Holding

The High Court failed to consider material facts and must re‑examine the two issues of the nature of the work and the claim for idle‑labour payment, while the dismissal of the review petition stands affirmed.

Summary

The original respondent, Santwant Singh Gill, entered into an agreement with the Executive Engineer of the Indravati Dam for concrete‑cum‑masonry work, but failed to complete the work and was later replaced by another contractor. Gill filed a money suit against the State of Orissa, the General Manager of the Upper Indravati Hydro‑Electric Project and the Executive Engineer, which was decreed in his favour. The respondents appealed to the Orissa High Court, which dismissed the appeal; subsequently, the Upper Indravati Hydro‑Electric Project was transferred to Orissa Hydro Power Corporation Ltd. under the Orissa Electricity Reforms Act, 1995, and the corporation filed a review of the High Court’s decision. The Supreme Court held that the High Court had not examined two crucial issues – whether the work was extra or covered by the agreement and whether payment for idle labour beyond the stipulated completion date was payable – and ordered a limited re‑examination of those issues. However, the Court affirmed the High Court’s dismissal of the review petition, noting that the basic grievances had not been raised before the High Court earlier. The appeals were disposed of with no costs awarded.

Issues considered

Whether the work in question was extra work or covered by the original agreement.
Whether any assurance given by the Executive Engineer affects the entitlement to payment.
Whether payment for idle labour beyond the agreed completion date is payable.
Whether the High Court erred in not considering the effect of the letter purportedly written by the respondent.

Legislation cited

Orissa Electricity Reforms Act, 1995

Subjects

contract interpretationextra workidle labour compensationreview petitionre‑examinationtransfer of undertakinghydro power projectletter evidenceSupreme Court of India

Judgment

A ORJSSA HYDRO POWER CORPORATION LTD.
v.
SANTWANT SINGH GILL (DEAD) BY LRS. AND ORS.

JULY 24, 2006

B [ARIJITPASAYAT ANDLOKESHWARSINGHPANTA,JJ.]

Appeal-First appeal--High Court dismissed same without considering
two relevant issues-Hence directed to re-examine the matter-Re-
consideration limited to the said two issues.
c
Review petition-Not maintainable before High Court, when basic
issues relating to alleged grievances not placed for consideration before the
High Court earlier.

Original Respondent No.1 had entered into an agreement with the
D Executive Engineer, lndravati Dam Division for concrete-cum-masonry work
of the lndravati Dam. Disputes arosl! with regard to the agreement Respondent
No. I filed money suit against Respondents No.2 to 4 i.e. the State Government;
the General Manager, Upper lndravati Hydro-electric project and the Executive
Engineer, lndravati Dam Division. The suit was decreed. Respondents No.2 to
E 4 filed first appeal before the High Co!irt which was dismissed.

Pursuant to enforcement of the Orissa Electricity Reforms Act, 1995
and the Rules framed thereunder, the Hydro Electric Project alongwith all
its circles and Divisions with all assets and liabilities was transferred by the
State Government to the appellant-corporation. Appellant filed review
F application before High Court with regard to the First Appeal. The application
was dismissed. Hence the present two appeals, one against the judgment
rendered by High Court in the First Appeal and the other against the order
passed on review application filed by Appellant.

Disposing of the appeals, the Court
G
HELD: 1.1. Several relevant factors have not been considered by the High
Court; for example the effect of the letter purported to have been written by
Respondent No. 1. [816-Cj

H 812
ORIS SA HYDRO POWER COPR. LTD. "· SANTWANT SINGH GILL (DEAD) BY LRS. [PASA YAT, J]
813
1.2. The High Court has not made any effort to find out as to whether A
the work in question was extra work and/or covered by agreement. If it was
covered by the agreement, the question of assurance, if any, given as claimed
is inconsequential. If it was a part of agreement it was to be covered by the
rate stipulated. In that event there is no question of any assurance having any
role to play. This aspect has also not been considered by the High Court.
Additionally, if work was to be completed by 2.8.1985 as claimed by the B
respondents, the question of any payment being made for idle work beyond
the said date does not arise. This aspect was also required to be analysed by
the High Court which has not been done. In the fitness of nature, therefore,
;.
the High Court should re-examine the matter on the aforesaid two aspects
and decide the matter in accordance with law. (816-E-G) c
2. However the High Court had rightly rejected the review petition. Since
the basic issues relating to alleged grievances were not placed for
consideration before the High Court earlier there was no scope for
entertaining a review petition. (817-A)
D
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3113 of2006.

From the Judgment and Order dated 19.6.2002 of the High Court of
Orrisa at Cuttak, in First Appeal No. 168/1991.

WITH E
C.A. No. 3114/2006.

Raj Kumar Mehta for the Appellant.

Janaranjan Das, Swetaketu Mishra, S.K. Sanganeria, Jamshed Bey and
F
Parmanand Gaur for the Respondents.

The Judgment of the Court was delivered by

ARIJIT PASAYAT, J. Leave granted.

The appeal arising out ofSLP(C) No.17187 of2003 is directed against G
the judgment rendered by a Division Bench of the Orissa High Court in the
First Appeal. The appeal relating to SLP (C) No. 16439 of2003 is against the
order passed on a review application filed by the appellant relating to the
connected first appeal.
::io.
' H
814 SUPREME COURT REPORTS [2006] SUPP. 3 S.C.R.

A The factual background in a nutshell is as follows :

An agreement bearing No. 21 F2 of 1984-85 was executed between the
original respondent Santwant Singh Gill (who has died in the mean time and
is represented by his legal representatives) and the Executive Engineer, lndravati
Dam Division for construction of Concrete-cum-Masonry work of the lndravati
B Dam of Block No. 18 upto RI 625.5. Stipulated dates of commencement of work
and completion of work were 2.2.1985 and 1.5.1985 respectively. Since the
respondent did not complete the work and did not participate in the
measurement, by letter dated 6.1.1986 the respondent was asked to accept the
final measurements of the work done by him. Subsequently the work was .('

assigned to another contractor. A writ petition was filed by the respondent
c questioning the decision. High Court disposed of the matter directing the
authorities to consider the grievances. In September, 1986 the respondent
filed a suit in the Court of Subordinate Judge, Jeypore being Money Suit No.
417 of 1986 claiming a sum of Rs.8,93,659.91/- with pendente-lite and future
interest@ 18% per annum. The defendants in the said suit who are respondents
D No.2 to 4, herein i.e. State of Orissa, the General Manager, Upper Indravati
Project and the Executive Engineer, lndravati Dam Division filed written
statement denying the claim, except for a sum of Rs.94,006.40/- and prayed
for dismissal of the suit. The admitted amount was paid in November, 1987.
The suit was decreed on 20th March, 1991 for Rs.7,03,375.29/- along with
pendente-lite interest at the rate of 12% and future interest at the rate of 9%
E p.a. on the principal amount of Rs.6,51,077.29/-.

The respondents Nu.2 to 4 filed an appeal before the High Court which
was dismissed. Pursuant to the enforcement of the Orissa Electricity Reforms
Act, 1995 and Orissa Electricity Reforms (Transfer of undertaking, assets,
F liabilities, proceeding and personnel) Schemes Rules, 1997 framed thereunder,
the Upper Indravati Hydro Electric Project alongwith all its circles and Divisions
with all assets and liabilities was transferred by the State Government to the
appellant with effect from 1.4.1996. Since the appellant was not a party in the
First Appeal, prayer for permission to file SLP was made and has been
granted, and that is how the appeals have been filed. As noted above the
G High Court dismissed the First Appeal and the application for review filed by
the appellant was rejected by the High Court on the ground that no case for
review was made out. At this juncture it is to be noted that certain stands
which were not highlighted in the First Appeal were sought to be introduced
by the appellant in the review petition.
H f'
.....
ORISSA HYDRO POWERCOPR LTD."· SANTWANT SINGH GILL (DEAD) BY LRS. [PASAYAT. J.] 815

Learned counsel for the appellant-Corporation submitted that basically A
two issues were considered by the High Court. They related to (I) whether
any extra work was undertaken by the respondent and (2) whether damage
on account of idle labour was payable. State's stand was that Clause 11 of
the Agreement clearly indicated that M-150 is purely an extra item and as such
the plaintiff i.e. present respondent would be entitled to receive payment as B
per schedule of rate of 1982. The High Court proceeded on the basis that
though the work in question is not stipulated in the agreement, it was known
to the parties concerned that there was a change in the design and as given
in the drawing (Exhibit N), the execution of M 150 grade concrete work was
necessary. This according to learned counsel for the appellant runs counter
to the observation of the High Court. The stand of the respondent before the C
courts below was that the Executive Engineer had assured payment as per
agreement for M-200 grade concrete work for which the agreement was
executed and the work had commenced. As there was no official
communication in that regard, the respondent informed the Executive Engineer
to allow him to commence the work and confirm the arrangement.
D
Learned counsel for the appellant further submitted that it has not been
established that any assurance was given. Even if it is conceded for the sake
of argument that any assurance was given, the same is clearly unauthorized
and in any event the respondent himself accepted that this was an extra item
of work and that the schedule of rates applicable in 1982 were applicable. E
Strong reliance was placed in this regard on a letter purported to have been
written on 30.9.1985 by the respondent.

The other item awarded which was questioned related to payment for
idle labour. It was submitted that the time period for completion of work
expired on 1.5.1985 and even if the claim of the respondent that there was F
extension up to 2. 7.1985 is accepted, the courts below were not justified in
granting compensation for idle labour up to 6.1.1986. It is submitted that the
High Court has not given practically any reason, to uphold the award in
respect of these items. So far as the first item is concerned, the High Court
merely observed as follows: G
"In view of what has been stated above, we are inclined to concur
with the finding of the learned trial Judge that the plaintiff is entitled
to be paid for the M-150 grade concrete work at the rate for M-200
grade concrete work."
H
Similarly, it was submitted that in regard to the claim relating to idle
·t
816 SUPREME COURT REPORTS [2006] SUPP. 3 S.C.R.

A labour the High Court did not even consider as to the period by which the
work was to be completed. If no extension of time was granted beyond
2.8.1985 which according to the courts below was the last date by which the
work was to be completed, the appellant cou Id not have been directed to make
payment for a period (a) from 26.2.1985 to 13.4.1985 and (b) from 3.7.1985 to
B 6.1.1986.

In response, learned counsel for the respondents submitted that both
the trial court and the High Court have analysed the factual position and have
worked out the entitlement of the respondents and there is no infirmity so as
to warrant any interference.
c We find that several relevant factors have not been considered by the
High Court; for example the effect of the letter purported to have been written
by the respondent- Santwant Singh Gill. The relevant portion reads as follows:

"Jn the meantime, due to change in design, I was asked to do plain
D concrete in place of masonry. This item of work was not contemplated
in my agreement. However, I have Jone the plain concrete at the
schedule of rate. "

(Underlined for emphasis)

E The High Court has not made any effort to find out as to whether the
work in question was extra work was and/or covered by agreement. If it was
covered by the agreement, the question of assurance, if any, given as claimed
is inconsequential. If it was a part of agreement it was to be covered by the
rate stipulated. In that event there is no question of any assurance having
any role to play. This aspect has also not been considered by the High Court.
F
Additionally, as rightly pointed out by the learned counsel for the
appellant, if work was to be completed by 2.8.1985 as claimed by the
respondents, the question of any payment being made for idle work beyond
the said date does not arise. This aspect was also required to be analysed
G by the High Court which has not been done.
In the fitness of nature, therefore, the High Court should re-examine the
matter on the aforesaid two aspects and decide the matter in accordance with
law.

H So far as the connected appeal is concerned we find that the High Court
rightly held that a case of review was not made out on the grounds apart from
ORISSA HYDRO pOWER COPR. LTD. '· SANTWANT SINGH GILL (DEAD) BY LRS. [PASAYAT, J.] 8J7

those which we have dealt with in the connected appeal. Since the basic A
issues re!ating to alleged grievances were not placed for considered before
the High Court earlier there was no scope for entertaining a review petition.
The High Court had therefore rightly rejected the review petition. The said
appeal stands dismissed.

As noted above in the appeal relating to the First Appeal before the B
High Court basic issues are to be examined and, therefore, the re-consideration
is to be limited to the two issues indicated above.

,, The appeals are accordi.ngly disposed of. No costs.

B.B.B. Appeals disposed of.

•

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