to
breach of contract by the defendant, the plaintiff could not
execute the work. It also appears from the record that the
plaintiff has not avoided the work rather than the defendant
has directed stoppage of work and has prepared the final
measurement.
26. Now, considering the evidence on record and discussion
made by the learned Judge awarding the compensation as
referred to hereinabove on various counts, it appears that the
learned trial Court has committed serious error of facts and
law in granting Rs.1,04,905/ under the head of "overstay"
and "overhead". The trial court has calculated the said
amount for the entire period of contract. In the considered
opinion of this court, no such amount for entire stipulated
period and thereafter on extra time would be available to the
plaintiff. The damages for the overhead and overstay is
permissible only for the period after expiration of the
stipulated period of the contract. Now, in this matter the
stipulated period for completing the contract was of 18
months, therefore, for the duration of stipulated period no
damages on account of overhead and overstay is permissible.
As such, on this count only amount for 1 and 1/2 months
could be awarded to the plaintiff. For calculating the
damages on this count, the formula adopted by the learned
trial Court for granting overhead and overstay at the rate of
5,400 per month is proper. Therefore, the amount for 1 and
1/2 month would come to Rs.8,100/ Thus, the learned trial
C/FA/1400/1996 JUDGMENT
Court has committed serious error of facts and law in
granting the amount of Rs.1,04,905/ for overhead and
overstay. The plaintiff contractor is only entitled to get
Rs.8,100/ under this head. Therefore, the amount of
compensation is required to be reduced on this count.
27. On perusal of the entire material on record, it clearly appears
that the learned trial Court has considered the evidence on
record in proper perspective and has not committed any
serious error of facts and law in awarding Rs.52,734.30 ps for
expected loss of profit and on account of interest on damages
Rs.15,015.70 ps, Rs.17,751.00 for Security deposit and
Rs.2,00,000/ on account of work done but not paid.
However, the learned trial Court has committed error of fact
and law in granting Rs.1,04,905/ for overhead and overstay.
The excess amount on the count of "overhead" and "overstay"
needs to be modified. Therefore, the amount awarded by the
learned trial Court is required to be modified to the following
extent:
Claim Particulars Amount of claim Amount of claim
granted by trial granted by this
Court Court
Claim On account of Rs.2,00,000.00 Rs.2,00,000.00
No.1 work done but
not paid
Claim On account of Nil Nil
No.2 saving in tender
quantity
Claim Towards security Rs.17751.00 17,751.00
No.3 deposit
C/FA/1400/1996 JUDGMENT
Claim On account of Rs.1,04,905.00 8100.00
No.4 overhead and
overstay
Claim On account of Nil Nil
No.5 material on site
Claim On account of Nil Nil
No.6 extra items of
iron gates
Claim On account of Rs.52,734.30 52734.30
No.7 expected loss of
profits
Claim On account of Rs.15,015.70 15,015.70
No.8 interest as
damages
Total:
3,90,406.00 2,93,601.00
28. Regarding awarding of interest is concerned, at the relevant
point of time, it is contention of the plaintiff that it was the
general practice of granting interest at the rate of 15% was in
existence. However, considering the facts of the case, the
interest granted by the learned trial Court at the rate of 15%
is on higher side which is required to be modified to the
extent that the plaintiff is entitled to get interest at the rate of
12% simple interest from the date of filing of the suit till the
date of filing of the appeal and after filing of this appeal, the
rate of interest would be 9% till realisation of the amount. At
the same time the direction of releasing of deposit of
Rs.22,000/ does not warrant any interference.
29. In view of the aforesaid reasoning, the judgment and decree
passed by learned Civil Judge (S.D.), Valsad on 16.12.1995 in
C/FA/1400/1996 JUDGMENT
Special Civil Suit No.16 of 1989 is hereby modified to the
extent that plaintiff is entitled to recover Rs.2,93,601/
instead of Rs. 3,90,406/ with the interest at the rate of 12%
simple interest from the date of filing of the Suit till the date
of filing of the Appeal and thereafter rate of interest would be
9% from the filing of the Appeal till realisation of the
amount. The direction to release deposit of Rs.22,000/ is
hereby confirmed. No order as to costs. Decree to be drawn in
this Appeal accordingly.
30. Registry to send R&P to the learned trial Court along with a
copy of this judgment as well as decree forthwith.
(DR. A. P. THAKER, J)
SAJ GEORGE
