Madras High Court

S.B.Buvaneswari vs Sri Foundation on 1 December, 2022

                                                                           A.S.Nos.32 & 33 of 2017

                           IN THE HIGH COURT OF JUDICATURE AT MADRAS
                                            DATED:     01.12.2022
                                                  CORAM:
                                  THE HONOURABLE Mr. JUSTICE S.SOUNTHAR
                                            A.S.Nos.32 & 33 of 2017
                                          and C.M.P.No.21099 of 2017


              S.B.Buvaneswari                                    ...Appellant in both A.S's

                                                     Versus

              Sri Foundation, a partnership firm,
              duly registered vide No.1209/08 at
              SRO Saidapet and represented by its
              Managing Partner Mr.Nandakumar
              having office at No.1/360,
              Thirumurugan Nagar, Mugalivakkam,
              Chennai - 600 116.                                 ... Respondent in both A.S's


              PRAYER in A.S.No.32 of 2017: Appeal Suit filed under Section 96 r/w Order
              XLI Rule 1 CPC, pleased to set aside the judgment and decree dated 20.08.2016
              made in O.S.No.210 of 2010 by the learned Principal District Judge of
              Kancheepuram District at Chengalpattu, dismissing the counter claim filed by the
              appellant with costs.


              PRAYER in A.S.No.33 of 2017: Appeal Suit filed under Section 96 r/w Order
              XLI Rule 1 CPC, pleased to set aside the judgment and decree dated 20.08.2016
              made in O.S.No.210 of 2010 by the learned Principal District Judge of
              Kancheepuram District at Chengalpattu, directing the appellant to pay to the
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                                                                                A.S.Nos.32 & 33 of 2017

              respondent a sum of Rs.2,07,000/- with proportionate costs with interest at 18%
              p.a. from the date of the plaint till the date of realization. Direct the respondent to
              pay costs of this appeal and allow this appeal.
                                    For Appellant      : Mr.B.S.Jhothiraman
                                    ( in both A.S's)
                                    For Respondent     : Mr.R.Amizhdhu
                                    ( in both A.S's)


                                                    O R D E R

The defendant in the suit is the appellant. The respondent filed a suit for

recovery of money seeking a direction to appellant to pay a sum of

Rs.12,28,351/- being the arrears of payment due to the respondent for the

building construction work done by it for the appellant together with interest at

the rate of 12%. The respondent also sought for an injunction restraining the

appellant from dis-possessing respondent from the suit site by removing men and

material. The appellant on her part laid a counter claim seeking a direction to

respondent to pay a sum of Rs.5,11,116/- towards escalation in cost of labour

and materials due to failure of the respondent to keep the time schedule in

completing construction, loss of rental income, mental agony etc., The Trial

Court decreed the suit in part by directing the appellant to pay a sum of

Rs.2,07,000/- to respondent together with interest at the rate of 18% per annum

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from the date of plaint to date of realization. The counter claim filed by the

appellant was dismissed in toto. Aggrieved by the decree granting plaint prayer

in part the defendant has come up with A.S.No.32 of 2017. He also filed a

separate appeal in A.S.No.33 of 2017, challenging dismissal of counter claim.

2. Plaint averments:

According to the respondent there was a construction contract between

respondent and appellant entered into on 06.07.2009. The respondent agreed to

construct a residential building in the site belonged to appellant. As per the terms

of agreement respondent agreed to construct a building with an extent of 2,102

sq. ft. at the cost of Rs.1,240/- per sq. ft. When the construction was nearing

completion during March 2010 dispute arose between respondent and the

appellant with regard to the release of further payment by the appellant. As

construction of the building progressed some changes were brought in by the

appellant and her husband and construction was done as per the requirements and

modifications suggested by the appellant. Hence total build up area increased.

According to the respondent as per the revised estimate for the revised built up

area, the total cost of construction came to Rs.45,05,521/-. When the dispute

arose between parties, the cost of the completed construction was worth about

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Rs.38,28,351/-. But at that stage, total amount released and paid by the appellant

was only Rs.26.00 lakhs. Therefore, huge amount of Rs.12,28,351/- remained

payable by the appellant to respondent towards the cost of the completed works.

The respondent further averred that majority of the works were completed and as

the appellant failed to release further payment as per the revised estimate, the

respondent was not in position to proceed further with the completion of the

construction. It was also averred that appellant engaged the services of Engineer

called Pandurangan to assess the work done by the respondent and the amount

required for the completion of the building, but the said Engineer demanded bribe

from the respondent for giving favourable report, but he refused. Hence

according to the respondent the said Engineer Pandurangan had given a faulty

report against the respondent. As the appellant tried to get rid of the respondent

from the construction site and attempted to complete the construction through a

third party, the present suit was laid by the respondent for the aforesaid reliefs.

3. Averments found in the written statement:

The appellant filed a detailed written statement denying various averments

found in the plaint filed by the respondent. It was specifically pleaded by the

appellant that as per the time schedule agreed for release of payment she has to

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pay 25% as the initial amount, 10% when the building reaches the base ground

level, 20% when the building reaches the roof level and 15% at the stage of

plastering. According to the appellant, the cost of the total project was

Rs.44,05,583/- and she had paid Rs.26.00 lakhs when construction was

unilaterally stopped by respondent. It was also pleaded that both agreed to

appoint an Engineer called Pandurangan to assess the value of the semi finished

building and the amount required for completing the building. According to the

appellant both parties agreed to settle the dispute on the basis of the value fixed

by said Engineer. The appellant also averred that as per the estimate given by the

said Pandurangan the cost of the semi finished building was assessed at

Rs.25,52,000/- and the cost required for completing the building was fixed at

Rs.10,90,796/-. It was also specifically averred by the appellant she already paid

Rs.26.00 lakhs and therefore as per the report furnished by the common Engineer

Ex.B.20 the respondent has to return the sum of Rs.48,000/-. The appellant also

averred that due to failure of respondent in finishing the construction work the

cost of materials has gone up, when she finished construction work by employing

a third source she incurred extra amount for completion of the construction.

Therefore, appellant by way of counter claim claimed Rs.5,11,116/- from the

respondent. On these pleadings both the parties went to trial and the partner of

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the respondent firm was examined as P.W.1, the husband of the appellant was

examined as D.W.1 and Mason employed by the appellant to finish construction

work was examined as D.W.2.

4. The Trial Court on appreciation of oral and documentary evidence came

to the conclusion that the contract between the parties got frustrated due to

failure of the appellant to release funds as agreed. The Trial Court accepting the

Engineer's report of said Pandurangan which was marked as Ex.B.20, has come

to a conclusion that the semi finished construction put up by the respondent cost

about Rs.25,52,000/- adding 10% of the same towards profit to the builder, the

cost of the construction was fixed by the Trial Court at Rs.28,07,000/-. As the

appellant paid only Rs.26.00 lakhs, the Trial Court directed the appellant to pay a

sum of Rs.2,07,000/- with proportionate cost and interest. In view of the said

finding, the Trial Court came to the conclusion that respondent is not liable to

pay any amount to appellant as per her counter claim. Aggrieved by the said

judgment and decree the appellant has come up by way of this appeal.

5. The learned counsel for the appellant submitted that as per the

Engineer's report Ex.B.20, the cost of the semi finished building arrived by him at

Rs.25,52,000/- includes profits of the construction company. The learned counsel

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by taking me to the remarks made by the Engineer in his foot of the report to the

effect that the above cost includes reasonable materials + labour cost and

contractor's profit for his construction work. Therefore, the learned counsel for

the appellant submitted that the Trial Court erred in adding Rs.2.00 lakhs to the

valuation arrived at by the Engineer under Ex.B.20 towards profit to the builder.

The learned counsel also vehemently argued that the loss suffered by the

appellant due to sudden stoppage of the work by the respondent and

consequential escalation in the cost of construction material was spoken to by

Mason engaged by appellant who was examined as D.W.2. The learned counsel

submitted that the evidence of appellant's husband as D.W.1 was very well

corroborated and supplemented by the evidence of D.W.2. Therefore, it is the

contention of the learned counsel for the appellant that the Trial Court ought not

to have dismissed the counter claim made by the appellant.

6. Per contra the learned counsel for the respondent submitted that even as

per the admission of the appellant in her written statement, the cost of revised

estimate was Rs.44,05,583/- and not as claimed by the respondent at

Rs.45,05,521/-. The learned counsel submitted that when appellant herself

admitted that the cost of the revised estimate was Rs.44,05,583/- the Trial Court

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ought to have directed the appellant to pay more amount, but it directed the

appellant to pay only a sum of Rs.2,07,000/-, and hence, decree was passed by

the Court below need not to be interfered with. The learned counsel further

contended in view of the admission made by the appellant in her written

statement that revised estimate is Rs.44,05,583/-, the failure of appellant to

release further sum as agreed was the reason for failure of contract and

consequently the appellant is not entitled to any sum as demanded by her in the

counter claim.

7. On the basis of the pleadings, evidence available on record contentions

of the respective counsel following points are arising out for consideration

1. Whether the construction work was stopped due to default on the part

of the appellant or on the part of the respondent

2. Whether the decree passed by the Trial Court directing the appellant to

pay sum of Rs.2,07,000/- towards balance of costs of semi finished building is

correct or not.

3. Whether the counter claim preferred by the appellant is deserved to be

allowed or not.

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8. Points 1 to 3:

Since all the points arising for consideration in the appeal are interlinked.

All the points are taken up for consideration jointly. The first question to be

determined is whether the construction work was stopped due to the fault of the

appellant or due to the fault of the respondent.

9. As per the agreement between the parties the extent of the agreed

construction was 2,102 Sq.ft. It is not in dispute that the respondent had started

construction in the suit property. The appellant herein in his written statement

specifically admitted the revised cost of construction was Rs.44,05,583/-. The

plaintiff in the plaint averment had mentioned that in view of the increased area

of construction, the total estimate for construction of the building had risen to

Rs.45,05,521/-. As per the agreement the respondent agreed to construct 2,102

sq. ft. of building at the rate of Rs.1,240/- Therefore, as per the agreement, the

cost of the construction was Rs.26,06,480/-. But it is not in dispute at the time of

taking up the construction, the respondent put up construction in the increased

area. Though the respondent/plaintiff had averred in his plaint that in view of the

increased area of construction the revised cost for the building had risen to

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Rs.45,05,521/-, the same was denied by the appellant in her written statement.

But in paragraph 13 of written statement, the appellant had averred as follows:

“ The defendant denies the allegations in para 4 that the estimate was revised to Rs.45,05,521/-. As stated above, it was revised to Rs.44,05,583/- and not as claimed.”

10. The above averment of the appellant in her written statement explicitly

proves that the total extent of the construction as well as the cost of the

construction was revised later by mutual agreement of the parties. In her written

statement she had specifically admitted that the revised cost was Rs.44,05,583/-.

Had the appellant not agreed for extra construction, absolutely, there was no

necessity for her to agree for revised estimate of Rs.44,05,583/- as against the

original estimate of Rs.26,06,480/-. In view of the specific admission by the

appellant/defendant in her pleadings that revised estimate was Rs.44,05,583/-,

this Court comes to a definite conclusion that though parties agreed to put up

construction for 2,102 sq. ft. of building, subsequently, on mutual agreement they

decided to increase the extent of construction and consequently they revised the

cost of construction.

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11. Even as per the admitted case of the appellant/defendant, she had paid

only Rs.26.00 lakhs when the construction was stopped by the respondent.

Therefore, as per the revised estimate cost, appellant has to release more than

Rs.18.00 lakhs when the construction was stopped. Since appellant refused to

release the remaining amount as per the revised estimate, the respondent was

compelled to stop the work. Therefore, I agree with the finding rendered by the

Trial Court that the stoppage of the construction work was only due to the failure

of the appellant to release the remaining sum as per the revised estimate.

12. Once we come to the conclusion that the stoppage of the construction

work had happened only due to the failure of the appellant/defendant to release

balance of cost of construction, the appellant is not entitled to make claim against

the respondent towards escalation of the prices due to the stoppage of work by

the respondent. It is settled law, no person can take advantage of his own default.

Therefore, the appellant is not entitled to make any claim against the respondent

for the extra cost incurred by her for completing the construction work by

engaging a third party. The learned counsel for the appellant by taking this Court

to the evidence of D.W.1 and D.W.2 namely the Mason who helped the

appellant to finish the construction work, contended that there are ample

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evidence available on records to show that appellant incurred extra cost in

completing the construction work due to the default committed by the

respondent. Though the appellant's husband who was examined as D.W.1

deposed that he never requested the respondent to increase the extent of

construction. The said version of the D.W.1 is not acceptable for a reason that

the appellant herself in her pleadings admitted that the revised cost of

construction was Rs.44,05,583/-. If the extra construction put up by the

respondent is an unilateral act of his own, certainly there is no need for the

appellant to revise the cost of construction. The very fact that appellant agreed

for increase of cost of construction from Rs.26,06,480/- to Rs.44,05,583/- amply

proves that increase in the area of construction was mutually agreed by the

parties. In view of the discussions made above, this Court come to a conclusion

that the appellant/defendant is not entitled to make a claim against the

respondent/plaintiff towards escalation of cost of construction. Consequently, the

counter claim made by the respondent deserved to be dismissed.

13. The Trial Court taking into consideration Ex.B.20 report of the

Engineer came to the conclusion that the cost of the construction of the semi

finished building was Rs.25,52,000/-. Though the respondent seriously disputed

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the valuation adopted by the Engineer by making allegations against the Engineer

has not chosen to challenge the decree passed by the Trial Court. The learned

Trial Judge, in addition to the cost of the construction mentioned by the Engineer

in Ex.B.20 added 10% of the said amount towards minimum profit for the

contractor. In other words, the Trial Court assumed the cost of construction

arrived at by Engineer in Ex.B.20 is the actual cost of the construction excluding

the profit margin of the respondent/plaintiff. The said approach of the Trial Court

is not acceptable to this Court. A reading of the Ex.B.20, Engineer's report would

suggest that the cost of the construction arrived at by the Engineer at

Rs.25,52,000/- includes profit of the contractor. The Engineer who prepared

Ex.B.20 in the foot of the calculation sheet specifically mentioned that the above

cost includes reasonable material and labour cost and contractor profit for

construction. Therefore, a sum of Rs.25,52,000/- arrived at by Engineer under

Ex.B.20 includes profit margin for the contractor. In that case Trial Court is not

justified in adding 10% of the above said sum towards cost of construction.

Admittedly, the appellant already paid a sum of Rs.26.00 lakhs to respondent. As

per the Ex.B.20, Engineer's report the cost of construction of the semi finished

building which includes the profit of the Contractor is only Rs.25,52,000/-

Therefore, the Trial Court is not justified in adding 10% on the said amount and

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directing the appellant to pay a further sum of Rs.2,07,000/-. The amount already

paid by the appellant to respondent represents almost equal to the cost of the

construction arrived at by Engineer under Ex.B.20. In these circumstances,

appellant is not liable to pay any further sum to the respondent. Hence, the

decree passed by the Court below directing the appellant to pay a sum of

Rs.2,07,000/- to the respondent is liable to be set aside.

14. In Nut shell:

1. Appeal in A.S.No.32 of 2017 stands allowed by setting aside the judgment

and decree passed by the Trial Court directing the appellant/defendant to

pay a sum of Rs.2,07,000/- with interest at 18% to the respondent.