IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUIT NO.881 OF 1983 Mahrashtra Housing & Area Development Authority .. Plaintiff Vs. Patel Construction (India) Pvt.Ltd. & Ors. .. Defendants Mr.P.G.Lad, A.G.P for the plaintiff. None for the defendants. CORAM CORAM CORAM : A.S.OKA, J. : A.S.OKA, J. : A.S.OKA, J. DATE DATE DATE : 03rd December 2008. : 03rd December 2008. : 03rd December 2008. ORAL ORAL ORAL JUDGMENT: JUDGMENT: JUDGMENT: . The present suit is filed for recovery of sum of Rs.03,02,044/- together with interest thereon at the rate of 12% per annum from the date of the suit till realisation. The plaintiffs are a body corporate incorporated under the Maharashtra Housing and Area Development Act, 1976. The plaintiffs claim to be successors of the Maharashtra Housing Board (hereinafter referred to as the said Board) which was constituted under the Bombay Housing Board Act, 1948. 2. The 1st defendant are class AA registered contractors with the Municipal Corporation of Greater 2 Bombay. The 2nd to 5th defendants are the directors of the 1st defendant company. 3. In October 1975, the said Board invited tenders for the purpose of carrying out construction work of four buildings consisting of 320 tenements to be built for economically weaker sections at Kannamwar Nagar, Vikroli (E), Bombay. The 1st defendant submitted the tender which was accepted by the said Board. Accordingly, a written agreement was executed by and between the said Board and the 1st defendant on 30th April 1976. A work order was also issued on the same day. The work commenced on 03rd May 1976 which was to be completed on or before 02nd August 1977. The 1st defendant had furnished security deposit of Rs.28,262/- in the form of the bank guarantee of Syndicate Bank. According to the case of the plaintiffs, upto 30th April 1977, the 1st defendant carried out a part of the work the value of which was assessed at Rs.14,39,944/-. Payment of various amounts was made by the said Board to the 1st defendant from time to time and the last payment was made on 30th April 1977. The case of the plaintiffs is that by 30th April 1977 less than one half of the work covered by the agreement was completed by the 1st defendant and therefore during the remaining period of 3 three months of contract period, it was apparently impossible for the 1st defendant to complete the balance work. Therefore, a notice dated 25th February 1977 was issued by the said Board to the 1st defendant pointing out that the progress of the work was very poor and therefore the 1st defendant was liable to pay penalty at the rate of Rs.30/- per day from 01st February 1977. The case of the plaintiffs is that even after receipt of the said communication, the 1st defendant did not expedite the work covered by the agreement. Another notice dated 03rd January 1978 was issued by the said Board to the 1st defendant calling upon the 1st defendant to attend the site of the work for the purposes of drawing measurement. By communication dated 13th January 1978, the 1st defendant informed the Executive Engineer of the said Board the inability of the 1st defendant to attend on the date stipulated in communication dated 03rd January 1978. 4. According to the plaintiffs on 04th March 1978 the directors of the 1st defendant attended the site and verified the measurements taken by the Deputy Engineer of the Board. However, they refused to sign the measurements. As the 1st defendant abandoned the work under the contract from 03rd January 1978, the 4 plaintiffs invited fresh tenders for carrying out the remaining work under the contract. The contract was awarded by the plaintiffs to M/s.Anubhav Construction Company. The work order was issued to the said company on 05th June 1978. It is stated that the balance work was finally completed on 31st May 1980. The case of the plaintiffs is that they have incurred additional expenses of Rs.02,76,626.00/- in getting the work carried out through another contractor. It is contended that the plaintiffs are entitled to charge compensation on account of delay in execution of the work. The plaintiffs claimed a sum of Rs.53,680/- on the said account. The plaintiffs have contended that they have adjusted security deposit of Rs.28,362/- against their claim and therefore, total amount of Rs.03,02,044/- is due and payable by the defendants. By a letter dated 08th May 1981 the plaintiffs demanded the said amount. However, by a reply dated 02nd July 1981, defendants declined to pay the said amount. Therefore, the present suit has been filed by the plaintiffs. 5. The 4th defendant filed written statement and contested the suit. The 4th defendant contended that he was no more a director of the 1st defendant with effect from 01st January 1976. The 4th defendant denied the 5 various allegations made in the plaint. The 4th defendant prayed for dismissal of the suit. 6. The issues were settled on 03rd February 2006. The issues read thus: 1. Whether the plaintiff is entitled to a decree of a sum of Rs.03,02,044/- as prayed for in the suit? 2. Whether the plaintiff is entitled to interest at the rate of 12% per annum on the sum of Rs.03,02,044/- from the date of the suit till realisation? 3. Whether the plaintiff is entitled to a decree of costs from the defendants? 4. Whether the suit is liable to be dismissed as misconceived and not maintainable in law as mentioned in paragraph 1 of the written statement of defendant no.4? 5. Whether the suit is liable to be 6 dismissed as bad in law for misjoinder of party defendants and alleged cause of action as mentioned in paragraph 2 of the written statement? 6. Whether defendant no.4 proves that he was not the director of the 1st defendant company at the relevant time and, therefore, he is not liable for any damages as prayed for in the suit, as stated in paragraph 23 of the defendant no.4’s written statement? 7. Any other order? 8. What decree? 7. The plaintiffs examined one Mr Jairam Mutegere Vewkatnarsimhachar as their witness by filing his affidavit in lieu of examination in chief. Formal examination-in-chief of the said witness was recorded on 19th November 2008. None appeared for the defendants on the said date. Today, when the suit is called out none appears for the defendants. The defendants have not cross-examined the said witness by the plaintiffs. The 7 defendant have not adduced any evidence. 8. I have perused the plaint, the affidavit in lieu of examination-in-chief of the only witness examined by the plaintiffs and the documents produced by the plaintiffs. On the basis of the last bill dated 30th April 1977 the plaintiffs have contended that the 1st defendant carried out work equivalent to value of Rs.14,39,944/-. A reliance has been placed on the measurement book. The contents of the measurement book have been duly proved by the witness examined by the plaintiffs. The version of the witness that not even 50% of the contract work was completed by the 1st defendant by 30th April 1977 has not been challenged by the defendants by cross-examining the said witness. The case of the plaintiffs is that the balance work was got carried out by appointing another contractor has been substantiated by the documents produced on record. 9. The witness has stated in paragraph 13 of his affidavit that on 04th March 1978 the Managing Director of the 1st defendant and the 5th defendant attended the site for checking and verifying the measurement taken by the Deputy Engineer of the said Board. He stated that though the said Directors verified the measurements, 8 they declined to sign the said measurements recorded in the measurement book. As stated earlier, the measurement book has been placed on record and the entries therein have been duly proved. Reliance has been placed on letter dated 25th February 1977 sent by the said Board to the defendant stating therein that the 1st defendant was liable to pay penalty of Rs.30/- per day with effect from 01st February 1977. Accordingly, the plaintiffs have claimed an amount of Rs.52,680/- on account of the penalty. The security deposit of Rs.28,262/- has been adjusted against the said penalty amount. The evidence on record shows that the plaintiffs were required to incur additional expenditure of Rs.02,76,726/- for getting the work completed through the another contractor. Thus, the plaintiffs have established the liability of the 1st defendant to the extent of sum of Rs.03,02,044/-. 10. Perusal of the plaint shows that the decree has been sought not only against the 1st defendant but also against the 2nd to 5th defendants who are allegedly the directors of the 1st defendant. The 1st defendant company is a contractor appointed by the said Board. The 1st defendant is a private limited company. Therefore, there cannot be any personal liability of the 9 directors and therefore a decree can be passed only as against the 1st defendant. 11. The plaintiffs have prayed for interest at the rate of 12% per annum. In view of section 34 of the Code of Civil Procedure, 1908 interest will have to be granted at the rate of 6% per annum. The issues are answered accordingly. 12. Hence, I pass the following order: (i) The 1st defendant is ordered and decreed to pay to the plaintiff a sum of Rs.03,02,044/- together with interest thereon at the rate of 6% per annum on the said amount from the date of institution of the suit till realisation. (ii) The 1st defendant is ordered and decreed to pay costs of the suit to the plaintiff. (iii) The suit as against the 2nd to 5th defendants stands dismissed. 10 (A.S.Oka,J)