Problem 7:

Madhavan Nair, a recognized contractor for construction work enters into a

contract of construction with Alka in 2003. The contract is for extension work
of inhabiting house of the second party Alka. The terms of contract included
that construction shall be completed within 6 months. The construction
involved building an upstairs, a common hall and a bedroom and its attached
bathroom. The estimated cost is Rs. 4,00,000/- The contractor failed to comply
with the terms and conditions of the contract and completed the work in 2.5
years and second party incurred a total expense of Rs. 7,50,000/- The service
rendered was proved to be dissatisfactory. Later on the day before the
completion of limitation period of the completion of contract work, the
contractor filed a suit for recovery of money and inherent attachment over the
property. The second party has defamed and incurred on a huge loss of money
to meet the proceedings. The party has two daughters pursuing professional
courses. The appeal has been placed in the Hon'ble High Court wherein order
for mediation is passed. Decide the matter on mediation.
TEAM 7
Sivaraman P L

: Mediator

Shaji A V

: Mediator

Venugopal K

: Contractor

Sudheesh S

: Advocate of Contractor

Sidhiqul Akbar K A

: Alka

Vinode V L

: Advocate of Alka

Brief Facts
Contractor

: Madhavan Nair

Client

: Alka

Term of Contract

: 6 months

Estimated Cost

: Rs. 4,00,000/-

Actual completion

: In 2.5 years

Actual Cost

: Rs. 7,50,000/-

Contract is for extension work of inhabiting house of Alka.


o
o
o

Construction involved
building an upstairs,
a common hall,
a bedroom and its attached bathroom
Service rendered was proved to be dissatisfactory
Contractor filed suit for recovery of money and attachment of property
Alka got defamed and incurred a huge loss of money to meet

proceedings
Alka has 2 daughters doing professional course
In Appeal High Court passed order for mediation

Points
1. Petitioner - Contractor
The contractor started to do the work in time.
When the brick work was almost completed, there started strike in
the Crushers and ban by the High Court in operating the country

side Crushers.
The strike went on for more than 6 months.
It is known to everybody that the entire construction work was on a

stand still.
By the time it was amicably settled, there started the 'Metro' work

and there was scarcity for boulders.

Once everything was almost settled the contractor started the work.

2. Respondent - Alka
At the time of entering into the contract the contractor new that,
o it is an inhabiting house
o it is an extension work
o condition of the roads, etc
Considering all these things, he entered into the contract
No shortcoming from my client's side was pointed out in the suit filed
If everything went fine and the contractor earns a profit, it will not be
shared with my client. Then how can the Contractor asks for share

when there is a loss.

It is not my client's duty to see that the contractor get all the raw

materials.
The contractor is to meet all the risks
Social status - was defamed in the public
Incurred a huge amount on cases
Still the house is not in completed position

2.5 years - dust, no privacy for the girls, could not study
My client is suing for damages

Mediation Process
Mediation in this matter was held based on the order of the Hon'ble High
Court of Kerala. There were three sitting altogether. In the first two sittings the
matter could not be settled because of the extreme stands of the petitioner and
the respondent. The petitioner stood adamant on his stand that he should get
Rs. 7,50,000/- (Seven lakhs and fifty thousand rupees) that is Rs. 3,50,000/(Three lakhs and fifty thousand rupees) more than the agreed amount. The
respondent was on the firm stand that he will not give anything other than
what was agreed between them initially. However in the third and final sitting,
it was made clear to both the parties that if the matter is not settled amicably
in that sitting, it would be reverted to the Hon'ble High Court.
Decision
At the outset it was decided by the parties to amicably settle the matter.
Considering the huge expenses incurred by the Petitioner, even though it was
not a fault of the respondent, the respondent agreed to pay an additional
amount of Rs. 1,00,000/- (One lakh rupees) together with the agreed amount
of Rs. 4,00,000/- (Four lakhs rupees). Thus the matter was settled between
the parties by paying an amount of Rs. 5,00,000/- (Five lakhs rupees) in total
to the petitioner.
The matter was amicably settled and it was reported to the Hon'ble High
Court.