This is an appeal filed by the plaintiff in O.S.No.96 of 1991 challenging the judgment and decree dated 31.7.1998 of the Sub Court, Mavelikkara, dismissing the suit. The respondents are the defendants in the suit. The suit was filed by the appellant for a declaration that the Revenue Recovery proceedings initiated against the plaintiff and the order of the second defendant on the basis of which such proceedings were taken are illegal, unenforceable and void. A perpetual injunction restraining the defendants from taking any action against the plaintiff pursuant to the notice dated 25.2.1991 under the Revenue Recovery Act, was also sought. The suit was filed on the following allegations.
AS 253/1999 2
2. The plaintiff was a contractor registered under the Public Works Department. The second defendant, the Executive Engineer, P.I.P Division, Chengannur invited quotations for the formation of the Pampa irrigation project of Kandalloor Branch Distributory No.1, 13th reach from Ch.2601 to 2810 including C.D.works. The plaintiff's quotation dated 29.6.1982 was accepted and a letter was sent to the plaintiff on 5.4.1983. But, he did not receive the letter as he was not in station. Therefore, he did not make the deposit or execute the agreement, as stipulated. Consequently, the contract was cancelled by the second defendant on 7.2.1984. Later on, the cancellation was revoked and the plaintiff was permitted to execute necessary agreement on 28.2.1984. He also made the necessary deposit of Rs.6,200/-.
3. Though the plaintiff collected materials for the AS 253/1999 3 work at site, he could not complete the work due to unforeseen circumstances. Since the plaintiff did not commence the work as stipulated, the second defendant cancelled the contract by order dated 8.12.1986, in exercise of his powers under clause - 13 of the notification inviting tenders. In the order, it was informed that the work would be re-arranged at the risk and cost of the plaintiff. However, no notice of any steps regarding the rearrangement of the work or steps taken to assess the loss, if any, to the Government was given to the plaintiff. According to the plaintiff, on 7.3.1991, he received a notice dated 25.2.1991 from the Taluk Office, Karthikappally under Section 7 of the Kerala Revenue Recovery Act, 1968 calling upon him to pay an amount of Rs.95,483/- as PWD dues and informing him that if the amount was not paid immediately, proceedings for attachment of his properties would be taken against him. It is the AS 253/1999 4 case of the plaintiff that since he did not know on what account the demand was made, he made an application to the second defendant and on 14.3.1991, he got copy of a letter dated 18.8.1989 which imposed a liability on him to pay an amount of Rs.22,024/- towards the cost of cement received by him and Rs.73,459/- as liability on account of the rearrangement of the work.
4. The total amount of the contract entered into by the plaintiff was Rs.1,53,681/-. Rs.87,892/- was the probable amount of contract as per the estimate, including the cost of departmental materials, viz. Rs.30,674/-. The tender excess was 34.9% (Rs.35,095/-). The work was rearranged for an amount of Rs.2,18,554/- inclusive of tender excess and cost of departmental materials. But, actually, the value of the completed rearranged work was only Rs.1,40,377/- which is much less than the amount of the plaintiff's AS 253/1999 5 original contract. Therefore, it was contended that the State had not suffered any loss by rearranging the work. The plaintiff contended that no notice was given regarding rearrangement of the work. He also contended that clause-13 did not apply to the present situation and applies only in cases where there was non-payment of the 4% amount and non-execution of the agreement. The plaintiff had four other contract works with the Government with respect to which amounts were due to him from the department. According to him, a total amount of Rs.1,46,500/- was due to him but the amount has not been paid, since amounts were allegedly recoverable from him. It was also contended that he was prevented from executing the work by the departmental authorities who refused to approve cancellation of the power of attorney executed by the plaintiff in favour of one Sri.K.Thankachan. Therefore, it was contended that AS 253/1999 6 the Revenue Recovery proceedings were illegal and liable to be set aside.
5. The suit was contested by the defendants who filed written statement admitting the award of the work to the plaintiff based on a quotation submitted by him. However, he did not come forward to execute the agreement before 11.4.1983 as provided in the notice, in spite of repeated reminders. So the contract was terminated invoking clause 13 of the notice inviting tenders. He was informed that the work would be rearranged at his risk and cost. Thereupon, he came forward to execute the work and the termination was revoked, taking a lenient view. Thereafter, he executed the agreement on 28.2.1984. But, he failed to complete the work within the stipulated time. Therefore, the time was extended up to 30.6.1985 on payment of a nominal penalty of Rs.100/-. The department rendered all necessary assistance and co- AS 253/1999 7 operation for completing the work. 200 bags of cement was also supplied to the plaintiff on 16.5.1985, but, still the plaintiff did not start the work. Therefore, the work was cancelled at his risk and cost.
6. Thus, the contract was terminated by the second defendant as per order dated 8.12.1986. According to the defendant, the plaintiff is liable to pay the excess cost incurred by the defendants due to rearrangement of the work. As per the agreement, no separate notice is necessary for assessing the loss. Though several notices were issued to the plaintiff, directing him to remit an amount of Rs.95,483/-, he did not pay the amount and there was no response to the notice. Therefore, Revenue Recovery proceedings were initiated against him. According to the defendant, the plaintiff had quoted for the work at the 1980 rates while the work was rearranged on the basis of 1986 rates. Therefore, the P.A.C. was increased to AS 253/1999 8 Rs.2,18,554/-. However, the quantities of the work that was re-tendered was substantially reduced and therefore the work done by the second contractor was reduced to Rs.1,40,377/-. However, the department has suffered loss which the plaintiff was liable to compensate. The payment due to the plaintiff has not been disbursed only because he had not come forward to have the measurement conducted and therefore the bills have not been settled. At present no amounts are due from the department to the plaintiff. At the same time, huge amounts are due from him. On the above contentions, the defendants sought for dismissal of the suit.
7. The suit was tried on the above pleadings by the court below after raising necessary issues. At the trial, PW1 and DW1 were examined as witnesses and Exts.A1, A2 and B1 to B3 documents were marked. The court below considered the matter in detail and AS 253/1999 9 came to the conclusion that the second defendant had the authority to cancel the contract and to fix the liability on the plaintiff, as done in the present case. It was found that the department had suffered loss by the non execution of the contract by the plaintiff and therefore, the said loss was liable to be recovered from him. Consequently, the court below found that the Revenue Recovery proceedings initiated in the present case was perfectly justified. Therefore, the suit was dismissed. This appeal is filed challenging the said judgment and decree of the court below.
8. I have heard the learned counsel appearing for the appellant as well as the learned Government Pleader. I have also perused the records of the case and the evidence, both oral and documentary, in detail.
9. The point that arises for consideration is:
appellant/plaintiff had taken the contract, as per Ext.B1 agreement executed by him. However, he did not complete the work though the time for completion thereof had been extended a number of times. According to the plaintiff, the work could not be completed by him due to financial difficulties. However, the defendants are not responsible for the financial difficulties of the plaintiff and therefore, the said contention is of no consequence at all. Since the plaintiff did not complete the work, the defendants had no other option but to re-tender the work at the risk and cost of the plaintiff, invoking clause 13 of Ext.B1. Having agreed to be bound by clause - 13 of Ext.B1, it is not open to the plaintiff to turn around and question the invocation of the said clause. It is AS 253/1999 11 also to be noted that the plaintiff has admittedly not completed the work, for no fault on the part of the department. It is seen that the department had extended the time on a number of occasions so as to enable him to complete the work. They had also supplied 200 bags of cement to him so as to ensure that the work was completed on an early date. However, in spite of the above, the plaintiff did not complete the work and therefore, he has committed breach of Ext.A1 agreement. In the above circumstances, the action of the defendants in cancelling his contract and re-tendering the work at his risk and cost cannot be found fault with.
11. It is further contended that the actual value of the completed work was only Rs.1,40,377/-. While the value of the work in favour of the plaintiff was Rs.1,53,366/-. Since the rearranged work was at a lower amount, it is contended that the AS 253/1999 12 Government have not suffered any loss. As per the original agreement, six items of work were to be done. However, items 1,2 and 4 of the original work related to removal of the stumps of trees and bailing out water. The said items of work were not done because they were not necessary to be done when the re-tender was effected. However, according to DW1, the original contract was as per the 1980 rates while the rearranged contract was as per the 1986 rates and thus, the State has incurred additional expenses, which could have been avoided had the plaintiff executed the work as per the original agreement. The said amount is therefore liable to be recovered from the plaintiff. The court below has found that the amount of Rs.73,459/- that has been determined as the loss so caused is correct. The balance amount represents the value of 200 bags of cement supplied to the plaintiff. By adding the two AS 253/1999 13 amounts mentioned above, the court below has found that the amount sought to be recovered is correct. I do not find any ground to interfere with the said finding.
12. The counsel for the appellant has pointed out that no notice whatsoever was issued to the appellant before the work was rearranged by the second defendant. However, the counsel for the respondents submit that a number of notices had been issued to the appellant before the work was re-tendered. But, there was no response to any of the communications. It was because the appellant did not bother to complete the work within the stipulated time or respond to the notices issued that the defendants had to re-tender the work at the risk and cost of the appellant, it is pointed out. The second defendant has been examined as DW1 and he has deposed about the above aspects in detail. It is AS 253/1999 14 true that a number of items in the original work have been deleted and only a much lesser quantity of work has been re-tendered. However, the rates adopted are the rates of the year 1986 which was unwarranted, it is contended. But, it is to be noted that a work could be tendered by the department only at the rates applicable as on the date of issuing the tender notification. Therefore, the defendants could not re-tender the work at the rates applicable in 1980 when the work was re-tendered in 1987. Therefore, the defendants cannot be found fault with for having adopted the 1986 rates for re-tendering the contract. It is also to be noted that all the above consequences could have been avoided had the work been duly executed by the appellant as per the original agreement.
13. The further contention of the counsel for the appellant is that an amount of Rs.1,46,500/- was due AS 253/1999 15 to him from the department for other works successfully completed by him. Therefore, the amount, if any, due from him, could be recovered from the said amount due to the appellant. But, according to DW1, though the works have been completed by the appellant, the bills have not been signed by the appellant and therefore, no amount could be paid to him for the said works. The actual amount, if any, due to the appellant would be quantified only after a measurement of his work, on the basis of the bills signed and submitted by him. It is pointed out that no amounts are actually due to the appellant/plaintiff as contended. It cannot be said before the actual measurement and submission of bills that any amount is actually due or payable to the plaintiff. Therefore, the contention of the appellant on this ground has to fail.
14. It is contended by the counsel for the AS 253/1999 16 appellant that the Revenue Recovery proceedings should have been initiated only after a proper quantification and determination of the actual amount that was due or recoverable from the plaintiff. Since there was no such quantification with notice to the appellant, initiation of the Revenue Recovery proceedings was bad. Ext.B2 is the calculation statement produced by the defendants. The amount that is sought to be recovered from the appellant has been quantified in Ext.B2. Ext.B2 shows that the amounts as per the said contract is substantially more than the earlier contracts. It is on the basis of the difference in the rates that the amount of Rs.73,459/- has been quantified and determined by the respondents. Therefore, I find that there has been a quantification of the amount that was due and recoverable, as per Ext.B2.
15. Yet another contention of the appellant is AS 253/1999 17 that Section 73 of the Contract Act mandates a mitigation of the damage and since there was no proper action at mitigation, the damages sought for cannot be recovered. It is also contended that many of the items of work in the initial agreement were not tendered as per the second agreement. According to the counsel, 60% of the work was left out. Therefore, it is pointed out that there was no proper action at mitigation of the damage. As rightly found by the court below, the work was re-tendered after 1= years of the initial agreement with the appellant. During the interregnum, the necessity for execution of many of the works had ceased to exist and therefore the said items were not required to be done, at the time of re-tender. Deletion of such necessary works would not offend the principle of mitigation contained in Section 73 of the Contract Act. It cannot be said that by deleting some of the AS 253/1999 18 items from the earlier contract, the defendants have violated the principle of mitigation. Therefore, this contention is also not sustainable.
16. It is an admitted fact that the work was not completed by the appellant. Though notices had been issued to him requiring him to complete the work, he had not chosen to respond to any of the notices. Though the period of the contract was extended a number of times, he did not complete the work even within the extended period. Therefore, there was no other choice available to the defendant except to terminate the contract. It is clear from the conduct of the appellant that he was not interested in completing the work and that he is guilty of breach of contract. He had executed an agreement Ext.B1 and therefore he was bound by clause 13 thereof. Since the action of the defendants is in terms of clause 13 of Ext.B1, the re-tender was perfectly in order. AS 253/1999 19 Consequently, the claim for recovery of the risk and loss is also justified. Therefore on facts, the action of the respondents in initiating Revenue Recovery proceedings against the appellant is justified.
17. It has been pointed out by the learned Government Pleader that the suit has to fail for the further reason that it is barred under Section 72 of the Kerala Revenue Recovery Act, 1968. Section 72 bars the jurisdiction of the Civil Court. Every question arising between the Collector or authorised officer and the defaulter or his representative or any other person claiming any right through the defaulter, relating to the execution, discharge or satisfaction of a written demand issued under the Revenue Recovery Act are to be determined by the Commissioner of Land Revenue where the Collector is a party to the proceedings and by the Collector in other cases. Therefore, the suit itself was not AS 253/1999 20 maintainable, as per the above provision.
18. It is therefore found that there are no grounds to interfere with the judgment and decree in O.S.No.96 of 1991 of the Sub Court, Mavelikkara.
The appeal fails and is dismissed, confirming the judgment and decree of the trial court. No costs.
Sd/-
K.SURENDRA MOHAN Judge css/ /True copy/ AS 253/1999 21 K.SURENDRA MOHAN, J ------------------------------- A.S.No. 253 of 1999 ------------------------------- JUDGMENT 3.8.2009 AS 253/1999 22