Dismissed

M/S Lakhsmi Constructions v. M/S Central Coalfields Ltd. And

Jharkhand HC2 Jan 2019FA/2/2011

Case brief

AI extract

What is this about?

Single judge dismissed an appeal against the dismissal of a money suit. The High Court upheld the lower court's finding that the appellant failed to prove that the construction contract was concluded and that the site was handed over, which were essential ingredients for claiming final payment.

What did the court decide?

The appeal was dismissed without costs, upholding the decree dated September 22, 2010, dismissing the plaintiff's suit for final payment.

M/S Lakhsmi Constructions Vs M/S Central… — Contract and Commercial Disputes | Jharkhand HC (2019)

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F.A. No. 2 of 2011

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IN THE HIGH COURT OF JHARKHAND AT RANCHI F.A. No.2 of 2011

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------ (Against the Judgment and Decree dated 22^nd day of September, 2010 passed by the Sub-Judge-I, Hazaribagh in Money Suit No. 4 of 2004)

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------

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M/s Lakshmi Constructions, A Partnership Firm, through one of its partner Ashok Kumar, son of Sri S.P. Vidyarthi, having its office at Lakshmi Bhawan, Near VishwakarmaMandir, Main Road, Ramgarh Cantt, P.O. + P.S. – Ramgarh, District - Hazaribagh.

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.... .... …. Appellant

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Versus

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M/s Central Coalfields Limited, Darbhanga House, Ranchi.

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The Chairman-cum-Managing Director, Central Coalfields Limited, Darbhanga House, P.O. – Kuchhary Road, P.S. – Kotwali, District - Ranchi.

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The General Manager (B), Central Coalfields Limited, Barkakana Area, P.O. + P.S. – Barkakana, District – Hazaribagh.

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The General Manager (Civil) (Const.), Central Coalfields Limited, at Darbhanga House, P.O. Kuchhary Road, P.S. – Kotwali, District – Ranchi.

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Staff Officer (Civil) (B), Central Coalfields Limited, Barkakana Area, P.O. + P.S. – Barkakana, District – Hazaribagh.

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Project Officer (COP), Central Coalfields Limited, Sounda –‘D’, Colliery, At / P.O. Saunda ‘D’, P.S. + District – Hazaribagh.

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Superintending Engineer (Civil), Central Coalfields Limited, Sounda‘D’, Project Officer, P.O. + P.S. – Pratratu, District – Hazaribagh.

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.... .... ….Respondents

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------ For the Appellant : Mr. Anjani Nandan, Advocate : Mr. Atanu Banerjee, Advocate For the Respondents : None

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F.A. No. 2 of 2011

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PRESENT HON'BLE MR. JUSTICE ANIL KUMAR CHOUDHARY ------

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By the Court:- Heard the learned counsel for the appellant.

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The appellant has preferred this appeal being aggrieved by the judgment and decree dated 22^nd day of September, 2010 passed by the Sub-Judge-I, Hazaribagh in Money Suit No. 4 of 2004 whereby and where under the learned court below has dismissed the suit of the plaintiff filed with a prayer for grant of a decree for Rs.15,41,639/with pendentelite future interest thereon.

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The case of the plaintiff, in brief is that the plaintiff is a registered partnership firm looked after by its partner Ashok Kumar. The defendant no.1 invited sealed tender for execution of the works relating to Diversion of 8 Inches Dia Existing Water Supply Pipe Line at Saunda –‘D’ Colliery as well as diversion of approach road near Ch.P. at Bhurkunda. The plaintiff submitted its sealed tender in the form and deposited earnest money. The contract work was allotted to some other contractor but as the said contractor even on acceptance of his tender did not work, hence the defendant no.1 negotiated with the bidders who participated in the tender and ultimately the sealed tender submitted by the plaintiff was accepted and work order dated 11.12.1995 was issued to the plaintiff. As per the terms of the work awarded to the plaintiff, escalation on labour wages was to be reimbursed as per the existing rules/practices of the Company with the increase in the minimum wages of unskilled labour based on

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F.A. No. 2 of 2011

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Government Notification. The rate of unskilled labours was to be taken as 30-50 as agreed on negotiation. There was also the condition that escalation on increase rate of C.I. Pipes will be reimbursed as per existing rules/practice of the Company and the base date will be 11.07.1995. The defendant no.3 who was in-charge of the execution of the contract work, called upon the plaintiff to undertake the contract work. The plaintiff vide its letter dated 22.11.1996 informed the defendant no.7 that the plaintiff has not been supplied with any drawing of alignment of C.I. Pipe Lines and bricks, pillars etc. with a request to supply the same since the order has already been placed to the Indian Iron and Steel Company Ltd. Calcutta, for supply of C.I. S/S Spoon Pipes. In pursuance to that a photocopy of the drawing as per diversion of existing water supply was supplied to the plaintiff. Since the pipe line was not connected with the main line and as such the plaintiff was called upon to start the work from the corner situated at plot no. 99 towards south of the main pipe line and accordingly, the plaintiff undertook to execute the contract work therefrom but the plaintiff was obstructed by the landholders and the villagers of Saunda Basti which led the plaintiff to inform the same to the defendant no. 7 vide his letter dated 14.02.1996 and 24.02.1996. Thereafter the plaintiff was asked to execute the contract work from the other end starting from Jainagar Colliery. Accordingly, the plaintiff commenced execution of the contract work as per the site shown and pointed out by the defendant no.7. In the mean while the contract agreement was executed

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F.A. No. 2 of 2011

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on 02.05.1996. On account of the disturbance caused by the villagers again and again the contract work could not be completed within the stipulated period. The period of contract work was extended and during the extended period the plaintiff completed the entire work of 2200 metres except the portion of 230 metres and that too on account of obstruction created by the owner of the land, which fact was known to the defendants and the plaintiff handed over the site to the defendants. It is further pleaded by the plaintiff that under the circumstances the plaintiff could not complete the work for an area of 230 metres which resulted in closing of the contract work and returning the rest of the C.I. Pipes to the defendant under proper receipt. Accordingly the bills of the plaintiff were passed after deducting 15 percent on account of C.I. Pipes. The plaintiff vide its letter dated 08.06.1998 informed the defendant that it could not complete the contract work, hence further execution of the contract be closed and also made a request to make final payment of the contract work beside other dues. After closure of the contract work, the site was delivered to the defendants who took charge of the same and came in possession thereof and the site along with articles lying thereon came under the possession of the defendants who got the same managed by their security staff and other staff. After handing over the site by the plaintiff to the defendants, a theft occurred and various articles were stolen and in this respect an F.I.R. was lodged against unknown persons on behalf of the defendants. On account of the said theft, payment of various bills amounting to Rs.1,00,000/- has

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F.A. No. 2 of 2011

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been withheld from the other contract works of the plaintiff under the defendants and in this suit the plaintiff has claimed the said amount also. After several demands, the defendants constituted an Internal Enquiry Committee who after holding enquiry found the dues of the plaintiff legal, valid and genuine and directed the department to make payments. The Executive Engineer (Civil) of the defendant company made a recommendation to obtain sanction from the authorities concerned but the amount was not paid to the plaintiff though the same has never been denied and the matter is pending. Ultimately finding no way-out, the plaintiff sent a lawyers’ notice calling upon the defendants to make the payment and further filed W.P. (C) No. 1886 of 2004 in this Court which was disposed of with an observation that the petitioner if so advised may file a representation for his claim in the department or to move appropriate court for release of the amount also and hence the plaintiff filed the suit.

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After notice, the defendant nos. 3, 5, 6 & 7 filed a joint written statement. In their joint written statement, these defendants besides the usual defence inter alia pleaded that the plaintiff is not entitled to any escalation on labour wages or price escalation of C.I. Pipes due to noncompletion of the work by it. It is further pleaded by these defendants that though the plaintiff started the work in time as per the agreement but the contention of the plaintiff of not handing over the drawing is false, as the defendants have not to do any work on plot no. 99. The defendants further pleaded that provisional extension of time was

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F.A. No. 2 of 2011

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granted to the plaintiff on his request, reserving its right to impose penalty at the time of finalization of contract depending on the merits of the case, as per the agreement of the contract. The work was in progress during those periods but still the work could not be completed as such handing over the site to the defendants by the plaintiff does not arise. It is specifically pleaded by these defendants that as per the terms of the agreement, the plaintiff has to perform tests for C.I. Pipe Lines which the plaintiff has never done. These defendants further pleaded that since the work is still incomplete and the testing of pipe line has not been done by the plaintiff, the contract is still open and not concluded. 230 metres of pipe for which payments have been effected are still in custody of the plaintiff and no proof of proper receipt has been submitted by the plaintiff. In order to facilitate the financial position of the plaintiff, payment for 233.5 metres of C.I. Pipes 8 Inch Diameter brought at work site was handed over to the plaintiff and such materials were in custody of the plaintiff. The defendants also pleaded that the plaintiff never submitted the bills. In usual course of action, measurements were recorded in measurement book by department of the defendants in presence of the plaintiff and acceptance of measurement by the plaintiff is obtained in the measurement book and the bill forms. Then only the bill as mentioned in annexure-II of the plaint was passed. These defendants further pleaded that as the agreement is a bilateral one, the unilateral decision of closing the contract on the part of the plaintiff is in violation of the

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F.A. No. 2 of 2011

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terms of the agreement. As such the plaintiff is not entitled to the final payment in respect of the said work. The handing over of the site in government/semi-government organization are done on papers after observing all formalities of the agreement as well as the rules and the plaintiff was well aware about the same being an experienced contractor as claimed by it and in this case the plaintiff has not submitted the certificate of handing or taking over for payment of final bill. It is then pleaded that since the work has not been completed, all the materials lying at site where the work was done have been under the control of the plaintiff. As the plaintiff evaded lodging F.I.R. with the police regarding the theft as such the defendants have no alternative but to lodge an F.I.R. with the police in order to prevent further loss and damage even though the site was under the control of the plaintiff at the time of commission of theft and the plaintiff did not laid the pipes again, hence some amount of other contract work of the plaintiff was withheld was per Clause – 5 & 8 of the general terms and conditions of the agreement. The plaintiff failed to procure the pipes in time. The disturbance of land owners was only with respect to 100 metres and the same was intimated to the plaintiff. The abnormal delay on behalf of the plaintiff caused damages to the defendants. The Enquiry Committee constituted assessed the damage and observed that 636 metres of pipe were stolen.

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On the basis of the rival pleadings of the parties, the learned court below framed the following issues:-

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F.A. No. 2 of 2011

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I. Whether the suit as framed maintainable?

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II. Whether the plaintiff has got any cause of action for the suit?

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III. Whether the suit is barred by law of limitation?

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IV. Whether the suit hit under the provision of Specific Relief Act?

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V. Whether the plaintiff is entitled for a decree for Rs.15,41,639. 67 paisa as per Schedule ‘A’ to the plaint?

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VI. Whether the plaintiff is entitled for interest @ 9% per annum pendente lite and future?

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VII. To what relief or reliefs, if any, the plaintiff is entitled to?

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Learned court below took up issue nos. V & VI together and held that the plaintiff has failed to prove that the contract was concluded and thus the plaintiff is not entitled to get the relief as claimed in the suit. In respect of issue nos. III & IV, learned court below observed that these issues were framed at the behest of the defendant and as the defendant has not adduced any evidence in respect of these issues so these issues were disposed of. In respect of issue nos. I & II, learned court below held that the suit as framed is not maintainable and there is no cause of action for filing the suit as the plaintiff has filed the suit before conclusion of the contract work. In respect of issue no. VII, learned court below held that the plaintiff is not entitled to any relief and dismissed the suit.

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Mr. Anjani Nandan the learned counsel for the appellant submits

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F.A. No. 2 of 2011

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that the learned court below failed to appreciate the evidence in record in its proper perspective and came to an erroneous conclusion. It is further submitted that the learned court below committed a serious error of law by drawing adverse inference against the plaintiff for not coming to court to adduce evidence in support of the case as the trial court lost sight of the fact that the plaintiff is a partnership firm. It is further submitted that the learned court below ought to have held that withholding payment of security money or earnest money by the defendants was illegal. Hence, it is submitted that the impugned judgment be set aside and the suit of the plaintiff be decreed.

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No one turns up on behalf of the respondents in-spite of repeated calls.

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Having heard the submissions made at the Bar and after going through the materials in record, the only point to be determined in this appeal is “Whether the learned court below has rightly dismissed the suit on the basis of the evidence in record?”

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The only witness examined by the plaintiff is P.W.1-Siddheshwar Prasad Vidyarthi. In his examination in chief filed in shape of affidavit, he has corroborated the entire contents of the plaint. In his crossexamination, the P.W.1 has stated that he is the whole and sole proprietor of the plaintiff but he does not know whether the same has been mentioned in the plaint or not. The partnership registration of the plaintiff was made at Patna. The plaintiff has executed a power of attorney in his favour in the year 1994 and he filed the suit. The

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F.A. No. 2 of 2011

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defendants did not enter into any agreement with him for the work but the agreement was entered into with plaintiff. He could not fix the C.I. Pipes in total length of 233 metres as the same was obstructed by the villagers. He does not remember the contents of the agreement. He does not know that the pipes were stolen. He does not know in which of the plots he has to work. The work has not been completed. 233 metres of work was to be done. He does not know whether 230 metres pipe fixing work was to be done. Those papers were not in his custody. His signature is not appearing in the measurement book. He has not submitted the bills for the work. He only submitted the bills for escalation. There were four partners of the plaintiff out of only Ashok Kumar Singh is alive and other three partners have died before filing of the suit. Beside the oral testimony, the plaintiff has proved the following documents:-

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(i) Letter dated 29.06.1997 and 18.07.1997 of the plaintiff

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to the defendant no.3 for settling of the dispute which has

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been marked as Exts.1 and 3 respectively.

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(ii) Photo copy of the note-sheet by which the

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provisional extension of time up to 30.09.1997 was

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recommended to be granted which has been marked Ext.2.

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(iii) Letter of the Senior Executive Engineer (Civil)

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Saunda-D Colliery to the plaintiff dated 09.12.1999

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intimating therein that the plaintiff could not complete the

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work in all respects till that date and also intimated therein

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F.A. No. 2 of 2011

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that the plaintiff has not handed over the work site and also advising the plaintiff to provide the layout the C.I. pipes 8 inches Dia from where it has been stolen which has been marked Ext.4.

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(iv) The letter of the plaintiff to the Senior Engineer (Civil) of the defendant no.1-Company dated 03.01.2000 requesting therein to kindly arrange for closure of the contract and finalize old outstanding dues or else the

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plaintiff will be forced to take shelter in the court of law which has been marked Ext.5.

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(v) The copy of the letter dated 15/18.02.2000 by the plaintiff to the said Executive Engineer (Civil), Central Coalfields Limited requesting therein to review the suggestion made by the defendant and requesting the said Executive Engineer for closure of the contract and

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finalization of all dues of the plaintiff which has been marked Ext.6.

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(vi) The letter of the Executive Engineer (Civil) Saunda-D Colliery to the plaintiff dated 05.02.2000 advising the

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plaintiff to turn up immediately to complete the work providing and laying the C.I. Pipes kept stolen due to the negligence on the part of the plaintiff which has been marked Ext.7.

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(vii) The copy of the note sheet of the Executive Engineer

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F.A. No. 2 of 2011

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(Civil) Saunda-D Colliery recommending kind

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consideration by the Project Officer to obtain the

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sanction from the competent authority for closure of the contract without imposition of any penalty for noncompletion of the work which has been marked Ext.8.

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(viii) A partially legible note sheet of the company which have been marked Ext.9 and 9/a with objection.

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(ix) The signature of one Arjun Ram on the note sheet which has been marked Ext.10 and the photocopy of the note sheet which has been marked Ext.11.

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From the side of the defendants, D.W.1-Badri Narayan is the Executive Engineer (Civil) Saunda-D of the defendant no.1-Company. He has been examined on behalf of the defendant no.1. He has interalia stated that the work order was issued on 11.12.1995 and the plaintiff was to complete the work within six months. The agreement on being identified by the D.W.1 has been marked ‘X’ for identification. As per the agreement on 21.12.1995, the plaintiff started the work and from time to time, the payment was made to the plaintiff as per the measurement entered in the measurement book. The measurement book has been marked ‘B’ for identification. The payment details have been mentioned in the measurement book. The agreement as well as measurement book has been signed by Ashok Kumar. As the plaintiff could not complete the work within the stipulated time, the request for extension of the period which was granted from time to time and from

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F.A. No. 2 of 2011

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time to time, the plaintiff was requested to complete the work. The plaintiff did not have to do any work on plot no.99. Conditional provisional extension of time was granted to the plaintiff. The plaintiff did not complete the work nor did he hand over the site to the defendant. The plaintiff also did not get the pipe line tested and the contract was still open. The enquiry committee report that 636 metres of C.I. pipe was stolen from the custody of the plaintiff worth Rs.9,55,329.24/- and the plaintiff cannot unilaterally take a decision to close the agreement. The plaintiff could not file any document regarding completion of the work or handing over the site to the defendant. In his cross-examination, he has stated that the land in which the pipe was to be laid was handed over by the defendant to the plaintiff. D.W.2-Krishna Prasad Singh was working as Junior Engineer (Civil) from 1997 to 2003 at Saunda-D of the defendant no.1-Company. The measurement book no.4 was lost hence; the certified copy of the same has been kept in its custody by the defendants. In his crossexamination, on confrontation, the documents of the defendant have been marked Ext.2A, 2B and 10. Beside the oral evidence, the defendant proved the signature of Ashok Kumar on the agreement which was marked Ext. A and the signature of Ashok upon the work order was marked Ext. A/1. The office copy of the letter dated 02.09.1996 of the Staff Officer (Civil) (B of Bhurkunda) to the plaintiff requesting the plaintiff to make sincere efforts to complete the job at the earliest possible time has been marked Ext. B and the office copy of the letter of

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F.A. No. 2 of 2011

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the Superintendent Engineer (Civil) Saunda-D Colliery to the plaintiff intimating therein that time is the essence of the contract has been marked Ext. B/1 and the office copy of the letter of Executive Engineer (Civil) Saunda-D Colliery to the plaintiff intimating therein which was already marked Ext. 7 has also been marked Ext. B/2 by the defendant. 12. After going through the evidence in record, it appears that the plaintiff has failed to establish the two essential ingredients for entitling it to get the final payment: - (i) that the agreement was closed, (ii) and the site was handed over to the defendant.

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None of the documents filed on behalf of the plaintiff as already referred to above even remotely refers that the agreement between the parties is close or that the plaintiff has handed over the site to the defendants. The learned counsel for the plaintiff does not dispute that the plaintiff has not adduced evidence in respect of the said two essential ingredients. Thus this court is of the considered view that because of lack of evidence in the record in respect of these two essential factors entitling the plaintiff to the claim, the appellant is not entitled to a relief of payment of final bill.

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So far as the photo copy of the note sheet filed on behalf of the plaintiff is concerned the same is an internal communication of the defendant company. It is a settled principle of law, the same being the photo copy and the original of the same has not been called for by the plaintiff from the defendants in accordance with law and obviously they being not primary evidence, they are not admissible in evidence. It

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F.A. No. 2 of 2011

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is also a settled principle of law that the plaintiff has to stand on its own legs and as already indicated above as the plaintiff has failed to establish the two essential ingredients for making its entitled for the final payment, this Court is of the considered view that there is no illegality in the impugned judgment. The point for determination is answered accordingly. Therefore decree dated 22^nd day of September, 2010 passed by the Sub-Judge-I, Hazaribagh in Money Suit No. 4 of 2004 and this appeal being without any merit is dismissed but in the circumstances without any costs.

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Let the Lower Court Record be sent back to the learned court below along with a copy of this Judgment forthwith.

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High Court of Jharkhand, Ranchi Dated the 2^nd January, 2019 AFR/ Sonu-Gunjan/-

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M/S Lakhsmi Constructions v. M/S Central Coalfields Ltd. And

Case brief

What is this about?

What did the court decide?

M/S Lakhsmi Constructions v. M/S Central Coalfields Ltd. And

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

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