LexVENKATESH CONSTRUCTION COMPNAY versus KARNATAKA VIDYUTH KARKHANE LIMITED (KAVIKA)
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[2016] 1S.C.R.511 VENKATESH CONSTRUCTION COMPNAY A v. KARNATAKA VIDYUTH KARKHANE LIMITED (KAVIKA) (Civil Appeal Nos.461-462 OF 2016) JANUARY 20, 2016 [T.S. THAKUR, CJI., A.K. SIKRI AND R. BANUMATHI, JJ.) Contract - Execution of Work Contract - Suit by contractor making a claim for Rs. 30 lakhs for the work already completed, for extra work, stocking of materials etc. - Trial Court decreed the suit and directed the defendant to pay Rs. 3,23,0001- to the plaintiff with 12% per annum interest - Cross appeals - High Court set aside the decree - On appeal, held: Findings of trial court need not be interfered with by the appellaie court unless they are erroneous or reached ignoring the evidence on record - bi the present case findings of trial court and the amount awarded was based -on evidence and material on record - The High Court, without considering oral or documentary evidence erroneously interfered with the factual findings of trial court - In view of the facts of the case, rate of interest is reduced to 6% per annum. Allowing the appeal, the Court HELD: 1. .The Appellate Court may uot interfore with the finding of the trial court unless the finding recorded by the trial court is erroneous or the trial court ignored the evidence on record. The amount awarded by the trial court under various heads was based on evidence and material on record. The High Court reversed the decree passed by the trial court without discussing oral and documentary evidence and several grounds raised before the trial court. The High Court veered away from themainissueandwenton to.elaborate on the law ofarbitration and the mode of setting aside the arbitral award under Section 34 of the Arbitration Act, which was n'ilf warranted. The High Court erred in interfering with the factual findings recorded by the trial court. [Paras 15 and 16) [519-B-D) 2. The defendant has not adduced any evidence to discredit the testimony of PWs l and 3 that extra work was 511 B c D E F G H 512 A B c D E F G H SUPREME COURT REPORTS [2016] I S.C.R. required to be done on account of seepage of water and soil caving in and widening and deepening the trench. In so far as the direction of the respondent to stop the work is concerned, on appreciation of evidence, trial court rightly held that the respondent asked the appellant to stop the running work for want of revised design. So far as the claim of the appellant that it suffered loss due to loss of stock of material, PWs 1 and 3 have stated that they have stocked the ·material of worth about rupees six lakhs at the work site. Even though the appellant has claimed rupees six lakhs on account of loss of the material stocked, as the appellant had not produced any bill relating to purchase of material nor produced authentic trip sheet, the trial court rightly awarded rupees one lakh only on account of loss of building material. (Paras 11, 12, 13 and 15([517-B-C, H; 518-F-H; 519-A] 3. The High Court took note of clause 11 of the contract which states that the contractor is not authorized to do any extra work or make any alteration without the previous consent in writing of the respondent. The respondent has not raised the plea relying upon clause 11 of the contract. Further, by perusal of Ex.P2 dated 20.12.1991, a letter addressed by the appellant to the respondent informing the respondent about the extra work which needs to be done and the fact that PW-4 was engaged hy the respondent to prepare the new design for the work, it is evident that the respondent was aware of the fact of the change in the nature of work and that there is alteration in the work done by the appellant. When the evidence and material clearly depict the change of nature of work involved and when the extra work to be done was also admitted by DW-1, parties cannot be expected to go for a revised agreement/contract, and specially when the work was to be completed within a specified time-frame. The High Court was not right in placing reliance upon clause 11 of the contract to reverse the findings of fact recorded by the trial court. [Para 14] [518-A-J<'] 4. In the facts and circumstances of the case and having regard to the fact that the matter is pending for over two decades and in the interest of justice, it is appropriate that the interest of 12% per annum awarded by the trial court is reduced to 6% per annum. [Para 17] [519-F] VENKATESH CONSTRUCTION COMP
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