Karnataka High Court

Managing Director vs A S Hegde on 5 March, 2024

Author: Krishna S Dixit

Bench: Krishna S Dixit

                          -1-
                                     RFA No.1284 of 2016


IN THE HIGH COURT OF KARNATAKA AT BENGALURU

     DATED THIS THE 05TH DAY OF MARCH, 2024

                       PRESENT
     THE HON'BLE MR JUSTICE KRISHNA S DIXIT
                         AND
      THE HON'BLE MR JUSTICE C.M. POONACHA
           R.F.A. No. 1284 OF 2016 (MON)

BETWEEN:

1.   MANAGING DIRECTOR
     M/S CAUVERY NEERAVARI NIGAM LTD.,
     COFFEE BOARD BUILDING,
     4TH FLOOR, BANGALORE-1

     NOW SITUATED AT
     WATER RESOURCES DATA CENTRE,
     3RD AND 4TH FLOOR,
     ANAND RAO CIRCLE,
     BANGALORE-560 001

2.   THE CHIEF ENGINEER
     IRRIGATION DEPARTMENT,
     HEMAVATHY CANAL ZONE,
     TUMKUR, TUMKUR DISTRICT

3.   SUPERINTENDENT ENGINEER
     HEMAVATHY CANAL ZONE,
     TURUVEKERE, TIPTUR TALUK

4.   THE EXECUTIVE ENGINEER
     IRRIGATION DEPARTMENT,
     HEMAVATHI CANAL DISTRIBUTARY
     DIVISION NO.1, TIPTUR TALUK,
     TUMKUR DISTRICT-572227

     NOW SITUATED AT
     NO.4, H.L.B.C DIVISION
     CAUVERY NEERAVARI NIGAM LTD.,
                            -2-
                                    RFA No.1284 of 2016


     TURUVEKERE 572227
                                           ...APPELLANTS
(BY SRI. M R.C RAVI., SENIOR COUNSEL A/W
    SRI. B.R. PRASHANTH., ADVOCATE)

AND:

1.   A S HEGDE
     SINCE DECEASED
     REPRESENTED BY LR's


1(A) SMT RUKMINI S HEGDE
     W/O LATE A S HEGDE
     AGED MAJOR

1(B) SMT SWAPNA ALVA,
     W/O RAMAKRISHAN ALWA
     AGED ABOUT 47 YEARS

1(C) SRI SANDESH HEGDE
     S/O LATE A S HEGDE
     AGED ABOUT 45 YEARS

1(D) SAHANA ALWA
     W/O DHIRAJ ALVA
     AGED ABOUT 45 YEARS

     ALL THE ABOVE ARE
     R/AT: FLAT NO.004,
     VICTORY HARMONY,
     CHOLA NAGAR
     R.T. NAGAR POST
     BANGALORE 560032

2.   STATE OF KARNATAKA
     REP BY THE SECRETARY TO
     GOVERNMENT, IRRIGATION DEPARTMENT
     VIKASA SOUDHA
     VIDHANA VEEDI
     BANGALORE 560001.
                                      ...RESPONDENTS
(BY SRI. CHANDRANATH ARIGA K., ADVOCATE FOR R1(A) TO
R1(D)
                                                    -3-
                                                               RFA No.1284 of 2016


       SRI. PRINCE ISAAC., AGA FOR R2)

     THIS RFA IS FILED UNDER SEC.96 OF CPC., AGAINST
THE JUDGMENT AND DECREE DATED 20.04.2016 PASSED IN
OS.NO.89/2009 ON THE FILE OF THE II ADDL. SR.CIVIL JUDGE
AND JMFC, TUMAKURU, PARTLY DECREEING THE SUIT FOR
RECOVERY OF MONEY.

     THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
28.02.2024,  COMING   ON   FOR  PRONOUNCEMENT   OF
JUDGEMENT, THIS DAY, POONACHA. J., DELIVERED THE
FOLLOWING:

                                         JUDGEMENT

The above appeal is filed by defendant Nos.2 to 5

challenging the judgment and decree dated 20.4.2016 passed

in OS No.89/2009 by II Additional Senior Civil Judge JMFC,

Tumakrur1, whereunder the suit filed by the plaintiff for

recovery of money has been partly decreed and the defendants

have been directed to pay a sum of `2,10,53,864/- together

with interest at 6% pa., from the date of suit till realization.

2. For the sake of convenience, the parties herein are

referred as per their rank before the Trial Court.

3. The relevant facts necessary for consideration of the

present appeal are that the plaintiff is a Class-I Contractor and

he entered into an Agreement on 27.10.1989 (Ex.P24) with

defendant No.5 for excavation and construction of an

embankment. The approved tender was for `35,06,025/- and

Hereinafter referred to as the 'Trial Court'

time for completion of the work was 24 months from the date

of handover. It is the further case of the plaintiff that the entire

land was not handed over and only a portion of the land was

handed over to him for carrying out the work. Further, the

plaintiff has averred with regard to various difficulties in

carrying out the work, as a result of which it is averred that the

plaintiff sustained loss. That the plaintiff and defendant No.5

entered into a supplemental agreement on 3.8.1992 (Ex.D5)

wherein the contracted amount was agreed to be

`80,85,313.27 and the date of completion was 31.3.1993. That

the plaintiff was forced to sign the supplemental agreement as

a result of the intimidation of the defendants to rescind the

original contract.

4. It is the further case of the plaintiff that he

continued to face problems due to various other factors leading

to stoppage of work. It is further averred that a second

supplemental agreement was executed on 21.4.1994 at the

rates of 1993-94. Despite the work not proceeding smoothly

and the various hardships faced, the work was completed to

the satisfaction of the defendants. However, payments in

respect of the work were not made, as a result of which he

continued to make representations to the various officials of the

defendants. Subsequently, vide final bill dated 20.12.2006 the

same payment was made. It is the contention of the plaintiff

that his signature on the final bill cannot be termed as a

voluntary acceptance and the plaintiff caused a legal notice

dated 11.2.2007 demanding payment of amounts due. Since

the amounts not having been paid in terms of the demand

made by the plaintiff, he filed a suit for recovery of a sum of

Rs.2,10,53,864/- together with interest at 18% pa., from the

date of suit till realization.

5. Defendant Nos.2 to 5 entered appearance in the suit

and contested the claim of the plaintiff. In the written

statement, the defendants have in detail denied the allegations

made in the plaint as also set out various details and particulars

as to the manner in which the portion of the property was

handed over to the plaintiff to carryout the work which he was

contracted to do. It is the contention of the defendants that

having regard to the various hurdles faced in carrying out the

work due to variety of reasons including objections from the

land owners, etc., and keeping in mind the hardship caused to

the plaintiff, the defendants have adequately revised the rates

and paid higher amounts substantially increasing the payments

from what was originally agreed. Hence, the defendants

sought for dismissal of the suit.

6. The Trial Court consequent to the pleadings of the

parties framed the following issues:

"1. Whether the plaintiff herein above does prove that for want of acquisition of land which was subject matter of contract by and between the parties hereto the defendants for not handing over the land in question to the plaintiff-contractor well on time, thereby men and material collected by the plaintiff at the relevant time, so as to carryout and to execute the work order were remained unused for a length period of time and the same in turn has caused financial loss to the plaintiff contractor?

2. Whether the plaintiff-contractor does prove that on account of changes of embankment to homegenous section subsequent to the work order, that on account of non-cooperation of defendant authorities in the matter of fetching of water to the site area due to the non- clearance of trees which were in existence on the site area well on time and also on account of failure on the part of the defendants, the plaintiff contractor could not make use of men and material said to have been collected by him at the relevant time and also due to escalation in prices of costs of labour, the plaintiff contractor has sustained untold financial loss?

3. Whether the defendant/authorities do prove that subsequent to the admitted contract and work order, two supplementary agreements/contracts were entered into by and between the parties hereto and said supplementary contracts were entered at the instance of plaintiff-contractor himself and by virtue of the said supplementary contracts, all payments were made by the defendant-authorities well on time not only in accordance with the terms and conditions of main as well as supplementary contracts but also in accordance with law and therefore, the question of incurring of any loss as pleaded by the plaintiff- contractor does not arise at all?

4. Whether the plaintiff contractor is entitled to the relief of recovery of Rs.2,10,53,864/- together with current as well as future interest @ 18% per annum as sought for?

5. What order or decree?"

7. The plaintiff examined himself as PW.1 and

examined a Civil Engineer and Chartered Valuer as PW.2.

Exs.P1 to P42 were marked in evidence. Defendant No.5 has

been examined as DW.1. Exs.D1 to D8 were marked in

evidence. The Trial Court by its judgment and decree dated

20.4.2016 decreed the suit of the plaintiff. Being aggrieved,

the present appeal is filed.

8. Learned Senior Counsel for the appellants -

defendants vehemently contended that the plaintiff has not

proved his claim and the Trial Court, without noticing the

various aspects of the manner in which the work was carried

out and the defendants having adequately from time to time

revised the rates and paid higher amounts, has erroneously

decreed the suit of the plaintiff. Hence, he seeks for allowing of

the appeal and setting aside of the judgment and decree

passed by the Trial Court.

9. Per contra, learned counsel for the first respondent

-plaintiff justifies the judgment and decree passed by the Trial

Court and seeks for dismissal of the above appeal.

10. The submissions of the learned Senior counsel for

the appellants and learned counsel for the respondent No.1

have been considered and the material on record including the

records of the Trial Court have been perused. The questions

that arise for consideration in the present appeal are:

i) Whether the plaintiff has proved that the defendants are

liable to pay the suit claimed amount?

ii) Whether the findings recorded by the Trial Court on the claim made by the plaintiff are just and proper?

Re. question Nos.(i) and (ii)

11. It is forthcoming that although in the plaint, the plaintiff

has elaborately averred with regard to the transaction between the

parties and the various details and particulars as to the manner in

which the work was carried out as well as the difficulties faced by the

plaintiff in carrying out the work, as also the extensive

correspondences exchanged between the parties, it is relevant to

note that in the plaint, the plaintiff has not made any specific plea as

to the nature of claim in respect of which the suit claimed amount

has been sought, as also the details, particulars and the basis for

making the claim.

12. In the examination-in-chief of PW.1 also the plaintiff has

merely reiterated the plaint averments and has not set out the

details/particulars as to the basis of the claim made by him in the

plaint. PW.1 has marked in evidence a calculation sheet as Ex.P38

wherein the amounts mentioned are as follows:

"49. Direct the defendants to pay Plaintiff (as per Document No. 74)

A) A sum of Rs.14,95,000/- (Fourteen Lakhs Ninety Five Thousand only) towards revised rate of S.R. 92-93 for work executed as per supplemental agreement as per Annx. 74-A.

B) A sum of Rs.9,97,088/- (Nine Lakh Ninety Seven Thousand and Eighty-Eight only) towards lead charges for conveying excavated stuff of base stripping of embankment as per Annx. 74-

C) A sum of Rs.23,77,800/- (Twenty Three Lakhs Seventy Seven Thousand and Eight Hundred only) towards lead charges for conveying water for embankment as per Annx. 74-C.

D) A sum of Rs.42,81,809/- (Forty-Two Lakhs Eighty One Thousand Eight Hundred and Nine only) towards lead/lift charges considering the standard swell factor for embankment material as per Annx. 74-D.

E) A sum of Rs.17,79,312/- (Seventeen Lakhs Seventy Nine Thousand Three Hundred and Twelve only) towards idle machineries as per Annx. 74-E.

F) Interest on the delayed payments as per Annx.74-F an amount of Rs.1,49,972/- (One Lakh Forty Nine Thousand Nine Hundred and Seventy Two only) for the actual number of days.

G) Towards the total amount of the above

claims the principle amount is Rs.1,09,31,009/- + 1,49,972/- 1,10,80,981/-, the interest on this principle amount at 12% per annum for 15 years and 10 months (i.e. from 20.01.1994 to 20.11.2009) works out to Rs.1,10,80,981/- x 12% x 190 months 2,10,53,864/- (Two Crore Ten Laths Fifty Three Thousand Eight Hundred and Sixty Four only). This may kindly be granted.

Thus the total claim made as above is Rs.2,10,53,864/- (Two Crore Ten Laths Fifty Three Thousand Eight Hundred and Sixty Four only)."

13. It is forthcoming from the testimony of PW.2 that he

has stated that he is working as a Civil Engineer and Chartered

Valuer in Tumakuru for 26 years and that he has visited the

spot along with the plaintiff and conducted personal enquiry.

Further he has stated with regard to the non availability of

hearting material so as to cover the embankment and that

delay in handing over the land to the plaintiff and that the

same increased the cost of work due to increase of price, etc.

It is further stated in his testimony that the plaintiff was

fetching water to the work spot from 22 kms. That the material

removed had to be disposed of and due to insufficient and non

availability of dumping yard, the plaintiff incurred additional

cost of transportation and dumping and hence has stated that

the plaintiff is entitled to addition of 22%. Further, he has

stated that he has verified the calculation list which is set out at

para 5 of the affidavit evidence of PW2 which is as follows:

              Sl.No.    Description            Amount (in Rupees)


             01.        Claim-A                14,95,000=00


             02.        Claim-B                9,97,088=00


             03.        Claim-C                23,77,800=00


             04.        Claim-D                42,81,809=00


             05.        Claim-E                17,79,312=00


             06.        Claim-F                1,49,973=00


                               Total=          1,10,80,982=00

14. It is relevant to note that in the chart/table set out

in para 5 of the examination-in-chief of PW.2, the plaintiff has

not furnished the details, particulars and basis for the claims

made. The total of the claims made at (a) to (f) at para 5 of

the examination-in-chief of PW.2 is `1,10,80,982/-, and PW.2

has stated that as on the date of completion of the work by the

plaintiff he was entitled to claim the said amount. There is no

plea of the plaintiff with regard to the said claim of

`1,10,80,982/-. The claim made by the plaintiff in the plaint is

in a sum of `2,10,53,864/- and there is no correlation between

the testimony of PW.2 and the claim of the plaintiff.

15. It is further necessary to note that the Trial Court at

para 34 of the judgment has noticed that the plaintiff has made

a claim at Ex.P38 and has extracted the said claims. Further,

the Trial Court has merely stated that it has perused the

contents of Ex.P38 and the oral evidence of PWs.1 and 2 and

has recorded a finding that with regard to the claim made by

the plaintiff that he has claimed 22% over and above the

schedule rates of SR 1990-91. Further, it merely notices the

nomenclature of the claims made and recorded a finding that

the plaintiff is entitled to an amount of Rs.2,10,53,864/-. The

Trial Court has not even discussed the separate claims made by

the plaintiff in Ex.P38.

16. It is clear and forthcoming from the aforementioned

that the findings recorded by the Trial Court in decreeing the

suit of the plaintiff are ex facie contrary to the pleadings of the

parties and without any basis and are liable to be interfered

with.

17. It is forthcoming from a perusal of first page of

Ex.P38, that claims (a) to (g) are made and in justification of

claims (a) to (f), Annexures 74A to 74F which are annexed

along with Ex.P38 have been produced. The said annexures

have not been separately marked. In Annexures 74A to 74F of

Ex.p38 various calculations are placed on record. However, the

plaintiff has not adduced any evidence to justify the details,

particulars and the basis of the claims made vide Ex.P38 and its

annexures. It is further relevant to note that there is no

averment in the plaint nor in the evidence of PW.1 or PW.2 as

to the basis of the claim made in Ex.P38.

18. In the case of LIC v. Ram Pal Singh Bisen2, the

Hon'ble Supreme Court has held as follows:

"5. We are of the firm opinion that mere admission of a document in evidence does not amount to its proof. In other words, mere marking of exhibit on a document does not dispense with its proof, which is required to be done in accordance with law."

(emphasis supplied)

19. It is further relevant to note that the plaintiff has

merely pleaded regarding the extensive correspondence that

was exchanged with the defendants. The plaintiff also seeks to

draw justification to his claim from the fact that in response to

the correspondences that the plaintiff has addressed to the

defendants, various spot inspections and various

recommendations have been made by the officials of the

defendants to consider the claims made by the plaintiff for

enhanced payments to the plaintiff. Although there is extensive

(2010) 4 SCC 491

correspondence that has been placed on record by both the

parties, the same only leads to justification to the contention of

the defendants, that having regard to various factors that were

faced by the plaintiff in the manner of carrying out the work

entrusted, the defendants have revised the rates and paid

additional amounts to the plaintiff much higher than the rates

that were originally contracted by the defendants.

20. In this context it is relevant to note that under the

original agreement dated 27.10.1989 (Ex.P24) the contracted

amount was Rs.35,06,025/- and the basis for the said amounts

is SR rate of 1988-89. In the supplemental agreement dated

3.8.1992 (Ex.D5) the contracted amount is a sum of

`80,85,313.27 and the basis for the same is CSR rate of 1990-

91 and 1991-92. It is further forthcoming that the parties had

entered in to a second supplemental agreement dated

21.4.1994. Further it is relevant to note that consequent to

every grievance that was addressed by the plaintiff, the officials

of the defendants have periodically looked in to the same,

conducted spot inspections and have adequately addressed the

issues raised by the plaintiff. Subsequently, vide the final bill

dated 20.12.2006 a sum of `8,64,611/- was paid to the

plaintiff.

21. It is the contention of the plaintiff that the entire

land was not handed over and only parts of the lands were

handed over. That the construction of the embankment was

required to be done in one stretch and the construction of the

embankment could not be done in parts and the said aspect

contributed to the delay and increase in the cost. However, the

plaintiff has not placed any material on record to prove the fact

that the construction of the embankment could not be done in

parts. Hence, the said contention of the plaintiff is liable to be

rejected.

22. The plaintiff has contended that the second

supplemental agreement was executed on 21.4.1994 at the SR

rate of 1993-94 three months after the completion of the work

which was on 20.1.1994. DW.1 has specifically deposed

regarding the same that when the quantity of the first

supplemental agreement was completed, for the extra quantity,

the second supplemental agreement was executed.

23. DW.1 has further deposed that since the plaintiff

approached the Hon'ble Chief Minister, consequent to which the

Chairman of the Technical Accounts Committee of Defendants

Sri K.C.Reddy was asked to look in to the matter and pursuant

to the submission made in this regard, the Board of Defendants

approved payment of `8,64,611/- which was the final bill,

which specifically noticed that the payment was being made as

a swell factor amount to the plaintiff.

24. Another contention that is averred by the plaintiff in

the plaint is that he has signed the first supplemental

agreement dated 3.8.1992 out of force and coercion and not

out of his free consent. However, the said contention is made

for the first time in the plaint in the year 2009 nearly 17 years

after the document was signed. In none of the

correspondences exchanged by him with the defendants from

the date of signing of the agreement till the filing of the suit, he

has not indicated regarding the same.

25. It is the further contention of the plaintiff that the

acceptance of the final bill dated 20.12.2006 cannot be termed

as voluntary acceptance. The plaintiff having voluntarily

entered in to various contracts with the defendants, carried out

the works under the same, as also having accepted payments

which were enhanced from time to time, the said averment of

the plaintiff regarding compulsion and coercion is ex facie

untenable and liable to be rejected.

26. In the case of Grasim Industries Ltd., v. Agarwal

Steel3, the Hon'ble Supreme Court has held as follows:

(2010) 1 SCC 83

"6. In our opinion, when a person signs a document, there is a presumption, unless there is proof of force or fraud, that he has read the document properly and understood it and only then he has affixed his signatures thereon, otherwise no signature on a document can ever be accepted. In particular, businessmen, being careful people (since their money is involved) would have ordinarily read and understood a document before signing it. Hence the presumption would be even stronger in their case.

There is no allegation of force or fraud in this case. Hence it is difficult to accept the contention of the respondent while admitting that the document, Ext. D-8 bears his signatures that it was signed under some mistake. ...."

(emphasis supplied)

27. The plaintiff has miserably failed in proving that he

is entitled to various amounts from the defendants by making

necessary averments as to the details, particulars and the basis

for such claim. The relevant plea not having been made, the

plaintiff has also not adequately proved regarding the basis for

the claims made by him. The only document where some

details are furnished is Ex.P38 which are not supported by any

other material on record. The plaintiff has miserably failed to

aver as also adduced oral or documentary evidence to justify

the claim made by him in the suit.

28. The Trial Court merely on assumptions and