Back
1960 Supreme(P&H) 104
PUNJAB & HARYANA HIGH COURT
Tek Chand and Shamsher Bahadur JJ.
State Of Punjab
Versus
Hindustan Development Board Ltd.
First Appeal No. 119 of 1954,
Decided On : MAY 25, 1960
When a fundamentally different situation is brought about by the conduct of one party to a contract, even if it is not a breach of contract, the party in fault will not be allowed to take advantage of the new situation to the detriment of the other party.
Headnote:
CONTRACT - Implied Contract - Quantum Meruit - Plaintiff's Claim for Enhanced Rate for Work Done - Applicability of Section 70 of the Indian Contract Act - Reasonable Compensation for Work Done and Accepted by Defendant.
Fact of the Case:
Plaintiff, a company engaged in building work, entered into a contract with the defendant, the State of Punjab, to supply windows for 500 houses at a flat rate of Rs. 1/12/- per square foot. Later, the plan was revised, and the plaintiff was required to manufacture and supply panelled windows, which entailed higher costs. The plaintiff demanded an enhanced rate of Rs. 2/12/- per square foot, but the defendant refused to agree. The plaintiff completed the supply as per the new design, but the defendant did not agree to the enhanced rates, leading to arbitration and subsequent legal proceedings.
Finding of the Court:
1. There was no agreement between the parties as to the rates at which the plaintiff was to be paid for the revised work. 2. A flat rate of Rs. 2/3/- per square foot would be a reasonable rate for all the work done by the plaintiff. 3. The plaintiff is entitled to be paid a sum of Rs. 11,509/14/6 in all, after deducting the amount already received under the award.
Issues: 1. What was the rate at which the plaintiff agreed to work after the change of design? 2. If no agreement is proved, at what rate the plaintiff is entitled to claim for the work done? 3. To how much money is the plaintiff entitled for the work done? 4. Is the plaintiff entitled to any interest on the amount due and if so, how much and at what rate?
Ratio Decidendi: 1. The rate of Rs. 1/12/- per square foot, originally agreed upon for glazed windows, cannot be deemed to be the rate for panelled windows as well, as there was no consensus ad idem between the parties regarding the making charges of windows of altered design. 2. The plaintiff is entitled to compensation under Section 70 of the Indian Contract Act, as the delivery of the panelled windows was lawful, the plaintiff did not intend to do so gratuitously, and the defendant enjoyed the benefit thereof. 3. The amount of compensation payable to the plaintiff should be determined on the basis of fair and reasonable rates, considering the market rate prevailing at the time the supplies were made.
Final Decision: The plaintiff's suit is decreed for a sum of Rs. 4,789-14-6, after deducting the amount already received under the award. The defendant's appeal is allowed to the extent that the decretal amount payable to the plaintiff is reduced from Rs. 16,299/13/- to Rs. 4,789-14-6. The plaintiff's cross-objections for an increased rate are dismissed.
Tek Chand, J.
1. This regular first appeal has been preferred by the State of Punjab and cross-objection have been filed by the respondent. This appeal arose out of a suit filed by the plaintiff for the recovery of Rs. 46,000.00 . The plaintiff is a Company engaged in building work. By a notice dated 9-2-1948 the Superintending Engineer, Development Circle (North) Ambala invited tenders for supply of windows and C-windows (Clerestory Windows) for 500 houses at Jagadhri Township. A contractor Dewan Raj Paul Nanda submitted his tender which was accepted and work was allotted to him at the flat rate of Rs.1/12/- per square foot but later on he could not perform the contract which was cancelled by the Superintending Engineer and the Executive Engineer was directed to have the work carried out by negotiation through some other contractor. The Executive Engineer negotiated with the plaintiff-company and it agreed to carry out the work at the same rate, that is at Rs. 1/12/- per square foot. It is the case of the plaintiff-company that it had undertaken to supply glazed windows in accordance with the plan and designs given to them by the Government. These windows were to be glazed but the costs of glass panes and fixing charges were to be borne by the Government. After the plaintiff had manufactured windows covering 2000 cft. In accordance with the original designs, the plan was revised and the plaintiff-company was required to manufacture and supply panelled windows, and panels were to be made by the plaintiff from other timber paid for them and with their labour. As a result of the revised plan higher costs were entailed as the work required more timber and labour. The plaintiff-company on 5-5-1948 asked the Executive Engineer Incharge for enhancement of the flat rate from Rs. 1/12/- per sq. ft. to Rs. 2/12/- per sq. ft. The Executive Engineer Incharge required the plaintiff to supply detailed analysis in support of the plaintiffs demand for enhanced rate which was done on 26-5-1948. The Executive Engineer recommended to the Superintending Engineer that the rates of the new work be enhanced from Rs. 1/12/- to Rs. 2/10- per sq. ft. It was also alleged that the Executive Engineer advised the plaintiff to carry on with the supply like a good contractor and that this would be in his own interest. The plaintiff consequently completed the supply as per new design but the Superintending Engineer did not agree to the enhanced rates and the matter had to be referred to arbitration. The arbitrator who was the Superintending Engineer himself, allowed only Rs. 6720.00 to the plaintiff under the terms of the award dated 15-2-1950. Both the award and the reference was later on set aside by the Senior Sub-Judge on objections having been preferred by the plaintiff-company. The plaintiff after serving notice as required under S. 80 of the Civil Procedure Code has instituted the present suit for recovery of Rs. 46,000.00 . This sum has been arrived at in the following manner as stated in the plaint.
"The windows which had been supplied by the plaintiff measured 52617.25 sq. ft. for which he had already been paid at the rate of Rs. 1/12/- per sq. ft. leaving a balance of Rs. 52,617/4/- at the rate of Re. 1/- per sq. ft. claimed in addition to the agreed rate. After deducting a sum of Rs. 6,720.00 which had already been received by the plaintiff under terms of the award, the plaintiff was due Rs. 45,897/4/- as the balance of the principal and further a sum of Rs. 413/1/- as interest at 6 per cent per annum. Thus the total claim comes to Rs. 46,310/5/- but the plaintiff having given up his claim for Rs. 310/5/- has sued for the recovery of Rs. 46,000.00 only."
2. The defendant denied the plaintiffs claim, and averred that after the plaintiff had supplied some windows the Superintending Engineer asked for the supply of panelled windows and on this the plaintiff requested to be paid Rs. 2/12/- instead of Rs. 1/12/- per sq. ft. Though the plaintif
