Posted On by &filed under Supreme Court of India.


Supreme Court of India
Tamil Nadu Electricity Board & Anr vs N. Raju Reddiar & Anr on 24 April, 1996
Equivalent citations: 1996 AIR 2025, 1996 SCC (4) 551
Author: G Pattanaik
Bench: G.B. Pattanaik (J)
           PETITIONER:
TAMIL NADU ELECTRICITY BOARD & ANR.

	Vs.

RESPONDENT:
N. RAJU REDDIAR & ANR.

DATE OF JUDGMENT:	24/04/1996

BENCH:
G.B. PATTANAIK (J)
BENCH:
G.B. PATTANAIK (J)
RAMASWAMY, K.

CITATION:
 1996 AIR 2025		  1996 SCC  (4) 551
 JT 1996 (6)	14	  1996 SCALE  (4)180


ACT:



HEADNOTE:



JUDGMENT:

J U D G M E N T
PATTANAIK. J.

Leave granted.

This appeal by special leave is directed against the
Judgment of the Division Bench of the Madras High Court
dated 6.9.1995 in O.S.A. No. 112 of 1987. The plaintiffs who
are the respondents in this appeal filed the suit on the
original side of the High Court for recovery of a sum of Rs.
46,08,820/- together with interest at 18% per annum. It was
alleged in the plaint that the defendants who are appellants
in this appeal invited tenders for transportation of iron
and steel materials including unloading, weighment and
stocking from various stockyards of the suppliers to the
destination stores during the period 1.9.1978 to 31.8.1979.
In pursuance of the aforesaid advertisement the Plaintiff
No. 1 submitted his tender on 13.7 .1978 and along with
tender submitted a letter was also enclosed. This offer of
the plaintiff was accepted and an agreement was entered
into. In accordance with the agreement the plaintiff
furnished a bank guarantee and deposited the necessary
earnest money and commenced the work of transport of
materials. It was further alleged that the plaintiffs
carried the material and delivered the same at various
destinations as per the direction given from time to time by
the defendants. In all a total quantity of 1,73,78,821
metric tones of iron and steel were transported and the
necessary bills were submitted in November, 1979. But the
defendant instead of making the payments in accordance with
the terms of the contract postponed the payment of the
bills. It was averred in the plaint that the defendant
agreed to pay on multi slab basis which is apparent from
letter of the plaintiff attached to the tender submitted by
him and that was also the trade practice. The plaintiff
finally issued a notice on 28.3.1980 calling upon the
defendants to settle the bills but the defendants replied on
7.5.1980 making several misleading averments. As the
plaintiffs’ bills were not settled, the suit was filed for
recovery of the amount as already stated.

The defendants in their written statement denied the
allegations made in the plaint. The specific stand taken in
the written statement was that the plaintiffs are not
entitled to claim multi slab basis and on the other hand
they are entitled to single slab basis. It was stated that
the multi slab rates had never been accepted and not covered
by the agreement executed by the parties. It was also stated
that on the basis of instructions from headquarters the
Superintending Engineers have been passing the bills on
single slab basis and the plaintiffs remained silent during
the entire tenure of the contract period but raised this
issue after the contract period was over. The defendant
further averred that the plaintiffs have not delivered the
materials correctly at some destinations. In reply to the
aforesaid written statement the plaintiffs also filed a
reply statement denying the allegations made in the written
statement and reiterated the stand taken in the plaint. On
these pleadings the learned Single Judge framed three issues
and on Issue No. 1 came to hold that the rates mentioned in
Exhibit D-8 will have to be calculated on single slab basis
and not on multi slab basis as contended by the plaintiffs.
So far as the letter Exhibit P-1 dated 11.7.1978 which was
enclosed to the tender form Exhibit P-2, the learned Single
Judge negatived the contention of the defendant and came to
hold that the words written in ink in Exhibit P-1 were there
at the time of submission of the tender. The words were “I
have quoted my rates for each slab and add for every extra
one and part thereof”. The plaintiffs’ case is essentially
based on the aforesaid expression in the letter which was
enclosed to the tender and which according to the plaintiffs
was ultimately accepted. The learned Single Judge, however,
construed the expression “for each slab” mentioned in
Exhibit D-6 and came to hold that the tender was not on
multi slab basis. The learned Judge also held that merely
because the tender conditions are not clear one cannot
accept the contention of the plaintiff that the rates agreed
upon is on multi slab basis. Further taking into account the
terms and conditions of Exhibit D-1 the learned Judge came
to hold that the irresistible conclusion is that what was
intended is only a single slab basis. The learned Judge also
examined several other tenders and then negatived the
plaintiff’s contention that the agreement was on multi slab
basis. On an analysis of the pattern of the working of the
rates in several tenders the learned Judge rejected the
plaintiffs contention that the contract was on multi slab
basis. Though the plaintiffs relied upon several
recommendations of the Superintending Engineer but the
learned Judge on consideration of the same came to hold that
those recommendations will have to be rejected. It was also
held that the terms and conditions of a contract have to be
decided on its own and production of other contracts will
not be of any help in deciding what are the terms of the
present contract. He also held that the defendants failed to
produce any other contemporarius contract which has been
granted on multi slab basis. On issue No. 2 the learned
Single Judge on consideration of entire evidence on record
came to hold that the shortages alleged by the defendants
had not been established. On Issue No. 3 the learned Single
Judge came to hold that there is considerable delay in the
matter of payment of bills though such delay had occasioned
on account of difference in the interpretation of the terms
of the contract and the delay is on the part of the
defendants in settling the bills. With these conclusions and
on calculating on single slab basis the learned Single Judge
passed a decree for Rs. 9,31,157.63 with interest at 12% per
annum from 1.1.1980 till the date of decree and thereafter
at 6% per annum. The suit was thus decreed in part. The
plaintiffs challenged the decree by filing an appeal and the
defendants also filed a cross-objection challenging that
part of the decree in favour of the plaintiffs. The Division
Bench of the High Court relying upon the hand written
portion of Exhibit P-1 and the conduct of the Superintending
Engineer in passing the plaintiffs’ bills on multi slab
basis as well as relying upon some other contracts came to
hold that the plaintiffs are entitled to freight charges on
multi slab basis. The Division Bench also held that the
interpreation of the learned Single Judge of the expression
‘for each slab’ is wholly erroneous and it could only mean
that the rate was on multi slab basis. With these
conclusions the Division Bench allowed the plaintiffs’
appeal and dismissed the defendants’ cross-objection and
hence the present appeal by special leave.

Mr. V.R. Reddy. the learned Additional Solicitor
General appearing for the appellants contended that the hand
written portion in the plaintiff’s letter Exhibit P-1 dated
11.7.1978 which was enclosed to the tender form Exhibit P-2
is nothing but a subsequent interpolation inasmuch as
neither there is any signature either of the plaintiff or of
the receiving officer on the same and further it was really
astonishing that though the tender was submitted on
12.7.1978 but according to the plaintiff an attested copy of
the letter could be obtained from the departmental officer
on 11.7.1978. Mr. Reddy further argued that the acceptance
of the tender by the contractor clearly indicates that it
was on single slab basis as the note to the same states
“only one rate should be quoted for various lengths and
sizes and not different rates for different lengths”. Mr.
Reddy further urged that the very fact that the plaintiffs
did not submit any bills till the end of the contract period
and started to submit the bills during the extended period
of the contract would indicate that with an obvious illegal
design the bills were not being submitted in time. Repelling
the reasonings advanced by the Division Bench of the High
Court Mr. Reddy urged that passing of some bills by some of
the Superintending Engineers on multi slab basis is not
determinative of the terms and conditions of the contract
particularly when the contract is a written one and
consequently the Division Bench erred in law that the
contract was on multi slab basis.

We find sufficient force in each of the contentions
advanced by the learned counsel for the appellants.

Mr. Sivasubramanaim, the learned senior counsel
appearing for the respondents repelling the contentions
advanced by Mr. Reddy urged that there was no issue at all
on the question as to whether hand written portion was
subsequently inserted with the connivance of the officers of
the Board and therefore it would not be appropriate for this
Court to interfere with the same at this stage. The learned
counsel also contended that the very admission of DW-1, one
of the witnesses of the defendants to the effect that after
submission of the tender, discussions were made with the
contractor and the contractor explicitly expressed to have
the work done on multi slab basis, clinches the matter and
it is not open for the defendants to give a go bye to the
said admission of the witness. The learned counsel also
urged that the defendants in fact accepted and acted on
multi slab basis as is apparent from the letter Exhibit P-39
dated 18.4.80 from the Superintending Engineer, General
Construction Circle/South, Tirunelvalli to the Chief
Engineer, Materials Management, whereunder not only the
Superintending Engineer has candidly admitted that the
system of payment of multi slab basis has been in vogue in
several circles but also stated that the single slab system
will not give a workable practical solution. Learned counsel
lastly urged that the single slab system is on the face of
it wholly unreasonable and to sustain the said argument
placed before us certain calculations made in different
documents. We are unable to persuade ourselves to agree with
the contentions advanced by the learned counsel for the
respondents.

At the outset it must be borne in mind that the
agreement between the parties was a written agreement and
therefore the parties are bound by the terms and conditions
of the agreement. Once a contract is reduced to writing, by
operation of Section 91 of the Evidence Act it is not open
to any of the parties to seek to prove the terms of the
contract with reference to some oral or other documentary
evidence to find out the intention of the parties. Under
Section 92 of the Evidence Act where the written instrument
appears to contain the whole terms of the contract then
parties to the contract are not entitled to lead any oral
evidence to ascertain the terms of the contract. It is only
when the written contract does not contain the whole of the
agreement between the parties and there is any ambiguity
then oral evidence is permissible to prose the other
conditions which also must not be inconsistent with the
written contract. The case in hand has to be adjudged
bearing in mind the aforesaid principles and the plaintiffs
being conscious of this position along with the tender
appended a letter and in that letter inserted certain terms
by writing in ink to establish the case that the acceptance
of the plaintiffs’ tender would tantamount to the acceptance
to the terms contained in the letter in which there was
insertion in writing to the effect that it was on multi slab
basis. It is in this context the question whether such hand
written portion was originally there or was subsequently
inserted assumes great significance. We are unable to accept
the stand taken by the learned counsel for the respondents
that there was no such issue on this question inasmuch as
this question was considered by the learned Trial Judge
while discussing Issue No. 1 on the basis of evidence laid
and the Trial Judge had given a finding in favour of the
plaintiffs. The said finding, however, on the face of it
appears to us to be wholly unsustainable. As has been stated
earlier there was no signature either by the persons
submitting the tender or by the persons receiving the same
on the hand written portion of the letter. The learned Trial
Judge had noticed that the certified copy which was issued
by the Board on 11.7.1978 of the aforesaid letter clearly
contains the hand written portion and therefore he came to
the conclusion that the hand written portion was there at
the time of submission of the tender. The tender itself was
submitted on 12.7.1978 and we fail to understand how the
Board could grant a certified copy of the letter on
11.7.1978 when the plaintiffs’ case itself is that along
with the tender he had appended the letter in question. On
this ground alone it can be safely held that hand written
portion in Exhibit P-1 was not there at the time of
submission of the tender but was subsequently inserted
obviously with the connivance of the officers of the Board.
The Board in its rejoinder affidavit filed in this Court has
stated that the attested copy was actually received on
28.12.1978, much later than the finalization of the tenders
and agreement and in order to build up a case the aforesaid
interpolation has been made. In the facts and circumstances
of the present case the aforesaid stand of the Board appears
to us to be wholly justified and at any rate we have no
hesitation to come to the conclusion that the hand written
portion in Exhibit P-1 was not there initially and has been
inserted subsequently. The main basis of the plaintiffs’
case on which a multi slab rate was claimed therefore fails.
The written agreement between the parties nowhere indicates
that the rate to be paid to the plaintiffs was on multi slab
basis and the terms and conditions of the written contract
is not susceptible of such a construction.

It is no doubt true that DW-1 a witness of the
defendants in his evidence had admitted that after
submission of tender there was certain discussions between
the contractor and the authorities and in that discussion
contractor had expressed to charge for the job on multi slab
basis and same was accepted by the authorities. We are
afraid a decree cannot be granted in favour of the
plaintiffs on the aforesaid statement since the contract in
hand was a written one. There is no document whatsoever in
support of the aforesaid so called after tender discussion
and the acceptance of the terms in the said discussion to
the effect that rate would be charged on multi slab basis.
Then again if the plaintiff had appended the letter to the
tender indicating that he would be charging on multi slab
basis there was no occasion to have any after tender
discussion or to raise the issue of rate being accepted on
multi slab basis. The so called statement of DW-1 therefore
is wholly unacceptable and in the eye of law also cannot be
taken into account to vary the terms of the written
contract. The Division Bench of the High Court committed
obvious error in allowing variance of the terms of the
written contract relying upon such statement of DW-1 and
granted the decree on multi slab basis.

The only other question which survives for
consideration is whether the conduct of some of
Superintending Engineers in passing some of the bills on
multi slab basis can be pleaded as an estopped against the
defendants and can form the basis of plaintiffs’ case. The
answer to this question must be in the negative. It
transpires that some of the Superintending Engineers passed
some of the bills on multi slab basis and further when
complaints were received and the matter was investigated
into by vigilance to absolve the concerned officers from
liability, a recommendation has been made to grant the rate
on multi slab basis. But such a recommendation or such
passing of bills on one count or multi slab basis cannot be
construed to have conferred a right on the plaintiffs to get
the payments on multi slab basis, until and unless it is
proved by the plaintiff that the defendants agreed under the
written contract to pay on multi slab basis. The plaintiffs
have utterly failed to establish the same. A particular
officer for various reasons may pass a bill on multi slab
basis or a contractor may be able to get one of his bills
passed at a rate other than the rate given in written
contract in connivance with the passing authority. But when
a dispute arises and the matter comes to court for
adjudication no decree can be granted to the plaintiffs on
that basis and the plaintiffs would be required to establish
that the defendants in written contract agreed to grant the
rate on multi slab basis. That has not been established in
the case in hand. Therefore, in our considered opinion the
Division Bench of the High Court wholly erred in law in
allowing the plaintiffs’ appeal and granting the decree
accepting plaintiffs’ claim that the rate has to be paid on
multi slab basis. In the aforesaid premises the impugned
judgment and decree of the Division Bench is set aside and
that of the learned Single Judge is affirmed. This appeal is
allowed but in the circumstances there will be no order as
to costs.


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