The central legal point established in the judgment is the interpretation of the contract and the application of the Contract Act, particularly regarding the payment terms and the measurement of work done.

Lord Radcliffe.:-

This is an ex parte appeal from a decree of the Chief Court of Sind dated 26th May 1942, which reversed a judgment of the first class Subordinate Judge, Hyderabad, dated 8th October 1938. The dispute to which the appeal relates arises out of a contract which the parties entered into on 15th February 1934, and the interpretation of that contract is the central issue of the case. There was a marked divergence between their respective submissions as to the construction of the contract, and a divergence not less marked in the evidence that they tendered on certain important issues of fact. The trial Judge interpreted the contract in a sense favourable to the appellant's contention, while the appeal Court took the opposite view. Nor did the two Courts agree as to the proper findings of fact to be made on the evidence available. But their Lordships think that, once the question is settled as to the interpretation of the contract, the treatment of the evidence presents no great difficulty.

2. In the year 1933, the appellant was engaged in putting through an engineering project known as the East Kacha Storm Water Disposal Project. Apparently the contractors for the construction of the drain or channel required were a concern called the Hindustan Construction Co. The appellant desired at the same time to let out a contract for filling up and consolidating the earth in hollows along the sides of the drain and a low laying area round it. Accordingly in June 1933, the appropriate Committee of the Municipality gave the Municipal Engineer, Mr. Kirpalani, authority to invite tenders for this work. They had before them his estimate that the probable expense involved was Rs. 36,937 and that the earth work would amount to 24,00,180 cu. feet. His previous estimate had been 18,71,030 cu. feet.

3. The respondent was one of those who tendered for this contract. It is not necessary to refer to the circumstances in which three successive sets of tenders were obtained, for it is not in dispute that on the third occasion his tender (ex. 41) showed the lowest total amount, Rs. 29,696, and was accordingly accepted on 26th January 1934. Both Courts in India have proceeded to the interpretation of the contract on the basis that this tender forms part of and is to be read with the formal contractual document that was later executed by the parties. That may be so. Certainly the contract refers to the tender for the schedule of rates per 100 cu. feet : and, if the rates themselves are incorporated in this way, it may be hard not to go further and incorporate the conditions and qualifications that are in a sense part of the rate. Their Lordships have not found it necessary to form any decided opinion on this point, for, in their view, the nature of the contract appears the same, whether it is ascertained from the formal document itself with no more reference to the tender than is involved in a mere reading off of the figures of the rates or whether the two documents are read together to make one whole. But, since both Courts in India have treated the question on the latter basis, it is convenient to make some reference to the tender.

4. The document was, of course, drawn up and issued by the Municipality. All that the tenderer had to do was to fill in his proposed rates and sign it. Now it was described as a tender for works, and underneath the heading was a short description of the filling up and consolidating work required. The words "estimate amount Rs. 33503" followed. Their significance has not been satisfactorily accounted for, although it is possible to discover from the record that this figure represented the total amount of an earlier tender by the Hindustan Construction Co. However that may be, the important part of the tender consisted of the schedule, entitled "schedule of rates." It was divided into five columns, of which the first was headed "Quantities estimated, but may be more or less." The other columns were successively headed