BENGAL NAGPUR RAILWAY COMPANY LIMITED RUTTANJI RAMJI Vs. RUTTANJI RAMJI BENGAL NAGPUR RAILWAY COMPANY LIMITED

JUDGEMENT

(1.) These consolidated appeals arise out of an action brought by the plaintiffs to recover, from the Bengal Nagpur Railway Company, Limited, (hereinafter referred to as "the railway"), a certain sum of money on account of the price of the work done by them for the railway. The circumstances which have led to the litigation may be shortly stated.

(2.) On March 31, 1920, one Ramji Madhoji, (described hereinafter as the contractor), the predecessor in interest of the plaintiffs, entered into three contracts with the railway for doing earth work, bridge work and miscellaneous work respectively, in the construction of a branch railway line known as the Amda Jamda branch. The terms of each contract, which were embodied in a document variously described as schedule of works or schedule of rates, prescribed, inter alia, the rates at which payments were to be made to the contractor for various items of work to be done by him.

(3.) In May, 1920, the contractor commenced work in the section of the line allotted to him ; but he soon found that, owing to the wild and uninhabited nature of the locality through which the line had to pass, and to other local disadvantages, it was difficult to induce labourers from distant places to come and work there ; and he encountered many other difficulties. He did not take long to realise that the rates specified in the schedules were wholly inadequate and asked for their enhancement. The railway recognised the reasonable ness of the claim and enhanced the rates in August, 1920, and framed new schedules of rates. But the contractor refused to sign the revised schedules, as he considered even the new rates to be inadequate. He was, however, asked to continue the work and on October 5, 1920, he received from the assistant engineer of the railway a letter in these terms :-