IN THE HIGH COURT OF JUDICATURE AT PATNA First Appeal No.835 of 1979 (Against the judgment and decree dated 28th July, 1979 passed by Sri Budhdeo Narayan Sinha 3rd Additional Subordinate Judge at Sasaram in Money Suit No.173 of 1966/1 of 1979). M/S Modi Brothers & Anr. ....Plaintiffs/Appellants Versus The State of Bihar ....Defendant- Respondent ******** For the Appellants: Mr. Sukumar Sinha, Sr. Advocate For the Respondent: Mr. J.S. Arora, S.C. 6 Dated : 13th day of September, 2011 P R E S E N T THE HON'BLE MR. JUSTICE MUNGESHWAR SAHOO J U D G M E N T This First Appeal has been filed by the plaintiffs-appellants against the judgment and decree dated 28.07.1979 passed by Sri Budhdeo Narayan Sinha, the learned 3rd Additional Subordinate Judge at Sasaram in Money Suit No.173 of 1966/1 of 1979 dismissing the plaintiffs-appellant’s suit for realization of money amounting to Rs.1,61,463.23. (2) The plaintiffs-appellants filed the aforesaid money suit no.173 of 1966/1 of 1979 alleging that in September, 1962, tender Mungeshwar Sahoo, J. 2 was invited by the respondent for the work of bolder pitching in apron and slop on Western Guide Bank Barrage Project, Indrapuri, Dehri-on- sone, Sahabad, Bihar. The plaintiff’s tender was accepted by the respondent on 12.09.1962 and a contract was signed and work order was issued on 18.10.1962. Both parties entered into agreement dated 10.11.1962. Pursuant to the said contract, the plaintiffs went to the site with his staffs on 06.12.1962 but plaintiffs were allowed to commence the work only on 26.12.1962. The plaintiffs completed the work on 24.07.1963. The defendant did not take the progress work measured and paid only Rs.5,49,086 from time to time against the value of work of Rs.6,93,681.23. There were some short measurement and in some cases no measurement at all and in some cases, there were less measurement i.e. relating to item nos.2 and 3 and there were no measurement relating to item nos.4 and 5 of the contract. The plaintiffs were put to loss due to the fault and negligence of the defendant employees and the plaintiffs were not responsible for the loss suffered by the defendant for which compensation was claimed in the bill. Deductions were made from the security amount and still Rs.22,000 security deposit is with the defendant. The plaintiffs are entitled to get back the same also. (3) The plaintiffs served notice under Section 80 C.P.C. on 24.05.1966 and thereafter, receiving the notice, Executive Engineer sent a cheque for Rs.5100.32 with respect to the security deposit. Accordingly, the plaintiffs filed the suit for realizing the aforesaid amount. 3 (4) The defendant on being noticed appeared and filed contesting written statement. The defendant admitted the agreement dated 10.11.1962 and the issuance of work order on 18.10.1962. It is stated that in fact, the site was made available to the plaintiffs on 06.12.1962 but the plaintiffs started working on 25.12.1962. The plaintiffs were required to complete the work within 31.05.1963 but failed to complete the work within the stipulated period which was essence of the contract. The plaintiffs were given repeated reminders to complete the work and it was stipulated that the time is the essence of contract but failed to complete the work and requested for extension of time. However, the time was extended till 25.07.1963. Since the plaintiffs were negligent and were not able to complete the work within the time, the department engaged another agency to complete the work before the monsoon break according to the clause nos.2 and 3 of the agreement. The plaintiffs completed the work till 25.07.1963 only upto 10,93720 Cubic feet bolder pitching out of the stipulated 15.95 lacs Cubic feet and the remaining work was done by the other agency on higher rate at the risk of the plaintiffs and, therefore, the said excess amount paid to the other agency has been deducted from the security deposit of the plaintiffs amounting to Rs.17,931.68. All other allegations made by the plaintiffs were denied. The defendant further alleged that the notice under Section 80 was not served according to the provision on the proper authority; therefore, in the eye of law, there was no service of notice under Section 80 C.P.C. (5) On the basis of the aforesaid pleadings of the parties, the learned Court below framed the following issues: 4 I. Is the suit as framed maintainable? II. Has the plaintiff got valid cause of action for the suit? III. Is the service of notice under Section 80 C.P.C. illegal being not in proper form and not served to the proper authority? IV. Is the suit barred under Section 34 of the Arbitration Act? V. Is the plaintiff entitled to the relief claimed by him? VI. To what relief or reliefs, if any, is the plaintiff entitled? (6) After trial, the learned Court below while discussing issue no.3 found that plaintiffs have not given proper notice to proper authorities as required under Section 80 C.P.C. While discussing issue no.4, the learned trial court overruled the objection regarding arbitration clause. While deciding issue no.5, the learned Court below found that the plaintiffs have failed to prove that the Government officials were responsible for the slow progress of the work vide paragraph 15 of the judgment. The learned Court below also found that the work was allotted to other agency due to some practical constructional difficulty as such any deduction made by the defendant on that score is clearly unjustified vide paragraph 16. The learned Court below also found that the objection of the plaintiffs regarding less measurement and no measurement are not sustainable and observed that from other evidences available on record, the plaintiffs are not entitled for Rs.1,44,595.23. However, at paragraph 19, the learned Court below held that the suit is not maintainable on account of improper service of notice under Section 80 C.P.C. and therefore, dismissed the suit. (7) The learned senior counsel, Mr. Sukumar Sinha appearing on behalf of the appellants submitted that the learned Court 5 below has wrongly found that the notice under Section 80 C.P.C. was not properly served on proper authority. According to the learned counsel, notice was served on the concerned authorities i.e. the Executive Engineer of the concerned department and even after service of notice, some amount was paid by the authorities and, therefore, no prejudice was caused to the State, defendant. Moreover, it cannot be said that without bringing to the notice of the proper authority or the State of Bihar, the Executive Engineer arranged for the amount of Rs.5100 and paid it to the plaintiffs. The learned counsel further submitted that the learned Court below held wrongly that the plaintiffs are not entitled for the amount of Rs.1,44,595.23 on the ground that the defendant has not produced the relevant documents. The documents were in possession of the defendant and, therefore, for the fault of the defendant, the learned Court below could not have dismissed the plaintiff’s claim for recovery of amount. The learned counsel further submitted that no deduction could have been made from the security deposit of the plaintiff on the ground that the work was done by some other agency because the other agency was appointed for no fault on the part of the plaintiffs and, therefore, the plaintiffs are not responsible for any loss. On these grounds, the learned counsel submitted that the impugned judgment and decree are liable to be set aside and the plaintiff’s suit be decreed. (8) On the other hand, the learned S.C. 6, Mr. J.S. Arora submitted that the agreement was entered into between the parties and the total agreement amount was Rs.7 lacs. Admittedly, the plaintiffs could complete the work upto 10 lacs Cubic feet of bolder pitching work and the rest work was done by the third agency. This 6 third agency was appointed after giving due notice and sufficient time to the plaintiffs. Moreover, the plaintiff never challenged the appointment of third agency. The State of Bihar had no option but to appoint the third agency to complete the bolder pitching work prior to monsoon break because the work was urgent and flood was expected after the month of June. The plaintiffs themselves informed the department that they will be able to complete the work of only 10 lacs Cubic feet bolder pitching work within the extended time and, therefore, third agency was appointed for doing the rest of the work. In such view of the matter, the plaintiffs are not entitled for the price as compensation which was paid to the third agency. In fact, the plaintiffs have claimed the total amount of the work under the agreement which they are not entitled. On these grounds, the learned counsel submitted that the First Appeal is liable to be dismissed. (9) In view of the above rival contentions of the parties, the points arise for consideration in this appeal is as to: I. Whether the plaintiffs are entitled to the decree for realization of the amount claimed by them and whether the impugned judgment and decree is sustainable in the eye of law? II. Whether the notice under Section 80 C.P.C. is valid in the eye of law? (10) From perusal of the plaint, it appears that the clauses of the agreement have been quoted in the plaint. In clause 2, it is specifically been stated that the time allowed for carrying out the work as entered in the tender shall be strictly observed and shall be reckoned from the date on which the written order to commence the 7 work is given to the contractor. It is also specifically mentioned that time is the essence of the contract. The plaintiffs claimed that the plaintiffs were put to loss due to the fault and negligence of the defendant’s employees. Some portion of the final bill was not considered because those works were beyond agreement. In Schedule-A of the plaint, the plaintiffs claimed that the price for the bolder pitching was Rs.6,93,681.23. Out of that, he used Government bolders cost of which Rs.11,477 and the plaintiffs were paid Rs.5,37,609. The balance of Rs.1,44,595.23 is claimed by the plaintiffs towards the bolder pitching work and the rest amount i.e. Rs.22,000 towards the security deposit. (11) From perusal of the tender, Exhibit 9, it appears that the total estimated cost of Rs.7 lacs for which the tender of the plaintiffs was accepted. (12) According to the plaintiffs, the delay was caused because of the fact that site was not made available before 26.12.1962. The witnesses, P.W. 8 and 12 and the plaintiff himself who has been examined as P.W.7 have stated that on 06.12.1962, the plaintiffs went to the spot but it was not ready. The plaintiffs were allowed to work from 26.12.1962 as the site was made ready from that date. On the contrary, from perusal of Exhibit-E, a letter written by Assistant Engineer to the plaintiffs, it appears that he requested the plaintiffs to start pitching work without any delay. Exhibit-E/1 is letter written by said Assistant Engineer to the Executive Engineer informing that the site was ready from 05.12.1962 but the plaintiffs did not start work. This letter, Exhibit-E/1 is dated 17.12.1962. Exhibit-E is dated 8 09.12.1962. From perusal of Exhibit-E/12, it appears that a programme of work was given by the plaintiffs wherein the plaintiffs stated that work will be started firstly with the apron work. This letter is dated 22.09.1962. From the above documentary evidences produced by the defendant-respondent, it is clear that the site was made ready even from 05.12.1962 but the plaintiffs themselves did not start the work. In such view of the matter, the oral testimony of the plaintiff witnesses is not reliable. I, therefore, find that the learned Court below has rightly held that the delay in starting the work was not because of the fault on the part of the department. (13) Here, the plaintiffs are claiming the entire amount of the tender i.e. the entire amount of the price of the bolder pitching work for which his tender was accepted. The learned counsel for the appellants submitted that the third agency was appointed not for the fault of the plaintiffs but on technical grounds. The plaintiffs are not responsible for the same and, therefore, the plaintiffs submitted the bill for total price. Admittedly, in the present case, third agency was appointed who completed the work. From perusal of Exhibit-E/3, a letter dated 11.02.1963 written by the Executive Engineer to the plaintiff’s firm, Exhibit E/4, letter dated 16.02.1963, Exhibit-E/5, letter dated 28.02.1963, it appears that the plaintiff’s firm was not making progress in the work. The plaintiffs were therefore, reminded again and again and told that the work will be allotted to the other agency in order to get the work completed in time because the work is being done in river bed. The plaintiff’s firm was requested to increase the number of trucks and the workers. Exhibit-E/7 is letter addressed to the plaintiff dated 22.03.1963. It was found that the plaintiffs will not 9 be able to do remaining 6 lacs Cubic feet bolder pitching within 2 months and, therefore, final notice was given to increase the number of trucks for doing about 12,000 Cubic feet bolder pitching per day otherwise, the work will be taken up out of their hand. From perusal of Exhibit-E/9, which is letter addressed to the plaintiffs by Executive Engineer time till 30.06.1963 was allowed giving the plaintiffs one more chance to complete the work. It was stipulated that the remaining work will be allotted to other agency at the cost of the plaintiffs. Lastly, by Exhibit E/10 which is dated 07.05.1963 it was found that the plaintiff’s work was lagging beyond expectation and it was found absolutely necessary to get the work completed before the break of monsoon, the departmental bolders were issued in favour of the plaintiffs with a view to help him at the rate of Rs.50 per Cubic feet. From perusal of Exhibit E/16, it appears that the plaintiffs stated clearly that he will not be able to do more than 10 lacs Cubic feet of stone pitching work against the quantity of 12.15 lacs Cubic feet and the plaintiffs informed the department by his letter dated 01.05.1963. From the said letter, it is evident that to complete the remaining work of bolder pitching, M/S Devi Prasad was appointed because in spite of ample opportunity given to the plaintiffs and in spite of extension of time also, the plaintiffs could not complete the work. This fact is again evident from Exhibit E/17 which is dated 01.05.1963. From said letter also, it appears that the plaintiffs expressed its inability to do more pitching work than 10 lacs Cubic feet by end of May, 1963. From perusal of Exhibit-E/18, it appears that considering all these aspect of the matter and the urgency of the work, it was found that the plaintiffs have taken the work out of their capacity. It was also found that 10 completion of the work was beyond imagination within the time stipulated and, therefore, the Sub Divisional Officer by this Exhibit- E/18 dated 10.05.1963 wrote that only alternative left is to allotment of work to some other agency. In view of the above letters written by the department, it appears that sufficient time was granted to the plaintiffs. Reminders were given to him to increase the progress of the work by increasing number of trucks and engaging more labourers. The department also helped him by giving departmental bolders and also time was extended but lastly, the plaintiffs informed the department that he will be able to do the work only upto 10 lacs Cubic feet bolder pitching only. Now, therefore, admittedly, the rest work i.e. 2.15 Cubic feet bolder pitching work was done by the third agency i.e. M/S Devi Prasad. This fact has nowhere been denied by the plaintiffs. The total price of the contract was Rs.7 lacs. Admittedly, the plaintiffs worked upto only 10 lacs Cubic feet pitching work. In such view of the matter, the plaintiffs are not entitled to receive the total amount of the whole bolder pitching work. The evidences adduced by the plaintiffs to the effect that there is no fault on the part of the plaintiffs is concerned, I do not agree because of the above discussed various letters. Repeatedly, he was requested to complete the work before the monsoon break. When he expressed his inability to complete the whole work, the department had no option but to complete the work before the monsoon break by appointing another agency because the work had to be completed before monsoon break because the work was going on in the riverbed. In such circumstances, it cannot be said that because of no fault on the part of the plaintiffs, another agency was appointed. Admittedly, here, there 11 is no evidence of less measurement or no measurement. The learned Court below has rightly observed the same. (14) In the present case, admittedly, when another agency was appointed for completing the work within the time stipulated, the plaintiffs did not challenge the appointment of third agency. The plaintiffs allowed to complete the work by the said M/S Devi Prasad. Now, therefore, he cannot say that he is entitled for the whole amount of bolder pitching work. (15) From perusal of the impugned judgment, it appears that the learned Court below observed that the defendant did not produce the document to show what work was done by the other agency. In my opinion, the learned Court below did not consider these Exhibits which have been discussed above from which it is clear that the plaintiffs worked only upto 10 lacs Cubic feet bolder pitching and admittedly, the rest 2.15 lacs Cubic feet bolder pitching work was done by M/S Devi Prasad. From the above Exhibits, it appears that M/S Devi Prasad was awarded the work at the last moment on higher rate which completed the work within the time stipulated. In such view of the matter, the amount which was paid to the said agency was out of the total amount sanctioned for the total work. The excess amount which was paid to the said agency has been deducted from the earnest security deposit made by the plaintiffs. I, therefore, find that no illegality has been committed by the State, defendant-respondent by deducting the said amount. The observation of the learned Court below that the third agency was appointed because of no fault on the part of the plaintiffs is concerned, in my opinion, it is not sustainable 12 as the learned trial court has not considered these admission of the plaintiffs to the effect that he was unable to do more work than 10 lacs Cubic feet within the time extended. (16) In view of my above discussion, I find that the plaintiffs are not entitled for anything. Admittedly, the amount for the work done by the plaintiffs has already been paid to the plaintiffs. It is not the case of the plaintiffs that he has not been paid for the work of 10 lacs Cubic feet pitching work. As stated above, he is claiming the entire price of the total work. Thus, the point no.1 is answered in favour of respondent and against the plaintiffs-appellants. (17) So far service of notice under Section 80 C.P.C. is concerned, admittedly, the notice was served to the Executive Engineer. In A.I.R. 1991 Patna 178(The State of Bihar vs. M/s. Bera Colliery Company (P) Ltd.), it has been held at paragraph 21 to 24 as follows: “21. In P.P. Abunbacker v. The Union of India reported in AIR 1972 Kerala 103, V.R. Krishna Iyer, J. stated that role of the State as a litigant in the following terms:- at pages 107 & 108 of AIR 1972 Kerala. “The State, under our Constitution, undertakes economic activities in a vast and widening public sector and inevitable gets involved in disputes with private individuals. But it must be remembered that the State is no ordinary party trying to win a case against one of its own citizens by hook or by crook; for the State’s interest is to meet honest claims, vindicate a substantial defence and never to score a technical point or overreach a weaker party to avoid a just liability or secure an unfair advantage, simply because legal devices provide such an opportunity. The State is a virtuous litigant and looks with in concern on immoral forensic successes so that if on the merits the case is weak, Government shows a willingness of 13 prestige and other lesser motivations which move private parties to fight in court. The lay-out on litigation costs and executive time by the State and its agencies is so staggering these days because of the large amount of litigation in which it is involved that a positive and wholesome policy of cutting back on the volume of law suits by the twin into forensic show-downs where a reasonable adjustment is feasible and ever offering to extinguish a pending proceeding on just terms, giving the legal mentors of government some initiative and authority in his behalf. I am not indulging in any judicial homily but only echoing the dynamic national policy on State litigation evolved at a Conference of Law Ministers of India way back in 1957. This second appeal strikes me as an instance of disregard of that policy.” V.R. Krishna Iyer J. again reiterated the duties of the State as a litigant by reiterating the aforementioned observations of the Kerala High Court in Dilbagh Rai Jerry v. Union of India reported in AIR 1974 SC 130: (1974 Lab IC 149). 22. In any event the Code of Civil Procedure(Amendment) Act 1976 has brought about a drastic change with regard to the dismissal of the suit for non-service of valid notice, by inserting sub-section (3) Section 80 of the Code of Civil Procedure which reads as follows:- “No suit instituted against the government or against a public officer in respect of and act purporting to be done by such public officer in his official capacity shall be dismissed merely by reason of any error of defect in the notice referred to in sub-section (1), if in such notice. (a) the name, description and the residence of the plaintiff had been given as to enable the appropriate authority or the public officer to identify the persons giving the notice and such notice had been delivered or left at the officer of the appropriate authority specified in sub- sections (1) and (b) the cause of action and the relief by the plaintiff had been substantially indicated. 23. Further it is not the case of the appellants that the defendant No.3, District Mining Officer, Dhanbad, did not receive any notice. The written statement has been filed on behalf of the State of Bihar and the District Mining Officer, Dhanbad, and the said written statement has been signed 14 and verified by the District Mining Officer, Dhanbad. The appellant, therefore, has not been able to show that they were prejudiced in any manner whatsoever as allegedly the notice was not addressed to a secretary to the Government or the Collector of the District. 24. It may be noticed that the notice under S.80 of the Code of Civil Procedure is to be addressed to the State but the same may be delivered to or left at the address of the Secretary to the Government or the Collector of the District.” (18) Admittedly, in the present case, the work was being done by the department i.e. Executive Engineer and the Engineer-in- Chief. It is also admitted fact that after receiving notice, Rs.5100 has been paid to the plaintiffs. The State, respondent has not been able to show that any prejudice has been caused in any manner whatsoever because of the fact that the notice was not addressed to Secretary to the Government or the Collector of the District. It is not the case of the