JUDGMENT
K.B. Siddappa, J.
1. This Appeal is filed against the Judgment and decree passed in O.S. No. 296/82 on the file of Principal Subordinate Judge, Visakhapatnam.
2. The suit was filed for recovery of Rs. 44,10,000/- towards compensation for the loss sustained by plaintiff-Company as the handing over of the ship after causing repairs was delayed by the defendant for 70 days i.e., from 27-12-1979 to 7-3-1980 at Rs. 63,000/- per day. They claimed interest at the rate of 19% per annum and also costs of the suit.
3. The case of the plaintiff is as follows:-
The ship of the plaintiff’s company named “M. V. Indian Tribune” sustained damage when it met with an accident in Bombay in 1979. It was handed over to the defendant i.e., M/s. Hindustan Shipyard Ltd., Visakhapatnam for necessary repairs and to make it seaworthy again. The repairs should be effected within a stipulated and reasonable time of 57 days. The starting of the period is reckoned from completion of survey by the Local Classification Surveyors and after obtaining their recommendations. Time was essence of the contract. Payment will be made by the plaintiff on presentation of the bills accompanied by certificates and details of work done. The defendant should also do within the said time all incidental works as may appear necessary or to be advised by the plaintiff during the progress of work. On or about 31-10-1979 the defendant requested for another extra week for completion of the work. But the plaintiff turned down the request by its letter dated 2-11-1979. The starting of the work should be taken as 30-10-1979 as on that day Insurance Surveyors held survey and gave recommendations. The job was to be done by the defendant partly in wet basin and partly in dry dock. For that purpose 42 days and 15 days respectively were allotted. By 27-12-1979 the period for completion of work elapsed. However, the defendant failed and neglected to complete the dry dock work expeditiously with due diligence though the dry dock was available. The defendant repaired some other vessels and refused to pay any attention to the repairs of the ship of the plaintiff in spite of repeated protests by the plaintiff. Further, though not required, at the request of the defendant the plaintiff made two interim payments of Rs. 5,00,000/- and Rs. 10,00,000/- even before the work was completed. The ship was delivered on 7-3-1980. The defendant committed breach of contract and the plaintiff sustained heavy loss at the rate of Rs. 63,000/- per day, for 70 days. When the defendant failed to pay damages in spite of demands, the suit is filed.
4. The defendant’s case is as follows:-
The plaintiff in its telex dated 1-9-1979 requested the defendant to send estimates and to quote approximately the price and time with regard to repairs to the vessel. The defendant-company in their letter dated 6-9-1979 gave their quotation. In response to the letter of the plaintiff the defendant company sent a quotation on 20-9-1979. They also communicated the conditions. The following are the material clauses: that the acceptance of the quotation for carrying out the repairs to be informed 15 days in advance; the date of commencement to be reckoned only after completion of survey by local classification surveyors after the recommendations were obtained and the vessel to be ready for hot work certificate to be obtained by the owners; that the repairs to be carried both in wet basin and dry dock, approximately for 57 days. The additional work is to be taken up at additional cost and time. The quotations were valid for a period of 90 days, subject to the restrictions imposed by the Electricity Board with regard to the supply and price of energy. Thus the time required to carry out such of those repairs that were expressly indicated by the plaintiff in its letter dated 6-9-1979 was approximately indicated as 57 days. The same cannot be construed as definitely fixed. Some ancillary works were also indicated during the progress of the work. Thus, the ancillary works could not be finished within the anticipated 57 days. Further, the plaintiff failed to communicate its acceptance of the quotation dated 20-7-1979 well in advance of 15 days. But they accepted by their letter dated 2-11-1979 long after the arrival of the vessel at the defendant’s yard i.e., on 29-10-1979. The plaintiff in its letter dated 2-11-1979 submitted that the vessel would be required to stay for a further period of one week over and above 57 days in the defendant’s dry dock and that it would request that the work involved in the damage repairs be proceeded with and completed as soon as possible. At no time the defendant agreed that the work would be completed within a period of 57 days including the ancillary or incidental works which were indicated by the plaintiff during the progress of the work. The survey was completed on 30-10-1979. They indicated that the quantum of work in No. 3 hold has increased than originally indicated in the plaintiff’s specifications and therefore they informed the plaintiff that an additional week would be required. The plaintiff sent as many as 7 lists between 3-11-1979 and 26-11-1979 to be included in the work order. The vessel arrived on 29-10-1979. The survey was completed on 30-10-1979. The repairs were started with effect from 31-10-1979. The defendant in its letter dated 20-9-1979 indicated that the period of 57 days is only approximate and they indicated that additional work would be subject to additional time and cost. The telex messages dated 1-9-1979 and 20-9-1979 sent by the plaintiff would establish that the plaintiff did not record time to be the essence of the contract. The docking schedule was upset. The repairs of another vessel M.V. Jala Murari of Scindias was to be given priority. Hence, the dry dock was continuously occupied from 30-11-1979 to 15-2-1980. Further, there was 75% power cut each day during that period. The defendant was forced to reschedule the work of the plaintiff’s vessel. The power cut necessitated additional time for completion of repairs. This fact was brought to the notice of the plaintiff by the letter dated 8-1-1980. In those circumstances, the work could not be completed. The plaintiff never informed that the defendant caused any financial loss to them. They did not demand any damages for the delay when they took delivery of the vessel on 7-3-1980. The claim of damages is only an afterthought. No protest was registered at the time of taking delivery. The part payments were treated as advance payments against the repairs done to the ship. The plaintiff has to pay more than Rs. 92,017-33 towards repair work. They have filed O.S. No. 118/81 for reimbursement of Rs. 1,30,99,254-02, being the balance of excise duty paid in advance by the defendant-company in respect of vessels M.V. Indian Grace and M.V. Indian Glory built by the defendant company for plaintiff company. The present suit is filed as a retaliation. It is a speculative case. The plaintiff never claimed any damages. They did not take the trouble of issuing a lawyer’s notice claiming this amount. The suit is misplaced and is liable to be dismissed.
5. The lower Court on the above pleadings framed the following Issues:
(1) Whether the time is the essence of the contract?
(2) Whether the plaintiff is entitled for damages at the rate of Rs. 63,000/- per day for a period of 70 days as claimed?
(3) Whether the plaintiff is estopped from making the suit claim?
(4) To what relief ?
6. The plaintiff examined P.Ws. 1 to 4 and marked Exs. A-1 to A-12. The defendant examined D.W.I and marked Exs. B-1 to B-6.
7. Considering the evidence on record, the learned Subordinate Judge held all the Issues against the plaintiff and consequently dismissed the suit with a direction to bear their respective costs.
8. The learned Counsel for the appellant/plaintiff submitted that the lower Court went wrong when it failed to take some important aspects of this case into consideration. The delay of 70 days is apparent. The terms of the agreement clearly indicate that time is the essence of the contract. In the agreement it is specifically admitted that both the dry dock and wet basin work should be completed within 57 days as indicated in Ex. A-3 dated 20-9-1979. The learned Subordinate Judge grossly erred to appreciate the fact that in their letter dated 2-11-1979 (Ex. A-4) the plaintiff specifically declined to grant extension of time. This itself indicates that the time was always deemed to be the essence in this contract. The evidence of P.Ws. 1 and 2 is very cogent on this aspect. The learned Judge took their evidence in a light vein. It is pertinent to note that one C.M. Rao was the Manager of the defendant company during that time. But he was not called to the witness box. He would have been the better person to speak about the terms of the contract. The lower Court has not even taken into consideration the fact that the repairs were not effected within the reasonable time after the expiry of the stipulated time. For that the learned Judge ought to have granted damages. It is in the evidence of D.W. 1 himself that there was delay in effecting the repairs to the vessel of the appellant because they were attending the repairs of other vessels. They kept the vessel of the plaintiff idle awaiting a vacancy in wet basin till 17-2-1980 and thereby caused every day loss to the plaintiff. They were not diligent in effecting the repairs. They were attending the repair work of vessels of Scindias, neglecting the work of appellant. The lower Court erred in applying the general conditions of docking of vessels in Hindustan dry dock of respondent (Ex. B-5). The lower Court also erred in applying conditions 3(c) and 18 thereof to the vessels. The general conditions were not part of the contract between the parties. They kept the vessel at dry dock for repair for 17 days. But as per the agreement they should keep the vessel for 15 days. This caused delay in effecting the repairs. Even the rotation in the entry book of Hindustan Dry Dock is not followed in this case. The lower Court was not right in holding that the plaintiff did not give 15 days prior intimation in writing to the respondent of its acceptance of the quotations. The plaintiff accepted the quotations long prior to that date by the telex dated 20-9-1979 under Ex. A-5. The defendant confirmed by the telegram dated 4-10-1979 (Ex. A-6). The additional repairs suggested by the plaintiff were only ancillary. They could have been done within the stipulated time. According to the Counsel, the lower Court grossly erred in observing that the delay in effecting the repairs was due to the circumstances beyond the control of the defendant. The lower Court also erred in observing that there was no formal written protest while taking delivery of the ship and that the plaintiff is estopped from claiming any damages. The plaintiff is not precluded from claiming damages for late delivery. The lower Court erred in dismissing the claim of the plaintiff.
9. In support of his contention, the learned Counsel for the appellant relied upon the Judgment in Muhammad Habidullah v. Bird and Company, AIR 1922 P.C. 178. In that case it was held that the promisee may extend time for performance of contract. The damages for breach of contract should be calculated from the extended date.
10. The law on this point is fairly settled. In Gomathinayagam Pillai and Ors. v. Palaniswamy Nadar, it is held as follows:-
“…………It is not merely because of specification of time at or before which the thing to be done under the contract is promised to be done and default in compliance therewith, that the other party may avoid the contract. Such an option arises only if it is intended by the parties that time is of the essence of the contract. Intention to make time of the essence, if expressed in writing, must be in language which is unmistakable: it may also be inferred from the nature of the property agreed to be sold, conduct of the parties and the surrounding circumstances at or before the conduct. Specific performance of a contract will ordinarily be granted, notwithstanding default in carrying out the contract within the specified period, if having regard to the express stipulations of the parties, nature of the property and the surrounding circumstances, it is not inequitable to grant the relief. If the contract relates to sale of immovable property, it would normally be presumed that time was not of the essence of the contract. Mere incorporation in the written agreement of a clause imposing penalty in case of default does not by itself evidence an intention to make time of the essence………”
The Supreme Court also held:
“………… Fixation of the period within which the contract is to be performed does not make the stipulation as to time of the essence of the contract. It is true that appellants 1 and 2 were badly in need of money, but they had secured Rs. 3006 from the respondent and had presumably tied over their difficulties at least temporarily. There is no evidence that when the respondent did not advance the full consideration they made other arrangements for securing funds for their immediate needs. Intention to make time of the essence of the contract may be evidenced by either express stipulations or by circumstances which are sufficiently strong to displace the ordinary presumption that in a contract of sale of land stipulations as to time are not of the essence. In the present case there is no express stipulation, and the circumstances are not such as to indicate that it was the intention of the parties that time was intended to be of the essence of the contract. It is true that even if time was not originally of the essence, the appellants could by notice served upon the respondent call upon him to take the conveyance within the time fixed and intimate that in default of compliance with the requisition the contract will be treated as cancelled ………”
11. A Bench of this High Court in Kilaru Venkatasubbayya v. Kalluri Padmalayamba and Anr., 1969 (1) An. W.R. 344 held that where there is failure to perform terms of contract before the stipulated time, the contract does not become void. It only becomes voidable at the option of the promisee and that if promisee accepts performance afterwards, promisee is not entitled to claim compensation unless he gives notice to promisor of his intention to claim compensation and that the question whether time is the essence of the contract or not must be expressed in contract in clear terms or may be inferred from the conduct of parties prior to the contract.
12. Again, in State of A.P. v. M/s. Associated Engineering Enterprises, Hyderabad, 1989 (2)ALT 372 a Bench of our High Court held that it is open to the respondent Contractor to avoid the contract on account of the Government’s breach of promise to deliver the site at a particular time, but he did not do so and accepted delivery of site at a time other than agreed upon earlier. In such a case he is precluded from claiming compensation for any loss occasioned by such delay, unless he had given notice to the Government of his intention to claim compensation on that account.
13. This being the position of law, now we have to see in the circumstances of the present case, whether the time was intended to be the essence of the contract and whether the plaintiff was entitled to any damages for delayed delivery of ship for a period of 70 days.
14. In this case, there is no indication in so many words fixing the rigid time schedule for carrying out the repairs. The defendant indicated that the work would be completed subject to power cut by the Electricity Board. The vessel itself was handed over at the yard on 29-10-1979. The Surveyors gave recommendations as to the repairs to be carried out on 30-10-1979. In Ex.A-3 which is dated 20-9-1979 it is stated by the defendant that 15 days advance intimation as to the acceptance should be given. The plaintiff in its letter Ex.A-4 dated 2-11-1979 wrote their acceptance which is beyond the scheduled time. The defendant had indicated in Ex. A-3 dated 20-9-1979 that additional work would be undertaken at additional cost and at additional time. The quotations were indicated to be valid for a period of 90 days. It was also one of the conditions that all the repairs should be indicated before taking delivery of the vessel. In this case, the Insurance Surveyors incorporated some other work in No. 3 Port hold. This necessitated for extension of time. It is pertinent to note that after considering the nature of work the plaintiff in Ex. A-4 dated 2-11-1979 accepted the quotations and requested the defendant to effect the repairs ‘as soon as possible’. There is indication in Ex. B-4 that in case of increase in power cut by the Electricity Board, the time for repair work shall be extended. The defendant addressed Ex. B-2 dated 8-1-1980 in which they clearly informed the plaintiff that the Electricity Board imposed 75% power cut during night between 5 p.m. and 10 p.m. each day and that they were forced to reschedule the work of the plaintiff with effect from 31-12-1979. They also indicated that they required additional time which was not negatived by the plaintiff. Therefore, the above documents indicate that there was no intention to make the time essence of the contract. The later conduct of the parties also does not indicate that the time was made essence of the contract. Moreover, the plaintiff was indicating additional work from time to time. This necessitated extension of time in completion of the work. DW-1 clearly stated that the time limit of 57 days is only a tentative period and there was no intention to make the time as essence of the contract. It is already indicated that the acceptance of the quotations by the plaintiff-company was not communicated 15 days in advance as stipulated under Ex. A-3. They only communicated under Ex. A-4 dt. 2-11-1979. The delay is on the part of the plaintiff only. In this case, the conduct of the parties is also important in coming to a conclusion. PW-2 admitted that he did not ask the plaintiff-company to issue notice to the defendant for delay in repairs. He admitted that they have not written any letter to the defendant saying that they would claim damages if the work is not carried out within the time. There is no protest at the time of taking delivery after the vessel was made seaworthy. Moreover, the learned Judge was right in holding that the delay was due to the circumstances beyond the control of the Shipyard and that the plaintiff could not prove that the defendant has purposefully delayed the repairs. It is elicited from P.W.3 that he did not write any letter to the defendant claiming damages. It is also elicited that the plaintiff did not register any protest before taking delivery of the ship. There is no allegation that the defendant was negligent in effecting the repairs. In those circumstances, the lower Court was justified in holding that there was no intentional delay or negligence on the part of the defendant in delaying the completion of repairs to the plaintiff’s ship. Therefore, he rightly held that the plaintiff in the instant case is not entitled for any amount towards damages and compensation.
15. When there is no fault on the part of the defendant there is no question of claiming any damages at the rate of Rs. 63,000/-per day, for 70 days. The appellant/plaintiff is estopped from making the suit claim.
16. The lower Court threadbare considered all the aspects in the case and rightly dismissed the claim of the appellant/plaintiff. There are no grounds to interfere with the Judgment and decree passed by the lower Court. Hence, the Appeal is dismissed. The parties are directed to bear their own costs.