SYMBIOSIS LAW SCHOOL, PUNE- NOVICE MOOT ELIMINATION, 2019

MOOT PROPOSITION

1. Rashtra is a country of large geographic dimension situated in the South-Asian region of

the continent. It has the second largest population of the world with diversity of religion
and culture. Due to its large geographical spread of 1,269,219 sq. miles, it experiences
almost all different weather conditions in their extremes in different parts. The northern-
most part of Rashtra receives snow fall almost nine months a year whereas the southern
part experiences hot and humid climate throughout the year. Rashtra is surrounded by
water from three sides and has well equipped functional ports for security and trade.

2. Rashtra‟s framer of the constitution envisaged a Federal structure of Government with the
lengthiest and most detailed constitution of the world. The capital city of Rashtra is Zehli
which is one of the eight Union territories of the country. With thirty federal states, it has
40 official languages and around more than 2000 dialects.

3. Zuamai is the capital city of the state of Zigaro, one of the economically important States
of Rashtra. Zigaro is situated in the western part of Rashtra and has two major ports on
the Western Ghats, and contributes 40% of the trade through sea of Zuamai. Zuamai,
amongst few other cities of Zigaro, experiences heavy rains in the month of May and June
which generally disturbs the life and trade of not only residents but of the whole country.

4. Zigaro recently had elections in the early months of 2017. The newly elected State
government foresaw the situation which usually arose in the capital during rains. The
government wanted to take some concrete steps to avoid any ugly situation similar to
what happened last year. For the purpose of preparing the cities for the usual heavy rains,
which is generally expected, the cabinet met in March 2017 and discussed the necessary
course of action. Amongst other measures, the Government issued a Government Order
dated June 17, 2017 calling all housing societies beyond the local limits of the municipal
corporation to carry out survey in their properties and to take necessary steps for ensuring
no damage due to rains.

5. Jayshree Builders and Developers Pvt. Ltd. (hereinafter „builders‟) are reputed builders in
the northern and central part of the country, with their head office in Zehli. They had
three townships in the city of Zuamai, 28 townships in the state of Zigaro and around
eighty seven townships across the country. Their regional office is situated in all the cities
of their townships. With seven on-going projects it is the largest builder of the State.

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6. One of the newly constructed townships of the builders adjacent to the city of Zuamai,
“Jayshree Homes” was a lavish 800 acres green township close to forest belt. The
township with limited residents consisted of only row houses and had no apartment
structure. It was situated beyond the local jurisdiction of the Zuamai Municipal
Corporation and Jayshree Builders had purchased all the rights related and incidental to
the land over which the township was developed. This township was most prone to heavy
rains due to inefficient drainage system which the builders had constructed themselves.

7. The builders decided to outsource the engineering and construction work for this
township since they had to look into their other townships as a result of the Government
Order (G.O). They invited tender from specialized engineering firms engaged in building
and development.

8. A reputed engineers‟ firm by the name of Karmakar and Partners (hereinafter, „the firm‟)
got the tender. Karmakar and Partners was a firm with its head office in Zuamai. It
employed over 100 civil engineers amongst other specialised and focused engineers.

9. A contract to this effect was entered into on September 1, 2017 by the CEO of Jayshree
Builders and Developers Pvt. Ltd., Mr. Jayesh

10. The terms of the contract stipulated that work should be finished within one year from the
date of signing the contract, it was agreed that time is the essence of the contract. Both the
parties agreed on payments and a unilateral dispute resolution clause in following terms-
i. Dispute Resolution: That only the builder, in case of dispute, may either nominate a
person to be a sole arbitrator under the Arbitration and Conciliation Act, 1996, or
take any other recourse within the jurisdiction of Zelhi. In the event Karmakar and
Partners is faced with any dissonance with the builders with respect to the work under
this agreement, a notice has to be sent to the builder invoking this provision and
detailing the cause of any such dissonance. Once the notice is received the builder
shall constitute a committee of seven qualified engineers to look into the same.
That the parties hereby agree that any such dissonance will be negotiated and settled.
Any outcome or settlement is understood to be final and binding on both parties, and
shall be recorded in writing. Karmakar and Partners hereby submit their right to
resolve dispute in any other manner.
The above clause is specifically agreed to be lawful and valid consideration within the
agreement.

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ii. Terms of Payment: That the payment for the contracted work shall be released in four
phases by the Builders subject to the approval by an independent engineer’s committee
to be constituted by the Builders.
That the Builders shall constitute a committee of at least five engineers for the period
of contract i.e. one year. The committee, on successful completion of each milestone,
shall issue a certificate of satisfaction to the builders in favour of Karmakar and
Partners. After the issuance of the said certificate is communicated to the builders, the
pre decided payment will be released in five days, excluding non-working days.
That the payment shall be released in percentage breakup of 20-30-30-20 of the total
amount agreed upon by the parties. The first 20% shall be paid within 15 days of the
commencement of the work as advance payment for first phase. The next 30% shall be
paid within five days of communication of certificate of satisfaction after completion of
the second phase whereas the third payment of 30% shall be made in the same manner
after the completion of the third phase. The fourth and final payment shall be made
after evaluation and satisfaction, within three months of completion of development
work.
iii. That the firm will be held liable for any loss arising from the breach of any of the
terms of this agreement.
iv. That it is agreed between the parties that the agreement shall be read as a whole.

11. Jayshree Engineer‟s Committee (JEC) was constituted by the builders by an internal
process comprising of six qualified engineers, of who two were employees of the Builders
and four other were recruited for the project specifically.

12. The firm identified 1200 Acres of area in its early survey in which work was to be done;
the nearest outlet of the drain was 2 km from the north- west direction of the township.
Also, the firm suggested that rainwater should be harvested as the city mainly relied on
rain for drinking water. After discussions with the JEC, the effective land was divided
into four work areas, and a layout design was prepared. Work on each of the areas was to
be completed separately (consecutively) subject to the certificate of satisfaction of the
JEC. It was agreed that all technical communications with respect to the work should be
communicated to JEC by the firm.

13. The work of first phase in North-West region of the township started on October 12,
2017. The agreed payment was released by the builders on October 20, 2017. The firm

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purchased all of the plumbing equipment and goods from PPP Ltd., a preferred seller of
metal hardware of the builders. The first phase of work was finished in 3 months and the
second phase in South-West started from December 15, 2017. During the work of second
phase, on January 18, 2018, the firm discovered that a wide network of underground
cemented pipes was present below the earlier laid pipes of the builders. The fact of
presence of these pipes was unknown to the firm and further development of drainage
could not be completed without cutting into these pipes. A further complication arose due
to the manner in which the pipes by the builder were laid; it was difficult to sever the
downward pipes without damaging the builder‟s pipes which were in use currently.

14. The information about the same was communicated to the JEC on February 15, 2018 with
possible complication of extra time and expenditure; the firm also sought JEC‟s opinion
on the issue. Communication between the firm and JEC is attached herewith as
ANNEXURE 1. The firm dropped another mail to the CEO of Jayshree Builders to
release part payment due to the change in equipment required after the discovery. The
firm informed that the need to buy new arrangements were necessary without delay in
order to complete the work of second phase. Find the email as ANNEXURE 2.

15. A part payment for second phase of 15% of the total agreed amount was released on
February 27, 2018. It took around one month‟s continuous effort by the firm to sever the
discovered network of pipes and the new joints could be laid only on March 10, 2018. On
May30, 2018balance payment was released for the second phase after the JEC certified
that the work done so far was satisfactory. The work of Second phase was completed on
July 15, 2018. After the successful completion of the second phase, the firm moved on to
the third phase of the work which covered the South- East area of the township.

16. The South- East part mainly comprised of open area for recreational purposes with a
limited number of luxury villas. The firm decided to construct a reservoir on the extra
land near the centre for the purpose of storage of rainwater which would also act as a
precautionary measure in case of flood due to rain. The work on the same was expected to
be completed at a relatively faster pace than the earlier phases. It took around forty days
to finish the work and to get onto the next phase. The progress report was submitted to
JEC for the third phase on August 26, 2018.

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17. By the time JEC could conduct a survey to its satisfaction it became defunct. The same
was communicated to the CEO office of the builders by the Firm. The communication
from both the parties is annexed herewith as ANNEXURE 3.

18. The agreed payment of third phase was released on September 2, 2018.

19. The work of the fourth phase took around three months and the successful completion of
the work was notified to the builders on November 30, 2018. Another mail to the effect of
seeking the contractual payment in addition to the extra expenses incurred was sent on
January 1, 2019.The communication of the same is attached as ANNEXURE 4.

20. Meanwhile, Karmakar and partners also tried to approach Mr. Jayesh through a mutual
business friend. But, failing to do so and in light of the exchange of mails, Karmakar and
Partners sent out a legal notice to the builders on March 2, 2019 requesting the final
payment and clearance of the bills of extra expenses in accordance with the contract
within 15 days of receipt of legal notice or to bring a legal action in the court of
competent jurisdiction.

21. Builders did not reply to the legal notice within the stipulated time frame and on April 1,
2019 a mail to Karmakar and Partners was sent stating that the contract was amended
owing to the email dated: 02-09-2018. Further, if Karmakar and Partners wanted to raise
an issue, they must do it in accordance with the contract. They further alleged that
original contract was discharged by breach on September 1, 2018 where time was the
essence of the contract.

22. Karmakar and Partners, on receipt of this mail, filed a civil suit for breach of contract
before the High Court of Zigaro on May 1, 2019. One of their contentions was that the
original contract was amended by e-mail dated 18/2/2018 sent by Karmakar and Partners
to the CEO of Jayshree and it cannot be said to be breached by Karmakar and Partners.

23. During the pendency of the suit, an objection to the jurisdiction was raised by the
builders. While the matter was still pending for hearing, the city of Zumani received
heavy rainfall for 6 continuous days.

24. The newly developed and built drainage system of the township worked efficiently during
early rains and there was no stagnation of water on roads; the underground passage of
water was wide enough to gush out the rainwater all at once. Water distribution by

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(collection) reservoir further helped water to gush out with given circumference of the
pipes.

25. After few days of heavy rain, communication and transport routes in the city came to a
standstill. A resident of Jayshree Homes informed the builders on the third day of rain
that the reservoir of the township was almost full and it was necessary to release water.
The builders replied that someone from their side would visit by evening. On the next
day, two officials from builders came to visit the site in late morning. The officials were
unable to access the situation and called two engineers for the same. Engineers could
arrive only in the late evening.

26. It continued raining on the fifth day and the situation with reservoir now became risky, if
the walls of the same broke or leaked due to the overflow, around 80% of row houses
would be covered underwater due to the water pressure. The engineers could not
understand whether the reservoir water be released in the main stream through the
connected drainage pipe or separately through shafts. It was ultimately decided that
amongst the four shafts, the one spill-way on the North-West would be opened for half an
hour to decrease the water pressure inside of the reservoir and as the water level reached
the safety mark, the same would be closed.

27. As soon as the spill way was opened, the five days of collected rain water gushed out
uncontrolled or undirected and North-West row houses were filled with water. The
opening of the spillway caused the death of a senior citizen resident, and movable
property of around Rupees two crores was damaged.

28. The thirty seven affected parties of the North-West block brought an action against the
builder under the law of Torts through the secretary of Society, Mr. Rawat.

29. A civil suit was filed in the High Court of Zigaro by Mr. Rawat claiming damages for loss
of life and property. The builders filed a Written Statement stating that the loss was due to
the inefficiency of Karmakar and Partners and that this was a loss arising out of the
contract. They further argued that there was no negligence from the side of builders. All
evidence have been adduced.

30. The High Court joined the two civil suits and the same is pending for hearing before the
Hon‟ble High Court on _________.

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ANNEXURE 1
E.MAIL 1

Time: 10:07AM Date: 15-2-2018

From: Karmakarnp@gmail.com
To: jec@jayshee.co.in
Subject: Regarding discovery in second phase

Dear members of the JEC,

It is to bring in your kind knowledge that during the work of second phase our team has
discovered an old network of pipelines eight inches below the currently in work pipe line laid
by you.
In addition to the information, we are hereby seeking your opinion as to whether a new
pipeline should be laid above the builder‟s pipeline being used or should the newly
discovered pipelines be cut to arrange the new construction as planned earlier. The execution
of the previously agreed plan would require extra expense and time and also involves some
degree of risk, in case if the pipeline in use was disturbed.
Further, it seems that the extra expenses that will have to be incurred should be covered by
builders. Also, some delay from the plan is inevitable as the work of severing the pipes is
increased.

Waiting for your response.

Regards,
Karmakar and Partners

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E.MAIL 2

Time: 11:57 AM Date: 17-2-2018

From: jec@jayshee.co.in
To:karmakarnnp@gmail.com
Subject: Regarding discovery in second phase

Dear Sir,

This comes as a surprise to us!

We think that laying the network of pipelines above the pipelines which are being used will
be easy. There is no difference between the two procedures if you can keep a safe distance
underground between the used pipeline network and the new network.

You may choose to go ahead with laying the new pipes above the pipelines being used.

Regards,

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ANNEXURE 2
E.MAIL 3

Time:10:09 AM Date: 18-2-2018

From:karmakarnp@gmail.com
To: ceooffice@jayshree.co.oi
Subject: Regarding: Requesting early release of payment.

Dear Sir,

It is hereby requested that with reference to the conversation with the JEC, your office may
kindly be pleased to release the part payment for second phase. The purchases for second
phase of construction are already made from PPP Ltd., the same could be utilised in the third
phase with minimum inevitable loss in nature of gypsum and other perishable adhesives.
Also, due to the change in circumstances and extra expenses, we request you to change the
payment mode from milestone basis to timeline basis, with difference of three months from
the date of present prospective payment. Please confirm the understanding so that we may
proceed with work.

Regards,
Karmakar and Partners
E.MAIL 4

Time: 11:57 AM Date: 18-2-2018

From: jec@jayshee.co.in
To:karmakarnp@gmail.com
Subject: Regarding: Requesting early release of payment.

Dear Mr. Karmakar,

Okay, we will look into it. Get the request approved by the JEC and the payment shall be
cleared within 5 days of such approval.

Regards,

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ANNEXURE 3
E.MAIL 5

Time: 01:57PM Date: 30-8-2018

From:karmakarnp@gmail.com
To: ceooffoce@jayshree.co.in
Subject: Regarding completion of phase three and no communication by JEC.

Dear Mr. Jayesh

A communication with respect to the completion of the third phase and accounts of extra
expenses was sent to JEC on August 26, 2018, but no members have come to visit the site as
of now.
We request you to kindly look into the matter as it may ultimately delay the work and release
of payment.

Regards,

Karmakar and Partners

E.MAIL 6

Time: 03:55PM Date: 30-8-2018

From: ceooffice@jayshee.co.in
To:karmakarnp@gmail.com
Subject: Regarding completion of phase three and no communication by JEC.

Dear Mr. Prabhas,

My office will look into the matter; a new committee may be required.

Regards,

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E.MAIL 7

Time: 01:05 PM Date: 02-09-2018

From: jec@jayshee.co.in
To:karmakarnp@gmail.com
Subject: Regarding competition of phase three and no communication by JEC.

Dear Mr. Prabhas,

Two of our in-house engineers who were members of the de funct committee visited the site
today. The work was found satisfactory but the same is delayed beyond our apprehension.
However, the payment of 30% of the agreed amount will be released in the favour of the firm
today.
In absence of a competent committee due to the delay in services provided and the change in
original design, we may be unable to give our final evaluation until after completion of the
full project. The office will be able to release the final payment only after experiencing the
condition of the area after Monsoon rains in the city.

Regards,

Office of CEO

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ANNEXURE 4
E.MAIL 8

Time: 04:15 PM Date:01-01-2019

From: karmakarnp@gmail.com
To: ceooffioce@jayshree.co.in
Subject: Regarding completion of all four phases.

Dear Sir,
It is to bring in your kind notice that the work for the last phase is completed and the all the
four working areas are consolidated.

As agreed by us under the terms of the contract, we request you to do as necessary to release
the final payment in favour of the firm.

Further, in reference to my earlier mails to your office and JEC, I would also request you to
kindly clear the bills of extra expenses incurred in the second phase of the project at the
earliest. Only the shaft of the reservoir needs to be connected to the main source; we will be
in position to do the required if the payment of extra expenses is met in time.

The bills are hereby attached for your consideration.

Regards,
E.MAIL 9

Time: 01:05 PM Date: 01-01-2019

From: ceooffice@jayshree.co,in
To:karmakarnp@gmail.com
Subject: Regarding completion of all four phases.

Dear Mr, Prabhas

We acknowledge the receipt of your mail and the contents of the same are duly noted.

Regards,

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E.MAIL 10

Time:01:05 PM Date: 01-04-2019

From: ceooffice@jayshree.co.in
To:karmakarnp@gmail.com
Subject: Regarding payment.

Dear Mr. Prabhas,

We request you to be patient as the payment will be released in time. We may form a
committee to look into the quality and efficiency of the services provided by you.

With respect to the extra expenses incurred by your firm, the bills of the same were never
forwarded to our office before this point. We fail to understand such expenses without our
prior approval. I don‟t think that we should be inclined to pay any amount beyond what was
agreed between us as per the contract.

Regards

SUGGESTED ISSUES:

1. Whether the High Court has (territorial) jurisdiction to entertain the present suit.

2. Whether the ordinary legal remedy can be barred by way of an agreement.

3. Whether the original contract can be considered to be legally amended on occasions

alleged by plaintiff or respondent.

4. Whether Jayshree Builders is liable to pay the residents damages under law of torts

Students are advised to argue under the issues hereby framed. However, a student may
choose to add further sub-issues under the given issues for better flow and clarity of thoughts.
Laws of Rashtra are pari materia to the laws of India.

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