Kerala High Court
Electronics Technology Park- Kerala vs United Electrolinks on 20 February, 2024
Author: Sathish Ninan
Bench: Sathish Ninan
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE SATHISH NINAN
TUESDAY, THE 20TH DAY OF FEBRUARY 2024 / 1ST PHALGUNA, 1945
RFA NO. 545 OF 2015
AGAINST THE JUDGMENT IN OS 140/2004 OF I ADDITIONAL SUB COURT,
THIRUVANANTHAPURAM
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APPELLANTS/DEFENDANTS:
1 ELECTRONICS TECHNOLOGY PARK- KERALA,
TECHNOPARK, REP. BY ITS C.E.O,
KAZHAKKUTTOM,THIRUVANANTHAPURAM - 695 581.
2 CHIEF EXECUTIVE OFFICER AND REGISTRAR,
ELECTRONICS TECHNOLOGY PARK- KERALA, TECHNOPARK,
KAZHAKKUTTOM, THIRUVANANTHAPURAM - 695 581.
BY ADVS.
SRI.M.SREEKUMAR
SRI.A.ABDUL KHARIM
RESPONDENT/PLAINTIFF:
UNITED ELECTROLINKS,
A DIVISION OF ESSJAY ELECTROLINKS PVT.LTD., REP. BY
MR.SHAJI SEBASTIAN, MD, ESSJAY ELECTROLINKS PVT. LTD.
MANAPPATT CENTRE, HMT JUNCTION,
KALAMASSERY,KANAYANNOOR TALUK, ERNAKULAM 683 104.
BY ADVS.
ALEX ANTONY SEBASTIAN P.A.
M.B.VINOD
THIS REGULAR FIRST APPEAL HAVING COME UP FOR HEARING ON
20.02.2024, ALONG WITH CO.172/2022, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE SATHISH NINAN
TUESDAY, THE 20TH DAY OF FEBRUARY 2024 / 1ST PHALGUNA, 1945
CO NO. 172 OF 2022
AGAINST THE JUDGMENT IN OS 140/2004 OF I ADDITIONAL SUB COURT,
THIRUVANANTHAPURAM
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CROSS APPELLANT/RESPONDENT:
UNITED ELECTROLINKS, A DIVISION OF ESSJAY ELECTROLINKS
(P) LTD., MANAPATTU CENTER, HMT JUNCTION, KALAMASSERY
COCHIN-682104 REP. BY ITS MANAGING DIRECTOR, SHAJI
SEBASTIAN.
PRESENTLY THE ENTITY IS MERGED WITH ESSJAY
ELECTROLINKS (P) LTD., KALLINGAPARAMBIL, NOCHIMA NAD
P.O., ALUVA, ERNAKULAM PIN 683563 AND NOW OPERATING AT
ITS CORPORATE OFFICE AT KALLINGAPARAMBIL, NOCHIMA, NAD
P.O., ALUVA REP. BY ITS ADDL. DIRECTOR, LISHA JAYAN
AGED 50 YEARS, W/O LATE SRI. JAYAN K.S., KAKKATIL
HOUSE, ALATTUCHIRA P.O., KODANAD, PERUMBAVOOR, PIN-
683544.
BY ADVS.
ALEX ANTONY SEBASTIAN P.A.
M.B.VINOD
RESPONDENTS/APPELLANTS:
1 ELECTRONICS TECHNOLOGY PARK- KERALA, TECHNOPARK, REP.
BY ITS CEO, KAZHAKKUTTAM, THIRUVANANTHAPURAM, PIN
695581.
CO NO. 172 OF 2022 -2-
2 CHIEF EXECUTIVE OFFICER & REGISTRAR, ELECTRONICS
TECHNOLOGY PARK-KERALA, TECHNOPARK, REP. BY ITS CEO
KAZHASKKUTTAM, THIRUVANANTHAPURAM PIN 695581.
THIS CROSS OBJECTION HAVING COME UP FOR HEARING ON
20.02.2024, ALONG WITH RFA.545/2015, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
SATHISH NINAN, J.
= = = = = = = = = = = = = = = = = =
R.F.A. No.545 of 2015
&
Cross Objection No.172 of 2022
= = = = = = = = = = = = = = = = = =
Dated this the 20th day of February, 2024
J U D G M E N T
The suit for money under a works contract was
decreed in part. The defendant and the plaintiff are
before this Court through appeal and cross objections
respectively.
2. As per Ext.B2 dated 19.02.2001, the defendant
invited tender for electrification of their building.
The plaintiff was the successful tenderer. Ext.A4 dated
26.04.2001 is the agreement between the parties. The
work was to be completed within four months. However,
the plaintiff failed to complete the work within time.
As per Ext.A20 = Ext.B13 dated 10.07.2002, the contract
was terminated and the work was re-tendered. The suit
was filed for realisation of the balance amounts payable
to the plaintiff, for the works done by him.
RFA No.545/2015 &
3. The defendant contended that there was
inordinate delay on the part of the plaintiff in
completing the work which led to the re-tender. The re-
tender was for a higher rate which resulted in loss to
the defendant. So also the tender contained a penalty
clause for recovery of penalty at the rate of 1% of the
probable amount of contract for every week, subject to a
maximum of 10%. The defendants are entitled to realise
the said amount from the plaintiff.
4. The trial court found that the plaintiff was
responsible for the delay in carrying out the work. It
was held that the defendant is entitled to realise the
loss suffered consequent on the re-tender. The claim for
penalty for the delay was declined stating that the
plaintiff was permitted to continue with the work even
after the period stipulated in the contract and that
thereafter penalty clause could not be invoked. It was
also held that the relevant clause enabling recovery of
RFA No.545/2015 &
penalty is only during the currency of contract and not
after its termination. Challenging the declining of
penalty, the defendant has preferred the appeal. The
plaintiff is in cross objections challenging the grant
of decree for damages under the head of re-tender.
5. Heard learned counsel on either side.
6. The points that arise for determination are :-
(i) Was the plaintiff responsible for the delay in
completion of the works under the contract ?
(ii) Was the trial court right in having held the plaintiff
liable for the loss/damages consequent on the re-tender ?
(iii) Was the trial court right in having declined the claim
of the defendant for the penalty?
(iv) Without a claim of set-off, is the defendant entitled to
seek for recovery of amounts under the heads of damages
consequent on re-tender and penalty for delay?
7. As per the agreement between the parties, the
work was to be completed within four months. The
RFA No.545/2015 &
plaintiff contended that there was delay on the part of
the defendant in handing over the site which contributed
the delay in performance. Ext.A5 communication by the
plaintiff to the District Electrical Inspector would
indicate otherwise. There is no material to the contrary
to suggest that there was delay in handing over of the
site. The trial court found against the contention of
the plaintiff. Ext.A7 is the time schedule suggested by
the plaintiff to the defendant wherein the work was to
be completed by 08.08.2001. Ext.A9 is the revised time
schedule. Therein the date for completion is suggested
as 30.08.2001. Ext.A15 is yet another revised time
schedule submitted by the plaintiff. Therein the date of
completion is given as 30.09.2001. Ext.A16 is the letter
dated 11.10.2001 by the plaintiff seeking for time for
completion. Ext.B12 is the letter dated 18.06.2002 by
the plaintiff to the defendant wherein he has pointed
out his inability to complete the work due to pendency
RFA No.545/2015 &
of the proceedings with the Bank at the Debts Recovery
Tribunal. On the materials it is evident that the
plaintiff was responsible for the delay. The trial court
has rightly found so.
8. The trial court has allowed the defendant to
deduct an amount of ` 4,21,531/- towards damages
suffered consequent on the re-tendering of the work. It
is the defendant's contention that the plaintiff's quote
was 17% below the probable amount of contract whereas in
the re-tender the quote was 6% below the probable amount
of contract. This has resulted in damages of 11%. The
defendant quantified the same at ` 4,21,531/-. The
defendant claims that they have the right to recover the
said amount from the plaintiff.
9. Though the defendant claims that the re-
tendering was at 6% below the PAC, curiously no document
in the said regard is produced. When the defendant
claims damages that has allegedly occasioned consequent
RFA No.545/2015 &
on the re-tendering, it was for the defendant to produce
the relevant documents to prove the damages. The
documents relating to the re-tendering, including the
quote at 6% below the probable amount of contract, was
available with the defendants. However, the defendant
has not produced the same before the Court. The
contention that there was difference of 11% in the re-
tender, remained unsubstantiated. The finding of damages
by the trial court is without any material. The said
finding is liable to be interfered with.
10. It is the case of the defendant that the trial
court went wrong in not awarding penalty for the delay.
The agreement permits recovery of 1% probable amount of
contract for damages for every week of delay subject to
a maximum of 10%. It is to be noticed that, but for a
claim that the defendant is entitled to realise the
penalty, there is no prayer for set off. Order VIII Rule
6 of the Code of Civil Procedure reads thus:-
RFA No.545/2015 &
"6. Particulars of set-off to be given in written statement.--
(1) Where in a suit for the recovery of money the defendant
claims to set-off against the plaintiff's demand any ascertained
sum of money legally recoverable by him from the plaintiff, not
exceeding the pecuniary limits of the jurisdiction of the Court,
and both parties fill the same character as they fill in the
plaintiff's suit, the defendant my, at the first hearing of the suit,
but not afterwards unless permitted by the Court, present a
written statement containing the particulars of the debt sought
to be set-off.
(2) Effect of set-off.- The written statement shall have
the same effect as a plaint in a cross-suit so as to enable the
Court to pronounce a final judgment in respect both of the
original claim and of the set-off; but this shall not affect the
lien, upon the amount decreed, of any pleader in respect of the
costs payable to him under the decree.
(3) The rules relating to a written statement by a
defendant apply to a written statement in answer to a claim of
set-off."
Section 8 of the Court Fees and Suits Valuation Act
prescribes the fee payable for set off to be the same as
that for a plaint. There is no specific plea of set off
RFA No.545/2015 &
and no court fee is paid. At paragraph 26 of the written
statement what is pleaded is that, "The final bill is produced
after the termination of the contract and the said bill could be settled only
after fixing the liabilities, penalties, risk and cost, damages, compensation,
expenses etc." There is no plea that the amounts due to the
defendant were already adjusted. Therefore, in the
absence of a plea of set off there was no occasion for
the trial court to adjudicate on the said claim.
Therefore, though for varying reason from that of the
trial court, the rejection of the claim of the defendant
under the head of penalty by the trial court does not
warrant interference. So also, with regard to the claim
for damages for re-tendering which has been dealt with
earlier, the defendant ought to have raised a plea of
set off.
11. Therefore, while upholding the judgment of the
trial court to the extent it declined the defendant's
claim for penalty, the grant of damages consequent on
RFA No.545/2015 &
re-tendering is to be set aside.
12. The trial court had found that the decree
amount due to the plaintiff from the defendant is
` 22,54,621/-. From the said amount the trial court
deducted ` 4,21,531/- towards the claim for damages for
re-tender. Such deduction is not liable to be made.
Plaintiff is entitled to realise ` 22,54,621/-.
13. The trial court has granted interest from
10.07.2002 which is the date of termination of the
contract till date of realisation. It is to be noticed
that, though the termination of the contract was on
10.07.2002 the suit was filed only on 11.03.2004 ie.
after the period of almost two years. Considering the
delay involved, I am of the opinion that the plaintiff
is not entitled for interest during the said period and
the same is declined. Plaintiff is entitled for interest
as granted by the trial court but from the date of suit.
RFA No.545/2015 &
14. The learned counsel for the defendants-
appellants would point out that, pursuant to the decree
the defendant has deposited the decree amount before the
trial court on 09.01.2017. Necessarily, the plaintiff
shall not be entitled for interest for such amount from
the date of deposit.
Resultantly, the appeal and cross objection are
allowed and a modified decree is passed as hereunder.
The plaintiff is granted a decree for realisation of an
amount of ` 22,54,621/- with interest at the rate of 6%
per annum from the date of suit till realisation. It is
clarified that the amount deposited by the defendant
pursuant to the decree of the trial court shall be
liable to be deducted therefrom and that the plaintiff
shall not be entitled for interest for such amount, from
the date of deposit. No costs.
Sd/-
SATHISH NINAN
JUDGE
kns/- //True Copy// P.S. to Judge
