J U D G M E N T

(Heard through video conferencing)

This Second Appeal has been directed against the judgement and order of the I Additional District Court, Coimbatore, dated 31.01.2006 passed in A.S.No.

216 of 2003.

2. The appellant herein is the plaintiff and the respondents herein are the defendants in suit. For the sake of convenience the appellant is referred as the plaintiff and the respondents are referred as the defendants 1 & 2 during the course of this discussion.

3. The avernments of the parties in brief:

The plaintiff was a contractor registered with TWAD Board under unemployed Engineers Scheme. In response to the tender dated 11.11.1987 called by the defendants Department for the erection of certain structures for supplying drinking water within the Coimbatore Corporation, the plaintiff submitted his quotation and the same was accepted by the defendants. An agreement to this effect was executed between the plaintiff and the defendants on 25.03.1988. However the plaintiff was given with the work order on

21.01.1988.

3.1. Subsequent to the issuance of the work order, taking sand from Madhampatti Quarry for carrying out the work was not feasible. So the plaintiff requested the 1st defendant to change the quarry and also make necessary arrangement for availability of water to test the pipes laid down for the project. Despite the request sent by the plaintiff on 08.03.1988, the 1st defendant could change the quarry only on 10.05.1988 and he approved another quarry was situated beyond 65 kilometers.

3.2. Due to the delay and other inconvenience as stated above, the plaintiff could not carry out the work immediately. Considering the allocation of the quarry at faraway place, the 2nd defendant has asked the plaintiff to submit the revised rate and thereafter asked him to attend the meeting on 03.06.1988 for revision of rates. All of a sudden, the 2nd defendant sent a letter dated 31.05.1988, by stating that if the work is not completed the contract will be terminated.

3.3. The plaintiff sent a reply on 02.06.1988 and explained about his inability to complete the work due to the change of circumstances. Even before the discussion was over, the defendants had unilaterally revised the rate at their whims. Since the plaintiff could not accept the revised rate forced on him, he did not carry out the work. Thereafter the defendants sent a letter by cancelling the contract vide letter dated 11.07.1988. The said cancellation was illegal and against the principles of natural justice. The deposit amount was also not refunded to the plaintiff after cancelling the contract.

3.4. Again on 11.01.1994 the 2nd defendant sent an another letter in LR.No.6852F 102/JD03/DB stating that the Board suffered a huge loss by making the work done through an another agency and hence the plaintiff should pay a sum of Rs.5,63,322.86 as damages. The amount so claimed by the defendants as damages is illegal and arbitrary, beside it is barred by limitation. Hence the plaintiff has filed a suit for declaring the letter demanding compensation dated 11.01.1994 as null and void and consequently, for permanent injunction restraining the defendants from any manner implementing the said order by resorting to any recovery proceedings under Revenue Recovery Act.

4. The written statement of the defendant in brief is as under:

The terms and conditions enlisted in the agreement would bind the plaintiff since he has signed the contract only after fully understanding the same. The work was not carried out and completed owing to his lethargy. Only after holding the discussion with the plaintiff, the 2nd defendant fixed the rate at Rs.82.49 /M3. Even if the plaintiff had suffered any inconvenience and compelled to execute the contract, he could have settled the same by invoking the arbitration clause after completing the contract work. Despite knowing that the scheme is a time bound one, the plaintiff failed to execute the work at the earliest. The plaintiff has caused the loss due