Authority: High Court of Judicature at Madras

Order Date: 12 June 2026

Case Overview

  • Appeal No. AS 893 of 2012 filed by Jayalakshmi, W/o Mounagurusamy, Proprietrix of Power Sys Roof (respondent in original suit), seeking to set aside the judgment and decree dated 29 February 2012 passed by the Additional District Judge & Fast Track Court‑IV, Coimbatore in O.S. No. 598 of 2008.
  • Original suit was instituted by Tiruppur Exprt Knitwear Industrial Complex (plaintiff) for recovery of consultancy, supervision and monitoring charges for an electrical distribution network. The plaintiff alleged that a partnership firm had submitted a proposal on 24 December 2003, which was accepted, and work was entrusted. The partnership later dissolved and the plaintiff continued the business as a sole proprietrix, claiming all assets, liabilities and goodwill.
  • The plaintiff raised invoices amounting to a substantial sum; the defendant made partial payments by cheque, acknowledged them, but a significant balance remained unpaid. The plaintiff claimed interest at 6 % per annum and costs.
  • The defendant denied any enforceable contract, arguing the offer was never formally accepted, essential terms (consideration) were missing, there was no privity, the bills were unilateral, and the work was incomplete.
  • Issues framed by the trial court: (1) entitlement of plaintiff to recover money; (2) existence of privity of contract; (3) non‑joinder of Mounagurusamy; (4) whether the bills were unilateral; (5) entitlement to claim a percentage of project cost without project completion; (6) reliefs.
  • Trial Court Findings:
  • Held a valid contractual relationship existed; dissolution of the partnership did not extinguish the right to recover dues (relying on Shree Gomathy Shankar Transports v. State of Karnataka 2010 (4) CTC 58, AIR 1984 Madras 47, 2007 (1) MLJ 623).
  • Found clear privity of contract; the defendant had dealt with “Power Sys Roof” and continued dealings after it became a proprietorship.
  • Dismissed the objection of non‑joinder of Mounagurusamy, stating he was merely an employee/representative.
  • Accepted the bills (Ex A7‑A10) as not unilateral; the defendant did not dispute the project cost figures.
  • Held the plaintiff entitled to 5 % of project cost for supervision and monitoring even though the project was not fully completed; no contractual condition made payment contingent on completion.
  • Awarded interest at 6 % per annum in the absence of a specific clause, based on principles of the Indian Contract Act.
  • The appellant (Power Sys Roof) argued before the High Court that there was no concluded contract, no privity, the partnership‑act bar under Section 69(2) applied, the bills were arbitrary, and the plaintiff was not entitled to a percentage of an unfinalised project cost.
  • The respondent (Tiruppur Exprt Knitwear) contended that the contract could be inferred from conduct, the defendant had accepted services and made payments, and the partnership‑act bar was inapplicable.

Final Outcome

  • The Madras High Court, after considering the submissions and the trial court’s findings, concluded that the trial court was correct on all material points.
  • The appeal was dismissed; the decree and judgment of the Additional District Judge dated 29 February 2012 were upheld.
  • The connected miscellaneous petition was closed, and no order as to costs was made.

Topics: Contract Law, Civil Appeal, Consultancy Fees