Decided on October 28,1991

S. M. SAREEN Appellant
STATE Respondents


V.K.MEHROTRA,J. - (1.) A learned single Judge of this Court (C. R. Thakur, J.) decided civil suit No. 6 of 1975 on March 5, 1979. He dismissed it. Plaintiff Surinder Mohan Sareen has assailed that decree in the present regular first appeal.
(2.) THE case with which plaintiff Sareen came to this Court was that he was a Government contractor and submitted an item rate tender, in response to a notice issued by the Executive Engineer, HP PWD, Mandi Division, Mandi, calling for tender for the construction of R.C.C. Tee Beam Bridge over Suketi Khad (270 feet span) on Shimla -Mandi road. This tender was accepted by the Chief Engineer, HP, PWD, through his letter dated March 22, 1955 addressed to the Superintending Engineer, First Circle, Shimla, saying : "... As recommended by you, the item rate lowest tender of Shri S. M. Sareen is hereby accepted at Rs. 2,30,172.13 i.e. 7.45% above the rate put to tender ..." The acceptance of the tender was conveyed to the plaintiff through the Executive Engineer. The case of the plaintiff is that he entered into an agreement with the President of India on March 23, 1955 for the work aforesaid through the Executive Engineer, Mandi Division, Mandi. This agreement, it was subsequently discovered, had not been signed by the Chief Engineer HP PWD. The case of the plaintiff is that the work was executed by him according to the specifications and the conditions of the contract during the stipulated time and to the satisfaction of the PWD authorities. The measurements had been made by the Engineer -in -charge of the work on September 29, 1959 which had been signed, in token of its correctness, both by the Engineer -in -charge as well as by the plaintiff. The plaintiff, according to his case, had executed the work for the Union of India of the value of Rs. 9,40,062/ - out of which, from time to time, the plaintiff had been paid a total sum of Rs. 6,20,312.97 including cash and in the form of price of material supplied to him. An amount of Rs. 3,24,049/ - remained due to the plaintiff from be Union of India, including the security amount and earnest money deposited by him. The plaintiff says that extra items of work were got executed by the PWD as per terms of the tender. He has submitted his quantity and rates which have been approved by the Superintending Engineer of the First Circle through letter dated January 14, 1958 and also through a subsequent letter dated June 14, 1960. These extra items were incorporated in the measurement book. The plaintiff had not been paid, according to the rate submitted by him, for the extra items. The case of the plaintiff is that initially the PWD had invited tenders for sinking of twin wells upto 20 feet depth below the subsoil water level as marked on the drawings attached with the tender. However, during the course of sinking of these wells it was found that in some cases wells had to be sunk to a greater depth in excess of the original designed depth of 20 feet. The plaintiff had submitted his quotations for further sinking beyond 30 feet which limit was 50 per cent in excess of the anticipated and designed depth of 20 feet. The defendants were under a legal obligation to pay to the plaintiff as per the quotations given by the plaintiff dated September 3, 1956 for sinking of twin wells beyond 20 feet which they were not doing. The first defendant in the suit is the State of Himachal Pradesh. The other defendants No. 2 to 10 are different officers who were in some manner or the other connected with the work. The first defendant alone has filed a written statement. The others, though served, did not put in appearance nor filed written statements. What has, in essence, been pleaded by the first defendant is that the plaintiff after acceptance of tender and execution of the agreement, completed the work in accordance with the specifications or the conditions enumerated in the structural drawings handed over to the plaintiff, to the satisfaction of the P.W.D. authorities. The plaintiff had voluntarily signed all the 26 running bills as also the measurement book which had also been signed by the defendant's Engineer -in -charge in token of the correctness of the final measurements. The plaintiff did not sign the final bill. According to the defendants, work had been executed by the plaintiff of the value of Rs. 5,64,197.70 inclusive of the extra items said to have been executed by the plaintiff and further that in fact the plaintiff had received an amount of Rs. 6,72,330.30. Thus, Rs. 1,08,330.13 had been over -paid to the plaintiff by inadvertence. After adjusting the credit for steel and also for security amount etc. the plaintiff owed to the defendants a sum of Rs. 27,522.57. The plaintiff was not entitled to any amount from the defendants. It was denied that the plaintiff did the work of a total amount of Rs. 9,40,062/ - or that he was entitled to any interest. Apart from the aforesaid plea the defendant also pleaded that the suit filed by the plaintiff was barred by limitation.
(3.) WE may notice at this stage some more facts, as put forward by the plaintiff. What he says is that the defendants failed to settle the accounts, the plaintiff had to apply to the Senior Sub -Judge, Mandi, calling upon the first defendant to file the arbitration agreement under Section 20 of the Arbitration Act on account of an arbitration clause in the agreement. During the pendency of the application, jurisdiction of Delhi High Court was extended to Himachal Pradesh and the pecuniary jurisdiction of the Senior Sub -Judge was limited to Rs. 25,000/ -. The proceedings which were pending before the Senior Sub -Judge, were therefore, withdrawn by the Delhi High Court Himachal Bench. An objection was taken by the defendants that the agreement was not enforceable as it did not conform to the requirements of Article 299 of the Constitution. This plea was accepted by the High Court in its judgment dated July 22, 1968 whereunder the agreement was held to be void. The plaintiff then served notice under Section 80 CPC on March 31, 1969 and in reply to that notice the defendants wrote to the plaintiff that : "... you are requested to submit the details of Rs. 3,24,049/ - which you have claimed in your notice as claim along with an attested copy of of your letter No. SMS/401, dated 3rd of September, 1956 and M.D. II -1/57 -7572 dated 14th of June, 1960. You are requested to submit the rates demanded by you along with the quantity executed to enable this office to examine in detail the claims submitted by you for further action. When the efforts of the plaintiff to recover the suit amount from the defendants failed he had to file the suit. He made an application for permission to sue in forms pauperis which was granted to him by the High Court vide its order dated December 26, 1974. The relief which has been sought is that a decree be granted in favour of the plaintiff for a sum of Rs. 5,37,921/ - which included a sum Rs. 3,24,049/ - being the difference between the value of the work executed by the plaintiff and the amount actually paid to him by the defendants as well as the amount of the earnest money with -held by the defendants. Further, damages at 6 per cent per annum on the aforesaid sum amounting to Rs. 2,13,872/ - for the period between July 10, 1959 and July 10, 1970 have also been claimed. The claim is founded on the plea that the plaintiff had law fully done the work for the first defendant and had not done so gratuitously and since the Union of India enjoyed the benefit thereof, it was bound to pay compensation and costs of the suit together with the damages at the rate of 6 per cent per annum for the period between July 10, 1959 and July 10, 1970 for the wrongful retention and use and withholding of money which was due to the plaintiff from the Union of India. The plaintiff was entitled to payment for the work executed by him, under Sections 65 and 70 of the Contract Act, albeit, under a void agreement.;

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