Fair Judgment in O.S.38/2014
Dated 08-04-2025
IN THE COURT OF THE VI ADDITIONAL DISTRICT JUDGE :: KAKINADA
Present : Nikitha R.Vora
VI Addl. District Judge, Kakinada,
Tuesday, the 8th day of April, 2025
O.S.No.38/2014
Between: Nallam Pullarao, S/o late Venkatareddi, 51 years, Registered Contractor, Door No.68-8-2/5D, Ashok Nagar,
Kakinada. Kakinada JCJC... Plaintiff.
AND
1.Chairman and Managing Director, Andhra Pradesh Eastern Power Distribution Company Limited, Visakhapatnam (Corporate Office, near Gurudwar Junction, P&T Colony, Visakhapatnam). Visakhapatnam JCJC.
2.Superintending Engineer, (Operation Circle), Andhra Pradesh Eastern Power Distribution Company Limited, Rajahmundry. Rajahmundry JCJC.
3.The Executive Engineer (Operations), Andhra Pradesh Eastern Power Distribution Company Limited, Power House compound, Kakinada. Kakinada JCJC.
(Description of 3rd defendant is amended as per
orders in I.A.1020/2023, dated 01.11.2023).. Defendants.
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This suit came on 02.04.2025 for arguments before me in the presence of Sri O.Sudhakar, Advocate for plaintiff and of Smt.Bindu Sree Vemuri, Advocate for defendants and the matter having stood over for consideration till this day, this court delivered the following;
JUDGMENT
This suit is filed by the plaintiff against the defendants for recovery of 1. Rs.19,58,309/- with subsequent interest and costs.
The brief averments of the plaint are as follows:- 2.
(a)The plaintiff is resident of Kakinada and is a registered contractor with Andhra Pradesh Eastern Power Distribution Company
Limited. The plaintiff was entrusted with the work for manufacture of 8.0
M/300 KG WL PSCC poles for an amount of Rs.1,07,56,800/- and a concluded work agreement was entered on 23.10.2008 between the plaintiff and the Andhra Pradesh Eastern Power Distribution Company Limited @
Rs.1,494/- per one number with 8.43% less than the estimated rate and it was further agreed to complete the work by 29.04.2010. While so, the plaintiff noticed that there was a recovery for declamation of 4 MM HT Steel wire and cement in the bills prepared and paid by the company officials, which was against the conditions stipulated in the agreement. As per the agreement between the plaintiff and Andhra Pradesh Eastern Power
Distribution Company Limited, the plaintiff is precluded from claiming any escalation in case of any raise in the rate of material etc., and he shall bear the additional expenditure if any due to the escalation of the prices, which implies that the company is not entitled to deduct any amount towards declamation of prices in view of the agreement which is binding on the both the parties. Neither of the parties are entitled to unilaterally alter any terms in the agreement or violate the same. It was further contended that there is no specific clause in the agreement that the company is entitled to reduce or deduct proportionate amount towards declamation in the rate of cement and 2 of 27
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steel from the agreed amount of the contract. Further, there is no clause in the agreement as to the applicability of the subsequent dues to the agreement. It is further contended that as the plaintiff quoted the tender for 8.43% less than the estimated rate and after the company was satisfied with the same, work was allotted to him by entering into an written contract and as such, the company is not entitled for any recovery of any amount towards declamation in the rate of steel and cement. Once the agreement is entered and the rate is adopted in the bilateral agreement, the said agreement shall prevail and be implemented as per the condition No.5 of additional conditions of the agreement. But, the company deducted an amount of
Rs.11,50,594/- from the bills of the plaintiff under the ground of declamation in the price variation of HT steel wire and cement.
(b)The plaintiff further submits that the last payment was made by the defendant on 07.07.2010 by paying an amount of Rs.7,59,703/- by way of cheque bearing No.883436 and hence, the limitation starts from the said date. He further contended that he had given several representations orally and in writing through letters dated 31.05.2010 and 07.01.2011. The 2nd defendant issued a reply dated 22.02.2011, wherein for the first time, the 2nd defendant referred to the G.O. dated 16.04.2008 said to have been adopted by the company on 18.11.2008, which is admittedly subsequent to the bilateral agreement between the plaintiff and the defendant, and declined to consider the request of the plaintiff. Similarly, the Chief General
Manager, Andhra Pradesh Eastern Power Distribution Company Limited also sent a reply dated 09.05.2011 with similar contentions. The plaintiff further contended that as both the parties are covered by written contact they are bound only to terms specified in the written contract and no amount can be deducted from the bills of the plaintiff towards declamation under the shelter of a subsequent G.O. issued by the Government, that too, without prior notice or information to the plaintiff. The plaintiff further contended that even after above said representation, the plaintiff 3 of 27
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approached the officials of the company who in turn stated that the matter was under consideration. While so, on 09.04.2013, the plaintiff again sent a representation to the 1st defendant, but, there was no reply from the 1st defendant. Thereafter, the plaintiff issued legal notice dated 25.04.2013 to 1st and 2nd defendants by marking a copy to the 3rd defendant with a request to repay the amount of Rs.11,50,594/- along with 24% per annum. After receipt of the said notice, the 1st and 2nd defendants issued reply dated 10.05.2013 alleging that the claim of the plaintiff was barred by limitation as the work was completed by 29.04.2010. The plaintiff further contended that though the work was completed by 29.04.2010, the last payment was made on 07.07.2010 and as the limitation starts from 07.07.2010 i.e., date of last payment, the claim of the plaintiff is not barred by limitation. Hence, the suit.
The defendants contested the suit and 3rd defendant filed written 3. statement and the same is adopted by the defendants 1 and 2. The 3rd defendant denying the averments in the plaint. The brief averments of the defendants are: The plaintiff is a registered contractor entrusted with the work as mentioned in the plaint. The execution of agreement dated 23.10.2008 is also admitted by the defendants. But, the defendants are contending that the plaintiff is aware of the fact that as per the terms of the contract, as and when any G.O. is issued by the Government with regard to the prices, the same is binding on the plaintiff. The defendants have to follow the G.O. issued by the Government. The Government issued two G.Os
dated 16.04.2008 and 18.11.2008 and the copies of the said G.Os were
supplied to the plaintiff on 31.05.2010 and 07.01.2011 and as per the said
G.Os, the defendants deducted the amount from the bills of the plaintiff. The defendants further admitted the deduction of an amount of Rs.11,54,594/- as per G.Os issued from time to time. The defendants contended that as the deductions were made according to the G.Os issued by the Government, the plaintiff has no right to make any claim against the defendants. The 4 of 27
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defendants contended that the claim of the plaintiff is barred by limitation.
They further contended that the plaintiff is not entitled to any interest as per the terms of the contract. Hence, prays to dismiss the suit with costs.
Basing on the above pleadings, the following issues are settled for 4. trial:
1. Whether the suit claim is within time or is not barred by limitation?
2. Whether the plaintiff is entitled to the suit amount?
3. To what relief?
During the course of trial, the plaintiff examined PW1 and PW2 and got 5. marked Exs.A1 to A10. On behalf of the defendants, the DW1 to DW3 were examined and Exs.B1 to B12 were got marked on their behalf. On the representation of counsel for the defendants, the evidence of DW1 was eschewed.
Heard both sides. 6.
ISSUE NO.1:-
Whether the suit claim is within time or is not barred by limitation?
7.The case of the plaintiff is that he is a registered contractor under
Andhra Pradesh Eastern Power Distribution Company Limited. He was entrusted with the work for manufacture of 8.0 M/300 KG WL PSCC poles for an amount of Rs.1,07,56,800/- and a concluded work agreement was entered on 23.10.2008 between the plaintiff and the Andhra Pradesh
Eastern Power Distribution Company Limited @ Rs.1,494/- per one number with 8.43% less than the estimated rate and it was further agreed to complete the work by 29.04.2010. While so, the plaintiff noticed that there was a recovery for declamation of 4 MM HT Steel wire and cement in the 5 of 27
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bills prepared and paid by the company officials, which was against the conditions stipulated in the agreement. As per the agreement between the plaintiff and Andhra Pradesh Eastern Power Distribution Company Limited, the plaintiff is precluded from claiming any escalation in case of any raise in the rate of material etc., and he shall bear the additional expenditure if any due to the escalation of the prices, which implies that the company is not entitled to deduct any amount towards declamation of prices in view of the agreement which is binding on the both the parties. Neither of the parties are entitled to unilaterally alter any terms in the agreement or violate the same. It was further contended that there is no specific clause in the agreement that the company is entitled to reduce or deduct proportionate amount towards declamation in the rate of cement and steel from the agreed amount of the contract. Further, there is no clause in the agreement as to the applicability of the subsequent dues to the agreement. It is further contended that as the plaintiff quoted the tender for 8.43% less than the estimated rate and after the company was satisfied with the same, work was allotted to him by entering into an written contract and as such, the company is not entitled for any recovery of any amount towards declamation in the rate of steel and cement. Once the agreement is entered and the rate is adopted in the bilateral agreement, the said agreement shall prevail and be implemented as per the condition No.5 of additional conditions of the agreement. But, the company deducted an amount of Rs.11,50,594/- from the bills of the plaintiff under the ground of declamation in the price variation of HT steel wire and cement.
8.The further case of the plaintiff is that the last payment was made by the defendant on 07.07.2010 by paying an amount of Rs.7,59,703/- by way of cheque bearing No.883436 and hence, the limitation starts from the said date. He further contended that he had given several representations orally and in writing through letters dated 31.05.2010 and 07.01.2011. The 2nd defendant issued a reply dated 22.02.2011, wherein for the first time, the 6 of 27
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2nd defendant referred to the G.O. dated 16.04.2008 said to have been adopted by the company on 18.11.2008, which is admittedly subsequent to the bilateral agreement between the plaintiff and the defendant, and declined to consider the request of the plaintiff. Similarly, the Chief General
Manager, Andhra Pradesh Eastern Power Distribution Company Limited also sent a reply dated 09.05.2011 with similar contentions. The plaintiff further contended that as both the parties are covered by written contact they are bound only to terms specified in the written contract and no amount can be deducted from the bills of the plaintiff towards declamation under the shelter of a subsequent G.O. issued by the Government, that too, without prior notice or information to the plaintiff. The plaintiff further contended that even after above said representation, the plaintiff approached the officials of the company who in turn stated that the matter was under consideration. While so, on 09.04.2013, the plaintiff again sent a representation to the 1st defendant, but, there was no reply from the 1st defendant. Thereafter, the plaintiff issued legal notice dated 25.04.2013 to 1st and 2nd defendants by marking a copy to the 3rd defendant with a request to repay the amount of Rs.11,50,594/- along with 24% per annum. After receipt of the said notice, the 1st and 2nd defendants issued reply dated 10.05.2013 alleging that the claim of the plaintiff was barred by limitation as the work was completed by 29.04.2010. The plaintiff further contended that though the work was completed by 29.04.2010, the last payment was made on 07.07.2010 and as the limitation starts from 07.07.2010 i.e., date of last payment, the claim of the plaintiff is not barred by limitation. Hence, the suit.
9.The case of the defendants as found in the written statement is that the plaintiff is a registered contractor entrusted with the work as mentioned in the plaint. The execution of agreement dated 23.10.2008 is also admitted by the defendants. But, the defendants are contending that the plaintiff is aware of the fact that as per the terms of the contract, as and when any 7 of 27
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G.O. is issued by the Government with regard to the prices, the same is binding on the plaintiff. The defendants have to follow the G.O. issued by the Government. The Government issued two G.Os dated 16.04.2008 and 18.11.2008 and the copies of the said G.Os were supplied to the plaintiff on 31.05.2010 and 07.01.2011 and as per the said G.Os, the defendants deducted the amount from the bills of the plaintiff. The defendants further admitted the deduction of an amount of Rs.11,54,594/- as per G.Os issued from time to time. The defendants contended that as the deductions were made according to the G.Os issued by the Government, the plaintiff has no right to make any claim against the defendants. The defendants contended that the claim of the plaintiff is barred by limitation. They further contended that the plaintiff is not entitled to any interest as per the terms of the contract. Hence, prayed for dismissal of the suit.
10.During the trial, the plaintiff got examined himself as PW1 and got marked Exs.A1 to A10 – Ex.A1 is office copy of representation to 2nd defendant; Ex.A2 is copy of final bill served by the defendant; Ex.A3 is office copy of representation, dated 07.01.2011; Ex.A4 is reply issued by the 2nd defendant dated 22.02.2011; Ex.A5 is reply issued by Chief General
Manager, APEPDC Ltd., Visakhapatnam; Ex.A6 is Office copy of representation to 1st defendant, dated 09.04.2013; Ex.A7 is office copy of legal notice to defendants 1 and 2 marking copy of the same to the 3rd defendant, dated 25.04.2013; Ex.A8 is postal acknowledgment from 2nd defendant; Ex.A9 is reply notice issued by the defendants 1 and 2 dated 10.05.2013; Ex.A10 is statement of account of current account in State
Bank of Hyderabad, Sarpavaram branch from 01.07.2010 to 31.07.2010.
The plaintiff got examined supervisor cum accountant in M/s.Mani Power
Distribution Systems Private Limited, Hyderabad as PW2. On the other hand, the defendants got examined 3rd defendant, who is executive engineer of Andhra Pradesh Eastern Power Distribution Company Limited, Kakinada
Division as DW2 and also got examined Deputy Executive Engineer Civil, 8 of 27
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Andhra Pradesh Eastern Power Distribution Company Limited was examined as DW3 and got marked Exs.B1 to B12. Ex.B1 is Government
G.O. dated 28.04.2008; Ex.B2 is abstract of adoption by APEPDCL, dated 16.04.2008; Ex.B3 is bunch of bills issued by APEPDCL; Ex.B4 is agreement entered between plaintiff and APEPDCL; Ex.B5 is copy of 11th and final bill for the contract bearing No.19/2008-2009 issued by APEPDCL to M/s.Mani
Power Distribution Systems Pvt.Ltd., Hyderabad; Ex.B6 is copy of IV and part bill for contract No.12/2008-09 issued by APEPDCL to M/s.Mani Power
Distribution Systems Pvt.Ltd., Hyderabad; Ex.B7 is agreement of work;
Ex.B8 is bunch of work bills and approvals; Ex.B9 is adoption proceedings inpursuancetodirectionsofG.O.No.94videMemo
No.CGM/O&CS/EPDCL/VSP/EECIVIL/F.P.V/D.No.2054/08,dt.18.11.2008;
Ex.B10 is month wise G.Os issued for fixing cement and steel prices by the
Council of Chief Engineers; Ex.B11 is agreement by APEPDCL with M/s.Sai
Enterprises of Tanuku, W.G.Dt., for the work of manufacturing of 8.0M/300
Kg and 9.1M/280 kg WLPSCC poles at PSCC centre, Bommuru and Ex.B12 is bunch of bills issued to M/s.Sai Enterprises of Tanuku, W.G.Dt, On the representation of counsel for the defendants, the evidence of DW1 was eschewed.
11.In this backdrop, reference is made to the evidence of plaintiff side wherein, the plaintiff was examined as PW1, who in his examination-in-chief by way of affidavit as required under Order XVIII Rule 4 CPC, reiterated the facts so far as the claim of the plaintiff is concerned against defendants.
During his cross examination, he stated that he is doing contract works for
Andhra Pradesh Eastern Power Distribution Company Limited for the past 20 years apart from doing private contract works. He deposed that any scheme imposed by the public sector will be applicable to Andhra Pradesh
Eastern Power Distribution Company Limited. He further deposed that there is no clause regarding non application of public sector schemes in the agreement dated 23.10.2008. He further deposed that the total value of the 9 of 27
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contract was Rs.1,07,56,800/- and the amount shall be paid in installments after completion of the work. He further deposed that he was not aware as to whether he had filed the agreement in the Court or not. He further stated that after the completion of the work as and when he raised bills, they were paid by Andhra Pradesh Eastern Power Distribution Company Limited. He further stated that Andhra Pradesh Eastern Power Distribution Company
Limited reduced the amount of steel and cement at the time of making payment. He further stated that the 1st installment was paid in the year 2009. He further stated that the 1st and 2nd bill were paid as per the bill raised by the plaintiff and no amount was deducted. Thereafter, again during his further cross examination, he stated that Andhra Pradesh
Eastern Power Distribution Company Limited started to deduct price according to G.O. from the 2nd installment. He further deposed that the 2nd bill was issued within two months of the 1st bill. He deposed that the contract work was started on 03.12.2008. He further admitted that he had no document to show that he raised objection with regard to reduction in the rates. He further admitted that there was no clause in the agreement under Ex.B4 that Andhra Pradesh Eastern Power Distribution Company
Limited will not implement the Government G.O.s and he further admitted that as per Ex.B4, the wages are to be paid as per Government G.O. He further admitted that as per the additional condition in Ex.B4, it was mentioned that any price escalation will not bind. He pleaded ignorance as to the existence of said G.O. on the date of the agreement. He further denied the suggestion that he was having knowledge about the G.O. and accepted the price reduction till the last bill was paid and raised the objection at a later stage as if he was not aware about the G.O.
12.The plaintiff got examined supervisor cum accountant in M/s.Mani
Power Distribution Systems Private Limited, Hyderabad, which undertakes contract works for Andhra Pradesh Eastern Power Distribution Company
Limited for the past 20 years as PW2. He deposed that their company did 10 of 27
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contracts of construction of TEN 33/11 KV sub stations with connected 33
KV and 11 KV lines under work order 19/2008-2009 and agreement dated 13.03.2009. Apart from the above contract, their company did another contract for construction of three 33/11 KV sub stations with connected 33
KV and 11 KV lines under work order 12/2008-2009 and agreement dated 30.09.2008. He further deposed that both the contracts were executed during 2009-2010 and both were completed. He further stated that under both works, their bills were paid as per actual work done and no amount was deducted towards declamation of steel and cement from their company.
During his cross examination, he stated that Andhra Pradesh Eastern Power
Distribution Company Limited was public sector, but pleaded ignorance as to the applicability of Government G.Os. to Andhra Pradesh Eastern Power
Distribution Company Limited. He stated that as per the documents submitted by him there was no deduction made for steel by Andhra Pradesh
Eastern Power Distribution Company Limited. He further stated that he had not filed the agreement between their company and the defendants and he stated that he was not aware of clauses of agreement between their company and the defendants. He further pleaded ignorance as to the averment in his chief affidavit about the escalation and declamation of prices. He denied the suggestion that as there was no necessity of using large quantity for works under Ex.B5 and B6, no declamation of price was given for steel. He further admitted that there was no mention of steel in item No.2 of Page No.7 of Ex.B6 in schedule SS.II. But, he stated that there was a mention about the steel in Ex.B5.
13.On the other hand, though the defendants choose to file the chief affidavit of Gorla Prasad, Executive Engineer (Operations), Kakinada as
DW1, but later counsel for the defendants filed memo stating that the DW1 got promotion and not holding the office and the evidence of DW1 may be eschewed and hence, the evidence of DW1 was eschewed by this Court.
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14.The defendants got examined 3rd defendant, who is executive engineer of Andhra Pradesh Eastern Power Distribution Company Limited, Kakinada
Division as DW2. He filed his chief affidavit in lieu of chief examination under Order 18 Rule 4 CPC and reiterated the averments of his written statement. During his cross examination, he stated that he was deposing basing on the record as he was not working in the said office at the relevant point of time. He admitted that the plaintiff was doing contracts works for
Andhra Pradesh Eastern Power Distribution Company Limited since 2000 and still continuing works till date. He further deposed that the tender estimate will be prepared by their corporate department who will take into consideration all the G.Os while preparing tender notice and estimates. He admitted that Ex.B2 was issued on 16.04.2008 and it came into effect from 01.03.2008. He further admitted the procedure mentioned in clause 5 of
Ex.B2. He further admitted that the declamation in the present case was made on flat rate and not as per the procedure laid down in Ex.B2. He further deposed that Ex.B1 was issued by transmission corporation on 28.04.2008 and Andhra Pradesh Eastern Power Distribution Company
Limited adopted the same on 18.11.2008 under Ex.B9. He further admitted that their corporate department will peruse all the G.Os passed by Transco while preparing tender notice and estimates. He further deposed that the date of opening of price bid for tender was 16.07.2008 and the agreement was dated 23.10.2008. He further admitted that the plaintiff offered 8.43% lesser than the estimated price. He stated that the prices were fixed as per rate fixed in the year 2008-09. He further stated that Ex.B4 was a printed firm prepared by their department and the contractor had no right to make any alteration in the said contract under Ex.B4. He further admitted that there is no clause either in tender notification or Ex.B4 that the prices mentioned in the tender notification are subject to variation of prices adopted by Andhra Pradesh Eastern Power Distribution Company Limited.
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He further admitted that Ex.B4 was a concluded contract between the plaintiff and Andhra Pradesh Eastern Power Distribution Company Limited.
He deposed that there is no additional or supplementary agreement entered between the contractor and Andhra Pradesh Eastern Power Distribution
Company Limited subsequently. He further deposed that as per their records, there was no information to the plaintiff given by their department about Ex.B9 and applicability of price variation in the contract from the date of Ex.B9. He further stated that as per Ex.B4, the contractor was not entitled to ask for any escalation of prices. He further stated that as per
Clause 13 of detailed tender notice in Ex.B4, it is mentioned that “notwithstanding any subsequent change in the market value for each material the changes to the contractor will remain as originally entered in the written contract.” He further stated that in the present case, materials were purchased by the contractor himself. He further stated that the working instructions mentioned in Ex.B9 were not enclosed to Ex.B9 and they have not filed the said instructions and earlier EOO (P&MM)
M.S.No.121 dated 26.05.2008 mentioned in Ex.B9. He further deposed that the 1st bill under Ex.B3 was dated 11.02.2009 and no declamation was made in the 1st bill. He further deposed that the income tax and work tax deductions were to be made from the net amount payable to the contractor after deduction of declamation amount. But, he pleaded ignorance as to whether the bills under Ex.B3 shows that tax amounts deducted from the gross amount and thereafter the declamation was deducted. He stated that he cannot depose about the method adopted in Ex.B3 bills due to the lack of records. He further deposed that the final bill will be issued only after the contractor completes the work to the satisfaction of the department and in the present case, the final bill was issued on 15.06.2010. He further admitted that there was no record to show that they had intimated the levy of declamation to the plaintiff. He further stated that they filed Exs.B7 and
B8 to show the other contracts entered by their department, but, denied the suggestion that Exs.B7 and B8 related to the escalation and not 13 of 27
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declamation. He deposed that as per page No.73 and 78 of Ex.B7, there was a mention about supplemental agreement. But, he denied the suggestion that as Ex.B7 and Ex.B8 were case of escalation, the department entered into supplemental agreement. He further stated that they made deduction of declamation in 12 bills of the plaintiff. He further deposed that the contract of construction of substation includes construction of office of sub station with cement and steel. He admitted that the contract under Exs.B5 and B6 were for construction of new sub stations. He further admitted that the contractor under Exs.B5 and B6 used cement and steel for the construction of office, but no declamation was made. But, he stated that the agreement under Exs.B5 and B6 were partial turn key works in which 80% of the material will be supplied by the department and only 20% will be purchased by the contractor. He further denied the suggestion that as there was a concluded contract between the plaintiff and their department under Ex.B4, no declamation can be claimed. He further denied the suggestion that as the plaintiff was not informed about the deduction of declamation in each bill, and the department had made deduction for declamation only in the case of the plaintiff and no other contractors.
15.The Deputy Executive Engineer Civil, Andhra Pradesh Eastern Power
Distribution Company Limited was examined as DW3. He filed his chief affidavit in lieu of chief examination under Order 18 Rule 4 CPC and reiterated the averments as folded in the written statement. He further stated that their department had entered into supplementary agreement to one M.Srinivasarao, as it was a case of escalation and there was no necessity for separate agreement in the case of declamation. He further stated that the plaintiff himself signed in the measurement book for the deduction of the prices and received the deducted payment from the second bill till the final bill and there was no violation in the procedure adopted by the department. During his cross examination, he stated that he was not working in the said post at the relevant period of contract. He further 14 of 27
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admitted the procedure in the specified Clause 5 of Ex.B2 and they adopted the rate fixed by the principal secretary (R&B) every month as per the said procedure. He further admitted that they deducted declamation charges for 12 bills under Ex.B3. When asked about filing of any record to show the adoption of the said procedure, he stated that they would prepare the bills basing on the G.Os and forwarded the same to the plaintiff and if he had any objection, he could raise the same at that point or he can even stop the work. He further admitted that escalation can be claimed by the contractor and declamation can be claimed by the department if there was a difference of 5% between the tender rate and government rate. He admitted that in the present case, the contractor agreed for 8.9% lesser than tender rate. He further stated that they have adopted tender rate as per G.O. for claiming declamation. He further admitted that their department had not issued any notice intimating declamation in the price or the proposal to impose declamation calling for objections. He stated that the plaintiff gave his first representation of protest on 07.01.2011. He stated that they have not referred the said representation to the Arbitrator as the work was already completed, but, they issued reply notice. He further admitted that Ex.B7 and Ex.B8 related to the escalation cases. He further stated that there was a written contract under Ex.B4 between the plaintiff and the defendant but denied he suggestion that the said written contract was binding on the both the parties and not G.Os. He further denied the suggestion that the department adopted declamation only in the case of the plaintiff. During his further cross examination, he stated that the contractor under Ex.B11 accepted the tender under 3.3% lesser than tender rate. He stated that the declamation and escalation are concerned with the price variation of steel and cement. He further admitted that the gross amount mentioned in
Ex.B12 was without giving effect to declamation. He further admitted that the department had collected income tax and work tax on the amount of declamation in the case of the plaintiff. He denied the suggestion that the declamation calculation was wrong and the department was not entitled to 15 of 27
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claim any declamation after entering into a concluded contract with the plaintiff under Ex.B4.
16.First of all, it is better to lay down the undisputed facts that i.e., there is no dispute about the opening of tender, offer of the plaintiff at 8.43% less than the tender rate and execution of written agreement on 23.10.2008 under Ex.B4. Similarly, there is no dispute that the defendant company is statutory authority and any G.Os passed by the Government are applicable to the defendants. Further, there is no dispute that the plaintiff had completed the work under the contract to the satisfaction of the department on 29.04.2010. Further, there is no dispute that the plaintiff received the payments under 13 bills and the final bill was paid on 24.05.2010. Further, there is no dispute that the department had deducted an amount of
Rs.11,50,594/- towards declamation in the rate of steel and cement.
17.First of all, it is pertinent to note that the plaintiff is contending that the limitation starts from the date of last payment i.e., 07.07.2010, whereas the defendant is claiming that the date of limitation starts under Article 137 from the date of first deduction made in second bill or under Article 18 from the date of completion of work i.e., dated 29.04.2010. The plaintiff is claiming that the limitation starts from the date of last payment and he filed
Ex.A10 to show that the said amount under the final bill was received by the plaintiff on 07.07.2010. But, a perusal of Ex.A2 bill goes to show that the date of completion of work is 29.04.2010 and the said bill was prepared and accepted on 24.05.2010 wherein the plaintiff had signed and received the cheque without raising any objection. The present suit is filed on 20.06.2013.
18.Now, it is better to put down the relevant provisions hereunder:-
Article 137 of Limitation Act is a residuary provision, meaning it applies to any application for which no specific period of limitation is 16 of 27
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provided elsewhere in the Act, and it prescribes a limitation period of three years from the date the right to apply accrues.
As per provisions of Article 137, the limitation starts from the date when the right to sue accrues. The defendant is contending that in the present case, the limitation starts from the date when the 2nd bill was issued. On the other hand, the plaintiff is contending that the limitation starts from the date of payment of last bill.
Article 18 of Limitation Act is for the price of work done by the plaintiff for the defendant at his request, where no time has been fixed for payment.
As per provisions of Article 18, the limitation starts from the date of completion of work. The defendant is contending that in the present case, the limitation starts from the date when the work was completed and final bill was issued. On the other hand, the plaintiff is contending that the limitation starts from the date of payment of last bill.
19.The plaintiff is not denying the applicability of G.Os to the defendant company. It is not the case of the plaintiff that there is any clause for declamation in Ex.B4 agreement. Admittedly, as per clause 5 of additional conditions in Ex.B4 agreement, it is categorically mentioned that no request for escalation of rate will be considered when once rate is accepted and the contractor shall abide to the rate accepted till the completion of the contract.
There is no specific mention about declamation in the agreement under
Ex.B4, but the plaintiff is contending that by virtue of above said clause, as the plaintiff is not entitled for escalation the implied meaning is that the department is not entitled for declamation. On the other hand, the defendant is contending that the defendant being a statutory authority had incorporated the said clause only to avoid price fluctuations in market leading to higher claims and the word escalation does not include declamation as both the words and meanings are different. If at all, the department wanted to exclude declamation along with escalation, it would 17 of 27
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have been mentioned as price variation. But, the specific use of the word escalation shows that the department had intentionally avoided declamation.
20.The Learned counsel for the plaintiff contended that the G.O relied upon by the defendant for deduction of declamation under Ex.B2 is dated 16.04.2008, whereas a perusal of Ex.B4 goes to show that the tender were called in the month of June, 2008, whereas the tender was prepared during 2008-2009 and the bid was opened on 16.07.2008 and the agreement under
Ex.B4 was entered on 23.10.2008. The contention of the counsel for the plaintiff is that the tender process itself was initiated after the issuance of
Ex.B2 G.O., which means the department had knowledge of the said G.O and is required to fix the price after taking into consideration the said G.O.
To the contrary, the counsel for the defendant contended that though the
G.O. was passed on 16.04.2008, the same was adopted by Transco under
Ex.B1 on 28.04.2008 and the same was adopted by the Andhra Pradesh
Eastern Power Distribution Company Limited on 18.11.2008 under Ex.B9 which is subsequent to the date of agreement under Ex.B4.
21.It is vital to note that Andhra Pradesh Eastern Power Distribution
Company Limited has not made any deduction towards declamation in respect of the first bill dated 11.02.2009, as the execution of the work was already completed. The department would make the payment by raising bills as and when work is done. In such manner, the department made deduction towards declamation from the second bill where under the work was executed after the adoption of G.O. under Ex.B9. The plaintiff having knowledge about the said deduction towards declamation and signing the measurement book at each stage of completion and estimation of work, kept quiet without agitating or any protest for the deduction in respect of declamation and after receiving the entire amount under the contract including the realization of the final bill, has chosen to give representation to 18 of 27
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the department with regard to deduction of declamation. A perusal of Ex.A2 and Ex.B3 bills, clearly goes to show that the plaintiff has nowhere made any protest or agitated that he was receiving the amount under the said bills while reserving his right to contest or challenge the deduction towards declamation charges. If at all, the plaintiff wanted to challenge the said deduction for declamation, he ought to have made any representation or protest at the earliest point of time.
22.In this regard, it is vital to note the various decisions relied upon by the both the parties, which are as follows:-
The counsel for the defendant relied on the following decision between
Dhanush Economically Vs. A.P.S.R.T.C. reported in 2020 (0) Supreme
A.P. 451, wherein it was observed that the notification and G.O. would prevail over the terms and conditions of the license deed.
The counsel for the defendant relied on a decision in Hindustan Steel
Limited Vs. R.C.Roy reported in 1987 (0) Supreme (Pat) 314, wherein it was held that article 18 of Limitation Act, 1963 was applicable to the case and the period of limitation would run from the date of submission of the final bill, not from the date of submission of each individual bill. The court reasoned that the work done by the plaintiff was continuous process and the final bill represented the completion of the entire work.
The counsel for the defendant relied on a decision in the State of
Rajasthan Vs. Mohan Singh reported in 1992 (0) Supreme (Raj) 947, wherein it was observe that Section 113 of the Limitation Act provides that a suit for the recovery of the money due on a contract must be filed within three years from the date when the money becomes due and the Court held that the money in the present case became due only when the final bill was prepared and since, the final bill had not been prepared until the date of the suit, the suit is not bad by limitation. The limitation period for the filing of the suit for recovery of money due on a contract starts from the date 19 of 27
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when the money hecom4es due, which is the date of preparation of the final bill.
The counsel for the defendant relied on a decision in State of
Rajasthan Vs. Ram Kishan reported in 1977 (0) Supreme (Raj) 49, wherein it was observed that the staring point of limitation for filing a suit for recovery of the price of works done under a works contract is the date of issuance of the completion certificate and final measurements by the engineer in chief in charge.
The counsel for the defendant relied on a decision in Devendra Kumar
Vs. Nagarpalika Parishad, Shamali and another reported in 2015 (0) (All) 1399, wherein it was observed that under Article 18 of the Limitation
Act, the limitation period for a suit for recovery of money due for a works contract is three years, which would commence from the date of completion of work. It was further observed that the words “when the work is done” in clause 3 of Article 18, would have to read in consonance with column 1 and the limitation would commence when the work done by the plaintiff is measured by the defendant and he find satisfaction that work as requested has been done. It was further observed that the work will be deemed to have been done when it was duly entered in the measurement book and on the basis of which final bill was prepared.
From all the above decisions relied upon by the defendants it is clear that in the case of a works contract, the period of limitation would start from the date of completion of work or preparation of final bill.
23.Applying the relevant provisions and above decisions to the present facts of the case on hand, it is seen that by virtue of Article 137, the right to sue first accrued to the plaintiff on the date of deduction of the declamation in the second bill which was within two months of the first bill dated 11.02.2009. Even if Article 18 of the Limitation is applied, the period of limitation would start from the date of completion of the work i.e., 20 of 27
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29.04.2010. Even in case, if the limitation is to be counted from the date of preparation of final bill, it would start from 24.05.2010 and not from the date of encashment of cheque by the plaintiff i.e., 07.07.2010, as the cheque can be presented for encashment at any time in its validity. Even if assumed that the final bill was issued on 15.06.2010. as mentioned in letter attached to the said bill in Ex.A2 and B3, the limitation would start from that date, but as the present suit is filed on 20.06.2013, the same is clearly barred by limitation.
24.Another fold of contention of the plaintiff is that the defendant department had deducted declamation only in the case of present plaintiff arbitrarily, without any prior notice or information. On the other hand, the defendant got filed Ex.B5 to Ex.B8 and Ex.B11 and Ex.B12 to show that they have made deductions for declamation in the case of other contractors.
A perusal of Ex.B5 to Ex.B8 goes to show that they all the case of escalation wherein supplemental agreement was executed and escalation was given to the contractor. It was elicited during the cross examination of DW2 and
DW3 that the case under Ex.B5 to Ex.B8 relate to escalation. A perusal of
Ex.B10 and Ex.B11 goes to show that they relate to application of declamation and the said contractors accepted the same without agitating and the same was brought out during the cross examination. It is pertinent to note that admittedly the plaintiff being registered contractor with Andhra
Pradesh Eastern Power Distribution Company Limited is still continuing to do contract works for the company. If really, he had any grievance that the company illegally or unlawfully made deductions only in his case, he would have not chosen to continue the said contract works for the defendant company after filing of the suit. It is not out of place to mention that as the defendant company, being statutory authority, is bound to abide by G.Os, it has chosen to honour the case of escalation under Exs.B5 to B8 by executing supplementary contract and also made deduction towards declamation in respect of other contractors under Exs.B10 and B11 apart 21 of 27
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from the case of plaintiff and the same shows that the contention of the plaintiff does not hold any water.
25.The evidence of PW2, who is another contractor, is to the effect that no declamation was deducted in his work contract. But, a perusal of the material on record shows that the said G.O under Ex.B2 would be applicable only to the case where the variation is more than 5%, but, as the case of PW2 fell under the category of below 5%, no deduction was made in his case. Moreover, the nature of work contract and usage of steel and cement in both the contracts is varying and as such, the evidence of PW2 does not seems to help the case of the plaintiff.
26.The another argument put forth by the learned counsel for the plaintiff is that the department had not adopted and followed proper procedure while making deductions towards declamation. In this context, the defendants submitted Ex.B10, which shows the fixing of prices for cement and steel by the council of chief engineers as per the procedure contemplated and approved by the Government. Hence, the said contention is not tenable.
27.The counsel for the defendant during the course of arguments contended that the defendant company being statutory authority, the plaintiff was bound to issue mandatory notice under Section 80 CPC before filing of the present suit. But, the plaintiff did not issue the mandatory notice under Section 80 CPC and hence, the suit is liable to be dismissed on that ground also. In this regard, when looked into the written statement of the defendant, there is no pleading in this aspect and hence, it has to be construed that the said plea was waived. In this regard, it is vital to refer a decision Bishan Dayal Vs. State of Orissa reported in 2001 (1) SCC 555, wherein it was observed that notice under Section 80 CPC can be waived by 22 of 27
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the authorities concerned and the waiver can be inferred even from non appearance and absence of pleadings in the written statement.
28.The counsel for the plaintiff relied on decision in Rashtriya Ispat
Nigam Vs. M/s. Pratyusha Resources and Infra private Ltd., and
anotherreported inAIR 2016 SC 861, wherein it was held that cause of action arises when the real dispute arises i.e., when one party asserts and the other party denies any right. A perusal of the said decision goes to show that in that case there was extension of time for completion of the work and there were exchanges of letters for the dispute between the parties and hence, the cause of action was calculated from the date of refusal. But, in the present case, the plaintiff never agitated or gave any representation till the realization of final bill and hence, the said facts of the case are not applicable to the present case on hand.
29.The counsel for the plaintiff also relied a decision Pramod
constructions, Guntur vs. Government of A.P., rep. by chief
examination, Hyderabad and others , reported in 2024 (3) ALT 530 (D.B.) (A.P.), wherein it was observed that the cause of action for the suit accrued from the time of rejection of the claim. A perusal of the said facts of the case goes to show that the work was not completed and it was a case of inclusion of new items and hence, the limitation was taken from the date of refusal of the claim of the contractor, but, in the present case, the facts are different and hence, the said decision is not applicable.
30.The counsel for the plaintiff also relied on another decision in Branch
Manager, Oriental Insurance Company Limited and another Vs.
M/s.Sri Venkateswara Poly system and othersreported in 2024 (6) ALT 46 (A.P.) (NRC), wherein it was held that the date for cause of action was taken from the date of denial. A reading of the said decision goes to show 23 of 27
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that there were continuous correspondence between the parties and there was acknowledgment of debt under Section 18 of Limitation Act. But, in the present case on hand, the plaintiff accepted and signed the M-book and received the payments under second bill to final bill without any protest and hence, the above decision is not applicable to the present facts of the case.
31.The counsel for the plaintiff also relied on another decision in N.Aruna
Vs. The State of Andhra Pradesh and othersinBatch Petitions
W.P.No.11215, 11273, 11274 and 11275 of 2023, wherein it was observed that the government should be more vigilant while issuing tender notification and the tendering authority cannot alter the tender conditions in the middle of the tender process unilaterally. On going through the said decision, it is seen that the in the said case, there was negligence on the part of the department and the department found fault with for unilateral change in the tender terms. In the present case on hand, there is no negligence on the part of the department, but the declamation was imposed due to the adoption of subsequent G.O issued by the Government which cannot be found fault with in the light of documentary evidence submitted by the defendants for following the proper procedure contemplated, especially when the plaintiff is not denying the applicability of G.Os to the defendant company.
32.The counsel for the plaintiff also relied on another decision in Chief
Engineer, Water Resources Department and others Vs. Rattan Indian
Power Limited through its directors and others reported in AIR 2023 (SC) 422, wherein it was observed that a party is estopped from challenging the levy of amount after signing the contract i.e., concluded contract is binding on both the parties. In the said case, there were two conflicting G.Os and hence, it was observed by the Hon’ble Apex Court that concluded contract would prevail over G.O. Even if it is assumed that concluded contract would prevail G.O., admittedly, there is no clause or mention in 24 of 27
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Ex.B4 excluding the levy of declamation. Hence, the said facts are not applicable to the present case on hand.
33.The counsel for the plaintiff also relied on another decision in Block
Development Officer, Panchayhat Samati, Guntur and another Vs.
M.Sambaiah reported in 2023 (2) LS 229 (DB), and A.P. Industrial
Infrastructure Corporation Ltd., Hyderabad Vs. M/s.NCCIVRCLSMC JV
rep.by its power of attorney holder, Hyderabad reported in 2024 (6) ALT 475 (DB) (TS) with regard to awarding of interest.
34.Even taking into consideration the argument of the learned counsel for the plaintiff that the citations relied upon by the learned counsel for the defendants are helpful to the plaintiff than the defendants, the limitation starts from the date of completion of work and submission of final bill, it can be seen that the work was completed on 29.04.2010 and final bill was prepared on 24.05.2010 and the said final bill was issued on 15.06.2010.
The present suit is filed on 20.06.2013. So, viewed from any angle, the suit of the plaintiff is barred by limitation. From the entire edifice of evidence on record, it is clear that the suit of the plaintiff is clearly barred by limitation.
Accordingly, the issue is answered.
ISSUE NO.2:
Whether the plaintiff is entitled to the suit amount?
35.In view of the enunciation in the earlier issue, this court has no hesitation to conclude that the plaintiff is not entitled for the relief claimed in the suit. Accordingly the issue is answered against the plaintiff.
ISSUE NO.3:
To what relief?
36.In the result, the suit is dismissed.
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Typed to my dictation by the Stenographer Grade-II, corrected and pronounced by me in open Court on this the 8 th day of April, 2025.
Sd/- Smt.Nikitha R.Vora,
VI ADDL.DISTRICT JUDGE,
KAKINADA
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
FOR PLAINTIFF: P.W.1 : Nallam Pullarao P.W.2 : Kola Naga Surya Padmanabham
FOR DEFENDANTS: DW.1 : Gorla Prasad, Executive Engineer (Operations) DW.2 : Nallam Uday Bhaskar, Executive Engineer DW.3 : Gazula Veera Venkata Satya Surya Seshagirirao, DEE
DOCUMENTS MARKED
FOR PLAINTIFF: Ex.A1: Office copy of representation to 2nd defendant. Ex.A2: Copy of final bill served by the defendant. Ex.A3: Office copy of representation, dated 07.01.2011. Ex.A4: Reply issued by the 2nd defendant dated 22.02.2011. Ex.A5: Reply issued by Chief General Manager, APEPDC Ltd., Visakhapatnam. Ex.A6: Office copy of representation to 1st defendant, dated 09.04.2013. Ex.A7: Office copy of legal notice to defendants 1 and 2 marking copy of the same to the 3rd defendant, dated 25.04.2013. Ex.A8: Postal acknowledgment from 2nd defendant. Ex.A9: Reply notice issued by the defendants 1 and 2 dated 10.05.2013. Ex.A10 : Statement of account of current account in State Bank of Hyderabad, Sarpavaram branch from 01.07.2010 to 31.07.2010. FOR DEFENDANTS: Ex.B1: Government G.O. dated 28.04.2008. Ex.B2: Abstract of adoption by APEPDCL, dated 16.04.2008. Ex.B3: Bunch of bills issued by APEPDCL.
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Ex.B4: Agreement entered between plaintiff and APEPDCL. Ex.B5: Copy of 11th and final bill for the contract bearing No.19/2008- 2009 issued by APEPDCL to M/s.Mani Power Distribution Systems Pvt.Ltd., Hyderabad. Ex.B6: Copy of IV and part bill for contract No.12/2008-09 issued by APEPDCL to M/s.Mani Power Distribution Systems Pvt.Ltd., Hyderabad. Ex.B7: Agreement of work. Ex.B8: Bunch of work bills and approvals. Ex.B9: Adoption proceedings in pursuance to directions of G.O.No.94 vide Memo No.CGM/O&CS/EPDCL/VSP/EECIVIL/F.P.V/ D.No.2054/08, dt.18.11.2008. Ex.B10: Month wise G.Os issued for fixing cement and steel prices by the Council of Chief Engineers. Ex.B11: Agreement by APEPDCL with M/s.Sai Enterprises of Tanuku, W.G.Dt., for the work of manufacturing of 8.0 M/300 Kg and 9.1 M/280 kg WL PSCC poles at PSCC centre, Bommuru. Ex.B12: Bunch of bills issued to M/s.Sai Enterprises of Tanuku, W.G.Dt,
Sd/- Smt.Nikitha R.Vora,
VI ADDL.DISTRICT JUDGE,
KAKINADA
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