M/S Subhash Projects and Marketing Ltd. and Another Vs M/S Pilot Engineering Works and Others

The present Regular Second Appeal has been preferred by the defendants against the judgment & decree dated 11.08.2025 passed by the learned Addi�onal District Judge, Ludhiana, whereby the appeal filed by the plain�ff was partly allowed, and the judgment & decree dated 25.01.2018 passed by the learned Civil Judge (Junior Division), Ludhiana were modified. By virtue of the impugned judgment, the plain�ff was held en�tled to recover a sum of ₹10,90,513/- along with interest at the rate of 6% per annum from the date of filing of the suit �ll realiza�on.

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2.1 The facts necessary for adjudica�on of the present appeal are that the plain�ff is a proprietorship concern engaged in the business of hydro mechanical works. The defendants are companies engaged in the execu�on of hydro power projects. It is the case of the plain�ff that the defendants approached it for fabrica�on of pen-stock pipes and other related works for

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hydro power projects being executed in Himachal Pradesh. A quota�on dated 19.12.2007 submiHed by the plain�ff was accepted and a leHer of intent/work order dated 22.12.2007 was issued in favour of the plain�ff. The plain�ff thereaIer executed fabrica�on work and raised various bills with respect to work carried out at Luni and IQU project sites. Some payments were admiHedly made by the defendants from �me to �me.

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2.2 According to the plain�ff, despite comple�on of the work, a substan�al amount remained unpaid. The plain�ff ul�mately raised a final bill for a sum of ₹29,73,203/-. It was further alleged that certain tools and machinery belonging to the plain�ff were lying with the defendants. Since repeated requests for release of payment did not yield any result, mee�ngs and communica�ons took place between the par�es. A mee�ng between the par�es was held on 10.08.2011 and the minutes of the said mee�ng were recorded. As per the minutes of mee�ng, the defendants agreed to release an amount of ₹20,00,000/- to the plain�ff towards seHlement of its claims. It was further recorded that approximately 75 MT - 80 MT of steel plates were lying at the yard of the plain�ff at Machiyal and the plain�ff agreed to shiI the said material to the yard of the defendants at Luni site aIer receipt of the payment. The minutes also recorded that the tools and plants belonging to the plain�ff lying at the defendants site would be returned aIer verifica�on.

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2.3 However, according to the plain�ff, the defendants failed to release the agreed amount of ₹20,00,000/- within the s�pulated period. Consequently, the steel plates lying at the yard of the plain�ff were disposed of and the plain�ff received a sum of ₹18,82,690/- from the said sale. AIer adjus�ng the aforesaid amount, the plain�ff filed the present suit seeking recovery of ₹38,90,459/- along with interest @ 18% per annum.

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The defendants contested the claim and while admiNng the issuance of work order and the fact that fabrica�on work had been entrusted to the plain�ff, the defendants alleged that the plain�ff had not carried out the work as per specifica�ons. It was further pleaded that the plain�ff had raised bills without comple�ng tes�ng and erec�on of the fabricated material. The

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defendants also took the stand that the seHlement amount of ₹20,00,000/men�oned in the mee�ng dated 10.08.2011 was condi�onal upon return of the steel plates lying with the plain�ff. Since the plain�ff did not return the said plates and instead sold them, it was contended that the defendants were not liable to pay any amount.

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Learned Trial Court framed necessary issues and upon apprecia�on of the evidence on record led by the par�es, the learned Trial Court partly decreed the suit and held the defendants liable to pay a sum of ₹1,17,000/- along with interest at the rate of 6% per annum from the date of filing of the suit �ll realiza�on.

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Feeling aggrieved, the plain�ff preferred an appeal. The learned First Appellate Court re-appraised the evidence and observed that there was no dispute regarding the fact that the defendants had awarded fabrica�on work to the plain�ff and that the plain�ff had executed the same. The appellate court further observed that the minutes of mee�ng dated 10.08.2011 had been admiHed by the defendants and clearly recorded that the defendants had agreed to pay ₹20,00,000/- towards seHlement of the plain�ffs claim. The appellate court found that the Trial Court had erred in adjus�ng the sale proceeds of the steel plates against the seHlement amount of ₹20,00,000/-. According to the appellate court, the adjustment ought to have been made against the original claim of ₹29,73,203/-, par�cularly when the defendants had failed to honour the seHlement by making payment within the s�pulated �me. Consequently, the appellate court modified the decree and held that the plain�ff was en�tled to recover ₹10,90,513/- (₹29,73,203 minus ₹18,82,690) along with interest at the rate of 6% per annum from the date of filing of the suit.

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The defendants have now approached this Court in the present Regular Second Appeal.

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Learned counsel appearing for the appellants has contended that the First Appellate Court misinterpreted the minutes of mee�ng dated 10.08.2011. According to the appellants, the payment of ₹20,00,000/- was

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condi�onal upon return of the steel plates by the plain�ff and since the plain�ff sold the plates instead of returning them, the defendants were not liable to make any payment. It is further argued that the appellate court erred in interfering with the well-reasoned judgment of the Trial Court.

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Per contra, learned counsel appearing for the respondentplain�ff/ caveator has supported the impugned judgment and submiHed that the execu�on of work and the issuance of work order are admiHed facts. It is argued that the defendants had agreed to seHle the claim of the plain�ff for ₹20,00,000/- but failed to make payment within the agreed period. Once the defendants themselves commiHed breach of the seHlement, the plain�ff was jus�fied in disposing of the material lying at its yard. It is further submiHed that the findings recorded by the First Appellate Court are based on proper apprecia�on of evidence and do not call for any interference in the second appeal.

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I have heard learned counsel for the par�es and have gone through the record with their assistance.

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At the outset, it may be no�ced that the jurisdic�on of this Court in a Regular Second Appeal under Sec�on 100 of the Code of Civil Procedure is confined to cases involving substan�al ques�ons of law. The High Court cannot re-appreciate the evidence merely because another view is possible. Interference is warranted only when the findings recorded by the courts below are shown to be perverse or based on misapplica�on of legal principles.

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In the present case, the issuance of the work order and the execu�on of fabrica�on work by the plain�ff stands admiHed. The dispute essen�ally relates to the quantum of liability of the defendants. The minutes of mee�ng dated 10.08.2011, which have been proved on record and admiHed by the par�es, clearly show that the defendants had agreed to release an amount of ₹20,00,000/- towards seHlement of the plain�ffs claim. The said minutes further indicate that the payment of the aforesaid amount was to be made within one week and that thereaIer the plain�ff was to shiI the steel plates lying at its yard.

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The First Appellate Court has rightly observed that the first obliga�on under the seHlement was on the part of the defendants to make payment of ₹20,00,000/-. The defendants admiHedly failed to comply with the said obliga�on. In these circumstances, the plain�ff cannot be faulted for disposing of the material lying in its yard when the defendants themselves did not honour the seHlement.

¶37

The approach adopted by the Trial Court in adjus�ng the sale proceeds of the steel plates against the seHlement amount of ₹20,00,000/was not legally correct. The First Appellate Court has rightly held that the sale proceeds were required to be adjusted against the original claim of ₹29,73,203/-, par�cularly when the defendants had failed to perform their part of the seHlement agreement. The reasoning recorded by the appellate court is based upon the documentary evidence on record and does not suffer from any perversity.

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The findings recorded by the First Appellate Court are essen�ally findings of fact based upon apprecia�on of evidence. Learned counsel for the appellants has not been able to point out any perversity or illegality in the said findings. No substan�al ques�on of law arises for considera�on in the present appeal.

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Consequently, the present Regular Second Appeal is dismissed. The judgment and decree dated 11.08.2025 passed by the learned Addi�onal District Judge, Ludhiana are affirmed.

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Pending applica�ons, if any, also stand disposed of.

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13.03.2026 (DEEPAK GUPTA) Yogesh JUDGE Whether speaking/reasoned:Yes/No Whether reportable:Yes/No

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M/S Subhash Projects and Marketing Ltd. and Another v. M/S Pilot Engineering Works and Others

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M/S Subhash Projects and Marketing Ltd. and Another v. M/S Pilot Engineering Works and Others

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