The main legal point established in the judgment is the comprehensive framework provided by clause 2 of the agreement for determining compensation, emphasizing the role of the Superintending Engineer in considering mitigating circumstances and arriving at a considered decision.

Rajiv Sharma, J.

1. This regular second appeal is instituted against the impugned judgment and decree dated 25.4.2007 rendered by learned Additional District Judge, Shimla, in Civil Appeal No. 105-S/13 of 2005.

2. The key facts necessary for the adjudication of the appeal are that the respondents/ plaintiffs (hereinafter referred to as the “plaintiffs” for convenience sake) filed a suit for recovery of Rs.1,64,124/- @ 18% per annum on the averments that plaintiff No. 2, i.e. Executive Engineer, H.P. Housing Board invited the tenders for construction of approach road, retaining walls and cutting work on 8.11.1996 for Social Housing Colony, Shoghi. The appellant/defendant (hereinafter referred to as the “defendant” for convenience sake) participated in the tendering process. The defendant’s tender was accepted and he was issued award letter dated 11.12.1996. He was asked to start the work at once. The date of commencement of the work was to be reckoned from 15th day after the issuance of award letter or actual date of commencement, whichever was earlier. The date of commencement of work was latest by 11.12.1996 and date of completion of the work was fixed on 10.6.1997. The plaintiffs and defendant entered into an agreement within fifteen days of issuance of award letter. The defendant acknowledged and accepted all the terms and conditions of the agreement. The site was handed over to the defendant on 11.12.1996. As per clause 2 of the agreement, the defendant was to execute 1/8th of the entire work before completion of 1/4th of the time fixed, but the defendant only executed the work valuing Rs.1,94,942.40 paise before completion of 1/4th of the time fixed against the total value of work Rs.19,84,885.55 paise, whereas he was required to execute the work valuing Rs.2,48,110/- within 1/4th of time fixed. The defendant was time and again requested by plaintiff No. 2 to accelerate the work, but he failed to do so. The notice was issued to the defendant by plaintiff No. 2 on 10.2.1997 to accelerate the work. The defendant was again issued notice on 11.6.1997 vide which he was asked to restart the work at the site. He was again issued a letter dated 26.6.1997. The defendant did not care and miserably failed to restart the work at the site. He was again asked to accelerate the progress of work and ensure its entire completion before 31.7.1997, but he failed to do so. Thereafter, the plaintiffs were constrained to rescind the agreement. The plaintiffs imposed the compensation of Rs.1,98,488.55 paise upon the defendant and after final billing, a sum of Rs.1,64,124/- was still recoverable from the defendant.

3. The suit was contested by the defendant. He admitted that the agreement was entered into between the parties and the stipulated time to complete the work was six months. It was denied that the site was handed over to him by the plaintiffs on 11.12.1996. According to him, the plaintiffs failed to make regular monthly payments. Therefore, he was prevented from executing the work by the acts, conduct, omission and commission of the plaintiffs.

4. The replication was filed by the plaintiffs. The learned trial court framed the issues on 4.4.2001 and decreed the suit of the plaintiffs vide judgment and decree dated 16.11.2004. The defendant feeling aggrieved with the judgment and decree dated 16.11.2004 preferred an appeal before the learned first Appellate Court, who dismissed the same vide impugned judgment and decree dated 25.4.2007. Hence, this regular second appeal, which was admitted on following substantial questions of law on 17.12.2007:-

1. Whether the impugned decree can be sustained on the basis of Exhibit PW3/K when the said decision of the Superintending Engineer did not fall within the definition of considered decision in terms of the judgment of the Hon’ble Supreme Court of India in AIR 1989 SC 952?

2. Whether the impugned decree as passed by the ld. Courts below be sustained especially in the peculiar facts and circum