Works Contract

Source: The Hitavada      Date: 11 Sep 2017 11:33:46


The view taken by the High Court, in the opinion of the Apex-Court , is just and proper and a possible view. The Apex-Court found force in the argument of the respondents (defendants) that the Trial Court misled itself in misreading the pleading and discarding the legal evidence relied upon by the respondents

In the judgement of the case – M/s National Building Construction v. State of Maharashtra & Others, delivered on August 23, 2017, Justice Dipak Misra (as His Lordship was then) and Justice A.M.Khanwilkar, at the Supreme Court, have held that the view taken by the Nagpur Bench of the Bombay High Court with respect to the claim set up by the appellant regarding pitching of stones and extra lead for water being Claims Nos. 1 and 3, respectively was just .


The appeal in this case arose from the decree and judgement of September 1, 2009, passed by the Nagpur Bench of the Bombay High Court in first appeal No. 312 of 1992, whereby the HC had partly modified the decree passed by the Trial Court and negatived the Claims Nos. 1 and 3 set up by the appellant.


The appellant- partnership firm engaged in civil construction works, had submitted a tender for work pertaining to construction of one Nishanghat Minor Irrigation Tank in pursuance of a notice issued by the respondent –State of Maharashtra. After the appellant’s tender was approved and work order of December 21, 1978 was issued by the State in favour of the appellant, the parties executed an agreement at Nagpur.

After completion of the contract work on June 16, 1982, final bill was paid to the appellant on October 22, 1982, which the appellant disputed on the ground that it had performed extra work over and above the tendered work, for which payment was not included.

Feeling aggrieved by the alleged shortfall in payment and unable to settle the dispute with the respondents, the appellant filed a special civil suit against the respondents before the 6th Joint Civil Judge, Senior Division, Nagpur, seeking a decree for amounts due to it under the 4 heads of Claim 1, 2, 3 and 4.


After considering the rival contentions, the Trial Court passed a decree of Rs. 4,98,769.87 in favour of the appellant-plaintiff on October 29, 1991, with costs and 15 pc per annum interest from the date of the filing of the suit till its actual realisation.


On September 1, 2009, the HC partly allowed the respondents’ appeal modifying the decision of the Trial Court and reducing the decretal amount. Thus, the HC allowed Claims No. 2 and 4 and rejected Claims 1 and 3, holding that Trial Court allowed these Claims without considering the evidence on record.


In the Supreme Court’s opinion, the HC was right, both on facts and in law, in rejecting the claim of the appellant in respect of pitching of stones, to the extent of Rs. 1,76,199/-. The Apex Court found that the finding of facts recorded by the HC is in consonance with the pleading in the written statement and the oral and documentary evidences produced by the respondents (defendants) in that behalf.


The appellant, however, relied on the observation made by the Trial Court that it was not open to the Superintending Engineer to modify the rates of CSR/ Government with
retrospective effect. This argument did not impress the Apex-Court. The effect of typographical error in the CSR applicable for the financial year 1981-82, is not one of the modification of the rates as such. Whereas , the effect of correcting the typographical error in the CSR rates is to restate the correct position as applicable for the relevant period and not one of modification of rates, as contended.
It is not disputed that in the previous financial year 1979-80, the rate prescribed in the CSR was Rs. 27.60 per cubic metre. In the following financial year 1980-81, it was Rs. 28.55 per cubic metre.

It is, therefore, logical and rational to accept the stand taken by the respondents that the rates specified for the same work was only Rs. 46.65 per cubic metre. Thus, correcting the typographical error in the CSR rates was not act of modification of those rates as such. That act cannot be construed as a retrospective change introduced in the CSR rates by the respondents. The HC has justly rejected this plea by giving an illustration that if the CSR rates were to be misprinted as Re. 1 or Rs. 2 per cubic metre for the financial year 1981-82, the appellant would have not agreed to be bound by such rate.


The Supreme Court considered it sufficient to observe that it found no error, much less any infirmity in the approach of the HC in disallowing the claim of the appellant concerning pitching of stones to the extent of Rs. 1,76,199/-. In the opinion of the Supreme Court, the HC was right, both on facts and in law , in rejecting the claim of the appellant, in respect of pitching of stones , to the extent of Rs. 1,76,199/-.


The view taken by the HC, in the opinion of the Apex-Court , is just and proper and a possible view. The Apex-Court found force in the argument of the respondents (defendants) that the Trial Court misled itself in misreading the pleading and discarding the legal evidence relied upon by the respondents concerning Claim No. 1. Further, the Trial Court has selectively referred to the deposition in the cross examination of the Defence witness 1 and not analysed his evidence as a whole. Hence , no interference is warranted at the instance of the appellant in respect of Claim No.1. In respect of the Claim No. 3 set up by the appellant regarding additional lead for water, the Supreme Court found that the trial court was swayed away by the fact that the appellant was required to transport water from some distance via Kachcha road for which the appellant was entitled to such claim.


The HC in paragraph 21 of the impugned judgement, however, considered the said claim of the appellant with reference to the contract document. In that , Clause “d” of tender item No. 8 pertaining to watering and mechanised compaction of earthwork, clearly stated that the rates for earthwork raising are inclusive of watering and compaction at optimum moisture content. Further, in Clause “d” of Item No.8, it has been made amply clear that no extra payment for these items would be given.


The HC held that the appellant having accepted the terms in the contract, which did not provide for any extra payment relating to lead for water, was not entitled to that claim. The HC also took note of the document issued by the Executive Engineer on June 19, 1981, which also forms a part of record at Exh. 65-A and noted that it reinforced the stand of the respondents that the appellant was not entitled to grant of the amount of Rs. 80,000/- for additional lead for water. The Supreme Court did not find any infirmity in the view so taken by the HC.


The Claim of the appellant under this head is not supported by express terms of the contract document. As a result, no interference is warranted even with the conclusion reached by the HC in relation to Claim No.3 set up by the appellant. The Apex-Court dismissed the appeal with costs.