IMPORTANT POINT
Merely accepting the final bill cannot deprive the appellant of his right to claim damages.

JUDGMENT

P. Sathasivam, J. —

1) This appeal is directed against the judgment and final order dated 07.10.2002 passed by the Division Bench of the High Court of Gujarat whereby the High Court set aside the judgment and decree dated 14.12.1982 passed by the Civil Judge, (S.D.), Jamnagar directing the State Government to pay a sum of Rs.2,27,758/- with costs and interest and dismissed the Civil Suit as well as cross objections filed by the appellant- Firm for recovery of the aggregate amount of Rs. 3,66,538.05 on account of different counts as specified in the claim of the said suit.

2) Brief facts:

a) The appellant-Firm, a partnership firm registered under The Indian Partnership Act, is carrying on the business of construction of roads, buildings, dams etc. mostly in Saurashtra and also in other parts of the State of Gujarat. In response to the invitation of tender by the State Government for construction of Fulzer Dam II in Jamnagar District, the appellant-Firm quoted and offered to construct the same for the quotation, specifications and design of the Dam vide covering letter dated 05.06.1970. In the said letter, the appellant-Firm also offered that they would give rebate of 3/4% provided the final bill be paid within three months from the date of completion of the work. The offer of the appellant being the lowest amongst other parties, it was accepted by the State Government with the clause that the construction work was to be completed within a period of 24 months from the works order dated 07.09.1970 which was subsequently clarified that the period of 24 months was to be commenced from the date of commencement of work i.e., 29.11.1970.

b) During execution of the said work, the Executive Engineer, who was in-charge of the project, made certain additions, alterations and variations in respect of certain items of work and directed the appellant to carry out additional and alteration work as specified in writing from time to time. The final decision as to the alteration in respect of certain items of work and particularly, in respect of the depth of foundation which is known as cut off trenches (COT) took long time with the result that the Firm was required to attend the larger quantity of work and thus entitled for extra payment for the additional work. As per the works contract, the Firm was not paid the running bill within the specified time and, therefore, suffered loss.

c) On 16.07.1976, the Firm lodged a consolidated statement of their claims for the additional or altered works etc. to the Executive Engineer. As there was no response, the Firm served a statutory notice dated 04.01.1977 under Section 80 of the Code of Civil Procedure (hereinafter referred to as ‘the Code’). Again, on 24.03.1977, after getting no reply, the Firm filed Civil Suit No. 30 of 1977 on the file of the Civil Judge (S.D.), Jamnagar praying for a decree of the aggregate amount of Rs.3,66,538.05 with running interest at the rate of 9% p.a. from the date of final bill till the date of Suit and at the rate which may be awarded by the Court from the date of Suit till payment. Vide order dated 14.12.1982, the Civil Judge allowed the suit and passed a decree for a sum of Rs.2,27,758/- with proportionate costs together with interest @ 6% p.a. from the date of suit till realization.

d) Being aggrieved by the said judgment and decree, the State Government filed First Appeal No. 2038 of 1983 before the High Court of Gujarat at Ahmedabad. The Division Bench of the High Court, vide its order dated 07.10.2002, allowed the appeal of the State Government and dismissed the suit of the appellant-Firm and also directed that the decretal amount deposited by the State Government and as permitted to be withdrawn by the Firm should be refunded within a period of four months from the date of the judgment. Being aggrieved by the said judgment, the appellant-Firm has filed this appeal by way of special leave petition before this Court.

3) Heard Mr. Altaf Ahmed, learned senio