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2024 Supreme(Guj) 91

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BIREN VAISHNAV, NISHA M. THAKORE, JJ.
CHAIRMAN/MANAGING DIRECTOR – Appellant
Versus
ASHOK BUILDERS – Respondent
First Appeal No. 1030 of 2001, Civil Application (For Additional Evidence) No. 1 of 2023, Cross Objection No. 12 of 2019
Decided On : 09-01-2024

Advocates:
Advocate Appeared:
For the Appellants : VISHRUT JANI, R.C. JANI.
For the Respondent: K.G. SUKHWANI.

The judgment clarified the jurisdiction of the Civil Court, the application of the Limitation Act, and the entitlement of the plaintiff to claim losses incurred due to non-cooperation from the defendants.

Headnote:

Public Works Contract - Dispute Arbitration Tribunal Act - Sec.21, Sec.20 of the Arbitration Act, 1940 - Jurisdiction of Civil Court - Limitation Act - Article 55 - Termination of Contract - Delayed Payment - Extension of Time Limit - Rise in Material and Labour Costs - Overhead and Overstay - Interest - Final Order and Decree

Fact of the Case:

The plaintiff, an engineer and contractor, entered into a contract with the defendants for laying sewerage collecting system. The plaintiff claimed non-payment for work done, rise in material and labour costs, and other expenses, leading to a lawsuit.

Finding of the Court:

The Trial Court found in favor of the plaintiff on issues of jurisdiction, limitation, and losses incurred due to non-cooperation from the defendants. The Court also awarded specific amounts to the plaintiff for overhead and overstay.

Issues: Jurisdiction of the Court, Limitation, Losses due to Non-cooperation, Refund of Security Deposit, Delayed Payment, Extension of Time Limit, Rise in Material and Labour Costs, Overhead and Overstay, Interest, Final Order and Decree

Ratio Decidendi: The Court held that the suit was within the jurisdiction of the Civil Court and not barred by limitation. It also found that the plaintiff suffered losses due to non-cooperation from the defendants and was entitled to specific amounts for overhead and overstay.

Final Decision: The first appeal and cross objection were dismissed, and the Civil Application for additional evidence was also dismissed.

ORDER :

1. The appellants, who were original defendants, have filed the present First Appeal on being aggrieved and dissatisfied with the judgment and decree dated 30.12.2000 passed by the Second Joint Civil Judge (SD), Himmatnagar, in Special Civil Suit No. 122 of 1990. Cross objections have been filed by the original plaintiff who filed the Civil Suit.

2. The case of the respondent-plaintiff, as narrated in the judgment and decree are as under:

    “1. The plaintiff is an engineer and contractor and registered under “A” Class, under the list of maintained by Public Works Department (PWD) and also approved by the various other authorities and is carrying on its activities as engineer and contractor. The Executive Engineer, Public Health Works Division, Himmatnagar, now renamed as Executive Engineer, Gujarat Water Supply & Sewerage Board, Himmatnagar. The defendant no. 2 had invited the tenders publicly on behalf of the defendant no. 1 for the work of laying sewerage collecting system at Talod and accordingly the plaintiff had purchased a blank tender form and had filled in the same and as the rates quoted by plaintiff was found lowest and compensative, hence the tender of the plaintiff was accepted by the defendants and regular agreement bearing no. B/1/37 of 1983-84 was entered into between the plaintiff and defendants. As per the terms and conditions laid down in the contract agreement and also in the work order issued to the plaintiff. The plaintiff was required to commence the work from 13.12.1983 and the said work was required to be completed within the period of eight months i.e. on or before 12.8.1984, but due to delays and preventions created by the defendant department the said work could not be completed within its stipulated time. The reasons for the non-completion of the said work within stipulated time are narrated in nutshell as under:

(i) That due to non-availability of the funds the defendants had called upon the plaintiff to slow down the progress of the work.

(ii) That the defendants were required to pay secured advance on the material, but the defendants have fail to make the payment of the material brought on the sight by the plaintiff.

(iii) That there was much variation in the specification the work could not be executed and hence under the different type of situation the plaintiff was required to execute the work.

(iv) That the shorting and shuttering were required to be done at many places for which the plaintiff had all the time intimated the defendants and even the said work was never contemplated at the time of tendering in full reaches.

(v) That no line out were given as and when required and the line out which were made available were given in piece meal.

(vi) That material required to be supplied as per schedule-A were never supplied in time and even the material were not supplied after the stipulated time.

(vii) That the C.I. Main holes covers were also not given to the plaintiff in time.

(viii) That there was heavy water in the excavated land and hence the defendants had called upon by the plaintiff to provide encasing of cement concrete of 1:3:6, so that the uplift of the pipes be avoided.

(ix) That due to crop-up of many extra items and failures to finalise the same the work could not be progressed.

2. That due to the abolitions, the said work could not be completed within its stipulated time the plaintiff had called upon the defendants to extend the time limit and to settle and pay price rise and other demand vide the letter dated 30.10.1986. But though the work thereafter continued by the plaintiff the defendants neither extended the time limit nor did settled and pay the price rise and ultimately the payment of work done was also not made, hence the plaintiff was concentrate to abandon/rescind/terminate the contract and, therefore, the plaintiff served a legal notice to the defendant on 3.1.1986 through his advocate.

3. Though the said notice was received by the defendants the defendants did not comply with

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