ORDER
1.These two civil revision petitions under Section 115 of the Code of Civil Procedure, arise from the judgment and order, delivered by the Principal District Judge, Dharwad, on an application under Section 471 of the Karnataka Municipal Corporations Act, 1976, namely Ravi P. Tiwari v The Hubli-Dharwad Municipal Corporation.
2. Revisionist-applicant filed this application under Section 471 of the Karnataka Municipal Corporations Act, 1976, for the following reliefs, namely.–
To decide and determine the dispute between the applicant and the Corporation in respect of the suit tender work and various tender items mentioned in the petition. He prayed for award of a sum of Rs. 9,65,113-09 paise as the amount due as against the Corporation and in favour of the claimant, The claimant further claimed further interest at 18 per cent per annum on Rs. 5,48,506-00 from the date of application till the payment and for costs. According to the applicant who claims himself to be Engineer and registered Class II Contractor, In 1981 the opposite party Corporation called tenders for construction of residential EWS houses at Central Township, Rayapur (Navanagar) under Group Nos. 6, 7 and 8. According to the applicant the tender submitted by the applicant being the lowest were accepted, orders were given by the respondent on 9-7-1982. According to the applicant’s case, under the tender conditions there was very clear, express and specific condition that the Corporation had to supply cement for execution of such work, but according to the claimant-applicant the Corporation did not supply the
required cement and in spite of it the applicant completed the construction work of Group Nos. 6, 7 and 8 by using his own cement, after purchasing it from outside at Rs. 72/- per bag as against S.R. rate of Rs. 35/- per bag and the work was completed in 1984. He has further alleged that though the Corporation had not supplied any cement to the applicant for construction of EWS houses, it deliberately and falsely concocted false running bills and deducted various amounts totalling to Rs. 1,52,623-00, in such bills towards the supply of cement. According to the claimant that is the applicant, after having completed the works in
1984. check measurements were done on 30-1-1984, and then this applicant submitted his final bill for Rs. 53,000/- to the opponent-Corporation on 9-3-1984, seeking payment. However, opponent Corporation had deducted Rs. 77,277-00 in the running bills towards security deposit amount payable by him. The case of the applicant has been that opponent Corporation did not show any interest in deciding the dispute and making payment to the applicant of money due under the final bill and the amounts deducted in the running bills. The Corporation on 2-12-1985, in its letter stated that the security deposit amount and the earnest money deposit would be returned in three months. There are several instances where security deposits and earnest money deposits have been returned to the Contractors even before the settlement of final bills and payment thereunder. The claimant alleged that he had purchased the cement at the rate of Rs. 72/- per bag as against S.R. rate of Rs. 357- per bag, he was entitled to receive Rs. 37/- per bag from the Corporation and in total he claimed to be entitled to a sum of Rs. 2,65,606/-. In paragraph 10, details of the claim has been mentioned, namely Rs. 53,000/- final bill; Rs. 77,277/- towards security deposit, which the opponent has deducted from time to time from the applicant’s running bills towards security deposit; Rs. 2,65,606/- towards difference in cement price payable back; Rs. 1,52,623/- as amount wrongly deducted from applicant’s bill towards supply of cement, which according to the claimant was not actually supplied and that a sum of Rs. 4,16,6077- has been claimed as interest at the rate of 18 per cent on the sum of Rs. 5,48,506/-.
3. The claim was resisted by the Corporation and it filed the written objections. It denied the allegation of illegal deductions of the security deposit from the running bills. It mentioned that under condition No. 1 of the agreement it was entitled to deduct security deposit amount from running bills of the applicant and it had to be paid back to him only after 3 months from the date of payment of the bills. The opposite party-Corporation also denied the allegation made by the applicant-claimant about the failure to supply cement and he having used his own cement and he has also denied that the claimant was entitled to any difference. It further averred that according to the terms and conditions of the tender it had supplied cement in part, for which the amounts were deducted from the running bills of the applicant and the bills were verified by the applicant and he affixed signatures. It asserted that it is wrong to say and it could not be contended by the applicant that the cement was not supplied and the deductions made were illegal. It has
also been averred in the objections that the applicant had filed a complaint alleging wrongful deductions and the Lok Ayukta found the complaint was false and rejected it. It was asserted that the cement was supplied by the Department. The applicant under tender condition No. 30 made a request to the Commissioner in respect of all the three works and such letter was placed before the Corporation, which by its Resolution No. 1533, dated 29-10-1986, rejected the claim of the applicant.
4. The detailed pleadings were filed and the learned District Judge on the basis of the pleadings of the parties framed the following issues.–
1.Whether the claim made by the applicant is determinable under Section 471 of the Karnataka Municipal Corporations Act, 1976?
2.Whether the decision of the opponent Corporation under its Resolution No. 1533 in respect of the claim is final and binding on the applicant?
3.Whether the applicant proves that a sum of Rs. 53,000- is due to him from the Corporation as claimed under the final bills?
4a.Whether the opponent Corporation is due in a sum of Rs. 77,277-00 deducted towards security deposit?
4b.Whether the opponent Corporation is not liable to pay the same till the settlement and payment of final bills?
5a.Whether the applicant proves that he had used his own cement for the completion of the work under Group Nos. 6, 7 and 8? If so, in what quantity?
5b.Whether the applicant proves that he had purchased such cement at Rs. 72/- per bag and is entitled to claim difference in price at Rs. 37/- per bag and in a total sum of Rs. 2,65,606-
00?
6.Whether the applicant proves that a sum of Rs. 1,52,623-00 had been deducted from the running bills in respect of the supply of cement though such cement was not actually supplied?
7.Whether the applicant is entitled to interest as claimed?
8.What order?
5. The District Court held that the claim petition under Section 471 of the Karnataka Municipal Corporations Act, 1976 filed by the contractor was maintainable. It further held that the decision of the opponent-Corporation under Resolution No. 1533 in respect of the claim is final and binding on the applicant, but so far as present application is concerned, it held the application to be maintainable. The District Judge further held that a sum of Rs. 47,794-22 is due to the applicant from the respondent. With reference to Issue Nos. 4(a) and (b) the District Court found that the Corporation is due in a sum of Rs. 60,041-83 deducted towards security deposit and the Corporation is liable to pay that
amount. Dealing with Issue Nos. 5(a) and (b) District Judge found that claimant had used 3,344.62 bags of cement of his own in the matter of completion of work under Group Nos. 6, 7 and 8 is entitled to claim the difference of the price at the rate of Rs. 37/- per bag and in total a sum of Rs. 1,23,750-94 paise. Dealing with Issue No. 6, the District Court held that the applicant failed to prove that a sum of Rs. 1,52,623/- had been deducted from the running bills in respect of supply of cement, though such cement was not actually supplied. District Court further held that the claimant-petitioner has been entitled to interest to the tune of Rs. 52,039.31 from 1-11-1984 till the date of filing of the petition and not to the sum of Rs. 4,26,607.09 paise. It further held that the claimant is entitled to interest at the rate of 6 per cent per annum from the date of petition till the date of realisation of the sum of Rs. 2,29,586.99 paise. The learned District Judge recorded the finding to the effect that from the date of petition till the date of realisation, the claimant-applicant has been entitled to interest at Rs. 2,29,586.99, at the rate of 6 per cent per annum,
6. Feeling aggrieved from the award or order of the District Judge, under Section 471 of the Karnataka Municipal Corporations Act, 1976, both the parties have come up in revision and have challenged the order of the District Judge. Revision No. 77 of 1991 has been filed by the Corporation itself, while Revision No. 2260 of 1991 by the claimant.
7. I have heard Shri H.K. Vasudeva Reddy, Counsel for the Corporation in Revision No. 77 of 1991 and Sri I.G. Gachchinamath for the petitioner in Revision No. 2260 of 1991.
8. The principal contention which has been forcefully pressed by learned Counsel for the Corporation is that proper remedy for the applicant was to file revenue civil suit and not application under Section 471 of the Karnataka Municipal Corporations Act, 1976. No doubt much effort had been made to satisfy this Court on this point, but it may be mentioned here that this point is now concluded by the decision of this Court in this very case, which has been delivered by Hon’ble Justice Mohamed Anwar on 6-2-1998. After having heard the arguments at length, this Court has held as under:
“Sub-sections (20) and (21) of Section 59, which as excerpted above, make it clear that the undertaking construction of the residential houses for their distribution among the weaker sections and poor persons falls in the discretionary function of the Corporation. Therefore, the said contract work entrusted by the Corporation to the contractor by the Corporation under agreements Exhs, R-1 to R-3 was in furtherance and discharge of its obligations under the Act. As such, any dispute arising from the terms and conditions envisaged in Exhs. R-l to R-3 would be the dispute attracting applicability of Section 471. In that view of the legal position emerging from the factual position between the parties, I find that the learned District Judge has rightly held that the application under Section 471 of the Act made before him by the contractor was maintainable thereunder.
Hence, the objection of Mr. Pandurangaswamy, learned Counsel for the Corporation raised on the point of maintainability of contractor’s application under Section 471 of the Act, is liable to be rejected and the same is rejected”.
9. This order is final between the parties and as such this primary contention of the Counsel for the Corporation is rejected and as held vide, order dated 6-2-1998, the application under Section 471 is maintainable and there is no force in the contention of the learned Counsel for the revisionist-applicant that the application is not maintainable and as such Revision No. 77 of 1991 deserves to be dismissed, as no other contention which may he said to be covered by Section 115 of the Code of Civil Procedure. The question of jurisdiction that has been raised regarding maintainability of revision, is answered in the negative against the revisionist-applicant, Revision No. 77 of 1991 and is rejected.
10. In Revision No. 2260 of 1991, learned Counsel for the applicant primarily contended that the finding of the learned District Judge that the claimant’s case that he has purchased 7000 or 7178 bags of cement and utilised for the purpose, is wrong and false. In the claim petition he alleged 7178 bags and in evidence he states 7000 bags. It further considered the question on the basis of material evidence on record – oral and documentary and finally came to the conclusion the claimant’s case that agreement was in respect of 3 groups for supply of cement by the Corporation is false, and it came to the conclusion that the condition of supply of cement by the Corporation was only limited to Group Nos. 6 and 7 only and not to Group No. 8. It further found on the basis of material on record and it came to the conclusion and recorded the finding after appreciation of evidence. It referred to Exhs. P-4, P-5, P-7, P-17 and P-18 and observed under these documents total quantity of the cement actually used for the works under Group Nos. 6 and 7 comes to (2725.99 plus 2743.63), i.e., 5469.62 bags. This figure tallies with the figure 5470 bags of cement, which petitioner himself mentions in his letter Exhs, P-17 and P-18, as having been used for the works under Group Nos. 6 and 7. The District Court further took into consideration the statement of Sri S.S. Nadkarni, as well as documents Exhs. P-4 and 5 and the statement containing quantity of cement supplied. It refers to those exhibits and observes – It also mentions that in respect of work under Group No. 6, the Corporation had issued 1150 bags of cement and in respect of work under Group No. 7 the Corporation had issued 975 bags of cement i.e., 2125 bags of cement. With reference to Group Nos. 6 and 7 the conclusion the District Judge records at page 59 as under:
“Then when the documentary evidence, relied upon by the petitioner himself, shows that he had received 2125 bags of cement, it does not lie in his mouth to say, he had not received any cement in respect of works under Group Nos. 6 and 7.
To conclude on this aspect, it is seen that the Corporation had agreed to supply cement in respect of the works only under Group Nos. 6 and 7 but had not fully done so. As against the total quantity of 5469.62 bags of cement used for these works under
Group Nos. 6 and 7, it had supplied only 2125 bags of cement. This would imply that the petitioner would have used (5469.62 -2125) 3344.62 bags of cement of his own. At the best he can claim reimbursement for this 3344.62 bags of cement and not 7178 bags as spelt out in the petition or 7000 bags as stated in his evidence”.
11. The learned District Judge as such held that the claimant has proved that he used 3344.62 bags of cement of his own for the completion of works under Groups 6 and 7 and is entitled to claim the difference in price at Rs. 37/- per bag, that is in a total sum of Rs. 1,23,750-94.
12. This findings of the learned District Judge has very hotly been contested by the learned Counsel. With reference to revision of contractor the learned Counsel for the applicant contended that this finding has been arrived at without properly appreciating the entire evidence of R.Ws. 1 and 2 and if the entire evidence is looked, the evidence of R.W. 1 may be unreliable. He contended entire evidence should have been looked into and the District Judge should have found that really 7000 bags of cement was supplied and that Corporation was liable to pay for difference of 7000 bags. It has also been contended that interest that has been awarded at the rate of 6 per cent is illegal and run contrary to Section 34 of the Code of Civil Procedure.
13. These contentions have been hotly contested on behalf of the Corporation, which is appearing as respondent. Learned Counsel submitted that the scope of Section 115 of the CPC is limited to jurisdictional error and not to error of law or fact. He further submitted howsoever erroneous a finding may be or even if the other view may be possible to be had but Section 115 of the Code of Civil Procedure, does not confer jurisdiction on this Court to interfere with the findings. Learned Counsel submitted that the Court has not acted illegally. Learned Counsel for the respondent contended appreciation of evidence, question as to reliability or unreliability of the evidence, cannot be said to be one of illegality or irregularity. He made reference to the decision of the Privy Council in the case of N.S. Venkatagiri Ayyangar and Another v The Hindu Religious and Endowments Board, Madras. He had also made a reference to the decision of their Lordships of the Supreme Court, which is on the same lines, namely M/s. D.L.F. Housing and Construction Company Private Limited v Sarup Singh and Others.
14. I have applied my mind to the contentions raised by learned Counsel for the parties. Jurisdiction of this Court under Section 115 of the Code of Civil Procedure is confined to jurisdictional error that is exercise of jurisdiction not vested or refusal to exercise jurisdiction vested, as to the illegal exercise or irregularity in exercise of jurisdiction. I may mention that the learned Counsel for the applicant in this revision contends his case to be one of the Court’s below’s acting illegally or with material irregularity in exercise of jurisdiction and as to what is the meaning of Court’s acted illegally or with material irregularity under clause (c) of Section 115 of the Code, the meaning of this phrase has been explained in these two decisions of the Privy Council in the case of N.S. Venkatagiri Ayyangar, supra and of Supreme Court in Sarup Singh’s case, supra. Their Lordships of the Privy Council in the case of N.S. Venkatagiri Ayyangar, supra, observed:
“….. The section empowers the High Court to satisfy itself upon three matters (a) That the order of the subordinate Court is within its jurisdiction; (b) That the case is one in which the Court ought to exercise jurisdiction; and (c) That in exercising jurisdiction the Court has not acted illegally, that is, in breach of some provision of law, or with material irregularity, that is by committing some error of procedure in the course of the trial which is material in that it may have affected the ultimate decision. If the High Court is satisfied upon those three matters, it has no power to interfere because it differs, however profoundly, from the conclusions of the subordinate Court upon questions of fact or law.
15. Similar is the observation to the effect made by their Lordships of the Supreme Court in the case of Sarup Singh, supra. It will be appropriate to quote the following observations.–
“The position thus seems to be firmly established that while exercising the jurisdiction under Section 115, it is not competent to the High Court to correct errors of fact however gross or even errors of law unless the said errors have relation to the jurisdiction of the Court to try the dispute itself. Clauses (a) and (b) of this section on their plain reading quite clearly do not cover the present case. It was not contended, as indeed it was not possible to contend, that the learned Additional District Judge had either exercised a jurisdiction not vested in him by law or had failed to exercise a jurisdiction so vested in him, in recording the order that the proceedings under reference be stayed till the decision of the appeal by the High Court in the proceedings for specific performance of the agreement in question. Clause (c) also does not seem to apply to the case in hand. The words “illegally” and “with material irregularity” as used in this clause do not cover either errors of fact or of law, they do not refer to the decision arrived at but merely to the manner in which it is reached. The errors contemplated by this clause may, in our view, relate either to breach of some provision of law or to material defects of procedure affecting the ultimate decision, and not to errors either of fact or of law, after the prescribed formalities have been complied with”.
16. A reading of these decisions, per se reveal that if the Court has not committed any breach of law and has followed necessary procedural rules, thereafter when it after the consideration of material on record arrives at certain findings of facts, the High Court has no jurisdiction to interfere, unless it shows that the decision on question of facts or law is of such nature that it touches the jurisdiction of the Court, I mean to say where there is no erroneous findings of fact on question of jurisdictional
fact or law, touching or affecting the jurisdiction. The pure findings of fact or finding on simple question of law, cannot be interfered with under Section 115 of the Code as the Court having jurisdiction to decide a case, may commit mistake. But simple error of fact not of law will not constitute jurisdictional error.
17. Here what has been contended has been merely with reference to the question of appreciation of evidence. It has been contended that vouchers having been produced or documentary of other evidence having been produced as to supply, the question is whatsoever evidence is lead by the parties on the basis thereof the Court had to decide the point of fact on an appreciation of evidence. It could have held that the evidence to be not sufficient enough to establish the claim of either of the parties. It could have held that Corporation could not establish supply of cement or it could have relied on the evidence led. It is something within the jurisdiction of the Court, to determine the case, on the basis of appreciation of evidence. Here it appears documentary evidence filed by the petitioner itself has been considered, coupled with the oral evidence of the parties and on the basis of documentary evidence in particular, it has been found that the supply of 2125 bags had been made by the Corporation and not of entire commodity required to discharge obligation under the contract. Therefore, the District Judge found that the supply of cement by the Corporation was short by 3344.62 bags, which petitioner claimed that he had purchased from the market at the higher rate and the difference was Rs. 37/- per bag that the claimant has been entitled to claim and get from the Corporation.
18. In my opinion these findings of fact arrived at by the Court, on the basis of appreciation of evidence, this Court is not entitled to interfere, because it is not within the jurisdiction of this Court under Section 115 of the Code to infer with the finding of fact simpliciter.
19. As regards rate of interest, learned Counsel invited my attention to Section 34 of the Code of Civil Procedure. No doubt in respect of commercial transaction, it has been provided that rate of interest from the date of order till the date of payment, may be at the higher rate than 6 per cent, but not more than the contracted rate or not higher than the Bank rate. But when I consider the question whether it is commercial transaction in the light of Section 34, I am unable to accept the contention of the learned Counsel, for Explanation II to Section 34, provides “For the purpose of this section, a transaction is commercial transaction, if it is connected with the industry, trade or business of the party incurring the liability. The liability incurred for payment for supply of cement itself was that of the Corporation. Some houses were got to be constructed by the Corporation. The question as to whether it relates to the trade and business. It is the duty of the State authorities, including the State to see that people may get the shelter or roof to save their self from hot sun, from the rains and the vagaries of nature as well. But it cannot be said to be business of the Corporation. Their duty is to provide cheap cost house. So this is a welfare activity, it cannot be said to be trade or industry or business. So here Section 34 of the CPC, is not
applicable, as the transaction cannot be said to be commercial transaction connected with industry, trade or business of the party incurring the liability. In this view of the matter in my opinion, Section 34 being applicable, interest at the rate of 6 per cent had to be awarded and not more than 6 per cent, under Section 34 of the CPC also. Therefore, in my opinion, no jurisdictional error has been committed by the learned District Judge in disposing off the matter under Section 471 of the Karnataka Municipal Corporations Act, 1976.
Both the revisions tested on the yardsticks provided by and under Section 115 of the Code of Civil Procedure appear to be devoid of merits and substance and as such are hereby dismissed.
Costs to be borne by the parties respectively.