- (1.) P. H. Hanumantbiah & Company, hereinafter called 'the plaintiffs' executed on June 24, 1946 lour contracts Nos. 23, 24, 26 & 27 of 1946 in favour of C. R. I. E., Kirkee for demolition of existing barracks in the Kirkee cantonment and for contraction of a number of "Nissen prefabricated huts," The following table sets out the relevant details about the contracts, including the dates on which they were either completed or terminated : Time for completion was extended from time to time till September 5, 1946. Thereafter on September 8, 1946 contracts Nos/23 & 24 were terminated by the C. R. I. E. and the work unfinished was done departmentally or through other contracts. Contracts Nos. 26 & 27 were completed on November 10, 1946 and November 28, 1946. The Union of India withheld payment out of the amounts claimed by the plaintiffs of Rs. 4,920/- being penalty recoverable under Clause 22 of the terms of the contracts, and Rs. 67,237/- for failure to provide "brick ends" as stipulated to be supplied under the terms of the contracts.
(2.) The plaintiffs commenced an action in the court of the Civil Judge, Senior Division, Poona against the Union of India for a decree for Rs. 1,21,878/- being the principal and Rs. 22,622/-as interest: the break-up of the principal amount claimed by the plaintiff is as follows: . (1) Rs. 4,920/- being the penalty imposed for delay in completion of the contracts. (2) Rs. 12,966/- being the cost of extra cost of paint. (3) Rs. 35,000/- for wrongful demolition of 40 buts constructed by the plaintiff. (4) Rs. 1,955/- being the excess recovered by the Union for completing the work left unfinished by the plaintiff. (5) Rs. 67,237/- being the amount of deduction in respect of supply of wooden ends in place of brick ends. The trial court rejected the claim in respect of item 1 & 4, and awarded Rs. 18,760/- for item 3, the full amount claimed for item 5 and the amount claimed for item 2 with a slight variation. Accordingly the Trial court awarded Rs. 98,637/- as principal and Rs. 7,950/- as interest to the plaintiffs. In appeal to the High Court of Bombay the Union claimed that the suit filed by the plaintiffs should have been dismissed in its entirety.
(3.) The plaintiffs filed cross-objections to the decree appealed from and made a claim for the amounts disallowed. The High Court Rs. 12,644/15/- for item 2 and rejected the remaining claims The plaintiffs have appealed to this Court with certificate granted by the High Court. Counsel for the has not challenged the dismissal of the plaintiff's claim in respect of items 1 and 4 and there is no appeal before us by the Union in respect of item No 2. The claim in appeal is therefore restricted to two items- Items 3 and 5. Item 3 relates to a claim made by the plaintiffs for demolition of 40 huts constructed by them under Contract No. 24. The plaintiffs pleaded that dismantling of the huts by the C.R.I.E.. Kirkee was "altogether illegal", and even if the construction work was defective, the action of the C.K.I.E., was "indiscriminate and unjustified" since it was in direct contravention of the terms and conditions of the contract prescribing the treatment of defective work. The plaintiffs submitted that non-compliance with the mandatory provision of the conditions rendered the conduct of the C.R.I.E , illegal and actionable at law and the plaintiffs were therefore entitled to recover Rs. 35,000/- being "the expenses for erection and other incidental charges which were the direct consequence of the illegal acts of the C.R.I. E.". In respect of item (5) the plaintiffs claimed that three contracts Nos. 24, 26 & 27 were carried out by them according to their terms, that there was "continuous inspection" at all material times during the progress of the contract but no objection was ever raised about the details of the work and finally at the time of settlement of the bills an objection was raised the in respect of some of the huts "wooden ends" instead of "brick ends,' were built, and large amounts were unlawfully deducted. The plaintiffs averred that they had complied with every requirement of the contracts and the performance answered in all respects the "exact work required to be done under the contracts", and the basis of deduction according to the plaintiffs was not justified by the language of the instruments. According to the plaintiffs the term 'ends' had a "Specific significance" in the erection of a Nissen hut which represented a component structural unit, with its components clearly described in the brochure referred to in the contract. It was submitted that the contracts read with the brochure, bill of quantities at Schedule B and Schedule C and particular specifications and drawings did not require "brickends" to be built in the erection of "Nissen huts, and that it was expressly agreed that "wooden ends" supplied by the C.R.I.E. were to be used by the plaintiffs and they accordingly constructed the huts with wooden ends, and that the lumpsum quotation for the contracts was "principally guided and determined by the requirements of work need in regard to the ends, which formed the crucial part and core of the contract, and as such the deductions therefore were unjustified.";