IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA C.S. No. 93 of 2001 Reserved on: 3.6.2008 Date of decision: 03.07.2008. Inder Singh Thakur ... Plaintiff Versus M/S. R.P.G. Transmission Ltd. and Anr. … Defendants Coram : The Hon’ble Mr. Justice V.K. Ahuja, Judge. Whether approved for reporting?1 No. For the plaintiff : Mr. R.K. Gautam, Senior Advocate with Mr. N.K. Sood, Advocate. For the defendants : Mr. Rakesh Jaswal, Advocate. V.K. Ahuja, J. : Suit for Recovery of Rs.30,02,308/- : This is a suit for recovery of the amount filed by the plaintiff. Briefly stated, the facts of the case are that the plaintiff is doing the work of a contractor and defendants had been allotted contract for construction of 400 KV Nathpa Jhakri-Koldam Double Circuit Transmission Line. The plaintiff was issued different work orders by defendants for head loading of tower Members in Batwara, Bilaspur and Karsog Sections. The material was to be head loaded at different sites and the work orders were given to the plaintiff on different dates in the year 1Whether reporters of Local Papers may be allowed to see the judgment? Yes. 2 2000. The cost estimation of head loading of tower Members in different locations was prescribed as per mutually agreed schedule of rates reflected in different work orders. It was further alleged that the plaintiff completed the works allotted to him in December, 2000 and submitted the bills to the defendants duly approved by the Site Incharge of defendants. The payments were not released by the defendants in favour of the plaintiff inspite of demand and the plaintiff served a legal notice upon the defendants on 25.4.2001. After the receipt of notice, the plaintiff was called for negotiations by defendants and during the course of negotiations some mis-calculations were found in the amount claimed by the plaintiff. The plaintiff had alleged that he had done work for worth Rs.79,75,000/-, out of which Rs.43,64,365/- stood paid to him and balance of Rs.36,10,635/- was due to him. In the negotiations it was agreed in between the parties that the total amount due was Rs.78,63,069/-,out of which over Rs.43,64,365/- as mentioned above was paid to the plaintiff and amount of Rs.1,11,931/- was found excess in the earlier calculation to which the plaintiff agreed. During the course of negotiations, a sum of Rs.8 Lacs was paid by to the plaintiff by the defendants and thus the balance amount payable to the plaintiff by defendants was Rs.26,98,704/-. It was further agreed in between the parties that so far as the measurement of length of road etc. is concerned, a team was proposed to visit the site again and after re- measurement of the distance any excess or shortcoming was to be settled in between the parties and this agreement was reduced into writing on 10.5.2001. 3 It was further alleged that as per the agreement, representatives of the defendants visited the site, re-measured the distance and issued a chart of calculations. Insofar as the first part of the calculation is concerned, the measurements were found to be correct and tallied with the measurements made by the officers of the defendants. It was further alleged that payment qua location No. 134 to 138 stood already paid in favour of the plaintiff and in so far payment of location No. 139 onwards is concerned, no payment was made to the plaintiff. It was alleged that the measurement of location No. 145 to 149 were not shown in the calculation chart but these were admitted to be true as per earlier measurement. It was also alleged that as second part of the calculation chart titled ‘Balag Store’ is concerned, the total distance has been reduced by 11 KMs in each of the locations. Otherwise the distance is correct but 11 KMs distance in each location is required to be added. It was further alleged that representatives of the defendants have excluded 11 KMs where there is a Kacha road which was used by the plaintiff to carry the load and for which the plaintiff had to bear lot of expenses to get the road made motorable and only then he was able to use this road. It was further alleged that the rate agreed between the parties were as per the distance and quantity and a sum of Rs.25,81,471/- was settled to which he is entitled Alongwith interest at the rate of 15% upto date of filing of the suit. Hence, the suit for recovery of the amount Alongwith interest thereon. The defendants took up preliminary objection in regard to maintainability. On merits, they pleaded that the plaintiff is not liable to recover the amount since he has received the full and final amount for the work undertaken by him against receipt dated 10.5.2001. They 4 claimed that they are entitled to reimbursement of excess payment made to the plaintiff. They also pleaded that as per agreement dated 10.5.2001, the plaintiff had agreed to receive an amount of Rs. 8 Lacs over and above Rs. 43,64,365/- already paid to him for the aforesaid work. They also pleaded that he has been paid Rs.3 Lacs for road maintenance and Rs. 4.5 Lacs for transportation of material from Nihri to Balag and he was entitled to the distance given by him qua the location mentioning distance of 11 KMs in between Nihri and Balag road. The parties were to take back the excess payment to either of the parties and the plaintiff was not entitled to sum of Rs.37,10,800/- in the alternative for maintenance and transportation since the sum of Rs.7.5 Lacs already stands paid to him under this head. Thus, it was submitted that the plaintiff has already been paid the amount in full and he has been paid over Rs. 8 Lacs in excess and as such, the plaintiff is not entitled to any amount. On the pleadings of the parties, the following issues were settled by the Court:- 1. Whether the plaintiff is entitled to Rs.30,02,308/- as alleged in the plaint? OPP 2. Whether the plaintiff is entitled to interest as claimed in the plaint, if so at what rate and from what date and on what amount? OPP 3. Whether the plaintiff is estopped to maintain the present suit, if so its effect? OPD 4. Relief. In support of these issues, the plaintiff examined six witnesses and defendants examined two witnesses. 5 I have heard learned counsel for the parties and have gone through the record. My findings on these issues are as under:- Issue No. 1: In support of this issue, there is statement of PW-1 Sanjay Kumar who has stated that the plaintiff had hired an excavator from him for construction of road from Nihri to Balag. It was not in proper shape. It was hired from him by the plaintiff for a period of four and half months. The excavator was hired at the rate of Rs.800/- per hour by the plaintiff. He has proved the bills Exts. P-1 to P-3 which are in his hand and bear his signatures. The amount of these bills comes to Rs.9,68,800/-. In cross-examination he has stated that he has not maintained any log book for the use of excavator or any record regarding actual use of excavator. His driver has noted down in the copy, but he has not brought the said copy today in Court. He also admitted that distance from Nihri to Balag was about 11 KMs. He stated that he has received this amount in cash and has not maintained any account in regard to this amount. PW-2 Jagish Kumar has stated that he owns a JCB machine, which is used for laying, cutting of roads and paths. The plaintiff hired his machine for a period of two months in the year 2000 and used it at Nihri at the rate of Rs.800/- per hour and he issued the bill Ext. P-4 in this regard. He stated that he has received the amount of this bill amounting to Rs.2,48,000/- in cash. He stated that he has maintained his accounts and receipt of this amount has been shown in it but these were not brought by him as it was not summoned from him. 6 PW-3 Inder Singh Thakur, plaintiff, who has stated that he was engaged as a sub-contractor by the defendants for head loading, foundation and rebatement. He has proved the work orders Ext. P-5 and P-6 which were admitted by the defendants. He has also stated that charges per kilo meter and mode of payment are also detailed in Exts. P-5 and P-6. He stated that the defendants used to make payment to him from time to time after verifying those bills and he has proved these bills Exts. P-7 and P-8 which had been admitted on behalf of the defendants. The Photostat copies of the bills have been proved as Exts. P-9 to P-26. He stated that the amount of bills Ext. P-7 to P-27 was not paid to him and, therefore, he issued a legal notice to the defendants. After issuance of notice Ext. P-27, the defendants paid a sum of Rs. 8 Lacs through a cheque. On the same day, another agreement was entered into, a copy of which is Ext.P-28 between him and defendants/company and the execution of this document was also admitted by the defendants. He has further stated that as per term of Ext. P-28, the defendants agreed to pay the actual amount incurred by him for the maintenance etc. of road from Nihri to Balag, but he was not paid the amount despite agreement Ext. P-28. He further stated that defendants issued distance chart Ext. P-29 which was admitted by the defendants which was signed by him and one Rajesh Singh and one Satyajit Chakarvarti on behalf of defendants. Ext. P-29 pertains to distance beyond 11 KMs of Nihri – Balag road. He also proved a Photostat copy Ext. P-30 which document was admitted subject to objection. He issued another notice to the defendants Ext. P-31 which was admitted by the defendants. He also proved cost of estimation of head loading Ext. P-32 and P-33. He stated 7 that he is entitled to over Rs. 24 Lacs as unpaid amount of bills apart from the interest and retention amount. He stated that it was commercial transaction. He was entitled to interest at the rate of 15% per annum from the date of filing of the suit till the date of payment besides costs. PW-4 Dhani Ram has stated that the plaintiff had engaged him for clearance of Nihri – Balag road. He had engaged 100 labourers for clearance of the said road from March, 2000 to November, 2000. He has seen the original receipts Exts. P-34 to P-41 which were signed by him. He stated that this clearance was got done by the plaintiff from him because he had undertaken some work relating to tower construction. He stated that the total amount of the bills comes to Rs.13,52,000/-. He stated that the payment was made to him and he has not brought the Muster Rolls as these were not summoned. PW-5 Netar Singh has stated that the plaintiff had requisitioned his truck for transportation of material of tower lines from Nihri to Balag for about 9/10 months and in addition to his truck, the plaintiff had engaged five more trucks for transportation of the transmission lines. He issued the receipts Exts. P-42 to P-53, which all amount has been received by him. These bills were for about Rs.10.25 Lacs He admitted that in these receipts there is no mention that these were executed towards the cost of transportation undertaken by his own truck and five other trucks. PW-6 Kundan Lal has stated that he owns excavator-cum- loader machine and his machine was hired by the plaintiff at the rate of Rs.800/- per hour for about 2/2.15 months. He issued the bill and has proved the receipt Ext. P-54 which contains the signatures of his partner. 8 To rebut this evidence, defendants examined DW-1 Tejasvi Ram, Range Officer, Jhugi, who has proved that Nihri – Balag road was constructed between September, 1998 to July, 1999. A sum of over Rs.41 Lacs was spent by the Government for construction of this road and the department has spent a sum of over Rs. One Lac as expenses of maintenance during the year 1999-2000. He admitted that even today this road is a Kacha road and he denied his knowledge in case lot of maintenance was required of this road. DW-2 Vimal Gupta, Assistant Construction Manager of the defendants/company has stated that the plaintiff had taken the contract with the company for head loading vide Ext. DW2/A to DW2/F. There were 24 locations. The material was to be carried from road head to respective locations. He stated that a sum of over Rs. 51 Lacs was paid to the plaintiff. The original agreement with the company is Ext. DW2/G and at that time a sum of Rs. 8 Lacs was paid to the plaintiff. He further stated that the plaintiff did not submit any bill for the construction of any road by him to carry the material. They used to make the adhoc payments to the plaintiff upto 95% of the amount. In his cross- examination, he admitted that the contract for the work of head loading was given to the plaintiff as per the terms and conditions stipulated in the agreement Exts. P-5 and P-6. In case of excess payment made to the plaintiff, he was liable to refund the same to the company and similarly, the company was liable to pay the amount to the contractor. He admitted that whenever the bill was presented by the plaintiff, the entire amount was reimbursed to him after deducting the retention money and the income tax. He stated that the retention money was to be paid after the completion of the work by the plaintiff/contractor. However, the bill 9 became redundant after the agreement was entered into between the parties. He admitted that the payment made by the company was adhoc payment. He stated that the payments of the bills Exts. P-7 and P-8 were made except the retention. He stated that they have paid 95% of the amount against the bills presented by the plaintiff. From a perusal of the evidence led by the parties, it stands established that the plaintiff was given the work by the company for head loading and the work orders of different dates are Exts. DW2/A to DW2/F as well as Exts. P-5 and P-6 which also contains the terms and conditions of the head loading to be undertaken by the plaintiff per kilo meter and of the mode of payment. It is also proved on record that there were 24 locations from which the material was to be carried and the payments used to be made to the plaintiff on submitting of his bills which were verified by the representatives of the defendants. According to the evidence led by the plaintiff after he issued a notice upon the defendants that they have not made the full payment to him, the defendants called the plaintiff and they entered into negotiations. It is in the statement of PW-3 Inder Singh Thakur, plaintiff, that after he issued notice Ext. P-27, a sum of Rs. 8 Lacs was paid to him by cheque. He further stated that another agreement was executed in between him and defendants/company Ext. P-28 and according to the statement of the plaintiff as has come up, this document was admitted by the defendants at the stage of admission and denial and the defendants had agreed to pay the actual amount to him incurred for maintenance etc. but he was not paid the amount as agreed by the defendants. A perusal of agreement Ext. P-28 shows that it is in the form of an agreement executed in between both the parties and signed by 10 both the parties on 10.5.2001, which document was admitted at the time of admission and denial and as such, it stands proved. A perusal of this agreement shows that the first party i.e. the defendants had agreed to pay the sum of Rs. 8 Lacs in addition to Rs.43,64,365/- already paid to the plaintiff which assertions were made by the plaintiff as correct in the plaint. The parties has agreed that the distances will be verified and whatever amount is found due will be paid and excess amount will be liable to be adjusted. The physical verification of the location was to be done within a period of one month from the date of settlement. In his statement as DW-2 Vimal Gupta on behalf of the defendants has not denied that no such agreement was executed on that day or a sum of Rs. 8 Lacs was not paid to the plaintiff. A perusal of his statement shows that he is rather silent about this agreement having been executed, though, in his further statement, he simply stated that at the time of last agreement they paid Rs.8 Lacs to the plaintiff. The plaintiff has also proved in evidence Ext. P-30 signed by this DW-2 Vimal Gupta on behalf of the company in which gross amount paid, income tax deducted and the net amount payable have been calculated and shown in the chart. This document was not admitted by the defendants for want of original having not been produced. In the statement also, this witness has not denied that no such document was executed or that the photo copy does not bear his signatures. However, in cross-examination, he admitted that statement Ext. P-30 was made by the defendants/company but it was never issued to the contractor and was required for the purpose of the company. This clearly shows that a sum of Rs.22,51,772/- was the net amount payable upto the last transaction i.e. 27.1.2001, which clearly shows that when Ext. P-28 agreement was prepared on 10.5.2001, this 11 document was in existence which showed a sum of Rs.22,51,772/- being the amount payable to the plaintiff. This document admittedly as per DW-2 Vimal Gupta has been prepared by the company, though may be for their own record. But since the copy was in possession of the plaintiff, it suggests that this copy was given to the plaintiff at any time before execution of the agreement in question Ext. P-28. A perusal of Ext.P-29 distance chart shows that various distances were measured and these bear the signatures on behalf of the defendants Satyajit Chakarvarti and Rajesh Singh and that of plaintiff which shows that distances were verified on the date mentioned therein in the month of June and as per agreement Ext. P-28. These distances were to be verified within one month and they in fact were verified during the month of June, 2001. According to agreement Ext. P-28, the defendants were liable to pay the amount after physical verification of the locations and it is not the case of the defendants that any amount was paid to the plaintiffs after execution of the agreement Ext. P-28 or after the measurements were carried on as per Ext. P-29 during the month of June, 2001. The plaintiff has based his claim on two basis firstly, on the basis of the bills submitted by him and notice Ext.P-27 vide which he had claimed that a sum of Rs.36,15,000/- was not paid to him and after this date, a sum of Rs. 8 Lacs has been paid to the plaintiff admittedly, but there is no proof of any payment made by the defendants to the plaintiff at any time thereafter. It was for the defendants to have proved from his statement that after entering into agreement Ext. P-28 and after actual verification of the bills, they paid the amount to the plaintiff and to what extent. However, DW-2 Vimal Gupta simply stated that at the time of last agreement, they paid Rs. 8 Lacs to the plaintiff and had admitted 12 the agreement Ext. P-28, but never stated that thereafter they paid balance amount due to the plaintiff or not. In cross-examination, he rather stated that retention money was to be paid after completion of the work by the contractor/plaintiff. He has admitted that they had made adhoc payment upto 95% against the bills presented by the plaintiff and retention money has not been paid to the plaintiff. It follows from above discussion that the plaintiff had claimed the amount as per the notice issued by him and as per the bills submitted by him and after the statement of accounts, an agreement was entered into for verification of the actual distances and at that time out of the full amount due to the plaintiff only a sum of Rs. 8 Lacs was paid. The road was measured but no final settlement had taken place and the defendants had not stated that after the road measurement, they were entitled to deduction of this much amount out of the total amount due to the plaintiff including retention money about which DW-2 on behalf of defendants has not stated anything. He has never stated that after re-verification of the amount, they made this payment to the plaintiff excluding the excess payment claimed by the plaintiff, if any. In the absence of the statement made by the defendants in this regard that they paid the balance amount to the plaintiff at any time and cleared the amount, the plaintiff was entitled to the balance amount claimed by him about which he has submitted bills to the defendants who admitted making payment upto 95% and had also paid the retention money to which the plaintiff was entitled. The other part of the evidence led by the plaintiff is to consider if after the distance of 11 KMs was to be reduced from Nihri to Balag, whether he is entitled in the alternative to the amount spent by him in the alternative by use of trucks machinery and 13 other maintenance expenses but that was to be in the alternative if the distance was reduced by 11 KMs. but there is nothing that in the final adjustment of bill, the distance of 11KMs was admitted by the plaintiff and since this amount which was claimed in the alternative, I am of the opinion that this alternate amount was more than the amount claimed by the plaintiff vide bill submitted by him, therefore, this distance of 11 KMs cannot be deducted and the plaintiff was not entitled to the amount spent by him for repair of road etc. which amount was in excess of the original amount claimed by him i.e. it was over Rs. 37 Lacs to which he was entitled only in the alternative if his first claim was not considered. In view of the above discussion, I accordingly hold that the plaintiff is entitled to the amount settled at the time of agreement Ext.P-28 and statement Ext.P-30 shows that at that time a sum of Rs.22,51,772/- was due to the plaintiff from the defendants. This document has been proved in evidence by the plaintiff himself which also makes a reference to the retention money and other details. In view of the fact that at that time a sum of Rs.8 Lacs was paid to the plaintiff by the defendants by way of a cheque, the plaintiff is entitled to a sum of Rs.22,51,772/- less Rs.8 Lacs i.e. Rs.14,51,772/-. This issue is accordingly decided in favour of plaintiff and as against the defendants. Issue No. 2: The transaction in question was commercial and the parties were entitled to the interest but the plaintiff has not proved any clause of the agreement providing for the interest. But keeping in view the normal commercial rate prevalent at that time which varied from 9% to 12%, I am of the opinion that the plaintiff is entitled to the interest at the rate of 9% per annum upto the date of filing of suit from