IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.BHAVADASAN FRIDAY, THE 30TH SEPTEMBER 2011 / 8TH ASWINA 1933 AS.No. 54 of 2000(A) -------------------- OS.485/1993 of PRINCIPAL SUB COURT, PALAKKAD .................... APPELLANTS/DEFENDANTS ---------------------------------------- 1.STATE OF KERALA REP BY THE SECRETARY TO GOVT IRRIGATION (ISW) DEPT, GOVT SECRETARIAT THORUVANANTHAPURAM 2. THE EXECUTIVE ENGINEER, IRRIGATION DIVISION CHITTUR TALUK, PALAKKAD DISTRICT BY GOVERNMENT PLEADER P K RAVIKRISHNAN RESPONDENT/PLAINTIFF: ------------------------------------ M M MATHAI, S/O.MATHAI AGED 40 YEARS, MANGATTU HOUSE MALAYIDDAMTHURUTHU PO, ALUVA KIZHAKKAMBALAM VILLAGE KUNNATHUNADU TALUK, ERNAKULAM DT. ADV. SRI.K.L.VARGHESE, SANTHA VARGHESE THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 30.09.2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.BHAVADASAN, J. ------------------------------------- AS No.54 of 2000 ------------------------------------- Dated this the 30th day of September 2011 Judgment Aggrieved by the judgment and decree dated 15.03.1999 in OS No.485/93, the State has come up in appeal. The parties and facts are hereinafter referred to as they are arrayed before the trial court. 2. The plaintiff is a contractor, who undertook the work of improvements of a road for 450 M from Chulliarmedu to the saddle dam end. An agreement was entered into by him with the defendants on 27.07.1989. The works cost as per the agreement was Rs.2,56,849/-. The period for completion of the work was fixed as four months from the date of handing over the site. The site was handed over to the plaintiff on 11.8.1989. It is pointed out by the plaintiff that the time for completion of the work was extended upto 30.05.1990. Again, the time was extended upto 15.07.1990. It is alleged that the AS 54/00 2 defendants did not make payment of the part bills submitted by the plaintiff, inspite of repeated requests. Ultimately, for want of bitumen, the plaintiff was unable to complete the work and he informed the Department about the same. Thereafter, the plaintiff was informed by the officials of the defendants that bitumen was made available and he was asked to take delivery of the same. The plaintiff found that the bitumen made available was of inferior quality, which was rejected by another contractor. According to the plaintiff, the work could not be completed within the stipulated time because of the delay in making available the bitumen required for the work. But, inspite of the definite stand taken by the plaintiff, the defendants terminated the contract. Pointing out that the termination is illegal and that he is entitled to an amount of Rs.33,802.69 under various heads and for refund of security amount and realisation of Rs.1,000/- towards loss of profits with 18% interest on the said amounts, the suit was laid. AS 54/00 3 3. The defendants resisted the suit. Most of the facts are admitted by the defendants. The State took the stand that the Department had made available all facilities for due performance of the work in time and it was due to the failure on the part of the plaintiff that the work could not be completed. It was pointed out that extension of time was granted to the plaintiff on two occasions and inspite of that, he could not complete the work. It was due to his fault that the contract stood terminated and that he is not entitled to any reliefs. 4. On the basis of the above pleadings, necessary issues were raised. The evidence consists of the testimony of PW1 and documents marked as Exts.A1 to A24 from the side of the plaintiff. The defendants had DW1 examined and Exts.B1 to B7(a) marked. 5. The trial court, on an appreciation of the evidence in the case, found that it was due to the laches on the part of the Department that the plaintiff could not complete the work. The trial court also found that the AS 54/00 4 plaintiff has completed 95% of the work and that he had expressed his willingness and readiness to complete the work if materials are made available, within a short period. Holding that the termination of contract by the defendants is not justified, a decree was granted in favour of the plaintiff. The said decree is assailed in this appeal. 6. The only question that arises for consideration in this appeal is whether the finding of the trial court that the termination of contract is improper, is justified. 7. The learned Government Pleader, appearing for the State pointed out that it was due to the fault on the part of the plaintiff that the work could not be completed and the Department could not be found fault for that. As per the terms of the contract, the site was made available to the plaintiff within time and extensions of time were granted twice to the plaintiff, on his requests. It is also pointed out that the Department had done, all that were necessary from their part to have the work completed and that it was due to the laches on the part of the plaintiff that AS 54/00 5 the work was not completed. The learned Government Pleader submits that there is no provision in the contract for escalation of work costs and therefore, the request of the plaintiff in that regard could not be considered. It is also pointed out that materials were in fact, made available and it was due to the failure on the part of the plaintiff to take delivery of the materials that the delay had occasioned, for which the defendants could not be held liable. Therefore, the learned Government Pleader pointed out that the judgment and decree passed by the trial court are unsustainable in law. 8. The learned counsel for the respondent, on the other hand, pointed out that a reading of the judgment of the trial court clearly shows that the trial court has clearly analysed the evidence and found that it was due to the fault on the part of the Department in making available the materials that the delay had occasioned and the work could not be completed. The learned counsel also pointed out that the trial court has found that about 95% of the work AS 54/00 6 was completed and it is inconceivable that the contractor would leave 5% of the work incomplete, taking the risk of terminating the contract. The communication between the parties will clearly show that there was delay on the part of the Department in furnishing the necessary materials and finally, when bitumen was made available, the plaintiff noticed that it was of inferior quality, which fact was brought to the notice of the Department. The trial court has found that there was no laches or negligence from the part of the plaintiff in not completing the work within the stipulated period and the lower court, according to the learned counsel, was perfectly justified in decreeing the suit. According to the learned counsel, no grounds are made out to interfere with the judgment and decree passed by the trial court. 9. That the plaintiff entered into a contract with the defendants, for maintenance of the road work, is not in dispute. The site was handed over to the plaintiff on 11.08.1989 and the work was to be completed within four AS 54/00 7 months thereafter. The work could not be completed within the said period and extension of time was granted on two occasions. On 31.07.1990, the plaintiff informed the defendants that he was unable to complete the work for want of materials and that he was prepared to complete the work only on escalated costs. That was rejected by communication dated 21.08.1990. Inspite of the direction of the Assistant Executive Engineer to complete the work, the plaintiff did not do so. According to the defendants, it was due to the fault of the plaintiff that the work was not completed. 10. The court below has considered the evidence in considerable detail. It has referred to the communications between the parties and found that extension of time was granted on two occasions due to the default on the part of the Department in making available necessary materials for the work. The lower court has also referred to the file produced by the Department and found that on going through the various communications between AS 54/00 8 the parties, it could be seen that most of the grievances voiced by the plaintiff are justified. The lower court has also noticed that though two extensions were given, no penalty was imposed on the plaintiff, which would indicate that the plaintiff was not at fault in not completing the work within the stipulated period. A supplemental agreement was also executed when the plaintiff sought extension. One must notice that the plaintiff had completed 95% of the work and only a smaller portion of the work was left to be completed. The plaintiff pointed out that he could not complete the work for want of bitumen, which had to be supplied by the Department. Ultimately, it is seen that the Department directed the plaintiff to take delivery of the bitumen from a particular depot. The plaintiff then informed the Department that the bitumen made available was of inferior quality and he could not do the work with the said material. The lower court has referred to the communications between the parties and has found that the bitumen was not available with the Department. The AS 54/00 9 court below has, on consideration of evidence, found that it could not be said after going through the evidence that the plaintiff had wilfully defaulted in performing his part of the contract. On going through the records, it is seen that it was due to the laches on the part of the Department that the work could not be completed and the plaintiff could not be held responsible for the same. On going through the records, evidence and the judgment passed by the lower court, it is found that there is no justification for interfering with the findings of the trial court. The findings seem to be fully justified. Going by the records, the finding of the trial court that the termination was improper and that the plaintiff was not at fault in not completing the work within the stipulated period is justified. Therefore, the finding regarding termination is only to be confirmed. 11. The learned counsel for the appellant then brought to the attention of this court that the interest awarded by the trial court is extremely excessive and there is no necessity for awarding interest @ 15%. AS 54/00 10 12. There is some justification in the above complaint. It is not discernible from the order of the trial court that on what basis such an excessive rate of interest has been awarded. It, therefore, needs to be interfered with. In the result, while confirming the decree passed by the trial court, that part of the decree granting interest @ 15% under clauses 2 and 3 of the decree, stands modified and interest shall be paid @ 9% under the respective clauses. 13. It was pointed out by the learned Government Pleader that as per the interim order, the State had deposited Rs.30,000/- and that has been withdrawn by the plaintiff. It is directed that the amount so withdrawn by the plaintiff shall be adjusted towards the amount found due to him as per the modified decree. P.Bhavadasan, Judge sta AS 54/00 11 AS 54/00 12