IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE HARUN-UL-RASHID WEDNESDAY, THE 17TH MARCH 2010 / 26TH PHALGUNA 1931 AS.No. 296 of 1999() ------------------------------- (AGAINST THE DECREE AND JUDGMENT DATED 31/07/1995 IN O.S.NO.304 OF 1992 OF 1ST ADDL. SUB COURT, KOZHIKODE) ....... APPELLANT(S): PLAINTIFF: -------------------------------------------- K.PRABHAKARAN, S/O.SANKARANKUTTY, AGED 55 YEARS, P.W.D. CONTRACTOR, WEST HILL, PUTHIYANGADI, KOZHIKODE. BY ADV. MR. C.VATHSALAN RESPONDENT(S): DEFENDANTS: -------------------------------------------------- 1. THE STATE OF KERALA, REPRESENTED BY THE DISTRICT COLLECTOR, KOZHIKODE. 2. THE EXECUTIVE ENGINEER, P.W.D NATIONAL HIGHWAY DIVISION, KOZHIKODE - 20. BY GOVERNMENT PLEADER THIS APPEAL SUITS HAVING COME UP FOR ADMISSION ON 17/03/2010 ALONG WITH A.S.NO.636 OF 1996 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss HARUN-UL-RASHID, J. ----------------------------------- A.S.Nos.296/1999, 297/1999, 636/1996, 650/1996 and 651/1996 --------------------------------- Dated this the 17th day of March, 2010 J U D G M E N T The judgment and decree in O.S.Nos.282/1992, 301/1992, 302/1992, 303/1992 and 304/1992 are under challenge. Plaintiff filed the above five suits claiming reliefs against the Government. All the five suits were dismissed by the court below. Aggrieved by the same, the plaintiff has preferred the above appeals. The parties are hereinafter referred to as the plaintiff and defendants. 2. O.S.No.282/92 is a suit for release of the security amount with interest at the rate of 18% per annum. The plaintiff claimed Rs.20,905.50/- with future interest. The other suits are filed challenging for a declaration that the order referred to in each plaint dated 30.3.1990 passed by the second defendant and the notice dated 26.3.1991 as arbitrary, incompetent, illegal, unsustainable and unenforceable against the plaintiff and to restrain the defendant and the officials from enforcing the aforesaid orders for recovery of a sum of Rs.2,94,475/- with future interest from the plaintiff. The first A.S.No.296/99 and conn. cases 2 defendant in all the suits is State of Kerala and the second defendant is the Executive Engineer, PWD, National High Way Division, Kozhikode. The plaintiff is a PWD contractor. 3. A.S.No.650/1996, which arises out of O.S.No.282/92 is for distinct reliefs and therefore can be dealt with separately. The facts in O.S.No.282/92 are as follows: Plaintiff was entrusted with the work of resurfacing of N.H.17 with 20 mm premixed chipping carpet from K.M.292/00 to 293/00, K.M.300/450 to 301/00 and K.M.296/00 to 297/00 as per agreements dated 18.7.1988, 18.7.1988 and 1.12.1988 respectively executed between the second defendant and the plaintiff. The plaintiff had deposited security amount of Rs.6,850/-, Rs.4,000/- and Rs,.8,850/- respectively in relation to the three agreements totalling to Rs.19,700/-. 4. It is alleged in the plaint that the plaintiff has completed the work as per the above said three agreements to the satisfaction of the department. The department released 4 payments and also released final bills during 1988-89. The plaintiff allege that, without any justification the security amount was not released in spite of repeated demands. According to the A.S.No.296/99 and conn. cases 3 plaintiff he had finished the work on 15.6.1989 and the security amount should have been released at least by 15.6.1990. In the circumstances, the suit was filed for realisation of the amount with interest. I have gone through the written statement filed by defendants 1 and 2. They have admitted the entrustment of work of resurfacing of N.H 17 and further admitted that the plaintiff had deposited security amount of Rs.19,700/- for the three agreements. They also admitted that the plaintiff had requested to release the amount on 4.5.1990. It is the case of the defendants that the payment was withheld as per Government Order till the disposal of Crime No.5/85 as the plaintiff was one among the accused in the said crime registered by the Vigilance Department. The written statement also referred to the tenders submitted by the plaintiff for another 4 work as per the tender notification dated 12.7.1989 which are the subject matter of the four suits separately dealt with in this judgment. It is stated that the tender submitted by the plaintiff are accepted and orders are issued. Four different agreements were executed between the parties during the period 1989-90. It is pleaded that since the contractor neither executed the A.S.No.296/99 and conn. cases 4 agreement nor started the work, the department terminated the contract during March, 1990 at the risk and cost of the plaintiff as per the agreement conditions. It is further stated in the written statement that the department sustained Rs.85,295/-, Rs.60,723/-, Rs.60,952/- and Rs.90,505/- in the matter of awarding the said four contracts in the name of the plaintiff. The total loss alleged to have sustained is Rs.2,94,475/-. Hence revenue recovery proceedings was initiated by the District Collector for recovery of amount from the plaintiff pursuant to the letters issued by the Government during 1991. 5. Going by the contentions raised in the written statement it is clear that in respect of the contract referred to in the plaint, admittedly, the plaintiff completed the work. It is further admitted that Rs.19,700/- was paid as security amount which the department is bound to release. Two reasons are stated in the written statement. One reason for not releasing the amount is regarding the pendency of the crime No.5/85. Ext.A33 is the judgment in C.C.No.24/92 on the file of the Assistant Sessions Court, Kozhikode. The plaintiff in this suit is the second accused in C.C.No.24/92. All the three C.C cases commonly arise A.S.No.296/99 and conn. cases 5 out of Crime No.5/85. The learned Judge held “the prosecution has miserably failed to prove charge against the persons in the case and therefore I find that the accused are not guilty of the offences alleged against and they are acquitted under Section 248 of the Code of Criminal Procedure.” Therefore the said ground is also no longer available, as a reason for not releasing the amount. The other reason stated is the breach of contract committed by the plaintiff in respect of four other contracts referred to in the preceding paragraphs which are the subject matter of the four suits and appeals, hereinafter dealt with in the following paragraphs. 6. On a perusal of the written statement of the defendants it can be seen that they have not raised any other ground for non-suiting the plaintiff. The plaintiff is entitled to return of the security amount which he has claimed in O.S.No.282/92 with reasonable interest. According to the defendants the plaintiff committed breach of contract in respect of all other works and therefore he is liable to pay Rs.2,94,475/-. 7. Appeal Nos.636/96, 651/96, 296/99 and 297/99 filed against the dismissal of the suits can be considered together. A.S.No.296/99 and conn. cases 6 The disputes and the related issues are more or less the same in the above appeals. Work entrusted to the plaintiff is the resurfacing of N.H. with 20 mm chipping carpet. Four different works are awarded to the plaintiff for different reaches. The agreements are executed on 18.7.1988 and 1.12.1988. The prayer in the suits are for declaration that the order dated 30.3.1990 passed by the second defendant and notice dated 26.3.1991 are arbitrary, incompetent, illegal and unenforceable and to restrain the defendant and the officials and their men from enforcing the order dated 30.31990 and notice dated 26.3.1991. The plaintiff in all the 4 suits claimed return of the security deposit along with interest at the rate of 18% interest. The plaintiff also claimed amounts on the grounds that he sustained loss of profit. Thus, the four suits are filed for the above said reliefs and for the release of security amount plus the alleged loss of profit and value of materials. 8. The case of the plaintiff is that the tender was accepted and he was directed to execute agreements. A communication was issued on 17.9.1985 by the department informing the plaintiff that his tender was accepted. Ext.B4 is the A.S.No.296/99 and conn. cases 7 communication. The plaintiff did not turn up to execute the agreement. Ext.B2 is the reminder send to the plaintiff to execute the agreement. Subsequently, several reminders were sent. The trial court noted that the copies of the reminder sent is seen on page Nos. 45, 49 and 53 of Exts.A10 to A14. Thereafter again notice was sent directing the plaintiff to execute the agreements and to start the work. After a period of about 2½ years, the plaintiff had deposited the security amount on 5.5.1988 and subsequently, the agreement was executed. Exts.A1 to A4 are the agreements. 9. It is the case of the defendants that even after three years of the agreement, the plaintiff was not willing to do the work and he did not commence the work. According to them the plaintiff had took possession of the site, but failed to commence the work and started sending letters requesting the department to improve the site so as to enable him to stock the materials. It is further contended that neither in the tender form nor in the agreement there is a condition for cleared berm so as to stock his materials. Trial court noticed that from the attitude of the plaintiff it is crystal clear that he is not willing to proceed with the A.S.No.296/99 and conn. cases 8 work and he is saying one thing at one time and another thing at another time. In the earlier letters he never complained about the conditions of the berm or requested the department to clear the berm. He started sending letters to the department stating that he did not commence the work due to the fact that the berm was not cleared. The court on evidence observed that the change of stand on the part of the plaintiff is only to escape from the liability for not carrying out the work. Various letters sent by both sides are produced in the case. After issuing various letters mentioned in the written statement which are produced by the department, finding that the plaintiff failed to commence the work, the department issued order on 28.3.1990 terminating the contract at the risk and cost of the plaintiff. 10. From the nature of tender it is clear that the work is urgent in nature and therefore three months time was given to complete the work. Since the contractor was doing other work in the same locality, the department waited for three years. The court below rightly held that it is not proper for the department to wait unreasonably enabling the plaintiff to execute the work. A.S.No.296/99 and conn. cases 9 11. The trial court held that the damage in this case is an ascertained sum. The trial court held that, since the plaintiff did not even start the work and did not perform his part of contract, the Government was forced to rearrange the work. 12. Learned Sub Judge observed that the sum demanded is an ascertained sum and that the defendants are not assessing the loss by some method and held that they are claiming the amount paid for the arrangement made by granting the work to another contractor and held that it is an ascertained sum of money. 13. Exts.A1o to A13 dated 30.3.1990 are the orders issued by the second defendant terminating the contract at the risk and cost of the plaintiff. It is further ordered that the work will be rearranged through the other agency and loss if any by the Government, the money will be realised from the plaintiff as per the terms and conditions. The security deposit remitted by the contractor was forfeited to the Government. Exts.A22 to 25 are the communications issued to the plaintiff fixing the liability on account of the rearrangement of the work. Rs.85,295/-, Rs.60,723/-, Rs.60,952/- and Rs.90,505/- are the amounts A.S.No.296/99 and conn. cases 10 demanded from the plaintiff. The trial court held that the amounts demanded is the excess amount paid by the Government on account of rearrangement of the contract to the subsequent contractor. The said amount is an ascertained sum of money and therefore the plaintiff is bound to pay the aforesaid amount due to the subsequent action. I confirm the findings of the learned Sub Judge that the plaintiff is liable to pay the loss caused to the Government. The liability will be the loss caused to the Government for rearranging the work. Exts.A22 to 25 are the orders passed demanding liability. It is not known whether the amount shown in Exts.A22 to 25 are the actual loss amount caused to the Government due to rearrangement of the work. No documents were produced by the Government showing the amount for which the rearrangement work was done. So long as the difference between the first work and rearranged work was not known to the court it is difficult to enter a finding that the amount shown in Exts.A22 to 25 are the correct liability due from the plaintiff. Government has a duty to produce the documents including the agreement executed between the subsequent contractor and has a duty to appraise the court the amounts A.S.No.296/99 and conn. cases 11 demanded is the loss on account of the rearrangement of the work. the Government should have produced documents necessary for substantiating their claim under Exts.A22 to 25. Since the said documents are not produced before the court, this Court is not in a position to check and verify the amount claimed by way of liability is the amount of loss caused to the Government. In the aforesaid circumstances, this Court is inclined to remit the 4 cases back for the purpose of ascertaining whether the amount of liability fixed in Exts.A22 to 25 are the amount caused to the Government by way of loss due to rearrangement of the work. On production of the documents necessary for ascertaining the matter, the court may reconsider the question of quantum of liability. 14. During the course of hearing the learned Government Pleader produced documents to show that the Government sustained loss of Rs.85,295/-, Rs.60,723/-, Rs.60,952/- and Rs.90,505/- in the matter of awarding of four contracts in the name of the plaintiff. The court below shall pass orders on the four petitions filed by the Government to receive the documents in evidence after hearing both sides. The plaintiff in the suit has A.S.No.296/99 and conn. cases 12 filed a counter opposing the reception of documents as additional evidence. This Court during the course of hearing observed that the Government should have produced the supporting documents in order to show that the amounts shown in Exts.A22 to 25 are the loss amount caused to the Government due to rearrangement of the work. This Court also observed that the Government did not produce the supporting documents so that the court can satisfy whether the amount demanded is the correct amount. Those documents are now produced by the learned Government Pleader. Since this Court is remanding the matter, four applications filed for receiving additional evidence shall be considered by the trial court. Learned counsel for the plaintiff has filed a counter affidavit opposing the prayer. 15. The learned counsel for the appellant submitted that insufficiency of court fee was considered by the court only at the time of delivering the judgment. Learned counsel referred to Section 12 of the Kerala Court Fees and Suits Valuation Act and submitted that parties should be given an opportunity to pay the balance court fee, if any, if it is found that the court fee paid is not sufficient. The learned counsel submitted that such an A.S.No.296/99 and conn. cases 13 opportunity was not given to the plaintiff. According to him the question of sufficiency of court fee is a matter to be examined by the office at the time of registering the suit. The grievance of the plaintiff is that the question regarding court fee also be examined by the trial court and shall given an opportunity to the plaintiff to pay the requisite court fee, if the court finds after hearing the plaintiff that the court fee paid is not sufficient. Court below shall reconsider the case afresh in the light of the observations made above. The court below shall dispose of the suits within a period of 6 months from the date of receipt of a copy of this judgment. Parties shall appear before the court below on 31.3.2010. In the result, the appeal is allowed. The case is remanded to the court below for fresh consideration in accordance with law in the light of the observations made above. There will be no order as to costs. The registry is directed to send back the records of the cases to the court concerned, forthwith. HARUN-UL-RASHID, JUDGE. bkn/-