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IN THE HIGH COURT OF JHARKHAND AT RANCHI
GAUTAM KUMAR CHOUDHARY, J.
M/s. Bharat Coking Coal Limited – Appellant
Versus
M/s. Rajkumar and Brothers – Respondent
F.A. No. 22 of 2011
Decided On : 04-03-2022
Indian Partnership Act, 1932 – Section 69 –Evidence Act, 1872 – Section 91 – Appellant company represented through principal officers are defendants have preferred the instant appeal against judgment and decree passed by learned Sub-Judge-V, Dhanbad in Money Suit whereby appellants have been directed to pay decreed amount with 6% pendent lite and future interest – Held, Extra-work of track cleaning and wagon levelling was beyond terms of agreement and even on this, there is no evidence on basis of which damage has been awarded – Judgment of award of damage on this count is not sustainable – Finding on Issue No. V has recorded that Appellants had failed to supply coal as per agreement – It is also settled that plaintiff had been given work extension twice – DW-4 has deposed that defendant company had to pay demurrage to Railway on account of laches on part of plaintiff but no documentary evidence has been proved to show amount of demurrage paid – Forfeiture of security deposit is in nature of penalty and same can be done only on basis of specific pleading and proof – Appeal partly allowed.
JUDGMENT :
GAUTAM KUMAR CHOUDHARY, J.
1. The appellant company represented through principal officers are the defendants have preferred the instant appeal against the judgment dated 27.09.2010 and decree dated 02.11.2010 passed by the learned Sub-Judge-V, Dhanbad in Money Suit No. 27 of 1993, whereby the appellants have been directed to pay the decreed amount of Rs. 13,65,551/- with 6% pendent lite and future interest.
2. The case of the plaintiff is that the plaintiff was awarded coal transportation and allied job at Damoda Colliery vide Work Order No. GM/AR-I/Fin/2443/91 dated 05/11.09.1991 covering the period from 14.08.1991 to 31.03.1992 on the terms and conditions set forth therein and thereafter the plaintiff was given extension of work with effect from 01.04.1992 initially upto 30.06.1992 vide letter No. 379 dated 30.04.1992 and thereafter vide letter No. GM/AR-I/PS-F-3/1323/92 dated 30.06.1992 upto 31.08.1992. The terms of the contract besides the general terms included special terms and conditions for picking out all shale/stone, loading coal into tipping trucks by contractor’s pay-orders and transportation of coal from Albion Depot to K.G. siding, Albion depot to BJ-II and BJ-VI sidings. According to the plaintiff under the terms of the work order the plaintiff was to provide 4000 M.T. of coal each day for transportation etc. and keeping in view the same, plaintiff maintained its huge infrastructure but the appellant/defendant failed to provide such quantity of coal to the plaintiff at the colliery for which the plaintiff suffered loss in maintaining such huge infrastructures. The Plaintiff submitted their rates against N.I.T. No. GM(S&P)/F-20/Coal/599 dated 11.3.1992 for transportation and allied jobs at Damoda colliery from 1.4.1992 to 31.3.1992. In view of the facts that the decision on the aforesaid N.I.T. could have taken time resulting in the suspension of transportation work defendant no. 2 asked the plaintiff to continue the work of transportation of coal and allied jobs on the same condition as earlier. On the basis of the assurance given by the defendants the plaintiff kept all its establishment and equipments at the site and continued further work of transportation of coal and allied jobs. The defendants failed to perform the part of contract that is providing adequate contracted quantity of 4000 metric ton coal per day causing substantial loss to the plaintiff. There was no item mentioned in the contract for (i) track clearing (ii) wagon levelling with the plaintiff had to do because rakes were not moving unless tracks cleaning and wagon levelling was done. This work falls under extra item for which the plaintiff is entitled to payment.
3. The plaintiff firm on the basis of the above averments brought the suit for damages for the loss suffered under the following different heads:
(b) Payment for idle Tippers, engaged by the plaintiff in connection with contracted work, but no actual work allotment.
(c) Pay Loaders engaged but no work allotted.
(d) Loss and damages sustained by the plaintiff during the period 1992-93 for coal transportation and allied jobs.
(e) Idleness of pay loaders.
(f) Extra work of track cleaning and wagon leveling.
(g) Claim for illegal deductions.
(h) Claim for the refund of S. deposit and earnest money.
(i) Claim for the work done and for coal stock lying in the railway standing.
4. The case of the appellant/defendants per contra is that the suit is barred under the provisions contained in Section 69 of the Indian Partnership Act. Averments made in paras 4 to 7 of the plaint regarding the tender notice, work order and the clause thereof has not been disputed. However, the interpretation of the terms and conditions of the contract as put forward by the plaintiff has been contested. It is asserted that plaintiff had never deployed 12 numbers of tippers or 4 numbers of pay loaders. Similarly the other assertion of deputing labour force for transportation of the 4000 metric ton
The court affirmed that failure to demonstrate actual loss precludes the forfeiture of security deposits, underscoring the principle that a breach must cause substantial damages to warrant penalties.
The court affirmed the right to forfeit a security deposit for non-completion of work as per contract terms, emphasizing the necessity of proving actual damages.
The obligation of the state to act fairly and reasonably in contractual disputes, and the importance of respecting the specific terms of a contract.
The court ruled that claims for damages in breach of contract require proof of actual loss, which was not established by the plaintiffs, leading to dismissal of the appeal.
Contractual obligations regarding delayed construction projects must consider the contractor's contributions to delays and enforceability of claims under economic duress.
Point of law: When the appeal is presented in terms of Section 96 CPC and when this Court is considering this appeal not only as a last Court of fact but also in terms of law, it is open for the appe....
The main legal point established in the judgment is that the recovery of an allegedly excess amount for transportation of coal was justified as per the transportation contract agreement.
The contractor is not liable for destination shortages absent sufficient evidence, affirming the court's findings on liability for withheld amounts.
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