1 IN THE HIGH COURT OF BOMBAY ATGOA FIRST APPEAL NO.146 OF 2005 AND FIRST APPEAL NO.54 OF 2006 FIRST APPEAL NO.146 OF 2005 M/s. Gajanan Saw Mills, a registered Partnership Firm, Opposite Railway Station, Sanvordem-Curchorem, Goa – 403 706, through its Authorized Partners (1) Shri. Nilkant Gangadhar Amonkar and (2) Smt. Prabhavati Nilkant Amonkar … Appellants V e r s u s 1. State of Goa, through its Chief Secretary, having office at Secretariat, Panaji, Goa. 2. The Executive Engineer, Works Division I, Public Works Department, Patto, Panaji, Goa. … Respondents Mr. Nitin Sardessai, Advocate for the Appellant. Mr. Guru Shirodkar, Government Advocate for the Respondents. AND FIRST APPEAL NO. 54 OF 2006 1. State of Goa, through its Chief Secretary, having office at Secretariat, Panaji, Goa. 2. The Executive Engineer, Works Division I, 2 Public Works Department, Patto, Panaji, Goa. … Appellants V e r s u s 1. M/s. Gajanan Saw Mills, Registered Partnership Firm, Opposite Railway Station, Sanvordem-Curchorem, Goa – 403 706, through its Authorized partner. … Respondent. Mr. Guru Shirodkar, Government Advocate for the Appellants. Mr. Nitin Sardessai, Advocate for the Respondent. CORAM : F.M. REIS, J. DATE : 29th JANUARY, 2011 JUDGMENT : The above appeals challenge the judgment and decree dated 17/01/2005 passed by the learned Additional District Judge, Panaji in Civil Suit No.117/2004. 2. The parties shall be referred to in the manner they so appear in the cause title of the impugned judgment. 3. The plaintiffs filed the suit against the defendants on the ground that they were awarded a contract for the purpose of renovating 17 rooms for the improvement of the Government Circuit House at Altinho, Panaji, which were to be completed 3 within a span of 120 days. The terms and conditions pursuant to which the said contract was granted were stipulated at Exhibit 42. It is contended by the plaintiffs that as per the terms of the said agreement they were entitled to take over 17 rooms for such renovation, but however, the defendants had defaulted in delivering the said rooms as contemplated in the said agreement which prevented the plaintiffs from completing the said work within the time stipulated. It is further their case that the plaintiffs had mobilised construction machinery and purchased material worth Rs.5,94,309/- of an unperishable nature and brought the same at the site, but he found that the work site for the purpose of carrying out the said activities were not handed over to the plaintiffs. At the first instance, the plaintiffs were given only one room for the purpose of executing the tendered work though he was supposed to receive all 17 rooms at a time. Subsequently, the defendants released 9 rooms initially between the period of 17/11/1995 to 5/12/1995. It is further their case that extra items were sought for by the defendants in addition to the work alloted to them. It is further their case that by letter dated 20/12/1995 they brought to the notice of the defendants about the hindrances and violations of the contractual terms in handing over the entire site to the plaintiffs. It is further their contention on account of no fault on 4 the part of the plaintiffs they were unable to utilise the entire material worth Rs.5,94,309/-, as scheduled, as the site was not handed over to them. It is further their contention that there was further delay in the execution of the work as the working hours of the plaintiffs were only up to 6.30 p.m. so as to not to disturb the guest at the circuit house. It is further their case that the plaintiffs started the work on 21/11/1995 and were due for completion on 21/03/1996, but on account of the delay on the part of the defendants and the hindrances occasioned to the plaintiffs they were unable to complete the said work within the contractual period which forced the plaintiffs to seek for extension of time by different letters addressed to the defendants. The hindrances occasioned to the plaintiffs were specified in the letter dated 26/12/1996 and 5/01/1996. It is further their case that on 14/12/1996, they informed defendant no.2 that 9 rooms were already renovated and completed and that they called upon the defendants to complete the wiring work before doing the painting. It is further their case that on 11/03/1996, they were compelled to seek further extension on no fault on their part and after due consideration the extension of 153 days was recommended by defendant no.2. The contractual period was extended up to 21/08/1996, as the delay was occasioned on account of default 5 committed by defendants. It is the contention of the plaintiffs that they had suffered damages. Such damages were also inclusive of the payments to the workers and other persons hired by the plaintiffs which were stated to be idle. It is further their case that the rates prevailing at the time of tender for the raw material were increased by 35% and as the delay was on account of the defendants, the plaintiffs claimed that they were entitled to the difference in the prices. The losses suffered by the plaintiffs were enumerated in para 23 of the plaint on such count. The remaining damages claimed were enumerated in paras 24, 25 & 26 of the plaint. For the reasons stated in the plaint, the plaintiffs claimed different amounts as stipulated in para 35 of the plaint. 4. The defendants filed their written statement and contended that the rooms were made available to the plaintiffs for executing the work as per his requirement for the mobilisation of the construction. The plaintiffs were paid a sum of Rs.4,45,732/- as security advance. It is further submitted that the plaintiffs had purchased material and requested for payment on 5/01/1996. The claim of the plaintiffs that they had brought material at the site, was disputed, as according to the defendants, the same was brought only on 5/01/1996. The defendants also disputed that there was 6 any hindrance in the completion of the work. It was also disputed that work hours were restricted up to 6.30 p.m. It is further their case that it was the duty of the plaintiffs to complete 50% of the work i.e. 9 rooms which were alloted to them, on or before 21/01/1996, but the plaintiffs could not complete the said work as per the said schedule. It is further their case that the plaintiffs could not complete the work within the contractual period due to their own negligence and the question of contending that there was any default on the part of the defendants was totally incorrect. The defendants, accordingly, disputed the claim of the plaintiffs and inter alia prayed that the suit deserves to be dismissed. 5. The learned Judge framed the issues and examined witnesses. PW1 was Gajanan Amonkar, who has deposed about the nature of the work done by the plaintiffs. The said witness has also been cross-examined. He claimed that it was promised by the defendants that once the work order was issued the rooms would be vacated. The defendants examined Shri J.J.S. Rego as DW1, who has filed his affidavit as well as has been cross-examined. The learned Judge after hearing the parties and appreciating the evidence on record has come to the conclusion that the defendants failed to comply with the terms of the suit contract on account of 7 the failure of the defendants to allot the site to the plaintiffs within time and free from any hindrances. The learned Judge further held that the plaintiffs were entitled for a sum of Rs.63,743.26 together with interest at the rate of 16% p.a. towards the final bill. The learned Judge has also partly affirmed the claim in favour of the plaintiffs on account of price rise along with interest. The claim for a sum of Rs.1,09,623/- due to reduced productivity during the contractual period was refused. The learned Judge has also partly affirmed the claim of the plaintiffs on account of additional over head together with interest. The learned Judge also granted amount towards loss of profit and directed the defendants to pay a total sum of Rs.63,743.26 with interest at the rate of 16% from 10/11/1997 till actual payment besides the sum of Rs.1,01,655.18 with interest at the rate of 16% p.a. and a further sum of Rs.1,58,208.00 with interest at 16% p.a. and interest at the rate of 10% p.a. on the sum of Rs.5,87,950.50 from 22/03/1996 till 4/12/1996. 6. Mr. N. Sardessai, learned Counsel appearing for the plaintiffs has assailed the impugned judgment and submitted that the compensation which has been ordered to be paid has not been properly assessed and, in fact, the amount ought to have been much 8 higher in view of the fact that the plaintiffs had adduced evidence that on account of default committed by the defendants the plaintiffs had to engage the work force in two subsequent extensions which resulted in substantial damages to the plaintiffs. He further submitted that as per the impugned judgment the interest has been awarded at the rate of 16% p.a. which should have been from the date of the first notice issued to the plaintiffs on 30/01/1997. The learned Counsel further submitted that while deciding issue no.4 there was a mistake in the calculation committed by the learned Judge with regard to the work which was completed prior to the first extension. The learned Counsel further pointed out that as per the evidence on record, the issue no.5 has been wrongly decided against the plaintiffs and he further submitted that the issue no.9 has not been duly appreciated by the learned Judge while passing the impugned judgment. The learned Counsel further submitted that the plaintiffs were entitled to a sum of Rs. 4,22,226.77 as claimed by them and the learned Judge erroneously decided the claim of the plaintiffs and partly decreed the suit. The learned Counsel further submitted that the impugned judgment deserves to be modified and the suit filed by the plaintiffs is to be decreed as prayed for. 9 7. On the other hand, Shri G. Shirodkar, the learned Government Advocate appearing for the respondents has supported the impugned judgment and submitted that the learned Judge has essentially granted the compensation as prayed for by the plaintiffs though there is no evidence on record to substantiate the claim of the plaintiffs that they had suffered any damages on account of delay in completion of the work. The learned Counsel took me through the terms of the agreement at Exhibit 42 and pointed out that as per clause 5 which provides that there was time stipulated within which the work has to be completed or otherwise the contractor/plaintiffs were liable to apply for extension of time which was invoked by the plaintiffs, while seeking for extension. The learned Counsel further submitted that clause 5 of the said agreement has not at all been considered by the learned Judge while passing the impugned judgment and consequently the effect of such terms has not been dealt with by the learned Judge in the impugned judgment. The learned Counsel further submitted that the existence of such clause itself suggests that the question of plaintiffs claiming any damages would not arise. He further pointed out that the interest awarded by the learned Judge by the impugned judgment is exorbitant and in any event under Section 34 of the Civil Procedure Code the Court has got a discretion in the 10 grant of interest during the pendency of the suit as well as future interest which has to be exercised judiciously and in a reasonable manner. The learned Counsel further submitted that the considering the interest rates prevailing in Nationalized Bank the interest awarded by the learned Judge is exorbitant. The learned Government Advocate, as such, submitted that the impugned judgment deserves to be set aside. 8. Having heard the learned Counsel and on perusal of the record, I find that the learned Judge while passing the impugned judgment has in fact not at all considered the effect of clause 5, which is part of the agreement executed between the parties at Exhibit 42. The existence of such clause in the agreement will have to be considered while appreciating the evidence on record and the claim put forward by the plaintiffs as to whether the plaintiffs have been able to establish that they are entitled for any compensation on the grounds set out in the plaint, when it is alleged by the defendants that the extension was sought by the plaintiffs without any demeanor. 9. Shri N. Sardessai, the learned Counsel appearing for the plaintiffs has fairly conceded that this aspect and the effect of such 11 clause in the agreement has not at all been considered by the learned Judge while passing the impugned judgment. But, however, the learned Counsel pointed out that even assuming such clause was existing, the plaintiffs were entitled for compensation as prayed for by them in the suit. 10. Apart from that the learned Judge while passing the impugned judgment has failed to consider whether there was any substantial evidence on record to come to the conclusion that the plaintiffs have actually suffered the damage on the grounds set out by them in the plaint. At this stage, Shri Sardessai, the learned Counsel appearing for the plaintiffs pointed out that the plaintiffs would be in a position to adduce evidence to substantiate their claim on this aspect. He further pointed out that the law is well settled as to the manner in which the discretion is to be exercised by the Courts under the provisions of Section 34 of the Civil Procedure Code with regard to the grant of interest pendente lite and future interest. 11. Considering the submissions of both the Counsel and on the basis of material on record, I find that the evidence on record was not sufficient for the learned Judge to come to the conclusion that 12 the plaintiffs were entitled for the claim of damages as ordered by the impugned judgment. The fact and/or existence of clause 5 would have to be considered by the learned Judge to ascertain as to whether the plaintiffs are entitled for any damages as claimed by them on different counts. In the interest of justice, it is my considered opinion that considering the submissions of both the Counsel, the matter deserves to be remanded to the learned Judge to decide the suit afresh after hearing both the parties and giving an opportunity to lead further evidence in accordance with law. No doubt the defendants would also be entitled to lead evidence to dispute the claim of the plaintiffs as claimed by them. 12. In view of the above, I pass the following order: O R D E R (i) Both the appeals are partly allowed. (ii) The impugned judgment and decree dated 17/01/2005 is quashed and set aside. (iii) The Civil Suit No.117/2004 is restored to the file of the learned Additional District Judge. (iv) The learned Judge is directed to decide the said suit afresh after giving both the parties an opportunity of being heard and adducing further evidence in 13 accordance with law without being influenced by any observations on merits given herein above. (v) All the contentions of both the parties on merits are expressly kept open. (vi) Both the appeals stand disposed of accordingly with no order as to costs. (vii) Parties are directed to appear before the learned Additional District Judge on 21/03/2011 at 10.00 a.m. and abide by its further directions. F.M. REIS, J. NH/-