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TMI Blog1957 (11) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... 9-7-1949. 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 work referred to in the said documents upon the terms and conditions contained or referred to therein and as detailed in the General Summary below, and to carry out such deviation as may be ordered, vide Condition 7 of I.A.F.W. 2249 up to a maximum of 50 per cent and furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble 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's letter of acceptance, Ex. A-6 which runs thus : I hereby accept your tender, dated 28th July, 1949 for the above work for the lump sum of Rs. 7,155/- (Rupees seven thousand one hundred and fifty five only). Please lodge with the Garrison Engineer, Vizagapatnam, the security deposit of Rs. 720/-(Rupees seven hundred and twenty only) within se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curity 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 upon in his case. The defendant vaguely says in his evidence that he could not begin the contract work, without making the deposit and signing the papers required by the authorities. But there was not even a suggestion to P.W. 1 that the defendant would not have been allowed to commence the work, unless he made a deposit and signed the papers mentioned in Ex. A-6. Subsequent to Ex. A-6 in his letter Ex. A-15 dated 18-8-1949 and A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 an offer would not make a binding contract in fact, it does not extend to all the terms the contract under negotiation or if it is of a provisional arrangement subject to the condition that a further agreement would be execution between the parties. (See Hussey v. Horne-Pay (1879) 4 AC 311 (C) and Winn v. Bull, (1877 Ch D 29 (D). It is also well settled that in order to decide these matters, the entire negotiations and correspondence on which the contract dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 p. 288 (E), in the following passage which has been approved by the Judicial Committee in Hukum Chand v. Ban Bahadur Singh, ILR 3 Pat 625: (AIR 1924 PC 156) (F), Harichand Mancharam v. Govind Laxman, ILR 47 Bom 335 : (AIR 1923 PC 47 (G) and Currimbhoy Co. Ltd. v. L.A. Creet, MR 60 Cal 980 : (AIR 1933 PC 29) (H). It appears to be well settled by the authorities that if the documents or letters relied on as instituting a contract contemplated the execut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards. 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(a) of I.A.F.W. 2249 which reads: 1. Definitions, etc. (a) The contract means the document forming the tender and acceptance thereof, together with the documents referred to therein including these conditions, schedules A, B, C, D and/or General Summary attached to the form of tender, the M.E.S. schedule the specifications and the drawings and all these documents as applicable taken together shall be deemed to form one contract and shall be complementary to one another. He says that the documents referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 assurances for any of those purposes, and purchase or acquire any property in British India within the said respective limits, and make any contract for the purposes of this Act. 2. Every assurance and contract made for the purposes of this section shall be executed by such person and in such manner as the Governor-General in Council by resolution directs or authorises, and, if so executed, may be enforced by or against the Secretary of State in Council for the time being. 3. All property acquired in pursuance of this section shall vest in His Majesty for the purposes of the Government o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 the same High Court took the opposite view and held that it is not necessary that a contract, in order that it may comply with S. 30 of the Government of India Act of 1915, must be by and and it may be entered into by correspondent. The same view has been taken in Deviprasad krishna Prasad v. Secy. of State, ILR (1941) 741: (AIR 1941 All 377) (M). In my opinion, although the provisions old S. 30 or the present S. 175 of the Government of India Act are mandatory and all contracts behalf of the Secretary of State or the Government of India or the Dominion, in order to enforceable, must be in writing and in the name of the appropriate authority, it is not essentia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 Government of India Act 1935. 11. The contract is next assailed on the and that it is vitiated by a mutual mistake, not seriously suggested by the learned counsel that there is any scope for invoking S. 20 of Contract Act, which provides that where the parties to an agreement are under a mistake as to a matter of fact essential to the agreement, the agreement is void. The reason is that there is no foundation whatsoever in the evidence for supposing that as far as P.W. 1 is learned, he was under any mistake about the of facts concerning the contract. The argument is merely that the appellant was labour under a mistake as to the nature of the work done. But this would not entitle h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 minimised a lot of labour and helped in the early completion of the work. P.W. 2's evidence shows that when he was subsequently entrusted with the work he did it in time without the use of the crane. He is corroborated in this respect by P.W. 3 the officer who supervised his execution of the work. The learned counsel's criticism is that P.W. 2 has got no account books in respect of the work, although he was assessed to income-tax in the year 1949-50. But this is not a sufficient ground to reject his evidence which is consistent with the evidence of P.Ws. 1 and 3. The appellant himself has admitted in his evidence that he saw P.W. 2 doing the work and did not see a crane being u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich 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 of the contract and what it would have been if the contract had been performed and not the sum which it would cost to perform the contract, though in particular cases the result of either mode of calculation may be the same. See Wigsell v. School for Indigent Blind, (1882) 8 QBD 357 (N). It is therefore clear that the measure of compensation is the increased cost of the work to the plaintiff on account of having got it done by another contractor. The evidence of P.W. 1 is that after the defendant's contract was terminated, the next lowest tenderer, Prabhakar and Co., who had quoted 621/2 per cent., over the M. E. S., schedule of rates, was not prepared to do the work. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 cases thus: The question must always be whether was done was a reasonable thing to do, having regard to all the circumstances, and one test is what a prudent person uninsured, i.e., not having a claim for compensation or indemnity on any one would do under the same circumstances. The test is, what a prudent man might reasonably done if the whole expense was to on himself. But the rule must be applied discretion because the party who was already the wrong by breaking his contract is not tied to impose new and extraordinary duty the aggrieved party. The plaintiff must not acted in a way legitimately open to blame. 18. So far as the deviations are concerned they naturally ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting 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 calling for fresh tenders was not worth-while. But before deciding to get the work done at double the rates originally bargained for, the plaintiff ought to have exercised more circumspection. We do not consider that a prudent man would have adopted the course of incurring double the expenditure without making every possible effort to get Praghakar and Co. or some other contractors to do the work even though this might have resulted in some delay. P. W. 1 was too easily satisfied that Prabhakar and Co., were not prepared to do the work and he precipitately entrusted the work to P.W. 2. As we have already noticed, proof that Prabhakar and Co., declined to do the work depends only on P. W. 1's oral assertion ..... X X X X Extracts X X X X X X X X Extracts X X X X
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