IN THE HIGH COURT OF KARNATAKA CIRCUIT BENCH AT DHARWAD DATED THIS THE 05th DAY OF APRIL 2011 PRESENT THE HON’BLE MR. JUSTICE K. L. MANJUNATH AND THE HON’BLE MR. JUSTICE H. N. NAGAMOHAN DAS R.F.A. No.1232/2005 [MON] C/W. R.F.A. CROB.11/2006 [MON] BETWEEN: THE STATE OF KARNATAKA I-3t I PS EC RETAR 10 GO\ T PLBLIC \VORRS DEPARPMENT M S BUILDING DR.B.R.AMBEDIKAR VEEDHI. E3ANGALORE 56000 THE CHIEF ENGINEER COMMUNICATION AND BUILDING NORTH) DHARWAD580 001 5. THE SUPERINTENDENT ENGINEER PUBLIC \:ORKS DEPARTMENT HELGALM CIRCLE. FORT HEL(iAUM-590 00 I 4, THE EXECUTIVE ENGINEER P.W.D,DIVISION, CHIRKODU591 201. 5. THE ASSISTANT EXECUTIVE ENGINEER P \V.D.SUB DIVISION NO.4. HUIKIKERI-591 309. APPELLANTS [RESPONDENTS IN RFA.CROB. 11 /2006[ (By Sri.IK.B.ADYAPAK. AGA) :2: AND: MIS. ADITYA CONSTRUCTION COMPANY, REGISTERED UNDER THE INDIAN PARTNERSHIP ACT. 1932, WITH MAIN OFFICE AT:KARAPUR TISK, SONEUQLIM. GOA AND THE BRANCH OFFICE FUNCTIONING IN PLOT NO.2553 SECTOR NO.12. MALAMARUTHI EXTENSION. BELGAU M REPRESENTED BY ITS PARTNER MR.B.S.PURANDARA. 0CC: BUSINESS R/O BELGAUM-590 001. RESPONDENT ICROSS-O&JECTOR IN RFA.CROB. 11/20061 (By Sri. B.S.MAHENDRA ADV.) RFA. 1232/2005 15 FILED U/S 96 CPC AGAINST THE .JUDGMENT AND DECREE DATED: 15.4.2005 PASSED IN OS.NO. 75/2003 ON THE FILE OF THE CIVIL JUDGE (SR.DN.;. HURKERI. DECREEING THE SUIT FOR SETI’LEMENT OF ACCOUNTS/BILLS. RFA.CROB.l1/2006 IS FILED U/O 41 R 22 OF CPC AGAINST THE JUDGMENT AND DECREE DATED: 15.4.2005 PASSED IN OS.NO. 75/2003 ON THE FILE OF THE CIVIL JUDGE (SR.DNJ, HUKKERI, IN SO FAR AS AWARDING INTEREST AT THE RATE OF 8% p.a. FROM THE DATE OF SUBMITFING THE FINAL BILL TO TILL THE DECREE AND FROM THE DATE OF DECREE TO TILL ITS REALISATION AT THE RATE OF 6% p.a. These matters coming on for final hearing this day, H.N.Nagamohan Das, J, delivered the following: r :3: JUDGMENT This appeal and cross—objection are against the judgment and decree dated 15.04.2005 in 0.8. No.75/2003 passed by the Civil Judge (Sr.Dn.), Hukkeri. 2. Appellants are the defendants and respondent is the pluintilT before the trial court. For convenience, in this Judgment, the parties are referred to their stat us before the trial court. 3. Plaintiff is a Company engaged in construction of bridges, tanks, etc. The defendants invited tenders for construction of a bridge across the 1-liranyakeshi River near F3adakundri Village. The tender submitted by the plaintiff came to be accepted and finally ended in an agreement with 4’h defendant. As per the terms of tender, the cost of work was Z1 .85.55A48/-. The 4th defendant issued work order on 04.02.1998 with a condition that work shall be completed within a time frame of 24 months, excluding the Mansoon season. Further, on 05.02. IQQ8 the site was handed over to the plaintiff. Accordingly, the plaintiff started the work. Due r :4: to certain lapses on the part of the defendants in supplying designs, matcrials, in directing to carryout non-tender works and era-tender works, work was delayed and the delay was attributable to the defendants. It is further contended that though the defendants agreed for escalation of prices on account of delay, went back on their promise. Though, a final bill was submitted, the same was not passed by the defendants. EMD and security deposits were not returned. On account of delay and latches on the part of the defendants, the plaintiff suffered losses in keeping the machinery idle, under-utilisation of machinery and men, incurred over-head charges and suffered losses. Having no other alternative, the plaintiff filed a civil suit in O.S. No.75/2003 for recovery of a sum of ?88,18,968/- with interest. 4. The defendants entered appearance before the trial court. filed written statement denying the claim of plaintiff. The defendants contend that the delay was on account of the failure on the part of the plaintiff and consequently, they have forfeited the security deposit and earnest money. The r claim made by the plaintifi is contrary to the lender conchi ions. On these grounds. the cletnda ins opposd the claim of plaintiff. On the basis of pleadings. the trial court framed the fbllo\ving issues: (i) Whether the plaintiff-company proves that there was a previty of contract between plaintiff company with the defendants? (ii) Whether the plaintiff-company proves that there was a breach of contract by the defendants as averred in the plaint? (iii) Whether the plaintiff-company proves that it has brought to the notice of defendant No.4 and also other appropriate authorities in respect of various problems facing difficulty and delay occurred during the progress work as contended in para 5A to 5J of the plaint? (iv) Whether the plaintiff-company proves that, due to the various lapses omission. commissions and breach of contract on the part of defendants, the work could not be completed within the stipulated period under the tender which was to be expired on 04.02.2000? (v) Whether the plaintiff-company proves that, defendant No.4 considered delay and assured to solve the problem in an expeditious manner as per the proceedings of the meeting conferred under PWD/BGM/Bridge/Meeting/AE/2/ 99-2000/5024 dated 2310.1999. but the same was not complied with as contended under para 6 and 7 of the plaint? (vi) Whether plaintiff-company proves that, extra work necessitated due to the change in lower water level and also for need of extra item, fabrication of steel to be provided for super-structural RCC work, hence, the said contract work was not completed within stipulated period? (vii) Whether plaintiff-company proves the loss sustained due to the idling and under utilisation of site organisation, loss suffered due to the prolongation of completion period, loss suffered due to the prolongation of competition period. Hence, plaintiff-company is entitled to recover the said loss from the defendant? (viii) Whether the plaintiff-company proves that, it was requested to the defendants to enhance the quoted rates by 25% to compensate and account for the same for the balance items of the work that they executed after tender period. Accordingly. the plaintiff submitted interim bill based on the same vide letter NoADT / CCO! Bridge / Badakundri / 00-0 1 / 246 dated 04082000? (ix) Whether the plaintiff-company further proves that it is legitimately entitled for payment for the various items of the work on quoted rates as shown against each for the final bill submitted with letter No.CCO / Bridge / Badakundri I 02-03 / 610 dated 05.092002? (x) Whether the defendant proves that delay caused in competition of the project work was due to the failure of the plaintiff in conducting the project work properly? (xi) Whether the defendants prove that, on account of plaintiff’s failure to execute the project work in time, defendants are entitled to forfeit the earnest money and also security deposit? (xii) Whether the defendants prove that. plaintiff-company is purposely delayed in claiming un-acceptable claims, hence. suit is untenable as per Clause 29 of the tender agreement? (xiii) Is there any cause of action to file the suit? (xiv) Whether the plaintiff-company is entitled for the relief sought? (xv) Whether the defendants are entitled for the compensatory costs? (xvi) What order and decree? 5. Bcfore the trial court, plainrilT examined one witness as PW-1 and got marked Ex.P% to Ex,P-53. The defendants examined one witness as DW- I and got marked Lx. F) - to Lx. D -22 The trial coo ri on a pprccia 000 of pleadings. oral and documentary evidence, decreed the sUit at plaintiff in its entirety, directing the defendants to pay a sum of 88. I 8,b68/ - togethcr with 8% interest f’rom the date of submitting the final bill till the date of decree and from the :9: Ci at ‘ ol decice till reali so ion a I 0 H cncr’. I his a ppcal by cIelndants questioning thc entiro judgment and decree. Tho plaintiff is heft)re this Court in Cross-objection No. 11/2009 boom Cericvcd by the loncr rato ol inicrest awarded by tho trial court. u. Heard arguments on both the side and perused the at i a a poua i pa pers 7. A perusal of the impugned judgment manifestly makes it clear that there is no discussion with reg’ard to the cntirc ovidence placed on record. Thc trial court has not given reasons while determining the amount payable under the lollo\ving heads: (i) Final Bill amount: 34.7965O/- (ii) EMD & Security Deposit: 1447,568/- (iii) Loss of profit due to prolongation of work beyond the stipulated period: 495OOOf- (iv) Losses due to idling & under utilisation of men and machineries : 2091.37OI- (vi) Losses suffered due to unproductive overhead charges during extended period: 13.O5.38OI- 10 It i obligatory on the part ol the trial court to consider the evidence on record and to give reasons as to how it arrived at the figures under each head specified above. But. in he impugned j udlgmcnt. the trjal court haCI not undertaken the exercise ol considering the evidence and assigned the reasons while determining the quantum of lYionev pava ble by the de1endi n ts under each of I h heads This is a grave error committed by the trial court and on this ground, the impugned judgment is liable to he set aside. ). It is seen from the impugned judgment that the trial court has not given reasons even while awarding the rate of interest. On the question of rate of interest, it is necessary for the trial court to give reasons. Again a uniform rate of interest is not applicable in the instant case in respect of each of the heads. Again the trial court on this count commit ted illegality and therefore, the impugned judgment is liable to be set aside. I 0 When the plaintiff has macic a claim with regard to the extra-tender works and non-tender works, then it is :11: obligatory on the part of the trial court to find out as to what arc the non-tender works and extra-tender works, whether these works are really executed, whether execution of these works was on the proper authorisation, what is the rate applicable and whether really the defendants have accepted the non-tender and extra-tender works. But, unfortunately. in the instant case, the trial court had not undertaken this exercise while decreeing the claim of the plaintiff. 11. We have also seen that the trial court while determining the amount payable under the head loss of profit due to delay, loss due to idling and under-utilisation of machinery and loss due to over-head charges, no reasons arc assigned. This approach of the trial court is very casual, arbitrary and unguided. Therefore, the impugned judgment is liable to be set aside. 12. In the normal course, this Court will not remand a regular first appeal. But, in the instant case, this Court did not had the benefit of opinion of the trial court on the material evidence placed by both the parties. Since, the trial r 12: court has not considered the evidence on record and not assigned any reasons, the matter requires to be remanded. 13. It is brought to our notice that during the pcndencv of this appeal by virtue of interim order passed by this court, defendants have deposited in all a sum of 48,OO.OOO/- and the same is withdrawn by the plaintiff. This payment to the plaintiff by the defendants is subject to the outcome in the suit. 14. Learned counsel for the plaintiff submits that the defendants have admitted a part of plaintiff’s claim. If that is so. plaintiff is at liberty to file an application before the trial court seeking judgment on admission. If such an application is filed, then the same shall be considered by the trial court in accordance with law. 15. For the reasons stated above, the appeal and the cross-objections are hereby allowed. The impugned judgment of the trial court dated 15.04.2005 is hereby set aside. The matter is remanded to the trial court for fresh disposal in accordance with law after providing an r :13: f)uL111itV to both the parIws. All contentions ar left open. I-i av inc rega rd to tl-i lact that t he SUit is pnd ing from In veai 2003 and that we are in 20 1 1, a ci irection is hereb\ issued to the trial court to dispose of the suit within a time fra me of six months from the date of receipt of copy of this order. In View of the order of remand, the court fee paid in RPACrob. 11 / 2006 is ordered to he refunded. Sd/ JUDGE Sd! JUDGE