LexSTATE OF KERALA AND ANR. versus M.A. MATHAI
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STATE OF KERALA AND ANR. A v. M.A. MATHAI APRIL 9, 2007 [DR. ARillT PASA Y AT AND LOKESHWAR SINGH PANT A, JJ.] B -y Contract Act, 1872: / s. 55-Work contract-Completed in extended time-Suit by contractor for damages-Agreement containing no escalation clause-Trial Court and c High Court decreeing suit of contractor and awarding him damages holding that extension agreements were due to coercion-Held, for coming to such conclusion there is no material on record-Mere assertion by plaintiff should not have been accepted-If, instead of avoiding contract, contractor accepts belated performance of reciprocal obligation on part of employer, contractor D cannot claim compensation for non-performance of reciprocal promise by r employer at agreed time-Judgment of High Court set aside. Respondent-contractor filed a suit against the appellant-State, for recovery of a certain amount in connection with the work executed by him. The State Government contested the suit on the grounds that the contractor E did not complete the work within the extended period; that the stand taken by the contractor that extensions had been sought for and supplemental agreements executed not under his free will, was based on no evidence; and that there was no clause in the agreement for any escalation. The trial court held that the supplemental agreements were executed under threat of F forefeiture and decreed the suit by awarding the claimed amount as damages. ~ On appeal by the State, the High Court agreeing with the view taken by the trial court, held that though the contractor was entitled to damages under other heads also, but since he himself had claimed a lesser amount, the claim was restricted to the decretal amount Aggrieved, the State Government filed the present appeal. G - Allowing the appeal, the Court A HELD: 1. When the contract is not completed at agreed time, and if instead of avoiding the contract, the contractor accepts the belated performance 995 H +- 996 SUPREME COURT REPORTS '[2007] 4 S.C.R. A of reciprocal obligation on the part of the employer, the innocent party i.e. the y contractor, cannot claim compensation for any loss occasioned by the non- performance of the reciprocal promise by the employer at the time agreed, unless, at the time of such acceptance, he gives notice to the promisor of his intention to do so. It was pointed out that there was no clause for any B escalation. (Paras 3 and 8) (998-G-H; 997-D-E) 1.2. In the instant case, the suit was only for damages. The plaint itself indicated that it was a "suit for recovery of money for damages". The trial -..- court proceeded on the basis as if the suit was for damages. In fact, the High Court itself observed that the primary issue related to assessment of damages. -...:_ c The stand that the amount was claimed not for damages, but for extra work done, cannot be countenanced. (Para 5 and 7) (997-H; 998-C) General Manager, Northern Railway and Anr. v. Sarvesh Chopra, (2002) - 4 sec 45, referred to. D Chitty on Contracts, 28th Edn. 1999, p.1106, para 20-015, referred to. 1.3 Both the trial court and the High Court have without any basis come ")_ tohold that the supplemental agreement was due to coercion etc. The finding that the agreements were not obtained by free will and free consent and in the normal course of events, to say the least, is an inferential conclusion not E supported by any evidence. For coming to such conclusion, material had to be placed, evidence had to be led. Mere assertion by the plaintiff without any material to support the said stand should not have been accepted by the trial court and the High Court. The judgment of the High Court is set aside.· (Para 9 and 6) (999-C; 998-A-B) F CIVIL AP.PELLA TE JURISDICTION : Civil Appeal No. 7333 of2004. 'f "' F~om the Final Judgment and Order dated 27.01.2004 of the High Court ofKerala at Emakulam in AS No. 290of1994. G. Prakash for' the Appellants. G T.G. Narayanan Nair for the Respondent. .. The Judgment of the Court was delivered by )..... DR. ARIJIT PASA Y AT, J. 1. Challenge in this appeal is to the judgment H rendered by a Division Bench of the Kerala High Court dismissing the appeal ST ATE OF KERALA v. M.A. MATHAI [P ASAY AT, J. ] 997 filed by the appellant-State and its functionary questioning legality of the A ·judgment and decree in O.S. No.859 of 1988 on the file of the Sub Court, Trichur. The suit was filed for
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