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State of Punjab Vs. A.K. Raha (Engineers) Ltd. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKolkata High Court
Decided On
Case NumberA.F.O.D. No. 40 of 1960
Judge
Reported inAIR1964Cal418
ActsContract Act, 1872 - Section 49
AppellantState of Punjab
RespondentA.K. Raha (Engineers) Ltd.
Appellant AdvocateB.K. Ghose and ;B.C. Basak, Advs.
Respondent AdvocateR.C. Deb and ;S. Sinha, Advs.
DispositionAppeal dismissed
Cases ReferredStephenson v. Weir
Excerpt:
- .....plaintiff at its temporary office at nangal. the contract required the plaintiffs to submit their final bill to the executive engineer in charge within one month of the date fixed for completion of the work. the contract also provided that the certificate of completion shall not be given and the work shall not reconsidered to be complete until the contractor shall have removed from the premises on which the work shall be executed all scaffolding, surplus materials and rubbish and cleaned off the dirt from all wood work, doors, windows, wells, floors and other parts of any building in upon or about which the work is to be executed or of which he may have had possession for the purpose of the execution thereof. in view of this clause in the contract, the work was not considered to have.....
Judgment:

Bachawat, J.

1. This is an appeal by the defendant State of Punjab against a decree directing an enquiry as to the amount due and payable to the plaintiff Company in respect of their claim as mentioned in paras. 6, 7 and 8 of the plaint.

2. Under paragraph 6 of the plaint the plaintiffs claimed a sum of Rs. 31,949-12 as. on account of excess deductions from running bills and under paragraphs 7 and 8 of the plaint they claimed a sum of Rs. 3,35,211-12 as. on account of the price of work done, refund of security deposit and damages as in the schedule to the plaint. The claim for damages as mentioned hereafter has been abandoned and given up before us. The plaintiff's claim as it stands now is for the refund of the security deposit and for the price of work done under the contract between them and the defendant. Under the contract the plaintiffs undertook to construct for the defendant a broad guage Railway tunnel on the Bhakra Nangal Canal Railway. The contract was between the plaintiffs, a limited company having then its registered office at D5, Clive Buildings in the town of Calcutta and the Punjab Government having then its Head Quarters at Simla. The tender was submitted by the plaintiffs to the Superintending Engineer, First Bhakra Civil Circle, Ellersley, Simla-E. The acceptance of the tender was sanctioned by the Chief Engineer. Irrigation Works, East Punjab Simla. The contract was signed on behalf of the plaintiff Company under the authority of the resolution of their Board of Directors passed at their registered office at Calcutta. Part of the Security deposit, namely a sum of Rs. 5,000/- was deposited in cash by the plaintiff company with the Subdivisional Officer, Left Bank Tunnel Subdivision at Barmula and the balance of the deposit, i.e., a sum of Rs. 20,000/. was deposited by them with the Punjab National Bank Rupar Branch. The work of construction of the tunnel on the Nangal Bhakra Railway was done under the supervision of the Executive Engineer, Tunnelling Division, Nangal Township P. O. Nangal Nikku Hoshiarpur. During the progress of the work the plaintiff Company had a temporary office at Nangal Nikku. The work was practically completed on or about the 4th of March 1949 but the last stone was removed on or about the 9th April 1949. According to the certificate of the Subdivisional Officer Railways Tunnel Subdivision the work was completed on the 9th April 1949. The contract required the plaintiff Company to submit their bills to the Executive Engineer-in-Charge of the works. During the progress of the work running bills for work done were submitted to the Executive Engineer and payments were received by the plaintiff Company at its temporary office at Nangal by cheques. Under the contract the plaintiffs were entitled to receive monthly payments against the running bills which were to be treated as advances against the final payment. Considering that the plaintiff Company would maintain a temporary office at Nangal during the progress of the works and considering also that the payments under the running bills were made by way of advances to meet the running disbursements on the spot, a term may well be implied in the contract that the payments under the running bills could be made by the defendant to the plaintiff at its temporary office at Nangal. The contract required the plaintiffs to submit their final bill to the executive engineer in charge within one month of the date fixed for completion of the work. The contract also provided that the certificate of completion shall not be given and the work shall not Reconsidered to be complete until the contractor shall have removed from the premises on which the work shall be executed all scaffolding, surplus materials and rubbish and cleaned off the dirt from all wood work, doors, windows, wells, floors and other parts of any building in upon or about which the work is to be executed or of which he may have had possession for the purpose of the execution thereof. In view of this clause in the contract, the work was not considered to have been completed until the 9th April 1949 when the last stone was removed from the site. After the conclusion of the work, the plaintiff Company could not also maintain their temporary establishment at the site of the work at Nangal and had to bring to Calcutta all their accounts and measurements relating to the construction work. The final bill to the Executive Engineer was sent by the plaintiff Company from their registered office at Calcutta on or about the 15th March 1949. Then and at all material times previously the plaintiffs had their registered office at D5, Clive Buildings, Calcutta. The correspondence suggests that the registeredoffice of the plaintiffs was shifted from D5, Clive Buildings, Calcutta to premises No. 22, Canning Street, Calcutta in or about October, 1949. In spite of demands the defendant failed and neglected to pay any portion of the plaintiff's claim. The plaintiffs contend that they are entitled to payment of their final bill at Calcutta whereas the defendant claims that the bill was payable to the plaintiff in the Punjab.

3. The case made in the plaint is that inasmuch as the contract contained no provision as to the place where the final payments under the contract were to be made, it was the duty of the defendant to make such payment at the registered office of the plaintiffs at Calcutta. Before Mallick J., the plaintiffs contended that there was no provision in the contract as to the place of payment of the final bill, whereas, the defendant contended that the final bill was payable by the defendant at one of its Treasuries in the Punjab. Mallick, J. held the final bill including the security deposit was not payable either expressly or impliedly in the Punjabi and there being no place of payment agreed to, the money was payable at the plaintiffs' Calcutta office either under Section 49 of the Indian Contract Act or in accordance with the common law rule that the debtor must seek the creditor and make the payment at the creditor's place. Both parties have repeated their respective contentions before us, and additionally the plaintiffs have contended that if we are to hold that the contract fixes the place of payment of the final bill by necessary implication, we should find that the con-tract by necessary implication provided for payment of the final bill at the plaintiffs' registered office at Calcutta.

4. The place of payment of the final bill is not stated in the contract in express terms. If no place of payment is specified in the contract in express terms, the place may sometimes be fixed by necessary implication from the nature and the terms of the contract and the surrounding circumstances, see Mahaluxmi Bank Ltd. v. Chotanagpore Industrial and Commercial Association. 95 Cal L J 64 : (UK 1955 Cal 413), Sailendra Nath v. Ramsundar Ghosh, 16 Cal L J 279, Riley v. Holland (William) & Sons Ltd., (1911) 1 K B 1028 at p. 1031. In Soniram Jeetmull v. R. D. Tata & Co., Ltd. the Judicial Committee found that the obligation to pay the plaintiff company involved the obligation to pay them at their branch office 'at Rangoon. In Thompson v. Palmer, (1893) 2 Q B 80, the Court held that the obligation to pay the plaintiff, a civil engineer, his travelling expenses and percentage of commission on the value of the work of construction done under his superintendence outside England involved an obligation to pay him at Newcastle where he generally earned on business and where the necessary plans and calculations for the work would be available and he would have the means of ascertaining the correctness or otherwise of the amount tendered. The fact that the moneys are payable to limited company may support the conclusion that the payment should be made at their registered office, which is the only place where in point of law they can be considered as legally existing: See Charles Duval & Co., Ltd. v. Gans, (1904) 2 K. B. 685, at p. 692, The question is whether in the instant case, the place of payment of the final bill may be fixed by necessary implication from the nature and terms of the contract and the surrounding circumstances. During the relevant period of time, the Government of Punjab had its head-quarters at Simla but it is not suggested that Simla is the place of payment. Nangal is the place where the work was done and where the Executive Engineer had his office and measurement books and where the final bill was submitted. Mr. Ghose does not, however, claim that Nangal is the place of payment of the monies due under the final bill. The suggestion in the written statement was that the monies due to the plaintiff were payable at the treasury at Una, district Hoshiarpur, Punjab. The suggestion is not supported by the evidence on the record. Before us Mr. Ghose did not attempt to support the case so made ia the written statement. On behalf of the defendant the only positive suggestion was that the final bill was payable at one of the treasuries of the defendant in the Punjab, but we cannot accept this suggestion. We cannot find any necessary implication in the contract that the plaintiffs were obliged to receive payment of their final bill at any one of the numerous treasuries of the Punjab Government in the Punjab. Mr. Ghosh did not make any other positive suggestion with regard to the place of payment of the final bill. On the other hand, we find that the plaintiff company lad all along their registered office in Calcutta. They lad a temporary establishment at Nangal during the progress of the work; but with the conclusion of the work the temporary establishment was closed down. Before the commencement of the work the defendant sent to the plaintiffs at their registered office at Calcutta the tender notice, the request in writing to send the security deposit and also the order to commence work. After the conclusion of the work, the plaintiff company sent all their communications to the defendant from their registered office at Calcutta. The final bill was sent by the plaintiff company from their registered office where their measurements and cumulations were available. In the light of these surrounding circumstances and on a tair reading of the contract, we think that the obligation under the contract to pay to the plaintiff company the amount due on their final bill by necessary implication involved the obligation to pay them at their registered office at Calcutta wheretheir measurements and calculations were available. The breach of this obligation therefore took place at Calcutta.

5. The case has been argued on the alternative footing that no place for payment can be fixed by necessary implication. No application was made by the defendant to the plaintiffs for fixing a place of payment and Section 49 of the Indian Contract Act cannot apply to the facts of the case. The general rule in that where no place of payment is specified in the contract either expressly or impliedly, the debtor must seek the creditor, see The Eider (1893) P 119 at p. 136, Drexel v. Drexel. (1916) 1 Ch 251 at p. 261, North Bengal, Das Brothers Zemindary Co. Ltd. v. Surendra Nath Das, ILR (1957) 2 Cal 6. The obligation to pay the debt involves the obligation to find the creditor and to pay him at the place where he is when the money is payable. The application of the general rule is not excluded because the amount of debt is disputed. On behalf of the appellant it is argued that the claim in the instant case is not a liquidated demand and therefore not a debt, and in this connection our attention was drawn to the case of Sabjee Sahib v. Noordiu Sahib, ILR 22 Mad 139. We cannot accept this contention. The claim for damages has been abandoned. The claim, as it stands now, is for refund of the security deposit and for payment of the price of the work done. The bill gives the quantities and particulars of the work done and the rates charged. Part of the claim is for price of the work done, including extras, to be ascertained by measuring each particular class of work and pricing it in accordance with the contract schedule. Beyond doubt, this claim is a debt or liquidated demand, see Halsbury's Laws of England, Third Edition Volume 3, Article 917, page 474. The rest of the claim is on a quantum meruit for reasonable price for work done for which no price is fixed. It is again well settled that an action of debt can be maintained for the value of work and labour upon a quantum meruit, see Lagos v. Grunwaldt, (1910) 1 K B 41 at pp. 46, 48, Stephenson v. Weir, (1879) 4 L R Ir 369 at p. 373. The value of the work done and of goods sold and delivered for which no price is fixed, formerly recoverable under the Courts known as quantum meruit and quantum valeabat could be sued for under the indebitatus accounts, see Bullens and Leake Pleadings, Second Edition, p. 28. By the application of the general common law rate also the defendant was under an obligation to pay to the plaintiffs their dues under their final bill at their registered office at Calcutta and the breach of this obligation took place there.

6. It is to be observed that in the written statement the defendant admitted that a sum of Rs. 11,582 was due to the plaintiff. In other words, a part of the plaintiff's entire demand under their final bill was admitted. No portion of this admitted demand was paid before the institution of the suit. The defendant was under an obligation to pay the debt to the plaintiffs at their registered office at Calcutta and the breach of this obligation took place at Calcutta. It is true that after the institution of the suit, the defendant deposited the admitted amount of the claim in Court and the plaintiffs have withdrawn the same. But the fact of this deposit during the pendency of the suit in no way displaces the cause of action existing on the date of the institution oi the suit.

7. We are therefore satisfied that a part of the cause of action arose at Calcutta within the jurisdiction of the trial Court and the Court had jurisdiction to entertain and try the suit.

8. On behalf of the defendant it was next argued that the leave under Clause 12 of the Letters Pattent should have been revoked by the learned Judge. In order to sustain this point the defendant must make out that there is an over-whelming balance of convenience in favour of a trial in the Punjab. But the defendant has not made out any case whatsoever for revocation of the leave granted under Clause 12 of the Letters Patent. We are not told in what way the balance of convenience is in favour of a trial in the Punjab. We are not told which of the oral and documentary evidence which the defendant would be obliged to call is available in the Punjab and not elsewhere. The oral and documentary evidence of the plaintiff is available in Calcutta. At one time we thought that we should direct the trial of the reference at some place in the Punjab convenient to the defendant. But Mr. Ghose stated that he did not want a trial of the reference in the Punjab. He added that the point strictly is a point of jurisdiction and not a point of inconvenience to the defendant. Besides, an application for revocation of the leave granted under Clause 12 of the Letters Patent should have been made at the earliest possible opportunity. No such application was made by the defendant. In all the circumstances of the case, we think the learned Judge rightly refused to revoke the leave granted under Clause 12 of the Letters Patent.

9. There is no merit in this appeal. We pass the following order : --

The appeal be and is hereby dismissed with costs. Certified for two counsel.

Be it recorded that the plaintiff respondent A. K. Raha (Engineers) Ltd., through consent hereby unconditionally abandons and gives up the following items of claims', namely :

(1) Rs. 3,000/- on account of expenditure incurred in constructing godowns as a result of godowns not being handed over to them (3) godowns ;

(2) Rs. 50,000/ on account of compensation due to them because of departmental unnecessary interference with work resulting in slowing down progress, causing heavy losses in time and labour, also because the department failed to supply adequate machineries and equipments as per Schedules A and B to the agreement as also for failure to supply continuous power for lighting the tunnel and compressed air on many occasions causing huge losses in time and labour ;

(3) Rs. 29,500/- on account of compensation for work done by other contractors under work order basis from within the contracted works composed of the item of Rs. 19,500/- on account of compensation for 130 rft. tunnel done from two faces at 150 per rft. and of the item of Rs. 10,000/- on account of compensation for duly excavation done for 40 rft. of tunnel at Rs. 250/- per rft. ;

(4) The claim for Rs. 25,000/- on account of losses as mentioned in paragraph 4 of the plaint.

A.K. Mukherjea, J.

10. I agree.


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