The main legal point established in the judgment is the importance of following proper procedures for proving evidence under the Evidence Act and the duty of the adjudicating authority to fully focus on every aspect of the case while reaching a conclusion.

JUDGMENT :

DIVYESH A. JOSHI, J.

1. The appellants-State of Gujarat and another are the original defendants and the respondent M/s. Valji Poona and Company is the original plaintiff in the proceeding before learned Civil Judge, (S.D.) at Gandhinagar in Special Civil Suit No.77 of 1997. For the sake of brevity and convenience, the parties are herein after referred to as “the defendants” and “the plaintiff” respectively.

2. The short facts leading to the filing of the suit are as under:-

2.1 The plaintiff is engaged in the business of undertaking, on contract, heavy civil engineering works, in and outside Gujarat State. The plaintiff and defendant no.1 entered into a contract No.B2/2 of 1979-80 for construction of Earthern Dam, Spilway and Head Regulator on left side of Kakdiamba Irrigation Scheme after following prescribed procedure of public tender.

2.2 Under the provisions of the contract, the plaintiff was required to start the said works on 7.12.1980 and complete it in all respects on or before 6.2.1982. The plaintiff completed the work on 31.3.1982 and Completion Certificate was issued on 19.9.1986 by the defendants. The contract and the law imposed certain obligations and promises, express and/or implied, which were required to be fulfilled or preferred by the defendants.

2.3 Some of the obligations and promises were as under:-

(a) For execution of the said works contract, it was necessary that the work site, free from any hindrences and interruptions, was provided by the defendants. This is a very fundamental obligations of the defendants, failure to fulfill which prevents the plaintiff from performing his promises under the agreement. The defendants embarked on this project without ensuring that the required land was available, free from any encumbrances or trouble. The defendants neglected and/or failed to redress the grievances of the villagers to their satisfaction whose lands were acquired.

(b) The area on which the Earthen dam and other structures are to be located is required to be identified and shown to the plaintiff by the defendants. This is commonly, in the trade known as "giving the line out". The plaintiff is also obliged to execute the said works exactly as per the drawings, decisions and specifications prescribed and laid down by the defendants. Throughout the execution of the said works there were constant delays in giving the line out or supplying the drawings and other necessary designs. Required approvals and other appropriate decisions and instructions were also not forthcoming on time.

(c) The defendants were obliged to supply certain materials under the contract. The defendants could not supply the same on time and in required quantity.

(d) The contract also provides that every month payment for the work done during the month would be made. Non-payment of admissible payments creates problems of funds for the plaintiff and effect adversely to maintain the required rate of progress. The defendants failed to make the payments of these monthly bills known as R.A. Bills and created problems of shortage of funds for the plaintiff which also affected the rate of progress.

2.4 The reasons enumerated above resulted in keeping the idle men, machinery etc, of the plaintiff, in the stipulated period of contract. These reasons also resulted in delaying the project much beyond the period originally contemplated. The reduced output obtained from the resources employed by the plaintiff as compared to the output that ought to have been obtained from the same resources meant under utilization of these resources causing loses to the plaintiff. The plaintiff had provided for 10% of the tender amount towards overheads and 15% towards profit. The overhead expenses remained fractious and the estimated profits, the plaintiff lost because of the enormous delay which was entirely due to the fault of the defendants. The defendants also directed the plaintiff to carry out certain works in more difficult circumstances for which the plain