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Oil and Natural Gas Commission, Eastern Region and ors. Vs. Shyam Sundar Agarwalla and Co. - Court Judgment

LegalCrystal Citation
Subject;Contract
CourtGuwahati High Court
Decided On
Case NumberF.A. 35 of 1974
Judge
ActsContract Act, 1872 - Sections 70 and 74
AppellantOil and Natural Gas Commission, Eastern Region and ors.
RespondentShyam Sundar Agarwalla and Co.
Appellant AdvocateG.K. Talukdar and D.K.Talukdar, Advs.
Respondent AdvocateJ.K. Baruah, P.C. Gayan and B. Dutta, Advs.
DispositionAppeal partly allowed
Prior history
T.N. Singh, J.
1. This appeal is by the defendant? who have been saddled with a liability of Rs. 20,972/- by the learned Assistant District Judge, Jorhat, by decreeing the plaintiff's suit in full and their grievance is that this has been done in a most perfunctory manner. The appellant No. 1 is the Oil and Natural Gas Commission and the other three appellants are employees of the Commission. The plaintiff was awarded a contract for the extension (widening) of one bridge and it is not disputed
Excerpt:
.....the documentary as well as oral evidence on this point in detail. ' he has further held that 'in the absence of any prohibition the plaintiff cannot be punished for doing a good work (and) the provisions under section 70, contract act also comes in his favour. the claim was in respect of these items which was upheld on the basis of section 70 on the failure of the contractor to prove the oral contract (for these items) pleaded by him. in that case it was unsuccessfully contended that recognising a claim under section 70 would result in either directly or indirectly nullifying the effect under section 175(3) of the govt. from the evidence on record documentary as well as oral, we find that the delay occurred not due to any lack of diligence on the part of the plaintiff but due..........and that this fact was brought to the notice of the defendants who permitted the plaintiff to use short pieces of joists. it is further alleged in the plaint that the defendants agreed to pay the extra costs for joining the joists by welding, drilling holes and also for the costs of m. s. plates used in the process. it is further alleged that the plaintiff brought the joists in short pieces from calcutta by road transport as railway booking was restricted and the defendants did not help the plaintiff in getting priority allotment of railway wagon. the defendants in their written statement averred that the material was brought by the plaintiff in short pieces for his own transportation convenience and that they did not advise the plaintiff to do so. it is also averred that the plaintiff.....
Judgment:

T.N. Singh, J.

1. This appeal is by the defendant? who have been saddled with a liability of Rs. 20,972/- by the learned Assistant District Judge, Jorhat, by decreeing the plaintiff's suit in full and their grievance is that this has been done in a most perfunctory manner. The appellant No. 1 is the Oil and Natural Gas Commission and the other three appellants are employees of the Commission. The plaintiff was awarded a contract for the extension (widening) of one bridge and it is not disputed that the full amount due under the contract (Rs. 46,937.41) as per tender submitted by him has been paid to him by the Commission. His case is that he has done some extra jobs and the appellants are liable to pay him for the same. The claims as given in the plaint is made up of the following items:

1

Cost of welding joint materials etc.

Rs. 14,281/-

a.

Cost of constructing 36 sq. ft. of bamboo palisiding.

Rs.    288/-

3.

Refund of penalty imposed.

Rs.    688/-

4.

Interest at the rate of 12% per annum for three years.

Rs.  5,716/-

2. Mr. G. K. Talukdar, the learned counsel for the appellants has strenuously contended that the learned court below did not take care to ascertain the true legal position bearing on the facts of the case and decided Issue. No. 5 wrongly against the defendants without even discussing the relevant evidence on the point with reference to the legal provision relied on by him. The issue No. 5 is as follows:

Whether the plaintiff is entitled, to Rupees 14,281/- as cost of welding the joists?

3. In the plaint it is stated that iron joist of 14' x 8' x 18' size were not available in the local market and that this fact was brought to the notice of the defendants who permitted the plaintiff to use short pieces of joists. It is further alleged in the plaint that the defendants agreed to pay the extra costs for joining the joists by welding, drilling holes and also for the costs of M. S. plates used in the process. It is further alleged that the plaintiff brought the joists in short pieces from Calcutta by road transport as railway booking was restricted and the defendants did not help the plaintiff in getting priority allotment of railway wagon. The defendants in their written statement averred that the material was brought by the plaintiff in short pieces for his own transportation convenience and that they did not advise the plaintiff to do so. It is also averred that the plaintiff never required any assistance from the defendants for obtaining priority from the railway. It is stated that for the execution of the contract it was the entire responsibility of the plaintiff to obtain all, materials necessary for the work covered by the contract and the defendants were not liable to pay for any extra job which had to be done by the plaintiff for joining the short pieces which they had brought of their own choice.

4. Four witnesses were examined by the plaintiff in support of his case and some correspondence between the parties was also proved in support of the claim. Shortly it may be noted that tender for the contract was invited on 27-5-1965 (Ext. Ka) which was submitted by the plaintiff on 7-6-1965 vide Ext. Ka (1) and accepted by the appellant No. 1 on 9-7-1975 vide Ext. 1. It will be useful to refer first to Exts. 2 and 3 on which apparently the claim is based for the extra, job ''as respects the joists and accepted as such by the learned trial court without referring at all to the contract, Ext. Gha. On 4-9-1965 the plaintiff wrote Ext. 2 to the Assistant Engineer, appellant No. 4, to 'confirm' certain discussions said to have been made on that date. It is claimed in the letter that the joists will be brought in pieces and that the costs for making the joint shall be paid by the Commission. Again on 7-10-1965 a reference is made (in Ext. 3) to another discussion that had taken place on that date to similar effect. It is noteworthy that in neither letter any mention is made of the fact that the joists of the required length were not available in the market, either in Assam or in Calcutta. There is no request made either in these letters for any assistance for priority allotment of wagon. To these letters no reply came from the defendants, as appears from Ext 5. It is true that earlier on 27-7-65, vide Ext. 8, the plaintiff while acknowledging the award of the contract had stated that joists of the required length were not available in Assam and that these have to be produced from Calcutta for which three months time will be required. There is however, no mention in this letter of any assistance for priority allotment of wagon or of non-availability of the required size even in Calcutta and indeed no suggestion at all is made in this letter about joining the joists after obtaining the same in short pieces, or about payment therefor.

5. Reference may now be made to the tender submitted by the plaintiff himself in this connection to which also the trial court has not given due weight and proper attention. From item No. 3 of Ext. Ka (1) it appears that the plaintiff has quoted rate for the relevant item of the job which included supplying of the joists in question and it is to be noted that the size of the joist is not mentioned. In his evidence also the plaintiff admits that different rates for different items of work were quoted and that the joists had to be supplied by him and he also admits that the Commission (Defendant-Appellant No. 1) had paid him the price for the joists but it did not pay him the price for 'extra welding and fastening of plates etc.' It was also admitted by him in evidence that there was no mention in Ext. Ka (1) of the length of the joist to be used but he adds that the joists measuring 19/20 in length were not available in the market and that the defendants asked him to fetch short joists and to join the same. He also admits that the joists could be joined without plates. In this connection reference may also be profitably made to another letter written by the plaintiff (Ext. 5) in which he does not make any claim for any extra job although he refers to the change in size of the joists. Indeed he accordingly signed the final bills also, albeit, under protest, as appears from Ext. 6. From this letter also (written on 8-3-1968) it is clear that although he had been making claims on account of various items from time to time the defendants had not accepted his claim. One of the items mentioned in this letter appertains to the costs of welding the joists etc. for which the claim is renewed in this letter. This was after the work was completed and final payment under the contract was made to the plaintiff. Indeed, to his earlier letter (Ext. 4) in which this claim was reiterated, the defendants replied (Ext. 10) to refute it in categorical terms stating that 'joists should have been brought in, full length and not in cut pieces'. This reply is also important because it was given On 27-1-1967 as a sharp reaction to the claim made on 23-1-1967, vide Ext, 4.

6. It is necessary to refer at this stage to the contract (Ex. Gha) which has been totally ignored by the learned trial court. Clause 12 of the Contract envisages cases of 'alteration in specific case and design'. It is stipulated that the Engineer-in-charge shall have the power to make 'any alteration in, omission from, addition to, or substitution for, the original specification, drawings, design and instruments that may appear to him to be necessary during the progress of the work'. But the contractor shall carry out such work only when instructions are given to him in writing. Detailed procedure is laid down for fixing rates for such work and for payment of such work done under the said clause. Apparently this refers to cases where there is a possibility of additional work being done for which a new contract has to be made,

7. There is another aspect of the evidence on this point which has not been considered at all by the learned trial court. In his evidence the plaintiff has stated that he paid Rs. 12,500/- to one Janak Singh who had carried out this item of work. It is, however, stated, that Janak Singh is dead but surprisingly no receipt even executed by Janak Singh acknowledging this payment is produced, and proved in this case by the plaintiff. On the other hand P. W. 1 has come to depose that although Janak Singh was a contractor arid that he received Rs. 12,000/- from the plaintiff for the job, the actual job was carried out by him and another person on wages for which they received only Rs. 1,800/- from the plaintiff. Further, defendant-appellant No. 4 was examined in this case and he categorically stated that he did not make any commitment to the plaintiff to the effect that the defendants would pay him extra expenses for welding etc. for joining the short pieces of joists. What is more surprising is that he is not asked anything about any of the letters which are exhibited in this case and are said to have been addressed to him; There is no escape from the conclusion that it is not proved in this case that there was either any oral or any written undertaking of any nature given on behalf of the defendants to the plaintiff in respect of the concerned item of job. The bare statement of the plaintiff which is not borne out by the documentary evidence as discussed above cannot be accepted.

8. We had to go ourselves into the evidence on this point in detail to discuss the same threadbare for the important reason that it is necessary so to do to give a proper decision on Issue No. 5 as the learned Assistant District Judge has disposed of this issue without discussing the documentary as well as oral evidence on this point in detail. He has referred to one or two stray statements merely of defendant No. 4 and has not referred at all either to the oral evidence of the plaintiff or to any documentary evidence bearing on the point, except Exts. 2 and 3 and Ext. Ka (1). On, what legal basis the plaintiff was entitled to be paid for his claim for joining the short pieces of joists is not clear from the findings of the learned Assistant District Judge. He has not held that there was any independent contract for the job under which the liability of the defendants arose. He has made the defendants liable by merely holding, albeit, without discussing the relevant evidence, that the plaintiff had used, the short pieces of joists with the approval of the defendants and that the plaintiff made electric welding etc. for the joists 'honestly intending to add strength to the joists.' He has further held that 'in the absence of any prohibition the plaintiff cannot be punished for doing a good work (and) the provisions under Section 70, Contract Act also comes in his favour.'

9. Mr. G. K. Talukdar contends that there was only one contract for the execution of the work and whatever work was done by the plaintiff was done in execution of the contract for which he was paid in full in accordance with the contract. There was no addition or alteration and the plaintiff himself had therefore not invoked the aid of Clause 12 of the agreement. His further case is that Section 70 of the Contract Act also cannot help the plaintiff. In view of the evidence which were placed before us Mr. J. K. Barua, the learned counsel for the plaintiff realised the difficulty to base his claim on any new contract as no such contract, apart from Ext. Gha, was proved in this case. Indeed, the mere claim by the plaintiff which was not accepted by the defendants at any point of time, as revealed by the evidence, could not be treated as a completed contract, much less a valid contract, for which Clause 12 of the agreement executed by the parties (Ex. Gha) expressly stipulated, a writing. He has therefore tried to support the impugned judgment on the basis of Section 70 of the Contract Act which is in the following term:

70. Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered.

10. We must, however, say that the legal position under Section 70 has not been correctly appreciated by the learned court below which is apparent from the fact that only an incidental reference to the said provision is made by him. In our opinion Section 70 of the Contract Act applies to a case where there is no subsisting or valid contract and the liability of the defendant arises on the basis of the equitable doctrine which prevents unjust enrichment. Therefore, it must be shown in a case in which Section 70 is invoked that the act for which the plaintiff is entitled to 'compensation' is not a part of, or envisaged under any contract and further that from that particular act itself, on which the claim is founded, the defendant has derived any 'benefit'. If the act is one which is relatable in any manner to any subsisting or valid contract, no claim founded on Section 70 can be sustained. In the execution of any contract if any act is done in any particular manner or following any particular method which is more arduous or expensive according to the plaintiff a claim solely on that ground cannot be entertained under Section 70 because it cannot be said that the defendant derived any 'benefit' from the manner or method according to which the act was performed. In such cases the court has to look into the terms and objects of the contract to find out whether the defendant had derived any 'benefit' which was more than what the parties had contracted for and further that the 'benefit' accrued as a result of some work done by the plaintiff which was not related to the terms and objects of the contract.

11. Mr. J. K. Baruah has relied on certain decisions which, in our opinion, do not have much bearing on the facts of this case and do not in any case support his contentions but we propose to examine them. Indeed, the decision in Subramanyam v. Thayappa, AIR 1966 SC 1034, rather supports the legal proposition enunciated by us. In that case a claim was made by the contractor for some additional works which were not covered by the contract. A building was constructed according to a plan sanctioned by the Municipality on the basis of which the contract for the construction was made. Later, the plan was altered and the area of some of the rooms was increased; and extra room and also a compound wall were also provided. The claim was in respect of these items which was upheld on the basis of Section 70 on the failure of the contractor to prove the oral contract (for these items) pleaded by him. In State of West Bengal v. B. K. Mondal, AIR 1962 SC 779, the court held that Section 70 applied equally to individuals, corporations and the Government. In that case also it was observed that claim for compensation under Section 70 is not made on the basis of any subsisting contract. It can be invoked when there was either no contract or an invalid contract. In that case it was unsuccessfully contended that recognising a claim under Section 70 would result in either directly or indirectly nullifying the effect under Section 175(3) of the Govt. of India Act. In New Marine Coal Co. v. Union of India, AIR 1964 SC 152 (153), it was held that if in pursuance of a void contract (entered into in violation of Section 175(3) of the Govt of India Act) anything was done and the Govt. had received the benefit, the Govt. was bound to make compensation for the same under Section 70. In Union of India v. J. K. Gas Plant, AIR 1980 SC 1330, their Lordships were called upon to construe the expression 'enjoys the benefit thereof' of Section 70. It was held that the Govt. could not escape the liability for any supply made to the third party if it had derived any benefit from the transaction.

12. We, therefore, hold that in view of the legal position discussed above on the evidence on record in this case the plaintiff is not entitled to invoke Section 70. He had not done any additional work for the defendants as is apparent from his tender, Ext. Ka(1) and the other evidence discussed above. It is further clear that the defendants have not derived any benefit from the particular manner or method in which the contract was executed namely, joining short pieces of joists. The plaintiff was required to supply the joists under the contract for the widening of the bridge, which was the object of the contract. The terms of the contract did not envisage any particular size of joists to be supplied. If the plaintiff had procured the joists in short pieces to execute the contract, he had done so as a part of the contract and joining of the short pieces was also a part of the contract. Supply of short pieces or joining thereof in any manner was not an additional item of work from which the defendants derived any benefit. Indeed, defendant No. 4 has deposed that they preferred long joists and that short joists are weaker. The width or any other dimension of the bridge or the strength of the bridge was not in any way increased by the plaintiff's work and he was, therefore, not entitled to any 'compensation' for the same. Issue No. 5 was therefore wrongly decided in favour of the plaintiff and we hold that it should be decided against the plaintiff, and, his claim for this item of job which he laid at Rs. 14,281/- is liable to be rejected.

13. As regards the other two minor items there is no serious contest and Mr. Talukdar has not addressed any argument on them. In one of the items the plaintiff claimed Rs. 288/- for erecting bamboo walls on both ends of the bridge to prevent falling of earth. DW 2 proves that he had done this work and he had received Rs. 250/- from the plaintiff for this work. On a reference to the tender, Ext. Ka(1) it is found that this item of work was not included in the contract and from the evidence we find that the defendants derived benefit from this work as this gave protection to the bridge. The plaintiff is, therefore, entitled to compensation for this work under Section 70 and we see no reason to disturb the finding of the learned court below on this point by which he has allowed this claim. There is another item against which the plaintiff has claimed a sum of Rs. 688/- on account of deduction made from his bill, as a penalty for the delay in execution of the work. From the evidence on record documentary as well as oral, we find that the delay occurred not due to any lack of diligence on the part of the plaintiff but due to circumstances beyond his control. One such circumstance is non-availability of the appropriate size of joists and the other is the delay in furnishing the drawing for the work by the defendants. Under Clause 2 of the contract (Ext. Gha) penalty could be imposed in the form of compensation for delay if the work was 'not done by the contractor with due diligence' which is to be read with the other relevant provision, Clause (5), which provided for extension of time. It appears from the evidence that the plaintiff had from time to time brought to the notice of the defendants the causes due to which the execution of the contract was being delayed and on 20-6-66 he also wrote to the defendants, vide Ext. 5, for extending the time of completion of the work. This request for extension was not rejected and therefore, the defendants were not justified to impose the penalty for delayed execution of the work. We, therefore, see no reason to disallow this claim, either. On this point, the learned court below has, on a proper discussion of the evidence, allowed the claim giving valid reasons therefor. We also uphold the findings and the decision of the court below to the effect that the plaintiff is entitled to claim interest at the rate of 12% per annum which we allow in respect of the two items for which the decree of the court below has been upheld.

14. In the result this appeal is allowed in part. The decree passed by the learned Assistant District Judge is modified to the extent indicated above. The plaintiff is entitled to a decree of Rs. 976/- and a sum of Rs. 366/- on account of interest at the rate of 12% per annum for three years. We further direct that the total decretal amount of Rs. 1342/- shall carry an interest of 6% from the date of the decree to the date of payment But in the facts and circumstances of the case we make no order as to costs.


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