Delhi District Court
Umesh Tyagi vs Mcd on 30 November, 2024
IN THE COURT OF SH MUKESH KUMAR GUPTA
DISTRICT JUDGE(COMMERCIAL)-07(CENTRAL)
TIS HAZARI COURTS: DELHI
CS (Comm.) No. 562/2023
CNR No. DLCT010046142023
DLCT010046142023
SH. UMESH TYAGI,
Sole Proprietor of M/s Amit Elevator Services,
Office-732, Burari, Village,
Delhi-110094
Email: [email protected]
......Plaintiff.
Vs
1. MUNICIPAL CORPORATION OF DELHI .
(Previously known as North DMC)
Through: its Commissioner,
4th Floor, Dr. S.P. Mukherjee,Civic Centre, Minto Road,
J.L. Nehru Marg,
New Delhi-110002.
2. The Executive Engineer (E)CSPZ,
Municipal Corporation of Delhi,
under Ground Car Parking,
Asif Ali Road, New Delhi-110002.
...... Defendants.
SUIT FOR RECOVERY OF RS. 5,29,809.85ps
Date of institution of suit : 29.03.2023
Digitally First Date before this court : 30.03.2024
signed by
MUKESH
MUKESH
KUMAR Date of hearing of final argument : 30.11.2024
KUMAR
Date of Judgment : 30.11.2024
GUPTA
Date:
GUPTA 2024.12.03
01:10:56 -
0800
CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 1 of 38
Appearance(s) : Mr. Akhil Rana, Adv. Ld. Counsel for plaintiff.
Shri Sanjeet Malik, Adv. Ld. Counsel for the defendant.
JUDGMENT
(A) PRELUDE:
1. By way of present judgment, I shall conscientiously adjudicate upon suit of the plaintiff for Recovery of Rs. 5,29,809.85ps/- alongwith interest @ 14% per annum pendentlite and future from the date of filing of the suit till its realisation. The plaintiff has also prayed for costs of the suit against the defendants.
(B) CASE OF THE PLAINTIFF:-
2. Eschewing prolix reference to the pleadings crystallizing the same the plaintiff has averred in the plaint that:-
2.1) The plaintiff is the proprietor of proprietorship firm namely M/s Amit Elevator Services which is duly enrolled as a Municipal Contractor with the defendant No.1 corporation. The plaintiff firm has been carrying on different works for the Municipal Corporation of Delhi (Previously known as North DMC) since long and is engaged in the civil nature of work for the defendant No.1 corporation.
2.2) The defendant No.1 is a body corporate of Delhi, established and governed under the Municipal Corporation of Delhi Act, 1957. The suit is being filed against the defendants through its Commissioner defendant no.1 who is in-charge of all the acts and day to day activities of the defendants. The defendant No.1 is engaged in taking care of all the MUKESH Digitally by MUKESH signed KUMAR KUMAR GUPTA Date: 2024.12.03 GUPTA 01:11:04 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 2 of 38 civil amenities, development etc. Defendant No.2, the Executive Engineer of defendant No.1 is responsible for construction activities in the area of erstwhile MCD and the work order in question was issued by him.
2.3) It is further the case of the plaintiff that plaintiff being Contractor approached the defendant No.1 for the work through tender invited by the Executive Engineer (E)/CSPZ/defendant No.2, and after due process became successful. After satisfaction and completion of required conditions at the stage of pre-work order, the work covered by the tender was awarded by the defendant No.2 on behalf of defendant No.1 to the plaintiff. Accordingly, the work order No. EE(E-
II)CLZ/SYS/2018-2019/109 dated 29.11.2018 ( in short "WO-109") for the A/R & M/O of DG Sets near OPD Block in Hindu Rao Hospital, sub Head: Annual Running and Operation of 2X500 KVA DG Sets was issued to the plaintiff. The plaintiff has also deposited the security/earnest money and entered into an agreement with the defendant as a pre-condition of the award. The work was completed by the plaintiff to the satisfaction of the defendant No.2 within the stipulated period to the satisfaction of Engineer-in-Charge/Defendant No.2.
2.4) The defendant No.2 completed the final measurement of the aforesaid works and bills pertaining to the aforesaid work were passed and recorded in the measurement books. The defendant No.2 passed the first RA bill in respect of WO 109 of Rs.9,16,334/- and paid the amount MUKESH by Digitally signed MUKESH of Rs.8,88,844/- on 06.11.2020 after deducting 2% Income Tax i.e. KUMAR GUPTA KUMAR Date:
GUPTA 2024.12.03 01:11:11 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 3 of 38 Rs.18,327/- and 1% Labour Cess i.e. Rs.9,163/-. The Second & Final bill of Rs.2,69,996/- was processed on 22.03.2021 and sent the same vide demand No. 209/EE(E)CSPZ/2021 dated 25.03.2021 on the basis of formalities completed and measurement book. The plaintiff has also deposited the security/earnest money of Rs.17,100/- towards work order No.109 on 09.05.2018.
2.5) As per the establish practice between the parties, plaintiff is entitled to get reimbursement of ESIC & EPF on submission of proof to the defendants as the ESIC & EPF is being regularly reimbursed by the defendants as per work order to the contractors. The reimbursement of ESIC & EPF contribution paid by the contractor on the part of the Employer, is to be made preferably within 07 days but not later than 30 days of submission of the documentary proof of the payment and accordingly, the contractor/plaintiff has made the payment as per Office Memorandum No. DG/SE/CM/CON/MISC./01 dated 30.06.2015 of CPWD. However, after submitting the proof of contribution made towards ESIC & EPF by the plaintiff vide letter No. AES/2021-22/60 dated 08.06.2021, the defendants have not reimbursed the ESIC & EPF amount of Rs.1,23,016/73ps in reference to the aforesaid work order. As per Office Memorandum No. DGW/MAN/150 dated 14.12.2007 of CPWD, the plaintiff is also entitled to get the contractual profit @ 15% on the aforesaid ESIC & EPFO i.e. Rs.18,452/-. Accordingly, the total outstanding principal amount including the amount of passed bill security/earnest money, ESIC and EPF, Contractual Profit, Overhead MUKESH by MUKESH Profit @ 15% on ESIC & EPF and thus, the total amount including the Digitally signed KUMAR GUPTA KUMAR Date:
GUPTA 2024.12.03 01:11:20 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 4 of 38 amount of passed bills and security/earnest money comes to Rs.4,28,565/23ps-.
2.6) Despite passing of the bill, the defendants have neither released the payment nor informed the plaintiff and amounts were withheld for which the plaintiff has made several request vide letter No. AES/2021-22/112 dated 26.07.2021, AES/2021-22/171 dated 20.09.2021, AES/2022-23/163 dated 24.08.2022, AES/2022-23/158 dated 23.08.2022, AES/2022-23/204 dated 24.09.2022, AES/2022-23/212 dated 10.10.2022 to the defendants for release of the amount of passed bill as also the security amount but to no avail. According to the clause 9 of the General Terms and conditions of the agreement, the defendants are liable to release the same within a period of six/nine months. The plaintiff considering the transaction being the nature of commercial transaction, has claimed interest of Rs.90,244/62ps- @ 14% per annum as simple interest upon the principal amount of Rs.4,28,565/23ps- from the date of passing of the bill i.e. from 22.09.2021 till 24.03.2023 for 439 days which the defendant has not paid to the plaintiff.
2.7) As per plaintiff, the defendants have tried to evade the payment on one pretext or the other compelling the plaintiff to issue a legal notice dated 02.03.2021 u/s 477/478 of the MCD Act, calling upon the defendants to pay the suit amount with interest @ 18% per annum, which was also not replied to by the defendants.
Digitally signed by MUKESH MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2.8) The plaintiff has claimed the cause of action arose on the 2024.12.03 01:11:30 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 5 of 38 date when the defendants awarded the works order to the plaintiff on 29.11.2018, when final bill in respect of WO No.109 dated 06.11.2020 was passed and second RA bill of Rs.2,69,996/- dated 22.03.2021 was sent to HQ, on issuance of legal notice which was not responded to and finally when steps for pre-institution mediation were taken under Section 12-A of Commercial Courts Act, 2015.
2.9) Hence the present suit for recovery of Rs.5,29,809.85ps alongwith interests and costs.
(C) CASE OF THE DEFENDANTS:-
3. On receipt of summons for settlement of issues, the defendants contested the suit by filing a detailed Written Statement thereby taking various preliminary objections as averred and mentioned herein under:-
3.1) The suit filed by the plaintiff is without any cause of action and therefore deserves to be rejected at the threshold. The plaintiff has failed to comply with the conditions of WO No.109 besides breaching the General conditions of Contract (GCC) . It has further been contended that the plaintiff has not submitted any bill either interim or final and submission of proof of ESIC & EPF with bills which he was contractually required to and as such in absence of any bill, no amount can be said to be due or payable to the plaintiff. It is further contended that the plaintiff has failed to disclose a cause of action to maintain the Digitally signed by present suit and the plaintiff has failed to comply with and adhere to the MUKESH MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2024.12.03 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 6 of 38 01:11:38 -0800
contractual obligation as set out in the Work order and the General Conditions of Contract (GCC). The defendants have also reproduced clause 7, 9, 17 and 45 of the GCC to support its defence besides also raising the aspect of interest and limitation.
3.2) On merits, all the allegations made in the plaint have been denied as incorrect. It has been contended that the plaintiff himself admits being bound by the terms of the NIT, the Work Order and the GCC, however, the plaintiff has failed to abide by the same and do what was necessary thereunder. The defendants have also denied that the plaintiff completed the work within the stipulated time and to the satisfaction of the defendants. It has also been contended that once the plaintiff is aware of his obligations under the GCC and the law, issuance of legal notice would not absolve him of his legal and contractual duty to furnish the bills. It has also been contended that the amounts given as security deposit cannot be refunded unless the plaintiff complies with provisions of the GCC. It has also been denied that the plaintiff is entitled for any service tax paid by him on behalf of the defendants and also denied the order as per office memorandum 01 dated 30.06.2015 is applicable to the defendants. The defendant has also denied that the memorandum No.150 dated 14.12.2007 of the CPWD is applicable or adopted by the MCD, therefore, the plaintiff is not entitled for the claimed outstanding amount. It has also been denied that defendants are liable to pay interest as claimed by the plaintiff as no amounts have become due on date. The entire claim of the plaintiff including the claim MUKESH by Digitally signed MUKESH of the interest is stated to be false and liable to be dismissed.KUMAR
KUMAR GUPTA Date:
GUPTA 2024.12.03 01:11:57 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 7 of 38
4. Replication to the Written Statement was also filed by the plaintiff refuting the contentions raised by defendant and reiterating the contents of the plaint. It has been averred that the defendant has prepared the bills of the Work Order which was duly accepted by the plaintiff and contains signatures of the plaintiff, pursuant to which the same have been sent for payment to HQ. It has been stated that since the defendants have already passed the bills, no question arise for non-filing of bills by plaintiff and the defendant is trying to shy away from its responsibility and liability to pay the legitimate amount to the plaintiff.
(D) CRYSTALISING THE DISPUTE :-
5. On the pleadings of the parties and documents placed on record the following issues were framed for adjudication vide order dated 21.11.2023.
ISSUES.
(i) Whether the plaintiff has breached the terms of the Agreement between the parties? If so, its effect ? OPD.
(ii) Whether the plaintiff is entitled to recover the suit amount from the defendant ?OPP
(iii) Whether the plaintiff is entitled to any interest ? if so, at what rate and for what period ?OPP Digitally signed
(iv) Relief.
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2024.12.03
01:12:07 -0800
CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 8 of 38
(E) EVIDENCE OF PLAINTIFF.
6. Plaintiff, in support of his case, got examined himself as PW1 and reiterated the contents of the plaint on oath in his affidavit Ex.PW1/A. He got exhibited the Registration Certificate of his firm as Ex.PW1/1, Copy of Work order as Ex.PW1/2 (colly), Second and Final Bill of Rs.1,40,198/- on 22.03.2021 and sent vide demand No.209/EE(E) CSPZ/2021 dated 25.03.2021 as Ex.PW1/3, Reimbursement Letter No. AES/2021-22/60 dated 08.06.2021 of ESIC & EPF & CP @ 15% on ESIC & EPF as Ex.PW1/4, Completion Certificate/Performance Report vide letter No.62/EEE-1/CSPZ/2021-22 dated 21.0-5.2021 as Ex.PW1/5, Legal Notice dated 19.10.2022 as Ex.PW1/6, Demand Letters No. AES/2022-23/204 dated 24.09.2022, AES/2022-23/158 dated 23.08.2022, AES/2022-23/163 dated 24.08.2022, AES/2022-23/171 dated 20.09.2022 and AES/2021-22/112 dated 26.07.2021 as Ex.PW1/7 (colly), Relevant Clauses of GCC as Ex.PW1/8, details of ESIC Contribution by him to his employees from December, 2018 to November, 2019 downloaded from website www.in as Ex.PW1/9(colly), Challans of EPF deposited by him to his employees from website www.epfindia.gov.in as Ex.PW1/10 (colly), ESIC Receipts of monthly contribution made for the period December, 2018 to November, 2019 downloaded from website www.esic.in as Ex.PW1/11(colly), payment details of EPF contribution made for the period December, 2018 to November, 2019 downloaded from website www.epfindia.gov.in as Ex.PW1/12 (colly), Proof of depositing ESIC & EPF by him vide letter No. AES/2022-23/212 dated Digitally signed by 10.10.2022 and list of wages paid by him to his employees as Ex.PW1/13 MUKESH MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2024.12.03 01:12:15 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 9 of 38 (colly), office memorandum both dated 30.06.2015, 14.12.2007 and 08.06.2009 downloaded by him from the website of CPWD as Ex.PW1/14(colly), Non-Starter Report dated 12.07.2022 as Ex.PW1/15, Notice u/O XII Rule 8 of CPC dated 06.05.2023 given to the defendant as Ex.PW1/16 and Certificate u/s 65-B of the Indian Evidence Act, as Ex.PW1/17. He deposed that despite passing of the bills of the plaintiff, the defendant has failed to release the payments to the plaintiff and a legal notice dated 19.10.2022 in this regard also issued. It has further been deposed that the suit is correct and the defendants are liable to pay the outstanding amount alongwith interest and costs.
7. During cross-examination, Ld. Counsel for defendants has tried to puncture the testimony of PW1 on the point of compliance of terms & conditions of the Agreement, non-submitting the bill in question and other aspects including labour clearance. The witness/plaintiff has admitted that he has gone through the terms and conditions of NIT as well as the Agreement i.e. GCC before applying for the Work Order. He has deposed that five workers including reliever were employed for completion of the work order and the work was to be completed in one year. He has admitted that the labourers deployed by him in the present case are his permanent employees and the payment is being made to them on monthly basis. He has also admitted that copy of passed bill Ex.PW1/3 is a document of defendant No.1 corporation. He deposed that he did not submit any bill to the defendant No.1 corporation, however, volunteered that he had submitted the requisite documents for Digitally signed reimbursement of ESI and EPF alongwith proof of payment of wages.
by MUKESH MUKESH KUMAR KUMAR GUPTA Date: GUPTA 2024.12.03 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 10 of 38 01:12:23 -0800
He has further deposed that he has obtained the copy of demand raised by the Department Ex.PW1/3 through officials of the defendant No.1 corporation on his request, however, he has not filed any acknowledgement of having received the said document from the officials of the defendant. He has denied the suggestion that the payment can be released only upon submission of proper bills. He has deposed that the proof of payment of ESI & EPF i.e. Ex.PW1/13 on 10.10.2022 and he had not filed any documentary proof to show the payments to the workers deployed by him. However, he has voluntarily stated that the salary was paid online and he can file the proof of the same. He has denied the suggestion that he is not entitled to any interest as it is not part of the Agreement with the defendant. He has denied the suggestion that the department is not liable to pay any interest as he has not submitted any final bill and proof of the payment to the labourers alongwith ESI & EPF records to the department or that he has deposed falsely.
8. No other witness was examined by the plaintiff and the evidence of the plaintiff was closed by his statement on 04.11.2023.
(F) DEFENDANT'S EVIDENCE :-
9. The defendants in their defence got examined one Shri Prateek, Assistant Engineer (Elect-I), CSP Zone, Municipal Corporation of Delhi, Asaf Ali Road, Delhi on behalf of defendants as DW1 who has filed his evidence by way of affidavit Ex.DW1/A. He reiterated the contents of the Written Statement on oath. DW1 also deposed in his evidence that Digitally signed by the suit of the plaintiff is pre-mature, without any cause of action since MUKESH MUKESH KUMAR KUMAR GUPTA GUPTA Date:
CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 11 of 38 2024.12.03 01:12:38 -0800 the the plaintiff has not submitted any bill that he was contractually required to and that in the absence of any bill submitted by the plaintiff no amount can be said to be due or payable to the plaintiff and in this regard, he has relied upon the clause 7 of the GCC, Clause 9 of the GCC and clause 4 of the Work Order for the purpose of payment of the work and also for the reimbursement of ESIC and EPFO alongwith relevant records of payment made to the labourers. He has also deposed that the plaintiff has failed to comply with clause 17 and clause 45 of the GCC and unless the conditions of clause 17 and 45 are fulfilled, there can be no refund of security deposit to the plaintiff. He has deposed that the suit of the plaintiff is liable to be dismissed as misconceived and bereft of cause of action with exemplary costs.
10. The witness was subjected to a detailed cross-examination by Ld. Counsel for the plaintiff, during which DW1 has been confronted with certain documents which he has brought as per the Notice u/O XII Rule 8 of CPC viz copy of original Measurement Book No. 29046 as Ex.DW1/P-1, copy of Completion report of Work Order No. 109 as Ex.DW1/P-2, Copy of Original Test Check Statement of the said Work Order as DW1/P-3, copy of Third Party QC Report as Ex.DW1/P-4 and copy of Original passed Second Bill of the Work Order No. 109 as Ex.DW1/P-5. He has contended that he has not brought the Attendance Register/Log book of the labourers as the same is not traceable. He has admitted that the payment has not been released till date and as per departmental procedure, demand for the said bill amount has been sent to MUKESH by Digitally signed MUKESH Headquarters. He has admitted that they reimburse the amount of ESIC KUMAR GUPTA KUMAR Date:
GUPTA 2024.12.03 01:12:45 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 12 of 38 and EPF after the submission of proof by the contractor and the reimbursement was not made in case of plaintiff as the plaintiff did not furnish any proof of payment of labourer wages. He has admitted that the document Ex.PW1/4 was received by his department. After seeing documents the Ex.PW1/12 (colly), the witness has deposed that this document also do not reflect the payment of labourer wages and he does not know whether at the time of passing of the bill, it had been verified by the concerned officials as to whether the payment has been made to labourers by the Contractor or not. He has further deposed that he has verified the details of Attendance Register and Measurement Book before passing of the bill and the plaintiff had deposited earnest money to the tune of Rs.17,100/- and the same has not been refunded. He has also deposed that after joining, he has sent a letter to submit all documents pertaining to ESIC and EPF and the said letter was not pertaining to the Work Order No. 109. It has further been contended that no memo has been sent to the plaintiff to the effect that the payment of ESIC and EPF has not been made by the plaintiff. He has admitted that being the principal employer, the defendant corporation is liable to reimburse ESIC and EPF to the Contractor, but has volunteered to depose that the same is subject to the submission of proof of payment of wages to the labourers by the Contractor. He has further deposed that no security amount has been released to the plaintiff. He has denied the suggestion that the department is liable to pay interest as there has been delay in making the payment.
Digitally signed by
11. No other witness was examined by the defendants and the MUKESH MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2024.12.03 01:12:55 -0800
CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 13 of 38 evidence of the defendants was closed vide statement dated 24.01.2024.
(G) ARGUMENTS ADDRESSED:-
ARGUMENTS OF PLAINTIFF.
12. Ld. counsel for the plaintiff Shri Akhil Rana has vehemently argued that the plaintiff has successfully executed the awarded Work Order No.109 to the satisfaction of the defendants within time and as per the guidelines of the GCC. It has been argued that the defendant has already paid the entire outstanding amount of the bill in respect of the Work Order No. 109. Ld. Counsel has argued that the plaintiff has paid contribution towards ESIC and EPF of the employees for the period December, 2018 to November, 2019 besides a contractual/overhead profit @ 15% on ESIC/EPF claim paid by him to the workers and as such plaintiff is entitled for the same too. He has prayed that the suit be decreed with interest and costs but exemplary costs and damages should also be granted to the plaintiff against the defendants.
ARGUMENTS OF DEFENDANT:
13. Ld. counsel for the defendant Shri Sanjit Malik on the other hand has admitted that the principal amount qua the Work Order No. 109 has already been paid to the plaintiff. He has vehemently opposed the arguments of the Ld. Counsel for the plaintiff on the point of interest and has stated that the plaintiff has not submitted the bills qua the Work Order No. 109 and therefore not complied with the terms and conditions of the GCC which he himself is relying upon and as such the suit of the plaintiff is pre-mature and misconceived. Ld. Counsel for defendants Digitally signed by MUKESH MUKESH KUMAR KUMAR GUPTA CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 14 of 38 GUPTA Date:
2024.12.03 01:13:02 -0800 while making specific reference to clause 7 and 9 of GCC has vehemently argued that the submission of the bills is a pre-condition on which a cause of action can arise. On the aspect of refund of security deposit, Ld. Counsel has again referred to clause 17 and 45 of GCC to state that it was on account of plaintiff failure to complete the formalities, the same was not released as no occasion has arisen for the defendants to release the same. Ld. Counsel Shr Sanjit Malik has also referred to the Judgment of Hon'ble High Court in New Delhi Municipal Corporation & Ors. Vs. Sanjeev Kumar RFA No. 430/17 (DOD 22.03.2018). Finally, he has argued that the plaintiff has failed to comply with the provisions of MCD Act in as much as notice u/s 478 of the Act has issued to the defendant corporation was defective and the plaintiff is not entitled to the interest on the outstanding amount. He has further stated that the suit is liable to be dismissed with exemplary costs.
(H) ANALYSIS & DETERMINATION:-
14. I have heard the arguments addressed by the Ld. Counsels for the parties, perused the entire record including the oral and documentary evidence. I have given a thoughtful consideration to the same. My issue-
wise determination is as under:-
Issue No.1: Whether the plaintiff has breached the terms of the Agreement between the parties?
If so, its effect?OPD.
15. The onus of proving this issue was held upon the defendants who Digitally signed has taken a preliminary objection in its Written Statement that the suit is MUKESH by MUKESH KUMAR KUMAR GUPTA Date:
GUPTA 2024.12.03 01:13:09 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 15 of 38 liable to be dismissed for the reason that the plaintiff has breached the terms of the Agreement between the parties which governs the tender and work orders. This issue is pivotal to the entire controversy between the parties as there is no dispute regarding the award of contract, completion of work within stipulated time, labour complaint or any other issue regarding the satisfactory work being completed except the alleged non- compliance of GCC. Ld. Counsel for the defendant has vehemently taken only one stand in defence that the plaintiff has not submitted the bills (interim or final) and submission of proof of ESIC & EPF with bills, which he was contractually required to submit. It has also been argued that as per specific clause 7 and 9 of GCC and clause 4 of the work order, the contractor shall not be entitled for any payment, if he does not submit the certificate of completion and further plaintiff was required to submit final bill within one month of the date of the final certificate of completion furnished by the Engineer-in-charge or within three months of physical completion of the work.
16. Per Contra, Ld. counsel for the plaintiff has argued that the defendant had passed the bills which have been exhibited as Ex.PW-1/3 (colly) a copy of which was also provided to the plaintiff which he had accepted after counter signing the same and hence, there was due compliance of the clause 7 and 9 of the GCC and as such, the plaintiff is entitled for the amount of the bills as claimed and which the defendant is withholding without any justifiable reason. He has relied upon the decisions of Hon'ble High Court of Delhi in North Delhi Municipal Digitally signed MUKESH by MUKESH KUMAR KUMAR GUPTA Corporation Vs. Barahi Construction RFA (COMM) 6/2021 (Neutral Date:
GUPTA 2024.12.03 01:13:17 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 16 of 38 citation: 2021/DHC/958-D) and the judgment of Hon'ble Division Bench of High Court of Delhi in North Delhi Municipal Corporation Vs. Vipin Gupta RFA 160/2017 to support his point. He has further relied upon the judgment of Mr. Rajnish Yadav proprietor of M/s. Bharat Construction Company Vs. North Delhi Municipal Corporation, RFA (OS) (COMM) 1/2021 (Neutral citation:
2023/DHC/000174) to argue that once the defendant had accepted the execution of the work by the plaintiff as also after submission of the measurement duly entered in the Measurement Book even processed the bills pertaining to the work orders without any dispute whatsoever and therefore, the defendant was under the liability to pay the contractual work amount to the plaintiff.
17. Before proceeding further, I deem it appropriate to reproduce the Clause 4,7 and 9 of the GCC which has been referred to by both the parties:-
Clause 4 of Work order:
"It should be noted - (a) that as and when orders are given for execution of any extra/substitute item prior orders from the competent Authority to be obtained before execution of the same to avoid any further complications; (b) that contractor has to submit his RA/Final bill with measurement otherwise nothing will be consider due on account of work execution".
Clause 7 GCC:
"No payment shall be made for work estimated to cost Rs. Twenty thousand or less till after the whole of the work shall have been completed and certificate of completion given. For works estimated to cost over Rs. Twenty thousand, the interim or running account bills shall be submitted by the MUKESH by Digitally signed MUKESH contractor for work executed on the basis of such recorded KUMAR GUPTA KUMAR Date:
GUPTA 2024.12.03 01:13:34 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 17 of 38 measurement on the format of the department in the triplicate on or before the date of every month of the fixed for the same by the Engineer-in-Charge. The contractor shall not be entitled to be paid any such interim payment if the gross work done together with the note payment/adjustment of advances of material collected., if any, since the last such payment is less then the amount specified in Schedule 'F' in which case the interim bill shall be prepared on the appointed date of month after the requisite progress is achieved. Engineer-in Charge shall arrange to have the bill verified by taking or causing to be taken, where necessary, the requisite measurement of the work. In the even of the failure of the contractor to submit the bills progress is achieved. Engineer-in-charge shall prepare or cause to be prepared such bills in which event no claims whatsoever due to delays on payment including that of interest shall be payable to the contract. Payment on account of admissible shall be made by the Engineer-in-charge certifying the sum to which the contractor is considered entitled by way of interim payment at such rates as decided by the Engineer-in- charge of his Asstt. Engineer together with the account of the material as issued by the department, or dismantled materials, if any. The payment of passed bills will be subject to availability of funds in particular head of account from time to time in MCD. Payment of bills shall be made strictly on Queue basis i.e. first and past liabilities will be cleared and after that the release of payment for passed bills be in order of the demand received at HQ under particular head of accounts. No interest shall be payable to the contractor in case of delay in payment on account of non-availability of fund in the particular head of account of the MCD."
Section 9 of GCC "The final bill shall be submitted by the contractor in the same manner as specified in interim bills within three months of physical completion of the work or within one month of the date of the final certificate of completion furnished by the Engineer- in-charge whichever is earlier. Nor further claims shall be made by the contractor after submission of the final bill and these shall be deemed to have been waived and extinguished. Payment of Digitally signed by those items of the bill in respect of which there is no dispute and MUKESH MUKESH KUMAR KUMAR GUPTA of items in dispute, for quantities and rates as approved by GUPTA Date:
2024.12.03 01:13:43 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 18 of 38 Engineer-in-charge, will, as far as possible be made after the period specified here-in-under the period being reckoned from the date of receipt of bill by the Engineer-in-charge or his authorized Asstt. Engineer, complete with account of material issued by the department and dismantled. The payment of passed bills will depend on availability of funds in particular head of account from time to time in MCD. Payment of bills shall be made strictly on Queue basis i.e. first the past liability will be cleared and after that the release of payment for passed bills will be in order of the demand received at the HQ and the particular head of account. No interest shall be payable to the contractor in case of delay in payment on account of non-availability of fund in the particular head of account of MCD.
(i) If the tendered value of work is upto Rs.5 lacs : 6 months.
(ii) If the tendered value of work exceeds Rs.5 lacs :9 months."
18. On harmonious constructions of these provisions, it is clear that :
"a. for payments of bills regarding the works, the Engineer-in-Chief is required to certify the payments. b. the payments of the passed bills shall be made subject to availability of the funds in specific head from time to time with the MCD.
c. the payments of the bills shall be strictly made on queue basis, and d. the interest shall not be payable by MCD for delayed payment on account of non-availability of funds".
19. Hon'ble High Court of Delhi had the occasion of examining the aforesaid clauses where it has been observed that a corporation which gets the work done to the satisfaction cannot be allowed to include a term in a contract which is per se unconscionable and unreasonable in so far as the availability of the funds are concerned as there is no fixed period or mechanism to determine as and when these funds shall be made available MUKESH by Digitally signed MUKESH in a particular head of account that too without any knowledge of the KUMAR GUPTA KUMAR Date:
GUPTA 2024.12.03 01:13:50 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 19 of 38 aforesaid two factors to the plaintiff. Reliance placed on Sanjeev Kumar (supra). The Hon'ble High Court after examining the entire issue has even passed guidelines in the batch of appeals on 22.03.2018 where the bills after submission was required to be scrutinized by the Engineer in- chief and the work should be recorded in measurement book and bills should be passed. The Hon'ble High Court has been categoric that payment of 6 months and 9 months should be strictly adhered to and any delay in payment thereof would entail interest to be paid by the defendant corporation.
20. The Hon'ble High Court has gone to the extent of directing that for refund of security deposit and earnest money deposit the contractor shall unscrupulously comply with the condition of clause 17 and 45 for which even the payment of final bills need not be awaited. The Hon'ble High Court has further passed a plethora of directions for streamlining the aforesaid issue which results in avoidable litigation between the corporation and the contractors executing the work.
21. Adverting to the present case, it is not in dispute that the plaintiff firm was awarded WO No.109 dated 29.11.2018 Ex. PW1/2 (colly) by the defendant No.1 and the said work were duly executed by the plaintiff and as a precondition earnest money and contribution of ESIC & EPFO was also deposited by the plaintiff. It is also not in dispute that the work was completed within time and the plaintiff has completed the necessary formalities including the measurement immediately on completion of the Digitally signed MUKESH by MUKESH KUMAR KUMAR GUPTA work leading to preparation of the bills passed the Executive Engineer Date:
GUPTA 2024.12.03 01:14:05 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 20 of 38 concerned mentioning not only the details of the work done, rates on which the work was done and the actual amount due to be paid by the defendant corporation. The only question which has raised by the defendant is technical non-filing of final bills by the plaintiff which the plaintiff has refuted even during his cross-examination by stating that "I did not submit any bill to the MCD. Vol. I had submitted the requite documents for reimbursement of ESI and EPF alongwith proof of payments of wages.
I had obtained at the copy of the demand raised by the Department Ex.PW1/3 through officials of the defendant corporation on his request,. He has not filed any acknowledgement of having received the said document from the officials of the defendant.".
22. According to the plaintiff, bills were passed on 22.03.3021 and sent vides demand No. 209/EE(E)/CSPZ/2021 dated 25.03.2021 for Rs.1,40,198/- qua WO No.109.
23. The defendant on the other hand, has taken a technical objection that no bills were submitted for clearance by the defendant corporation and that Ex.PW1/3 (colly) was an internal noting of the defendant corporation only. However, if the cross-examination of DW1 Shri Prateeks AE is considered, he has not only admitted Ex.PW1/3 but has stated that these bills were issued by the defendant corporation and sent for demand liability to the Head Quarters. It has also been admitted that the running bills Ex.PW1/3 (colly) also bears the signature of contractor i.e. the plaintiff herein. If the bill is carefully examined and as already discussed the bill contain not only the details of work, rates on which the Digitally signed work was completed but also the total amounts against work order. The MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
GUPTA 2024.12.03 01:14:22 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 21 of 38 bill has been signed by the concerned JE, DCA, the Assistant Account Officer and even the Executive Engineer on behalf of the Commissioner MCD which clearly indicates that these bills have been duly approved by the competent officers of the defendant corporation who are duly authorised not only to verify and check the same but also approve the same. These bills are admittedly based on the measurement book which contains the details and particulars of work done duly cross-checked by the officers of defendant corporation after physical verification at the site. This bill has admittedly been also given to the plaintiff after his due signatures on the same. It is not the case of the defendant that this bill has been obtained by the contractor through illegitimate means or through back door. It is unfathomable for the court to understand as to how the defendant corporation will reach this stage of preparation, cross- verification and approval of the bills without the necessary formalities being completed by the plaintiff/contractor. Thus, taken on the yardstick of preponderance of probabilities, Ex.PW1/3(colly) cannot be merely called an internal noting of the department but is a document to which the plaintiff is clearly also a party.
24. It is further not in dispute that these bills were prepared, cross- checked and also sent to headquarters for demand liability and has been prepared strictly after verification on the basis of the measurement book. DW1 Shri Prateek during cross-examination has admitted that the final bill has not been released. As per departmental procedure, demand for the said bill amount has been sent to Headquarters during cross- examination. It is also an admitted case of the defendant that there is no MUKESH Digitally by MUKESH signed KUMAR KUMAR GUPTA Date: 2024.12.03 GUPTA 01:14:37 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 22 of 38 labour complaint pending or received against the plaintiff in respect of the work orders in question. Thus, taken comprehensively the defendant has though admitted the liability on satisfaction of the works covered by the work orders Ex.PW1/2(colly) but is deliberately denying the claim of the plaintiff on the plea of non-submission of bills. Certainly law and equity cannot permit the same to happen, more so, when there is clear admission of completion of work without any complaint or lack of compliance and even the liability by the corporation. The defendant has admittedly failed to show any document on record showing failure of compliance or guidelines at the end of the plaintiff.
25. Thus, on taken on the yardstick of preponderance of probabilities and on the basis of oral as well as documentary evidence on record, the court is of the considered opinion that the defendant has failed to discharge the onus casted upon him to prove the aforesaid issue.
26. This issue is, accordingly decided against the defendant and in favour of plaintiff.
Issue no.2. "Whether the plaintiff is entitled to recover the suit amount of Rs. 5,29,809/85ps- from the defendant ?OPP"
27. The onus of proving this issue was held upon the plaintiff who has examined himself as PW1 and filed his affidavit by way of evidence as Ex.PW1/A. This issue is pivotal to the entire controversy between the MUKESH by Digitally signed MUKESH parties as there is no dispute regarding the award of contract Ex.PW1/2, KUMAR GUPTA KUMAR Date:
GUPTA 2024.12.03 01:14:46 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 23 of 38 completion of work within stipulated time, labour complaint or any other issue regarding the satisfactory work being completed except the alleged non-filing of bills and resultant non-compliance of GCC. The defendants have taken only one stand in defence that since the plaintiff has not submitted the bills which he was contractually required to submit. He is not entitled to the amount of Work Order and as per specific clause 7 and 9 of GCC and clause 4 of the work order Ex.PW1/2, the contractor shall not be entitled for any payment, if he does not submit the certificate of completion and further plaintiff was required to submit final bill within one month of the date of the final certificate of completion furnished by the Engineer-in-charge or within three months of physical completion of the work.
28. On the other hand, the plaintiff has pressed upon the fact that the defendants had passed the requisite bill in respect of the work done which have been exhibited as Ex.DW-1/P-5 a copy of which was also provided to the plaintiff which he had accepted after counter signing the same and hence, there was due compliance of the clause 7 and 9 of the GCC and as such, the plaintiff is entitled for the amount of the bill as claimed and which the defendants is withholding without any justifiable reason and even passing of the same after due measurement. The plaintiff has relied upon the decisions of Hon'ble High Court of Delhi in North Delhi Municipal Corporation Vs. Barahi Construction RFA (COMM) 6/2021 (Neutral citation: 2021/DHC/958-D) and the judgment of Hon'ble Division Bench of High Court of Delhi in North Delhi Digitally signed MUKESH by MUKESH KUMAR KUMAR GUPTA Municipal Corporation Vs. Vipin Gupta RFA 160/2017 to support his Date:
GUPTA 2024.12.03 01:15:00 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 24 of 38 point. He has further relied upon the judgment of Mr. Rajnish Yadav proprietor of M/s. Bharat Construction Company Vs. North Delhi Municipal Corporation, RFA (OS) (COMM) 1/2021 (Neutral citation:
2023/DHC/000174) to submit that once the defendants had accepted the execution of the work by the plaintiff as also after submission of the measurement duly entered in the Measurement Book even processed the bills pertaining to the work order without any dispute whatsoever and therefore, the defendants were under the liability to pay the contractual work amount to the plaintiff.
29. As already discussed the Clauses 4, 7 and 9 of the GCC are the relevant clauses which are applicable to the court and has been a subject matter of discussion before the Hon'ble High Court of Delhi in Sanjeev Kumar's(supra) case where the Hon'ble High Court has held that the Engineer in chief or the concerned Engineer is required to certify the payments in respect of the amounts of the work done by the Contractors and the payments are to be made by the Defendant Corporation in respect of the passed bills subject to availability of the fund with a caveat that the same shall be made on queue basis as per the specified period of 6/9 months as the case may be beyond which interest shall be payable by the MCD for the delayed period. The Hon'ble High Court after examining the entire issue has even passed guidelines in the batch of appeals on 22.03.2018 where the work executed is required to be recorded in measurement book and bills should be passed after such certification.
30. In the present case, it is not in dispute that the plaintiff firm was Digitally signed by MUKESH MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2024.12.03 01:15:09 -0800
CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 25 of 38 awarded WO No.109 dated 29.11.2018, Ex.PW1/2 by the defendant No.2 for and on behalf of Defendant no.1 Corporation and the said work were duly executed by the plaintiff and as a precondition earnest money was also deposited by the plaintiff. It is also not in dispute that the work was completed within time and the plaintiff has completed the necessary formalities including the entering of work & measurement immediately in the measurement book Ex.DW1/P-1 on completion of the work leading to preparation of the bill Ex.DW1P-5 passed the Executive Engineer concerned mentioning not only the details of the work done, rates on which the work was done and the actual amount due to be paid by the defendant corporation. The only question which has raised by the defendant is technical non-filing of final bill by the plaintiff.
31. According to the plaintiff, bill Ex.PW1/3 was passed for Rs.2,61,896/- on 22.03.202- qua WO No.109 and the earnest amount for the same work of Rs. 17,100/- was also deposited as precondition and compliance of the tender document which has still not been returned by the defendants. The plaintiff has paid contribution ESIC & EPF of the employees of Rs.1,23,016.73ps. The testimony of PW1 in this regard is not only clear and categoric but has also not been breached during cross-examination.
32. The defendant on the other hand, has taken only one technical objection that no bill was ever submitted for clearance to the defendant corporation. However, if the cross-examination of DW1 Shri Prateek, AE is carefully examined, he has not only admitted the measurement Digitally signed by MUKESH MUKESH KUMAR KUMAR GUPTA Date:
GUPTA 2024.12.03
01:15:17 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 26 of 38
book Ex.DW1/P-1 but has admitted that the bill regarding the work order No.109 has been passed on 22.03.2021 by the defendant corporation and the payment has not been released till date and as per the departmental procedure, demand for the said bill amount has been sent to Headquarters. If the bill Ex.DW1/P-5 is carefully scrutinized and as already discussed they contain not only the details of work, rates on which the work was completed but also the total amounts against each work order. The bill has been signed by the concerned AE, the Assistant Account Officer and even the Executive Engineer on behalf of the Commissioner MCD which clearly indicates that this bill has been duly approved by the competent officers of the defendant corporation who are duly authorised not only to verify and check the same but also approve the same. The bill has been duly signed by the Contractor, the plaintiff herein as a mark of its acceptance. This bill is admittedly based on the measurement book Ex.DW1/P-1 which contains the details and particulars of work done duly cross-checked by the officers of defendant corporation after physical verification at the site. This bill has admittedly been also given to the plaintiff after his signatures on the same. It is not the case of the defendant that this bill Ex.DW1/P-5 or the measurement book Ex.DW1/P-1 has been obtained by the contractor through illegitimate means or through illegal access. It is unfathomable for the court to understand as to how the defendant corporation will reach this stage of preparation, cross-verification and approval of the bills without the necessary formalities being completed by the plaintiff/contractor. Thus, taken on the yardstick of preponderance of Digitally signed by MUKESH MUKESH probabilities, Ex.PW1/3 cannot be merely called an internal noting of the KUMAR KUMAR GUPTA GUPTA Date:
2024.12.03 01:15:25 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 27 of 38 department but is a document to which the plaintiff is clearly also a party.
33. It is further not in dispute and is rather an admitted fact during cross-examination of DW1 Shri Prateek that the bill Ex.PW1/3 was prepared, cross-checked and has been prepared after verification on the basis of the measurement book Ex.DW1/P-1. It is also an admitted case of the defendant that there is no labour complaint pending or received against the plaintiff in respect of the work orders in question. Thus, taken comprehensively the defendant has though admitted the liability on satisfaction of the works covered by the work order Ex.PW1/2 but is deliberately denying the claim of the plaintiff on the technical plea of non-submission of bill. As already discussed, law and equity cannot permit the same to happen, more so, when there is clear admission of completion of work without any complaint or lack of compliance and even the liability by the corporation, for which, the defendant has already sent the demand to the Head Quarter for payment. The defendant has admittedly failed to show any document on record showing failure of compliance or guidelines at the end of the plaintiff.
34. The claim of the defendant regarding non-compliance of contractual obligations and failure to submit the final bill as required under clause 7 and clause 9 of GCC and clause 4 of the work order besides compliance of clause 17 and 45 of GCC for refund of the security deposit has already been discussed in detail in the light of the judgment of Hon'ble High Court of Delhi in North Delhi Municipal Corporation Vs. Digitally signed by MUKESH MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2024.12.03 01:15:34 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 28 of 38 Sanjeev Kumar (RFA 430/2016) has already been duly shown by the plaintiff to rebut the claim for refund of the security deposit being pre- mature and untenable.
35. As already held in the foregoing paras, admittedly the plaintiff had completed the works awarded to him pursuant to work order Ex.PW1/2 and a completion report dated 29.11.2018 has been exhibited as Ex.DW1/P-2 as well as original Test Check Statement of the said Work Order Ex.DW1/P-3 alongwith Original Third Party QC Report Ex.DW 1/P-4 and even the bill has been prepared, verified and passed by the defendant corporation on 22.03.2021. The defendant has admitted its liability by preparing and passing of the bills Ex.PW1/2 which were counter signed by the plaintiff in token of its correctness.
36. As regards the amount of Rs.2,69,996/- withheld by the defendant in the bills Ex.PW-1/2, DW-1 Shri Prateek in his cross examination has admitted that this amount was withheld qua the work order No.109. It is now more than 3 and half years that the work has been completed and defect liability period has also expired and there is no complaint qua the work done by the plaintiff. The bill in question Ex.PW1/3 covering the amount of work done have admittedly been prepared by the defendant. The plaintiff on his part has issued a legal notice under Section 477 & 478 of DMC Act, dated 19.10.2022 Ex.PW1/6, the receipt of which has not been disputed or denied by the defendants in their affidavit of Admission Denial of documents but have merely mentioned that GCC MUKESH by Digitally signed MUKESH KUMAR was not complied with. The plaintiff has made request for passing of the KUMAR GUPTA Date:
GUPTA 2024.12.03 01:15:42 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 29 of 38 bills and release of payment in respect of the works completed pursuant to the work order Ex.PW1/2 awarded to him.
37. In so far as the refund of the security deposit of Rs.17,100/- against the work order is concerned, PW-1 Shri Umesh Tyagi, the plaintiff has categorically deposed that the same was not refunded despite satisfactory completion of the work covered under work order Ex.PW1/2. On the other hand defendant has claimed non-compliance of clause 17 & 45 of GCC. The defendant, DW1 during his cross-examination has admitted that as per record, the plaintiff had deposited earnest money to the tune of Rs.17,100/- and the same has not been refunded to the plaintiff till date.
38. Perusal of clause 17 of GCC makes it clear that plaintiff cannot claim the security deposit before the expiry of 12 months after the issue of the final certificate of completion of the work or till the time final bill has been prepared and passed, whichever is later. Clause 45 of the GCC also provides that security deposit of the work will not be refunded till the contractor produces a clearance certificate from the labour office.
However, it further says that if no complaint is pending on record till after three months after completion of the work and/or no communication is received from the labour officer to this effect till 6 months after the date of completion, it will be deemed to have received the clearance and the security deposit will be released, if otherwise due.
Digitally signed by 39. In the present case, the works were completed by the plaintiff and MUKESH MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2024.12.03 01:15:51 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 30 of 38 the bills were prepared and passed by the defendant on 22.03.2021. A period of almost 3 and half years has expired from the date of completion of work. Admittedly, there is no complaint regarding the quality of work done by the plaintiff nor there is any complaint against the plaintiff regarding any labour dispute in respect of the aforesaid work order Ex.PW1/2 (the maximum period for which was 6 months). A considerable time has expired since the contract was completed and admittedly there is no claim made by the defendant on account of any acts of commission or omission on the part of the plaintiff. DW-1 Shri Prateek has also admitted in his cross examination that there are no labour complaints in respect of the work order Ex.PW-1/2 . Hence, there are no grounds for the defendant to withhold the security amount of the plaintiff. Accordingly, taken on the yardstick of preponderance of probabilities and in view of oral as well as documentary evidence which has come on record, the plaintiff has been successful in discharging the onus for his entitlement.
40. Now adverting to the refund of ESIC & EPF contribution which the plaintiff has given to the employees during execution of Work Order, the plaintiff/PW1 during his cross-examination has deposed that he had submitted the requisite documents for reimbursement of ESI and EPF alongwith proof of payment of wages. He has further reiterated that he had submitted the proof of payment of ESI & EPF i.e. Ex.PW1/13 on 10.10.2022. On the other hand, DW1 Shri Prateek during his cross-
examination has deposed that he could not tell if the plaintiff had MUKESH by Digitally signed MUKESH KUMAR GUPTA submitted all the requisite documents including proof of payment of KUMAR Date:
GUPTA 2024.12.03 01:15:58 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 31 of 38 ESIC, EPF and wages to the labourers and that is what the bill was passed. However, no memo has been sent to the plaintiff to this effect. He has also volunteered deposed that he was not posted in the concerned Zone at that time. He has admitted as correct that plaintiff has deposited the ESIC and EPF alongwith the salary and being the principal employer, the defendant corporation is liable to reimburse ESIC and EPF to the Contractor, subject to submission of proof of payment of wages to the labourers by the contractors. The plaintiff has deposited the proof of payment of wages to the defendant No.1 corporation. Hence, the plaintiff is entitled for reimbursement of ESIC & EPF for a sum of Rs.1,23,016.73ps (rounded of to Rs.1,23,017/-).
41. In so far as the contractual/overhead profit @ 15% on ESIC and EPF claim of Rs.1,23,016.73ps, to the tune of Rs.18,452/- is concerned, the counsel for plaintiff has sought to rely upon Ex.PW1/14(colly) which are various letters/office memorandum issued by CPWD from time to time thereby raising the contractor's profit/overhead to the tune of Rs.15% from the existing 10% as per GCC of CPWD Works, 2008. As per the contention raised by ld counsel for plaintiff, these circulars are applicable to the Defendant Corporation mutatis mutandis as the GCC of MCD Ex.PW1/8 mentions its basis to be the GCC of CPWD. During the course of evidence, DW1 has categorically deposed that there are no circulars for overhead/contractual profit on ESIC and EPF in MCD Department. Essentially the Work Order Ex.PW1/2 which is the foundation of the instant case is based on accepted terms and conditions, Digitally to which, the plaintiff and the defendant are parties and these terms signed by MUKESH MUKESH KUMAR KUMAR GUPTA GUPTA Date:
CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 32 of 38 2024.12.03 01:16:08 -0800 cannot be interpolated to include terms which have not been specifically agreed to between them. While drawing the GCC, the defendant might have taken necessary conditions from the GCC of CPWD. However, the same does not ipso facto means that the GCC of CPWD would be binding on MCD and create any contractual obligation between the parties. In view thereof, the plaintiff has failed to prove the same on the yardstick of preponderance of probabilities and the court is not inclined to grant the same to the plaintiff.
42. Pertinent to point out that during pendency of the suit, the plaintiff has received the principal sum of Rs.2,69,996/- towards 2nd and final bill from the defendant on 11.03.2024 and the earnest money deposit of Rs.17,100/- on 15.11.2023. A statement to this effect has already been recorded before the court on 28.11.2024. Accordingly, the plaintiff shall only be entitled to the ESIC/EPF claim of Rs.1,23,016.73ps along with proportionate interest besides pre-suit, pendentelite and future interest which the plaintiff has been successful in establishing its entitlement on the yardstick of preponderance of probabilities. This issue is accordingly decided in favour of the plaintiff and against the defendant.
Issue no.3: "Whether the plaintiff is entitled to recover any interest from the defendant, if so, at what rate and for what period ?OPP"
43. The onus to prove this issue was on the plaintiff. The plaintiff has claimed pendentelite and future interest @ 14% per annum on the claimed amount of Rs.,5,29,809/85ps pendentlite and future interest from Digitally signed by MUKESH MUKESH the date of filing of the suit till its realization. KUMAR KUMAR GUPTA GUPTA Date:
2024.12.03 01:16:15 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 33 of 38
44. Ld. Counsel for the plaintiff has argued that defendant has illegally withheld the amount of bills. It is further argued that the plaintiff has suffered financial losses as defendant failed to release the payments within a period of 6/9 months as required under clause 9 of GCC and hence, the plaintiff is entitled for the interest on the delayed payment. Ld. Counsel for the defendant on the other hand, has staunchly refuted the same on the ground of non-compliance of terms and conditions of GCC.
45. The plaintiff has, however, failed to establish the basis on which the interest is being claimed @ 14% per annum by way of any clear or cogent evidence. Though there is no stipulation for interest on delayed payments, however, the Hon'ble High Court in Sanjeev Kumar's(supra) has clearly held that interest shall be levied to the defendant for delayed payment beyond 6/9 months as applicable. In NDMC & Others Vs. Shish Pal MANU/DE/1200/2018, it was observed that:-
"45. In the present case, the combined effect of the Clauses and the Circular and amendments, set out above, is that if the Corporation does not procure funds, it is not liable to even pay the Contractor any interest and the Contractor has no remedy. This by itself would mean that such a Clause could be read as leading to a contract without consideration and hence unlawful under Section 23 of the Contract Act.
The Corporation being an instrumentality of State, such a contract would also be opposed to public policy under Section 23 of the Contract Act. Section 46 of the Contract Act is also clear that if no time for performance of a contract is MUKESH by Digitally signed MUKESH KUMAR specified, it has to be performed within a KUMAR GUPTA Date:
GUPTA 2024.12.03 01:16:23 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 34 of 38 reasonable time. Reading these provisions together, it is clear that an open ended Clause which in effect says that the payment shall be made at an undetermined time in the future, subject to availability of funds, in a particular head of accounts is wholly unreasonable and such a term would also be unfair.....
71. A conjoint reading of Clauses 7 & 9 along with the amendment dated 19th May, 2006, clearly shows that for the payment of bills, the Contractors have to follow the queue basis and as and when the amount is available under the particular head of account, the amount would be payable. The amendment does not, however, have a condition that no interest is payable for delayed payment. Such a condition exists only in Clause 7. Clause 9, therefore, when read with the amendment has to mean that the Corporation itself considers 6 months and 9 months to be the reasonable periods for which the payments of the final bills can be held back. Obviously, therefore, if payments are made, whether on a queue basis or otherwise, beyond the period of 6 months and 9 months, interest is payable.
72. In view of the question of interest having been gone into detail and non-payment having been held to be illegal by various Single Judges of this Court, in cases involving the Corporations, it is held that non-payment of interest beyond the period of 6 months and 9 months, as stipulated in Clause 9 of the General Conditions of Contract, would be contrary to law. Hence, the Contractors are entitled for payment of interest after a period of 6 months - 9 months respectively."
Digitally signed 46. However, this court is of the considered opinion that the interest of MUKESH by MUKESH KUMAR KUMAR GUPTA Date:
GUPTA 2024.12.03 01:16:31 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 35 of 38 justice would be subserved if the plaintiff is awarded simple interest @ 8% per annum on the entitled amounts for the entitled period, which are calculated as under:-
(Table A) Pre-Suit Interest Sl. Amount Period Interest Amount No.
1. On Principal amount of the 22.09.2021(6 Rs.32,724.99ps outstanding bill(Rs.2,69,996/-) months as per clause 9 of GCC ) to 29.03.2023
2. Surety Amount of Rs.17,100/- 22.09.2021 Rs.2,938.39ps to 29.03.2023
3. ESIC/EPF amount of 08.07.2021(1 month Rs.16,959.46ps Rs.1,23,016/- after raising of claim) to 29.03.2023 Total pre-suit interest amount Rs. 52,622.84ps (Table B) Pendentelite Interest Sl. Amount Period Interest Amount No.
1. On Principal amount of the 30.03.2023 Rs.20,534.49ps outstanding bill(Rs.2,69,996/-) to 11.03.2024(date of actual payment by MCD)
2. Surety Amount of Rs.17,100/- 30.03.2023 Rs.862.03ps to 15.11.2023 (date of actual payment by MCD) Total pendentelite interest Rs. 21,396.52ps Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
GUPTA 2024.12.03 01:16:39 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 36 of 38 The plaintiff shall also be entitled to an interest @ 8% per annum on the outstanding ESIC & EPF amount of Rs.1,23,016.73ps from the date of fling of suit till its realisation. Reliance placed on Pt. Munshi Ram @ Associates (P) Lt. Vs. DDA, 2010 SCC Online Delhi 2444, Rajendra Construction Co. Vs. Maharashtra Housing & Area Development Authority and others, 2005 (6) SCC 678, McDermott International Inc. Vs. Burn Standard Co. Ltd. and others, 2006 (11) SCC 181, Rajasthan State Road Transport Corporation Vs. Indag Rubber Ltd., (2006) 7 SCC 700, Krishna Bhagya Jala Nigam Ltd. Vs. G. Harischandra, 2007 (2) SCC 720 & State of Rajasthan Vs. Ferro Concrete Construction Pvt. Ltd. (2009) 3 Arb. LR 140 (SC). This issue is, accordingly decided in favour of the plaintiff and against the defendants.
(I) CONCLUSION:-
ISSUE No.3: Relief.
47. In view of the aforesaid discussions and finding of the court on the aforesaid issues, the court is of the considered opinion that the plaintiff has been able to successfully prove its entitlement to the recovery against the defendant. The suit of the plaintiff is, accordingly decreed against the defendants for a sum of Rs.1,23,016/- + Rs.52,622.84ps + Rs.21,396.52ps, thereby totaling to 1,97,036.09ps ( rounded to Rs.1,97,036/-). with interest @ 8% per annum from the date of the judgment till its realization. Since the principal amount MUKESH by Digitally signed MUKESH outstanding is granted as Rs.1,23,016/-, the plaintiff shall also be KUMAR GUPTA KUMAR Date:
GUPTA 2024.12.03 01:16:48 -0800 CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 37 of 38 entitled to a simple interest @ 8% per annum on this amount of Rs.1,23,016/- pendentlite from the date of filing of the present suit till the date of the judgment.
48. In the specific facts and circumstances of the case, the plaintiff shall also be entitled to the costs of the suit throughout.
49. Decree sheet be drawn accordingly.
50. File be consigned to record room after due completion.
PRONOUNCED IN OPEN COURT .
Digitally signedMUKESH by ON THIS 30th NOVEMBER, 2024.
MUKESH KUMAR GUPTA KUMAR Date:
GUPTA 2024.12.03 01:17:00 -0800 (MUKESH KUMAR GUPTA) DISTRICT JUDGE (COMM. COURT)-07 CENTRAL/DELHI CERTIFICATE Certified that the judgment contains 38 pages and each page has been digitally signed by me. The judgment was pronounced on 30.11.2024 in open court and is being checked and uploaded on 03.12.2024. MUKESH Digitally by MUKESH signed KUMAR Date: 2024.12.03 KUMAR GUPTA GUPTA 01:17:06 -0800 (MUKESH KUMAR GUPTA) DJ (COMMERCIAL COURT)-07 CENTRAL/DELHI CS (Comm.) No. 562/2023 Umesh Tyagi Vs. Municipal Corporation o f Delhi & Anr. Page no. 38 of 38