DALMIA CEMENT COMPANY, LIMITED Vs. ASGLOURDUSAMI PILLAI

JUDGEMENT

(1.) These are two connected appeals. They arise out of a suit for damages for breach of a building contract stated to have been committed by the defendant company in refusing to get a cement factory, or in any case, certain material portions thereof (and described as Raw Meal silos, workshops and stores and Lepol Kiln) constructed by the plaintiff. The plaintiff alleges that in response to a written invitation to offer for rates and terms at or on which persons who were willing to undertake the construction of a factory as well as subsidiary buildings to be raised in connection with the defendant company's new cement works at Kalakudi, Lalgudi Taluk (contained in a notice published by the latter and now embodied in the contract. Ex. A) he submitted a tender on the 26 May, 1938, under his covering letter Ex. B along with a deposit of Rs. 1,000 that was required to be made with the tender. This was accepted by the defendant company on the 2nd June, 1938, and the rates given by the plaintiff in his tender form part of the contract (Schedule B). The plaintiff alleged in his plaint that he was to supply " all the labour and materials needed for the works specified in the drawings supplied as per Clause 3 of the said agreement" and was required to make a deposit of Rs. 5,000, as the approximate cost of the work thus entrusted to the plaintiff amounted to Rs. 1,50,000 in accordance with the terms of the agreement. He states that he made the deposit, entered on his duties and made all arrangements necessary for the carrying out of the work.

(2.) These consisted of, according to the plaintiff, constructing temporary sheds and other conveniences for a large number of workmen, getting the necessary materials, tools and plants, appointing technical staff necessary for the purpose and making advances to the workmen. The plaintiff states that after all this had been done and excavation work had proceeded for a few weeks, the defendant company's manager decided to substitute metal broken from limestone for granite stone and as no rates had been asked for or tendered in respect of such work, he suggested an unreasonable reduction in the rates which the plaintiff could not accept. The plain-tiff asserts that from the discussion that took place between him and the servants of the defendant company and from their attitude he had reason to apprehend that they were trying to terminate the plaintiff's agreement on account of the offers made by other contractors to do the work at lower rates. It is then stated in the plaint that while the plaintiff was continuing to do the work, he found that the foundations excavated by the plaintiff and the other works given to him were being filled with concrete and carried out by other petty constactors although the entire work had, according to the contract between the parties to be done by the plaintiff for the due performance of which he had secured and maintained a large number of workmen at considerable cost in addition to the collection of all necessary tools and plant and large quantities of granite, construction of sheds and appointment of technical staff. He thus claimed a sum of Rs. 14,000 as damages for the breach of the contract and Rs. 2,666-14-3 for the work actually done by him. As the defendant company had paid Rs. 2,000 to the plaintiff for what he had done, a suit for Rs. 14,666-14- was instituted by him against the defendant company.

(3.) In their written statement, the defendant company did not deny that the plaintiff's tender to do certain work had been accepted by them but alleged that under the agreement between the parties, there was no obligation on their part to have any or all the works done through the plaintiff's agency and that they had the option to have such portion or portions of the works carried out as they or their authorised representative chose to do. They alleged that in pursuance of the plaintiff's agreement, the site for excavation of foundations of Raw Meal Silos, Lepon kiln workshop, etc., was marked out by their assistant engineer and the plaintiff was doing excavation work till about the first week of August, 1938; that while this work was in progress, the use of limestone jelly in place of granite stone was suggested by the head office for mass concrete in foundations and as aggregate in reinforced concrete work and that inasmuch as they were at liberty to make any alteration, addition or deviation in the contract, they informed the plaintiff of the change of the rates which they were prepared to pay for the limestone concrete in respect of which there was no mention in the agreement. It was denied on behalf of the defendant company that there was any "agreement as regards the rates for the substituted material, for mass concrete in foundations, etc." (which in fact the plaintiff did nowhere allege) or that they had committed any breach of the contract and were liable in damages. It was contended on their behalf that the plaintiff himself had in his letter dated the 6 August, 1938, recognised that the original contract had ceased to be operative and as in any case he did not continue further execution of work and violated the agreement, if one subsisted, the defendant company were justified in terminating the same and in employing other contractors for filling the excavated foundations. They alleged that the amount actually payable to the plaintiff for the work done by him was Rs. 1,822-9-0 but to obviate an unnecessary dispute they had paid a sum of Rs. 2,000 instead.