High Court Of Rajasthan
Judgename : A.P. Sen,S.N. Modi,M.L. Joshi
State of Rajasthan - Appellant
Versus
Ram Kishan - Respondent
Civil Appeal No.77 of 1965
Decided On : 05/06/1977
LIMITATION ACT - ARTICLE 56 - WORKS CONTRACT - STANDARD FORM - CLAUSES (6) AND (7) - CLAIM FOR DAMAGES BY CONTRACTOR FOR NONPAYMENT OF PRICE OF WORK DONE - WHETHER FALLS WITHIN ARTICLE 56 OR ARTICLE 115 - INTERPRETATION OF CLAUSES (6) AND (7) - STARTING POINT OF LIMITATION.
Fact of the Case:
Plaintiff, a contractor, entered into a works contract with the State Government for lowering the waste-weir of a tank. The contract contained Clauses (6) and (7), which provided for the issuance of a completion certificate by the Engineer-in-charge, removal of scaffolding and surplus materials by the contractor, and submission of the final bill within one month of the completion date. The plaintiff completed the work on 7-1-1958 and submitted the final bill on 22-9-1960. The State Government disallowed the plaintiff's claim for extra work done, and the plaintiff filed a suit on 24-10-1961.
Finding of the Court:
The court held that the suit was not barred by limitation under Article 56 of the Limitation Act, 1908, as the starting point of limitation was the date of issuance of the completion certificate and final measurements by the Engineer-in-charge. The court further held that a suit for breach of contract based on a building contract containing Clauses (6) and (7) would fall under Article 115, and the period of limitation would be reckoned from the date of breach of contract, i.e., the date of drawing up of the final bill.
Issues: 1. Whether a claim for damages by a contractor for nonpayment of the price of work done arising out of a works contract in standard form containing Clauses (6) and (7) falls within the purview of Article 56 of the First Schedule of the Indian Limitation Act, 1908 or comes within the ambit of Article 115. 2. Interpretation of Clauses (6) and (7) of the standard form works contract.
Ratio Decidendi: 1. The court interpreted Clauses (6) and (7) of the standard form works contract and held that the starting point of limitation for a suit for recovery of the price of work done under such a contract would be the date of issuance of the completion certificate and final measurements by the Engineer-in-charge. 2. The court held that a suit for breach of contract based on a building contract containing Clauses (6) and (7) would fall under Article 115, and the period of limitation would be reckoned from the date of breach of contract, i.e., the date of drawing up of the final bill.
Final Decision: The court answered the reference by holding that a suit of this nature may fall under Article 56 or Article 115, depending on the facts and circumstances of each case. The court further held that where a suit is based on a building contract containing Clauses (6) and (7), as here, is governed by Article 56 of the First Schedule of the Indian Limitation Act, 1908 the starting point of limitation would be the date when the Engineer-in- charge issues the certificate of completion and when the final measurements are made. Where such a suit is for breach of contract, the suit falls under Article 115 and the period is to be reckoned from the date of breach of contract, i.e., the. date of drawing up of the final bill.
A.P. Sen, ACJ.-This reference to the Full Bench raises a question of some importance, namely, whether a claim for damages by a contractor for nonpayment of the price of work done arising out of a works contract in standard form containing Clauses (6) and (7), falls within the purview of Article 56 of the First Schedule of the Indian Limitation Act. 1908 or comes within the ambit of Article 115.
2. The Division Bench before which the appeal came up for hearing felt that the point of limitation was one of frequent occurrence and, therefore, there was need for an authoritative decision. It noticed a diversity of opinion between the different High Courts on the question. It referred to two decisions of this Court in Bhawani Shanker vs. State of Rajasthan (AIR 1970 Raj 268) and Tej Singh vs. State of Rajasthan ((1971) 2 W LN 28), which, the Division Bench felt, expressed views which were irreconcilable and, therefore, it was desired that the point should be settled by a larger Bench.
3. The reference being on a point of law, there is no necessity of going into the facts in detail. The material facts briefly are these. By a contract in writing dated 9-12-1957 the State Government of Rajasthan in the Irrigation Department, granted to the plaintiff a work in connection with Baori irrigation Project in Bundi district i. e., lowering the waste-weir below F.T.L. by 5 to discharge surplus water of Guda Tank, at Pench-ki-Baori in district Bundi. The plaintiff gave a tender at 16% above the scheduled rates, but later reduced it to 11%. The work was to be completed within 4 months of the date of contract i.e. 9-12-1957. It involved cutting of rocks, deepening of waste-weir, earth work construction of face wall etc. Under the terms of the contract, the plaintiff was net only bound to supply labour, but also bear the costs of materials. During the execution of the work, the deepening of the waste-weir involved extra work. The work was completed on 7-1-1958. The plaintiff submitted his final bill on 22-9-1960.
4. The plaintiff alleges that the ‘G’ Schedule was prepared without any trial bore and on the assumption that the soil was soft and only required three leads and three lifts and. therefore, no site plan of borrow pit was supplied. At the time of the execution of work the plaintiff , however, came across hard soil mixed with moranda at an early stage and he brought this fact lo the notice of the Engineer-in-Charge by his letter dated 10-5-1955. The Engineer-in-charge realising the difficulty agreed that the plaintiff should be paid for this as an extra item. For the extra work done, the plaintiff claimed that he was entitled to receive payment of Rupees 85,218 but restricted his claim to Rupees 85,000.
5. Thesuit was brought on 24-10-1961. The plaintiff alleges that the cause of action in the suit arose in Bundi in the month of February 1960, the date on which he signed the final bill under protest, when the Chief
Engineer disallowed his claim for payment of extra work done.
6. TheState Government contested the plaintiffs claim on various grounds. It pleaded, inter alia, that the suit was barred by limitation.
7. Thelearned trial Judge, while negativing the plea of the defendant that the suit was barred by limitation decreed the plaintiffs claim to the extent of Rs. 56,309.15 and the defendant’s counter claim for Rs. 17.228.64. The resultant decree in favour of the plaintiff was, therefore, for Rs. 39,080.51 with interest at the rate of 4% per annum.
8. ShriShisodia, learned Additional Government Advocate, contends that the suit in a claim founded on a contract of this nature is, in a sense a suit to recover the price of the work done by the plaintiff for the defendant at his request, where no time is fixed for payment. His submission, therefore, is that the suit would be barred by limitation under Article 56, unless such suit is brought within 3 years from the date when the work is done. He points out the averment in para 5 of th
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