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Form No. (J) 2

HEADING OF JUDGMENT IN ORIGINAL SUIT

District: Kamrup (Metro)

IN THE COURT OF CIVIL JUDGE NO. 3, KAMRUP (M), GUWAHATI

Present: Shri Jaspal Singh, AJS,Civil Judge No.3,Kamrup (M), Guwahati

Monday, the 8th day of February, 2016

Money Suit No. 120/2011

1. Sri Joy Prakash Beria, son of Late Radha Kishan Beria, Proprietor of M/s.

Jaypee Construction, having office at Kamal C. Plaza, Ground Floor, Opportunity.

Bora Service Petrol Pump, Ulubari, Guwahati-781007

2. M/s. Jaypee Construction, a Proprietorship concern of Sri Joy Prakash Beria,

having its office at Kamal C. Plaza, Ground Floor, Opportunity. Bora Service Petrol

Pump, Ulubari, Guwahati-781007 ..........................Plaintiff

versus

1. The State of Assam, represented by the Chief Secretary to Govt. of Assam,

Assam Secretariat, Dispur, Guwahati-781006.

2. The Commissioner & Secretary, Public Works Department, Govt. of Assam,

Assam Secretariat, Dispur, Guwahati-781006.

3. The Public Works Department, represented by the Chief Engineer, PWD

(Roads), Assam, Chandmari, Guwahati-781003.

4. The Executive Engineer, PWD, Dibrugarh Rural Roads Division, Dibrugarh-

786001. ............................Defendants

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This suit coming on for final hearing (arguments) on 02.09.2015, 14.09.2015,

16.10.2015, 20.11.2015, 07.12.2015 and 27.01.2016 in presence of:–

Mr. G. Khandelia …........Advocate for the Plaintiffs

Mr. A.C. Dutta ………..Advocate for the Defendants

And having stood for consideration to this day, the Court delivered the following

judgment:--

J U D G M E N T

Case of the plaintiffs

1. The case of the plaintiffs is as follows. The plaintiff no. 2 firm, the

proprietorship concern of the plaintiff no. 1, was awarded with the work of

“Construction of RCC Bridge No. 35/2 & 53/2 on Moran Naharkotia Road with

Approaches and Protection Work under NLCPR” after following a regular tender

process. The authorities issued a ‘Notice to Proceed with the Work’ dated

11.04.2005 (Exhibit 2). The said work was awarded for an estimated amount of

Rs.1,09,12,005/- (Rs. 89,73,337/- for Proper Bridge Work, Rs. 16,83,068/- for

Approaches and Rs. 2,55,600/- for Protection Work). Although the Formal Work

Order was given on 11.04.2005, the Drawing was approved by the defendants only

on 16.06.2005 vide letter dated 16.06.2005 (Exhibit 4). However, due to onset of

rainy season, the construction work could not gather full momentum until

September, 2005. Thereafter, within the next three months, almost 40% of the work

was completed, which included the work of ‘construction of island’, which was an

item though not provided in ‘‘Bill of Quantities” was required to be done. In this

regard, the plaintiffs intimated the same to the defendants vide letter dated

15.10.2005. Within the 1st week of August, 2006, almost 70% of the total work as

per the ‘Bill of Quantities’ was completed in spite of various constraints and several

difficulties faced by the plaintiffs such as heavy floods, several bandhs/strike calls,

etc.

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2. As per the Contract Agreement, it was incumbent on part of the defendants

to make monthly and/or timely payments to the plaintiff firm. However, the plaintiff

firm had not received any payment during the months of December 2005 to

November 2006. The defendant no. 4 by his letter dated 27.05.2008 (Exhibit 6)

raised a demand before the defendant no. 3 for release of a sum of Rs. 11,82,660/-

being the balance after the release of a sum of Rs. 74,16,000/- out of Rs.

86,82,256/- as on 27.05.2008. But the defendants did not make timely payment to

the plaintiffs.

3. Apart from the main work, at the request of the defendant no. 4, the plaintiff

firm had partially completed the construction work of the “approach road” of Bridge

No. 35/2 & 53/2 for which the plaintiff firm was assured of being provided with a

formal Supplementary Work Order by the defendant no. 4. Without the approach

road, the bridge would not have become operational. However, despite completion

of the said work, the promised Supplementary Work Order has not been issued till

date. For the said work, the plaintiff firm had raised a demand for payment of a sum

of Rs. 14,50,000/-. But no payment has been released to the plaintiff firm in respect

of the said work.

4. After executing more than 70% of the work, it was found that there were

glaring mistakes in the Bill of Quantities as the quantities as provided in the Bill of

Quantities were not in accordance with the actual work carried out at site. In view of

the said inherent defect in the tender, the sanctioned amount was not sufficient to

cover for the actual cost of quantities for execution and completion of construction

of both the bridges. Requests were made by the plaintiff firm on several occasions

to the concerned defendant authorities to prepare a revised Working Estimate.

However, despite the plaintiff’s letter dated 12.03.2007 (Exhibit 8) to the defendant

no. 4 and letter dated 21.04.2008 (Exhibit 9) to the defendant no. 3, no revised

Working Estimate was prepared or approved. The plaintiff had also requested the

defendant no. 4 vide letter dated 21.04.2008 (Exhibit 9A) to arrange for funds for

the work already executed, which were also ignored by the defendants.

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5. During the period from March 2007 to April 2009, the plaintiff had to keep his

staff and machineries idle because the competent authorities of the defendants did

not give any instructions to the plaintiff firm to leave the work-site. Vide several

letters (Exhibit 12 to 21), the plaintiff firm informed the concerned authorities of

PWD (Roads), Assam about the progress of the work, demanded payment,

requested for revised working estimate and also requested for extension of time to

complete the contract, but the defendants never responded to any of the aforesaid

letters.

6. Vide letter dated 20.04.2009 (Exhibit 22), the plaintiff no. 2 firm had

informed the defendant no. 4 that that the plaintiffs were finding it very difficult to

continue with the contract work as their requests were not acceded to. Having no

other alternative, the plaintiffs, vide a letter dated 20.04.2009, made a request for

foreclosure of the Contract Agreement on the grounds as stated therein. By the said

letter, the plaintiff firm had also informed the defendant no. 4 that the plaintiff firm

had suffered huge losses for keeping staff, materials and machineries, etc. in idle

condition for a long period. On receipt of the letter dated 20.04.2009 (Exhibit 22),

the defendant no. 4, by letter dated 30.04.2009 (Exhibit 23) unilaterally rescinded

the contact on false, fabricated and concocted grounds.

7. Vide letter dated 08.05.2009 (Exhibit 24), the Assistant Executive Engineer

asked the plaintiffs to be present at the site on 18.05.2009 for taking joint

measurement. On receipt of the said letter, the plaintiff firm informed the Assistant

Executive Engineer vide letter on 18.05.2009 (Exhibit 25) (which was served on the

same day) about the plaintiff’s difficulties to be present at site on that date and

sought for certain clarifications from the Assistant Executive Engineer.

8. The plaintiffs had submitted an RTI Application dated 11.05.2009 to the

Public Information Officer (PIO), Office of the Chief Engineer, PWD (Roads), Assam,

seeking certain information/documents pertaining to the said contractual work. The

said authority did not provide the plaintiff with the requested information and

document. Aggrieved thereby, the plaintiffs filed a Writ Petition [W.P.(C) No. 2841 of

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2009]. The Hon’ble High Court by its order dated 17.07.2009 (Exhibit 26), directed

the said PIO to provide the required information/documents to the plaintiff firm on

or before 03.08.2009. From the information so provided to the plaintiff firm under

RTI Act, the plaintiffs came to know for the first time that revised Working Estimate

was ultimately approved by the defendant no. 3 in the month of June, 2009.

9. Having failed to elicit any favourable response to the issues raised by the

plaintiff firm, the plaintiffs served on the defendants one Advocate’s notice dated

03.07.2009 (Exhibit 28) under Section 80 of the CPC on behalf of the plaintiff firm.

10. The plaintiff firm had done some supplementary work on good faith on the

basis of the verbal instructions of the defendant no. 4. However, although the

officers then holding the office of Chief Engineer, Additional Chief Engineer,

Assistant Executive Engineer, etc. had assured the plaintiffs that they would be

formally taking up and issuing the post work sanction of revised bill of quantities,

the defendants actually did not issue any formal order in favour of the plaintiff firm.

11. The schedule of plaintiffs’ claims is as follows:-.

a. Principal outstanding as on 27.05.08 Rs.11,82,660/-

b. Interest thereon from 27.05.08 to 21.05.11 @ 18% p.a. Rs. 7,55,688/-

c. Payment for work executed but not recorded: Rs.14,50,000/-

d. Refund of security deposit: Rs. 3,23,000/-

e. Compensation for loss suffered for idle men, material

and machinery from March, 2007 to April, 2009: Rs. 6,00,000/-

f. Interest on (c), (d) and (e) above from 03.07.09 upto

21.05.11 @ 18% p.a. Rs. 8,78,094/-

Total Rs.51,89,442/-

12. The plaintiffs have prayed for a decree jointly and severally against the

defendants in terms of the prayers made in the suit; i.e. (a) for recovery of an

amount of Rs. 51,89,442/- as on 21.05.2011; (b) for pendente lite and future

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interest on Rs. 51,89,442/- at the rate of 24% from 21.05.2011 till actual recovery;

(c) costs of the suit; and (d) for any other relief or reliefs to which the plaintiff may

be found entitled to under the law and equity.

Case of the defendants

13. The defendants have contested the suit by filing written statement. The

contentions of the defendants in their written statement are as follows:

(1) In respect of the pleading of the plaintiff that it has constructed the island on the

instruction of the Executive Engineer although the same was not a part of the Bill of

Quantities, the defendants in paragraph 11 of their written statement have stated

that no instruction was given to the plaintiff’s firm to construct island at the site

inasmuch as the item is not included in the estimate for construction.

(2) As regard the demand of Rs. 11,82,660/- of the defendant no. 4 vide Exhibit 6,

the defendants in their written statement in paragraph 13 have stated that “the

demand of Rs. 11,82,660/- is a rough assessment made in anticipation of progress

of work to be done so that fund crunch will not affect the work.

(3) In paragraph 14 of the written statement the defendants stated that the interim

payment will be made on the basis of actual measurement of Bill prepared and

recorded in measurement book. As per section 4 of Special Condition of Contract the

payment of Bill for work done shall be subject to availability of fund and delayed

payment bears no interest. Hence the plaintiff cannot claim any interest as per

tender agreement on the balance Bill value.

(4) In paragraph 16 of the written statement the defendants stated that ”no

supplementary work order was required to be issued as it was clear from the

working estimate that the approach road can be completed within the estimate

amount. Further, it is to be stated that the plaintiffs have not done any work for

approach road and other earth work, hence the question of supplementary tender

and claim for it does not arise and plaintiff’s claim is not acceptable.”

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(5) In paragraph 34 of the written statement the defendants stated that “it was laid

down in the above quoted Bid No. BR/NLCPR/6/CF/ of 2005-2006 in section 4 (page

1) in clause No. 6(f) that the security deposit will be retained by the department

(defendant) for a period of 5(five) years after completion of work and as such the

statement regarding taking back of the security deposit by the plaintiff at this stage

does not arise.”

Issues

14. The following issues were framed in this suit, based on the pleadings of both

the sides:

(1) Whether the suit is maintainable in its present form?

(2) Whether the suit is barred by law of limitation?

(3) Whether the plaintiff has performed the contract work as agreed upon and

entitled for recovery of the amount as claimed?

(4) Whether there was any proposal for submission of revised working estimate and

technical sanction and for non-granting the same the plaintiff had to suffer loss for

delay in completion of the work?

(5) Whether the plaintiff is entitled for Rs. 51,89,442/- from the defendants due as

on 21.05.11?

(6) Whether the plaintiff is entitled for pendente lite and future interest on the above

amount @ 24% per annum till recovery?

(7) To what other relief/reliefs the parties are entitled?

Discussion, decision and reasons therefor

15. Both the sides examined a witness each. Both the sides filed their respective

written arguments. I heard the oral arguments advanced by the learned advocates

for both the sides.

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Issue No. 1

16. The defendants have stated in their written statement that the suit is not

maintainable in its present form. The defendants have further stated that the suit is

barred under the Specific Relief Act as the efficacious remedy available to the

plaintiffs is anyway not available in the present form by filing the suit for declaration

and decree. The defendants have also stated that there is no cause of action for the

suit and the plaintiffs are not at liberty to club together different causes of action for

the same relief. In their written arguments, the defendants have stated inter alia

that the plaintiff has clubbed together the cause of action from the date of rescind

letter dated 30.04.2009 which is repugnant to law. They have further stated that the

plaintiff failed to perform his duties and responsibilities and violated the terms and

conditions of the contract agreement which resulted in the rescission of the contract.

I, however, find from the averments made in the respective pleadings of both the

sides that the present suit is very much maintainable. Cause of action means that

every fact which would be necessary for the plaintiff to prove, if traversed, in order

to support his right to the judgment of the Court. The plaintiffs have filed this suit

claiming monetary reliefs and the bundle of facts averred by the plaintiffs in the

plaint clearly make out a cause of action for the suit. The claim of the defendants

that the plaintiffs have clubbed together different causes of action for the same

relief is misconceived. Whether the rescission of the contract on the part of the

defendants was proper or not is a matter to be decided in the suit on merits and

therefore the defendants are not right in their submission that the instant suit is not

maintainable as the defendants have rightly rescinded the contract under Section 39

of the Indian Contract Act. The suit is therefore maintainable in its present form.

The issue is answered in the affirmative.

Issue No. 2

17. Learned advocate for the defendants has stated in the written arguments

that the instant suit is barred by limitation as because the same is filed much beyond

the expiry of 3 years. It is submitted that the intended completion date of the entire

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work was 18 months from the date of formal work order which was given on

11.04.2005, but the plaintiff admitted in his cross-examination that he could not

complete the work within the prescribed period and as such the suit is filed beyond

the period of limitation as per tender agreement. According to the learned advocate

for the defendants, the plaintiffs are not entitled to the relief under Article 58 of the

Schedule to the Limitation Act as because the accrual of right to sue falls beyond the

period of 3 years. But the submission of the learned advocate for the defendants is

not worth accepting. The present suit is filed for realization of money. As per

averments made in the plaint the basis for the claim for principal outstanding of Rs.

11,82,660/- is the letter dated 27.05.2008 by which the defendant no. 4 had raised

a demand from the defendant no. 3 for release of the said amount for paying to the

plaintiff no. 2 firm. The plaintiff claims that the value of work which he had executed

for the defendants till 27.05.2008 was Rs. 86,82,256/- and the authorities had

released only a part payment of Rs. 74,16,000/- as on 27.05.2008. The instant suit

was filed on 23.05.2011 i.e. within 3 years from the above date, 27.05.2008.

Therefore, the suit is not barred by limitation. Article 58 is not applicable to the

instant suit as this is not a suit relating to declarations. The issue is answered in

negative.

Issue No. 3

18. This issue involves two questions: (a) as to whether the plaintiff performed

the contract work as agreed upon; and (b) as to whether the plaintiff is entitled to

the recovery of the amount as claimed. I am taking up only the first question here in

the discussion on issue no. 3. The second question will be addressed and answered

while discussing the issues relating to entitlements/reliefs i.e. issues no. 5, 6 and 7.

19. The plaintiff firm was awarded with the work of “Construction of RCC Bridge

No. 35/2 & 53/2 on Moran Naharkotia Road with Approaches and Protection Work

under NLCPR”. The authorities issued a ‘Notice to Proceed with the Work’ dated

11.04.2005. The said work was awarded for an estimated amount of

Rs.1,09,12,005/- (Rs. 89,73,337/- for Proper Bridge Work, Rs. 16,83,068/- for

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Approaches and Rs. 2,55,600/- for Protection Work). As per the Contract Agreement

(Exhibit 3), the intended completion date for the whole of the works was 18 months

from the date of issuing Work Order.

20. But the contention of the plaintiff is that due to circumstances not within his

control he could not complete the work to the whole extent, though a major part of

the work was completed. The pleas of the plaintiff are as follows (as stated in this

paragraph). Although the Formal Work Order was given on 11.04.2005, the Drawing

was approved by the defendants only on 16.06.2005 vide letter dated 16.06.2005

(Exhibit 4). However, due to onset of rainy season, the construction work could not

gather full momentum until September, 2005. Thereafter, within the next three

months, almost 40% of the work was completed, which included the work of

‘construction of island’, which was an item though not provided in ‘‘Bill of Quantities”

was required to be done. In this regard, the plaintiffs had intimated the same to the

defendants vide letter dated 15.10.2005. Within the 1st week of August, 2006,

almost 70% of the total work as per the ‘Bill of Quantities’ was completed in spite of

various constraints and several difficulties. Apart from the main work, at the request

of the defendant no. 4, the plaintiff firm had partially completed the construction

work of the “approach road” of Bridge No. 35/2 & 53/2 for which the plaintiff firm

was assured of being provided with a formal Supplementary Work Order by the

defendant no. 4. Without the approach road, the bridge would not have become

operational. However, despite completion of the said work, the promised

Supplementary Work Order has not been issued till date. After executing more than

70% of the work, it was found that there were glaring mistakes in the Bill of

Quantities as the quantities provided in the Bill of Quantities were not in accordance

with the actual work carried out at site. In view of the said inherent defect in the

tender, the sanctioned amount was not sufficient to cover for the actual cost of

quantities for execution and completion of construction of both the bridges.

Requests were made by the plaintiff firm on several occasions to the concerned

defendant authorities to prepare a revised Working Estimate. However, no revised

Working Estimate was prepared or approved. During the period from March 2007 to

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April 2009, the plaintiff had to keep his staff and machineries idle because the

competent authorities of the defendants did not give any instructions to the plaintiff

firm to leave the work-site. Vide several letters (Exhibit 12 to 21), the plaintiff firm

informed the concerned authorities about the progress of the work, demanded

payment, requested for revised working estimate and also requested for extension

of time to complete the contract, but the defendants never responded to any of the

aforesaid letters. Vide letter dated 20.04.2009 (Exhibit 22), the plaintiff no. 2 firm

had informed the defendant no. 4 that that the plaintiffs were finding it very difficult

to continue with the contract work as their requests were not acceded to. Having no

other alternative, the plaintiffs, vide a letter dated 20.04.2009, made a request for

foreclosure of the Contract Agreement on the grounds as stated therein. On receipt

of the said letter, the defendant no. 4, by letter dated 30.04.2009 (Exhibit 23)

unilaterally rescinded the contact on false, fabricated and concocted grounds.

21. The defendants have stated in their written statement that the contract work

was rescinded in April 2009 as the plaintiff could not complete the same as per the

contract agreement. They have further stated that no supplementary work order

was required to be issued as it was clear from the working estimate that the

approach road can be completed within the estimated amount. They have also

stated that the plaintiffs have not done any work for approach road and other earth

work and hence the question of supplementary tender and claim for it does not

arise. The defendants have also submitted that the plaintiff deliberately delayed the

work though notices were served upon him from time to time by the defendants to

resume the work, even extension of time was given to him in the interest of work

without imposing liquidated damage, but the plaintiff took the privilege of extension

of time. It is also the plea of the defendants that the plaintiff was asked to execute

the work as per the approved drawing cum sanctioned estimate and the question of

raising the working estimate does not arise as the plaintiff completed only 74% of

the work of the sanctioned estimate and as a result the work was rescinded as per

tender agreement.

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22. It is, however, worth mentioning that the defendant no. 4 by his letter dated

03.09.2008 had submitted a “revised Working Estimate” along with comparative

statement with the earlier Working Estimate to the Superintending Engineer, PWD

(Roads), Dibrugarh Roads Circle, Dibrugarh. From the RTI reply, the plaintiff came

to know for the first time that revised Working Estimate was ultimately approved by

the defendant no. 3 in the month of June, 2009. The plaintiff also came to know

that the defendant no. 4 had admitted in its revised Working Estimate as follows:-

“… At the time of execution of the work some nominal modification of originally

prepared estimate has become most essential. The reasons are as under (1) The

Bridge has been constructed as per the design drawing. The Design drawing had

been strictly maintained. Thus some variations were to be made in some items of

the bridge proper. While doing this the expenditure almost attained the tender

amount and hence the approach work was left out from the working estimate. The

approaches of the bridge will be taken up from the savings of the work

“Improvement & strengthening of Moran Naharkatia Road from Moran town to

Naharkatia Town under C.R.P (MOSRT & H) from 2007-08”. In accordance with that,

the working estimate has been prepared and will be forwarded to CE, PWD (Roads)

for approval …”

23. Moreover, in his letter dated 03.09.2008 [Exhibit 10(1)] addressed to the

Superintending Engineer, PWD, Dibrugarh Roads Circle, Dibrugarh, with which the

Working Estimate was enclosed, the defendant no. 4 had stated as follows:

“…the construction of bridge proper of the project has been carrying out as per the

approved drawing. Quantities of the different items of works related to bridge proper

completed on the basis of approved drawing are found different from the quantities

of accepted tender mentioned in the B.O.Q. related to bridge proper work. Over all

impact of such differences resulted in enhancement of the amount of cost for

construction of bridge proper than the stipulated amount of accepted tender against

bridge proper. In regard of protection work redesign of the same is invariably

needed to provide the required quantity of protection work as per actual

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requirement of prevailing site condition. The quantity computed on the basis of

redesign exceeds than the quantity of accepted tender mentioned in the B.O.Q.

against protection work, in consequence of which amount of cost for construction of

protection work exceeds the limit of the earmarked amount of cost mentioned in

accepted tender against protection work. As such out of the three major parts of

works of the project, the part i.e. the approach work is not possible to be done

within the sanction amount of the project…”

24. In his cross examination, DW1 admitted that the letter [Exhibit 10(1)] was

issued by the defendant no. 4 on 03.09.2008 for approval of working estimate and

working estimate was enclosed therein. He admitted that the same (working

estimate) was approved by letter dated 10.06.2009 (Exhibit 10). He categorically

admitted that from 03.09.2008 till 10.06.2009 since there was no approval of

working estimate, the contractor cannot continue with the contractual work. DW1

also admitted that “I have not submitted any document in my evidence giving details

of the period for which extension was granted. A contractor cannot execute any

work without getting any approval of extension of time. The contractor cannot

execute work without approval of working estimate.” DW1 also admitted in his

cross-examination that the contractual work was terminated without getting

approval of the working estimate. Thus, it appears that the plaintiff could not

complete the contractual work due to non-approval of revised working estimate in

time as the same was approved only on 10.06.2009. The work was rescinded on

30.04.2009 i.e. much before the date of approval which was clearly against the spirit

of the contract agreement. Situated thus, I am of the considered view that the

plaintiff was not at fault for the non-completion of the balance work.

25. The issue no. 3 is, accordingly, answered with the finding that though the

plaintiff completed a major part of the contract work, but due to reasons detailed

herein before he could not complete the balance work. The issue is decided

accordingly.

Issue No. 4

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26. In view of the detailed discussion on issue no. 3, I am inclined to hold that

there was proposal for submission of revised working estimate and technical

sanction. The defendants have submitted in their written arguments inter alia that

proposal for submission of revised working estimate and technical sanction etc. does

not arise inasmuch as the letter dated RBPC 225/2004/7 dated 22.03.2005 clearly

depicted all terms and conditions of the work to be completed the plaintiff. But fact

remains that the revised working estimate was ultimately approved by the defendant

no. 3 in the month of June, 2009 as I have observed in the discussion on issue no.

3. For non-granting the same in time, the plaintiff obviously had to suffer loss for

delay in completion of work, as the plaintiff had to keep his men, materials and

machineries at site waiting for the revised working estimate as the defendants had

not instructed the plaintiff to leave the site with his men, materials and machineries

during the period 03.09.2008 till 10.06.2009. During cross-examination, DW1 stated

that they have not intimated the contractor to leave the site with men and materials

during the period between 03.09.2008 upto 10.06.2009 and the contractor’s work

was terminated without getting approval of the working estimate and further stated

that from 03.09.2008 upto 10.06.2009 since there was no approval of working

estimate, the contractor cannot work. Instead of informing the plaintiff about the

approval of the revised working estimate, the defendant no. 4 terminated the

contract of the plaintiff. Therefore, for non-granting of revised working estimate and

technical sanction in time, the plaintiff had to suffer loss. The issue is answered in

the affirmative and in favour of the plaintiff.

Issue No. 5

27. The plaintiffs have sought a decree inter alia for the recovery of an amount

of Rs. 51,89,442/- as on 21.05.2011. The break-up of the said amount is as under:

Sl. No. Item Amount (Rs.)1 Principal outstanding as on 27.05.2008 11,82,6602 Interest thereon from 27.05.2008 to 21.05.2011 @

18% p.a.

7,55,688

3 Payment for work executed but not recorded 14,50,000

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4 Refund of security deposit 3,23,0005 Compensation for loss suffered for idle men, material

and machinery from March, 2007 to April, 2009:

6,00,000

6 Interest on (3), (4) and (5) above from 03.07.2009

upto 21.05.2011 @ 18% p.a.

8,78,094

TOTAL 51,89,442

28. Let me make my discussion under the following sub-heads (on the basis of

the above break-up items):

(1) Principal outstanding as on 27.05.2008

29. It is stated in the plaint as well as in the evidence of PW1 that the defendant

no. 4 by his letter dated 27.05.2008 (Exhibit 6) had raised a demand before the

defendant no. 3 for release of a sum of Rs. 11,82,660/- for paying to the plaintiffs,

being the balance after the release of a sum of Rs. 74,16,000/- out of Rs.

86,82,256/- as on 27.05.2008. The defendant no. 3, vide letter dated 05.06.2008

(Exhibit 11) addressed to the Deputy Secretary to the Govt. of Assam, PWD

(Budget), Dispur, had recommended for release of fund of Rs. 11,82,660/- for

payment to the plaintiff. But the requisite funds were not released to the plaintiffs by

the defendants. As rightly submitted by the learned advocate for the plaintiffs in

their written arguments, PW1 was not at all cross examined by the defendant side in

respect of the demand for Rs. 11,82,660/-. It is the contention of the defendants is

that the demand of Rs. 11,82,660/- is a rough assessment made in anticipation of

progress of work to be done so that fund crunch will not affect the work. But the

contention is not worth believing, for, had the demand been a rough assessment,

the amount would have been in somewhat round figure, not Rs. 11,82,660/-. That

apart, this submission of the defendant side runs counter to their own submission

that as per para 6(p) of SCC of the contract agreement interim payment will be

made on the basis of actual measurement and bill prepared and recorded in

measurement book. Moreover, there are certain admissions/statements in the cross-

examination of DW1 which are worth stating. Exhibit 7 is the details of quantity

executed in Statement-II and it shows that as on 27.05.2008 the value of the work

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executed was Rs. 86,82,256/-. During cross examination, DW1 stated thus: “Exhibit

7(1) is my signature. The heading of Exhibit 7 is ‘Details of Quantity executed’. Rs.

86,82,256/- is the value of the work executed as on date 27.05.2007. Exhibit 27(16)

(i) is my signature. The value of work executed as per the details of quantity

executed [at page 162 of Exhibit 27(18)] is the same to the value of the bill as

reflected in page no. 160 exhibited as Exhibit 27(16). Bill abstract as per Exhibit 6

(page 90) means summary of the bill. Bills are prepared after the execution of the

work. Exhibit 7 is the bill abstract as given in Exhibit 27(16) and 27(18).” Therefore,

the demand of Rs. 11,82,660/- was a demand for the executed work. The value of

the last bill (i.e. bill paid to the plaintiff) was Rs. 74,15,512/- as admitted by DW1 in

cross examination. Upon subtracting Rs. 74,16,000/- (Rs. 74,15,512/- rounded off)

from the value of work executed upto 27.05.2008 as per Exhibit 7 i.e. 86,82,256/-,

the amount receivable by the plaintiff comes to Rs. 12,66,256/-. However, in the

column ‘present demand’ in Exhibit 6(1) and Exhibit 6(2) the amount Rs.

12,66,256/- is found struck off and in its place an amount of Rs. 11,82,660/- is

found written. The contention of the plaintiffs in this connection is that since the

defendant no. 4 in Exhibit 6(1) and 6(2) had made demand of Rs. 11,82,660/- by

correcting the figure Rs. 12,66,256/- so the plaintiff from the very inception had

been demanding only Rs. 11,82,660/- from the defendants thinking that the balance

could be recovered after the final measurement. DW1 admitted that fund was

available under NLCPR (Non Lapsable Central Pool of Resources). He stated that he

does not know why in spite of demand and availability of fund, no payments were

made from October 2006 till the date of termination of contract on 30.04.2009. In

view of the above discussion, the plaintiffs are entitled to an amount of Rs.

11,82,660/- as on 27.05.2008 as prayed for.

(2) Interest on Rs. 11,82,660/- from 27.05.2008 to 21.05.11 @ 18% p.a.

30. The plaintiffs have claimed interest for delayed payment @ 18% per annum

on the amount receivable from the date of demand i.e. 27.05.2008. The contention

of the plaintiffs is that as per Clause 7 of the contract agreement the contractor is

entitled to monthly payment; but in this case the same was not done. The plaintiffs

17

in order to protect the interest of the defendants and to save the work from huge

cost escalation had procured adequate finance from market, friends, private sources

as well as from their Bank on interest. The plaintiffs contend that the defendants are

the Government authority and against any claims the Government collects interest at

the rate of 18% per annum for any delayed payments whether it is sales tax, income

tax or any other dues and therefore the plaintiff firm is also entitled to interest at the

rate of 18% per annum together with the cost of the suit. On the other hand, the

learned advocate for the defendants has submitted that as per Section 4, para 2 of

the SCC of the contract agreement it is stipulated that payment of contractor’s bills

for works done shall be subject to availability of fund and delayed payment will not

bear any interest. Moreover, the contention of the defendants is that no interest can

be awarded in the case at hand as there was no agreement to pay interest on bills

or dues and moreover there were no any usages or customs for payment of interest.

The learned advocate for the defendants placed reliance on the decisions reported in

AIR 1966 SC 275 and AIR 1966 SC 395.

31. I have considered the contentions and submissions of both the sides. DW1 in

cross-examination stated that the bill in Exhibit 27(16) was paid from NLCPR fund.

He stated that the work under the instant contract is also covered under the same

fund. DW1 admitted that fund was available under NLCPR and said he does not

know why in spite of demand and availability of fund, no payments were made from

October 2006 till the date of termination of contract on 30.04.2009. In view of the

withholding of payments on the part of the defendants in spite of availability of

funds, the plaintiffs are entitled to interest on the principal amount. After all, interest

is nothing but the cost of retaining the payment after its due time. Hon’ble Supreme

Court has held in Alok Shanker Pandey Vs. Union of India [Appeal (Civil) 1598

of 2005] [date of judgment 15.02.2007] that interest is not a penalty or punishment

at all, but it is the normal accretion on capital. Equity demands the payment of

interest. Considering all the aspects in entirety, including the provision contained in

Section 34 of the CPC, I am of the view that the plaintiffs are entitled to interest.

The plaintiffs have claimed interest at the rate of 18% per annum, but interest at

18

the rate of 18% per annum appears to be quite exorbitant. I am of the opinion that

the grant of interest at the rate of 10% per annum is appropriate in the facts of this

particular case. The plaintiffs are, therefore, entitled to interest on Rs. 11,82,660/-

from 27.05.2008 to 12.05.11 @ 10% per annum. The interest, so calculated, comes

to Rs. 3,52,854/-.

(3) Payment for work executed but not recorded

32. The plaintiffs have averred that apart from the main work, at the request of

the defendant no. 4, the plaintiff firm had partially completed the construction work

of the “approach road” of Bridge No. 35/2 & 53/2 for which the plaintiff firm was

assured of being provided with a formal Supplementary Work Order by the

defendant no. 4. The same has also been admitted by the defendants vide Exhibit

10(1) page 104 as well as Exhibit 10(4) page 107 wherein the defendant no. 4 had

included in the revised working estimate: “The approaches of the bridge will be

taken up from the savings of the work Improvement & Strengthening of Moran

Naharkatia Road from Moran town to Naharkatia Town under C.R.F. (MOSRT & H)

from 2007-08”. Without the approach road, the bridge would not have become

operational. However, despite completion of the said work, the promised

Supplementary Work Order has not been issued till date. The plaintiffs have averred

that for the said work the plaintiff firm had raised a demand for payment of a sum of

Rs. 14,50,000/-, but no payment has been released to the plaintiff firm in respect of

the said work.

33. DW1 stated in paragraph 11 of his evidence that the plaintiff did not work for

approach road and other earth work hence the question of supplementary tender

and claim does not arise and acceptable to the defendant department. In his cross-

examination, he stated that “Utilization Certificate are communicated to the Planning

and Development deptt. containing details of the payment made head-wise. Exhibit

27(25) (page 169) is the Utilization Certificate. In respect of bridge No. 35/2 work

worth Rs. 9,29,000/- was executed in respect of approach work. Similarly, in respect

of Bridge No. 53/2, work worth Rs. 4,31,100/- was executed in respect of approach

19

work. I cannot say on which Bill payment of Rs. 13,60,000/- as shown in Utilization

Certificate was made. I cannot say whether this payment was made or not.” DW1

further stated that in Exhibit G, in column no. 7, the “Roller and other machineries”

are required for construction of approach road. DW1 further stated thus: “Final Bill

contains full quantity of the works executed by the contractor. In Exhibit G apart

from item no. 25 (Supplying and spreading of broken stones, gravel, metal and

gravel) no other item in respect of approach road is indicated. Therefore, in the Final

Bill only a sum of Rs. 40,495/- is included in respect of approach road. The balance

work was allotted to some other contractor after re-tendering. Exhibit 34 is the RTI

reply received from the defendants which contains the details of the balance work

allotted to some other contractor. The balance work does not contain any item for

approach road.” As it appears from the cross-examination of DW1, the plaintiff had

done the work of approach road (worth Rs. 9,29,000/- in respect of bridge No. 35/2

and worth Rs. 4,31,100/- in respect of bridge No. 53/2). If the plaintiff had not done

the work of approach road, the same would have been an item in the balance work

allotted to some other contractor by retendering. From the cross-examination of

DW1, it becomes clear that the plaintiffs had done the work of approach road for Rs.

13,60,100/- and out of this amount only a sum of Rs. 40,495/- is included in the

Final Bill of the plaintiffs. Therefore, the plaintiffs are entitled to the balance amount

of Rs. 13,19,605/-.

34. The plaintiffs claim that they had also done the work of ‘construction of

island’ though the item was not provided for in Bill of Quantities. The plaintiff firm

had done the said work as per the verbal direction of the Engineer-in-Charge. The

said fact was intimated to the defendants vide letter dated 15.10.2005 (Exhibit 5),

which has not been responded to by the defendants. But, the defendants have

stated in their written statement that no instruction was given to the plaintiff firm to

construct island at the site inasmuch as the item is not included in the estimate for

construction. But in his cross-examination DW1 has stated in this connection that “In

spite of letters (Exhibits 5, 6, 9, 15, 17, 21) we have never intimated the contractor

that there is no requirement for construction of island and so not to proceed with

20

the construction of island. I do not know if as per instruction of the Executive

Engineer the contractor had constructed the Island for construction of the bridge”.

Therefore, the claim of the plaintiffs as regards construction of island is worth

believing. Be that as it may, the plaintiffs have not shown how much amount was

incurred for construction of the island and as such I am not inclined to grant any

monetary relief to the plaintiffs in relation to the construction of island.

35. In view of above discussion, the plaintiffs are entitled to recovery of the

admitted amount of Rs. 13,19,605/- being the balance of the expenditure incurred

by the plaintiffs for doing the work of the approach road.

(4) Refund of security deposit of Rs. 3,23,000/-

36. The plaintiffs have averred that they are also entitled to refund of the

security deposit amounting to Rs. 3,23,000/- which has not been released till date

by the defendants. But, according to defendants, the security deposit is retained by

the Department for a period of 5 years after completion of works as per Section 4 in

para 6(f) of SCC of the tender agreement and as such taking back of the security

deposit by the plaintiff does not arise. I am, however, satisfied with the argument

advanced by the plaintiffs side that more than five years have elapsed since the date

of termination of the contract by the defendants and therefore the plaintiffs are

entitled to refund of the security deposit. Hence, the plaintiffs are entitled to the

refund of the security deposit amount as prayed for.

(5) Compensation for loss suffered for idle men, material and machinery

from March, 2007 to April, 2009

37. The plaintiffs are also claiming a sum of Rs. 6,00,000/- on account of loss

that the plaintiff firm had to suffer by keeping its men, materials and machineries

idle from March, 2007 to April, 2009. According to them, the reasons for keeping the

men, equipments, machineries and materials idle are: firstly, the defendants did not

permit removal of the plaintiff’s men, equipments, machineries and materials from

21

the site; secondly, because the plaintiffs were having high hope that their payments

will be expeditiously made and that the competent authorities would eventually issue

the requisite revised working estimate for completing the balance work. The

defendants have stated that the plaintiffs had not mobilized the men and materials

at site. DW1 has admitted in his cross-examination that “From 03.09.2008 till

10.06.2009 since there was no approval of working estimate the contractor cannot

continue with the contractual work. We have not intimated to the contractor to leave

the site with men and materials during this intervening period.” From the said cross-

examination of DW1, the claim of the plaintiffs is worth believing. Be that as it may,

the plaintiffs have not given the details of the men, materials and machineries by

showing break-up of the claimed amount of Rs. 6,00,000/-. Therefore, I am not

inclined to grant the said payment to the plaintiff. Considering, however, the ends of

justice, the plaintiffs are entitled to a lump sum amount of Rs. 1,00,000/- on that

count.

(6) Interest on Nos. (3), (4) and (5) above from 03.07.2009 upto

21.05.2011 @ 18% p.a.

38. In the light of the discussion on No. (2), made in paragraphs no. 30 and 31

above, I am inclined to hold that the plaintiffs are entitled to interest on Rs.

13,19,605/- + Rs. 3,23,000/- + Rs. 1,00,000/- i.e. total Rs. 17,42,605/- from

03.07.2009 upto 21.05.2011 at the rate of 10% per annum. The interest, so

calculated, comes to Rs. 3,27,992/-.

39. In the result, the total amount due to the plaintiffs as on 21.05.2011 comes

to Rs. 11,82,660/- + Rs. 3,52,854/- + Rs. 13,19,605/- + Rs. 3,23,000/- + Rs.

1,00,000/- + Rs. 3,27,992/- i.e. Rs. 36,06,111/-. The plaintiffs are, therefore,

entitled to an amount of Rs. 36,06,111/- (Rupees Thirty Six Lakh Six Thousand One

Hundred and Eleven) from the defendants due as on 21.05.2011. The issue is

decided accordingly.

Issue No. 6

22

40. In view of the finding upon issue no. 6, the plaintiffs are entitled to an

amount of Rs. 36,06,111/- from the defendants due as on 21.05.2011. As regards

interest pendente lite and future interest until the date of realisation, such interest,

in view of the decision of the Hon’ble Supreme Court in Mahabir Prashad Rungta

Vs. Durga Datt, AIR 1961 SC 990, is within the discretion of the Court. The

plaintiffs, to my considered view, are also entitled to pendente lite and future

interest on the total due amount of Rs. 36,06,111/- and I am of the considered

opinion that interest at the rate of 6% per annum would be appropriate in the facts

and circumstances of the case. The issue is answered accordingly.

Issue No. 7

41. Apart from the above reliefs, the plaintiffs are entitled to the costs of this

suit. The issue is answered accordingly.

Order

42. The suit is decreed on contest with costs. The plaintiffs are entitled to the

following reliefs against the defendants, jointly and severally:

(a) realization of an amount of Rs. 36,06,111/- (Rupees Thirty Six Lakh Six

Thousand One Hundred and Eleven) as on 21.05.2011;

(b) pendente lite and future interest on Rs. 36,06,111/- (Rupees Thirty Six Lakh Six

Thousand One Hundred and Eleven) at the rate of 6% per annum from 21.05.2011

till actual recovery; and

(c) costs of the suit.

43. A decree be drawn up accordingly within the prescribed time.

23

Given under my hand and the seal of this Court on this the 8 th day of

February, 2016.

Civil Judge No. 3,

Kamrup (M), Guwahati

24

APPENDIX

Witnesses examined by the Plaintiffs:

Sri Joy Prakash Beria (PW1)

Documents exhibited by the Plaintiffs:

1. Order dated 22.03.2005 issued by Dy. Secy. to Govt. of Assam, PWD, Dispur

(Exhibit 1)

2. Letter dated 11.04.2005 (Notice to Proceed with the Work) (Exhibit 2)

3. Contract agreement (Exhibit 3)

4. Letter dated 16.06.2005 of Addl. Director, Design, Assam, PWD (Exhibit 4)

5. Letter dated 15.10.2005 to defendant no. 4 (Exhibit 5)

6. Copy of demand made by defendant no. 4 vide letter dated 27.05.2008 (Exhibit

6)

7. Details of quantity executed in Statement-II (Exhibit 7)

8. Plaintiff’s letter dated 12.03.2007 to defendant no. 4 (Exhibit 8)

9. Copy of letter dated 21.04.2008 by plaintiff to defendant no. 3 (Exhibit 9)

10. Copy of letter dated 21.04.2008 by plaintiff to defendant no. 4 (Exhibit 9A)

11. Letter dated 10.06.2009 of Addl Director, Design, to defendant no. 4 with

enclosures [Exhibit 10, 10(1) to 10(12)]

12. Copy of defendant no. 3’s letter dated 05.06.2008 recommending release of

funds (Exhibit 11)

13. Copies of plaintiff’s letters from dated 01.08.2006 to 23.03.2009 (Exhibit 12 to

21)

14. Copy of plaintiff’s letter dated 20.04.2009 to defendant no. 4 (Exhibit 22)

25

15. Letter dated 30.04.2009 of defendant no. 4 unilaterally rescinding the contract

(Exhibit 23)

16. Letter dated 08.05.2009 issued by Assistant Executive Engineer to plaintiff

(Exhibit 24)

17. Plaintiff’s letter dated 18.05.2009 to Assistant Executive Engineer (Exhibit 25)

18. Order dated 17.07.2009 passed in W.P.(C) No. 2841 of 2009 (Exhibit 26)

19. Copies of relevant documents received by plaintiff under RTI Act [Exhibit 27,

27(1) to 27(28)]

20. Plaintiffs’ advocate notice dated 03.07.2009 under Section 80 CPC (Exhibit 28)

21. Photographs of work in progress (Exhibit 29 to 32)

22. Petition bearing no. 3335 dated 24.08.2012 (Exhibit 33)

23. Notice to admit (Exhibit 34)

24. Notice to produce (Exhibit 35)

Witnesses examined by the Defendants:

Sri Tomzid Ali (DW1)

Documents exhibited by the Defendants:

1. Authority letter from deptt. To adduce evidence (Exhibit A)

2. Tender for the Bid – BR/NLCPR/6/CE/2004-2005 (Exhibit B)

3. Memo No. DBRD/TB/Br. No.(35/2 & 53/2) NLCPR/08/7 dt. 11.02.2008 (Exhibit C)

4. Memo No. DBRD/TB/Br. No.35/2 & 53/2 NLCPR/08/19 dt. 12.01.2009 (Exhibit D)

5. Memo No. DBRD/TB/Br. No.35/2 & 53/2 NLCPR/08/20 dt. 08.04.2009 (Exhibit E)

6. Memo No. DBRD/TB/Br. No.35/2 & NLCPR/08/21 dt. 30.04.2009 (Exhibit F)

7. Running A/c Bill –C-D Bill No. 4th /RA/IF/193.H-dated 08.12.2009 (Exhibit G)

Civil Judge No. 3,

Kamrup (M), Guwahati