Holding

The contractor is entitled to extra remuneration for work beyond the contract at Rs.215 per MT for quantities above 750 MT, but not to any amount beyond Rs.15 per MT for transportation, under Section 70 of the Indian Contract Act.

Summary

The Food Corporation of India contracted Vikas Majdoor Kamdaar Sahakari Mandli Ltd. to perform stevedoring and cargo handling at Kandla Port. The corporation later requested the contractor to increase the discharge rate, leading the contractor to incur extra expenses and seek higher remuneration. The trial court dismissed the claim, but the Gujarat High Court decreed payment for the extra work. On appeal, the Supreme Court examined the applicability of Section 70 of the Indian Contract Act, 1872 (quantum meruit), despite the contract’s specific rate clauses. The Court held that the contractor is entitled to reasonable compensation for extra work beyond the contract, awarding Rs.215 per MT for quantities above 750 MT, but denied any claim for enhanced transportation charges beyond the agreed Rs.15 per MT. Consequently, the corporation’s appeal was partially allowed and the society’s appeal dismissed.

Issues considered

Whether the contractor is entitled to additional payment for extra work performed beyond the contract under Section 70 (quantum meruit).
Whether the contractor can claim an enhanced stevedoring rate of Rs.215 per MT beyond the contractual rate of Rs.108 per MT.
Whether the contractor can claim an enhanced transportation rate of Rs.45 per MT beyond the contractual rate of Rs.15 per MT.
Whether the principle of quantum meruit applies notwithstanding specific contractual rate provisions.

Legislation cited

Indian Contract Act, 1872s. 70

Subjects

quantum meruitSection 70extra workstevedoringcontract remunerationdemurragetransportation chargesFood Corporation of IndiaVikas Majdoor Kamdaar

Judgment

r
A FOOD CORPORATION OF INDIA AND ORS.
v.
VIKAS MAJDOOR KAMDAR SAHKARI MANDLI LTD.

NOVEMBER 12, 2007
B
[DR.ARIJITPASAYAT ANDLOKESHWAR ~
SINGHPANTA,JJ.] :

Contract Act, 1872-s. 70-Contract for stevedoring and
c transportation ofCargo-Contractor asked by the secondparty to the
contract to do extra work-Suit demanding higher rate for doing extra
work-Dismissed-High Court decreeing the suit invoking principle
of quantum meruit-On appeal, HELD: Contactor entitled to extra
remuneration for doing extra work beyond the contract-It inc.urred
D extra expenditure for doing the extra work done beyond the contract- -..(
However, not entitled to any amount beyond the agreed amount for ..
transportation-Principle ofquantum meruit.
Principles-Principle of quantum meruit-Applicability-
Discussed-Contract Act, 1872-s. 70.
E
Respondent-Society was appointed as contractor by the
appellant-Corporation for stevedoring, clearance for transportation
at a Port, pursuant to a tender. The Society started execution of the
work as per the contract. It received two letters dated 30.9.1994 and
F 14.10.1994 from the Corporation asking it to do extra work. For doing
extra work, extra expenditure was involved. Society requested the
Corporation to provide extra money and demanded higher rate for
the extra work. The demand was examined in the office of the
Corporation and by a letter, it was pointed out that the Society was
G incurring extra expenditure and was paying excess money for
speedy work. There was also recommendation to fonvard the
request of the Society to the concerned authority, but there was no
response.

1038
}
FOOD CORPRN. OF INDIA v. VIKAS MAJDOOR 1039
KAMDAR SAHKARI MANDLI
Society filed a suit claiming payment from the Corporation for A
the extra work done at the higher rate. The suit was dismissed. High
Court decreed the suit. Hence the present appeals, one by the
Corporation and another by the Society.
Partly allowing the appeal of the Corporation and dismissing B
that of the Society, the Court
HELD: 1.1. If a party to a contract has done additional
construction for another not intending to do it gratuitously and such
other has obtained benefit, the former is entitled to compensation
for the additional work not covered by the contract. If an oral C
agreement is pleaded, which is not proved, he will be entitled to
compensation under Section 70 of the Contract Act, 1872. Payment
under this Section can also be claimed for work done beyond the
terms of the contract, when the benefitoftheworkhas been availed
of by the defendant. [Para 13] ll048-G; 1049-A] D
1.2. The term 'extra' 's generally used in relation to the works,
which are not expressly or impliedly included in the original contract
price, provided the work is within the framework of the original
contract. The question whether a particular work is extra will depend
upon the terms and conditions of the contract, and other documents E
connected therewith. [Para 14] (1049-A, B]
1.3. The demand for the higher remuneration was in accordance
with the terms of Clause XVI of tender notice. There is no dispute
that there was a request made by the appellant-Corporation to F
discharge more than what was stipulated in terms of the Charter Party
agreement. The Corporation was insisting that the respondent-
Society should increase the discharge. That being so, the respondent
Society was entitled to extra remuneration. Since the appellant-
Corporation had failed to respond to the request, the High Court had G '
rightly invoked the principle of quantum meruit and accepted the
claim. From various documents exhibited more particularly the
letters dated 30.9.1994 to 14.10.1994 it is clear thatthe functionaries
of the appellant-Corporation recommended higher payment rate for
higher discharge. The letters written by the respondent-Society also H
\
-~\
1040 SUPREME COURT REPORTS [2007 j 11 S.C.R.
f' ~.,-

A clearly indicate that the demand was for higher charges in. respect
of the extra work. Though a stand has been taken that the
signatories of the letters by the Corporation were not authorized, it
is not disputed that on the basis of these letters, extra work was
undertaken. There is also material on record to show that extra
B expenditure had to be incurred for doing the extra work.
)--
[Paras 11and16] (1048-A, B, C; 1051-B, C]
1.4. With reference to Clause XX of tender notice, the
contractor was only obliged to ensure discharge the cargo at the rate
provided for in the Charter Party agreement. It is pointed out'that
c the contractor was bound to discharge the articles at an average rate
of750/- per MT. In the event of failure to do so, the corporation was
liable to pay demurrage at the rate of US$ 4000'per day. In case the
rate was achieved, the Corporation was entitled to receive discharge
money for working time saved at the rate of US$2000 per day. Io
D the present appeal, the Corporation has withheld the information
from the trial court as well as the High Court. The respondent
completed the work. Not only the appellant-Corporation saved
demurrage at the rate of US$ 4000 per day, it also earned discharge
money for speedy work done. [Para 11] [1047-A, B, C; 1048-A]
E
1.5. Sufficient evidence has not been placed on record to justify
the claim at the rate of Rs.215. Society shall be paid at the rate of
Rs.108 per M.T. in terms of the contract up to 750 M.T. and atthe
rate of Rs.215 per MT for quantum beyond that. The interest rate
F shall be 6% as fixed by the High Court. No issue was framed relating
~·
to the claim of enhanced rate for transportation at the rate of Rs.45/ )<

- per M.T. and even no ground was urged accordingly. The
respondent-Society shall not be entitled to any amount beyond the
agreed amount ofRs.15 per M.T. for transportation.
[Paras 17 and 18] [1052-A, B, CJ
G
2. The principle of quantum meruit is often applied where for y
some technical reason a contract is held to be invalid. Under such
circumstances an implied contract is assumed, by which the person
for whom the work is to be done contracts to pay reasonably for the
H work done, to the person who does the work. The provisions of
}
FOOD CORPRN. OF INDIA v. VIK.AS MAJDOOR 1041
KAMDARSAHKARIMANDLI [PASAYAT,J.]
Section 70 of Contract Act are based on the doctrine of quantum A
meruit, but the provisions of the Contract Act admit of a more liberal
interpretation; the principle of the Section being wider than the .
principle of quantum meruit. The principle has no application where
there is a specific agreement in operation. A person who does work
or who supplies goods under a contract, if no price is fixed, is entitled B
-1 to be paid a reasonable sum for his labour and the goods supplied.
If the work is outside the contract, the terms of the contract can have
no application; and the contractor is entitled to be paid a reasonable
price for such work as was done by him. [Para 12] [1048-D, E, F]
CIVIL APPELLATE nJRISDICTION: Civil Appeal No. 7440 of C
2000.
From the final Judgment and Order dated 7.8.2000 of the High Court
of Gujarat at Alm1edabad in First Appeal No. 2678 of 1999.
WITH
D

C.A. No. 2540 of 2002.
Dr. A. Francis Julian, Sumit Kumar, Kramveer and Khwairakpam
Nobin Singh for the Appellants.
E
Jawahar Lal Gupta, S.K. Gambhir and T.N. Singh for the
Respondent.
The Judgment of the Court was delivered by
DR. ARIJIT PASAYAT, J. 1. These two appeals have a common F
matrix. The Food Corporation oflndia and Others are the appellants in
Civil Appeal No. 7440 of2000 while the respondent in the said appeal
is the appellant in the other appeal i.e. Civil appeal No. 2540 of 2002.
Parties in this judgment are described as per Civil Appeal No.7440 of
2000. 0
-, -{_ 2. Challenge in these appeals is to the judgment of a Division Bench
of the Gujarat High Court holding that the suit filed by plaintiff (respondent)
was to be partly decreed for recovery of Rs.68,02,973/- from the
defendants i.e. present appellants together with pendente lite and future
FI
1042 SUPREME COURT REPORTS (2007] 11 S.C.R.
r ~
~

A interest at the rate of 6% per annum with appropriate cost throughout. It
is to be noted that the respondent had filed a suit (Civil Suit No. 6040 of
1994) before learned City Civil Judge Ahmedabad for injunction
restraining the appellant No. I-Corporation and its functionaries from
recovering and/or withholding any amount from the bills of the respondent
B herein and also for a declaration that action of appellant No. I -Corporation
1--
in recovering various amounts without deciding the rates for extra work
was bad in law and for directing the appellant-Corporation to make
payment for the extra work at the rates demanded by the respondent. It
was averred that as per the tender notice the respondent herein was
c required to handle 750 MT per day as per the charter party and for
handling for which rate was fixed at Rs.108 per MT. It was further stated
that the appellant-Corporation by the letters dated 30.9.1994, I4.10.1994
directed the respondent herein to handle more cargo than what was
prescribed above and consequently the respondent herein started handling
D cargo to the tune of I200 to 1300 MT per day against the contracted
-..(
rate of 750 M.T. In view of the accelerated discharge, the respondent
had to incur additional expenses towards enhanced rate of wages,
payment to the workers and demurrage to wagons. The respondent
claimed that its entitlement for enhanced transportation charges was Rs.45
E per MT in place ofRs.15 per MT which was stipulated in the contract.
The appellant No. I-Corporation in its written statement took the stand
that it had no intention of withholding any payment demand as per· the
terms of the contract and that whatever bill was raised as per the terms
of the contract had been paid and the final bill had not been settled as
F yet. On the claim towards additional expenses due to the accelerated
discharge, the Corporation contented that as per the terms of the contract )< ""'·
the respondent herein was bound to carry out discharge so as to avoid
any demurrage being incurred and it was bound to follow the rules and
regulations of the Port authorities under which it had to discharge at a
faster rate. The Corporation also denied that the respondent had incurred
G
any extra expenses because of the accelerated discharge. The appellant-
Corporation also denied the claim towards enhanced rate for transportation
charges. Subsequently the respondent herein amended the claim to an
amount ofRs.68,07,I I3.20 with interest at the rate of I8% per annum
from the due date. Towards stevedoring charges the respondents herein
H
j
FOOD CORPRN. OF INDIA v. VIKAS MAJDOOR 1043
KAMDAR SAHKARI MAND LI [PASA YAT, J.]
claimed Rs.215/- per MT instead of agreed rate ofRs.108/-per MT. A A
sum ofRs.51,20,263.70 was claimed as the difference. The respondent
further claimed the enhanced transpm;tation charges and on that account
claimed an additional sum ofRs.12,84t847.50. The appellant-Corporation
filed its additional written statement denying the claim for enhanced
compensation. B
3. Learned Civil Judge (Court No.14), Ahmedabad framed the
following issues for determination.
(i) Whether the Court has jurisdiction to entertain the suit?
(ii) Whether the Plaintiff proves that the Plaintiff appointed as C
contractor for stevedoring, clearance for transportation at
Kandla Port pursuant to the tender?
(rii) Whether the Plaintiff proves that the plaintiff was canying out
a work of transport and handling the cargo as per the terms D
and conditions of the tender
(iv) Whether the plaintiff is entitled to the enhancement rate from
Rs.108/- per M.T. to Rs.215/- per M.T. as alleged?
(v) Whether the plaintiff proves that the plaintiff was unloading the
quantity of the goods more than stipulated in the tender? E
(vi) Whether the plaintiff is entitled to recover the amount from the
defendant as prayed in para 12(A) and (B) of the plaint?
(vii) What order and decree?
F
4. The learned trial Judge decided issues (i), (ii), (iii) and (v) in favour
of the Respondent/Plaintiff. However, the learned Judge dismissed the suit
on the basis of findings in issue Nos. (iv) and (vi).
5. The following findings inter alia were recorded by learned trial
~~ G
(i) Clause XX (1 )(i) of the contract provided for a minimum
discharge rate of750 M.T. per day as provided in the Charter
Party, so that the vessel would not suffer any demurrage. Thus,
the Respondent herein (Plaintiff) had carried out the work of
H
1044 SUPREME COURT REPORTS (2007] 11 S.C.R.
{ -r·
A handling cargo as per the terms of the contract.
(li) The Appellant Corporation (Defendant) had insisted for
discharge of cargo at higher rate with a view to comply with
the direction of the port authorities. The Respondent Plaintiff
had discharged additional quantities. Clause 41 of the contract
B provides that the contractor shall comply with the rules and '~

regulation of the Port Authorities, and since the Port Authorities
had demanded discharge at faster rate the Respondent herein
(Plaintiff) was under obligation to discharge at faster rate.

c (m) In any event, the Respondent (plaintiff) had not established by
evidence any additional cost incrred by him for such additional
discharge.
(iv) The Respondent (Plaintiff) was entitled to only contractual rate
ofRs.108/- per M.T. and not at higher rate ofRs.215/ per
D M.T.
(v) The claim for enhanced rate for additional quantity discharged
under S. 70 of the Contract Act on the principle of quantum
meruit would not be applicable since there was a stipulation
under the contract for payment at the rate of Rs.108/- M.T
E orJy.
6. On the basis of the aforesaid findings the suit was dismissed.
Aggrieved by the above judgment respondent herein filed First Appeal
No. 2678 of 1999 before the Gujarat High Court. A Division Bench of
F the Gujarat High Court reversed the judgment of the trial court and
decreed the suit for a sum ofRs.68,02,973/- with interest at the rate of
6% from the date of suit.
7. Following findings were recorded by the High Court:

G (i) A combined reading of Clause XX Part I (i) along with Clause
19 of the Charter Party would show that the Respondent herein
(Plaintiff) was bound to handle only an average quantity of 750/-
per M.T. per day, but not at the minimum quantity of750/- per
M.T. per day.
H (ii) The Respondent/Plaintiff had done extra-work than what was
f
FOOD CORPRN. OF INDIA v. VIKAS MAJDOOR 1045
- ~
,. KAMDARSAHKARIMANDLI [PASAYAT,J.]
agreed to in the contract. The extra-work was not done A
gratuitously.
(iii) Since it was an extra-work as stated in clause XVI of the
contract, but no negotiation took place as required under this
clause, despite written request of the Respondent (Plaintiff) and B
-i no mutual settlement was arrived at despite the request of the
\_ Respondent in various letters, there was no rejection ofthe Plaintiffs
request for higher remuneration.
(iv) The Plaintiff is entitled to e>..1.ra remuneration for extra wor~.
(v) Since no negotiation took place in spite of written request by
c
the Plaintiff, the principle of quantum meruit applied for awarding
compensation.
(vi) Since no reply was sent by the Appellant Corporation to the
letter of Respondent dated 9.11.1994, refusing the demand the D
Respondent (Plaintiff) had proved his claim for compensation at
Rs.215/M.T.
(vii) Even though the trial Court did not frame any issue on the
., claim of transportation charges at the rate ofRs.45/- per tonne E
instead of Rs.15/- per tonne, the High Court decided the issue
holding that the respondent herein had substantiated the said claim
by the letter dated 9.11.1994.
(vii) In letter dated 14.11.1994 sent by the Assistant Manager of
the appellant-Corporation he had recommended for the enhanced ·F
>- )\
rate of payment that would constitute an admission of the enhanced
~

rate as claimed by the respondent.
8. In support of Civil Appeal No.7440 of2000, learned counsel
for the appellants submitted that the contracts stipulated remuneration at G
the rate of Rs. I 00/- per MT for discharge at the charter party rate for a
period from 16.8.1994 to 15.8.1995. It does not preclude any higher
discharge rate since its discharge rate is not pre-determined and it varies
from ship to ship. The stipulation of the charter party rate is only for the
purpose of ensuring that the appellant-Corporation does not suffer any
H
1046 SUPREME COURT REPORTS [2007] 11 S.C.R.
~
-{ ~-
A demurrage on account of slow discharge. Since the rate of discharge is a
variable factor from ship to ship, the remuneration in the present contract
is not dependant on the daily discharge rate. Actual figures also show that
the discharge rate has been varying daily. Therefore, the request of the
appellant Corporation for a faster discharge was as per the terms of the
B contract and in view of the specific order from the port authorities in terms
of Clause 41 of the contract. It was, therefore submitted that the ~

respondent is not entitled to claim remuneration at a higher rate but only
the contractual rate.
9. Secondly, it was submitted that in the absence of any specific
c contract between the parties or the acceptance of the appellant of the
demand of the respondent for higher rate of remuneration, the respondent
is entitled to claim remuneration only as per the terms of the contract.
Finally, it is submitted that principles of quantum meruit under Section 70
of the Indian Contract Act, 1872 (in short the 'Contract Act') has no
D application in view of the specific contractual provisions. Alternatively, it
was pleaded that the claim for enhanced rate is highly exorbitant and not
substantial by any evidence of actual expenses. Though the High Court
had relied on the letter dated 9.11.1994 (Ext.67), the same has no
relevance because the respondent had claimed Rs.215/- per MT for a .,,..

E minimum discharge of 1200 MT per day. This was even much higher than r-
the ·actual discharge rate achieved by the respondent. Therefore, the decree
at the rate of Rs.215 per MT is unsustainable. The letter dated 15.11.1994
(Exh. 90) written by the Assistant Manager of the appellant-Corporation
has also no relevance because he was not competent to decide the issue
F and the same could not have been the basis of a decree when he was
not examined as a witness. Even otherwise, it was only a unilateral )(
""
recommendation to higher authorities. The letter does not in any way
substantiate the claim of the respondent and the same was not accepted
by the appellant. The decree for enhanced transportation charges at the
G rate ofRs.45/- per MT for transporting the cargo from the wharf to the
appellant godown is unsustainable since the contractual rate has no
connection with the discharge rate. Therefore the principle of qua.Tltum :r'
meruit does not apply and the respondent is entitled to claim at the
contractual rate only.
H
I

(
f FOOD CORPRN. OF INDIA v. VIKAS MAJDOOR 1047
KAMDARSAHKARI MANDLI [PASAYAT, J.]
") 't
10. Respondent supported judgment and its appeal prayed for A
enhanced rate of interest.
11. With reference to Clause XX of tender notice, it is submitted
that the contractor was only obliged to ensure discharge the cargo at the
rate provided for in the Charter Party agreement. Clauses 22 and 23 are
B
relevant. It is pointed out that the contractor was bound to discharge the
-1
articles at an average rate of 750/- per MT. In the event of failure to do
so, the corporation was liable to pay demurrage at the rate of US$ 4000
per day. In case the rate was achieved, the Corporation was entitled to
receive discharge money for working time saved at the rate of US$2000
per day. In the present appeal, the Corporation has withheld the c
information from the trial court as well as the High Court. Since the
respondent-Society had started the execution of the work it had received
a letter dated 30th St:ptember, 1994 from the Corporation "to rise to the
occasion and to come forward with all the machinery geared up to ensure
maintaining four gangs/cranes in each shift to achieve the target of not less D
than 2000 M.Ts. per day without fail". Another letter dated 14th October,
1994 was to similar effect. It is unconceivable as contended by the
appellant-Corporation that no extra expenditure would be involved in
getting a higher rate of discharge. The Customs authorities were delaying
the clearance. There was delay even at the time of unloading. At the depot E
of the Corporation, the arrangements were very poor. Therefor~, the
Corporation was requested to provide extra money. A fax was sent in
this regard. When the respondent-Society did not get any response, it
sent another letter dated 9.11.1994 reiterating its demand for payment of
a higher rate. A copy of the letter was endorsed to Senior Regional F
_.,,.
x Manager, FCI, Ahmedabad, the basis on which the extra remuneration
was demanded was indicated. It appears that the matter was examined
in the office of the Corporation and therefore the letter dated 14th
November, 1994 was issued, giving details and pointing out that the
respondent-Society was incurring extra expenditure and was paying excess G
money for speedy work to each and every DLB gangs, shore cranes,
-'--(, Tmcks, Short labourers, and other organizations. Various difficulties faced
by the respondent Society were also listed. It was found that the
worksheet is in order. He recommended that th~ request of the
respondent society was to be accepted and accordingly recommended H
1048 SUPREME COURT REPORTS (2007] 11 S.C.R.
\
-f { .
A that the request may be forwarded to the concerned authority. Despite
these specific recommendations, there was no response. The respondent
completed the work. Not only the appellant-Corporation saved demurrage
at the rate of US$ 4000 per day, it also earned discharge money for
speedy work done. The demand for the higher remuneration was in
B accordance with the terms of Clause XVI. There is no dispute that there
was a request made by the appellant-Corporation to discharge.more than ~-

what was stipulated in terms of the Charter party agreement. The
Corporation was insisting that the respondent-Society should increase the
discharge. That being so Clause XVI(b) is clearly attracted. The
c respondent Society was entitled to extra remuneration. Since the appellant-
Corporation had failed to respond to the request, the High Court had rightly
invoked the principle of quantum meruit and accepted the claim. Reasons
for extra expenditure have been clearly stated in the statement of Sh.
Jayantibhai.
D
12. The principle of quantum meruit is often applied where for
...(
som~ technical reason a contract is held to be invalid. Under such
circumstances an implied contract is assumed, by which the person for
whom the work is to be done contracts to pay reasonably for the work
done, to the person who does the work. The provisions of this section
E are based on the doctrine of quantum meruit, but the provisions of the
Contract Act admit of a more liberal interpretation; the principle of the
section being wider than the principle of quantum meruit.' The principle
has no application where there is a specific agreement in operation. A
person who does work or who supplies goods under a contract, if no
F price is fixed, is entitled to be paid a reasonable sum for his labour. and
<.
the goods supplied. If the work is outside the contract, the terms of the .)(.,

contract can have no application; and the contractor is entitled _to be paid_
a reasonable price for such work as was done by him.

G 13. If a party to a contract has done additional construction for
another not intending to do it gratuitously and such other has obtained
benefit, the former is entitled to compensation for the additional work not
covered by the contract. If an oral agreement is pleaded, which is not
proved, he will be entitled to compensation under Section 70. Payment.
under this section can also be claimed for work done beyond the te1ms
H
f FOOD CORPRN. OF INDIA v. VIKAS MAJDOOR 1049
KAMDAR SAHKARI MAND LI [PASAYAT, J.]
of the contract, when the benefit of the work has been availed of by the A
defendant.
14. The tenn 'extra' is generally used in relation to the works, which
are not expressly or impliedly included in the original contract price,
provided the work is within the framework of the original contract. The B
~ question whether a particular work is extra will depend upon the tenns
• and conditions of the contract, and other documents connected therewith.
15. The relevant clauses of the contract read as follows :
"XVI-REMUNERATION:
(a) The Contractors shall be paid the remuneration ip. respect of the
services described in para XX and perfonned by them at the contracted
rates.
(b) If the Contractors are required to perfonn any services in addition , D
>- to those specifically provided for in the Contract and the annexed schedule,
the Contractors remuneration for the same will be paid at the rate as
negotiated and fixed by mutual agreement.
(c) The question whether a particular service is or is not covered
by any of the services described and provided for in the contract, or is E
not auxiliary or incidental to any of such services, shall be decided by the
Sr. Regional Manager whose decision shall be final and binding on the
Contractor.
(d) The Contractor will have the right to represent in writing to the
Sr. Regional manager that a particular service which he is being called F
1

upon to perfonn is not covered by any of the services specifically provided
for in the contract or as the case may be, is not auxillary or incidental to
such services, provided that such representation in writing must be made
within 15 days of the commencement of actual performance of such
services. If no such representation in writing is received within the said G
time, the Contractor's right in this regard will be deemed to have been
waived."
XX - Services to be Performed by the Contractors:
H
1050 SUPREME COURT REPORTS . [2007] 11 S.C.R.
~
i
A Part I For Stevedoring
"The contractor shall render all the services, which are usually
performed by the stevedors. These will generally include services given
below:
B "(i) The Contractors shall discharge the Sugar in bags (including
sweeping and spilling) from the ship to the whar£'roof of the transit ~

shed carefully and expeditiously and arrange to complete discharge
in the minimum period possible and shall take all necessary steps
to avoid ships going under demurrage and to earn maximmn amount
c of dispatch money. No additional remuneration will be paid for
discharging on roof of transit shed.
The contractors shall ensure the discharge of cargo in a vessel
handled by him at the rate not less than what is provided for in the charter
party of the concerned vessel and ultimately if there has been any short
D
fall in discharge of the vessel at the stipulated rate and consequential ....(
demurrage charges, the contractor will be responsible for the same and
will make good whatever losses and expenses incurred by the
Corporation, the Corporation shall have the right to deduct these losses
from the admitted bills of the contractors".
E
"Clause XXII - Ship to discharge at the average rate of750 M.T.
calculated on gross weight provided vessel can deliver at this rate
per working day of 24 consecutive hours time from noon Saturday
to 8 a.m. Monday (for local equivalent) and from 5 p.m. day
F preceding holiday until 8 a.m, next working day excepted, even
,--
used, time employed in shifting anchorages or discharging places ,;'..,
'---

within the same port or its jurisdiction not to count as laytin1e, and
shifting expenses to be for owners account".
Clause XXIII of the charter party agreement provided as under:
G
"Iflonger detained in loading and/or discharging ports, demurrage
to be paid at the rate of $4000.00 per day, or in proportion for
any part of 1 day. Ship to pay $2000.00 per day or in proportion,
dispatch money for all working time saved at both ends. Such time
H lost is to be calculated in accordance with the custom of port. Lay
f FOOD CORPRN. OF INDIA v. VIKAS MAJDOOR 1051
KAMDARSAHKARI MANDLI [P ASAY AT, J.]
time to be non-reversible between loading and discharging ports, · A
but may be reversible between the ports ofloading at the ports of
discharging.
Demurrage or dispatch to be settled directly between owners and ,
Charters at discharging port(s):"
B
t 16. From various documents exhibited more particularly the letters ·
dated 30.9.1994 to 14.10.1994 it is clear that the functionaries of the
appellant-Corporation recommended higher payment rate for higher
discharge. The letters Mitten by the respondent society also clearly indicate
that the demand was for higher charges in respect of the extra work. C
Though a stand has been taken that the signatories of the letters by the
Corporation were not authorized, it is not disputed that on the basis of
these letters extra work was undertaken. There is also material on record
to show that extra expenditure had to be incurred for doing the extra work.
The quoted rates in terms of the contract was Rs.108 per M. T. For D
claiming Rs.215 per M.T. the following details were given:

SR. NAME OF OPERATION PMT
NO. PREVAILING
RATE(RS.) E
1. Stevedoring Charges 75-00
2. 'Tally clerks, Gears, foreman private Labourers 10-00
inside hatches
..,
.) . Loading of trucks 10-00 F
4. Shifting T. Sheds by trucks at Kandla 17.00
5. Wagon loading from T. Sheds by trucks at Kandla 40.00
6. Wharf clearing, Wagon cleaning security and for
Casual Labourers in T. Sheds. 8.00 ()
7. Custom clearance Documentation 10.00
8. Administration charges, warehousing. 10.00
9. Various liabilities like Wagon Demurrage, shed
Demurrage etc. 15.00
H
1052 SUPREME COURT REPORTS [2007] 11 S.C.R.
\
1 , '
A 10 Contingency over and above costing 20.00
Grand Total 215.00
17. As has been rightly contented by learned counsel for the
appellant, sufficient evidence has not been placed on record to justify the
claim at the rate ofRs.215; for example, the serial No.IO i.e. "contingency
B over and above costing", and for custom clearance, documentation or ).
administration charges and warehousing. It is, however, clear that no issue
was framed relating to the claim of enhanced rate for transportation at
the rate ofRs.45/- per M.T. and even no ground was urged accordingly.

c 18. In view of the above, we direct that the respondent-society shall
be paid at the rate ofRs.108 per M.T. in terms of the contract up to 750
M. T. and at the rate of Rs.215 per MT for quantum beyond that. The
interest rate shall be 6% as fixed by the High Court. The respondent-
Society shall not be entitled to any amount beyond the agreed amount of
Rs.15 per M.T. for transportation. Civil Appeal No.7440of2000 is
D --.<.
allowed to the aforesaid extent.
19. The Society's appeal (Civil Appeal No.2540of2002) is sans
merit and deserves dismissal, which we direct.

E 20. There shall be no order as to costs in both the appeals.
K.K.T. CA. No. 7440 of2000 partly allowed and
CA No. 2540 of 2002 dismissed.