S JAGAT SINGH Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS appeal arises out of a suit filed by the appellant against the Union for recovery of Rs. 67,000 on the basis of a contract for the construction of certain works and in the alternative on the basis of quantum remit. The claim was contested by the Union, inter alia, on the plea of bar of limitation. The Union also set up a counter claim. The trial Court dismissed the claim of the appellant, both on the merits and on account of the bar of limitation. The counter-claim of the Union prevailed with the result that the appellant, who came to the Court with a claim of Rs. 67,000 against the Union, got in return a decree against him for Rs. 49,759.12 with costs.

(2.) ACCORDING to the appellant, the appellant entered into a contract with the Government of India for the construction of two additional wings in the Rangers College at Dehradun (Ex.D-l/A). "The tender was formally accepted on behalf of the Governor General of India in Council by the then Additional Chief Engineer on July 24, 1947, and the formal contract was signed by the then Executive Engineer in 1949. In terms of the contract work was to start on November 27, 1946, and to be completed by June 1947. It has been a common case of the parties that the work on the contract could not commence as agreed as the Union failed to hand over part of the site of work and to supply some of the material for the work. It has also not been in dispute that on account of the delay, the context in which the contract had been entered into was considerably changed on account of the partition of India and the disturbed conditions preceding and following it with the result that the appellant, who had carried out some work until August 11, 1947, abandoned the work and claimed payment for the work done on the basis of quantum meruit. It has also been a; common case of the parties that subsequently the question as to the resumption of the work by the appellant on the basis of revised rates in view of the unforeseen intervening circumstances was discussed between the representatives of the appellant and the Union and certain decisions with regard to the terms of resumption of work were arrived at which were set out in a letter of May 13, 1948, from the Superintending Engineer, Central Circle, Central Public Witness D., New Delhi, to the appellant, P-63. This is how the letter runs :-

(3.) IT is not in dispute that the appellant had agreed to carry out the work entrusted to him on the basis of rates which had been agreed to between the parties vide original contract. Ex. D-1/A. IT is also undisputed that on account of default on the part of the Union to make the site available and to supply the material required for the work, there was delay in the commencement of the work. IT is also beyond controversy that in view of the delay, unforeseen circumstances and situation arose which changed the whole extent in which the contract was entered into and, inter alia, made labour force scarce as well as costlier, besides raising the cost of material that may have to be secured by the appellant, in view of the rather unsettled and abnormal conditions on account of civil strife preceding and following the partition of India. IT is true, and this is how the trial Court has looked at the problem, that the default on the part of the Union did not entitle the appellant to abandon the work, even though these circumstances could have justified an extension of time within which the work had to commence or eventually to be completed. The abandonment of the work by the appellant was not, therefore, justified. This was, however, neither treated as a breach of the contract nor was it taken advantage of by Government because Government neither cancelled the contract at that stage nor entrusted it to any other contractor for completion apparently because it realised that the situation was partly of its making and partly because of adverse circumstances over which the appellant, in any event, had no control. The fact that in the unfortunate situation that emerged labour was not only scarce. but there had been increase in the cost both of material and labour was apparently considered justified by Government and this probably was the reason why no precipitate action was taken on behalf of Government even after the appellant could be said to have been at least technically in default. What transpired subsequently is of considerable significance and there was considerable controversy before us as to its nature and true impact. IT is admitted that the situation arising out of abandonment of work by the appellant was discussed and considered at a very high level between the representatives of the appellant and the representatives of Government, including the Additional Chief Engineer, as a sequel to which the Superintending Engineer, Central Circle, wrote on May 13, 1948, a letter to the appellant. Ex. P-63, the contents of which have been extracted above, conceding in categorical terms the right to the appellant, notwithstanding the stipulation to the contrary in the original contract, to be paid for future work at the enhanced rates, even though some ambiguity was left in the latter as to how the revised rates would be worked out. The letter clearly sets out a decision arrived at by the Additional Chief Engineer, IT is important to bear in mind that it is only the representation in the latter and the promise of enhanced rates that ultimately persuaded a recalcitrant contractor to resume the work and agree to complete it. Two things clearly emerge from this communication. In the first instance, the act of the appellant in abandoning the work earlier was clearly waived and secondly, the right of the appellant to complete the remaining work at enhanced rates was conceded by an authority, which was competent to bind the Government in that the formal acceptance was by an authority of equivalent status. IT is not in dispute that the appellant resumed the work on the basis of this representation and continued to carry it out until the Government took, what the appellant has described, and to our mind correctly, as "a somersault" with the letter of August 26/28, 1948, referred to above, by which the appellant was informed by the Superintending Engineer that the decision to allow revised rates for the completion of the work set out in Ex. P-63, was subject to the approval of "the Government of India", thereby implying as if the decision arrived at earlier was tentative and the appellant was, therefore, bound to complete the work on original rates until the same had been approved of by Government IT is at this stage that the appellant threatened to abandon the work on the ground that the decision did not need an approval and eventually, when this contention was not accepted, carried out the threat treating the position taken by Government as constituting a breach of the contract.