Shripati Lakhu Mane v. The Member Secretary, Maharashtra Water Supply and Sewerage Board
Quick Summary
The Supreme Court drew a clean line between abandonment and breach. A party may abandon a right, but cannot abandon an obligation. If a contractor stops work until the other side performs its reciprocal promises, that stance is not abandonment. It may amount to breach or be excused under Section 67, ICA when the promisee’s neglect blocks performance.
Issues
- Did the contractor abandon the contract, or was it a refusal linked to reciprocal promises?
Rules
- Section 67, ICA: If the promisee neglects or refuses to give reasonable facilities, the promisor is excused for the non-performance caused by that neglect.
- Material changes to the original contract allow a party to refuse to perform those original terms; this does not become abandonment.
- Abandonment concerns rights (waiver). Refusal to perform an obligation amounts to breach, not abandonment.
- On refusal, the other party may sue for breach or rescind and claim quantum meruit for work already done.
Facts (Timeline)
Arguments
Appellant / Contractor
- Work was stalled by changes, lack of specified materials, and delayed revised rates.
- Refusal to continue without reciprocal performance is justified; not abandonment.
- Section 67 excused non-performance caused by the respondents’ neglect.
Respondents / Board
- Contractor’s stoppage amounted to abandonment of the project.
- Penalties were proper, and the decree had to be reduced to reflect abandonment.
- Scheme changes did not excuse the contractor’s obligations.
Judgment
- Refusal to perform an obligation is a breach, not abandonment.
- Stopping work until reciprocal promises are met cannot be tagged as abandonment.
- Section 67 protects a promisor when the promisee’s neglect blocks performance.
- The High Court erred in overturning the Trial Court; its view on abandonment was incorrect.
Ratio
Abandonment relates to rights. A contractor’s refusal to continue work due to unperformed reciprocal promises is not abandonment. Under Section 67, ICA, neglect by the promisee excuses non-performance to that extent.
Why It Matters
- Clarifies the difference between abandonment and breach in construction contracts.
- Strengthens the role of Section 67 where employer actions hinder performance.
- Guides contractors on lawful responses when terms are materially changed mid-project.
Key Takeaways
You can waive a right; you cannot abandon an obligation.
Promisee’s neglect can excuse non-performance by the promisor.
Stopping work pending reciprocity ≠ abandonment.
Record material changes and rate revisions to avoid disputes.
Mnemonic + 3-Step Hook
Mnemonic: “RIGHTS CAN REST; DUTIES CAN’T.”
- Abandon rights → possible.
- Abandon obligations → no; it’s breach.
- Sec 67 → neglect by promisee can excuse performance.
3-Step Hook:
- Ask: “Right or obligation?”
- Check: any neglect/material change by promisee?
- Decide: breach/quantum meruit; not abandonment.
IRAC Outline
Issue
Was the contractor’s refusal abandonment or a response to unmet reciprocal promises?
Rule
Sec 67 ICA; abandonment concerns rights; refusal of obligation → breach, not abandonment.
Application
Material changes, delayed rates, and neglect hindered performance; contractor’s stance was not abandonment.
Conclusion
High Court erred; Trial Court view substantially restored; no abandonment.
Glossary
- Abandonment
- Giving up a right; not the same as refusing to perform an obligation.
- Breach
- Failure to perform a contractual duty without legal excuse.
- Section 67, ICA
- Promisee’s neglect can excuse the promisor’s non-performance to that extent.
- Quantum Meruit
- Payment for the value of work done when a contract is rescinded or otherwise ends.
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