1 Fair Judgment in O.S.547/2016,
dated 04-11-2019
IN THE COURT OF THE I ADDL. SENIOR CIVIL JUDGE :: KAKINADA
Present : SMT.K.VIJAYA KALYANI I Addl. Senior Civil Judge, Kakinada
Monday, the 4th day of November, 2019
O.S.547/2016
Between:
M/s.Sri Sai Gopi Krishna constructions, D.No.5-3, Vadlamuru. Peddapuram Mandal. E.G.Dt., represented by the Managing Partner M.Chandrasekhararao, S/o Suryanarayana, Hindu, 48 years, Vadlamuru, Peddapuram Mandal.…Plaintiff.
AND
1.The Chief Engineer, A.P. Rajiv Swagruha Corporation Ltd., 7th floor, Gagana Vihar, M.J.Road, Nampally, Hyderabad – 500 001. 2.The Senior General Manager (Projects), A.P. Rajiv Swagruha Corporation Ltd., ABJA Township, Chollangi, Tallarevu Mandalam. 3.The State represented by the District Collector, East Godavari, Kakinada.…Defendants.
This suit coming on 15-10-2019 for final hearing before me in the presence of Sri P.Subbarao, Smt.K.Saradadevi, Advocates for plaintiff and of Assistant Government Pleader for defendants and the matter having stood over for consideration till this day, this Court delivered the following:
J U D G M E N T
This suit has been filed by the plaintiff’s company
represented by its Managing Partner Sri M.Chandrasekhara Rao to
pass a decree for Rs.8,24,400/- in their favour and against the
defendants with interest, costs and other reliefs.
1.Brief averments made in the plaint are as follows:-
Plaintiff was given contract work on tender basis under agreement dt.27-06-2013 for laying of B.T.surface to existing approach road from N.H.214 to ABJA Township and laying internal roads for packages-C and
D area under Phase-I within six months stipulated period at Chollangi Village,
Tallarevu Mandal near Kakinada under Rajiv Swagruha Scheme. On that 2 Fair Judgment in O.S.547/2016,
dated 04-11-2019
plaintiff furnished bank guarantee for Rs.4,30,700/-, paid insurance amount for the works, spent Rs.2 lakhs for the works, requested the department to handover clear possession of site without any hurdles and obstructions, but, defendants department failed to do so.
Plaintiff made correspondence with the department to handover possession as per Clause 20.1 of terms and conditions of the agreement, extension of time to complete the work, for estimation to grant E.O.T., but, no favourable reply received from the department.
Plaintiff issued notice on 03-11-2015 to the defendants 1 and 2 to consider circumstances or else to close the contract, return EMD and to pay the spent amount of Rs.2,00,000/-. 1st defendant issued reply notice
dated 01-12-2015 denying notice contents. Plaintiff got issued another legal
notice to defendants, but, they did not issue any reply notice.
Defendants Department has withdrawn the bank guarantee of
Rs.4,30,700/- on 01-12-2015. Even plaintiff filed W.P.38816/2015 before
Hon’ble High Court of A.P., Hyderabad to issue Writ of Mandamus, writ order
declaring the action of defendants in cancelling the contract without handing over possession physically as illegal and arbitrary, violative of principles of natural justice and consequently to set aside notice letter dated 15-10-2015.
The Hon’ble High Court admitted Writ Petition and dismissed the petition with a direction to approach local Court within jurisdiction.
Under such circumstances, plaintiff is constrained to file the present suit. Hence, the plaint.
2.The defendants denied and disputed the claim of the plaintiff in toto. 2nd defendant filed detailed written statement which was adopted by D1 and D3.
3.Brief averments of the written statement filed by the 2 nd defendant are as follows:-
(a) This defendant admits that on 27-06-2013 plaintiff was given contract work. As per the terms of contract, plaintiff has to complete the 3 Fair Judgment in O.S.547/2016,
dated 04-11-2019
entrusted work within six months. Accordingly, 2nd defendant handed over land for placing road. Plaintiff did work for only one day, left place unattended and did not choose to complete the work entrusted. As plaintiff did not complete the entrusted work in time, 2nd defendant withdrawn the guaranteed amount. Suppressing the facts, plaintiff invented the theory that defendants did not clear the hurdles.
(b) This defendant submits that the land on which work was to be done is a clear land, nothing was to be cleared off as stated by the plaintiff.
Plaintiff alone has to prove the alleged hurdles. Pipelines are no way hurdles for plaintiff to lay road.
(c) This defendant submits that plaintiff’s company with their misbehaviour did not come forward to complete the entrusted work, on that department issued show cause notice on 25-08-2015. As there is breach of agreement on the part of plaintiff, 1st defendant cancelled the agreement.
Without doing any work, plaintiff’s company put a claim in an improper manner for huge amount to gain unlawfully.
(d) This defendant submits that as already contract dated 26-07-2013 lapsed, the question of closing of agreement does not arise. As there is breach of agreement, department withdrew the amount from the bank, as such, they are not liable to alleged insurance made by plaintiff’s company investing Rs.47,262/- and plaintiff’s company alone should prove the same.
(e) This defendant submits that suit is barred by limitation and not maintainable. Value of the suit is incorrect. Hence, prays to dismiss the suit with exemplary costs.
4.After hearing both sides and basing on the above pleadings, this
Court framed the following issues:-
1. Whether the plaintiff paid an amount of Rs.2,01,700/-,
Rs.47,262/- and an amount of Rs.4,30,700/- for construction works?
4 Fair Judgment in O.S.547/2016,
dated 04-11-2019
2. Whether the defendants 1 to 3 are liable to pay any amounts to plaintiff?
3. Whether the plaintiff is entitled for suit claim?
4. To what relief?
5.Heard arguments.
6.To prop up the contentions of both parties, plaintiff
examined himself as P.W.1 and got marked Exs.A1 to A11
documents. On the other hand, general manager of A.P. Rajiv
Swagruha Corporation Ltd by name Kambala Venkata Mutya Saya
Satyanarayanarao examined as D.W.1 on behalf of the defendants.
Exs.B1 to B4 were marked.
7.As Issues 1 to 3 overlap each other, for better appreciation, all the three Issues were answered at a stretch.
Issues 1 to 3:-
1. Whether the plaintiff paid an amount of Rs.2,01,700/-,
Rs.47,262/- and an amount of Rs.4,30,700/- for construction works?
2. Whether the defendants 1 to 3 are liable to pay any amounts to plaintiff?
3. Whether the plaintiff is entitled for suit claim?
It is the contest of the plaintiff’s company that contract
work was entrusted to them on tender basis under agreement dated
27-06-2013, but, defendants department did not hand over site
without any hurdles despite several demands. Plaintiff mobilised
labour and materials by giving advance and spent Rs.2,01,700/- and
made preliminary works. Plaintiff issued notice on 03-11-2015 to
the defendants 1 and 2 to consider circumstances or otherwise,
5 Fair Judgment in O.S.547/2016,
dated 04-11-2019
close the contract, return EMD and to pay spent amount of
Rs.2,00,000/-, for which, 1 st defendant issued reply notice dated 01-
12-2015 denying notice contents. Again, another legal notice has
been issued by plaintiff to defendants, having received, defendants
did not issue any reply notice. Therefore, plaintiff is constrained to
file the present suit for recovery of amounts for the value of
insurance amount, value of bank guarantee. Hence, prays to decree
the suit with costs.
Per contra, it is the contest of the defendants 1 to 3 that
as per the terms of the agreement plaintiff’s company has to
complete entrusted work within six months, but, failed to do so and
did work for only one day and did not choose to complete the work
entrusted. As work not completed, 2 nd defendant withdrawn the
guaranteed amount. Several letters addressed to the plaintiff, but,
no response from his side. Plaintiff did not place any material or
machinery in the work spot, did not mobilise labour, did not invest
amount and did not spent that much amount as mentioned in plaint
anticipating the alleged clearing possession of land. In fact, land on
which work was to be done is a clear land, nothing was to be cleared
off as stated by the plaintiff. Pipelines are no way hurdles to the
plaintiff to lay road and complete work entrusted. As there is breach
of agreement on the part of plaintiff, 1 st defendant withdrew the
amount and they are not liable to alleged insurance made by
plaintiff investing Rs.47,262/- and plaintiff alone has to prove the
same. Hence, prays to dismiss the suit with exemplary costs.
To prove their case, plaintiff’s construction company
examined their managing partner Sri M.Chandra Sekhararao as
P.W.1. His chief affidavit is admitted in lieu of chief examination which is the replica of the plaint pleadings. Through him Exs.A.1 to A.7 were marked wherein Ex.A.1 is letter of D1; Ex.A2 is the reply; Ex.A3 is the termination 6 Fair Judgment in O.S.547/2016,
dated 04-11-2019
letter; Ex.A4 is the office copy of legal notice; Ex.A5 is the reply notice; Ex.A6 is the notice given by the plaintiff; Ex.A7 is the expenditure statement; Ex.A8 is the photos along with C.D.; Ex.A9 is the letter dated 25-04-2014 addressed to Chief Engineer, APRSCL, Bandlaguda, Hyderabad; Ex.A10 is the letter
dated 23-11-2013 addressed to General Manager, APRGCL, Kakinada and
Ex.A11 is the letter dated 06-04-2016 addressed by General Manager,
APRGCL, Kakinada.
Exs.A1, A2, A3, A4, A5, A6, A8, A9, A10 and A11 are admitted documents, hence, not discussed in detail.
He was cross examined at length by the counsel for the defendants. In his cross examination, he stated that date of agreement is 27-06-2013 and as per agreement, he should complete work within six months.
With regard to visiting site, at one breathe of cross examination, he stated that he did not verify the site location prior to filing tender. In another breathe of cross examination, he admitted that before bidding, he physically verified the site.
To know the exact facts let us peruse Ex.B1 which was admitted by both parties. One of the terms or conditions in Ex.B1 in S.No.2 at Page 45, it has been mentioned as follows:-
“we have inspected the site of the work before quoting my
percentage excess or less on ECV. We have satisfied about the
quality, availability and transport facilities for stones, sand and
other materials.”
In S.No.3 at Page 45 it has been mentioned as follows:-
“we are prepared to furnish detailed data in support of all
my quoted rates, if and when called upon to do so without any
reservations.” 7 Fair Judgment in O.S.547/2016,
dated 04-11-2019
Therefore, Ex.B1 (bidders/Contractor’s certificate), clearly speaks that plaintiff has inspected site of the work before quoted percentage.
Hence, the evidence of P.W.1 that he physically verified the site before bidding prevails.
In further cross examination, P.W.1 stated that the site was not given in possession to him, as such, he could not complete the contract work.
The admitted agreement between him and the defendants has been confronted and marked through him as Ex.B1. He admitted the terms and conditions of the agreement.
He admitted that as per clause 14.6 at Page No.29 of the agreement, the earnest money deposit will not carry any interest. He also admitted that as per clause 14.7 if the bidder withdraws the bid during the validity period of bid, the EMD shall be forfeited.
With regard to this piece of evidence, it is the case of plaintiff that he did some preliminary work anticipating possession of site to be given to him which is not believable because without giving possession of site, how could a contractor can commence his work i.e., preliminary work.
During further cross examination, P.W.1 added that when he went to physical verification of the site after bidding, when he verified the site there is some variation as pipelines were fixed and gravel was laid in the site with excess height and if he carry his work, water will go into the neighbouring house. He again stated that he stopped his work as the water will enter into the neighbouring house, but, the same was not informed to the defendants. Even he did not mention in the plaint that if he start work, water will enter into the neighbouring houses. As per “Clause 6” of Ex.B1 agreement mentioned in Page No.45, he gave a declaration that he did not claim any price escalation.
8 Fair Judgment in O.S.547/2016,
dated 04-11-2019
As can be seen from the evidence of P.W.1, there is some variation prior to physical verification before bidding and after bidding and with regard to the defects in continuing works. Admittedly, the same was not mentioned in the plaint. The defects stated by P.W.1 is also very crucial for the plaintiff’s case because what made him to stop his work is also crucial and important to decide this case, but, for the first time, P.W.1 made a whisper about defects in continuing work. As evidence without a pleading is ignored, therefore, evidence of P.W.1 about inconvenience to proceed with the work is also ignored.
When he admitted that as per Clause 6 of the agreement mentioned in Page No.45, he gave declaration that he did not claim any price escalation, then how he can claim price escalation in the plaint.
He also admitted that as per Clause (9), it is declared that they will execute the work as per the mile stone programme and if he fail to complete the work as per the mile stone programme, he abide by the condition to recover liquidated damages as per the bid conditions.
He also admitted that as per clause 23.1 in Page 51, if any dispute or difference of any kind whatsoever arises between the department and the Contractor in connection with, or arising out of the Contract, whether during the progress of the works or after their completion and whether
before or after the termination, abandonment or breach of the Contract, it
shall in the first place, be referred to and settled by the EE/ General Manager who shall, within a period of thirty days after being requested by the
Contractor to do so, give written notice of his decision to the Contractor.
Upon receipt of the written notice of the decision of the EE/General Manager the Contractor shall promptly proceed without delay to comply with such notice of decision.
When admittedly there is a Clause in Ex.B1 agreement to refer the dispute or difference to EE or General Manager, who shall within a period 9 Fair Judgment in O.S.547/2016,
dated 04-11-2019
of 30 days give written report of the decision to the contractor, what made
P.W.1 not to make an application before EE or General Manager. The reason for non referring to EE or General Manager remained unexplained.
It is further evidence of P.W.1 that validity of Ex.B1 agreement is only for six months and he sought extension of period of agreement continuously, but, there is no response from the defendants department. He admitted that if time is not extended automatically agreement gets terminated. He agreed with the terms mentioned in Clause 24.8. He agreed with the terms mentioned in Clause 25.1. He agreed that he did not submit work schedule to the defendants and he added that defendants did not give site clearance, he is in dilemma.
When he admitted that he is abide by the terms mentioned in
Clause 24.8 of the agreement which speaks that:- “Extension of time will be allowed by the EE or General Manager, which in the opinion of the EE or
General Manager are undoubtedly beyond the control of the contractor. If it is beyond the control of the contractor, then only time will be extended.” But here in the present case it is not so, therefore, time was not extended. As time was not extended admittedly agreement gets terminated.
Here, admittedly, even P.W.1 did not submit work schedule to the defendants as referred in Clause 25.1 of Ex.B1 agreement, no matter whatever may be the reason.
With regard to price escalation also, he stated that as per
G.O.Ms.No.35, he is seeking price escalation and as per Clause 46.2 of the agreement, G.O.Ms.No.35, dated 30-01-2009 is not applicable.
Through him, Ex.B2 which is letter addressed by General
Manager to him on 03-12-2014; Ex.B3 is letter addressed by General
Manager along with acknowledgment dated 09-01-2015; Ex.B4 is the letter 10 Fair Judgment in O.S.547/2016,
dated 04-11-2019
addressed by General Manager along with acknowledgment dt.15-05-2014 were marked.
Here, when it is the contest of the plaintiff that he did preliminary work anticipating possession of site, burden lies on the plaintiff to prove the expenditure incurred by him for the preliminary work if he wants to claim that amount. To prove the same P.W.1 filed Ex.A7 which disclose about expenditure made by him for gravel, 60 excavator, two wheeler tractor and labour charges. Ex.A7 is self styled document of plaintiff’s company as expenditure mentioned on their company’s letter head. No receipts or bills enclosed along with Ex.A7. Therefore, Ex.A7 cannot be relied upon.
In this case, admittedly, work was not completed by the plaintiff.
Therefore, bank guarantee etc., was forfeited as per the agreement. Even admittedly, after completion of work, he get refund of insurance premium, but, no such work has been completed, therefore, even insurance amount not paid to him. Hence, plaintiff/P.W.1 do not have any right to seek the said reliefs as prayed for.
Now, let us discuss the evidence of defendants herein. One
Kambala Venkata Mutya Saya Satyanarayanarao has been examined
as D.W.1. In his cross examination, he stated that he did not file any proof to show that he is the authorized person for East and West Godavari
Districts. He admitted that D1 is connected with the suit as he is signatory of
Ex.B1.
Here, suit has been filed against Senior General Manager, A.P.,
Rajiv Swagruha Corporation Ltd., ABJA Town ship, Chollangi, Tallarevu Mandal by showing as 2nd defendant for which D.W.1 stated that there is no cadre of
Senior General Manager in their department. He is General Manager in A.P.
Rajiv Swagruha Corporation Ltd.
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dated 04-11-2019
He also admitted that basing on the record available with 2nd defendant, he is deposing evidence. He also admitted that plaintiff has done one day work. One day work is that plaintiff has been peg marking through his “labour.”
Here, D.W.1 stated that plaintiff did one day work. When defendants admitted that plaintiff did one day work, then burden lies on the plaintiff to prove the expenditure for his one day work, which is lacking here.
He also stated that Assistant General Manager informed him orally that plaintiff did peg marking through his labour. He admitted that they laid pipelines for drainage, water facility for said houses. Generally, before laying any road, they apply road level technology. Unless and until, he peruse levels record, he cannot say the road levels.
He admitted that as per pleadings of the plaintiff, there are hurdles for formation of the road. Again he added that pleading of the plaintiff is false.
According to his evidence, in the year 2013 contract work was allotted to the plaintiff. In the year 2015, back guarantee was encashed. He admitted that if there is fault on the part of contract that after expiry of six months, bank guarantee can be encashed.
Here, as discussed supra no work has been completed before expiry of six months. Therefore, bank guarantee was encashed as deposed by D.W.1.
Letter dated 25-04-2014 addressing to the Chief Engineer,
APRSCL, Bandlaguda, Hyderabad confronted to D.W.1. On perusing letter with acknowledgment, he identified that the copy of letter has been received by Divisional Accounts Officer, A.P. Rajiv Swagruha, Kakinada. The said letter along with the acknowledgment was marked as Ex.A9. He cannot say 12 Fair Judgment in O.S.547/2016,
dated 04-11-2019
whether letter dated 05-02-2017 addressed to 2nd defendant and copy to 1st defendant sent through courier received or not.
He admitted that plaintiff has paid insurance amount and also admitted that Ex.B2 disclose three letters dated 23-11-2013, 22-05-2014 and 21-11-2014 addressed by plaintiff to them. Ex.B3 disclose four letters dated 23-11-2013, 22-05-2014, 21-11-2014 and 15-12-2014 addressed by plaintiff to them.
He also admitted that if contractor fails to do work within six months, he should apply extension of time. He admitted that the letter dated 23-11-2013 was referred in Exs.B2 and B3. The said letter dt.23-11-2013 addressed to General Manager, APRGCL, Kakinada, copy marked to Chief
Engineer, APRSCL marked as Ex.A10 along with acknowledgment. Even letter
dated 06-04-2016 was marked as Ex.A11. Ex.A4 refer to Ex.A11 letter.
He also admitted that if the reasons mentioned by the contractor is not reasonable, penalty will be imposed. He further stated that if contractor failed to complete the work in time, a notice will be issued to him, if the reasons mentioned by the contractor is satisfactory, further time will be extended, but, if the reasons are not satisfactory bank guarantee will be forfeited.Here, as deposed by D.W.1 reasons are unsatisfactory. Therefore, further time not extended and bank guarantee has been forfeited by the defendants.
As per agreement, there is no interest to EMD (Earning Money
Deposit) given by way of bank guarantee for Rs.4,00,000/- and odd. Then how “with interest” plaintiff is claiming on EMD i.e., bank guarantee.
According to the facts and circumstances of the case, burden lies on the plaintiff to prove the reliefs claimed by him either by adducing any evidence or by extracting evidence from the opposite party.
13 Fair Judgment in O.S.547/2016,
dated 04-11-2019
Hence, plaintiff failed to prove his case by adducing cogent evidence and also failed to extract from the evidence of D.W.1.
In the light of above discussion, defendants are not liable to pay any amounts to the plaintiff. Therefore plaintiff is not entitled for an amount of Rs.2,01,700/-; an amount of Rs.47,262/- and amount of Rs.4,30,700/-, finally not entitled for the suit claim.
Issue No.4 :- “To what relief?”
From the above discussion made supra in Issues 1 to 3, as plaintiff is not entitled for the suit claim,
In the result, suit is dismissed without costs.
Dictated to the Stenographer Grade-II, transcribed by him, corrected
and pronounced by me in Open Court, this the 4th day of November, 2019.
I Addl Senior Civil Judge, Kakinada.
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Plaintiff: P.W.1 : M.Chandrasekhara Rao (plaintiff)
For Defendants : D.W.1: Kambala Venkata Mutya Saya Satyanarayanarao
DOCUMENTS MARKED
For Plaintiff: Ex.A1: Letter of D1 dated 25-08-2015. Ex.A2: Reply notice dated 18-09-2015. Ex.A3: Termination letter, dt.15-10-2015. Ex.A4: Office copy of legal notice dt.03-11-2015. Ex.A5: Reply notice issued by defendants counsel dated 01-12-2015. Ex.A6: Notice given by plaintiff dated 02-12-2015. Ex.A7: Expenditure statement, dated 05-03-2016. Ex.A8: Photos along with C.D. Ex.A9: Letter dated 25-04-2014 addressed to Chief Engineer, APRSCL, Bandlaguda, Hyderabad. Ex.A10: Letter dated 23-11-2013 addressed to General Manager, APRGCL, Kakinada. Ex.A11: Letter dated 06-04-2016 addressed by General Manager, APRGCL, Kakinada.
For Defendants: Ex.B1: Agreement bond.
14 Fair Judgment in O.S.547/2016,
dated 04-11-2019
Ex.B2: Letter addressed by General Manager along with acknowledgment dated 03-12-2014. Ex.B3: Letter addressed by General Manager along with acknowledgment dated 09-01-2015. Ex.B4: Letter addressed by General Manager along with Acknowledgment TO plaintiff’s company dt.15-05-2014.
I A.S.C.J.,
Kakinada.