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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
FIRST APPEAL NO.433 OF 1998
1. Khopoli Municipal Council }
at and Post: Khopoli Taluka }
Taluka Khalapur,District Raigad }
2. The Chief Officer, Khopoli }
Municipal Council,At and Post }
Khopoli,Taluka Khalapur }
District Raigad } . Appellants
Orig.Defendants)
vs
Ram Malhari Sable (since deceased) }
ig }
1. Smt Chanda R.Sable }
2. Mina Ram Sable }
3. Santosh Ram Sable }
4. Sandhya Ram Sable .. }
5. Sachin Ram Sable }
All adults, residing at Khopoli, }
Taluka Khalapur, District Raigad }
.. Respondents
(Orig.Plaintiff
nos.1 to 5 in
the suit)
..
Mr.Gautam Patel a/w Mr.Rushir Tolat i.b.L.C.Tolat & Co
for Appellants
Mr.S.G.Aney,Sr.Counsel with Mr.Vineet B,Naik with
Mr.R.S.Alange for Respondent nos. 1 to 5.
CORAM:P.B.MAJMUDAR AND
R.V.MORE,JJ
Reserved on: 6th October, 2009
Pronounced on:16th October, 2009
JUDGMENT ( Per R.V.More, J )
1. The appellant (Original Defendants) takes exception
to the judgment and decree dated 7th March, 1998 passed
by the Civil Judge, Senior Division, Panvel, at Panvel in
Special Civil Suit No.91 of 1992 wherein the appellants
were directed to pay Rs.53,32,411/- to the respondents by
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way of damages with simple interest at 18 % p.a. From the
date of the suit.
The facts leading to the filing of the appeal are
as follows :
2. One Ram Sable, predecessor-title of the respondents
filed a suit against the appellants for a perpetual
injunction and directing them to obey the agreements and
resolutions passed from time to time for the construction
of a hospital building. In the alternative, a claim was
also made for recovery of an amount of Rs.35,65,411/-
towards damages. (hereinafter for the sake of convenience
Appellants and Respondents are referred to as defendants
and plaintiff respectively.) The case of the plaintiff
was that the defendants had called for tender for
construction of a hospital building. The plaintiff
filled in the tender and his tender being the lowest, the
work of construction of hospital by a written agreement
dated 19th August, 1980 was alloted to him. The period
of completion of the construction of the said hospital
was 18 months from the date of agreement. The defendants
agreed to supply the required quantity of cement bags for
the construction of hospital building. The work order in
pursuance of agreement was issued on 21st August, 1980.
The line out one was given on 12th September, 1980 and
actual work of construction started on 15th September,
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1980. The plaintiff thereafter, collected the required
material for the construction of the building and also
obtained loan from the Bank of Maharashtra to the extent
of Rs.3,50,000/-. It is the specific case of the
plaintiff that the defendants stopped supply of cement
and therefore, the work was stopped. The rates of
building material was in the meantime enormously
increased. The plaintiff did not seek any escalation in
the rate of construction for a period of 18 months.
However,thereafter demanded higher rate for the
construction in view of the escalation of the price of
the building material and the defendants in pursuant to
the demand of plaintiff passed a resolution bearing No.64
on 22nd July, 1983 and agreed to the escalation in price.
The plaintiff continued the construction work from
August, 1983 but, on 31st March 1984 the Collector,
Raigad stopped the construction work of the building on
the basis of a complaint by one of the Councillors of the
defendants. The plaintiff again sought for increase in
the rate since the building material had become very
costly during that period. The defendants passed a
resolution bearing No.58 on 25th July 1986 and agreed to
increase 25 % above the DSR of 1986. This resolution was
again stayed by the Collector of Raigad and the plaintiff
was compelled to suspend the construction activities. An
appeal was filed against the order of the Collector to
the Director of Municipal Administration. However, the
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same was dismissed and thereafter Revision application
was filed before the State of Maharashtra. The State of
Maharashtra allowed the appeal of the plaintiff and a
direction was given that the plaintiff should complete
the construction work as per the rates given in the
resolution No.58 dated 25th July, 1986.
3. The plaintiff thereafter in pursuance of the order
of the government executed a fresh agreement on 16th May
1988. This
igagreement was subsequently confirmed by
defendants by passing Resolution No.51 dated 9th June,
1988. The plaintiff contended that they are ready and
willing to complete the construction work as per the
agreement dated 16th May 1988. However, officers of the
defendants did not allow the plaintiff to commence the
work and they worked against their interest. The
defendants did not pay the plaintiff adequate money, did
not supply cement and did not record the measurement in
the measurement book. The plaintiff also averred that
had the defendants co-operated, he would have constructed
the hospital building in time and would have earned
goodwill. However, for the adamant attitude of the
officers of the defendants the work could not be
completed for a period of 9 years. It was also contended
that exorbitant interest was required to be paid for the
loan obtained by the plaintiff from the Bank of
Maharashtra. An amount of Rs.10,10,000/- was also
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claimed from the defendants towards running bills. This
payment was also delayed by the defendants. The plaintiff
ultimately served a notice on 21st August, 1989 and
thereafter filed a suit requiring the defendants to obey
the agreements and resolutions passed by them from time
to time and an injunction restraining their officers,
servants and agents from causing obstruction in the
construction work. An amount of Rs.10,10,000/- was
claimed towards outstanding bills as on 30th September,
1988.
By way of damages, the plaintiff claimed an amount
of Rs.6,60,000/- for the rent he had to pay for centering
and machinery for a period of 11 months at Rs.60,000/-
per month, Rs.15,76,818/- towards interest amount which
the plaintiff was required to pay to the bank, an amount
of Rs.3,13,700/- towards payment of salary to gateman and
watchman and Rs.5,000/- for notice charges.
4. The plaintiff amended the plaint in pursuance of an
order on Exhibit 32 and added para No. 39. By this
amendment, he prayed for obedience of Resolution no.43
dated 9th May 1991. In pursuance of an order below
Exhibit 75, the plaint was again amended so as to enhance
the original claim of Rs.35,65,411/- to Rs.60,82,418/-.
The plaintiff revised the claim for damages under the
caption” interest” from Rs.15,76,811/- to Rs.17,18,811/-.
The plaintiff further claimed centering material bills at
Rs.60,000/- per month from the date of notice till the
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institution of suit totalling Rs.3,60,000/-. Thus, the
claim for rent for centering and machinery and other
material is calculated at Rs.10,20,000/- as on the date
of suit. The plaintiff also added new claim of Rs.
19,50,000/-. This claim was made on the basis of
resolution No.43 dated 9th May 1991. It is contended by
the plaintiff that the defendants agreed to give
construction rate as per DSR for 1991-92. Balance work
of the hospital building was estimated at Rs.78,00,000/-
and had the work was completed, he would have earned 25 %
profit that is how claim of Rs.19,50,000/- was made. The
plaintiff also claimed 24 % interest on the decreetal
amount.
5. The defendants by filing the written statement
resisted the claim of the plaintiff. The facts in respect
of calling for tender, contract with the plaintiff and
issuance of the work order are not disputed by the
defendants. It was contended by the defendants that they
have supplied 3355 cement bags to the plaintiff during
the period from 14th November, 1980 to 3rd December,
1981. It was contended that considering the total supply
of cement bags to the plaintiff and the total work done
by the plaintiffs at site, it cannot be said that the
construction work was suspended due to non supply of
cement. The defendants denied that they have committed
any breach of the agreement for the supply of cement. It
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was the case of the defendants that payment of advance
towards material, running account bills etc have been
paid to the plaintiff and inspite of this he did not
complete the construction of hospital within the agreed
period and completely stopped the construction since
November, 1981. The plaintiff was informed from time to
time by letters dated 15th June 1986, 19th February
1982, 31st February 1982 and 12th July, 1982 for the
lapses committed on his part. Notice dated 16th September
1982 was also issued to him. In the said notice, it was
contended that the defendants complied with its
obligation under the agreement and inspite of this, the
plaintiff failed to complete the work within the
prescribed period. It was specific case of the
defendants that plaintiff raised false contentions of
price escalation of building material and suspended the
work. It also contended that brother of the plaintiff,
Laxman Sable being a Municipal Councillor used his
position to gain undue advantage and attempted to seek
escallation in the amount of construction of the hospital
building. It was contended that the plaintiff did not
make sincere efforts for completion of the construction
work within a period of 18 months. Inspite of
resolution no.64 dated 22nd July 1983 granting him
increased rates, the plaintiff started construction at a
very slowly speed just to give a feeling that work was
started. The defendants supplied 1700 bags of cement
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during the period from 10th March 1983 to 8th October,
1984. An amount of Rs.2,00,000/- and Rs.1,00,000/- was
paid on 30th December 1983 and 14th February 1983
respectively. Subsequently, resolution no. 58 dated 25th
July, 1986 was passed under which the plaintiff was to be
paid 25 % above DSR of 1986 and an amount of Rs.
2,00,000/- was to be given by way of advance. However,
both the resolutions were quashed and set aside by the
Collector and the respondents were directed to complete
the work as
igper the original tender rates. It was
contended that the government allowed the appeal of the
plaintiff whereunder directions were given to complete
the construction of hospital building as per resolution
no. 58 dated 25th July, 1986. However, payment of Rs.
2,00,000/- was turned down which was agreed to be given
as advance to the plaintiffs. In pursuance of this
decision, the defendants supplied 1000 bags of cement
between he period from 20th March 1988 to 29th April
1988. However, the plaintiff started demanding payment
of all the work completed by them as per new rates which
was contrary to the government order itself. The
defendants paid to the plaintiffs 4th running bill of Rs.
6,09,600/-. It is specific case of the defendants that
after receipt of this bill, the plaintiff again stopped
construction work and did not obey the terms and
conditions incorporated in the agreement dated 16th May
1988 executed in pursuance of government order. In such
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a situation, the defendants passed a resolution dated
23rd December, 1988 and thereafter the plaintiff was
served with communication that he should start work
within 15 days otherwise the work will stand withdrawn.
Inspite of this notice, the plaintiff did not re-start
the work. In the meantime, all the files were
requisitioned by the Collector of Raigad. The defendants
were ordered not to make payment to the plaintiff. In the
above view of the facts, it was contended that the
plaintiff was never interested in starting the work as
per the latter agreement and filed a false suit. It is
the specific contention of the defendants that they had
recorded measurement of construction done by plaintiffs
in their measurement book. No further work was done by
the plaintiff beyond the work recorded in the measurement
book. The running bills have been paid for the
measurement that were recorded. The claim along with the
amended claim have been specifically denied by the
defendants. On the contrary, the defendants contended
that they have made extra payment of Rs.4,55,000/- to the
plaintiff. They also contended that they supplied in
total 6055 cement bags to the plaintiff. However,
plaintiff used 4020 cement bags and 2035 bags of cement
were received by the plaintiffs in excess. The price of
the same is at Rs.63,737/-. Thus, the defendants claimed
an amount of Rs.5,18,937/- from the plaintiffs for which
counter claim was made.
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6. The plaintiff by filing written statement denied
the counter claim of the defendants. At the stage of
evidence, the plaintiff has restricted his claim to an
alternate prayer for damages.
7. The learned trial Judge in view of the above
pleadings framed as many as 13 issues. The plaintiff
examined his brother who is the power of attorney holder
as PW No.1. The plaintiff also examined one Jamalbhai
Sisotia as PW2. On behalf of the defendants one Sunil
Gawde, Civil Engineer was examined as DW 1. Both the
plaintiff and the defendants relied upon number of
documents to which reference will be made at an
appropriate place. The learned trial Judge on the basis
of the pleadings, documentary and oral evidence came to
the conclusion that the defendants have committed breach
of contract by stopping supply of cement by not making
payment in time and by not giving cooperation to the
plaintiff. The trial Court also held that the resolution
no. 43 dated 9th May 1991 is legal and valid. The trial
court also held that the defendants has not paid
outstanding bill amount of Rs.10,10,000/- to the
plaintiff. The trial court granted damages including the
above amount of Rs.10,10,000/- at Rs.53,37,411/- with 18
% interest p.a.from the date of the suit till realisation
of the decreetal amount.
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8. Mr.Gautam Patel, learned counsel for the
defendants took us through the oral evidence of the
plaintiffs and the defendants. He also invited our
attention to various correspondence and notices
exchanged between the parties. He submitted that the
defendants have not committed any breach in supply of
cement bags to the plaintiff. The measurement of the work
done by the plaintiff was forthwith taken into the
measurement book. The plaintiffs was given from time to
time amounts towards advances and running bills. The
plaintiff has alleged breach in respect of the first
agreement dated 28th August, 1980. However, that
agreement was not produced on record. Earlier agreement
dated 19th August, 1980 is superseded by latter agreement
dated 16th May 1988. He submitted that if allegations of
the plaintiff is about breach of the first agreement,
then the said agreement ought to have been produced on
record. However, the plaintiff has not done so. He also
submitted that if the suit is on the basis of latter
agreement dated 16th May 1988 then a grievance cannot be
made about breach of the terms and conditions of the
first agreement. He submitted that finding of the trial
court cannot be sustained if the evidence on record is
appreciated in its proper perspective. He submitted that
the plaintiff’s brother Laxman Sable is an influential
person being a Councillor of the defendants-council since
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1975. The suit was filed by the said Laxman Sable as a
power of attorney holder of the plaintiff. The said
Laxman Sable had taken undue advantage of his position
and got passed various resolutions from time to time. He
also submitted that the plaintiff could not prove that
the defendants had committed breach of the terms and
conditions of agreement. On the contrary it was the
plaintiff who was not interested in completion of the
construction of the hospital work and only interested in
getting increased rate in construction amount. Mr.Patel
also submitted that the plaintiff failed to prove that
Rs.10,10,000/- is due and recoverable from the defendant-
council. He submitted that the plaintiff also failed to
prove damages under the head of ‘loss of profit’, salary
of staff, rent of centering and machinery and interest
on loan. He lastly submitted that the plaintiff’s suit is
liable to be dismissed.
9. Mr.Aney, learned senior counsel appearing for the
plaintiff invited our attention towards the prayers made
in the suit and submitted that the suit was filed for
enforcement of the various resolutions passed by
defendants from time to time. He invited our attention to
the text of the resolutions of the defendants passed in
the years 1980, 1983, 1986, 1988 and 1991. He submitted
that there is enough evidence on record to show that the
the defendants itself committed breach of the terms of
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contract and terminated the contract. Mr.Aney took us
through the impugned judgment and submitted that the
learned trial Judge has given cogent reasons in arriving
at a conclusion that an amount of Rs.10,10,000/- is due
and recoverable from the defendants to the plaintiff.
He also submitted that their grant of damages under other
heads are allowed on the basis of evidence on record and
the same cannot be faulted with in any way.
Mr.Aney lastly submitted that the appeal filed is
devoid of substance and the same deserves to be
dismissed.
10. While considering the rival contentions, it is
necessary to be seen as to who has committed breach of
contract. In this regard, voluminous evidence produced
by the parties is required to be considered along with
the oral evidence adduced by the parties and only
thereafter liability of either parties will have to be
fixed. There is no dispute that the plaintiff’s tender
was accepted and work of construction of hospital
building was allotted to him. Accordingly, agreement was
executed on 19th August, 1980. Under this agreement, the
defendants undertook to supply cement bags to the
plaintiff. The construction was to be completed within a
period of 18 months from the date of execution of the
agreement.
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11. At this stage, the evidence of the parties is
required to be appreciated. Laxman Sable was examined as
PW 1 who is brother and power of attorney holder of the
plaintiff. He deposed in his deposition that from 1978
to 1984 he was the Municipal Councillor of the defendant
council. Thereafter, he deposed about the tender and
agreement executed between the defendants and the
plaintiff for construction of the hospital. He further
deposed that
ig cement bags were to be supplied by the
defendants in accordance with the progress of
construction and it was decided that construction
material was to be procured by the plaintiff against
which the defendants were to pay advances and these
advances were to be adjusted in their running bills. He
also deposed that a loan of Rs.3,50,000/- was obtained by
plaintiff from the Bank of Maharashtra, Khopoli Branch,
in the name of the Company and repayment was to be made
within interest at the rate of 18 % p.a. He deposed that
the first running bill was issued within 2/3 months from
commencing of the construction and progress of
construction was depending on the supply of cement bags
from the defendants. He testified that supply of cement
bags should have been atleast 1000 bags per month as the
plaintiff had capacity to utilise 1000 bags of cement.
Cement in those days was available on permit and till
September 1981 the defendants supplied 3355 bags of
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cement. He testified that supply of cement was not
regular after September, 1981 and construction was
stopped for want of cement. He also testified that after
September 1981 to July 1983 rates of building material
were increased by 100% and therefore the defendants
accepted his proposal for increase in rates of
construction and passed resolution bearing no.64 of 1983.
This resolution was stayed by the Collector, Raigad at
the instance of one Councillor. He preferred a revision
with the Commissioner, Raigad. However, the same was
rejected and stay was confirmed. He also deposed that
against order of the Commissioner, he filed an
application to the government and the government allowed
his application and as per this decision it was decided
to enter into a fresh agreement which was executed on
16th May 1988 and thereafter resolution no.51 of 1988 was
passed on 29th June, 2988. He deposed that he was ready
and willing to perform his part of contract as per the
new agreement but, the defendants were not ready. They
did not abide by the terms and conditions of the
agreement. They did not supply cement bags and did not
make any payment against it. In para 17 he deposed that
he has submitted the running bill of Rs.10,10,000/- to
the defendants. However, payment under this bill was not
paid to him and therefore on 21st August, 1989 notice was
issued to the defendants. In para 8 he deposed that
after filing of the suit there was a meeting between the
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office bearers of the defendants and himself on 31st
December, 1990 and it was decided to make payment of the
running bills of Rs.10,10,000/- and they further agreed
payment of Rs.26,00,000/- towards damages subject to
outcome of the suit. The defendants thereafter passed a
resolution No.43 dated 9th May 1991. The defendants also
wrote a letter on 5th December 1991 to the Collector,
Raigad seeking permission to make payment of Rs.
10,10,000/-. However, the Collector, Raigad did not give
permission and no payment is made till today. In para 8
he has deposed that during the pendency of the suit he
became President of Khopoli Municipal Council and he
advised the plaintiff to give up their claim regarding
the construction of the hospital and suit claim is
restricted for recovery of the amount of running bills
and dsamages.
12. In cross examination, he admitted that he was the
Councillor during the period from 1978 to 1984 and from
1996 onwards. He further admitted that whenever he was
not Councillor somebody from his family used to be
Councillor of the defendant-Council. However, he denied
that he has influenced other Municipal Councillors. He
also admitted that he was unable to give the account of
the centering. In para 11 he admitted that whatever
bills he has produced on record are as per the
measurement maintained by the defendants. He further
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admitted that the completed construction was measured and
plaintiff has submitted the running bills accordingly.
He also admitted that there is no construction which is
not measured by the defendants and about which no bill is
prepared by him. In para 13 he has specifically admitted
that the plaintiff had utilised 2355 cement bags upto
February 1982. He also admitted that plaintiffs received
3355 cement bags from the defendants up to February 1988.
He admitted that measurement books were signed by his
brother.
He admitted the measurement recorded in the
books. He admitted having received 3 running bills. In
para 14 he has deposed that he has not produced any
document in respect of account of centering materials.
He also admitted in this para that he has not produced
any more document whatsoever in respect of the claim of
Rs.10,10,000/-. He was confronted with the advocate’s
letter dated 6th November, 1988 under which the
plaintiffs agreed for deduction of an amount of advance
from running bills. In para 15 he admitted that there is
no documentary evidence in respect of the claim towards
payment of salaries of watchman and gatekeeper. In this
para he also deposed that he has not produced any
document for refund of interest of loan amount to the
bank or interest.
13. The plaintiff also examined one Jamal Sisotia as PW
2. This witness is doing business of contractor in the
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name of Universal Contractor. He deposed about the
material required for slab work and cost of material. He
has also given rate of rent of that material. In cross
examination he has admitted that Laxman Sable is having
his own centering materials
14. The defendants examined Sunil Gawde Civil Engineer
as DW1. He deposed about the tender and agreement
executed between the defendants and the plaintiff on 19th
August, 1980. He deposed that up to 30th December 1981
the defendants supplied 3355 cement bags to the
plaintiffs and there was no dispute between the parties
about supply of cement. He further testified that the
plaintiffs did not complete the construction of hospital
in proportionate of supply of cement. The Chief Officer
accordingly sent notices to the plaintiff from time to
time which are exhibited at Exhibit 152 to 154. He
specifically deposed that the plaintiff did not complete
the work within the prescribed time but on the contrary
demanded higher rent and thereafter removed the centering
material from site and work was stopped. Notice was given
accordingly on 16th September, 1982 to the plaintiff. He
deposed that the plaintiff used to make request and
accordingly he was given cement bags. He deposed that
about the resolution of 1984 and 1986 regarding
escalation of price. However, these resolutions were
stayed by the Collector. In para 4 he referred to the
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letter dated 6th April, 1988 at Exhibit 163 in which the
plaintiff agreed for the deduction of advance from the
running bills. He has deposed that the defendants
supplied total 6000 cement bags. However, the plaintiff
utilised only 4000 cement bags. After the fresh contract
of 1988, the plaintiff started work for sometime and
again started demanding increase in rates. Thereafter,
the defendants passed a resolution dated 23rd December
1988 calling upon the plaintiff to start work within 15
days.
The plaintiff was informed accordingly by letter
dated 4th January 1989. However, the plaintiff did not
start work of construction. He specifically denied that
demand of Rs.10,10,000/- was for the work done. He
further deposed that there is no construction on site for
which no payment is made to the plaintiff as per the
measurements and defendants are not liable towards the
loss for any unexecuted work. He also deposed that the
defendants never restrained the plaintiff from carrying
out further construction.
15. In cross examination in para 14 he deposed that
in the year 1980 Laxman Sable was Councillor from his
family and thereafter in the next term in 1984 wife of
Laxman Sable was the councillor. For the term 1990, son
of Laxman Sable was the Councillor from his family and in
the year 1992 Tukaram Son of Laxman Sable and wife of
Laxman Sable were the Councillors. In para 20 he
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admitted that the plaintiff submitted bills for centering
at Exhibit 121 dated 6th February 1989 and bills at
Exhibit 126 and 127 claiming interest on bank loan and by
Exhibit 128 claimed bills for watchman. In para 21 he
denied that there was compromise between the defendants
and the plaintiff in the year 1990 as per Exhibit 139.
He expressed ignorance regarding the plaintiff’s
application dated 16th March 1991 for payment of Rs.
10,10,000/-.
16. The plaintiff claimed breach of the agreement on
the part of the defendants for want of supply of cement
bags being not proportionate etc etc. If the case of
the plaintiff is perused minutely then it is clear that
the plaintiffs was alleging breach of the terms and
conditions in supply of cement bag, prior to the
executing the latter agreement dated 16th May 1988. It is
not disputed that the second agreement was executed in
pursuance of the government order and thereby agreeing
to the rate of construction as per resolution nos. 58
dated 25th July, 1986. Under this agreement the
plaintiffs were obliged to complete the construction
within a period of 15 months. It is clear from this
agreement that the rate as per resolution no.58 dated
25th July, 1986 was to be given to the plaintiff for
further construction and further period of 15 months was
also given to him to complete the construction. In view
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of these developments the plaintiffs could not have
complained about the alleged breach of agreement on the
part of the defendants namely non supply of cement bags
etc etc which is prior to the execution of latter
agreement of 1988. However, since it is the specific
case of the plaintiffs made out in the plaint and in his
deposition let us scrutinise the evidence in this regard.
17. In the light of the evidence adduced by the
respective parties, we have to consider which of the
party has committed breach of the agreement. It is the
case of the plaintiff that the defendants have committed
breach of the terms and conditions of the agreement by
not supplying cement bags, by not recording the
measurement in the measurement book because of non-
cooperative attitude of the defendants and non payment of
running bills. Case of the defendants on the contrary
was that supply of cement bags were made as per the
requirements of the plaintiff. The measurement of
construction was taken in the measurement book and
payment of advance of running bills were made to the
plaintiff. The plaintiff was obliged to complete the
construction of hospital building within a period of 18
months from the date of execution of the agreement dated
19th August, 1980. In para 13 constituted attorney of the
plaintiff deposed as follows :
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We have utilised 2355 cement bags up to
February 1982. Again I say that up to 3rd
December 1981. It is true that we received
3355 cement bags from the appellant up to “February
1982.”.
It is true that we received 3355 cement bags
from the council up to February, 1982. ”
Above admission on the part of the C.A.of the
plaintiffs do show that the Municipal council supplied
3355 cement bags to the plaintiff till February 1982.
However, only 2355 bags were utilised up to February 1982
or 3rd December 1981. This admission totally demolish
the case of the plaintiff that construction of hospital
work was stopped due to non supply of cement bags. It is
clear from the above admission that though adequate
quantity of cement bags were supplied to the plaintiff,
he could not utilise the total bags supplied by the
municipal council.
18. In para 11 of the cross examination, C.A. of the
plaintiff Laxman Sable deposed as follows :
“What ever running bills we have produced on
record are as per the measurement maintained by
the defendants. It is true that whatever
construction was completed that has been
measured and we have submitted the running
bills accordingly. There is no construction
which is not measured for and about which no
bill is prepared by me. ”
This admission of the C.A. Of the plaintiff
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also falsify the plaintiff’s that they defendants did
not measure the constructed work and running bills are
not paid accordingly.”
19. In this regard, the defendants relied upon the
documentary evidence at Exhibit 150 to 154. Exhibit 150
is letter dated 25th June 1981 addressed to the plaintiff
by the defendants. It is stated in this letter that they
have supplied the required cement and directed the
plaintiff to start construction. Exhibit 151 is letter
dated 18th August 1982 addressed to the plaintiff by the
defendants. This letter indicate that since 30th
September 1981 work is being stopped on site and the
defendants agreed to consider the extention of time for
construction of the building. Exhibit 152 is the letter
dated 19th February 1982. in this letter complaint is
made by the defendants that though in the month of 1981
advance is paid to the plaintiff by running bills the
plaintiff did half of the slab work and then it was
stopped. It is further pointed out that they have
supplied cement for first slab and thereafter
construction is being stopped. The defendants also
pointed out that work of the plaintiff was not
satisfactory. At exhibit 153 is letter dated 12th July
1982 by the defendants to the plaintiff. By this letter
it was pointed out to the plaintiffs that he has removed
the centering material from the site which is not proper
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behaviour. Exhibit 154 is letter addressed to the
defendants by the plaintiff which show that due to rains
there was damage and therefore the plaintiff removed the
centering material from site.
20. If the correspondence produced by the defendants at
Exhibit 150 and 154 is considered in its proper
perspective then it is clear to our mind that there is no
substance in the contention of the plaintiff that the
construction work was stopped for want of cement bags.
The above documentary evidence coupled with the admitted
fact that the plaintiff received 3355 cement bags till
February 1982 do show that the plaintiff failed to
complete construction work in proportionate with supply
of cement bags by the defendants.
21. It is true that in resolution passed in the year
1983 and 1984 it is stated the the work of hospital
building could not be completed for want of supply of
cement and accordingly, escalation in rates were granted
to the plaintiff in construction. However, it is the
case of the defendants that family of the plaintiff is
influential and since 1974 members of the said family
were continuously municipal councillors of the
defendants. At one time there were 3 councillors from
the family of the plaintiff and brother Laxman Sable
C.A.of the plainitiff and who was occupying position of
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President of the council. It is the specific case of the
defendants that the plaintiff’s family used to their
influence to get undue advantage. From the evidence
produced on record it is clear that entire
correspondence in respect of the subject matter of the
suit was made by Laxman Sable brother of the plaintiff
with the defendant-council. Evidence was also given by
the said Laxman Sable on behalf of the said plaintiffs.
In these circumstances, the only inference can be drawn
is that though
ig tender was allotted and agreement was
executed in the name of the plaintiff Ram Sable. Yet,
construction was undertaken by Laxman Sable who was at
the relevant time was councillor of the defendants. In
our opinion, it is highly inappropriate on the part of a
sitting councillor, to obtain contract of the municipal
council in which he is a municipal councillor either in
his name or in the name of the family member. We are of
the clear opinion that brother of the plaintiff by
utilising his position as councillors, and subsequently
as President of the municipal council got passed
resolutions mentioned above. In that view of the matter,
in our view, weightage need not be given to the
resolution passed in the years 1983 and 1986 while
arriving at a conclusion as to who is at fault especially
when witness of the plaintiff admitted that though the
plaintiffs had received 3355 cement bags till December,
1982 only 2355 cement bags were utilised till February
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1982. We find substance in the contention of the
defendants that the plaintiff was and in fact only
interested in getting escalation in the amount of
construction and not in completing the construction
within the stipulated time under the agreement in
question. Thus, it is the plaintiff who has committed
breach of the terms and conditions of the agreement by
not completing the construction work and the defendants
thus cannot be held liable for the same.
22. Once it is concluded that the defendants have not
committed any breaches of the agreement and it is the
plaintiff who has failed to complete the construction
work within the stipulated time then in our view, the
plaintiff is certainly not entitled for any damage under
any of the heads. However, since the evidence is adduced
by respective parties in this regard, we are dealing with
the same aspect hereinafter.
23. Firstly, we will deal with the plaintiff claim of
Rs.10,10,000/- towards running bills. This amount is
claimed by the plaintiff on the basis of a writing dated
31st December 1990 at Exhibit 139 and resolution nos. 43
dated 9th May 1991 at Exhibit 163 and letter of the
President of the defendant- Municipal council to the
Collector, Raigad dated 5th December, 1992 at Exhibit
149. Exhibit 139 is the minutes of meeting. These
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minutes are signed by the President of the municipal
council and 8 others. C.A. of plaintiff Laxman Sable and
his wife are the signatories of these minutes. Wife of
Laxman Sable is shown as councillor of defendant-council.
Under these minutes the meeting was called for settling
of the dispute between the parties and it was stated that
the plaintiffs has filed a suit for damage of Rs.
36,00,000/- from the defendants. It is further stated
that out of Rs.36,00,000/- amount of Rs.10,00,000/- is
towards the running bills and amount of Rs.26,00,000/- is
towards damages. It is further stated that the amount of
damages will be subject to the final hearing of the suit
and the plaintiffs should start work of construction of
hospital and complete the same within a period of one
year and within 8 days from the commencement of
construction an amount of Rs.10,00,000/- is be given to
the plaintiffs. Clause 5 of the minutes of the meeting
is very specific under which final decision in this
regard is to be taken after approval of the council and
secretary of the Urban Development Department.
24. Exhibit 134 is the resolution no.43 passed on 9th
May 1991. By this resolution the council considered the
representation of the plaintiff dated 16th May 1991 and
it is resolved that action regarding payment be taken in
accordance with rules after obtaining report from the PWD
of the government. It is further resolved that decision
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regarding payment to the plaintiff be taken in
consultation with the technical Engineer of the
government. It was further resolved that after obtaining
opinion of the technical expert of the government
decision regarding increase in the construction rate as
per 1991-92 DSR be taken.
25. By a letter dated 5th December, 1992 President of
the municipal council asked permission from the
Collector, Raigad to pay to the plaintiff an amount of
Rs.10,10,000/-. At this stage, it is worthwhile to make
a reference to Exhibit 163. Exhibit 163 is the letter
dated 6th November, 1988 by the plaintiff to the Chief
Engineer of the defendants. By this letter the
plaintiffs agreed that advance given to him may be
deducted from the running bills so as to enable him to
commence work. This writing was given by the plaintiffs
after the order passed by the government granting
escalation in rates in construction as per resolution no.
57 of 1986 and prior to execution of the agreement dated
6th May 1988. Exhibit 156 is the plaintiff’s letter
dated 25th May 1988 under which they have acknowledged
payment of Rs.6,21,496/- towards running bills. Of
course this payment is accepted under protest.
26. Exhibit 124 is the letter by the plaintiff to the
defendants’ C.E.O. Under which he claimed payment of Rs.
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6,98,600.95 under bill dated 9th January 1989. In
pursuance of this bill, the plaintiffs were paid an
amount of Rs.6,21,496/- for which the plaintiff have
executed receipt on 25th June, 1986 which is at Exhibit
156.
27. It is the specific case of the plaintiff that bill
of Rs.10,10,000/- is due from the defendants as on 30th
September, 1988. Plaintiff’s claim for Rs.10,10,000/- is
falsified in view of the document at Exhibit 124 i.e
letter dated 31st January 1989 in which he claimed an
amount of Rs.6,98,600/- as per bill dated 9th January
1989. This claim of the plaintiff in letter dated 31st
January 1989 is made over and the same is evidenced by
document at Exhibit 156 which is receipt executed by the
plaintiff on 25th May 1988 acknowledging Rs.6,21,696/-
under protest. If the plaintiff as on 31st January 1989
claimed Rs.6,58,600/- and the defendants on 25th May 1988
paid to the plaintiff Rs.6,21,096/- then it is not
understood how the plaintiff could claim further amount
of Rs.10,10,000/- claiming the same to be outstanding as
on 30th September, 1988. Again at this stage, it is
relevant to mention that by document at Exhibit no.163
the plaintiff admitted the advance given to him by
deducting from four running bills.
29. In this context, it is the specific case of the
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defendants that the plaintiff must establish that the
claim of the outstanding amount of Rs.10,10,000/- which
must be for the work done by him subsequent to execution
of agreement dated 16th May 1988. However, the plaintiff
have not given any particulars of this bill. The C.A.of
the plaintiff in para 14 of his cross examination has
specifically admitted that he has not produced any more
document in respect of Rs.10,10,000/-. He was also
confronted with letter dated 6th April 1988 at Exhibit
163. A
conjoint reading of the above documentary
evidence only conclusion that can be arrived at by the
plaintiff claim of Rs.10,10,000/- not towards the work
subsequent to the execution of the latter agreement
but,the same is being claimed for the work by way of
escalation in the rates of construction for the work done
earlier between the period from 1980 to 1984 by way of
difference in the rate granted in 1980 and the rates
granted under the orders of the government mentioned
above. In fact, it is clear from the government’s order
that the rate as per resolution no.57 of 1986 was to be
given for construction which is to be carried out
subsequent to the order and not to the earlier
construction which was completed prior to the date of the
order.
30. It is true that under Exhibit 139 it was agreed
that the amount of Rs.10,10,000/- was to be paid to the
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plaintiff. However, this amount was to be given after
according necessary approval of the government and that
of the Secretary in the Urban Development Department.
It appears that this decision was influenced by the
plaintiff’s brother Laxman Sable and his wife who was
municipal councillor and who was present in the meeting.
On the basis of this document, there is no doubt in our
mind that the so called decision is taken under the
influence of plaintiff’s brother and his wife. This
minutes does not show the particulars of work completed
by the plaintiff. Exhibit 147 is the copy of resolution
no.43 passed on 9th May 1991. This resolution does not
take the plaintiff’s case any further regarding payment
of Rs.10,10,000/- in as much as in this resolution there
is no reference regarding outstanding bill of the
plaintiff to the extent of Rs.10,10,000.- and therefore,
no relevant can be placed.
31. Letter dated 5th December, 1992 also cannot be
relied upon by the plaintiff in this regard. The said
letter is written by the President of the defendants.
This letter is sent in pursuant of the the resolution
dated 9th May 1991 which is at Exhibit 147. As stated
above, resolution at Exhibit 147 is silent about the so
called due payment of Rs.10,10,000/- to the plaintiff.
Therefore, the plaintiffs cannot contend that in this
letter President of the defendants admitted the
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plaintiff’s claim for the due payment of Rs.10,10,000/-.
32. In the light of above we are of the clear opinion
that the plaintiffs have failed to establish his claim of
Rs.10,10,000/- from the defendants.
33. The plaintiff claimed for damages of Rs.17,18,811/-
towards the interest amount which were required to pay to
the bank due to delaying tactics adopted by the
defendants,
ig Rs.10,20,000/-towards the rent of centering
materials as on the date of the suit,Rs.3,13,600/-,
towards payment of salary to the gateman and watchman,
Rs.65,000/-towards refund of security deposit and Rs.
19,50,000/- towards profit can be discussed hereinbelow:
34. Let us consider the plaintiff’s claim one by one:
The amount of Rs.17,18,811/- claimed towards
interest which the plaintiff was required to pay to the
bank due to the delay in completing the project. It is
case of the plaintiffs that he has taken a loan of Rs.
3,50,000/- from the bank. It is the specific case of the
plaintiff that he obtained loan from the Bank of
Maharashtra for doing the work in question. PW1 in para
12 specifically stated that there is no documentary
evidence in his custody in respect of payment of Rs.
17,17,000/- to the bank by the plaintiff. He has
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contradicted the above statement by saying that the
plaintiff obtained loan in the name of M/s Sable and Co.
He has specifically admitted that he has not produced any
document on record for refund of loan amount or interest.
In this regard, he relied upon document at Exhibit 127.
However, he admitted that it is not mentioned in document
at Exhibit 127 that loan amount of Rs.3,50,000/- and
interest thereon is due against the plaintiff Ram Sable.
It is not disputed that amount of Rs.2,70,000/- was
initially
given to the plaintiff by defendants
immediately upon execution of the first agreement towards
advance. If that is so, it was not necessary for the
plaintiff firstly to raise loan from the bank on
undertaking execution of the construction work even if it
is assumed for the sake of argument that the respondents
obtained said loan from Bank of Maharashtra. However,
absolutely there is no material on record to come to the
conclusion that the plaintiff paid amount of Rs.
17,00,000/- towards interest to the bank which fact is
admitted by the C.A. Of the plaintiff. We have already
recorded a finding that the construction of hospital
building was delayed because of the greedy attitude of
the plaintiffs. In that view of the matter, we are of the
clear opinion that the plaintiff failed to prove his
claim for damages.
35. The plaintiff has claimed an amount of Rs.
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3,13,600/- towards salaries of watchman and gatekeepers.
In para 50 of the cross examination of the respondent;s
C.A. he has specifically admitted that in respect of
payment of salaries of watchman and gatekeeper, there is
no documentary evidence. In this regard, the plaintiff
could not produce books of accounts to substantiate his
case. Be that as it may under Exhibit 154 the plaintiff
agreed that due to rainy reasons, to avoid damages he
removed the materials and machines. This was done in the
year 1982
itself. If that is so, then it is not
understood as to why the plaintiff was required to engage
watchman and gatekeepers. One can understand if
machinery of the plaintiff is lying at the site for
protection thereof. He is required to engage watchman.
However, this machinery and materials was already
removed. The plaintiff was not at all required to engage
watchman and gatekeepers to protect the same. In absence
of any material on record, the plaintiff cannot claim any
damage under this head.
36. The plaintiff has further claimed an amount of Rs.
10,20,000/- towards rent of materials and machineries.
In order to succeed in the plaint, the plaintiff are
expected to produce documents of accounts showing that he
paid amount for machineries. In para 14 C.A. Of the
plaintiff specifically deposed that he is not going to
produce any document in respect of account of centering
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machines claimed in the suit. Again in para 11 of the
cross examination contradictory statements are made. At
one place it is stated that C.A. Of the plaintiff by name
Laxman Sable is owner of the material and at another
place it is stated that the plaintiff- Ram Sable was
owner of the centering machines. This material as per
document at Exhibit 154 was already removed by the
plaintiff. If that be so, then the question of damages
towards rent of machines does not arise for
consideration.
ig The plaintiff in our view, failed to
prove this damage under this head.
37. The plaintiff claimed Rs.19,50,000/- towards loss
of profit. It is clear that on the basis of 15,60,000/-
under this head it is clear that on the basis of
resolution no.147 dated 9th May 1991. The resolution
however, was subject to approval by the technical officer
of the government. There is no evidence on record that
this resolution was subsequently approved by the
government and therefore the plaintiff cannot rely upon
this resolution in order to claim loss of profit based on
DSR of 1990-92. Be that as it may, we have already held
that the plaintiff and not the defendants has committed
breach of the terms and conditions of the agreement The
plaintiff was only interested in hike in the rate of
construction and therefore he stopped the construction.
The plaintiff even tried to extract money from the
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defendants utilising his influential position in the
defendant-council. In that view of the matter, we are of
the considered opinion that the plaintiff is not entitled
to claim damages under the head loss of profits.
38. Now, we will consider the counter claim of the
defendants. The defendants made counter claim for
recovery of Rs.5,18,937/-. Out of this amount, Rs.
5,50,000/- is towards recovery of advance and amount of
Rs.63,937/- is towards cost of the unutilised cement bags
by the plaintiff.
39. The evidence of the Engineer of the defendants
disclosed that there is no proof for payment of advance.
In our view, the defendant’s claim made in the counter
claim cannot be granted for want of particulars in the
evidence adduced by them on their behalf. The defendants
have paid running bills of the plaintiff as on 25th May
1988 which is evidenced by at document at Exhibit 56.
Regarding unutilised cement bags by the plaintiff there
are no satisfactory evidence. In that view of the
matter, we are not inclined to entertain the counter
claim of the defendants.
40. Taking over all view of the matter, we are of the
view that the plaintiff has failed to prove that the
defendants have committed breaches in the agreement,
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further the plaintiff failed to prove his claim for
damages. At the same time, the defendants also failed to
prove its counter claim. We accordingly, quash and set
aside the impugned judgment of the lower court. Special
Civil Suit No.91 of 1992 on the file of the Civil Judge,
Sr.Division, Panvel is dismissed with costs. Counter
claim of defendants also stands dismissed.
41. This Court admitted the First Appeal on 17th July,
1998. and stay was granted to the effect and operation of
the impugned judgment and decree on the condition that
the defendants shall deposit the entire decreetal amount
of Rs.75,00,000/-. This amount was allowed to be
withdrawn by the plaintiff after furnishing bank
guarantee. The plaintiff pursuant to this order has
withdrawn the decreetal amount on furnishing bank
guarantee Since we have dismissed the suit the plaintiff
is directed to re-deposit the said amount in this court
within a period of eight weeks from today.
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