Case Note & Summary
The State of Goa, through the Chief Secretary, appealed against the judgment and order dated 12.11.2009 passed by the District Judge-II, North Goa, Panaji, which partly allowed the suit filed by M/s. Sneha Constructions, Engineers & Contractors, a registered partnership firm. The trial court directed the State to pay ₹43,03,412.92 along with interest at 15% per annum from 17.04.2003. The dispute arose out of a contract for improvement and drainage system at main nullah at Naikvadda in the Village Panchayat of Mandrem. Tenders were invited by the State, and the respondent's tender was accepted at a cost of ₹19,85,115/- with a completion period of 150 days. The respondent filed a suit for declaration and recovery of money, claiming that due to delays, variations, and hindrances caused by the State, there was a breach of contract and the work could not be completed in time. The State raised a plea of limitation and contended that the respondent did not carry out the work in a planned manner, causing delay, and issued a show cause notice for termination. The trial court partly allowed the suit, holding the State liable. The High Court, in appeal, considered the issues of limitation and liability. It found that the suit was filed within limitation as the cause of action arose on 17.04.2003 when the final bill was prepared. The court also held that the State's delays and hindrances constituted a breach of contract, making it liable for the respondent's losses. The High Court upheld the trial court's decree, dismissing the appeal with no order as to costs.
Headnote
A) Limitation Act, 1963 - Article 18 - Suit for recovery of money under contract - Limitation period of three years from the date of breach - The suit was filed within limitation as the cause of action arose on 17.04.2003 when the final bill was prepared and the amount became due - Held that the suit was not barred by limitation (Paras 2-5). B) Contract Law - Breach of Contract - Delay and Hindrances - The appellant caused delays, variations, and hindrances which prevented the respondent from completing the work in time - The appellant's failure to provide timely drawings and instructions constituted breach of contract - Held that the appellant was liable for the losses suffered by the respondent (Paras 2-6). C) Interest - Award of Interest - The trial court awarded interest at 15% per annum from 17.04.2003 - The High Court upheld the rate of interest as reasonable given the commercial nature of the transaction and the delay in payment - Held that the interest rate was justified (Para 6).
Issue of Consideration
Whether the suit filed by the respondent was barred by limitation and whether the appellant was liable to pay the amount decreed by the trial court.
Final Decision
The High Court dismissed the appeal with no order as to costs, upholding the trial court's judgment and decree directing the appellant to pay ₹43,03,412.92 with interest at 15% per annum from 17.04.2003.
Law Points
- Limitation period for suit for recovery of money under contract
- Breach of contract due to delay and hindrances caused by employer
- Entitlement to damages for extra work and escalation
- Interest on delayed payments
