TaxTMI 
TaxTMI 
1957 (11) TMI 37
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....h from the date of the order to commence, which was proper to be placed on or about 29-7-1949. He received tenders from five contractors 28-7-1949, the last late fixed for the purpose, of them, the defendant's tender for Rs. 7,1 Ex. A-4 dated 27-7-1949, was the lowest. Ex. read with the amendments thereto set out in a list both of which have been signed by the defendant, is in the following terms: To the Governor-General of India-Having examined and perused the following document 1. Specifications signed by the G. E., Vizagapatnam. 2. Drawing detailed in the specifications, 3. Schedules A. B. C and D attached the 4. M. E. S. Schedule of prices for works repairs to buildings, etc., 1817 (hereinafter and in I, A. F. W. 2249 referred to as the 'MES' schedule) together with amendments Nos. 1 to 4 of May 1949, 5. General conditions of contracts I.A.F.W. 2249, together with amendments Nos. 1 to 13. We agree to execute all the....
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....re that the contract not a completed one but was still at the stage of negotiations between the parties, that in event the contract was not valid as it did comply with the requirements of S. 175(3) of Government of India Act, 1935, that it was vitiated by mutual mistake as to the nature of the work, and that the Garrison Engineer rendered performance impossible by refusing to supply a crane and iron materials. Objection was also taken to the quantum of damages claimed. The learned Subordinate Judge found all these points against the defendant, holding that Ex. A-4 along with the endorsement of its acceptance by the Garrison Engineer, P.W. constituted a completed contract and satisfied the requirements of S. 175(3) of the Government of India Act and that there was no mutual mistake or impossibility of performance. He according decreed the suit and the defendant has come up in appeal. 4. Sri G. Balaparameswari Rao, the learned counsel for the appellant, has reiterated all the contentions which were unsuccessfully urged in the lower Court. The first point taken by him is that there was no completed contract. In order to appreciate his argument, it is necessary to read P.W. 1'....
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....act. This is made clear from the fact that in Ex. A-7 one of the two work orders enclosed with Ex. A-6 for the defendant's signature, the proposed date of handing over was mentioned as 5-8-1949 and the proposed date of commencement of the work was 6-8-1949. In Ex. A-6 dated 2-8-1949, the defendant was given 7 days' time after receiving it for furnishing the security. The intention was clearly that he could furnish the security after commencing: the work. No doubt according to Cls. III and V of the notice Ex. A-3 the tender documents were to be issued to and tenders were invited from only contractors on the M.E.S. approved list and P.W. 1 says that he asked for the security deposit as the defendant was not on the approved list at the time. But the qualification that the tendering contractor should be on the approved list was obviously waived, when the fender documents were issued to the defendant and when P.W. 1 accepted the defendant's tender. It is in the defendant's evidence that he had done M.E.S. contract since 1944 to the tune of several lakhs of rupees. This might have been the reason why the qualification of being on the approved list was not insisted u....
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....ould not prevent full effect being given to the contract already existing, unless it is established as a fact that the contract was rescinded or varied with the consent of both the parties or that both parties treated it as incomplete and inconclusive. Once completed, the contract can be got rid of only with the concurrence of both parties. It was open to the defendant here to have refused to give the security deposit and to have insisted that his offer, which was accepted, was to execute the work without furnishing any security. Actually he did not demur against the demand for security and agreed to furnish it, his reply Ex. A-17 dated 24-8-1949. 6. We shall next deal with the contention that a binding contract was not concluded by reason of the defendant not signing and returning 2 copies of Ex. A-6 and of the work order which have been marked as Exs. A-7 and A The questions that arise for consideration are whether the parties were ad idem even wither the defendant completing these documents a whether his doing so was contemplated by the parties and was a condition precedent to a binding contract. It is well settled that an absolute acceptation of a....
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.... is consistent with the one month's time allowed by CI. 2 of the ''Preliminary and General Conditions" signed by the defendant at page 34 of Ex. A-1. Thus it is clear that all the material terms of the contract were covered by Ex. A-4. The defendant's convenient story that he affixed his signature to the tender forms without perusing or examining them cannot be accepted, as he was an experienced M.E.S. contractor and had the assistance of his agent D.W. 1 who knew English. The documents establish that upon the acceptance of Ex. A-4, the parties were ad idem on all the material terms of the contract and that no terms were left over to be settled by the defendant's signing the copies of exs. A-6 to A-8. 6a. On the question whether the agreement confirmed by the acceptance of the defendant's tender was provisional and subject to the execution of another formal document, the averment in the plaint was that no separate agreement was intended or contemplated and this was traversed in the defendant's written statement. The position of the law on the subject has has been summarised by Parker J. in Von Hatzfeldt Wildenburg v. Alexander, 1912-1 Ch. 284 at....
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....larly signed by him do not form part of the contract agreement. Ex. A-6, paragraph (3) read "this letter, will also form part of the contract agreement and you are requested to sign and return two of the copies enclosed herewith immediately to its officer (Sic)" (The witness explains that a contract is concluded the moment the contractor receives acceptance letter from the Garrison Engineer). The work orders, etc., are records necessary for the execution of the contract and for the purpose of billing the contract afterwards. P.W. 1 has not referred to any provisions of law or in the negotiations between them to support either of his conflicting view on the question whether the signing of the acceptance letter and the work orders by the defendant was necessary to conclude the contract. Reading his evidence, as a whole it is manifest that he was giving only his own uncertain impressions as to what was required by the law. In the circumstances, his evidence can be of no avail to substantiate the learned counsel's contention that the unconditional acceptance of the defendant's tender did not have the effect of concluding the contract. The learned counsel next relies on Cl. 1....
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.... case may be, shall vest in His Majesty for those purposes. 3. All contracts made, in the exercise of the executive authority of the Dominion or of a Province shall be expressed to be made by the Governor-General, or by the Governor of the Province, as the case may be and all such contracts and all assurances of property made in the exercise of that authority shall be executed on behalf of the Governor-General or Governor by such persons and in such manner as he may direct or authorise. Section 30 of the Government of India Act, 1915 reads : 1. The Governor-General in Council and any local Government may, on behalf and in the name of the Secretary of State in Council, and subject to such provisions or restrictions as the Secretary of State in Council, with the concurrence of a majority of votes at a meeting of the Council of India, prescribes, sell and dispose of any real or personal estate whatsoever in British India, within the limits of their respective Governments, for the time being vested in His Majesty for the purposes of the Government of India, or raise money on any such real estate by way of mortgage, and make proper assuranc....
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....be observed that S. 30(1) of the Government of India Act, 1915, corresponded some extent to S. 175(1) of the Act of 1935. By S. 30(3) of the Act of 1915 only required the every contract shall be executed by such personal in such manner as the Governor-General Council, by resolution, directs or authorises. Section 175(3) of the Act of 1935 goes further and demands that the contract must be expressed be made by the Governor-General. Power to make contract is conferred by S. 175(1) of the Government of India Act. Under sub-s. (3) all contracts made in excise of the executive authority of the Domini shall be expressed to be made by the Government General... There is conflict of authority as to whether a contract, in order to satisfy the conditions of S. 175 or its previous count part S. 30 must be incorporated in a formal de In Secy. of State v. Yadavgir Guru Dharrngir, ILR 60 Bom 42: (AIR 1936 Bom 19) (K), a Bench of the Bombay High Court held that, in or to bind the Secretary of State, there must be deed executed in his name and by the proper authority. In Secretary of State v. Bhagwandas Goverdhandas, AIR 1938 Bom 168 (L), another Bar of t....
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.... of Rs. 40,000/- and this was not alleged in his cross-examination. As we have already indicated, Ex, A-4 has be read along with the list of amendments thereto at page 9 of the file Ex. A-1 which has been signed by the defendant. Ex facie the tender is expressed to be made to the Governor-General and to be accepted on behalf of the Governor-General. No doubt the acceptance is not expressed to be made by the Governor-General but only by P.W. 1 on behalf of the Governor-General. But we do not consider that this is a defect of substance. Reading the document as a whole, we hold that the contract is expressed to made by the Governor-General and has been executed on his behalf by P.W. 1 who had the necessary authorisation. 10. In this view, it is unnecessary for us to with the alternative contention on behalf of Government that even if Ex. A-6 is construed conditional acceptance the defendant agreed the condition by his letter Ex. A-17 dated 24-19 and the resulting contract which came into existence by the correspondence satisfies S. 175(3) is valid. We agree with the learned Subordinate Judge that the contract evidenced by Ex. complies with the requirements of S. 175(3) the Gover....
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....x I that some of them weighed as much as 5 tons and that it would have been impossible to handle them without a crane. He also points out from P.W. 1's evidence that iron was a controlled article in 1949 and that paragraph 12 of the "Preliminary and general conditions" at page 34 of Ex. A-1 mentioned that assistance may be given to the contractor for obtaining necessary permit for controlled articles. But the appellant wanted cranes and iron materials without payment for them as is clear from his letter Ex. A-26 dated 20-10-1949 in which he asked for them at "no cost basis". There was no justification whatever for such a demand because it was clearly stated in Schedules B and C of the tender documents that no articles would be supplied to him. P.W. 1 also definitely informed the appellant by Ex. A-15 dated 18-8-1949 that he had to provide himself with the necessary equipment or machinery. The appellant's reply was Ex. A-17 undertaking to begin the work on 29-8-1949. Thus the principle of S. 53 of the Contract Act has absolutely no application to the facts. According to P.W. 1's evidence the use of a crane was not essential for the work, although it might have minimis....
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.... by his letter, Ex. A-26, dated 20-12-1949 he refused to carry out the work unless the plaintiff agreed to his new conditions that a crane and certain iron materials were supplied to him on no costs basis. After this, the plaintiff was manifestly entitled to treat the contract as at an end and it is not necessary to consider whether the plaintiff could have also terminated the contract on the ground mentioned in his letter Ex. A-10 dated 26-10-1949 that the defendant did not complete the work within the agreed time. The plaintiff is entitled to recover from the defendant in the words of S. 73 of the Contract Act, compensation for any loss or damage caused to him by the breach, which naturally arose in usual course of things from such a breach or which the parties knew, when they made the contract, to be likely to result from the breach of it, but not for any remote and indirect loss or damage sustained by reason of the breach. 15. The rule applicable for determining the amount of damages for the breach of a contract to perform a specified work is that the damages are to be "assessed at the pecuniary amount of the difference between the state of the plaintiff upon the breach o....
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....rectness of any of the measurements or calculations he ought to have called for the necessary documents from the plaintiff, which he failed to do. The learned Subordinate Judge says that a memo of calculation was filed by the Government Pleader there and that no dispute raised before him as regards its correctness, consider this objection to be untenable. 17. The second objection is that the plaintiff did not make any attempt to mitigate damage, but on the other hand swelled the same.This objection is taken both with reference the propriety of having got the work done P.W. 2 and the propriety of the deviations, was undoubtedly the duty of the plaintiff mitigate the damage caused by the defend breach. Although, Cl. 53 of I. A. F. W. 2249 vides that after the contract is cancelled, work may be got done at the contractor's and expense, under Cl. 51 the contract is governed by the general law. The plaintiff cannot claim to be compensated for any loss which due to his own failure to behave reason after the breach. The principles applicable stated at pages 399 to 401 of Indian Contract Specific Relief Acts by Pollock and Mullah Edition, 1944) on the authority of a numb English cas....
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....d to do the work. That letter is not filed into Court. The second lowest tender was that of Prabhakar and Company. None came to me in connection with that tender. Some agent of Prabhakar and Company was interviewed. I do not know his name. There is absolutely no explanation as to why the alleged letter of Prabhakar and Co. which is vital to support the view that the plaintiff did not act in an unreasonable manner, has not been produced. The legitimate inference is that if produced it would have been unfavourable to the plaintiff. The important fact to be borne in mind is that in entrusting the work to P, W. 2, P. W. 1 got it done at nearly double the rates offered by the defendant without sufficiently attempting to get it done at intermediate rates. The correspondence in connection with enforcing the defendant's contract proceeded in a leisurely fashion and it is not shown as to how the execution of the work suddenly became urgent and how further delay was injurious to the plaintiff after the defendant's contract was terminated. If the difference had been small, as in the case of Prabhakar and Co., it might have been reasonably be said that the delay on account of cal....