Bangalore District Court
Shankaranarayana Constructions Pvt … vs Manjunath Papanna on 25 July, 2025
IN THE COURT OF LXXXIX ADDL.CITY CIVIL &
SESSIONS JUDGE, BENGALURU. (CCH-90)
Present: Sri.K.M.RAJENDRA KUMAR., LLM, M.Phil,
LXXXIX Addl.City Civil &
Sessions Judge, Bengaluru.
DATED THIS THE 25th DAY OF JULY 2025
Com.OS.No.5396/2018
Plaintiff : M/s. Shankaranarayana
Constructions Pvt.Ltd.,
A company incorporated under the
provisions of
the Companies Act, 1956,
Having its registered office at:
SNC House, 4th Floor, No.7,
Residency Road,
(Old No.9, Raja Ram Mohan Roy
Road), Bengaluru-560025.
Represented by its duly
authorized signatory,
Subramanian Annamalai.
(By M/s.Keystone Partners)
V/s.
Defendant : Manjunath Papanna,
Sole Proprietor,
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Com.O.S.No.5396/2018
Lima Engineering Services,
A Proprietary concern,
Having its office at:
No.220, 3rd C Cross, 2nd Block,
3rd Stage, Basaveshwaranagar,
Bengaluru-560 079.
(By Sri.Rakesh Bhatt And Associates,
Advocate)
Date of Institution of suit : 25.07.2018
Nature of suit : Money Suit
(suit on pronote, suit for
declaration and
possession suit for
injunction, etc.,)
Date of commencement : 21.06.2022
of recording of evidence
Date of judgment : 25.07.2025
Total duration : Year/s Month/s Day/s
07 00 00
(K.M.RAJENDRA KUMAR)
LXXXIX ADDL.CITY CIVIL &
SESSIONS JUDGE,
BENGALURU. (CCH-90)
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Com.O.S.No.5396/2018
JUDGMENT
The Plaintiff has filed this suit praying the Court to pass
a judgment and decree
a. Directing the defendant to pay the plaintiff a sum of
₹.2,72,70,460/- (Rupees Two Crores Seventy Two Lakhs
Seventy Thousand Four Hundred and Sixty Only).
b. Directing the defendant to pay interest pendente lite @
24% p.a. on the suit claim.
c. Directing the defendant to pay future interest, to be
computed from the date of suit till the date of eventual
payment, @ 24% p.a. on the suit claim;
d. Directing the defendant to bear the costs of the
present proceedings;
e. Pass any other orders as this Court deems fit in the
interest of justice and equity.
The brief facts of the plaintiff’s case are as under:
02. That, the plaintiff is private company limited by
shares, incorporated under the provisions of the Companies
Act, 1956 and presently operating under the Companies Act,
2013. That, the plaintiff is a renowned civil contractor and
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Com.O.S.No.5396/2018has successfully completed construction of various large-scale
infrastructure projects in diverse fields such as power,
irrigation, transportation and civil engineering works.
03. That, the defendant is the sole proprietor of the
proprietary concern trading under the name ‘Lime
Engineering Services’, which is in the business of providing
steel structuring services.
04. That, the plaintiff placed work order dated
14.07.2016 bearing reference No.SNC/BNG/2016-17/258 on
the defendant for structural steel fabrication, erection,
alignment and other miscellaneous work (with mild steel
rolled section/built up section/combination of both) to be
performed in connection with coal handling plant and an Ash
Handling Plant at Kothagudem Thermal Power Station – Unit
12 Stage – VII (1x800MW), Kothagudem, Paloncha,
Khammam Dist, Telangana.
05. That, the plaintiff itself had been awarded a work
order in connection with the above project by its own end
client, BHEL-PSSR; and under the said work order, the
plaintiff had to carry out a number of works in relation to the
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Com.O.S.No.5396/2018Coal Handling and Ash Handling Plant at Kothagudem
Thermal Power Station. That, the defendant was, thus, a
subcontractor of the plaintiff, and was appointed for the
purposes of taking up a portion of the works at this plant, the
scope of which portion was described in the Work Order
issued by the plaintiff to the defendant.
06. That, the work order, and all the terms and
conditions contained therein, was duly accepted by the
defendant, and such acceptance has been recorded in the
work order itself. That, in view of the said acceptance, the
work order constituted a valid and binding contract between
the plaintiff and the defendant.
07. Terms of the Work Order: That, the quantity of
structural steel to be fabricated, erected, aligned and welded
by the defendant as per the Work Order was agreed to be
about 3000 MT of Steel, as set out in Clause 2 of the Work
Order. That, under the contract, the minimum monthly
progress to be achieved by the defendant, as stated in Clause
21 of the Work Order, was 500 MT of fabrication and erection,
alignment and full welding of structural steel.
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Com.O.S.No.5396/2018
08. As per Clause 20 of the Work Order, the defendant
was contractually obliged to perform the works specified
thereunder within a period of 12 months from 26.05.2016 –
that is, on or before 25.05.2017. That, it was also expressly
recorded and understood that time was the essence of the
contract. That, in other words, failure on the part of the
defendant to adhere to the agreed timelines would constitute
a fundamental breach of contract.
09. That, the time was agreed to be of the essence of the
contract is further evidenced by Clause 49 of the Work Order,
which prescribes liquidated damages to be paid @ 1% of the
total contract price, for every week’s delay in connection with
the completion of the project, subject to a maximum of 15% of
the total value of the order.
10. That, further, Clause 50 also expressly recorded that
if the defendant failed to perform or fulfill any part of the
contract, the plaintiff was entitled to either split or cancel the
work order, and to have the pending works performed by any
other contractor – at the risk and cost of the defendant. That,
in other words, any costs incurred by the plaintiff in having
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Com.O.S.No.5396/2018
the works completed by an alternative contractor are liable to
be reimbursed to the plaintiff by the defendant.
11. That, in order to ensure the defendant’s compliance
with the terms of the work order, and keeping in mind that
time was the essence of the contract, Clause 16 of the work
order expressly specified that the defendant was contractually
obliged to deploy a minimum number of laborers on the work
site at different points in time during the progress of the
works.
12. That, it was also an express clause of the work order
that if the defendant failed to mobilize resources within 30
days of the work order, a penalty of ₹.10,000 per day would
be levied on the defendant.
13. Under Clauses 24 to 28 of the Work Order, the
Plaintiff had agreed to provide the structural steel to the
Defendant for the purposes of the fabrication and other works
(and it routinely did so). The Defendant was liable to account
for the steel received by it from the Plaintiff and to return any
surplus, wastage and/or scrap steel (or the value thereof) to
the Plaintiff. The Defendant was also liable to submit a
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Com.O.S.No.5396/2018
reconciliation statement for the steel, with each working bill
submitted by it to the Plaintiff.
14. As per the payment terms set out in Clause 31 of the
Work Order, the Defendant was to generate monthly RA Bills
in the name of the Plaintiff. The Plaintiff was only required to
release payments against the RA Bills within a period of 15
days from the date of its receipt of its own corresponding
payments from BHEL-PSSR (who had issued the larger work
order to the Plaintiff). It was a term of the Work Order
between the Plaintiff and the Defendant that payments would
be released by the Plaintiff only for quantities duly certified by
the Plaintiff/BHEL-PSSR. The Plaintiff was additionally also
expressly entitled to deduct 5% of each RA Bill, towards
deposit, which the Plaintiff was liable to refund to the
Defendant only 12 months after the date of completion of
works by the Defendant (as certified by the Plaintiff).
Breaches committed by the Defendant
15. That, the Defendant failed to perform its obligations
under the Work Order in accordance with the terms and
conditions thereof and as per the time schedules specified
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Com.O.S.No.5396/2018
thereunder. Although the Defendant was required to complete
the work entrusted to him within a period of one year (i.e., by
end of May 2017), the Defendant throughout the tenure of the
contract – failed abysmally to deploy adequate labour at the
work site, as required by him. Further, when he did deploy
labour, the Defendant failed to make prompt payments of
their wages (and, in many months, made no payments to
them at all) – thus causing stoppage of work by the labour,
and also complete cessation of works for prolonged periods of
time. These failures of the Defendant also resulted in idling of
machinery, and compounded the problem of failure to make
substantial progress in terms of timelines committed by the
Defendant under the Work Order. Eventually, the Defendant
also abandoned the works altogether (in October 2017),
without completing them in accordance with the terms of the
Work Order, thereby constraining the Plaintiff to formally
terminate the Work Order.
16. As a result of the Defendant’s breaches that
preceded the termination, and failure to perform the tasks
contractually entrusted to it, the Plaintiff was put to severe
loss and injury, for which the Defendant is contractually and
legally liable to compensate the Plaintiff. Further, the Plaintiff
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Com.O.S.No.5396/2018
was constrained to engage another contractor to complete the
works entrusted originally to the Defendant, and to make
payments to the said contractor, for which the Defendant is
liable to reimburse the Plaintiff as per the terms of the Work
Order.
17. Even prior to the formal termination to the Work
Order (on 31.10.2017), the Defendant had maintained a
woefully slow pace with respect to the completion of the
works, all through the tenure of the contract. Although it had
been expressly agreed between the parties that the works
entrusted by the Plaintiff to the Defendant would be
completed by 25.05.2017, the Defendant never mobilized
adequate men and manpower to maintain the required pace
of work. As of October 2017, when the work was finally
abandoned in toto by the Defendant, the Defendant had
completed only about 305 MT of steel work (in all respects),
out of the total 3000MT stipulated under the Work Order. A
table showing the month-wise progress of work by the
Defendant is set out as under:
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Com.O.S.No.5396/2018SHANKARANARAYANA CONSTRUCTIONS PVT LTD
KOTHAGUDEM THERMAL POWER PROJECT
Name of the Contractor:M/s Lima Engineering
Monthly Progress of Fabrication, Erection and A&W
SI. Month Fabrication Erection A&W Finishing Remarks
No.
1 May-16 – – – –
2 Jun-16 95.983 – – –
3 Jul-16 127.649 – – –
4 Aug-16 227.556 – – –
5 Sep-16 191.82 178.67 – –
6 Oct-16 218.842 117.1836 – –
3
7 Nov-16 163.088 43.56315 – –
8 Dec-16 381.947 – 55.9183 –
9 Jan-17 149.849 – 96.11776 –
10 Feb-17 138.213 350.2906 146.00133 –
6
11 Mar-17 204.203 289.6198 100.55956 –
1
12 Apr-17 130.609 238.2535 234.63898 –
4
13 May-17 122.543 81.73243 257.77779 –
7
14 Jun-17 130.269 161.0381 18.219531 –
5
15 Jul-17 24.342 172.7420 – –
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Com.O.S.No.5396/2018
6
16 Aug-17 62.837 130.7224 22.56232 –
6
17 Sep-17 22.983 80.44237 24.99326 261.9220
7 2
18 Oct-17 -11.597193 71.37891 143.47016 43.07825 FINAL
8 BILL
Total 2381.1358 1915.633 1100.259 305.0002
7 7
18. By September 2017, the labor shortage at the project
site became chronic. This had already be resulted in a severe
delay, and the Plaintiff began to suspect that the Defendant
was becoming incapable of solving the problem as the project
deadline had long passed. The Plaintiff therefore addressed
two letters to the Defendant, one dated 13.09.2017 (bearing
reference no. SNC/LIMA/2017-18/002) and another dated
15.09.2017 (bearing reference no. SNC/LIMA/2017-18/003),
to draw the Defendant’s attention specifically to the shortage
in deployment of labor, and the resultant delays being caused
in implementation of the Work Order. The Plaintiff also called
upon the Defendant to rectify its breaches in this connection
forthwith, and to take all steps necessary to perform the works
as per the terms of the Work Order a timely fashion.
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Com.O.S.No.5396/2018
19. The Plaintiff called upon the Defendant to resolve
labour issues at once, so as to ensure the expeditious progress
of the pending works.
20. The Defendant replied to the Plaintiff’s aforementioned
letter vide a hand-written letter dated 04.10.2017. By means
of this letter, the Defendant claimed that its laborers had
ceased work since wages amounting to a total of
₹.10,89,697/- were allegedly then outstanding and payable to
them and since the laborers had allegedly insisted that they
would not continue work till these dues were cleared. The
Defendant also requested the Plaintiff to clear these dues on
its behalf – even though this was not the obligation of the
Plaintiff – so that the work could continue.
21. Upon receiving the above letter and only in the
interests of expediting the work and facilitating speedy
completion of the project, the Plaintiff released an ad hoc sum
of ₹.4,50,000/- to the Defendant towards its bills, even though
the same had not fallen due for payment (as corresponding
payments had not yet been received by the Plaintiff from
BHEL-PSSR).
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Com.O.S.No.5396/2018
22. However, despite the aforesaid communications and
also the explicit terms in the Work Order, the Defendant
continued to neglect making payment of wages to its
labourers, unmindful that such defaults would result in
cessation of work by the labourers and amount therefore to a
blatant breach and violation (on its part) of the terms of the
Work Order. Inevitably, the continued failure of the Defendant
to make labour payments led to a virtual cessation of all works
concerning structural steel fabrication, which had been
entrusted to the Defendant.
23. In a meeting held between the Plaintiff and the
Defendant on 22.10.2017, the Plaintiff once again reiterated
that it was not in any way liable or obliged to facilitate
payment of wages to the Defendant’s labourers and that the
obligation and liability to do so was solely that of the
Defendant’s. The Plaintiff had also clarified that it make
payments to the Defendant only in accordance with the terms
of the Work Order, upon certification and measurement of
works, and that it could not be arm-twisted into releasing ad
hoc amounts.
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Com.O.S.No.5396/2018
24. The Defendant, thereafter, issued a letter dated
23.10.2017 to the Assistant General Manager of the Plaintiff,
purporting to record the discussions that had taken place
between the parties in their aforementioned meeting. The
Defendant, by this letter, requested the Plaintiff to consider
the Defendant’s plea to release amounts for the payment of
wages due to the Defendant’s labourers, conceding that it was
not in a financial position to do so. It is pertinent to note that,
in this letter, the Defendant explicitly also conceded that the
Plaintiff was at liberty to Invoke any clause of the Work Order’
against the Defendant, on account of the Defendant’s failure to
make payments to the labourers on its own.
25. In view of the above communication, and the
Defendant’s continued refusal to make payment of wages to
his labourers deployed at the site despite multiple reminders
and discussions, it was evident to the Plaintiff that the
Defendant was intent on stopping works altogether and to
wind up his operations on the site prematurely. In other
words, there was every Indication that the Defendant Intended
to altogether abandon the work and to cease performance of
the Work Order, owing ostensibly to its financial Inability to
proceed. As a result, the Plaintiff was left with no option other
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Com.O.S.No.5396/2018
than to itself make payments directly to the Defendant’s
labourers and to continue the work through them directly and
to search for an alternative sub-contractor in the meanwhile.
26. By the last week of October 2017, it was thus evident
that the situation had reached a breaking point-the Defendant
was showing no Intent to perform its obligations under the
Work Order, and instead, in blatant breach of its contractual
commitments to the Plaintiff, had created a situation which
had resulted in a complete cessation of works at the site, to
the severe detriment and loss of the Plaintiff. Faced with no
other option, the Plaintiff was constrained to formally invoke
Clause 52 of the Work Order, to terminate the Work Order
issued to the Defendant, after noting that the Defendant had
ceased all work completely despite several demands and
reminders to resume work. The Plaintiff also intimated the
Defendant of its breaches of Clauses 16 and 21 of the Work
Order, which had resulted in severe delays in performance of
the works.
27. In response to the Termination Letter, the Defendant
issued two baseless letters to the Plaintiff, dated 07.11.2017
and 11.11.2017. By these letters the Defendant sought to level
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Com.O.S.No.5396/2018
completely false and untenable allegations against the
Plaintiff, for the first time, to try and somehow create a false
record to cover-up its breaches of the Work Order.
28. The Defendant, on 21.11.2017, submitted its
purported “final bill invoice”, in a sum of ₹.43,62,433/- to the
Plaintiff.
29. That, the Plaintiff was shocked to receive this evidently
inflated and false bill. The Plaintiff therefore called upon the
Defendant to send his representative to the work site, so as to
reconcile the final bill in accordance with the protocol set out
in the Work Order.
30. The Plaintiff had also, in a letter dated 02.01.2018
bearing reference no. SNC/BNG/2017-18/547 reiterated that
the Defendant had, in a previous meeting, opted to reconcile
and certify an accurate final bill. However, despite the
repeated bona fide attempts of the Plaintiff to reconcile the
final accounts of the Defendant, the Defendant failed to come
forward and participate in the exercise-and Instead adamantly
insisted on payment of its inflated and unjustified bill (which
does not reflect an amount actually due under contract or in
law to the Defendant).
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Com.O.S.No.5396/2018
31. In addition to its so-called “Final Bill”, the Defendant
also went ahead and issued another baseless bill of ‘claims’ to
the Plaintiff, by contending that further amounts were also
owed to him by the Plaintiff. This demand was initially made
by a letter dated 22.11.2017, by which the Defendant claimed
that the Plaintiff would be held liable for the Defendant’s
machinery left on the site and raised a demand for
₹.73,59,000/- a demand with no basis as the Plaintiff had
always called upon the Defendant to take back machinery left
at the site.
32. As a result of the Defendant’s unjust refusal to
cooperate with the Plaintiff in the final certification of the
works performed by him and in the reconciliation of accounts
(after taking into account the Plaintiff’s claims and demands
for compensation), the Plaintiff was constrained to carry out
the exercise by itself. Upon examining the works completed by
the Defendant, and accounting for all past ad hoc
disbursements made either to the Defendant or on his
account, the Plaintiff has fairly certified a sum of
₹.12,83,294/- as being the amount due from it to the
Defendant (Inclusive of the security deposit amount of
₹.11,67,134/-, which was to be paid to the Defendant at the
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Com.O.S.No.5396/2018
expiry of the contract). However, after adjusting for amounts
due from the Defendant as Goods and Service Tax in a sum of
₹.5,06,464/-, the final amount certified as due to the
Defendant from the Plaintiff in respect of the work done and
the legitimate bills submitted by the Defendant to the Plaintiff
stands at ₹.7,76,830/-. A reconciliation statement detailing
the calculation to arrive at the said sum is set out as below:
Shankaranarayana Constructions Pvt Ltd
1X800 MW KTPS PALVONCHA
21.03.2018
STATEMENT OF FINAL ACCOUNT-LIMA ENGINEERING
SERVICES
1 Name of Sub- Lima Engineering Remarks
Contractor Services
2 Date of Work Order SNC/BNG/2016-
17/258
3 Total Value of Work 2,35,33,880.58 Inducing
Done (Gross) Final Bill
Less:-Payment &
Recoveries
a.Store Recovery 9,38,728.00
b.Up to date Amount 2,07,73,529.00 As per Tally
paid
4 Withheld for GST 5,06,464.00 From July up
to F to Final
bill
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Com.O.S.No.5396/2018
5 Net Security Deposit 11,67,134.00 As per Tally
Payable
6 RA BIII against 1,16,160.00 As per Tally
balance payable
TOTAL PAYABLE 7,76,830.00
33. In addition to the foregoing, since the Defendant had
unconscionably ceased all work (leading eventually to the
termination of the Work Order) and had compelled the Plaintiff
(by its conduct) to engage alternative contractors to complete
the works originally assigned to the Defendant, the Plaintiff
has prepared its separate computation of the amounts due to
it as compensation/damages arising from abandonment of the
work by the Defendant and the requirement to engage
alternative contractors.
34. As set out above, when the Defendant herein had first
delayed and then completely abandoned the works that it was
engaged, the Plaintiff was constrained to immediately engage
alternative contractors to complete the abandoned works
within the stipulated time or risk being penalized by BHEL for
delays. In addition to the difficulty faced by the Plaintiff in
identifying alternative contractors who were willing to take up
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Com.O.S.No.5396/2018the works that were partially completed by the Defendant, the
Defendant also started threatening contractors to prevent
them from taking up the works. Further, since the works that
had been partially completed by the Defendant were at ground
level and at a lower height and the abandoned works to be
completed by the alternative contractors were at a far greater
height of up to 75 mts, the alternative contractors demanded a
higher rate for these higher-risk works. After long persuasion,
the Plaintiff was able to engage alternative contractors only by
offering an attractive rate of payment and by providing free
issue materials. Moreover, in view of the fact that two years
had passed since the Work Order was placed on the
Defendant, the Plaintiff was also constrained to incur
substantial price escalation in both labour and material
charges while engaging alternative contractors to complete the
scope of works abandoned by the Defendant.
35. That these alternative contractors have completed the
said works and raised their respective bills for the same which
have been certified only after the filing of the present suit. The
total amount of expenditure incurred by the Plaintiff in
connection with engaging these alternative contractors to
complete the Scope of Works abandoned by the Defendant is
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Com.O.S.No.5396/2018as follows:
a. Tribal Labour Contract Co-Op Society Limited:
Period of Bill Bill Amount Cost of Free
Work (INR) Issue Material
(INR)
Nov-17 Sub Bill No. 1 48,666.62 38,403.65
Dec-17 Sub Bill No. 2 23,886.77 77,266.88
Jan-18 Sub Bill No. 3 33,958.44 53,900.70
Feb-18 Sub Bill No.4 21,889.03 47,896.80
Mar-18 Sub Bill No. 5 8,236.44 39,899.48
Apr-18 Sub Bill No. 6 12,631.73 53,467.05
May-18 Sub Bill No. 7 16,842.31 26,281.50
Oct-18 Sub Bill No. 8 78,836,40 36,598.80
Total 6,18,662.60
36. The original Work Order dated 20.11.2017 placed on
this alternative contractor, along with the original certified
bills and cost of free issue materials are produced.
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Com.O.S.No.5396/2018
b. Guna Engineering Private Limited:
Period of Bill Bill Amount Cost of Free
Work (INR) Issue Material
(INR)
Nov-17 Sub Bill No. 1 5,80,215.77
Dec-17 Sub Bill No. 2 3,33,405.18
Jan-18 Sub Bill No. 3 2,84,181.34
Feb-18 Sub Bill No. 4 6,045.40
Mar-18 Sub Bill No. 5 10,056.11
Oct-19 Sub Bill No. 6 2,02,276.25 17,104.50
Nov-19 Sub Bill No. 7 1,52,124.11 15,627.15
Dec-19 Sub Bill No. 8 1,53,283.04 146,42.25
Jan-20 Sub Bill No. 9 1,46,822.96 16,186.80
Feb-20 Sub Bill No. 10 1,63,630.50 15,673.35
Mar-20 Sub Bill No. 11 1,22,376.83 11,375.70
Apr-20 Sub Bill No. 12 47,481.50 3,116.40
May-20 Sub Bill No. 13 61,905.00 13,763.40
Total 23,71,293.54
37. The original Work Order dated 21.11.2017 placed on
this alternative contractor, along with the original certified
bills and cost of free Issue materials are produced.
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Com.O.S.No.5396/2018
c. Anon Power Engineers Private Limited:
Period of Bill Bill Amount Cost of Free
Work (INR) Issue Material
(INR)
Dec-17 3,68,792.38
Jan-18 Invoice No. 1 8,68,596.02 4,93,744.07
Feb-18 Invoice No. 2 10,32,876.59 3,53,690.54
Mar-18 Invoice No. 3 2,26,374.57 1,69,062.75
Apr-18 Invoice No. 4 2,00,086.32 79,494.98
May-18 Invoice No. 5 2,83,204.97 1,50,866.14
Jun-18 1,68,837.65
Advance payment 18,79,669
Total 6275295.98
38. The original Work Order dated 31.03.2018 placed on
this alternative contractor, along with the original certified
bills and cost of free issue materials and letter confirming
advance payments are produced.
d. Maruthi Industrial Engineering Works:
Period of Bill Bill Amount Cost of Free
Work (INR) Issue Material
(INR)
Nov-17 RA Bill 1 34,342.48 7,700.18
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Com.O.S.No.5396/2018Dec-17 RA Bill 2 1,07,844.60 20,450.33
Jan-18 RA Bill 3 1,65,364.60 16,146.38
Feb-18 – – 31,477.95
Mar-18 RA Bill 4 2,60,370.09 79,774.82
Apr-18 RA Bill 5 1,43,807.94 39,389.7
May-18 RA Bill 6 8,918.83 543,08.67
Jun-18 RA Bill 7 2,25,539.24 37,589.48
Jul-18 RA Bill 8 2,27,126.21 45,600.45
Aug-18 RA Bill 9 1,14,117.00 48,410.25
Sep-18 RA Bill 9 2,64,888.40 44,469.60
Oct-18 RA Bill 10 6,02,188.72 51,714.60
Nov-18 RA Bill 11 4,65,024.88 56,485.80
Dec-18 RA Bill 12 3,04,115.07 58,325.40
Jan-19 RA Bill 13 2,99,644.87 62,296.50
Feb-19 RA Bill 14 2,17,279.12 47,980.28
Mar-19 RA Bill 15 2,27,192.40 40,939.50
Jun-19 RA Bill 17 13,835.40 3483.90
Total 44,28,143.64
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Com.O.S.No.5396/2018
39. The original Order dated 20.11.2017 placed on this
alternative contractor, along with the original certified bills,
Invoices and cost of free Issue materials are produced.
e. K Ramachander:
Period of Bill Bill Amount Cost of Free
Work (INR) Issue Material
(INR)
Jun-19 Bill No. 3 37,979.97
May-19 Bill No. 2 31,348.17
29,627.85
April-19 Bill No. 1 60,030.23
Total 1,58,986.22
40. The original Work Order dated 25.03.2019 placed on
this alternative contractor, along with the original certified
bills and cost of free issue materials are produced.
f. Raja Mani Engineering Erectors:
Cost of Free
Period of Bill Amount
Bill Issue Material
Work (INR)
(INR)
Jan-18 – – 75,070.8
Feb-18 Invoice No. 1 78,876.92 32,844.69
Mar-18 Invoice No. 2 57,659.92 19,225.50
Apr-18 Invoice No. 3 33,550.27 4,650.45
May-18 Invoice No. 4 24,223.20 4,735.50
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Com.O.S.No.5396/2018Jun-18 Invoice No. 5 90,684.24 38,608
Jul-18 6588.75
Total 4,66,718.24
41. The original Work Order dated 25.01.2018 placed on
this alternative contractor, along with the original certified
bills and cost of free issue materials are produced.
42. In addition to the above, the Plaintiff was also
constrained to incur hire and fuel charges for a Hydra Crane
(which were originally part of the Defendant’s Scope of Works),
which are as follows:
Expense Amount (In INR) Balireddi Balaeswara Rao 2,08,000 (Hire Charges) Chandra Balaji Constructions 1,21,160 (Hire Charges) Kolati Ravi (Hire Charges) 2,39,200 Fuel Consumption 5,06,590 Total 10,74,950
43. That the Plaintiff was constrained to incur the above
expense of ₹.1,53,94,050/- only on account of the Defendant’s
/28/
Com.O.S.No.5396/2018poor performance and abandonment of the works under the
Work Order which forced the Plaintiff to terminate the Work
Order of the Defendant. As per clause 50 of the Work Order,
the Defendant is contractually liable to reimburse this sum of
INR 1,53,94,050/- to the Plaintiff.
44. That, even as on November 2017, a large amount of
the total work was yet to be completed. Therefore, the
Defendant was in breach of Clause 20 of the Work Order
pertaining to timely performance; and is consequentially
liable, under Clause 49, to compensate the Plaintiff for its
willful delay and for having abandoned the works. Under
Clause 49, the Defendant is liable to compensate the Plaintiff
in a sum equivalent to 1% of the contract value for every week
of the delay/abandonment of work, subject to a cap of 15% of
the total value of work order. The Defendant had delayed the
progress of the works for a period of nearly 17 weeks until
31.10.2017, when ultimately the work was altogether
abandoned (resulting in the Plaintiff having to terminate the
Work Order). Hence, the Defendant is contractually liable to
pay the Plaintiff liquidated damages for delay, in a sum of
₹.54,00,000/- under Clause 49 of the Work Order.
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Com.O.S.No.5396/2018
45. Another breach by the defendant was its failure to
deploy adequate labour on account of its admitted failure to
pay wages to its own labourers. That, under Clause 16 of the
Work Order, the defendant was liable and obligated to ensure
payment of wages to its own labourers; and for every instance
of failure to do so, the defendant was liable to compensate the
plaintiff in a sum of ₹.25,000/-. Since there were two
instances of non-payment of wages by the defendant to its
labourers, the plaintiff has quantified a sum of ₹.50,000/- as
due and payable by the defendant to the plaintiff as damages,
under Clause 18 of the Work Order. That, in addition, since
the defendant did not mobilize the requisite resources within
30 days period after the execution of the Work order, as
required under Clause 16, it is liable to pay a further penalty
of ₹.10,000/- to the plaintiff.
46. That, under Clause 24 to 26 of the Work Order, the
defendant was liable to account for all the steel supplied by
the plaintiff in connection with the project, and to duly return
any unutilized steel. That, the defendant has failed to account
for an aggregate quantum of 72.699 MT of structural steel and
26.015MT of scrap steel made available to it. Under contract, a
rate of ₹.65,000/- MT is payable by the Defendant to the
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Com.O.S.No.5396/2018
Plaintiff in respect of any unaccounted-for steel beyond the 4%
permitted wastage tolerance limit set out in Clause 27 of the
Work Order. It may be noted that the phrase “penal rate” used
in Clause 27 is to be understood in accordance with the
Plaintiff’s contract with BHEL-PSSR, more specifically the
Technical Conditions of Contract, which set out the penal rate
for unaccounted steel. A true extract of a portion of the
Technical Conditions of Contract of the Plaintiff’s contract with
BHEL-PSSR showing the penal rate payable by the Plaintiff to
BHEL-PSSR for unaccounted steel is produced. The Defendant
is thus liable to pay a total of ₹.64,16,410/- to the Plaintiff, to
compensate the Plaintiff for steel issued to the Defendant
which has not been accounted for by the Defendant.
47. In view of the aforesaid, the Plaintiff is entitled to
claim a total sum of ₹.2,72,70,460/- (Rupees Two Crores
Seventy-Two Lakhs Seventy Thousand Four-Hundred and
Sixty only) from the Defendant, on the following counts:
a. ₹.60,000/- under Clauses 16 and 18 of the Work Order,
on account of (i) failure of the Defendant to mobilize resources
promptly, to the extent committed, within the agreed period of
30 days; (ii) failure to make payments due to labourers, on two
occasions;
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Com.O.S.No.5396/2018
b. ₹.54,00,000/- under Clause 49 of the Work Order, as
liquidated damages for delay in completing the works beyond
the agreed deadline of May 2017;
c. ₹.1,53,94,050/- under Clause 50 of the Work Order,
towards reimbursement of the cost projected to be incurred by
the Plaintiff in engaging alternative contractors to complete the
works entrusted to the Defendant under the Work Order; and
d. ₹.64,16,410/- towards compensation for structural and
scrap steel that remains unaccounted for by the Defendant
under Clause 27 of the Work Order. By contending so, the
plaintiff has prayed to decree the suit by awarding
₹.2,72,70460/- together with interest @ 24% p.a. from the
date of suit till its realization.
48. After the service of summons the defendant has
appeared before the Court through his advocate. The
defendant has filed his written Statement and counter claim
and prayed the Court to dismiss the suit filed by the plaintiff
and to decree his counterclaim.
WRITTEN STATEMENT AND COUNTER CLAIM:
49. In the written statement the defendant at the outset
contended that the very suit as brought is not maintainable
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Com.O.S.No.5396/2018
both on Law and on facts. That, the prayer sought for in the
suit is not at all maintainable as necessary reliefs are not
sought for which are essential in deciding the prayer sought
for in the suit. That, on this ground alone, the suit is liable to
be dismissed, but the present suit is also not maintainable in
view of the fact that the company is not properly represented
and no any document in proof passing any resolution to file
and prosecute the suit, so also authorizing the persons who
signed the pleadings to represent the company. That, on this
ground alone, the suit is liable to be rejected.
50. That, the defendant has not committed any breach,
the question of paying compensation in terms of contract
between the parties, is a misnomer. That, the present suit for
damages or losses is a vexatious and frivolous one as a
counter blast to the claim made by the defendant against the
plaintiff. That, it was the plaintiff who committed various
breaches in the process of executing the contract by the
defendant.
51. That, extracted clause of the plaint that, time is the
essence of contract and the prescribed liquidated damages to
be paid on the total contract price for every weeks delay in
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Com.O.S.No.5396/2018
connection with the completion of the project subject to
maximum 15% of the total value of the order is subject to
plaintiff performing its part of duty and the said clause is
unilateral and fundamentally defective and unenforceable.
That, any delay was attributed to the plaintiff and not the
defendant. That, there was no agreement to pay any amount
in the event of delay.
52. That, there was no scope for employment of alternate
contractor, which can be done after estimate of the work done
by the defendant and after canceling the work order. That, in
the present case there was no any estimate of the work done
by the plaintiff in accordance with the terms of the contract
and further there was no any cancellation of the agreement or
revocation of the work order hence, the said clause is not
applicable to the facts of the case.
53. That, the completion of work entrusted to the
defendant depending upon payment of money and other
terms, the plaintiff for the reason best known to it, failed to
make periodical payment in respect of submission of RA bills
which made the defendant put to untold hardship and it also
affected the payment of labor charges. That, the said failure is
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Com.O.S.No.5396/2018
attributable to the plaintiff and not the defendant.
54. That, the defendant has completed the fabrication
work of 2508 MT erection of 2223 MT, aligning of 1835 MT
and finishing of 342 MT and in fact after completing the said
work, a final bill was also raised and submitted along with the
claim. That, the plaintiff for the reason best known to it,
denied the said amount to the defendant. That, the defendant
abandon the work after learning plaintiffs engaging favourable
contractor for the said work as there was no any other
avenues to do the work further.
55. That, the plaintiff has committed various acts of
omissions and commissions against the Defendant. The
plaintiff by his act of omissions made the Defendant to
abandon the contract. The plaintiff by its conduct, non co-
operation and step motherly attitude caused financial loss to
the Defendant.
56. It is further the case of the defendant that, as per
the Work Order signed by both the parties under Clause 31,
the terms of payment are expressly stated which reads as
follows.
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Com.O.S.No.5396/2018
a] Fabrication @ ₹.7200/- per MT 60%
b] Placement @ ₹.2400/- per MT 20%
c] Alignment/Welding @ ₹.1800/- per MT 15%
d] Handing over / Finishing @ ₹.600/-per MT 5%
57. That in the Work-spot, RA Bills were cleared
differently at:
a) Placement @ 15% against 20%
b] Alignment / Welding @ 20% against 15% which works
out to be ₹.2.32,909/-.
58. That, while placing the quotation as per Defendant
scope matrix dated 25-02-2016, the plaintiff has agreed to
provide gantry at fabrication yard to reduce the total cost of
fabrication by way of manpower and additional equipment
and also in order to improve production time and quantity.
59. The plaintiff after the Defendant’s mobilization in the
spot of the Project, failed to provide gantry in spite of repeated
requests and demands. The matter was placed before the
AGM & GM but nobody bothered to provide gantry. The non
providing of gantry made the Plaintiff to incur heavy loss, in
as much as the plaintiff has to engage additional equipment
excessive fuel for machinery and also man power.
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Com.O.S.No.5396/2018
60. That, while it was quoted ₹.16,000/- per MT without
gantry but the assurance of the plaintiff that they will provide
gantry as such the rate was reduced to ₹.13,500/-.
61. The non providing of gantry at Fabrication Yard
caused huge loss to the Defendant even though the plaintiff
reduced the rate ₹.2,500/- per MT from the agreed rate of
₹.16,000/-. But, such reduced rate was accepted subject to
provide gantry but admittedly the plaintiff failed to provide
gantry at Fabrication Yard. In this Head, the defendant had
lost a sum of ₹.64,70,278/- assessed at ₹.2,500/- per MT.
62. That, while negotiation and entering in to an
Agreement, the plaintiff represented that the erection work
shall be maximum at the height of 35 Mtrs. On the said
promise, the plaintiff given his quotation up to the height of
35 Mtrs only, but while working at site, the site Management,
site Engineer and in charge had assigned erection work in
excess of 35 Mtrs and forced the Defendant to work at a level
higher than 35 Mtrs. This process reduced progress of work
and required more man power and skilled labour.
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Com.O.S.No.5396/2018
63. In this regard, RA Bill was submitted till September
2017 which was certified by the plaintiff. The Defendant is
entitle to a sum of ₹.29,48,797/- on this Head, after reducing
the rate of ₹.1,500/- i.e., at the rate of ₹.12,000/- per MT, the
final rate agreed was ₹. 12,000/- per MT to 35 Mtrs. Height.
64. The Assignment of work, due to heavy rain the works
was not carried continuously for several days during the said
period. There were power shut down which made the
Defendant workmen to be idle without carrying any work,
thereby, the Defendant was made to pay the workers which is
assessed at ₹.6,69,866/-.
65. It was agreed that in the event Defendant has to
carry on any re-works alteration to any already assembled
structure, the Defendant shall reimburse the entire amount
in regard to the said alteration. The Defendant, during the
month of September 2017 requested to alter the structure
which was already assembled and which weighed about 50
MTs and requested to reduce the weight to 35 MT as per the
order dated 09-09-2017.
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Com.O.S.No.5396/2018
66. The plaintiff carried on the work for more than one
week by employing skilled labour and Engineers. The
Defendant incurred a sum of ₹.1,35,000/- has to be
reimbursed by the plaintiff for which the defendant is entitled
to.
67. That, it was agreed between the parties that the
plaintiff shall provide transportation of the materials to the
work spot with free of cost as per scope matrix at Sl.No.1 and
10 and as per the work order dated 14-07-2016 under clause
24 “…SNS will provide trailer for transportation from Stock
Yard to Fabrication …..” The plaintiff utterly failed to provide
the very transportation thereby, this transportation is agreed
to be free of cost but while raising the bill, the plaintiff
deducted / recovered ₹.220/-per MT. The plaintiff has no
right to deduct any amount on this Head as such, the
Defendant is entitle a sum of ₹.5,47,454/- up to RA Bill
No.16.
68. As per the Revised quotation dated 01-03-2016
submitted by the plaintiff and also under the scope matrix
dated 25-02-2016, it was agreed and understood UT & RT
etc., are in the scope of SNC. However, SNC deducted /
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Com.O.S.No.5396/2018
recovered UT & RT testing in its monthly billing submitted by
the plaintiff and which deduction is not justified or agreed by
the Defendant. In this regard, the Defendant is entitle to get a
sum of ₹.16,870/- up to RA Bill No. 16.
69. That, the reconciliation statement submitted by the
Defendant in the month of December 2016 was not
considered by the plaintiff. The delay in submitting the bills
was due to heavy rains in the work spot even though the
Defendant was very regular in submitting the reconciliation
statement along with monthly bills. However, the plaintiff
without any cause or reason deducted ₹.25,000/- per RA Bill
of September 2016. This amount was deducted without any
justification. Hence, the Defendant is entitle to the said
amount.
70. That, the plaintiff had withheld a sum of ₹.50,000/-
in RA bill No.7 for the month of December 2016, on the
ground that non completion of TP 08 structure. However, the
Defendant in clear terms given reason for not completing the
work as there were heavy rains and there was no workable
weather condition and requested not to deduct any amount
but the said work was completed later. However, the amount
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Com.O.S.No.5396/2018
was not released. Hence, the Defendant is entitle to the said
amount of ₹.50,000/-.
71. That, the plaintiff deducted a sum of ₹.11,51,058/-
from RA Bill Number but the RA bill No.16 which amount is
cumulative and refundable. This amount is the amount
payable to the Defendant. The Defendant is entitle to recover
the said amount from the plaintiff. Hence, the claim of
₹.11,51,058/- on the Head of Security Deposit.
72. That, as per the final bill submitted by the
Defendant after not allowing the work to be done at the spot
by the plaintiff, a final bill was submitted, as per the final bill
which is produced as Document No.01, the plaintiff is due to
the Defendant in a sum of ₹.42,27,433/- which amount is
legally due and payable by the plaintiff to the Defendant.
73. The plaintiff without any valid reason, alleged that
the contract was terminated and forced the Defendant to stop
the work and go out of work spot. In view of illegal act of the
plaintiff, the Defendant lost a sum of ₹.17,03,842/- towards
loss of profit. The details of which are as follows:
/41/
Com.O.S.No.5396/2018a] Fabrication Loss of Profit 411.889 MT ₹.593,120
b] Erection -Loss of profit 776.31 MT ₹.372,629
c] Alignment -Loss of profit 1164.491 MT ₹.419,217
d] Finishing – Loss of Profit 2657.3 MT ₹.318.876
74. That, the quotation was for ₹.5000 MT however before
placing the order, the plaintiff restricted the quantity for 3000
MT for initial period stating that the remaining 2000 MT order
will be placed, once the 3000 MT order is completed.
75. That, the Defendant accepted the order on the above
said promise but the reasons stated in the letter the plaintiff
rescinded the contract and not allowed the Defendant to
complete even 3000 MT work, but the Defendant has made
arrangement to complete 5000 MT work by his equipment,
machinery, laborers etc., and the Defendant has lost profit
margin of 2000 MTs which works out to ₹.48,00,000/-.
76. That, he purchased huge equipment and machinery
for completion of the work. The said machinery and equipment
are in the work-spot and in the custody of plaintiff. The said
machinery and equipment worth several lakhs of Rupees.
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Com.O.S.No.5396/2018
77. The Defendant machinery are kept idle and the
Defendant is not able to make use of the said machinery,
equipments. If the Defendant make use of the said machinery
and equipments, he will get ₹.1,50,000/- at the minimum per
month and in this regard, the Defendant is entitle to a sum of
₹.32,44,800/- and the bill was already submitted to the
Plaintiff.
78. That, as per the contract, it is the duty of the plaintiff
to deliver back the equipment and machinery to Ballari and
the entire transportation cost was agreed to be made by the
plaintiff, but they failed to do so.
79. The Defendant prays for mandatory injunction
directing the plaintiff to deliver back the entire machinery and
equipments immediately to the Defendant to the place where
the machinery transported by Plaintiff.
80. That, some of the items of claims above and up to RA
Bill No.16 attracts tax liability. The Defendant submit that, the
plaintiff is liable to pay applicable taxes on the said amount.
81. That, the Counter claim made by the Defendant arises
from the same contract, on which the plaintiff filed the present
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Com.O.S.No.5396/2018
suit and that the cause of action to file the Counter claim is
also the cause of action alleged by the plaintiff. The Counter
claim is for the reason stated above and between the parties
and in lieu of the contract alleged in the plaint.
82. That, after due calculation of the amount due by the
Plaintiff and also the loss suffered by the Defendant due to
unilateral termination of the contract and also the damages
caused due to the act of plaintiff is assessed at
₹.2,00,29,709/- which is the Counter Claim in this suit.
83. That, the Defendant prays this Court be pleased to
grant decree in favour of the Defendant and against the
plaintiff for a sum of ₹.2,00,29,709/- with future interest at
24% from the date of Counter claim till the payment of the
amount by the plaintiff.
REJOINDER:
84. The plaintiff has filed Rejoinder to the counter claim
and contended that the counter-claim of the defendant are
false, frivolous and vexatious and that they deserve to be
dismissed in limine with exemplary costs.
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85. That, the counter claims have been introduced
belatedly, by amendment, only with the malafide intent of
protracting the suit and to delay and defeat the rights of the
plaintiff. That, if there had been any merit in any of the
counter claims the defendant would have made them at the
first instance. That, the written statement was filed in April
2019 and the application seeking to amend the same so as to
introduce counter-claims was made only in September 2019,
i.e., after considerable delay.
86. That, the defendant’s counter-claim are vexatious
and frivolous, intend to confuse the issues for consideration
arising in the suit and made as a counter blast to the suit of
the plaintiff. That, the counter claims have been made with
the sole aim of harassing and arm-twisting the plaintiff and
are nothing but an attempt to extort monies from the plaintiff
and avoid paying amounts lawfully due from the defendant to
the plaintiff. Hence, the plaintiff prays to reject the counter
claims.
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Com.O.S.No.5396/2018
ADDITIONAL WRITTEN STATEMENT FILED BY THE
DEFENDANT TO THE REJOINDER.
87. That, the amendment sought for by the plaintiff is
not only fraudulent but also frivolous. That, the amended
claim is nothing but a counterblast to the counter claim of
defendant. That, the plaintiff fully knowing that the amended
claim is a bogus, frivolous, vexatious and not tenable in the
eye of Law, made such claim only to harass the defendant
and to misguide the Court.
88. That, the alleged amended claim of plaintiff is barred
by Law of Limitation. That, the contract between the plaintiff
and the defendant was ended in the year November, 2017
itself. That, the present amendment brought in the year 2021
is hopelessly barred by Law of Limitation and an issue may
kindly be raised on this point.
89. That, the amendment sought for is also bad for mis-
joinder and non-joinder of necessary parties and cause of
action. That, on this ground also the rejoinder of plaintiff is
bound to be rejected.
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90. That, the plaintiff by issuing a notice dated
31.01.2018 had quantified his alleged claim for ₹.84,81,681/-
is now making unrealistic, fraudulent claim to make wrongful
gain for itself. This is without prejudice to the contention that
the claim of ₹.84,81,681/- is also a false claim which was
already denied by the defendant.
91. That, the very conduct of the plaintiff claims to be a
reputed construction company which is trying to enrich itself
by sucking blood of a small individual entrepreneur. By
contending so, the defendant prays to dismiss the suit with
costs in the interest of justice and equity.
92. On the basis of the rival contentions, pleadings,
material proposition of fact and law and the documents this
Court has framed the following:
ISSUES
1. Whether the Plaintiff proves that the defendant
has committed breach of terms and conditions of Work
Order dated:14.07.2016 and has left the entrusted work
incomplete thereby caused the plaintiff to suffer huge
loss?
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Com.O.S.No.5396/2018
2. Whether the Plaintiff proves that it is entitled to
recover a sum of ₹.2,72,70,460/- from the defendant as
damages/ compensation/ reimbursement on account of
the breach of terms and conditions of Work Order
dated:14.07.2016 committed by the defendant, as
detailed in paragraph 50 of the plaint?
3. Whether the Plaintiff proves that it is entitled to
recover pendent lite and future interest at 24% p.a. on
₹.2,72,70,460/- from the defendant?
4. Whether the defendant proves that the Plaintiff
has prevented him from executing the work entrusted to
it under Work Order dated:14.07.2016 and has illegally
terminated the contract?
5. Whether the defendant proves that the plaintiff
has prevented him from removing the machinery and
equipment from the work site?
6. Whether the defendant proves that the plaintiff
is liable to pay compensation to him towards the alleged
loss of rent and damage caused to machinery and
equipment which are kept idle in the work site?
7. Whether the defendant proves that he is
entitled to recover ₹.2,00,29,709/- along with current
and future interest at 24% p.a. from the plaintiff?
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Com.O.S.No.5396/2018
8. Whether the plaintiff is entitled for suit reliefs?
9. Whether the defendant is entitled for counter
claim reliefs?
10. What order or decree?
93. To substantiate the case of the plaintiff,
Sri.Subramanian Annamalai, the Senior General Manager of
plaintiff Company got examined as PW.1 and got marked the
documents at Ex.P1 to Ex P50. On the other hand the
defendant has examined himself as DW.1 and got produced
documents marked at Ex.D.1 to Ex.D.103.
94. Heard on both sides. Both counsels filed written
arguments.
95. In support of plaintiff’s case, he has relied upon the
following citations:
Sl.No. Particulars Citations 01. Mangala Woman Karandikar (2021) 6 SCC 139 (dead) through LRs v.Prakash Damodar Ranade 02. Rajasthan State Industrial (2013) 5 SCC 470 Development and Investment Corporation & Anr. V. Diamond /49/ Com.O.S.No.5396/2018 & Gem Development Corporation Ltd., & Anr., 03. Roop Kumar V. Mohan Thedani (2003) 6 SCC 595 04. Gurubasappa & Ors., Vs. ILR 1961 Mys 878 Gurulingappa 05. Uttam Singh Duggal & Co., Ltd., (2000) 7 SCC 120 V. United Bank of India & Ors., 06. Karam Kapahi & Ors., Vs. Lal (2010) 4 SCC 753 Chand Public Charitable Trust & Anr., 07. Construction and Design Services (2015) 14 SCC 263 Vs. Delhi Development Authority
08. Saisudhir Energy Ltd., V. NTPC 2016 SCC OnLine Del
Vidyut Vyapara Nigam Ltd., 5093
09. M.Lachia Setty & Sons Ltd., Vs. (1980) 4 SCC 636
Coffee Board, Bengaluru
10. Highway Engineering Pvt., Ltd., V 1996 SCC OnLine Del
Union Of India & Anr., 552
11. M/s.Vikas Electrical Service V. ILR 2008 KAR 1304
Karnataka Electricity Board, by
its Executive Engineer
96. In support of defendant’s case, he has relied upon the
following citations:
Sl.No. Particulars Citations 01. Mahanagar Telephone Nigam (2019) 5 SCC 341 Limited V. Tata Communications Limited /50/ Com.O.S.No.5396/2018 02. Fateh Chand V. Balkishan Dass AIR 1963 SC 1405 03. Welspun Specialty Solutions (2022) 2 SCC 382 Limited V. Oil and Natural Gas Corporation Limited 04. Gopal Kirshnaji Ketkar Vs. AIR 1968 SC 1413 Mohammed Haji Latif and Others 05. In Re:Pandam Tea Co., Ltd., MANU/WB/ 0034/1974 06. Dwaraka Das V. State of (1999) 3 SCC 500 M.P.Another 07. Shripati Lakhu Mane V. Member 2022 SCC Online SC Secretary, Maharashtra Water 383 Supply Board 08. Gail (India) Ltd., V. M/s.Gupta O.M.P. (COMM) Bros (India) No.474/2018 Delhi High Court
97. My answer to the above framed issues are as follows:
ISSUE No.1 to 3 and 8 : Partly in the
AFFIRMATIVE
ISSUE No.4 to 6 : In the NEGATIVE
ISSUE No.7 & 9 : In the NEGATIVE
ISSUE No.10 : As per final Order
for the following
REASONS
98. ISSUE No.1 to 3 and 8 : For the purpose of brevity
and convenience I would like to answer above four issues in
common.
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99. It is pertinent here to mention that as I have already
narrated the facts of the case in detail at the inception, I will
not repeat the facts once gain at length, but I will confine
myself to the material facts.
100. It is the specific case of the plaintiff herein that it
being a private company is a renowned Civil Contractor and
into the construction line and has constructed various large
scale infrastructure projects in diverse field such as power,
irrigation, transportation and civil engineering works. The
defendant is the sole proprietor which is also involved in the
business of providing steel structuring services.
101. The BHEL has awarded the work order to the
plaintiff in connection with a project i.e., a Coal handling plant
and ash handling plant at Kothagudem Thermal Power
Station, Khammam District, Telangana. Thereafter, the
plaintiff has engaged various sub-contractors to carry out
different part of the works entrusted to it by the BHEL and the
defendant is one of such sub-contractor.
102. The present dispute arise out of the work order
executed by the plaintiff and defendant on 14.07.2016. It is
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the specific case of the plaintiff that the defendant has
committed breach of terms of the work order and has left the
entrusted work incomplete causing loss to the plaintiff, hence,
plaintiff is entitled to recover a sum of ₹.2,72,70,460/- along
with interest @ 24% from the date of suit till its realization.
103. On the other hand, the defendant herein has filed
written statement and counter claim and disputed the case of
the plaintiff and further claimed that the plaintiff itself has to
pay an amount of ₹.2,00,29,709/- along with interest @ 24%
p.a.
104. Keeping in mind the main rival contentions of both
the parties it is essential to go through the evidence on record.
In order to decide the above issues, it is relevant to examine
the evidence of plaintiff both oral as well as documentary. In
my opinion the evidence of defendant and his document can
be considered while discussing the issue of counter claim.
105. The Senior General Manager of the plaintiff
company has himself been examined as PW.1 reiterating
almost all the contents of the plaint and got produced Ex.P.1
to Ex.P.50. It is pertinent to note that out of 50 documents,
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the Ex.P.1 to Ex.P.28 are marked with consent of the
defendant on the strength of Statement of Admission and
denial filed by the him.
106. The Ex.P.1 is the Plaintiff’s work order dated
14.07.2016. On careful perusal of various conditions
enunciated in the work order it appears both the parties on
going through each and every aspects of the terms of work
order have admitted and affixed their signature upon it. In my
opinion the contention raised by the defendant in para 14
and 15 of Written statement, after lapse of 3 years from
the date of signing the work order that some of the
conditions were unenforceable, it is unilateral and
fundamentally defective holds no water. If some of the
conditions could not be enforced the defendant was at liberty
not to sign the work order. Having signed the work order the
defendant can not raise any objection with regard to the
specific terms of the work order more particularly clause 50.
107. As per Clause 7 of the work order/Ex.P1 the
defendant was advised to visit the project site and acquire full
knowledge and information about the site condition and it
was agreed that no claim of any nature due to lack of
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knowledge of site conditions shall be entertained. As per the
said condition it was further agreed that no sort of claim/price
revision or idle charges of machinery or labors due to any
reason shall not be entertained.
108. As per Clause 15 the plaintiff was bound to provide
crane free of cost on sharing basis in the site and all the
contractors were directed to share the crane facility without
hampering their works. The Clause No.16 is relating to the
number of labors to be deployed by the contractor to see that
maximum work can be extracted within the prescribed period.
109. As per Clause 20 the time was the essence of the
contract and it shall be concluded within 12 months. As per
Clause 49 of the work order the plaintiff is entitled to recover
liquidated damages subject maximum of 15% of the total value
of the order. As per Clause 51 the final bill shall be submitted
by the contractor i.e, defendant within 30 days after
completion of entire work duly certified by the Engineer in-
charge at the site and payment will be made after necessary
deductions towards security deposit, statutory dues.
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110. Admittedly, the Ex.P.1 is marked with consent and
as I have already held the defense raised by the defendant that
some of the conditions are unlawful and against to his interest
is not at all tenable in the eye of law.
111. The Ex.P.2 is the Defendant Letter dated
10.02.2017 which is written by the defendant herein alleging
that the site condition is not favorable and the defendant
sustained loss of ₹.50,00,000/-.
112. The Ex.P.3 is the Plaintiff’s letter dated 13.09.2017
wherein the plaintiff has intimated the defendant that since
July 2017 there was huge shortage of manpower in fabrication
and erection works.
113. The Ex.P.4 is another Plaintiff’s letter dated 15.09.2017
wherein it is also brought to the notice of the defendant that since
for the past 3 months no man power was engaged and all the works
are pending.
114. The Ex.P.5 is the Plaintiff’s letter dated 03.10.2017
wherein once again the plaintiff informed the defendant that
his workers have stopped the work since 29.09.2017 without
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any intimation and also further intimated that the defendant’s
labor were sitting on strike and asked the defendant to ponder
over the letter issued by BHEL.
115. The Ex.P.6 is the Defendant’s letter dated
04.10.2017 wherein the defendant asked the plaintiff to
release the labor payments as the defendant is due to make
payment of ₹.10,89,697/-.
116. The Ex.P.7 is the Plaintiff’s letter dated 04.10.2017.
The Ex.P.8 is the defendant’s letter dated 19.10.2017 and the
defendant raised further issues which were against to the
terms of the work order.
117. The Ex.P.9 is the letter dated 23.10.2017 sent by
the defendant to the plaintiff wherein the defendant once
again asked the plaintiff clear to pay amount so that the
defendant can pay workmen wages and further stated that if
need arises the plaintiff has got right to invoke any clause of
the work order against the defendant. The letter also reveals
that the defendant’s workmen were on strike.
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118. The Ex.P.10 is the Plaintiff’s letter dated 23.10.2017
wherein the plaintiff has stated that it has already cleared
payment up to August 2017 and in spite of it the defendant is
asking the plaintiff to clear workers payment directly by the
plaintiff. The plaintiff further intimated that on the facts of the
case they were forced to close the contract by terminating it.
119. The Ex.P.11 is the Plaintiff’s letter dated 31.10.2017
through which the termination notice is issued as the
defendant failed to pay its labors and did not resume the work
in proper order. In the present case on hand, the defendant
has not produced any contrary evidence to hold that the
plaintiff has unlawfully terminated him. In the present facts
and circumstances of the case, as the defendant did not
perform his part of contract, in my opinion the plaintiff has
terminated the contract lawfully.
120. The Ex.P.12 is the Defendant’s letter dated
07.11.2017 in response to the termination notice.
121. The Ex.P.13 is the Defendant’s letter dated
11.11.2017. The Ex.P.14 is the Plaintiff’s letter dated
27.11.2017.
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122. The Ex.P.15 is the Defendant’s letter dated
05.12.2017. The Ex.P.16 is the Invoice dated 21.11.2017.
123. The Ex.P.17 is the Plaintiff’s email dated
23.11.2017, 08.01.2018, 09.01.2018, 10.01.2018 and
11.01.2018 through which the plaintiff called upon the
defendant to send his representative for finalization of the bill.
124. The Ex.P.18 is the Plaintiff’s letter dated
02.01.2018.
125. The Ex.P.19 is the Defendants letter dated
05.01.2018.
126. The Ex.P.20 is the Defendant’s letter dated
22.11.2017. On careful reading of the said document it
appears the defendant herein has engaged and placed his
Supervisor to look after the machinery and equipment of the
defendant at the site and further asked the plaintiff to renew
the gate pass. In my opinion the defendant was in possession
of the site through his Supervisor and therefore the arguments
canvassed by the defendant counsel that there was no access
to the site is unbelievable.
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127. The Ex.P.21 is the Defendants letter dated
28.11.2018. The Ex.P.22 is the Defendants letter dated
20.12.2017.
128. The Ex.P.23 is the Defendants letter dated
31.03.2018.
129. The Ex.P.24 is the Plaintiff’s letter dated
06.04.2018.
130. The Ex.P.25 is the copy of the Invoice dated
02.07.2018.
131. The Ex.P.26 is the Office copy of legal notice dated
12.07.2018 issued by the defendant herein to the plaintiff
calling upon the plaintiff to settle the dispute amicably by the
intervention of the Arbitrator.
132. The Ex.P.27 is the Plaintiff’s letter dated 06.04.2018
wherein the plaintiff alleged that the defendant is obstructing
their ongoing works even after termination.
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133. The Ex.P.28 is the Plaintiff’s email dated
02.06.2018.
134. Admittedly the above documents are not at all
disputed by the defendants. In considering the above
documents and the admission of defendant, I am of the
opinion that the defendant was at fault., he did not perform
his part of contract and therefore the plaintiff terminated the
contractor and even after termination it appears the defendant
was obstructing on going works.
135. The PW.1 further got examined and produced
Ex.P.29 which is the letter issued by BHEL Dated 03.10.2017
wherein the BHEL has stated that even after providing a 350
Tonne Crane there is no improvement in the work.
136. The Ex.,P. 30 is another letter issued by BHEL
dated 24.10.2017 addressing the plaintiff stating that they
have received a copy of letter addressed by some of the
workers of Kothagudem Plant to labor Commissioner alleging
that they were not duly paid.
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137. The Ex.P.32 is the email dated 30.10.2020 with
attachment.
138. The Ex.P.33 is the Certificate under Section 65B of
Indian Evidence Act.
139. The Ex.P.34 to Ex.P.43 are the Bills which were
raised by other Sub-Contractors and their work orders which
as per the case of the plaintiff got concluded the work by
utilizing the service of said sub-contractors after terminating
the defendants contract. The said documents can be
considered in the subsequent paragraphs while discussing
issue of Reimbursement towards the loss of ₹.1,53,94,050/-
incurred by the plaintiff by engaging alternative contractors.
140. The Ex.P.44 is the copy of Extract of Board
resolution dated 12.07.2018 through which the PW.1 was
authorized to pursue legal proceedings on behalf of plaintiff.
141. The Ex.P.45 is the Contractor performance/
experience certificate issued by the BHEL dated 21.11.2022
wherein it appears the plaintiff herein has satisfactory
executed and completed the Kothagudem Thermal Plant.
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142. The Ex.P.46 is the certified copy Bank statement of
Canara Bank of plaintiff.
143. The Ex.P.47 is the certificate issued by Indusland
Bank to the plaintiff wherein it is mentioned that the plaintiff
has paid amount to one M/s.Guna Engineering Pvt., Ltd.,
which is the another sub-contractor under the plaintiff.
144. The Ex.P.48 is the another certificate issued by
State Bank of India the plaintiff wherein it is mentioned that
the plaintiff has paid some amount to one K.Ramachandran.
145. The Ex.P.49 is the Certificate under Section 65B of
Indian Evidence Act.
146. The Ex.P.50 is the receipt issued by Truth Labs
dated 19.10.2020 which is marked during the course of Cross-
examination of DW.1.
147. The learned counsel for defendant has Cross-
examined PW.1 at length wherein at page No.27 the defendant
challenged the authority of PW.1 to depose on behalf of
plaintiff, as the PW.1 admits that he was only associate with
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the project since from the year 2017 and whereas the work
order is of the year 2016.
148. In my opinion the defendant cannot question the
authority of PW.1 as in this case the main evidence which take
prime role is the documentary evidence and not the oral
evidence in this case. Admittedly, both the parties have
produced voluminous documents and therefore on verifying
upon the documents the PW.1 can depose before the Court.
149. The defendant counsel further Cross-examined
PW.1 wherein PW.1 admits that the project site was restricted
area with security persons. Based upon the said admission the
counsel for defendant argued that the defendant was not
capable to remove his machinery and equipment and also did
not remove the unutilized structural and scrap steel. The said
Issue will be answered by at a later stage while discussing the
Issue of Non-Returning of Structural and Scrap Steel by the
defendant.
150. The PW.1 voluntarily deposed that he has not
availed the gantry facility provided by the BHEL. The said
Issue will be considered in subsequent paragraphs while
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answering the Issue of gantry facility. However, in my opinion
if the defendant did not utilize the gantry facility it is not the
fault of the plaintiff but it is of the defendant.
151. The counsel for defendant further argued relying
upon the admission of PW.1 regarding RA Bills, however, in
my opinion any kind of admission by the PW.1 is against to
the Clause 51 of Ex.P.1 wherein final bill can be considered
only after completion of entire work. Admittedly, in this case
the defendant has not completed his entire work pertaining to
the Work Order Ex.P.1.
152. Per contra, the defendant himself has filed affidavit
in lieu of examination in chief reiterating his written statement
and counter claim averments and examined himself as DW.1
and got produced Ex.D.1 to Ex.D.103.
153. It is to be noted that as the facts of this case and
the documents relied upon by both the parties are voluminous
in nature, the relevant documents are discussed as and when
need arises while discussing each fact in Issue.
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154. Admittedly, the dispute arises out of the work order
executed by the plaintiff and the defendant on 14.07.2016,
The said document is marked at Ex.P.1. As per the said
document the Clause No.20 makes it clear that the time was
essence of the contract. On perusal of the said Clause a
normal prudent man would easily come to a conclusion that
the time was the essence of the contract. It is further admitted
that the twelve months was the period to conclude the
contract and three months grace period was provided to the
defendant and as per the case of the plaintiff even after
utilizing the extension period of three months also the
defendant has not completed the work and thereby breached
the terms of the work order.
First Breach: Failure to mobilize and pay to the
Labor:
155. As per the case of the plaintiff the defendant has
breached the terms of the contract by not mobilizing the full
strength of the labor in carrying out its part of contract work.
The learned counsel for the plaintiff brought to the notice of
this Court regarding Clause 16 of Ex.P.1 work order wherein
the defendant was duty bound to engage 106 labors at the site
within 30 days. However, as per Ex.D.6 and Ex.D7, the
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defendant deputed only 75 labors each, as per Ex.D.17 only
61 labors, as per Ex.D.18 only 47 labors were deputed, as per
Ex.D.19 only 38 labors were deputed and as per Ex.D.28 the
defendant deputed only 32 labors in the site. It is the
submission of the plaintiff counsel that the defendant has
failed to depute the labor as per the terms of the work order
and thereby hampered the work which caused delay.
156. On the other hand, it is the case of the defendant
that due to unfavorable monsoon season and due to shortage
of power supply he has intentionally deputed less number of
labors in the site.
157. Keeping in mind the above submission I would like
bestow my attention to Ex.P.3 which is the letter issued by the
plaintiff herein in the month of September 2017 wherein the
defendant was instructed to depute the minimum number of
labors as required in the site in compliance with the terms of
the work order.
158. Per contra, the defendant admitted vide Letters/
emails at Ex.D.21, Ex.D24 and Ex.D25 that there were only 32
labors at the site. On perusal of the plaintiff’s document it is
crystal clear that the defendant has pleaded at many a times
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by addressing letter that his labors are on strike.
159. As far as the shortage of labors deputed to the site
is concerned, the DW.1 in his Cross-examination at page
No.24 has clearly admitted that as per Ex.D.6 he has
undertaken to increase manpower to 75 in July 2016.
160. The DW.1 further admits that as per Ex.D.16 he has
stated that the manpower which is engaged by him in July
2016 did not exceed 51. The DW.1 volunteers to depose that
some of the labors might have taken holiday and as it was
rainy season it is quite possible as many as 20 laborers to take
leave. However, it is pertinent to note that the DW.1 has not
assigned any reason in Ex.D6 and therefore in my opinion the
reason assigned by DW.1 is an after thought before this Court.
161. Admittedly, the work order Ex.P.1 is dated
14.07.2016. It means the defendant was earlier made known
that the contract work is essentially needs to be completed
within the prescribed period including the rainy season.
Hence, in my opinion the reason assigned by the defendant
that due to rainy season he could not mobilize the labor is not
trust worthy, cogent and is unbelievable.
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162. The plaintiff herein has contended that due to
failure to mobilize the labor at the hand of defendant and as
the defendant failed to pay his labor the plaintiff suffered a
loss of ₹.60,000/-.
163. The learned counsel for plaintiff brought to the
notice of this Court regarding Clause 8, 17, 18 and 23 of work
order which cast liability on the defendant to ensure that he
should pay the labor at work, that the workmen should be
ensured and all other statutory labor compliance were
maintained. It is the specific case of the plaintiff that the
defendant repeatedly failed to make payment to his labors. On
perusal of Ex.D.8 it is clear that the defendant complained of
the burden faced by him in complying with the statutory
norms. In the present case on hand admittedly, the plaintiff
has advanced a sum of ₹.4.5 Lakhs to the defendant so as to
clear the labor payments. On perusal of Ex.P.10 it is clear that
the plaintiff informed that despite payment made by the
plaintiff the defendant had failed to clear the outstanding dues
to his labors. In the present case on hand as per Clause 18 of
the work order if in case the defendant fails to pay his labors
then a penalty of ₹.50,000/- is liable to be paid by him to the
plaintiff. Hence in my opinion the plaintiff herein is entitled
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for ₹.50,000/- as penalty from the defendant. Further the
plaintiff is entitled to claim ₹.10,000/- towards failure on the
part of the defendant to mobilize sufficient labor at the site.
Accordingly, the plaintiff is entitled to claim ₹.60,000/- in total
from the defendant.
SECOND BREACH: Targets not achieved-Liquidated
damages of ₹.54,00,000/-.
164. As per the case of the plaintiff the defendant was
bound to achieve a minimum monthly progress of 500 MT of
fabrication and other works as per Clause 21 of Ex.P.1.
However, as per Ex.D17, Ex.D.18 and Ex.D.19 the defendant
has not achieved the targeted quantity and did not exceed 150
MT on multiple occasions, much less 250 MT per month and
thereby breached the terms of the contract.
165. As per Clause 20 of the work order the defendant
was under the obligation to complete the works on or before
25.05.2017 i.e., 12 months from the date of hand over of the
site. The defendant required to execute total extent of 3000 MT
fabrication, erection, alignment, placement and finishing of
structural steel and thereby he was obligated to ensure that a
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minimum of 500 MT of work took place on monthly basis.
Accordingly, the contract placed by the plaintiff upon the
defendant was a short term contract which required the
defendant to ensure monthly progress to complete its scope of
work in order to finish the work within the contractual period.
166. The plaintiff relied upon Ex.D.17 to Ex.D.19 to
contend that the defendant failed to achieve the monthly
targets and thereby the plaintiff sustained loss of
₹.54,00,000/- and he is entitle the said amount towards
liquidated damages.
167. Per contra it is the case of the defendant that the
delay is not attributed to the defendant but the delay is only
because of the plaintiff.
168. Keeping in mind the rival contentions, once again I
would like to bestow my attention to Ex.D.17 to Ex.D19 which
are the monthly statements for the year June to September
2017 which clearly goes to show that the defendant did not
reached the targeted quantity of fabrication and his work did
not exceed 150 MT on multiple occasions. On careful reading
of the said document it is clear that the defendant has failed to
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reach the target as prescribed in the work order. In my opinion
the defendant’s own documents clearly goes to show that the
defendant has breached his obligation under Clause 21 of the
Work order.
169. During the course of arguments, the learned
counsel for the defendant has argued that the total scope of
work under the work order was 3000 MT and if the minimum
monthly quantity of work is fixed at 500 MT per month then
the duration of 12 months as per the work order is ridiculous
and therefore, the defendant is not at all liable to pay any
compensation to the plaintiff. However, on plain reading of the
work order it indicates that the work to be completed on a
monthly basis relating to fabrication, erection, alignment and
finishing action at 500 MT per month and therefore, the
defendant after signing the work order now is debarred from
raising a defense opposing the common understanding of the
terms of the work order.
170. On careful reading of the Cross-examination of
DW.1 at page No.37 it is clear that DW.1 has denied to the
suggestion made by the plaintiff that the statement at Page
No.P332 of Ex.D.46 shows monthly progress achieved by him.
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The DW.1 voluntarily deposed that he has furnished the
details of progress of the project along with respective RA bills
to the plaintiff. However, DW.1 clearly admits that he has not
produced the said copies of progress report and RA Bills before
the Court. The DW.1 further admits that he has not made any
effort requesting the plaintiff to furnish copies of RA Bills to
him. On careful reading of the above admission, I am of the
opinion that the defendant herein has breached the terms of
the contract and violated Clause 21 of Ex.P.1.
171. On perusal of Ex.P.5 and Ex.P.31 the letters issued
by BHEL and plaintiff wherein it is crystal clear that the
defendant herein has not utilized the crane which is provided
by the plaintiff. Further the documents produced by the
plaintiff is sufficient to conclude that as the labors of the
plaintiff were on strike he has abandoned the work. It is not
in dispute that as the defendant abandoned the work site the
plaintiff has issued termination letters as per Ex.P.10 and
Ex.P.11.
172. The learned counsel appearing for plaintiff herein
has relied upon the law laid down by the Hon’ble Apex Court
reported in 2015 (14) SCC 263 in Construction and Design
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Services Vs. Delhi Development Authority wherein the
Hon’ble Apex Court at para No.17 has held that
“evidence of precise amount of loss may not
be possible but in the absence of any evidence
by the party committing breach that no loss was
suffered by the party complaining of breach, the
Court has to proceed on guess work as to the
quantum of compensation to be allowed in the
given circumstances. Since, the respondent also
could have lead evidence to show the extent of
higher amount paid for the work got done or
produced any other specific materials but it did
not do so, we are of the view that it will be fair
to award half of the amount claimed as
reasonable compensation”.
173. Admittedly, in the present case on hand even
though the plaintiff herein is claiming that it had suffered a
loss of ₹.54,00,000/- for the reason that the defendant failed
to complete 500 MT work per month during the term of the
work order relying upon the decision as noted above I am of
the opinion that the plaintiff is entitled for ₹.27,00,000/- (50%
of claim under this head) towards liquidated damages under
Clause 49 of the Work order from the defendant.
174. Alternative contractors: In view of defendant’s
abandonment from the site work the plaintiff as per his case
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has employed alternative contractors to complete the
remaining suit works.
175. In order to prove that as the defendant did not
perform his remaining part of contract work and as he
abandoned the work from the site, the plaintiff was
constrained to engage 6 alternative contractors and has paid
the amount and therefore he is entitled for ₹.1,53,94,050/-
the plaintiff has led his evidence and produced documents.
176. On the other hand, it is the specific case of the
defendant that the plaintiff has paid the amount to the
defendant only after taking note of the work which is actually
completed by the defendant and therefore if the plaintiff had
employed alternative contractors to complete remaining part of
the work it is the liability of the plaintiff himself to pay the
amount to the alternative contractors, as such the defendant
is not liable to pay the said amount.
177. In order to prove the case of the plaintiff he has
relied upon Ex.P.34 to Ex.P.43 which are the various work
orders through which the plaintiff admittedly got the work
done with respect to the original work in the site. On careful
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perusal of some of the bills, in my opinion no proper dates and
signature are mentioned upon the bills.
178. The learned counsel for the defendant brought to
the notice of this Court that the GST pertaining to the Ex.P.34
document has become inactivated as on the date of November
2017 to February 2018.
179. The learned counsel for the defendant brought to
the notice of this Court regarding various loopholes in the
above noted documents such as bills not being signed, dates
not forthcoming etc., and argued that even if the documents
are in order the defendant is not liable to pay the labor
charges as the plaintiff has not paid any additional extra
amount to the defendant in this regard. In my opinion the
arguments canvassed by the defendant holds water in taking
note of the Clause 50 of the Work Order wherein the plaintiff
himself is obligated to pay the amount to the other sub-
contractors for the balance work done.
180. Taking note of the above mentioned documents, I
am of the view that as the plaintiff has paid the defendant only
to the extent of work which is carried by the defendant, the
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amount which is paid to the alternative contractors is
essentially be borne by the plaintiff. Admittedly, in this case it
is not the case of the plaintiff that it has paid ₹.1,53,94,050/-
to the defendant herein in addition to the already paid
amount, Hence, in my opinion the defendant cannot be levied
with the amount of ₹.1,53,94,050/- which is actually incurred
by the plaintiff towards the work done by engaging alternative
contractors, Accordingly, the plaintiff is not entitle to the
amount of ₹.1,53,94,050/-.
Compensation of ₹.64,16,410/- towards unaccounted
structural and scrap steel provided to the defendant in the
course of work order.
181. As per the case of the plaintiff for the purpose of
carrying out the works the BHEL would provide to the plaintiff
structural and scrap steel free of cost which had to be
accounted for. In turn the plaintiff furnished such structural
and scrap steel to various sub-contractors including the
defendant. As per the work order under Clause 24 and 25 the
structural steel was to be issued free of cost by the plaintiff to
the defendant and surplus steel and all waste materials would
have to be returned to the plaintiff as per Clause 26 by
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maintaining a monthly reconciliation Statement.
182. As per the case of the plaintiff it has issued
correspondences subsequent to termination of work order
setting out its preliminary assessment of the total quantity of
steel to be returned by the defendant, however the defendant
failed to carry out material reconciliation. Hence, the plaintiff
claims that it is entitle for ₹.64,16,410/- towards non-
accounting the structural and scrap steel at the hands of the
defendant.
183. On the other hand it is the specific case of the
defendant that the site was under the control of the plaintiff
and no person without the permission of plaintiff herein can
get into the site and without gate pass none of the employee of
the defendant would make an entry into the site and therefore
the entire structural steel and scrap was utilized by the
plaintiff. Hence, the defendant is not accountable and liable to
pay any amount with regard to structural steel and scrap.
However, the said argument canvassed by the defendant holds
no water because of the reason that it is not the case of the
plaintiff levying allegation upon the defendant that he has
removed the structural steel and scrap from the site. It is the
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case of the plaintiff that the defendant has not accounted for
the remaining structural steel and scrap in the site as it
abandoned the work site.
184. The learned counsel for the defendant further
argued that the plaintiff has made the alternative contractors
to utilize the available structural steel and scrap in the site
and therefore it is not liable to pay any amount under the said
Head.
185. Keeping in mind the above rival contentions it is
beneficial to bestow my attention to the Memo of calculation
which is admittedly filed by both the parties regarding the
remaining steel to be returned.
186. As per the evidence of the plaintiff and as per
Ex.D.46 at page No.332 the said admission of unaccounted
steel can be noted as under:
All Quantity in MT According to the According to the
plaintiff (Evidence Defendant
Affidavit of PW-1) (Ex.D-46, pg.332)
Total Supplied Steel 2987.303 2732.113
Certified Amount 2381.129 2392.726
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Allowed Wastage (4% 95.245 95.70904
as per Cl.26 of Ex.P-
1)
Steel returned by 202.460 37.82
defendant
Remaining Steel to 98.714 59.119
the Returned
BHEL rate of INR 64,16,410/- INR 38,42,735/-
recovery in respect of
structural and scrap
steel
187. Based upon the above noted Ex.D.46 the counsel for
plaintiff submits that the defendant has failed to return the
structural and scrap steel issued by the plaintiff under the
terms of the Work Order.
188. On careful perusal of admission of the defendant in
Ex.D.46, it is clear that 59.119 MT of Steel needs to be
accounted to the plaintiff.
189. As per the Ex.D.46 document it appears the
defendant herein categorically admits that it is accountable to
return 59.119 MT of structural steel and scrap to the plaintiff.
If one Metric Tonne of Structural steel and scrap is worth of
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₹.65,000/- then the 59.119 MT of structural steel and scrap is
worth of ₹.38,00,000/- approximately. Therefore, in my
opinion the plaintiff is entitled to claim ₹.38,00,000/- from the
defendant.
190. In considering all the above facts and circumstances
of this case I am of the view that the plaintiff herein is entitled
to claim ₹.60,000/- towards failure of the defendant to
mobilize and pay the labor, ₹.27,00,00/- as liquidated
damages towards the failure of the defendant to complete the
work in time and ₹.38,00,000/- towards compensation in
respect of unaccounted structural steel and scrap by the
defendant. In all the plaintiff is entitled to ₹.65,60,000/-
along with interest @ 24% p.a. from the date of suit till its
realization from the defendant as compensation under
different heads. The learned counsel appearing for plaintiff has
relied upon many decisions, however, as the case on hand is
to be decided based upon the written agreement i.e., the Work
Order/Ex.P.1, in my opinion the decisions which are relied
upon by the plaintiff is not at all useful to the case on hand.
Accordingly, I answer Issue No.1 to 3 and 8 partly in the
AFFIRMATIVE.
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191. Issue No.4 to 6: It is the case of the defendant that
the plaintiff has prevented him from executing the work
entrusted to him under work order dated 14.07.2016 and has
illegally terminated the contract and that the plaintiff has
prevented him from removing the machinery and equipment
from the work site and hence plaintiff is liable to pay
compensation towards the alleged loss of rent and damages
caused to the machinery and equipment which are kept idle in
the work site.
192. On careful perusal of the evidence on record it is not
in dispute that on the failure of defendant to perform its part
of contract and as the defendant abandoned the work the
plaintiff herein has lawfully terminated the contract with the
defendant as per the provision under the work order/Ex.P.1.
The evidence on record is sufficient to conclude that the
defendant had engaged his Supervisor in the site and therefore
now he cannot blame upon the plaintiff alleging loss of rent
and damage to his machinery and equipment and also cannot
allege that the plaintiff prevented him from removing the same
from the work site. Admittedly, as per the terms of the work
order the defendant cannot claim compensation towards idle
of its labor or machinery in the work place. Hence, in my
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opinion the defendant herein has failed to prove that the
plaintiff has illegally terminated the contract and also failed to
prove that the plaintiff has prevented him from removing the
machinery and equipment from the work site and failed to
prove that he is entitled for compensation towards the same.
Accordingly, Issue No.4 to 6 are answered in the NEGATIVE.
193. Issue No.7 and 9: For the purpose of brevity and
convenience I would like to answer above two issues in
common. The defendant herein has claimed ₹.2,00,29,709/-
as compensation along with interest @ 24% p.a. from the
plaintiff by filing a counter claim subsequent to his written
statement averments.
194. It is pertinent to note that the defendant herein
totally claimed a compensation of ₹.2,72,70,460/- but
restricted his claim to ₹.2,00,29,709/-. In order to prove the
case of the defendant, the defendant himself has examined as
DW.1 reiterating his written statement and counterclaim
averments and marked the documents at Ex.D.1 to Ex.D.103.
195. It is pertinent to note that out of the above
documents the Ex.D.1 to Ex.D50 are marked with consent and
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Ex.D.51 to 54 are marked during the course of Cross-
examination of PW.1.
196. The Ex.D.1 is the Letter of request dated 23.01.2016
for quotation along with quotation requirement issued by the
plaintiff calling upon the defendant to prescribe his quotation.
197. The Ex.D.2 is the Final quotation as per Scope
matrix. On perusal of Ex.D.2 it appears the defendant herein
admits that the employer shall provide the gantry yard for
fabrication. It means as per Ex.D.2 the plaintiff is only liable
to provide space for gantry and there is no need to the plaintiff
to provide the gantry itself. However, it is not in dispute that
the plaintiff has also provided gantry to all its sub-contractors
so that they can utilize on rotation basis.
198. The Ex.D.3 is the Scope matrix for structural
fabrication and erection work dated 25.02.2016.
199. The Ex.D.4 is the Letter of intent dated 05.04.2016.
The Ex.D.5 is the Work order dated 14.07.2016. In my opinion
the terms of Ex.D.1 to ExD.4 ultimately merges with the work
order and therefore both the parties have got no right to claim
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anything else except provided under the work order. It is
needless to say that plaintiff and the defendant should restrict
their claim only to the terms and condition of work order and
they cannot argue upon any terms prescribed in Ex.D.1 to
Ex.D.4.
200. The Ex.D.6 is the Letter dated: 10.08.2016 issued
by the defendant herein.
201. The Ex.D.7 is the email worksheet dated 02.10.2016
issued by the defendant.
202. The Ex.D.8 is the Letter dated: 10.02.2017 issued
by the defendant wherein the defendant called upon the
plaintiff to provide with gantry.
203. The Ex.D.9 is the Letter dated: 10.05.2017 with
acknowledgment, the Ex.D.10 is the Letter dated: 13.05.2017,
the Ex.D.11 is the Letter dated: 13.05.2017, the Ex.D.12 is the
Letter dated: 18.05.2017, the Ex.D.13 is the letter dated
13.05.2017 and the Ex.D.14 is the Letter dated: 23.05.2017.
The Ex.D.9 to Ex.D14 are the letters issued by the defendant
and in my opinion these documents in no manner helps the
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case of the defendant.
204. The Ex.D.15 is the Photographs pertaining to work
space wherein it appears at some relevant point of time there
was heavy rain. However, the evidence on record is clear that
the defendant was made known to the hostile condition of the
work place hence, in my opinion the said photocopy in no
manner help the case of the defendant.
205. The Ex.D.16 to Ex.D.50 are various email
communications and letters of correspondence in between the
defendant and the plaintiff. As these documents are marked
with consent, there is no need to go through these documents
in detail.
206. Admittedly, during the course of Cross-examination
of PW.1 the Ex.D.51 to D.54 are marked. The Ex.D.51 is the
Letter dated 03.04.2019 issued by the plaintiff to M/s.Guna
Engineering Pvt., Ltd., The Ex.D.52 is the letter dated
28.09.2016 addressed by the plaintiff to the BHEL-PSSR
stating that due to heavy and continuous rain, the project
work is hampered. Relying upon the said document it is
argued by the defendant counsel that the plaintiff himself has
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admitted that the work was slow due to heavy rain and
therefore submitted before the Court that the defendant
intentionally has not delayed the work but the work was
hampered due to heavy rain. On hearing the defendant
counsel and on perusal of the records, I am of the opinion that
as far as the Ex.D.52 is concerned it is the issue between the
plaintiff and the BHEL and the BHEL is the supreme authority
either to consider the submission made by the plaintiff or it
can levy penalty as per their work orders. Hence, in my
opinion the said document in no manner helps the defendant
herein.
207. The Ex.D.53 is the letter dated 26.09.2017 wherein
the plaintiff herein addressed a letter to BHEL stating that the
excavation work is delayed as they encountered with live-
electrical HT Cable. Relying upon the said document the
defendant counsel argued that it is for the reason as noted by
the plaintiff that the ground civil work could not be completed
and therefore, there was delay in carrying out the fabrication
work by the defendant. However, in my opinion the defendant
has not addressed any letter to the plaintiff stating that due to
HT Cable electrical line, civil work is not completed and hence,
there is a delay. Further in this case the defendant cannot
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raise such defense as he has admitted in the work order that
he was made known to the work conditions in the site.
Therefore, the Ex.D.53 also do not help the case of the
defendant herein.
208. The Ex.D54 is the letter dated 15.06.2017 issued by
the plaintiff to BHEL stating that all the manpower deployed
have become idle due to non-availability of workfront and 200
MT crane. Relying upon the said document it is argued by the
defendant counsel that the plaintiff himself has admitted that
200 MT crane was not provided and therefore submitted
before the Court that the defendant intentionally has not
delayed the work but the work was hampered due to non-
availability of crane. On hearing the defendant counsel and on
perusal of the records, I am of the opinion that as far as the
Ex.D.53 is concerned it is the issue between the plaintiff and
the BHEL and the BHEL is the supreme authority either to
consider the submission made by the plaintiff or it can levy
penalty as per their work orders. Hence, in my opinion the
said document in no manner helps the defendant herein in
considering the evidence on record wherein the defendant has
clearly admitted that a crane facility was provided on rotation
basis.
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209. The Ex.D.55 to Ex.D.71 are various email
communications which took place in between plaintiff and the
defendant.
210. The Ex.D.72 is the traces of TDS.
211. The Ex.D.73(1) to Ex.D.73(4) are the Income Tax
Returns of the defendant for the years 2016-17 to 2019-2020.
212. The Ex.D.74 and Ex.D.75 are the email
communications. The defendant herein has sought some
information from Additional Director (MSME&PP) by filing RTI
Application. The said authority has furnished all relevant
information and it is marked at Ex.D.76. The Ex.D.76 is not
relevant to the present proceedings.
213. The Ex.D.77 to Ex.D.81 are the Certificates under
Section 65B of Indian Evidence Act.
214. The Ex.D.82 is the print out of Voda fone Bill.
215. The Ex.D.83 is the Plaintiff Companies awards and
recognition Web page.
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216. The Ex.D.84 to Ex.D.91 are the various
communications seeking RTI information by the defendant. In
my opinion the said document in no manner are relevant to
adjudicate the present dispute on hand.
217. The Ex.D.92 to Ex.D.94 are the Tender documents
pertaining to the BHEL. In my opinion these documents in no
way are concerned to the present case on hand.
218. The Ex.D.95 is the GST registration details of tribal
labour contract. On perusal of the said document it is clear
that the said Firm is inactive since from the date of its
registration dated 01.07.2017. Relying upon the the above
document I am of the opinion that the plaintiff has
manipulated and fabricated the documents pertaining to Sub-
Contractors and therefore as I have already held plaintiff is not
entitle to claim any amount in respective of alternative
contractors who were allegedly engaged by the plaintiff for the
remaining incomplete work of the defendant.
219. The Ex.D.96 is the copy of work order issued by the
plaintiff to M/s.Guna Engineering to execute the work at KTPS
Project with the same terms and conditions as defendants
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work order.
220. The Ex.D.97 is the GST registration details of Anon
Power Engineers Pvt., Ltd.
221. The Ex.D.98 is the Defendant’s RTI Application
dated 04.07.2022 along with reply dated 18.08.2022 from
AndraPradesh Transport Department with certified copy of
vehicle registration certificate belonging to vehicle
No.AP31AB3492, AP31AB6799.
222. The Ex.D.99 is the RTI application of the defendant
dated 04.07.2022 along with reply dated 11.08.2022 from RTO
Hyderabad with Certified copy of vehicle registration certificate
belonging to vehicle No.TS12-EA8121 and TS12-AE8124.
223. The Ex.D.100 is also the RTI application of the
defendant dated 04.07.2022 along with reply dated
08.07.2022 from RTO Hyderabad with Certified copy of vehicle
registration certificate belonging to vehicle No.AP37BG8124.
224. The Ex.D.101 is the RTI application of the defendant
dated 08.08.2022 along with reply dated 30.08.2022 from
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Tamilnadu RTO THURAIYUR, Thrichirapalli with Certified
copy of vehicle registration certificate belonging to vehicle
No.TS12-EA8124.
225. On careful reading of the Ex.D98 to Ex.D.101, I am
of the view that the plaintiff herein has manipulated the
vehicle particulars and claimed compensation stating that he
has carried out unfinished work from various other Sub-
Contractors. As I have already held admittedly, the defendant
has not received any additional amount more than the amount
for which the work he has completed. Hence, the plaintiff is
not entitled to claim any compensation pertaining to
Alternative Contractors.
226. The Ex.D.102 is the Certificate under Section 65B of
Indian Evidence Act filed by the defendant.
227. The Ex.D.103 is the report submitted by Truth Labs
dated 29.10.2020 along with enclosures.
228. One of the ground which the defendant seeks for a
counter claim is pertaining to a question of contractual
obligation upon the plaintiff to ensure that the erection work
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shall be at a maximum height of 35 mtrs. As far as this
ground is concerned the defendant has claimed a sum of
₹.29,48,797/-. In order to disprove the claim made by the
defendant the plaintiff counsel has Cross-examined DW.1
wherein the DW.1 has clearly admitted that there was no
mention of height of the structure in Ex.D.2 to Ex.D.5. The
Ex.D.5 admittedly is the Work Order. Based upon the said
admission this Court can draw an inference that there is no
restriction to build the structure to the height of 35 mtrs and
above. Hence, the defendant is not entitle to claim
compensation of ₹.29,48,797/-.
229. The DW.1 further has clearly admitted at Page
No.24 regarding various instances as per Ex.D.6 to state that
there was shortage of manpower in the site.
230. At page No.27 of Cross-examination DW.1 clearly
admits that as per Ex.D.3 he was required to provide Hydra at
fabrication yard.
231. The DW.1 feigned his ignorance to state whether the
plaintiff has certified the measurement statement which is
submitted along with Ex.D.47/Final Bill.
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232. The DW.1 categorically admits at page No.31 that
the plaintiff had called upon him to participate in taking joint
measurements so as to settle the final bill.
233. In the present case on hand the defendant herein
has failed to co-operate with the plaintiff for joint
measurement pertaining to the work done and as I have
already held as the defendant has not completed the entire
work he is not entitle to claim the final bill.
234. The DW.1 further admits that he was obliged to
comply with Clauses 18 and 23 of work orders which pertains
to the labor issue.
235. Keeping in mind the above Cross-examination let
me go through the other grounds upon which the defendant
has claimed counter claim of ₹.2,00,29,709/-.
Failure of provide Gantry
236. It is the case of the defendant that, the defendant
while placing the quotation as per defendant scope matrix
dated 25.02.2016, the plaintiff has agreed to provide gantry at
fabrication yard to reduce the total cost of fabrication by way
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of manpower and additional equipment and also in order to
improve production time and quantity.
237. That, the plaintiff after defendant’s mobilization in
the spot of the project, failed to provide gantry in spite of
repeated requests and demands. That, the matter was placed
before the AGM and GM but nobody bothered to provide
gantry. The non-providing of gantry made the plaintiff to incur
heavy loss, in as much as the plaintiff has to engage additional
equipment excessive fuel for machinery and also man power.
238. That, while it was quoted ₹.16,000/- per MT
without gantry but the assurance of the plaintiff that they will
provide gantry as such the rate was reduced to ₹.13,500/-.
239. That, the non providing of gantry at Fabrication
Yard caused huge loss to the defendant even through the
plaintiff reduced the rate ₹.2,500/- per MT from the agreed
rate of ₹.16,000/-. But, such reduced rate was accepted
subject to provide gantry but admittedly the plaintiff failed to
provide gantry at fabrication yard. That, in this head, the
defendant had lost a sum of ₹.64,70,278/- assessed at
₹.2,500/- per MT.
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240. The defendant herein is claiming compensation of
₹.64,70,278/- under the head of failure to provide gantry. On
the other hand, the plaintiff has pleaded that the gantry was
made available at the site and it was the defendant who didn’t
utilized the services of gantry. Hence, the plaintiff is not liable
to pay the said amount.
241. Keeping in mind the rival contentions, I would like
to bestow my attention to Clause 15 of the Ex.P.1 wherein it
appears the “plaintiff and BHEL was bound to provide gantry
free of cost and the defendant was duty bound to utilize the
same. Further on perusal of the Ex.D.8 it is clear that the
defendant admits that other sub-contractors were using the
gantry for fabrication and crane for erections. Hence, in my
opinion, as per Clause 15 of Ex.P1 it was the duty of the
defendant to make arrangement at its own risk to utilize
service of gantry which is already been utilized by other
contractors.
242. Further, the evidence of DW.1 clearly goes to show
that, he has not produced any document to show that he
sustained loss of ₹.64,70,278/- due to non-availability of
gantry and due to his using Hydra for his work.
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243. Hence, the defendant is not entitled to the said
compensation of ₹.64,70,278/-under this head of failure to
provide gantry by plaintiff.
Compensation of ₹.29,48,797/- on account of
carrying out construction at a height greater than 35 Mtr.
244. It is the case of defendant that while negotiation and
entering into an agreement, the plaintiff represented that the
erection work shall be maximum at the height of 35 Mtrs. On
the said promise, the plaintiff given his quotation up to the
height of 35 Mtrs only, but while working at site, the site
Management, site Engineer and in charge had assigned
erection work in excess of 35 Mtrs and forced the defendant to
work at a level higher than 35 Mtrs. This process reduced
progress of work and required more man power and skilled
labor.
245. In this regard, RA Bill was submitted till September
2017 which was certified by the plaintiff. The defendant is
entitle to a sum of ₹.29,48,797/- on this Head, after reducing
the rate of ₹.1,500/- i.e. at the rate of ₹.12,000/- per MT, the
final rate agreed was ₹.12,000/- per MT to 35 Mtrs. height.
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246. On the other hand the plaintiff opposed the claim
made by the defendant. Admittedly as per Clause of Work
Order all the works carried out by the defendant would be in
accordance with the drawing prepared by BHEL and when the
defendant was aware of the height of the work to be carried
out, he can’t subsequently raise objections to the same at a
belated stage. In this case admittedly, defendant didn’t raise
any complaint while executing the suit works. No document is
furnished to support the claim of the defendant that he raised
any objections during the course of work. Hence, the
defendant is not entitled to claim the amount of ₹.29,48,797/-
also.
Idling charge of ₹.6,69,866/-.
247. It is the case of the defendant that due to heavy rain
the works was not carried on continuously for several days
during the said period. That there were power shut down
which made the defendant workmen to be idled without
carrying any work, thereby, the defendant was made to pay
the workers which is assessed at ₹.6,69,866/-.
248. On perusal of the above Clause 7 and 19 of Ex.P.1,
the defendant is explicitly barred from raising any claim on
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account of idle charges of labor on machinery. Accordingly, the
plaintiff is not entitled to claim the amount of ₹.6,69,866/-.
Alteration work charge at ₹.1,35,000/-
249. As per the case of the defendant it was agreed that in
the event of defendant has to carry on any re-works alteration
to any already assembled structure, the defendant shall
reimburse the entire amount in regard to the said alteration.
That, the defendant during the month of September 2017
requested to alter the structure which was already assembled
and which weight about 50 MTs and requested to reduce the
weight to 35 MT as per the order dated 09.09.2017.
250. The plaintiff carried on the work for more than one
week by employed skilled labor and Engineers. That, the
defendant incurred a sum of ₹.1,35,000/- which amount has
to be reimbursed by the plaintiff for which the defendant is
entitled to.
251. The plaintiff during the course of arguments brought
to the notice of this Court regarding the evidence of DW.1
dated 12.12.2023 at page No.3 where the DW.1 admits that
there is no written agreement with the plaintiff regarding the
alteration or re-work in respect of the work already carried out
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regarding assembled structure. On perusal of the above
evidence, I am of the opinion that when there is no agreement
to alteration, the defendant is not entitled to claim
₹.1,35,000/- from the plaintiff.
Transportation Charges:
252. As per the case of the defendant it was agreed
between the parties that the plaintiff shall provide
transportation of the materials to the work spot with free of
cost as per scope matrix at Sl.No.1 and 10 and as per the
work order dated 14.07.2016 under Clause 24 “…SNS will
provide trailer for transportation from Stock Yard to
Fabrication…” The plaintiff utterly failed to provide the very
transportation thereby, this transportation is agreed to be free
of cost but while raising the bill, the plaintiff
deducted/recovered ₹.220/- per MT. The plaintiff has no right
to deduct any amount under this head as such, the defendant
is entitle a sum of ₹.5,47,454/- up to RA Bill No.16.
253. On perusal of evidence of DW.1, it is crystal clear
that none of the documents are forthcoming to state that
plaintiff was duty bound under Clause-24 of Ex.P.1 to provide
trailer free of cost to the defendant for the transportation of
materials from the stock yard to fabrication yard on site
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254. Further DW.1 has clearly admits in his Cross-
examination that he don’t have copy of the documents to show
that he incurred ₹.5,47,454/- towards transportation of
materials. Hence, the defendant is not entitle to claim
₹.5,47,454/- toward cost of transportation.
UT & RT tests:
255. The defendant has claimed rs 16,870/-under this
head. However the evidence on record is quite contrary to the
case of the defendant.
256. DW1 has admitted at page 29 of cross examination
that ” It is true to suggest that the plaintiff has to provide UT
& RT for the first shot only as per Ex.D.3. After the first shot
for any subsequent UT & RT tests I was responsible to
undertake the test”.
257. As the plaintiff was duty bound only to pay the
charge of 1st test, the defendant is not entitled to claim
₹.16,870/- under UT/RT testing.
₹.25,000/- Delay in submitting re-conciliation
Statement by the defendant:
258. Admittedly, the defendant herein has assigned
reason that due to heavy rain in the work spot, he could not
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submit the bills in time. However, as per Clause 35 of the
Ex.P.1, the plaintiff is entitled to withhold the payment as
determined by the plaintiff’s Engineer in charge. Hence,
defendant is not entitled to claim ₹.25,000/-.
₹.50,000/- towards sum withhold under RA Bill No.7
in December-2016.
259. The defendant herein clearly admits that the work is
incomplete and as per the Clause 35 of the Work Order the
plaintiff is entitled to withhold the amount in relation to
incomplete work.
Security Deposit of ₹.11,51,058/-:
260. Clause 32 of work order stipulates that the defendant
is entitled to a refund of the entire interest free security
deposited deducted after 12 months from the completion of
the works as certified by the plaintiff’s Engineer in-charge at
the site.
261. It is an admitted position that the defendant has
abandoned the works and completed only 8.73% of the total
suit works entrusted to him under the Work Order. In spite of
this, the plaintiff appears to have already adjusted a large sum
of ₹.11,67,134/- towards the security deposit refundable to
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the defendant under the work order when computing its total
claim in the present proceedings. Accordingly, the plaintiff has
already set off any sums payable to the defendant in respect of
the security deposit collected during the execution of the suit
works. Hence the defendant is not entitled to claim security
deposit.
The defendant’s entitlement to ₹.42,27,433/- towards
Final Bill
262. As per the work orders, bills to be certified by the
concerned Engineers of the plaintiff. However, it appears even
though the plaintiff herein addressed various correspondences
to the defendant calling upon him to come forward for the
Joint Certification of the works, the defendant failed to come
forward. Further, admittedly, the defendant has not completed
the entire work as he has completed only 8.75% of the total
work, the defendant is not entitled to claim ₹.42,27,433/-
towards final bill. Under Clause -51 of Ex.P.1, the defendant
can submit the final bill only after completion of entire work,
as the defendant not at all completed the entire work, he is not
entitled to claim the above noted amount.
LOSS OF PROFIT
263. Apart from this the defendant herein has contended
that due to illegal termination of the contract, the defendant
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lost a sum of ₹.17,03,842/- and ₹.48,00,000/- towards loss of
profit.
264. As the plaintiff has terminated the contract in a
lawful manner, the defendant cannot claim any sum towards
loss of profit much less the amount of ₹.17,03,842/-.
265. It is the specific case of the defendant that the
quotation was for 5000 MT however before placing the order
the plaintiff restricted the quantity for 3000 MT for initial
period stating that remaining 2000 MT order will be placed
once the 3000 MT order is completed. Based upon such a
vague plea the defendant is claiming loss of profit of
₹.48,00,000/-. On careful perusal of the evidence on record it
is crystal clear that the defendant has not even completed his
entrusted work for 3000 MT and therefore he is barred to
claim any loss of profit towards the vague, imaginary quantity
of 2000 MT.
Idling Charges:
266. The defendant at page No.26 of his written
statement has once again claimed a sum of ₹.32,44,800/-
towards idling of machinery.
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267. In the above paragraphs I have already come to a
conclusion that the defendant is not entitled to claim any
compensation under the Head of Idling of Labor or Machinery.
Therefore, I am of the view that the defendant is not entitle to
claim the said sum.
268. It is pertinent to note that the defendant herein at
the time of filing written statement has not raised any
grievance against the plaintiff. Only after filing the written
statement to fill up the lacuna and as a means of counterblast
to the case of the plaintiff by filing amendment application, the
defendant has claimed counter claims which are blatantly
erroneous. As per the provision under ORDER VIII Rule VIA of
CPC, the defendant should claim counterclaim along with the
written statement itself. The said provision reads as under:
[6A. Counter-claim by defendant.–(1)
A defendant in a suit may, in addition to
his right of pleading a set-off under rule
6, set up, by way of counter-claim against
the claim of the plaintiff, any right or
claim in respect of a cause of action
accruing to the defendant against the
plaintiff either before or after the filing of
the suit but before the defendant has
delivered his defence or before the time
limited for delivering his defence has
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the nature of a claim for damages or not:
Provided that such counter-claim
shall not exceed the pecuniary limits of
the jurisdiction of the court.
(2) Such counter-claim shall have the
same effect as a cross-suit so as to enable
the Court to pronounce a final judgment
in the same suit, both on the original
claim and on the counter-claim.
(3) The plaintiff shall be at liberty to
file a written statement in answer to the
counter-claim of the defendant within
such period as may be fixed by the court.
(4) The counter-claim shall be treated
as a plaint and governed by the rules
applicable to plaints.
6B. Counter-claim to be stated.–
Where any defendant seeks to rely upon
any ground as supporting a right of
counter-claim, he shall, in his written
statement, state specifically that he does
so by way of counter-claim.
269. On perusal of above provision of law it is clear that
the defendant is duty bound to plead counterclaims along with
filing his written statement. As in this case, the defendant has
pleaded counterclaims as an after thought after filing the
written statement, the defendant is not entitle to claim any of
the reliefs.
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270. The learned counsel for the defendant has relied
upon many decisions to contend that the defendant is entitle
for counter claims. However, for the reasons as noted above
and taking into the consideration of the provision of law, I am
of the view that the defendant is not at all entitled to claim
counter claim at belated stage and as it is filed as a means of
counterblast to the case of plaintiff. Hence, the decisions relied
upon by the defendant is not at applicable to the facts of the
case. Accordingly, I answer Issue No.7 and 9 in the
NEGATIVE.
271. Issue No.10: In view of my findings on Issue No:1
to 9, I proceed to pass the following:
ORDER
The suit filed by plaintiff is hereby decreed
in part with cost.
The defendant is directed to pay a sum of
₹.65,60,000/- (Rupees Sixty Five Lakhs Sixty
Thousand Only) [which includes ₹.38,00,000/-
towards compensation in respect of unaccounted
structural and scrap steel + ₹.27,00,000/-
towards liquidated damages + ₹.60,000/-
towards failure to mobilize labor by the
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Com.O.S.No.5396/2018defendant) along with interest @ 24% p.a. from
the date of suit till its realization to the plaintiff.
The defendant shall pay the above
mentioned amount within 90 days from the date
of this Order.
The counterclaim filed by the defendant
stands dismissed.
The pending IAs if any are disposed off
accordingly.
Draw decree accordingly.
The office is hereby directed to send a copy
of the judgment to the plaintiff and the
defendants through e-mail as per Order XX Rule
1 CPC as amended by Section 16 of Commercial
Courts Act, 2015.
(Directly dictated to the Stenographer on computer, corrected and then
pronounced by me in the open court on this the 25th day of July 2025).
(K.M.RAJENDRA KUMAR)
LXXXIX Addl.City Civil &
Sessions Judge, Bengaluru
(CCH-90)
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Com.O.S.No.5396/2018
ANNEXURES
List of witnesses examined for the plaintiff:
P.W.1 Sri.Subramanian Annamalai
List of documents exhibited on behalf of the plaintiff:
Sl.No. Particulars of documents Ex.P.
1. Plaintiff’s work order dated Ex.P.1
14.07.2016 (Doc. No.1)
2. Defendant Letter dated 10.02.2017 Ex.P.2
(Doc. No.7)
3. Plaintiff’s letter dated 13.09.2017 Ex.P.3
(Doc. No.3)
4. Plaintiff’s letter dated 15.09.2017 Ex.P.4
(Doc. No.4)
5. Plaintiff’s letter dated 03.10.2017 Ex.P.5
(Doc.No.6)
6. Defendant’s letter dated 04.10.2017 Ex.P.6
(Doc. No.7)
7. Plaintiffs letter dated 04.10.2017 Ex.P.7
(Doc. No.8)
8. Defendant’s letter dated 19.10.2017 Ex.P.8
(Doc. No.9)
9. Email dated 23.10.2017 sent by the Ex.P.9
defendant to the plaintiff (Doc. No.10)
10. Plaintiff’s letter dated 23.10.2017 Ex.P.10
(Doc. No.11)
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11. Plaintiff’s letter dated 31.10.2017 Ex.P.11
(Doc. No.14)
12. Defendant’s letter dated 07.11.2017 Ex.P.12
(Doc. No. 15)
13. Defendant’s letter dated 11.11.2017 Ex.P.13
(Doc. No. 16)
14. Plaintiff’s letter dated 27.11.2017 Ex.P.14
(Doc. No. 17)
15. Defendant’s letter dated 05.12.2017 Ex.P.15
(Doc. No. 18)
16. Invoice dated 21.11.2017 (Doc. No.19) Ex.P.16
17. Plaintiff’s email dated 23.11.2017, Ex.P.17
08.01.2018, 09.01.2018, 10.01.2018
and 11.01.2018 (Doc. No.20)
18. Plaintiff’s letter dated 02.01.2018 Ex.P.18
(Doc. No.21)
19. Defendants letter dated 05.01.2018 Ex.P.19
(Doc. No.22)
20. Defendants letter dated 22.11.2017 Ex.P.20
(Doc. No.23)
21. Defendants letter dated 28.11.2018 Ex.P.21
(Doc. No.24)
22. Defendants letter dated 20.12.2017 Ex.P.22
(Doc. No.26)
23. Defendants letter dated 31.03.2018 Ex.P.23
(Doc No.27)
24. Plaintiff’s letter dated 06.04.2018 Ex.P.24
(Doc. No.28)
25 Invoice dated 02.07.2018 (Doc. No.29) Ex.P.25
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Com.O.S.No.5396/2018
26. Legal notice dated 12.07.2018 issued Ex.P.26
by defendant
27. Plaintiff’s letter dated 06.04.2018 Ex.P.27
(Doc. No.31)
28. Plaintiff’s email dated 02.06.2018 Ex.P.28
(Doc. No.32)
29. Letter dated 03-10-2017 issued by Ex.P.29
BHEL
30. Letter dated 24-10-2017 issued by Ex.P.30
BHEL
31. Original internal note sheets of the Ex.P.31
plaintiff 8 pages
32. E-mail dt 30-10-2020 with Ex.P.32
attachment
33. 65 B certificate Ex.P.33
34. Bills raised by Tribal Labour Contract Ex.P.34
society pg 59 to 86
35. Bills raised by Guna Engineering Pvt Ex.P.35
Ltd., pg 101 to 137.
36. Bills raised by Anon power Engineers Ex.P.36
pvt ltd., pg 138 to 184
37. Bills raised by Satish Reddy Earram Ex.P.37
Reddy pg 202 to 318
38. Bills raised by K. Ramachander pg Ex.P.38
333 to 342
39. Bills raised by Vasamalla Rambabu Ex.P.39
pg 260 to 390
40. Invoices raised towards hire charges Ex.P.40
of Hydra Crane pg 391 to 426
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Com.O.S.No.5396/2018
42. Original work order dated Ex.P.41
20.11.2017-M/s Trible Labour
Contract Co-operative Society Ltd.,
43. Original work order dated Ex.P.42
20.11.2017-M/s Maruthy Industrial
Engineering Works
44. Work order dated 25.01.2018-M/s Ex.P.43
Rajamani Engineering Erectors
45. Extract of Board resolution dated Ex.P.44
12.07.2018
46. Contractor performance/experience Ex.P.45
certificate
47. Bank statement-Canara Bank C/A Ex.P.46
No.0792256001174 for plaintiff
48. Certificate issued by Indusland Bank Ex.P.47
in respect of C/A No.650014118163
for plaintiff
49. Certificate issued by State Bank of Ex.P.48
India in respect of C/A
No.35554411716 for plaintiff
50. 65B certificate Ex.P.49
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Com.O.S.No.5396/2018List of witnesses examined for the defendant/s:
D.W.1 Sri.Manjunath Papanna
List of documents marked for the defendant/s:
Sl. Particulars of documents Ex.P.
No.
1. Letter of request for quotation along with Ex.D.1
quotation requirement
2. Final quotation as per Scope matrix Ex.D.2
3. Scope matrix for structural fabrication and Ex.D.3
erection work dated 25.02.2016
4. Letter of intent dated 05.04.2016 Ex.D.4
5. Work order dated 14.07.2016 Ex.D.5
6. Letter dated: 10.08.2016 Ex.D.6
7. Email worksheet dated 02.10.2016 Ex.D.7
8. Letter dated: 10.02.2017 Ex.D.8
9. Letter dated: 10.05.2017 with Ex.D.9
acknowledgment
10. Letter dated: 13.05.2017 Ex.D.10
11. Letter dated: 13.05.2017 Ex.D.11
12. Letter dated: 18.05.2017 Ex.D.12
13. Letter dated: 13.05.2017 Ex.D.13
14. Letter dated: 23.05.2017 Ex.D.14
15. Photographs - Lima Fabrication Ex.D.15
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16. E-mail dated: 10.02.2016 with attachments Ex.D.16
17. E-mail dated: 15.06.2017 with attachments Ex.D.17
18. E-mail dated: 21.08.2017 with attachments Ex.D.18
19. Letter dated: 10.09.2017 Ex.D.19
20. Letter dated: 13.09.2017 Ex.D.20
21. Reply letter dated: 14.09.2017 Ex.D.21
22. Letter dated: 15.09.2017 Ex.D.22
23. E-mail dated: 19.09.2017 Ex.D.23
24. Letter dated: 18.09.2017 Ex.D.24
25 E-mail dated: 25.09.2017 Ex.D.25
26. Letter dated: 03.10.2017 Ex.D.26
27. Letter dated: 04.10.2017 Ex.D.27
28. E-mail dated: 04.10.2017 Ex.D.28
29. Letter dated: 19.10.2017 Ex.D.29
30. E-mail dated: 23.10.2017 Ex.D.30
31. Letter dated: 07.11.2017 Ex.D.31
32. Letter dated: 11.11.2017 Ex.D.32
33. E-mail dated: 11.11.2017 Ex.D.33
34. Letter dated: 22.11.2017 Ex.D.34
35. Letter dated: 27.11.2017 Ex.D.35
36. Letter dated: 28.11.2017 Ex.D.36
37. Letter dated: 20.12.2017 Ex.D.37
38. Letter dated: 02.01.2018 Ex.D.38
39. Letter dated: 05.01.2018 Ex.D.39
40. Letter dated: 31.03.2018 Ex.D.40
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41. Letter dated: 06.04.2018 Ex.D.41
42. Letter dated: 15.04.2018 Ex.D.42
43. Invoice for the month of April 2018 Ex.D.43
44. Letter dated: 16.08.2018 Ex.D.44
45. Copy of legal notice dated: 25.08.2018 issued Ex.D.45
by the plaintiff
46. Letter dated: 05.12.2017 Ex.D.46
47. Invoice dated: 21.11.2017 Ex.D.47
48. Notice dated: 31.01.2018 Ex.D.48
49. Reply notice dated: 14.02.2018 Ex.D.49
50. Notice dated: 12.07.2018 Ex.D.50
51. The Letter dated 03.04.2019 issued by the Ex.D.51
plaintiff to M/s.Guna Engineering Pvt., Ltd.,
52. The letter dated 28.09.2016 to BHEL-PSSR Ex.D.52
53. The letter dated 26.09.2017 issued by the Ex.D.53
plaintiff to BHEL
54. The Letter dated 15.06.2017 issued to BHEL Ex.D.54
55. E-mail dated 10.08.2016 Ex.D.55
56. E-mail dated 01.03.2017 Ex.D.56
57. E-mail dated 22.05.2017 Ex.D.57
58. E-mail dated 15.06.2017 Ex.D.58
59. E-mail dated 11.04.2017 Ex.D.59
60. E-mail dated 13.09.2017 Ex.D.60
61. E-mail dated 09.10.2017 along with progress Ex.D.61
report
62. E-mail dated 09.11.2017 Ex.D.62
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63. E-mail dated 11.11.2017 Ex.D.63
64. E-mail dated 23.11.2017 Ex.D.64
65. E-mail dated 28.11.2017 Ex.D.65
66. E-mail dated 20.12.2017 Ex.D.66
67. E-mail dated 05.01.2018 Ex.D.67
68. E-mail dated 05.04.2018 Ex.D.68
69. E-mail dated 05.04.2018 Ex.D.69
70. E-mail dated 05.05.2018 Ex.D.70
71. E-mail dated 25.08.2018 Ex.D.71
72. Traces (Page No.191-198) Ex.D.72
73. ITR 2016-17 Ex.D.73
(1)
74. ITR 2017-18 Ex.D.73
(2)
75. ITR 2018-19 Ex.D.73
(3)
76. ITR 2019-20 Ex.D.73
(4)
77. E-mail dated 07.12.2017 Ex.D.74
78. E-mail dated 21.11.2017 Ex.D.75
79. Letter issued by Additional Director Ex.D.76
(MSME&PP) dated 11.05.2020 along with
copies of proceedings in Case No.59/2017
80. 65B Certificate dated 04.11.2020 Ex.D.77
81. 65B Certificate dated 07.01.2022 Ex.D.78
82. 65B Certificate dated 07.01.2022 Ex.D.79
83. 65B Certificate dated 07.01.2022 Ex.D.80
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Com.O.S.No.5396/2018
84. 65B Certificate dated 07.01.2022 Ex.D.81
85. Print outs Voda fone Bill Ex.D.82
86. Plaintiff Companies awards and recognition Ex.D.83
Web page
87. Reply communication from BHEL/TSGENCO Ex.D.84
regarding Milestone achievement protocal
dated 26.12.2018 and 30.06.2018
88. Copy of press release statement from the Ex.D.85
Hans India dated 27.10.2018, Deccan
Cronical dated 29.06.2018, Business Line
dated 01.07.2018
89. RTI application to TSGENCO and response Ex.D.86
dated 28.06.2022 along with certified copy
about power generation from KTPS Project
90. RTI- Reply of BHEL Letter dated 16.08.2016 Ex.D.87
and 20.04.2016 issued to plaintiff at site
91. RTI-reply of plaintiff dated 22.05.2017 issued Ex.D.88
to plaintiff at site regarding KERB Stone Rate
analysis along with enclosures
92. RTI-reply of plaintiff- letter dated 19.05.2017 Ex.D.89
with reference No.SNC/KTPS/2017-18/11
issued to BHEL at site
93. RTI-reply of plaintiff dated 10.05.2017 with Ex.D.90
reference to No.SNC/KTPS/2017-18/11
issued to BHEL at site
94. RTI-reply of plaintiff- letter with power of Ex.D.91
attorney dated 04.02.2016 submitted to
BHEL at site
95. BHEL-Tender documents with reference Ex.D.92
No.BHEL:PSSR:SCP:1585 Volume-1, Book-1
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96. BHEL-Tender documents with reference Ex.D.93
No.BHEL:PSSR:SCP:1585 Volume-1A, Part-1,
Chapter VII terms of payment
97. BHEL-Tender document, Volume IC General Ex.D.94
conditions of contract (GCC)
98. GST registration details of tribal labour Ex.D.95
contract
99. Copy of the Guna Engineering Pvt., Ltd., Ex.D.96
work order issued by plaintiff to execute the
work at KTPS Project with the same terms
and conditions as defendants work order
100. GST registration details of Anon Power Ex.D.97
Engineers Pvt., Ltd
101. Defendants RTI Application dated 04.07.2022 Ex.D.98
along with reply dated 18.08.2022 from
AndraPradesh Transport Department with
certified copy of vehicle registration certificate
belongs to vehicle No.AP31AB3492,
AP31AB6799
102. Defendants RTI application dated 04.07.2022 Ex.D.99
along with reply dated 11.08.2022 from RTO
Hyderabad with Certified copy of vehicle
registration certificate belongs to vehicle
No.TS12-EA8121 and TS12-AE8124
103. Defendants RTI application dated 04.07.2022 Ex.D.100
along with reply dated 08.07.2022 from RTO
Hyderabad with Certified copy of vehicle
registration certificate belongs to vehicle
No.AP37BG8124
104. Defendants RTI application dated 08.08.2022 Ex.D.101
along with reply dated 30.08.2022 from
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Com.O.S.No.5396/2018Tamilnadu RTO THURAIYUR, Thrichirapalli
with Certified copy of vehicle registration
certificate belongs to vehicle No.TS12-EA8124
105. 65B Certificate filed by defendant Ex.D.102
106. Report submitted by Truth Labs dated Ex.D.103
29.10.2020 along with enclosures(K.M.RAJENDRA KUMAR)
LXXXIX Addl.City Civil &
Sessions Judge, Bengaluru
(CCH-90)****