SHIV DAYAL KAPOOR Vs. UNION OF INDIA

JUDGEMENT

(1.) This is a plaintiffs first appeal from the judgment and decree of the Court of Subordinate Judge, Delhi dismissing the plaintiffs' suit, but leaving the parties to bear their own costs. The plaintiffs are seven in number, out of whom plaintiff No. 5 is a minor. Plaintiffs Nos. 2 to 5 are sons of plaintiff No. 1. The first defendant is the Union of India and the second defendant is Captain S. Kirpa Ram. The claim in the suit is for recovery of Rs. 72,266/13/-and for the grant of mandatory injunction or in the alternative for recovery of Rs. 1,47,730/127-.

(2.) The second defendant, who is a Government Contractor, has been carrying on business under the name and style of R. S. Captain Kirpa Ram and Sons. The Central Government had invited tenders for supply of door frames and window frames (Chaukats) etc. and shutters of hard and soft wood. The second defendant submitted his tender in his business name of Captain S. Kirpa Ram and Sons for C. P. Teak wood, Deodar and Kail. In the month of February 1948, the Government made a new proposal to defendant No. 2 to make the entire supply in Teak wood if he would, charge at the lowest rates which had been tendered by different tenderers. An agreement was thus brought about and the agreement form was signed by defendant No. 2 on 27th of July, 1948. On behalf of the Governor General of India in Council, the Chief Engineer signed the agreement on 18th December, 1948 (vid Exhibit D.J.) Under this agreement the second defendant was to use C. P. Teak wood but in February, 1949, the terms of the contract were changed and defendant No. 2 was to execute the contract partly in Teak wood and partly in Deodar wood, The reason alleged for this change was that there was considerable difficulty in procuring railway wagons for transport of Teak wood from the Central Provinces. By this change, the quantity of Teak wood to be supplied was reduced to 5,58,000 square feet. To distinguish this contract from other contracts which were held by the second defendant from the Central Public Worts Department, this contract was styled "Captain S. Kirpa Ram and Sons (Woodwork)". The entire supply was to be completed within ten months. Clause 2 provided:

(3.) Owing to financial difficulties, it is stated that the second defendant could not finance the execution of the work. Before the agreement was signed on behalf of the Government, the second defendant approached plaintiffs Nos. 1 to 4 with a request to finance the business to which they agreed subject to certain terms. Plaintiffs 6 and 7 also agreed to join, A formal agreement was drawn up on 30th of "August, 1948 and it was executed between plaintiffs Nos. 1 to 4 and plaintiffs Nos. 6 and 7 of the one part and the second defendant of the other (vide Exhibit P. 16). By its terms, plaintiffs Nos. 1 to 4 agreed to advance up to Rs. 2,00,000. The 5th plaintiff was admitted to the benefits of the partnership. This agreement was modified by a later agreement dated 15th April, 1949, whereby the plaintiffs Nos. 1 to 4 agreed to contribute Rs. 3,00,000/-. Defendant No. 2 was entitled to profits and was also liable to losses in the raiio 4 annas 3 pies in the rupee. The agreement as modified was sent to the Central P.W.D. and its receipt was acknowledged by letter dated 12th of May, 1949 (vide Exhibit P. 18). It is said that the plaintiffs in order to carry out the contract erected a factory at considerable expense, on a site near Central Public Works Department Warehouse, Factory Road, New Delhi, which had been allotted by the Government. Considerable sum of money was spent on the erection of the-building and for connecting the premises with the electric mains. The total cost for this construction as detailed in Annexure 'A' attached with the plaint comes to Rs. 90,977/37-.