1984 Supreme(Bom) 102
IN THE HIGH COURT OF BOMBAY
V.V. Vaze, J.
State of Maharashtra.... Appellant.
Versus
S.N. Chawhan.... Respondent.
First Appeal No. 6 of 1975, decided on 22-3-1984.
Advocates appeared :
H.D. Hombalkar, A.G.P., for appellant.
J.R. Lalit, for respondent.
A party to a contract who is prevented from performing his promise by the other party's breach of contract is exonerated from the allegation of a breach of contract, and therefore the penalty clause of the conditions of contract relating to delay in execution of the work is not invokable.
Headnote:
CONTRACT - CONSTRUCTION OF BRIDGE - DELAY IN EXECUTION - PENALTY IMPOSED - CONTRACTOR'S CLAIM FOR REFUND - SECTIONS 52 TO 55 OF THE CONTRACT ACT - IMPLIED TERM - FAILURE OF THE DEPARTMENT TO GIVE LINE OUT AND DECISION ON CUTTING EDGE - DELAY CAUSED BY THE DEPARTMENT - PENALTY CLAUSE NOT INVOKABLE.
Fact of the Case:
A contractor filed a suit against the State of Maharashtra for refund of penalty imposed for delay in execution of a contract for construction of a bridge. The contractor claimed that the delay was caused by the failure of the Department to provide line out and decision on cutting edge, which were necessary for the execution of the work.
Finding of the Court:
The court found that the contractor had complained about the delay in giving the line out and decision on the cutting edge at the earliest possible opportunity, but the defendant State tarried for a long time and then maintained that all that was needed for the execution of the work had been supplied. The court also found that the Department failed to produce records to prove the supply of drawings and other necessary information to the contractor.
Issues: Whether the delay in execution of the work was caused by the failure of the Department to provide line out and decision on cutting edge.
Ratio Decidendi: The court held that the supply of drawings and other necessary information to the contractor was an implied term of the contract, and the failure of the Department to provide the same amounted to a breach of contract. The court also held that the delay caused by the Department's breach of contract exonerated the contractor from the allegation of a breach of contract, and therefore the penalty clause of the conditions of contract relating to delay in execution of the work was not invokable.
Final Decision: The court dismissed the appeal filed by the State of Maharashtra and upheld the trial court's decree refunding the penalty imposed on the contractor.
2. In a case like the present one, in order to pronounce upon the responsibility of delay in execution of the work, the test to be applied is contained in sections 52 to 55 of the Contract Act, relating to reciprocal promises. Section 52 provides that reciprocal promises have to be performed in that order which the nature of the transaction requires. Under section 53 if a party to the contract prevents the other from performing his promise, the contract becomes voidable entitling the aggrieved party to claim compensation. Under section 55 which deals with the contracts, where time is of the essence the promise is entitled to compensation from the promisor if the latter fails to perform certain things at or before specified times.
3. After the work order was issued on 19th January, 1967 the contractor vide Exh. 58 dated 14-4-1967 informed the Dy. Engineer, Barsi, that he has made preliminary arrangements for starting the work but requested the Engineer to spare some time for personal discussion of the work programme and "marking lining out of work". In this letter the contractor also referred to an earlier letter dated 30th January, 1967 i.e. issued within 10 days of having received the work order on the same subject. No reply was sent to the 30th January letter nor Exh. 58, for a fairly long time in between, on 14th July, 1967 vide Exh. 59, the contractor requested for detailed measurements and drawings of R.C.C. curbs, stating dimensions of range etc. This was replied to on 4th August, 1967 Exh. 60 when the Executive Engineer expressed surprise about the complaint of non-supply of the drawings when they had been already, supplied. During the course of the trial, the plaintiff had called upon the defendant to produce the record showing as to when detailed measurements and drawings were supplied, but the defendants did not produce any record.
4. The 4th August, 1967 letter was replied to promptly on the next day by Exh. 67 wherein the contractor pointed out that the drawings which are supplied show only details of cutting edges but dimensions of bar have not been given without which R.C.C. work cannot be executed. By Exhibit 67 dated 14th September, 1967 this contention of the contractor was not entertained.
5. A contractor who is expected to construct a bridge will not be able to proceed with the work unless the line out of the bridge is given. Vide Exh. 63 dated 21-9-1967 the contractor informed the Executive Engineer that the Deputy Engineer has given the line out of the work and has promised to give dimensions of the bars for the curb works. This was done only in the second week of November. The contr