w w w . L a w y e r S e r v i c e s . i n



M/s Kayco Engineering, Engineering & Contractor & Another v/s State of Goa, Executive Engineer, Works Division VI, Irrigation Department & Others

    First Appeal No. 171 of 2003

    Decided On, 01 September 2014

    At, In the High Court of Bombay at Goa

    By, THE HONOURABLE MR. JUSTICE U.V. BAKRE

    For the Appellants: Sudesh Usgaonkar, Advocate. For the Respondents: V. Rodrigues, Additional Government Advocate.



Judgment Text

Oral Judgment:

1. Heard Mr. Usgaonkar, learned Counsel appearing on behalf of the appellants and Mr. Rodrigues, learned Additional Government Advocate appearing on behalf of respondent no. 1.

2. This appeal is directed against the judgment and decree dated 30/12/2002 passed by the learned Civil Judge, Senior Division, Bicholim (trial Judge) in Special Civil Suit No. 4/1993/A.

3. The appellants and respondents no. 2 to 6 were the defendants and respondent no. 1 was the plaintiff in the said suit. Parties shall, hereinafter, be referred to as per their status in the said suit.

4. The plaintiff had filed the said suit against the defendants for recovery of a sum of Rs.1,32,781/- together with interest at the rate of 12.5 % from the date of filing of the suit till final payment. Case of the plaintiffs was as follows:- The defendants no. 2 to 8 are the partners of the defendant no. 1. On 01/12/1983, the plaintiff had invited item rate tender and contract for construction of right bank main canal of Anjunem Irrigation Project. The defendants submitted their tender on 31/12/1983 which was accepted by the plaintiff and an agreement for construction of the works was entered into on 31/01/1984 and order was issued on the same day directing the defendants to start the work within 15 days of the issue of order and the date of completion was fixed as 05/12/1985. The said date of completion was extended upto 05/06/1986. A show cause notice dated 26/02/1986 was issued to the defendants followed by final notice dated 16/04/1986 thereby rescinding the contract. After terminating the contract, the balance work was re-tendered and was completed by independent agency. Subsequently, final bill was intimated to the defendants claiming the said amount of Rs.1,32,781/-.

5. The defendants no. 1 and 3 to 8 filed written statement-cum-counterclaim. The case of the defendants was as follows:

The termination was illegal and in abuse of the power and authority vested in the plaintiff. The work could not be completed due to fault of the plaintiff on account of hindrances and delays caused by the plaintiff by giving them small extra job in between without recognizing the same as extra work and without fixing the rate for the same and not issuing work drawings in time. Even the entire site was not handed over before the date of commencement of the work. After the termination, the defendant no. 1 had to incur considerable extra expenditure due to prolongation of work by way of overheads, establishment and other supervisory expenditure and that the extra expenditure was to be recovered from the plaintiff with interest from 16/04/1986.

6. By way of counter claim, the said defendants claimed an amount of ` 16,31,715.67/- with interest at the rate of 21 % p.a. from the date of counterclaim till payment. The plaintiff filed written statement to the counterclaim thereby resisting the same.

7. The learned trial Judge framed the following issues:

'1. Whether the plaintiff proves that they are entitled to claim a sum of Rs. 1,32,781/- towards the total dues recovered from the defendants ?

2. Whether the defendant nos. 1, 3 to 8 proves that termination of the contract dated 31/10/1984, on 16/04/1986 was in misuse and abuse of the Power of Attorney and authority vested in the plaintiff under the contract and the law?

3. Whether the defendant no. 1 proves that on account of unlawful termination of the contract by the plaintiff he suffered a loss of Rs.13,14,877.67 p. with interest at the rate of 27 % interest per annum and he is entitled to recover the same from the plaintiff?

4. Whether the plaintiff proves that this Court has no jurisdiction to grant the reliefs prayed in the counter claim?

5. Whether the plaintiff proves that counter claim is non-tenable in law?

6. Whether the plaintiff proves that counter claim is barred by law of limitation?

7. What orders ? What reliefs? '

8. The plaintiff examined Shri K. A. Sadanand, Assistant Engineer of Irrigation Department, Works Division, VII as PW1. The defendants examined Smt. Tessey Jose, the defendant no. 6 as DW1. Various documents were produced by the plaintiff and oral Judgment dated 16/11/1998 passed by this Court in Appeal from order No. 58/1998 was produced by the defendants.

9. The learned trial Judge took the issues no. 1 to 5 together. The trial Judge observed that the suit was filed to recover the amount of compensation due to delay in work as well as to recoup the costs of labour and the materials paid extra by the Government for getting the balance work completed through other agency. The trial Judge observed that the quantum of compensation has been determined by the Engineer in-charge as well as the Superintending Engineer in exercise of powers vested in them under clauses 2 and 3 of the agreement. According to the trial Judge as per clause 3(a), the decision of the Engineer in-charge was final and binding, and conclusive. The trial Judge relied upon the case of 'Vishwanath Sood Vs. Union of India and another', [AIR 1989 SC 952]. The trial Judge also held that the evidence of PW1 has not been shaken in the cross-examination. It has been held that in view of the legal position and consideration of the ratio laid down by the Supreme Court in the case of 'Vishwanath Sood' (supra), it was proved that the plaintiff was entitled to claim compensation fixed by the Engineer in-charge as well as by the Superintending Engineer. It has been also held that the defendant no.1 failed to prove that the contract was unlawfully terminated and that the defendants suffered loss of Rs.13,14,877.67/-. Issue no. 1 has been answered in the affirmative whereas issues no. 2 to 6 have all been answered in the negative. In view of the above findings, the suit came to be decreed and the counterclaim came to be dismissed.

10. The defendants are, therefore, before this Court.

11. Mr. Usgaonkar, learned Counsel appearing on behalf of the defendants submitted that admittedly extension of time for completion work was granted upto 05/06/1986, in spite of which the show cause notice was given on 26/02/1986 alleging that the contractors had failed to complete the work by the extended date of completion and final notice of termination was given on 16/04/1986. He submitted that on the date of said notices i.e. on 26/02/1986 and 16/04/1986, the extended date for completion of the work was not over. He submitted that since the termination notice itself was illegal, the question of the plaintiff recovering any amount from the defendants did not arise. He further pointed out that initially by letter dated 02/01/1992, the plaintiff claimed an amount of ` 95,493/-. Thereafter, by letter dated 26th of the year 1995, the plaintiff claimed an amount of Rs.1,31,750/-, but again by letter dated 23/03/2001, the plaintiff issued corrigendum and claimed the amount of Rs.1,31,750/-. Thus, he submitted that there was no consistency. He pointed out that an amount of Rs.3,794/- was claimed as charges of bulldozer when in fact as per the contract, there was no provision for any bulldozer to be employed. He submitted that the trial Judge has not at all considered all the said aspects and also the documentary evidence on record and has rendered the findings as if this was a matter of arbitration. He submitted that the findings have not been substantiated by way of reasons. He also submitted that there is a wrong finding given by the trial Judge to the effect that the amount claimed was on account of levy of compensation due to delay in work. He submitted that no such claim at all was made by the plaintiff. He also submitted that the judgment of the Apex Court in the case of 'Vishwanath Sood' (supra) was not at all applicable to the facts and circumstances of the present case.

12. On the other hand, Mr. Rodrigues, learned Counsel appearing on behalf of the plaintiff submitted that the termination was not due to failure of the completion of the work by extended date, but because of delay in execution of the work within the prescribed time. He submitted that clause 3 of the contract provided for such termination of the contract. He further submitted that the Engineer in-charge as well as the Superintending Engineer in exercise of the powers vested in them under clauses 2 and 3 of the Agreement, determined the amount of compensation and that the same was supported by way of evidence of PW1 and documents produced by him. He pointed out that the defendants did not examine any witness. According to him, therefore, there is no scope to interfere with the impugned judgment and order.

13. I have gone through the entire material on record. I have considered the submissions made by the learned Counsel for both the parties.

14. Rule 5 of Order XX of the Code of Civil Procedure, 1908 provides that in suits in which issues have been framed, the Court shall state its finding or decision, with the reasons therefor, upon each separate issue, unless the finding upon any one or more of the issues is sufficient for the decision of the suit. Indisputably, the Judgment of the Court which is not in accordance with the provisions of Order XX Rule 5 of C.P.C. is no Judgment in the eyes of law. The respective contentions of the both the parties and proper reasons should be given for the conclusions arrived at so that the appellate Court may be able to appreciate as to what prevailed with the trial Judge while passing the order. There has to be marshalling of the evidence on record, both oral and documentary. A Judgment containing wrong statement also cannot be a Judgment in the eyes of law.

15. A perusal of the judgment of the trial Court reveals that the trial Court has rendered the findings and has answered the issues. However, no reasons are given for finding on each issue. It has been stated that the respective parties have filed their written submissions. However, not a single contention of each party has been stated and dealt with. The issues no. 1 to 5 have been taken together, though all do not appear to be interconnected. It is also seen that there is a mistake committed by the trial Judge by holding that the amount of compensation claimed by the plaintiff was on account of levy of compensation due to delay in work. The plaint as well as the documents on record clearly reveal that no compensation had been claimed by the plaintiff on account of delay in completion of the work. It is further seen that it has been repeatedly held by the trial Court that the decision of the Engineer in-charge and Superintending Engineer is final and conclusive in terms of clause 3 of the contract and on that basis, the issues no. 1 to 5 have been answered. Since the foundation of the Judgment of the trial Judge, inter alia, was that the amount claimed by the plaintiff was on account of the levy of compensation due to delay in work, the findings might have gone wrong. A perusal of the judgment of the Apex Court in the case of 'Vishwanath Sood' (supra), shows that the same is not applicable to the facts and circumstances of the present case, since the Apex Court in the case supra was dealing with a matter pertaining to clause 2 of the agreement which was in relation to compensation for delay in carrying out the work.

16. The termination notice dated 16/04/1986 says that the contract is terminated because the work was not completed within the extended period of time. The time was extended till 5th June 1986. However, the show cause notice was given on 26/02/1986 i.e. before the completion of the extended period and even the termination notice was given on 16/04/1986. This is also prior to the completion of the period, which was extended. The learned trial Judge has not at all considered this aspect. There is no explanation to show as to how the liability changed from time to time. The learned Counsel appearing on behalf of the plaintiff also could not make any submissions regarding the same.

17. Considering the fact that the judgment of the trial Court is a non-speaking judgment insofar as the findings that have been rendered are concerned, sin

Please Login To View The Full Judgment!

ce no proper reasons are given and further since there are certain wrong observations made, I am of the view that the impugned judgment and decree should be quashed and set aside and the learned trial Judge should be directed to decide the matter afresh by hearing the learned Counsel for the parties afresh and by giving appropriate reasons for findings on each of the issues. 18. In view of Section 26(1) of the Goa Civil Courts Act, 1965, inter alia, no Court other than the District Court shall receive or register any suit in which the Central Government or the Government of Goa or any officer of Government, in his official capacity, is a party. Hence, now the suit will have to go to the District Court. 19. In the result, the appeal is partly allowed. (a) The impugned judgment and decree is quashed and set aside. The Special Civil Suit No. 04/1993 is restored to the file of the Principal District Judge, North Goa at Panaji. (b) The learned Principal District Judge or any other District Judge, to whom the suit is made over, after hearing the parties, shall decide the matter afresh by giving appropriate reasons for the findings arrived at on each issue. (c) All the contentions of both the parties are kept open. (d) Parties to appear before the District Court on 07/10/2014 at 10.00 a.m.
O R