Case on Law of Quantum Meruit

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Case Analysis

Puran Lal Sah versus State of UP

Submitted by –

Aseem Agarwal (12PGPIM04)

Nitin Gupta (12PGPIM21)

Rahul Jain (12PGPIM24)

Saumitra Das (12PGPIM28)

Nishant Shah (12PGPIM29)

Supreme Court of India

Puran Lal Sah vs State Of U.P on 21 January, 1971
Equivalent citations: 1971 AIR 712, 1971 SCR (3) 469
Bench: Reddy, P Jaganmohan

PETITIONER:

PURAN LAL SAH

Vs.

RESPONDENT:

STATE OF U.P.

DATE OF JUDGMENT 21/01/1971

BENCH:

REDDY, P. JAGANMOHAN

BENCH:

REDDY, P. JAGANMOHAN

DUA, I.D.

CITATION:

1971 AIR 712 1971 SCR (3) 469

1971 SCC (1) 424

ACT:

Contract-Claim on basis of Quantum Meruit - When sustainable

Brief Facts of the Case

The Public Works Department of the State of UP had issued a tender notice to construct Mile 3 of the Nainital - Bhowali Road. They published Schedule B rates based on the calculation that stone would be available within 26 chains. The appellant inspected the site and found that there was stone available for construction within 26 chains. Satisfied he submitted a tender at 13% below the rates given in Schedule B on 30th September, 1946. Finally the tender was accepted and contract signed on 20th November, 1946.

However when the appellant tried to take stone from the specific area, he was stopped by Cantonment authorities. Furthermore he was not given permission from the Cantonment authorities for the removal of stones. As a result he had to get stone from Gadhera and Bhumedar from a distance of 79 and 110 chains respectively. Also during the construction of the road he encountered very hard shale rock that wasn’t mentioned in the contract as result of which he had to do some extra work. He requested for a higher rate from PWD but was rejected. After that he commenced the work, finally when the work was finished the Executive engineer forwarded his request for a higher rate. In his letter dated 15th June 1950 he mentioned that since the appellant was unable to get the stone from within 26 chains and had to bring it from outside, he is entitled to get extra compensation.

Under para 5 of the contract the appellant must be prepared to execute the work at original tender rate in excess of the given quantities of work upto 30 % and if he works in excess of 30% he is entitled to refuse the work if the rates are not increased. Since the appellant worked in excess of 30% he claimed a higher rate of payment for this extra work – Rs 48,840 due as balance together with interest by way of damages at 12% amounting to Rs 17,582 making a total of Rs 66,422.

When this claim was rejected the appellant gave notice under Section 80 of the CPC and filed a suit for the above amount. The defendant-respondent resisted the suit due to 3 reasons –

1) No assurance was given to the appellant by officers of the PWD as alleged by them.

2) Quantity of very hard shale rock shown by the appellant was false.

3) Under para 5 of the contract the appellant must be prepared to execute the work at original tender rate in excess of the given quantities of work upto 30 % and if he works in excess of 30% he must intimate to Engineer-in-charge in writing his willingness or refusal to do extra work at original rates and if he refuses to carry on at the original rates he is required to settle fresh rates for increased work over 30% before doing the work. The appellant did no such thing but continued to work even after it went in excess of 30%.

The trial court held issues 1, 2, 6 and 7 in favour of the appellant while issues 3, 4 and 5 were decided against him. As a result a decree for a sum of Rs 20,495 for extra lead plus Rs 1,653 for extra work done under the item very hard shale and Rs 4,155 interest by way of damages on Rs 22,158 making it a total of Rs 26,313 was passed with interest at 3 per cent per annum. The High court however reversed the decree for 2 reasons –...
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