IN THE COURT OF Dr. [ENTITY]: ADDL. DISTRICT JUDGE: DELHI RCA No. 24/2007 [ENTITY] Through its Chief Engineer, Rohini, Delhi. Appellant Versus Shri [ENTITY] S/o Late Sh. Om Prakash Sloe Proprietor of M/s. Sat Construction Company, 111A, Pkt. B, Group - III, Dilshad Garden, Delhi - 95 Respondent
Date of Institution: 19.9.2007 Arguments heard on: 2.7.2008
Last date for filing written submissions: 21.7.2008 Date of Decision: 25.7.2008 : J U D G M E N T :
This civil appeal has been preferred by the appellant [ENTITY] against the judgment and decree dated 30.4.2007 passed by the Ld. Civil Judge in suit bearing no. 180/06/98. Before proceeding further with the grounds of appeal the brief facts of the case are as under:
: 1 : The respondent [ENTITY] had filed a civil suit for recovery of Rs.1,50,000/ against the [ENTITY] on the ground that he was awarded the work of M/o Service Under NA/C 11, Rohini, SH: C/o Boundary wall with chain link fencing at Zonal Green Avantika, Rohini, vide award letter No. F.45 (54)ND1/A/9798/1262 dated 10.9.97 under the territorial jurisdiction of N.D.I, [ENTITY]. The work was later on transferred under the territorial jurisdiction of Rohini Project Divn. No. 11, Naharpur Village, Rohini, Sector VII, Delhi
85. There has been a concluded contract between the plaintiff and the defendants and the time of completion of the work was 1 months and the date of start of the work was 20.9.97. The case of the respondent is that he was always ready and willing to complete the work and the appellants are liable under the terms and conditions of the agreement to handover the site to the respondent for execution of the work. However, the contract of the respondent was rescinded on 31.8.1998 due to which reason the respondent haD approached the Ld. Civil Court.
: 2 : According to the appellant, the site was made available to the respondent despite which it was the respondent who was not ready to execute the work at all and he was requested several times to start the work which fact is evident from letter No. 477 dated 23.5.1998; letter No. 551 dated 9.6.98 which was sent before the reply to the legal notice of the respondent on 5.8.98. It was also averred that the time was essence of the contract and the respondent is trying to take advantage of its own wrong and is not entitled to recovery of Rs.1,50,000/ from the appellant and that the contract was rightly rescinded vide letter dated 31.8.98 which is legal and in accordance with the terms and conditions of the agreement.
Issues were framed by the Ld. Trial Court after which evidences were lead by both the parties and after hearing the arguments, the Ld. Trial Court had decreed the suit of the respondent vide judgment and decree dated 30.4.2007. Being aggrieved by the same, the appellant has now approached this court on the ground that the impugned order passed by the Ld. Trial Court is against the law and the : 3 : facts of the case due to which reason it is liable to be set aside. It is also stated that the Ld. Trial Court has failed to consider the relevant material evidence and had the Ld. Trial Court considered the relevant material evidence, it ought to have come to a different conclusion and ought to have dismissed the suit of the respondent.
According to the appellant, the Ld. Trial Court has failed to appreciate that in examinationinchief PW1 had categorically admitted that the site was given and the respondent started the excavation work and that the appellant did not allow him to execute the work for the reasons of the disputed site. It is submitted that the testimony of the respondent does not inspire any confidence in as much as the respondent has also admitted that before the tender is submitted the contractor must get himself acquainted with the proposed site for work and study specifications and conditions carefully. It is further pleaded that DW1, in his cross examination categorically stated that the work was never started by the respondent and that the site was handed over at the time of the award wherein the : 4 : respondent was supposed to start the work at once and the time was essence of the contract. The appellant has stated that after going through the testimony of the witnesses, it becomes clear that the contract was rightly rescinded and hence, there is no question of any relief which could be provided to the respondent.
Further, according to the appellant, the Ld. Trial Court has erred in in deciding the issue No. 4 in favour of the respondent and against the appellant having failed to appreciate that the contract was rightly rescinded by the appellant and it was the respondent who was not ready to execute the work at all inspite of the fact that the site was made available to him. It is submitted that as per the terms and conditions, the respondent was not entitled to the alleged claim of 30% extra rate along with interest which fact has been ignored by the Ld. Trial Court. According to the appellant the said demand raised by the respondent clearly proves that the respondent was not ready to execute the work on the one pretext or the other. It is also stated that the Ld. Trial Court has also erred in deciding the issues No. 1 and 5 : 5 : in favour of the respondent having failed to appreciate that no evidence for hire charges for cement godown was given and no evidence as to whom the rent was paid, was lead by the respondent. It is also pleaded that no evidence was lead by the respondent as to whom and when the watch and ward charges were paid, and also there is no evidence as to how and what material was wasted. In so far as the cartage is concerned, the respondent had examined PW2 which cannot be relied upon since he has in his cross examination stated that he was doing the business of stone and badarpur and he did not remember the exact date when he supplied the material. According to the appellant, the respondent had also claimed a sum of Rs.1,01,250/ on account of idle labour, baildars, masons, and chowkidar but wage register was not produced nor the names of the persons to whom labour charges etc. were paid was examined by the respondent nor any evidence of loss suffered by the respondent was led. It is pleaded that the respondent has not stated whether he had actually made the payment of the amount as claimed in the plaint and as per [SECTION] of the [SECTION] : [ACT], the respondent had to prove the amount of loss actually suffered by him. It is averred that there is no direct evidence as to how he suffered the actual loss and how he made the payment thereof has been led. It is submitted that the Ld. Trial Court without any basis has passed the decree for Rs. 1,50,000/ against the appellant and in favour of the respondent.
It is further pleaded that the Ld. Trial Court has erred in holding that the rent of cement godown was paid at Rs.1000/ per month for 10 months but no evidence in this regard was led by the respondent nor any evidence as and when and how the said rent was paid, led by the respondent. It is stated that the Ld. Trial Court has erred in holding that the respondent had to pay Rs.2000/ per month for the chowkidar for ten months despite the fact that no evidence as to whether the respondent had employed any person as Chowkidar was led by the respondent and no name of the person as to who was employed as Chowkidar and when and how the amount was paid to him, was led by the respondent. According to the appellant, the Ld. Trial Court has wrongly : 7 : held that the respondent is entitled for Rs.28,965/ on account of hiring charges of cement godown, handling charges and watch and ward charges and that the respondent is entitled for a loss of Rs.53,520/ on account of idle labour charges having failed to appreciate that the site was made available to the respondent and it was the respondent who was not ready and willing to complete the work. Even otherwise the respondent neither produced the wages payment register nor it examined any person to whom the alleged labour charges were paid. it is submitted that as per the settled law that under the provisions of [ACT] if a person employs more than ten persons in case power is used and in any other case if a person employs more than 20 persons, his registration under [ACT] is mandatory and the respondent was compulsorily required to be registered under the provisions of [ACT]. Therefore under these circumstances, the respondent was mandatorily required to maintain record pertaining to the wages payment. It is : 8 : further averred that the Ld. Trial Court has erred in holding that the respondent was entitled for 25 trips on account of cartage and that the earnest money cannot be forfeited and the respondent is entitled for Rs.8,471/ on this account. It is stated that no loss actually suffered by the respondent has been proved and thus the respondent was not entitled for any indirect loss or damage due to which reason the decree for recovery of Rs. 1,50,000/ along with interest @ 6% p.a. from the date of suit till realization is liable to be set aside. According to the appellant, the judgment passed by the Ld. Trial Court is not tenable in the eye of the law, and is based on surmises and conjectures and it is, therefore, liable to be set aside.
I have considered the submissions made by the counsel for the appellant both on the application under [SECTION] of the [ACT] and also on the appeal. I have also gone through the various authorities placed on record which are as under:
1. [PRECEDENT].
: 9 :
2. [PRECEDENT].
3. [PRECEDENT].
4. [PRECEDENT].
5. [PRECEDENT].
6. [PRECEDENT]. Reported in [PRECEDENT].
Coming now to the application under [SECTION] of the [ACT] for condonation of delay. It is evident that the appeal against the judgment/ decree dated 30.4.2007 passed by the court of Sh. [ENTITY], the then Civil Judge, Delhi was filed before this court only on 19.9.2007 after a delay of 4 months 18 days. According to the Ld. Counsel appearing on behalf of the appellant the order dated 30.4.2007 and the certified copy appears to have been prepared on 21.5.2007 and the same was ready on 4.5.2007. It is stated that the trial was conducted by Sh. [ENTITY] Advocate before the Ld. Trial Court and he had sent the file : 10 : alongwith the certified copy to the SLO (Admn.) after which it was sent to the Executive Engineer on 30.5.2007. The Executive Engineer marked the file to the Accounts Officer for examination and the Accounts Officer examined the matter and marked the file to the concerned auditor. The auditor examined the matter on 31.5.2007 and sent the file to the Accounts Officer and on the on same date the Accounts Officer marked the file to the Executive engineer for examination. On 1.6.2007 the Executive Engineer asked the Accounts Officer to discuss the matter which discussion between the Executive Engineer and the Accounts Officer took place on 4.6.2007 and the file was sent to the Assistant Engineer for comments. On the same date the Assistant Engineer after putting his comments sent the file to the Executive Engineer who in turn sent the same to the AAO to again check up and discuss the matter. The AAO sent back the file on 4.6.2007 to the Executive Engineer and on 5.6.2007 the AAO prepared the brief facts of the case and placed the matter before the Executive Engineer. On 8.6.2007 the Executive Engineer after examination of the : 11 : matter sent the file to Superintending Engineer who sent the case to the Chief engineer for taking a decision on the matter. On 25.6.2007 the Chief engineer desired to prepare agenda for placing the same before the Arbitration Board, however, it was found that the matter was not come under the purview of the [ACT], therefore the file was not placed before the Arbitration Board and was sent to the Chief Legal Advisor on 12.7.2007. The matter is stated to have been examined at various levels in the department and thereafter vide noting dated 21.8.2007 Sh. [ENTITY] was entrusted with the matter to file the appeal. The file was thereafter sent to the chief engineer for signing the power of attorney and on 29.8.2007 the said file was delivered to Sh. [ENTITY] Advocate. It is stated that the counsel Sh. [ENTITY] was busy in some other work and drafted the appeal on 11.9.2007 and sent the same for signatures and verification of the appeal and for purchase of the stamp paper. The file was received back by him on 18.9.2007. According to the Ld. Counsel after excluding the time taken in obtaining the certified copy there is a delay of 107 days in : 12 : filing the appeal which has been duly explained and it is requested that the appellant being a impersonal machinery who has to act through its officials which the matter has to be examined at various levels from one table to another, should be given benefit of the same and the delay in filling the appeal which is neither intentional nor deliberate should be condoned.
I have gone through the averments made in the application and also the arguments advanced before me. I have also gone through the case law placed before me on the subject. It is evident from the [SECTION] of the [ACT] that the limitation for filing the appeal before this court is 30 days from the date of the judgment and decree. In the present case the judgment and decree had been passed on 30.4.2007 and the certified copy which appears to have been prepared on 2.5.2007 was ready on 4.5.2007. hence the 30 days period for filing the appeal was 4.6.2007. Thereafter, there has been a delay of 107 days. It is evident on record that the file in question had remained with the Superintendent Engineering from 8.6.2007 to 22.6.2007 i.e. : 13 : for almost 14 days which delay has not been explained at all. Thereafter, the file had been sent to the Chief Engineer on 22.6.2007 for taking a decision. It is stated that the Chief Engineer had desired to prepare agenda for placing the same before the Arbitration Board on 25.6.2007. There is no noting or document placed on record to show that the Chief Engineer has desired to place the said file before the Arbitration Board. Even otherwise being an appeal against the judgment and decree of the civil court it is rather strange that the Chief Engineer should have desired to prepare agenda for placing the file before the Arbitration Board and the explanation so provided does not go down well and seems to be an after thought. The file for the first time placed before the Chief Legal Advisor on 12.7.2007 and it was only on 21.8.2007 that the CLA entrusted the matter to the penal advocate. This delay between 25.6.2007 to 21.8.2007 which is of 56 days has not been sufficiently explained. Simply stating that the Chief Engineer has desired for preparation of agenda for placing the same before the Arbitration Board or that the matter was examined : 14 : at various legal departments is not sufficient. Neither the various noting nor the opinion of the officers on the various levels to show that the file was actually under an active consideration of the officers, have been placed on record. It appears that the aforesaid ground has been created only to justify the delay, therefore, under these circumstances, I hereby hold that though the government or private parties cannot put on the same footing while considering the explanation of delay in view of peculiar characteristics of the governmental organization yet in the given facts and circumstances where the Ld. Trial Court had decreed the suit of the respondent by holding that the present respondent is entitled to the decree of Rs.1,50,000/ alongwith interest @ 6% per annum from the date of filing of suit till the date of realization of the decreetal amount; the day to day delay of 107 days has not been sufficiently explained. Though by and large the counsel for the appellant has tried to justify and explain the delay yet the appellant has failed to place on record sufficient cause and for explaining the delay between 8.6.2007 to 22.6.2007 and thereafter from 22.6.2007 till : 15 : 21.8.2007. The application under [SECTION] of the [ACT] is hereby dismissed.
Even on merits I have considered the grounds raised in the appeal and also considered the written synopsis filed by the appellant which is basically a repetition of the grounds raised in the appellant. The main thrust of arguments of the counsel for the appellant is that the Ld. Trial Court has seriously erred in holding that the time was not an essence of the contract and the contract was rightly rescinded. I have gone through the case law on the subject and the testimonies of the various witnesses. It is evident from the record that the work for maintenance of Service Under NA/C 11, Rohini, Sub Head construction of Boundary Wall with chain link fencing at Zonal Green Avantika, Rohini was awarded to the respondent on 10.9.1997 vide agreement Ex.PW1/1 according to which the date of starting the work was after 10 days and the date of completion was 5.11.1997. The respondent was directed to contact the AE - IV immediately to start the work as the time will be reckoned from 10th day after the award of work : 16 : for completion and the respondent was required to start the work immediately to complete it within 1 months i.e. upto 25.11.1997 in order to avoid the levy of compensation under Clause 2 of the agreement as well as recession of the contract and execution of the work at risk and cost and for forfeit the security deposit under Clause 3 of the agreement. It is evident from the aforesaid that the respondent was not obliged under the agreement to complete the work until and unless the promise for availability of site was not performed by the appellant. In this regard the provisions of [SECTION] of the [ACT] clearly lays down that if the promisor has not performed his part of the promise, the promisee has no duty to perform his part under the agreement. Therefore, under these circumstances when the promisor is not able to perform his part on which the performance of the promissee will depend, the promise will not be compelled to perform his performance and he cannot be liable for any breach of contract. It is evident from the material on record that on 15.9.1997 the Assistant Director Sh. [ENTITY] and SO Sh. [ENTITY] had stopped the work : 17 : which fact is evident from the letter dated 16.9.1997 which is Ex.PW1/3 wherein the respondent had written to the Executive Engineer, NDII, to get the work started which was stopped by horticulture officers. The said work was thereafter transferred from NDI to RPDII and therefore a letter dated 31.10.1997 which is Ex.PW1/5 was written to the Executive Engineer RPDII to get the work started which was in continuation of the earlier letter dated 16.6.1997. Again another communication dated 20.11.1997 which is Ex.PW1/4 was addressed to the Executive Engineer RPDII in continuation of the previous letter to get the work started. Though the time stipulated in the agreement had already expired on 5.11.1997 but the appellant had failed to get the work started as there were some hindrances from the side of villagers which could not be removed by the appellant and according to PW1 it was under these circumstances that the letter Ex.PW1/6 dated 2.2.1998 was addressed by the respondent claiming 30% extra rates or loss as damage of Rs.80,000/ with interest @ 18% per annum as compensation for the breach of contract. It was also : 18 : mentioned in the said communication that in case if the site is not available, the work be closed and the payment of damages may be made. A legal notice dated 10.5.1998 which is Ex.PW1/7 was also sent to the appellant when the site was not made available despite the earlier communication Ex.PW1/3 to PW1/6 claiming various damages alongwith interest. Another communication dated 19.5.1998 was also addressed to the appellant informing that 360 bags were issued at the time of award of the work and 180 bags were taken back in other works by the [ENTITY] and transferred to the other work as the site was not available. Vide letter dated 19.5.1998 which is Ex.PW1/17 the appellant was requested to take back 360 balance bags so that it could be used in some other work and the cement may not be damaged by setting before use in the work and subsequently on 24.6.1998 160 bags of said cement were taken back by the appellant which fact is admitted by DW1 in his deposition. The provisions of [SECTION] of the [ACT] provide that if the promisee is failed to complete the work within stipulated period (time essence of : 19 : the contract initially in the agreement) i.e. upto 5.11.1997, then the promisee will not be able to determine the balance work on the ground of time as the essence of the contract after stipulated date of the agreement until and unless the time is not made as essence of the contract.
Applying the settled principles of law to the facts of the present case and also applying the judgment of the Hon' ble Apex Court in the case of [PRECEDENT] (Supra), [PRECEDENT], S.S. Jain vs. [ENTITY] reported in 1996 (1) Arb.L.J. 516; Harinder Anand Vs. [ENTITY] reported in 83 (2000) DLT 391, I hereby hold that in the present case the respondent had admittedly failed to complete the work within the stipulated period which was upto 5.11.1997. Clause 2 of the agreement specifically provides that time is the essence of the contract but it is admitted by DW1 that the contents of Clause 5 of the said agreement which is Ex.PW1/1 provided for extension of time. Therefore, Clause 2 and Clause 5 read altogether indicate that there is no intention of the parties : 20 : before the court i.e. the plaintiff and the defendant to make the time as the essence of the contract. It has been observed by the Hon'bl e Apex court in the case of [PRECEDENT] (Supra) that when there is a clause under the agreement that levying of compensation and extension of time then time is not the essence of the contract. It is evident that in all the cases i.e. [PRECEDENT]; [PRECEDENT]; Harinder Anand Vs. [ENTITY], [PRECEDENT] the Hon' ble Courts have been pleased to declare the recession of the contract and forfeiture of the security as illegal.
Perusal of the communications sent by the respondent to the appellant on 23.5.1998 and 9.6.1998 also prove that the time was not an essence of the contract and had been extended by the defendant without fixing a new date for completion of work with the consent of the parties. Even otherwise once the site had been made available to the respondent at the time of the contract but on account of the subsequent hindrances the work could not be executed : 21 : within the stipulated time and thereafter time was extended and the respondent claimed the enhanced rates and there was a disputed between the parties as the present appellant wanted the defendant to complete the contract on the same rates, then under these circumstances and also in view of the fact that the work could not be completed due to non availability of the site, I hereby hold that there is no infirmity or illegality in the judgment of the Ld. Trial court holding that the time was not an essence of the contract more so since the evidence brought on record also goes to substantiate the case of the respondent that the site was not made available to him by the appellant and even the cement bags had been taken back by the appellant prior to the rescinding of the contract and the time for completion of contract had been extended unilaterally by the appellant without even the consent of the respondent.
Ld. Counsel appearing on behalf of the appellant has also challenged the quantum of damages awarded by the Ld. Trial Court and has argued that there has been a total non application of mind since the respondent had failed to : 22 : bring on record any concrete evidence in the form of wages register, names of the person to whom the labour charges were paid, cartage charges, charges for employment of any person as a Chowkidar , rent for the godown, handling charges and watch & ward charges etc. It is argued that the respondent was under a legal obligation to have maintained the record pertaining to the wages payment as per the provisions of [ACT] and therefore the claim of the respondent on account of the aforesaid is without any basis.
I have considered the submissions of the Ld. Counsel. It is a settled law that in case of recession of contract, the contractor is entitled to loss suffered on account of non - execution of the expected work. The expected loss or profit is not required to be proved by way of evidence as it is based upon the percentage depending upon different cases. Applying the settled principles of law to the facts of the present case I find no infirmity in the judgment and decree of the Ld. Trial court granting 10% loss of profit as reasonable under the facts and circumstances of the present : 23 : case. There is no dispute on the aspect of tender amount of Rs.3,70,776/ and the stipulated material of cement as per the agreement was amounted to Rs.57,000/ and therefore by deducting Rs.57,000/ from Rs.3,70,776/ and 10% loss on the said amount the respondent has been correctly awarded Rs.31.377/ on account of loss of profit. I find no illegality in the order of the Ld. Trial Court thereby awarding Rs.28,965/ in so far as the claim of the plaintiff on account of hire charges of cement godown, handling charges and watch and ward charges. Further, the Ld. Trial court has objectively calculated the damages on account of idle labour since the respondent had engaged 5 masons and 25 beldars in order to complete the work. Initially the plaintiff had been given the site but subsequently it was not made available as evident from Ex.PW1/3, PW1/4 and PW1/5 which shows that the plaintiff had waited for availability of the same and accordingly he had to discontinued the labour after 30 days. I find no infirmity in the findings of the Ld. Trial Court awarding Rs.53,250/ to the plaintiff as the loss occurred on account of idle labour charges. The Ld. Trial : 24 : Court has also awarded damages on account of wastage of material, cartage of material to the site on the basis of the testimony of PW1 which has gone uncontroverted. The amount so granted is reasonable and I find no ground to interfere in the same.
In view of my aforesaid discussion, I hereby uphold the judgment and decree passed by the ld. Tiral court date 30.4.2007. The appeal is hereby dismissed being devoid of merits and also having been filed beyond the period of limitation. Parties to bear their own costs. Decree sheet be prepared accordingly. Trial Court record be sent back alongwith the copy of this order. Appeal file be consigned to Record Room.
Announced in the open court (Dr. [ENTITY]) Dated: 25.7.2008 Addl. District Judge: Delhi : 25 : 25.7.2008 Present: None for both the parties.
Vide my separate detailed order dictated and announced in the open court but not yet typed, the appeal is hereby dismissed. Parties to bear their own costs. Decree sheet be prepared accordingly. Trial Court record be sent back alongwith the copy of this order. Appeal file be consigned to Record Room.
ADJ: DELHI 25.7.2008 : 26 :