Tamil Nadu
Electricity Board & Anr Vs. N. Raju Reddiar & Anr [1996] INSC 603 (24 April 1996)
G.B.
Pattanaik (J) G.B. Pattanaik (J) Ramaswamy, K. Pattanaik. J.
CITATION:
1996 AIR 2025 1996 SCC (4) 551 JT 1996 (6) 14 1996 SCALE (4)180
ACT:
HEAD NOTE:
Leave
granted.
This
appeal by special leave is directed against the Judgment of the Division Bench
of the Madras High Court dated 6.9.1995 in O.S.A.
No. 112 of 1987. The plaintiffs who are the respondents in this appeal filed
the suit on the original side of the High Court for recovery of a sum of Rs.46,08,820/-
together with interest at 18% per annum. It was alleged in the plaint that the
defendants who are appellants in this appeal invited tenders for transportation
of iron and steel materials including unloading, weighment and stocking from
various stockyards of the suppliers to the destination stores during the period
1.9.1978 to 31.8.1979.
In
pursuance of the aforesaid advertisement the Plaintiff No. 1 submitted his
tender on 13.7 .1978 and along with tender submitted a letter was also
enclosed. This offer of the plaintiff was accepted and an agreement was entered
into. In accordance with the agreement the plaintiff furnished a bank guarantee
and deposited the necessary earnest money and commenced the work of transport
of materials. It was further alleged that the plaintiffs carried the material
and delivered the same at various destinations as per the direction given from
time to time by the defendants. In all a total quantity of 1,73,78,821 metric
tones of iron and steel were transported and the necessary bills were submitted
in November, 1979. But the defendant instead of making the payments in
accordance with the terms of the contract postponed the payment of the bills.
It was averred in the plaint that the defendant agreed to pay on multi slab
basis which is apparent from letter of the plaintiff attached to the tender
submitted by him and that was also the trade practice. The plaintiff finally
issued a notice on 28.3.1980 calling upon the defendants to settle the bills
but the defendants replied on 7.5.1980 making several misleading averments. As
the plaintiffs' bills were not settled, the suit was filed for recovery of the
amount as already stated.
The
defendants in their written statement denied the allegations made in the
plaint. The specific stand taken in the written statement was that the
plaintiffs are not entitled to claim multi slab basis and on the other hand
they are entitled to single slab basis. It was stated that the multi slab rates
had never been accepted and not covered by the agreement executed by the
parties. It was also stated that on the basis of instructions from headquarters
the Superintending Engineers have been passing the bills on single slab basis
and the plaintiffs remained silent during the entire tenure of the contract
period but raised this issue after the contract period was over. The defendant
further averred that the plaintiffs have not delivered the materials correctly
at some destinations. In reply to the aforesaid written statement the
plaintiffs also filed a reply statement denying the allegations made in the
written statement and reiterated the stand taken in the plaint. On these
pleadings the learned Single Judge framed three issues and on Issue No. 1 came
to hold that the rates mentioned in Exhibit D-8 will have to be calculated on
single slab basis and not on multi slab basis as contended by the plaintiffs.
So far
as the letter Exhibit P-1 dated 11.7.1978 which was enclosed to the tender form
Exhibit P-2, the learned Single Judge negatived the contention of the defendant
and came to hold that the words written in ink in Exhibit P-1 were there at the
time of submission of the tender. The words were "I have quoted my rates
for each slab and add for every extra one and part thereof". The
plaintiffs' case is essentially based on the aforesaid expression in the letter
which was enclosed to the tender and which according to the plaintiffs was
ultimately accepted. The learned Single Judge, however, construed the
expression "for each slab" mentioned in Exhibit D-6 and came to hold
that the tender was not on multi slab basis. The learned Judge also held that
merely because the tender conditions are not clear one cannot accept the
contention of the plaintiff that the rates agreed upon is on multi slab basis.
Further taking into account the terms and conditions of Exhibit D-1 the learned
Judge came to hold that the irresistible conclusion is that what was intended
is only a single slab basis. The learned Judge also examined several other
tenders and then negatived the plaintiff's contention that the agreement was on
multi slab basis. On an analysis of the pattern of the working of the rates in
several tenders the learned Judge rejected the plaintiffs contention that the
contract was on multi slab basis. Though the plaintiffs relied upon several
recommendations of the Superintending Engineer but the learned Judge on
consideration of the same came to hold that those recommendations will have to
be rejected. It was also held that the terms and conditions of a contract have
to be decided on its own and production of other contracts will not be of any
help in deciding what are the terms of the present contract. He also held that
the defendants failed to produce any other contemporarius contract which has
been granted on multi slab basis. On issue No. 2 the learned Single Judge on
consideration of entire evidence on record came to hold that the shortages
alleged by the defendants had not been established. On Issue No. 3 the learned
Single Judge came to hold that there is considerable delay in the matter of
payment of bills though such delay had occasioned on account of difference in
the interpretation of the terms of the contract and the delay is on the part of
the defendants in settling the bills. With these conclusions and on calculating
on single slab basis the learned Single Judge passed a decree for Rs.
9,31,157.63 with interest at 12% per annum from 1.1.1980 till the date of
decree and thereafter at 6% per annum. The suit was thus decreed in part. The
plaintiffs challenged the decree by filing an appeal and the defendants also
filed a cross-objection challenging that part of the decree in favour of the
plaintiffs. The Division Bench of the High Court relying upon the hand written
portion of Exhibit P-1 and the conduct of the Superintending Engineer in
passing the plaintiffs' bills on multi slab basis as well as relying upon some
other contracts came to hold that the plaintiffs are entitled to freight
charges on multi slab basis. The Division Bench also held that the interpreation
of the learned Single Judge of the expression 'for each slab' is wholly
erroneous and it could only mean that the rate was on multi slab basis. With
these conclusions the Division Bench allowed the plaintiffs' appeal and
dismissed the defendants' cross-objection and hence the present appeal by
special leave.
Mr.
V.R. Reddy. the learned Additional Solicitor General appearing for the
appellants contended that the hand written portion in the plaintiff's letter
Exhibit P-1 dated 11.7.1978 which was enclosed to the tender form Exhibit P-2
is nothing but a subsequent interpolation inasmuch as neither there is any
signature either of the plaintiff or of the receiving officer on the same and
further it was really astonishing that though the tender was submitted on
12.7.1978 but according to the plaintiff an attested copy of the letter could
be obtained from the departmental officer on 11.7.1978. Mr. Reddy further
argued that the acceptance of the tender by the contractor clearly indicates
that it was on single slab basis as the note to the same states "only one
rate should be quoted for various lengths and sizes and not different rates for
different lengths". Mr. Reddy further urged that the very fact that the
plaintiffs did not submit any bills till the end of the contract period and
started to submit the bills during the extended period of the contract would
indicate that with an obvious illegal design the bills were not being submitted
in time. Repelling the reasonings advanced by the Division Bench of the High
Court Mr. Reddy urged that passing of some bills by some of the Superintending
Engineers on multi slab basis is not determinative of the terms and conditions
of the contract particularly when the contract is a written one and
consequently the Division Bench erred in law that the contract was on multi
slab basis.
We
find sufficient force in each of the contentions advanced by the learned
counsel for the appellants.
Mr. Sivasubramanaim,
the learned senior counsel appearing for the respondents repelling the
contentions advanced by Mr. Reddy urged that there was no issue at all on the
question as to whether hand written portion was subsequently inserted with the
connivance of the officers of the Board and therefore it would not be
appropriate for this Court to interfere with the same at this stage. The
learned counsel also contended that the very admission of DW-1, one of the
witnesses of the defendants to the effect that after submission of the tender,
discussions were made with the contractor and the contractor explicitly
expressed to have the work done on multi slab basis, clinches the matter and it
is not open for the defendants to give a go bye to the said admission of the
witness. The learned counsel also urged that the defendants in fact accepted
and acted on multi slab basis as is apparent from the letter Exhibit P-39 dated
18.4.80 from the Superintending Engineer, General Construction Circle/South, Tirunelvalli
to the Chief Engineer, Materials Management, whereunder not only the
Superintending Engineer has candidly admitted that the system of payment of
multi slab basis has been in vogue in several circles but also stated that the
single slab system will not give a workable practical solution. Learned counsel
lastly urged that the single slab system is on the face of it wholly
unreasonable and to sustain the said argument placed before us certain
calculations made in different documents. We are unable to persuade ourselves
to agree with the contentions advanced by the learned counsel for the
respondents.
At the
outset it must be borne in mind that the agreement between the parties was a
written agreement and therefore the parties are bound by the terms and
conditions of the agreement. Once a contract is reduced to writing, by operation
of Section 91 of the Evidence Act it is not open to any of the parties to seek
to prove the terms of the contract with reference to some oral or other
documentary evidence to find out the intention of the parties. Under Section 92
of the Evidence Act where the written instrument appears to contain the whole
terms of the contract then parties to the contract are not entitled to lead any
oral evidence to ascertain the terms of the contract. It is only when the
written contract does not contain the whole of the agreement between the
parties and there is any ambiguity then oral evidence is permissible to prose
the other conditions which also must not be inconsistent with the written
contract. The case in hand has to be adjudged bearing in mind the aforesaid
principles and the plaintiffs being conscious of this position along with the
tender appended a letter and in that letter inserted certain terms by writing
in ink to establish the case that the acceptance of the plaintiffs' tender
would tantamount to the acceptance to the terms contained in the letter in
which there was insertion in writing to the effect that it was on multi slab
basis. It is in this context the question whether such hand written portion was
originally there or was subsequently inserted assumes great significance. We
are unable to accept the stand taken by the learned counsel for the respondents
that there was no such issue on this question inasmuch as this question was
considered by the learned Trial Judge while discussing Issue No. 1 on the basis
of evidence laid and the Trial Judge had given a finding in favour of the
plaintiffs. The said finding, however, on the face of it appears to us to be
wholly unsustainable. As has been stated earlier there was no signature either
by the persons submitting the tender or by the persons receiving the same on
the hand written portion of the letter. The learned Trial Judge had noticed
that the certified copy which was issued by the Board on 11.7.1978 of the
aforesaid letter clearly contains the hand written portion and therefore he
came to the conclusion that the hand written portion was there at the time of
submission of the tender. The tender itself was submitted on 12.7.1978 and we
fail to understand how the Board could grant a certified copy of the letter on
11.7.1978 when the plaintiffs' case itself is that along with the tender he had
appended the letter in question. On this ground alone it can be safely held
that hand written portion in Exhibit P-1 was not there at the time of
submission of the tender but was subsequently inserted obviously with the
connivance of the officers of the Board.
The
Board in its rejoinder affidavit filed in this Court has stated that the
attested copy was actually received on 28.12.1978, much later than the
finalization of the tenders and agreement and in order to build up a case the
aforesaid interpolation has been made. In the facts and circumstances of the
present case the aforesaid stand of the Board appears to us to be wholly
justified and at any rate we have no hesitation to come to the conclusion that
the hand written portion in Exhibit P-1 was not there initially and has been
inserted subsequently. The main basis of the plaintiffs' case on which a multi
slab rate was claimed therefore fails.
The
written agreement between the parties nowhere indicates that the rate to be
paid to the plaintiffs was on multi slab basis and the terms and conditions of
the written contract is not susceptible of such a construction.
It is
no doubt true that DW-1 a witness of the defendants in his evidence had
admitted that after submission of tender there was certain discussions between
the contractor and the authorities and in that discussion contractor had
expressed to charge for the job on multi slab basis and same was accepted by the
authorities. We are afraid a decree cannot be granted in favour of the
plaintiffs on the aforesaid statement since the contract in hand was a written
one. There is no document whatsoever in support of the aforesaid so called
after tender discussion and the acceptance of the terms in the said discussion
to the effect that rate would be charged on multi slab basis.
Then
again if the plaintiff had appended the letter to the tender indicating that he
would be charging on multi slab basis there was no occasion to have any after
tender discussion or to raise the issue of rate being accepted on multi slab
basis. The so called statement of DW-1 therefore is wholly unacceptable and in
the eye of law also cannot be taken into account to vary the terms of the written
contract. The Division Bench of the High Court committed obvious error in
allowing variance of the terms of the written contract relying upon such
statement of DW-1 and granted the decree on multi slab basis.
The
only other question which survives for consideration is whether the conduct of
some of Superintending Engineers in passing some of the bills on multi slab
basis can be pleaded as an estopped against the defendants and can form the
basis of plaintiffs' case. The answer to this question must be in the negative.
It transpires that some of the Superintending Engineers passed some of the
bills on multi slab basis and further when complaints were received and the
matter was investigated into by vigilance to absolve the concerned officers
from liability, a recommendation has been made to grant the rate on multi slab
basis. But such a recommendation or such passing of bills on one count or multi
slab basis cannot be construed to have conferred a right on the plaintiffs to
get the payments on multi slab basis, until and unless it is proved by the
plaintiff that the defendants agreed under the written contract to pay on multi
slab basis. The plaintiffs have utterly failed to establish the same. A
particular officer for various reasons may pass a bill on multi slab basis or a
contractor may be able to get one of his bills passed at a rate other than the
rate given in written contract in connivance with the passing authority. But
when a dispute arises and the matter comes to court for adjudication no decree
can be granted to the plaintiffs on that basis and the plaintiffs would be
required to establish that the defendants in written contract agreed to grant
the rate on multi slab basis. That has not been established in the case in
hand. Therefore, in our considered opinion the Division Bench of the High Court
wholly erred in law in allowing the plaintiffs' appeal and granting the decree
accepting plaintiffs' claim that the rate has to be paid on multi slab basis.
In the aforesaid premises the impugned judgment and decree of the Division
Bench is set aside and that of the learned Single Judge is affirmed. This
appeal is allowed but in the circumstances there will be no order as to costs.
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