State of Kerala and The Superintending Engineer Public Works Department, R and B, South Circle, Trivandrum v. K.C. Jose

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MRS. JUSTICE SHIRCY V.** **TUESDAY, THE 30TH DAY OF JULY 2019 / 8TH SRAVANA, 1941** **RFA.No.550 OF 2007** **AGAINST THE JUDGMENT AND DECREE IN OS 237/1998 DATED 06-10-2006 OF PRINCIPAL SUB COURT,KOTTAYAM** ## **APPELLANTS/DEFENDANTS:** **1 STATE OF KERALA REPRESENTED BY THE SECRETARY TO PUBLIC WORKS DEPARTMENT, GOVERNMENT SECRETARIAT, TRIVANDRUM. 2 THE SUPERINTENDING ENGINEER PUBLIC WORKS DEPARTMENT, R AND B,, SOUTH CIRCLE,TRIVANDRUM.** **BY GOVERNMENT PLEADER SMT.N.S.REHNA** ## **RESPONDENT/PLAINTIFF** **K.C.JOSE KOOTIYANIYIL HOUSE, MEENACHIL VILLAGE PALA, KOTTAYAM DISTRICT.** **R1 BY ADV. SRI.K.BABU THOMAS** **THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 30.07.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** RFA.No.550 OF 2007 2 ## **JUDGMENT** Dissatisfied and aggrieved by the judgment and decree in O.S.No.237/1998 on the file of the Principal Sub Court, Kottayam, the defendants have come up with this appeal. 2. The parties are herein after referred to as the plaintiff/contractor and the defendants/Department, as mentioned by the court below. 3. The factual matrix of the case in brief are as follows: The plaintiff/respondent is a PWD contractor. PWD has invited tender of works for improvements to Velloor Manjamattom Road. The plaintiff submitted the tender which was accepted on 1.4.1992 at 35% over and above the estimated costs. Thereafter on 29.4.1992 an agreement was executed and the plaintiff had deposited an amount of Rs.1,00,000/- as security. The agreed amount for the work was Rs.48,79,766/-. The defendants agreed to effect monthly part payments and also to supply the materials required such as cement, steel, bitumen etc. for the construction of the road. The period fixed for the contract was 24 months. The possession of the site was also RFA.No.550 OF 2007 3 handed over on 4.5.1992. The work was to do the construction of a road having a length of 9500 metres. Though there was a specific stipulation in the agreement to give unhindered possession of the site, they failed to do so as standing trees, stumps, electric and telephone posts, live lines, water supply pipes etc were not removed till the expiry of the contract on 30.3.1994. The site of work beyond 5900 metres, for about 200 meters was not surrendered by the respective owners of the land. Still the plaintiff had started the work and the initial level measurement was taken and the payment of the said work was effected. The plaintiff had constructed 30 culverts, out of 36 envisaged and 34 needed. The soiling, metalling and spreading works were to be carried out and the entire road was to be formed. Thereafter as per the order of the Chief Executive Engineer, the work was stopped for efflux of rainy season from June 1995 to October 1995. The plaintiff in fact carried out works valued up to Rs.39,20,417/-.The defendants had paid Rs.33,51,504/- and the balance withheld was Rs.5,68,912/-. The defendants had failed to pay the retention amount, the security amount and also the payment of the measured quantity of the RFA.No.550 OF 2007 4 work effected by the contractor. The contractor was doing another work also. The Superintending Engineer has terminated the contract illegally on 17.4.1995 and failed to pay the amount mentioned earlier. The department has also retained the amount of Rs.2,05,000/- which was due to the contractor in the other work due to the termination of this work. So in total, the plaintiff has claimed an amount of Rs.25,47,012 **/-** 4. The defendants filed a written statement inter alia contending that the plaint claim is barred by limitation. But admittedly the site was handed over only on 4.5.1992 following the agreement executed on 29.4.1992. It is also admitted that there occurred some delay in shifting of the electric posts and telephone posts to enable the plaintiff to do the widening work of the road. But no hindrance was caused to the progress of the work. The contractor had also completed the construction of the side drain along with the earth work. But the allegation that the amount due for the blasting and spreading work was not paid is not correct. All the bills for the works carried out by the contractor was measured out and final bill was prepared. The payment was made in 6 part payments and monthly payments RFA.No.550 OF 2007 5 could not be made due to the financial position of the State. The plaintiff had in fact failed to complete the contract work. The tarring work was not completed by him. So the plaintiff is not entitled for the amount claimed. 5. Before the court below ,the plaintiff was examined as PW1 and Exts.A1 to A45 were marked. On the side of the defendants DW1 was examined and Exts.B1 to B16 were marked. Exts.C1 and C1(a) were also marked. 6. The court below after marshaling the evidence concluded that the plaintiff is entitled to realize only a sum of Rs.10,72,928/- with 9% interest. Aggrieved by the decree of the court below to pay the amount of Rs.10 lakh this appeal has been preferred by the defendant/PWD department. 7. Heard the learned Counsel for the plaintiff/respondent as well the defendants/ appellants. 8. Admittedly, the plaintiff is a A class contractor .His tender in response to the notice issued by the second defendant for conducting the works related to the improvements of Velloor Manjamattom road was accepted on 1.4.1992. The agreement was executed on 29.4.1992. Admittedly, the period fixed for RFA.No.550 OF 2007 6 completion of the work was 24 months, which would end by 30.3.1994. It is also not disputed that the site was handed over only on 4.5.1992. As per Ext.A1 agreement, the plaintiff was entrusted to do the construction of the road to a length of 9500 metres. The work includes widening of the road, metalling, tarring, construction of drainage etc. 9. It is submitted by the learned counsel for the plaintiff that 200 m length road was not handed over to the plaintiff even at the time of termination of the contract on 17.4.1995. Admittedly, the department had to supply the materials such as cement, steel and bitumen etc. But bitumen was not supplied though metalling, soiling and spreading works were done by the contractor. According to the plaintiff, the work was carried out upto 25.10.1994 which is admitted by DW1 before the court below. So it is evident that the contractor was permitted to do the work even after the expiry of the time. So the burden is upon the department to show that all the materials required to enable the contractor to perform the work had been supplied by the department. While the work was going on Ext.A13 notice dated 9.2.1994 was seen issued by the Superintending Engineer. As per RFA.No.550 OF 2007 7 Clause 1 of Ext.A13 it has been specifically stated that the new road after construction work shall be opened to traffic after completion of the sub base and base for a minimum period of one monsoon. It is evident from the records that such a direction was given for allowing natural settlement of the road already formed. So it could be seen that the work came to a stand still because of the said direction from the authority and that was of course for natural settlement as the construction was a road meant for traffic. It could also be seen that the entire work was not completed by the plaintiff as termination notice was issued to him on 17.4.1995 though there was breach on the side of the department in completing the construction work of the road. 10. According to the learned counsel for the plaintiff measurement of the work done by him was not taken in his presence in spite of repeated requests. On 15.6.1995 as evident from Ext.A19, measurement of the work done by the plaintiff was taken by the department in the absence of the contractor and a final bill was prepared pursuant to the said measurement. Apparently, it is clear that the final bill was not settled though measurement was taken by the department and also the RFA.No.550 OF 2007 8 retention amount and the other amounts claimed in the plaint were not returned by the department . 11. The main argument advanced by the learned Government Pleader is that the plaint claim is barred by limitation as the termination of the contract was on 17.4.1995, but the suit was filed only on 10.7.1998. But it is to be noted that DW1 had admitted before the court that the work was done by the plaintiff till 25.10.1994. As per Ext.A13 the plaintiff was asked to stop the work for a particular period due to the ensuing monsoon so as to allow natural settlement of the road. 12. From Ext.A13 issued by Chief Engineer as well the deposition of DW1 it is revealed that the contractor had to wait for the monsoon period to be over and it was over by October, 1995. If that period is taken into account the suit which was filed on 10.7.1998 is within the period of limitation. So the contention raised by the defendants that the plaint claim is barred by limitation is not legally sustainable. 13. According to the learned counsel for the plaintiff, the final bill prepared on the basis of the measurement shown in Ext.A19 was only on 15.6.1995. Final bill could be prepared only RFA.No.550 OF 2007 9 after considering the entire measurement and the cost of materials utilized by the plaintiff for the work done etc. Here as measurement was taken on 15.6.1995 preparation of final bill could only be on a later date and right to sue accrues only then Therefore, the suit filed on 10.7.1998, is within the period of limitation. The learned Government Pleader had submitted that since the contract was terminated on 17.4.1995, the suit filed on 10.7.1998 is barred by limitation as there was no contract existing after the period of termination. But the learned counsel for the plaintiff has invited my attention to the decision in **Aries and Aries v. Tamil Nadu Electricity Board [AIR 2017 SC 1897]** wherein it has been held in para 11 as follows: **“** In the present case, dehors the correspondences that had been exchanged by and between the parties after the date of final payment i.e. 13[th] January, 1981, the aforesaid date of final payment would have been crucial for determination of the period of limitation for filing the instant suit. However, in the present case, from the correspondences that had been exchanged after the date of final payment it clearly appears that the plaintiff after receipt of the payment on 13[th] January, 1981, reiterated its claim for additional payment on different counts including escalation and for extra works done. The defendant instead of rejecting the said claim entertained the same and kept the matter pending. Finally on 6[th] November, 1981 (Exhibit P2) the said claims were rejected. RFA.No.550 OF 2007 10 If the claims raised by the plaintiff were entertained and rejected finally on 6[th] November, 1981, it would be reasonable to assume that the cause of action for the suit in respect of the said rejected claims arose on 6[th] November, 1981 and the suit could have been filed at any point of time prior to the expiry of three years from the said date ie;6[th] November, 1981 in view of the Article 113 of the Limitation Act,1963. The suit having been filed on 6[th] November, 1984, the same, therefore, will have to be considered to be within the period of limitation. The High Court, therefore, was not justified in holding the contrary.” 14. It is also submitted by the learned Counsel for the plaintiff that though the final bill was prepared on 15.6.1995, it was without entering the entire measurements in the measurement book.The plaintiff has further contended that the value of the materials supplied by him was not considered in the final bill prepared by the defendants and if the same is also counted, there will be difference to the actual amount due to the plaintiff and that would result in variation of the amount prepared by the defendants on 15.6.1995. The right to sue accrues only when final bill is finalized by the defendants. It was held in **Gannon Dunkerley and Co. Ltd. Union of India [1969 3 SCC 607]** that there is no right to sue until there is an accrual of the RFA.No.550 OF 2007 11 right asserted in the suit and its infringement or at least a clear and unequivocal threat to infringe that right by the defendant against whom the suit is instituted. 15. So the contention raised by the defendants that the claim is barred by limitation is not legally sustainable on that count also. On a perusal of the judgment it could be seen that the court below in paragraph No.21 had discussed about the amount due to the plaintiff in detail which reads as follows; “21. The evidence of the plaintiff and the defendants also show that the plaintiff had made rubble masonry to the tune of 999 m3. This aspect is admitted by the defendants also. So the plaintiff is entitled for the value of that work which is Rs.186450/-. The evidence of the plaintiff show that an amount of Rs.470541/- is due to the plaintiff. Ext.B9 show that the final bill was prepared and it was not paid. The plaintiff is entitled for the money claimed in the final bill. So the plaintiff is entitled to an amount of Rs.470541/- being the value of the work done by him. The evidence of the plaintiff show that the bill amount due to the plaintiff in Punalur-Muvattupuzha road construction is retained. That fact is admitted by the defendants also. The plaintiff is entitled to Rs.2,05,000/- on that ground. The evidence in this case also show that the security deposit and retention amount totally to an amount of Rs.188184/- is retained by the defendants. There is no dispute with respect to the fact that the plaintiff is entitled for that money. The work has been completed by another contractor. The evidence in this case show that the RFA.No.550 OF 2007 12 breach of the contract was from the side of the defendants. The evidence also show that the work could not be completed in time due to the failure of the defendants to clear the obstructions on the road. Therefore, the plaintiff is entitled for the security deposit and retention amount. 22. The evidence of DW1 also show that the plaintiff had supplied metal and that was duly measured. But the money was not paid. The plaintiff is entitled to an amount of Rs.22123/- on that ground. Ext.B14 and 15 shows that metal was supplied by the plaintiff and it was measured.” 16. No material was placed by the defendants to discard the evidence adduced by the plaintiff. Records of the department is most significant piece of evidence and is crucial to decide the dispute. Having regard to the terms of the contractual agreement I do not find any reason to interfere with the finding of the court below. It is pertinent to note that the plaintiff is engaged with another work entrusted by the defendants and an amount of Rs.2,05,000/- was, due to the plaintiff in that work. But it is interesting to note that the amount due to the plaintiff in the other work was also retained by the defendants as this work was terminated on 17.4.1995, which is legally incorrect. The department cannot retain the amount which was due to the RFA.No.550 OF 2007 13 contractor in another work due to the termination of the work in this contract and hence, he is entitled get back the said amount. He is also entitled for the return of the retention amount of Rs.88,184/- and also the security amount of Rs.1 lakh. Therefore the finding of the court below warrant no interference. So the total amount due to the plaintiff is Rs.10,72,298/- (1,00,000/+88,184/-+2,05,000/-+4,70,541/-+1,86,450/-+22,123/) 17. It is to be noted that in the appeal memorandum the defendants have not seriously contended that the plaintiff is not entitled to realise the amount claimed under different heads. The main ground urged in the appeal is that the plaint claim is barred by limitation as no suit was filed within the period of three years from the date of termination. But as discussed in the earlier paragraphs, the plaint claim is not barred by limitation and so the plaintiff is entitled to recover the amount of Rs.10,72,298/-. 18. Coming to the question of the interest it has to be noted that the court below has awarded 9% interest from the date of the suit till realization from the defendants. The learned Government Pleader has pointed out that the court below has RFA.No.550 OF 2007 14 awarded exorbitant rate of interest for the decree amount and hence, it has to be reduced to 6%. But the learned counsel for the plaintiff would point out that the contractor had borrowed from various persons to complete the work due to the non cooperation of the defendants. Even he had to face litigation filed against him by the persons from whom he borrowed money to complete the work. Exts.A36 and 37 are the copies of the judgments and decree in O.S.No.647/1994 and O.S.No. 83/95 of the Sub court, Pala awarded against the plaintiff. 19. Taking into consideration of the entire facts involved in this case, I am not inclined to reduce the rate of interest which is awarded by the court below. The court below has considered the entire facts including the rate of interest to be awarded to the plaintiff for the delay in payments and it appears that no material error was committed. Hence, I find absolutely no justifiable or legal ground to interfere with the findings of the court below. It is also to be noted that the suit was one filed in the year 1998 it was decreed only in the year 2006. Now we are in 2019. Till this date the plaintiff has not received the amount. The execution of the decree was stayed by this Court for a short period. RFA.No.550 OF 2007 15 Hence, the judgment and decree of the court below are hereby confirmed. Accordingly, the appeal is dismissed leaving the parties to bear their respective costs. Sd/SHIRCY V JUDGE ## smm