STATE OF GUJARAT Vs. MOHANLAL MOTILAL AND CO

JUDGEMENT

(1.) The plaintiff Contractor had filed Special Civil Suit No. 21 of 1974 in the Court of the Civil Judge (S.D.) Bhavnagar against the State of Gujarat for recovering Rs. 3 14 407 with 12 running interest. The said suit was partly decreed by the Civil Judge (S.D.) Bhavnagar by his judgment and decree dated 7th December 1977 by holding that plaintiff No. 2 was entitled to recover Rs. 64 920 with interest at the rate of 6 per cent per annum from the date of filing the suit till realisation. Against the said judgment and decree the State of Gujarat has filed First Appeal No. 215/78.

(2.) The Contractor has filed First Appeal No. 371/78 for recovering the remaining amount as per the claim made in the suit.

(3.) With regard to the other item the learned advocate for the Contractor had not pressed it except that he had vehemently submitted that the trial Court materially erred in not passing decree for refund of the security deposit of Rs. 13 431 As against this the learned advocate for the State submitted that because the Contractor had abandoned the work and has commited breach of contract the Department was entitled to forfeit the security deposit or to levy penalty and/or recover damages because the Department has completed the work at the risk and cost of the Contractor. According to his submission the defendant has suffered heavy loss. The conditions of the contract Exhibit 95 provide that the Government is entitled to appropriate any sum of money due and payable to the Contractor under the contract against any claim of the Government. The said clause reads as under: