[Cites 2, Cited by 0]
Kerala High Court
The Rubber Board vs Teji Paul on 26 March, 2026
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R.F.A. No. 500 of 2014
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P.
THURSDAY, THE 26TH DAY OF MARCH 2026 / 5TH CHAITHRA, 1948
RFA NO. 500 OF 2014
AGAINST THE JUDGMENT AND DECREE DATED 19.07.2013 IN O.S.
NO. 318/2011 ON THE FILES OF THE PRINCIPAL SUB JUDGE,
KOTTAYAM
APPELLANT/DEFENDANT:
THE RUBBER BOARD,
SUB JAIL ROAD, KOTTAYAM-686 009
REPRESENTED BY ITS SECRETARY
BY ADVS.
SRI.V.ABRAHAM MARKOS
SRI.ABRAHAM JOSEPH MARKOS
SRI.ABRAHAM VARGHESE THARAKAN
SRI.BINU MATHEW
SRI.TOM THOMAS (KAKKUZHIYIL)
RESPONDENT/PLAINTIFF:
TEJI PAUL,
AGED 47 YEARS, S/O.PAUL,
PUTHOOPARAMBIL HOUSE,
NJEEZHOOR VILLAGE, THIRUVAMPADI P.O.,
KOTTAYAM DISTRICT, PIN-686 504.
ADV. NIREESH MATHEW
THIS REGULAR FIRST APPEAL HAVING COME UP FOR HEARING
ON 26.03.2026, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
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R.F.A. No. 500 of 2014
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MOHAMMED NIAS C.P., J.
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R.F.A. No. 500 of 2014
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Dated this the 26th day of March, 2026
JUDGMENT
The Rubber Board, the defendant in O.S. No. 318 of 2011
on the files of the Principal Sub Judge, Kottayam, a suit for
realisation of an amount of Rs. 2,71,869/- instituted by the
respondent herein, is the appellant.
2. The respondent/plaintiff and the defendant/appellant
had entered into a contract pursuant to a tender floated for the
construction of Labour Lines at the Rubber Research Institute of
India, Kottayam. On 04.03.2008, the plaintiff and the defendant
executed Ext. B3, under which the work had to be completed
within six months in accordance with the specification and
schedule appended to the agreement. The plaintiff alleges that the
work of the basement was completed before 15th October, 2008, and
he requested part payment in October itself. The defendant had
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paid an amount of Rs. 1,40,000/- on 02.09.2008, but the balance
amount of Rs. 1,38,447/- was paid only on 12.05.2009. The plaintiff
would allege that the delay in making payment had affected
further construction. It is also pleaded that after the
commencement of the work, the plaintiff was requested to
construct a side retention wall over and above the work allotted as
per Ext.B3 agreement, whereby the plaintiff was required to do the
work amounting to 476.18 m3 instead of 176 m3 as originally agreed
between the parties.
3. It is alleged that, though the plaintiff requested
enhancement of the rates based on the revision made by the PWD,
the defendant did not accept the same and instead issued Ext.A3
letter dated 06.07.2009 to restart the work. The plaintiff would
allege that during that period, bricks were not available for
construction, and therefore, the plaintiff couldn't restart the work
as required. The plaintiff then informed the defendant about his
inability to restart the work and expressed his willingness to take
the final measurements for the work already completed.
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Accordingly, the defendant had taken the final measurements on
13.07.2009. The plaintiff further submits that thereafter, the
defendant, without inviting any tender, had entrusted the work to
a person by the name Reji T. Chacko. It is pleaded that the
defendant had enhanced the rates by giving undue favour to the
second contractor.
4. The plaintiff claimed an amount of Rs. 80,245.30/-
towards the work completed by him. He also claimed the return of
the security deposit to the tune of Rs.1,03,450/- and a further
amount of Rs.25,000/- towards the value of tools illegally detained
by the defendant. Thus, on the date of the suit, the plaintiff claimed
an amount of Rs. 2,51,030/- with further interest at the rate of 12%
per annum.
5. The defendant filed a written statement contending
that the plaintiff was awarded the work as per a work order dated
13.02.2008, calling upon him to execute an agreement within seven
days and directing him to start the work within two weeks and to
complete the same within six months thereof. It was stated that the
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plaintiff executed the agreement only on 04.03.2008, and the work
was started only on 01.06.2008. As per the agreement, the date of
completion of the work was 27.08.2008, but even the construction
of the foundation was completed only on 15.10.2008. It is admitted
by the defendant that during the progress of the work, an
additional quantity of work was also directed to be done at the
same rates and thus 476.18 m3 of random rubble masonry work had
to be carried out. It is submitted by the defendant that an amount
of Rs. 1,40,000/- was paid to the plaintiff on 02.09.2008, but after
the completion of the foundation work in October 2008, the
plaintiff did not go ahead with the construction. After repeated
requests, the defendant again paid an amount of Rs.1,40,000/-,
which was released on 09.02.2009 on condition that the plaintiff
would resume the work. But the plaintiff did not do so and issued a
letter dated 26.06.2009 seeking enhancement of the rates. By letter
dated 06.07.2009, the defendant gave an ultimatum to the plaintiff
to restart the work by 15.07.2009, making it clear that the
defendant would be forced to terminate the contract without
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further notice in the event of failure to act as demanded.
6. The plaintiff, vide letter dated 11.07.2009, informed the
defendant that he was not able to carry out the balance work and
requested to take the final measurements on 13.07.2009. The
defendant would allege breach on the part of the plaintiff for not
carrying out the work in terms of Ext.B3 agreement. However, it is
submitted that the final measurements taken by them were
accepted by the plaintiff. In the written statement, the plaintiff was
informed that an amount of Rs.39,120.99/- is due to the defendant.
However, there is no counterclaim as such that was raised by the
defendant. The allegation regarding the non-release of tools was
denied by the defendant. It is further contended that there is no
need for inviting a tender for awarding the balance work, as the
said work was awarded on the same rates and there was no change
of materials and quantity for the work.
7. The plaintiff was examined as PW1 and Exts.A1 to A16
and A17 series were marked. On the side of the defendant, DW1 was
examined, and Exts.B1 to B16 were marked.
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8. The trial court found that even going by the case of the
defendant, the plaintiff was requested to do the excess work over
and above the work mentioned in Ext.B3 agreement. It was also
found that, contrary to the initial work of 176 m3, the plaintiff was
asked to do the additional work amounting to 476.18 m 3 without
any enhancement of the rates or increasing the time schedule. The
trial court, accordingly, found that the said circumstances led to
the non-completion of the entire work. Accordingly, the trial court
found that there was an abrupt escalation of the volume of work
within the time frame originally fixed, which was for a lesser
quantity of work and thus the contention of the defendant that
there is a delay on the part of the plaintiff in completing the work
as stipulated in Ext.B3 agreement was not accepted. For the same
reason, it was found that the alleged delay raised by the defendant
also cannot be accepted, despite the finding that the plaintiff had
not completed the work originally granted as per Ext.B3.
9. The trial court further found that the loss sustained by
the defendant was not substantiated by the pleadings or evidence.
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It was also found that the defendant did not care to re-tender the
work and instead the same was assigned to Reji T. Chacko on the
reason that he had agreed to complete the work left behind
without any additional cost. This contention of the defendant was
also not accepted as the trial court found that the major portion of
the work relating to fixing of door frame and shutters, fixing of
window frame and shutters, earth work done with the help of JCB
and tippers and the balance earth leveling work, with a value of
Rs.3,55,006/- were excluded from the work assigned to Reji T.
Chacko. Thus, it was found that the contention of the defendant
was only to cover up the irregularity committed by them in
assigning the work without inviting a fresh tender.
10. Although in the Annexure to the written statement,
the defendant had computed the extra expenses incurred by them
in respect of the works shown as item Nos. 3 to 6, which were
excluded from the terms of contract with Reji T. Chacko, the said
contention was not accepted as it was the case of the defendant
that the remaining work was assigned to him without any extra
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cost. As regards the contention of the defendant for forfeiting the
security deposit and EMD, it was found by the trial court that the
defendant breached the provisions of Ext.B3 agreement by not re-
tendering the work in accordance with Ext.B3 agreement. In this
context, the specific contention of the defendant that they did not
re-tender the work because Reji T. Chacko had agreed to complete
the balance work at the same rates was considered, and it was
found that the defendant could not prove any loss due to the
default on the part of the plaintiff.
11. Under such circumstances, the trial court, relying on
the judgment of this Court in Abdulla v. State of Kerala [2001 (3)
KLT 903], which relied on the judgment of the Supreme Court in
Union of India v. Rampur Distillery & Chemicals Co. Ltd. [AIR
1973 SC 1098], found that the party complaining of breach must be
in a position to adduce evidence whereby the court can access
reasonable compensation. In the instant case, it was found that the
defendant could not prove that the alleged breach of contract on
the part of the plaintiff led to any legal injury. The defendant had
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no case that they had re-tendered the work and thereby sustained
a loss as a higher amount was to be incurred. Thus it was found
that there was no justification for the refusal on the part of the
defendant to release the security deposit and EMD to the tune of
Rs.1,03,450/- to the plaintiff.
12. The trial court also considered the fact that the
defendant had admitted in the written statement that the actual
value of the work done by the plaintiff was Rs. 6,65,473.30/-,
towards which only Rs.5,85,228/- was paid by the defendant.
Accordingly, it was found that the defendant is bound to pay an
amount of Rs. 80,245.30/- along with the security deposit and the
EMD amounting to Rs. 1,03,450/- with 12% interest from the total
amount of Rs.1,83,695.30/- from 13.07.2013, the date when joint
measurements were taken. Thus, adding the interest of Rs.
88,173.74/-, it was found that the aggregate amount to be paid was
Rs. 2,71,869/-. The plaintiff's claim for the value of the tools was
rejected. Accordingly, the suit was decreed directing the defendant
to pay an amount of Rs.2,71,869/- within thirty days, failing which
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the plaintiff was entitled to recover and realise the amount with
interest at the rate of 6% per annum from 19.07.2013 till
realisation.
13. The learned counsel for the appellant submits that the
respondent/plaintiff was liable to do the additional works in terms
of Clause 6 of Ext.B3 agreement at the same rates. It is also argued
that the appellant had suffered loss in finishing the work agreed
upon as per Ext.B3 and is therefore entitled to retain the security
deposit and EMD. It is also argued that Ext.A3 notice dated
06.07.2009 threatened the plaintiff with terminating the contract
and therefore, there was compliance with Clause 15 of Ext.B3
agreement.
14. The learned counsel for the respondent/plaintiff
would argue that even going by the case of the defendant, it cannot
be held that they had sustained any loss, as they contend that they
did not re-tender the balance work as the contractor had agreed to
do the balance work at the same rates. Since no injury has been
caused, there is no application under Section 74 of the Contract
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Act. As regards the work completed, there is no dispute; therefore,
the defendant cannot withhold the payment due to the plaintiff for
the work completed.
15. Having heard the learned counsel on either side and
after perusing the records, I am not inclined to interfere with the
judgment and decree in question for multiple reasons. There is no
dispute that, after the execution of Ext.B3 agreement, additional
works were directed by the defendant, despite which the time
prescribed for performance was not extended. As rightly found by
the trial court, the quantity of work done was increased nearly
three times without any corresponding increase in the time for
performing the contract.
16. It is also not disputed that the defendant did not
terminate the contract as envisaged in Clause 15 of Ext.B3
agreement, whereupon the defendant could forfeit the security
deposit. It is admitted that the balance work was done without any
re-tender and without assessing the cost of completing the work
that was left behind. There is no dispute on the actual amount of
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work done by the plaintiff, which was Rs. 6,65,473.30/-. For these
reasons, and in view of the non-compliance by the defendant with
the terms of Ext.B3 agreement and based on the specific plea that
the balance work was done at the same rates, in the absence of any
pleadings and evidence, the claim of the defendant that they had
sustained loss due to the breach on the part of the plaintiff cannot
be accepted.
17. The Court below has considered the terms of the
agreement and the entire facts and circumstances, and has
appreciated the evidence, both oral and documentary, in the
correct perspective while decreeing the suit. I do not find any error
of fact or law warranting interference with the judgment of the
trial court.
The appeal fails and is accordingly dismissed.
Sd/-
MOHAMMED NIAS C.P.
JUDGE
bpr
