SHRIPATI LAKHU MANE versus THE MEMBER SECRETARY, MAHARASHTRA WATER SUPPLY AND SEWERAGE BOARD & ORS.

Citation: [2022] 2 S.C.R. 839 · Decided: 30-03-2022 · Supreme Court of India · Bench: HEMANT GUPTA · Disposal: Appeal(s) allowed

Judgment (excerpt)

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[2022] 2 S.C.R. 839
839
SHRIPATI LAKHU MANE
v.
THE MEMBER SECRETARY, MAHARASHTRA WATER
SUPPLY AND SEWERAGE BOARD & ORS.
(Civil Appeal No. 556 of 2012)
MARCH 30, 2022
[HEMANT GUPTA AND V. RAMASUBRAMANIAN, JJ.]
Contract Act, 1872: ss.67 and 75 – Neglect or refusal on
part of promisee to afford reasonable facilities for performance of
the promise – Appellants, a registered contractor of state government,
issued a work order for execution of work at the cost of Rs.80,45,034/
-, 47% above the estimated cost – Appellant was informed about
the non-availability of pipes stipulated in the contract – Since
respondents wanted change in work order by substituting pipes of
different diameter, the appellant demanded modified rate – Due to
this dispute, respondent instructed the appellant to stop the pipeline
work and start the work of construction of another work – Bills
raised by appellant were not honoured in time, therefore he did not
proceed with the work – Respondent issued threat to withdraw the
work and to levy fine – Appellant filed suit for recovery of a sum of
Rs. 51,35,289/- – Trial court decreed the suit partially directing the
respondents to pay 24,97,077/- with 10% interest to the appellant –
High Court allowed the appeal filed by respondent partially and
reduced the decree amount to Rs.7,19,412/- – On appeal, held: The
entire sequence of events showed that appellant was not guilty of
anything including abandonment – Clause 3(a) of the contract
enabled the respondents to rescind the contract, forfeit the security
deposit and entrust the work to another contractor at the risk and
costs of the appellant – This clause was never invoked by
respondents – Material changes done in work order without the
finalization of the modified rates caused the non-performance of
contract – Hence, the respondent cannot accuse the appellant of
abandonment and non-performance of the contract – The refusal
of a contractor to continue to execute the work, unless the reciprocal
promises are performed by the other party, cannot be termed as
abandonment of contract – It was the respondents who made it
difficult for the appellant to execute the contract as per the terms
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SUPREME COURT REPORTS
[2022] 2 S.C.R.
originally agreed – High Court’s order is set asdie and trial court’s
order restored.
Contract Act, 1872: Abandonment – It is fundamental to the
Law of Contract that whenever a material alteration takes place in
the terms of the original contract, on account of any act of omission
or commission on the part of one of the parties to the contract, it is
open to the other party not to perform the original contract – This
will not amount to abandonment – Moreover, abandonment is
normally understood, in the context of a right and not in the context
of a liability or obligation – A party to a contract may abandon his
rights under the contract leading to a plea of waiver by the other
party, but there is no question of abandoning an obligation.
Allowing the appeal, the Court
HELD: 1. Refusal of a contractor to continue to execute
the work, unless the reciprocal promises are performed by the
other party, cannot be termed as abandonment of contract. A
refusal by one party to a contract, may entitle the other party
either to sue for breach or to rescind the contract and sue on a
quantum meruit for the work already done. The respondents did
not choose the option of rescinding the contract and suing for
damages in terms of clause 3 (a) and (b). It was the respondents
who made it difficult for the appellant to execute the contract as
per the terms originally agreed. [Para 22][848-A-B, F-G]
2. The High Court was clearly in error in overturning the
judgment of the Trial Court with regard to the aforesaid 3 heads
of claims, on a wrong understanding that there was abandonment
of contract on the part of the appellant. Hence this appeal is
allowed. The impugned judgment and decree of the High Court
are set aside and the judgment and decree of the Trial Court are
restored. [Para 23][848-G-H]
CIVIL APPELLATE JURISDICTION: Civil Appeal No.556 of
2012.
From the Judgment and Order dated 24.04.2009 of the High Court
of Judicature at Bombay in First Appeal No.528 of 1998.
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Vinay Navare, Sr. Adv., Ms. Gwen Karthika, Ms. Abha R.
Sharma, Advs. for the Appellant.
Sunil Murarka, Satyajit A. Desai, Siddharth Gautam, Himanshu
Sharma, Satyakam Sharma, Ms. Anagha S. Desai, Advs. for the
Respondents.
The Judgment of the 

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