M/S Indicon Westfalia Limited ... vs Yogendra Nath Tiwary
2023 Latest Caselaw 2065 Jhar

         IN THE HIGH COURT OF JHARKHAND AT RANCHI
                 (Commercial Appellate Jurisdiction)
                 Commercial Appeal No. 5 of 2019
                              -------
M/s INDICON Westfalia Limited through its authorised
representative Sri Biswajit Mukherjee, aged about 42 years, s/o
late Sudin Kumar Mukherjee, r/o 46A, Rajendra Avenue, PO+PS-
Uttarpara, District-Hooghly (W.B) 712258 having its registered
office at Thapar House, 25, Brabourne Road, PO-Burrabazaar, PS-
Hare Street, Kolkata, West Bengal-700001, previously known as
M/s Karam Chand Thapar & Bros., (Coal Sales), having its
principal office at Thapar House, 25, Brabourne Road, Kolkata,
West Bengal-700001.                                  ... Appellant

                             Versus
Yogendra Nath Tiwary, aged about 56 years, s/o late Pandit
Mahendra Nath Tiwary, Proprietor of M/s Yogendra Construction
Works, having his place of work at Dugda, PO & PS-Dugda,
District-Bokaro, Jharkhand 828404              ... Respondent


                       PRESENT
      HON'BLE MR. JUSTICE SHREE CHANDRASHEKHAR
        HON'BLE MR. JUSTICE RATNAKER BHENGRA

For the Appellant         : Mr. Amit Kumar Das, Advocate
For the Respondent        : Mr. Abhijeet Kumar Singh, Advocate
                               --------
                                                    ORDER

18th May 2023 Per, Shree Chandrashekhar, J.

The judgment in Original Suit No. 7 of 2017 passed by the Commercial Court at Dhanbad has been challenged by M/s INDICON Westfalia Limited (in short, defendant-company) by filing the present commercial appeal under section 13(1-A) of the Commercial Courts Act, 2015.

2. Original Suit No. 7 of 2017 was instituted for a money decree for Rs.1,77,39,940.96/- including taxes and interest @ 12% per annum w.e.f 1st January 2014. In the suit the plaintiff has examined himself as PW1 and laid in evidence work order vide Exhibit-1, amended work order vide Exhibit-2 and running bills and letter dated 23rd September 2013 to claim a money decree. Arindam Dutta who was the authorised signatory of the defendant- company was examined as DW1 and he has proved 20 documents including general and special conditions of contract, work order no.

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BW/KPO/002907/481/12-13/000681, original MOM dated 19 th September 2012 etc. to resist the money claim made by the plaintiff, and to support the counter-claim to the tune of Rs. 31,19,727/-.

3. The plaintiff who is the respondent before us has pleaded that a work order dated 1 st November 2012 was issued for execution of civil foundation works in two mines at Katras and Keshargarh. The work order was amended vide order dated 6th May 2013 and the scope of the work was enlarged and extended to the mines at Katras, Keshargarh and Kusunda. The initial cost for the work order dated 1st November 2012 was Rs.1,37,00,000/- which was enhanced to Rs.2,05,50,000/- after the civil work for the 3 rd mine was included in the amendment order dated 6 th May 2013. According to the plaintiff, the running bills were raised but payment was made after deductions on various counts. The running bills contained details of the work executed and the same was supervised and verified by the agent of the defendant-company who put his endorsement to the effect that "measurement has been certified and found OK".

4. The plaintiff has claimed that it completed the amended work order dated 6th May 2013 but the defendant-company did not pay about half of the amount payable to it which was to the tune of Rs.1,38,97,831.92/-. On the contrary, the defendant-company was pressurizing the plaintiff to hand over the work site without making any further payment and, therefore, a meeting was held on 5 th October 2013 between the plaintiff and the Marketing Manager of the defendant-company and it was agreed that Rs.30,00,000/- shall be paid on 7th October 2013 towards the work executed at Kusunda mining. However, no payment was made by the defendant-company and the officials of the defendant-company took forcible possession of the three sites in December 2013. The plaintiff has further pleaded that to mask the forcible possession of the three sites taken over by the defendant-company, letter dated 3rd January 2014 was issued to him requiring him to hand over possession of the three sites.

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5. While the dispute between the parties continued, the plaintiff was asked to come for a meeting in the 3 rd week of May 2016 at Kolkata office of the defendant-company. Accordingly a meeting was held on 31 st May 2016 in which the plaintiff was assured of a final decision. On 6 th June 2016 a letter was written by Pradip Kumar Paul who was the Manager (Procurement) of the defendant-company asking the plaintiff to submit documents such as approval for extra-work, challans for PF & ESIC and statement for working months and virtual completion certificate for Katras. Constrained, the plaintiff issued legal notice on 13 th October 2016 seeking refund of Rs.98,51,561.63/- and statutory taxes such as service tax, sales tax etc. with interest @ 12% per annum from 1st January 2014. On 2nd November 2016 the defendant-company denied its liability to pay the aforesaid due to the plaintiff.

6. The defendant-company contested the suit by filing written statement raising a plea of bar under section 11 of the Commercial Courts Act on the ground that the Principal Office of the defendant-company is at Kolkata in the State of West Bengal and the documents and records are available at Kolkata office which is outside the jurisdiction of the Commercial Court at Dhanbad. It has also set up a defence that the suit is hit under Order VII Rule 11 of the Code of Civil Procedure and barred by the law of limitation. The defendant-company has further pleaded that running bills were raised by the plaintiff beyond the scope of MOM and the work order and that too without obtaining written approval from the competent authority of the defendant-company. The defendant-company has also claimed Rs.31,19,727/- which was excess payment made to the plaintiff on evaluation of the bills and calculation.

7. The defendant-company pleaded that Mr. A.K. Sinha was the Supervisor at the site but was not authorized to approve any extra-work beyond the scope of work order. According to the dedendant-company the progress of work was not as per the time-frame and was behind the schedule but the plaintiff stopped work at all the sites and informed the defendant-company that he 4 Commercial Appeal No. 5 of 2019

would not execute the pending work. Therefore, vide letters dated 9th September 2013 and 17th September 2013 the plaintiff was informed that in the event he does not execute the remaining work the defendant-company shall be compelled to get the remaining work executed through another agency at the risk and cost of the plaintiff. It has denied that any assurance was given to the plaintiff that Rs.30,00,000/- shall be paid to him. The allegation of unauthorized taking over the work sites by the officials of the defendant-company has also been denied.

8. On the basis of the pleadings of the parties, the following issues were framed for determination by the Commercial Court at Dhanbad:

"I. Whether this suit is maintainable?

II. Whether this suit barred under section 11 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Court Act, 2015?

III. Whether this court have territorial jurisdiction to entertain and determine the present suit in view of the provisions contained in section 20(A) CPC ?

IV. Has the defendant vide work order no.BW/KPO/002907/481/12- 13/00681 dated 01-11-12 as well as vide amendment order no. BW/KPO/A/002907/481/13-14/00089A dated 06-05-13 placed orders for execution of various civil works upon the plaintiff and the plaintiff executed those orders or substantial part thereof to the satisfaction of the officials of the defendant?

V. Has the defendant failed and neglected to pay considerable portion of the bills raised by the plaintiff for execution of the aforementioned orders and as such Rs.1,38,97,831.92/- became payable by the defendant to the plaintiff and the plaintiff is entitled to get a decree in respect of aforementioned outstanding dues with interest thereon? VI. Whether an amount of Rs.31,19,727/- should be refunded by the plaintiff to the defendant in as much as the Service Tax is paid by the defendant ?

VII. Whether the bill presented by the plaintiff were duly certified by a competent authority of the defendant?

VIII. Whether the defendant is liable to pay for any item of work beyond the scope of the work order ?

IX. Whether the time is the essence of contract ? And the plaintiff failed to complete the Civil job withing stipulated time? And the defendant has the reserve the right to get the incomplete job done through other available sources?"

9. The Commercial Court has considered the rival claims regarding default and neglect in paragraph no.11 of the judgment under challenge. The Commercial Court has rendered the following findings:

"13. After going through above discussed material on record I find that the defendant/company have allotted work to the plaintiff through work order dated 01-11-12 and amended work order dated 06-05-13 and substantial part of the work were done by the plaintiff. Issue no. IV is accordingly decided. The plaintiff in the light of above discussed material 5 Commercial Appeal No. 5 of 2019

on record is not required to refund Rs.31,19,727/- to the defendants. Issue no. VI is accordingly decided. I have already discussed the provisions of special and general terms Exhibit A as well as various letters written by both the sides to each other in preceding para of this Judgment which goes to show that the plaintiff was never informed by the defendant that they have to get their bills certified by the competent authority. Issue no. VII is accordingly decided. On the basis of above discussed evidence on record it is held that the defendant is liable to pay Rs.96,36,434/- as mentioned in Exhibit 3/30, 3/2, 3/3 submitted by the plaintiff himself to the defendant. Issue no. V and VIII are accordingly decided."

10. The aforesaid findings of the Commercial Court have been challenged by the defendant-company inter alia on the following grounds:

(i) the claim for extra-work could not have been allowed without written instruction of the employer,

(ii) the claim for extra-work has been accepted by the Court without any adjudication and merely on the basis of authentication by the supervisor, and

(iii) the issue of limitation has not been dealt with and counter-claim of the defendant-company has been declined without any adjudication.

11. The powers under section 13(1-A) of the Commercial Courts Act, 2015 are no doubt extensive in so far as an appeal arising from the judgment of a Court exercising original civil jurisdiction is concerned, and the limitations provided under sub- section (1-A) by the proviso to section 13 are confined to the matters arising from the arbitration or the order passed under Order XLIII of the Code of Civil Procedure. Therefore in exercise of the powers under sub-section (1-A) to section 13, the High Court can reappreciate the evidence, record its independent findings, affirm or interfere with the judgment under challenge. However, there is an implicit limitation on exercise of the powers by the High Court under sub-section (1-A) that every error in law and of fact cannot be gone into and the High Court should not proceed in a manner as if it is on a mistake-finding mission in the judgment under challenge.

12. In the written statement, the defendant-company has taken an objection that the suit was barred by the law of limitation. This objection has been raised on the premise that the work order was issued on 1st November 2012, the amended work order was 6 Commercial Appeal No. 5 of 2019

issued on 6th May 2013 and the suit was instituted on 16 th March 2017. In the written submissions filed on behalf of the defendant- company, this plea has been elaborated by taking a stand that the plaintiff stopped work in December 2013 and the suit was filed on 16th March 2017 whereas the period of limitation for claiming money by the plaintiff for the work done for the defendant is 3 years from the date of execution of the work.

13. Section 3(1) of the Limitation Act casts a duty upon the Court to dismiss a suit even if limitation is not set-up as defence on the ground that the suit was instituted after the prescribed period of limitation. In "Maqbul Ahmad v. Onkar Pratap Narain Singh" AIR 1935 PC 85, the Privy Council has held that the Court is bound under section 3 of the Limitation Act to ascertain for itself whether the suit before it is within time and if it fails to do so and entertain a suit or claim which is barred by limitation the Court acts without jurisdiction.

14. The issue of limitation was raised in the written statement but not contested by the defendant-company inasmuch as it has raised no grievance against non-framing of a specific issue on limitation. This is not in dispute that except raising a bald plea in the written statement no argument was advanced by the defendant-company to challenge maintainability of the claims as time-barred. Therefore, the plea of limitation seems to have been taken casually by the defendant-company. There is no specific pleading in this regard and this issue was not contested before the Commercial Court inasmuch as no issue was framed that the suit was filed beyond the period of limitation. Article 18 of the Limitation Act, 1963 provides the period of limitation of 3 years where no time has been fixed for payment. In a work contract, whereunder the time for execution of the work is fixed the time for payment for the work executed must also be deemed to have been fixed under the contract. Secondly, the plaintiff has pleaded that the cause of action last arose on 2nd November 2016 when the defendant-company in its reply to the legal notice issued by the plaintiff denied its liability to pay Rs.98,51,561.63 and statutory 7 Commercial Appeal No. 5 of 2019

taxes with interest @ 12% per annum. The reply dated 2 nd November 2016 has been admitted by the defendant-company and, viewed thus, Original Suit No.7 of 2017 was instituted within the period of limitation.

15. The objection taken by the defendant-company that the Commercial Court at Dhanbad has no jurisdiction to entertain the suit is also without any substance. Section 11 of the Commercial Courts Act, 2015 provides that a Commercial Court or a Commercial Division shall not entertain or decide any suit, application or proceedings relating to any commercial dispute in respect of which the jurisdiction of a civil Court is either expressly or impliedly barred under any other law for the time being in force. The jurisdiction of the Commercial Court at Dhanbad to entertain the money suit instituted by the plaintiff is neither expressly nor impliedly barred under any other law. The works under reference were for carrying civil works in 3 mines at Katras, Keshargarh and Kusunda which fall within the territorial jurisdiction of the Commercial Court at Dhanbad. Section 6 of the Commercial Courts Act outlines jurisdiction of the Commercial Courts. Explanation to section 6 provides that the suit or application relating to a commercial dispute can be instituted as per the provisions of sections 16 to 20 of the Code of Civil Procedure. The cause of action for instituting Original Suit No.7 of 2017 or atleast a part of cause of action has arisen within the territorial jurisdiction of the Commercial Court at Dhanbad and, therefore, the said Court had jurisdiction to entertain the money suit.

16. The defendant-company has laid the foundation for denying the claim of the plaintiff for payment of Rs.1,77,39,940.96/- on the basis of clause 10.0 of the work order which provided that any item of work which is not covered under the work order shall be termed as "extra item", for which the contractor shall first notify his rate and seek a written agreement from the Engineer before commencing the work.

17. However, the stand taken by the defendant-company that there was a specific stipulation under the contract that for 8 Commercial Appeal No. 5 of 2019

extra-work written instruction shall be issued by the employer and every extra-work must be certified by the authorised officer has not been accepted by the Commercial Court. Mr. Amit Kumar Das, the learned counsel for the appellant has submitted that the specific case of the defendant-company is that extra-payment to the tune of Rs.31,19,727/- was made to the contractor. However, on the contrary, the Commercial Court has accepted the claim for extra- work. The Commercial Court has discussed this issue in paragraph no.11 of the judgment dated 18 th March 2019 and recorded a finding that the claim for extra-work is supported by authentication by the Supervisor. The Commercial Court has noticed that the defendant-company admitted the running bills which were counter-signed by its Supervisor A.K. Sinha. The other three bills vide Ext. Nos. 3/1, 3/2 and 3/13 not counter-signed by Mr. A.K. Sinha were also accepted by the defendant-company and payment for Ext. Nos. 3/1 & 3/2 bills were made to the plaintiff. These bills were raised for extra-work for excavation and the defendant-company had deducted TDS in respect of all the bills, in respect of which an objection was taken by the defendant-company that those were for extra-works. Moreover, Arindam Dutta who was examined by the defendant-company as DW1 admitted in the Court that A.K. Sinha was Overseer and Supervisor of the defendant- company and in charge of the work sites.

18. On a consideration of the materials before him, the Presiding Officer of the Commercial Court at Dhanbad has recorded a finding that the plaintiff executed substantial part of the work and submitted running bills amounting to Rs.2,15,12,479/-. However, the defendant-company has raised objection to extra- work after more than 3 years. We are of the opinion that in view of the certification by the Supervisor of the defendant-company it must be held that the claim raised by the plaintiff for extra-work is based on the actual work executed by him. Moreover, the documents vide Exhibits nos. 3/30, 3/2 and 3/3 were not under challenge and the Supervisor was not produced as a witness by the defendant-company to deny authentication of extra-work by him.

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The plea raised by the defendant-company that no extra-work was carried by the plaintiff was without any basis and not supported by any evidence. In our opinion, once it is found that the plaintiff company was entitled for extra-work claim, the counter-claim on the foundation of extra-payment must automatically fail.

19. In view of the aforesaid discussions, Commercial Appeal No. 5 of 2019 is dismissed.

(Shree Chandrashekhar, J.)

(Ratnaker Bhengra, J.)

Jharkhand High Court, Ranchi Dated: 18th May 2023 Amit A.F.R