Appeals Nos 321 and 322 of 1956
Appeals by special leave from the judgment and decree dated September 21
1951 of the Mysore High Court in Regular Appeals Nos
32413 and 25 of 1948
49 arising gut of the judgment and decree dated 85 664 January 9 1948 of the Principal DistriCt Judge Bangalore in Original Suits Nos
55 of 1946 47 and 117 of 1945 46 respectively
section K Venkataranga Aiyangar and section K Aiyangar for the appellant
B K B Naidu for the respondents
February 1
The Judgment of the Court was delivered by SHAH J
V R Subramanyam the appellant herein is the owner of plot No 29 Subedar Chattram Road in the town of Bangalore
B Thayappa respondent is a building contractor
The appellant entrusted the respondent with the work of constructing a house and shops on the plot on terms and conditions set out in a written agreement dated October 1 1942 which was slightly modified on October 6 1942
By the agreement the respondent was to construct for the appellant on the plot six shops abutting a public road the main building at the rear of the shops an out house and a garage according to a site plan
The respondent was to be remunerated at rates specified in the agreement for constructions with R C C roofing the rate stipulated was Rs 4 2 0 per square foot and for  tiled construction  it was Rs 3 2 0 per square foot
The Municipality of Bangalore did not sanction the plan as proposed by the appellant
The plan was altered and it was sanctioned subject to those alterations
By the alterations the shops were deleted from the plan the area of the out house was increased and a puja room on the ground floor and an extra room on the first floor were added to the plan
A compound wall was also to be constructed
The respondent carried out a substantial part of the construction work according to plan and the appellant paid to him diverse sums of money and delivered building materials
The aggregate amount accordingly received by the respondent was Rs 20200
But before the work could be completed disputes arose between the appellant and the respondent about the work done by the latter
The appellant claimed that the work done was defective and that he was entitled to compensation for effecting 665 repairs necessary to rectify the defects
The respondent claimed compensation at certain rates set up by him for work done for the appellant for which no express provision was made in the written agreement
Each party set up an oral agreement about the remuneration to be paid to the respondent for the extra work which was not included in the original agreement
The appellant filed a suit in the court of the Subordinate Judge Bangalore against the respondent which was later transferred to the court of the Principal District Judge Bangalore and numbered O section 54 of 1946 47 for a decree for Rs 8515 4 0 being the amount of compensation which the appellant claimed he was entitled to receive from the respondent for defective work and for delay in completion of the construction
The respondent filed a suit against the appellant which was later transferred to the Court of the Principal District Judge Bangalore and numbered 55 of 1946 47
By this suit the respondent claimed a decree for Rs 5988 12 0 being the remuneration due to him for the work done in constructing the house less Rs 20200 received from the appellant
The respondent filed another suit No 117 of 1945 46 for a decree for Rs 15001 10 9 with interest and notice charges being the amount due to him for the construction of the out house godown first floor room and flight of steps and the value of some building materials which the respondent claimed he had left in the premises of the appellant and which the latter had wrongfully removed
The trial court granted to the appellant a decree for Rs 3000 in suit No 54 of 1946 47
To the respondent he granted a decree for Rs 2989 6 0 in suit No 55 of 1946 47 and in suit No 117 of 1945 46 he granted a decree for Rs 13329 10 9
Both the parties felt themselves aggrieved by the decrees passed in the three suits and six appeals were preferred to the High Court of Judicature of Mysore at Bangalore against those decrees
The High Court reversed the decree passed in suit No 54 of 1946 47 and dismissed the appellant s claim in its entirety
The decrees 666 passed in suit Nos
55 of 1946 47 and 117 of 1945 46 were also set aside and proceedings were remanded to the District Court with a direction that a qualified engineer be appointed as Commissioner to determine the amounts payable to the respondent for work done in addition to the work agreed to be done under the written contract
The High Court ordered that the same be determined  in accordance with the directions  given in the judgment
The appellant has appealed to this court against the decrees in suits Nos
55 of 1946 47 and 117 of 1945 46 with special leave under article 136 of the Constitution and he challenges the directions given in the order of remand
The dispute between the parties related to the construction of the out house garage puja room the room on the first floor the stair case leading to the upper floor room and the compound wall
In respect of these constructions except for the compound wall the District Judge awarded compensation to the respondents at the rate of Rs 4 2 0 per square foot and in respect of the compound wall he awarded compensation at the rate of Rs 5 per running foot and certain additional charges
The High Court held that the respondent was entitled to receive compensation at the prevailing market rate for constructions which were not covered by the agreements dated October 1 1942 and October 6 1942
The High Court negatived the plea of the respondent that the appellant had agreed to pay him at  extra rates for deviations and additions not specifically contained in the original agreement
 The High Court then held that for the construction of the out housepuja room and the upper floor room the respondent was entitled to receive compensation at the rate of Rs 4 2 0 and for the out house he was entitled to receive  some extra amount for the additional constructions  In these items according to the High Court there was no material deviation from the original plan
The High Court further directed that for the flight of stairs compensation be paid either by way of a lump sum or on cubical content whichever was more practicable or common according to the rates which they proposed to indicate for such 667 additional work  The High Court however held that there was substantial variation from the original contract in the construction of the garage and therefore the garage could  not be covered by the contracted rate and must be paid for at the rates current at the end of the year 1943
The High Court also directed that  if the extra items not covered by Exs
VII and VIIa have been constructed or supplied by the defendants as claimed in his bills Exs
XXI XXII and XXIII are to be paid for in addition to the flat rate the basis on which they should be paid for may  be fixed in accordance with the rates contained in exhibit II
 Counsel for the appellant submitted that as in the view of the High Court the respondent failed to prove the oral agreement pleaded by him the suit should have been dismissed and they should not have awarded compensation quantum meruit which was not claimed
it was urged that the respondent must succeed or fail  on the case pleaded by him and not on a cause of action not pleaded
In our view there is no substance in this contention
As we have already observed in respect of the additional work done by the respondent both the parties set up conflicting oral agreements
These were not accepted by the High Court
If a party to a contract has rendered service to the other not intending to do so gratuitously and the other person has obtained some benefit the former is entitled to compensation for the value of the services rendered by him  Evidently the respondent made additional constructions to the building and they were not done gratuitously
He was therefore entitled to receive compensation for the work done which was not covered by the agreement
The respondent claimed under an oral agreement compensation at prevailing market rates for work done by him even if he failed to prove an express agreement in that behalf the court may still award him compensation under section 70 of the Contract Act
By awarding a decree for compensation under the Statute and not under the oral contract pleaded there was in the circumstances of this case no 668 substantial departure from the claim made by the respondent
It was then urged that the High Court was in error in directing assessment of compensation for the additional work  in accordance with the rates mentioned in exhibit II
 The plaintiff s witness T section Narayana Rao had admitted that the rates in exhibit II were the current market rates for building construction work similar to the appellant s building
In the view of the High Court the rates set out in that bill were not excessive
If with a view to restrict the scope of the enquiry the learned judges of the High Court gave a direction to the Commissioner for assessing compensation on the basis of rates which were approved by the plaintiff s witness it cannot be said that any serious error was committed in incorporating that direction which would justify our interference
Finally it was urged that the appellant was entitled to claim the loss suffered by him on account of defective work by way of an equitable set off in the claim made by the respondent in suits Nos
55 of 1946 47 and 117 of 1945 46
But the appellant made a claim in a substantive suit for compensation for loss suffered by him because of the alleged defective work done by the respondent
That suit was dismissed by the High Court and it is not open to the appellant thereafter to seek to reagitate the same question in the companion suits when no appeal has been preferred against the decree in suit No 54 of 1946 47 and no plea of equitable set off has been raised in the written statements in the companion suits
In our view there is no substance in any of the contentions raised
The appeals therefore fail and are dismissed with costs
One hearing fee
Appeals dismissed


Summary:
The appellants were shareholders of a company known as Navjivan Mills Ltd which held a large number of shares of the Bank of India
The Bank with the object of increasing their share capital offered some more shares to the Mills for a price including premium which was about half the market value
The Mills purchased a small number of the shares so offered with their own funds and distributed their right to acquire the remaining shares to their shareholders in the proportion of two shares of the Bank for one share held by them
The assessment of the appellant was reopened by the Income Tax Officer under section 341a of the Income tax Act on the footing that the release of the right to the shares of the Bank of India amounted to distribution of dividend
Appeals against the order of the Income Tax Officer having failed the High Court at the instance of the appellants framed the following question Whether on the facts and circumstances of the case the distribution of the right to apply for the shares of the Bank of India by Navjivan Mills Ltd in favour of the assessees amounted to a distribution of dividend 585 The High Court answered the question in the affirmative
On appeal with a certificate of the High Court Held that the view taken by the High Court was correct
The distribution to the shareholders of the Mills of the right to obtain two shares of the Bank of India for each share held by them at half the market value amounted to distribution of dividend which was liable to be taxed