V. R. Sejbramanyam Vs. B. Thayappa
& Ors  INSC 30 (1 February 1961)
CITATION: 1966 AIR 1034 1961 SCR (3) 663
Building contract--Defective work--Additional
work not covered by agreement--Compensation, when can be allowed--Indian
Contract Act, 1872 (9 of 1872), s. 70.
The appellant entered into an agreement with
the respondent who was a building contractor entrusting him with the work of
constructing a house and shops. The respondent undertook the work but before it
could be completed disputes arose between them and the appellant claimed
compensation for effecting repairs to rectify defective work done by the
respondent, and the respondent claimed compensation at certain rates set up by
him for work for which there was no express provision in the written agreement.
Suits based on their respective claims were filed by the appellant and the
respondent which were partly decreed by the trial court.
The High Court dismissed the appellant's suit
entirety and remanded the respondent's suit
directing the appointment of a qualified engineer for determining, according to
the directions given in the judgment, the amount payable to the respondent for
work done in addition to the agreed work under the contract. The appellant
contended that the respondent having failed to prove the oral agreement pleaded
the respondents' suit should have been dismissed and compensation quantum
meruit which was not claimed should not have been awarded.
Held, that if a party to a contract rendered
service to the other not intending to do so gratuitously and the other party
had obtained some benefit, the former was entitled to compensation for the
value of the services rendered by him.
The respondent not intending to do gratuitous
work was entitled to compensation for additional work not covered by the
Even if the respondent failed to prove his
claim for compensation at the prevailing market rate under an oral agreement
the court had jurisdiction to award compensation for work done under S. 70 of
the Contract Act.
The appellant's suit having been dismissed by
the High Court and no appeal having been preferred against it, it was not open
to him to reagitate the same question of compensation in the companion suits in
which no equitable set-off was claimed.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 321 and 322 of 1956.
Appeals by special leave from the judgment
and decree dated September 21. 1951, of the Mysore High Court in Regular
Appeals Nos. 3,24,13 and 25 of 1948. 49, arising gut of the judgment and decree
dated 85 664 January 9, 1948, of the Principal District Judge, Bangalore, in
Original Suits Nos. 55 of 1946-47 and 117 of 1945-46 respectively.
S. K. Venkataranga Aiyangar and S. K. Aiyangar,
for the appellant.
B. K. B. Naidu, for the respondents.
1961. February 1. The Judgment of the Court
was delivered by SHAH, J.-V. R. Subramanyam, the appellant herein is the owner
of plot No. 29, Subedar Chattram Road in the town of Bangalore. B. Thayappa
respondent is a building contractor.
The appellant entrusted the respondent with
the work of constructing a house and shops on the plot, on terms and conditions
set out in a written agreement dated October 1, 1942, which was slightly
modified on October 6, 1942. By the agreement the respondent was to construct
for the appellant on the plot six shops abutting a public road, the main
building at the rear of the shops, an out-house and a garage according to a
site plan. The respondent was to be remunerated at rates specified in the
agreement: for constructions with R. C. C. roofing, the rate stipulated was Rs.
4-2-0 per square foot and for " tiled construction " it was Rs. 3-2-0
per square foot. The Municipality of Bangalore did not sanction the plan as
proposed by the appellant. The plan was altered and it was sanctioned, subject
to those alterations. By the alterations the shops were deleted from the plan,
the area of the out-house was increased, and a puja room on the ground floor
and an extra room on the first floor were added to the plan. A compound wall
was also to be constructed. The respondent carried out a substantial part of
the construction work according to plan and the appellant paid to him diverse
sums of money and delivered building materials. The aggregate amount
accordingly received by the respondent was Rs. 20,200. But before the work
could be completed disputes arose between the appellant and the respondent
about the work done by the latter. The appellant claimed that the work done was
defective and that he was entitled to compensation for effecting 665 repairs
necessary to rectify the defects. The respondent claimed compensation at
certain rates set up by him for work done for the appellant for which no
express provision was made in the written agreement. Each party set up an oral
agreement about the remuneration to be paid to the respondent for the extra
work which was not included in the original agreement.
The appellant filed a suit in the court of
the Subordinate Judge, Bangalore, against the respondent which was later
transferred to the court of the Principal District Judge, Bangalore, and
numbered O. S. 54 of 1946-47, for a decree for Rs. 8,515-4-0 being the amount
of compensation which the appellant claimed he was entitled to receive from the
respondent for defective work and for delay in completion of the construction.
The respondent filed a suit against the appellant which was later transferred
to the Court of the Principal District Judge, Bangalore, and numbered 55 of
1946-47. By this suit, the respondent claimed a decree for Rs. 5,988-12-0 being
the remuneration due to him for the work done in constructing the house less
Rs. 20,200 received from the appellant. The respondent filed another suit No. 117
of 1945-46 for a decree for Rs. 15,001-10-9 with interest and notice charges
being the amount due to him for the construction of the out-house, godown,
first floor room and flight of steps and the value of some building materials
which the respondent claimed he had left in the premises of the appellant and
which the latter had wrongfully removed.
The trial court granted to the appellant a
decree for Rs. 3,000 in suit No. 54 of 1946-47. To the respondent, he granted a
decree for Rs. 2,989-6-0 in suit No. 55 of 1946-47 and in suit No. 117 of
1945-46, he granted a decree for Rs. 13,329-10-9. Both the parties felt
themselves aggrieved by the decrees passed in the three suits and six appeals
were preferred to the High Court of Judicature of Mysore at Bangalore against
those decrees. The High Court reversed the decree passed in suit No. 54 of
1946-47 and dismissed the appellant's claim in its entirety. The decrees 666
passed in suit Nos. 55 of 1946-47 and 117 of 1945-46 were also set aside and
proceedings were remanded to the District Court with a direction that a
qualified engineer be appointed as Commissioner to determine the amounts
payable to the respondent for work done in addition to the work agreed to be
done under the written contract. The High Court ordered that the same be determined
" in accordance with the directions " given in the judgment. The
appellant has appealed to this court against the decrees in suits Nos. 55 of
1946-47 and 117 of 1945-46 with special leave under Art. 136 of the
Constitution and he challenges the directions given in the order of remand.
The dispute between the parties related to
the construction of the out-house, garage, puja room, the room on the first
floor, the stair case 'leading to the upper floor room and the compound wall.
In respect of these constructions (except for the compound wall) the District
Judge awarded compensation to the respondents at the rate of Rs. 4-2-0 per
square foot and in respect of the compound wall he awarded compensation at the
rate of Rs. 5 per running foot, and certain additional charges. The High Court
held that the respondent was entitled to receive compensation at the prevailing
market rate for constructions which were not covered by the agreements dated
October 1, 1942 and October 6, 1942. The High Court negatived the plea of the
respondent that the appellant had agreed to pay him at " extra rates for
deviations and additions not specifically contained in the original agreement.
" The High Court then held that for the construction of the out-house,puja
room and the upper floor room, the respondent was entitled to receive
compensation at the rate of Rs. 4-2-0 and for the out-house he was entitled to
receive " some extra amount for the additional constructions. " In
these items, according to the High Court, there was no material deviation from
the original plan. The High Court further directed that for the flight of
stairs compensation be paid either "by way of a lump sum or on cubical
content whichever was more practicable or common according to the rates which they
proposed to indicate for such 667 additional work. " The High Court
however held that there was substantial variation from the original contract in
the construction of the garage, and therefore the garage could " not be
covered by the contracted rate" and must be paid for at the rates current
at the end of the year 1943. The High Court also directed that " if the
extra items not covered by Exs. VII and VII(a) have been constructed or
supplied by the defendants as claimed in his bills Exs. XXI, XXII and XXIII are
to be paid for in addition to the flat rate, the basis on which they should be
paid for may.......... be fixed in accordance with the rates contained in Ex.
II. " Counsel for the appellant submitted that as in the view of the High
Court the respondent failed to prove the oral agreement pleaded by him, the
suit should have been dismissed, and they should not have awarded compensation
quantum merit which was not claimed. it was urged that the respondent must
succeed or fail' on the case pleaded by him, and not on a cause of action not
pleaded. In our view, there is no substance in this contention. As we have
already observed, in respect of the additional work done by the respondent,
both the parties set up conflicting oral agreements. These were not accepted by
the High Court. If a party to a contract has rendered service to the other not
intending to do so gratuitously and the other person has obtained some benefit,
the former is entitled :to compensation for the value of the services rendered
by him' Evidently, the respondent made additional constructions to the building
and they were not done gratuitously. He was therefore entitled to receive
compensation for the work done which was not covered by the agreement. The
respondent claimed under an oral agreement compensation at prevailing market
rates for work done by him: even if he failed to prove an express agreement in
that behalf, the court may still award him compensation under s. 70 of the
Contract Act. By awarding a decree for compensation under the Statute and not
under the oral contract pleaded, there was in the circumstances of this case no
668 substantial departure from the claim made by the respondent.
It was then urged that the High Court was in
error in directing assessment of compensation for the additional work " in
accordance with the rates mentioned in Ex. II. " The plaintiff's witness
T. S. Narayana Rao had admitted that the rates in Ex. II were the current
market rates for building construction work similar to the appellant's building.
In the view of the High Court, the rates set out in that bill were not
excessive. If with a view to restrict the scope of the enquiry, the learned
judges of the High Court gave a direction to the Commissioner for assessing
compensation on the basis of rates which were approved by the plaintiff's
witness, it cannot be said that any serious error was committed in
incorporating that direction which would justify our interference.
Finally it was urged that the appellant was
entitled to claim the loss suffered by him on account of defective work by way
of an equitable set off in the claim made by the respondent in suits Nos. 55 of
1946-47 and 117 of 1945-46.
But the appellant made a claim in a
substantive suit for compensation for loss suffered by him because of the
alleged defective work done by the respondent. That suit was dismissed by the
High Court and it is not open to the appellant thereafter to seek to reagitate
the same question in the companion suits when no appeal has been preferred
against the decree in suit No. 54 of 1946-47.- and no plea of equitable set off
has been raised in the written statements in the companion suits.
In our view, there is no substance in any of
the contentions raised. The appeals therefore fail and are dismissed with
costs. One hearing fee.