' This is an application under Order XII, rule 6, C. P. C. Whereby the plaintiff has prayed that a decree for Rs, 12,70,863 be passed on the basis of the alleged admission on the part of the defendant. The facts leading to filing of the above application arc shortly that the plaintiff was awarded a building contract for the construction of K. M. C. Market, situated, in Liaquatabad, Karachi, for lump sum amount of Rs, 48,97,000. The defendant issued a work order dated 14th March, 1973. As per terms of the contract the completion period for the work provided for was 1 years. However, the Work was completed in December 1976 with extended period. During the execution of the above work the plaintiff made a claim for escalation of prices. It appears that the K. M. C. Had appointed a committee headed by Mr. Abbas Patel for the purpose of examining the question of escalation, hereinafter called as Patel Committee. The Patel Committee submitted its report in August, 1974 the recommendations made by the aforesaid committee were not accepted by the defendant- Corporation. However, another committee was appointed which was headed by Major Shamim hereinafter called as Shamim Committee, which submitted its report on 5th December, 1974. On the basis of the recommendations of the Shamim Committee, the defendant paid certain amounts to the plaintiff towards their claim for escalation. However, on 4th March, 1976 on the basis of the objection raised by the Assistant Director, Local Fund Audit, deducted the defendant the price the cement from the gross bill and granted escalation on the net amount instead of granting the same on the gross amount of the running bill. It may be observed that under the terms of the contract, the defendant had supplied cement to the plaintiff for the contract work at the agreed/fixed rate for the contract work.
2. The question as to whether the plaintiff was entitled to receive escalation on the gross amount or net amount of a running bill remained under active consideration of the defendant-Corporation as well as of the Controlling Authority and of the Law Department of the Government of Sind. In this connection. It may be pertinent to refer to the Section Officer's letter dated 16th June, 1977 addressed to the Plaintiff (Annexure F to the Plaint), whereby the plaintiff was informed that the escalation was to be paid on the basis of the condition contained in Patel's committee report and that the cost of cement was to be deducted from the gross running bill and that the escalation was to be paid on the net amount. However, subsequently, the plaintiff received another letter from the Section Officer (Annexure J) intimating to the plaintiff that the interpretation given by the Assistant Director Local Fund (Audit) Rules, 196 would be effective from 14th June, 1977. The copy of the above letter was also endorsed to the defendant Corporation informing it that the aforesaid interpretation would be effective with effect from 14th June, 1977 and that the plaintiff should be paid the bills on the basis of the above interpretation. It has been urged by Mr. Mohammad All Sayeed, the learned counsel for the plaintiff that since the above direction contained in the aforesaid letter dated 15th December, 1977 is binding on the defendant, for the purpose of deciding the present application, this Court should hold that the plaintiff was entitled to receive escalation on the basis of the gross amount of a running bill and not on the basis of its net amount. It was also urged that the aforesaid letter constituted an admission on the part of the Controlling authority that the plaintiff was entitled to receive escalation on the gross amounts of running bills for the period prior to 14th June 1977. In support of the present application it was also contended by the learned counsel for the plaintiff that prior to 4th March, 1976 the defendant had paid escalation on the basis of gross amounts of running bills which itself also constituted an admission on the part of the defendant.
3. On the other hand, Mr. Muslim Naqvi, the learned counsel for the defendant Corporation submitted that the defendant had started paying escalation on gross amount of running bills after 16th running bill and that was also paid on the condition that it was provisional payment subject to adjustment. He has referred to Annexure B-1 to the written statement which was allegedly signed by the plaintiff. (However, Mr. Sayeed submits that he denied the signature on this letter). In the above letter, it has been allegedly stated by the plaintiff that in case the Government takes decision for not paying the escalation of the cost of cement, the amount may be adjusted from any amount outstanding with the K. M. C. Payable to the plaintiff firm. It was urged by Mr. Mohammad Alt Sayeed, that the above letter in any case cannot be pressed into service, as according to him, no payment was made by the defendant after the alleged submission of the above letter. Mr. Mohammad Ali Sayeed has also referred a letter dated 6th November, 1976 from the Administrator K. M. C. To the Additional Chief Secretary, Housing, Town Planning and Local Government in which the stand taken by the Administrator K. M. C. Was that the interpretation given by the Assistant Director, Local Fund Audit was not correct. Whereas Mr. Muslim Naqvi learned counsel for the defendant has urged that the above letters cannot be looked into as the same have not yet been formally proved.
4. Be that as it may, the question which requires consideration is, as to whether there is an admission on the part of the defendant within the meaning of Order XII, rule 6. C. P. C. As to entitle the plaintiff to get a decree on admission for a sum of Rs, 12.70,863. It may be observed that this Court by an order dated 9th September, 1978 had directed the defendant-Corporation to file a statement indicating the amount. If any, payable by the defendant to the plaintiff. In pursuance of the above order the defendant filed a statement dated 23rd September, 1978 stating therein that a net sum of Rs, 6.66.953 was payable by the defendant Corporation to the plaintiff. After the dismissal of their application under section 34 of the Arbitration Act the defendant filed written statement on 9th January, 1979. Wherein, in para. 11 the defendant reiterated their stand that the plaintiff firm is entitled to receive a sum of Rs, 6,66,953. It has also been pleaded that the plaintiff was entitled to receive escalation on the net amount and not on the gross amount of the bills. I cannot spell out any admission on the basis of an interpretation given by the various Departments to rule 35 (a) of the West Pakistan Municipal Fund (Audit) Rules contained in the letters referred to by the learned counsel for the plaintiff. In my view, this will be an issue at the trial of the suit as to whether the plaintiff was entitled to receive escalation on gross amounts of the running bills or on the net amounts. Since there is no clear admission on the part of the defendant for .The amount claimed in the present application, I can only decree the suit to the extent of the amount which has been admitted by the defendant in their aforesaid statement dated 9th September, 1978 and also in para. 11 of the written statement dated 9th January, 1979.
5. I, therefore, decree the suit for Rs, 6,66,953 with 9% simple interest thereon from the date of the suit till payment and proportionate costs.
It may be observed that Mr. Muslim Naqvi the learned counsel for the defendant has urged that as the plaintiff had not served a notice under section 94 of the Sind Local Government Ordinance ,1972, before th E filing of the suit the plaintiff is not entitled to any cost or interest. On the other hand, Mr. Mohammad All Sayeed has pointed that the defendant has not raised any such plea in their written statement. It was also urged by him that factually the plaintiff had served requisite notice on the defendant before the filing of the above suit, namely, Annexure M to th plaint. It will suffice to observe that as no plea had been taken in the written statement I cannot presume that notice was not served. Further are, the defendants did not tender above amount to the plaintiff even alter the filing of the above suit.