1997 PLP 893 (CLC)

(5) Whether the plaintiff after receipt of an amount of Rs. five lacs is estopped from claiming further amount in respect of the said work? (6) Whether the defendant at any stage made any acknowledgement of the plaintiff's liability as alleged? (7)What should the decree be?

9. In support of plaintiff's case Manzoor Ahmed Qureshi, Managing Director of the Company appeared as witness while the defendant KDA examined Amanullah Chachar, Executive Engineer Incharge of the work.

10. Mr. Gulzar Ahmed, Advocate for the plaintiff addressed this Court at the final hearing of the suit while the KDA remained un-represented without any sufficient cause. With the assistance of the learned counsel for the plaintiff I have gone through the evidence on record. My findings are as under for the following reasons: Issue No. l:

11. Article 131 of KDA Order, 1957 reads as under: "

131. Notice of suit against Authority. etc.‑‑‑(1) No suit shall be instituted against the Authority or any member or any person associated with the Authority or against any servant of the Authority or against any person or persons acting under the direction or authority of the Chairman or of any officer or servant of the Authority, in respect of any act purporting to be done under this Order or the rules or regulations made thereunder until the expiration of one month from the delivery of a written notice at the Authority office or the place of abode of such member, officer, servant‑or person, stating the cause of action, the name and place of the intending plaintiff, and the nature of the relief sought. (2) In every such suit the plaint shall contain a statement that such notice has been so delivered. (3) Notwithstanding anything in the Limitation Act, 1908 (IX of 1908), no such suit as is described in clause (1) shall, unless it is a suit for the recovery of immovable property or for a declaration of a title thereto, be commenced otherwise than within six months next after the accrual of the cause of action. "

12. Plain reading of the aforesaid provision requiring a written notice in respect of any act purporting to be done, under the KDA Order or the Rules or Regulations made thereunder tends to show that the delivery of such notice at the office of the authority is mandatory before filing of the suit. Strictly speaking such notice must state the cause of action, the name and place of the intending plaintiff and the nature of the relief sought. Besides, in every such suit brought against KDA plaint should contain a definite statement that such notice has been so delivered, one month before the suit.

13. On perusal of the plaint it is evidently clear that the plaintiff‑company is undoubtedly aggrieved by the act of the officials of the KDA with regard to non‑payment of its claims and it is also dissatisfied with the resolution of Governing Body of the KDA in sanctioning lump sum payment of Rs. five lacs in satisfaction of its pending claims. Accordingly the plaintiff described the undertaking and payment of this amount vide Exh.5/35 as part payment towards its claim. There is however no express or implied averment in the plaint that a legal notice as required by Article 131 was actually delivered at the office of the authority stating the cause' of action, the name and address of the plaintiff and the proposed relief sought.

14. Faced with this situation learned counsel referred to plaintiff's letter Exh.5/30 dated 25‑9‑1980 addressed to Executive Engineer, KDA calling upon him for payment of dues. Copies of this letter are endorsed to the Chairman, Claims Committee, Chief Engineer (Construction) and Superintending Engineer (Construction) Circle II, KDA which at any rate do not satisfy the requirements of Article 131 of KDA Order. Reliance on this letter is therefore completely displaced, misconceived and preposterous also for the reason that the plaintiff on its own showing actually accepted a sum of Rs. five lacs much subsequent to this letter on 29‑12‑1983 in full and final settlement of his claim undertaking that no further claim against the Authority in respect of the work shall be lodged. Learned counsel next referred to letters Exh.5/36 to 5/39 in this connection. While letter Exh.5/36 dated 22‑1‑1984 is addressed to Executive Engineer, KDA requesting for payment of balance amount for use of additional quantity of steel to the tune of 48.302 tons at the rate of Rs.7,500 per ton and payment of account of new design prepared for the execution of the work, Exh.5/37 is a letter dated 24-4‑1984 addressed to Chief Engineer (Construction), KDA inviting attention to the earlier letter addressed to Executive Engineer. Exh.5/38 dated 6th June, 1985 is a reminder of the earlier letter addressed to the Director- General, KDA in continuation of the earlier letter Exh.5/39 dated 5‑8‑1984.

15. On a careful consideration of these letters I am of the definite view that these letters by themselves at best constitute a time‑barred demand for payment of claims and by any stretch of reasoning not a. valid and legal notice as contemplated by Article 131 of the KDA Order. Needless to emphasise there is neither mention of the amount claimed in the suit; the alleged cause of action and intention to file a suit in case the claim was not accepted in the aforesaid letters. Mere recital in the letter Exh.5/36 to the effect that the plaintiff signed the measurement book and the receipt dated 29‑12‑1983 under duress or that this amount was received as an interim part payment towards longstanding dues would not tantamount a mandatory legal notice as required by KDA Order. To my mind the letters at best may be treated as acts of resiling from the solemn commitment made by the plaintiff‑company while executing undertaking on receipt of payment of Rs. five lacs as sanctioned by the Governing Body of the KDA in full and final satisfaction of its pending claims with the KDA.

16. After the judgment was reserved, learned counsel cited Karachi Development Authority v. Evacuee Trust Board PLD 1984 Karachi 34, in order to meet the legal objection with regard to statutory notice by the defendant. In this case Salim Akhtar. J. (as his Lordship then was), while referring to Zainab Hajiani's case PLD 1978 Karachi 848 observed that it is not in every case that notice under Article 131 is necessary before instituting, a case against KDA. Such notice is necessary against KDA if suit has been filed in respect of an act purporting to be done under the Order or Rules or Regulations made thereunder. In the said case plaintiff had challenged the action of the KDA on the ground that their act of dispossessing them was illegal, without jurisdiction and not according to law as the property belonged to Evacuee Trust Property Board. In the present case neither the authority of the KDA is challenged nor is there any dispute with regard to a property between the parties. Evidently plaintiff claimed non‑payment of his dues on account of contract which was completed and KDA acted under the Rules and Regulations made under the KDA Order by making lump sum payment to the plaintiff after the claim was sanctioned by its Board of Governors in their meeting. Reported case is therefore completely out of context and not relevant to the facts of the case in hand. For the aforesaid facts and circumstances, the issue is answered against the plaintiff. ISSUES NOS.2 AND 6.

17. Both the issues may be discussed together for the sake of convenience and brevity. According to learned counsel for the plaintiff Article 56 of the First Schedule to the Limitation Act is attracted to the suit which provides a period of three years for the price of work done by the plaintiff for the defendant at his request, where no time has been fixed for payment from the date when the work is done. According to the plaintiff, execution of work was completed on 31‑12‑1978 whereas according to the defendant it was completed on 11‑5‑1979. In his evidence P. W. Manzoor Ahmed Qureshi admitted that in, all 35 running bills were paid by the defendant and 36th bill being final was paid to the company on 24‑4‑1979. Computing the period of limitation from the date of completion of the work as asserted by either of the parties, the suit filed on 25‑12‑1986 is patently barred by time and no other view can possibly be taken in the circumstances.

18. Learned counsel referred to a Single Bench judgment from this Court as well as Division Bench case from Lahore jurisdiction reported as Abdul Latif Khan v. D.B. Ghadially 1992 CLC 827 and Federation of Pakistan v. Javed Naseem PLD 1994 Lahore

303. In the Karachi case, suit for recovery of amount in respect of construction work done by the plaintiff though filed after stipulated period of three years was filed within one year from submission of final bill by him which was refused by defendant alleging that contract had ceased. In these circumstances, the Court held that the suit was within time as starting point for computation of period of 3 years would be from date when contract was allegedly broken or same was ceased. Suffice to say neither the suit has been filed within 3 years from the date of payment of final bill nor from the date of completion of the contract: Admittedly there was no breach of contract in the I present suit thus the reported case is of no avail to the plaintiff.

19. In the Lahore case a Division Bench sitting in its appellate jurisdiction, observed that the contractor had received payment of final bill without raising objection regarding payment of the additional work allegedly done by him. He also did not plead coercion and strain in accepting final bill without objection. His attorney even did not mention such fact in his examination‑in‑Chief. The Court accordingly held that the principle of estoppel could be pressed into service as strong inference would be raised from the factum of receiving payment of final bill without raising any objection that in fact no such work was got done, for had it been done he would not have received payment against the final bill or at least would have raised objection for non‑payment of same or could have received payment under protest and kept the question of payment regarding dispute open for decision by the department as per terms of contract. On the issue of limitation Court found that the suit was filed within 3 years from the date of accrual of cause of action and was thus within time. I am unable to comprehend as to how this judgment advances the plea raised by the plaintiff which is hopelessly barred by time and the doctrine of estoppel.

20. Learned counsel for the plaintiff, however referred to the undertaking dated 29‑12‑1983 Exh.5/35 when according to the plaintiff partial payment of Rs.five lacs was made by the defendant through a cheque. To re‑enforce his contention learned counsel referred to section 19 of the Limitation Act for computation of fresh period of limitation from this date. This provision of law postulates that where before the expiration of the period prescribed for a suit or application in respect of any property or right, an acknowledgement of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed or by some person through whom, he derives title or liability a fresh period of limitation shall be computed from the time when the acknowledgement was so signed; In order to appreciate this provision of law, it seems necessary to reproduce the undertaking executed by the plaintiff's Managing Director which reads as under: "We give an undertaking that no claim on account of compensation due to the rise in prices against the work of construction of 10 M.G. Reservoir at University Hill (under 3rd phase) will be demanded after the payment of Rs 500.000 at approved by the G.B. KDA. This amount is full and final in connection with our pending claim with KDA. We further give an undertaking that no further claim against the authority in respect of the above work will be demanded in future. 21. 1t may be observed that in the first instance unqualified and voluntary undertaking executed by the plaintiff does not at all amount to acknowledgment of liability and secondly it is neither signed nor acknowledged by any agent or officer on behalf of the defendant. Moreover, the period prescribed for filing the suit had already expired inasmuch as according to plaintiff the work was completed on 31‑12‑1978 while the undertaking is dated 29‑12‑1983. Confronted with this situation learned counsel for the plaintiff referred to explanation I to section 19 which postulates that "for the purpose of this section an acknowledgment may be sufficient though it omits to specify the nature of the property or right or avers that the time for payment, delivery performance or enjoyment has not come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy or is coupled with a claim to a set‑off or is addressed to a person other than the person entitled to the property or right.

22. Argument on the face of it is without any substance and superfluous. As observed earlier firstly the undertaking executed by the plaintiff does not amount to an acknowledgement of liability and secondly this is hardly a case of acknowledgement coupled with refusal to pay the amount. To my mind there is absolutely no admission of debt or liability which does not operate as waiver of the time that had already elapsed. In law, the acknowledgment suffices to exclude the operation of statute and to set time running against the right of action. An acknowledgement merely saves the running of limitation and is relatable to a subsisting liability or legal relationship. The acknowledgement is supposed to rest upon the rebuttal afforded thereby of the presumption of payment of debt and therefore any acknowledgement which repels that presumption is as a rule sufficient.

23. Long after the Judgment was reserved, learned counsel cited United Bank Ltd. v. Begum Fazai Ahmed PLD 1994 Karachi

248. In this case G.H. Malik, J. (as he then was), dealing with a plea raised by reason of section

20. Limitation Act held that fresh period of limitation would he computed in terms of section 20, Limitation Act, 1908, where there was payment; such payment was on account of a debt or, of interest on legacy; payment in question, should be by the person liable to pay the debt, or interest on legacy, or by his authorized agent and; acknowledgement of payment in question, must appear in the hand‑writing of, or in a writing signed by, the person making the payment. Learned Judge further observed that payment by a cheque signed by a debtor and delivered to,‑and encashed by the creditor was payment of the amount thereof. Even a cheque drawn by a third person in favour of judgment‑debtor and endorsed by him in favour of decree‑holder, who subsequently encashed it, fulfilled the requirement of acknowledgement in terms of section 20, Limitation Act. Learned Judge further held that part payment by such cheque on specified date before expiration of period of limitation would extend period of limitation and suit filed before expiry of such extended period would be within time. Authority on the face of it is hardly applicable to the facts of the suit and of no avail to the plaintiff on the facts pleaded and established in the reported case.

24. No other point was urged in support of these issues. In my view there is hardly any force in the contention of the plaintiff that the defendant having acknowledged liability after the payment of Rs.five lacs to the plaintiff, a fresh period of limitation started running from the date of payment. Both the issues are therefore answered against the plaintiff. ISSUES NOS.3, 4 AND 5.

25. These issues may be discussed together for the sake of convenience and to avoid possible repetition of evidence and reasoning. After the decision of foregoing issues seemingly findings on these issues may not be called for but since evidence on such issues has been adduced, dispensation of safe administration of justice demands that these issues may also be adjudicated upon.

26. As regards the claim on account of change of design plaintiff failed to establish by evidence of unimpeachable and high order that in terms of the agreement between the parties, it is entitled to the payment of Rs.three lacs on this account. No clause in the agreement between the parties has been referred to in support of this claim whereas according to the defendant design prepared by plaintiff involved amendments and corrections as noticed by its consultant. Plaintiff relied upon defendants' letter Exh.5/11 dated 9‑9‑1976 in order to substantiate its claim, which tends to show that the design calculations submitted by the plaintiff had been approved by Consulting Engineer with minor corrections. Accordingly the plaintiff was requested to submit the revised design incorporating all the corrections and amendments. By another letter Exh.5/12 bearing the same date, the plaintiff was informed that due to revision of BS 2007 Code department was considering to revise the design of the structure in accordance with the revised BS 5337 Code but before taking any decision it was essential to determine the extra cost involved. Plaintiff was therefore requested to calculate the cost of the items design as per BS 2007 Code and revised cost of the effected items designed as per the revised BS 5337 Code. By another letter Exh.5/13 dated 12‑1‑1977, plaintiff was informed that M/s. Umar Munshi Consulting Engineers had advised revision of the design in accordance with new Birtish Code of Practice i.e. B.S. 5337. The plaintiff was therefore requested to get the revised design completed through their Consultants and to supply the same immediately. By its letter Exh.5/14 dated 20‑10‑1976 however the plaintiff wrote to the Superintending Engineer (Construction) Circle No.III, KDA enclosing therewith two sets of design calculations one based on BSCP 2007 in 47 sheets and another design based on BSCP 5337 in 46 sheets respectively. Plaintiff added that they had already taken the work in hand according to the new design as verbally ordered. There is no mention of the difference in cost actually involved except an averment in the letter that the same had already been intimated and was payable to the plaintiff. Quite inordinately by its letter Exh.5/16 dated. 5th March, 1978 plaintiff emphasised the Superintending Engineer (Construction) III, KDA by referring to sub‑para. (1) of para. 3 of the Contract Agreement on page 33 stating that in general, Civil Engineering Works shall be designed and constructed in accordance with BS Code of Practice Nos.310, 114 and 2007, latest if revised. Plaintiff further pointed out that BSCP 2007 was not revised but it had been scrapped and another Code BSCP 5337 introduced one year after the submission of the tender. This letter refers to earlier letters of 9‑1‑1978 and 18‑1‑1978. While letter dated 9‑1‑1978 was not produced for the reasons better known to plaintiff, letter dated 18‑1‑1978 Exh.5/46 by the plaintiff tends to show that revision of Code had resulted in requirement of additional quantities of steel, concrete and cement. A sum of Rs.32,77,766 was claimed on this score and adjusting a sum of Rs.5,40,000 already received balance payment of Rs.27,37,766 was claimed against the KDA but not responded.

27. From these letters the plaintiff led this Court to believe that in fact there was complete change of design from one Code to a different design Code with consequential entitlement to an additional amount on this account. Be that as it may, it seems that there was some change/revision/modification in the design in the structure of the work at the initiative of the defendant but there is no promise, agreement and commitment for extra payment on account of this change or revision in the design. True that the plaintiff was paid the cost for use of additional quantity of steel on account of this change but no payment was made for preparation of new design as none was agreed upon.

28. As regards claim of the plaintiff on account of escalation in prices notwithstanding clause 46 of the agreement between the parties that no claim on account of fluctuation of prices will be entertained during the currency of this contract for terms of the, work as per schedule of quantities attached to this agreement, in view of clause 17 of the Contract as no schedule of quantities is attached to the agreement and because of the advice rendered by Law Officers of the KDA Exh.5/33 it would be just, fair and equitable to accede the demand of the plaintiff for escalation on account of increase in the prices of material used in the execution of the contract. The question for consideration now is whether the plaintiff is entitled to claim such escalation in this suit after the acknowledgement of Rs.five lacs in full and final settlement of his pending claims with KDA. No doubt plaintiff in his evidence claimed that negotiations had taken place between the parties regarding escalation in prices in relation to quantity of steel, defendant expressly and unequivocally denied any kind of negotiations or commitment on their part. Be that as it may, the plaintiff failed to establish that Claims Committee of the KDA had recommended for payment of Rs.13,67,233.35 on account of escalation in prices as urged. Indeed this issue was placed before the Governing Body of KDA at the request of the plaintiffs who sanctioned the payment of Rs.five lacs on account of escalation in prices in full and final satisfaction of the claims made by the plaintiff. Having accepted this payment without any protest the plaintiff is legally estopped from questioning the same after a lapse of nearly three years by stating that the acknowledgement was executed by him under duress. Admittedly, plaintiff did not state at the time of acceptance of amount that the same was accepted under duress or protest. The explanation that had it been so stated, plaintiff would not have been paid even this amount, is hardly any justification for backing out of his undertaking that he would not claim any other grant. Likewise there is absolutely no evidence as regards the commission of fraud and duress as pleaded and canvassed at the Bar. On plaintiff's own showing he had given this undertaking in full and final satisfaction of claim. Plaintiff's witness admitted, that he did not send any letter of protest either to the Governing Body or the Chairman, KDA but sent letters to the Director‑General, KDA on 24‑4‑1984, 5‑8‑1984 and 6‑6‑1985 long after the execution of the undertaking and receipt of the amount. To my mind, the plaintiff should thank himself for the conduct and attitude adopted by him while receiving payment of Rs.five lacs. In law he is estopped and debarred from raising any objection, protest, reservation to it at a highly belated stage of the suit in the absence of any strong evidence and plausible explanation. Obviously there were no compelling and exceptional circumstances warranting the acceptance of the amount on the part of the plaintiff to entitle him to claim the said amount subsequently.

29. For the aforesaid facts and reasons these issues are decided against the plaintiff. ISSUE No7.

30. In the light of the aforesaid findings suit must fail and is hereby dismissed with no order as to costs. A.A./S‑65/K Suit dismissed.