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1998 Supreme(HP) 179
High Court Of Himachal Pradesh
R.L.KHURANA
H.K.SAREEN - Appellant
Versus
STATE OF HIMACHAL PRADESH - Respondent
Civil Suit No. 9 of 1991
Decided On : 09/21/1998
For the Plaintiff:Mr. J.S. Bhogal, Advocate. For the Respondent:Mr. Anand, Sharma, Advocate;
Headnote:INDIAN CONTRACT ACT, 1872 - Contract - Admittedly, in the site where the building was to be constructed there existed sixteen trees - Such trees were to be felled and without the trees being felled the work of construction could not be carried out - Evidence. Necessary permission to fell trees was not granted - Plaintiff was prevented from executing the work by acts of omission and commission on the part of defendants - Since they had failed to get necessary permission to fell tress thereby rendering the contract impossible to be performed by plaintiff - Plaintiff is entitled to the refund of earnest money.
INDIAN CONTRACT ACT, 1872 - Contract - Correspondence between parties resulting into the acceptance of tender of plaintiff by defendants - Amount to a valid contract expressed to be made by Governor of State - No rules made by the Governor under Article 299(1) of the Constitution have been placed before court showing that in executing work contract like the one in the presence case, to be binding and valid must be followed by a formal contract - The issue is as such decided in favour of plaintiff.
INDIAN CONTRACT ACT, 1872 - Contract - Tender submitted by plaintiff was accepted by defendant No.2, a duly authorised person and such acceptance has been expressed to have been made in the name of Governor of the State Therefore, in mere absence of a formal agreement/contract, it cannot be said that there is no valid contract between parties within meaning of Article 299(1) of the Constitution of India.
INDIAN CONTRACT ACT, 1872 - Section 73 - Compensation for loss or damage caused by breach of contract - As per defendants own evidence contractors profit was taken at 10% of the value of work - Since, the plaintiff was prevented from completing the work due 10 acts of Commission had commission of defendants he is entitled to damages at such rate of the value of remaining work - Which comes to Rs 2,71,520/- - Since the transaction between the parties was a commercial transaction, plaintiff shall be entitled to pendente lite and future interest under Section 34 C.P.C. at the rate of 10% per annum on decree amount of Rs. 3,15,896/- from the date of suit till date of realisation of amount.
R.L Khurana, J. : The plaintiffs, Shri H.K. Sareen, is a Building contractor duly enlisted with the Himachal Pradesh Pubic Works Department for execution of civil and electrical works.
2. In the year 1988, the defendants had issued a notice inviting tenders for the work of "Construction of main building for I.T.I, at Shimla, In response to such notice, the plaintiff had also submitted his tender. The tender of the plaintiff was accepted by the defendants on 12.9.1988 and the work was awarded to him. After the award of work, the plaintiff made all the arrangements for the immediate start of the work. Machinery, labour and other infrastructure was carried by him to the site. In terms of the contract, the plaintiff also constructed labour huts at the site and took up the work as per the directions of defendant No.2 the .concerned Executive Engineer and his subordinate staff. Since, there were as many as 16 trees in the site where the building was to be constructed and the necessary permission to fell such trees was not granted to the defendants, the. whole site could not be made available by the defendants to the plaintiff. In the part of the she, which was handed over to the plaintiff, he started the cutting and excavation work as per the directions of defendant No.2 in anticipation that the sanction for the felling of the trees and applied for by the defendants would be accorded by the time the cutting and excavation work in the available vacant site was completed.
3. The plaintiff was informed that the sanction to fell the trees would have to be obtained from the Central Government. The plaintiff, therefore, left with no alternative, had to stop the execution of the work awarded to him till such time the requisite sanction to fell the trees was obtained by the defendants.
4. The plaintiff, thereafter has been m making repeated representations to the defendants to make the site available so as to enable him to execute and complete the work as per the contract The defendants on each occasion had been expressing their inability to make the site available for want of sanction to fell the trees. While the site was not being made available to the plaintiff, he had to keep and maintain his machinery, tools, equipments and other infrastructure at the site and for this purpose he had to employ the watch and guard staff: by incurring expenses therefore.
5. The plaintiff executed the work of cutting and excavation amounting to Rs. 75,000/-. The work so executed by the plaintiff was duly measured and entered in the relevant measurements book being maintained by the defendant No. 2. However, inspite of repeated demands the plaintiff has not been paid for the work done by him.
6. At the time of submission of the tender, the plaintiff had deposited a sum of Rs. 20,000/- as earnest money with the defendant No.2. Since the plaintiff could not execute and complete the work awarded to him duo to the acts of omission and commission of the defendants, the said amount of earnest money is liable to be refunded to the plaintiff, which has not been refunded by the defendants inspite of repeated demands and the assurance given in the meeting held on 21.5.1990.
7. The total value of the work awarded to the plaintiff was to the value of Rs. 30,41,273/-. Held the plaintiff been allowed to execute and complete the work, he would have earned at least 15% of the said amount as profit The plaintiff has been deprived of such profit due to the acts of omission and commission of the defendants. The plaintiff is, therefore, entitled to be compensated therefore.
8. By virtue of the present suit, the plaintiff is seeking to recover a sum of Rs. 6,60,000/- from the defendants detailed as under :- (a) Amount of earnest money deposited. Rs. 20,000.00 (b) Cost of work done at contract prices. Rs. 75,000.00 (c) Cost of raising infrastructure at Site Rs. 50,000.00 (d) Loss of rent of machinery, tool and plant for the period Sept. 1988 to Sept 1989, and watch and ward ex
