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Judgment
AR. Lakshmanan, J.—The plaintiffs, who succeeded in part before the learned single Judge of this Court, are the appellants in the above
appeal and the respondents in the memorandum of cross objections filed by the Tamil Nadu Electricity Board, who are the respondents in the
appeal.
The appellants filed the suit C.S. No. 678 of 1982 on the file of the Original Side of this Court, for recovery of a sum of Rs. 46,08,820 together
with interest at 18% per annum from the date of institution of the suit till the date of realisation and for costs. The respondents/defendants invited
tenders (Specification No. P. 543) for transport of iron and steel materials including unloading, weighment and stocking from various stock-yards
of the supplies to the destination stores of the respondents during the period 1.9.1978 to 31.8.1979. In pursuance of the said tender, the 1st
appellant submitted his tender form on 12.7.1978 along with a letter dated 11.7.1978 quoting the following rates:
Rate per kilo metre per ton
-----------------------------------------
(a) 0 to 50 kms Rs. 1.26
(b) 51 to 200 kms Rs. 0.26
(c) 201 to 400 kms Rs. 0.24
(d) 401 to 600 kms Rs. 0.19
(e) Beyond 600 kms Rs. 0.11
For hill areas, Rs. 3.00 per kilo metre per metric ton.
The respondents by their letter dated 25.8.1978 accepted the tender submitted by the appellants and entered into an agreement dated
31.8.1978 incorporating the terms and conditions. Pursuant to the agreement, the appellants also furnished a bank guarantee for Rs. 1,00,000 and
also deposited a sum of Rs. 5,000 as Earnest Money Deposit and executed an Indemnity Bond dated 31.8.1978 in favour of the respondents and
commenced the work of transport of materials. According to the appellants, they transported and carried the materials offered for carriage and
delivered the same at various destinations as per the directions given from time to time by the respondents. Under P.543 tender they had
transported in all a total quantity of 17,378,821 m.t. of iron and steel material, which includes the materials transported as disclosed in the bill
submitted in November, 1979. However, the respondents, without adhering to the terms of the contract, are postponing the payment of the bills.
According to the appellants, a perusal of the tender form and the letter dated 11.7.1978 submitted by the 1st appellant would clearly show that
slab rates were agreed to between the parties as that was the practice of the trade and the 1st appellant had the benefit of such practice on various
earlier occasions before the contract in question was entered into. According to the respondents, only a flat rate was agreed to between the
parties. The stand taken by the respondents is against the very essence of the agreement. The appellants issued a notice on 28.3.1980 and called
upon the respondents to effect settlement of the bill amounts with interest. To the said notice, the respondents sent a reply on 7.5.1980 containing
untenable and misleading averments. Since the bills were not settled, the appellants were constrained to file the suit for recovery of the amounts as
mentioned above.
The 2nd respondent filed a written statement denying the allegations contained in the plaint. According to the respondents, the appellants are not
entitled to claim on multi slab basis, that they are entitled only on single slab basis as contemplated by the Tamil Nadu Electricity Board and that the
multi slab rates were not accepted and not covered by the agreement executed. The Superintending Engineers have been passing the bills on single
slab basis on the instructions from the headquarters office. In other words, according to the respondents, the payments have been made only on
single slab basis and that the appellants having remained silent during the entire tenure of the contract period, had raised this issue only now in the
suit. According to the respondents, as per their office records, a total quantity of 16,765,547 m.t. of iron and steel had been transported against
the contract P.543. The respondents would submit that number of other contracts have also been executed by other contractors on the basis of
single slab and multi slab and that Specification P.543 is distinctly different from the specification of contract on multi slab basis, which the
appellants had executed in the systems in working, form and contents. It is also their case that though the contract was awarded for a period from
1.9.1978 to 31.8.1979 the appellants had sent the bills after a long delay in July/November, 1979, when major portion of the work was
completed. The appellants have also not delivered the materials correctly at destinations. Therefore, it is contended that the claim of the appellants
for Rs. 46,08,829 is not in accordance with the terms of the contract.
The appellants filed a reply statement denying the allegations contained in the written statement. It is stated that P.543 agreement entered into
between the parties specifically mentioned the transport charges on multi slab basis and not single slab basis as contended by the respondents. The
appellants claimed transport charges only on multi slab basis as stipulated in the agreement and the transport charges on multi slab basis was paid
in October, 1979 by the Madurai System, Tirunelveli System and Tirunel veli General Construction Circle. The Chief Engineer had issued
instructions to the said three systems after a lapse of three months to make payments only on single slab basis and to recover the excess from the
appellants and it is only pursuant to such instructions, the said Superintending Engineers deducted the alleged excess from the bills of the appellants
relating to some other work. It is also pointed out that the very same issue was referred to the State Vigilance and Anti Corruption Department and
the said Department sent a report to the Government stating that the claim of the appellants is a reasonable one and is in accordance with the
agreement between the parties. The Government also issued directions to the respondents to make payments to the appellants on multi slab basis
on the report of the Vigilance Department and inspite of these directions, the respondents have not made any payment. It is submitted that the
respondents are bound by the agreement entered into between the parties and the Vigilance Department has no say in the matter. It is relevant to
mention that the matter was referred to the Vigilance Department only for the purpose of finding out whether the appellants have not delivered the
entire quantity of materials that were entrusted to them for transport and that the Vigilance Department had also sent a report stating that there was
no shortage. The agreement in question is also like the one entered into between the same parties in the year 1969-70 with the Superintending
Engineer, Ramanathapuram. It is stated that the Government also in G.O.Ms. No. 432, Industries Department, dated 29.3.1979 had fixed the
transport charges at multi slab basis only. The tenders submitted by three other contractors, referred to in paragraph 15 of the written statement,
did not mention in their tender whether it is single slab basis or multi slab basis whereas the appellants have specifically stated that the tender is on
multi slab basis.
On the basis of the above pleadings, the following issues were framed for trial:
Whether the plaintiff is entitled to claim transport charges only on single slab basis?
Whether the plaintiff had delivered the steel entrusted to him in specie at proper destination as per the terms of contract?
Whether there is any delay on the part of the defendant in settling the bills?
On issue No. 1, the learned Judge held that the rates mentioned in Ex.D-8 will have to be calculated on single slab basis and not on multi slab
basis as claimed by the appellants and accordingly answered this issue in favour of the respondents. On issue No. 2, the learned Judge concluded
that the shortage alleged by the respondents had not been established. On issue No. 3 relating to the delay on the part of the respondents in settling
the bills, the learned Judge held that there is delay on the part of the respondents in settling the bills. In the result, the learned Judge arrived at a sum
of Rs. 14,77,491.63 as the freight charges payable by the respondents to the appellants on single slab basis and awarded interest at 12% per
annum from 1.1.1980 till the date of decree and thereafter at 6% per annum till date of payment with proportionate costs.
The plaintiffs have filed the above appeal against the disallowed portion of their claim in the suit claiming the transport charges on multi slab
basis. The dissatisfied respondents have filed a memorandum of cross-objections in sofaras the finding of the learned Judge relating to the shortage
of goods and the delay on the part of the respondents in making the payments. They also questioned the rate of interest awarded by the learned
Single Judge at 12% per annum from 1.1.1980, till the date of decree and thereafter at 6% per annum till the date of payment, with proportionate
costs. A ground is also raised to the effect that the judgment of the learned single Judge is vitiated in so far as no credit has been given to the
amount of Rs. 56,137 paid to the appellants before the filing of the suit and another sum of Rs. 2,23,557.40 paid on 16.8.1985. Though the above
grounds have been raised in the memorandum of cross-objections, no attempt was made by the respondents/cross-objectors to substantiate the
same. Therefore, the only question which remains to be decided by us is whether the appellants are entitled to claim freight charges on multi slab
basis or on single slab basis.
We have heard the arguments of Mr. V.S. Subramanian on behalf of the appellants and Mr. S. Rajasekar on behalf of the respondents. Our
attention was also drawn to the various documents filed in this case and also to the oral evidence. We have also gone through the entire pleadings,
evidence on record, both oral and documentary, and the judgement under appeal.
According to Mr. V.S. Subramanian, learned counsel for the appellants, the learned Single Judge has proceeded to deal with the matter on
assumptions and presumptions without any evidence and in some cases even contrary to the evidence on record. He submitted that the tender
called for quotation for rates from 0 to 50 kms, 51 to 200 kms, 201 too 400 kms, 401 to 600 kms and beyond 600 kms and not for rates for
distances upto 50 kms, upto 200 kms, upto 400 kms, upto 600 kms and beyond 600 kms. According to the learned counsel for the appellants,
the learned Judge ought to have come to the irresistible conclusion that the tender was invited only for quotation of rates on multi slab basis and
that the appellants had given the tender on multi slab basis. It is further urged by him that this factor alone would decide the issue in controversy.
He then contended that the tender did not call for rates for a particular destination nor did the tender say that for any destination the rates for that
distance range alone would be adopted for the entire distance and on this ground also the learned Judge ought to have held that the rates that were
invited were only and could have been only multi slab rates and not on single slab rate. The learned counsel also argued that the learned Judge has
not properly appreciated the contention of the appellants that the other contracts will have, to be looked into for comparison only and that the
provisions in the other contracts cannot be a criterion in deciding as to whether the contract is a multi slab or a single slab contract.
Learned counsel for the appellants, in order to substantiate his contentions as narrated above, first invited our attention to two exhibits which
are the sole basis for the appellants'' claim. Ex.D-8 is the agreement entered into between the respondents and the appellants for transport of iron
and steel materials from the various stockyards during the period in question as per Specification P.543. The 1st appellant also sent a letter to the
Chief Engineer, Materials Management and Distribution, Madras-2, agreeing to execute the transport work including unloading, weighment and
stacking at the destination stores at the rates quoted by him in the said letter. Annexure I mentions the names of probable destination stores. It is
useful to refer to the rates quoted by the 1st appellant in the said letter.
Distance Range Rate per km/mt
0 to 50 kms Rs. 1.96
51 to 200 kms Rs. 0.26
201 to 400 kms Rs. 0.24
401 to 600 kms Rs. 0.19
Beyond 600 kms Rs. 0.11
Ex.P-1 is the letter dated 11.7.1978 written by the 1st appellant to the Chief Engineer, Materials Management agreeing to submit the tender
for the work in question. It refers to the rates quoted by the 1st appellant for each slab. Ex.D-2 dated 8.8.1978 is the proceedings of the
Electricity Board with reference to U.O.No.SE/RE & LL/T.O./P.543. This refers to the acceptance of the rates of Tenderer No. 4 viz., M/s. N.
Raju Reddiar, Sivakasi, as the rates quoted by him for all ranges are the lowest. It is useful to extract a passage from the said proceedings, which
runs as follows:
It is seen that the rate of Raju Reddiar even for the 0.50 km range is the cheapest. The rates quoted by Raju Reddiar are therefore the lowest in all
ranges. He has however quoted Rs. 3 per km per MT for transport in hill area. Normally 50% over the plains rate is applicable for hills. The
approximate tonnage involved is 300 mt for Kadamparai Project. We may allow 50% over the plains rate foor hill area in case transport in hill area
is involved. M/s. Raju Reddiar also has produced the proof for the bonafide ownership of 4 Nos. heavy duty vehicles. The S.E.P.C./West has also
intimated that the above contractor during 1973-74 has transported steel plates from Cochin to Karamadai and his performance was fully
satisfactory. The performance of the contractor in transporting R.C.C. pales in Madurai and Ramnad Systems has also been satisfactory.
The Board, therefore, recommended that the entire transport contract relating to the transport of iron and steel materials from the stockyards
of M/s. H.S.L., M/s. Tata Iron and Steel Company Limited and M/s. Indian Iron and Steel Company Limited to the various destination stores of
the Board against the above Specification P.543 may be awarded to the 1st appellant at the rates noted below:
Sl.No. Distance Range Rate KM/MT
0 - 50 KMs Rs. 1.96
51 - 200 KMs Rs. 0-26
201 - 400 KMs Rs. 0-24
401 - 600 KMs Rs. 0-19
Above 600 KMs Rs. 0-11
The above proceedings was signed by the ADE, T.O., and SE/MM on 8.8.1978.
Ex.P-8 is the certified copy of Ex.P-1 sent by the 1st appellant to the Chief Engineer. The certified copy was attested by the Assistant
Executive Engineer, Office of the Superintending Engineer, Materials Management, Tamil Nadu Electricity Board, Madras-600 002. Though it is
contended by the learned counsel for the respondents that there is interpolation, we see no interpolation on verification of the original.
Ex.P-45 is G.O.Ms. No. 432, Industries, dated 29.3.1979 issued by the Government of Tamil Nadu wherein the Government, after careful
consideration and in consultation with the Director of Industries and Commerce, Madras, fixed the following road freight for lifting of cement by
road:
Kilometres Per km/Per mt
1 to 50 32 paise
51 to 100 31 paise
101 to 150 24 paise
151 to 200 21 paise
201 to 250 20 paise
251 to 300 19 paise
301 to 350 18 paise
It is thus seen from the above that the road freights are fixed for the distance at different slab rates.
Ex.P-46 is another Government Order issued by the Government of Tamil Nadu in G.O.Ms. No. 1160, Industries Department, dated
19.8.81. The said Government Order refers to the freight rate fixed for movement of cement to hill stations and the revision of freight charges for
plains upwards in G.O.Ms. No. 1149, Industries, dated 18.8.1981. It is seen from the above Government Order that rates were fixed for the first
33 kms at flat rate, next 67 kms at 35 paise and next 96 kms at 28 paise. This document has been put to D.W.2 K.S. Chellappa, who joined the
Board as Junior Engineer and retired as Superintending Engineer. When G.O.Ms. No. 1160, Industries Department, dated 19.8.1981 was put to
this witness, he answered that P.W.D. Schedule is always given by multi stages (vide: Page 208 of Volume 4).
Exs.D-174 and D-175 are the Measurement Books with reference to the Central Stores, Korattur. and T.T.P., Tuticorin. D.W.3, V.T.
Karthikeyan. Divisional Engineer (Electrical), in answer to the questions put to him with reference to Exs.D-174 and D-175, accepted that the
rates arrived at are per ton and on the basis of multi stage system. It is also seen from his evidence that all the Measurement Books, which the
appellants wanted, were not produced before court (vide page 310 of Volume 4). To a question put by the learned counsel for the appellants with
reference to Ex.D-176, in which, according to the appellants, the rate was calculated at multi stage basis in respect of the contract P.543, D.W.3
simply said that he cannot say. A cursory look at Exs.P-20. P-21 and P-22 would show that the bills were passed only at multi point stage. D.W.1
N.R. Rangaswami, Divisional/Executive Engineer in the Board, when questioned in cross-examination with reference to Ex.P-20 and also with
reference to the agreement P.543, dated 31.8.1978, has answered in the affirmative that the Bill has been prepared at multi point stage by the
particular system. He also said that Exs.P-21 and P-22 bills were also prepared at the multi point stage. It is to be noticed that Exs.P-20 to P-22
are the bills passed by the Board in favour of the 1st appellant for the transport work done by him with reference to the tender specification No. P-
543, dated 31.8.1978.
Ex.D.9 is the communication sent by the Superintending Engineer, Materials Management, Madras to the Superintending Engineer, Systems,
Circles and Project, informing him that the bills should be admitted only on single slab system pertaining to their concerned destination and not on
different slab system, such as calculating different rates for different distance ranges. In continuation of Ex.D-9, dated 12.12.1979, the
Superintending Engineer, Materials Management, Madras, sent another communication under Ex.D-10, dated 9.1.1980 to the Superintending
Engineer, Systems, Circles and Projects, directing him to strictly adhere to the single slab system and to take steps to recover the excess amount
paid to the contractor on the basis of multi slab system. As already indicated, these two letters, viz. Exs.D-9 and D-10 were sent after a delay of
one year and odd after the tender specification P-549.
Ex.P-24 is the specification schedule used by the Electricity Board. A question was put to D.W.1 with reference to Clause 6 of Ex.P-24,
which runs thus:
It must be noted that for each trip payment will be reckoned only on particular slab concerned for the entire distance, e.g. for a trip performed
between places 110 kilmetres away, payment will be made for all the 110 kilmetres at the rate as per slab 2 i.e. over 60 kilometres and upto the
inclusive of 130 kilometres and not 60 kilometres at slab (1) rate and 50 kilometres at slab (2) rate. If different trips are performed on the same
day within unpaid empty trips in between, such trips will be reckoned as a separate trip and paid accordingly in the slab concerned.
D.W.1 was asked to say whether in the specification relating to Ex.D-8 suit contract, the expression like the one contained in Clause 6 of Ex.P-24
was used, he answered that the expression found in Clause 6 of Ex.P-24 has not been used in Ex.D-8 suit contract. D.W.2, the Superintending
Engineer also, when Ex.P-24 was put to him and asked whether it is a multi slab contract or single slab contract, only replied that he cannot say.
The officer has purposely, in our view, evaded perusing the contract under Ex.P-24 and given the answer. It is also pointed out that even though
the agreement was entered into between the parties as per tender dated 12.7.1978, a clarification was issued under Ex.D-9 only after a year that
only single slab system should be adopted.
Ex.P-39 is a letter dated 18.4.1980 sent by the Superintending Engineer, General Construction Circle, South, Tirunelveli to the Chief Engineer,
Materials Management, Madras, which was sent by way of reply to the letter dated 28.3.1980 of the Chief Engineer. It is seen from Ex.P-39 that
in the agreement in question schedule rates were given in multiple range and that the transport charges per ton was arrived at adopting the above
slab rate and based on the distance range and that the said rate was claimed by the transport contractor and the bills were prepared by the field
staff, viz. Storekeeper, Kayathar, counter-signed by the Assistant Executive Engineer, T.L.C., Tirunelveli and check measured by the Executive
Engineer, T.L.C., Tirunelveli, adopting the above rate and the bill was sent to the Office of the Superintending Engineer, General Construction
Circle, South, Tirunelveli for making payment. It is also mentioned in the said letter that there is no explanatory note mentioning the mode of
calculation in multiple or single slab and nowhere in the agreement it is mentioned that single slab rate is to be adopted and that this system of
payment has been in vogue in several systems such as Tanjore, Trichy Mettur Electricity System and also in Madurai, Tirunelveli and General
Construction Circles for the last decade.
Ex.P-42 is a letter by the Superintending Engineer, Madurai Electricity System dated 10.4.1980 addressed to the Chief Engineer, Materials
Management, Madras-2 with reference to Specification P.543 contract. The said letter refers to the agreement accepted by the Chief Engineer,
Material Management, in regard to the rates for transport of iron and steel materials under multi slab system. Paragraph 2 of the said letter states
that nowhere the agreement mentions about the adoption of single slab rate. Paragraph 6 of the said letter can be usefully reproduced in this
context. It runs as follows:
In the above agreement, there is mention about adoption of rates under single slab system nor a note as above has been made in the agreement. I
would also state that the Superintending Engineer/MM/Madras has again clarified recently on the method of arriving at the rate/ton for the system
according to the distance - vide his letter No.SE/MM/MMM4/TRPT/F.543/65, dated 9.1.1980. Hence, it may kindly be seen from the above
that slab system of calculation of rates was arrived by this system as per the provisions contained in the agreement.
In the concluding portion of the above letter, the Superintending Engineer has said that the bill was passed by adopting multi slab system based on
the stipulations in the agreement and that the clarification of the Superintending Engineer, Materials Management, Madras, dated 12.12.1979
directing the adoption of single slab system was received by him only after the actual payment was made to the contractor.
Ex.P-43 is a letter dated 14.4.1980 by the Superintending Engineer, Tirunelveli Electricity System to the Chief Engineer, Materials
Management, Madras, wherein the rate accepted by the headquarters with reference to specification No. P. 543 contract has been referred to. He
has also stated reasons for the payment made to the contractor as per the multi slab system. The reasons are:
(a) Absence of explanatory note: At the end of the agreement executed by the headquarters for the rates for different ranges there is no
explanatory note regarding the mode of calculation for payment to be made.
(b) In the tenders that have been floated by this system for transporting of materials, at the end of the schedule, a note saying ''Bill will be admitted
only at the rates in which the distance falls in the above slab'' is being added. A copy of this office specification No. 1/80-81 is enclosed for kind
perusal.
The letter also refers to the previous tender of the Tirunelveli Electricity System and the multi slab rate accepted by them. It further refers to the
tender received by the said system under Specification No. 1/80-81, which was opened on 7.4.1980 and the rate quoted therein.
Ex.P-10 is a similar contract like the present one. The tender for contract was floated by the Ramanathapuram Electricity System for transport
of materials by road between one store to another and to the other stores in other systems and circles of the Madras State Electricity Board and
vice versa.
Ex.P-57 is a letter from the Commissioner and Secretary to Government, Public Works Department, Government of Tamil Nadu, dated
23.3.1982 addressed to Mr. P. Murari, Chairman, Tamil Nadu Electricity Board, Madras. While forwarding a copy of the confidential report of
the Director of Vigilance and Anti-corruption on the allegation of corruption and mal-practice against some of the engineers and other officers of
the Board, it is mentioned that the analysis treating the quoted rates as single slab rates is prima facie absurd as it results in lesser charges for
certain long distances and that the analysis should and could have treated the quoted rates only as multi slab rates.
D.W.1 M.R. Rangaswami, to a question put by the learned counsel for the plaintiffs with reference to the statement made by the respondents
in their written statement has deposed that the tenderers were asked to quote the rates so that for any particular destination, the rate quoted for the
corresponding range in which the distance from the source to destination falls, may be used for arriving at the transport rate for that destination.
D.W.2 K.S. Chellappan, in answer to a question put by the learned counsel for the plaintiffs in cross-examination, has also deposed that the tender
discussions were made with the contractor in this case and that the contractor has explicitly expressed on multi slab basis. Ex.P-44 was also relied
on by the appellants, which also relates to multi stage rate given at about the same time of the present contract. The contract was with reference to
the transport of steel plates from Hindustan Steels Limited stockyard to Tuticorin Thermal Power Project Stores.
Placing strong reliance on the above documents and the oral evidence, Mr. V.S. Subramaniam, learned counsel for the appellants, contended
that the tender called for in the present case was for rates from 0 to 50 KMS, 51 to 200 KMs, 201 to 400 KMs, 401 to 600 KMs. and beyond
600 KMs., and not for rates for distances and on this factor alone, the appellants are entitled to get a decree as prayed for, as according to him,
the tender was invited only for quotation of rates on multi slab basis and that the appellants have also submitted the tender only on that basis and as
such, the conclusion reached by the learned single Judge is erroneous and against the terms of agreement between the parties and therefore, the
judgment and decree of the learned Judge insofar as he disallowed the claim of the appellants, are liable to be set aside.
Per contra, Mr. S. Rajeswaran, learned counsel for the respondents, contended that there is no mention in the contract as to whether the rate
is to be adopted either multi slab or single slab and in the absence of any specific term, the Department is right in sancttioning payment only on the
basis of single slab. He would further contend that the letter dated 12.7.1978 only introduces multi slab and that there is interpolation in Ex.P-8
letter. We have also verified Ex.P-8, which is the certified copy issued by the Department, and we see no interprolation in that document as alleged
by the learned counsel for the respondents.
We can usefully refer to the evidence of P.W.1 N. Raju Reddiar in regard to a question put by the counsel for the defendants in cross-
examination viz-whether in the original of Ex.P-1, the entirety of the contents were typed or whether any portion was in manuscript, P.W.1
answered that at the time of filling up the tender form, the schedule rate of Public Works Department was not known to them and therefore, they
left about two lines blank in that form and after ascertaining the rate, they filled it up in manuscript. P.W.1 also denied the suggestion that the
manuscripts in the original of Ex.P-1 were inserted by him subsequent to the submission of the tender.
Learned counsel for the respondents then contended that there is a collusion and connivance between the officers of the Department on the
one side and the appellants on the other and therefore the multi slab system had been introduced in the contract. We are unable to countenance the
said contention. Such a contention has not been raised by the respondents in their written statement at all. It is settled law that in the absence of any
pleadings, the respondents are estopped from raising such contentions at the time of argument.
Learned counsel for the respondents then referred to the collection and recovery of excess amount paid, from the contractor and contended
that the conduct of the appellants in repaying the excess amount collected on the basis of multi slab system would itself go to show that the
contractor is entitled to claim only on single slab basis. According to the learned counsel for the respondents, the Superintending Engineers have
wrongly passed the bills of the contractor based on multi slab basis but subsequently, recoveries have been effected by the concerned
Superintending Engineers. We are unable to accept the said contention for this reason. The agreement under Ex.P.543 entered into between the
parties specifically mentions the transport charges as multi slab and not single slab as contended by the respondents. The appellants claim the
transport charges only on multi slab as stipulated under the agreement and that the transport charges on multi slab was also paid in October, 1979,
by the Madurai System, Tirunelveli System and Tirunelveli General Construction Circle and after a lapse of more than three months, the Chief
Engineer had issued instructions to the abovesaid three Superintending Engineers to make payments only under single slab basis and to recover the
excess from the appellants. It is only pursuant to such instructions, the said Superintending Engineers deducted the alleged excess from the bills of
the appellants relating to some other work.
The appellants also in their reply statement clearly mentioned the procedure for submitting bills, obtaining payments, etc. There is also the oral
evidence of the 1st appellant as P.W.1 on this aspect. It is seen from the records that bills will be submitted before the concerned Superintending
Engineer and not to the Chief Engineer as contended by the respondents. The concerned Superintending Engineer will note the four relevant
particulars in the Measurement Book and it is only thereafter payments were made. In the instant case, it is not in dispute, that the bills raised by
the appellants were checked and audited by the Chief Store Keeper, Assistant Divisional Engineer and Divisional Engineer and that the said
authorities have also made necessary entries in their respective Measurement Books. The appellants have also specifically denied the contention
raised in the written statement that payments have been made only on single slab basis, which is factually incorrect. We, therefore, reject the
contention of the learned counsel for the respondents that the excess amounts were recovered from the contractor. The fact remains, it is not so.
As clearly explained by the appellants, pursuant to the instructions from headquarters office, the respective Superintending Engineers have only
deducted the alleged excess from the bills of the appellants relating to some other work. Therefore, this contention of the respondents also fails.
Our attention was also drawn to the different tender forms for transport of Board''s materials by road from one departmental stores to another
of the Board. In support of this the respondents have marked Exs.D-179 and D-180. It is further contended that the, 1st appellant himself had
executed multi slab and single slab agreements and number of other contracts have also been executed by other contractors on the basis of single
and multi slabs. It is then contended that Specification No.P-543 is distinctly different from the specification of contracts on multi slab basis which
the appellants had executed in the systems in working, form and contents. Since the appellants did not seek any clarification at the time of
submission of tender or when the 1st appellant signed the agreement, or when the contract becomes final, it is not open to them to claim on multi
slab basis as, according to the respondents, Specification P.543 tenders were called for only on single slab basis. We are unable to accept this
contention as well. It is not in dispute that the respondents have not specifically stated while calling for tenders, about the method of calculation of
transport charges. It is also not specifically stated in what manner the bills should be claimed. It is also pointed out to us that in Tirunelveli System in
Tender No. 3/1974-75 and in Madurai System in Tender No. 5/1974-75, it was specifically mentioned that the transport charges will be paid only
on single slab basis whereas in this case, such a thing was not specifically mentioned. Further, in the Specification P.543, the rate for mileage-wise
alone was mentioned. Therefore, we are of the view, that the contention of the learned counsel for the appellants that the rate is to be taken as
multi slab basis is Correct. In fact, such a procedure was adopted in Ramanathapuram System in Agreement in K.2/Asst. 269-70 and Tirunelveli
General Construction Circle in K-2/Asst. 79-80. It is also proved by evidence that for more than ten years, such mutli slab rates were adopted in
the Electricity Board. A perusal of both multi slab and single slab referred to in the written statement will clearly show that either multi slab or single
slab has been specifically mentioned in those agreements. Hence, we are of the view, that the contention of the learned counsel for the respondents
on this aspect is not tenable.
Learned counsel for the respondents has also invited our attention to the tenders submitted by three other contractors, which is mentioned in
paragraph 15 of the written statement. The tenders submitted by them did not mention whether they are on single slab or multi slab basis whereas
the appellants have specifically stated that the tender is on multi slab basis.
Lastly, it was contended by the learned counsel for the respondents that the appellants will be entitled to the amount calculated on single slab
basis for the transport of 16,598.690 tonnes to several destinations. In support of this contention, learned counsel for the respondents relied on a
statement, which was reproduced by the learned single Judge in paragraph 77 of his judgment. On the other hand, according to the learned counsel
for the appellants, the appellants are entitled to the amount calculated on multi slab basis for transport of 16,762.783 M.T. The particulars of the
total consignments carried by the appellants are set out in the tabular statement filed by them and also marked as Ex.P-5, whereas the statement
relied on by the respondents, which was reproduced in paragraph 77 of the judgment of the learned Judge, was not even marked by the
respondents as an exhibit. In the absence of any proof in regard to the said statement, we are of the view, that the learned Judge has erroneously
adopted the said statement filed by the respondents and arrived at the total materials transported at 16,598.690 M.T. The procedure adopted by
the learned Judge in this regard is wholly irregular. The respondents have miserably failed to prove that the particulars in Ex.P-5 are incorrect or
inaccurate. In the absence of any documentary evidence contra, the learned Judge has committed a serious error in rejecting Ex.P-5. We,
therefore, hold that the appellants are entitled to freight charges for 16,762.783 M.T. on multi slab basis. The reasonings given by the learned
Judge for rejecting the contention of the appellants in regard to their claim on the basis of multi slab basis, and the interpretation given by the
learned Judge to the words ""for each claim"", in our view, are not correct. The learned Judge has failed to appreciate the evidence tendered by the
appellants, both oral and documentary, in its proper perspective. The learned Judge has also failed to notice that several contracts entered into by
the respondents, which are on multi slab basis, have not been produced before court in spite of notice given by the appellants. Therefore, as rightly
contended by the learned counsel for the appellants, an adverse inference has to be drawn. It is the specific case of the appellants that the
respondents are in possession of those documents, which would throw light on the issue in controversy, and purposely the respondents are
withholding the same. Under such circumstances, this Court can draw an adverse inference against the respondents. Therefore, in the
circumstances an adverse inference can be drawn from the non-production of documents by the respondents.
Learned counsel for the appellants has also relied on a passage in Halsbury''s Laws of England, Fourth Edition, Volume 12, para 1460, which
deals with the ascertainment of intention from a written instrument. The function of the court is to ascertain what the parties meant by the words
which they have used and to declare the meaning of what is written in the instrument and not of what was intended to have been written, to give
effect to the intention as expressed, the expressed meaning being, for the purpose of interpretation, equivalent to the intention. As already pointed
out, the learned Judge has not ascertained what the parties meant by the words which they have used in the agreement in question, but has
interpreted the words contained in the agreement as referred to in his judgment in a manner it ought not to have been interpreted. It is not for the
court to guess at the intention of the parties and substitute the presumed for the expressed intention of the parties. In our view, the intention is clear
on a mere reading of the agreement and the letter annexed to the same. The learned Judge, without following the ordinary rule of construction,
which he ought to have applied, has adopted a different mode in interpreting the intention of the parties.
Learned counsel for the appellants has also cited the decisions reported in Abdulla Ahmed Vs. Animendra Kissen Mitter, , M.N. Aryamurthy
and Another Vs. M.D. Subbaraya Setty (Dead) through L. R. and Others, and The Godhra Electricity Co. Ltd. and Another Vs. The State of
Gujarat and Another, in regard to the construction of a document. It has been held that in construing a document, whether in English or vernacular,
the fundamental rule is to ascertain the intention from the words used and also the surrounding circumstances for the purpose of finding out the
intended meaning of the words which have actually been employed.
In the decision reported in Bhupendra Narayan Sinha Bahadur v. Midnapore Zamindary Company Limited, 68 Ind.Cas. 937: AIR 1922 Cal.
300, a Division Bench of the Calcutta High Court has observed as follows:
If the meaning of a term in the original agreement is doubtful assistance might be sought from the conduct of parties. Apart from ambiguity, the
mere fact that the parties have acted on an erroneous construction of an instrument furnishes in itself no reason why the courts should not follow the
general rule that an instrument should be construed according to its natural meaning in the light of the circumstances in which it was executed.
We have given our anxious consideration to the points at issue. We are of the view that the judgment of the learned single Judge insofar as it is
against the appellants is liable to be set aside since the learned Judge has proceeded to deal with the matter on assumptions, surmises and
conjectures and also on presumptions without any evidence, and in some cases, even contrary to the evidence on regard. The discussion made
above by us with reference to the evidence on record will clearly establish that the appellants are entitled to freight charges on multi slab basis as
agreed upon by the parties, though the respondents have attempted to give a different interpretation as to the meaning of the document. It is also
very clear from the evidence on record, both oral and documentary, that the intention of the parties is only to charge under multi slab system. The
learned Judge has failed to appreciate that the quotation that was required for given distance ranges which were conjunctive and not disjunctive
and on that factor, should have held that Ex.D-1 was invited only for multi slab rates.
As already seen, the tender was called for quotation for rates from 0 to 50 Kms., etc. and not for rates for distances upto 50 Kms. upto 200
Kms. upto 400 Kms. upto 600 Kms., and beyond 600 Kms. The conclusion reached by the learned Judge that the tender was invited only for
quotation of rates on single slab basis is wholly baseless and against the voluminous documentary evidence let in this case. The learned Judge, in
our view, ought to have relied on the inconsistent testimony of the two senior officials of the Department, viz., D.Ws.1 and 2, who would not even
find out whether the contract that is given to the appellants is on multi slab basis or single slab basis. The answers given by them are evasive in
nature. The learned Judge has also erred in holding that the improper drafting should go in favour of the person who drafted such a tender.
Likewise, the interpretation given by the learned Judge for the words, ""for each slab"" and ""add for every extra one kilometre and part thereof"" is
not correct. The finding of the learned Judge that the words ""for each slab"" would not indicate that the tender is only on multi slab basis, is without
appreciating the fact that term ""each slab"" itself would and could only mean multi slab. The only irresistible conclusion would be to grant the prayer
of the appellants, as prayed for in view of the overwhelming documentary and oral evidence adduced by them.
As far as the award of interest on the suit claim is concerned, the learned Judge has erred in granting interest at 12% per annum from 1.1.1980
till the date of decree and thereafter at 6% per annum only till the date of realisation. In this case, it is to be noticed that the respondents had been
detaining the money due to the appellants for a very long time wrongfully. The appellants were prevented from the use of the money even though
they are legally entitled to the same as per the contract. Taking into consideration, the prevalent rate of interest charged by the nationalised banks,
we are of the view that the appellants are entitled to interest at 12% per annum from 1.1.1980 till the date of realisation even though interest is
claimed at 18% per annum by the appellants.
In the result, the appeal is allowed, the judgment and decree of the learned single Judge are modified and the suit is decreed as prayed for with
interest at 12% per annum from 1.1.1980 till the date of realisation, with costs throughout. There are absolutely no merits in the memorandum of
cross objections and therefore, we dismiss the same, however, without costs.