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High Court of Judicature at Madras
P.R. SHIVAKUMAR, J.
P. Janakiraman
Versus
State of Tamil Nadu Rep. by the Superintending Engineer, Highways Chennai Circle
C.S. NO. 994 OF 2010
Decided On : 24-08-2012
CONTRACT - ROAD CONSTRUCTION - ADDITIONAL WORK - PAYMENT - INTEREST - DELAY - ESTOPPEL - PUBLIC INTEREST - CLAIM - REJECTION - MEASURE OF DAMAGES - REASONABLE RATE OF INTEREST - SECTION 80 CPC - SECTION 34 CPC - LIMITATION - POST DECREE INTEREST - CONTRACTUAL RATE OF INTEREST - BANK RATE OF INTEREST - EVIDENCE - BURDEN OF PROOF.
Fact of the Case:
Plaintiff, a contractor, entered into an agreement with the defendant, a government department, for the widening and strengthening of a road. During the course of the work, the plaintiff claimed additional payment for certain items of work, including granular sub base, jungle clearance, and gravel filling. The defendant rejected the claims, contending that the plaintiff was estopped from claiming a higher rate for the granular sub base, that the jungle clearance and gravel filling were not additional work, and that the plaintiff was not entitled to loss of profit and overheads due to prolongation of the contract. The plaintiff filed a suit for recovery of the claimed amounts, along with interest and costs.
Finding of the Court:
1. The plaintiff was estopped from claiming a higher rate for the granular sub base, as he had agreed to the rate specified in the contract and had not sought permission to proceed with the work on condition that the rate would be settled later. 2. The plaintiff's claim for payment for jungle clearance and gravel filling was rejected, as there was no proof of additional work undertaken beyond the quantity noted in the final measurement. 3. The plaintiff's claim for loss of profit and overheads due to prolongation of the contract was rejected, as the delay was attributable to the plaintiff's own actions and not to any act or omission on the part of the defendant. 4. The plaintiff was entitled to interest on the belated payment of the balance amount of the final bill and the retention amount, at the rate of 12% per annum from the date of default till the date of payment. 5. The plaintiff was entitled to proportionate costs from the defendant.
Issues: 1. Whether the plaintiff was entitled to receive additional payment for granular sub base work, jungle clearance work, and gravel filling work. 2. Whether the plaintiff was entitled to claim loss of profit and overheads due to prolongation of the contract. 3. Whether the plaintiff was entitled to interest on the belated payment of the final bill and the retention amount. 4. Whether the plaintiff was entitled to costs.
Ratio Decidendi: 1. A contractor is estopped from claiming a higher rate for work than the rate agreed upon in the contract, unless he has sought permission to proceed with the work on condition that the rate would be settled later. 2. A contractor is not entitled to payment for additional work unless he can prove that the work was actually undertaken and was not included in the original contract. 3. A contractor is not entitled to claim loss of profit and overheads due to prolongation of the contract, if the delay was attributable to his own actions or to unforeseen contingencies beyond the control of the other party. 4. A contractor is entitled to interest on the belated payment of the final bill and the retention amount, at a reasonable rate, from the date of default till the date of payment.
Final Decision: The suit was decreed in part. The defendant was directed to pay the plaintiff a sum of Rs.41,43,136.00, together with interest @ 12% per annum on Rs.28,04,755/- from the date of plaint till the date of decree and thereafter with a further interest at the rate of 6% per annum from the date of decree till the date of payment. The defendant was also directed to pay proportionate costs to the plaintiff.
The plaintiff has filed the suit on the following plaint averments:-
i) Plaintiff is engaged in the business of undertaking contracts for laying of roads, construction of bridges and culverts and other allied civil works. He has also been registered as a Class-I contractor in the Highways Department (State Level) in the State of Tamil Nadu. The State of Tamil Nadu, represented by the Superintending Engineer, Highways, Chennai Circle, invited tenders for the work of widening and strengthening of the road branching from K.M.11/8 of Sadras-Chengalpattu-Kancheepuram-Arakkonam-Thirutani Road to Pudupattinam (via) Vitalapuram K.M.0/0 -17/0. In the usual course of business, plaintiff submitted his tender on 29.05.2003 for the said work. The said work was allotted to the plaintiff accepting the lowest negotiated value of Rs.4,38,53,228/-under an agreement bearing No.Nil/2003-2004 dated 27.08.2003. As per the agreement, work was to be commenced on 27.08.2003 and targeted to be completed by 26.11.2004. However, due to unavoidable reasons, the work could be completed only on 04.04.2005.
ii) The agreement contains four schedules designated as schedules A to D. Schedule 'A' contains description of items to be executed by the plaintiff, the quantity to be executed, the relevant 'MOST' clauses and the rates for which the work is to be executed. In Sl.No.4 of Schedule 'A' of the agreement the description of the item of work has been noted as "granular sub base (S.G.Mix)/providing, laying and compacting well graded material on prepared sub grade in accordance with the requirements of the specifications. The material shall be laid in one or more layer as sub-base or lower subbase and upper sub-base as necessary according to the lines, grades and cross sections shown in the drawing or as directed by the Engineer." The relevant 'MOST' numbers for the same have been mentioned as 111, 112, 401 and 900. Granular sub base and the S.G.Mix sub base are different types of items and they require different types of execution. Granular sub base contains earth excavated from hilly region and it will contain mixture of stones (both big and small), variety of sand particles and various other things. S.G.Mix is only a mixture of sand and gravel. Both granular sub base and S.G.Mix cannot be laid together. Sub base has to be laid with either granular sub base or S.G.Mix. For maintaining good quality of road Granular sub base, shall be preferred.
iii) As there was ambiguity in Sl.No.4 regarding the nature of material to be used for laying the sub base, the plaintiff sought a clarification from the Divisional Engineer, Highways, Chengalpattu, by a letter dated 10.11.2003 regarding the type of sub-base to be provided - whether granular sub base or S.G.Mix sub base. A further clarification was also sought for as to the grading (grading-1, grading-2 pr grading-3), if granular sub base was to be used for laying the sub base. The Divisional Engineer, Highways, Chengalpattu issued a clarification in his letter No.4640/2003/JDO dated 19.11.2003 informing that the design traffic is more than 2 M.S.A. (Million Standard Axle) and granular sub base should be provided as per the 'MOST' specification 401 grading 1 to satisfy the minimum CBR (California Bearing Ratio) value of 30 to receive base over it. The plaintiff was requested to complete the laying of granular sub base as per the provisions contained in the MOST specification and was directed to produce the test results. In pursuance of the clarification issued, the plaintiff carried out the laying of granular sub base grading 1. Plaintiff also arrived at a rate analysis for granular sub base grading 1 as per table 400-1 as per MOST & H specifications for roads and bridges as well as rate analysis under Chapter IV - Sub-base, Bases (non bituminous) and shoulders-4-1(B) by mix in place method to carry out the granular sub base grading 1. The rate for the above specifications worked out at Rs.482.45 per cubic
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