IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE A.K.BASHEER & THE HONOURABLE MR. JUSTICE P.Q.BARKATH ALI TUESDAY, THE 16TH MARCH 2010 / 25TH PHALGUNA 1931 AS.No. 860 of 1998 ------------------------------ OS.1000/1994 of II ADDL.SUB COURT, ERNAKULAM .................... APPELLANT (PLAINTIFF): ---------------------------------------- SAJU PETER, S/O VARKEY PATHROSE GOVT. CONTRACTOR PALAI HOUSE, KUSUMAGIRI-P.O. COCHIN-30. BY ADV. SRI.P.V.BABY SRI.S.VINOD BHAT RESPONDENTS (DEFENDANTS): --------------------------------------------------- 1. STATE OF KERALA REP BY THE SECRETARY PUBLIC WORKS DEPARTMENT GOVT. SECRETARIAT TRIVANDRUM. 2. THE SUPERINTENDING ENGINEER, PWD (R & B) CENTRAL CIRCLE, ALUVA, ERNAKULAM DISTRICT 3. THE EXECUTIVE ENGINEER PWD ROADS DIVISION MUVATTUPUZHA, ERNAKULAM. SENIOR GOVT. PLEADER SRI.K.G.SURESH BABU FOR R1 TO R3 THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 16/03/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: A.K.BASHEER & P.Q.BARKATH ALI, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - A.S.No.860 OF 1998 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 16th day of March 2010 JUDGMENT Basheer, J. Appellant is the plaintiff in a suit for recovery of money. The suit was instituted by the appellant/plaintiff claiming a total sum of Rs.7,42,985/- from the defendants under various heads in connection with the work carried out by him for “improvements” to Puthencruz -Chottanikkara road in terms of Ext.A2 agreement executed between the parties pursuant to a tender notification. 2. According to the plaintiff, the work was completed by him strictly in accordance with the specifications contained in the agreement. However, certain amounts were withheld by the defendants while making payment to him. It was for recovery of those amounts including interest, additional cost incurred in carrying out certain items of work, etc. that the appellant had instituted the suit. 3. The court below dismissed the suit, after considering the oral and documentary evidence available on record, holding that the appellant/plaintiff was not entitled to recover any amount from the defendants as claimed by him. Hence this appeal. 4. Though it is not necessary to refer to or to deal with the rival contentions of the parties at length, it may be appropriate to refer to the A.S.No.860 OF 1998 :: 2 :: major item of work entrusted to the plaintiff, as revealed from Ext.A2 agreement. The said work (Item No.1) work reads thus: “Earthwork excavation in all classes of soil (except hard and medium rock which required blasting) and forming embankment with all leads and lifts by spreading in horizontal layers of uniform thickness over the full width, drying or watering as the case may be, scarifying to get uniform optimum moisture content and compacting in layers not exceeding 25cm (loose thickness) using power roller satisfying compaction tests including trimming slopes to lines and levels.” 5. The quantity of the above work was reckoned as 18883 cubic meters. The quantity of the second item of work was indicated as 1007 cubic meters which primarily comprised of earthwork excavation. The third item was dry rubble masonry for the retaining wall, including cost and conveyances of materials and all other incidental charges. The agreed P.A.C. as indicated in the agreement is extracted hereunder: Net P.A.C. : Rs.25,27,333/- Add tender excess at 17.4% above E/R : Rs.4,39,756/- Add cost of deptl. materials and hire charges of T&P : Rs.3,24,034/- --------------------- Agreed P.A.C. : Rs.32,91,123/- ========= 6. The specific case of the appellant/plaintiff was that he had completed the entire work under the supervision of departmental officers, A.S.No.860 OF 1998 :: 3 :: especially the Engineers who were available at the work site. Daily measurements were taken by the site Engineers and recorded in Exts.B2 to B9. However, the department, while making payment, withheld a sum of Rs.3,20,495/-. Thereafter a further sum of Rs.32,486/- was also withheld (total Rs.3,52,981/-). Plaintiff contended that the action of the defendants in withholding payment was totally without any warrant or justification. Therefore, in the plaint, appellant claimed a total sum of Rs.7,42,985/- under the following heads: (a) Rs.4,10,967/- withheld and retained by the defendants from 29-7-1993 and 30-3-1994 respectively from and out of the bills due and payable to him for value of work carried out. (b) Rs.56,476/- towards interest at 24% on Rs.3,52,981.86/- withheld in between 29-7-1993 and 30-3-1994. (c) Rs.6,000/- towards commission to the bankers for securing bank guarantee of Rs.3,25,000/- for release of Rs.3,20,495/- on 30-3-1994. (d) Rs.1,41,172/- in lieu of deprivation of gains at 10% of Rs.3,52,981/- in 4 turn overs in between 29-7-1993 and 30- 3-1994 as provided in the agreement. (e) Rs.7,000/- on account of costs incurred in legal proceedings against the defendants even for releasing part of the amounts withheld. (f) amount due to the plaintiff for 3979m3 of excavated surplus soil conveyed to distant places at 1992 schedule of rates with his quoted percentage of 17.4% above the estimated costs of defendants. (g) Rs.1000/- towards costs incurred for suit notice dt.26-7-1994. (h) grant decree allowing the plaintiff to realise 10% of A.S.No.860 OF 1998 :: 4 :: Rs.1,81,472/- in every quarter of the years, toward gains deprived due to retention of amounts from 30-3-1994 till date of payment. (i) Rs.1,19,370/- towards additional costs incurred in conveying and disposing of excavated surplus soil of 3979m3 at Rs.30/m3. 7. In the written statement, the defendants admitted that a total sum of Rs.3,52,981/- was withheld by the department, since the work carried out by the plaintiff was not in accordance with the specifications of the agreement and also since the Accountant General had raised certain objections with regard to the manner in which the plaintiff had executed the work. Defendants further contended that the claim made by the plaintiff was totally without any basis, and therefore they were justified in withholding the payments. It was further contended that the claim made by the plaintiff towards cost for conveyance of additional quantity of earth, was not sustainable at all. 8. The court below framed the following issues: 1) What is the amount withheld by the defendants? 2) Is the plaintiff entitled to recover the amount withheld by the defendants? 3) Is the plaintiff entitled to recover Rs.56,476/- towards interest on Rs.3,52,981/- from 29-7-1993 to 30-3-1994? 4) Is the plaintiff entitled to recover Rs.6,000/- paid towards commission for bank guarantee? 5) what is the amount, if any, to which the plaintiff is entitled as deprivation of gains? A.S.No.860 OF 1998 :: 5 :: 6) What is the amount, if any, to which the plaintiff is entitled as costs in the proceedings disposed of by the High Court? 7) What is the amount, if any, to which the plaintiff is entitled as costs of conveyance of surplus soil? 8) What is the rate of future interest to which the plaintiff is entitled? 9) What is the order as to costs? 9. Plaintiff got himself examined as PW1 and Exts.A1 to A14 were marked on his side. An Assistant Engineer in the department, who was in charge at the site, was examined as DW1. Exts.B1 to B9 were marked on the side of the defendants. 10. As mentioned earlier, the court below upheld the contentions raised by the defendants and dismissed the suit. 11. Sri.R.D.Shenoy, learned Senior counsel appearing for the appellant, submits that the court below has proceeded at a tangent without making any attempt to comprehend the true gamut of the case pleaded by the plaintiffs. It is pointed out by him that the short question that came up before the court below was whether the defendants had satisfactorily established that the plaintiff had carried out the work in question at variance with the specifications contained in Ext.A2 agreement. He also takes exception to the stand taken by the defendants that they had withheld payments on the basis of some objection raised by the Accountant General which never saw the light of the day. A.S.No.860 OF 1998 :: 6 :: 12. Learned Senior counsel however fairly submitted before us that the appellant intends to restrict his claims only to (a) and (c) in the plaint which we have extracted in the earlier part of the judgment. He submits that this court need not consider the claims raised by the appellant under the other heads as indicated under part II of the relief portion of the plaint. 13. It is beyond controversy that the defendants had withheld a total sum of Rs.3,52,981/- while making payment to the plaintiff for the work executed by him. The case of the defendants as discernible from the written statement is that the plaintiff had not carried out the work specified as item No.1 in the agreement, namely, earthwork excavation, strictly in accordance with the agreed stipulations. 14. We have already extracted the above item of work in the earlier part of our judgment. The said work was quantified at 18,883 m3. Defendants do not have a case that the plaintiff had not carried out the said item of work fully. In other words, the quantum of earthwork done by the plaintiff is not disputed. Exts.B2 to B9 measurement books clearly indicated the quantum of work turned out by the plaintiff. More importantly, DW1, who was the Engineer in charge at the work site, did not have a case that item no.1 work was not completed by the plaintiff. To a specific question put to DW1 in the course of cross examination he admitted the plaintiff was not informed by the defendants at any point of time, particularly when final measurement was taken, that there was shortfall in the quantum of work or A.S.No.860 OF 1998 :: 7 :: that he had not carried out the work in terms of the agreement entered into between them. It was further admitted by DW1 that no document was available with the Department to show that plaintiff had not carried out the work in terms of the specifications contained in the agreement. In short, the defendants had not produced any material to show in what manner the plaintiff had deviated from the specifications contained in the agreement or what was the shortfall, if any, in the quantum of earthwork as far as item nos.1 and 2 were concerned. 15. It is in the above context that we have to consider the so called objection allegedly raised by the Accountant General. Though the defendants have vaguely mentioned about certain “objection” stated to have been raised by the Accountant General as regards the execution of the work, no document had been produced to substantiate the above contention. If in fact the Accountant General had raised any objection in writing, the defendants ought to have produced the said document before the court below. In the absence of any such material, it is futile for the defendants to contend for the position that they were justified in withholding payment on the basis of the audit objection raised by the Accountant General. On that short ground, the contention raised by the defendants is liable to be repelled. 16. We have carefully perused the relevant clauses in the agreement and also the various communications exchanged between the plaintiff and defendants. One objection raised by the defendants was that the plaintiff had A.S.No.860 OF 1998 :: 8 :: accepted part payment of the bills without any demur or protest and therefore he was not entitled to make a claim for the alleged balance at a later stage. But it is seen that in Ext.A3 communication sent by the plaintiff to the Executive Engineer on July 28, 1993, he had specifically pointed out that withholding of payment of Rs.3,20,495/- was totally illegal and against the terms of the agreement. He had requested for release of the said amount in order to enable him to complete the work. In Ext.A4 dated August 19, 1993, the plaintiff had reiterated his above stand and prayed for immediate release of the amount with interest. The defendants did not dispute receipt of these two communications from the plaintiff nor did they have a case that the plaintiff had, at any point of time, admitted that there was any flaw or lapse on his part in executing the work. On the contrary, it is the admitted position that the defendants had never informed or alerted the plaintiff that he had been executing the work at variance with the specifications contained in the agreement. 17. In this context it is pertinent to note that respondent No.3, the Executive Engineer, PWD Roads Division, Muvattuuzha has filed a statement before this Court raising some new contentions that the defendants had never raised in the written statement. Paragraph 2 of the said statement is extracted hereunder: It is humbly submitted that even though there was a provision in the original agreement between the parties to pay Rs.561/- for 10m3 for the purpose of removing the earth from the work cite. A.S.No.860 OF 1998 :: 9 :: But actually the contractor was not carried out the work as specified in the original agreement even though the distance fixed was 5 kms from the work cite at the implementation stage, he had conveyed the earth only to the distance of 50 meters to 150 meters that also by way of head load and the involvement of lorry conveyance is only for a short quantity of earth. The actual work of earth removing has been calculated and verified on the basis of data available in the implementation stage. It was realized that the contractor was not entitled to get Rs.561/- for 10m3 . The fact is that the distance of transportation of earth was very less which was fixed in the agreement. In this case, it is also noted that the Accountant General has verified the payment made to the contractor and also verified the bills in connection with this work and he made a remark to the effect that the reasonable rate that could be fixed in this case is Rs.405 for 10m3 on the basis of actuals arrived on the basis of the spot verification. So the authorities were constrained to fix the amount as 405 for 10m3. This amount (20653 x 405 / 10m3) can only be given to the Contractor. During passing of bill an amount of Rs.378257 including Tender excess of 17.4 % (20653 x 156 / 10 m3 (i.e.561 - 405) was withheld as Deposit. 18. We have extracted the above portion from the statement not only to indicate that the respondents have admitted the position that the appellant had carried out the work in question, but also to show that the relevant facts were not placed before the court below while filing the written statement. More importantly a totally different stand was taken before the trial court. 19. We have carefully perused the judgment under challenge. In our view, the court below has failed to address the issues involved in the case in their proper perspective. As indicated by us earlier, the short question that fall for consideration was whether the defendants had produced any material to substantiate their contention that the plaintiff had carried out the work ignoring or overlooking the specifications contained in the agreement. In the A.S.No.860 OF 1998 :: 10 :: absence of any such material and especially in the light of the tacit admissions made by DW1 in his depositions the court below was not justified in travelling beyond the scope of the issues that were at large. Therefore, we have no hesitation to set aside the impugned judgment and decree. We do so. 20. In view of the submission made by the learned Senior counsel, the other claims raised by the appellant in the suit are disallowed. The plaintiff is granted a decree to recover a sum of Rs.4,10,967/- from the defendants. However, the sum of Rs.3,20,495/- which the appellant/plaintiff has already received from the defendants pursuant to a direction issued by this court in W.A.No.1433/93, shall be deducted from the above decretal amount. Appellant shall be entitled to get the balance amount of Rs.90,472/- with interest at the rate of 6% per annum from April 1, 1994 till the date of realization. Since learned Senior counsel does not press for cost, it is directed that parties shall suffer their respective costs. Appeal is allowed in the above terms. A.K.BASHEER, JUDGE P.Q.BARKATH ALI, JUDGE jes A.S.No.860 OF 1998 :: 11 :: A.K.BASHEER & P.Q.BARKATH ALI, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - A.S.No.860 OF 1998 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - JUDGMENT Dated 16th March 2010