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State of Orissa Vs. Ananda Prasad Mandal - Court Judgment

LegalCrystal Citation
SubjectContract
CourtOrissa High Court
Decided On
Case NumberFirst Appeal No. 2 of 1974
Judge
Reported inAIR1985Ori142
ActsContract Act, 1872 - Sections 70
AppellantState of Orissa
RespondentAnanda Prasad Mandal
Appellant AdvocateAdv. General and ;Addl. Standing Counsel
Respondent AdvocateB. Pal, ;N. Prusty and ;A. Mohanty, Advs.
DispositionAppeal dismissed
Excerpt:
.....are not good law]. - sheets, to different places during the period from 21-5-1965 to 21-8-1965. the works executed by the plaintiff were duly accepted by the defendant who enjoyed the benefits thereof. , cuttack, in which it has been clearly stated that in case of urgent works, the executive engineer, p. as well as in ext. as a matter of fact, 7 of the bills of the plaintiff were passed and paid at the d & s rates which clearly indicates that the transportation work was to be carried out by the plaintiff at the d & s rates......bhubaneswar, to the executive engineer, p. h. division, cuttack, it appears that for urgent works, the payment was to be made at the approved d. & s. rates. the same would be the inference on a reference to exts. 24 and 40, in view of the letter in ext. 38 from the superintending engineer to the executive engineer, p.h.d., cuttack, in which it has been clearly stated that in case of urgent works, the executive engineer, p.h.d., may contact the executive engineer, d. & s. division and have the lowest rates recently approved for his division and get the works executed at those rates. the chief engineer, p.h., orissa, in his letter in ext. c. as well as in ext. 40 decided that as the jurisdiction of carriage of the materials of the d & s division was limited to 30 miles, the carriage.....
Judgment:

P.C. Misra, J.

1. The sole defendam in Money Suit No. 340/6 of 1969/73 of the Court of the First Additional Subordinate Judge, Cuttack, is the appellant in this appeal. This is a suit by the plaintiff for recovery of a sum of Rs. 39,713.92 with pendente lite and future interest from the defendant who is the State of Orissa.

2. The plaintiffs case in brief is that the plaintiff is a carriage and transport contractor and his business is to carry materials to different destinations. The plaintiff alleges that at the request of the Executive Engineer, Public Health Division, Cuttack, acting on behalf of the State of Orissa the plaintiff carried various materials, such as cement C.I. & G.I. pipes A.C.C. sheets, to different places during the period from 21-5-1965 to 21-8-1965. The works executed by the plaintiff were duly accepted by the defendant who enjoyed the benefits thereof. The plaintiff submitted bills for a total sum of Rs. 87,659.83 for the said works. From time to time the defendant paid a total sum of Rs. 48,759.92 towards the said bills. The plaintiff's case is that the balance amount out of the said bills had not been paid by the defendant in spite of repeated demands for which the plaintiff served a notice under Section 80, C.P.C. on the defendant who on receipt of the same made a part payment of Rs. 15,000/- anddid not make any further payment thereafter. According to the plaintiffs calculation, a sum of Rs. 33,759.92 has remained outstanding against the defendant for the recovery of which the suit has been filed along with the interest thereof.

3. The defendant denies all the plaint allegations made in the plaint and contends that during the year 1964-65 tenders for transportation of materials were invited and forwarded to the Superintending Engineer for his decision. On scrutiny it was found that certain essential items were not included in the tender. Therefore, the Superintending Engineer, P. R Circle, Bhubaneswar, in his letter No. 9032 Dt. 30-9-1964 rejected the tenders and asked the Cuttack P. H. Division to invite fresh tenders for the work. The Superintending Engineer in the aforesaid letter also ordered that for urgent cases of carriage the lowest rates for the carriage tender decided in respect of Drainage and Sewerage Division should be adopted and the lowest tenderer or any other contractor might to asked to execute the work till the tenders were finalised for the Division. Thereafter the next tender was invited on 16-6-1965 and a decision was taken on 23-8-1965 by the Superintending Engineer in his letter No. 10/274 dt. 23-8-1965. The plaintiff executed the work of transportation of materials during the period from 21-5-1965 to 21-8-1965 on the verbal orders of the officers of the Division as no written order was issued at any level. On 31-5-1965 the plaintiff filed an application praying that he be paid at the rates accepted for the Drainage and Sewerage Division. For the works executed by the contractor, he was paid 7 bills and 12 of his bills were kept pending for payment. In the meanwhile the Superintending Engineer in memo. No. 244 dt. 5-8-1965 issued an order to ban payment to transport contractors and called for detailed informations on the tenders invited from March, 1962 onwards. Accordingly, detailed informations were furnished to the Superintending Engineer, P. H. Circle, Bhubaneswar. The Superintending Engineer referred the matter to the Chief Engineer who in his letters No. 471 dt. 3-12-1965 and No. 628 dt. 24-8-1967 gave decision in the matter. Subsequently, on a reference for clarification, the Chief Engineer in his letter No. 431 dt. 22-5-1968 gave the decision regarding the payment of the bills. Further clarifications on several points were sought for and the latest decision of theSuperintending Engineer was received vide letter No. 217 dt. 22-5-1969. According to the said decision, the contractors were to execute agreements for final disposal of their cases and recoveries were to be made from them from their pending bills. The plaintiff was asked to execute the agreement but he refused to do so on the plea that the matter was sub judice. As per the rates decided by the authority, the claim of the plaintiff for his pending bills comes to Rs. 12,234,45 instead of Rs. 48,759.92 as claimed by him. The defendant has appended a statement of the total recovery made from the contractor and has stated that it is not possible to make any further payment to the plaintiff as the recovery to be made from him is much more than his dues. It has also been stated that since the outstanding bills of the plaintiff are insufficient to meet the recovery, his earnest money deposited in the shape of N.D.C. has also been held up. The defendant has also pleaded that the suit is barred by limitation and is hit by the provisions of Article 299 of the Constitution. The defendant ultimately prays for dismissal of the suit.

4. The learned Subordinate Judge on consideration of the evidence laid before him has come to the conclusion that the decision of the Chief Engineer referred to in the written statement is obviously a deviation from the terms of the contract agreed upon by the parties and that the plaintiff is entitled to be paid at the rates as decided by the Drainage and Sewerage Division as per the letter in Ext. 38. The learned trial Judge has further held that there is no material on record to show that any excess payment has been made to the plaintiff calculated at the Drainage and Sewerage rates and for that reason, the defendant is not entitled to re-open the bills already paid. As regards the maintainability of the suit due to the bar under Article 299 of the Constitution, it has been held that though formal deed of contract was not executed between the parties, the correspondence between them shows that the requisite conditions contemplated under Article 299 of the Constitution have been fulfilled. Besides, the learned Subordinate Judge has held that the plaintiff is entitled to claim compensation for the works done under Section 70 of the Contract Act. Interest at the rate of 6 per cent per annum from the date when the last payment was made till the institution of the suit wasallowed and the suit has accordingly been decreed on contest with costs. Pendente lite and future interest has also been allowed at the rate of 6 per cent per annum.

5. The main question that has been urged in this appeal is as to whether the plaintiff is entitled to the payment of his bills at the Drainage and Sewarage rates. The learned trial Judge has held that the Superintending Engineer asked the Executive Engineer, P. H. Division, Cuttack, vide his letter No. 9032 Dt. 30-9-1964 (Ext. 38) to call for fresh tenders with a specific direction to get the urgent works done at the lowest rates then approved by the Executive Engineer, Drainage and Sewerage Division, till the tenders were finally decided. It is not disputed that the plaintiff executed the works as per the orders of the defendant between 21-5-1965 and 21-8-1965. It has not been alleged by the defendant that the works executed by the plaintiff were not satisfactory or that the Government has not been benefited by the said works. The plaintiff submitted 19 bills in all out of which 7 bills were passed and paid to the plaintiff. The remaining 12 bills, namely, Exts. 10, 12 to 15 and 17 to 23, remained unpaid From the letter dt. 2/3-12-1965 (Ext. D) of the Chief Engineer, Public Health, Orissa. to the Superintending Engineer, P. H. Circle, Bhubaneswar, it appears that the Drainage and Sewerage rates as approved by the Superintending Engineer on 30-9-1964 were to be adopted. From the letter dt. 15-12-1965 (Ext. E) of the Superintending Engineer, P. H. Circle, Bhubaneswar, to the Executive Engineer, P. H. Division, Cuttack, it appears that for urgent works, the payment was to be made at the approved D. & S. rates. The same would be the inference on a reference to Exts. 24 and 40, in view of the letter in Ext. 38 from the Superintending Engineer to the Executive Engineer, P.H.D., Cuttack, in which it has been clearly stated that in case of urgent works, the Executive Engineer, P.H.D., may contact the Executive Engineer, D. & S. Division and have the lowest rates recently approved for his Division and get the works executed at those rates. The Chief Engineer, P.H., Orissa, in his letter in Ext. C. as well as in Ext. 40 decided that as the jurisdiction of carriage of the materials of the D & S Division was limited to 30 miles, the carriage charges should be paid at the declared rates or scheduled rates whichever is less. As per this decision of theChief Engineer, the other bills (if the plaintiff were not passed at the D & S rates. Obviously the aforesaid decision of the Chief Engineer was a deviation from the terms of the contract agreed upon by the parties for the carnage of the materials. Once the plaintiff agreed to execute the work at a particular rate and got the work done to the satisfaction of the defendant, it is no more open for the defendant or any of its officer to vary the rate to the prejudice of the plaintiff. It is not disputed by the defendant that the plaintiff's bills were not submitted at the D & S rates. As a matter of fact, 7 of the bills of the plaintiff were passed and paid at the D & S rates which clearly indicates that the transportation work was to be carried out by the plaintiff at the D & S rates. After an agreement was arrived at between the parties for execution of a contract work, it is no more open for either of the parties to take a unilateral decision deviating the agreed terms to the prejudice of the other. In that view of the matter, it was beyond the competency of the Chief Engineer to issue orders to pass the bills of the plaintiff at a rate different from the one earlier agreed upon, thus, in consideration of the evidence on record we confirm the finding of the learned Subordinate Judge that the plaintiff is entitled to get the payment of his remaining bills at the D & S rates.

6. Nothing has been placed before this Court to show that any excess payment has been made to the plaintiff calculating his dues at the D & S rates. The claim of the defendant for a set-off is, therefore, without any basis and is liable to be rejected.

7. The learned counsel appearing for the appellant did not press any of the other points taken in the memorandum of appeal. The plaintiff is entitled to reasonable compensation under Section 70 of the Contract Act and the rates approved under Exts. D. E and 24 are reasonable.

8. In the result, we do not find any merit in this appeal and accordingly the same is dismissed. In the facts and circumstances of the case, there will be no order as to costs.

G.B. Patnaik, J.

9. I agree.


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