Posted On by &filed under Allahabad High Court, High Court.

Allahabad High Court
Nadir Shah vs The Municipal Board on 21 March, 1929
Equivalent citations: 121 Ind Cas 394
Bench: Banerji, King


1. This is a plaintiffs appeal in a suit for damages against the Municipal Board of Cawnpore for breach of a contract to construct filter beds in three chambers at Banajhabar.

2. The Municipal Board of Oawnpore called for tenders for construction of the work and the plaintiff’s tender for Rs. 23,437 was accepted, and a contract for the construction of two pre filters and one final filter was placed with him.

3. The course of business regarding con-tracts by the Municipal Board appears to be that they call for tenders and the contractors offer rates for the work to be done, and on the 19th of April, 1923, the plaintiff presented the tender Ex. N. He also duly deposited the necessary amount of money which had to be deposited under the terms of the tender which he had offered. At a resolution of the Municipal Water Works Committee, dated the 24th of May, 1923, and confirmed by the, Municipal Board, the tender of the plaintiff wa9 accepted. He got a work order and he was directed to arrange to start work at once and to complete the work by the 3lst of December, 1923. The work order Ex. K contained certain conditions to be found at page 41 of the paper-book. One of the conditions was that if the Municipal Engineer did not approve of the work being proceeded with, he had the right to countermand the order within a reasonable time, and the contractor could only claim for work done up to the time the order was countermanded at the rates entered in the work order. Condition 2 was that if any alteration in the work-order may be made that must be entered in writing and initialled and dated by the Municipal Engineer. There were other conditions. A contract was entered into between the contractor and the Municipal Board of Cawnpore, which is to be found at page 42, Ex. L. At page 43 there is an extract of the conditions. The Municipal Engineer had the power to make any alteration in the designs, drawings or instructions that may appear to him necessary during the progress of the work, and the contractor was bound to carry them out within such time as the Municipal Engineer by writing under his hand specifying the alterations shall fix. As regards the rate it was provided that the rate mentioned in the agreement was to continue to be the rate for the extra work, but if there were no such rate mentioned and there were no estimates then at the rate mentioned in the Municipal Engineer’s schedule of rates or at a rate agreed upon in writing before the commencement of such work. It further provided that such alteration will not invalidate the contract but the time for the completion of the work will be extended and the certificate of the Municipal Engineer will be conclusive as to such time and the contractor shall not make any alteration or execute any work not provided in the contract without the Municipal Engineer’s authority in writing.

4. The plaintiff commenced work and on the 8th of October, 1923, the Municipal Engineer directed the work to be stopped until further orders. What had happened was that on the 7th of October, 1923, a meeting had been convened by Mr. Rya D. Chairman of the Water Works Committee, in connection with the work that had been going on and that Committee had decided that the work was to be stopped until expert opinion was obtained about the filters, and the Superintending Engineer to Government was the expert whom they consulted. Exhibit D ia a copy of a letter which was sent by the Executive Engineer, 3rd Division, Public Health Department, to the Superintending Engineer, and the latter forwarded this letter to the Municipal Board. This letter is dated the 18th of October, 1923. A copy of this letter was sent to the plaintiff on the 14th November, 1923. No orders were given to the plaintiff by the Municipal Engineer about what was to be done, “and whether the recommendations of the super intending Engineer contained in Ex. 2 had been accepted or not does not appear. But the plaintiff had been writing to the Municipal Engineer and we find from Ex. P. dated the 21st of April, 1924, that the plaintiff was claiming overhead charges since the work was stopped. The plaintiff gives reference to the letters he had been writing to the Municipal Engineer from the 6th of November, 1923, and he said:

We have not received any instructions which we are awaiting as clearly stated in Municipal Engineer’s letter No. 680 dated the 8th of October, 1923. By not replying our letters the Municipal Board is subjecting itself to overhead expenses claimed by us from month to month.

5. This letter was addressed to the Chairman of the Municipal Board. No clear instructions were given to the plaintiff.but the Municipal Engineer wrote to the plaintiff on the 3rd of May, 1924 (Ex. 3). The Municipal Engineer gave an extract of a resolution of the Water Works Committee, dated the 27th March, 1924, for information To see what this resolution meant one has to refer to Ex. 20 which is a copy of the proceedings of a meeting of the Water Works, Committee of the 27th of March, 1924. Certain recommendations were made by the Water Works Committee to the Municipal Board and sending a copy of the portions of the recommendations clearly conveyed nothing to the plaintiff. The plaintiff wrote to the Municipal Engineer on the 15th of May (Ex. 4) that a mere alteration of part of specification could not invalidate a contract because para. 14 of the agreement says so clearly in unequivocal terms. The plaintiff followed this letter up by a notice sent by his Plea der to the Chairman of the Municipal Board on the 19th of June, 1924 (Ex. F). That notice said that if for any reason the Municipal Board wrongly wished to terminate the contract for no fault of the plaintiff the plaintiff was entitled to Rs. 6,000 as damages plus overhead charges to make good the loss sustained by the plaintiff by a breach of the contract on the part of the Board, and if the plaintiff was not allowed to complete the work the plaintiff would fiLe a suit for recovery of Rs. 9,000 as damages. On receipt of the notice a resolution was passed by the Municipal Board on the 26th of July, 1924, by which a Sub-Committee of two members of the Board was asked to report. That report was not submitted until the 18th of November, 1925. The Sub-Committee did not agree with the Water Works Committee that the contract with the plaintiff terminated with the stopping of the work in accordance with the letter dated the 8th of October, 1923. The Committee further recommended that plaintiff should not get any damage and that the plaintiff should be allowed to go on with the work with such additions and alterations as suggested by the Superintending Engineer, Public Health Department. On the 8th of April, 1925, the Municipal Board accepted the recommendations of the Sub-Committee (see Ex. 6 page 77).

6. The plaintiff’s case is that what happened after that date and the further action of the Municipal Board amounted to a breach of contract which had been entered into by him with the Municipal Board.

7. Certain contractors filed what is called a petition of appeal (Ex. 9) on the 21st of April, 1925. What had happened was that on the 21st of April the Municipal Engineer went to the spot and gave directions for certain work to be started and it was duly started as appears from Ex. 7 (letters of the plaintiff to the Municipal Engineer). The work that now had to be done was divided into two parts. One was thereconstruction of the filters with different materials, and another was certain dismantling that had to be done before the filters were to be constructed. By Ex. 7 the plaintiff asked that a copy of the Board’s resolution with the necessary annexure be sent to him.

8. The Municipal Engineer in the meantime prepared fresh schedules which were divided into two parts. Part A he headed as comprising work the tender for which had already been accepted by the Board, and part B as comprising work about which tenders had to be called. In place of Rs. 23,000 the alteration of the work necessitated the cost to be increased to Rs. 49,420, and as regards the other work the cost was calculated by the Municipal Engineer to be Rs. 25,467.

9. In consequence of the appeal referred to above there was an emergent meeting of the Municipal Board on the 29th of April, 1925, and it was resolved that the work be stopped till the Chairman made an inquiry as to rates and submitted and reported the new estimates to the Board. It does not appear that any orders were given to the contractor about stopping or continuing the work. We find, however, that on the 20th of May, 1925, the Board met again and two proposals were made. The first resolution which is to be found at page 89 (Ex. C) was negatived and the second resolution was that in case the contractors do not agree to this proposal fresh tenders for the whole work be called for without further reference to the Board. The reports of the Municipal Engineer dated the 16th May, 1925, and the 18th May, 1925, to be found at pages 90 and 91, appear to have been laid before the Municipal Board when the resolution referred to above was passed. That report stated that no change in the sanctioned design was contemplated, that the estimate was divided into two parts A and B. Part A consisted of works the tender for which had already been accepted by the Board and the contractor had agreed to do the cement mortar works on estimated rates. The rates of other items in this estimate are according to the tender already accepted by the Board and the estimated cost of part A was Rs. 42,420. A detail of the alteration is also to be found at page 90. It was after this that the trouble arose and the plaintiff’s work was stopped by the Municipal Board. The plaintiff thereupon instituted the present suit claiming Rs. 8,000 as damages.

10. various pleas were raised by the Municipal Board and every conceivable plea that could have been raised was set out in the written statement.

11. The learned Subordinate Judge framed five issues. His finding on issue No. 1 was in favour of the plaintiff. Issue No. 2 was decided in the plaintiff’s favour and he held that there was no breach on the part of the contractor, but that the Board stopped the work. As regards the 3rd issue his finding was that the work was rightly stopped under the circumstances and that the Board was justified in stopping the work. The 4th issue was whether the suit was barred by limitation and the learned Subordinate Judge found that the plaintiff’s suit was barred by time.

12. In appeal the learned Advocate for the Respondent, the Municipal Board of Cawn pore, has conceded that the plaintiff’s claim was not barred by limitation if the date, of the cause of action was the 20th of May, 1925, or even the 29th of April, 1925.

13. The learned Subordinate Judge has taken 29th of April, as the starting point of the cause of action and he has held that under Section 326 of the Municipalities Act, the claim not having been brought within six months, was barred. It is unnecessary to go into the point as it does not arise upon the admission made by Mr. P.L. Banerji, which, in our opinion, is correct according to the law as it stands since the amendment of Section 29 of the Limitation Act in the year 1922.

14 Dr. Katju for the appellant submits that in view of the finding that there was no breach of contract on the part of his client and because the Board having stopped the work they must be deemed to have committed a breach of contract entered into he was entitled to sue for damages.

15. Mr. Banerji on the other hand contends that the cause of action of the plaintiff arose on the 19th of June, 1924, when the plaintiff sent Ex. F to the Municipal Board. We cannot accept that contention because in our opinion that did not amount to any act on the part of the plaintiff which suggested that he was not willing to go on with the work. It appears to us that all that the plaintiff wanted was to understand what was his position with regard to the original contract entered into by him and to receive instructions according to the agreement entered into by the parties. Mr Banerji submits that when within two months from that date the plaintiff did not receive any instructions he ought to have understood that the Municipal Board was not going to accede to his request and he should have instituted a suit within six months from the date of the expiry of notice.

16. We cannot accept this contention as it was entirely due to the dilatory methods adopted by the Municipal Board of Oawnpore that they have been involved in the suit. It was not in our opinion unreasonable for the plaintiff to await the report of the Sub-Committee as he must have known that on the 26th of July 1924 long before the period of the expiry of two months from the date of his notice the Board had appointed a Sub-Committee to go into the matter. The plaintiff seems to have waited patiently from the 26th of July, 1924 to the 18th of February, 1925 to find out what were the recommendations of this Sub-Committee. He could not have anticipated that no faction would be taken by the Sub-Committee and no action would be taken by the Municipal Board until the 8th of April, 1925, and when the Municipal Board accepted the recommendation of the Sub-Committee there was no cause for him to complain. He had claimed Rs. 9,000 as damages on the 19th of June but if he was going to continue the work with the altered specification he had nothing to complain. It appears to us further that the Municipal Hoard forgetting the provisions of Section 94 (6) of the Municipalities Act decided on the 20th of May, 1925, to give a go-bye to the resolution of the 8th of April, 1925. All the work that the plaintiff had agreed to do under the terms of his contract and at the rates which had been settled by the Municipal Engineer was in accordance with the original contract entered into and there was really no new contract when the plaintiff agreed to do the altered work. We are, therefore, of opinion that the Municipal Board of Cawnpore, committed a breach of contract and they were therefore, liable to the plaintiff for damages. Under the agreement entered into by the plaintiff and the Municipal Board it is perfectly clear that the Municipal Engineer was the authority for altering or adding to the work and the Municipal Board having accepted on the 8th of April, 1925 the recommendations of the Sub-Committee and the Municipal Engineer having prepared estimates and the plaintiff having accepted the estimates made by the Municipal Engineer, in our opinion, the Municipal Board cannot get out of the contract at all.

17. The only point that remains is what is the amount of damages which the plaintiff is entitled to claim on account of the breach by the Municipal Board. In our opinion the plaintiff was entitled to claim the damages on the agreed estimate of the revised work prepared by the Municipal Engineer and that amounts to Rs. 42,400 The evidence of Mr. Ryan in our opinion gives a fair estimate of what was the loss to the plaintiff on account of the breach of contract by the Municipal Board. Taking all the circumstances of the case we ate of opinion that if the plaintiff is given 10 per cent on the estimated cost of the work he will be sufficiently compensated for the loss to him. We set aside the decree of the Court below and decree the plaintiff’s claim for Rs. 4,240. Considering the conduct of the Municipal Board and the way in which this case was defended by the Municipal Board the plaintiff is entitled to his full costs both in this Court and in the Court below.

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