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The State Of Tamil Nadu vs Y.Savarimuthu (Died)
2021 Latest Caselaw 11342 Mad

Citation : 2021 Latest Caselaw 11342 Mad
Judgement Date : 26 May, 2021

Madras High Court
The State Of Tamil Nadu vs Y.Savarimuthu (Died) on 26 May, 2021
                                                                                A.S.(MD)No.141/2007 &
                                                                         Cross. Appeal (MD)No.56/2009


                                   BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

                                                 DATED : 26.05.2021

                                                       CORAM

                         THE HONOURABLE MRS. JUSTICE PUSHPA SATHYANARAYANA
                                                AND
                               THE HONOURABLE MRS.JUSTICE S.KANNAMMAL

                                               A.S.(MD)No.141 of 2007
                                                         and
                                          Cross Appeal (MD)No.56 of 2009 &
                                          M.P(MD)Nos.1 of 2007 & 2 of 2009
                     1. The State of Tamil Nadu
                        represented by its
                        District Collector,
                        Virudhunagar.

                     2. The Superintending Engineer,
                        National Highways, Tirunelveli.

                     3. The Divisional Engineer,
                        National Highways, Virudhunagar.

                                              ..Appellants in A.S(MD)No.141/2007/Defendants/
                                                    Respondents in Cross Appeal
                                                          Vs.

                     1. Y.Savarimuthu (Died)
                                       .. Respondent No.1 in A.S(MD)No.141/2001/Plaintiff/
                                                             Cross Appellant No.1
                     2. Soosaiammal
                     3. S.Albert Sekar
                     4. Dikkuruse
                     5. Glory
                     6. Sengole
                     7. Leo Francis Xavier
                     8. Alangara Philomi
                     9. Josphine Navamani
                             .. Respondents 2 to 9 in A.S.(MD)No.141/2007 &
                                                        Cross Appellants 2 to 9


https://www.mhc.tn.gov.in/judis/
                     Page 1/22
                                                                                  A.S.(MD)No.141/2007 &
                                                                           Cross. Appeal (MD)No.56/2009


                     (RR 2 to 9/cross appellants 2 to 9, are impleaded vide order
                     dated 12.02.2021 made in CMP (MD)
                     No.5044/2020 in AS (MD)No.141/2007)
                                                        ***
                     Prayer in A.S.(MD)No.141 of 2007 : Appeal Suit filed under Section
                     96 of the Code of Civil Procedure seeking to set aside the judgment and
                     decree in O.S.No.2 of 2009 dated 29.06.2007 on the file of the Additional
                     District Court, Fast Track Court, Virudhunagar.


                     Prayer in Cross Appeal (MD)No.56 of 2009 : Cross Appeal filed under
                     Order 41, Rule 22 of the Code of Civil Procedure seeking to set aside the
                     judgment and decree in O.S.No.2 of 2009 dated 29.06.2007 on the file of
                     the Additional District Court, Fast Track Court, Virudhunagar.
                                                          ***
                               For Appellants/   :   Mr.V.R.Shanmuganathan
                                Defendants/          Special Government Pleader
                                Respondents

                               For Respondents/:     Mr.Srinivasa Raghavan for RR 2 to 9
                               /Plaintiffs/Cross     R1-Died
                               Appellants

                                                     JUDGMENT

The Hon'ble Supreme Court vide order dated 30.04.2019 made in

Civil Appeal Nos.4495 & 4496 of 2019 (SLP [C]Nos.30945 & 30946 of

2015) remitted this appeal to this Court to dispose of the same on merits

at the earliest. The question came to be decided therein is whether a

notice under Section 80 of the Code of Civil Procedure (hereinafter

referred to as "CPC") has been given to the State Government.

https://www.mhc.tn.gov.in/judis/ Page 2/22 A.S.(MD)No.141/2007 & Cross. Appeal (MD)No.56/2009

2. Originally, the first respondent herein filed a suit in Pauper

O.P.No.3 of 2002 under Order 33, Rule 1 and Order 7, Rule 1 of the CPC

praying to permit the plaintiff to sue as an indigent person ; to declare

that the order dated 16.12.1999 passed by the third

respondent/defendant in his proceedings No.6870/97/98/JD, partially

determining the agreement as illegal and void ; and to direct the

respondents/defendants to pay a sum of Rs.3,30,40,000/-.

3. The prayer of the plaintiff to sue as indigent person was

rejected on 15.07.2003, against which, C.M.A.No.223 of 2004 was filed.

Pursuant to the order of this Court dated 07.03.2005 allowing the appeal,

the suit was taken on file as O.S.No.2 of 2005 on the file of the District

Court (Fast Track Court), Virudhunagar. The suit was partly decreed,

against which, the defendants preferred this appeal. The plaintiff, being

the respondent in the appeal, also filed cross appeal.

3.1. For the sake of convenience, the parties are referred to as

per their status before the Trial Court, i.e., plaintiff and defendants

respectively.

4. The case of the plaintiff, as has been culled out from the

plaint, is that he, being the First Class Contractor in various Government

Departments, executed various works running to several Crores. He

https://www.mhc.tn.gov.in/judis/ Page 3/22 A.S.(MD)No.141/2007 & Cross. Appeal (MD)No.56/2009

succeeded in the bid floated by the Highways Department for

strengthening the existing two lane pavement of N.H.7 from 17/910 to

42/0, Madurai-Kanyakumari Section and entered into an agreement for

Rs.3,09,62,156/- on 15.10.1997. The term of the contract was for a

period of 18 months. During January 1999 only, approval for Profile

Corrective Course, which is a sine qua non, for commencing the work

was issued for a portion and even for the rest, it was given only on

06.12.1999 and the hot mixing plant was inspected by the defendants

only on 01.02.1999 leading to certain modifications, all of which caused

enormous delay in executing the work. Thus, the defendants delayed the

execution of the work at every stage, and given extension of contract till

31.03.2000 vide order dated 06.12.1999. Therefore, the plaintiff cannot

be blamed for the delay. In spite of the same, the plaintiff executed

works to the tune of Rs.1,35,74,000/-, which is about 25% of the work.

Suddenly, nearly 10 days after issuing the order extending the contract,

the third defendant, partially terminated the contract without any valid

reason and without issuing any prior notice on 16.12.1999 and also failed

to sanction the bills.

5. According to the plaintiff, since the reasons assigned by the

defendants are not sustainable in the eye of law, he filed a writ petition

in W.P.No.20432 of 1999 before this Court, which was dismissed on

https://www.mhc.tn.gov.in/judis/ Page 4/22 A.S.(MD)No.141/2007 & Cross. Appeal (MD)No.56/2009

24.12.1999 with a direction to seek the remedy for damages before the

Civil Court. Aggrieved by the said order, he filed a writ appeal in W.A.No.

122 of 2000, and the same went in vain. However, the second defendant

called for fresh tender, which caused a huge loss to the plaintiff. The

plaintiff submitted that the lowest offer of the subsequent bidder was

rejected on the ground that the said rates are unworkable. The

defendants worked out a sum of Rs.73,15,157/- being the extra cost

involved in the execution of the balance work and recovered a sum of

Rs.60,95,131/- from the plaintiff, besides directing him to pay a sum of

Rs.12,20,026/-. In such backdrop, the plaintiff has filed the suit seeking

the aforesaid reliefs.

6. It is averred in the written statement filed by the defendants

that the plaintiff, who was awarded with the subject work, was to

complete the same by 19.04.1999. He was given time till 31.12.1999.

Since even thereafter no effective progress was shown, the contract was

partially terminated and the plaintiff was directed to pay the balance

sum. The defendants claimed that the plaintiff had not shown any

interest in executing the work. As there was enormous delay in

executing the work which caused loss to the Government, the defendants

were forced to go for fresh tender, owing to urgency.

https://www.mhc.tn.gov.in/judis/ Page 5/22 A.S.(MD)No.141/2007 & Cross. Appeal (MD)No.56/2009

7. The termination was questioned by the plaintiff before this Court

in W.P.No.20432 of 1999, which was dismissed, and the appeal filed

against the said order also met with the same fate. The defendants also

claimed that the plaintiff was not an indigent person, as he owned

valuable properties and had sufficient means to pay the Court Fee. The

defendants claimed that the plaintiff did not issue notice under Section

80 of CPC to them, who are Government and Public Officers, prior to the

institution of the suit and thus, the suit was to be dismissed.

8. The Trial Court, after appreciating the oral and documentary

evidence, partly decreed the suit directing the defendants, who are the

appellants herein, to pay a sum of Rs.87,01,200/- with interest at the

rate of 6% per annum from the date of the suit, till the date of

realisation. The plaintiff was also directed to pay the necessary Court

Fee. Thus, the appeal.

9. Claiming that the suit ought to have been decreed as prayed for

and alleging that the impugned decree caused him a loss of

Rs.34,39,529/- and also the award of interest is also less, the plaintiff

filed Cross Appeal (MD)No.56 of 2009. He prayed to award a sum of

Rs.1,54,10,000/- and also to pay interest on the awarded claim amount

at the rate of 15%.

https://www.mhc.tn.gov.in/judis/ Page 6/22 A.S.(MD)No.141/2007 & Cross. Appeal (MD)No.56/2009

10. This Court allowed the appeal vide judgment dated 17.06.2015

setting aside the decree and judgment of the Trial Court dated

29.06.2007 made in O.S.No.2 of 2005. As indicated above, on appeal,

the Supreme Court remitted back this appeal to this Court, by setting

aside the judgment of this Court and restoring the judgment of the trial

Court.

11. The sheet-anchor of the contentions of the defendants in the

grounds of appeal is that the mandate under Section 80 CPC has not

been complied with and hence, the suit was not maintainable. The other

ground is the poor quality and also the enormous delay in the execution

of the work by the plaintiff leading to the non-settlement of bills and

termination of the contract.

12. As the plaintiff is no more, his legal heirs, have been

impleaded as respondents 2 to 9 and it is their case that the Supreme

Court held that notice under Section 80 CPC is not mandatory to institute

the suit. It is submitted that the respondents delayed the project at

every stage, which is evident from the documents produced by the

plaintiff before the Trial Court and also the same is substantiated by the

https://www.mhc.tn.gov.in/judis/ Page 7/22 A.S.(MD)No.141/2007 & Cross. Appeal (MD)No.56/2009

oral evidence. It is submitted that the trial Court, while properly

appreciating the facts and circumstances coupled with oral and

documentary evidence, committed serious error in awarding the claim

amount, which has to be necessarily set right by this first appellate

Court.

13. Though the trial Court has framed as many as eight questions

for determination, this Court, in the first round of this appeal framed two

primary questions, which revolved around Section 80 of the CPC and

having answered those questions in favour of the defendants, this Court

did not take into consideration the other issues and the merits and

demerits of the those issues.

14. However, in view of the order of the Supreme Court dated

30.04.2019, which came to be passed at the instance of the plaintiff, this

Court is of the view that the only issue that may be considered in this

appeal is, whether the partial termination of the agreement by the

defendants 2 and 3 vide order dated 16.12.1999, is legally valid and if it

is not so, for what relief, the plaintiff is entitled to ?

15. Heard both sides and perused the materials available on

record.

https://www.mhc.tn.gov.in/judis/ Page 8/22 A.S.(MD)No.141/2007 & Cross. Appeal (MD)No.56/2009

16. The prayer in the plaint itself is for a declaration that the order

passed by the third defendant in his proceedings No.6870/97/98/JD,

partially determining the agreement as illegal and void and consequently

claimed a sum of Rs.3,30,40,000/- with interest @ 18% per annum from

the defendants.

17. As mentioned above, the trial court has framed as many as

eight issues and decreed the suit. As held by the Hon'ble Supreme Court

in issue No.5, the suit was held to be within the period of limitation. In

issue No.6, it has been decided that the suit dispute is not referable to

arbitration. With reference to issue No.4 as to whether notice under

Section 80 CPC is contemplated, which is also answered by the Hon'ble

Supreme Court holding that Section 80 notice is not mandatory. So far as

issue No.7 is concerned, which was framed for the maintainability of the

suit with respect to the claim of damages was also in the affirmative in

favour of the plaintiff. Therefore, the only question that has to be

determined is the partial termination of the agreement by the defendants

2 and 3, whether legally valid and sustainable.

18. The learned Special Government Pleader appearing for the

https://www.mhc.tn.gov.in/judis/ Page 9/22 A.S.(MD)No.141/2007 & Cross. Appeal (MD)No.56/2009

appellants/defendants would contend that, it is incorrect to state that

only because of the delay in providing Profile Corrective Course

(hereinafter referred to as PCC), the work could not be commenced. As

per the contract, the work involved more than 21 items, involving earth

work excavation, embankment, laying sand gravel mix, laying water

bound Macadam, grade I, II, III, applying primer coat, laying tack coat,

laying compact thick bituminous Macadam, laying semi dense bituminous

concrete laying open grade premix carpet, laying seal coat laying gravel

over the berms etc. After all the above works, PCC, is item No.21 as per

the agreement Ex.A1. The PCC will be provided to bring the pavement

surface to proper camber and to the required super elevation on curve

portions and the said provision will be given, as per clause 501 of MOST

(Ministry of Surface Transport) Specifications II Revision . Even as per

the agreement, the quantity of the PCC was not assessed due to time

factor. The same will be assessed before the commencement of the work

by taking cross section levels, closer intervals and the same will be

approved.

19. The learned counsel appearing for the plaintiff submitted that

unless and until the PCC is completed by the defendants, the plaintiff

cannot carry out the work as per the tender agreement. Though it was

argued by the defendants that the PCC was provided for about 18 Kms,

https://www.mhc.tn.gov.in/judis/ Page 10/22 A.S.(MD)No.141/2007 & Cross. Appeal (MD)No.56/2009

on 29.10.1998, 08.02.1999 and 18.05.1999, for the remaining 6 Kms,

PCC was given on 15.11.1999 and 24.11.1999. Only in October 1998,

the defendants had accorded the PCC. It is relevant to point out that the

tender agreement was executed on 15.10.1997 and the work should be

completed within 18 months from the date of site being handed over to

the plaintiff by the defendants. The site was handed over to the plaintiff

on 20.10.1997. Admittedly, PCC was accorded to the plaintiff on

29.10.1998, as per Ex.B7. Ex.B7 dated 29.10.1998 pertains to approval

of PCC only for 4 Kms out of the total length of 22 Kms. The subsequent

PCC approvals were given on various stages as per Exs.B8 to B11 dated

08.02.1999, 18.05.1999, 15.11.1999 and 24.11.1999. From the above,

it is evident that PCC approval was not accorded by the

appellants/defendants to the plaintiff/respondent for the entire stretch of

22 Kms at one stroke, but was given in a phased manner. It is also

incorrect to state that PCC was listed as item No.21 in the agreement

and therefore, the plaintiff could have proceeded with the rest of the

works, as without PCC, the rest of the works cannot be commenced. A

perusal of Exs.B7 to B11, would go to show that except for a stretch of 8

Kms, the PCC approval for remaining work was accorded to the plaintiff

only after the expiry of 18 months and only 2 Kms of the total extent of

the road was laid by the plaintiff because of the inordinate delay on the

part of the defendants in according PCC approval.

https://www.mhc.tn.gov.in/judis/ Page 11/22 A.S.(MD)No.141/2007 & Cross. Appeal (MD)No.56/2009

20. The learned counsel for the plaintiff also pointed out that

despite the piecemeal accord of PCC approval given by the defendants,

the plaintiff was able to complete the job of nearly 22 Kms as and when

PCC approval was given to him.

21. As per Ex.A3 dated 16.12.1999, the third defendant in his

proceedings has mentioned that the site was handed over to the plaintiff

on 20.10.1997 and the works should have been completed within

18 months from the date of handing over the site, besides keeping up

rate of progress every month. The work should have been completed by

April 1999 in all respects. The plaintiff having failed to keep the rate of

progress and to complete the work, was given several reminders and

notices. As there was no substantial progress, it was construed that the

plaintiff has no intention to complete the work and hence the contract

was partially determined and it was ordered to execute the balance work

as well as ratification of the work left over by the plaintiff. Thereafter, as

per Ex.A4 dated 29.12.1999, the plaintiff was given extension of time

upto 31.01.2000 to complete the items of work furnished in Schedule 'A',

which would be communicated separately. Once again, on 11.01.2000,

the contract was partially determined with reference to clause No.109-06

https://www.mhc.tn.gov.in/judis/ Page 12/22 A.S.(MD)No.141/2007 & Cross. Appeal (MD)No.56/2009

of PS to SSRB. On the same day, the third defendant had sent a

communication under Ex.B20 informing the plaintiff that the description

of the items of work as per Schedule 'A' alone should have to be

completed within 15 days. The balance items of work as per Schedule 'B'

is ordered to be executed through several agencies at the risk of the

plaintiff. The Schedules 'A' and 'B' description of work was also

communicated to the plaintiff.

22. Prior to extension as per Ex.B20, there were several reminders

sent to the plaintiff as per Ex.B5 series cautioning him to complete the

work and also imposing a fine of Rs.1,000/- and 5,000/- respectively. In

response to the same, the plaintiff, had sent a letter, which was marked

as Ex.B6, admitting that the work could not be commenced within the

agreed date and had given a schedule for completing the balance work.

It was specifically pointed out by the learned Special Government Pleader

that in Ex.B6 communication, there was no whisper about the non-

furnishing of the PCC as had been complained by the plaintiff. Once again

a communication was sent by the third appellant/defendant under Ex.B12

dated 16.06.1999, wherein, it was specifically pointed out that there was

not even 10% of the work completed and the time for completion of the

work was extended till 30.06.1999, failing which a fine of Rs.1,000/- for

each day will be imposed. It would be pertinent to point out that the

https://www.mhc.tn.gov.in/judis/ Page 13/22 A.S.(MD)No.141/2007 & Cross. Appeal (MD)No.56/2009

appellants/defendants have imposed fines and given warnings. However,

in view of the subsequent extension of time till 30.06.1999, the previous

acts are deemed to have been condoned by the appellants.

23. Now the only challenge is to Ex.B16 dated 16.12.1999, which

has determined the contract partially. It has been repeatedly pointed out

by the learned Special Government Pleader for the appellants/defendants

that for the entire stretch of 18 Kms PCC was given in the month of May

1999 itself and the PCC is only the 21st item out of the 24 works to be

completed by the plaintiff. Several extensions have been given to the

plaintiff for completion of the work. Therefore, he argued that the

termination is not unilateral. On the other hand, the trial court has given

a specific finding that the plaintiff is not the sole cause for the delay

based on the evidence of DW1. The relevant portion of the evidence of

DW1, in vernacular, reads thus:

"g[ug;igy; fuf;ot; nfhh;!; mjhtJ rhiyapy;

jd;ikia rPh; bra;jy;. g[ug;igy; fuf;ot; nfhh;!;go

Jiw K:yk; eph;zak; bra;ag;gLfpwJ/ mjw;fhd

mst[fs;. xg;g[jy; bgWtJ Jiw K:yk; eph;zak;

                                   bra;ag;gLfpwJ/          mjw;fhd      mst[fs;.         xg;g[jy;       bgWtJ

                                   Jiw        K:yk;         bra;ag;glntz;Lk;              xg;gjy;         bgw;w

                                   xg;ge;jf;fhuUf;F           bfhLj;j            gpd;       mth;           me;j

                                   mst[g;goa[k;.          ntiy       bra;a   ntz;Lk;/             ePs     kl;lk;
https://www.mhc.tn.gov.in/judis/
                     Page 14/22
                                                                                                       A.S.(MD)No.141/2007 &
                                                                                                Cross. Appeal (MD)No.56/2009


                                   vd;why;.      rhiyapDila                  bel;Ltrk;.        fpuh!;brf;!d;

vd;why; FWf;F trk;. rhiyapd; ikag;nkhL. nfk;g!;.

R{g;gh; vdpnkrd; vd;gJ rhiyapd; tist[ gFjpfspy;

                                   me;j       tist[fSf;Fj;                jFe;jthW            xU       gFjpia

                                   cah;j;JtJ            nky;go          ntiyfis              vy;yhk;      bra;a

ntz;Lk; vd;why; gp/rp/rp/ xg;g[jy; fpilj;j gpd;dh;jhd;

ntiyfis bra;a Koa[k;/ ,e;j xg;ge;jj;jpd; vd;d

ntiy bra;a ntz;Lk; vd;W bfhLf;fg;gl;Ls;sJ/

Mdhy; gp/rp/rp/ rk;ge;jg;gl;l xg;g[jy; vd;gJ xg;ge;jk;

nghlg;gl;l gpd;dh; ntiy jsj;jpy; xg;ge;jf;fhuhplk;

xg;gilf;fg;gl;l gpwF nkw;bfhs;s ntz;oa gzp MFk;/

gp/rp/rp/ rk;ge;jg;gl;l xg;g[jy; vd;gJ xg;ge;jk; nghlg;gl;l

gpd;dh; ntiy jsj;jpy; xg;ge;jf;fhuhplk;

xg;gilf;fg;gl;l gpwF bgw;Wf;bfhs;s ntz;oa gzp

MFk;/ gp/rp/rp/ rk;ge;jg;gl;l mst[fis xg;ge;jj;jpy;

bfhLg;gjw;F nghjpa mtfhrk; ,y;yhjjhy; mitfis

xg;ge;jj;jpw;F gpd;g[ gzpia bjhl';Ftjw;F

Kd;g[ tH';fg;gLk; vd xg;ge;jj;jpy; Twg;gl;Ls;sJ/

xg;ge;j ruj;Jf;fs; go gp/rp/rp/ mst[fis gzpia

bjhl';Ftjw;F Kd;g[ bfhLf;fg;gl;ljh vd;why; mJ

gw;wp vdf;F bjhpahJ/ 29/10/98 17/910 fp/kP/ Kjy; 22-0

tiuapYk; 8/2/99y; 22-0 Kjy; 26-0 tiu 18/9/99y; 26-0

Kjy; 36-0 fp/kP tiu btt;ntW njjpfspy;

bfhLf;fg;gl;Ls;sJ/ xg;ge;j ruj;Jg;go gp/rp/rp

https://www.mhc.tn.gov.in/judis/ Page 15/22 A.S.(MD)No.141/2007 & Cross. Appeal (MD)No.56/2009

rk;ge;jg;gl;l mst[fis thjpf;F xnu jtizahf

bfhLf;fg;gltpy;iy vd;why; rhpjhd; xg;ge;j fhyk;

                                   Koe;j      gpwnf     Jiwapdh;        gp/rp/rp/       mst[fis

                                   bfhLj;Js;sdh;/     gp/rp/rp/   mst[fs;      ,y;iy          vd;why;

                                   ve;jtpjkhd gzpa[k; bra;a KoahJ/ "



24. From the evidence of DW1, it is clearly seen that the

appellants/defendants have delayed the execution of the work by the

plaintiff at each and every stage and that they have conveniently shifted

the blame on the plaintiff, which this court does not appreciate. Hence

the respondents/plaintiff/cross-appellants are entitled to the balance

payment of the work done by him, which according to the plaintiff comes

to Rs.97,67,951/-.

25. As per the defendants, from the date of handing over of the

site from 30.10.1997 till the date of determination of the contract,

namely 16.12.1999, the plaintiff had done the work only less than 25%,

though he ought to have completed the work on or before 19.04.1999,

including the extensions given on three times.

26. The learned counsel appearing for the plaintiff, who has filed

the Cross Objection pointedly argued that there is no mentioning about

https://www.mhc.tn.gov.in/judis/ Page 16/22 A.S.(MD)No.141/2007 & Cross. Appeal (MD)No.56/2009

the splitting up of work as 'A' and 'B' schedules in the original agreement.

It was done by the defendants on their own after the award of the

contract, which itself is unjust and unreasonable. It is also pointed out

that when the agreement was terminated on 16.12.1999, the seven days

notice as contemplated, was not given to the plaintiff. In the termination

order, the EMD, FSD and the withheld amount are ordered to be credited

to the revenue account.

27. So far as the deposits with the defendants are concerned, the

amount returnable to the plaintiff is the Earnest Money Deposit (EMD) of

Rs.1,79,000/- and Further Security Deposit (FSD) of Rs.3,36,000/-,

totalling to Rs.5,15,000/-. The learned counsel for the cross-

appellants/plaintiff, points out that the EMD has to be returned in double,

as it was a deposit made by the plaintiff by way of Indra Vikas Patra

(IVP) bond. The maturity period of which was 5-1/2 years, in which time

it gets doubled. Therefore, it was prayed that another sum of

Rs.1,79,000/- has to be added with Rs.5,15,000/-.

28. In this regard, DW1 in his evidence also has stated that, it is

not true to say that EMD and FSD are not recoverable, if the contract is

partly terminated. His evidence in vernacular, reads thus:

                                         "KGikahd              xg;ge;jj;ij            uj;J

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                     Page 17/22
                                                                                          A.S.(MD)No.141/2007 &
                                                                                   Cross. Appeal (MD)No.56/2009


                                   bra;ak
                                        [ ;bghGJ    ,/vk;/o/   kw;Wk; vg;/v!;/o/   bjhifia

                                   rhp    bra;a   Koa[k;   vdt[k;.   xg;ge;jj;ij     gFjpahf

                                   uj;J    bra;ak
                                                [ ;nghJ    me;j   bjhifia      bgw     KoahJ

                                   vd;W brhd;dhy; rhpay;y/ "



29. It is to be seen that the plaintiff is entitled to the refund of the

EMD as admitted by DW1. The EMD was given in the form of IVP, which

carries interest and doubles at the end of five years and six months.

Presuming that the deposit was made in the year 1997, after the passage

of more than two decades, it has to be seen whether the IVP has been

renewed or reinvested. Even if it is not reinvested, the plaintiff would be

entitled for at least the maturity value. Therefore, he is entitled to a sum

of Rs.3,58,000/- [Rs.1,79,000 + Rs.1,79,000] towards EMD.

30. The plaintiff has demanded cost of escalation at the rate of

15% to 20% from 1999 to 2000 as the rates detailed in the tender

notification will be applicable only for the year in which the tender was

called for. Admittedly, in this case, the PCC itself was given only at the

end of 1999 and there would certainly be escalation of price if not at the

rate claimed by the plaintiff. It is also to be noted that in the Articles of

Agreement, there is no specific clause as to the escalation of price

though in commercial practice the same is as agreeable by both the

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parties. In fact, it is the evidence of PW2, who retired as the Chief

Engineer from the Highways Department, Government of Tamil Nadu,

that the agreed rate is payable only till the date of contract period.

Though normally for a contract of the length of 18 months, the escalation

is not payable, in this case contract was extended till 31.01.2000 and

later partially terminated. Hence the plaintiff is certainly be entitled for

the price escalation for the work completed till then. Therefore, the trial

court had given an escalation of 6% on 97,67,951/- which according to

us, is correct, in the absence of any concrete evidence to show the

accurate rate of escalation.

31. The trial court, has correctly arrived at the damages for the

loss of profit to the plaintiff at the rate of 6%, and the same does not

warrant any interference by this court. The damages worked out to the

tune of Rs.12,49,658/- is confirmed. Accordingly, the issue is answered

in favour of the plaintiff.

32. As far as the interest of 18% per annum claimed by the

respondents/cross-appellants is concerned, the same is on the higher

side. Considering the pandemic situation and the financial crunch being

faced by the State, the respondents/cross-appellants are entitled to

interest at the rate of 9% per annum from the date of plaint, till

https://www.mhc.tn.gov.in/judis/ Page 19/22 A.S.(MD)No.141/2007 & Cross. Appeal (MD)No.56/2009

realisation.

33. For better understanding, the amounts to which the

respondents/plaintiffs/cross-appellants, are entitled is as follows:

                               Work done amount due                   : Rs.    97,67,951/-

                               Escalation in cost of materials,
                               machinery and labour @ 6% on
                               Rs.97,67,951/-                         : Rs.    5,86,077/-

                               EMD (IVP) (Rs.1.79 Lakhs +
                               Rs.1.79 Lakhs)                         : Rs.    3,58,000/-

                               FSD                                    : Rs.    3,36,000/-

                               Damages for loss of profit             : Rs. 12,49,658/-
                                                                      ---------------------
                               Total amount due to the                : Rs.1,22,97,686/-
                               respondents/cross-appellants           ---------------------




34. In the result, the Appeal Suit filed by the State, is dismissed.

The cross-appeal filed by the respondents/plaintiffs, is partly allowed.

The respondents/plaintiff/cross-appellants are entitled to a sum of

Rs.1,22,97,686/-, along with interest at the rate of 9% per annum from

the date of plaint, till realisation. However, there is no order as to costs.

Connected M.Ps., are closed.



                                                                              [P.S.N., J.]  [S.K., J.]
                                                                                      .05.2021
                     Index         : Yes / No
https://www.mhc.tn.gov.in/judis/
                     Page 20/22
                                                                  A.S.(MD)No.141/2007 &
                                                           Cross. Appeal (MD)No.56/2009


                     Internet: Yes
                     gg/Asr




                     To

                     1. The Additional District Judge,
                        Fast Track Court, Virudhunagar.

                     2. The District Collector,
                        Virudhunagar.

                     3. The Superintending Engineer,
                        National Highways, Tirunelveli.

                     4. The Divisional Engineer,
                        National Highways, Virudhunagar.




https://www.mhc.tn.gov.in/judis/
                     Page 21/22
                                                    A.S.(MD)No.141/2007 &
                                             Cross. Appeal (MD)No.56/2009


                                     PUSHPA SATHYANARAYANA, J.
                                                         AND
                                               S.KANNAMMAL, J.


                                                                gg/Asr




                                         A.S.(MD)No.141 of 2007 &
                                   Cross Appeal (MD)No.56 of 2009




                                                         26.05.2021




https://www.mhc.tn.gov.in/judis/
                     Page 22/22

 
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