P.J. MATHAI Vs. THE STATE OF KERALA

JUDGEMENT

(1.) THE Plaintiff in O.S. No. 22 of 1972 on the file of the Subordinate Judge's Court, Trichur is the Appellant before us. That is a suit instituted by him against the State of Kerala for recovery of the balance amount said to be due to him in respect of the execution of a contract work with interest and costs. The Plaintiff was the successful tenderer for the construction of an earthen dam, well sluice, surplus sluice and surplus channel at Pathazhakundu, Talappilly Taluk as part of the Trichur Minor Irrigation Project. The tender submitted by the Plaintiff was accepted by the Department as per a communication dated 26th August 1964. But the proceedings for the acquisition of an important part of the work site, where from earth was to be quarried for the dam work, seems to have taken an inordinate length of time with the result that the site was handed over to the Plaintiff for commencement of the contract work only on 3rd February 1967. In the meantime, there had been a steep escalation in the labour charges, cost of materials, the cost of food to be supplied to the labourers, etc., and hence the Plaintiff put in representations as per Exts. P -2 and P -3 requesting that at least in respect of such portion of the work as he had been called upon to do in excess of the 110 per cent of the originally estimated quantity he should be sanctioned enhanced rates in accordance with the revised departmental scale of rates which was in force in 1967 and 1968. The work of construction of the dam, etc., was completed by the Plaintiff according to schedule and the site was handed over by him on 8th February 1969. Immediately thereafter the Plaintiff applied for the issuance of the requisite certificate for final payment under Clause 68 of the Madras Detailed Standard Specifications. Check measurement of the whole work was thereafter conducted by the Junior Engineer and the said process was completed on 23rd April 1969 and a final bill evidenced by Ext. B -17(a) was prepared by the Junior Engineer on 5th July 1969. As per that final bill the Junior Engineer recommended that Rs. 3,92,657 should be paid to the Plaintiff as balance amount due to him for the construction work. However, the matters did not move and the payment of the balance amount due to the Plaintiff as per the final bill prepared by the Junior Engineer was being indefinitely delayed. The Plaintiff thereupon issued a suit notice to the State Government as per Ext. B -6 dated 27th August 1969 demanding payment of the amount of Rs. 3,92,657 with interest at 12 per cent per annum from the date of completion of the work. In reply thereto the Plaintiff was informed as per Ext. A -2 dated 11th May 1970 that the Superintending Engineer, Minor Irrigation Circle had been directed to settle his claims and that the Plaintiff may therefore contact the Superintending Engineer, Minor Irrigation Circle, Trichur. Notwithstanding the said assurance held out in Ext. A -2, the Plaintiff was not paid the balance amount due to him, even after the lapse of several months subsequent to the despatch of Ext. A -2. The Plaintiff was therefore, forced to approach this Court by filing OP. No. 1560 of 1971 seeking the issuance of a writ of mandamus under Article 226 of the Constitution. It is only after receipt of the notice in the said writ petition that technical sanction for the revised estimate for the dam work was granted by the Chief Engineer as per Ext. B -12 dated 5th November 1971 and a certificate for payment of the final bill was issued by the Executive Engineer under Clause 68 of the Madras Detailed Standard Specifications as per Ext. B -7 dated 11th November 1971. Under the said certificate a sum of Rs. 3,90,720.24 was sanctioned to be paid to the Plaintiff subject to any legitimate deductions or retentions. On 11th November 1971 itself an amount of Rs. 3,68,730.41 was disbursed to the Plaintiff by the concerned Executive Engineer. That amount was arrived at after deducting from Rs. 3,90,720.24 a sum of Rs. 17,500 representing the security amount that had been originally refunded to the Plaintiff and a further sum of Rs. 4,489.83 representing the cost of some materials inclusive of sales tax, etc. While receiving the aforesaid amount the Plaintiff protested as per Ext. B -8 against the withholding of Rs. 17,500 being the security deposit which he was entitled to get back and also against the non -payment of interest of the final bill amount for the period subsequent to the date of completion of the work. Since the said protest was not heeded by the State Government the Plaintiff instituted the present suit for recovery of the balance amount due to him by way of refund of the security deposit as well as by way of interest. The lower court found that there had been inordinate delay on the part of the Defendant in effecting payment to the Plaintiff and that the Plaintiff has sustained consequential monetary loss on account of the same. But, it took the view that the Plaintiff is precluded from claiming interest from the Defendant in respect of the balance amount due for the execution of the contract work by reason of the provisions contained in Clause 69 of the Madras Detailed Standard Specifications. On this ground the Plaintiff's claim for recovery of interest was disallowed by the lower court. The court below, however, granted the Plaintiff a decree for recovery of a sum of Rs. 17,500 representing the amount of security deposit which had been withheld while disbursing the final bill amount and allowed the Plaintiff 6 per cent interest thereon from the date of suit till the date of realisation. In other respects the suit was dismissed without costs. It is against the said judgment and decree of the court below that the Plaintiff has filed this appeal.

(2.) THE main point urged before us on behalf of the Plaintiff concerns the claim for interest put forward in respect of the final bill amount of Rs. 3,68,730.41. It is contended by the learned Advocate for the Appellant that the view taken by the court below that Clause 69 of the Madras Detailed Standard Specifications imposes an absolute bar against any claim by the contractor for such interest is erroneous and unsustainable. It is also submitted that the Plaintiff is entitled to be awarded interest on the final bill amount inasmuch as he had made a specific demand for payment of interest as per Ext. B -6, dated 27th August 1969.

(3.) CLAUSE 69 then lays down that no omission by the Executive Engineer or the Sub -Divisional Officer to pay the amount due upon the certificate shall vitiate or make void the contract nor shall the contractor be entitled to interest upon any guarantee bond or payment in arrear, nor upon any balance which may, on the final submission of his accounts, be found to be due to him.