K S E B Vs. C S COMPANY

JUDGEMENT

(1.) The plaintiff, Kerala State Electricity Board, in O.S. No. 345 of 1987 before the Sub Court, Trivandrum is the revision petitioner. The original suit was filed for settlement of accounts and for a declaration that the plaintiff is entitled to recover damages from the defendants. Defendants/Respondents who are a partnership firm and three of its partners took a contract under the plaintiff for the work of Kakkad Hydro Electric Project Construction of a concrete lined power tunnel. The work was allotted for a total amount of Rs. 5,57,20,680/- at 88% above the estimated rate. It is contended in the plaint that eventhough plaintiff gave an advance of Rs. 19 lakhs and also agreed to give 90% of the cost of machinery actually purchased by the defendants, defendants were not able to utilise it Defendants were short of funds, short of men and materials. Therefore, notice was issued to the defendants calling upon them to show cause why the contract with them should not be terminated. Thereafter, an attempt was made by the defendants to reconstitute the partnership firm by some of the partners. The work did not progress and in the above circumstances, Board terminated the contract. After terminating the said contract the work was re-tendered on 14.12.1985, after splitting the work in three parts and the total amount of the three contracts was Rs. 8,99.71 lakhs. Therefore, suit was filed.

(2.) Defendants filed written statement stating that eventhough allegations are denied the suit itself is not maintainable. It was contended that suit for settlement of accounts is not maintainable against a contractor. Therefore, the suit itself is not maintainable. The above was taken as a preliminary issue. Trial Court held that the suit is prima facie maintainable. This court in C.R.P.No. 1581 of 1990 held that the issue of maintainability of the suit can be considered along with other issues after adducing evidence in the suit. Meanwhile, defendants filed an indigent O.P. before the Sub Court, Trivandrum for damages claiming an amount of Rs. 7.50 crores alleging illegal termination of the contract. These two cross suits between the same parties are being jointly tried. While so, in February 1995, plaintiff/revision petitioner moved I.A.NO. 2235 of 1995 seeking amendment of the plaint. The main amendment sought for is to introduce a new paragraph as 8A claiming Rs. 4.51 crores as damages, this being the difference between the contract amount with the defendants and the contract amount as per the re-tender. In the relief portion, the relief of settlement of accounts was sought to be deleted and in its place a prayer for recovery of an amount of Rs. 450 lakhs with 18.5% interest from the date of suit was substituted. Defendants opposed the prayer on the ground that it will materially alter the nature of the suit and a suit for settlement of accounts cannot under law be permitted to convert into a suit for recovery of a specific amount. It was further contended that if the suit is amended, their case that the suit is not maintainable cannot be contended. Therefore, one of their main defence will be lost and it cannot be compensated by cost It was also contended that the claim had already become barred by limitation and hence the amendment if allowed, would result in revival of a barred claim. The Court below accepted the above contention and amendment was rejected. It is admitted that if new suit was filed, on the date of amendment, claim for damages for Rs. 4.51 crores could have been time barred. It is the contention of the revision petitioner that the amendment should have been allowed. There was already a prayer for declaration that plaintiff is entitled to damages. In the amendment application damages has only been quantified and there is no change in the nature of the claim and therefore, amendment ought to have been allowed.

(3.) Both sides argued first regarding the maintainability of the suit without amendment It was argued that a Full Bench of the Jammu and Kashmir High Court in Triloki Nath Dhar v. Dharmarth Counsel, Srinagar (AIR 1975 Jammu and Kashmir 76) held that no suit for rendition of accounts can be maintained between promisor and promisee or between two contracting parties. The scope of suit for account is limited to a certain number of cases for instance between one partner against another, between the beneficiary against the executor or administrator, between mortgagor against the mortgage, between cestui que trust against a trustee, between principal against an agent etc. There is no legal obligation to render the accounts between two contracting parties as there is no confusionary relationship.