IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMAN & THE HONOURABLE MR. JUSTICE C.T.RAVIKUMAR WEDNESDAY, THE 28TH JANUARY 2009 / 8TH MAGHA 1930 AS.No. 283 of 1991(D) --------------------- (O.S.No.312 of 1980 OF SUB COURT, THIRUVANANTHAPURAM) APPELLANT(S): Additional defendants 5 to 10 -------------- 1. SATHYABHAMA, W/O. P.SUKUMARAN NAIR, T.C.NO.36/320, PALKULANGARA DIVISION, TRIVANDRUM TALUK. 2. S.SREEKUMARI AMMA, RESIDING IN T.C.36/320, PALKULANGARA DIVISION, TRIVANDRUM. 3. S. GANGA OF DO. DO. 4. S.YAMUNA OF DO. DO. 5. S.MANJU OF DO. DO. 6. S.ANILKUMAR OF DO. DO. BY ADV. SRI.G.P.SHINOD RESPONDENT(S): Plaintiff and Defendants 1 and 2. --------------- 1. P.KOCHUGOVINDAN, RESIDING AT SASI VILAS, VILABHAGAM, NEDUNGANDA, CHIRAYINKIL TALUK. 2. THE KERALA STATE HOUSING BOARD, TRIVANDRUM REP. BY ITS SECRETARY. 3. THE REGIONAL ENGINEER, KERALA STATE HOUSING BOARD, TRIVANDRUM. BY ADV. SRI.M.BALAGOVINDAN FOR R1 BY ADV.SRI.POOVAPPALLY M.RAMACHANDRAN NAIR,SC.KSHB THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 28/01/2009, ALONG WITH AS NO. 622 OF 1991,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R.RAMAN & C.T.RAVIKUMAR, JJ. ------------------------------- A.S.Nos.283 & 622 of 1991 ------------------------------- Dated this the 28th January, 2009 J U D G M E N T Raman, J. Both the above appeals are from the common judgment and decree, dated 2.1.1990, in O.S.No.312 of 1980, on the file of Sub Court, Trivandrum. The appellants in A.S.No.622 of 1991 are defendants 1 and 2, whereas appellants in A.S.No.283 of 1991 are the legal representatives of original 4th defendant, who died during the pendency of the suit. The first respondent in both the appeals is the original plaintiff, P.Kochugovindan, who died during the pendency of the appeal and subsequently his legal representatives are also brought on record as additional respondents. 2. The suit is one for recovery of money. The brief facts stated in the plaint claim is as follows. The original 4th defendant had taken two contracts from the Kerala State A.S.Nos.283 and 622 of 1991 2 Housing Board, Trivandrum, viz., (i) Ulloor Housing Scheme- Trivandrum- Construction of 10 Nos. of MIG buildings as per Type Design M6, and (ii) Ulloor Housing Scheme – Trivandrum- Construction of 10 Nos. of MIG buildings as per Type design M6. The first contract was named as Group 'A' and the second contract as Group 'B', and necessary agreements were executed. The 4th defendant did not have sufficient money to complete the contract, though he had laid the foundation for the construction of the building. Therefore, he executed a power-of-attorney in favour of the original plaintiff enabling him to complete the work and receive the payment for the work done by him. A specific power-of-attorney executed for that purpose is produced as Exts.A1 and A2. There was a clause in the power-of-attorney that the security deposit made by the 4th defendant shall be released to the plaintiff on completion of the work. So, however, the 4th defendant will continue to be answerable for completion of the work, as regards the Housing Board. The registered power-of- attorney was accepted and acted upon by the Housing Board. The remaining work was thus completed by the plaintiff. Though he A.S.Nos.283 and 622 of 1991 3 was paid partly, there is balance amount due and payable to him, and hence the suit was instituted. Along with the suit, the plaintiff has also enclosed a statement of accounts showing the balance amount due. The plaint claim is for Rs.1,40,901.30 together with interest at the rate of Rs.12% on the principal amount of Rs.1,11,692/= from 30.8.1977 from the assets of Kerala State Housing Board, Trivandrum, for recovery of cost and other incidental expenditure. 3. As per the statement of account stated in paragraph (D) of the plaint, balance amounts due as per the first and second contract were Rs.70,000/= and 19,000/= respectively, then the security amount for the first and second contracts are Rs.11,346/= and Rs.11,346/= respectively. The interest charged at the rate of 12% from 30.8.1977 to 30.8.1990 was Rs.40,209.36. Thus, out of the total claims of Rs.1,51,901.36, after deducting amount received on 15.12.1978 at Rs.11,000/=, the balance due arrived at was Rs.1,40,901.36. As per the plaint averment, the construction of 'A' group was A.S.Nos.283 and 622 of 1991 4 completed and the key was handed over to the department on 30.8.1977 and that of 'B' group was on 30.8.1978. 4. The defendants 1 and 2 in their written statement virtually admitted the execution of the contract and the power of attorney, but they laid emphasis on the clause contained in the specific power of attorney that the original contractor will not stand relieved of his obligation in completing the work and will continue to be held responsible for the satisfactory completion of the said work. According to them, the security amount can be released only after the work is completed to the satisfaction of the Board. The Board was not so satisfied about the work. Further, there was also delay in completing the work for which there was occasion for them to fine the contractor. The total value of the work done including the cost of departmental materials for B group buildings was Rs.2,52,018.68, out of that Rs.1,89,343.52 had been paid to the Contractor, and the balance amount due to the Board from the contractor was Rs.56.192.89/=. After adjusting the above amount also, the A.S.Nos.283 and 622 of 1991 5 balance due under the 'B' group contract was only Rs.6,482.27/= which had been adjusted towards the excess received under the contract for A group building. A group buildings work were also not completed as agreed to, and after adjusting the amount due to the contractor under B group buildings, the amount of Rs.8,204.36/= under A group buildings was due to the Board from the Contractor. According to them, the balance of materials supplied were not returned. They further state that amount of Rs.12,943/= has been deducted from out of the amount payable and has been remitted to the income tax department. Therefore, they prayed for dismissal of the case and also for a decree for realisation of Rs.8,204.36 from the plaintiff and the 4th defendant with interests and costs. 5. The third defendant has also filed a written statement disputing his liability in answer to the plaint claim, as he was not aware of the conditions contained in the power of attorney. The 4th defendant in his written statement inter alia contended that the suit is not maintainable; that he has A.S.Nos.283 and 622 of 1991 6 constructed the foundation and basement of the building; that he had another important work at Sabarimala and so he had to attend to that work and hence did not have sufficient time to attend to the work of the housing board, and so he entrusted the same to the plaintiff with the written permission obtained from the Board. The security amount of Rs.29,964/= was already deposited by him for the two works in question and that the works have been completed in accordance with the directions of the Engineers of the Board; that the plaintiff was in possession of materials; that the delay, if any, occurred is due to the laches on the part of the officers of the Board; that after completion, buildings have been allotted to the allottees and they were in possession of the same; and hence prayed for dismissal of the suit. 6. Necessary issues were framed by the court below. The evidence consists of oral testimonies of PWs. 1 to 4, DWs. 1 and 2 and the documentary evidence, Exts.A1 to A10 and Exts.B1 to B39. A.S.Nos.283 and 622 of 1991 7 7. The trial court, after considering the rival contentions, answered issued No.1, regarding the maintainability of the suit, and held that the suit against all the defendants except the third defendant is maintainable. Though the learned counsel appearing for the Housing Board contended that the suit is not maintainable, as according to him, the specific power of attorney executed between the original 4th defendant and the original plaintiff in no way discharges the obligation of the 4th defendant, who was the original contractor of the Housing Board and in the absence of any privity of contract between the plaintiff and the defendants 1 and 2, the suit as against defendants 1 and 2 is contended to be not maintainable. Though the argument as such is not raised, in the manner as is now raised, before the court below, we however considered his argument and found unacceptable. The power of attorney executed by the 4th defendant in favour of the plaintiff was admittedly accepted by defendants 1 and 2. By such acceptance, they cannot wriggle out of the obligation so passed on to the plaintiff for completing the work originally undertaken by the 4th defendant. True, that A.S.Nos.283 and 622 of 1991 8 ultimately for any reason, if the work is not completed, the 4th defendant cannot relieve from his responsibilities. That does not mean that for whatever work does and completed by the plaintiff, he is not entitled to be paid by the Housing Board. As a matter of fact, we have carefully gone through the provisions contained in the power of attorney and find that it entitles the plaintiff to complete the work and to receive the payment from the Housing Board. Not only that, even the security amount on completion of the work is to be released in favour of the plaintiff. It is in acceptance of these conditions that the work was completed and the Housing Board itself paid the amount to the plaintiff directly, though there is still balance amount said to be due to the plaintiff. In such circumstances, we find that the suit is perfectly maintainable as against the defendants. 8. The plea raised by defendants 1 and 2 that the work was not completed to their satisfaction was found against by the court below, referring to the contentions raised in the written statement of defendants 1 and 2, extracted in paragraph 14 of the A.S.Nos.283 and 622 of 1991 9 judgment, wherein there is an unequivocal and unambiguous admission that the work was completed and the buildings were handed over. The date on which the buildings were handed over is not seriously in dispute. We, therefore, concur with the view expressed in this regard, and the plea that the work was not completed to the satisfaction of defendants 1 and 2, is only to be rejected as unsustainable. 9. Though the court below considered the issue as to whether the plaintiff is entitled to claim the plaint amount as Issue no.4, before considering the contention regarding the issue as to whether the Housing Board supplied any departmental materials to the plaintiff, if so, for how much?, for proper appreciation, we think, these two issues can be conveniently considered together. The claim made in the suit is for a balance amount of Rs.70,000/=, as per the first contract and Rs.19,000/= towards the second contract, besides the security deposit made by the 4th defendant. In support of the plaint claim, plaintiff placed reliance on the oral testimony of Pws. 1 to 4 and A.S.Nos.283 and 622 of 1991 10 the defendants placed reliance on Dws.1 and 2. Exts.B1 to B39 are documents produced by the defendants. PW.1, the original Engineer of the first defendant, PW.2 the Executive Engineer, PW.3, the plaintiff's agent and PW.4, the Assistant Engineer, were the persons examined on the side of the plaintiff. DW.1, the Assistant Engineer, on the other hand, was examined on the side of the defendant. The 4th defendant was examined as DW.3, i.e., the original contractor. Exts.A1 and A2 are the specific power of attorney in respect of the two contracts in question executed by the 4th defendant in favour of the plaintiff. Exts.B1 to B5 are the measurement books relating to Group 'A' building and Ext.B5 measurement book contains the final calculation work of Group 'A' building. Likewise, Exts.B6 to B11 are the part bills relating to the payments made by Dws.1 and 2. Ext.B12 is the contract agreement for 'A' group building. Exts.B13 to B34 are the measurement books. Ext.B13 is the final calculation for B group buildings. Final measurements are taken on 5.7.1977. The court below found that as per Exts.B5 and B34, the total value of work done was Rs.4,32,987.31, out of which the amount received by A.S.Nos.283 and 622 of 1991 11 the plaintiff and the 4th respondent was Rs.3,56,030/=. No doubt, the department is entitled to deduct the cost of the materials supplied by them. In the written statement filed by defendants 1 and 2, it is their specific case that the cost of materials supplied and used for the work is Rs.17,888/= in one contract and Rs.22,970/=. The total amount together comes to Rs.40,858/=. While arriving at the excess figure said to have been paid by them, they have taken into account the above amounts also. Besides, they have also included the value of cost of materials unaccounted as Rs.25,096.99. Admittedly, the materials are received by the 4th defendant. There is also nothing produced by the plaintiff to show that he has procured the materials from outside, due to the failure of the department to supply the materials, which they have agreed to supply. In other words, there is no case proved by the plaintiff to show that for the failure of the department to supply the materials, he had procured the materials from outside. If so, it has to be taken that the amount of Rs.40,858/= being the cost of materials included, will have to be deducted from out of the plaint claim. Therefore, the A.S.Nos.283 and 622 of 1991 12 difference between the total value of work done, i.e., Rs.4,32,987.31, and the amount received by the plaintiff and the 4th respondent, i.e., Rs.3,56,030/= would come to Rs.76,951.31, and out of the said amount, Rs.40,858/=, being the cost of materials included, has to be deducted, and the balance will come to Rs.36,099.31. This is the amount which the plaintiff can claim as amount due as per the final bill. Even though defendants 1 and 2 has got a case that unused materials were not returned, what is the total quantity of materials supplied to the 4th defendant or on his behalf to the plaintiff, and what is the balance unreturned, is a matter which the defendants 1 and 2 have to prove at the first instance. Admittedly, the Executive Engineer examined in the case as PW.2, has deposed that materials were supplied as per the indent by the Junior Engineer at the site, and that when materials were supplied, receipts also obtained. Neither the indents nor the receipts is marked and produced. Further, no register showing the details regarding the materials supplied has been produced. Thus, the defendants 1 and 2 have failed to prove that there are materials to be returned by the A.S.Nos.283 and 622 of 1991 13 plaintiff or on his behalf by the original contractor, the 4th defendant. In such circumstances, there is no justification to set off an amount of Rs.25,000/= from out of the amount payable to the plaintiff. Thus the counter claim has necessarily to be rejected, in the absence of proof regarding the details of the materials supplied and used. 10. As rightly contended by the appellant, the 4th defendant, no decree could have been passed in favour of the plaintiff as against the 4th defendant. Admittedly, the security amount deposited by the 4th defendant is allowed to be released in favour of the plaintiff. What are the other arrangements between the plaintiff and the 4th defendant is a matter which is not brought out in evidence. For passing over the contract to the plaintiff by the 4th defendant, whether any amount is to be paid to the 4th defendants and whether he is entitled for any commission are all matters on which this Court is not called upon to adjudicate, in the absence of any plea in the suit on that regard. A.S.Nos.283 and 622 of 1991 14 Therefore, the decree as against the 4th defendant in favour of the plaintiff is to be set aside. We do so. 11. The court below has granted a decree for an amount of Rs.74,950.90 together with interest at the rate of 6% per annum from 30.8.1977. We have already found that the plaintiff will be entitled only for an amount of Rs. 36,099.31. Regarding the interest awarded, admittedly A group building was handed over on 30.8.1977 and B group building was handed over only on 30.8.1978. Though there are two contracts, in the absence of any details regarding the actual balance amount payable towards the first contract less the value of materials supplied, we have necessarily to fix the date for the purpose of awarding the interest. Therefore, we award interest on the principle amount of Rs.36,099.31 @ 12% from 30.8.1977 to 15.12.1978, and thereafter @ 6% from the date of institution of the suit till payment. Accordingly, A.S.No.283 of 1991 is allowed and the decree as against the 4th defendant is set aside. A.S.No.622 of A.S.Nos.283 and 622 of 1991 15 1991 is partly allowed modifying the decree as above. The parties are directed to bear their respective costs. P.R.RAMAN, JUDGE C.T.RAVIKUMAR, JUDGE. nj.