IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.L.JOSEPH FRANCIS WEDNESDAY, THE 3RD JUNE 2009 / 13TH JYAISHTA 1931 AS.No. 181 of 1996() -------------------- OS.432/1991 of PRL.SUB COURT, KOZHIKODE .................... APPELLANT/PLAINTIFF: --------------------------------- C. MADHAVADAS, S/O. CHEKKUTTY AGED 46 YEARS, P.W.D. CONTRACTOR, DALIYA HOUSE, KUTTIKATTUR P.O., KOZHIKODE TALUK. BY ADV. SRI.THOMAS ANTONY,JAMALUDDIN.K.M. RESPONDENTS/DEFENDANTS: ------------------------------------------- 1. THE STATE OF KERALA, REP. BY THE DISTRICT COLLECTOR, CIVIL STATION, KOZHIKODE. 2. THE SUPERINTENDING ENGINEER MINOR IRRIGATIOJN CIRCLE, CALICUT -6. 3. THE EXECUTIVE ENGINEERK, MINOR IRRIGATION DIVISION, CALICUT -6. BY GOVERNMENT PLEADER SRI. P.K. RAVI KRISHNAN THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 27/05/2009, THE COURT ON 03/06/2009 DELIVERED THE FOLLOWING: M.L. JOSEPH FRANCIS, J. - - - - - - - - - - - - - - - - - - - - - - - - - - A.S.No. 181 of 1996 - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 3rd day of June, 2009 JUDGMENT Joseph Francis, J. This appeal is filed by the plaintiff in O.S.No. 432 of 1991 on the file of the Sub Court, Kozhikode. The respondents herein are the defendants in that suit. O.S. 432 of 1991 is a suit for declaration, injunction and for rendition of accounts. 2. The case of the plaintiff is that he, a P.W.D. contractor, was awarded a major work by the respondents as per agreement No. SE (1) 27/82-83 dated 23.11.1982. The above agreement was executed by the appellant and the 2nd respondent herein. The contract work was started in right earnest but the same could not be completed due to various difficulties created by the respondents. The work site, a 'thodu' situated in Peruvayal Panchayath was running very near to the main supply pipe line to Calicut. The pipe line, due to pressure breaks very often, A.S.No. 181 of 1996 2 flooding the entire area, there by making it impossible to carry on the work at the thodu, so also payments due from the Government to the appellant were not made in time. So there was financial difficulty for the plaintiff, which resulted in delaying the mobilization of men and material. The respondents also failed in handing over the work site in time, so also the materials promised by them. The cost of materials and labour charges increased. 3. The appellant therefore requested respondents 2 and 3 to increase the rate or allow the appellant to withdraw from the contract with out risk and costs. The respondents agreed to the same. But to the surprise of the appellant, his contract was terminated by the 2nd respondent by order dated 13.1.1986, stating that the same is at the risk and cost of the appellant. Against the above said unilateral termination, the appellant protested and requested to the 2nd respondent to return the E.M.D. After 13.1.1986, for more than 3 years the work was not rearranged. 4. On 19.7.1989, the 3rd respondent informed the appellant that the work was rearranged as per an agreement dated 12.1.1989 and that A.S.No. 181 of 1996 3 the plaintiff is to pay an amount of Rs.67,782/- (Rupees sixty seven thousand seven hundred and eighty two only) to the Government as excess amount incurred by the Government on giving the work to another contractor. The said action for recovery is illegal. Usually, in the case of failure of a contractor, the terminated work will be rearranged within one year of termination. In the appellant's case, the terminated work was rearranged after a lapse of 3 years and by that time the rates of material and labor have increased. If the work would have been re-arranged within an year from the date of termination, there will not be great difference. The loss was caused to the Government due to the fault on the part of the respondents and not due to the appellant. The loss caused after a period of three years, due to the delay on the part of the Government is not burdened on the appellant. 5. Therefore, the suit was filed for declaration that the appellant is not liable to pay any amount as damages in connection with the execution of the agreement No.SE(1)27/82-83 and that the assessment of damages made by the respondents is one sided without hearing or A.S.No. 181 of 1996 4 giving the details to the appellant. The appellant came to know that the respondents are trying to recover the alleged loss from the appellant by way of revenue recovery. Therefore, the suit is filed for declaration, injunction and rendition of accounts. 6. The respondents contested the matter and filed a written statement denying the plaint claim. The respondents would contest that the work site was handed over within one month of the execution of the agreement and the work was not completed in the stipulated time. The appellant was slack and never had any initiative to start the work. The department issued various notices requesting and thereafter directing, for completion of work. 7. The appellant replied, requesting extension of time, which was granted by the department. The percentage of work done by the appellant during December 1982 to March 1983 was only 26.8 percent. The respondents are not liable for the blockage of funds to the appellant from other departments of the Government. The respondents have supplied the materials agreed in time. The respondents have fulfilled all the contractual obligations. The appellant raised flimsy A.S.No. 181 of 1996 5 reasons to hide the actual fact, the slackness of the appellant. The respondents, finding that the appellant will not complete the work, were forced to terminate the work by order dated 13.1.1986. It is only after terminating the work, tenders for the balance work were invited on 23.9.1987. The respondents have taken prompt and timely action for rearrangement of the work after the termination and there is no lapse on the part of the respondents. The liability of the appellant is worked out correctly and the same is recoverable under the Revenue Recovery Act. 8. In the Sub Court, PW1 was examined and Exts.A1 to A4 were marked. No evidence was adduced from the side of the defendants. The learned Sub Judge, on considering the evidence, dismissed the suit without cost. Against that judgment and decree the plaintiff filed this appeal. 9. Heard the learned counsel for the appellant and the learned counsel for the respondents. The prayer in the plaint is for a declaration that the plaintiff is not liable to pay any amount as damages to the defendants in connection with the execution of the work and that A.S.No. 181 of 1996 6 the order of the second defendant dated 19.7.1989 issued by the third defendant is without authority and invalid and not binding on the plaintiff and for an injunction to restrain the defendants from recovering the amount by resort to revenue recovery proceedings and for directing the defendants to render accounts for the work done under the above contract and to pay the bill amount, E.M.D. and retention amount due to the plaintiff. 10. Admittedly, the plaintiff was entrusted with the work of improvements to the upstream side of Mampuzha Thodu in Peruvayal Panchayath as per Annex.A1 agreement dated 23.11.1982 executed between the plaintiff and the second defendant. There is also no dispute that the plaintiff could not complete that work and that the contract was later terminated by Ext.A2 order of the second defendant dated 13.1.1986. Thereafter, on 19.7.1989, the second defendant issued Ext.A3 notice calling upon the plaintiff to pay Rs.67,782/- which was found to be a liability for re-arrangement of the work, which is challenged by the plaintiff by filing the above suit. A.S.No. 181 of 1996 7 11. When the plaintiff was examined as PW1, he deposed that he could not complete the work due to reasons mentioned in the plaint. PW1 admitted that he had requested the defendants to terminate the contract without any risk and cost on his part. The plaintiff has not challenged Ext.A2 order. The learned counsel for the appellant argued that since the contract with the appellant was terminated on 13.1.1986 and as there was no claim within the period of three years, the further claim of Rs.67,782/- as per Ext.A3 demand notice dated 19.7.1989 is barred by limitation. As per Ext.A1 agreement, the defendants are entitled to claim loss suffered by them due to re-arrangement of work when such loss is occasioned and ascertained by them. As observed by the learned Sub Judge, the re-arrangement of the work was on 12.1.1989 and the loss was then ascertained by the defendants. The actual loss due to the re-arrangement of the work could be ascertained only after 12.1.1989 and as from that date the defendants got three years time to make the demand. In view of the above aspect of the matter, the argument of the counsel for the appellant that Ext.A3 claim is barred by limitation cannot be accepted. A.S.No. 181 of 1996 8 12. The learned counsel for the appellant further argued that as the amount of compensation for the breach of the contract is not assessed by an independent agency, the defendants ought not have initiated revenue recovery proceedings for recovery of the damages. Since in Ext.A1 agreement there is a clause for adjudication by the Government or by any of its officers, there is nothing wrong in adjudicating upon the quantum of damages recoverable from the plaintiff. More over, it has come out in evidence that re-arrangement of the work was at 15% above the competent tender and based on that damages was worked up. As observed by the learned Sub Judge, as per the terms of Ext.A1 agreement, the second defendant is competent to re-arrange the work and recover the loss from the plaintiff. Therefore, the learned Sub Judge is perfectly justified in finding that the plaintiff is not entitled to get a declaration and injunction as prayed for. The prayer for rendition of accounts also cannot be allowed as the defendants are not under an obligation to render accounts as there is no fiduciary relationship between the plaintiff and the defendants. A.S.No. 181 of 1996 9 In view of the reasons stated above, the learned Sub Judge is fully justified in dismissing the suit. 13. In the result, this appeal is dismissed. The judgment and decree dismissing O.S.No. 432 of 1991 on the file of the Sub Court, Kozhikode is confirmed. The parties are directed to suffer their respective cost in this appeal. (M.L. JOSEPH FRANCIS) Judge tm