Delhi District Court
M/S Makker Construction vs M/S New Look Builders And Developers ... on 20 January, 2026
IN THE COURT OF MS. VRINDA KUMARI:
DISTRICT JUDGE (COMMERCIAL COURT)-03, SOUTH EAST
DISTRICT, SAKET COURTS, NEW DELHI.
CS (COMM) No. : 396/23
In the matter of :
M/S MAKKER CONSTRUCTION
R/O: B2/210, Paschim Vihar,
Delhi- 110063 .....Plaintiff
VERSUS
M/S NEW LOOK BUILDERS & DEVELOPERS PVT. LTD.
(Erstwhile: 'Ansal Phalak Infrastructure Pvt. Ltd.')
R/O: 1st Floor, The Great Easter Centre 70,
Nehru Place, Delhi-110019
Also At:
Marketing Centre, B Block, Esencia,
Sector-67, Gurgaon - 122102 .....Defendant
Date of e-filing : 24.04.2023
Date of Institution : 27.04.2023
Date when final arguments concluded : 09.12.2025
Date of Judgment : 20.01.2026
CS (COMM) 396/23
M/S MAKKER CONSTRUCTION 20.01.2026 Page 1/42
Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD
JUDGMENT
1. Vide this judgment, I shall dispose of the present suit of the plaintiff against the defendant for recovery of a total sum of Rs. 91,01,724/- including principal amount of Rs. 46,01,724/- along with compensation in sum of Rs. 45,00,000/- qua various claims along with interest calculated @ 24% p.a. from the date of default till actual realization.
PLAINT
2. The case of the plaintiff is that it is a registered partnership firm engaged in the business of construction in Delhi-National Capital Region. The defendant company (formerly known as Ansal Phalak Infrastructure Pvt Ltd) is engaged in the business of real estate in the National Capital Region. The defendant approached the plaintiff for civil work at its site, namely, 'The Versalia', Sector 67A, Gurugram, Haryana. After completion of negotiations, defendant issued a Letter of Intent dated 03.12.2018 in favour of plaintiff for executing External Development Work (Sewerage and Storm Water Work) at the above said site. The Letter of Intent dated 03.12.2018 specifically mentioned the date of commencement of work as 05.12.2018 and date of completion as 'three months from the date of start'.
3. It is submitted that upon receipt of the above said LOI, the plaintiff expeditiously mobilized all its resources and manpower to execute the work at the project site as per the terms and conditions CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 2/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD agreed mutually between both the parties. On the basis of the assurance of the defendant, plaintiff executed the work at site in its full swing. In meetings held on several occasions such as on 12.01.2019, 19.01.2019, 25.01.2019, 02.02.2019, 09.02.2019 and 16.02.2019, the defendant also sought updates of the project site from the plaintiff and further course of action was decided by both the parties.
4. It is further submitted that in the month of January 2019, plaintiff submitted first running bill in sum of Rs. 8,18,841/- against the work done. Defendant released a part payment of Rs. 3,00,000/- in the bank account of the plaintiff in three tranches of Rs. 1,00,000/- each on 18.02.2019, 11.03.2019 and 12.03.2019 against the above said bill. On the basis of further work done, the plaintiff raised another consolidated running bill dated 14.03.2019 for an amount of Rs. 32,81,851/- which was duly acknowledged by the defendant. Vide email dated 28.03.2019, the plaintiff raised the issue of remaining payment and further requested the officials of the defendant to honor the payment schedule. Despite assurances, defendant failed to clear the bill and pay outstanding due amount.
5. It is the case of the plaintiff that to avoid their legal liability towards the plaintiff without providing any reason, the officials of the defendant forcefully asked the plaintiff in the month of April 2019 to cease the work at project site. Defendant was informed verbally and through emails about the forceful removal of the plaintiff from the project site and requested them to clear the due bills. Vide email dated 10.05.2019, a final bill in sum of Rs. 46,01,724/- was raised by the CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 3/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD plaintiff against the defendant for the work done and also shared the Bill of Quantities. Defendant did not respond to any of these emails. Plaintiff also issued letters dated 02.09.2019, 31.10.2019 and 31.12.2019 calling upon the defendant to clear the outstanding bills but to no avail. Plaintiff also issued emails dated 18.02.2020 and 28.10.2020 for release of outstanding amounts. For the first time, the defendant responded vide email dated 03.11.2020 denying its liability to pay. Finally, the plaintiff was constrained to issue Legal Notice dated 31.01.2023 against the defendant seeking recovery of its legitimate due amount. Vide reply dated 13.03.2023, the defendant refuted all its liabilities.
6. In these circumstances, the plaintiff has filed the present civil suit against the defendant claiming recovery of (i) Rs. 46,01,724/- towards pending payment of final bill, (ii) Rs. 25,00,000/- on account of loss of profit, (iii) Rs. 20,00,000/- on account of loss of business opportunity, and (iv) interest @ 24% p.a. from the date of default till actual realization.
7. It is noted that prior to filing of present suit, plaintiff moved an application in terms of Section 12A of the Commercial Courts Act, 2015 before South-East District Legal Services Authority for conducting Pre-Litigation Mediation. Despite issuance of two notices, none appeared on behalf of the defendant. Accordingly, Non- Starter Report dated 24.03.2023 (Ex.PW1/33) was issued by South-East DLSA.
CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 4/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD WRITTEN STATEMENT
8. In its Written Statement, the defendant has vehemently denied the averments of the plaintiff in the plaint. It is submitted that plaintiff had approached the defendant in the year 2018 representing that the plaintiff provided construction related service and had a long experience in said field. Based on the assurances of the plaintiff, the defendant issued a Letter of Intent dated 03.12.2018 for the purpose of External Development Work (Sewerage and Storm Water Work) in its project. It is submitted that it was agreed between the parties that LOI shall not be a binding contract between the parties and the parties shall execute specific Contract Agreement within a period of 15 days from the date of LOI subject to the plaintiff furnishing various documents. Admittedly, the plaintiff failed to furnish the requisite document and therefore no agreement in relation to any services was executed between the plaintiff and the defendant. It is submitted that there is no privity of contract between the parties.
9. It is submitted that LOI is not a formal agreement between the parties and can only be considered as an intention of the parties to enter into the contract. In terms of clause 1 and clause 2 of the LOI, there was always an understanding between the parties that LOI was not a legally binding contract.
10. It has further been contended by the defendant that it decided not to go ahead with the plaintiff and instead allotted the said works to one Sh. Sanjay Sudhakar Bhagade, proprietor of M/s Business Park vide work order dated 05.09.2019. Even a Construction Agreement CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 5/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD was executed between Ansal Phalak Infrastructure and M/s Business Park Under this Agreement, M/s Business Park was solely responsible for engaging any services for the performance and execution of the Construction Agreement and in the interest of the Project.
11. It is submitted that the above said Construction Agreement permitted M/s Business Park to appoint a sub contractor, however the liability for such works in respect of the defendant shall be of M/s Business Park only. It is further submitted that even assuming without admitting that the plaintiff has any alleged dues under the inter se arrangement between the plaintiff and M/s Business Park, then also the said amount is recoverable from Sh. Sanjay Sudhakar Bhagade, proprietor of M/s Business Park.
12. It is also the contention of the defendant that it has been denying its liability towards the plaintiff since beginning. Reliance has been placed upon email dated 03.11.2020 where the defendant requested the plaintiff to approach Sh. Sanjay Bhagade for resolution of the dispute, if any. In the Reply dated 13.03.2023 to the legal notice dated 31.01.2023 issued by the plaintiff, the defendant refuted the demand raised by the plaintiff primarily on the grounds of privity of contract.
13. It is also the case of the defendant that various emails dated 28.03.2019, 10.05.2019, 31.12.2019 would show that when plaintiff was unable to recover, the amount in sum of Rs. 43 lac from Sh. Bhagade, the plaintiff has filed the present case against the defendant as an afterthought to unlawfully extort money from the plaintiff. It is CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 6/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD further submitted that the defendnant has not acknowledged even a single invoice raised by the plaintiff. It is submitted that the plaintiff is guilty of suppressing material facts from the Court. The defendant has denied all the allegations of the plaintiff.
REPLICATION
14. In the replication, the plaintiff has denied the contentions of the defendant and has reiterated its stand in the plaint. It is submitted that defendant itself had admitted that the transactions were supposed to be held between the plaintiff and the defendant and there was no third party involved in the transactions. Accordingly, the defendant had issued LOI dated 03.12.2018 for its Project.
15. It is further submitted by the plaintiff that after receipt of the LOI, the plaintiff being a professional contractor mobilised its resources and executed the work to the utmost satisfaction of the defendant. The Project site was of defendant only and the work was carried out as per the drawings provided by the defendant. It is submitted that though no formal contract was entered among the parties but it cannot be overlooked that both the parties had performed their duties as per the original agreement. The defendant provided all the drawings to the plaintiff and the plaintiff executed the work at the Project site of the defendant as per its directions. The part performance of the contract had been performed by both the parties.
16. It is the case of the plaintiff that the defendant took initiative and further directed the plaintiff to execute the work as per CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 7/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD drawings attached in the emails. Officials of the defendant were always present in the meetings wherein specific instructions were given by the officials of the defendant to the plaintiff to execute the work on immediate basis. It is also submitted that the Work Order dated 05.09.2019 relied upon by the defendant is a forged and a fabricated document.
17. It is submitted that after execution of work by the plaintiff under the direct instructions of the defendant, plaintiff raise invoices which were shared through emails only. The email dated 30.01.2019 would show that the defendant directed the plaintiff to submit documents for labour license and Workmen Compensation Policy. It is submitted that all the emails should be read together and not in piecemeal. In the email dated 10.05.2019, it was categorically written by the plaitiff that the payment against the work done would be reimbursed by the defendant. All the invoices were raised against the defendant only and it is nowhere mentioned in this email that only Sh. Sanjay is liable to clear the invoices.
ISSUES
18. On completion of pleadings, Vide Order dated 06.10.2022 following issues were framed by my Ld. Predecessor:-
"1. Whether the plaintiff is entitled to decree for a sum of Rs. 91,01,724/- against the defendant, as prayed for? OPP CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 8/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD
2. Whether the plaintiff is entitled to interest. If yes, at what rate and for which period? OPP
3. Relief."
PLAINTIFF'S EVIDENCE
19. Plaintiff led PE in its favour and examined Sh. Om Prakash Makker, AR of the plaintiff firm as PW1. His affidavit in evidence is Ex.PW1/A. His affidavit u/O XI R 6 (3) CPC is Ex.PW1/B. His affidavit u/s 65B of the Indian Evidence Act is Ex.PW1/C. He proved Authorization Letter dated 31.01.2023 as Ex.PW1/1. True copy of Memorandum of Acknowledgment Receipt of documents is Mark A. True copy of the GST particulars of the plaintiff firm is Ex.PW1/2. True copy of GST particulars of defendant is Ex.PW1/3. True copy of the company Master Data of the defendant is Ex.PW1/4. Original Letter of intent dated 03.12.2018 is Ex.PW1/5. True copy of email dated 14.01.2019 along with minutes of the meetings dated 12.01.2019 are Ex.PW1/6 (Colly). True copy of the email dated 18.01.2019 along with minutes of meetings dated 18.01.2019 are Ex.PW1/7 (Colly). True copy of the email dated 19.01.2019 along with minutes of the meetings dated 19.01.2018 are Ex.PW1/8 (Colly). True copy of email dated 21.01.2019 along with minutes of meetings dated 21.01.2019 are Ex.PW1/9 (Colly). True copy of the email dated 30.01.2019 is Ex.PW1/10.
20. True copy of the email dated 31.01.2019 is Ex.PW1/11. True copy of the first invoice raised by the plaintiff firm is Ex.PW1/12.
CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 9/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD True copy of the email dated 01.02.2019 is Ex.PW1/13. True copy of the email dated 04.02.2019 along with minutes of meetings dated 02.02.2019 are Ex.PW1/14 (Colly). True copy of email dated 08.02.2019 is Ex.PW1/15. True copy of the email dated 12.02.2019 along with minutes of meetings dated 09.02.2019 are Ex.PW1/16 (Colly). True copy of the email dated 15.02.2019 is Ex.PW1/17. True copy of the email dated 20.02.2019 is Ex.PW1/18. True copy of the email dated 28.03.2019 is Ex.PW1/19. True copy of the email dated 10.05.2019 is Ex.PW1/20.
21. True copy of the email dated 31.10.2019 along with the mail attachment, summary of bills, BOQ and abstract of quantities is Ex.PW1/21 (Colly). True copy of the email dated 31.12.2019 is Ex.PW1/22. Office copy of letter dated 18.02.2020 is Mark B. Original Speed Post receipt of letter dated 18.02.2020 and printout tracking report is Ex.PW1/23 (Colly). Copy of the letter dated 28.10.2020 is Mark C. Original speed post receipt of the letter dated 28.10.2020 is Ex. PW1/24. Email dated 29.10.2020 is Ex.PW1/25. True copy of the email dated 03.11.2020 is Ex.PW1/26. True copy of the email dated 21.06.2021 is Ex.PW1/27. True copy of the legal notice dated 31.01.2023 is Ex.PW1/28. Original speed post receipt is Ex.PW1/29. True copy of tracking report is Ex.PW1/30.
22. Original reply to the legal notice dated 13.03.2023 is Ex.PW1/31. Photocopy of the invoices showing work done at the project site is Mark D. True copy of the Income Tax Returns of the plaintiff firm for the financial year 2017-2018 along with computation, CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 10/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD 2018-2019 along with computation, 2019-2020 along with computation is Mark E (Colly). Photocopy of Bank Account Statement of the plaintiff of Axis Bank Account is Mark F. Photocopy of the sanction letter showing OD limit from the bank is Mark G. Copy of the tenders applied by the plaintiff firm in 2019 is Mark H. True copy of the GST Returns showing the receipt of amount from the defendant is Ex.PW1/32. Original Non-Starter Report dated 24.03.2023 is Ex.PW1/33.
DEFENDANT'S EVIDENCE
23. Defendants led DE in its favour and examined Sh. Sunil Kumar, AR of the defendant company as DW1. His affidavit in evidence is Ex.DW1/A. He relied upon various documents. Letter of Authorization dated 13.04.2024 is Ex.DW1/1. Board Resolution dated 13.02.2024 is Ex.DW1/2. Copy of construction agreement dated 30.10.2018 is Mark X. Copy of work order dated 05.09.2019 is Mark Y.
24. I have heard the detailed final arguments on behalf of both the parties and have perused the record carefully including the written submissions as well as case laws.
DISCUSSION
25. During the course of arguments, plaintiff has relied upon the following case laws:
(i) Judgment dated 12.01.2006 of Hon'ble Supreme Court of India in Civil Appeal Nos.
CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 11/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD 8357 and 8358 of 2003 titled as Dresser Rand S.A. Vs. Bindal Agro Chem Ltd. and Ors;
(ii) Judgment dated 19.11.1998 of Hon'ble Supreme Court of India in Civil Appeal No. 5810 of 1998 (Arising out of SLP (C) No. 7241 of 1997) titled as Rickmers Verwaltung GMB H Vs. The Indian Oil Corporation Ltd;
(iii) State of West Bengal and Others Vs. S.K. Maji 2025 SCC OnLine Cal 3945;
(iv) Judgment dated 25.07.1984 of Hon'ble Supreme Court of India in Civil Appeal No. 2054 of 1973 titled as A.T. Brij Paul Singh and Ors Vs. State of Gujarat;
(v) Judgment dated 20.01.2025 of Hon'ble Culcatta High Court in FMAT (ARBAWARD)/2/2024 titled as Executive Engineer Vs. M/s S. Bose and Others;
(vi) Netaji Subhash Institute of Technology Vs. Surya Engineers and Another 2024 SCC OnLine Del 8028;
(vii) Judgment dated 10.02.1999 of Hon'ble Supreme Court of India in Civil Appeal No. 1209 of 1992 titled as Dwaraka Das Vs. State of Madhya Pradesh and Ors.
(viii) Judgment dated 03.10.2023 of Hon'ble High Court of Delhi in O.M.P. (COMM) 405/2023, IA Nos. 19196/2023 (Stay) and 19198/2023 titled as Bharat Sanchar Nigam Ltd. Vs. Vihaan Networks Ltd.
26. During the course of arguments, defendant has relied upon following case law:
(i) South Eastern Coalfields Ltd. and Ors. Vs. Kumar's Associates AKM (JV) (2021) 9 SCC 166 wherein it was reiterated that a Letter of Intent may be construed as a letter of acceptance if such intention is evident from its terms.
27. I have considered the case laws carefully.
CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 12/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD Judgments pertaining to Letter of Intent
28. In Dresser Rand S.A.'s Judgment, it has been held by Hon'ble Supreme Court of India as under:
"34. It is now well-settled that a Letter of Intent merely indicates a party's intention to enter into a contract with the other party in future. A Letter of Intent is not intended to bind either party ultimately to enter into any contract. This Court while considering the nature of a Letter of Intent, observed thus in Rajasthan Co-operative Dairy Federation Ltd. V. Maha Laxmi Mingrate Marketing Service Pvt. Ltd. MANU/SC/0024/1997: AIR 1997 SC 66:
"... The Letter of Intent merely expressed an intention to enter into a contract. There was no binding legal relationship between the appellant and Respondent 1 at this stage and the appellant was entitled to look at the totality of circumstances in deciding whether to enter into a binding contract with Respondent 1 or not."
It is no doubt true that a Letter of Intent may be construed as a letter of acceptance if such intention is evident from its terms. It is not uncommon in contracts involving detailed procedure, in order to save time, to issue a letter of intent communicating the acceptance of the offer and asking the contractor to start the work with a stipulation that the detailed contract would be drawn up later. If such a letter is issued to the contractor, though it may be termed as a Letter of Intent, it may amount to acceptance of the offer resulting in a concluded contract between the parties. But the question whether the letter of intent is merely an expression of an intention to place an order in future or whether is a final acceptance of the offer thereby leading to a contract, is a matter that has to be decided with reference to the CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 13/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD terms of the letter. Chitty on Contracts (Para 2.115 in Volume 1- 28th Edition) observes that where parties to a transaction exchanged letters of intent, the terms of such letters may, of course, negative contractual intention; but, on the other hand, where the language does not negative contractual intention, it is open to the courts to hold the parties are bound by the document; and the courts will, in particular, be inclined to do so where the parties have acted on the document for a long period of time or have expended considerable sums of money in reliance on it. Be that as it may."
29. In Rickmers Verwaltung GMB H's case, it has been held by Hon'ble Supreme Court of India as under:
"15. In this connection the cardinal principle to remember is that it is the duty of the court to construe correspondence with a view to arrive at a conclusion whether there was any meeting of mind between the parties, which could create a binding contract between them but the Court is not empowered to create a contract for the parties by going outside the clear language used in the correspondence, except insofar as there are some appropriate implications of law to be drawn. Unless from the correspondence it can unequivocally and clearly emerge that the parties were ad idem to the terms, it cannot be said that an agreement had come into existence between them through correspondence. The Court is required what the parties wrote and how they acted and from that material to infer whether the intention as expressed in the correspondence was to bring into existence a mutually binding contract. The intention of the parties is to be gathered only from the expressions used in the correspondence and the meaning it conveys and in case it shows that there had been meeting of mind between the parties and they had actually reached an CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 14/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD agreement, upon all material terms, then and then alone can it be said that a binding contract was capable of being spelt out from the correspondence."
Judgments related to Loss of expected profit
30. In S.K. Maji's case, the primary issue before Hon'ble High Court of Calcutta was whether the claim for loss of profit at 15% raised in the statement of claim could have been awarded by the Ld. Sole Arbitrator in the absence of any proof either oral or documentary. It was held as follows:
"14. There lies a fundamental difference between claims raised by contractors against employers for loss of profit and loss of profitability. While loss of profit indicates claims for loss of expected profit due to unexecuted work resulting from an illegal or premature termination of the contract, loss of profitability of loss of business signifies claims for reduction in the estimated profit margin due to prolongation of the contract or claims for loss of opportunity to take up other projects during the extended period where the contractor could have earned a profit. Loss of profit and loss of profitability are often mistakenly used interchangeably which has been noted by the Delhi High Court in Ajay Kalra v DDA as follows: (SCC OnLine Del para 137) "137.'Loss of Profits' and 'Loss of Profitability' has often been interchangeably used in recovery cases. The former stands for the loss incurred due to the non-completion/ prevention from completing of the contract on account of breach committed by the respondent. The latter refers to the loss incurred due to the delay in the project attributable to the respondent, due to which the claimant has lost the opportunity to earn profits CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 15/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD through other projects after the contractual period."
15. It is now an established position of law that claims for loss of profitability are not generally allowed in the absence of evidence to prove such loss. The view of the courts on this issue is explicit through judgments like Unibros case; Bharat Coking Coal Ltd. case and Batliboi Environmental Engg. Ltd. case, as has also been relied upon by the appellants in this matter. However, reliance on such cases is not apposite in the present case since those conflate the concepts of loss of profit and loss of business. It is pertinent to note here that even though the Apex court used the expression 'loss of profits' in essence the claim was that of 'loss of profitability' and thus the requirement to prove actual loss was mandated only for losses arising out of delay and should not be misunderstood to be applicable to loss of profits for unexecuted works.
17. The Supreme Court in Unibros case placed reliance on Bharat Coking Coal Ltd. case, wherein the Court on similar lines had observed that it was not uncommon for contractors to claim loss of profit as a result of reduced turnover due to work completion delays. In such cases however, they should prove that if they had received the sum due under the contract, they could have used it to fund another business venture in which they could have profited.
Unless such a plea was raised and substantiated, the claim for loss of profits could not be granted.
19. However, if the contract is delayed due to breaches on the part of the employer the contractor would be entitled to recover his profit on the basis of reasonable expectation of profits which could be earned if not for the illegal termination of the contract.
CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 16/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD
22. A Division Bench of the Delhi High Court in Cobra Instalaciones Y Servicios, S.A. & Shyam Indus Power Solution Pvt Ltd. v. Haryana Vidyut Prasaran Nigam Ltd. upheld the quantification of damages by an arbitrator through "honest guesswork" or a "rough and ready method"
since it was difficult to quantify the precise amount of loss suffered by the party.
23. Subsequently, in MSK Projects India (JV) Limited v. State of Rajasthan, the Supreme Court clearly stated that a claim of expected profits is legally admissible on proof of the breach of contract by the erring party, as a reasonable expectation of profit is implicit in a works contract and its loss has to be compensated by way of damages once the breach on part of the other party is established and no other proof of loss shall be required. It was observed therein as follows: (SCC pp. 586-587, paras 38 and 39) "38. In common parlance, 'reimbursement' means and implies restoration of an equivalent for something paid or expended. Similarly, 'compensation' means anything given to make the equivalent. (See State of Gujarat v. Shantilal Mangaldas [(1969) 1 SCC 509 : AIR 1969 SC 634] , Tisco Ltd. v. Union of India [(2001) 2 SCC 41 : AIR 2000 SC 3706] , GDA [(2004) 5 SCC 65 : AIR 2004 SC 2141] and HUDA v. Raj Singh Rana [(2009) 17 SCC 199 : (2011) 2 SCC (Civ) 136 : AIR 2008 SC 3035] .) However, in Dwaraka Das v. State of M.P. [(1999) 3 SCC 500 : AIR 1999 SC AIR 1977 SC 1481 2024 SCC OnLine Del 2755 2011( 10) SCC 573 1031] it was held that a claim by a contractor for recovery of amount as damages as expected profit out of contract cannot be disallowed on ground that there was no proof that he suffered actual loss to the extent of amount claimed on account of breach of contract.
39. In A.T. Brij Paul Singh v. State of Gujarat [(1984) 4 SCC 59 : AIR 1984 SC 1703], while CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 17/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD interpreting the provisions of Section 73 of the Contract Act, 1972, this Court held that damages can be claimed by a contractor where the Government is proved to have committed breach by improperly rescinding the contract and for estimating the amount of damages, the court should make a broad evaluation instead of going into minute details. It was specifically held that where in the works contract, the party entrusting the work committed breach of contract, the contractor is entitled to claim the damages for loss of profit which he expected to earn by undertaking the works contract. Claim of expected profits is legally admissible on proof of the breach of contract by the erring party. It was further observed that : (SCC pp. 64-65, para 10) "10. ... What would be the measure of profit would depend upon the facts and circumstances of each case. But that there shall be a reasonable expectation of profit is implicit in a works contract and its loss has to be compensated by way of damages if the other party to the contract is guilty of breach of contract cannot be gainsaid." (emphasis supplied)
25. It is a general principle of law of contract that in case of breach of contract, the injured must be put back in the same position that he would have been if he had not sustained the wrong. Once the contractor has established an illegal and unjustified termination of contract and a breach thereof on the part of the employer, which was also a finding of fact by the sole arbitrator in the present case, the contractor cannot be further obligated to establish a loss suffered on account of such breach, because a reasonable expectation of profit is implicit in a works contract. [See MSK Projects India (supra)]. Therefore, any loss occasioned due to illegal termination of works contract, has to be compensated by way of damages once the CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 18/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD breach on part of the erring party is established. This is obviously subject to the caveat that the compensation must be reasonable and the parties should not be allowed to make a windfall profit, by a mere allegation of breach of contract. However, it is a settled position of law that for estimating damages, courts are not required to go into the minute details; a broad evaluation of the same would suffice.
38. In light of the distinction between loss of profits and loss of profitability/loss of business as elucidated hereinbefore and the fact that in cases of damages claimed by a contractor where the Government is proved to have committed breach by improperly rescinding the contract and for estimating the amount of damages, the court should make a broad evaluation instead of going into minute details, the respondent contractor in the present case should be entitled to loss of profit at the rate of 10% as awarded by the learned sole arbitrator."
31. In A.T. Brij Paul Singh's case, it was held by Hon'ble Supreme Court of India as follows:
"11. Now if it is well-established that the respondent was guilty of breach of contract in as much as the recession of contract by the respondent is held to be unjustified, and the plaintiff-contractor had executed a part of the works contract, the contractor would be entitled to damages by way of loss of profit, Adopting the measure accepted by the High Court in the facts and circumstances of the case between the same parties and for the same type of work at 15% of the value of the remaining parts of the work contract, the damages for loss of profit can be mesured."
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32. In Executive Engineer Vs. M/s S. Bose and Others's case, the issue before Hon'ble High Court at Calcutta was whether Ld. Arbitrator could have allowed the claim no. 6 under the heading loss of profit at 5% of the contract value when the claim no. 7 for damages /loss arising out of idling of machinery, site overhead expenses, expenditure over engagement of highly skilled, semi-skilled and under- skilled labourer from the Main land had been rejected. Regarding this specific issue, it was held as follows:
"29. The submission of the appellant that the conclusion in respect of claim no.6 cannot be at variance with the conclusion in respect of claim no.7, in our opinion, does not hold water. The claim no.7 is with regard to damages and loss due to idling of machineries, Tools and Plants and site over head expenses for the entire period. The claim under this head is also based on alleged procurement of unskilled, semi- skilled, highly skilled workers from the mainland but there is no material and evidence in support of this distinct claim. However, insofar as claim no.6 is concerned, the claimant has produced income tax returns showing a steady decline in the gross total income starting from the years 2010-2011 to 2015-2016. It is also not in dispute that the tender amount was inclusive of a margin of 15% as percentage on cost of materials and labour to cover all overheads and profits."
33. It was further held by Hon'ble High Court at Calcutta that the circumstances of the case gave rise to a claim u/s 73 of the Indian Contract Act in favour of the claimant for loss of profits. The same was distinct from the damages sought to be quantified by the claimant under claim no. 7. It was held by Ld. Arbitrator that the work could not be CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 20/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD performed on account of breach of contract by the employer. The tender amount included 15% being percentage on cost of materials and labour to cover all overheads and profits. Accordingly, net tender/ contract amount was calculated by excluding this 15%. Deployment of any material on site including labour was not accepted by Ld. Arbitrator and he limited the amount of loss of profit to 5% of the net contract amount. Hon'ble High Court at Calcutta upheld the Award of the Arbitrator.
34. In Netaji Subhash Institute of Technology's case, Hon'ble High Court of Delhi upheld the grant of 2% of the value of work remaining to be done for the purpose of expected profits. Reliance was placed upon A.T. Brij Paul's case.
35. In Dwaraka Das's case, the Trial Court had granted 10% of the contract price as damages on account of breach of contract it was held by Hon'ble Supreme Court of India that as and when the breach of contract is held to have been proved being contrary to law and terms of the agreement, the erring party is legally bound to compensate the other party to the agreement.
36. In Bharat Sanchar Nigam Ltd's case, the Arbitral Award was challenged by the petitioner u/s 34 of the Arbitration and Conciliation Act, 1996 before Hon'ble High Court of Delhi. In this case, the respondent / claimant's bid was accepted by the petitioner and respondent/claimant was declared as the successful L1 bidder. The petitioner directed the respondent/claimant to initiate all preparatory actions and to give unconditional acceptance for field test of life traffic for three months. This requirement was accepted by the CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 21/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD respondent/claimant and it sought issuance of Advance Purchase Order (APO). The Advance Purchase Order was issued by the petitioner and accepted unconditionally by the respondent/claimant. The respondent /claimant started deployment of resources and performance of project related work as per the requirement of the tender of the petitioner. However, petitioner did not issue the purchase order and ultimately withdrew the APO. Aggrieved with such withdrawal of the APO, the respondent raised various claims in the Arbitral proceedings including reimbursements of expenses incurred, loss of profit /expected profit /anticipated profit and loss of future earning /business opportunities/ business valuation.
37. One of the issues in Bharat Sanchar Nigam Ltd's case was whether any contract came into existence on the acceptance of APO and furnishing of PBG even in the absence of issuance of purchase order. Ld. Arbitrator decided this issue holding that APO was only an intention of BSNL to enter into a contract. It was further held that there was a specific provision expressing intention of the parties to have a formal contract in the form of issuance of Purchase Order. It was held by Ld. Arbitrator that when such a specific mode of entering into a contract was stipulated, contract could be treated as fructified only on the issuance of a Purchase Order. It was held that an enforceable contract did not come into existence. This issue, however, was not challenged in the petition u/s 34 of the Arbitration and Conciliation Act,1996 before Hon'ble High Court of Delhi. The issues considered by Hon'ble High Court of Delhi were whether the claimant undertook any work and CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 22/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD incurred expenditure after the issuance of APO and whether the claimant would be entitled to the payment for work executed by it even when no concluded contract came into existence. The petitioner had not denied that the claimant had undertaken the tasks as mentioned in the claim. It was held by Ld. Arbitrator that work had been undertaken by the claimant at the instance and on the specific instructions of the petitioner.
38. Regarding the issue whether claimant was entitled to any payment even when no concluded contract had come into existence, Ld. Arbitrator rejected the claim towards loss of profit / expected profit / anticipated profit, certain reimbursements and also loss of future earning / business opportunities / business valuation. Only part of the claims pertaining to reimbursements of salary, costs incurred on purchases and interest was allowed. While upholding the Award and findings of Ld. Arbitrator, it was held that claimant was entitled to reimbursement of expenses incurred by it notwithstanding absence of concluded contract was predicated upon Section 70 of the Contract Act which incorporates the doctrine of quantum meruit. The observation of Ld. Arbitrator that the absence of a contract would not deprive the respondent /contractor from a reasonable remuneration for the work performed was not interfered with. It was held by Hon'ble High Court of Delhi that the impugned Award in as much as it relies upon Section 70 of the Contract Act to assess the amount to which the respondent was entitled in respect of work performed by the respondent, cannot be faulted with. In the said case, the claimant had placed on record CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 23/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD documents showing deployment of staff for the work in question, which included the appointment / transfer letters of the employees to the subject project, their salary slips, proof of payment and other similar documents.
39. I shall apply the principles laid down in the above discussed case laws on the case in hand wherever applicable.
40. My issue wise findings are as follows:
ISSUE No.1 "1. Whether the plaintiff is entitled to decree for a sum of Rs. 91,01,724/- against the defendant, as prayed for? OPP"
41. The onus to prove this issue was on the plaintiff.
42. The contention of the plaintiff is that pursuant to issuance of Letter of Intent dated 03.12.2018 (Ex.PW1/5), the plaintiff mobilized men, machinery and materials at the site to commence work as required in the Letter of Intent (LoI). It is further submitted that necessary drawings were also provided to the plaintiff by the defendant for this purpose and in these circumstances as also the fact that the plaintiff executed work at the project site from December 2018 till April 2019 when it was forcibly removed from the project site, LoI amounts to concluded contract.
43. Contention of the defendant, on the other hand, is that a specific contract agreement was to be concluded within a period of 15 days from the date of LoI subject to the plaintiff furnishing certain CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 24/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD documents. Since the plaintiff failed to furnish the requisite documents, no agreement in relation to any services was executed between the plaintiff and the defendant. It is also the defense of the defendant that it decided not to go ahead with the plaintiff and allotted the said works to Sh. Sanjay Sudhakar Bhagade, proprietor of M/s Business Park vide Work Order dated 05.09.2019. It is defendant's case that even a Construction Agreement was executed between Ansal Phalak Infrastructure Pvt Ltd (erstwhile name of the defendant company) and M/s Business Park. It has also been contented by Ld. Counsel for defendant during the course of final arguments that under the Construction Agreement, contractor M/s Business Park could also engage a sub contractor. It is submitted that if plaintiff had been engaged as a sub contractor by Sh. Sanjay Sudhakar Bhagade, proprietor of M/s Business Park, the duty of making payments to the plaintiff fell on Sh. Sanjay Bhagade.
44. At this stage, it would be apt to reproduce the body of LoI dated 03.12.2018 (Ex.PW1/5). It was issued by Ansal Phalak Infrastructure Pvt Ltd (erstwhile name of the defendant company) and addressed to M/s Makker Construction (plaintiff) and reads as follows:
"Sub.: Letter of Intent for External Development Work (Sewerage & Storm Water Work) at Versalia, Sector- 67(A), Gurgaon Dear Sir, We are pleased to issue this letter of intent to for External Development Work Sewerage & Storm Water Work) at Versalia, Sector- 67(A), Gurgaon with the following condition:-
S. Description Approx
CS (COMM) 396/23
M/S MAKKER CONSTRUCTION 20.01.2026 Page 25/42
Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD No. Amount (Rs. In Crores) 1 External Development Work 2.50 (Sewerage & Storm Water Work) at Versalia, Sector -67(A), Gurgaon Approximate value of Contract : Rs 2.50 Crores (Rupees Two Crore Fifty Lacs Only)
1. Pricing of the Contract shall be based on Item rate. The rates shall be as accepted as jointly and agreed before entering into the contract.
2. The Contract Agreement with details i.e. (Bill of Quantities with mutually agreed Rates, Drawings, Work specifications, Special and General Terms & Conditions etc.) shall be made with you within next 15 days subject to you furnishing your compliance documents viz GST with competent authority in the state of Haryana, PF, ESI & PAN. However you are advised to contact our Site In charge in order to take necessary instructions and to proceed with the immediate mobilization of Men, Machinery and Materials at site to commence the work.
The letter will cease to be effective from the date of your signing "contract Agreement" for this work.
3. Commencement : 05.12.2018
4. Completion period : 03 months from the date of start.
This Letter of intent is being issued in Duplicate; you are requested to sign the copy in token of your acceptance.
Thanking you, Yours faithfully, For Ansal Phalak Infrastructure Pvt Ltd (Narendra Bhatia) Authorized Signatory"
CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 26/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD Plaintiff is silent in the plaint whether necessary compliance documents as mentioned in the LoI were supplied to the defendant or not.
45. For reaching the conclusion whether or not the plaintiff had executed any such work in furtherance of the LoI which would persuade this Court to hold that LoI amounts to a concluded contract, I shall consider various aspects of the matter.
46. First, I shall consider the Construction Agreement executed between the defendant and Sh. Sanjay Bhagade/ M/s Business Park and the Work Order issued in that respect. The defendant has placed a photocopies of these documents on record to show that subject work was assigned to M/s Business Park and not to the defendant. This Construction Agreement dated 30.10.2018 is Mark X. Defendant has also placed on record copy of the Work Order dated 05.09.2019. This document is Mark Y. The defendant did not produce the originals of these documents nor did it summon any witness to prove them. However, Ld. Counsel for plaintiff has referred to the Work Order (Mark Y) issued by defendant company (erstwhile Ansal Phalak Infrastructure Pvt Ltd) on 05.09.2019 during the course of final arguments and in its written submissions. Ld. Counsel for the plaintiff has pointed out that this work order pertains to EXTERNAL DEVELOPMENT WORKS (Retaining Wall) FOR VERSALIA, SEC 67A, GURUGRAM whereas the LoI pertains to EXTERNAL DEVELOPMENT WORKS (Sewerage & Storm Water Work) AT VERSALIA, SEC 67(A), GURGAON. Ld. Counsel for the plaintiff has contended that comparison of these two documents would show that CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 27/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD the scope of work of M/s Business Park (through Sh. Sanjay Bhagade) and plaintiff company in the project was completely different. While M/s Business Park was involved in the work of Retaining Wall, plaintiff was involved in Sewerage & Storm Water Work. This specific contention has been put forth by the plaintiff in its additional written submissions also. This contention of the plaintiff is vital and has significant bearing on this case.
47. It has further been contended by the plaintiff that in furtherance of the LoI, the defendant company also supplied the necessary drawings to it. The plaintiff has referred to the Minutes of Meeting dated 12.01.2018 (part of Ex. PW1/6 (Colly)). These Minutes of Meetings were shared with the plaintiff by the defendant vide email dated 14.01.2019. It shows that the meeting was attended by six representatives of the defendant, two representatives of NUPC, two representatives i.e. Sh. O.P. Makker and Sh. Manoj for the plaintiff and by Sh. Sanjay Bagre (mentioned as Sh. Sanjay Sudhakar Bhagade in the WS). Contention of the plaintiff is that the term 'Contractor' has been used in the Minutes of Meeting for plaintiff. Both the parties have primarily relied upon following clauses of these Minutes of Meeting :
"02. Contractor will increase the labour strength and take it minimum upto 100nos. To speed up the work progress.
06. Material Supply: Major material required at site will be procured by Mr. Sanjay Bangre.
08. Construction of connection RCC wall between Versalia and Escencia is also in the CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 28/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD scope contractor. Drawings for the same will be shared by Mr. Sunil.
16. Status of Material Procurement: SW and RCC pipes will started reaching at site from Monday i.e. 14.01.19 as assured. Procurement of other pipes like DI, GI, HDPE will be shared by Mr. Sanjay bagre."
48. Ld. Counsel for plaintiff has pointed out that above mentioned clause 08 clearly mentions that drawings will be shared by Sh. Sunil (representative of defendant). Further reference has been made by the plaintiff to the email dated 21.01.2019 at 10:45 PM (part of Ex.PW1/9 (Colly)) issued by defendant in which it is specifically mentioned as follows:
"PFA, scan copies of drawings for retaining wall which is already given to the Makker construction at site on 19th Jan 2019 in presence of Mr. Umesh."
The drawings and details of Toe Walls and Retaining Walls are also annexed with the above said email. This email is addressed by the defendant to its own employee with copies to Sh. Sanjay Bagade, plaintiff and others.
49. The perusal of the above mentioned Minutes of Meeting as also the email would show that the drawings mentioned in both these documents pertain to construction of retaining wall which is beyond the purview of development work pertaining to sewerage and storm water work. At the cost of repetition, the LoI pertains to sewerage and storm water works only at the project site. The plaintiff itself has raised the CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 29/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD contention that the Work Order in favour of M/s Business Park pertained to Retaining Wall whereas LoI in question pertains to Sewerage and Storm Water Works. The above said documents, therefore, do not help the plaintiff.
50. Plaintiff has also relied upon Minutes of Meeting dated 19.01.2018 which was shared with the plaintiff vide email dated 18.01.2019. The parties have relied upon the following clauses of the minutes of meeting:
"01. Mr. Snajay Bagade and Mr. Sunil Mattoo assured that 03nos. Trucks of RCC pipes will reach at site on 21.01.19 and 01no. truck of SW pipes on 23.01.19.
03. As per Mr. Makker, there today's total strength of labour is 37 nos. (including the 15 new labour which came today) and it will go on increase day by day.
07. All minor works in connecting roads such as shifting of cables, road crossing, minor sewer or storm line connections etc. are also to be done by M/s Makker Constructions, and joint measurement shall be recorded for the same."
51. Ld. Counsel for plaintiff has relied upon clause 07 submitting that the work mentioned in this clause ascribes no role to Sh. Sanjay Bagade. Clause 01, however, shows that the major material such as RCC pipes and SW pipes which are meant for sewerage and drainage system were to be supplied by Sh. Sanjay Bagade and Sh. Sunil Mattoo both representing M/s Business Park. Clause 07 talks of only minor CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 30/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD works like shifting of cables, road crossing, minor sewer or storm line which was to be executed by M/s Makker Constructions.
52. From the above mentioned Minutes of Meetings dated 12.01.2018 and 19.01.2018, it is clear that the work of major material procurement such as of SW and RCC pipes was assigned to Sh. Sanjay Bagade. The drawings shared with the plaintiff pertained to the work of retaining walls. Minor sewer or storm line connections were to be made by the plaintiff.
53. Plaintiff has also relied upon four emails dated 30.01.2019 (Ex.PW1/10) and 31.01.2019 (Ex.PW1/11). The email dated 30.01.2019 at 14:14 hrs was addressed by the defendant to Sh. Sanjay Bagade, Makker Constructions, one Sh. Umesh Kumar with copies to other representatives of the defendant wherein the addressees were asked to accomplish the mandatory requirements of submitting Labour License and Workman compensation policy which were mandatory requirements during construction phase of the project.
54. Email dated 30.01.2019 at 14:26 hrs issued by the defendant is addressed to plaintiff with copies to Sh. Sanjay Bagade and others. Vide this email, the defendant cautioned the plaintiff to strictly stop children at working site with immediate effect as there were deep excavations for sewer and storm lines and construction machineries and vehicles were moving all around. It is specifically mentioned in the email that children were roaming along with the working labours at project site.
CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 31/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD
55. Email dated 31.01.2019 at 14:41 hrs issued by defendant is addressed to plaintiff, Sh. Sanjay Bagade and others. The issue of inadequate curing of brick work, PCC at the project site was highlighted. It was mentioned that masons were using dry bricks while doing the brick work and were using buckets, jugs etc for curing.
56. Email dated 31.01.2019 at 14:43 hrs has also been issued by the defendant and is addressed to plaintiff, Sh. Sanjay Bagade and others. In this email, the defendant has highlighted the issue related to backfilling over sewer line (SW pipes) between Node 31 to 41 without doing the same in layers. The addressees were called upon to follow IS standards or CPWD including rolling the same with plates compactors.
57. I shall also refer to the minutes of meeting dated 02.02.2018 which was shared with Sh. Sanjay Bagade, plaintiff and others vide email dated 04.02.2019 (Ex.PW1/14). This meeting was attended by representatives of defendant, M/s Business Park, NUPC and Makker Constructions. As per these minutes of meeting, M/s Business Park would apply for license and Workman compensation policy.
58. Ld. Counsel for plaintiff has laid stress specifically on email dated 20.02.2019 (Ex.PW1/18) addressed by defendant to various persons including one Sh. Sunil Mattoo and Makker Constructions. In this email, it has been specifically mentioned that as the strength of the cube did not achieve the required strength, therefore, all the RCC done for main park columns including footings was rejected and not approved for payment. The defendant instructed the addressees to submit the design mix for RCC work or use the RMC for any further CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 32/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD concreting. Ld. Counsel for plaintiff has laid stress upon this email to show that plaintiff was not a sub contractor under Sh. Sanjay Bagade and, therefore, this email had not been addressed to Sh. Sanjay Bagade. This contention of the plaintiff is misconceived as this email is also addressed to Sh. Sunil Mattoo who as per the various minutes of meetings including the minutes dated 09.02.2018 (Ex. PW1/16) was the representative of M/s Business Park (proprietorship concern of Sh. Sanjay Bagade).
59. None of the above said emails and minutes of meetings would establish that sewerage and storm water work was independently assigned to the plaintiff after issuance of LoI.
60. Now I shall consider the emails dated 28.03.2019 (Ex.PW1/19), dated 10.05.2019 (Ex.PW1/20), dated 31.10.2019 (Ex.PW1/21), dated 31.12.2019 (Ex.PW1/22), dated 03.11.2020 (Ex.PW1/26) and legal notice dated 18.02.2020 (Mark B).
61. Email dated 28.03.2019 issued by the plaintiff is addressed to Sh. Sanjay Bagade with copy to NUPC which reads as follows:
"We have started work in 1st week of December 2018 after idle waiting for filling of road work. We created infrastructure for whole of the contract costing us approximate 5-6 lacs. We have submitted 1st R/bill of approximate 10 lacs. in last week of January 2019. which was never paid. We still continued work. we again submitted consolidated 1st & 2nd Bill dated 14//03/2019 for Rs. 32,81,851/= to your good self and kept copy at site for checking purpose. No payment has been released after so many telephonic conversation since one month. You CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 33/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD have defaulted in your committing to honour our payment pertaining to three month of works."
62. The above said email shows that the bills for the work done were submitted by the plaintiff with Sh. Sanjay Bagade. From this email, it appears that it was Sh. Sanjay Bagade who had to make the payments.
63. Email dated 10.05.2019 has been issued by the plaintiff and is addressed to the defendant. Its subject is External Development Work (Sewerage & Storm Water Work) at Versalia, Sector 67A, Gurgaon. It reads as follows:
"Dear Sir, It is brought to your kind attention that M/s. Makker Construction started above said work in the first week of December 2018. Work was started After MAHURAT which was also attended by Ansal Management & Supervisory staff. Management issued us L.O.I. with assumption that my payment will be jointly reimbursed by Ansal / Mr. Sanjay.
We attainted gradually good progress in the month of February & march 2019, and suddenly my work was abruptly stopped by Mr. Sanjay for reason best known to him. I submitted 1 st & than 2nd R/Bill but I did not received any payment, Finally, I submitted final bill of Rs. 43 Lacs for payments. Since 45 days I am repeately reminding Mr. Sanjay to clear my final bill, but with no positive response. I Hope, it is moral responsibility of Ansal Management to make sincere efforts to get my bill cleared."
64. The above email would show that as per the plaintiff, it started work from December 2018 and made good progress in February CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 34/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD and March 2019 when Sh. Sanjay Bagade abruptly stopped the work. It also shows that the Bills of the plaintiff were to be cleared by Sh. Sanjay Bagade. For the first time, the plaintiff has mentioned in this email that Management had issued LoI with the assumption that plaintiff would be jointly reimbursed by Ansal (defendant) and Sh. Sanjay Bagade. There is no mention as to what the specific arrangement regarding payments was and in what manner was the payment to be made jointly by the defendant and Sh. Sanjay Bagade. Besides, this reference to the assumption of joint payment is contrary to the pleadings in the plaint in which the plaintiff has submitted that the entire payment was to be made by the defendant. This contradiction in pleadings and in the email dated 10.05.2019 has not been explained by the plaintiff.
65. Contrary to the contents of email dated 28.03.2019 and 10.05.2019, PW1 has deposed in his cross examination that the plaintiff did not have any arrangement/ understanding with M/s M/s Business Park and its proprietor Sh. Sanjay Bagade. It is apparent from record that the plaintiff is not forth coming about its relationship with Sh. Sanjay Bagade and M/s Business Park.
66. Email dated 31.10.2019 at 11:05 hrs (Ex.PW1/21(Colly)) shows that for the first time plaintiff issued an email addressed to defendant with copy to Sh. Sanjay Bagade regarding non payment of bill and hoped that defendant's management would look into the issue. Four attachments were also sent with this email and printouts thereof are also annexed with this email. These attachments are the Final / CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 35/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD Cumulative Bill along with Summary of Bill description of work. The Final /Cumulative Bill is addressed to Sh. Sanjay Bagade.
67. I shall now refer to the email dated 31.12.2019 at 13:21 hrs (Ex.PW1/22) issued by plaintiff to defendant with copy to Sh. Sanjay Bagade which reads as follows:
"Please refer to our mail dated 31/10/2019 & 02/09/2019 Addressed to M/s. Ansal Phalak & Mr. Ajay Sharma Regarding Final Bill Payment of Rs. 46 Lacs. We have repeatedly address this issue to Mr. Sanjay /M/s. Ansal Phalak but till now no favorable response. It is now requested that Ansal management should get our payment released from Mr. Sanjay before further releasing any payment /plots otherwise We will take legal course."
68. This email makes it very clear that the payments towards work done were to be made to the plaintiff by Sh. Sanjay Bagade. Plaintiff called upon the defendant to not release any further payment / plots to Sh. Sanjay Bagade till he released plaintiff's payments. This finds resonance with the contents of email dated 03.11.2020 (Ex.PW1/26) sent by defendant to plaintiff wherein it was mentioned that as per mutual understanding, it was duty of Sh. Sanjay Bagade to clear all the plaintiff's bills.
69. In the correspondence dated 18.02.2020 (Mark B) issued by the plaintiff to defendant, for the first time, has the plaintiff referred to Sh. Sanjay Bagade as 'Middle Man' through whom final bill was submitted. The record as well as the pleadings show that there is no consistency in the case of the plaintiff. Plaintiff is CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 36/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD also not consistent about the reason why the work was abruptly stopped in 1st week of April 2019 and why was plaintiff removed from the project site. In the plaint, it has been mentioned that the officials of the defendant forcefully made the plaintiff to cease work at the project site without any reason to avoid their legal liability. In the email dated 10.05.2019 (Ex.PW1/20) issued by the plaintiff and addressed to the defendant, plaintiff has specifically mentioned that the work was abruptly stopped by Sh. Sanjay (Bagade). In his cross examination, however, PW1 denied that the work of the plaintiff was stopped by Sh. Sanjay Bagade. The witness volunteered to state that the work was stopped as the payments were not being made. He was confronted with email Ex.PW1/20 upon which he changed his answer and deposed that the work was stopped on account of M/s Business Park and its proprietor Sh. Sanjay Bagade's direction as also non payment of the bills of the plaintiff.
70. To show that it was the defendant who was responsible for making payments, the plaintiff has relied upon payment of Rs. 3 lakh received in 3 tranches of Rs. 1 lakh each. The saving account of the plaintiff in Axis Bank for the period from 01.03.2019 to 31.03.2019 (Mark F) shows receipt of Rs. 1 lakh each on 11.03.2019, 12.03.2019 and 18.02.2019. It is not reflected as to from whom these payments were received. In the plaint, the plaintiff has specifically submitted that defendant released part payment of Rs. 3 lakh on above mentioned dates towards the first running bill. In the cross examination, however, PW1 has deposed as follows:
CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 37/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD "The plaintiff had received 3 payments of Rs. 1,00,000/- each but the plaintiff is not aware as to who made these payments."
The plaintiff has failed to establish that the above mentioned part payments were received from the defendant.
71. Minutes of meetings as also the emails on record do show that some work was done by the plaintiff at the project site. The emails also show that defendant was dissatisfied with the work on a few aspects.
72. The core issue that has emerged from submissions of both the parties is whether or not defendant was the principal employer of the plaintiff or was the plaintiff a sub-contractor of M/s Business Park as also whether the LoI constituted a concluded contract.
73. For this purpose, I shall revert to LoI. The LoI has already been reproduced in the preceding paras. As per the LoI, the Contract Agreement with details such as Bill Quantities with mutually agreed Rates, Drawings, Work Specifications, Special and General Terms & Conditions etc was to be made within next 15 days subject to furnishing of compliance documents, namely, GST with the competent authority in the State of Haryana, PF, ESI and PAN. It also mentions that pricing of the contract shall be based on item rate and the rates would be as accepted jointly and agreed before entering into the contract.
74. It is not the plaintiff's case that the rates for pricing of the contract were agreed between the plaintiff and the defendant. It has already been discussed that the drawings relied upon by the plaintiff do CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 38/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD not pertain to Sewerage and Storm Water Work which is the subject matter of this LoI. No doubt, in the LoI, the plaintiff was advised to contact the Site-in-Charge to take necessary instructions and to proceed with the immediate mobilization of men, machinery and materials at the site but it is evident from the contents of the LoI that the intention of the parties was to enter into a Contract Agreement for the purpose of subject work within next 15 days. In this context, I shall also refer to the cross examination of PW1:
"Q12. Is it correct that since no construction contract was executed within a period of 15 days from the date of execution of letter of intent dated 03.12.2018 (Ex.PW-1/5), the letter of intent had expired automatically? A It is incorrect.
Q13. Did you ever after expiry of 15 days from the date of execution of letter of intent (Ex.PW-1/5) dated 03.12.2018 request the defendant by way of any letter/ email requesting to execute contract agreement as envisaged under clause 2 of the letter of intent? A I did not make any such request. (Vol. But I had executed the work).
Q14. I put it to you that no such request was made by the plaintiff for execution of the contract agreement in terms of clause 2 of the letter of intent (Ex.PW-1/5) dated 03.12.2018 as the parties had clear understanding that the LOI stands expired?
A It is incorrect. (Vol. Technically the defendant is right, however, the defendant representative Mr. Ajay Sharma, Project Head of the defendant had assured me that the plaintiff merely had to work and payment against the said work will be made accordingly).
CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 39/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD Q15. Is it correct that no such assurance was given by defendant company officially to the plaintiff in writing as stated in answer 14? A It is correct, however, the defendant's staff had assured the same."
75. PW1 has specifically deposed that the project head of the defendant had assured him that the plaintiff merely had to work and payment against the said work would be made accordingly. It is evident from this deposition that the work carried out by PW1 was not based upon LoI.
76. In nut shell, the case of the plaintiff itself shows that the rates for pricing of the contract as mentioned in LoI dated 03.12.2018 were not finalized by the plaintiff and the defendant. As already discussed in preceding paras, drawings supplied to the plaintiff did not pertain to the Sewerage and Storm Water Work. The work done by the plaintiff as discussed above was stopped in the first week of April, 2019. This work done by the plaintiff at the project site was on the basis of some oral understanding and assumptions in respect of which also sufficient evidence has not been put forth by the plaintiff. In these circumstances, the LoI dated 03.12.2018 cannot be considered to be a concluded contract.
77. At this stage, I will again consider email dated 31.12.2019 at 13:21 hrs (ExPW1/22) where the plaintiff requested the Ansal Management to get plaintiff's payments released from Sh. Sanjay Bagade before further release any payment / plot. The email dated 10.05.2019 (Ex.PW1/20) of the plaintiff refers to assumption of joint CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 40/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD payment by defendant and Sh. Sanjay Bagade. Email dated 03.11.2020 (Ex.PW1/26) of the defendant refers to duty of Sh. Sanjay Bagade to clear all the bills as per mutual understanding.
78. All this goes on to show that the work done by the plaintiff was on the basis of some mutual understanding and not on the basis of LoI (Ex.PW1/5).
79. The emails relied upon by the plaintiff, as discussed in preceding paras show that the bills were first raised by the plaintiff against Sh. Sanjay Bagade. Contents of the emails show that it was Sh. Sanjay Bagade who was expected to pay the bills.
80. It is noted that even though Sh. Sanjay Bagade is ubiquitous in all the documents of the plaintiff, there is no reference to him in the plaint. The plaintiff also did not bring him in the witness box.
81. Plaintiff has failed to prove that LoI (Ex.PW1/5) amounted to a concluded contract between it and defendant or that the work done by it was under this LoI or that the defendant was its principal employer.
82. The plaintiff has failed to discharge the onus of proving the issue no. 1. The issue is, therefore, against the plaintiff.
ISSUE No. 2.
"2. Whether the plaintiff is entitled to interest. If yes, at what rate and for which period? OPP"
83. The onus to prove this issue was on the plaintiff.
CS (COMM) 396/23 M/S MAKKER CONSTRUCTION 20.01.2026 Page 41/42 Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD
84. Since issue no. 1 has been decided against the plaintiff and the plaintiff has been held to be not entitled to recovery of sum of Rs. 91,01,724/- against the defendant, this issue is also decided against the plaintiff.
RELIEF
85. In view of above discussion, the suit of the plaintiff is dismissed.
86. Parties shall bear their own costs.
87. Decree sheet be prepared.
88. File be consigned to Record Room after due compliance.
PRONOUNCED IN OPEN COURT ON THIS 20 th DAY OF JANUARY 2026 Digitally signed by VRINDA (VRINDA KUMARI) VRINDA KUMARI District Judge(Commercial Courts)-03, KUMARI Date:
2026.01.21 SED/Saket Courts/Delhi (R)
14:30:42 +0530
CS (COMM) 396/23
M/S MAKKER CONSTRUCTION 20.01.2026 Page 42/42
Vs. M/S NEW LOOK BUILDERS AND DEVELOPERS PVT. LTD