IN THE HIGH COURT OF JUDICATURE AT MADRAS
N. KIRUBAKARAN, P.D. AUDIKESAVALU, JJ.
M/s. Chaitanya Builders and Leasing Private Limited, “Kakani Towers”, Chennai - Appellant
Versus
M/s. Rahul Foundations, Rep. by its Proprietor, Chennai - Respondent
O.S.A. No. 243 of 2017
Decided On : 18-02-2021
Limitation Act - Payment for Work Done - Article 113 - Summary
Fact of the Case:
The Plaintiff filed a suit for recovery of payment for construction work done for the Defendant. The Defendant resisted the suit, claiming poor quality of work and limitation.
Finding of the Court:
The court found in favor of the Plaintiff, holding the Defendant liable to pay the principal sum with reduced interest. The court rejected the limitation defense and granted interest based on the Interest Act and Code of Civil Procedure.
Issues: 1. Whether the suit claim is barred by limitation? 2. Entitlement of the Plaintiff to recovery of the claimed sum. 3. Defendant's entitlement to debit the cost of rectification. 4. Other relief the Plaintiff is entitled to.
Ratio Decidendi: The court applied Article 113 of the Limitation Act, 1963, and the Interest Act, 1978, to determine the period of limitation and grant of interest. It emphasized the distinction between 'when the right to sue accrues' and 'when the right to sue first accrues' in interpreting the limitation provision.
Final Decision: The impugned judgment and decree were upheld with a modification to reduce the rate of interest. The appeal was dismissed with the parties bearing their respective costs.
JUDGMENT :
P.D. Audikesavalu, J.
Prayer: Original Side Appeal filed under Order XXXVI Rule 1 of the Original Side Rules read with Clause 15 of the Letters Patent, praying to set aside the Judgment and Decree dated 06.02.2017 in C.S. No. 463 of 2011.
(through video conference)
1. The intra-court appeal arises out of the judgment and decree dated 06.02.2017 in C.S. No. 463 of 2011 passed by the Learned Judge on the Original Side of this Court.
2. The parties are hereinafter referred to as per their description in C.S. No. 463 of 2011 for the sake of clarity and convenience.
3. We have heard Mr. J.Sivanandaraj, Learned Counsel appearing for the Defendant and Mr. K.V.Babu, Learned Counsel for the Plaintiff and perused the materials placed on record, apart from the pleadings of the parties.
4. The Defendant had issued a Work Order and Supplementary Work Orders to the Plaintiff for construction in its commercial project at Royapettah High Road, Chennai as per the particulars shown below:-
| Ex.No. | Date | Description | Value |
| P-1 | 13.11.2006 | Work Order | Rs. 1,17,98,260.00 |
| P-2 | 11.02.2007 | Supplementary Work Order | Rs. 1,93,900.00 |
| P-3 | 02.11.2007 | Supplementary Work Order | Rs. 3,83,300.00 |
| P-4 | 15.11.2007 | Supplementary Work Order | Rs. 6,96,100.00 |
It has been mentioned in the Supplementary Work Orders (Ex. P-2 to P-4) that all other terms and conditions remain the same as per the Work Order (Ex. P-1). It is admitted by both parties that the entire construction in that project had been completed in March 2008 and the periodical bills raised by the Plaintiff had been paid by the Defendant from time to time during the contract period, except the final bill.
5. According to the Plaintiff, it had sent a final and revised bill on 25.06.2008 for a sum of Rs. 16,09,781.14 after deducting the sum of Rs. 5,72,848.67 towards payments directly effected to the sub-contractors while carrying out the construction project. Though the receipt of that final and revised bill had been acknowledged by the Defendant, payment towards the same had not been made, which necessitated the Plaintiff to issue a legal notice dated 09.04.2011 (Ex. P-6) and the Defendant sent a reply notice dated 05.05.2011 (Ex. P-7) repudiating liability. In such circumstances, the suit in C.S. No. 463 of 2011 had been instituted by the Plaintiff in the Original Side of this Court on 23.06.2011 for recovery of the aggregate sum of Rs. 32,77,718.14 comprising of Rs. 16,09,781.14 towards principal outstanding and Rs. 10,94,651.00 towards interest at the rate of 24% per annum from 25.06.2008 to 30.04.2011 and Rs. 5,73,286.00 towards service tax payable, in addition to interest from the date of suit and costs.
6. The Defendant resisted the suit by filing Written Statement contending that the Plaintiff was not entitled for the amount claimed on account of the poor quality of construction work for which the Defendant had to engage third parties to carry out rectification and incurred expenditure in that regard. It was also specifically pleaded that the Plaintiff had admitted the sub-standard work for which the Plaintiff was disentitled to any payment and that the suit claim was hopelessly barred by limitation.
7. The following issues had been framed for trial in the suit:-
(b) Whether the Plaintiff is entitled to the relief of recovery of a sum of Rs. 32,77,718.14 with interest thereon at the rate of 24% per annum?
(c) Is not the Defendant entitled to debit the cost of rectification from the Plaintiff’s account? and
(d) To what other relief the Plaintiff entitled?
The Learned Judge, while deciding the suit, considered the oral and documentary evidence adduced by the parties having regard to their respective pleadings and
Inder Singh Rekhi vs. Delhi Development Authority [(1988) 2 SCC 338]
Inder Singh Rekhi vs. Delhi Development Authority [(1988) 2 SCC 338]
Aries and Aries vs. Tamil Nadu Electricity Board [(2018) 12 SCC 393]
State of Rajasthan vs. Ram Kishan (AIR 1977 Raj 165 FB)
State of U.P. vs. Thakur Kundan Singh (AIR 1984 All 161)
Union of India vs. West Coast Paper Mills Ltd.
Khatri Hotels Private Limited vs. Union of India (2011) 9 SCC 126
Rukhmabai -vs- Lala Laxminarayan (AIR 1960 SC 335)
Assam State Electricity Board vs. Buildworth Private Limited (2017) 8 SCC 146
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