Case: Venkatesh Constrn.Co Vs. Karnataka Vidyut Karkhane Ltd.(Kavika)

by the appellant seeking permission to continue the work, there was no response from the respondent. Absence of any response on the part of the respondent, only indicates that the respondent was aware of the change of nature of work. 13. PW4-Naresh Kumar-architect had stated about his visit to the work site at the request of the respondent for preparing the design after the masonry wall for the length of hundred metres was over and that he gave the revised design and PW-4 estimated the cost of the work as per the revised design at rupees twenty lakhs. PW-4 was engaged to prepare the design suitable to the soil strength only because of the change in the nature of the work. Otherwise the need for engaging PW-4 for preparing new design would not have arisen if the earlier design would have been suitable. On appreciation of evidence, trial court rightly answered issue No.2 in favour of the appellant that the respondent asked the appellant to stop the running work for want of revised design. 14. The High Court took note of clause 11 of the contract dated 12.02.1992 which states that the contractor is not authorized to do any extra work or make any alteration without the previous consent in writing of the respondent. High Court set aside the findings recorded by the trial court holding that the parties are governed by the terms of the written contract and any variation with the terms of the agreement was required to be done strictly adhering to clause 11 of the contract. While saying so, the High Court brushed aside the admission by DW-1 that extra work was done by the appellant and the High Court was not right in ignoring the same to hold that the admission of DW-1 cannot have the effect on the contractual obligation of the parties. It is to be pointed out that the respondent has not raised the plea relying upon clause 11 of the contract. Further, by perusal of Ex.P2 dated 20.12.1991, a letter addressed by the appellant to the respondent informing the respondent about the extra work which needs to be done and the fact that PW-4 was engaged by the respondent to prepare the new design for the work, it is evident that the respondent was aware of the fact of the change in the nature of work and that there is alteration in the work done by the appellant. When the evidence and material clearly depict the change of nature of work involved and when the extra work to be done was also admitted by DW-1, parties cannot be expected to go for a revised agreement/contract. Moreover, having regard to the fact that the work was to be completed within a specified time-frame, the parties cannot be expected to go for a second round of negotiation and reframe the terms and conditions of the work. While so, the High Court was not right in placing reliance upon clause 11 of the contract to reverse the findings of fact recorded by the trial court. 15. So far as the claim of the appellant that it suffered loss due to loss of stock of material, PWs 1 and 3 have stated that they have stocked the material of worth about rupees six lakhs at the work site. The appellant also produced several letters (Exs. P5, P6 and P7) by which the appellant has informed the respondent that there was no progress in the work and that the building material are lying waste. Apart from these letters, the appellant has also produced photographs (Exs. P18 to P28) to substantiate their claim that the building material like bricks, size stones and other materials were stocked at the work site. Even though the appellant has claimed rupees six lakhs on account of loss of the material stocked, as the appellant had not produced any bill relating to purchase of material nor produced authentic trip sheet, the trial court rightly awarded rupees one lakh only on account of loss of building material. As noticed earlier, based on the evidence of PWs 1 and 3 and other documents, the trial court has awarded amount on various other heads viz., the amount payable in respect of:- (i) extra earth work; (ii) embankment work; (iii) extra soiling work; (iv) extra bed concrete work and (v) extra stone masonry work. The amount so awarded by the trial court under various heads is based on evidence and material on record. 16. The Appellate Court may not interfere with the finding of the trial court unless the finding recorded by the trial court is erroneous or the trial court ignored the evidence on record. The High Court reversed the decree passed by the trial court without discussing oral and documentary evidence and several grounds raised before the trial court. The High Court veered away from the main issue and went on to elaborate on the law of arbitration and the mode of setting aside the arbitral award under Section 34 of the Arbitration Act, which in our view, was not warranted. Without considering the oral and documentary evidence, the High Court erred in interfering with the factual findings recorded by the trial court and the impugned judgment is liable to be set aside.17. Trial court directed the respondent to pay a sum of Rs.3,23,000/- to the appellant with interest at the rate of 12% per annum from the date of suit till the date of realization. To award interest from the date of suit to date of decree and from the date of decree till the date of realization is entirely discretionary. The terms of the contract do not specify any rate of interest. In the facts and circumstances of the case and having regard to the fact that the matter is pending for over two decades and in the interest of justice, it is appropriate that the interest of 12% per annum awarded by the trial court is reduced to 6% per annum.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]14. The High Court took note of clause 11 of the contract dated 12.02.1992 which states that the contractor is not authorized to do any extra work or make any alteration without the previous consent in writing of the respondent. High Court set aside the findings recorded by the trial court holding that the parties are governed by the terms of the written contract and any variation with the terms of the agreement was required to be done strictly adhering to clause 11 of the contract. While saying so, the High Court brushed aside the admission by DW-1 that extra work was done by the appellant and the High Court was not right in ignoring the same to hold that the admission of DW-1 cannot have the effect on the contractual obligation of the parties. It is to be pointed out that the respondent has not raised the plea relying upon clause 11 of the contract. Further, by perusal of Ex.P2 dated 20.12.1991, a letter addressed by the appellant to the respondent informing the respondent about the extra work which needs to be done and the fact that PW-4 was engaged by the respondent to prepare the new design for the work, it is evident that the respondent was aware of the fact of the change in the nature of work and that there is alteration in the work done by the appellant. When the evidence and material clearly depict the change of nature of work involved and when the extra work to be done was also admitted by DW-1, parties cannot be expected to go for a revised agreement/contract. Moreover, having regard to the fact that the work was to be completed within a specified time-frame, the parties cannot be expected to go for a second round of negotiation and reframe the terms and conditions of the work. While so, the High Court was not right in placing reliance upon clause 11 of the contract to reverse the findings of fact recorded by the trial court.The Appellate Court may not interfere with the finding of the trial court unless the finding recorded by the trial court is erroneous or the trial court ignored the evidence on record. The High Court reversed the decree passed by the trial court without discussing oral and documentary evidence and several grounds raised before the trial court. The High Court veered away from the main issue and went on to elaborate on the law of arbitration and the mode of setting aside the arbitral award under Section 34 of the Arbitration Act, which in our view, was not warranted. Without considering the oral and documentary evidence, the High Court erred in interfering with the factual findings recorded by the trial court and the impugned judgment is liable to be set aside.17. Trial court directed the respondent to pay a sum of Rs.3,23,000/- to the appellant with interest at the rate of 12% per annum from the date of suit till the date of realization. To award interest from the date of suit to date of decree and from the date of decree till the date of realization is entirely discretionary. The terms of the contract do not specify any rate of interest. In the facts and circumstances of the case and having regard to the fact that the matter is pending for over two decades and in the interest of justice, it is appropriate that the interest of 12% per annum awarded by the trial court is reduced to 6% per annum.So far as the claim of the appellant that it suffered loss due to loss of stock of material, PWs 1 and 3 have stated that they have stocked the material of worth about rupees six lakhs at the work site. The appellant also produced several letters (Exs. P5, P6 and P7) by which the appellant has informed the respondent that there was no progress in the work and that the building material are lying waste. Apart from these letters, the appellant has also produced photographs (Exs. P18 to P28) to substantiate their claim that the building material like bricks, size stones and other materials were stocked at the work site. Even though the appellant has claimed rupees six lakhs on account of loss of the material stocked, as the appellant had not produced any bill relating to purchase of material nor produced authentic trip sheet, the trial court rightly awarded rupees one lakh only on account of loss of building material. As noticed earlier, based on the evidence of PWs 1 and 3 and other documents, the trial court has awarded amount on various other heads viz., the amount payable in respect of:- (i) extra earth work; (ii) embankment work; (iii) extra soiling work; (iv) extra bed concrete work and (v) extra stone masonry work. The amount so awarded by the trial court under various heads is based on evidence and material on record.e Appellate Court may not interfere with the finding of the trial court unless the finding recorded by the trial court is erroneous or the trial court ignored the evidence on record. The High Court reversed the decree passed by the trial court without discussing oral and documentary evidence and several grounds raised before the trial court. The High Court veered away from the main issue and went on to elaborate on the law of arbitration and the mode of setting aside the arbitral award under Section 34 of the Arbitration Act, which in our view, was not warranted. Without considering the oral and documentary evidence, the High Court erred in interfering with the factual findings recorded by the trial court and the impugned judgment is liable to be set aside.Trial court directed the respondent to pay a sum of Rs.3,23,000/- to the appellant with interest at the rate of 12% per annum from the date of suit till the date of realization. To award interest from the date of suit to date of decree and from the date of decree till the date of realization is entirely discretionary. The terms of the contract do not specify any rate of interest. In the facts and circumstances of the case and having regard to the fact that the matter is pending for over two decades and in the interest of justice, it is appropriate that the interest of 12% per annum awarded by the trial court is reduced to 6% per annum.