IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 690 of 2004 For Approval and Signature:
HONOURABLE MR.JUSTICE JAYANT PATEL HONOURABLE MR.JUSTICE C.L. SONI ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
========================================================= ROYAL CONSTRUCTION CO. - Appellant(s) Versus UNION OF INDIA - Defendant(s) ========================================================= Appearance :
MR KG SUKHWANI for Appellant(s) : 1, NOTICE SERVED for Defendant(s) : 1, MR MUKESH A PATEL for Defendant(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE JAYANT PATEL and HONOURABLE MR.JUSTICE C.L. SONI Date : 30/08/2012 CAV JUDGMENT (Per : HONOURABLE MR.JUSTICE C.L. SONI)
1. The appellant who is the original plaintiff filed Civil Suit No. 4065 of 1990 to recover an amount of Rs.65,67,463.00 with interest at the rate of 18% per annum on the ground that the respondent has failed to make payment according to the special conditions of contract for giving 425% above the SOR (Schedule of Rates) for the work done by the appellant.
2. The case of the appellant in the plaint is to the effect that the appellant was awarded work contract of construction of Major Bridge No.393 near Kothara. Agreement for the work was executed on 24.1.1986 and after the appellant completed the work, payment under the final bill was made to the appellant on 10.10.1998 which the appellant accepted under protest. It is further averred in the plaint that under clause 29 of the contract which was special condition, the appellant was entitled to the payment at 425% above the SOR for the work executed by the appellant for all the items under the contract. Since no payment was made even after the statutory notice, the appellant filed the above said suit for the recovery of the above stated amount.
3. The suit was resisted by the respondent by filing written statement at Exh. 13. It is, inter alia, stated that the suit is barred by the provisions of of Order 2, Rule 2 of the Code of Civil Procedure (“the Code” for short) as the appellant had already filed Civil Suit No.1173 of 1989 in respect of the claims arising under the contract; that the clause 29 would be applicable to only one Item NS/1 in Schedule-A. The items of work under the Work Contract were divided into two Schedules. Schedule-A is for SOR Items and NS/1 Item. Schedule-B is exclusively for NS Items. The appellant quoted 425% above SOR for Schedule A and quoted individual rates for items in Schedule-B. That since 425% above SOR is for the items of Schedule-A and since the payment was made according to the agreed rates in both the schedules, appellant is not entitled to any amount as claimed in the suit.
4. The trial Court framed following issues and answered as under:
Issues:-
1. Whether the present suit is maintainable in view of the earlier suit No.1173 of 1989 in respect of the same Agreement and, therefore, is barred by Order 2,Rule 2 as alleged?
2. Whether the plaintiff firm is registered partnership firm and the suit is maintainable?
3. Whether the plaintiff proves that the defendant Railway invited the tender for the major Bridge No.393 at Ficld CH.
22325 on pilc foundation near Kothara and tender submitted by the plaintiff firm was accepted by the defendant railway for which Agreement/contract was executed between the plaintiff and defendant on 24.1.86 and also supplementary Agreement/contract was executed on 10.10.86?
4. Whether the plaintiff proves that the work was satisfactorily completed by the plaintiff on 9.1.87?
5. Whether the plaintiff proves that the plaintiff was entitled to claim higher rate at 425% above SOR as per clause 29 of the special condition of the contract and the defendant Railway have failed to make such payment as per the terms of the Agreement/contract as alleged?
6. Whether the defendant prove that the plaintiff is entitled to claim at the higher rate as per clause 29 of the special condition of the contract? Further, whether it is proved by the defendants that according to the tender Agreement/contract the plaintiff was entitled to claim was applied to Schedule A to NS item only and higher rate as per condition no.29 of the special condition was not applicable to Schedule B as alleged?
7. Whether the defendants prove that the plaintiff had accepted all the bills without raising any dispute and payment of all the bills from 1 to 14 was made as per tender Agreement/contract ? Further, whether the defendants prove that the plaintiff has not given the details of the claim against each NS item under Schedule A or Schedule B for which the claim is made and is therefore not entitled to claim any such amount as alleged?
8. Whether the defendants prove that the plaintiff has failed to make or raise the demand as per clause 43 of the tender agreement and even such claim is made in the notice dated 17.12.88 or in the Civil Suit No.1173 of 1989 filed by the plaintiff and therefore is barred from making such claim?
9. Whether the plaintiff is entitled to recover Rs.65,67,.463.30 ps. along with interest?
10. What order?
Finding given by the learned Judge:-
1. First part in negative.
Second part in affirmative.
2. In affirmative.
3. In affirmative.
4. In affirmative.
5. In negative.
6. First part in affirmative.
Second part in affirmative.
7. In affirmative.
8. In affirmative.
9. As per final order.
5. The appellant examined one Shri Tulsibhai Madhavlal patel at Exh. 34. On behalf of the respondent, one Shri Motiram Khushaldas, Executive Engineer, was examined at Exh.48.Both the parties also adduced documentary evidence.
5.1 Learned Judge came to the conclusion that in earlier suit which was filed by the appellant, the appellant could have made all the claims under the contract including the claim made in the present suit and since no leave was sought for and granted for filing the another suit, the present suit would be hit by the provisions of Order 2, Rule 2 of the Code.
5.2 On merits, the learned Judge has come to the conclusion that Schedule-A covers SOR Items and only one Non-Schedule Item NS/1 included to which Clause 29 would be applicable but said Special Condition would not be applicable to the items covered under Schedule-B. Learned Judge has further observed that there is no dispute that the appellant had quoted rates for items covered under Schedule-B and merely because one item is stated to be Non Scheduled Item in Schedule-A would not be a ground to make the appellant entitled for payment at 425% above SOR even for items in Schedule-B. Accordingly, the learned Judge found that even on merits, the appellant is not entitled to claim of payment at 425% above SOR for items in Schedule-B. Suit is, thus, dismissed by the learned Judge.
6. We have heard the learned advocates for the parties.
7. Mr. K.G. Sukhwani, learned advocate for the appellant has submitted that the learned Judge has committed grave error in holding that the suit was barred by Order 2, Rule 2 of the Code. He submitted that by virtue of Clause 63 and 64 of the Contract, it was not open to the appellant to include the claim made in the present suit in the previous suit. He pointed out that under the clause of arbitration, the appellant was entitled to make claim to the extent of 20% of the value of the contract and since the claim made in the present suit is beyond 20% of the value of the contract, the appellant was justified in filing separate suit and there was no need for the appellant to seek leave under Order 2, Rule 2 of the Code for filing the separate suit.
7.1 On merits of the claim, learned advocate Mr. Sukhwani submitted that the claim of the appellant in the suit was squarely covered by clause 29 of the Contract. He submitted that under clause 29, even items of work stated in Schedule-B are also covered. He read clause 29 and pointed out that since the basic rate for NS Items were also indicated in Schedule A and since the said clause provided for percentage over SOR rate to be quoted by the tenderer and made applicable on the basic rate in the same manner as for SOR Items, the appellant would certainly be entitled to 425% above SOR even for items of work provided in Schedule-B. He, thus, urged that the judgment and decree passed by the learned Judge may be set aside and the suit of the appellant may be allowed.
8. In reply, learned advocate Shri M.A. Patel appearing for the respondent has submitted that the claim made in the previous suit as also in the present suit both are in relation to one and same contract. He submitted that in view of the provisions of Order 2, Rule 2 of the Code, the appellant could have made all the claims under the contract in the earlier suit and having not sought leave of the Court to file another suit, when the first suit was filed for the claims in relation to the very contract, the suit was clearly barred by Order 2, Rule 2 of the Code, therefore, the learned Judge has not committed any error in holding that the suit of the plaintiff was barred by Order 2, Rule 2 of the Code.
8.1 On merits, learned Advocate Mr. Patel submitted that the work contract was bifurcated in two different schedules. In Schedule-A, only one NS Item is included for which special condition 29 would apply along with other items in Schedule-A. For all the items of Schedule A, the appellant was paid as per the special condition in the agreement. However, so far as the items of work provided in Schedule B were concerned, terms of tender clearly provided that it was for the tenderer to quote their rates against items included in Schedule B, therefore, the appellant would be entitled to payment at the rates quoted by the appellant in his tender and not at 425% above SOR which was fixed by the respondent itself for items in in Schedule A. He, thus, submitted that the learned Judge has reached to correct finding that clause 29 would not be applicable to items in Schedule B. He, thus, urged to dismiss the appeal of the appellant.
9. We have perused record of the case and also the impugned judgment delivered by the learned trial judge.
10. As regards the issue of applicability of Order 2, Rule 2 of the Code,we find that the plaint of the previous suit being Civil Suit No.1173 of 1989 is already on record In the plaint of the said suit, we find that the claim made is in respect of the very contract though the cause of action stated to have arisen is of 17.12.1988 when the appellant served notice under clause 63 of the General Conditions of Contract for appointment of the arbitrator. However, it is clearly stated in the plaint that the work under the contract was already over and notice was given for making final payment and the respondent failed to make legitimate payment of the items of work carried out by the appellant in respect of very same contract. It is stated that the appellant had accepted the bill of final payment under protest.
10.1 Reading the plaint of the earlier suit, we are of the view that the whole of claim in relation to work contract could have been made by the appellant. However, the contention on behalf of the appellant is to the effect that by virtue of clause 63 and 64 embodied in the agreement, it was not open for the appellant to make claim beyond 20 per cent of the total value of the contract. This contention of the appellant would not destroy the bar embodied in Order 2, Rule 2 of the Code.
10.2 What is required to be seen is whether the appellant was entitled to put-forth whole of the claim in the suit or not, when the contract was already completed as stated by the appellant himself and when the final bill was also prepared by the respondent ?
10.3 Clause 63 and 64 in the agreement were arbitration clause and the embargo as regards limit of the claim to the extent of 20% of the value of the contract the same therefore was for the purpose of arbitration between the parties cannot be taken as bar for making of the claims in the suit before the civil court in relation to the work contract. When Order 2, Rule 2 specifically provides for putting up whole of the claim in the suit before the civil court, if possible on the basis of averments made in the first suit, the appellant cannot restrict the suit for some of the claims without the leave of the court. Otherwise, very purpose of provisions of Order 2, Rule 2 of the Code would be frustrated.
10.4 In earlier suit, though the cause of action stated was for the purpose of appointment of arbitrator but the foundation of the suit was as clearly stated about the claims based on satisfactory completion of work under the contract, therefore, going by the entire plaint, though prayer was restricted for appointment of arbitrator, we are of the view that the claim in the present suit could have been made by the appellant in the earlier suit also and we do not accept the contention canvassed on behalf of the appellant that because of clause 63 and 64 restricting to claim 20% of the value of the contract work, it was not possible for the appellant to include whole of the claim in the earlier suit. We do not find any error with the conclusion reached by the learned Judge on this issue and reject the contention of the appellant that the learned Judge has committed error in holding that the suit was barred by the provisions of Order 2, Rule 2 of the Code.
11. Now, so far as the claim of the appellant to get the payment at the rate of 425% above SOR for items in Schedule 'B', is concerned, we may first refer to clause 29 of the Agreement. Clause 29 reads as under:
“Rates for NS Items:-
A basic rate for NS Items has been indicated opposite NS/1 in the Schedule “A”- The percentage above SOR rate quoted by the TR will also be applicable on the basic rate in the same manner as for SOR Item."
Schedule “A” and “B” reads as under:
“2.1 SCHEDULE-”A”:-
This Schedule covers generally the items of providing pile cap, pile cap beam, RCC piers, abutments, returns, bed-blocks, ballast walls, rubble filling behind the abutments etc. All items included in this schedule are incorporated in W. Rly. Schedule of Rates, Part I, referred as SOR hereafter. The TR shall quote percentage to Ajmer Dvn. below the SOR (1984 edition) as applicable to Ajmer Dvn.
2.2 SCHEDULE “B”:-
This Schedule consists of items not covered inSOR and generally include items of works such as soil exploration and investigation during process of construction, construction of cast-in-situ RCC bored piles in foundation including all operations, testings; fabrication and placement of MS Liners earthwork in accordance with compaction and providing and fixing elestomatric bearings.”
12. It is not in dispute that the respondent had already prescribed rates for the items including item NS/1 in Schedule “A”. As per clause 29, tenderer was then entitled to quote percentage above the rates (SOR) or basic rates already provided in Schedule “A”.
12.1 It is also not in dispute that the respondent had not provided any rates for the items of work included in Schedule B and it was entirely left to the tenderer to quote his own rates for each and every item in Schedule B.
12.2 It is further not in dispute that the appellant had already quoted 425% above the SOR and basic rates for all the items in Schedule A including NS/1 Item and had also quoted his own rates for each of the items in Schedule B. It is pertinent to note that Schedule A includes only one NS Item which is described as NS/1 and for this NS-I item also, the respondent had already provided rate in Schedule A. Therefore, only for one NS Item which was included in Schedule A, tenderer appellant was entitled to get 425% above SOR. Attachment to the agreement at Exh.
21 signed by the parties contains rates agreed as stated below:
Thus, as per the above, the appellant agreed to be entitled to 452% above SOR for the items included only in Schedule 'A' and not for any of the items included in Schedule 'B”. It is clearly stated against Schedule 'B' that the appellant agreed to receive the payment at the rates indicated against each item of the work. Therefore, for the items in Schedule 'B', as per the above agreement, the appellant shall not be entitled to receive the payment 425% above SOR.
13. Witness of the appellant has stated in his deposition that the appellant had been paid necessary payment in respect of execution of work for schedule A Items and in respect of items of Schedule B, the payment was not at the rate of 425% above the SOR as per condition 29 of the Agreement. He further stated that under condition 29, the appellant would also be entitled at 425% above SOR on NS Items.
13.1 As against said oral evidence, officer of the respondent has deposed that 425% above Schedule rate was available only for the items in Schedule A and since the tenderer was required to quote his own rates for items in Schedule B, the appellant was not entitled to payment at 425% above his rate.
14. Having considered all the above aspects, we are of the view that the learned Judge has rightly come to the conclusion that the appellant was entitled to 425% above SOR only in respect of items provided in Schedule A including one NS Item and the appellant was entitled to the payment at the rates agreed upon between the parties for items in Schedule-B.
14.1 In fact, the language of Schedule A & B as also the agreement make clear distinction for applicability of different rates for items of works provided therein. Schedule A clearly provides that the tenderer shall quote percentage above or below SOR as applicable to Ajmer Division. This clearly suggests that the SOR for the items included in Schedule A were already settled and prescribed by the respondent and above SOR, it was for the tenderer to quote his percentage.
14.2 Similarly, the language of Schedule B also clearly provides that the said schedule (Schedule B) consists of items not covered in SOR and generally includes items of works such as soil etc., therefore, for the items of Schedule B, respondent had not settled or provided SOR. This makes it abundantly clear that it was for the tenderer to quote his own rates for all the items in Schedule B.
14.3 If we read the contents of Schedule A and B with rates at which the appellant agreed to receive payment for items in both the schedule, we find that the provisions made in clause 29 is only for items included in Schedule A and not for the NS Items of work provided in Schedule B. When clause 29 clearly provides that the percentage above SOR rate quoted by the tenderer will also be applicable on basic rate in the same manner as for SOR items, it would only mean that it was provided only for giving higher percentage above the rates already settled in respect of the items included in Schedule A. Since there was no SOR settled for the items of Schedule B, there was no question of permitting the tenderer to quote percentage above SOR and it was for the tenderer to quote his own rates. This being clear position emerging from the terms and conditions of contract and since the appellant has well understood and given his rates differently for both the schedules, we have no hesitation in concluding that clause 29 was only meant for the items provided in Schedule A and not for Schedule B. We accordingly concur with the finding recorded by the learned Judge that the appellant was not entitled to 425% above the rates quoted by it even for the items included in Schedule B. The appeal is, therefore, devoid of any merits.
15. In the result, this appeal is dismissed and the judgment and decree passed by the learned Judge is confirmed.
(Jayant Patel,J.) (C.L. Soni,J.) an vyas