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Panchanan Ganguly Vs. Kalipado Banerjee - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKolkata
Decided On
Reported inAIR1940Cal494
AppellantPanchanan Ganguly
RespondentKalipado Banerjee
Cases Referred and Conghlan & Mayo v. Wilmot
Excerpt:
- .....entitled to get any sum by way of interest. by consent of parties there was a reference made to a special referee who is an engineer and the scope of the reference is stated in the terms of settlement thus:by consent, referred to mr. subodh kumar ray, b.e., (of associated engineers ltd., of no. 14, clive street, calcutta) as a special referee to inquire and report what amount, if any, is due to the plaintiff for erecting and building dwelling house upon plot no. 355 of the improvement trust scheme 15-b as per contract dated 10th august 1930. in making the said enquiry the said special referee will go into the objections taken and raised by the defendant in his written statement with reference to the said work and to the two bills of the plaintiff. it is admitted by the parties that rs......
Judgment:
ORDER

Sen, J.

1. This is an application by the defendant for discharging a report made by a Special Referee. The plaintiff is a building contractor. The defendant engaged the plaintiff to build a house for him. According to the plaintiff, the building cost Rs. 44,433-6-6 and out of this sum the defendant paid him Rs. 30,500 leaving a balance of Rs. 13,936-6-6. For this sum he made out a bill, being bill No. 429 and presented it to the defendant on 21st June 1931. In addition to this the plaintiff claims to have done plumbing work for the defendant the cost of which amounted to Rs. 2284-9-3. For this sum a bill, being No. 430, was presented to the defendant on the same date. Thereafter the defendant made two several payments of Rs. 2000 each. The plaintiff claimed the sum of Rs. 12,217-15-9 as being the balance due on the abovementioned bills and the sum of Rs. 3820-2-7 as being due for interest at 12 per cent. Various defences were taken, among which the following only need be noticed. The defendant said that the contract was a lump sum contract, and that the plaintiff could not recover more than the amount mentioned in the contract deed, that the work was not properly done, that some of the items of work were done without authority, and that the plaintiff was not entitled to get any sum by way of interest. By consent of parties there was a reference made to a Special Referee who is an Engineer and the scope of the reference is stated in the terms of settlement thus:

By consent, referred to Mr. Subodh Kumar Ray, B.E., (of Associated Engineers Ltd., of No. 14, Clive Street, Calcutta) as a Special Referee to inquire and report what amount, if any, is due to the plaintiff for erecting and building dwelling house upon plot No. 355 of the Improvement Trust Scheme 15-B as per contract dated 10th August 1930. In making the said enquiry the said Special Referee will go into the objections taken and raised by the defendant in his written statement with reference to the said work and to the two bills of the plaintiff. It is admitted by the parties that Rs. 34,500 has already been paid by the defendant to the plaintiff.

2. The learned Special Referee has made a report in which he finds that a sum of Rs. 11,210 is due by the defendant on both the bills Nos. 429 and 430. He refused to make any report regarding the claims for interest on the ground that the question was not within the scope of the reference, Mr. P.C. Ghose, appearing on behalf of the defendant, takes exception to the report on the following two grounds: (1) He says that the question as to what was due for plumbing work was not a matter which is within the scope of the reference and that the Special Referee should not have gone into the question of the dues on bill No. 430. (2) He contends that the basis of the Special Referee's calculation, so far as bill No. 429 is concerned is wrong inasmuch as ha has construed the contract between the parties to be a measure and value contract or a rate contract, whereas as a matter of fact the contract was a lump sum contract.

3. He says frankly that he has nothing to urge against the findings of the Special Referee that the work was properly done or with respect to his findings that there was extra work done which was authorized by his client or to the other findings of fact. All that he contends is that the Special Referee went wrong in his mode of measurement and basis of calculation as ha misdirected himself into holding that the contract was a rate contract and not; a lump sum contract. Mr. Ghose says that the Special Referee should have ascertained first what the measurements were according to the terms of the contract and then taken the actual measurements. If there was any excess found the Special Referee should have ascertained whether the excess was due to miscalculation on the part of the plaintiff at the time of making the contract, or to additional works authorized by the defendant. If it was due to miscalculation he should not allow anything to the plaintiff for the extra work, the contract being a lump sum contract. It was only if he found that the excess in the measurements was due to extra authorized work that he should make the plaintiff liable to pay for it. He points out that the Special Referee has not done this, but has measured the building as it stands, and in deciding whether the defendant should pay for the extra work done, or material supplied, he has not ascertained how much of this extra work or materials was due to miscalculation, and how much to extra authorized work. He states quite clearly and frankly that he has no other objection to the Special Referee's report, and that if it be found that the contract was not a lump sum contract but a rate contract, he can have no objection either to the method of calculation or to the special referee's conclusions as to the amount due from his client with respect to bill No. 429. There is no substance in the first ground, and indeed, it was not seriously pressed. It is admitted that the plaintiff did plumbing work for the defendant and that his plumbing work was authorized. Now the plaintiff has based his claim on two bills, namely bill Nos. 429 and 430. The bill for plumbing is bill No. 430. The terms of settlement are quite clear. The parties agreed that

in making the said enquiries the said Special Referee will go into the objections taken and raised by the defendant in his written statement with reference to the said work and to the two bills of the plaintiff.

4. I hold therefore that the Special Referee was fully empowered to decide what was due on bill No. 430. There is no other objection as regards the findings of the Special Referee on this bill, With respect to the second objection, I am of opinion that it must also fail. The contract consists of two parts, the first part deals with the terms and conditions under which the work was to be done and the second part consists of a document which is headed as an 'estimate' and which the plaintiff contends is only a schedule of rates. Now, in the contract itself there is no indication that it was a lump sum contract. It is nowhere stated in the contract that the building was to be erected at a cost of any definite sum of money or that the plaintiff would be entitled to claim any lump sum as the price of his work on completion of the building. Para. 1 of the contract says that the contractor should erect and build a dwelling house

in accordance with the plans, sections, elevation and specifications signed by both the parties and hereto annexed, subject to such directions as hereinafter mentioned.

5. There is no reference here to the estimate or to any lump sum. The 'directions hereinafter mentioned' relate to various matters and in none of them is there any mention of a lump sum. Clause 6 of the contract is important, and in my opinion it is fatal to the claims of the defendant. It runs as follows:

The owner shall pay to the contracter for the work actually done according to the rates provided for various items in the schedule of rates hereto annexed and in case of items of work for which no provision has been made in the said schedule, the contractor shall be entitled to be paid market rates or the actual cost with an establishment charge of 5 per cent, and a profit of 10 per cent.

6. I have not been able to find any clause in the body of the contract from which it may be inferred that this was a lump sum contract on the contrary the terms of the contract are those to be found in a measure and value or rate contract. Mr. Ghose for the defendant relies entirely on the estimate for his contention that this was a lump sum contract. He points out that the estimate does not give merely the rates to be charged for the different items of work or materials but also mentions the amount of work to be done and materials to be supplied. He points out further that all the items are totaled together and a sum of Rupees 35,384-10-9 is given as the total of the costs of the various items. He contends that this estimate is part of the contract and that if the contract is read together with the estimate the only conclusion that can be drawn is that this was a lump sum contract. As regards Clause 6 of the contract Mr. Ghose argues that it should be read as having reference only to Clause 5 of the contract which provides for additional work which may be required to be done and that it should not be interpreted as having any application to work which is mentioned in the estimate, plans, sections, elevation and specifications. Clause 5 runs as follows:

If the owner shall require any deviation from the said drawings, plans and specifications or any additional or other work to be done other than those described or provided therein, the contractor will carry out the work according to such requirements and do the additional or other work to be done in a substantial and workmanlike manner within such additional time as may be agreed upon at the time, and in the absence of such agreement the contractor shall be entitled to such additional time to complete whole work as may be reasonable.

7. Mr. Ghose argues that the provision in Clause 6 that payment would be for work actually done refers only to extra or additional work, and not to the work already specified in the estimate or plans. The short answer to this is that Clause 6 nowhere states this. It is general in terms and it expressly provides for payment for work mentioned in the schedule of rates or estimate and also for work 'for which no provision has been made in the said schedule.' I see no reason to read into it restrictions which are not there. The mere fact that the estimate attached to the contract mentions not only rates but also the amount of work to be done and materials to be supplied would not in my opinion justify me in restricting the effect of Clause 6 to the possible extra work contemplated in Clause 5. As I have said before no where in the contract is it said that the contract was a lump sum contract or that the contractor would be entitled to be paid only the sum mentioned in the estimate. It is in Clause 6 alone of the contract that any mention is made of how the remuneration of the contractor is to be calculated. Nowhere else in the contract is there any reference either to the amount of remuneration or to the basis of its calculation. Clause 6 must therefore be of general application. It cannot be restricted to Clause 5 only. Although the annexure to the contract on which Mr. Ghose relies is headed 'estimate,' it is described in Clauses 6 and 9 of the contract as a 'schedule of rates' and it is treated as such.

8. In my opinion, the estimate is nothing but a schedule of rates although it also mentions the amount of work to be done and the amount of materials to be supplied. It does not in my opinion indicate that the contractor undertook to build the house on a lump sum bask. The estimate amounts only to this that the contractor intimated to the owner that he would charge at the rates mentioned in the estimate for a building of the dimensions given in the estimate and nothing more. I am supported in this view by the interpretation given to two similar contracts in two cases referred to by counsel on behalf of the contractor. They are Jamieson v. M'Innes (1887) 15 R (Court of Sess.) 17 and Conghlan & Mayo v. Wilmot & Victoria City Corporation (1895) 4 B.C.R. 20. The cases are referred to in foot-notes K & M at p. 365 of the English & Empire Digest Vol. 7. The first case is summarised thus in the digest:

A builder, by offer appended to a schedule, offered to do the mason work of a proposed tenement, 'agreeably to plans thereof now shown and to the extent of this schedule,' for a certain sum. The schedule, to which this letter was annexed, gave the estimated quantities of work required, and the offerer insetted the rate at which he proposed to do each item, adding a calculation of the cost of each item at that rate, and a summation at the end of the total cost, being the sum in the offer. Full power was reserved to the proprietor to alter the quantity of work required, and the work was to be measured when finished and charged at schedule rates, or others corresponding thereto, in proportion to the lump sum in the letter of offer. The offerer made an under-calculation in bringing out the cost of one item : Held the contract was a contract according to the schedule rates, and not a contract for a lump sum and the offerer was not barred by his error from claiming the full sum brought out at his rates.

9. The facts of this English case and the one under consideration are similar and the principle of interpretation of the contract of that case would apply to the present one. The facts of the second case are not quite so similar but there also though a lump sum was mentioned it was held that the contract was not a lump sum contract but a rate contract. I hold that the second ground has also failed. The other grounds taken in the petition have been abandoned. The application is therefore dismissed with costs as of a hearing. The report of the Special Referee stands confirmed. Certified for two counsel.


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