Santosh Kumar Naik v. State of Orissa represented through the Collector, Sundargarh
2026-02-20
A C Behera
body2026
DailyLaw.ai
JUDGMENT : A.C. Behera, J . This 2 nd Appeal has been preferred against the confirming judgment. 2. The appellant in this 2 nd appeal was the plaintiff before the learned trial court in the suit vide C.S. No.184 of 2013 and appellant before the learned 1 st appellate court in the 1 st appeal vide R.F.A. No.46/20 of 2018-21. The respondents in this 2nd appeal were the defendants before the learned trial court in the suit vide C.S. No.184 of 2013 and the respondents before the learned 1 st appellate court in the 1 st appeal vide R.F.A. No.46/20 of 2018-21. 3. The suit of the plaintiff (appellant in this 2 nd appeal) against the defendants(respondents in this 2 nd appeal) vide C.S. No.184 of 2013 was a suit for declaration and mandatory injunction. As per the case of the plaintiff, he(plaintiff) is an A-Class Contractor and he being the highest bidder of a tender in respect of the Government works indicated in Schedule-A of the plaint under Subdega Block in the district of Sundargarh, a work order in respect of the said works was issued by the defendant nos.1 and 2 in his favour. Then, as per the agreement, the defendant nos.1 and 2 received security money from the plaintiff for such work order in the form of original Bank guarantee described in Schedule-C of the plaint for completion of the said works within the period indicated in the work order and agreement. On the basis of that work order and agreement, he(plaintiff-Contractor) started its works at the work site and the said work site is under Subdega Block of Sundargarh district was within two to five kilometers distance from Jharkhand border. While, works at the work site by the plaintiff was under progress, some anti-socials of Jharkhand province interfered with his works at the work site and demanded crores of rupees as chanda/dadabati from the plaintiff or else they will not allow him(plaintiff) to continue with the works there. As such, the Maoists as well as Pahadi Chita Group anti-socials created disturbances at the work site coming to the work site physically on being armed with weapons and threatened to the engaged workers of the plaintiff to stop the works expressing that, unless the plaintiff comply their demand of money, they will not allow them to work at the work site.
They also threatened to the workers of the plaintiff at the work site to commit murder, if they will proceed with the works. One day, in the year 2009, the Maoists kidnapped to the nephew of the plaintiff, namely, Jatin Naik from the work site during the course of his supervision to the works and demanded lakhs of rupees from the plaintiff for his release. For which, the plaintiff lodged an F.I.R. on dated 27.08.2009 at Talasara Police Station and on the basis of such F.I.R. of the plaintiff, a case vide Talasara P.S. Case No.70 of 2009 was registered, but, the police could not able to rescue the nephew of the plaintiff from the clutches of the Maoists. Therefore, the plaintiff was compelled to satisfy the demand of the Maoists for the release of his nephew from their clutches and on payment of rupees ten lakhs to the Maoists, he(plaintiff) could able to release his nephew from the clutches of Maoists. Due to the above continuous interference of the Maoists and anti-socials in the work site of the plaintiff, the works of the plaintiff could not progress, which ultimately made the said works at the work site impossible/impracticable to perform. As such, he(plaintiff) was prevented from performing the contract works at the work site. When, due to the above impossibility/impracticability, the plaintiff could not able to complete the works at the work site during the contract period within the knowledge of the defendant nos.1 and 2, then, they(defendant nos.1 and 2) extended the period of completion of the works from time to time up to 2012, but, in spite of such extension of time given by the defendant nos.1 and 2, the plaintiff could not able to perform the works at the work site only due to the continuous interference of the Maoists and anti-socials for non-allowing the engaged workers of the plaintiff to work at the work site due to the non- fulfillment of their illegal demand of dadabati/chanda by the plaintiff. So, he(plaintiff) always apprehended attack upon him at any time by the Maoists and anti-socials.
So, he(plaintiff) always apprehended attack upon him at any time by the Maoists and anti-socials. For which, Superintendent of Police, Sundargarh provided one P.S.O. to the plaintiff for his security since 03.09.2009 to 31.01.2013, but, still then, when the plaintiff found that, his life is not secured inside the Sundargarh district and apprehended that, at any moment, he(plaintiff) may be killed or short dead by the Maoists and anti-socials, for which, he(plaintiff) was compelled to leave Sundargarh District and stayed at Bhubaneswar since the month of February, 2013 only in order to save his life from the attack of Maoists and anti-socials. Therefore, he(plaintiff) requested to the defendant no.2(Executive Engineer, Rural Works, Sundargarh) to measure the part of the works already done by him(plaintiff) at the work site and to terminate his contract on payment of bills relating to his performed works at the work site stating that, it is impossible/impracticable on his part to perform the rest of the works and to complete the works during the contract period as per Exts.A to K. In spite of such request of the plaintiff to the defendant nos.1 and 2 for termination of his contract on the ground of impossibility/impracticability to perform and to measure the part of the works already done by him(plaintiff), still then, without measuring the part of the works already done by him(plaintiff), the defendant nos.1 and 2 terminated the contract of the plaintiff on the ground of breach of contract by him(plaintiff) due to non-completion of such works during the extended period granted to him(plaintiff) and the defendants encashed the original Bank guarantee of the plaintiff described in Schedule-C on dated 16.02.2013, which was kept by the defendants as security from the plaintiff against the work order issued to him(plaintiff) and intimated the same to the plaintiff. When, without measuring the part of the works done by him(plaintiff) at the work site, they(defendant nos.2 and 3) terminated the contract of the plaintiff and encashed his original Bank guarantee described in Schedule-C, then, he(plaintiff) sustained irreparable loss for the aforesaid illegal actions of the defendants.
When, without measuring the part of the works done by him(plaintiff) at the work site, they(defendant nos.2 and 3) terminated the contract of the plaintiff and encashed his original Bank guarantee described in Schedule-C, then, he(plaintiff) sustained irreparable loss for the aforesaid illegal actions of the defendants. Therefore, without getting any way, he(plaintiff) approached the civil court by filing a suit vide C.S. No.184 of 2013 against the defendants praying for a declaration that, he(plaintiff) had rightly requested to the defendant nos.1 and 2 for the closure of his contract as the Naxals and Maoists groups created disturbances and made the works impossible to perform at the work site and the performance of the works at the work site was beyond the control of the plaintiff and to issue mandatory injunction against the defendant no.2 to measure the part of the works already done by him(plaintiff) and to pay the amount, to which, he(plaintiff) is entitled as per measurement and to direct the defendants to return the encashed amount of his Bank guarantee depositing the same in his account before the Bank of defendant no.3 and also to direct the defendant no.3 to pay the said amount to the plaintiff along with other relief, to which, he(plaintiff) is entitled for. 4. The defendants contested the suit of the plaintiff by filing two sets of written statements. When, the defendant nos.1 and 2 filed their written statement jointly, the defendant no.3 filed its written statement independently. In the joint written statement of the defendant nos.1 and 2, though, they(defendant nos.1 and 2) admitted about the issuance of work order to the plaintiff as per Annexure-A, but, they denied to the allegations alleged by the plaintiff relating to the disturbances created by Maoists and anti-socials at the work site preventing/obstructing the works of the plaintiff on the demand of dadabati/Chanda stating specifically that, the plaintiff intentionally and deliberately delayed the execution of the works. They(defendant nos.1 and 2) also totally denied to have any knowledge regarding any threat or interference by any Maoist or anti- social preventing the plaintiff from proceeding with the works at the work site. Therefore, the case of the plaintiff is not correct. Rather, due to the own negligence of the plaintiff, he did not progress the works at the work site deliberately and intentionally.
Therefore, the case of the plaintiff is not correct. Rather, due to the own negligence of the plaintiff, he did not progress the works at the work site deliberately and intentionally. Therefore, as per the terms of the work order and agreement, Bank guarantee of the plaintiff, which was given by the plaintiff as security of the said work has been encashed properly and lawfully as per the terms and conditions of the agreement. Therefore, the plaintiff is not entitled for any relief in the suit. So, the suit of the plaintiff is liable to be dismissed against them(defendant nos.1 and 2). 5. The defendant no.3(Branch Manager, State Bank of India, Sundargarh, Sadhepali) challenged the suit of the plaintiff taking its stands in its written statement that, the Bank guarantee of the plaintiff for Rs.45,00,000/-(rupees forty-five lakhs) has been encashed on dated 25.03.2013 properly following the proper procedures within the period of limitation. For which, there is no fault on his part in encashing the Bank gurantee. Because, the said Bank guarantee has been encashed without violation of the Banking Rules and Regulations. Therefore, the suit of the plaintiff is liable to be dismissed against him(defendant no.3). 6. Basing upon the aforesaid pleadings and matters in controversies between the parties, altogether ten numbers of issues were framed by the learned trial court in the suit vide C.S. No.184 of 2013 and the said issues are:- Issues 1. Whether the suit is maintainable? 2. Whether there is any cause of action for the plaintiff to file this suit? 3. Whether the termination of the contract of the plaintiff by defendant no.2 is lawful? 4. Whether the contract of the plaintiff has been terminated due to naxal and maoist problems? 5. Whether the plaintiff has rightly requested for closure of his contract? 6. Whether the plaintiff is entitled to a mandatory injunction against the defendant no.2 to get the work done by him, measure and release all the amounts payable for the works done by him with interest @ 18.5% per annum and not to take any steps for encashment of bank gurantee given in the „C? schedule submitted by the plaintiff before the defendant no.2 as security to perform the work, for which the plaintiff has entered into an agreement with defendant no.2? 7.
schedule submitted by the plaintiff before the defendant no.2 as security to perform the work, for which the plaintiff has entered into an agreement with defendant no.2? 7. Whether the plaintiff is entitled to a decree declaring encashment of bank guarantee of defendant no.2 from defendant no.3 be realized from defendant no.2 and be paid to the plaintiff through Court with interest @ 18.5% per annum? 8. Whether the suit is barred by law of limitation? 9. Whether the suit is not properly valued? 10. To what other relief/s, the plaintiff is entitled? 7. In order to substantiate the aforesaid relief(s), sought for by the plaintiff in the suit vide C.S. No.184 of 2013 against the defendants, the plaintiff examined altogether five numbers witnesses from his side including him as P.W.1 and exhibited the documents vide Exts.1 to Ext.13. On the contrary, in order to defeat/nullify the suit of the plaintiff, the defendants examined one witness on their behalf as D.W.1 and relied upon the documents vide Exts.A to AA. 8. After conclusion of hearing and on perusal of the materials, documents and evidence available in the record, the learned trial court answered the issues against the plaintiff and in favour of the defendants except issue nos.8 and 9. 9. Basing upon the findings and observations made by the learned trial court in issue nos.1 to 7 and 10, the learned trial court dismissed the suit vide C.S. No.184 of 2013 of the plaintiff on contest against the defendants as per its judgment and decree dated 12.09.2018 and 01.10.2018 respectively assigning the reasons that, no document has been filed or proved on behalf of the plaintiff to show any intimation/information to the defendant nos.1 and 2 stating about the so-called impossibility on his part to perform the works at the work site due to the interference of the Maoists and anti-socials. Rather, it is evident from the evidence of D.W.2 that, the part of the works, those were done by the plaintiff at the work site, the said part works of the plaintiff have already been measured properly and the payments thereof have already been made to the plaintiff.
Rather, it is evident from the evidence of D.W.2 that, the part of the works, those were done by the plaintiff at the work site, the said part works of the plaintiff have already been measured properly and the payments thereof have already been made to the plaintiff. When, in spite of extension given by the defendant nos.2 and 3 to the plaintiff to complete the rest works within that extended period, the plaintiff intentionally and deliberately did not proceed with the works for its completion within that extended period, then his work order and agreement for such works were rightly terminated by the defendant nos.1 and 2 according to the terms and conditions of the agreement. There was no request from the side of the plaintiff prior to the closure of the contract of the plaintiff about any impossibility on his part to perform the works at the work site for any interference of the Maoists and anti-socials. For which, the question of making further measurement to the part of the works done by the plaintiff does not arise. The termination of the contract of the plaintiff for such work and encashment of the Bank guarantee of the plaintiff on the basis of the agreement are not illegal. Therefore, the plaintiff is not entitled to get the reliefs sought for by him in the suit. For which, the suit of the plaintiff was dismissed on contest against the defendants. 10. On being dissatisfied with the aforesaid judgment and decree of the dismissal of the suit of the plaintiff vide C.S. No.184 of 2013 passed on dated 12.09.2018 and 01.10.2018 respectively by the learned Senior Civil Judge, Sundargarh, he(plaintiff) challenged the same preferring the 1 st appeal vide R.F.A. No.46/20 of 2018-21 being the appellant before the learned 1 st appellate court against the defendants arraying them(defendants) as respondents. 11. After hearing from both the sides, the learned 1 st appellate court dismissed to that 1 st appeal vide R.F.A. No.46/20 of 2018-21 of the plaintiff(appellant) on contest as per its judgment and decree dated 06.01.2022 and 11.01.2022 respectively concurring/confirming the judgment and decree of the dismissal of the suit of the plaintiff passed by the learned trial court in C.S. No.184 of 2013. 12.
12. On being aggrieved with the aforesaid judgment and decree of the dismissal of the 1 st appeal vide R.F.A. No.46/20 of 2018-21 of the plaintiff passed by the learned Additional District Judge, Sundargarh, he(plaintiff) challenged the same preferring this 2 nd appeal being the appellant against the defendants arraying them(defendants) as respondents. 13. This 2 nd appeal was admitted on formulation of the following substantial question of law and the said substantial question of law is:- (i) Whether the contract was impossible for execution within the purview of Section 56 of the Contract Act, by the plaintiff in the given facts of the case? 14. I have already heard from the learned counsel for the appellant(plaintiff) and the learned standing counsel for the respondents (defendants). 15. In order to nullify the judgments and decrees passed by the learned trial court and the learned 1 st appellate court in C.S. No.184 of 2013 and in R.F.A. No.46/20 of 2018-21 respectively, the learned counsel for the appellant(plaintiff) relied upon the following decisions:- ( i) In a case between South East Asia Marine Engineering and constructions limited(SEAMEC LIMITED) vrs. Oil India Limited : reported in (2020) 5 SCC-164 Termination/discharge of contract on the ground of frustration according to Section 56 of the Indian Contract Act, 1872, i.e., generally force majeure events, i.e., when occurrence of any event which renders performance of contract impracticable, then by virtue of Indian Contract Act, 1872, contract in such a case had become void and parties are exempted further performance thereof. (ii) In a case between Satyabrata Ghose vrs. Mugneeram Bangur and Company and others decided on 16.11.1953 in Civil Appeal No.88 of 1952 : reported in AIR 1954 SC-44 . When by reasons of supervening impossibility or illegality, the contracted works could not be discharged due to the impossibility or impracticability of its discharge, then, non-performance of the contract cannot be a breach of contract of the contracting parties. 16.
When by reasons of supervening impossibility or illegality, the contracted works could not be discharged due to the impossibility or impracticability of its discharge, then, non-performance of the contract cannot be a breach of contract of the contracting parties. 16. Here in this suit/appeal at hand, it is the specific/definite case of the plaintiff(appellant) that, due to the continuous interference of the Maoists and anti-socials at the work site for non-fulfillment of their illegal demand, i.e., dadabati/chanda, it was impracticable/impossible on his part to perform the works at the work site, as the Maoists and anti- socials threatened to the workers of the plaintiff at the work site and obstructed/prevented them to work and the said actions and activities of the Maoists and anti-socials were intimated by him(plaintiff) to the defendant nos.1 and 2 and the defendant nos.1 and 2 were well aware about such impossibility/impracticability on the part of the plaintiff to perform the works at the work site, for which, through the application of the doctrine of frustration envisaged in Section 56 of the Contract Act, 1872, he(plaintiff) is to be excused/exonerated from the breach of the said contract. Therefore, they(defendants) were not entitled under law to encash his original Bank guarantee of the plaintiff, which was provided by the plaintiff as per the terms and conditions of the contract, as the security of his work order and agreement. 17. It is the concurrent findings of the learned trial court and the learned 1 st appellate court that, no document has ever been filed or proved on behalf of the plaintiff showing any intimation/information to the defendant nos.1 and 2 by the plaintiff stating about any sort of impossibility on his part to proceed with the works at the work site either for the interference of any so-called Maoist or for the interference of any so-called anti-social or for any other reason. 18. As per Section 56 of the Indian Contract Act, 1872, A contract to do an act, which after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful becomes void when the act becomes impossible or unlawful. 19.
18. As per Section 56 of the Indian Contract Act, 1872, A contract to do an act, which after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful becomes void when the act becomes impossible or unlawful. 19. It is settled propositions of law that, when there is a positive contract to do a thing, not itself unlawful, the contractor has to perform it or pay damages for not doing it, although in consequence of unforeseen accidents, the performance of the contract may become unexpectedly burdensome or even impossible. On this aspect, the propositions of law has already been clarified in the ratio of the following decisions: (i) In a case between M/s. Harischandra Dwarkadas Cloth Market Indore vrs. Firm Murlidhar Chironjilal and another : reported in AIR 1957 Madhya Bharat (Division Bench)-53 (Para No.8) “Where there is a positive contract to do a thing, not in itself unlawful, the contractor has to perform it or pay damages for not doing it, although in consequence of unforeseen accidents the performance of contract may become unexpected burdensome or even impossible.” (ii) In a case between Girija Proshad Pal vrs. The National Coal Co. Ltd. : reported in AIR 1949 Calcutta-472(Para-16) “Where there is a positive contract to do a thing not in itself unlawful, the contractor must perform it or pay damages for not doing it, although in consequence of unforeseen accidents the performance of contract has become unexpected burdensome or even impossible.” The applicability of Section 56 of the Indian Contract Act, 1872 excuses breach of the contract only on the ground of impossibility to perform after the contact is made due to perform. Section 56 of the Indian Contract Act, 1872 does not apply to the cases of impossibility, due to the default of the contracting party himself. As per law, the party who takes the plea regarding impracticability or impossibility to perform the contract in order to invoke the doctrine of frustration envisaged in Section 56 of the Contract Act, the said party must prove the same. A contracting party cannot relieve from the performance of part of contract, if frustration of such contract is self-generated or disability is self-induced. On this aspect the propositions of law has already been clarified in the ratio of the following decisions:- (i) In a case between Benarasi Prashad vrs.
A contracting party cannot relieve from the performance of part of contract, if frustration of such contract is self-generated or disability is self-induced. On this aspect the propositions of law has already been clarified in the ratio of the following decisions:- (i) In a case between Benarasi Prashad vrs. Mohiuddin Ahmad : reported in AIR 1924 Patna-586 Section 56 of the Contract Act, 1872, has no application to a case, where the impossibility, if any, is due to the default of the contracting party himself. (ii) In a case between Eacom’s Controls(India) Ltd. vrs. Bailey Controls Co. and others : reported in AIR 1998 Delhi-365(Para-24) The contracting party must prove the impracticability and impossibility of the contract. A contracting party cannot be relieved from the performance of his part of the contract, if the frustration of the contract is self-generated or the disability is self-induced. 20. Here in this suit/appeal at hand, when the plaintiff has taken the specific plea for his excuse from the breach of the contract stating the sole ground/reason, i.e., due to the interference of the Maoists and anti- socials at the work site preventing/obstructing the workers of the plaintiff from doing the works, it was impossible/impracticable on his part to perform the works, then, as per law, the burden of proving such plea/ground/reason for his excuse from the breach of contract lies upon him (Plaintiff), but, he (Plaintiff) has not discharged such burden, which was/is laid upon him intimating/informing in writing about the same to the defendant nos.1 and 2 stating about the above so-called cause/reason of the impossibility/impracticability in performing the works at the work site, then at this juncture, by applying the principles of law enunciated in the ratio of the aforesaid decisions referred to supra in para no.19 of this judgment, it is held that, the plaintiff has failed to establish his plea for his excuse from the breach of the contract in completing the works during the contracted period. Therefore, the concurrent findings of the learned trial court and the learned 1 st appellate court regarding the failure of the plaintiff to establish his case against the defendants and dismissal of the suit of the plaintiff cannot be held as erroneous. 21.
Therefore, the concurrent findings of the learned trial court and the learned 1 st appellate court regarding the failure of the plaintiff to establish his case against the defendants and dismissal of the suit of the plaintiff cannot be held as erroneous. 21. For which, the question of interfering with the judgments and decrees passed by the learned trial court in C.S. No.184 of 2013 and the learned 1 st appellate court in R.F.A. No.46/20 of 2018-21 through this 2 nd appeal filed by the appellant(plaintiff) does not arise. 22. Therefore, there is no merit in this 2 nd appeal filed appellant(plaintiff). The same must fail. 23. In result, this 2 nd appeal filed by the appellant(plaintiff) is dismissed on contest, but, without cost. The judgments and decrees passed by the learned trial court and the leaned 1 st appellate court in C.S. No.184 of 2013 and R.F.A. No.46/20 of 2018-21 respectively are confirmed.