Allowed

M/s. Coramandal Prestcrete (Pvt) Ltd. v. Engineer-in-Chief

Telangana HC2 Jul 2013CCCA/250/1999

Case brief

AI extract

What is this about?

This appeal allowed a civil contractor to recover unpaid amounts and security deposits from a government department. The court held the notice requirement under Section 80 CPC was waived by correspondence and ruled that pending arbitration with a different entity did not justify withholding payment.

What did the court decide?

Appellant allowed to recover Rs. 12,66,513/- as final bill plus refunds, with interest at 9% per annum from the date of filing the suit.

M/s. Coramandal Prestcrete (Pvt) Ltd. Vs… — Contract and Commercial Disputes | Telangana HC (2013)

¶1

*THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY AND

¶2

THE HON’BLE SRI JUSTICE S.V.BHATT

¶3

+C.C.CA.No.250 of 1999

¶4

% Dated 02.07.2013

¶5

# M/s. Coramandal Presterete (Private) Limited.

¶6

… Appellant

¶7

$ Engineer-in-Chief, Public Health Department, Visakhapatnam and others.

¶8

….Respondents

¶9

! Counsel for the appellant : Sri N.Subba Reddy ^ Counsel for respondents : Advocate General

¶10

< GIST:

¶11

> HEAD NOTE:

¶12

? Cases referred:

¶13

THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY AND

¶14

THE HON’BLE SRI JUSTICE S.V.BHATT

¶15

C.C.C.A.No.250 of 1999

¶16

JUDGMENT: (Per LNR,J)

¶17

The unsuccessful plaintiff in O.S.No.364 of 1997 on the file of the learned IV Additional Judge, City Civil Court, Hyderabad is the appellant.

¶18

For the sake of convenience, the parties are referred to as arrayed in the suit.

¶19

The plaintiff is a company, and is registered as civil contractor. The defendants are the officials of the Department of Public Health of Government of Andhra Pradesh at various levels. They issued a tender notice on 26.09.1992 inviting tenders for the work of installation of certain machinery, laying of pipelines and commissioning of water supply at Visakhapatnam. The value of the work was said to be Rs.1,18,50,434/-. The plaintiff submitted its tender and it emerged as the successful tenderer. The work is said to have been completed.

¶20

According to the plaintiff, a sum of Rs.17,79,335/- remained unpaid, retention deposit of Rs.10,10,748/- and further security deposit of Rs.3,37,109/- were not refunded to it. For recovery of the same, it filed the suit against the defendants. On the three amounts referred to above, a sum of Rs.22,45,422/- was claimed as interest up to the date of suit.

¶21

A detailed written statement was submitted on behalf of the defendants. An objection was raised as to the maintainability of the suit on the ground that it was not preceded by notice under Section 80 of C.P.C. Plea of limitation was also raised. On merits, it was pleaded that though the work was completed in all respects, the plaintiff did not turn up to sign the measurement books and that as per their records, it is only a sum of Rs.18,61,001/- that is payable on all counts.

¶22

A further plea was raised to the effect that the plaintiff was awarded contract by the Hyderabad Metropolitan Water Supply and Sewerage Board (for short ‘the Sewerage Board’) and for recovery of amounts from the plaintiff in relation thereto, arbitration proceedings are pending. In effect, their plea was that they are entitled to retain the amount that is liable to the plaintiff for being adjusted, in relation to the contract, with the Sewerage Board.

¶23

The trial Court dismissed the suit through its judgment,

¶24

dated 23.09.1999.

¶25

Sri N. Subba Reddy, learned senior counsel for the plaintiff submits that once the work entrusted to the plaintiff was fully executed and the defendants are also clear about the amount payable, there was no justification for withholding it. He contends that the Sewerage Board is an altogether independent agency and even if the plaintiff is liable to pay any amount to it, the defendants have no right to adjust the amount payable to the plaintiff. Learned counsel further submits that even by the time the suit was decided, no liability was fastened upon the plaintiff, except that the arbitration proceedings were pending, and the trial Court was not justified in dismissing the suit. He submits that the attempt made by the trial Court, to apply the principle of res judicata is totally perverse.

¶26

Learned Advocate General appearing for the defendants, on the other hand, submits that the suit as well as the present appeal are not maintainable, be it on account of failure to issue notice under Section 80 C.P.C. or on the grounds of limitation. He further submits that though the principle of res judicata may not get attracted straight away, the objective underlying it can certainly be applied in the limited context of the right of the defendants to make adjustment or set off. He submits that the trial Court has taken correct view of the matter and no interference is warranted with the judgment and decree under appeal.

¶27

It is a matter of record that the plaintiff was entrusted with the work of making some installations pertaining to water supply, laying pipelines and commissioning the entire system. There is no dispute about the completion of the work according to the specifications, except that there is some difference of opinion as to the exact date of completion of the work.

¶28

The trial Court framed only one issue for its consideration, viz., whether the plaintiff is entitled for the recovery of the suit

¶29

amount as prayed for? On behalf of the plaintiff, P.W.1 was examined and Exs.A.1 to A.8 were filed. On behalf of the defendants, D.W.1 was examined and Ex.B.1 was filed. The suit was dismissed mainly by applying the principle of res judicata.

¶30

In view of the extensive submissions by the learned counsel for the parties, the following points arise for consideration:

¶31

(a) Whether the plaintiff proved its case for recovery of the amount and if so, the amount, which it is entitled to recover?

¶32

(b) Whether the suit is maintainable, despite failure to issue notice under Section 80 of C.P.C? and

¶33

(c) Whether the suit is barred by limitation ?

¶34

Issues 2 and 3, which tell upon the very maintainability of the suit, need to be dealt with first.

¶35

The dispute no doubt is between a private undertaking on the one hand and a Government Department on the other hand. In the normal course of things, before an individual institutes a suit against the Government, it is under obligation to issue notice under Section 80 of C.P.C. In the instant case, no such notice was issued. However, the claim was being made from time to time and there was no response from the defendants. The record discloses that correspondence ensued between the parties and as a matter of fact, reference thereof was made in the plaint. In the paragraph relating to cause of action, it was stated that a letter, dated 19.02.1994 was addressed to the defendants, before the suit was filed. Though a specific mention of Section 80 of the Act was not made therein, the plaintiff as well as defendants were clear, as to the purport thereof. Obviously for this reason, the defendants did not insist that an issue be framed on this aspect. We therefore hold that the suit filed by the plaintiff cannot be said to be defective for want of notice under Section 80 of C.P.C. `

¶36

Coming to the question of limitation, the defendants themselves were almost casual, in this regard. The only sentence in their written statement reads “the suit is barred by limitation”. May be, that it is not necessary that there must be clear or elaborate plea as to limitation. As a matter of fact, Section 3 of the Limitation Act imposes duty upon the Court to satisfy itself about the aspect of limitation.

¶37

If one goes by the general dates mentioned in the plaint, he may get an impression at the first blush that the suit is not filed within limitation. However, an important aspect, which is also admitted by the defendants, is that the finality as to the amount to be payable to the plaintiff was not arrived at on account of the fact that the plaintiff did not sign the measurement books. In this background, it is difficult to clinch the cause of action with reference to a particular date. Added to that, the defendants did not spell the final word as to the entitlement of the plaintiff to receive the amount. In the written statement itself, it was mentioned in paragraph 10 that the plaintiff is entitled to be paid a sum of Rs.18,61,001/- but that would be deposited to the credit of the Sewerage Board and cannot be paid to plaintiff. Hence, point No.3 is also answered in favour of the plaintiff.

¶38

Coming to point No.1, which covers the merits of the matter, it may be recalled that the defendants did not dispute the factum of award of contract to the plaintiff and completion of the work. Ex.A.5 is the completion certificate issued by the 3^rd defendant. No defect whatever was pointed out. The plaintiff claimed amounts under three heads, including the one, representing interest.

¶39

Though in the written statement, it was mentioned that the plaintiff is entitled to be paid a sum of Rs.18,61,001/-, no break up was given. In his cross-examination, D.W.1 admitted that the plaintiff is entitled to be paid a sum of Rs.12,66,503/- towards the final bill amount, and a sum of Rs.2,98,188/- towards refund of EMD, as against Rs.10,10,748. No reason is stated as to why

¶40

the remaining part of EMD cannot be refunded to the plaintiff. He did not dispute the liability to refund a sum of Rs.2,86,300/-, deposited as further security.

¶41

The trial Court also did not find much of difficulty in ascertaining the amounts. However, it has denied the relief to the plaintiff only on the ground that arbitration proceedings initiated by the Sewerage Board are pending against it and unless they are finalized, decree cannot be passed. The term “res judicata” was also employed.

¶42

Firstly, the arbitration proceedings were between two different parties and by no stretch of imagination, the Sewerage Board can be treated as part of the establishment of the defendants. Secondly, those proceedings did not attain finality. The payment of the amount under a contract cannot be withheld in contemplation of an award against the contractor.

¶43

Another aspect on which the trial Court was impressed was that the plaintiff filed W.P.No.3500 of 1994, when an attempt was made to invoke Clause (71) of the A.P. Detailed Standard Specifications, which enables adjustment of the bills payable to a contractor under different agreements and that the said writ petition was dismissed. Taking that into account, the trial Court made an attempt to invoke the principle of res judicata. We are of the clear view that such an approach does not at all accord with law.

¶44

Hence, we allow the appeal, holding that the plaintiff is entitled to recover a sum of Rs.12,66,513/- towards final bill and refund of Rs.10,10,748/- and Rs.2,86,300/-. These amounts shall carry interest at the rate of 9% per annum from the date of filing of the suit. It is also directed that in case, the defendants have paid any part of the amounts referred to above, it shall be open to them to make adjustment, duly furnishing the particulars thereof.

¶45

The miscellaneous petition filed in this appeal shall also

¶46

stand disposed of. There shall be no order as to costs.

¶47

______________________ L.NARASIMHA REDDY, J

¶48

S.V.BHATT, J Date: 02.07.2013 Note: L.R.Copy to be marked. JSU

¶49

THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY AND

¶50

THE HON’BLE SRI JUSTICE S.V.BHATT

¶51

C.C.C.A.No.250 of 1999

¶52

Date: 02.07.2013

¶53

JSU

M/s. Coramandal Prestcrete (Pvt) Ltd. v. Engineer-in-Chief

Case brief

What is this about?

What did the court decide?

M/s. Coramandal Prestcrete (Pvt) Ltd. v. Engineer-in-Chief

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Venigalla Pullaiah Vs Golla Venkata Krishna

Sri Y.Anthi Reddy, Vs Deepa Tiwari

Sri Y.Anthi Reddy, Vs Deepa Tiwari

Varada Jayalakshmi Vs M/S.Sri Padma Enterprises Guntur

The Food Corporation of India Vs M/s. Chandra Bhanu Traders, General Merchants and

K.Atchan Naidu Vs B.Veeraju and 5 Ors.