HIGH COURT OF JUDICATURE AT MADRAS
ABDUL QUDDHOSE, J.
M/s. Chokhani International Ltd., New Delhi - Appellant
Versus
Union of India, Rep. by The Secretary, Ministry of Defence, New Delhi & Ors. - Respondents
C.S. No. 1070 of 2005
Decided On : 29-01-2024
Quantum Meruit - Recovery of Additional Services - Indian Contract Act, Section 70, Liquidated Damages - The court dismissed the suit filed by the plaintiff for recovery of additional services rendered based on the quantum meruit principle. The defendants were not found liable to pay for the alleged additional services as the plaintiff failed to prove that the defendants had agreed to compensate for the additional work. The court also found that the suit claim was an abuse of process of Court and was dismissed with costs.
Fact of the Case:
The plaintiff, a ship repairer, filed a suit for recovery of additional wharfage yard services amounting to Rs.2,71,97,987/- with interest. The defendants contested the suit, claiming that the suit claim was false, frivolous, and an abuse of process of Court.
Finding of the Court:
The court found that the plaintiff failed to prove that the defendants had agreed to compensate for the additional services rendered. The court also concluded that the suit claim was an abuse of process of Court and dismissed the suit with costs.
Issues: The issues framed by the court included whether the plaintiff was entitled to a decree, whether the plaintiff had done the additional work, whether the claim of the plaintiff had been fully settled, whether there was a delay in execution of work by the plaintiff, whether the plaintiff was entitled to the suit claim for the alleged additional work, whether the plaintiff was entitled to 18% interest per annum, and to what other reliefs the plaintiff was entitled to.
Ratio Decidendi: The court applied the principle of quantum meruit under Section 70 of the Indian Contract Act and found that the plaintiff failed to satisfy the requirements of Section 70. The court also observed that the suit claim was an afterthought and an abuse of process of Court.
Final Decision: The court dismissed the suit filed by the plaintiff with costs, finding that the plaintiff was not entitled to the suit claim for the alleged additional work and that the suit claim was an abuse of process of Court.
JUDGMENT
(Prayer: Plaint filed under Order IV Rule 1 of the Original Side Rules and Order VII Rule 1 of the C.P.C. and Order VIII Rule 4 of Original Side Rules and Order XXXIII Rule 1 of C.P.C. to pass a decree in favour of the plaintiff against the defendants for Rs.2,71,97,987/- with interest on Rs.1,77,47,463/- at 18% p.a. from the date hereof until the date of payment in full and for the costs of the suit.)
1. This suit has been filed by the plaintiff as a quantum meruit action. Quantum meruit is a latin phrase and it means "what one has earned" or "as much as he has earned". In simpler terms, it refers to the actual value of the services rendered or performed. As per the quantum meruit principle, even if there is no specific contract, there is an implied promise to pay a reasonable amount for the labour and material furnished.
2. The plaintiff claims that, for the additional services rendered by them to the defendants, the defendants are liable to pay despite there being no specific promise made by the defendants under the contract to pay for the said services. According to the plaintiff, based on quantum meruit principle, there is an implied promise made by the defendants to pay the plaintiff for the additional services rendered by them as the defendants have benefited from the additional services.
3. The suit has been filed by the plaintiff based on quantum meruit principle for the recovery of the sums allegedly payable towards additional wharfage yard services amounting to a sum of Rs.2,71,97,987/- together with interest on Rs.1,77,47,463/- at 18% p.a. from the date of the plaint till the date of realisation.
4. The plaintiff is a ship repairer. On 20.06.1995, the defendants issued a refit order and entrusted the work of repairing its ship CGS Varaha to the plaintiff. The ship was entrusted on 04.07.1995. The special refit value as per the refit order dated 20.06.1995 was Rs.535 lakhs and the time limit for completion of the repair work by the plaintiff was fixed at 270 days. According to the plaintiff, there was a delay in completion of the work by the plaintiff only on account of the third defendant, as they had belatedly obtained sanction for purchase of spares and for additional work. According to the plaintiff, the third defendant, who was monitoring the refit work, insisted for additional works. Thereafter, Additional Work Requisition Form (AWRF) was approved for Rs.129 lakhs. According to the plaintiff, this additional work was also done by them to the defendant's satisfaction. According to the plaintiff, even in this package, the defendants deducted maximum 10% towards liquidated damages from the plaintiff's bill without any fault on plaintiff's part. According to the plaintiff, they had no option but to suffer this unjust and unlawful deduction because of business expediency.
5. According to the plaintiff, the vessel CGS Varaha was delivered in perfect condition to the satisfaction of the defendants on 09.06.1998. However, according to them, despite several reminders, the defendants failed to pay the plaintiff towards additional days of docking and wharfage yard services which work has been additionally done by the plaintiff at the request of the third defendant which does not form part of the special refit order dated 20.06.1995 issued by the defendants in favour of the plaintiff.
6. Under the aforementioned circumstances, the suit has been filed for recovery of a sum of Rs.2,71,97,987/- together with interest on Rs.1,77,47,463/- at 18% p.a. from the date of the plaint till the date of realisation.
7. However, on the other hand, the defendants in their written statement have pleaded that the suit is neither maintainable in law nor on facts. According to the defendants, the suit claim is false, frivolous, vexatious and is an abuse of process of Court.
8. According to the defendants, the Coast Guard Ship CGS Varaha was ent
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