1957 (11) TMI 37 - HC - Indian Laws

Summary

Issues Involved:
1. Whether there was a completed contract.
2. Compliance with Section 175(3) of the Government of India Act, 1935.
3. Mutual mistake regarding the nature of the work.
4. Impossibility of performance.
5. Quantum of damages.

Detailed Analysis:

1. Whether there was a completed contract:
The court examined whether there was an absolute and unqualified acceptance of the defendant's tender. The defendant argued that the acceptance letter (Ex. A-6) introduced a new term requiring a security deposit, amounting to a counter-offer. However, the court concluded that the security deposit was a collateral requirement and did not affect the unconditional acceptance of the defendant's tender. The court emphasized that the acceptance was not subject to the defendant furnishing the security deposit and signing the documents mentioned in Ex. A-6. The court held that the contract was complete upon the acceptance of the tender by the Garrison Engineer.

2. Compliance with Section 175(3) of the Government of India Act, 1935:
The defendant contended that the contract did not comply with Section 175(3), which mandates that contracts be expressed to be made by the Governor-General and executed on his behalf. The court noted that the endorsement of acceptance on Ex. A-4 by the Garrison Engineer, who was authorized to accept tenders up to Rs. 40,000/-, satisfied these requirements. The court held that the contract was expressed to be made by the Governor-General and executed on his behalf, thus complying with Section 175(3).

3. Mutual mistake regarding the nature of the work:
The defendant argued that the contract was vitiated by mutual mistake as to the nature of the work. The court found no evidence that the Garrison Engineer was under any mistake about the facts concerning the contract. The court noted that the defendant had the means to know everything about the work if he had been ordinarily diligent. The court concluded that there was no mutual mistake or misrepresentation that would entitle the defendant to avoid the contract.

4. Impossibility of performance:
The defendant claimed that performance was rendered impossible due to the refusal of the Garrison Engineer to supply a crane and iron materials. The court found that the demand for a crane and materials at no cost was unjustified, as it was clearly stated in the tender documents that no articles would be supplied. The court also noted that the subsequent contractor completed the work without a crane. The court rejected the defendant's plea of impossibility of performance, concluding that the work could be done without a crane and that the time allowed was sufficient.

5. Quantum of damages:
The plaintiff claimed Rs. 9,582-2-0 as additional expenditure incurred for getting the work done by another contractor and Rs. 750-8-0 as damages for delay. The court found that the plaintiff failed to mitigate damages by not making sufficient efforts to get the work done at intermediate rates. The court held that the proper measure of damages was the difference in expenditure that would have been incurred at the rates offered by the next lowest tenderer, Prabhakar and Co. The court disallowed the claim for Rs. 715-8-0 as it was a penalty, not compensation for loss suffered.

Conclusion:
The appeal was allowed to the extent that the damages were recalculated based on the rates offered by Prabhakar and Co., and the claim for Rs. 715-8-0 was disallowed as a penalty. The lower court's order on costs was modified accordingly.