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Petitioner: Syed ALTAF HUSSAIN through L.Rs,s VS Respondent: PROVINCE OF SINDH through Chief JUDGMENT
Court Name: Sindh High Court Judge(s): Nadeem Akhtar Title:Syed ALTAF HUSSAIN through L.Rs,s vs PROVINCE OF SINDH through Chief
JUDGMENT
Reported As: 2013 CLC 824 Result: Suit decreed Judgment JUDGMENT ' NADEEM AKHTAR, J.--- The plaintiff has filed this Suit against the defendants for recovery of outstanding amount payable to him by the defendants under a contract, and also for damages sustained by the plaintiff in view of the breach of contract committed by the defendants. 2. It is the case of the plaintiff that, at the relevant time, he was engaged in the business of Civil Engineers and Contractors as the sole proprietor thereof in the year 1990, defendant No,2 invited tenders for construction of 82 independent residential units/bungalows in the Revenue Staff Colony at Sukkur (the project). The plaintiff submitted his tender for the project, which was accepted by defendant No,2 vide its 'Letter of Award' dated 20-9-1990. The project was named by defendant No,2 as the 'Multi-Dimensional. Security Development Project (MDSDP)'. As per the Letter of Award issued by defendant No,2, the plaintiff was initially required to construct only four residential units at the "reduced cost" of Rs,2,040,000.00, and the remaining project was to be carried out by the plaintiff subject to approval of the modified PC-I of the project by the relevant Government authorities and the plaintiff's acceptance of the revised price of the remaining work of the project. 3. The plaintiff accepted the terms and conditions of the Letter of Award, and successfully executed the work by constructing four units. Upon successful execution of the said work by the plaintiff, defendant No,1, through defendant No,2 and the Project Director MDSDP, entered into an Agreement dated 8-11-1990 (the Agreement), with the plaintiff, whereby it was agreed by the parties that the plaintiff shall execute the work of the project. Consequently, a 'Letter of Award (2nd Part)' dated 24- 4-1991 was issued by defendant No,2 awarding the work of the remaining 78 units of the project to the plaintiff. Through this Letter, it , was confirmed by defendant No,2 that, as the required approval
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of modified PC-I of the project had been obtained, the offer of the plaintiff for the project had been accepted. The total contract price was agreed at Rs,23,923,330.50 including the already accepted reduced price of Rs,2,040,000.00. It was mentioned in both the aforementioned Letter of Award dated 20-9-1990 and Letter of Award (2nd Part) dated 24-4-1991, that the defendants had appointed National Engineering Services (Pvt.) Limited (NESPAK) as the 'Engineer' for the project. 4. It is also the case of the plaintiff that he successfully performed his agreed part of the 'contract by completing the project in June, 1996. After proper scrutiny and recommendation by the Engineer, the plaintiff submitted to the defendants his 14th running bill dated 27-10-1998 for Rs,4,273,292.00 and the 15th running bill dated 20-2-1997 for Rs,1,561,158.00. Along with his 14th and 15th running bills, the plaintiff also demanded from the defendants a sum of Rs,2,019,468.00 towards the balance retention money, which had also been recommended by the Engineer for payment. Thus the total amount claimed by the plaintiff from the defendants was Rs,7,853,818.00, which included the outstanding amount of Rs,6,886,718.00 pending from his 14th and 15th bills, and Rs,2,019,468.00 towards the balance retention money. 5. The plaintiff has stated that despite successful completion of the project by him in June, 1996, confirmation in this behalf by the Engineer, and recommendation of the Engineer for payment of his outstanding 14th and 15th running bills and the balance retention money the defendants deliberately avoided to pay him the outstanding amounts. Only a sum of Rs,967,100.00 was paid by defendant No,2 as a part payment through a cheque dated 15-2-1997 leaving an amount of Rs,6,886,718.00 still outstanding. The plaintiff sent a number of reminders and finally a legal notice to the defendants, but no further amount was paid to him. It has also been alleged by the plaintiff that despite successful completion of the project by him in June, 1996, the possession of the project was not taken over by the defendants. Due to this reason, the plaintiff was forced to incur heavy overhead expenses towards the maintenance and security of the project. 6. In the above background, this suit-has been filed for recovery of Rs,7,853,818.00, being the outstanding amount of the 14th and 15th running bills and the balance retention money, and a sum of Rs,5,000,000.00 on account of damages suffered by the plaintiff due to the breach of contract committed by the defendants. While this Suit was pending, the plaintiff passed away where after his legal heirs (the present two plaintiffs) were substituted as plaintiffs in his place. 7. The service on defendant No,1 (the Province of Sindh) was held good in March, 2000, where after the learned A.A.-G. Kept representing defendant No,1 on every date of hearing, but no written statement was filed on behalf of defendant No, 1. After granting many opportunities, defendant No,1 was debarred on 16-3-2001 from filing the written statement. Defendant No,2 (the Senior Member Board of Revenue, Government of Sindh) filed his written statement, wherein it has been alleged that no completion certificate was received by defendant No,2 from the Engineer payment of the balance retention money or the 14th and 15th running bills to the plaintiff was not recommended by the Engineer; the project was still incomplete the possession of the project was handed over by the plaintiff neither to the Engineer nor to the "user" it was the plaintiff who caused heavy losses to the Government the project was to be completed within 18 months as per the Agreement, .But the same was incomplete even after ten years; and that the plaintiff is not entitled to the amounts claimed in this Suit. 8. In view of the pleadings of the parties, the following nine issues were settled by the Court on 27- 5-2002:--- (1) Whether the defendants are entitled to withhold the payment of the balance amount of 14th and 15th bills of the plaintiff due to reasons or grounds stated in para 2 of the written statement? (2) Whether NESPAK, through letter dated 12-6-1998, had recommended for the payment to the plaintiff of the balance of Retention Money, if so, its effect? (3) Whether the work was executed in pursuance of the terms of the contract? If so, on what date?
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(4) Whether the building was ready for handing over the possession of the constructed bungalows by the plaintiff to the defendants? If so, when and to what effect? (5) Whether any portion of the work carried on under the contract Was affected? If so, to what extent and its effect? (6) What is the effect on the above suit of the letter dated 16-5-1998 written to the plaintiff by defendant No,2? (7) Whether the plaintiff is entitled to recover damages from the defendants as stated in para 13 of the plaint, if so, what should be the quantum thereof? (8) Whether the plaintiff has no cause of action to file the above suit? ' To what relief if any, the plaintiff is entitled?" 9. In support of their case, the plaintiffs examined two witnesses, the present plaintiff No,1 (the widow of the deceased plaintiff) as P.W.-1, 'and an Engineer of NESPAK as P.W.-2. P.W.-1 produced both the Letters of Award as Exhibits P/3 and P/5, the Agreement as Exhibit P14, letters/recommendations by the Engineer as Exhibits P/8, P/9 ana P/14, demands/letters/notices by the plaintiff as Exhibits P/6, P/12, P/13, P/15, P/16 and P/20, defendant No,2's letters admitting liabilities with promises to settle the same, as Exhibits P/7, P/10, P/17 and P/21, Minutes of the Meeting presided over by the Additional Commissioner-I, Sukkur, as Exhibit P/11, letters by the Executive District Officer (E.D.O.), Works and Services Department, Sukkur, confirming amounts lying for payment to the plaintiff, as Exhibits P/18 and P/19. All the aforementioned documents produced by P.W.-1 were exhibited. Both the plaintiffs' witnesses were cross-examined by the learned A.A.-G. On behalf of defendant No, 1. Thereafter, a number of opportunities were granted to defendant No,2 to cross- examine the plaintiffs' witnesses, but defendant No,2 failed to do so. By Order dated 25-5-2011, defendant No,2 was debarred from cross- examining the plaintiffs' witnesses, and further, the side of both the defendants was closed as they did not produce any witness. 10. Mr. H.A. Rahmani, the learned counsel for the plaintiffs, submitted that the evidence on record has established that the deceased plaintiff performed his agreed part of the contract and there was no breach of the Agreement on his part. He further submitted that the project was completed by the plaintiff in June, 1996, which was confirmed not only by defendant No,2 himself vide Exhibits P/10 and P/21, but also by the Engineer vide Exhibit P/14 and by the Additional Commissioner-I, Sukkur, in the Meeting (Exhibit P/11) held on 28-2-1998. The learned counsel also submitted that in any case the defendants had admitted their liabilities time and again and had promised to pay the amounts claimed by the deceased plaintiff. In support of his submissions, the learned counsel referred to all the relevant documents produced by the plaintiffs in their evidence, and also to the depositions and cross-examinations of- both the witnesses. He argued that the deceased plaintiff was entitled to receive without any delay the amounts claimed by him towards the 14th and 15th running bills and the balance retention money in view of the successful completion of the project by him, the confirmation thereof by defendant No,2, the Engineer and the Commissioner, Sukkur, the acknowledgement of liabilities by the defendants and their promise to settle the same. Mr. Rahmani contented that the claim for damages by the plaintiffs is fully justified in view of the facts and circumstances of this case. 11. Mr. H.A. Rahmani argued that (i) the defendants did not produce any evidence at all, (ii) the pleadings of defendant No,2 cannot be treated as a substitute of the defendants' evidence (defendant No,1 having not filed its written statement), (iii) the written statement of defendant No,2 has no value in the absence of supporting evidence, (iv) P.W.-1 was not confronted regarding the claim of 14th and 15th running bills, the balance retention money, and particularly the damages, and (v) P.W.-2/the Engineer was also not confronted regarding the scrutiny of bills and recommendations of payments made by him. In the end, Mr. Rahmani submitted that, without prejudice to his contention that the contents of the plaint and the entire evidence produced by the
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plaintiffs have remained unrebutted, the plaintiffs are entitled to a decree as prayed by them in view of the unequivocal and categorical admissions and promises made by the defendants. 12. Ms. Afsheen Aman, the learned State Counsel -appearing for both the defendants, submitted that the main issue in this Suit is the issue No,3; namely, " Whether the work was executed in pursuance of the terms of the contract? If so, on what date?". According to her, the findings on the other issues will depend on the finding of this issue. She submitted that, under Clause 1(iv) of the Letter of Award (2nd Part) (Exhibit P/5), the project was to be completed by the plaintiff within a period of 18 months. She further submitted that the time of 18 months for completing the project was of the essence of the contract; and by not completing the project within the stipulated time, the plaintiff committed , breach of the contract. She further submitted that the Suit is barred by limitation as it was filed in the year 2000, whereas according to the plaintiffs' own case, the project was completed and the amounts became due and payable in the year 1996. The last contention of the learned State Counsel was that, by not producing the evidence and by not confronting the plaintiffs' witnesses, the burden to prove never shifted on the defendants, as the plaintiffs themselves have failed to prove their case or to discharge the burden of proof which was on them. 13. After perusing the pleadings of the parties, examining the evidence on record and hearing the learned counsel, my findings on the issues involved in this Suit are as under:--- ISSUES Nos.1, 2, 3 and 4 14. The first four issues are inter-linked, therefore, they are being dealt with together. It would be advantageous if these issues are again reproduced here for the sake of convenience and ready reference:--- (1) Whether the defendants are entitled to withhold the payment of the balance amount of 14th and 15th bills of the plaintiff due to reasons or grounds stated in para 2 of the written statement? .(2) Whether NESPAK, through letter dated 12-6-1998, had recommended for the payment to the plaintiff of the balance of Retention Money, if so, its effect? (3) Whether the work was executed insurance of the terms of the contract? If so, on what date? (4) Whether the building was ready for handing over the possession of the constructed bungalows by the plaintiff to the defendants? If so, when and to what effect? 15. The contention of the learned State Counsel that the main issue in this Suit is the issue No,3 .And the findings on the other issues will depend on the finding of issue No,3, appears to be correct. Therefore, I will first deal with issue No,3. For deciding issue No,3, the most relevant documents are Exhibits 'P/10, P/11 and P/21, which are discussed separately. Exhibit P/10 is a letter dated 20-11-1997 which was addressed by defendant No,2 to the Commissioner Sukkur Division. The entire contents of Exhibit P/ 10 are of extreme importance and significance, and as such the same is reproduced below:--- ' The Contractor to whom the work of the subjected scheme was awarded has intimated that the work of the project Is complete In all respects excepting the energization. The Contractor has also requested this office to take over the possession of the scheme referred to above. The Board of Revenue is of view that the possession cannot be taken over untill and unless the clarification is sought from you regarding completion of the project. The energization work for which an amount of Rs,1.300 Mln. Was provided, under the revised PC-I has been disbursed to you through PLA Cheques previously. You have informed that the amount so far released would not be sufficient for the purpose of energization, you are therefore requested to intimate the figures of amount required for the purpose referred to above. The NESPAK authorities have also requested to come in contact with you and get the amount included in the re-revised PC-1 including the liabilities of Contractor which is under preparation. ' In view of the facts stated above the undersigned is directed to request you to intimate the present status of the project so that the taking and handing over process of the project may be
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intimated and got finalized. ", (Emphasis added) 16. Exhibit P/10 issued by defendant No,2 establishes many crucial and important facts, such as, defendant No,2 had acknowledged that the plaintiff had intimated him before 20-11-1997 (the date of Exhibit P/10), about completion of the project in all respects except "energization", and had also requested defendant No,2's office to take over possession of the project; defendant No,2's office "was of the opinion" that possession of the project cannot be taken over unless the Commissioner Sukkur Division gives "clarification" regarding completion, of the project ; funds were disbursed/provided to the Commissioner by defendant No,2 for the energization work ; the Commissioner had informed defendant No,2 that the said funds were insufficient for the energization work; defendant No,2 requested the Commissioner, to let him know the amount required by the Commissioner for the "energization work", so that taking/handing over process of the project could be initiated and finalized; the Engineer was also requested by defendant No,2 to co-ordinate with the Commissioner for calculating the amount ; and the PC-I of the proje't had been "re-revised". 17. It is important to note here that nowhere was it mentioned in the Agreement nor was it ever agreed by the parties that the Commissioner Sukkur Division, and/or any other person, will give his clarification or confirmation regarding completion of the project, or that handing/taking over of the project was subject to any "clarification" by the Commissioner Sukkur Division. In fact, there was no role or say of the Commissioner Sukkur Division in the Agreement, Only the Engineer was appointed by the defendants vide Letter of Award dated 20-9-1990 (Exhibit P/3), which formed an integral part of the Agreement. Therefore, not taking over possession of the project by defendant No,2 on the pretext that a "clarification regarding completion of the project" was required from the Commisioner Sukkur Division, was unjustified as it was beyond the scope of the Agreement. The other vital fact that has transpired from Exhibit P/10 is that the "energization work" was not the part of the Agreement, nor was it the responsibility of the plaintiff, as the funds for this purpose were not only disbursed/released by defendant No,2 to the Commissioner Sukkur Division, but defendant No,2 also enquired from him about the additional amount required by .Him to complete the energization work. 18. A perusal of Exhibit P/10 further reveals that PC-I of the project was "re-revised" by defendant No,2. In this context, I refer to Exhibit P/3 (the Letter of Award dated 20-9-1990, which was an integral part of the Agreement) issued by defendant No,2, whereby the plaintiff was required to execute the remaining project subject to approval of the modified PC-I of the project by the relevant Government authorities and the plaintiff's acceptance of the revised price of the remaining work of the project. The plaintiff accepted the revised price, whereafter the Agreement (Exhibit P/4) was executed by the parties. Vide Exhibit P/5, it was confirmed by defendant No,2 that the required approval of the modified PC-I for the project had been obtained. The documents executed by defendant No,2 show that the Original PC-I for the project was modified, and the necessary approval for the said modified PC-I was obtained by defendant No,2. It is to be noted that there was no provision in the Agreement for re-revision of the modified PC-I. Therefore, the defendants had no right to "re-revise " the modified PC-I unilaterally and without the consent of the plaintiff, or in delaying/refusing taking over the project on this ground. 19. After issuance of Exhibit P/10 by defendant No,2 to the Commissioner Sukkur Division, a meeting was held on 28-2-1998 which was attended by the Additional Commissioner-I Sukkur Division, the Engineer, the plaintiff, and the representatives of WAPDA and Sui Southern Gas Company. The Minutes of this meeting are on record as Exhibit P/11, paragraph 3 whereof is reproduced below because of its relevance:--- "3. The Administrative Officer, Board of Revenue, Sindh has already informed the Project Manager NESPAK that the payment could not be made to the contractor unless the Revised PC-I was not
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approved by the Planning and Development Department. The work of. Colony is complete in all respects. However the remaining work could only be finalised after the outstanding bills of the contractor are paid." (Emphasis added) ' Exhibit P/11 leaves no doubt that it was acknowledged and recorded in the above meeting that the project had been completed by the plaintiff "in all respects", and also that the bills of the plaintiff were outstanding. The "remaining work" mentioned in Exhibit P/11 had no concern with the plaintiff, as it pertained to the electric and gas works as mentioned in paragraphs 4 and 5 of Exhibit P/11. 20. Exhibit P/21 is even more relevant and important. It was addressed on 16-9-1997 by the Administrative Officer of the Board of Revenue, Sindh, to the Additional. Chief Secretary (Dev.), Government of Sindh, Planning and Development Department. The last two paragraphs of Exhibit P/21 read as under:--- "Further on account of exclusion of items, additional works and increase of Electric and Gas connection charges the scheme still remained un-operationalize as yet, though the construction works have been completed by the Contractor. The Commissioner Sukkur and our Consultant have also confirmed that the Construction work is completed in all respect excepting energization of Electric, Gas and Water connection. ' In the light of facts stated above, the Board of Revenue requests that the case may kindly be re- considered as the subjected project has been completed in all respect excepting the Electric, Gas and Water internal works and liabilities of Contractor." (Emphasis Added) ' This document (Exhibit P/21) further establishes that the defendants had fully acknowledged the fact of completion of the project by the plaintiff in all respects. 21. Exhibits P/10, P/11 and P/21 discussed above were produced by P.W.-1 in her evidence. Exhibits P/10 and P/21 were issued and signed by the Administrative Officer of the Board of Revenue, Sindh. Exhibit P/11 (the Minutes) was also produced by P.W.-1, During her cross- examination, P.W.-1 was not confronted by the defendants regarding the contents of any of these Exhibits or about the genuineness thereof. No suggestion was made to P.W.-1 that the project had not been completed by the plaintiff, or that the plaintiff's bills were not outstanding. Therefore, the entire contents of Exhibits P/10, P/11 and P/21 produced by the plaintiffs and the implications thereof against the defendants, have, remained unrebutted, 22. With respect to the learned State Counsel, her contentions that the plaintiff was required to complete the project within a period of 18 months which was of the essence of the contract, and by not completing the project within the stipulated time, the plaintiff committed breach of the contract, do not appear to be correct. The project was completed by the plaintiff in June, 1996. Exhibits P/10 P/11 and P/21 were issued after June, 1996 between the period from 20-11-1997 to 28-2- 1998, wherein the Board of Revenue, the Engineer and the Additional Commissioner Sukkur Division, time and again acknowledged and confirmed that the project had been -completed in all respects by the plaintiff in June, 1996. Had the plaintiff really committed breach of the Agreement by not completing the project within the purported stipulated period of 18 months, the aforementioned acknowledgement and confirmation would not have been made/recorded. On the contrary, the alleged delay or breach on the part of the plaintiff would have been recorded in the Minutes (Exhibit P/11), or protests would have been -made by the defendants through correspondence. Admittedly, no such correspondence or evidence has been produced by the defendants. On my query, the learned State Counsel conceded that no specific date for completion of the project was mentioned in the Agreement (Exhibit P/4), 'there was no other agreement between the parties, Exhibit P/5 showing completion period of 18 months was not signed by the plaintiff, and Exhibit P/5 was not an integral part of the Agreement as it was issued by defendant No,2 subsequent to the Agreement.
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23. In view of the admissions and acknowledgements made by the defendants regarding completion of the project by the plaintiff in all respects in June, 1996, the unrebutted evidence produced by the plaintiffs, and no evidence at all by the defendants in rebuttal, I have no hesitation in holding with regard to Issues Nos.3 and 4 that the project was executed by the plaintiff in pursuance of the terms of the Contract in June, 1996, and that the project was ready for the handing over of possession by the plaintiff to the defendants in June, 1996. 24, The Engineer (NESPAK), vide letter dated 12-6-1998 (Exhibit P/14), confirmed to defendant No,2 about completion of the project by the plaintiff "in June, 1996 as per their scope of work", and recommended, the payment of Rs,2,019,468.00 to the plaintiff towards the balance retention money. It was also confirmed in Exhibit P/14 by the Engineer that the 15th running bill of the plaintiff had been verified. By earlier letters dated 27-10-1996 (Exhibit P/8) and 20-2-1997 (Exhibit P/9), the Engineer had confirmed to defendant No,2 that the 14th and 15th running bills of the plaintiff had been scrutinized and were found to be in order. Through these Exhibits P/8 and P/9, the Engineer had recommended payment of Rs,4,273,292.00 and Rs,1,561,158.00 to the plaintiff…
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