# PURAN LAL SAH v. STATE OF U.P

- **Citation:** [1971] 3 S.C.R. 469
- **Court:** Supreme Court of India
- **Decided:** 1971-01-21
- **Case number:** Civil Appeal No. 1687 of 1966
- **Bench:** P. Jaganmohan Reddy, I. D. Dua
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/puran-lal-sah-v-state-of-u-p-5163
- **Pages:** 9

## Headnote

Contract-Claim on basis of quantum meruit-When sustainable.
The Public Works Department of the respondent.State had issued a
tender notice for the construction of a road. The appellant mspected the
site, went to the place where stone for the construction was said to ~
available, and after satisfying himsel'f submitted a tender below th~ estimates in the tender notice. It was accepted and a contract was signed.
The estimates in the tender notice were prepared by the P.W.D. on the
basis that stone was available at a distance of 26 chains from the work
spot. In fact, stone was available at that distance in the C~tonment area
but for its removal permission of the Cantonment authortlles had to be
taken. The appellant was not able to obtain the necessary permission and
so, he had to get the stone from a much longer distance.
He requested
for· a higher rate but his request was rejected. Thereafter, he commenced
work, and after the work was completed the Executive Engineer recommended his case for a higher rate .
By a subsidiary contract the appellant undertook to execute some additional work for the department. The quantity of work which the appellant actually performed was far in excess of what was mentioned in the
contract. He claimed a higher rate of payment 'for such extra work also.
Since he did not get the higher rates he claimed, he filed a suit which
was dismissed by the High Court in appeal.
In appeal to this Court,
HELD. : (I) (a) In none of the clauses of the tender notice or conditions of contract or in any other document was there any assurance that
if stone was not available at the distance of 26 chains the appellant would
l-e paid higher rates. It was for the appellant to have satisfied himself
before entering into the contract that the Cantonment authorities would
permit him to take the stone. Sillce he commenced work aner his request
for higher rate was rejected, it could not he said that the appellant was
in any way induced by any assurance.
The Ex~utive Engmeer's letter
was only recommendatory and did not establish a.,Y right to obtain a higher
rate. (472 G-H; 473 0-H; 475 CJ
(b) It could not be said that once stone was not available at a distance
of 26 chains, the contract was at an end and that because the appellant
had done the work, he should be paid on the basis of quantum meruit.
That remedy would be available only when the original contract had been
illscharged by the defendant in such a way as to entitle the plaintiff to
regard himself as discharged from any further performance, and he elects
to do so; but, where work is done under a contract persuant to its terms
r.o amount can be claimed by way of quantum meruit. [475 G-H; 476 C-DJ
Adopi Parshad & Sons. Ltd. v. Union of India, [1960] 2 S.C.R. 793;
followed.
(2) On the second item also the appellant could not succeed, because
of cl. 12 of the contract. Under the clllll!IC the apP'!llant was bo11nd to
perform all additional work which was l'lljuired of him on the same terms
and conditions in which he undertook to do the main work.
Further,
-470
SUPREME COURT REPORTS
(1971] 3 S;C.R.
paragraph 5 of the special instructions which fanned part and parcel of
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the original contract provided that unless he gave notice that he was not
prepared to do any extra work in excess of the quantity df the work
mentioned in the contract plus 30 per cent of that quantity of work, ond
settled fresh rates for such extra work over 30 per cent, the appellant
could not claim anything other than the rates mentioned in the contract.
;[476 E-H]

## Text

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PURAN LAL SAH
v.
STATE OF U.P.
January 21, 1971
469
[P. JAGANMOHAN REDDY AND I. D. DUA, JJ.]
Contract-Claim on basis of quantum meruit-When sustainable.
The Public Works Department of the respondent.State had issued a
tender notice for the construction of a road. The appellant mspected the
site, went to the place where stone for the construction was said to ~
available, and after satisfying himsel'f submitted a tender below th~ estimates in the tender notice. It was accepted and a contract was signed.
The estimates in the tender notice were prepared by the P.W.D. on the
basis that stone was available at a distance of 26 chains from the work
spot. In fact, stone was available at that distance in the C~tonment area
but for its removal permission of the Cantonment authortlles had to be
taken. The appellant was not able to obtain the necessary permission and
so, he had to get the stone from a much longer distance.
He requested
for· a higher rate but his request was rejected. Thereafter, he commenced
work, and after the work was completed the Executive Engineer recommended his case for a higher rate .
By a subsidiary contract the appellant undertook to execute some additional work for the department. The quantity of work which the appellant actually performed was far in excess of what was mentioned in the
contract. He claimed a higher rate of payment 'for such extra work also.
Since he did not get the higher rates he claimed, he filed a suit which
was dismissed by the High Court in appeal.
In appeal to this Court,
HELD. : (I) (a) In none of the clauses of the tender notice or conditions of contract or in any other document was there any assurance that
if stone was not available at the distance of 26 chains the appellant would
l-e paid higher rates. It was for the appellant to have satisfied himself
before entering into the contract that the Cantonment authorities would
permit him to take the stone. Sillce he commenced work aner his request
for higher rate was rejected, it could not he said that the appellant was
in any way induced by any assurance.
The Ex~utive Engmeer's letter
was only recommendatory and did not establish a.,Y right to obtain a higher
rate. (472 G-H; 473 0-H; 475 CJ
(b) It could not be said that once stone was not available at a distance
of 26 chains, the contract was at an end and that because the appellant
had done the work, he should be paid on the basis of quantum meruit.
That remedy would be available only when the original contract had been
illscharged by the defendant in such a way as to entitle the plaintiff to
regard himself as discharged from any further performance, and he elects
to do so; but, where work is done under a contract persuant to its terms
r.o amount can be claimed by way of quantum meruit. [475 G-H; 476 C-DJ
Adopi Parshad & Sons. Ltd. v. Union of India, [1960] 2 S.C.R. 793;
followed.
(2) On the second item also the appellant could not succeed, because
of cl. 12 of the contract. Under the clllll!IC the apP'!llant was bo11nd to
perform all additional work which was l'lljuired of him on the same terms
and conditions in which he undertook to do the main work.
Further,
-470
SUPREME COURT REPORTS
(1971] 3 S;C.R.
paragraph 5 of the special instructions which fanned part and parcel of
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the original contract provided that unless he gave notice that he was not
prepared to do any extra work in excess of the quantity df the work
mentioned in the contract plus 30 per cent of that quantity of work, ond
settled fresh rates for such extra work over 30 per cent, the appellant
could not claim anything other than the rates mentioned in the contract.
;[476 E-H]
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1687 of
1966.
Appeal from the judgment and decree dated March 8, 1965
<Of the Allahabad High Court in First Appeal No. 84 of 1954.
N. S. Biizdra and P. C. Kapur for the appellant.
G. N. Dixit and 0. P. Rana, for the respondent.
The Judgment of the Court was delivered by
P. Jaganmohan Reddy, J. This appeal
is by a certificate
under Art. 133(1) (a) of the Constitution againsQ'the judgment and
decree of the Allahabad High Court dated 8th March 1965 setting
aside the decree of the Trial Court and dismissing the suit of the
plaintifl'-appel!amt.
The appellant had submitted a tender to construct mile 3
of Nainital Bhowali Road at 13 per cent below the rates given in
Schedule B to the notice issued by the Government of the United
.Provinces on the 30th September, 1946. This tender was accepted and a contract was signed on 20th November 1946. It is alleged by the appellant that the rates llivqn in Schedule B were based
·on the calculation that stone reqmre.d for the road construction
work would be available at a distance of 26 chains while as a matter of fact no stQne was available within that distance. The appellant had in fact to get stone from Gadhera and Bhumadar from
;a distance of 79 and 110 chains respectively. It is his contention
that by reason of the non-availability of the stone and the definite
understanding and assurance given by the local authorities of the
P.W.D. that higher rates would be given for the extra work done
·Over and above the work provided in the contract he carried on
the work. It was also alleged that during the construction work
<Jn the road very hard shale rock came in the way mot originally
provided for in the contract, as such he was entitled to get the costs
for the work so done at the current rates from the P.W.D. which
was not paid to him. In respect of these items of work done as
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also due to his having done the work by bringing stone from a
longer distance than was given in the estimates the appellant claim:
ed Rs. 48,840-0-0odue as balance together with interest by way of
damages at 12% amounting to Rs. 17,582-0-0, making a total of H
R5. 66,422-0-0. When this claim was rejected the appella,nt gave
notice under Section 80 of the C.P.C. and thereafter filed a suit
for the above amount.
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P. L. SAH v. u.P. (Jaganmohan Reddy, J.)
471
The defendant respondent resisted the suit and pleaded that
no assurance was given to the appella.nt by officers of the PWD
as alleged; that the quantity of very hard shale shown in the plaint
was incorrect and l!t any rate the contractor, under paragraph 5 of
the special instructions must be prepared to execute the work at the
original tender rate in excess of the given quantities of work upto
30% and if an increase in excess of 30% is ordered over the work
the contractor must intiillate, tc; the Engineer-in-Charge in writir.g
his wiHingnes~ or refusal to do extra work at the original tendered
rates. If he refuses to carry on at the original rates he is required
to settle fresh rate for increased work over 30% before doing the
work.
On these averments the trial court held issues 1, 2, 6 ll!Ild 7
in favour 0f the appellant while issues 3, 4 and 5 were decided
against him.
In the result a decree for a sum of Rs. 20,495/-
for extra lead plus Rs. 1,663-14-0 for extra work done under the
item very hard shale and Rs. 4,155/- interest by way of damages
on Rs. 22,158-14-0 making a total of Rs. 26,313-14-0 was passed
with interest at 3 % per annum. In appeal the High Court reversed
the decree holding that ( 1) the employment of the figure 26 cha~ns
in the estimate was for no other purpose than that of calculation ..
and if knowing that the same was available within 26 chains it
rPWD) worked out its est!imates on that basis, it could not be held
to have extended any assuranee much less guarantee to the contractors that they would get stone within that distance; (2) the
plaintiff appellant performed the work required of him without
exercising his right under paragraph 5 of the special instructions
which gives the option to do the extra work in excess of30% but
if he refuses to 11,o the extra work at the originally tendered rates
he should settle fresh rates for increased work over 30% before
doing the work which he failed to do.
In view of these finding~
against the appella~t the appeal of the respondent was ai1owed
und the suit dismissed but in the special circumstances of the case
left the parties to bear their respective costs in both the Courts.
The two main questions in this appeal are : ( 1 ) Whether the
estimate of the PWD formed part of the contract so as to be binding on both parties and whether any assurances were given to the
appellant that he would be given higher rates for bringing the stone
from places situated at 79 chaiins and 110 chains respectively; (2)
Whether clause 5 of the special conditions of the contract was applicable to the extra item of work contained in Ex. B3 and whether
he was entitled on the assurances given by the local officers to higher rate for the extra work done. Shri Bindra, learned Advocate
for the appellant has referred us to ctauses 8, 11 and 14 of the
notice calling for the tender as aiso to certain letters and passages
in the evidence to substantiate his contention that the estimates of
472
SUPREME COURT REPORTS
[1971 J 3 S.C.R.
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the PWD were part of the contract and that in any case &Ssui:ances
were given to the appellant that whein he could not get stone from
distance of 26 chains, to bring from chains 79 and 110 for which
higher rates would be paid. It may be stated that the PWD of the
United Provinces, as it then was, had issued a tender notice con•
sisting of 16 paragraphs and the appellant was required to sign this
tender notice in token of his having received it because ultimately B
under clause 34 of .the conditions of the contract all papers signed
by the parties to the contract and bond will be deemed to be part
of the contract bond and have to be read as co11ditions to the contract. Clause 8, 11 and 14 of the notice to which reference was
made are as follows :
8. All tenders should be on percentage rates above
or below the rates given in the Schedule 'B'.
11. Items not provided in the Schedule B will be paid
'at current schedule of rate plus or minus the percent"
age above or below as tendered by the contractor whose
tender is acdepted for this work.
14. Contractors are . advised
to see the estimate,
plans, specifications, special cQnditions prescribed and
site of work before tendering.
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It is obvious from these clauses that the rates are given in
:Schedule B on the basis of certain plans and specifications. The E
person intending to tenqer for the work was r~uired to examine
this material and also inspect the site before tendering.
These
instructions were designed to make all those who were desirous
·Of obtaining the contract responsible for their acts so that it cannot
be said that any mis-representation was made or they were misguided in any way; The contention of the learned Advocate for
the appellant is that it was definitely stated in the estimates that
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:stone was a..Yililable at 26 chains which rep~esentation was binding
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on the respondents and if no stcme was available within that distance he was entitled to claim higher rates if he had to get stone
from places farther away.
In fact the appellant alleges that the
Engineers assured him that he would be paid higher rates.
We may here observe that in none of the clauses of the notice
or conditions of contract or in any other document is there any
specific mention that stQne will be available at 26 chains nor is
there any .assurance that if stone was not available within that distance the 'Contractor will be paid higher rates. The mere fact that
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the estimates were prepared by the PWD on the basis of the stone
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being available at 26 chains which respondents admitted as stated
in the judgment of Civil Judge, Nainital, does 1not mean that there
was any assijf@ce ar undertaking ,given that stone would be avail-
---·
P. L. sAH v. u.P. (Jaganmohan Reddy, J.)
473
A able at that place. J!t fact it is not denied that stone was available
within the distance of 26 Chains but it was in the area belonging to
the Cantonment, for the removal of which permission of the Cantonment authorities had to be taken. Evidently the contractor was
not able to obtain that permission. In our view it was upto the
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contractor to have satisfied himself before entering into the contract that the Cantonment authorities would permit him to take
stone from its jurisdiction just in the same way as permission will
have to be taken from any private individual in whose land stone
required for road building is fQund. If the contractor has failed
successfully to negotiate with. the owners of land from which he
could bring stone it cannot be said that the estimate prepared by
the PWD on the basis that the stone was available at 26 Chains
was a statement which amounted to an assurance or constituted
a condition of the contract.
The appellant as P.W. I stated in his evidence: "Before
giving offer I saw the estimates and plan. In the estimate it was
written that the stone would be found within 26 Chains. On this
basis estimate was prepared through the PWD. I enquired this
from the Asstt. Engineer also. He too informed !!hat stone would
be available within 26 Chains. On this basis I prepared the estimate ........ In the beginning of the year 194 7 I started work. I
attempted to take out stones from within 26 Chains. The moment
I started to take out stones, the Cantonment authorities checked
me. For this act I was challaned, but I was acquitted. The ell\ire
area within 26 Chains was of the Cantonment." Further-on he
says "I have seen the tender notice and I had gone through it; after
that I signed it. Schedule B was attached to the notice. I signed
it after going through it.
I submitted tender 13 % less than the
Scheduled rate ...... before giving the tender I went tio that place
and found that the stones were available within 26 Chains, when
I wanted to take them out, I learnt that this was within the Cantonm!lllt boundary.
I sought permission to take out stones from
the Cantonment! authorities, but it was disallowed."
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It is clear from this evidence tha:t the appellant before giving
the tender inspected the site, went to the place where stone was
said to be available and after satisfying himse!Lthat the stone was
available he gave the tender. A perusal of the documentary evidence would also show that he actually commenced work after
his request to al.low him higher rate was rejected which was long
after the time when under the contract he was required to start
the work. In fact just before the date fixed for the completion
of the work, he had under Ex. B4 dated the 12th June 1947 made
the following representation :
"That as agreed upon the contract deed of my contract Nainital
Bhowali Motor Road Mile 3 the lead of stones for masonary
474
SUPREME COURT REPORTS
(1971] 3 S.C.R.
work is given only about half a mile. On inspecting the place I
find it very difficult to get a quarry there as there is no stone at
all. I am getting the stones from near the K. E. Sanitorium which
falls at a distance of two aind a half miles from may place, as has
already been brought to your and the C.E.'s kind notice. Therefore, you are requested kindly to allow me a lead of two and a
half miles distance." On this the concerned authorities seem to
have made the endorsement : "As lead and royalty is provided in
the schedule B of the tender, the request cannot be acceded to.
Draft reply is put up". Accordingly by letter dated t!he 21st June
1947 he was informed as follows :.
"Reference your application dated 12th June 1947.
Please refer to item Nos. 6, 7, 8 and 9 of Schedule
B attached with your tender and on which bas.is you tend~red your rate in tliis connection. As the rates noted
thereiin provides all -lead and royalty and there is no
mention there 1hat the rate contains ·a lead for ! a mile,
your request cannot be acceded to".
This correspondence shows that the appellant's claim to have
extra lead was definitely rejected as untenable even before he
started the work under the contract, as is apparent from Ex. B2
dated the 19th July '47. In that letter the appellant was being
informed as follows :-
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"Please note that since )!OU have signed the contract
for the above work, the work must be started now in consultation with the Overseer-in-charge, Nainital Section.
The date of start and completion will be as follows :
Date of start-20 November 1946
Date of completion-19 July 1947".
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It cannot therefore be said that the appellant was in ~ny way
induced by any assurances given by the PWD authorities that they
would give a higher rate for the extra leaci before. he c01nmenced
work. The case of the appellant in these ~etters was·that''no stone
was available within half a mile while in his deposition.he gave a
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contrary version altogether. Subsequently he seems to have become hopeful because in. the letter of the .Assistant Engineer dated
28th December 1948 it is stated:
"In the estimate lead for 26 Chains was provided on
the assbmption that stone will be available within the
• distance from the quarries in Cantonment areas. Later
·on when the work was in progress the Cantonment au-
.thorities objected to quarrying stones from Cantonment
land ...... "
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f, L. ~H v. U.P. (Jaganmohan Reddy, I.)
475.
No doubt the Executive Engineer in his letter ~:lated 15th June.
1950, Ex. 22 has recommanded the case of the appellant for a.
higher rate as he. says "When the stones were not available from.
the Cantonment area it seems that the contractor naturally was
forced to bring them from quarries situated outside the Cantonment
area" and he further says "If these quarries are the places from.
where stones were actually obtaine_d then naturally the contractor
is entitled to get the lead for the full quantity of stones brought
by him to complete different items requiring the use of stones".
This letter seems to be a recommendatory letter by a subordinate to the high oft!cer but it does not in any way establish the
right of the appellant to obtain a higher rate, nor does the evidence justify this conclusion.
~n our view neither the t~ and
conditions of the contract nor the oral or documentary evidence
justify the conclusion that the appellant was entitled to any extra
lead.
Another argument was put forward by the learned Advocate
for the ;tppellant which is also based on the SaμJ<:: assumption that
the availability of the stone at 26 Chains was a condition of the
contract namely that once stone was not available at 2oChains
the contract was at an end and that because the appellant had done
the work he should be paid on the basis of quantum meruit. This
in our view is a far fetched argument and has no relation to the
facts and circumstances of the case. Even assuming that the stand
taken by the appellant that the availability of stone at 26 chains
was a condition of the contract was justified, he had notwithstanding the rejection of his claim even before he .started the work, acquiesced in the stand taken by the respondents that he is not entitled to any higher rates, carried on and completed the contract
as if there was no such condition. We therefore cannot understand
the contention of the appellaillt'~ Advocate as to how the contract
came to an end and who put an end to it. Even if at that stage
the contract had Been put an end to by the respondents which is
no one's case, as the appellant had not started the work no question of quantum meruit would arise. .The principie of quantum
meruit is rooted in English law under which there were certain
procedural advantages in framing an action for compensation for
work done. In order to avail of the remedy·~mder quanttlm meruit,
the original contract must have been discharged by the defenda,nt
in such a way as to entitled the plaintiff to regard himself as discharged from any further performance and he must have elected'
to do so. The remedy it may be noticed is however, not available
to the party who breaks the contract even though he may have
parl!ially performed part of his obligation. This remedy by way
of quantum meruit is 1'<'.5titutory that is it is a recompense for the
value of the work done by the plaintiff ilu order to restore him·
476
SUPREME COURT REPORTS
[197.IJ 3 S.C.R,
to the position which he weuld have been in if the contract had
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never been entered into. In this regard it is different to a claim
for damages which is a compensatory remedy aimed at placing
the injured party, as near as may be in the position which he would
have been in, had the other party performed the contract. This
.Court had in 'fyl/s. Alopi Parshad & Sons Ltd. v. The Union of
India(') observed at page 809 :
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"Compensation quantum meruit is awarded for work
done or services rendered when the price thereof is not
fixed by a contract. For work done or services rendered persuant to the terms of a contract compensation
quantum meruit cannot be awarded where the contract
provides for consideration payable in that behalf'.
'Though in that case the basis of the principle was 1110t explained,
it nonetheless lays down that where work is done under a contract
pursuant to the terms thereof no amount can be claimed by way
of quantum meruit. In the view we have taken on the facts of
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the case we do not propose to examine the decisions cited at the
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Bar in tfus behalf.
Th~ claim of the appellant for higher rates
which in fact was by way of damages has been rightly disallowed
by the High Court.
On the second question also the appellant cal1jllot succeed because under clause 12 of the contract Ex. BL the. plaintiff was
bound to perform additional work which was required of him on
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the same terms and conditions on which he undertook to do the
work for which he tendered. It appears that by a subsidiary contract entered into between the appellant and the P.W.D. Ex. B3
on the 12th April, 1946, the appellant undertook •to execute some
additional work for the Department. The quantity ofwork which
appellant actually performed was far in excess of what was menF
tioned in Ex. B.3. The appellant tho;!refore claimed payment for
the work done by him in excess of the quantitY mentioned in the
contract plus 30% at the current rate as againSt the stipultaed
rates. It was submitted on behalf of the State of U.P. before the
High Court that under clause 12 of the contract Ex. Bl and paragraph 5 of the special instructiQns the plaintiff was not entitled to
any amount in excess of what he had already been paid. This
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contention was accep~d because under the aforesaid clause 12
the contractor was bound to perform all additional work which
was required of him on the same terms and conditions in which
he imdert:ook to do the main work.
Paragraph 5 of the special
instructions further provides as follows :
"Contractors must be prepared to do at their original ten~ rate work in excess of the given quantities
(I) [1%0] 2 S.C.R. 793.
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P. L. SAH v. u.P. (Jaganmohan Reddy, J.)
477
of work upto 30% if an increase in excess of 30% is ordered over the work the contractor must intimate to the
Engineer Incharge in writing his willingness or refusal
to do extra work at the originally tendered rates. In the
latter case he should settle fresh rate for increased work
over 30% before doing the work".
These instructions being part and parcel of the original contract
Ex. Bl would govern the parties. As such the appellant unless
he gave notice under that paragraph that he is not prepared to do
the extra work over the 30% at normal rates, he cannot claim
anything other than at the rates mentioned in the contract, unless
he had settled fresh rates for that extra work. There is no evidence
nor is it claimed by the appellant that he had givqn any notice as
required under paragraph 5 of the special instructions and since
he did the work without fulfilling these requirements he is not
entitled to claim any amounts at a higher rate for the extra work
done. As neither of the contentions have force the appeal is dismissed but in the circumstances without costs.
V.P.S.
Appeal dismissed.