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Andhra Pradesh High Court
Judges : A.VENKATRAMA REDDY, V.NEELADRI RAO
Mir Qudrath Ali Khan - Appellant
Versus
Muzaffar Ali Khan - Respondent
Decided On : 11-30-92
ARCHITECT - FEE - BREACH OF CONTRACT - DAMAGES - QUANTUM - CALCULATION - COST OF PROJECT - INCLUSION OF COST OF EQUIPMENT - ARCHITECT'S PROFESSIONAL SERVICES - LIMITATION - INTEREST.
Fact of the Case:
The plaintiff, an architect, was engaged by the defendant for construction of Shalimar cinema Theatre. Ex. A-1 agreement was executed between the plaintiff and defendant. The plaintiff prepared a set of drawings and designs as per Ex. A-2 and submitted the same to the concerned authorities on 20-12-1977. When the defendant did not pay the fee as contemplated under Clause 3 (b) of Ex. A-1, the plaintiff issued notices to the defendant demanding the fee. The latter did not pay the same to the plaintiff. When the defendant was proceeding with-the construction of the cinema theatre, without payment of the fee of the plaintiff, the latter filed O. S. No. 6021 of 1971 on the file of the IX Assistant Judge, City civil Court, Hyderabad restraining the defendant from engaging any Architect other than the plaintiff, Ad interim injunction was granted in I. A. No. 477 of 1979 and later it was vacated by observing that alternative remedy of damages is available. Then the plaintiff filed this suit. The plaintiff estimated the cost of the theatre at Rs. 40,00,000/- and demanded Rs. 2,00,000/- as damages; as 5% of the total cost of the project is his remuneration. The suit was filed for recovery of rs. 1,90,000/- towards damages for breach of the contract as an amount of rs. 10,000/- was already paid by alleging that the defendant committed breach of contract in not taking his services as Architect as per Ex. A-1 agreement. The plaintiff also pleaded inter alia in para 7 of the plaint that in view of the high inflationary market trend, the estimated cost of theatre is bound to escalate further, and it may exceed Rs. 40,00,000/- during the long period required for its completion and he reserves his right to raise his claim of damages later as his fee is based and linked with the finally executed total cost of the defendant s theatre.
Finding of the Court:
The court held that the defendant committed the breach of contract. The court also held that the plaintiff is entitled to 5% of the total cost of the price. The court further held that the plaintiff is entitled to Rs. 1. 25 lakhs towards his remuneration. Out of it, an amount of rs. 10,000/- was already paid to the plaintiff as advance. Hence, the plaintiff would have been entitled to Rs. 1. 25 lakhs as remuneration if his services were not discontinued. The same amount can be fixed at as damages, for the plaintiff could have been entitled to the said amount if his service was not terminated. Hence, the decree amount has to be reduced fromrs. 1. 90 lakhs to Rs. 1. 25 lakhs.
Issues: 1. Whether the plaintiff is entitled to 5% of the total cost of the price? 2. Whether the plaintiff is entitled to Rs. 1. 25 lakhs towards his remuneration? 3. Whether the suit is barred by limitation?
Ratio Decidendi: 1. The court held that the plaintiff is entitled to 5% of the total cost of the price as per the terms of Ex. A-1 agreement. 2. The court held that the plaintiff is entitled to Rs. 1. 25 lakhs towards his remuneration as the cost of cinema project had to be held as Rs. 27 lakhs, and the fee of the plaintiff is 5% of the total cost of the project. 3. The court held that the suit is not barred by limitation as it is a case of anticipatory breach.
Final Decision: The appeal is allowed in part by modifying the decree of the lower Court by substituting Rs. 1. 25 lakhs for Rs. 1. 90 lakhs. In the circumstances, the parties have to bear their respective costs in mis Appeal and the Cross-objections.
( 1 ) THIS appeal and the cross-objections are directed against the Judgment in o. S. No. 291 of 1982 (old O. S. No. 995 of 1980) on the file of the Addl. Chief Judge, city Civil Court, Hyderabad.
( 2 ) THE facts which give raise to these proceedings are as under: The plaintiff is an Architect. He was engaged by the defendant for construction of Shalimar cinema Theatre, which was originally named as Pakeezah. Ex. A-1 agreement dated 7-10-1977 was executed by the plaintiff, and defendant. The material terms of the said agreement are as follows:"1. We shall render you the complete services for execution of above project namely: (a) Preparation of complete set of architectual designs/drawings; (b) structural Engineer s services i. e. , designing of R. C. C. and other structural members; (c) preparation of estimates and tender documents; (d) calling of tenders and submission of comparative statements; (e) Co-ordination between you and all contractors / agencies; (f) supervision and quality check of the construction; (g) scrutiny and checking of contractors bills; (h) Assistance and advise in selection of Materials / agencies; (i) Assistance in preparing project reports and technical feasibility report for your bank; (j) issue of valuation certificates as and when required by your Bank and other agencies. 2. For all the above pur comprehensive services will charge you five per cent (5%) of the total cost of your project as our fee. 3. The fee shall be payable at the following instalments: (a) Advance, on signing this contract of the project cost. . . 1/2 % (half per cent) (b) After submission of our final drawings for authorities sanction. . . 1/2% (half per cent) (c) At the time of calling tenders/ commencement of construction. . 1% (One per cent) (d) At the plinth level of the construction. . 1/2 % (Half per cent) (e) At the time of lintal levels. . 1% (One per cent) (f) At the time of 1st floor (or balcony) roof level. . 1% (One per cent) (g) After completion of the project. . 1/2% (Half per cent) of the balance as per final executed cost. 4. All the earlier instalments would be based on the approximate estimated cost of the project. However, the final instalment of fee would be based on the actual executed cost of the project. 5. . . . . . . 6. You shall not remove us from your this service till the whole project is completed in all respect. For further alterations/improvements / developments of the property / project you shall consult us and shalf not appoint any other agency. 7. The above term may be amended suitably at any time by mutual consent. "on 13-10-1977 an amount of Rs. 10,000/- w. as paid to the plaintiff as contemplated under Clause 3 (a) of Ex. A-1. The plaintiff prepared a set of drawings and designs as per Ex. A-2 and submitted the same to the concerned authorities on 20-12-1977. That plan was ultimately approved by the commissioner of Police, Hyderabad as per Ex. A-3 proceedings. When the defendant did not pay the fee as contemplated under Clause 3 (b) of Ex. A-1, the plaintiff issued notices to the defendant demanding the fee. The latter did not pay the same to the plaintiff. When the defendant was proceeding with-the construction of the cinema theatre, without payment of the fee of the plaintiff, the latter filed O. S. No. 6021 of 1971 on the file of the IX Assistant Judge, City civil Court, Hyderabad restraining the defendant from engaging any Architect other than the plaintiff, Ad interiminjunction was granted in I, A. No. 477 of 1979 and later it was vacated by observing that alternative remedy of damages is available. Then the plaintiff filed this suit. The plaintiff estimated the cost of the theatre at Rs. 40,00,000/- and demanded Rs. 2,00,000/- as damages; as 5% of the total cost of the project is his remuneration. The suit was filed for recovery of rs. 1,90,000/- towards damages for breach of the contract as an amount of rs. 10,000/- was already paid by alleging that the defendant
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