The Madras High Court has recently resolved a 45-year-old dispute between a contractor and Southern Railway over calculation of charges for the civil works carried out by him before the construction of a diesel locomotive shed at Erode in 1965.
Justice M. Venugopal resolved the dispute while disposing of an Appeal Suit filed by the Union of India, represented by the General Manager, Southern Railway, against a judgement passed by a lower court in 2001 in favour of the contractor in a civil suit filed by him in 1969.
The appellant claimed that the lower court had come to an erroneous conclusion that the contractor had cleared 9,81,000 cubic feet of rubble and ordered a payment of Rs.2,78,604 though as per records he had cleared only 6,17,816 cubic feet and entitled to Rs.46,153.
Not part of written agreement
On the other hand, the contractor stated that the works related to clearing the rubble was not part of the written agreement to build the loco shed. Yet, he agreed to do the job only after the then Executive Engineer Railways agreed to pay him Rs.284 per 1,000 cubic feet. But he never expected a volte face.
After completion of the work, the higher officials said that they would make the payment only at the rate of around Rs.29 per cubic metre as per the Basic Schedule of Rates (BSR), 1961.
The contractor received the money under protest and filed the suit claiming the balance due to him.
Finding force in his submission, Mr. Justice Venugopal said that the Southern Railway, which had benefited out of the civil work done by the contractor, was bound to pay the latter at the rate of Rs.284 per 1,000 cubic feet especially when the quantum had been agreed upon by the then Executive Engineer.
The judge pointed out that Section 70 of the Indian Contract Act, 1872 speaks of obligation of a person enjoying benefits of a non-gratuitous act.
“It is to be borne in mind that a claim for compensation by one individual against another as per Section 70 of the Act is not based on any subsisting contract.
“Its basis is that something has been done by one party for the other which the other side has accepted voluntarily,” he said and held that a person could claim payment for work done beyond the terms of contract if the other person had availed the benefits of the work.
However, pointing out that no document had been filed to prove the removal of over 9 lakh cubic feet of rubble, the judge directed the Railways to pay the amount to the contractor for removing 6.17 lakh cubic feet at the rate of Rs.284 per 1,000 cubic feet.
