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2007 Supreme(UK) 163
2007 UAD 572
SUPREME COURT OF INDIA
Hon’ble Dr. Justice Arijit Pasayat &
Hon’ble Mr. Justice Lokeshwar Singh Panta
Civil Appeal No. 7333 of 2004
STATE OF KERALA & ANR. – Appellants
Versus
M.A. MATHAI – Respondents
Decided on : 9.4.2007
For the Respondents:Mr. T.G. Narayanan Nair, Advocate
Headnote:Indian Contract Act, 1872 - Sec. 55, 56 — Under the Indian law — In spite of there being a contract between the parties, whereunder the contractor has undertaken not to make any claim for delay in performance of the contract occasioned by an act of the Employer — Such claim by contractor still entertainable in one of the following situations — (i) If contractor repudiates contract exercising his right to do so under Sec. 55 of the Contract Act — (ii) Employer gives an extension of time either by entering into supplemental agreement or by making it clear that escalation of rates or compensation for delay would be permissible — (iii) If contractor makes it clear that escalation of rates or compensation for delay shall have to be made by the employer and the employer accepts performance by the contractor in spite of delay and such notice by the contractor putting the employer on terms. (Para 8)
Hkkjrh; lafonk vf/kfu;e] 1872 & /kkjk 55] 56 & Hkkjrh; fof/k ds vuqlkj & i{kdkjksa ds e/; lafonk gksrs gq,( ftlesa fd lafonkdkj ¼Bsdsnkj½ us opu fn;k gS fd og lafonk ds vuqikyu esa gqbZ nsjh ds fy, dksbZ nkok ugha djsxk tks fd fu;kstd ds dR; }kjk ?kfVr gqbZ gS & bl izdkj dk nkok lafonkdkj ¼Bsdsnkj½ }kjk rks Hkh fuEufyf[kr n'kkvksa esa fopkfjr fd;k tk;sxk & (i) ;fn lafonk dkj ¼Bsdsnkj½ }kjk lafonk dk fujkdj.k lafonk vf/kfu;e dh /kkjk 55 o 56 esa fn;s x;s vf/kdkjksa ds rgr fd;k x;k & (ii) ;fn fu;kstd }kjk le; dh vof/k c<+k nh xbZ gS pkgs og lafonk ds vuqiwjd djkj }kjk ;k ;g Li"V dj ds fd njksa esa o`f) ;k nsjh ds fy;s {kfr vuqns; gksxh & (iii) ;fn lafonkdkj ¼Bsdsnkj½ }kjk Li"V dj fn;k x;k gS fd fu;kstd }kjk dh xbZ njksa esa o`f) ;k nsjh ds fy;s {kfr mls Lohdr gS] lafonkdkj ¼Bsdsnkj½ }kjk vuqikyu esa nsjh gksrs gq, vksj lafonkdkj ¼Bsdsnkj½ }kjk bu 'krks± dh lwpuk fu;kstd dks ns nh xbZ gSA ¼izLrj 8½
Dr. Arijit Pasayat, J. — Challenge in this appeal is to the judgment rendered by a Division Bench of the Kerala High Court dismissing the appeal filed by the appellant - State and its functionary questioning legality of the judgment and decree in O.S. No. 859 of 1988 on the file of the Sub Court, Trichur. The suit was filed for recovery of money in connection with the award of work undertaken by the responent-plaintiff who is the contractor.
2. The High Copurt was of the view that the court below had fixed award of damage of Rs. 9,53,669/- and found that the plaintiff was entitled to damage under other head and, therefore, restricted the decretal amount to Rs. 10,00,000/-. The appeal was accordingly dismissed.
3. In support of the appeal learned counsel for the appellant submitted that the letters on which reliance had been placed show that the contractor was not doing the work within stipulated period and had been asked for to apply for extension. The basic stand of the plaintiff-respondent was that the extensions had been sought for and supplemental agreements were executed not on the free will and free consent of the plaintiff but it was due to circumstances which prevailed at that time which necessitated the plaintiff to agree to the commands of the defendants. To put it differently as noted above the plaintiff had contented that it was due to coercion that these supplemental agreements were executed. The trial court concluded that on the threat of forfeiture, re-allocation and re-arrangement at the cost of the plaintiff the execution of supplemental agreement was done. It is pointed out that there was no clause for any escalation. It was wrongly assumed by the trial court that the supplemental agreements and declarations made by the plaintiff were not binding on him as it was not obtained by free consent and free will and in the normal course of events.
4. In response, learned counsel for the respondent submitted that the amounts awarded were not for damages and it was only in respect of extra work done that the amounts has been awarded. It was submitted that the department itself had recommended for payment for the extra work done and as per rates under the contracts the amounts have been awarded. Though the Government did not agree to the proposal, that itself shows about the genuineness of the respondent’s claim. In respect of another contract the extra amounts have been paid.
5. The trial court and the High Court appear to have been totally confused about the nature of the suit. The plaint itself indicated that it was a “suit for recovery of money for damages”. In fact the High Court itself observed at para 8 that the primary issue related to assessment of damages. It also found that the plaintiff was entitled to damages under various heads.
6. Additionally, the trial court concluded that the supplemental agreements (Ex. B-2 to Ex. B-6) and Declarations (B-10 to B-14) were not at all binding on the plaintiff. If that was really so, there could not have been any extension. The finding that these documents were not obtained by free will and free consent and in the normal course of events, to say the least, is an inferential conclusion not supported by any evidence.
7. As noted above, the trial court proceeded on the basis as to whether plaintiff was entitled to damages and if so what is the amount and quantum is to be fixed. It was noted that being a suit for damages, the plaintiff was claiming so many items of damages in terms of money involving many calculations. This is contrary to respondent’s plea before us. Their stand is that the amount was not for damages but for extra work done. As noted above it was only a suit for damages. In General Manager, Northern Railway and another v. Sarvesh Chopra [2002 (4) SCC 45] it was inter alia observed as follows :
“In our country question of delay in performance of the contract is governed by Sections 55 and 56 of the Indian Contract Act, 1872. If there is an abnormal
