LexBOMBAY HOUSING BOARD (NOW THE MAHARASHTRA HOUSING BOARD) versus KARBHASE NAIK & CO., SHOLAPUR
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BOMBAY HOUSING BOARD (NOW THE MAHARASHTRA
HOUSING BOARD)
' \!.
KARBHASE NAIK & CO., SHOLAPUR
January 29, 1975
[K. K. MATHEW, P. N, BHAG'YATI AND N. L. UNTWALIA, JJ.]
The Bombay Housing Board Act (69 of 1948), s. 64-'Anything done or
pll.'porti11g to lwve bee11 done in pursuance of the Acl', Scope of-Breach of
c1111tract if comes within_ expression.
There was a conlra1:t between the State and the respondent, which after the
passing of the Bombay Housing Board Act, 1948, was deemed to have b-~en
entered into between the appellant and the respondent, for the construction of·
buildings by the respondent.
Clause 14 of the Contract provided that where
any additional or altered work is directed to be carried out and no rates are
entered in the Schedu!e of Ra-tes in the Division, or agreed to, then. the contractor
may, within 7 days of the order, give notice of the rate he intends to charge.
In such a case, the Engineer-in,:harge would be at liber~ to cancel the order
if h.e does not agree to the rate stated by the. contractor, and get the work done
by another.
Where the Engineer-in-charge has not cancelled the order and
the contra.ctor ha!.i commenced work and incu.rred expenditure. the contractor
shall only be entitled to be paid at su:h rate as may be fixed by the Engineer'in-
charge, and if the contractor is dissatisfied, he may raise a dispute about the
rate and the decision of the Superintending Engineer will b·~ final.
Clause 15 provided that the Engineer-in-charge has power to stop or to
reduce the who'.e of the work specified in the tender or g·~t it done by ano!her,
and the contractor has no claim to any compensation whatsoever on account of
such stoppage or redudion.. But, befo:e th·~ Engineer-in-charge could stop the
work and get it done by another contractor, he should give the first contractor
a written notice, The contrac:or sha,JJ also have no right under the clause to
claim any payment or compensation on account ·of any profit or advantage
which he might have derived from the exe:ution of the work in full but which
he did not derive in consequence of the full amount of work not having been
carried out, or on account of any loss due to purchase of materia's or labour
recruited by him.
The clame further provides that the contractor shal! not also·
have any claim for compensation by reason of any alteration in the original
specifi.:a·tion which may involve curtailment of work as originally contemplated.
The respondent filed a suit claiming a certain sum of money with respect
to certain items and the. suit was decreed by the trial court except with respect
to 4 items. The High Court in appeal, however decr~ed those items also.
They were : (I) the respondent was ordered to carry out certain work with
respect to the first two items and the respondent intimated his rate as required·
by cl. 14. The Engineer-in-charge did not cancel the order or give the_ contract
for. the extra work to any other contractor, and therefore. the High Court held
that the amount due to the respondent for the extra work was to be calculated·
on the basis of the rate specified in the notice; (2) the respondent was assured
by the appellant that the work was to be completed in accordance with the
»pecifications in. the agreement. and that no alteration would be made therein,
but in fact an alteration was made as a result of whkh the respondent became
entitled to lesser amount and the High Court held he was entitled to the
difference; and (3) the appellant represented to the respondent that the appellant
would entrust the respon<;lent with another item of work bu,t, contrary to the
reprcsen~ation, got the work done by another without giving notice in writing
to the respondent and hence, the High Court held that the respondent was
entitied to compensation.
408
SUPREME COURT REPORTS
[1975] 3 S.C.R.
In appeal. to thi» Court, it was contended; (1 l. that with respect to the first
2 items in view of cl. 14 the respondent was entitled only to the rate Js fixed
.by the Engineer-in-charge;
0
('2) with respect to the 3rd item since the Engineer-in-
.char~e was entitled to ':hange the specifications, the respondent was not en:1tled
to compensation in view of Cl. 15; (3) with respect to the 4th item no notice
was necessary before getting the work done by another contractor; and ( 4) the
·su!t was barred by limitation under s. 64 of the Bombay Housing Board AcExcerpt shown. Read the full judgment & AI analysis in Lexace.