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Santu Prasad Das and anr. Vs. Eastern Coal Field Limited and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtJharkhand High Court
Decided On
Case NumberF.A. No. 328 of 1989 (P) and No. 442 of 1989
Judge
Reported inAIR2006Jhar24; 2005(3)BLJR1709; [2005(3)JCR416(Jhr)]
ActsIndian Partnership Act, 1932 - Sections 30 and 69(2); Public Demand Recovery Act, 1914; Indian Partnership Rules - Rule 2; Code of Civil Procedure (CPC) , 1908 - Order 23, Rules 1 and 4
AppellantSantu Prasad Das and anr.;eastern Coal Field Limited and ors.
RespondentEastern Coal Field Limited and ors.;santu Prasad Das and ors.
Appellant Advocate Chitranjan Sinha and; Prem Kumar Jha, Advs. in F.A. No. 328 of 1989 (P) and;
Respondent Advocate Ram Shanker Pradhan,; Shailesh Kumar Sinha,; R.N. Sahay
Excerpt:
indian partnership act, 1932, section 69(2) - money suit payment due against contract work not made--work completed with satisfaction--many assurances to release payment--meanwhile bank advancing funds arbitrarily filed false requisition and forfeited deposits--without impleading defendents--defendant not a party to contract with bank--dependent never played any fraud with bank--suit under section 69(2) of the act by a partnership concern could be filed only if said firm is duly registered with register of firms--court below right in denying claim being barred under section 69(2) of the act--action of bank not illegal--bank cannot be debarred from realising any amount which is only on account of any dispute between inter-se parties to contract--first appeal under section 442 of 1989(p)..........per agreement.2. the case of the plaintiffs in brief is that plaintiff no. 1 santu prasad das took contract work for construction of office building and n.h.s. quarters in chitra colliery from the defendant no. 1 eastern coal field limited and entered into agreement as per agreement nos. 4 and 7 of 1978. it is alleged that during the subsisting period of the contract work, there was some dispute as to the enhancement of rate and other damages and to settle the matter, an arbitration case vide title suit no. 83 of 1979 was filed in the learned court below and during the pendency of the arbitration proceeding, the plaintiff no. 1 who is appellant here, completed the aforesaid work to the satisfaction of the defendant no. 1 and constructed buildings were taken in possession by defendant no......
Judgment:

Hari Shankar Prasad, J.

1. Both the appeal (F.A. No. 328 of 1989 (P) and F.A. No. 442 of 1989) have arisen out of the judgment and decree dated 15.5.1989 passed in Money Suit No. 40 of 1987 whereby and whereby the learned Subordinate Judge I, Deoghar dismissed the suit. Money Suit No. 40 of 1987 was filed for recovery of Rs. 14,94,465.65 paise due to non-payment of bills in respect of agreement Nos. 4 and 7 of 1978 in respect of Chitra Colliery and agreement Nos. 5 and 6 of 1982 in respect of Lalmatia Colliery and interest was also claimed at the rate of 12% per annum together with temporary injunction restraining defendant No. 7, from getting any certificate of attachment for the alleged arrears with the plaintiff and also for mandatory injunction directing the defendant Nos. 1 to 6 to pay the defendant No. 7 the arrears as per agreement.

2. The case of the plaintiffs in brief is that plaintiff No. 1 Santu Prasad Das took contract work for construction of office building and N.H.S. quarters in Chitra Colliery from the defendant No. 1 Eastern Coal Field Limited and entered into agreement as per agreement Nos. 4 and 7 of 1978. It is alleged that during the subsisting period of the contract work, there was some dispute as to the enhancement of rate and other damages and to settle the matter, an arbitration case vide Title Suit No. 83 of 1979 was filed in the learned Court below and during the pendency of the arbitration proceeding, the plaintiff No. 1 who is appellant here, completed the aforesaid work to the satisfaction of the defendant No. 1 and constructed buildings were taken in possession by defendant No. 1 respondent and plaintiff No. 1 was paid running accounts bills but final bill and security money were not paid to him for which, he claims to be legally entitled. It is further alleged that defendant No. 1 represented to the plaintiff that the matter of payment will be settled if the plaintiff takes up the work at Lalmatia Colliery and entrusted the contract work for the construction of N.H.S. quarters at Lalmatia to plaintiff No. 1 for himself and on behalf of the plaintiff No. 2 vide agreement Nos. 5 and 6 of 1982 and the plaintiff accordingly constructed the building at Lalmatia Colliery also under the aforesaid contract, for which he was paid running account bills of Rs. 10,47,121.99 paise. It is further alleged that while construction was going on, some dispute of public nature arose there and the public dismantled the boundary wall of N.H.S. quarters and work was ultimately stopped. It is further alleged that after settlement of the matter, the plaintiffs were noticed by the defendant to complete the balance work and the plaintiff immediately completed the work.

3. In arbitration proceeding vide Title Suit No. 83 of 1979, the arbitrator made an award of Rs. 1,59,560/- in favour of the plaintiff No. 1 which caused annoyance to the defendant No. 1 and, the plaintiff No. 1 submitted to the Court to pass decree of the said amount against the defendant No. 1 but defendant No. 1 objected to the same. The plaintiffs submitted bills of completed N.H.S. quarters to the defendants to the defendant and demanded payment of final bill and earnest money but on account of the aforesaid award, the defendants withheld the payments. It is further alleged that defendants assured the plaintiffs that entire arrears will be cleared off if the plaintiff withdraw his petition for passing the decree against the defendant No. 1 and accordingly defendant No. 1 withdrew the petition. Thereafter a joint measurement was taken under the instruction of the General Manager of Lalmatia Colliery and the bills were passed and kept in the office since January, 1985 but has not been paid to the plaintiff till today. On the other hand, State Bank of India, Deoghar arbitrarily and illegally filed a false requisition for certificate and the same is pending before the District Certificate Officer and the Bank has further illegally forfeited the deposits of the relations of the plaintiffs and without making defendant No. 1 a party, is persuading issuance of attachment of immoveable properties of plaintiffs. Thereafter, plaintiffs filed a petition before CWJC No. 627 of 1987 before the Patna High Court and the Court was pleased to direct the defendant No. 1 to look into the grievance of the petitioner and inform them why payment in respect of their oills have been withheld. It is further alleged that Advocate's notice was also given to the defendant No. 1 but to no effect. Defendant No. 2 misrepresented to the plaintiff No. 1 and fraudulently induced him to withdraw the award case putting him to a loss of Rs. 1,59,560/- and further withheld the final bills of both Chitra and Lalmatia Colliery and, therefore, this suit have been filed.

4. Written statement was filed on behalf of the defendants in which besides taking ornamental defendant such as suit is barred by limitation, etc., it was pleaded that the plaintiff has failed to construct even a single unit of N.H.S. quarters in terms of agreement Nos. 4 and 7 of 1978 as per estimate, design and contract and in all respect to the satisfaction of the defendant No. 1. The plaintiffs could erect only 80 units of N.H.S. quarters but none of them was completed and plaintiff further failed to hand over any of the units within the agreed time. Further plaintiffs abandoned construction work of 16 units of N.H.S. quarters. The defendant although asked the plaintiff for rectification of the work and resuming of the balance work but he did not do so ultimately after long lapse of time, joint measurement was taken on 15.6.1984 and defendant No. 1 was compelled to complete the remaining work through other agency and because of the adjustment of extra expenses incurred in getting the said job completed through other agency, the plaintiff cannot claim any security money and other dues in terms of the contract. It is further alleged that it is wrong to say that defendant never assured the plaintiff for payment of the bill with regard to Vichitray Contract if he takes up the construction work at Lalamtia. On the other and, a general tender was invited for the construction of N.H.S. quarters at Lalmatia and the rate quoted by the plaintiff was found to be the lowest, hence plaintiff was given contract vide agreement Nos. 5 and 6 of 1982 at Lalmatia. It is further alleged that plaintiffs were given six running account bills of a sum of Rs. 8, 14,440.12 paise towards the agreement No. 6. The plaintiffs constructed the N.H.S. quarters so poorly that many of them collapsed during the monsoon. The contract at Lalmatia was given to the defendant No. 2 M/s. Santu Das and Co. and the defendant provided all sorts of possible held like supply of materials and also speedy payment of running account bills, but inspite of the said help, the plaintiff failed to carry on contract work up to the satisfaction of the defendant No. 1. Since plaintiff has failed to carry on the contract work up to the satisfaction of the defendant No. 1 and failed to fulfill the contract of the agreement Nos. 5 and 6 of 1982, hence defendant No. 1 is entitled to recover from the plaintiff the extra cost which has incurred in completion of the balance work. It is further alleged that defendants are not a party to the agreement between State Bank of India and the plaintiffs and there was no undertaking on behalf of these defendants that advance loan incurred by the plaintiffs shall be paid by the defendants, hence defendants are not necessary party in the certificate proceeding and defendants never played any fraud or misrepresentation in the matter of withdrawal of arbitration award proceeding.

5. On the pleadings of the parties, following issues were framed.

1. Is the suit as framed maintainable ?

2. Have the plaintiffs got valid cause of action for the suit?

3. Is the suit barred by law of limitation?

4. Is the suit bad for misjoinder of parties?

5. Is the suit bad for misjoinder of the causes of action?

6. Are the plaintiffs exempted from the payment of the Court fee?

7. Can the State Bank of India, Deoghar be restrained from proceeding with the certificate proceeding instituted against the plaintiff ?

8. Have the plaintiffs completed the construction work under agreement Nos. 4 and 7 of Chitra Colliery?

9. Have the plaintiffs completed the construction work under agreement Nos. 5 and 6 of Lalmatia Colliery?

10. Are the plaintiffs entitled to a decree for the award money?

11. Whether the plaintiffs are entitled to get a decree; if so, to what extent?

12. To what relief or reliefs, if any, the plaintiffs are entitled?

6. In the suit as many as 12 issues were framed. Issue No. 8 was decided partly in favour of the plaintiffs and partly in favour of the defendants. Issue No. 9 was also decided partly in favour of the plaintiffs and partly in favour of the defendants. Issue No. 7 was decided against the plaintiffs and in favour of the Bank-defendant. Issue No. 10 was decided in favour of the plaintiffs. Issue nO. 1 was decided in favour of the plaintiffs and issue No. 6 was decided partly in favour of the plaintiffs and partly in favour of the defendants. Issues Nos. 4 and 5 were decided in favour of the plaintiffs. Issue No. 2 was decided in favour of the plaintiffs. Issue No. 9 was decided partly in favour of the plaintiffs and partly in favour of the defendants and issue No. 12 was decided in favour of the plaintiffs.

7. On the basis of claims of the parties, following issues are necessary to be framed for their determination in these appeals.

(1) Have the plaintiffs completed the construction work under agreement Nos 4 and 7 of Chitra Colliery?

(2) Have the plaintiffs completed the construction work under agreement Nos. 5 and 6 of Lalmatiya Colliery?

8. Both the issues are connected with each other and, therefore, they are taken up together for decision in the appeal.

9. Both the appeal Nos. F.A. 328/ 89(P) and 442/89(P) have arisen out of one and common judgment and decree passed in Money Suit. No. 40/87 adjudicating claim in respect of the contract Nos. 4 and 7 of 1978 and 5 and 6 of 1978 field by the respective appellants (plaintiffs) and appellants (defendants).

10. It is admitted from the materials on record, as per contract Nos. 5 and 6 of 1978 that only 20 units of buildings could be constructed by the appellants (plaintiffs) out of 32 within the stipulated period assigned in the agreement and considering Ext. 5 (petition) dated 30.4.1982 seeking extension of time till 30.12.1982), the Court below has concluded that there was no further material on record evidencing continuation and completion of work in the said enhanced period by the appellants (plaintiffs). Moreover, the Court below has also come to a conclusion and held that Ext. 3, the alleged last measurement book (M.B), is not acceptable and has rightly refuted the same for want of signature of any authority as well as of the respondents (defendants) declining to grant of relief in respect of any enhanced payment for contract Nos 5 and 6 of 1978. Further finding, denying claim for the same contract in favour of appellant (plaintiff No. 2) on account of non-registration of the firm with the Registrar of the Firm, is found to be based on legal aspect. The registration of a partnership firm before the Registrar of Firm is conditions precedent for filing a suit by a partnership firm or by any of its partner on behalf of the firms under Section 69(2) of the Indian Partnership Act. As such, I find no illegality in deciding this issue by the Court below denying claim of plaintiff No. 2 (in M.S. No. 40/87) with respect to contract Nos. 5 and 6 of 1978 as barred under Section 30, Rule 2 read with Section 69(2) of the Indian Partnership Act, apart from evidences oral and documentary, which have been discussed in detail by the Court below.

11. So far as the relief granted in respect to contract Nos. 4 and 7 of 1978 is concerned, it is admitted position that on account of non-completion of construction, as per agreement, there was an arbitration proceeding by way of title suit No. 83/79 between inter se applicant (plaintiff No. 1) and appellants (defendants). It is also admitted fact that pending arbitration proceeding, 80 units of N.H.S. quarters and offices could not be constructed completely and the said title suit was withdrawn also by the appellant (plaintiff No. 1) on 28.1.1983 before the award was made rule of the Court.

12. In this context, as it emerges from the materials on record, that while withdrawing the suit, neither the permission to reserve the right to sue afresh was sought for by the appellants (plaintiffs) nor such permission was granted by the Court. Further admitted fact is that the suit was withdrawn before the award was made a rule of Court. The record further reveals that the arbitration proceeding was not for enhancement of the rate simplicitor rather it was closed with the claim for non-paid amount of running bills as well as against the non-supply of materials also. Since the right, if any, created by any such award, which could not be made rule of Court, the same cannot be confirmed under law without taking further step, for which the appellant (plaintiff No. 1) was required under law to have sought permission while moving his application under Order XXIII, Rule 1, which was made prior to making the award absolute and a rule of the Court. Having not sought any such permission, Order XXIII, Rule 4 puts a clog in the way of appellant (plaintiff No. 1) against re-agitating the matter and putting his claim fresh by way of money suit 40/87, which ought not to have been ignored and over-looked by the Court below and the Court below thus erred while decreeing the claim in favour of the appellant (plaintiff No. 1) with respect to contract Nos. 4 and 7 of 1978.

13. Appellants (plaintiffs) have also challenged the findings of the learned Court below on issue No. 7 declining to injunct SBI from proceeding with the certificate case against the appellants (plaintiffs). The Court below dealing with this issue, has discussed in detail the relevant exhibits on record and has come to a conclusion that the defendants (respondents) are not liable to pay back dues with regard to the work not completed by the appellants (plaintiffs) Ext. 2 only relates with the mode of payment, which has to be made through payments, as per the work done and completed by the plaintiffs (appellants). It is well settled that the recovery of amount advanced to any borrower comes under the domain of Public Demand Recovery Act, and therefore, the banking institution, dealing with the public money, cannot be injuncted from realizing the same through the process of law by any order in suit out of the dispute of inter se parties to an agreement only on the ground that the mode of payment to one party on behalf of other was entered into an agreement with the bank also. The bank, under such a situation, cannot be debarred from realizing such amount, which is only on account of any dispute of inter se parties to the contract. As such, I find no illegality in the judgment of the learned Court below, so far as the finding on issue No. 7 is concerned.

14. Having regard to the discussions made above, the appellants (defendants) succeeds in F.A. No. 442/89/(P), which is allowed and F.A. No. 328/89(P), preferred by the appellants (plaintiffs), is dismissed. The judgment dated 15.5.1989 and decree dated 26.5.1989 passed in money suit No. 40/87 by the learned Subordinate Judge-I, Deoghar is hereby set aside with modification to the extent that appellant (plaintiff No. 1) is also not entitled to any relief as sought for. There will be no order as to costs.


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