MAHARASHTRA STATE BOARD OF TECHNICAL EDUCATION

(Autonomous)
(ISO/IEC - 27001 - 2013 Certified)
Model Answer: Winter-2023
Subject: Contracts And Accounts Subject Code: 22601

Important Instructions to Examiners:

1) The answers should be examined by key words and not as word-to-word as given in the model
answer scheme.
2) The model answer and the answer written by candidate may vary but the examiner may try to
assess the understanding level of the candidate.
3) The language errors such as grammatical, spelling errors should not be given more Importance
(Not applicable for subject English and Communication Skills.)
4) While assessing figures, examiner may give credit for principal components indicated in the
figure. The figures drawn by candidate and model answer may vary. The examiner may give credit
for any equivalent figure drawn.
5) Credits may be given step wise for numerical problems. In some cases, the assumed constant
values may vary and there may be some difference in the candidate’s answers and model answer.
6) In case of some questions credit may be given by judgement on part of examiner of relevant
answer based on candidate’s understanding.
7) For programming language papers, credit may be given to any other program based on
equivalent concept.
8) As per the policy decision of Maharashtra State Government, teaching in English/Marathi and
Bilingual (English + Marathi) medium is introduced at first year of AICTE diploma Programme
from academic year 2021-2022. Hence if the students in first year (first and second semesters)
write answers in Marathi or bilingual language (English +Marathi), the Examiner shall consider
the same and assess the answer based on matching of concepts with model answer.

Total
Que. Sub.
Model Answer Marks Mark
No. Que
s
1 10
Attempt any FIVE of the following
:
a Define contract. List out any two requirement of valid contract.
Definition: Contract is an undertaking by person or firm to do work 1 mark
under certain terms and conditions.

Following are the requirements of valid contract;

1. Contract should be in writing and should be signed by both the parties
i.e. owner and contractor. 1/2
2. The subject matter of agreement must be legal and definite. mark
3. If situation arises the contract can be enforced in court of law. each
4. Parties should be competent enough to carry out work. (any
5. Both parties must give their free consent to do work. two)
6. Contract should be attested by responsible officer.

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 b State four conditions under which the contract is terminated.
Ans: Conditions under which the contract is terminated.
1) Contract is terminated by employer due to change in policy, non-availability 1/2
of work site or any other administrative reasons before the starting of work. Mark
2) The contract can be terminated by competent authority in bankruptcy of the each
contractor or death of contractor.
3) The contract can be terminated due to conditions beyond the control of
contractor to perform work. Example-Earthquake, Flood etc.
4) The contract can be terminated by mutual agreement between owner and
contractor and contractor is paid for work done.

c List any four types of engineering contracts 1/2

Ans: Mark
Types of contract: each
i) Lump sum contract.
ii) Item rate contract.
iii) Percentage rate contract.
a) Cost plus percentage rate contract.
b) Cost plus fixed fee contract.
c) Cost plus variable fee contract.
d) Cost plus variable percentage.
iv) Labour contract.
v) Demolition contract.
vi) Fee contract.
vii) Target contract.
viii) Negotiated contract.
ix) Material supply contract.
d Define arbitration. State two qualities of arbitrator.
Definition: During execution of work owner and contractor may come across 1 mark
situations where disputes may arise. The process of settling the dispute
between owner and contractor is called as arbitration.
The qualities of arbitrator are as follows:
i. The arbitrator should be a person having experience of work. 1/2
ii. He should have in depth knowledge of work. mark
iii. He should know rules, procedures of law. each
iv. Main thing is he should be impartial and acceptable to both parties. (any
two)
e Define First and final payment bill which form no. is used for it.
Ans:
1) First and final bill
A single payment made for a small job or small work on its completion is
1 mark
called as “first and final payment”.
1 mark
form no.
Form no.24 is used for First and final bill
f Define speculative value and distress value.
Ans:
Speculative value: 1 mark
Some property dealers have their business of purchasing of properties and

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 selling them at profit after some time. The price at which such property is
purchased with intention of selling it again at profit is known as speculative
value.
Distress value:
A property is said to have a distress value when it fetches lower value than
the market value. It is developed due to various reasons such as 1 mark
1. Fear of war, riots, earthquake etc.
2. Financial difficulties of seller.
3. Intention to favour purchaser etc.
g Define ‘depreciation’. Enlist two methods of calculating depreciation.
Ans: 1 mark
Depreciation: Depreciation may be defined as a loss in value or utility of
property. The loss is due to wear and tear, decay, inadequacy and
obsolescence.
Methods of calculating depreciation 1/2
i. Straight line method mark
ii. Constant percentage method or declining Balance method each
iii. Sinking fund method (any
iv. Quantity survey method. two)

2 Attempt any THREE of the following: 12

a Write any four functions each of
i. Chief Engineer :
ii. superintending engineer (SE) :
Ans:
i. Function of Chief Engineer :
1. To give administrative approval of work under his control . 1/2
2. Acceptance of tender under his control. mark
3. Sanction deposit work, full powers. each
4. Purchase of live stock Rs.30,000/- at only one time. (any
5. He prepares the budget estimates annually relating to the work under his four)
control.
6. To keep close watch over progress of work and expenditure against it.
ii. Functions of superintending engineer (SE) :
He is responsible for execution of work in his circle.
Functions:
1.Administrative approval to the work under his control.
2.He should give technical sanction to estimate within his power,
3.Technical sanction under his control. 1/2
4.Inspect work in his circle. mark
5.Arrange payment of store and material. each
6.Inspect division in his circle and report to chief engineer. (any
7.To check progress of work under his circle. four)
8.Financial control over execution of original repair work.
b Draw organizational structure of PWD.

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 1 mark

1 mark

1 mark

1 mark

c Mention the methods of execution of the following works, you would

prefer. Support your answer by reasons:
i) A polytechnic building
ii)Marble
Marble cladding of pedestal of a statue
iii)Concrete
Concrete lining to canal
iv)W.B.M. road
Ans: i) A polytechnic building
building- Item rate contract
Reason: As the contractor gets the payment against the actual quantities of
items done by him, the method is economical. No possibility for excess
payment. 1 mark
ii)Marble
Marble cladding of pedestal of a statue
statue- Day work method
Reason: This
his method is suitable for decorative work, Artistic work, and
1 mark
Special work.
iii)Concrete
Concrete lining to canal
canal- Item rate contract
Reason: As the contractor gets the payment against the actual quantities of 1 mark
items done by him, the method is economical. No possibility for excess
payment.
iv)W.B.M. road- Item rate contract
Reason: As the contractor gets the payment against the actual quantities of
items done by him, the method is economical. No possibility for excess 1 mark
payment.
d State the classification of contractors based on financial capabilities.
Enlist Six documents required to b bee submitted for registration of
contractorin PWD.
Ans:-
The classification of contractors based on financial capabilities. For
general work
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 Class I : No limit 1 mark
Class II : up to 3 crores
Class III : up to 1 crore
Class IV : up to 50 lakhs
Class V : up to 15 lakhs
Class VI : up to 5 lakhs
Class VII : up to 2 lakhs
The documents required for registration of contractor in PWD.
The applicant has to submit the following documents along with his
application: 1/2
i. Latest income tax clearance certificate. mark
ii. Proof of financial status. each
iii. Solvency certificate. (any six)
iv. List of machinery with their condition.
v. List of technical staff employed along with qualification and experience.
vi. Professional capacity and experience certificate.
vii. Attested copies of
3 Attempt any THREE of the following: 12
a Define BOT Project. Write any four objectives of BOT project.
Ans:-
B.O.T.
B.O.T. is a form of project where government grants permission to private
firm to construct and administrate certain public infrastructure by financing 2 mark
and authorizing them to pay off loans reclaim investment by allowing them
to collect tools, fees, rent as stated in contract and after concession period is
over, ownership is transferred back to government. 1/2
Four objectives of BOT project. mark
a) To encourage private investment. each
(any
b) To promote foreign investment, techniques and technology.
four)
c) To ensure quality of work and speed of work.
d) To release burden on public budget.
b State the salient feature of BOT project. Give two examples of B.O.T.
projects.
Ans.
Salient features of BOT project: 2 mark
i. BOT project means build, operate and transfer project. It is defined as a type
of agreement in which private sector builds infrastructure project, operates it
and transfers ownership of project to government.
ii. Fast development of infrastructure is possible.
iii. On completion of project, the expenditure incurred will be collected by toll
and this amount is used for maintenance of project.
iv. Quality of work is good since public, private partnership is there for
construction of project.
Examples: 1 mark
i) Mumbai – Pune express highway each
ii) Baroda – Ahmadabad highway (NH8). (any
iii) Nagpur Express highway (NH50) two)
c Write any eight points to be included while drafting tender notice.

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 Ans. Following points should be included while drafting a tender notice:
1. Name of the authority inviting tender
2. Name of work and its location
3. Estimated cost 1/2
4. Time limit of completion mark
5. Earnest money required along with tender each
6. The availability of data and forms (any
7. The last date, place and time of receipt of tender eight)
8. The right to reject the tender.
d Define tender and enlist the types and necessity of tender.
Ans.
Tender:-The tender is defined as an offer in writing for execution of certain
specified work or for supply of specified materials subject to certain terms and 1 mark
conditions such as rates, time limits etc.
The various types of tenders are,
a) Local tender
b) Global tender
c) Open tender 1 mark
d) Limited tender
e) Negotiated tender
Necessity of Tender: 2 mark
1. To execute work as per specification and drawing. (any
2. To complete the work within specified time. two)
3. To supply materials and labours.
4. For transportation of materials.
4 Attempt any THREE of the following: 12
a Prepare NMR- Part-I for the following details mentioned below.
Period of writing NMR-9th January 2023 to 15th January 2023. Weekly off
Sunday.
i.) Nand Kishor (Mason) Rs.800/-per day present on all days.
ii.) Vijay Kumar (Mason) Rs.800/-per day absent on 12th January 2023.
iii.) Meena Kumari (Female labour) Rs.400/- per day present on all days.
iv.) Ramesh Kumar (Male labour) Rs.400/-per day present on all days.
Ans:

Desig Sr. Nam Fat Dates…Month T Rate Amou Dated

natio No e her 9th January ot RS nt initial of
n grou s 2023 to 15th al paying
Descr pped Na January 2023 officer
iption acco me
rdin
g to
class
1 2 3 4 5 6 7
Mason 1 Nand Kish W 6 800 4800 1 mark
or P P P P P P e
Mason 2 Vijay Kum e 5 800 4000
ar k
P P P A P P l

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 Female 3 Meen Kum y 6 400 2400
labour a ari P P P P P P
o
f
Male 4 Rame Kum f 6 400 2400
labour sh ar P P P P P P

Initial of person making 2 mark

daily attendance
Initial of inspecting officer
Passed for RS 13,600/-(RS Thirteen Thousand Six hundred)
Signature………..Rank…..
Grand total of this muster roll 13600/-
Deduct-payment not made as per details ----------
Transfer to register of arrears ----------
Total amount paid in words RS 13600/-
Date ………..signature…………….Rank……………
1 mark

b State one use of

i)Measurement book
ii)Indent and invoice
Also draw their format in tabular form.
Ans:
Use Measurement Book (M.B.):
1. It is the book in which measurement of all works and supplies are recorded. 1/2
2. All the payment of all works is done based on entries done in measurement mark
record. (any
Use of Indent: one)
1. Procurement of material from store.
2. Materials from the stock are issued on demand 1/2
Use of Invoice- mark
1. It is used as a token of acknowledgement of the receipt of goods. (any
2. The issuing officer issues the material available in stores and then fills the one)
invoice as actual goods issued.

1 mark

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 1 mark

1 mark

c Describe procedure of issuing the materials through indent.

Ans: Procedure of issuing materials through indent:
1. Materials from the stock are issued on demand in a proper form no. 7
which is termed as Indent. It is prepared by Sub divisional Officer or
Assistant Engineer.
2. Indent form is prepared in four copies. In all four copies entry of the 4 mark
quantity of the stores issued is made with the signature of store keeper.

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 3. Out of four copies, one copy is remained with the store keeper record,
the second copy is returned to Indenting officer. Third and Fourth copies
are being sent to Divisional officer.
d State any four legal aspects of specification?
1. Specification of various items becomes the important documents as per
as legal aspect like contract and agreements are concerned. Hence the
drawing and specifications are two important contract documents
considered as a legal documents. 1Mark
2. The tender documents and agreements towards legal aspect are each
incomplete and invalid without specifications.
3. Specifications have more legal strength and hence most of the contract
state that in case of discrepancy between the drawings and specifications,
the specification act as a legal proof.
4. In case of disputes between the owner and the contractor, specifications
act as a useful legal documents to solve the problem in between two party.
e Differentiate between brief specification and detailed specification.

1 Mark
each

5 Attempt any TWO of the following: 12

a Draft a Tender notice for a construction of multi speciality hospital in a
city costing 3.2 Cr. Invited by E.E. (PWD). Assume suitable
information if any.
Ans:
Date :
Tender Notice 1 Mark
Sealed item rate tenders in form B-2 are invited from experienced and
appropriate class of contractors registered with state-central government.
PWD for the work mentioned below :

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 Estima
Name of Earnest Security
Sr. No. ted Time limit
Work Money Deposit 2 Mark
Cost
multi
20 month
specialit
1 3.2 Cr 3,20,000 16,00,000 (including rainy
y
season)
hospital

1. Cost of blank tender form is 5000 Rs./ each (non refundable.) (Rs. 5600/-
if required by post)
2. Period of issue of blank tender _______ to ______ between (11am to 4 2 Mark
pm) except Sunday and holiday.
3. The Tender form with complete sets of blank forms of contract can be
obtained from the office of the Executive Engineer___
4. Last date for receipt of tender is ____ upto 4pm.
5. Tender will be opened on the same day at 6pm in presence of contractor
who may like to attend..
6 The authorities reserve right to reject any or all tenders without assigning
any reason. 1 Mark
Sd/-
Executive Engineer
b Define the following term:
i)Sinking fund
ii)Years purchase
iii)Valuation
Ans:-
Sinking Fund: Fund created by regular periodic payments which
accumulate at the compound interest is a sinking fund. Amount of sinking 2 Mark
fund is used at the end of utility period of the structure.
Years Purchase: Years purchase is the capital sum required to be invested 2 Mark
so as to receive an annuity of Rs. 100, at certain rate of interest.
Valuation- Valuation is a branch of quantity surveying which deals with
the art of assessing the present fair value of a property. 2 Mark
c Calculate capitalized value of a property. The property fetches gross
income of RS 10000/- per month. The total outgoing are 30% of gross
income. Assume rate of interest 12% p.a.
Ans:
Monthly rent = Rs. 10,000
Annual income from rent = Rs. 1,20,000/-
Net income = Gross income – outgoings
Outgoings are
outgoings =30 % of gross income
outgoings =0.3 x 1,20,000 = 36000
Net income = 1,20,000 – 36000
= Rs. 84,000/-

Y.P. = 1/I = 1/ 0.12

= 8.33

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 Capitalized value = Y.P. x Net annual income
= 8.33 x 84000
= Rs. 6,99,720 /-

6 Attempt any TWO of the following: 12

a Draw formats of schedule A and schedule B. State purposes of both.
Ans

2 Mark
Purpose of schedule A:
Schedule A is statement showing details of materials supplied to contractor
by PWD store, and the rate at which materials are to be charged

1 Mark

2 Mark

Purpose of schedule B:
Schedule “B” consist of description of each item, approximate estimate
quantity, rate per unit, the amount of each item and total amount of all the
items. A contractor has to insert his rates on schedule “B” only.

1 Mark
b Draft a detailed specification for external plastering in cm (1: 4) with 20
mm thickness of a new brick wall.
Ans.
(i)Material:
Cement: Ordinary Portland cement shall be used .The cement shall conform to
IS: 269 latest versions. 1 Mark
Sand: Fine aggregate shall be natural sand obtained from a river bed and shall
conform to 15:383-1 and to the relevant portion of IS: 515- 1959. Sand shall be

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 clean, hard, strong, durable and free from organic matter, dust, clay, shale,
alkali, salts, soft or flaky particles or other injurious substances.
Water: Potable water shall be used for mixing the mortar.
(ii)Proportion: Cement and sand shall be mixed in the proportion of one part
of cement to four parts of sand.
Mixing: Mortar shall be mixed in a mechanical mixer of an approved pattern
at the site of work The drum shall be rotated for a minimum period of 2
minutes The mortar shall be used within 30 minutes of adding water or by
hand mixing 1 Mark
(iii)Plastering: The mortar shall be firmly applied on the surface from top to
down and well pressed into the joints. The mortar shall then be rubbed and
leveled with a flat wooden rule until a perfectly plane and even surface is
achieved. All corners shall be finished to their angles, unless otherwise
directed by the engineer: The jambs and reveals Of door and window openings
shall be finished perpendicular to the sill and lintel bottom. Plastering shall be 1 Mark
done in squares or strips as directed by the engineer. Strips or squares shall be
so formed that day-to-day breaks are made to coincide with architectural
breaks.
Finish: While the plastered surface is fresh, a thick coat of cement slurry shall
be applied and rubbed smooth.
Curing: All plastered surfaces shall be kept continuously damp for -a period of
14 days.
(iv)Mode of Measurements: The unit of measurement shall be the square 1 Mark
meter as per IS: 1200.
c A building is newly constructed at the cost of Rs.14,00,000 /- on a plot
of 500 m2. Fix monthly rent of this property from the following data.
(i) Rate of land Rs. 800 per sq.m
(ii)Return expected on cost of land = 8%
(iii)Return expected on cost of building= 10%
(iv)Life of building =60 years,
(v)rate of interest for sinking fund=3%,
(vi)Scrap value of building= 10% of construction cost.
(vii)Other outgoings = 30% gross rent.
Given : Cost of construction = 14,00,000 /-
Cost of land @ Rs. 800 per sq.m (800X 500) = 4,00,000
Total cost = 14,00,000 +4,00,000 = 18,00,000
Step 1 : To find total net return per annum :
Return expected on cost of land 8%
= 8/100 X 4,00,000 =32000 1 Mark
Return expected on cost of building 10%
= 10/100 X 14,00,000 =1,40,000
Total net return per annum = 32,000+1,40,000=1,72,000/-
Net cost of building = 14,00,000-1,40,000
= 12,60,000
Sinking Fund Installment for total cost of building 2 Mark
n
= S x I / (( 1+ i) - 1
= 12,60,000 x 0.03 / ((1+0.03)60 -1
= 6608.39
Step 2 : Other outgoings at 30% of gross rent

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 Outgoings = 0.3 X R
(Assuming gross rent as R) 2 Mark
Gross rent = Net return + outgoings.
R = 1,72,000+ 6608.39+ (0.3R)
R = 0.3R +1,78,608.39
0.7 R =1,78,608.39
R = 2,55,154.84
Step 3 : To find rent per month :
Rent per month = 2,55,154.84/12 =21262.90 Say 21265/-
1 Mark

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