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2016 Supreme(SC) 62

SUPREME COURT OF INDIA
T.S. THAKUR, CJI., A.K. SIKRI, R. BANUMATHI, JJ.
VENKATESH CONSTRUCTION COMPANY – APPELLANT
VERSUS
KARNATAKA VIDYUTH KARKHANE LIMITED (KAVIKA) – RESPONDENT
CIVIL APPEAL NOS. 461-462 OF 2016 (ARISING OUT OF SLP (C) NOS.29680-29681 OF 2010)
Decided on : 20-01-2016

IMPORTANT POINT
Appellate Court may not interfere with finding of trial court unless finding recorded by trial court is erroneous or trial court ignored evidence on record.

Headnote:Government Contract – Work Contract – Payment – When evidence and material clearly depict change of nature of work involved and when extra work to be done was also admitted by DW-1, parties cannot be expected to go for a revised agreement/contract – Having regard to fact that work was to be completed within a specified time-frame, parties cannot be expected to go for a second round of negotiation and reframe terms and conditions of work – Appellate Court may not interfere with finding of trial court unless finding recorded by trial court is erroneous or trial court ignored evidence on record – High Court reversed decree passed by trial court without discussing oral and documentary evidence and several grounds raised before trial court – To award interest from date of suit to date of decree and from date of decree till date of realization is entirely discretionary – Terms of contract do not specify any rate of interest – Having regard to fact that matter is pending for over two decades and in interest of justice, it is appropriate that interest of 12% per annum awarded by trial court is reduced to 6% per annum – Judgment and decree passed by trial court restored with modification of reduction of interest at 6% per annum from date of the suit till date of realization. (Paras 14 to 18)

       Facts of Case:

       Present appeals assail judgment in R.F.A. by which High Court of Karnataka vide common impugned judgment reversed judgment of trial court and allowed appeal of respondent-defendant. While doing so, High Court dismissed cross-appeal preferred by appellant-plaintiff.

       Findings of Court:

       Appellate Court may not interfere with finding of trial court unless finding recorded by trial court is erroneous or the trial court ignored evidence on record. High Court reversed decree passed by trial court without discussing oral and documentary evidence and several grounds raised before trial court. High Court veered away from main issue and went on to elaborate on law of arbitration and mode of setting aside the arbitral award under Section 34 Arbitration Act, which in our view, was not warranted. Without considering oral and documentary evidence, High Court erred in interfering with factual findings recorded by trial court and impugned judgment is liable to be set aside.

       Result : Appeals allowed.

       

JUDGMENT :

R. Banumathi, J.

Leave granted.

2. These appeals assail the judgment dated 15.06.2010 in R.F.A. Nos.1051 of 2003 and 1076 of 2003, by which the High Court of Karnataka vide the common impugned judgment reversed the judgment of the trial court and allowed the appeal of respondent-defendant. While doing so, the High Court dismissed the cross-appeal preferred by the appellant-plaintiff.

3. Briefly stated case of the appellant-plaintiff is that appellant-company is engaged in construction of dams and other civil works and registered as a civil contractor for the Government of Karnataka amongst others. The respondent-defendant invited tender on 17.08.1991 “for constructing a compound wall along the boundary line of Kavika and also for constructing underground sump, shed to store useful laminations and also core assembly shop for these works”. The appellant responded to the said tender and appellant’s tender was accepted by the respondent. On 12.02.1992, a contract was executed between the appellant and the respondent incorporating the terms and conditions and the cost of work was estimated at Rs.10,86,200/-. The appellant had quoted the rates on the premise that the earth work for the foundation was to the depth of 1.5 metres and average width of 4.25 metres. However, after the work commenced, even while digging earth to one foot depth, it was noticed that soil was caving in and there was seepage of water from Vrushabhavathi river. The appellant was instructed by the respondent’s engineers to dig earth up to four metres depth until hard soil bed is reached. Accordingly, in order to make a trench of four metres depth, appellant had to excavate earth commencing from width of six metres at the ground level and the entire nature of work changed and appellant had to incur additional expenses on account of the changed plan. The changed measurements were verified by the engineers nominated by the respondent and a payment of Rs.4,50,000/- was made in two running bills. The respondent then asked the appellant to stop the work till the new designs are given by the respondent which was not forthcoming. Vide several letters appellant sought permission for continuation of the work, but, there was no response from the respondent. Finally, after issuing legal notice dated 15.03.1993, for which no reply was given by the respondent. The appellant filed a civil suit being Original Suit No.11037 of 1993 in the court of Additional City Civil Judge, Bangalore, making a claim of rupees thirty lakhs under various heads, interalia, on the work already completed, towards the extra earth work, stocking of materials and also liquidated damages and others.

4. Admitting the execution of the contract dated 12.02.1992, the respondent filed a written statement contending that the construction of the compound wall was in accordance with the estimate and the question of the respondent’s directing the appellant to stop the ongoing work for want of fresh design did not arise. Respondent averred that the appellant unilaterally stopped the work and there is no question of defendant making further payment. It was averred that no extra work was done by the appellant and the respondent was not liable to pay any amount either towards the damages or towards the alleged loss sustained by the appellant.

5. On the above pleadings, trial court framed seven issues. To substantiate the claim, appellant-plaintiff examined four witnesses and produced thirty three documents. On behalf of respondent defendant, DW-1-Jagadeesh Kumar-Deputy Manager was examined and five documents were produced. Upon consideration of evidence adduced by the parties, the first three issues were answered in favour of the appellant-plaintiff viz.:- (i) appellant’s claim as to extra work; (ii) respondent’s direction to stop the running work for want of revised design and (iii) due to stoppage of work side embankment began to fall in the trench due to the seepage of water and involving double work for th













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