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Surjit Singh Atwal Vs. Union of India (Uoi) - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata High Court
Decided On
Case NumberSuit No. 531 of 1951
Judge
Reported inAIR1965Cal191
ActsGovernment of India Act, 1935 - Section 175(3); ;Constitution of India - Article 299; ;Code of Civil Procedure (CPC) , 1908 - Sections 20 and 80
AppellantSurjit Singh Atwal
RespondentUnion of India (Uoi)
Appellant AdvocateMahadeo Hazra and ;Depankar Gupta, Advs.
Respondent AdvocateG.P. Kar and ;R.M. Dutt, Advs.
DispositionSuit dismissed
Cases ReferredAmarnath v. Union of India
Excerpt:
- p.c. mallick, j.1. this is a contractor's suit for recovery of the sum of rs. 50,000/- with lute-rest. there is a prayer for accounts if necessary. it is alleged in the plaint that the contractor was employed by the c. p. w. d., for construction of a hard-runway, taxi tracks and three dispersal roads. as is usual in the case of government contracts there was an invitation to tender pursuant to which the plaintiff submitted a tender. this tender of the plaintiff was not accepted. it is the plaintiffs case that subsequently the plaintiff was urged to take up the contract on terms and conditions contained in two letters passed between the parties in january 1943. copies of these letters are annexed to , the plaint. the formal contract was signed by the parties much later in february, 1944......
Judgment:

P.C. Mallick, J.

1. This is a contractor's suit for recovery of the sum of Rs. 50,000/- with lute-rest. There is a prayer for accounts if necessary. It is alleged in the plaint that the contractor was employed by the C. P. W. D., for construction of a hard-runway, taxi tracks and three dispersal roads. As is usual in the case of Government contracts there was an invitation to tender pursuant to which the plaintiff submitted a tender. This tender of the plaintiff was not accepted. It is the plaintiffs case that subsequently the plaintiff was urged to take up the contract on terms and conditions contained in two letters passed between the parties in January 1943. Copies of these letters are annexed to , the plaint. The formal contract was signed by the parties much later in February, 1944. This formal contractwas introduced in the plaint by an amendment effected in December, 1955. The case made in paragraph 1 of the amended plaint is that the formal contract in the instant case was subject to the terms contained in a contemporaneous letter dated 28/29th February 1944. The original case in the plaint to the effect that the terms were recorded in the two letters dated January, 1943 was however retained. The work was completed in 1945. In the middle of November, 1947 it was agreed that the final bill to be prepared on the basis of rates settled would be payable immediately save and except the sum of Rs. 50,000/- the payment of which would be withheld for a fortnight from the date of the payment of the final bill. In terms of the agreement a final bill was prepared by the Executive Engineer and was paid on November 22, 1947 except Rs. 50,000/- withheld in terms of the agreement. It is the plaintiff's case that on such acceptance of the final bill there was a final and concluded contract between the parties. The money withheld not having been paid as agreed to, the instant suit has been instituted. It is pleaded in paragraph 10 of the plaint that notice under Section 86 of the Civil Procedure Code had been duly served. In paragraph 11 leave is reserved to institute suits in respect to the other claims of the plaintiff. Paragraph 12 of the plaint reads as follows:

'As part of the cause of action as pleaded in paragraph 5 hereof arose within the said jurisdiction the plaintiff has been advised to ask for leave under Clause 12 of the Letters Patent.'

2. The suit was filed on 24th January, 1951. The Union of India on being served with the summons, made an application under Section 34 of the Indian Arbitration Act for stay of the suit. The stay was granted but subsequently on August 23, 1954 the stay order was vacated and the suit was directed to proceed. Thereafter the defendant filed its written statement. It is contended in the written statement that the terms and conditions of the contract will appear in the formal agreement; bearing No. AVT 11/196 of 1943-44. This formal contract was not subject to the conditions contained in the letter dated 28/29th February, 1944. It is further pleaded that from time to time during the continuance of the work payments have been made to the plaintiff on running bills. The total payment alleged to have been made to the plaintiff from time to time on the said running bills came up to Rs. 25,45,298/~. The Government's case is that the payments made to the contractor were all 'on account bills'. When final accounts were prepared it was found that the contractor has been overpaid to the extent of Rs. 2,61,054/-. Further, the contractor was also found liable to pay a sum of Rs. 1,48,109/- as and 'by way of recovery for services rendered and materials supplied. Allegations made in paragraphs 5 and 6 of the plaint have been denied. It is denied that the bill prepared by the Executive Engineer, as pleaded in paragraph 6 was a 'final bill' or that there was a concluded contract or that the sum of Rs. 50,000/- was withheld in terms of the said contract. The plaintiff's claim is disputed in toto. 'The validity of the notice under Section 80 of the Code of Civil Procedure has been challenged. Itis contended that this Court has no jurisdiction to,entertain this suit.

3. I have stated, that after the stay order, was vacated in 1954 and the suit was directed to proceed, the plaint was amended. The formal contract dated Febraury 1944 was introduced in the amended plaint and it was pleaded that the works were done thereunder. A further paragraph, was added being paragraph 8(a) to make an alternate case under Section 70 of the Indian Contract Act. In the written statement filed the alternate case, has also been disputed. During the trial an application was made for amending the written statement to raise a plea that the contract in suit is hit by the provision of Section 175(3) of the Government of India Act. This was not expressly pleaded in the written statement filed. I dismissed the application for amendment on the grounds stated in my order rejecting the application. In my view, the plea can be raised without amendment and the amendment was unnecessary in consequence.

4. Counter-claim is unknown in this country and the defendant is not entitled to a decree in the plaintiff's suit, for the amount alleged to be due to the defendant on account of overpayment and recoveries. I am told that the Government is seeking to recover the same by invoking the arbitration clause. In fact proceeding is pending in the Delhi Court of and relating to the same. It is not proper for me to say anything in this proceeding which may affect the rights of the parties in the said proceedings. This judgment should not be construed to affect the rights of the parties one, way or the other of and relating to the Government's claim against the contractor indicated in the written statement and alleged to be pending in other proceedings and/or in other Courts. In my judgment that is the proper approach. I will only confine myself to the factual determination of the plaintiff's claim as made in the suit without determining the defendant's counter-claim, if any. Mr. Kar appearing for the defendant very properly did, not raise any issue relating to the defendant's counterclaim indicated in the written statement. Factually, therefore, the dispute in suit comes within a very narrow compass.

5. Before, however, I determine the dispute of fact, I think it necessary to consider the questions of law raised, which appear to be substantial. The first question of law raised is the question of jurisdiction. The subject matter of the contract out of which the claim arises is the construction of hard runway, taxi tracks and dispersal road all situate outside the jurisdiction of this Court. It is pleaded in paragraphs 5 and 6 of the plaint that the rates at which the plaintiff would be paid, were settled in a conference at Calcutta within the jurisdiction of this Court. A final bill was agreed to be prepared and was prepared by the Executive Engineer at Calcutta and the amount of the bill so prepared would be paid forthwith and was partly paid in Calcutta save a sum of Rs. 50,000/- the payments of which was to be withheld for a fortnight from the date of payment of the bill. The jurisdiction of this Court is invoked on the facts pleaded in paragraphs 5 and 6 of the plaint and no other.

6. The contention of Mr. Kar learned counsel appearing for the defendant is that the contract is an illegal contract not being in compliance with the provisions of Section 175(3) of the Government of India Act. No claim can be founded on such a contract. If the contract goes, then there are no other facts that give jurisdiction to this. Court to entertain this suit. The suit, therefore, fails on the point of jurisdiction. The third point of law raised is that the case made is different from the case made in the notice served under Section 80 of the Code of Civil Procedure and as such the instant suit is liable to be dismissed on that ground also.

7. It is strenuously contended by Mr. Kar that the entire cause of action on which this suit is founded is the contract pleaded in paragraphs 5 and 6 of the plaint. The reference to the contract evidenced by the January letters and also the formal contract of 1944 pleaded in the plaint are historical facts and are merely introductory. They are not any part of the cause of action in suit. The claim in suit is not in terms either of the contract evidenced by the two letters of January or of the formal contract No. AVII/96 but in terms of the contract arrived at in November, 1947 and pleaded in paragraphs 5 and 6 of the plaint. For convenience this November contract may be referred to as the new contract. The most important term of the new contract is that the rates at which the plaintiff would be paid far all the works done were agreed, settled and confirmed by the parties. The claim made in suit pursuant to the new agreement is therefore not on the rates provided for in the schedule to the formal contract but new rates agreed to in November, 1947. It is true that the works were undertaken to be done under the formal contract which provided rates at which the contractor was to be paid. But on the pleadings the claim made is on an entirely different basis i. e. on the basis of rates agreed to by the parties in November, 1947, It is de hers the formal contract and not in terms, of the formal contract. There is, therefore, in law a substitution of a new contract and the for-mal contract for determining the amount to be paid to the contractor for works done and materials supplied was given the go-by. Reference to the formal contract in paragraph 2 of the plaint must therefore be construed as introductory facts and not constituting any part of the cause of action in suit. The cause of action on which the claim in suit is made is the new contract pleaded in paragraphs 5 and 6 of the plaint. Admittedly this new contract is not in conformity with Section 175(3) of the Government of India Act. The suit must therefore fail on this ground.

8. The plaintiff anticipated this difficulty,and consequently sought to make an alternativecase on the basis of quantum merit. At thetrial the alternate case made in paragraph 8 (a).was given up and I need not further consider it.The point to be noted is that such an alternatecase was made. It would not have been made ifthe validity of the new contract was not in serious doubt.

9. Mr. Hazra, learned counsel appearing for the plaintiff, submitted that there has been nosubstitution or novation of the formal contract on the basis of which the work was entrusted to the plaintiff. Not all the rates as provided in the schedule to the formal contract were altered or modified. Only rates in respect to some items of work were modified and this change was made because there was a change of specification. The, formal contract itself provided that should there be a change of specification the rates would have to be altered by the Engineer-in-Charge. What happened is that there was change in specification. At the time when the contract was entered into, the parties intended that the works under the contract would be done with the 'stone at sight' and there was a provision accordingly. In fact, substantial part of the work was done not 'with stone at sight' but with stone obtained by blasting a hill. This fact necessitated change of specification. The rates for hill blasting and the costs at which the stone was obtained thereby not having been provided for in the contract new rates were agreed in November, 1947 by the parties in a conference. This is the new contract. Clauses 12 and 12 (a) of the terms and conditions in the original contract provides for such determination of rates. The rates agreed to in the new contract cannot therefore be said to be de hors the formal contract but in terms thereof. There has been no novation or modification of the formal contract. The Executive Engineer or the Superintending Engineer under the formal contract was empowered to determine the rates in such contingencies and such determination effected by the said Officers and accepted by the plaintiff is not required to comply with the formalities laid down in Article 175 (3) of the Government of India Act, 1935. Mr. Hazra drew my attention to paragraph 12 of the plaint. It is expressly stated in paragraph 12 that the agreement pleaded in paragraph 5 of the plaint is only a part of the cause of action and not the whole. Had it been the whole of the cause of action as Mr. Kar's argument suggests, leave would not have been asked for in the plaint. According to Mr. Hazra the claim in suit is on the formal contract and the claim of the contract was finally, determined by the new contract not de hors but in terms of the original contract. Even if the plaintiff fails to prove the new contract on any ground the plaintiff is nevertheless entitled to a decree for, enquiry and accounts as to how much was still due and payable to the plaintiff on account of works done under the formal contract. The suit is not therefore liable to be dismissed on the ground that the contract pleaded in paragraphs 5 and 6 of the plaint is not in compliance with the requirements of Section 175(3) of the Government of India Act.

10. The answer to the question raised depends on the decision as to whether the new contract is in accordance with the formal contract of de hors the formal contract. If it is in accordance with the formal contract then in my judgment the contract pleaded in paragraphs 5 and 6 of the plaint need not comply with the provisions of Section 175(3) of the Government of India Act. If not, i. e., if it amounts to a substitution or it it is a modification of the formal contract it would not be binding on the Government unless it complies with the requirements of Section 175(3) ofthe Government of India Act. I have therefore to, determine which of the two rival contentions is to be accepted.

11. In the new contract according to the pleadings the rates at which the plaintiff would be paid for all works done by him were agreed, settled and confirmed by the parties. This is also the evidence of the plaintiff in chief. According to him all rates were settled in the conference. The pleading and the evidence of the plaintiff himself seem to support the contention of Mr. Kar that, rates were agreed to and settled not in terms of Clause 12 or 12A of the formal contract but de hors that contract. Clause 12 provides that the Engineer-in-charge, in case of alteration of specification and design, will determine the rates if no rate is specified in respect to additional or substituted work and in case, of dispute the rate is to be decided by the Superintending Engineer. This determination of rates by the Engineer-in-Charge or the Superintending Engineer, as the case may be shall be final. So also if such, additional or substituted work involves employment of additional materials the Engineer-in-Charge may revise the rates and in case of disputes the rate is to be determined by the Superintending Engineer, whose decision shall be final. Can it be said that the rates agreed to by the parties in the contract pleaded in paragraphs 5 and 6 of the plaint were in terms of Clause 12 or 12A of the contract? It does not appear to be so. Firstly, it does not appear that the determination of the rate was limited to 'additional or substituted work'. It is pleaded that the rates for all works were determined including rates for additional or substituted- work. Pleading therefore is against the contention of Mr. Hazra, Mr. Kar has submitted that the parties should be bound by their pleadings and the plaintiff now will not be heard to say that the rates have been, determined not in respect to all items of works but only in respect to some items. Mr. Hazra submitted that the wording of the agreement in paragraph 5 of the agreement may not be accurate and the evidence of the plaintiff is clearly erroneous. The contract including the schedule as also the bill CCII Consolidated on which the instant claim is founded--both of these documents are in evidence. Comparing the rates in the two documents it would be found that all rates have not been altered. Rates in respect to 14 items of work have not been altered. Rates in respect to 10 items of work only have been altered. All the isles in the said 10 items except one are much in excess of what is provided in the schedule to the contract. There is one exception where the rate is lower than the rate in the schedule. This item is item 2 (b) of the schedule in the contract. It is item (7) in CCII Consolidated. In the schedule the rate is Rs. 22/- whereas in CCII Consolidated the rate is Rs. 21/-. As stated before, in respect to other items the rates are substantially in excess of what is provided in the Schedule to the formal contract. A comparison of the rates in the Schedule and in CC II Consolidated does not rapport Mr. Hazra's contention. Mr. Hazra's contention may hold water in respect to nine items of work in which, the works may have been done not 'with stone at site' but with stone obtained byrock blasting. It may well be argued that there was a change in the specification and in consequence new rates were determined in terms of Clause 12 of the contract. The explanation, however, breaks down in respect to the remaining: item which involved no rock-blasting. It may be that the parties had the schedule of rates before them for determining the rates. It may also be that some of the rates provided in the schedule were accepted by the parties in the conference held in November, 1947. In the conference new rates were arrived at in respect to those items involving stone, on the ground suggested by Mr. Hazra. But; Mr. Hazra cannot explain why there should be a reduced rate for one item of works which involves no rock blasting and in which there was no change of work. It cannot be contended therefore that in respect to this item there was any change of specification. It follows that the determination of the new rates is not either under Clause 12 or I2(a) of the formal contract. It is next to be noted that the rates settled in the conference were not alleged to be determined by the Superintending Engineer. The settlement was effected in a conference in which, on the Government Side, were the Superintending Engineer, the Deputy Accountant General who was authorised to finalise the rates and the Executive Engineer. It cannot, therefore, be said that the determination of the rates has been made by the Superintending Engineer only, who is the authority to determine rates in terms of Clauses 12 and 12 (a), on dispute being raised about the rates. Again, if the determination is made by the Superintending Engineer, in terms of Clauses 12 and 12 (a), no question of the plaintiff's acceptance of such rates arises; the plaintiff is bound to accept the rates under the said clauses. The very fact that the rates were alleged to have been settled by agreement as alleged rules out the case that such determination of rates was made in terms of Clauses 12 and 12 (a) of the terms and conditions in the formal contract.

12. The Superintending Engineer, Mr. Sinha, gave evidence in Court. According to him, he only determined the rate for rock-blasting. He had nothing to do with the determination of rates in respect to any other item of works. The official note left by him supports this evidence of the Superintending Engineer Sinha. I find no reason to reject this evidence. It follows that the determination of the other rates must have been made by either of the remaining two, presumably by the Executive Engineer. Having regard to the fact that disputes have been raised in respect to all the rates, the only authority competent to decide the rates was the Superintending Engineer. The determination of the rates by the Executive Engineer therefore cannot be held to be in compliance with Clauses 12 and 12 (a) of the conditions of the formal contract, I am, therefore, unable to hold that the rates agreed to by the parties at the conference held in November, 1947 were in terms of Clauses 12 and 12 (a) of the conditions of the contract of February, 1944. The contract pleaded in paragraphs 5 and 6 of the plaint must therefore, be held to be a substitution of the formal contract of 1944 by the contract pleaded in paragraphs 5 and 6 of the plaint. The new contract admittedly is not in compliance with the provisions of Section 175(3) of the Government of India Act, 1935 and must be held to be not binding on the Union Government.

13. The next point for consideration is the question of jurisdiction. It is contended by Mr. Kar that the suit is founded on the contract pleaded in paragraphs 5 and 6 of the plaint. The jurisdiction of the court is invoked, on the ground that the contract was entered into at Calcutta, within the jurisdiction of this Court, If the contract is negatived, for whatever reason, then the suit must fail, on the ground of jurisdiction as well. Mr. Hazra submitted that the suit is for works done in terms of the contract dated February, 1944. This contract is pleaded in paragraph 2 of the plaint. It does not matter that in the original plaint no reference was made to the contract of February, 1944. The effect of the amendment is 'that the claim in suit is for works done under the contract of February, 1944, the claim being settled in November, 1947, in terms of the agreement arrived at in the conference. In this submission Mr. Hazra is right. It is clear that the works were entrusted to the plaintiff and the plaintiff undertook to do the works in terms of the contract of February, 1944. It is obvious that with a view to avoid the arbitration clause in the original contract, no reference was made of the February, 1944 contract in the original plaint and it is only when the defendant obtained a stay of the suit that the Court was apprised of the said contract of February, 1944. When the stay was vacated, the plaint was amended and the contract of 1944 was brought within the purview of the suit. This conduct of the plaintiff in suppressing the formal contract initially may not receive the approval of the Court. But the plaint is amended so as to bring the claim for works done under the formal contract of February, 1944. On the amended plaint Mr. Hazra is entitled to contend that the claim is for works done under the contract of February 1944. I am prepared to stretch a point in favour of the plaintiff and hold that the entire cause of action on which the claim is founded is not the agreement pleaded in paragraphs 5 and 6 but also on the averments made in paragraphs 2, 3 and 4 of the plaint. I am prepared to accept Mr. Hazra's contention that these averments are not merely introductory facts but facts constituting a part of the cause of action as well. In paragraph 12 of the plaint it is not stated that the agreement pleaded in paragraphs 5 and 6 of the plaint constitutes the whole of the cause of action. It is expressly stated that the said agreement constitutes a part of the cause of action. On that basis, leave under Clause 12 of the Letters Patent has been obtained for filing this suit in this Court. Had the whole cause of action been alleged to have arisen in Calcutta by reason of the contract having been entered into at Calcutta, no leave under Clause 12 would have been necessary. Mr. Hazra further submitted that he has claimed in the plaint not merely a decree for Rs. 50,000/-but alternately for accounts and enquiry. If the claim was on the basis of the new contract, the claim for enquiry and accounts would havebeen unnecessary. It is to be noted that in the amended claim there was the alternative case made under Section 70 of the Contract Act. In the alternative case under Section 70 the proper relief is for the agreed amount or enquiry and account. Be that as it may, I am prepared Jo accept the contention of Mr. Hazra that the suit is for the recovery of the dues of the plaintiff for works done under the February 1944 contract and that the amount to which the plaintiff was entitled was settled by an agreement arrived at in November 1947 in Calcutta. The settlement effected in November 1947 may not be binding on the Union Government, but the liability of the Union Government to pay is still there. The Union Government remains liable to pay on the basis of the original contract of February 1944 and if the amount cannot be held to have been settled in November 1947, then there must be a decree for enquiry and accounts. The plaintiff does not lose his right to payment on that basis on any account The abandonment of the alternative case under Section 70 does not affect this right of the plaintiff, inasmuch as the claim is made not under the void contract of November 1947 but under the valid contract of February 1944. This contention of Mr. Hazra is sound and must he accepted. The right of the plaintiff to claim payment for works done remains unaffected. But the question to be determined is not whether the plaintiff has any claim but whether this Court has jurisdiction to determine the plaintiff's claim, if any. Apart from the new contract pleaded in paragraphs 5 and 6 of the plaint no other fact constituting a part of the cause of action has been pleaded to have been arrived at within the jurisdiction of this Court. There is no pleading and no evidence that the agreement was entered into at Calcutta. The works under the contract were executed outside the jurisdiction of this Court. Only the November 1947 contract is alleged to have been concluded in Calcutta within the jurisdiction of this Court, and on this fact the jurisdiction of this Court is invoked. If this contract is held to be invalid and not binding on the Union of India, then it cannot be relied on as constituting a part of the cause of action. I am, therefore, bound to hold that no part of the cause of action in this suit arose within the jurisdiction of this Court and this Court is not competent to entertain this suit.

14. The next point of law raised by Mr. Kar to non-suit the plaintiff is that the notice under Section 80 of the Code of Civil Procedure is defective. The notice was sent by the plaintiff's solicitor and is hereunder set out:

20th Novr. 1950. 'The Chief Secretary,The Ministry of Works, Mine and Power, theUnion of India,Secretariat Building, New Delhi.Dear Sir,

Notice under Section 80 of the Code of Civil Procedure on behalf of Surjit Singh Atwal, residing at Atwalnagar, Asansol, in the district of Burdwan, a contractor:

1. The cause of action and relief claimed by our client will appear from the facts hereunder:

2. Our client was acting as a contractor for thepurpose of constructing the N. S. hard runway, taxi track, dispersal roads and hard standing at Dalbhumgarh Airfield Job No. 180,

3. In addition to the terms quoted in the agreement AVII/96 of 1944-45, our client had to do various other substituted and supplementary items. The rates for which items were settled by the Engineer-in-Charge of the works of the C.P.W.D. Department of the Government of India and he made a bill on the basis of the rates offered by him on behalf of the Government of India and such bill was subsequently accepted by our client the final bill as drawn by the Engineer-in-Charge on behalf of the Government of India was partly paid on 22-11-47 retaining Rs. 50,000/- which was agreed to be paid as soon as other claims of our client in respect of the said job are disposed of by the Department. The said claims have already been disposed of by the Department arbitrarily. Thereafter our client has repeatedly asked for the said money deposited as aforesaid. But so far the same has not been paid. In the circumstances our client cannot wait indefinitely. Our client's claims on the basis of the bill prepared by the Government of India and accepted by our client. The claim of our client amounts to Rs. 50,000/-plus interest due on the same and our client claims that the said money is being held by the Government for and on behalf of our client in trust.

Please note that if the said claim of our client is not paid, our client shall have no other alternative but to seek relief from the Court of law and hold the Government of India liable for all costs and consequences.

If you like to go to arbitration, please let us know the same within a fortnight from the date hereof. Yours faithfully, K. K. Dutt and Co.'

The receipt of the letter by the defendant is not disputed. The contention of Mr. Kar is that the case made in the notice is, different from the case made in the plaint. In the notice no reference is made to the contract pleaded in paragraph. 5 of the plaint. According to the notice, the rates of work were settled' by the Engineer-in-Charge of works and accepted by the plaintiff. No reference is made to the Superintending Engineer and there is not the slightest indication in the notice that the Superintending Engineer or the Deputy Accountant General had any hand in the settlement of the rates or that there was any conference held in November 1947 in which the rates were settled. The next point to be noticed is that in the notice the case made is , that Rs. 50,000/- 'was agreed, to be paid as soon as the other claims of the plaintiff in respect of the said job are disposed of by the department.' The claim is made on this basis that the said claims have been disposed of, though arbitrarily, and the payment of Rs. 50,000/- withheld became thereupon due and payable. The case made in paragraph 5 of the plaint is that the sum was unconditionally payable after a fortnight from the date of payment of the final bill.

15. Notice required to be served under Section 80 must state 'the cause of action, the name, description and the place of residence of the plaintiff and the relief which he claims.' The notice in the instant case was served by the plaintiffs attorney on the Chief Secretary of the Central Government. The validity of the notice is challenged, on the ground, first, that the cause of action in the notice is different from the cause of action in suit and second, the relief claimed in the suit for accounts and enquiry is not indicated in the notice. It is true that the November 1947 Contract has not been referred to in the notice, though it is alleged in the notice that the final bill 'was partly paid on 22-11-47 retaining Rs. 50,000/- which was agreed to be paid as soon as the other claims of our client in respect of the job are disposed of by the department.' Mr. Kar wants me to note that the date of the alleged agreement is not given nor have the terms of the agreement as pleaded in paragraph 5 of the plaint been set out. No reference to the agreement at all has been made in the notice. It is to be noted further that whereas in the agreement pleaded in paragraph 5 of the plaint the sum of Rs. 50,000/-withheld from payment was payable within a fortnight from the date of payment of the rest of the bill, i.e., 22-11-47, in the notice the amount was payable only after the disposal of the other claims of the plaintiff. Payment was, therefore, conditional. It is, therefore, contended that the cause of action as stated in the notice is different from the cause of action pleaded in the plaint. On the top of that, relief for accounts has not been set out in the notice. Hence, the notice is not in compliance with Section 80 of the Code. The plaintiff must, therefore, be non-suited on this ground.

16. Previously there was a difference of judicial opinion on the point as to whether the notice under Section 80 was mandatory in all cases. The Bombay High Court took the view that it being a rule of procedure, the Court should relax its rigidity and need not non-suit the plaintiff in every case if the provisions of Section 80 are not complied with. In the interest of justice, the Court can proceed with the trial of the suit even in case of non-compliance, if insistence on notice results in hardship. For instance, if the suit is for injunction and the mischief complained of would be done if the plaintiff is to serve notice and wait for two months before instituting the suit, it was held that in the interest of justice, such cases should not be dismissed, on the ground that the suit was premature, having been filed before the expiry of notice or even without notice. In the case of Bhagchand v. Secy. of State, reported in the Judicial Committee negatived this view with the following observation at p. 357 (of Ind App): (at 184 of AIR):

'Section 80 is express, explicit and mandatory and it admits of no implication and exception. A suit in which (inter alia) an injunction is prayed is still 'a suit' within the words of the section and to read any qualification into it is an encroachment on the function of legislation.'

In the case of Dhian Singh Sobha Singh v. Union of India, reported in : [1958]1SCR781 . Bhagwati. J. made the following observation:

'The Privy Council no doubt laid down in Bhagchand v. Secretary of State that the terms of this section must be strictly complied with. That however does not mean that the terms of the notice should be scrutinised in a pedantic manner or in a manner completely divorced from common sense.'

This observation was quoted with approval by Das, C. J. in the case of State of Madras v. C. P. Agencies, reported in : AIR1960SC1309 . At 1310 the learned Chief Justice makes the following observation :

'The object of Section 80 Is manifestly to give the Government or the Public Officer sufficient notice of the case which is proposed to be brought against it or him so that it or he may consider the position and decide for itself or himself whether the claim of the plaintiff should be accepted or resisted. In order to give the Government or Public Officer to arrive at a decision it is necessary that it or he should be informed of the nature of the suit proposed to be filed against it or him and the facts on which the claim is founded and the precise relief asked for.'

The learned Chief Justice opined that the notice should not be scrutinised in a pedantic manner. The view expressed in the above two cases was also approved by Ayyangar, J. in the case of Amarnath v. Union of India, reported in : [1963]1SCR657 the learned Judge makes the following observation:

'It is no doubt true that a notice under Section 80 is not a pleading and need not be a copy of the plaint and that no particular or technical form is prescribed for such a notice, still having regard to the object for which Section 80 has been enacted, the details which it contains should be sufficient to inform the party on whom it is served of the nature and basis of the claim and the relief sought. Admitting that a notice has to be interpreted not pedantically but in the light of common sense without one being hypercritical about the language, still the question remains to be considered is whether in the notice there is substantial information conveyed on the basis of which the recipient of the notice could consider the claim of the would-be plaintiff and avert the suit.'

In the instant case, the nature of the suit intended to be filed is sufficiently indicated in the notice. The suit was for works done under the contract. Though the agreement pleaded in paragraph 5 of the plaint has not been clearly indicated in the; notice, nevertheless it is stated that an agreement was arrived at between the parties as to the rates of work. The right to payment of Rs. 50,000/-withheld, which is the most important fact constituting the cause of action as pleaded in the plaint, is somewhat different from what is stated in the notice. In the plaint, money withheld is made payable unconditionally a fortnight after the payment of the main bill. In the notice the money was payable, first, conditionally and, second, no specific time was fixed for payment. The condition was stated to be after the disposal of the other claims of the plaintiff. While fully recognising the force of Mr. Kar's argument I am not inclined, though not without some hesitation, tohold that these discrepancies are fatal. In my judgment, the nature of the suit and the facts on which the claim in suit is based are sufficiently indicated in the notice. The relief 'for accounts and enquiry if necessary' which is not stated in the notice also, in my judgment, is not fatal. At its worst, the Court should ignore this relief claimed in the suit, -which was not stated in the notice. The main relief, that is, the claim for Rs. 50,000/-with interest, has been indicated in the notice and the Court is not debarred from hearing and determining this claim, on the ground that the relief for enquiry and account claimed in the suit is not to be found in the notice. At the highest, the defendant may claim that if the plaintiff fails in proving his claim for Rs. 50,000/-, he will be debarred from claiming a decree for enquiry and accounts. I must not be understood to hold that in a suit for the recovery of a specific sum of money for works done the Court is debarred from granting a decree for accounts if the Court is satisfied that the plaintiff has proved his claim for payment, but has failed to prove the exact amount of his claim. I will therefore stretch a point in favour of the plaintiff and hold in his favour that the suit is not liable to be dismissed, on the ground that the notice under Section 80 is not a proper notice.

17. As indicated before, the dispute of fact which should be determined in this suit is confined to a narrow compass. The dispute is : Was there a conference in the middle of November, 1947, in which the parties agreed to the terms set out in paragraph 5 of the plaint? On the evidence on record, it must be held that in the middle o November 1947 a conference was held in Calcutta as alleged in paragraph 5 of the plaint. The plaintiff stated in the witness-box that such a conference was held, in which the Superintending Engineer, Deputy Accountant General and the Executive Engineer were present, on the Government side. The Superintending Engineer Mr. Sinha stated that there was not one but a number of conferences. Beyond that, he could not remember. The case sought to be proved by Sinha on the point was never put to the plaintiff when he was in the witness box. The evidence of the Deputy Accountant General on the point is not helpful. The evidence of the plaintiff is clear and definite that such a conference was held for settling the dispute as to rates and the amount payable to the plaintiff for works done in the arbitration proceeding the Government admitted the conference in its state of facts. In this state of evidence, it must be held that a conference was held about the middle of November, 1947 for the purpose of settling the rates payable to the contractor. No formal record has been proved recording what transpired in the conference. May be no minutes were kept. It is equally clear from the evidence that subsequent thereto a bill was prepared by the Executive Engineer for works done by the plaintiff on the basis of rates settled. This bill is known as CC II Consolidated and this has been tendered in evidence. Regarding the settlement of rates, Sinha, the Superintending Engineer stated that the only rate determined by him in the rate for stone by hill-blasting. He determined no other rate. Hisnote in the records tends to support this evidence of the Superintending Engineer Sinha. The other rates, in such event, must have been settled by the Executive Engineer. The fact that all the rates were settled in the middle of November, 1947 at the conference, cannot be disputed. It may be that the Superintending Engineer did not settle all the rates. He only settled the rate for hill--blasting. Other rates might have been settled by the Executive Engineer. It may be that the Executive Engineer understood that his determination of the other rates had the approval of the Superintending Engineer and on that basis the Executive Engineer directed the preparation of the contractor's bill for works done under the contract. Two material witnesses Mr. Ramen Roy and Mr. Bhattacharyya, Executive Engineer, who could throw light as to what happened, have not been called by the Government. Ramen Roy is still in service and is holding a very high post. Bhattacharyya, though superannuated, is still alive and is working in a private concern. They could have been called to give evidence and, in my judgment, should have been called. Mr. Hazra is entitled to argue, as he did, that adverse inference should be drawn against the Government case for failure to tender the evidence of these two witnesses, I hold that an agreement was arrived at in which the rates were settled, and on that basis a bill was prepared by the Executive Engineer, The entire bill except the sum of Rs. 50,000/-, which was withheld, was paid to the contractor on November 22, 1947. I am not, however, satisfied that it was agreed that the amount withheld would be payable within a fortnight from November 22, 1947. Notice under Section 80 does not state that the amount withheld was payable after a fortnight: Mr. Hazra referred me to previous letters wherein it was stated that money would be payable after a fortnight. On the evidence, I am not inclined to accept this part of the plaintiffs case. The object of withholding payment was to determine whether the Government had any claim against the contractor and to make payment after the determination of the fact that the Government had no claim against the contractor. The contractor might have been assured that this would be done expeditiously, but I do not believe that the amount withheld was promised to be paid to the contractor unconditionally after a fortnight. If It was to be paid after a fortnight unconditionally, why withhold payment at all? It is not suggested that the Government was not in a position to pay Rs. 50,000/- on the 22nd of November 1947 but would be solvent enough to pay after a fortnight. This part of the contractor's case is therefore unacceptable to me. On the other hand it was reasonable to withhold payment till the claim of the Government against the contractor was determined. That indeed is the reason given for withholding payment in the notice under Section 80 of the Code.

18. It is strenuously argued by Mr. Hazra that the contractor's ledger would show that the Government had no claim against the contractor on any account whatsoever and the contractor's ledger has not been proved. I cannot however overlook the fact that the Government is making a case ofoverpayment and quite a large sum of money is claimed by the Government against the contractor. That claim is not the subject-matter of investigation in this suit. The Government, therefore, may be justified in not introducing this bit of evidence at this stage in these proceedings.

19. This brings me to the disputed question whether the bill prepared and partly paid on November 22, 1947, CC II Consolidated is a final bill or a running bill. According to the plaintiff, it is the final bill. According to the Government, the final bill has been prepared subsequently according to which a large sum of money still remains payable by the contractor. This last bill on the basis of which, the Government is making its claim against the contractor is the subject matter of arbitration. I refrain from expressing any opinion on it for reasons indicated previously. In my judgment, it would not be proper. I will only confine my observation on CC II Consolidated. The nature of the Bill is sought to be made so important in this case, because the parties are apt to think that the determination of the question in favour of either will not only be of great advantage to them in this proceeding but also in the other proceeding relating to the Government's claim against the contractor. The contractor feels that a decision in his favour will demolish the counterclaim of the Government indicated in the written statement and which is the subject-matter of arbitration. The Government feels in the like way that a decision against the contractor will considerably weaken the contractor's defence to the Government's claim. This is the motive of the parties in having a finding in his or its favour in this proceeding. As indicated before, I do not intend to prejudice the case of either party in the other proceeding and my decision on the point must be read in the background of that attitude of mind. Ex-facie CC II Consolidated is on bill form red in colour in which running bills are prepared. The colour of a final bill is yellow. Ex-facie when the bill was prepared the word 'final' was written on the measurement boob on which the original bill is made. The measurement book is admittedly the basic document. Subsequently, when after the preparation of the bill the measurement book was sent to the S.D.O.'s Office, the word 'final' was struck out. The initial of the clerk who struck out the word 'final' does appear in the bill. It does not bear the initial of an officer. Nor does the date on which it was done, appear in the measurement book. Mr. Hazra drew my attention to the rule printed in the measurement book itself to this effect that a clerk is not entitled to make any correction of the measurement book and the date on which the signature or initial of the officer who has the authority to correct a mistake in the measurement book must appear. In Mr. Hazra's submission, the correction without date and not bearing the initial of the officer must be ignored. In the result, in spite of the correction the bill prepared, intended to be final, continued to be so in spite of the words 'final' being struck out by the clerk. Mr. Hazra contended with force, that the work was concluded as far back as 1945 and the settlement was admittedly effected in November 1947 in a conferencein which, the Superintending Engineer was specially deputed to settle finally the claims of the contractor and that the bill ex facie shows that the bill prepared was intended to be final. On these facts I must record a finding that it was a 'final' bill. I have no doubt that the bill prepared was intended to be the final bill by the Executive Engineer who directed the preparation of the bill in the sense, that the amount due and payable to the contractor for works done was finally settled. Apart from the legality of the Act, there cannot be any doubt about the intention of the Executive Engineer that the contractor's claim for works done was finally settled and quantified in the amount indicated in the bill. This is apart from the question as to the power of the Government officer to bind the Government and apart from the question whether the rates agreed to on the basis of which the final bill was prepared was vitiated on the ground of mistake on fraud. I do not feel called upon to express any opinion on this aspect of the matter. I agree with Mr. Hazra that the parties intended to settle the rates finally and on the basis of those rates the bill was prepared which may well be characterised as a 'final bill' in that sense. Whether by reason of mistake or fraud, the rates settled are liable to be reopened, need not be decided by me, and I do not decide the same. Mr. Hazra then submitted that I must hold as a fact that the contractor was not liable to the Government on account of 'recovery' or on any other account on that date. The Government could have proved its claim for recovery by proving entries in the contractor's ledger. The entries would have shown what amount, if any, was still due and payable by the contractor on account of recovery or otherwise. The Government has failed to prove it. It should therefore hold that there being no outstanding claim against the contractor on that date, the bill was 'final' in the fullest sense of the term. If there was no outstanding claim against the contractor, the contractor was entitled to get a refund of Rs. 50,000/- withheld from his bill. As stated before, the argument of Mr. Hazra has force and but for legal impediment indicated before, I might possibly have passed a decree in favour of the contractor for the said amount, making it clear at the same time that the case of mistake or fraud is left open for decision in such other proceeding that the Government may be advised to initiate.

20. It is contended by Mr. Kar that the bill does not contain a 'no claim certificate' which is to be found in a final bill. Hence CC II Consolidated cannot be considered to be a final bill. Mr. Hazra submitted that such a certificate is required to be given in bills for work done under the Railways and not for this kind of work. Absence of a 'no claim certificate' may not disentitle the parties to make a claim. The sense in which I have held the bill to be final would not disentitle any party to make a claim against the other, provided they have a cause of action, which is not being investigated into, in this proceeding. In that viewof the matter it would be a profitless war ofwords to carry on the controversy any further.

For, reasons given above the suit fails and is dismissed. The parties will bear and pay their own costs.


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