1. This appeal arises out of a suit for money on account of work done by the plaintiff for the defendant. The plaintiff is a building contractor and he obtained certain contracts from the defendant, namely the District Board of Allahabad, for the construction or repairs of certain buildings. The last of the works was completed sometime in December 1927. The contractor submitted his bill sometime in January 1928 and the bill was scrutinised by the District Board sub-overseer, who did not admit that the sums claimed were correct and made certain deductions. The plaintiff persisted in his demands and even sent registered notices to the District Board from time to time demanding payment of the sums claimed. The matter was under consideration of the Board for some months. The final notice sent by the plaintiff was dated 2nd March 1929, and after the expiry of two months the plaintiff instituted his suit on 16th May 1929.
2. One of the principal defences to the suit was that the suit was barred by limitation by virtue of the provisions of Section 192, District Boards Act, 1922. Under Sub-section (3), it is laid down that no action such as is described in Sub-section (1) shall be commenced otherwise than within 6 months next after the accrual of the cause of action. We have omitted certain words which are irrelevant for the purposes of the present suit. It may be open to argument whether actions described in Sub-section (1) apply only to suits arising out of tortious acts or whether they apply also to suits arising out of contracts. It is unnecessary for us to consider that point and we will assume for the purpose of argument that this section does apply also to actions against District Boards arising out of contracts. The trial Court gave effect to the defendant's plea and held that the suit was barred by limitation but passed a decree for a certain sum which the District Board admitted to be due. The plaintiff appealed to the learned District Judge, who took a contrary view on the question of limitation and held that the suit was within time and decreed the plaintiff's suit for the sum of Rs. 2,131-8-0 together with interest pending the suit. The defendant comes to this Court in second appeal and the principal point argued was that of limitation.
3. The appellant's contention is that the period of limitation for a suit of this nature is governed primarily by Article 56, Schedule 1, Limitation Act, which gives a period of three years from the time when the work is done. He argues that the effect of Section 192, Sub-section (3) District Boards Act, is to substitute a period of six months for the period of three years laid down in the Limitation Act but that the starting point for limitation should be the same. As it is necessary under Sub-section (1) of Section 192 for a plaintiff when suing the Board to give notice of his intended suit two months before instituting the suit, this period of two months must be added to the terms of six months mentioned in Sub-section (3) so that the period of limitation would be eight months from the date of the completion of the work. If this contention is accepted then obviously the suit is barred, because the work was completed in December 1927 and the suit was not instituted until 16th May 1929. We are not prepared to accept the appellant's argument on the question of limitation. Under Sub-section (3) of Section 192 the period of six months runs from the date of the accrual of cause of action. The date of the accrual of the cause of action in a suit of this kind is not necessarily the date when the work was completed. For instance, it might be agreed between the parties that payment was to be made for work done within six months after the completion of the work. In such a case it could not be held that the plaintiff had a cause of action until the expiry of six months after the completion of the work. In view of the language of Section 192, Sub-section (3), District Boards Act, we have to look to the date of the accrual of the cause of action. It appears from the terms of the contract itself that this date cannot be taken as equivalent to the date of the completion of the work because in accordance with the terms of the contract itself it is provided that after the work has been completed the contractor is to submit his bill and this bill is to be scrutinised by the officers of the District Board and after scrutiny and acceptance it will be paid. It is obvious therefore that the contractor could have no cause of action until after the scrutiny of his bill by the District Board servants, and this scrutiny might take a considerable time.
4. It appears that the District Board sub-overseer prepared a bill setting forth the amounts which were due to the contractor and on 28th March 1928, a registered notice was sent to the contractor to come and sign bill in token of acceptance. The contractor refused to come to the office to sign the bill. The appellant argues that when notice was sent to the contractor that his bill had been prepared and admitted for a certain amount this implied that any further amount bad been refused and this refusal constituted a cause of action. Therefore the period of limitation should be held to start from 28th March 1928. We think that this argument would be sound if the bill prepared by the overseer could be taken to be the final decision of the Board on the question of the amount due to the contractor if the contractor knew that the Board had finally decided that only a certain amount was due to him, and if he claimed a further sum then undoubtedly the contractor had a cause of action from the date when the final decision was communicated to him. In the present case however it seems clear that the contractor's bill which was drawn up in March 1928 cannot be taken to represent the final decision of the Board on this point. We do not know all the correspondence' that took place between the parties. It appears that a number of letters which were sent by the plaintiff to the defendant have been removed from the file of the District Board office. We do know that on 15th August 1928 the contractor stated that he was prepared to sign the bill and take the sum admittedly due to him on conditions that he reserved his right of instituting a suit for the balance which he claimed. Further negotiations must have taken place because we find that on 19th September 1928 the Board passed a resolution appointing the senior vice-chairman to make a 'final settlement' of the contractor's claims.
5. This implies that before 19th September 1928 the Board had not finally settled the contractor's claims and if the contractor had instituted a suit before that time, his suit might have been dismissed as premature. The vice-chairman gave notice to the contractor to submit his bill by 5th October, and he did so on 20th October. After this, so far as we know, the senior vice-chairman did nothing in the direction of settling the contractor's claims. On 2nd March 1929 the contractor sent his final registered notice to the Board demanding the amount claimed and upon receiving no reply within the period of two months he instituted the present suit. In our opinion, the contractor's cause of action cannot be said to have accrued while the question of the amount due to him was under the consideration of the Board and had not been finally settled by them and it is clear that it had not been finally settled by the, Board so late as 20th October 1928 and we do not know what happened subsequently, in this state of affairs we think that when the contractor served the Board with his final notice, and failed to get any reply, he might fairly have assumed that negotiations had broken down and that the Board had finally decided to disallow his further claims, so that there was no alternative but to get the question settled by the civil Courts. Taking all the facts of this case into consideration we think that the cause of action may fairly be taken to have accrued on the expiry of two months after his last notice dated 2nd March 1929. On this view the suit is well within time.
6. It has been argued in the alternative by the learned Counsel for the appellant that, if the suit is not held to be time-barred, it may be dismissed as premature, because no cause of action had arisen before the date of the institution of the suit, as there is no proof that the negotiations had finally broken down or that the Board had finally refused to pay the contractor's claim. We cannot accept this contention as we have already stated that when the contractor submitted his last notice and waited for two months without getting any reply he could fairly have assumed that the negotiations had broken down and that his claim had been finally disallowed and that he had a complete cause of action for the suit.
7. Another point raised by the appellant was that the contractor claimed at certain higher rates than had been agreed upon in the original contract executed on behalf of the Board. It appears that the sub-overseer of the Board, who was supervising the contractor's work, gave certain instructions to the contractor, such as that he should use cement instead of mortar or that he should use bricks of a better quality than third class bricks, and that the contractor acted in accordance with the sub-overseer's instructions. This meant that he put in better work than had been agreed upon in the original contract and he therefore naturally claimed payment at a higher rate. It is argued that under Section 65, District Boards Act, the sub-overseer was not authorised to enter into any fresh contract with the plaintiff which imposed liability upon the Board exceeding Rs. 100. We think that Section 65 does not apply to a case of this sort. The sub-overseer did not enter into any fresh contract with the plaintiff. He merely gave certain instructions to the plaintiff as to the manner in which he should carry out his work. It might be that by his instructions he varied in some particulars the terms of the original contract, but we do not think that Section 65 applies to the slight variations made in the original contract. In any case the extra amounts claimed do not come to any large sum oven though they may come to over Rs. 100. The sub-overseer was acting for his superior officer, the District Board Engineer, and it would certainly be inequitable if a contractor should suffer for carrying out the instructions of an officer of a District Board. In any case we do not think that Section 65 applies to a case of this sort and the District Board cannot seek shelter under its provisions.
8. The last point argued is that no interest should have been allowed upon the sums claimed. It is true that the contract itself does not provide for any interest to be given on account of any delay in settling the bills. In view of the attitude taken by the District Board in this case we think that the Court below was justified in awarding interest as compensation for the unreasonable delay due to the obstructive attitude of the district board sub-overseer. It appears that the sub-overseer and the 1 contractor had quarreled and the sub-overseer was obstructing the plaintiff in every way. In view of these facts we cannot find that the interest awarded by the Court below was in any way unreasonable. We accordingly dismiss the appeal with costs.