Sunday 23 October 2016

When bank can not refuse to make payment to contractor in works contract?

After execution of the work, contractor, plaintiff-respondent No.1, herein instituted a suit for recovery of security amount, balance due, payment of final amount along with interest. 
It was pleaded in the plaint that the contractor, plaintiff-respondent, herein was always ready and willing to do remaining wooden work, but since the bills raised were not paid, therefore, the wooden work could not be carried by the contractor.
Having heard the learned counsel appearing for the parties, this Court is of the view that if there was a delay in execution of the work and the contractor had not commenced the work within four-&-half months, the period stipulated for completion of the work, the defendant-appellants always had the option to annul or cancel the work order. To their best of wisdom, the defendant-appellants persisted that the contractor should execute the work. 
This Court cannot become oblivious of the fact that the Bank had also given a provisional extension to the contractor to complete the work, hence, the Bank cannot rue for the delay on the part of the plaintiff-respondents. Furthermore, since the Bank itself had not cleared the bills, therefore, an impediment was caused for the contractor not to complete the wood work. 
Reportable
In the High Court of Judicature for Rajasthan at Jaipur Bench Jaipur

S.B. Civil First Appeal No.85 of 1996
Rajasthan State Cooperative Bank Limited and Others
V
Sh. Ramavtar Sharma and another
Dated:    15.02.2016

Hon'ble Mr. Justice Kanwaljit Singh Ahluwalia
Citation: AIR 2016 (NOC)657 Raj



Instant appeal has been instituted by the defendant-appellants, namely Rajasthan State Cooperative Bank Limited, Jaipur through its Managing Director, in order to assail the impugned judgment and decree dated 03.06.1995 rendered by the Court of Additional District Judge, Sikar, whereby the suit of the plaintiff-respondent was decreed for Rs.13,402/-.
Ramvatar Sharma, plaintiff-respondent No.1, herein is a work contractor. Way back on 08/12.03.1983, he was awarded construction work of 100 MT Godown (residence) at G.S.S. Kotri Shimarla, Police Station Srimadhopur District Sikar (Rajasthan). In the work order, he was asked to carry out the work upto an amount of Rs.81,771/-. The work order (Exhibit/2) further stated that work allotted will be restricted upto Rs.70,666/-. A condition was also specified in the work order that the work is to be completed within a period of four-&-half months from the date of issuance of the work order. 
 Mr. J.K. Singhi, learned senior counsel, ably assisted by Mr. Amitabh Jatav, ld. counsel appearing for the defendant-appellants, has submitted that the plaintiff-respondents had not started the work within four-&-half months, the period stipulated for the completion of the work. It is contended that after giving repeated reminders, execution of the work started in the month of July, 1983. Ld. senior counsel has further submitted that after completing the work upto Rs.70,666/-, contractors stopped the work and later-on, the wooden work was to be awarded to another contractor and, hence, the delay had occurred in execution of the contractor. 
After execution of the work, contractor, plaintiff-respondent No.1, herein instituted a suit for recovery of security amount, balance due, payment of final amount along with interest. 
It was pleaded in the plaint that the contractor, plaintiff-respondent, herein was always ready and willing to do remaining wooden work, but since the bills raised were not paid, therefore, the wooden work could not be carried by the contractor.
Be that as it may, ld. Court of Additional Sessions Judge, Sikar, vide its impugned judgment dated 03.06.1995, decreed the suit for Rs.13,402/-. The ld. trial Court held that regarding remaining claim, suit of the plaintiff is to be dismissed. The ld. trial Court further held that the plaintiff will be entitled to interest on amount of Rs.6056/- from the date of filing of the suit i.e. 11.01.1998 @ 12%  per annum till realization. 
Mr. Vaibhav Bhargava, learned counsel appearing for the plaintiff-respondents, has submitted that during pendency of the present appeal, decreetal amount has been paid. 
This Court on the previous date has specifically asked ld. counsel appearing for the defendant-appellants, whether after payment of the decreetal amount, they are still willing to pursue the appeal or not. 
Mr. J.K. Singhi, ld. Senior counsel, on instructions from the Bank Manager, has submitted that he has been instructed to leave the matter at the doors of the Court and the Court may decide the case at its own and the same will be accepted by the appellant.
Having heard the learned counsel appearing for the parties, this Court is of the view that if there was a delay in execution of the work and the contractor had not commenced the work within four-&-half months, the period stipulated for completion of the work, the defendant-appellants always had the option to annul or cancel the work order. To their best of wisdom, the defendant-appellants persisted that the contractor should execute the work. 
This Court cannot become oblivious of the fact that the Bank had also given a provisional extension to the contractor to complete the work, hence, the Bank cannot rue for the delay on the part of the plaintiff-respondents. Furthermore, since the Bank itself had not cleared the bills, therefore, an impediment was caused for the contractor not to complete the wood work. 
The finding has been returned by ld. trial Court, after appreciating the evidence. Hence, no interference is warranted, especially when the decreetal amount has been paid. However, this Court deprecate the tendency on the part of officials not to take decisions and leave everything on the doorstep of the Court. Those who are manning public institution must take a decision for the best interest of the institution. However, each and every litigation cannot be thrown at the face of the Courts, which are facing over explosion of the  docket.
It is to be noted here that in this Court the appeals of lifers were not decided, even though they have undergone fourteen years, it is now with much effort arrears of appeals have been reduced and period of detention has been brought down. Unnecessarily litigation choke the system. 
After decreetal amount was paid an opportunity was given to the Bank Manager to decide, whether he wanted to pursue with the appeal or not. Arrogance of the official not to take decision and the attitude that 'let the Courts decide and play safe' is not a good policy. It is not good to abdicate one's duties. The State must have a litigation policy to reduce the pending cases.
Hence, the present appeal is dismissed with cost of Rs.10,000/- (Rupees Ten Thousand Only). The cost of Rs.10,000/- shall be deposited with the Office of the Secretary, Rajasthan State Legal Services Authority, Jaipur so that same is utilized for the legal aid to the poor persons.
The Secretary, Rajasthan State Legal Services Authority, Jaipur is also directed to recover the cost so imposed by taking active steps. 
Copy of this order be sent to the Secretary, Rajasthan State Legal Services Authority, Jaipur.
 [ Kanwaljit Singh Ahluwalia ] J.


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