1999 Supreme(AP) 119

Andhra Pradesh High Court
Judges : N.Y.HANUMANTHAPPA, NEELAM SANJIVA REDDY
State Of A.P. - Appellant
Versus
Pioneer Builders, Engineers and Contractors, Hyderabad - Respondent
Decided On : 03-03-99

Headnote:

Indian Arbitration Act -- Sections 8 and 20 - Suit for recovery money - Seeking injunction against department from encashing bank guarantee - Case relating to suit claim arise on a complex plane - Termination of Contract - Breach of Contract - Pioneer Builders Engineers and Contractors had entered into an Agreement with defendant viz Superintending Engineer Right Branch Canal (SRBC) Circle vide agreement to execute work pertaining to earth work excavation lining and construction of structures of SRBC from for a sum of - According to agreement work is to be executed within a period of thirty six months from date of handing over site to plaintiff which was given on - AT end of contract period of three years plaintiff could complete only of total work and according to defendants plaintiff did not accelerate progress of work in spite of several notices issued to it - At that stage plaintiff filed present suit Along with suit plaintiff also filed seeking injunction against department from encashing bank guarantee furnished as performance security at of contract value and also restraining defendants from taking action under Clause of agreement - Adverse climatic conditions also affected execution of work - Payments were not arranged or arranged with abnormal delay by defendants in respect of some items - Payment of additional dewatering was not arranged - Price adjustment clause provided in contract was not given effect to - Disposal of appeals by defendant without following contractual provisions has caused irreparable damage to plaintiff as several claims were denied ex parte - CONTRACT contemplated laying cement concrete of different grades for constructing various components of structures - Technical specification of contract stipulated that proportions of various ingredients to be used in concrete for different parts of work will be established by proper mix design by Engineer-in-charge during progress of work -Whether defendants are guilty of committing breach of contract entered into by plaintiff with defendants ? Whether defendants have not handed over site to plaintiff free from obstacles for execution of work under contract ? Whether plaintiff is entitled to recover towards overhaul charges ? Whether plaintiff is entitled to recover a sum of towards illegal recovery made by defendants towards cost of difference of cement ? Whether plaintiffs entitled to recover Court view correct interpretation of price adjustment clause ? Whether plaintiff is entitled to recover by virtue of statutory hike of minimum wages of labour and contract labour ?Whether plaintiff is entitled to recover towards statutory hike in steel price ? Whether plaintiff is entitled to recover towards loss of progress of work on account of omissions and commissions occasioned by defendants ? Whether plaintiff is entitled to recover a sum of towards work done by the plaintiff but not measured and paid by defendants ? Whether defendants are guilty of various commissions and omissions attributed to them in of plaint ? Whether termination or expulsion of plaintiff from site by defendants is legal just and reasonable and if not whether plaintiff is entitled to damages from defendants ? Whether plaintiff is entitled to recover towards loss of profits on account of work foregone by plaintiff due to illegal action of defendant by which plaintiff has been expelled ? Whether plaintiff is entitled to recover as damages for illegal encashment of bank guarantee worth crores pertaining to mobilisation advance? Whether plaintiff is entitled for interest from till date of payment ? Whether plaintiff is entitled to interest at from date of execution of work till payment ? Whether invoking of performance of bank guarantee to an extent of by defendants is legal and proper ? Whether defendants action in recovering FSD to a tune of from the bills due to plaintiff is valid ? To what relief? - Held, consideration of evidence adduced on record Subordinate Judge on Issue that defendants not handed over site to plaintiff free from obstacles for execution of work under contract - On Issue it was that plaintiff is entitled to towards overhaul charges - On Issue trial Court plaintiff is not entitled to towards hike in wages of labour under minimum wages rules - It was also that plaintiff is not entitled to towards hike in steel prices - On Issue it was that plaintiff is not entitled to towards work done but not measured and paid by defendants - Claim under Issue towards payment on account of loss of progress due omissions and commissions alleged to have been committed by defendants was disallowed - However claim of which comes towards loss of profit on unexecuted profits of work at is allowed - On Issue regarding correct interpretation of price adjustment clause it was that plaintiff is entitled to recover - On Issue it was held that plaintiff is not entitled to recover towards recovery of cement - On Issue it was that defendants are guilty of various omissions and commissions and consequently on Issue it was held that expulsion of plaintiff from site is not legal just and reasonable - On Issue it was that defendants are guilty of committing breach of contract - On Issues it was by trial Judge that plaintiff is entitled to interest at only - On Issue it was that invoking of performance bank guarantee to an extent of is illegal and improper - On Issue it was that plaintiff is not entitled to recover as damages for alleged illegal encashment of bank guarantee worth crores pertaining to mobilisation advance - On Issue trial Court held that action of defendants in recovering FSD to a tune of - From bills due to plaintiff is not valid - Trial Court failed to take into consideration change of nature of suit by way of amendment and also failed to consider jurisdiction - Lastly he contended that Court below while disallowing certain claims of plaintiff should not have granted relief on other items as evidence given by parties is same - Same is contrary to known procedure - Arguing he sought appeal be allowed and appeal filed by plaintiff be dismissed - FINALLY it is stated by defendants that plaintiff is not entitled to towards overhaul charges - Recovery of made towards cost of cement is quite legal - Plaintiff is not entitled to towards price adjustment of labour materials and fuels - It is also not entitled towards hike of minimum wages of labour - Appeal Dismissed