1. ' The facts of this suit, filed by the plaintiff against the defendants for recovery of Rs,7,09,612.38, are that the defendants Nos.1 and 2 engaged the plaintiff for construction of a building consisting of ground plus 8 floors on plot No,8-SR-8, Serai Quarters, Hassan Ali Efendi Road, Karachi on the rates and terms contained in agreement dated 1-2-1979. The defendant No,3 was appointed Architect/Engineer by the defendants Nos.l and 2 to supervise the work. It is alleged by the plaintiff that after it had commenced the work the defendants directed some changes in the work which changes were carried out by the plaintiff. In respect of the work done the plaintiff used to submit its bills, which, according to the plaintiff, were not paid in full and Rs,3,62,112.38 remained due against these. The plaintiff had constructed the ground and the first floor when, it is alleged, the work was suspended by the defendants in January, 1980 and then was stopped in June, 1980. The plaintiff claims an amount of Rs,3,62,112.38 as being outstanding against its various bills, Rs,3,00,000 for loss of profits on 6 more storeys, Rs,10,000 for overlapping steel bars and Rs,37,500 as compensation for maintaining staff, equipment etc. The defendants Nos.1 and 2 have contested the suit and denying the claim of the plaintiff have alleged overpayment. These defendants have claimed that due to unsatisfactory performance of the plaintiff, dispute between the parties arose and the agreement was terminated in accordance with clause 24 thereof.
2. ' The following consent issues were framed:--
(1) Whether the Building agreement between the parties is invalid to the extent of 5 to 8 storeys?
(2) Whether the work done by the plaintiff on ground and first floor is deficient? Its effect in either case?
(3) Whether the defendants Nos.1 and 2 have paid the plaintiff for the agreed extra work and on mutually agreed upon terms and conditions?
(4) Whether the defendants Nos.1 and 2 have paid the bills of the plaintiff in accordance with the agreement? If not what amount is outstanding?
(5) Whether the plaintiffs are entitled for reimbursement as claimed?
(6) Whether the plaintiffs are entitled for damages? If so to what amount?
(7) Whether the plaintiffs are entitled for any further payment for work done by them as per Agreement?
(8) Whether the Agreement was terminated in accordance with clause 24 of the same?
(9) What should the decree be?
3. ' Issues Nos.1 and 8 are interlinked and may be dealt with together. The contention of Mr. F.M.
4. Firacha, learned counsel for plaintiff, was that the defendants were aware that they had permission to construct only 4 storeys yet they entered into agreement for construction of ground plus 8 storeys and got the foundation laid for that, which shows they intended to raise 8 floors and therefore they cannot be allowed to take the plea that the agreement with regard to the, additional storeys had become void. As regards termination his contention was that no notice of termination was served on the plaintiff and the work was merely suspended by the defendants but thereafter the plaintiff was never allowed to/resume the work.
5. ' Mr. Mansoor Ahmed Khan, learned counsel for defendants Nos.1 and 2 has submitted that, as would be apparent from the approved plan, at the time the agreement between the plaintiff and defendants Nos.1 and 2 was entered into there was permission to construct 4 storeys only, which was in the knowledge of the plaintiff. The agreement was made for construction of 8 floors on the understanding that as the work would progress, permission for further storeys would be. Granted.
6. As the concerned authorities did not grant permission for ground plus 8 floors, the contract for construction of the additional storeys beyond the permitted 4 storeys became void, as no construction could be undertaken without the requisite permission. The defendant No,2 has stated in his deposition: " initially the building was to consist of 8 floors. We contracted with the plaintiff for raising construction of such building and Exh.5/1 which bears my signature is such building contract. The Architect who was assigned the relevant job initially got a building plan approved of all parties to the suit. The intention at that time was as the construction will go on we will get further permission."
7. ' As regards termination of the agreement his contention was that, in view of the disputes between the parties it was terminated in accordance with clause 24 thereof.
8. ' The contention of the defendants' counsel is not without force, in so far as construction beyond the approved four storeys was concerned. The plaintiff was aware that the sanctioned construction was only up to four storeys (ground plus 3 floors) and therefore mention of additional storeys in the agreement could be only subject to permission from the authorities. Had this not been so, the plaintiff, immediately on receipt of the construction plan for only four storeys, would have raised objection. After all as a building contractor the plaintiff ought to have known that construction beyond the sanctioned limit was not permissible and if undertaken would defeat the provision of law.
9. ' As regards termination of the agreement, the defendant No,2 in his written statement took the plea that the agreement was terminated in accordance with clause 24 thereof.
10. ' In his deposition he stated that: "So far as I recollect the construction work was discontinued somewhere in 1979, and in so far as the contractor is concerned he subsequently wanted to re-start the work and made request in that behalf. I see Exh.5/47-A and say that on the second page thereof, marked Exh.'X' the intimation for discontinuation by the Architect is confirmed."
11. ' Exh.5/47 (A), copy of which was admittedly received by the plaintiff. The Architect, however, was not called as witness to prove that the said document was part of Exh.5/47 (A) or that its copy was sent to and received by the plaintiff. But, even if assumed as part of Exh.5/47 (A) the document would still be of no help to the defendants, for, on their own showing it was allegedly written by defendant No,3 who was neither a party to the agreement nor authorised to terminate the same and admittedly Exh.5/47 (A) was written on 3-9-1980 long after stoppage of the work by defendants in January 1980. Issue No,1 is accordingly decided in the affirmative and issue No,8 in the negative.
12. ' Issues Nos.3, 4 and 7 are interconnected and are being taken up together. Plaintiff's counsel has submitted that the plaintiff was required to execute several extra items referred to in the deposition of plaintiffs witness Yousaf, which items had been claimed in the plaintiffs running bills but were not paid for. He has submitted that after adjusting the cost of material supplied by the defendants the total amount of all running bills of the plaintiff add up to Rs,11,04,112 while the total amount paid to the plaintiff against these bills was Rs,7,42,000, as such, a sum of Rs,3,62,112 remained unpaid.
13. ' Defendants' counsel's submission on these issues was that all the items being claimed as extra work were included in plaintiffs running bills. Each bill was thoroughly checked by the Architect and then certified for such payment as was considered due to the plaintiff on the basis of work done.
14. The payment for which the respective bill was certified was paid by the defendants, and in the process due to duplication in payment, the plaintiff has been overpaid.
15. ' The admitted position appears to be that the defendant No,3 was appointed Architect to supervise the construction of the building. The periodic running bills submitted by the plaintiff used to be scrutinized by the defendant No,3 and passed for such payment as he considered appropriate on the basis of work done. The running bills included claims for the alleged extra works too and while some of these were rejected by the Architect, others were passed for payment either as claimed or at reduced rates. For instance in the 3rd running bill (Exh.5/26) the plaintiff claimed Rs,18,500 for extra excavation, Rs,15,000 for extra work of providing 1:4:8: C.C. Between foundation 5 and 6 and Rs,4,500 extra masonary work on footing Nos.6 and 7. In Architect's letter. (Exh.5/27) dealing with this bill, the first item was passed for payment of Rs,9,250, second item for full Rs,15,000 and the third item for Rs,2,500. Similarly, in the 4th running bill (Exh.5/28), the claim for Rs,40,000 for raising the height of ground floor by 2 feet was allowed in full while certain other extra items were disallowed. Similar rejections and reductions were made in respect of other items too. Apparently at that time the plaintiff accepted such cuts in its bills, for, otherwise it would have undoubtedly taken this up with defendants without loss of time and perhaps would also have reclaimed the disputed amount in its next bill as it did once in the case of unpaid amount of its running bill, when in its 2nd running bill it included the amount of Rs,18,833.12 by way of, "1st running bill balance payment". Had the plaintiff raised such dispute at the earliest the defendants would have had the opportunity to examine the objection and if these were considered unreasonable to terminate the contract at the initial stage in pursuance of clause 24 thereof. It is apparent that while the work continued, the plaintiff, by its conduct, made the defendants believe that the cuts in running bills were acceptable to it, but, once the work was discontinued at the instance of defendants in January, 1980 it made a claim of all the rejected items of the various running bills in its 8th bill, dated 16-2-1980 (Exh.5/35). There could hardly by any justification for such a belated claim. As would appear from the subsequent events, the claim made in 8th running bill was more to put pressure on the defendants to allow resumption of the work than to press the claim. This would be obvious from the fact that though 8th bill was not passed for payment, yet no protest was made by the plaintiff, instead, it submitted its 9th running bill dated 26-5-1980 wherein the items of 8th bill were omitted and in its letters dated 26-5-1980 (Exh.5/79) and 16-6-1980 (Exh.5/80) while it sought defendants' instruction for the resumption of the work and requested for early payment of the 9th running bill, no reference was made to the unpaid 8th bill. Relevant portion from plaintiffs letter (Exh.5/80) addressed to the defendant No,1 may be reproduced as under:--- "Payments of 9th Running Bill have also been withheld. The work of construction beyond 2nd floor has been suspended since about more than 5 months." again, "In the circumstances stated above we request earnestly that necessary instruction about the construction works may please be given to us at a very early date and the payment of our 9th running bill may kindly be made to us as early as possible."
16. ' Had the plaintiff considered himself to be entitled to any payment under the 8th running bill he would have not abandoned the same. As regards 10th running bill, that is almost repetition of the 8th bill, which had already been given up by the plaintiff, except for tie item relating to 9th bill. In so far as the 9th bill was concerned, the same had been approved by the Architect for Rs,96,000 and there appears to be no reason to disregard the recommendation. The rate agreed between the parties being mainly on constructed area basis, as distinct from item-wise basis, it was for the plaintiff to establish that the items claimed by it by way of extra work items were not covered by the constructed area rate. This the plaintiff having failed to do, it is not possible to find fault with the assessm ent of the Architect. In the circumstances of the cases in my view, the recommendation of the Architect with regard to the amount payable on plaintiffs running bills Nos.1 to 7 and 9 should be taken to be a fair basis for determining the amount, if any, now payable to the plaintiff for the work executed by it.
17. ' As is apparent from Exhs.5/22, 5/25, 5/27, 5/29, 5/31, 5/34 and 5/47 the payments recommended by the Architect against plaintiff's aforesaid bills, after deducting the cost of material supplied by the defendants, total* to Rs,8,47,770.49. As against this the total amount paid by the defendants Nos.1 and 2 to the plaintiff was Rs,7,42,000. This is borne out from admission made in para 7(b) of the written statement filed on behalf of defendant No,2 as well as his cross-examination where he stated that, "With regard to the question about which I had undertaken to give reply I say that documents Annexure 'B' to the plaint and Annexure `M' with the written statement are the relevant documents and such documents indicate the relevant figures of payment. I do not remember the date of the last payment made by me."
18. ' Under Annexure 'B' to the plaint the total amount of payment to the plaintiff is shown as Rs,7,42,000. No doubt in Anncxure 'M' to the written statement (same as Exh.7/1) the defendants have claimed payment of Rs,7,87,000 but have not been able to establish payment in addition to the admitted amount of Rs,7,42,000. The plaintiff in his cross-examination denied having received payments of Rs,25,000 and 45,000. There is, therefore, no safe basis to assume payment to the plaintiff in excess of 7,42,000. Accordingly, taking Architect's recommendation as base for plaintiff's entitlement, an amount of Rs,1,05,770.49 is still payable for the work done by the plaintiff under the agreement, inclusive of the extra work. Issues Nos3, 4 and, 7 are decided accordingly.
19. ' On issue No,2 the submission of the plaintiff's counsel was that at no time any defect or deficiency in the work was pointed out to the plaintiff and even after completion of the work by the plaintiff, none of the defendants raised any objection to the quality of the work.
20. ' On the contrary the contention of the defendants' counsel was that the deficiencies had been referred to in Exhs.5/3 to 5/20 and in addition to these the Architect used to point out defects at the site as also in his letters. This issue appears to be relatable to para 4 of the written statement, where it has been stated that: " However, the work done by them on the ground floor (shops) and first floor is deficient in respect of the following items:
(1) Finishing of stairs.
(2) Finishing of well for a car lift.
(3) Well for passenger lift.
(4) Finishing of lavatory."
21. ' The above averment is, however, not supported by any letter of the defendants, though in his cross-examination the defendant No,2 did mention that, "The Lavatory, Plumbing, White washing works of the Contractor are still incomplete and yet they have been paid foe', but such passing reference at the stage of evidence, without any support from the correspondence cannot be given much weight. In so far as Exhs.5/3 to 5/20 are concerned, these are in the nature of periodical inspection reports and generally appear to favour plaintiffs contention that its work was satisfactory. Mere mention of a few defects in some of these would not mean the defects had not been ratified later. Had plaintiffs work been deficient, the Architect would not have recommended payment therefor, I would therefore hold that there was no deficiency in such work of the plaintiff as had been passed for payment by the Architect. The issue is decided accordingly.
22. ' Before taking up issue No,5, it will be convenient to deal with issue No,6. While discussing issue No,8 it has already been held that in respect of 4 storeys the contract was valid and it was not terminated by the defendants in accordance with the provision thereof. As such the plaintiff would be entitled to be compensated for the loss caused to it, "which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it", as provided under se1/4:tion 73 of the Contract Act. However, it is a settled principle that in order to be entitled to compensation for breach of contract, the party claiming compensation must establish specifically the loss suffered by it, a mere general assertion cannot be made basis for awarding compensation. Here compensation/damages has been claimed by the plaintiff on two counts,
(i) Rs,3,00,000 by way of "damages on balance of work on 6 storeys approximately cost of Rs,30,00,000 profit @10% amounting to Rs,3,00,000.
(ii) Rs,37,500 by way of salary to employees from June 1980 to December 1980 and hire charges for machinery for 5 months.
23. ' In so far as the first item is concerned all that has been stated by plaintiffs witness in his deposition is that, "Because of stoppage of work beyond 1st floor I suffered losses to the extent of Rs,3,00,000 which also I am entitled to recover from the defendants.
24. "There is neither any explanation nor details of the so-called loss nor has the same been substantiated by document or other evidence. I am afraid a bare statement like the one made by plaintiffs witness cannot be made basis for awarding damages/compensation.
25. ' As to the second item, the plaintiffs witness has stated that, "Because of the work we engaged services of Chowkidar, Supervisor and equipment and on these items we incurred about Rs,37,500 as expenses which we are entitled to recover from the defendants. I produce 18 receipts showing the work done as Exh.5/55 to Exh.5/72."
26. ' The plaintiff is more specific on this item of its claim. However, it has not justified the reason for employing the employees and retaining the equipment's for such a long period after the work had admittedly been suspended in January 1980. It is also cardinal principle for awarding damages for breach of contract that in estimating the loss for breach the means available for mitigating the loss should be taken into account.
27. In the present case after the suspension of work in January 1980 there could be no justification for the plaintiff to continue to employ Supervisor or Chowkidar up to December, 1980 or to continue to keep construction machineries at site, all the more when these were on rent. Therefore, I find no justification for plaintiff's claim for salary of employees from July to December, 1990 and hire charges for the machineries also up to December 1980. Accordingly issue No,6 is decided in the negative.
28. This brings me to the remaining two issues Nos.5 and 9. In view of the foregoing discussion on the various issues my finding on these issues is that though the plaintiff is not entitled for reimbursement of the entire amount as claimed, it is entitled to receive from the defendants Nos.1 and 2 and these defendants are liable to pay, jointly and severally, to the plaintiff the sum of Rs,1,05,770.49 for work done by the plaintiff. Accordingly painting suit is decreed against the defendants Nos.1 and 2, jointly and severally, in the sum of Rs,1,05,770.49 with interest @ 10% per annum from the date of suit till payment and with proportionate costs.