LexGANNON DUNKERLEY & CO. LTD. versus UNION OF INDIA
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A B c D E F G H 47 GANNON DUNKERLEY & CO. LTD. v. UNION OF INDIA October 28, 1969 [J. C. SHAH AND K. S. HEGDE, JJ.) Limitation Act, 1908-Suit for payment at an additional rate over contract rate in view of altered circumstances and co1nplex nature_ of work-Claim ;., not one for price of work done nor /or comtunsuiion for breach of contract-Therefore Art. 56 and Art. 115 of First Schedule noti applicable-Suit governed by Art. 120----Commencement of period of /imitation under Article. The appellant-comp'!lly filed a suit agafust the Union of India demand- ing payment at an .~nhanced rate over the basic rate stipulated in a cons- truction contract with the- Union of India. The clailn related to revision of rates due to the complex nature and increase in the quantity of work and in respect of work not covered by the contract. The addi- tional work was done at the request of the Engineer-in-charge who m1der the terms of the contract was competent to give instructions for work not covered by the ten:.-.s of the contract and fix the rate at which-remunera- tion was to be P"'<l in respect of such work. The Union of India con- tended that the claim was barred by the law of limitation. The trial court decreed the suit fur the amount certified by the Superintending Engineer. On. appeal the High Court held that the claim was governed eithe·r by Art. 56 or by Art. 115 of the First Schedule to the Limitation Act, 1908, and a suit, more than three years of the date on which the work was done and in any event of the date on which the claim was rejected, was barred. Allowing the apeal to this Court and restoring the decree for the trial court, HELD : (i) Article 56 of the First Schedule to the Indian Limitation Act, 1908, prescribes a period of three years for a suit for the price of the work done by the plaintiff for the defendant at his request. where no time has been fixed for payment, and the period of limitation commences to run from the date when the work is done. A suit is governed by Art. 5 6 if it arises out of a contract to pay the pric.e of work done at the request of the defendant. The claim in the present case is for pavment lllOt an additiolllll rate over the stipulated rate in view of change in circumstances and not for the price of work done by the appellant. even though the additional work was done at the. request of the Engineer-in- charge. [51 Fl (ii) Article 115 of the First Schedule to the Limitation Act is a resi- duary article dealing with the claim for compensation for the breach of any oontract, express or implied, not in writing registered and not spe- cially provided for in the 'first schedule. The period of limitation in 'uch cases . is three years and it commences to run when the contract is broken,. or where there are &uccessive breaches whe.n the breach in respect of which the suit is instituted occurs or where the breach is continuing when it ceases. The suit filed by the appellant company is not a suit for ccm- pensation for breach of contract express or implied; it is a suit for en- hanced rate because of change of circumstances, and in respect of work not CQ\>ered by the contract. The additional work directed bv the. Engineer-in-charge whe.n carried out may be deemed to be done under the 48 SUPREME COURT REPORTS (1970] 3 S.C.R. terms of the IX)nb:act; but the claim for enhanced rates does not arise A out of the contract : it is in any case not a .claim for compensation for breach of contract. [51 HJ (iii) The claim is, therefore, not covered by any specific article under the First Schedule and must fall within the terms of Art. 120. Under this Article the period of six years commences to run when the right to sue accrues. There is no right .to sue until there is an accrual of the right asserted in the suit and its infringement or at least a clear and 'un- R equivocal threat to infringe the right by the defendant against whom the suit is instituted. [52 CJ Bolo v .. Kokao 9nd Others, L.R. 87 I.A. 325, referred to. CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 2584 and 2585 of 1966. Appeals from the judgment and decrees dated January 19, 1965 of the Patna High Court in First Appeals Nos. 190 and 213. of 1960. H. R. Gokhale, G. L. Sanghi, J. B. Dadachanji and Ravinder .Narain, for the appellant (in both the appeals). Jagdish Swarup, Solicitor-General, V. A. Seyid Muhammad, B. D. Sharma and S. P. Nayar, for the respon
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