• Cheating by building contractor

Hello Advocate

My house construction contractor has cheated us by signing the agreement and he has completed the partial work by taking advance money and later he comes and asks for more money without completing the work and stopping the work for 10 working days stating that we should pay him more money for the material he has brought. He is also not giving us the bills or receipts for material he has brought for house construction but still claiming for the money. 

He is now threatening us that if we do not pay him for material he has brought for construction he will not allow us to engage any other contractor for the further work. He is also not continuing the work and asking for more money. This is leading to loss as the material lying in the site is going waste such as sand and cement due to rains. 

When we asked him to refer to the agreement as we have made the payments as per agreement, he is now saying he cannot read english and he will ask some other engineer to read the agreement for him. This contractor has already signed agreement in the month of May 2015 and after completing partial work he is saying he does not know how to read and write english and he wants more money then what is mentioned and agreed upon in the agreement. 

Can I file this case as IPC 420 for cheating us with false claims, signing the agreement with payment terms and conditions and now asking for more money for work not completed & now saying he does not know english. 

He has also cheated in the material as some of the material we had to bring and give it to him though the contract is a labour with material contract. 

Can we also claim for damages caused to the material loaded in the site and for work stopped past 10 days?

Please advise on what is the further legal action that I can take 

Regards
Sheela
Asked 1 year ago in Property Law from Bangalore, Karnataka
Religion: Hindu
1. according to sec 37/39 of the contract act, builder is bound to complete his work then he can full payment. you should send him a legal notice to completion of work. 

2. when contract is signed, party to the contract can't take this defence that he can't read the terms of contract. In excelware ltd vs spincton it is held by the court that when information is given in the contract at or before the signing of contract then party to the contract can't say that contract is not binding on him because language is unknown to him. this view is reaffirm by the supreme court of india in Ashish Goel case. 

3. So don't file criminal case at this stage, first you send a legal notice and wait for his reply. If he gives false bills then you have grond to file criminal case for cheating, you can also file suit for compensation and completion of work.       
Shivendra Pratap Singh
Advocate, Lucknow
2771 Answers
41 Consultations
4.9 on 5.0
In Bharat Fire & General Insurance ... vs Parameshwari Prasad Gupta it is held by the supreme court of India that when language of the contract is clear then party to the contract can't say that he was unaware it is not acceptable in the cases which is general tredition or natural course of the business.

In your case it is general course of business to complete the work before full payment. contractor is bound to perform his duty first.   
Shivendra Pratap Singh
Advocate, Lucknow
2771 Answers
41 Consultations
4.9 on 5.0
1) it is necessary to peruse agreement signed by you with the contractor 

2) contractor is bound to furnish bills of material bought 

3) it is only after physical verification of material with the material bought should you make further payments 

4)( does your contract provide for arbitration clause? 

5)in case off failure to complete the work  you cna terminate the contract and seek damages for loss caused to you 
Ajay Sethi
Advocate, Mumbai
23370 Answers
1224 Consultations
5.0 on 5.0
1) you can file cheating case if contractor has defrauded you 

2) complaint may take some years to be disposed of 

3) suit for damages also take some years to be disposed of 

4) you can issue contractor legal notice to complete the work as stipulated in the contract failing which you would  have no option but to  terminate the contract 
Ajay Sethi
Advocate, Mumbai
23370 Answers
1224 Consultations
5.0 on 5.0
1) you should record his threats and lodge complaint of criminal intimidation under section 506 of IPC 

2) after issue of legal notice terminate contract and engage another contractor 
Ajay Sethi
Advocate, Mumbai
23370 Answers
1224 Consultations
5.0 on 5.0
Hi, first issue a legal notice to the contractor and ask him to do the finish the work if he fail to comply the notice then you can terminate the contract and file a suit for damages.

2. Simultaneously you can also lodge a police complaint. 
Pradeep Bharathipura
Advocate, Bangalore
4105 Answers
133 Consultations
4.3 on 5.0
1) no court will grant any stay order if contractor had refused to submit bills in reject of material purchased by him 

2) your defence should be that you are willing to pay for work done as per agreement . However on account of failure to complete work contract had been terminated after issue of  legal notice 

3) take photographs and video recording of the work done on site till date 

4) appoint a civil engineer to certify amount of work done by contractor 
Ajay Sethi
Advocate, Mumbai
23370 Answers
1224 Consultations
5.0 on 5.0
1) once you have terminated contract no need for issue of legal notice for termination 

2) you must keep photographs , civil engineer certificate to justify why you terminated contract 

3) court will not grant any stay unless strong case is made out by contractor 
Ajay Sethi
Advocate, Mumbai
23370 Answers
1224 Consultations
5.0 on 5.0
1. He has not yeat cheated you. He has just claimed more money than what he should get as per the agreement,

2. File a complaint case before the local District Consumer Dispute Redressal Forum alleging deficiency in service and unfair business practice claiming direction upon the contractor to immediately start construction and finish within a fixed period, pay damage for the delay and cost,

3. Also pray for leave to engage another contractor in case he refuses to stcrt his construction within the stipulated period,

4. File a police complaint for his stopping construction and putting you into misery and also file a petition under order 39 rule 1 & 2 praying for injunction upon the contractor restraining him in entering into your premises.
Krishna Kishore Ganguly
Advocate, Kolkata
12143 Answers
233 Consultations
5.0 on 5.0
1. Yes. You can issue him the said notice as per the agreement,


2. Please note that he has not yet cheated you by claiming extra amount since you have not yet paid him what he asked from you illegally,


3. However, you can sue him for cheating for not paying you the compensation you asked for as per the agreement,


4.You can also file a complaint for his treatening you and stopping you from engaging any other contractor to complete the work which he is refusing to complete. 
Krishna Kishore Ganguly
Advocate, Kolkata
12143 Answers
233 Consultations
5.0 on 5.0
1. Send him the termination of contract letter,

2. Ask him to submit bill strictly as per the agreement after deducting the cost of the material supplied by you,

3. Lodge a police complaint for his treatening you that he will resist the new contractor to work for for at your site,

4. Bring a stay order against his presence as advised in my earlier post.
 
Krishna Kishore Ganguly
Advocate, Kolkata
12143 Answers
233 Consultations
5.0 on 5.0
1. Pay him the money what you are supposed to pay him as per the agreement,

2. You must preserve all evidence in support of the ground for cancelling the contract,

3. It is not mentioned in any contract that one party will not go to court and bring stay order, if he is agrieved. It is his civil right.
Krishna Kishore Ganguly
Advocate, Kolkata
12143 Answers
233 Consultations
5.0 on 5.0
1. You can mention the extract of the report of the Civil Engineer and need not send any photograph,

2. As mentioned in my earlier post, every body has the right to approach court of law and pray for stay order and it can not be mentioned in any agreement that the parties are restrained from going to court. Such agreement will then be treated as invalid.
Krishna Kishore Ganguly
Advocate, Kolkata
12143 Answers
233 Consultations
5.0 on 5.0
Besides police complaint, before he is approaching the court, you may secure the evidence for the incomplete and sub-standard work done by the contractor so far vide a certificate from a qualified civil engineer along with the photographs, issue him a legal notice stating the contract stands terminated quoting the clause for termination and file an injunction  suit against him in the jurisdictional civil court seeking the relief of restraining him from interfering with the continuation of construction work to be carried out through some other contractor and also can seek recovery of compensation money for the loss he caused due to the breach of contract and discontinuing the construction work half way. 
T Kalaiselvan
Advocate, Vellore
14151 Answers
127 Consultations
5.0 on 5.0
1. Once you enter into an agreement it is sacrosanct and inviolate. Since the contractor has violated the agreement you can file a lawsuit to compel him to honour the agreement or return the amount already paid to him along with damages for dishonouring the agreement. 

2. The court orders may also be sought to direct him to furnish the bills for the material which he has claimed to have purchased. 

3. You can also launch his prosecution for cheating as he has not honoured the agreement. 

4. Before going to court you may issue him a lawyer's notice through your lawyer to send a warning to him.
Ashish Davessar
Advocate, Jaipur
18190 Answers
449 Consultations
5.0 on 5.0
1. You are at liberty to cancel the agreement if he has violated it. 

2. Cancellation of the agreement will not impair your legal right to prosecute him for cheating and also claim the refund of the money paid to him and damages for violation. 
Ashish Davessar
Advocate, Jaipur
18190 Answers
449 Consultations
5.0 on 5.0
1. You are free to engage any other contractor. However, this can be done only after you cancel the agreement you entered into with him.

2. If he impedes the functioning of any other contractor you can lodge a police complaint against him and also obtain a restraint order from the court. 
Ashish Davessar
Advocate, Jaipur
18190 Answers
449 Consultations
5.0 on 5.0
1. Once you cancel the agreement the contractor will be at liberty to go to court to recover from you the money, if any, spent on purchasing the construction material. The court will give you an opportunity to rebut his case in defence.  However, unless there is a stay order issued by the court the new contractor can commence and continue his work. 

2. Before he goes to court to seek a stay order you may approach the court to obtain the necessary orders against him as this may serve your interests. 

3. The right to seek a stay order against the acts of another person is an indefeasible legal right. It does not require a mention in the agreement. 
Ashish Davessar
Advocate, Jaipur
18190 Answers
449 Consultations
5.0 on 5.0
1. The notice to be sent by your lawyer does not have to be supported with the certificate from any civil engineer or photographs of the site.

2. The contractor can got o court to seek a stay order, which you can oppose. 
Ashish Davessar
Advocate, Jaipur
18190 Answers
449 Consultations
5.0 on 5.0

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