HIND CONSTRUCTION CONTRACTORS Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) These appeals by certificate of fitness granted by the High Court of Judicature at Bombay are directed against that Court's common judgement and decree dated September 9/10, 1968, passed in two cross appeals being First Appeals Nos. 245 of 1962 and 844 of 1961.

(2.) A contract for the construction of an aqueduct across the Alandi River at Mile No. 2 of the Nasik Left Bank Canal of the total value of Rs.1,07,000 was granted to the appellant-plaintiff (originally a partnership but later a proprietary firm of contractors) by the respondent-defendant (the State of Maharashtra) after the former's tender was accepted on June 17, 1955. On July 2, 1955 the Executive Engineer issued the work order to the appellant-plaintiff directing him to commence the work by July 5,1955 intimating in clear terms that the stipulated date for starting the work would be reckoned from July 5, 1955. The formal regular contract in prescribed Form B-2/1 of 1955-56 (EX.34)containing the terms and conditions as well as the Schedules, Specifications etc. was executed by the parties on July 12, 1955. A security deposit of Rs.4,936 was kept by the appellant-plaintiff with the respondent-defendant. The period for completion of work was fixed as 12 months from the date stipulated for commencement of the work, that is to say, it was expected to be completed on or before July 4, 1956. It appears that on the ground that the appellant-plaintiff had not completed the work as expected within the stipulated time the Executive Engineer by his letter dated August 27, 1956 (Ex.78) rescinded the said contract with effect from August 16, 1956. After serving a notice under S. 80 of the Civil Procedure Code the appellant-plaintiff filed a suit (being Special Civil Suit No. 23 of 1959) on August 28, 1959, in the Court of the Joint Civil Judge, Senior Division, Nasik making a claim for Rs. 65,000 in the aggregate against the respondent-defendant alleging wrongful and illegal rescision of the contract on the part of the respondent-defendant. The appellant-plaintiff's case was that the initial fixation of July 5, 1955 as the date for commencement of the work was nominal, that the area where the work was to be done had usually heavy rainfall rendering it impossible to carry out any work from July to November and that , therefore, it was the practice of the public Works Department to deduct the period of monsoon in case of such type of works and that the appellant-plaintiff had been orally informed that this period would be deducted or not taken into account for calculating the period of 12 months under the contract and that on this assurance he had commenced the work towards the end of December 1955. His case further was that in any event time was not of the essence of the contract, that on account of several difficulties, such as excessive rains, lack of proper road and means of approach to the site, rejection of materials on improper grounds by Government Officers, etc., over which he had no control, the completion of the work was delayed and that the extension of the time which was permissible under the contract had been wrongfully refused by the officers of the respondent-defendant. According to him none of these factors had been taken in to account by the government while refusing the extension and the contract was wrongfully rescinded and therefore, the respondent-defendant was liable in damages. The total claim of Rs. 65,000 comprised six items- (1) Rupees 4,936 being the amount of security deposit wrongfully forfeited by the respondent-defendant, (2) Rs. 10,254 being the amount due to him for the actual work done by him under Bill No. 1253 dated september 20, 1956 and which had not been paid for, (3) Rs. 7,375 being the value of the material collected by him on the site for work but which had been rendered useless on account of wrongful, recision, the 4th and 5th items sounded in damages, while the last item was interest from date of recision to the date of the suit.

(3.) The State of Maharashtra resisted the claim contending that time was of the essence of the contract, that the date fixed for commencement was real and not nominal and the 12 months period was fixed after all aspects of the matter had been taken into account; it was further contended that the appellant-plaintiff knew the situation of the site and the so-called difficulties, that there was no excuse for him for not doing the work during months of July to November, that the appellant-plaintiff failed to carry out the proportionate work during the periods fixed in the contract and that since the appellant-plaintiff had rendered himself incompetent to complete the work in proper time it had to rescind the contract and the recision was proper and for adequate reasons, it was further contended that the State was entitled to forfeit the security deposit which it did on the date when the contract was rescinded. The several items claimed by the appellant-plaintiff were denied by the State. It was denied that the material of the value of Rupees 7,375 remained on the site or that it was responsible for its non-removal from the site. Regarding items 4 and 5 the State denied its liability to pay the same as it was the appellant-plaintiff who had committed the breach of the contract.As regards the amount due under Bill No.1253 dated September 20, 1956 for the actual work done, it was contended that the State had to deduct the amount of penalty leviable under the contract and for the actual cement supplied to the appellant-plaintiff and after making deductions in that behalf only a sum of Rs. 700 would be due to the appellant-plaintiff.