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PETITIONER:

TAMIL NADU ELECTRICITY BOARD & ANR.

Vs.

RESPONDENT:

N. RAJU REDDIAR & ANR.

DATE OF JUDGMENT: 24/04/1996

BENCH:

G.B. PATTANAIK (J)

BENCH:

G.B. PATTANAIK (J)

RAMASWAMY, K.

CITATION:

1996 AIR 2025 1996 SCC (4) 551

JT 1996 (6) 14 1996 SCALE (4)180

ACT:

HEADNOTE:

JUDGMENT:

J U D G M E N T

PATTANAIK. J.

Leave granted.

This appeal by special leave is directed against the

Judgment of the Division Bench of the Madras High Court

dated 6.9.1995 in O.S.A. No. 112 of 1987. The plaintiffs who

are the respondents in this appeal filed the suit on the

original side of the High Court for recovery of a sum of Rs.

46,08,820/- together with interest at 18% per annum. It was

alleged in the plaint that the defendants who are appellants

in this appeal invited tenders for transportation of iron

and steel materials including unloading, weighment and

stocking from various stockyards of the suppliers to the

destination stores during the period 1.9.1978 to 31.8.1979.

In pursuance of the aforesaid advertisement the Plaintiff

No. 1 submitted his tender on 13.7 .1978 and along with

tender submitted a letter was also enclosed. This offer of

the plaintiff was accepted and an agreement was entered

into. In accordance with the agreement the plaintiff

furnished a bank guarantee and deposited the necessary

earnest money and commenced the work of transport of

materials. It was further alleged that the plaintiffs

carried the material and delivered the same at various

destinations as per the direction given from time to time by

the defendants. In all a total quantity of 1,73,78,821

metric tones of iron and steel were transported and the

necessary bills were submitted in November, 1979. But the

defendant instead of making the payments in accordance with

the terms of the contract postponed the payment of the

bills. It was averred in the plaint that the defendant

agreed to pay on multi slab basis which is apparent from

letter of the plaintiff attached to the tender submitted by

him and that was also the trade practice. The plaintiff

finally issued a notice on 28.3.1980 calling upon the

defendants to settle the bills but the defendants replied on

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7.5.1980 making several misleading averments. As the

plaintiffs' bills were not settled, the suit was filed for

recovery of the amount as already stated.

The defendants in their written statement denied the

allegations made in the plaint. The specific stand taken in

the written statement was that the plaintiffs are not

entitled to claim multi slab basis and on the other hand

they are entitled to single slab basis. It was stated that

the multi slab rates had never been accepted and not covered

by the agreement executed by the parties. It was also stated

that on the basis of instructions from headquarters the

Superintending Engineers have been passing the bills on

single slab basis and the plaintiffs remained silent during

the entire tenure of the contract period but raised this

issue after the contract period was over. The defendant

further averred that the plaintiffs have not delivered the

materials correctly at some destinations. In reply to the

aforesaid written statement the plaintiffs also filed a

reply statement denying the allegations made in the written

statement and reiterated the stand taken in the plaint. On

these pleadings the learned Single Judge framed three issues

and on Issue No. 1 came to hold that the rates mentioned in

Exhibit D-8 will have to be calculated on single slab basis

and not on multi slab basis as contended by the plaintiffs.

So far as the letter Exhibit P-1 dated 11.7.1978 which was

enclosed to the tender form Exhibit P-2, the learned Single

Judge negatived the contention of the defendant and came to

hold that the words written in ink in Exhibit P-1 were there

at the time of submission of the tender. The words were "I

have quoted my rates for each slab and add for every extra

one and part thereof". The plaintiffs' case is essentially

based on the aforesaid expression in the letter which was

enclosed to the tender and which according to the plaintiffs

was ultimately accepted. The learned Single Judge, however,

construed the expression "for each slab" mentioned in

Exhibit D-6 and came to hold that the tender was not on

multi slab basis. The learned Judge also held that merely

because the tender conditions are not clear one cannot

accept the contention of the plaintiff that the rates agreed

upon is on multi slab basis. Further taking into account the

terms and conditions of Exhibit D-1 the learned Judge came

to hold that the irresistible conclusion is that what was

intended is only a single slab basis. The learned Judge also

examined several other tenders and then negatived the

plaintiff's contention that the agreement was on multi slab

basis. On an analysis of the pattern of the working of the

rates in several tenders the learned Judge rejected the

plaintiffs contention that the contract was on multi slab

basis. Though the plaintiffs relied upon several

recommendations of the Superintending Engineer but the

learned Judge on consideration of the same came to hold that

those recommendations will have to be rejected. It was also

held that the terms and conditions of a contract have to be

decided on its own and production of other contracts will

not be of any help in deciding what are the terms of the

present contract. He also held that the defendants failed to

produce any other contemporarius contract which has been

granted on multi slab basis. On issue No. 2 the learned

Single Judge on consideration of entire evidence on record

came to hold that the shortages alleged by the defendants

had not been established. On Issue No. 3 the learned Single

Judge came to hold that there is considerable delay in the

matter of payment of bills though such delay had occasioned

on account of difference in the interpretation of the terms

of the contract and the delay is on the part of the

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defendants in settling the bills. With these conclusions and

on calculating on single slab basis the learned Single Judge

passed a decree for Rs. 9,31,157.63 with interest at 12% per

annum from 1.1.1980 till the date of decree and thereafter

at 6% per annum. The suit was thus decreed in part. The

plaintiffs challenged the decree by filing an appeal and the

defendants also filed a cross-objection challenging that

part of the decree in favour of the plaintiffs. The Division

Bench of the High Court relying upon the hand written

portion of Exhibit P-1 and the conduct of the Superintending

Engineer in passing the plaintiffs' bills on multi slab

basis as well as relying upon some other contracts came to

hold that the plaintiffs are entitled to freight charges on

multi slab basis. The Division Bench also held that the

interpreation of the learned Single Judge of the expression

'for each slab' is wholly erroneous and it could only mean

that the rate was on multi slab basis. With these

conclusions the Division Bench allowed the plaintiffs'

appeal and dismissed the defendants' cross-objection and

hence the present appeal by special leave.

Mr. V.R. Reddy. the learned Additional Solicitor

General appearing for the appellants contended that the hand

written portion in the plaintiff's letter Exhibit P-1 dated

11.7.1978 which was enclosed to the tender form Exhibit P-2

is nothing but a subsequent interpolation inasmuch as

neither there is any signature either of the plaintiff or of

the receiving officer on the same and further it was really

astonishing that though the tender was submitted on

12.7.1978 but according to the plaintiff an attested copy of

the letter could be obtained from the departmental officer

on 11.7.1978. Mr. Reddy further argued that the acceptance

of the tender by the contractor clearly indicates that it

was on single slab basis as the note to the same states

"only one rate should be quoted for various lengths and

sizes and not different rates for different lengths". Mr.

Reddy further urged that the very fact that the plaintiffs

did not submit any bills till the end of the contract period

and started to submit the bills during the extended period

of the contract would indicate that with an obvious illegal

design the bills were not being submitted in time. Repelling

the reasonings advanced by the Division Bench of the High

Court Mr. Reddy urged that passing of some bills by some of

the Superintending Engineers on multi slab basis is not

determinative of the terms and conditions of the contract

particularly when the contract is a written one and

consequently the Division Bench erred in law that the

contract was on multi slab basis.

We find sufficient force in each of the contentions

advanced by the learned counsel for the appellants.

Mr. Sivasubramanaim, the learned senior counsel

appearing for the respondents repelling the contentions

advanced by Mr. Reddy urged that there was no issue at all

on the question as to whether hand written portion was

subsequently inserted with the connivance of the officers of

the Board and therefore it would not be appropriate for this

Court to interfere with the same at this stage. The learned

counsel also contended that the very admission of DW-1, one

of the witnesses of the defendants to the effect that after

submission of the tender, discussions were made with the

contractor and the contractor explicitly expressed to have

the work done on multi slab basis, clinches the matter and

it is not open for the defendants to give a go bye to the

said admission of the witness. The learned counsel also

urged that the defendants in fact accepted and acted on

multi slab basis as is apparent from the letter Exhibit P-39

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dated 18.4.80 from the Superintending Engineer, General

Construction Circle/South, Tirunelvalli to the Chief

Engineer, Materials Management, whereunder not only the

Superintending Engineer has candidly admitted that the

system of payment of multi slab basis has been in vogue in

several circles but also stated that the single slab system

will not give a workable practical solution. Learned counsel

lastly urged that the single slab system is on the face of

it wholly unreasonable and to sustain the said argument

placed before us certain calculations made in different

documents. We are unable to persuade ourselves to agree with

the contentions advanced by the learned counsel for the

respondents.

At the outset it must be borne in mind that the

agreement between the parties was a written agreement and

therefore the parties are bound by the terms and conditions

of the agreement. Once a contract is reduced to writing, by

operation of Section 91 of the Evidence Act it is not open

to any of the parties to seek to prove the terms of the

contract with reference to some oral or other documentary

evidence to find out the intention of the parties. Under

Section 92 of the Evidence Act where the written instrument

appears to contain the whole terms of the contract then

parties to the contract are not entitled to lead any oral

evidence to ascertain the terms of the contract. It is only

when the written contract does not contain the whole of the

agreement between the parties and there is any ambiguity

then oral evidence is permissible to prose the other

conditions which also must not be inconsistent with the

written contract. The case in hand has to be adjudged

bearing in mind the aforesaid principles and the plaintiffs

being conscious of this position along with the tender

appended a letter and in that letter inserted certain terms

by writing in ink to establish the case that the acceptance

of the plaintiffs' tender would tantamount to the acceptance

to the terms contained in the letter in which there was

insertion in writing to the effect that it was on multi slab

basis. It is in this context the question whether such hand

written portion was originally there or was subsequently

inserted assumes great significance. We are unable to accept

the stand taken by the learned counsel for the respondents

that there was no such issue on this question inasmuch as

this question was considered by the learned Trial Judge

while discussing Issue No. 1 on the basis of evidence laid

and the Trial Judge had given a finding in favour of the

plaintiffs. The said finding, however, on the face of it

appears to us to be wholly unsustainable. As has been stated

earlier there was no signature either by the persons

submitting the tender or by the persons receiving the same

on the hand written portion of the letter. The learned Trial

Judge had noticed that the certified copy which was issued

by the Board on 11.7.1978 of the aforesaid letter clearly

contains the hand written portion and therefore he came to

the conclusion that the hand written portion was there at

the time of submission of the tender. The tender itself was

submitted on 12.7.1978 and we fail to understand how the

Board could grant a certified copy of the letter on

11.7.1978 when the plaintiffs' case itself is that along

with the tender he had appended the letter in question. On

this ground alone it can be safely held that hand written

portion in Exhibit P-1 was not there at the time of

submission of the tender but was subsequently inserted

obviously with the connivance of the officers of the Board.

The Board in its rejoinder affidavit filed in this Court has

stated that the attested copy was actually received on

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28.12.1978, much later than the finalization of the tenders

and agreement and in order to build up a case the aforesaid

interpolation has been made. In the facts and circumstances

of the present case the aforesaid stand of the Board appears

to us to be wholly justified and at any rate we have no

hesitation to come to the conclusion that the hand written

portion in Exhibit P-1 was not there initially and has been

inserted subsequently. The main basis of the plaintiffs'

case on which a multi slab rate was claimed therefore fails.

The written agreement between the parties nowhere indicates

that the rate to be paid to the plaintiffs was on multi slab

basis and the terms and conditions of the written contract

is not susceptible of such a construction.

It is no doubt true that DW-1 a witness of the

defendants in his evidence had admitted that after

submission of tender there was certain discussions between

the contractor and the authorities and in that discussion

contractor had expressed to charge for the job on multi slab

basis and same was accepted by the authorities. We are

afraid a decree cannot be granted in favour of the

plaintiffs on the aforesaid statement since the contract in

hand was a written one. There is no document whatsoever in

support of the aforesaid so called after tender discussion

and the acceptance of the terms in the said discussion to

the effect that rate would be charged on multi slab basis.

Then again if the plaintiff had appended the letter to the

tender indicating that he would be charging on multi slab

basis there was no occasion to have any after tender

discussion or to raise the issue of rate being accepted on

multi slab basis. The so called statement of DW-1 therefore

is wholly unacceptable and in the eye of law also cannot be

taken into account to vary the terms of the written

contract. The Division Bench of the High Court committed

obvious error in allowing variance of the terms of the

written contract relying upon such statement of DW-1 and

granted the decree on multi slab basis.

The only other question which survives for

consideration is whether the conduct of some of

Superintending Engineers in passing some of the bills on

multi slab basis can be pleaded as an estopped against the

defendants and can form the basis of plaintiffs' case. The

answer to this question must be in the negative. It

transpires that some of the Superintending Engineers passed

some of the bills on multi slab basis and further when

complaints were received and the matter was investigated

into by vigilance to absolve the concerned officers from

liability, a recommendation has been made to grant the rate

on multi slab basis. But such a recommendation or such

passing of bills on one count or multi slab basis cannot be

construed to have conferred a right on the plaintiffs to get

the payments on multi slab basis, until and unless it is

proved by the plaintiff that the defendants agreed under the

written contract to pay on multi slab basis. The plaintiffs

have utterly failed to establish the same. A particular

officer for various reasons may pass a bill on multi slab

basis or a contractor may be able to get one of his bills

passed at a rate other than the rate given in written

contract in connivance with the passing authority. But when

a dispute arises and the matter comes to court for

adjudication no decree can be granted to the plaintiffs on

that basis and the plaintiffs would be required to establish

that the defendants in written contract agreed to grant the

rate on multi slab basis. That has not been established in

the case in hand. Therefore, in our considered opinion the

Division Bench of the High Court wholly erred in law in

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allowing the plaintiffs' appeal and granting the decree

accepting plaintiffs' claim that the rate has to be paid on

multi slab basis. In the aforesaid premises the impugned

judgment and decree of the Division Bench is set aside and

that of the learned Single Judge is affirmed. This appeal is

allowed but in the circumstances there will be no order as

to costs.