ASSAM AGRICULTURAL UNIVERSITY Vs. MANJIT KUMAR BHATTACHARYA

JUDGEMENT

(1.) WHETHER communication of acceptance containing counter offer without there being a formal contract preceded by payment of earnest money constitutes a concluded contract, is the central question in the present first appeal. By challenging the judgment and decree dated 07.07.2003 passed by the learned Civil Judge (Senior Division), Jorhat in Money Suit No. 34/1998, the appellant has raised this question. According to the appellant, there was no concluded contract with the respondent/plaintiff and in that view of the matter the impugned judgment and decree for realization of Rs. 9,49,526/ -(Rupees nine lakh forty nine thousand five hundred and twenty six), being compensationed, is untenable and is liable to be set aside in cost.

(2.) THE respondent, as plaintiff, instituted Money Suit No. 34/1998 in the Court of learned Civil Judge (Sr. Divn.), Jorhat stating that pursuant to Notice Inviting Tender (hereinafter referred to as 'the NIT') dated 25.02.1992 for construction of first floor of vertical extension of the laboratory building at Regional Research Station, Diphu, the plaintiff submitted tender along with 8 (eight) others quoting Rs. 24,52,060/ - (Rupees twenty four lakh fifty two thousand and sixty) under Rule 13 Schedule III of the D.A.F.P. Rules, 1988 of the Assam Agricultural University Act. The Director, Physical plant of the appellant university informed the respondent on 07.08.1992 that works had been allotted to the plaintiff at the quoted rate of 20% above the A.P.W.D. Schedule of rates (building) for 1990 -91 and 89% above the APWD Schedule of rates (Sanitary & Water Supply) for 1981 -82 at the total tender value of Rs. 24,52,060/ - (Rupees twenty four lakh fifty two thousand and sixty) and thereby directed the plaintiff to deposit an earnest money of Rs. 49,050/ -(Rupees forty nine thousand and fifty) within 15 days for signing the formal tender agreement of work. Plaintiff claimed to have deposited a Bank Guarantee of the aforesaid amount and thereupon an agreement was signed on 18.08.1992. According to the plaintiff, even prior to signing of the agreement dated 18.08.1992, the defendant No. 3 issued final Work Order to him asking him to start the work in consultation with Executive Engineer -II, Director Physical Plant (DPP), Assam Agricultural University (AAU), Jorhat, within 15 days and to complete the work within 12 (twelve) months from the date of issue of the order. The plaintiff, accordingly, started work as per approved drawing and placed order for steel windows with ventilator of size 94.86 Sq. mtrs, Tubular truss of 988 Sq. mtrs, steel rod of 6, 8, 16 and 20 mm weighing 4000 Kgs. and also for construction of labour shed/Brick of 4 (four) trucks, Sand 3 (three) trucks, Chips 3/4" 5 (five) trucks and also performed other miscellaneous works like dismantling of existing house. The plaintiff claimed to have made advance payment to mason, carpenter and others amounting to Rs. 7,00,000/ - (Rupees seven lakh). In the mean time on 19.11.1992 the defendant No. 3 issued a letter informing the petitioner that the bank guarantee submitted by the petitioner could not be accepted and thereupon the plaintiff was asked to deposit Rs. 49,050/ - in the shape of Deposit at Call. By letter dated 12.12.1992, the plaintiff expressed his inability to do so and renewed his prayer for acceptance of the Bank Guarantee which was turned down by the University on 18.02.1993. However, on 20.03.1993 defendant No. 3 purporting to represent the university, asked the plaintiff to sign an addendum containing recital to the effect that the plaintiff could not deposit 2% earnest money in cash due to non -receipt of huge amount due to him from the University against works already done by him and so as per letter dated 31.10.1992, issued by the Legal Advisor, the Bank Guarantee in lieu of bank draft be accepted for accepting the agreement subject to the condition that amount covered by the bank guarantee would be recovered from the contractor at the earliest opportunity from his outstanding dues. But thereafter on 10.06.1993, the same defendant No. 3 informed him that the allotted work has been deferred for twin reasons, namely, lack of formal acceptance of tender and ongoing financial crisis of the university. A formal letter to that effect was also issued by the Director of Physical Plant on 07.09.1993. Despite several representations, the plaintiff was not permitted to resume the work and thus the plaintiff became entitled to the money for the work already done for which Executive Engineer also submitted L.O.C. for Rs. 3,00,000/ - for payment to the plaintiff. The Director of Physical Plant, retired in the mean time on 31.03.1993 and one Sri S.K. Gogoi assumed the charge and thereafter on 01.03.1996, the plaintiff found that there was an advertisement in the Daily Sentinel issued by the defendant No. 3 inviting tenders for construction of numbers of works including the work which was allotted to him and 30.05.1996 was fixed for submission of tenders which, however, was subsequently deferred to 09.07.1996. According to the plaintiff, the subsequent NIT, dated 01.03.1996 was illegal and this is why he preferred a writ petition before this High Court vide Civil Rule No. 2656/1996 whereupon this Court issued Rule and passed an interim order staying tender process on 10.06.1996. The plaintiff stated that total cost materials spent by him is Rs. 6,49,526/ - and he was entitled to payment of this amount by the defendants in addition to another sum of Rs. 3,00,000/ - being cost of agony suffered by him. The plaintiff also claimed interest at the rate of 20% per month. The suit for realization of Rs. 9,49,526/ - with 20% interest with effect from 01.03.1996 was the prayer made in the plaint.

(3.) THE defendants by filing written statement contested the suit. It is the case of the defendants that in terms of the NIT dated 25.02.1992, the Director was supposed to deposit 2% of the earnest money in the form of CDR/FDR duly pledged to Executive Engineer -II, DPP, AAU. Even by letter dated 07.08.1992 the plaintiff was directed in terms of the NIT to make deposit of Rs. 49,050/ - in the shape of deposit at call as contained in clause 5 of the NIT but the plaintiff defaulted to comply with the requirement of depositing the earnest money. In paragraph 7 of the written statement a specific stand has been taken by the defendants saying that no contract was concluded between the plaintiff and the defendants with a binding effect. It was also stated that in the absence of a formal contract there is no question of complying with the work order. In paragraph 10, on the other hand, it was pleaded that the addendum dispensing with a deposit of 2% of the earnest money was not accepted by the defendant No. 3 and accordingly the plaintiff was duly informed that agreement could not be executed in absence of the deposit of earnest money. Stand taken by the plaintiff at paragraph 10 of the plaint that 1% of the money was deposited by plaintiff by FDR has been specifically denied by paragraph 11 of the written statement reiterating the earlier stand. It was further pleaded at paragraph 17 that no contract was entered into between the plaintiff and the defendants and that conduct of S.K. Gogoi, who later on took over office of defendant No. 3, was not binding on the defendants. The defendants specifically denied the expenditure and the quantum thereof claimed to have been made by the plaintiff vide paragraph 19 of the plaint. In paragraph 22, on the other hand, it was stated that on 10.06.1993 itself the plaintiff was informed that the work under the NIT had been deferred. With all these averments apart from specific denial of the recital made in the plaint the defendants prayed for dismissal of the suit with cost.