FOOD CORPORATION OF INDIA AND ORS. versus VIKAS MAJDOOR KAMDAR SAHKARI MANDLI LTD.

Citation: [2007] 11 S.C.R. 1038 · Decided: 12-11-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Case Partly allowed
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Judgment (excerpt)

A 
B 
c 
D 
E 
FOOD CORPORATION OF INDIA AND ORS. 
v. 
VIKAS MAJDOOR KAMDAR SAHKARI MANDLI LTD. 
NOVEMBER 12, 2007 
[DR.ARIJITPASAYAT ANDLOKESHWAR 
SINGHPANTA,JJ.] 
Contract Act, 1872-s. 70-Contract for stevedoring and 
transportation of Cargo-Contractor asked by the second party to the 
contract to do extra work-Suit demanding higher rate for doing extra 
work-Dismissed-High Court decreeing the suit invoking principle 
of quantum meruit-On appeal, HELD: Contactor entitled to extra 
remuneration for doing extra work beyond the contract-It inc.urred 
extra expenditure for doing the extra work done beyond the contract-
However, not entitled to any amount beyond the agreed amount for 
transportation-Principle of quantum meruit. 
Principles-Principle of quantum meruit-Applicability-
Discussed-Contract Act, 1872-s. 70. 
Respondent-Society was appointed as contractor by the 
appellant-Corporation for stevedoring, clearance for transportation 
at a Port, pursuant to a tender. The Society started execution of the 
work as per the contract. It received two letters dated 30.9.1994 and 
F 14.10.1994 from the Corporation asking it to do extra work. For doing 
extra work, extra expenditure was involved. Society requested the 
Corporation to provide extra money and demanded higher rate for 
the extra work. The demand was examined in the office of the 
Corporation and by a letter, it was pointed out that the Society was 
G incurring extra expenditure and was paying excess money for 
speedy work. There was also recommendation to fonvard the 
request of the Society to the concerned authority, but there was no 
response. 
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FOOD CORPRN. OF INDIA v. VIKAS MAJDOOR 
1039 
KAMDAR SAHKARI MAND LI 
Society filed a suit claiming payment from the Corporation for A 
the extra work done at the higher rate. The suit was dismissed. High 
Court decreed the suit. Hence the present appeals, one by the 
Corporation and another by the Society. 
Partly allowing the appeal of the Corporation and dismissing B 
that of the Society, the Court 
HELD: 1.1. If a party to a contract has done additional 
construction for another not intending to do it gratuitously and such 
other has obtained benefit, the former is entitled to compensation 
for the additional work not covered by the contract. If an oral C 
agreement is pleaded, which is not proved, he will be entitled to 
compensation under Section 70 of the Contract Act, 1872. Payment 
under this Section can also be claimed for work done beyond the 
terms of the contract, when the benefitoftheworkhas been availed 
of by the defendant. [Para 13] ll048-G; 1049-A] 
D 
1.2. The term 'extra' 's generally used in relation to the works, 
which are not expressly or impliedly included in the original contract 
price, provided the work is within the framework of the original 
contract. The question whether a particular work is extra will depend 
upon the terms and conditions of the contract, and other documents E 
connected therewith. [Para 14] (1049-A, B] 
1.3. The demand for the higher remuneration was in accordance 
with the terms of Clause XVI of tender notice. There is no dispute 
that there was a request made by the appellant-Corporation to F 
discharge more than what was stipulated in terms of the Charter Party 
agreement. The Corporation was insisting that the respondent-
Society should increase the discharge. That being so, the respondent 
Society was entitled to extra remuneration. Since the appellant-
Corporation had failed to respond to the request, the High Court had G ' 
rightly invoked the principle of quantum meruit and accepted the 
claim. From various documents exhibited more particularly the 
letters dated 30.9.1994 to 14.10.1994 it is clear thatthe functionaries 
of the appellant-Corporation recommended higher payment rate for 
higher discharge. The letters written by the respondent-Society also H 
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1040 
SUPREME COURT REPORTS 
[2007 j 11 S.C.R. 
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A 
clearly indicate that the demand was for higher charges in. respect 
of the extra work. Though a stand has been taken that the 
signatories of the letters by the Corporation were not authorized, it 
is not disputed that on the basis of these letters, extra work was 
undertaken. There is also material on record to show that extra 
B 
expenditure had to be incurred for doing the extra work. 
[Paras 11and16] (1048-A, B, C; 1051-B, C] 
)--
1.4. With reference to Clause XX of tender notice, the 
contractor was only obl
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