Delhi District Court
M/S Ramacivil India Construction Pvt. ... vs Nbcc India Limited on 27 September, 2025
IN THE COURT OF MS. ANU GROVER BALIGA, DISTRICT
JUDGE (COMMERCIAL COURT-04),
SOUTH-EAST DISTRICT
SAKET COURTS, NEW DELHI
CS (COMM) NO. 140/23
M/S RAMACIVIL INDIA CONSTRUCTION PVT. LTD. VS. M/S NBCC (INDIA) LTD.
In the matter of:
M/S RAMACIVIL INDIA CONSTRUCTION PVT. LTD.
Office at BP-22, West Patel Nagar,
Through Its Duly Authorized Director
Mr. R.N. Gupta
E-mail : [email protected] ......Plaintiff
Versus
M/S NBCC (INDIA) LTD.
Corp. Off. NBCC Bhawan,
Lodhi Road, New Delhi-110003.
Through Its Chairman / MD
Email : [email protected]
[email protected] ......Defendant
Date of institution : 10.02.2023
Date of reserving judgment : 26.09.2025
Date of pronouncement of Judgment : 27.09.2025
SUMMARY JUDGMENT
1.Vide the present order, I shall decide an application filed by the Plaintiff under Order XIII-A CPC (as amended by the Schedule to the Commercial Courts Act) praying therein that the suit of the Plaintiff be summarily decreed, for the Defendant has no real prospect of successfully defending the claim of the Plaintiff.
CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 1 of 29 ANU Digitally signed
by ANU GROVER
GROVER BALIGA
Date: 2025.09.27
BALIGA 16:50:36 +0530
2. As per record, the present suit seeking recovery of Rs. 51,03,098/- has been filed by the Plaintiff interalia on the assertion that despite the Plaintiff having successfully executed the work awarded to it by the Defendant, is not being released its dues. According to the case put forward by the Plaintiff it was awarded the work of "Execution of balance work of Public Blocks (B&C) of Multistoried Multi Activity Centre at IIT Roorkee, at risk and cost of previous contractor" and that it completed the said work on 15.12.2014. The grievance of the Plaintiff is that his ninth RA Bill alongwith tenth and final bill remain unpaid to the extent of Rs. 32,40,002/- as on January 2016. It is also the averment of the Plaintiff that the security deposit of Rs. 62,886/- due to be refunded to the Plaintiff after the expiration of the defect liability period has also not been refunded to it till date. Apart from the aforementioned amount the Plaintiff is also claiming interest @ 14% per annum w.e.f. 13.03.2019 till 31.01.2023.
3. In its written statement, the Defendant has firstly raised a preliminary objection to the effect that the suit of the Plaintiff is barred by limitation. It has been pointed out that as per the Plaintiff's own case it had completed the work and raised bills in as far back as 2015 and that therefore the present suit filed in February 2023 is hopelessly barred by limitation. It has been further contended that even otherwise the Plaintiff is not entitled to any amount from the Defendant Company inasmuch as the work done by the Plaintiff was found to be defective and that in this respect two communications dated 02.01.2015 and 06.01.2015 were duly sent to the Plaintiff and that till date the Plaintiff has not rectified the defects point out by the client/Principal of the Defendant namely IIT, Roorkee. It has also been interalia asserted that the Plaintiff despite having received an e-mail dated 27.05.2019 from the Defendant asking it to furnish certain documents, failed to do so and that therefore is not CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 2 of 29 ANU Digitally signed by ANU GROVER GROVER BALIGA Date: 2025.09.27 BALIGA 16:50:45 +0530 entitled to any payment. In the alternative, it has also been pleaded that the Plaintiff is not entitled to any amount whatsoever in view of Clause 37.3 and Clause 73 of GCC which governs the contract entered between the parties. It has been pointed out that Clause 37.3 of the contract entered into between the parties clearly stipulated that the payment for the work awarded to the Plaintiff, will be made only when the Defendant receives the same from its Principal i.e. IIT, Roorkee and that till date no payment has been received by the Defendant from IIT, Roorkee. It has also been asserted that even if IIT, Roorkee does make payment to the Defendant, the Defendant still would have the right to not release the payment received, in view of Clause 73 of GCC. It has been pointed out that as per the said clause, the Defendant has the right to withhold the payments of the Plaintiff for the project, which is the subject matter of the present suit. It is the assertion of the Defendant that the Plaintiff had been awarded another contract by the Defendant in Sector-37D, Gurgaon, Haryana and that due to the defective work carried out by the Plaintiff in the said project, the Defendant has suffered huge losses and has filed, before the Hon'ble Delhi High Court, a suit claiming damages to the extent of Rs. 750 Crores from the Plaintiff and some other parties. It has thus been contended that the said amount is due from the Plaintiff to the Defendant and to recover the same, the Defendant has the right to exercise its lien on the amount due from it to the Plaintiff for the project, which is the subject matter of the present suit.
4. Now in view of the aforementioned assertions made by the Defendant in its written statement, the Plaintiff has preferred the present application under Order XIII-A CPC. It has been interalia asserted in the present application that none of the contentions taken by the Defendant are sufficient to negate the claim of the Plaintiff and that therefore this Court must pass a summary judgment in favour of the Plaintiff at this stage itself.
CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 3 of 29 ANU Digitally signed
by ANU GROVER
GROVER BALIGA
Date: 2025.09.27
BALIGA 16:50:53 +0530
5. On the other hand, in the reply filed to the aforementioned application, it has been interalia asserted by the Defendant Company that it has raised various triable issues and that the facts of the present case are not sufficient for this Court to exercise its jurisdiction under Order XIII-A CPC. According to the Defendant the suit of the Plaintiff infact should be summarily dismissed in view of the defences taken by the Defendant in its written statement.
Contentions of Ld. Counsels for parties
6. Ld. Counsel for the Plaintiff Sh. Anurag Kaushik and Ld. Counsel for the Defendant Sh. Jay Savla, have advanced arguments at length and have also filed detailed written submissions.
Contentions of Ld. Counsel for Defendant
7. Ld. Counsel for Defendant Sh. Jay Savla, has vehemently contended that in view of the various triable issues raised by the Defendant in its written statement, this Court should not exercise its jurisdiction under Order XIII-A CPC. He has sought to contend that the amounts being claimed by Plaintiff are vague and are not supported by its own documents. He has also vehemently contended that till date there is no denial on behalf of the Plaintiff that it did not submit the documents asked from it by the Defendant vide its mail dated 27.05.2019. According to him, it is for the Plaintiff to prove during trial that he did submit the said documents. It is his further contention that till the Plaintiff proves the said fact, the suit of the Plaintiff cannot be decreed. It has been further submitted by Ld. Counsel that Clause 37.3 and Clause 73 of GCC, governing the contract executed between the parties, and relied upon by the Defendant in its written statement are sufficient to negate the claim of the Plaintiff. Ld. Counsel has vehemently contended that Clause 37.3 clearly stipulates that the Defendant will not make any payment to the Plaintiff for the CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 4 of 29 ANU Digitally signed by ANU GROVER GROVER BALIGA Date: 2025.09.27 BALIGA 16:51:00 +0530 work awarded to it unless its Principal, IIT, Roorkee pays the amount due for the said work to it and that the Defendant till date, has not received the same. He has further submitted that this Court is bound to take note of the fact that the Defendant has filed a suit CS(Comm.) 153/2023 before the Delhi High Court seeking recovery of Rs.750 Crores from the Plaintiff and few other parties interalia on the assertion that the work done by the Plaintiff in respect of another project awarded to it by the Defendant was found highly unsatisfactory and has resulted in colossal loss to the Defendant. The submission therefore is that till the pendency of the said suit, the Defendant is within its right to exercise its lien over the payments due to the Plaintiff for the work done by it in the project, which is the subject matter of the present suit.
Contentions of Ld. Counsel for Plaintiff
8. In reply, the contentions of Ld. Counsel for Plaintiff with respect to Clause 37.3 of the GCC relied upon by the Defendant are as follows :-
(i) The aforesaid clause is to be treated as one in contravention of Section 29 of the Indian Contract Act, 1872 and thus not be given effect to on account of the same being vague as has been held by the Delhi High Court in the judgment dated 01.11.2019 in case of "Kashyapi Infrastructure Pvt. Ltd. v. NBCC & Ors.
(MANU/DE/3754/2019)"
(ii) It is pertinent to mention here that the Delhi High Court in the judgment dated 22.03.2018 passed in the case of "North Delhi Municipal Corporation & Ors. v.
Shishpal (MANU/DE/1200/2018)" has categorically held with respect to such clauses as contained in the MCD contract to be vague and ambiguous and thus hit by Section 25 read with Section 46 of the Contract Act.
(iii) The aforesaid judgment of the Delhi High Court was assailed by the MCD before the Supreme Court of India which was dismissed.
CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 5 of 29 ANU Digitally signed
by ANU GROVER
GROVER BALIGA
Date: 2025.09.27
BALIGA 16:51:08 +0530
(iv) It is pertinent to mention here that there is no disclosure by the defendant about the status of the payment received from the IITR to them or any correspondence made by them in this regard.
9. The contention of Ld. Counsel for Plaintiff with respect to the right of lien assertedly being exercised by the Defendant in terms of Clause 73.3 of GCC is as follows :-
The defendant is wanting to exercise lien in lieu of a claim of damages. It is a settled position in law that the right of lien has to be against an ascertained sum and cannot be against a claim which is in the nature of damages which is clear from the written statement wherein Para 16 of the preliminary objection, the defendant categorically pleads that the suit instituted by them seeking recovery of Rs. 750 Crores is on account of losses incurred by the defendant in respect of construction of another project which cannot qualify as an actionable claim to give the defendant a right to have lien over the amounts due and payable to the plaintiff.
10. In support of the aforementioned contention, he has relied upon the following judicial dicta :-
i. Union of India v. Raman Iron Foundry & Ors. AIR 1974 SC ii. Bharat Heavy Electricals Limited v. ABB India Ltd. 2023: DHC: 000026 iii. Intertoll Ics Cecons. O & M Co. Pvt. Ltd. v. National Highways Authority of India. 2013 ILR 2 Delhi 1018 iv. Lanco Infratech Ltd v. Hindustan Construction Company Ltd. 2016: DHC:6713 v. Thar Camps Pvt. Ltd. v. Indus River Cruises Pvt. Ltd. & Ors. 282 (2021) DLT 74 vi. M/s Greenhills Exports Pvt. Ltd. & Ors. v. Coffee Board; ILR 2001 KAR 2950
11. As regards the issue of defect in the work executed in non- compliance of the terms of the agreement, the main contentions of Ld. CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 6 of 29 ANU Digitally signed by ANU GROVER GROVER BALIGA Date: 2025.09.27 BALIGA 16:51:16 +0530 Counsel for Plaintiff are as follows :-
(i) Work completed and acknowledged in note dated 04.01.2017.
(ii) In the said note dated 04.01.2017, it is categorically recorded that "the defects notified by the client have been rectified'.
(iii) The note dated 04.01.2017 further records that the payment will be made to the plaintiff on receipt of the corresponding payment from their client.
(iv) The defendant in response to the plaintiff"s letter of demand dated 12.01.2019 (Doc. No. 10) for a work concluded on 25.01.2015 responded vide letter dated 13.03.2019 (Doc. No. 11) stating that the money will be paid only on release of the corresponding payment by their client in view of Clause 37.3 of GCC without raising any issue of there being any defect in the work executed by the plaintiff.
(v) The defendant for the 1s time on 27.05.2019 vide its email takes a stand that the amounts payable to the plaintiff is not payable on account of certain documents not submitted by the plaintiff. The said stand is taken for the 1s time in 2019 inspite of having acknowledged in 2017 and 2019 that the money due will be paid on receipt of the payment from their client.
(vi) The agreement entered into between the parties contains Clause 70 of the GCC (@Pg. 90-91 of the plaint) which contains the procedure to be adopted when the work executed by the contractor is defective.
No such plea has been raised nor is any counter claim or a claim of set off has been pleaded by the defendant in its written statement. Hence, the plea of defective work or non-compliance of the terms of the agreement is nothing but a sham defense being created by the defendant to not pay the plaintiff its legitimate dues.
12. In rebuttal, Ld. Counsel for Defendant has submitted that none of the judicial dicta being relied upon by the Ld. Counsel for Plaintiff is applicable to the facts and circumstances of the present case. He has sought to contend that the judgment pronounced by the Hon'ble Supreme Court in Raman Iron CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 7 of 29 ANU Digitally signed by ANU GROVER GROVER BALIGA Date: 2025.09.27 BALIGA 16:51:24 +0530 Foundry's case (supra), being relied upon by the Ld. Counsel for Plaintiff already stands overruled by the Hon'ble Supreme Court in its subsequent judgment pronounced in the case titled and reported as H.M. Kamaluddin Ansari and Co. & Ors. v. Union of India & Ors., AIR 1984 SC 29. In addition, Ld. Counsel for Defendant has also relied upon the following judgments to contend that suit of the Plaintiff cannot be decreed :-
i Gannon Dunkerley & Company Ltd v. South East Central Railway and [MANU/CG/3013/2020] iii. State of Gujarat Through Chief Secretary and Anr v. Amber Builders [2020 (2) SCC 540] ii. Union of India v. Concrete Products and Const. Co. & Ors [(2014) 4 SCC 416] iii. Union of India Through Executive Engineer v. M/s Swadeshi Civil Infrastructure Pvt Ltd. [2022: DHC : 3511
- DB / MANU / DE / 3338 / 2022 | iv. Union of India & Ors v. M/s Nellai Concrete Products (Decided on 11.12.2018 -Madras High Court) (Para 3) O.P. No. 1022 of 2017 Findings
13. This Court has carefully considered the submissions made by the Ld. Counsels and has perused the entire record as well as the judicial dicta relied upon by both the Ld. Counsels.
14. It will be relevant at this stage to reproduce relevant provisions of Order XIIIA CPC, which provide for the Court to pass a summary judgment in certain cases of commercial disputes. Rule 2 of the said Order lays down as under :-
"3. Grounds for summary judgment - The Court may give a summary judgment against a plaintiff or defendant on a claim if it considers that -
(a) the plaintiff has no real prospect of succeeding on the claim or the defendant has no real prospect of successfully defending the claim, as the case may be; and
(b) there is no other compelling reason why the claim should not be CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 8 of 29 Digitally signed ANU by ANU GROVER GROVER BALIGA Date: 2025.09.27 BALIGA 16:51:32 +0530 disposed of before recording of oral evidence."
In paras 49 and 52 of its recent judgment pronounced in the case titled Su-kam Power Systems Limited vs. Kunwer Sachdev & Anr. (2019) SCC Online, Delhi 10764, the Hon'ble Delhi High Court has dealt with the aforementioned provisions of Order XIII-A CPC and has observed as follows:-
"49. Consequently, this Court is of the view that when a summary judgment application allows the Court to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. It bears reiteration that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the Court the confidence that it can find the necessary facts and apply the relevant legal principles so as to resolve the dispute as held in Robert Hryniak (supra)....
52. Consequently, this Court is of the opinion that there will be 'no real prospect of successfully defending the claim' when the Court is able to reach a fair and just determination on the merits of the application for summary judgment. This will be the case when the process allows the court to make the necessary finding of fact, apply the law to the facts, and the same is proportionate, more expeditious and less expensive means to achieve a fair and just result."
The aforementioned succinct enunciation of law by the Hon'ble Court makes it clear that in case this Court is able to determine the necessary facts in dispute between the parties and is able to apply the relevant legal principles to the said facts so as to resolve the disputes between the parties, this Court will be justified in exercising its powers under Order XIII-A CPC.
15. Now in the present case let us examine what are the issues that have been raised by the Defendant to defend the claims made by the Plaintiff. It will be relevant to state at the outset that the plea that the present suit is barred by limitation was given up by the Ld. Counsel for Defendant on 18.04.2024 before this Court. On the said date, Ld. Counsel for Defendant Sh. Jay Savla had CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 9 of 29 ANU Digitally signed by ANU GROVER GROVER BALIGA Date: 2025.09.27 BALIGA 16:51:39 +0530 fairly submitted before this Court that in the balance sheets of the Defendant Company, the payment payable to the Plaintiff was being reflected as a debt till and that therefore the suit of the Plaintiff has been filed within the period of limitation. In such view the plea taken by the Defendant Company in its written statement that the suit of the Plaintiff should be dismissed as having been barred by limitation, no longer survives.
16. It is also absolutely apparent that the contentions raised by the Defendant with respect to the applicability of Clause 37.3 and Clause 73 of GCC, to the facts of the present case, are pure questions of law and do not require the leading of evidence by any of the parties. Ld. Counsel for Defendant Sh. Jay Savla has also fairly submitted that the Defendant will not be leading any evidence with respect to these two contentions, in view of the admitted document namely the contract entered between the parties.
17. Now let us examine the aforementioned two Clauses and their effect on the facts of the present case. It is the submission of Ld. Counsel for Defendant that as per Clause 37.3 of the Contract entered between the parties, the Plaintiff cannot demand its dues from the Defendant till the Defendant receives its corresponding payment from IIT, Roorkee. It will be relevant herein to reproduce the said Clause which is as follows :-
"37.3 It is clearly agreed and understood by the Contractor that notwithstanding anything to the contrary that may be stated in the agreement between NBCC and the contractor, the contractor shall become entitled to payment only after NBCC has received the corresponding payment(s) from the client / owner for the work done by the contractor. Any delay in the release of payment by the client / owner to NBCC leading to a delay in the release the corresponding payment by NBCC to the contractor shall not entitle the contractor to any compensation / interest from NBCC."CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 10 of 29 Digitally signed by
ANU ANU GROVER
GROVER BALIGA
Date: 2025.09.27
BALIGA 16:51:49 +0530
18. With respect to the aforementioned contention, as narrated hereinabove, the contention of Ld. Counsel for Plaintiff is that the said clause cannot be given effect to as the same is in contravention of Section 29 of the Indian Contract Act and is also hit by Section 25 read with Section 46 of the Indian Contract Act. Ld. Counsel has relied upon the judicial dicta laid down by the Hon'ble Delhi High Court in NDMC's case (supra).
19. In rebuttal, the submission of Ld. Counsel for Defendant is that the judicial dicta being relied upon by the Ld. Counsel for Plaintiff in support of his aforementioned contention is not applicable to the facts and circumstances of the present case. He has pointed out that in NDMC's case (supra), the clause in the contract was that the MCD would make payments to the contractor only on the availability of funds with it. He has pointed out that before this Court there is no such clause by virtue of which the Defendant Company is post-poning the payment due to the Plaintiff due the non-availability of funds. It is his submission that since the work in question was carried out by the Plaintiff for the client of the Defendant namely IIT, Roorkee it was validly incorporated in the contract that the payment would be made by the Defendant to the Plaintiff only after the Defendant received its payment from IIT, Roorkee. He submits that such a clause cannot at all stated to be hit by any of the provisions of the Indian Contract Act.
20. Though Ld. Counsel for Defendant Sh. Jay Savla may be right in contending that the clause that was held by the Hon'ble Delhi High Court to be invalid in NDMC's case was different from the Clause 37.3 in the present case, it cannot be ignored that it is the own statement of the Defendant that it had submitted its final bill to IIT, Roorkee on 28.02.2015 for the work in question. It is also an admitted fact that not a single correspondence has been filed by the Defendant to reflect that it ever followed up with IIT, Roorkee for the release of CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 11 of 29 Digitally signed by ANU ANU GROVER GROVER BALIGA Date: 2025.09.27 BALIGA 16:51:56 +0530 its payment or that the IIT, Roorkee ever informed the Defendant that the reasons for non-release of the payments for the works is due to some defects in the work carried out by the Plaintiff or otherwise. Infact when the Plaintiff communicated with IIT, Roorkee in this respect, it was categorically informed to the Plaintiff that it must only correspond with the Defendant as IIT, Roorkee had appointed the Defendant for the work in question. The said e-mail written by IIT, Roorkee to the Plaintiff is document no. 12 placed alongwith the plaint and the Defendant has not denied the said communication. In other words, according to IIT, Roorkee, it is for the Defendant to clear the outstanding of the Plaintiff. In such view, it is being rightly contended by the Plaintiff that the Defendant cannot make the Plaintiff wait indefinitely for the payment towards the work already executed by it 10 years back, only on the ground that it still has to receive payment from IIT, Roorkee. In NDMC's case the Hon'ble Delhi High Court has categorically held that a corporation which is an instrumentality of a State, cannot postpone the payment to a contractor indefinitely. In para 35 the Hon'ble Delhi High Court has made the following telling observations :-
"35. It is slightly unfathomable as to how the Corporation can postpone the payment to the Contractor, indefinitely. The issuance of the tender and the work order in favour of the Contractor has to be on the pre-condition that funds are available with the Corporation. To ask the Contractor to wait endlessly for his payment is wholly arbitrary. The Corporation which hands over the works contract to the Contractor cannot say "Do the work now, I will pay when I have the money". Even if such a clause has been signed and accepted by the Contractor, it does not make the clause valid inasmuch as it would render a fundamental condition of contract being hit by provisions of the Indian Contract Act, 1872 (hereinafter, 'Contract Act'). Every contract, to be valid, has to have consideration and the indefinite postponment of consideration would be wholly unconscionable."
(emphasis supplied) CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 12 of 29 Digitally signed by ANU ANU GROVER GROVER BALIGA Date: 2025.09.27 BALIGA 16:52:05 +0530
21. In the considered opinion of this Court by resorting to Clause 37.3, the Defendant also in the present cannot be allowed to postpone the payment of the dues of the Plaintiff indefinitely.
22. The next contention and infact the most pressed upon contention by the Counsel for Defendant is that the Defendant is entitled to exercise its right of lien on the payment of the final bill to be made to the Plaintiff on the ground that in another work awarded to the Plaintiff, it has allegedly done defective work causing huge loss to the Defendant. As narrated hereinabove, it is the contention of Ld. Counsel for Defendant, Sh. Jay Savla that in terms of Clause 73 of the Contract entered between the parties, no sum is payable to the Plaintiff as on date. He has submitted that the Defendant has filed suit being Suit No. CS(Comm.) 153/2023 before the Delhi High Court for recovery of Rs.750 Crores from the Plaintiff and some other parties and further that he has already filed on record of this Court, the copy of the said suit and its accompanying applications. It is his contention that till the pendency of the said suit and the applications filed therewith, this Court should not even consider the present application filed by the Plaintiff under Order XIII-A CPC. He has vehemently contended that Clause 73 has been the subject matter of interpretation by various Courts including the Hon'ble Supreme Court of India and various High Courts and that the said Courts have consistently held that party is entitled to exercise right of lien till the claim referred to in Clause 73 is adjudicated. He has further submitted that this Court must bear in mind that in the suit filed before the Hon'ble Delhi High Court, the Defendant herein has brought to the notice of the Hon'ble Delhi High Court the reports prepared by IIT, Delhi and IIT, Roorkee show that the Plaintiff in the Gurgaon Project, which was for the purpose of home buyers, has done substandard work. He has pointed out that in the said suit, the Defendant has categorically pleaded that it is only because of CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 13 of 29 Digitally signed ANU by ANU GROVER GROVER BALIGA Date: 2025.09.27 BALIGA 16:52:13 +0530 the substandard work done by the Plaintiff herein, that the home buyers had to vacate the respective Flats/Premises. He has further contended that the Defendant has had to suffer a colossal loss and the said fact is sufficient, at this stage, for the Defendant to exercise its lien over the payments due to the Plaintiff in the project which is the subject matter of the present suit.
23. In rebuttal, Ld. Counsel for Plaintiff has sought to submit that the aforementioned suit has been filed by the Defendant herein against 20 parties and that the Defendant itself had sought, from the Hon'ble Delhi High Court, the constitution of an expert committee to test and analyze as to which of the said parties is responsible for the condition of the Gurgaon Project. It is his submission that therefore the Defendant itself is not aware as to due to whose fault, the deterioration of the project occurred at site. Ld. Counsel for Plaintiff has also filed copies of three orders of the Hon'ble Delhi High Court which according to him reflect that after the Hon'ble Delhi High Court constituted a committee comprising of IIT, Mumbai and the said committee filed its report which was not in favour of the Defendant, the Defendant has now preferred objections to the said report. According to the Ld. Counsel for Plaintiff the proceedings before the Hon'ble Delhi High Court therefore make it clear that the Defendant has no actionable claim whatsoever against the Plaintiff. He has further reiterated that the judicial dicta referred to by him even otherwise makes it clear that no lien can be exercised by the Defendant with respect to a claim of damages.
24. To appreciate the contentions being made by both the Ld. Counsels, it will be relevant to reproduce Clause 73 of the contract for ready reference:-
CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 14 of 29 Digitally signed by ANU ANU GROVER
GROVER BALIGA
Date: 2025.09.27
BALIGA 16:52:20 +0530
"73.3 LIEN IN RESPECT OF CLAIMS IN OTHER
CONTRACTS
Any sum of money due and payable to the contractor including the security deposit returnable to him) under the contract may be withheld or retained by way of lien by the Engineer-in-Charge or by NBCC against any claim of the Engineer-in-Charge or NBCC in respect of payment of a sum of money arising out of or under any other contract made by the contractor with the Engineer-in-Charge of the NBCC.
It is an agreed term of the contract that the sum of money so withheld or retained under this clause by the Engineer- in-Charge or the NBCC will be kept withheld or retained as such by the Engineer-in-Charge of the NBCC or till his claim arising out of the same contract or any other contract is either mutually settled or determined by the arbitration clause or by the competent court, as the case may be, and that the contractor shall have no claim for interest or damages whatsoever on this account or on any other ground in respect of any sum of money withheld or retained under this clause and duly notified as such to the contractor."
25. Now, as narrated herein above, Ld. Counsel for Plaintiff has submitted that in view of the law laid down by the Hon'ble Supreme Court in Raman Iron Foundry's case (supra) the Defendant does not have an actionable claim as on date and therefore it cannot exercise its right of lien, in terms of the aforementioned Clause. On the other hand, it is the submission of Ld. Counsel for Defendant that the law laid down in Raman Iron Foundry's case, has been overruled by the Hon'ble Supreme Court itself in the subsequent case of H.M. Kamaluddin Ansari (supra).
CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 15 of 29 Digitally signed by ANU ANU GROVER
GROVER BALIGA
Date: 2025.09.27
BALIGA 16:52:27 +0530
26. This Court has gone through the judicial dicta being referred to by both the Ld. Counsels and in the considered opinion of this Court, the aforementioned submission of Ld. Counsel for Defendant cannot be accepted in view of the judicial dicta laid down by the Hon'ble Delhi High Court in the case titled and reported as Thar Camps Pvt. Ltd. v. Indus River Cruises Pvt. Ltd. & Ors., 282 (2021) DLT74. In the said case the Hon'ble Delhi High Court, has in detail considered the entire judicial dicta with respect to the issue of a claim for unliquidated damages and has also considered the judgments of the Hon'ble Supreme Court both in Raman Iron Foundary's case and H.M. Kamaluddin Ansari's case and after doing so it has been categorically held by the Hon'ble Delhi High Court that on the nature of the claim for damages, the decision in Raman Iron Foundry is still good law. The Hon'ble Court has first reiterated in para 45.3 of its judgment, the law laid down by the Hon'ble Supreme Court in Raman Iron Foundry's case. The said paragraph is reproduced herein below:-
45.3 .... In Union of India v. Raman Iron Foundry, MANU/SC/0005/1974 : (1974) 2 SCC 231, the Supreme Court cited all the above decisions with approval and held :-
"11...a claim for unliquidated damages does not give rise to a debt until the liability is adjudicated and damages assessed by a decree or order of a Court or other adjudicatory authority. When there is a breach of contract, the party who commits the breach does not eo instanti incur any pecuniary obligation, nor does the party complaining of the breach becomes entitled to a debt due from the other party. The only right which the party aggrieved by the breach of the contract has is the right to sue for damages. That is not an actionable claim and this position is made amply clear by the amendment in Section 6 (e) of the Transfer of Property Act, which provides that a mere right to sue for damages cannot be transferred..."CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 16 of 29 Digitally signed by
ANU ANU GROVER
GROVER BALIGA
Date: 2025.09.27
BALIGA 16:52:35 +0530
27. The Hon'ble Delhi High Court has then categorically posed a question whether the aforementioned dicta as regards the claim for unliquidated damages, laid down by the Hon'ble Supreme Court has been altered or overruled in any of its subsequent judgments and thereafter has answered it in the negative. In this respect it will be relevant herein to reproduce para 45.10 of the aforementioned judgment :-
45.10 The points on which Kamaluddin Ansari overruled Raman Iron Foundry were, therefore, according to Amber Builders, the right of the Government to withhold payments, stated to be due from the contractor, against dues of the contractor under other contracts, and the power of the Court to grant an injunction in that regard. The findings in Raman Iron Foundry regarding the nature of liquidated and unliquidated damages, and the liability in that regard crystallising only when adjudicated by a court, continue, however, to remain undisturbed. Status quo, regarding the observations made in that context, by Muralidhar, J., in Intertoll and Lanco Infratech, therefore, continues to prevail. On all points that concern us, Raman Iron Foundry is still good law.
(emphasis supplied)
28. In view of the aforementioned categorical judicial dicta laid down by the Hon'ble Delhi High Court, the Ld. Counsel for the Defendant cannot be allowed to contend that the Defendant has a lien over the payments to be made to the Plaintiff for the work already done by it in the contract in dispute. The mere fact that the Hon'ble Delhi High Court was only dealing with an application u/s 9 of the Arbitration and Conciliation Act and not a suit for damages, makes no difference to the proposition laid down by it.
29. There cannot be any denying the fact that in Raman Iron Foundry's case (supra), the Hon'ble Supreme Court, in para-9 of its judgment has categorically held that a claim for damages for the breach of a contract is not a CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 17 of 29 Digitally signed by ANU ANU GROVER GROVER BALIGA Date: 2025.09.27 BALIGA 16:52:41 +0530 claim for a sum presently due and payable and the party asserting that there has been a breach of contract has to go to a Court of law to get the damages quantified. It has also been categorically held by the Hon'ble Supreme Court that no pecuniary liability arises till the Court has determined that the party complaining of the breach is entitled to damages. The aforementioned legal proposition has not been overruled by the Hon'ble Supreme Court in any of its subsequent judgments. In the present case also the Defendant is merely asserting that the Plaintiff has committed a breach of a contract namely that it has done defective work in the project awarded to it by the Defendant in Gurgaon and hence is liable to pay damages to the Defendant. By no stretch of imagination can the said claim of damages be stated to be a sum of money which has become due and payable by the Plaintiff to the Defendant. It is the own case of the Defendant that it has filed only in 2023, a suit before the Hon'ble Delhi High Court seeking damages in this respect from the Plaintiff and 19 other parties and that the said suit is still pending. As such no sum can be stated to be presently due and payable by the Defendant, for the Defendant to exercise its right of lien over the payment due to the Plaintiff for the work already completed by it in the year 2015. It has been rightly contended by the Ld. Counsel for Plaintiff and infact also by Ld. Counsel for Defendant that this Court has no jurisdiction whatsoever to give any finding with respect to the assertions made by the Defendant herein in the said suit or with respect to the reports being referred to by both the Ld. Counsels as having being filed before the Hon'ble Delhi High Court with respect to the Gurgaon Project.
30. At this stage, it will also be relevant to take note of another judgment heavily relied upon by the Ld. Counsel for Defendant, namely that pronounced by the Hon'ble Supreme Court in the case titled and reported as Union of India v. Concrete Products & Const. Co. & Ors., AIR 2014 SC 1914.CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 18 of 29 Digitally signed
ANU by ANU GROVER
GROVER BALIGA
Date: 2025.09.27
BALIGA 16:52:46 +0530
Ld. Counsel for Defendant has pointed out that in the said case the Hon'ble Supreme Court upheld the exercise of lien by the Union of India in terms of a Clause which was similarly worded as Clause 73 in the present case. On the basis of the same he has reiterated that the Defendant is justified in exercising its right of lien.
31. This Court has gone through the said judicial dicta. In the facts before the Hon'ble Supreme Court in the said case, the contractors had been paid in excess of the amount actually due to them from the Union of India and it is in such facts that it was held that the Union of India was fully justified in recovering the amount from the contractors by exercising its lien over the future bill in terms of the contract entered between the parties. Now in the present case as discussed herein above, the claim against which the lien is sought to be exercised by the Defendant, is for unliquidated damages and therefore in the considered opinion the Defendant cannot be allowed to exercise any lien over the payments due to the Plaintiff in the present project.
32. Coming now to the objections taken by the Defendant namely that the Plaintiff caused delay in the execution of the work, the work done by the Plaintiff was defective and that till date the Plaintiff has not furnished certain documents demanded by the Defendant Company, Ld. Counsel for Defendant has pointed out to various communications issued by the Defendant Company in this regard. He has sought to contend that in view of the said communications, the receipt of which is not being denied by the Plaintiff, the suit of the Plaintiff cannot be summarily decreed.
33. In the considered opinion of this Court, the aforementioned contention of Ld. Counsel for Defendant has no merit whatsoever. It is an admitted fact that the work stands completed by the Plaintiff in as far back as in CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 19 of 29 Digitally signed by ANU ANU GROVER GROVER BALIGA Date: 2025.09.27 BALIGA 16:52:52 +0530 June 2015. As per Clause 74 of GCC the defect liability period remained in operation for a period of 12 months and all the communications being referred to regarding the allegedly defective work done by the Plaintiff, pertain to the month of January 2015. There is not a single communication placed on record by the Defendant to reflect that after the raising of the final bill by the Plaintiff in June 2015, was there any defect whatsoever pointed out by the Defendant during the defect liability period or even thereafter. Infact every time that the Plaintiff raised the issue of the payment of its dues, it was informed by the Defendant that the same would be paid once the payments are received from IIT, Roorkee. In particular, two documents prepared by the Defendant itself clearly prove that the contention of the Defendant that the Plaintiff had not cured the defects in its work is absolutely false and baseless. The first of the said documents is a note dated 04.01.2017 placed on record by the Plaintiff (the same is document no. 9 of the paper book filed by the Plaintiff). In the affidavit filed for the purposes of admission / denial, the Defendant admits the said document. It will be relevant herein to reproduce the contents of the said document :-
NOTE SUB: Construction of Multi Activity Centre at IIT Roorkee : Regarding adjustment of Final bill of Block (B & C) & (A & D) of M/s Rama Construction Company This has reference to the note of DGM (Fin.) RBG Noida on the subject cited above observations are clarified as under.
I. Contractor submitted the bill for B & C block on 17.06.2015 pertaining to the period upto 25.01.2015.
II. Contractor submitted the 10th RA bill for A & D Block on 17.06.2015 pertaining to the period upto 25.01.2015.
Unit Incharges / Zonal Incharges posting during the above period checked and finalized the bills. These bills were not processed for payment / entered in ERP on following ground :CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 20 of 29 Digitally signed by
ANU ANU GROVER
GROVER BALIGA
Date: 2025.09.27
BALIGA 16:53:14 +0530
I. Client was insisting for rectification of defects which were remedied during 2016-17.
II. The bills pertain to the prior period beyond sectioned cost.
Now, I. The defects notified by client have been rectified. II. IITR is being rigorously followed for release of balance payment. This payment pertains to extra item which were executed on the assurance of IITR to consider them on the completion of work (copy enclosed).
III. Further as per ERP an amount of Rs. 116.10 lakh is lying credited to M/s Alliance Infra developers besides Rs. 38.25 lakh towards SD.
Above billed amount is debitable to M/s Alliance Infra developers at the risk & cost of whom above works were executed, However payment to the party M/s Rama Construction Co. shall be made only after corresponding payment is received from the client.
Submitted please.
The aforementioned note categorically recording that the defects notified by IIT, Roorkee have been rectified, clearly proves beyond all doubt that the issue raised by the Defendant asserting that the Plaintiff failed to rectify the defects in the project, needs no further evidence whatsoever.
34. The second document in this respect is communication dated 25.04.2017 issued by the Defendant Company to the Plaintiff. The said document has been filed by the Defendant itself, alongwith its written statement. The same also clearly records that the payment is not being released to the Plaintiff only because the Defendant has not received the payment from IIT, Roorkee. It will be relevant herein to reproduce a portion of the said letter (the same appears at page no. 49 of the paper book filed by the Defendant).
" .......Please refer to your letter of even no. dated 17.04.2017 regarding balance payment of Multi Activity Centre. In this regard you have been informed time & CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 21 of 29 Digitally signed by ANU ANU GROVER GROVER BALIGA Date: 2025.09.27 BALIGA 16:53:21 +0530 again that as soon as the corresponding payment will be received from client, the same will be released to you. We are pursuing hard for release of payment from client but the dues are still awaited from them......."
35. The aforementioned makes it clear that as on April 2017 nothing was required by the Defendant Company from the Plaintiff, to process the final bill submitted by the Plaintiff and the only ground being taken by the Defendant not to release the dues of the Plaintiff was that it had not received payment for the contract in question, from IIT, Roorkee. It will be relevant herein to note that during the course of proceedings before this Court, Ld. Counsel for Defendant Sh. Jay Savla on one occasion had submitted that infact the payment has now been received by the Defendant from IIT, Roorkee. However, later he stated before this Court that the said submission had been made by him without seeking proper instructions from the Defendant. Pursuant thereto an additional affidavit on behalf of the Defendant Company was filed wherein it was interalia affirmed on oath that no payment has been received by the Defendant from IIT, Roorkee but that in its books of account the Defendant has adjusted the dues of the Plaintiff against the amount withheld from the previous contractor of the project in dispute. In other words according to the Defendant as on date the bills of the Plaintiff stand paid in its account. In such view, to now contend that the Plaintiff is not entitled to a summary judgment and that the Defendant must be granted an opportunity to prove during trial the defects allegedly committed by the Plaintiff in the execution of the work awarded to it, is nothing but an attempt to abuse the process of law.
36. Despite the aforementioned, Ld. Counsel Sh. Jay Savla has vehemently contended that the Defendant is justified in not paying the bills submitted by the Plaintiff, for the Plaintiff has not submitted certain documents as demanded by the Defendant vide its e-mail dated 27.05.2019. He points out CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 22 of 29 Digitally signed by ANU ANU GROVER GROVER BALIGA Date: 2025.09.27 BALIGA 16:53:26 +0530 that vide the said e-mail the Defendant had categorically directed the Plaintiff to furnish certain documents and according to Ld. Counsel the submission of the said documents is mandatory as per the terms of the Contract entered between the parties. He further points out that though the Plaintiff in para 10 of its plaint has asserted, that the documents sought in the aforementioned mail stand submitted, to the satisfaction of the Defendant, no such receipt / acknowledgment issued by the Defendant in this respect has been filed.
37. In reply to the aforementioned, Ld. Counsel for Plaintiff has sought to contend that the aforementioned e-mail was sent by the Defendant only after the Plaintiff brought it to the attention of the Defendant that IIT, Roorkee vide its mail dated 12.04.2019 had informed the Plaintiff that it has nothing to do with the dues of the Plaintiff and that the Plaintiff must correspond only with NBCC. His contention is that the Defendant after realizing that the Plaintiff has approached IIT, Roorkee, malafidely sent the aforementioned mail dated 27.05.2019 to somehow delay the release of the dues of the Plaintiff by directing him to furnish irrelevant documents. He further contends that the Plaintiff infact did furnish all the documents mentioned in the said communication, but did not realize that it had to take an acknowledgment from the Officials of the Defendant in this respect. According to Ld. Counsel for Plaintiff it will be a travesty of justice, if this Court puts the present case for trial only for the said issue. His contention is that even if it is taken that the Plaintiff did not furnish the said documents, the Defendant cannot withhold the payments due to the Plaintiff.
38. In the considered opinion of this Court, it is being rightly submitted by Ld. Counsel for Plaintiff that the aforementioned issue sought to be raised by the Ld. Counsel for Defendant does not require this case to be put up for trial. A perusal of the written statement filed by the Defendant makes it clear that the CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 23 of 29 ANU Digitally signed by ANU GROVER GROVER BALIGA Date: 2025.09.27 BALIGA 16:53:33 +0530 Defendant has not even taken this issue of non furnishing of documents by the Plaintiff as a ground for not clearing the payments of the Plaintiff. It is only during the course of arguments on the application under Order XIII-A CPC that Ld. Counsel for Defendant, Sh. Jay Savla has sought to rely heavily on this mail to contend that this Court must put this case for trial. Though in the opinion of this Court, it does no justice to the standing and competency of Sh. Jay Savla Ld. Counsel, to make such arguments, accepting that he is doing so on the instructions of the Defendant, this Court is constrained to observe that the Defendant Company despite being an instrumentality of state and therefore expected to act fairly, is acting in a totally arbitrary and whimsical manner to deny the dues of the Plaintiff. This Court has carefully gone through the list of documents which the Defendant asserts, are required by it to process the final bill submitted by the Plaintiff and in the considered opinion of this Court, it is apparent that the said list has been prepared by the Defendant only to harass the Plaintiff and none of the documents mentioned therein appear to be actually required by the Defendant to make the payments due to the Plaintiff. For instance one of the document sought in the aforementioned mail dated 27.05.2019 is a copy of the guarantee bond, which according to Ld. Counsel for Defendant was required by the Plaintiff to submit at the time of the acceptance of its tender and in this respect he has referred to Clause 9.2 of the Contract entered between the parties. A perusal thereof reflects that the guarantee bond required to be submitted by the Plaintiff was valid only till completion or the extended completion period. On a query by this Court, Ld. Counsel for Defendant has been at pains to explain as to why the copy of the said guarantee bond is now required by the Defendant when the same is not even valid. He also had no answer whatsoever to the query as to why in the said communication the Defendant was asking for a copy of the completion certificate, when it itself had issued the same. Another document mentioned in the said mail is the details of CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 24 of 29 ANU Digitally signed by ANU GROVER GROVER BALIGA Date: 2025.09.27 BALIGA 16:53:40 +0530 water charges, electrical charges etc incurred and paid by the Plaintiff to IIT, Roorkee during the construction period. Clause 44 of the contract being referred to, by Ld. Counsel for Defendant in this respect records that the contractor shall make its own arrangement for water and electric power for construction and other purposes, at his own costs and pay requisite electricity and water charges. According to Ld. Counsel for Defendant, the Plaintiff is required to give the details of the charges paid by him to IIT, Roorkee in this respect and details of balance if any which are required to be paid by it to IIT, Roorkee. It is not at all fathomable as to for what purposes does the Defendant require the same. It is not its case that the IIT, Roorkee has in the last 10 years ever communicated to it that the Plaintiff has not paid the water charges or the electrical charges and that some balance is required to be paid by the Plaintiff. Further Clause 44 being referred to, also does not record that the Plaintiff has to submit the proof of payment of these charges to the Defendant. All that it records is that the Plaintiff would be liable to make the payment of the said charges. Certain other documents mentioned in the said communication relate to the drawings and plans which were prepared during the construction of the project. It is absolutely unacceptable that the Defendant Company is now choosing to demand such plans / drawings from the Plaintiff for a project which has been completed 10 years back. It will also be relevant to note that apparently all the documents sought by the Defendant were required to be furnished by the Plaintiff at the time that his tender was accepted. It is also apparent that the Plaintiff must have done so and the Defendant already has the originals of the said documents, for in the mail dated 27.05.2019 it is the copies of the said documents which are being asked for, presumably on the ground that its branch office does not have all the records. It will also be relevant to note that on a query by this Court, Ld. Counsel Sh. Jay Savla had categorically submitted that even if the Plaintiff had furnished the documents sought to the Defendant, it would not have released the CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 25 of 29 ANU Digitally signed by ANU GROVER GROVER BALIGA Date: 2025.09.27 BALIGA 16:53:46 +0530 payments to the Plaintiff in view of the lien exercised by it. In such view, suffice to state that the communication dated 27.05.2019 being so heavily relied upon by the Counsel for Defendant to urge that this case be put up for trial is nothing but an abuse of the process of law. This Court is constrained to observe that the Defendant despite being an instrumentality of State by insisting that this Court must undertake the conducting of a purposeless trial seems to be only interested in defeating the provisions of XIII-A of the Commercial Courts Act, 2015. It is being rightly submitted by Ld. Counsel for Plaintiff that the conduct of the Defendant is hardly in lines with the policy of 'ease of business', being promoted by the State.
39. In view of the detailed discussion hereinabove, this Court hereby holds that no evidence is required to be led by the Plaintiff and it is entitled to a summary judgment under Order XIII-A CPC. The Defendant is bound to release the payment of the two bills in dispute amounting to Rs. 32,40,002/-(though Ld. Counsel for Defendant had sought to argue that in some of the documents filed by the Plaintiff, the amounts of the bills in question has been wrongly mentioned by the Plaintiff and that there is some discrepancy, this Court did not find any such discrepancy in the bills or in the averments made in the plaint). The Plaintiff is also hereby entitled to the refund of the security deposit of Rs. 62,886/- which was being withheld only on account of the exercise of lien by the Defendant.
Interest
40. The only question that now arises is as to what rate of interest is the Plaintiff entitled to and for what period. The Plaintiff has claimed Rs. 18,00,210/- on account of interest accrued w.e.f. 13.03.2019 till the filing of the suit, on the principal amount of the bills raised by it and the security deposit refundable to it by the Defendant. It is the submission of Ld. Counsel for CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 26 of 29 ANU Digitally signed by ANU GROVER GROVER BALIGA Date: 2025.09.27 BALIGA 16:53:51 +0530 Plaintiff that the judicial dicta referred to by him makes it clear that the Plaintiff is entitled to the said amount from the Defendant. He has pointed out that in all the judgments given by the Hon'ble Delhi High Court, referred to by him the Hon'ble Court has allowed interest in favour of the Contractors, w.e.f. the date of expiry of 9 months of the passing of the bills by the MCD. In particular he has relied upon a recent order dated 28.08.2025 of the Hon'ble Delhi High Court pronounced in the case titled as M/s Jha Constructions Pvt. Ltd. v. Municipal Corporation of Delhi, in CS (Comm) No. 309/2025. He has pointed out that in the said case the Hon'ble Delhi High Court after taking into account that the current rate of interest for unsecured debts is 10.9% per annum, awarded the same in favour of the Contractor Plaintiff w.e.f. the expiry of 9 months from the dates on which the respective bills were passed by the officials of MCD.
41. In rebuttal, it is the submission of Ld. Counsel for Defendant that no interest whatsoever is payable to the Plaintiff in terms of Clause 73.3. In support of the said contention, Ld. Counsel for Defendant has again relied upon the judicial dicta laid down by the Hon'ble Supreme Court in Union of India v. Concrete Products & Const. Co. & Ors., AIR 2014 SC 1914. He has pointed out that the Hon'ble Supreme Court has categorically held that if it is an agreed term of the contract entered between the parties that against the sum of money withheld or detained under lien, the contractor shall have no claim for interest or damages, the contractor cannot be allowed any interest by the Court.
42. This Court has gone through the aforementioned judicial dicta. Apart from the proposition being relied upon by the Ld. Counsel for the Defendant, the Hon'ble Supreme Court in the aforementioned case has also taken note (in para 17 of its judgment) that the contractor was duly notified of the exercise of lien by the Union of India, and therefore in view of the said notification, the contractor must not be granted any interest by the Court. Now CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 27 of 29 Digitally signed ANU by ANU GROVER GROVER BALIGA Date: 2025.09.27 BALIGA 16:53:59 +0530 in the present case it is to be noted that till filing of the present suit, the Defendant at no point of time notified the Plaintiff that it will be exercising its lien against the payment due to it, for the asserted losses suffered by the Defendant on account of defective work allegedly done by the Plaintiff in another project awarded to it by the Defendant. It is an admitted fact that despite having received numerous communications from the Plaintiff seeking release of its due and despite having also received the legal notice dated 25.04.2022 issued by the Plaintiff in terms of Section 80 CPC, the Defendant did not choose to notify the Plaintiff that it is exercising its right of lien over the payments due to the Plaintiff. In the said notice the Plaintiff has also categorically demanded interest @ 18% per annum w.e.f. 13.03.2019 and yet the Defendant chose not to give any reply to the said demand.
43. In such view, this Court is of the considered opinion that the Defendant cannot negate the claim of interest being made by the Plaintiff. The Hon'ble Delhi High Court in the cases CS (OS) 209 / 2016 titled as Gopesh Mehta Vs Swift Initia Pvt. Ltd. and RSA No. 195 / 2004 titled as Sh. Zile Singh Vs. Sh. Mangloo Ram Bansal, has held that even if there was no agreement between the parties with respect to the payment of interest on delayed payments, a Plaintiff is entitled to claim interest on the principles of equity, justice and good conscious. In both the said cases, the Hon'ble High Court on the basis of the aforementioned principles, awarded interest in favour of the Plaintiff, from the date of the legal notice issued to the Defendant. Keeping in view the said judicial dicta and also the order dated 28.08.2025 of the Hon'ble Delhi High Court in M/s Jha Constructions Pvt. Ltd. case (supra - the judgment relied upon by the Ld. Counsel for Plaintiff) in the considered opinion of this Court, the Plaintiff is to be held entitled to interest w.e.f. 25.04.2022 (the date of issuance of legal notice by the Plaintiff) @ 10.9% per annum till realization. It is made CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 28 of 29 Digitally signed by ANU ANU GROVER GROVER BALIGA Date: 2025.09.27 BALIGA 16:54:06 +0530 clear that this Court does not agree with Ld. Counsel for Plaintiff that the Plaintiff is to be held entitled to the said interest w.e.f. 13.03.2019 till realization, for it cannot be ignored that prior to the issuance of the legal notice dated 25.04.2022, the Plaintiff itself did not ever demand any interest whatsoever from the Defendant. Section 3 of the Interest Act makes it clear that in the absence of a written agreement between the parties, the interest is to be awarded from the date of the written notice issued by the person making the claim of the interest.
Relief
44. In view of the detailed discussion herein above, the application filed by the Plaintiff under Order XIII-A CPC stands allowed and the suit of the Plaintiff stands summarily decreed for Rs. 33,02,888/- alongwith interest @ 10.9 % per annum w.e.f 25.04.2022 till realization. The Defendant will also reimburse the GST amount as per rules to the Plaintiff. Costs of the suit are also allowed in favour of the Plaintiff.
Decree Sheet be prepared accordingly.
This file be consigned to Record Room.
Digitally signed by ANU ANU GROVER
GROVER BALIGA
Date: 2025.09.27
Announced in the open court BALIGA 16:54:12 +0530
on 27th September, 2025. (Anu Grover Baliga)
District Judge (Commercial Court-04)
South-East/Saket Court
New Delhi
CS (Comm) No. 140/23 M/s Ramacivil India Construction Pvt. Ltd. Vs. M/s NBCC (India) Ltd. Page 29 of 29