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2022 Supreme(SC) 255
SUPREME COURT OF INDIA
HEMANT GUPTA, V. RAMASUBRAMANIAN, JJ.
Shripati Lakhu Mane – Appellant
Versus
The Member Secretary, Maharashtra Water Supply and Sewerage Board – Respondent
Civil Appeal No. 556 of 2012
Decided On : 30-03-2022
Advocate Appeared:
For the Appellants : Mr. Vinay Navare, Ms. Gwen Karthika, Ms. Abha R. Sharma.
For the Respondents: Mr. Sunil Murarka, Mr. Satyajit A. Desai, Mr. Siddharth Gautam, Mr. Himanshu Sharma, Ms. Anagha S. Desai, Mr. Satya Kam Sharma.
IMPORTANT POINTS
(1) A party to a contract may abandon his rights under contract leading to a plea of waiver by other party, but there is no question of abandoning an obligation.
(2) Refusal to perform obligations can be termed as breach of contract and not abandonment.
Headnote:
Indian Contract Act, 1872 – Section 67 – Civil Procedure Code, 1908 – Order 37 Rule 1 – Money suit – High Court allowed appeal partially and reduced decree amount from Rs. 24,97,077/- to Rs.7,19,412/- – Appellant was not guilty of anything including abandonment – Clause 3(a) of contract enabled respondents to rescind contract, forfeit security deposit and entrust work to another contractor at risk and costs of appellant – This clause was never invoked by respondents – It is fundamental to Law of Contract that whenever a material alteration takes place in terms of original contract, on account of any act of omission or commission on part of one of parties to contract, it is open to other party not to perform original contract – This will not amount to abandonment – Abandonment is normally understood, in context of a right and not in context of a liability or obligation – A party to a contract may abandon his rights under contract leading to a plea of waiver by other party, but there is no question of abandoning an obligation – In this case, appellant refused to perform his obligations under work-order, for reasons stated by him – This refusal to perform obligations can be termed as breach of contract and not abandonment – Refusal of a contractor to continue to execute work, unless reciprocal promises are performed by other party, cannot be termed as abandonment of contract – Refusal by one party to a contract, may entitle other party either to sue for breach or to rescind contract and sue on a quantum meruit for work already done – High Court was clearly in error in overturning judgment of Trial Court on a wrong understanding that there was abandonment of contract on part of appellant – Impugned judgment and decree of High Court set aside and judgment and decree of Trial Court restored. (Paras 11, 16, 19, 22 and 23)
Facts of the case:
Plaintiff in a suit for recovery of money has come up with appeal challenging the judgment and decree of the High Court of Judicature at Bombay in a regular appeal under Section 96 of Code of Civil Procedure, 1908, by which the decree granted by the Trial Court for recovery of Rs.24,97,077/- together with interest at 10% per annum was modified into a decree for recovery of Rs.7,19,412/- together with interest.
Findings of Court:
The respondents did not choose the option of rescinding contract and suing for damages in terms of clause 3 (a) and (b). It was the respondents who made it difficult for the appellant to execute the contract as per the terms originally agreed.
Result : Appeal allowed.
JUDGMENT :
V. RAMASUBRAMANIAN, J.
1. The plaintiff in a suit for recovery of money has come up with the above appeal challenging the judgment and decree of the High Court of Judicature at Bombay in a regular appeal under Section 96 of the Code of Civil Procedure, 1908, by which the decree granted by the Trial Court for recovery of Rs. 24,97,077/- together with interest at 10% per annum was modified into a decree for recovery of Rs. 7,19,412/- together with interest.
2. We have heard Mr. Vinay Navare, learned senior counsel for the appellant and Mr. Sunil Murarka, learned counsel for the respondents.
3. The appellant is a registered contractor with the Government of Maharashtra. In a tender for the execution of the work of Regional Rural Piped Water Supply Scheme for Dabhol-Bhopan and other villages in Ratnagiri District, the appellant became the successful tenderer. He was issued with a work order on 03.07.1986, for the execution of the work at the cost of Rs. 80,45,034/- which was 47% above the estimated cost. The time for the completion of the work was stipulated as 30 months. But it appears that Respondent No. 3 herein issued a letter dated 28.07.1986 informing the appellant that the work order was kept in abeyance. After a few representations, Respondent No. 3 informed the appellant vide letter dated 17.12.1986 to start the work.
4. Though the appellant started executing the work from 29.12.1986, he was informed about the non-availability of C-1 pipes and cement pipes of the diameter stipulated in the contract. Later, the respondents wanted a change in the terms of the work order by substituting pipes of different diameter. Therefore, the appellant started demanding modified rate.
5. When the above dispute was brewing, Respondent No. 3 instructed the appellant, vide letter dated 02.03.1987 to stop the pipeline work and start the work of construction of another work at a different place namely Panchanadi. By another letter dated 04.03.1987, the Respondent No. 2 informed the appellant about a modification which involved the construction of one headwork at Karjai and another at Panchanadi. A work order dated 01.07.1987 was also issued in respect of these head-works.
6. Compounding the agony of the appellant, the bills raised by him were not honoured in time due to shortage of funds. Therefore, the appellant did not proceed with the work. As a result, Respondent No. 2 issued a threat to withdraw the work order and also to levy a fine of Rs. 10/- per day from 01.03.1988. Ever since then, the parties were at loggerheads, which ultimately led to the appellant filing a suit for recovery of a sum of Rs. 51,35,289/-.
7. The aforesaid claim of Rs. 51,35,289/- comprised of several heads of claim such as (i) value of the work done; (ii) release of the security deposit; (iii) compensation and (iv) damages etc.
8. Before the Trial Court, the appellant examined himself as PW-1 and marked several documents as exhibits. On the side of the respondents, 5 witnesses were examined as DWs. 1 to 5 and the respondents also marked several documents.
9. Eventually, the Trial Court, by a judgment and decree dated 02.02.1998 decreed the suit partially, directing the respondents to pay to the appellant, a sum of Rs. 24,97,077/- together with interest at 10% per annum from the date of the suit till realization.
10. Aggrieved by the decree so granted, the respondents filed a regular civil appeal under Section 96 of the Code of Civil Procedure, 1908 on the file of the High Court of Judicature at Bombay. The appellant did not file any appeal though the suit was decreed partially.
11. By a judgment and decree dated 24.04.2009, impugned in this appeal, the High Court allowed the appeal partially and reduced the decree amount to Rs. 7,19,412/-. Therefore, the plaintiff has come up with the above appeal.
12. Before we proceed to consider the grounds of attack and the r
