1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION SECOND APPEAL NO.293 OF 2008 Mahabaleshwar Hill Station Municipal .... Appellants Council, Mahabaleshwar thru’its Administrator & C.O. Vs. M/s A.S.K. Architects, Mumbai .... Respondents thru’ its partners Mr.K.K. Jadhav, Advocate for appellants. Mr.Atul Damle, Advocate for respondent no.1. Coram : SMT. R.P. SONDURBALDOTA, J. Date : 9th July, 2009 P.C. 1. On 21st November 1980, the appellant-Council accepted the quotation given by respondent-firm for architectural services for skating rink to be constructed at personage market, Mahabaleshwar. The respondent submitted first bill of Rs.24,538.98 on 20th January 1981 and the second bill on 19th May 1981 in the sum of Rs.49,492.72 on completion of the second stage. The Municipal Council disputed the second bill and referred the matter to Government Architect,Mumbai for ascertaining the fees payable to respondents. It cleared the first bill only on 6th July 1983 i.e. about 2½ years after submission despite there being specific agreement as regards the mode of payment as per Resolution No.243 dated 15th November 1980. The mode of payment consists of percentage of estimated costs payable at four stages. The fourth stage being the final 2 stage, curiously the Municipality instead of honouring the existing agreement called upon respondent to execute fresh agreement without cancelling the existing agreement. The respondent then filed Special Civil Suit No.87 of 1984 claiming recovery of the amount of second bill of Rs.49,492.72 and also damages for committing breach of contract by the Municipality. 2. In the written statement, appellant denied the claim of respondent on merit and also challenged the suit on various grounds including non issuance of statutory notice, limitation and validity of the agreement. The trial Court considered the rival contentions, the evidence led before it and granted amount under second bill of Rs.49,492.72 with interest @ Rs.12% per annum thereon from the date of the suit till the payment. The request of respondent for damages for breach of the contract, however, was rejected. 3. The respondent then preferred an appeal being Regular Civil Appeal No.183 of 2000 before the District Court. The appellant also preferred cross-objections. By the impugned judgment and order dated 2nd August 2005, cross-objections of appellant was rejected and the appeal by the respondent allowed. The decree passed by the trial Court was modified to grant damages as claimed by the respondent. The appellate court confirmed the findings of the trial Court as regards the issuance of statutory notice, limitation and validity of the agreement. 3 4. Being aggrieved by the decision of the appellate court, the appellant prefer this Second Appeal mainly contending that the first appellate court rejected the cross-objections without considering the same on merits. It is, however, admitted that the learned counsel for the appellant was not present before the first appellate court, when the appeal and the cross-objections were taken up for final hearing. The first appellate court at paragraph 27 of the judgment has considered this aspect and rejected the cross-objections. It will therefore not be possible to say that the court committed any error of law in rejecting the cross- objections. 5. As regards the grant of amount of Rs.98,985.44 by way of damages to the respondents, the learned counsel for the appellant submits that this amounts to penalty ordered by the first appellate court and not damages. There is nothing to indicate that this amount was directed by way of penalty. The appellate court at paragraph 22 of it’s judgment and order has held that there was breach of contract on the part of appellant- Municipal Council and therefore it was bound to compensate the respondent. The respondent was entitled to damages being expected profit out of the contract which was illegally rescinded. The Court was of the opinion that the plaintiff was entitled for remaining fees as damages. No fault can be found with this order. There is no substantial question of 4 law arising in the Second Appeal for consideration of the Court. Hence, the Second Appeal is dismissed. 6. The appellant has deposited the entire decretal amount in this Court which is invested in the fixed deposit with a nationalised bank. Respondent is at liberty to withdraw the amount. (Smt.R.P.SondurBaldota,J)