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HIGH COURT OF CALCUTTA
K. C. Das Gupta, H. K. Bose
UNION OF INDIA - Appellant
Versus
KHETRA MOHAN BANERJEE - Respondent
A. F. O. D. 116 Of 1955
Decided On : JUNE 04, 1959
CONTRACT - CONSTRUCTION - ANALYSIS RATES - ACCEPTANCE - REFERENCE - REASONABLE RATES - RISE IN LABOUR RATES - INTEREST - SALES TAX - COSTS OF REFERENCE - CORRESPONDENCE.
Fact of the Case:
The plaintiff, a contractor, sued the defendant, the Union of India, for a sum of money said to be due to him for work done in accordance with a contract, by which the learned Judge after recording his decision on several of the issues has directed a reference for the ascertainment of the amount due and payable by the defendant to the plaintiff, after" (1) ascertaining on evidence the market rate for 145 items of work out of the 170 items done by the contractor; (2) ascertaining the increase in labour charges in respect of the excess quantities of work done under the remaining 25 items; and (3) determining the quantity of work done under the different items on the basis of the measurement books, Exhibit 'c' series, and the correspondence which the plaintiff addressed to the authorities, the Referee being given liberty to rectify "arithmetical and other manifest mistakes."and ordered payment of interest at 6 per cent on the amount found due from 30-1-47.
Finding of the Court:
The Court held that the analysis rates were accepted and were binding on the defendant. The Court also held that the learned Judge was right in thinking that it was the new Clause 12a which was included in the present contract so that the contractor would be entitled to claim revision of rates in respect of rise in price of labour also provided, he made such a claim within 7 days. The Court further held that the learned Judge was not justified in directing the Referee to consider the correspondence that passed between the parties as regards certain quantities of work done even though such work does not appear in the measurement book.
Issues: 1. Whether the analysis rates were accepted and were binding on the defendant? 2. Whether the learned Judge was right in thinking that it was the new Clause 12a which was included in the present contract so that the contractor would be entitled to claim revision of rates in respect of rise in price of labour also provided, he made such a claim within 7 days? 3. Whether the learned Judge was justified in directing the Referee to consider the correspondence that passed between the parties as regards certain quantities of work done even though such work does not appear in the measurement book?
Ratio Decidendi: 1. The Court held that the analysis rates were accepted and were binding on the defendant because the Engineer-in-Charge by not having intimated rejection of the rates quoted by the contractor must be presumed to have accepted the same. 2. The Court held that the learned Judge was right in thinking that it was the new Clause 12a which was included in the present contract so that the contractor would be entitled to claim revision of rates in respect of rise in price of labour also provided, he made such a claim within 7 days because the clause clearly means, in my opinion, that when work for which no rate is specified in the contract or is not entered in the schedule of rates, the contractor has the right to inform the Engineer-in-Charge of the rate which it is his intention to charge for such class of work and that this right has to he exercised within 7 days of his receipt of the order. 3. The Court held that the learned Judge was not justified in directing the Referee to consider the correspondence that passed between the parties as regards certain quantities of work done even though such work does not appear in the measurement book because it is impossible to say in the face of the above authority that the mere detention of the amount due attracts any rule which would have been applied in a Court of Equity.
Final Decision: The appeal was allowed in part and the decree of the learned trial Judge was modified as follows: (1) The defendant would be liable to pay interest at 6 per cent per annum on amount due to the plaintiff from the date of the institution of the suit until realisation and not from 30th January 1947. (2) The direction of the learned Judge as regards sales tax be set aside. (3) The order of the learned Judge directing the defendant to pay the costs of the reference be set aside. The question of costs for reference be reserved. Subject to the modifications mentioned above, the decree of the learned Judge will stand.
( 1 ) THIS appeal is from a decision by Mitter, J. In a suit brought by the respondent Khetra Mohan Banerjee, a contractor, against the appellant the Union of India for a sum of money said to be due to him for work done in accordance with a contract, by which the learned Judge after recording his decision on several of the issues has directed a reference for the ascertainment of the amount due and payable by the defendant to the plaintiff, after" (1) ascertaining on evidence the market rate for 145 items of work out of the 170 items done by the contractor; (2) ascertaining the increase in labour charges in respect of the excess quantities of work done under the remaining 25 items; and (3) determining the quantity of work done under the different items on the basis of the measurement books, Exhibit 'c' series, and the correspondence which the plaintiff addressed to the authorities, the Referee being given liberty to rectify "arithmetical and other manifest mistakes. "and ordered payment of interest at 6 per cent on the amount found due from 30-1-47.
( 2 ) BRIEFLY stated the plaintiff's case as mentioned in the plaint was that tender having been invited on behalf of the 'government of India, Public Works Department, in P. W. D. Form No. 6 for construction of 20 officers' quarters in Calcutta, he submitted his tender and this was accepted, but that ultimately he signed contract documents in P. W. D. Form No. 7; that after work was commenced on and from the 11th of May 1945 on plans and specifications and drawings which were given to him on the 11th of May 1945, the work he was asked to do and which he actually executed differed considerably from the original plans, specifications and drawings, and that 145 items of the 170 items altogether executed being absolutely new and different, he is entitled to get his remuneration for these items on the basis of rates and analysis submitted by him. For the remaining 25 items the plaintiff claimed remuneration at 15 per cent over the tender rates "on account of the increase of wages of labour etc. " His case was that the analyses submitted by the plaintiff had been accepted on behalf of the Government of India and/or Governor General in Council and his claim at 15 per cent increase had also been so accepted. The total amount due, according to him, for the work done on the basis of the rates as claimed applied to the quantity of work done for the different items, amounted to Rs. 6,02,475/ -. After giving credit to Government for the sum of Rs. 1,66,040-7-0 said to have been received in the shape of materials and Rs. 1,46,136-4-0 received by cheques, he put his claim at a sum of Rs. 3,11,895-5-0 and for recovery of this amount he brought the present suit. The defence contention was that the plaintiff was bound by the terms of the agreement as executed by him in P. W. D. Form No. 7 but that he was not entitled to the rates submitted by him as analyses rates as these analyses were never accepted. The defendant also denied that the plaintiff was entitled to an enhanced rate of 15 per cent over the tender rates in respect of any item. It was, further, urged that the work done fell under 116 items -- 27 of the items, being contained in the schedule to the agreement, 16 being altered items of work done under Clause 12, 4 being substituted items of work under Clause 12a and 69 more being additional items of work done under Clause 12a of the agreement. The defendant contended that on the rates accepted and sanctioned by the competent authority after due consideration of the analyses of rates submitted by the plaintiff, the plaintiff was entitled for his work to a sum of Rs. 3,55,009/- out of which he had already received Rs. 2,03,397-4-0 towards materials supplied for work and Rs. 1,46,139-4-0 by cheques and only an amount of Rs. 6,472-8-0 remained due to the plaintiff. It appears that at the trial the plaintiff based his case on the contract as in P. W. D. Form No. 7 and clai
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