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2023 Supreme(Online)(Bom) 24913
BOMBAY HIGH COURT
ANIL L. PANSARE, J
M/s J.E.N. Builders Vidya nagar colony, Bhandara Through Partners Shri V.E.Epan s/o Epan Aged about 54 years, occu: Contractor – Appellant
Versus
The Executive Engineering Public Works Division Bhandara, Tah. & Dist. Bhandara – Respondent
Second Appeal No. 331/2007
For the Appellants/Petitioners: Mr.D.C.Chahande
For the Respondents: None
The court upheld that variations in contract work are permissible under agreed clauses, and unilateral modifications by the Engineer-in-charge remain binding upon the contractor without their consent.
Headnote:(A) Contract Law - Powers of Engineer-in-charge - The significance of contractual clauses regarding alterations and the binding nature of modifications made without contractor's consent, are paramount in adjudicating disputes related to deviations from contract terms. The court emphasized adherence to agreed clauses as governing modifications. (Paras 6, 8, 10)
(B) Contractual Obligations - Contractual terms provide mechanisms for addressing claims regarding deviations; the party's failure to assert claims undermines their grievances. (Paras 9)
Facts of the case:
This case involves a dispute arising from construction contract deviations where the contractor alleged unjust terminations and forfeiture of security deposits.
Findings of Court:
The alterations and reductions in work quantity were permissible under the contract terms, justifying the termination and forfeiture of security deposits.
Issues: The court scrutinized whether deviations exceeding stipulated percentages were permissible without specific provisions and if unilateral modifications were binding on the contractor.
Ratio Decidendi: The court ruled that deviations and modifications are permissible as outlined in the contract, emphasizing the contractor's obligations under such alterations.
Result: The appeal is dismissed.
| Table of Content |
|---|
| 1. fairness in presenting arguments. (Para 1 , 2) |
| 2. contract execution errors and their implications. (Para 3 , 4) |
| 3. modification authority under contract clauses. (Para 5 , 6) |
| 4. contractor obligations and claim substantiation. (Para 7 , 8) |
| 5. decision on contract terminations and legal binding. (Para 9 , 10) |
Heard Mr.D.C.Chahande, the learned counsel for the appellants. The Respondents though served, are absent.
2. This Appeal has been admitted on the following substantial questions of law :-
“(1) Whether the deviation of the work from original quantity of work in the contract to the tune of more than 60% is permissible as per terms and condition of the contract in absence of any specific provision?
(2) Whether the document i.e. Modified design and drawing unilaterally reduced/ executed by the respondent is binding upon the party/ plaintiffs who was not present or signed the said document?
(3) Whether reduction of quantity of work by the respondent more than 25% by complete change of drawing/ design of the building and further terminating of the contract is justified in absence of specific provisions in the admitted documents/ contract is justified?
3. The appellants were the original plaintiffs whereas, the respondents were the original defendants. The respondents/defendants had awarded the work of construction of Workshop Building for Industrial Training Institute at Bhandara to the appellants. The appellants deposited the security deposit of Rs. 81,000/-. The layout was given and the drawings were handed over to the appellants. The appellants found that the drawings given were altogether different and there was a huge deviation. The appellants studied the drawings and the cost of work was reduced to Rs. 18.60 lakhs from the original cost of Rs. 28.68 lakhs. Three items viz. Item Nos. 15, 39 and 43 of Schedule B of the tender were reduced by more than 60%. The appellants, therefore, requested the Respondent-Department to execute the work at the rate 4.96% above the scheduled rates. The request of the appellants was turned down. Thereafter, a fresh tender was called by the respondents. The amount of security deposit paid by the appellants was forfeited by the respondents. The appellants, therefore, filed Special Civil Suit No.43/1991 before the learned Civil Judge, Senior Division, Bhandara.
4. The trial Court, after considering the evidence - oral and documentary, and after hearing both the parties, was pleased to decree the suit vide judgment and decree dated 04.05.1995. The respondents preferred an appeal against the same before the District Judge, Bhandara in RCA No.119/2000. The first appellate Court vide judgment and decree dated 29.01.2007 set aside the trial court’s judgment. The appellants, being aggrieved by the reversal of the decree, have taken exception to the judgment passed by the first appellate Court, by way of present appeal, which has been admitted on the substantial questions of law quoted hereinabove.
5. Heard Mr.S.D.Chahande, learned counsel for the appellants and with his assistance, gone through the record. The respondents are absent,though served. The controversy revolves around the powers of the Engineer-in-charge to alter the specifications and design and consequences of such alterations and specifications. This controversy will have to be resolved in terms of the tender clauses accepted by both the parties. Clause No. 14, 15 and 37 are relevant and, therefore, are reproduced herein-below :-
“14. The Engineer-in-charge shall have power to make any alterations in, additions to, the original specifications, drawings, designs and instructions, that may appear to him to be necessary or advisable during the progress of the work and the contractor shall be bound to carry out the work in accordance with any instructions in this connection which may be given to him in writing signed by the Engineer-in-charge and such alteration shall not invalidate the contract; and any additional work which
