The Allahabad High Court, Lucknow Bench, has dismissed a first appeal filed by the Up Zila Nirvachan Adhikari (Panchayat), Lakhimpur Kheri and another, challenging a civil court decree awarding ₹74,99,120 along with 6% annual interest to Punjab Tent House for services rendered during the 2000 Three Tier Panchayat Elections.
The appeal, filed under Section 96 of the Code of Civil Procedure, 1908, challenged the judgment dated February 19, 2016, passed by the Civil Judge (Senior Division), Lakhimpur Kheri in Civil Suit No. 40 of 2004, wherein the trial court had found in favour of the contractor.
Background
A tender dated June 4, 2000, was floated by the appellants for arranging election-related materials and services, which was awarded to Punjab Tent House. A formal work order followed on June 11, 2000. The contractor submitted bills totaling ₹82,99,120, of which only ₹8,05,690 was paid by the authorities. Punjab Tent House issued a statutory notice under Section 80 CPC and subsequently filed a recovery suit for the balance amount of ₹74,99,120 with 18% interest per annum.
Arguments of the Appellants
The appellants contended that a letter dated January 18, 2000, from the Deputy Commissioner, State Election Commission, U.P., fixed a maximum payment cap of ₹11,25,000 for contractors. It was argued that the trial court erred in awarding an amount exceeding this cap.
They further argued that:
- Bills required mandatory certification by the Junior Engineer and countersigning by the Block Development Officer, which they claimed was not done;
- The plaintiff, being a proprietorship firm, was not competent to institute the suit under Order 30 Rules 1, 3, and 10 CPC;
- The notice issued under Section 80 CPC did not comply with the mandatory provisions of Section 80(3)(a) & (b).
Court’s Analysis
Justice Abdul Moin, after hearing the counsels for both sides, framed four points for determination corresponding to the grounds raised.
On the issue of the ₹11.25 lakh cap, the Court held:
“The tender dated 04.06.2000 that had been issued by the defendants/appellants did not contain any stipulation that the maximum amount payable would be ₹11,25,000… a letter purporting to fix a limit on the said payment which was not part of the tender could not be relied upon.”
The Court relied on Ramana Dayaram Shetty vs The International Airport Authority of India, (1979) 3 SCC 489, and Venkataraman Krishnamurthy vs Lodha Crown Buildmart Pvt. Ltd., (2024) 4 SCC 230, to reiterate that contract terms must govern the relationship between parties, not external communications.
Regarding certification of bills, the Court observed contradictions in the deposition of DW-1, a defence witness, and noted:
“All the bills are found to be certified by the Junior Engineer and duly countersigned by the Block Development Officer… the said ground raised by the learned counsel for the appellants is also rejected.”
On the question of maintainability of the suit by a proprietorship firm, the Court clarified:
“Order 30 Rule 1 of the CPC pertains to suits filed by partners and not proprietorships… the said ground is also rejected.”
As to the adequacy of the Section 80 CPC notice, the Court noted:
“The notice is carrying the name, description and residence of the plaintiffs as well as the cause of action… only a bald averment/denial had been given in the written statement without elaborating the same.”
Citing Order 8 Rule 2 CPC, the Court held that the denial must be specific, and the appellants had failed to do so.
Finding no merit in the grounds raised, the Court dismissed the appeal and directed the return of the trial court record.
Case Title: Up Zila Nirvachan Adhikari Panchayat, Lakhimpur Kheri & Anr. vs. Punjab Tent House & Ors.
Neutral Citation: 2025:AHC-LKO:19531
