Bangalore District Court
Toshiba Water Solutions Pvt. Ltd vs Karnataka Industrial Areas on 2 June, 2023
IN THE COURT OF THE LXXXIII ADDITIONAL CITY CIVIL
AND SESSIONS JUDGE AT BENGALURU CITY [CCH-84]
:Present:
Ravindra Hegde,
M.A., LL.M.,
LXXXIII Addl. City Civil & Sessions Judge,
Bengaluru
Dated on this 2nd day of June 2023
COM.O.S.No.1319/2016
Plaintiff Toshiba Water Solutions Pvt. Ltd.,
(Formerly UEM India Pvt. Ltd.,)
A private limited company
incorporated under the Companies
Act, 1956, having its registered
office at Poineer Urban Square,
4th Floor, Tower D, Sector 62,
Gurugram-122098.
Represented by
Shri Anil Kumar Chauhan,
Vice-president cum Company
Secretary.
(By Sri.S.N.A.K, Advocate)
// versus //
Defendants 1. Karnataka Industrial Areas
Development Board,
having its office at:
14/3, 2nd Floor,
Rasthrothan Parishad Building,
Near Reserve Bank,
Nrupathunga Road,
Bengaluru-560001.
Also at:
4th and 5th Floor, East Wing,
2
CT 1390_Com.O.S.1319-2016_ Judgment.doc
Kanija Bhavan, Race Course Road,
Bengaluru-560001.
Represented by its
Chief Executive Officer.
2. Stup Consultants Pvt. Ltd.,
A-1 Tower, 5th & 6th Floor,
Golden Enclave, HAL Airport,
Bengaluru-560017.
Registered Office:
1004 & 5, Raheja Chambers,
Nariman Point,
Mumbai-400021.
Represented by its
Chief Executive Officer.
(D.1 by Sri.P.V.C, Advocate,
D.2 by Sri.D.B.S, Advocate)
[
Date of Institution of the : 15/02/2016
suit
Nature of the suit : Recovery of Money
Date of commencement of : 16/06/2016
recording of the evidence
Date on which the :
Judgment was pronounced. 02/06/2023
: Year Month/ Day/s
Total duration /s s
07 03 18
JUDGMENT
This suit is filed by the plaintiff praying to direct the defendants to make total payment of Rs.3,79,85,329/- to the plaintiff in respect of its claims and also to direct the defendants to pay Rs.1,88,75,589/- towards interest payable on the outstanding dues and also to direct the defendants to 3 CT 1390_Com.O.S.1319-2016_ Judgment.doc pay pendente-lite and future interest @12% per annum on Rs.3,79,85,329/- and for costs.
2. Case of plaintiff in brief is as under:
Plaintiff is seeking recovery of total amount of Rs.5,68,60,918/- with interest from the defendant No.1 in this suit. The suit claim is arising out of amount outstanding under the contract agreement dated 25/1/2006 executed between the plaintiff and defendant No.1. As per the agreement, plaintiff established, commissioned, operated and maintained a 0.50 million litres per day Sewage Treatment Plant and a 5.00 MLD Common Effluent Treatment plant for treating waste water from textile dyeing and washing units to tertiary standards required for recycling of treated waste water to Apparel Park Units on Turnkey basis including operation and maintenance of the treatment plant for a period of 3 years. Plaintiff is an International multi-disciplined environmental services company specialising in providing turnkey design and construction services including operation and maintenance services in water and waste water treatment plants for industries and municipalities. Defendant No.1 is established under the Karnataka Industrial Areas Development Act and is acting as a Development Agency to set up an apparel park known as KIADB Apparel Park near Doddaballapur, Karnataka. The Apparel Park with all infrastructure facilities including STP and CETP etc has been developed for establishment of export oriented textile industries. The defendant No.2 company was appointed as 4 CT 1390_Com.O.S.1319-2016_ Judgment.doc KIADB's Representative and Project Consultant by the defendant No.1. The Government of India in furtherance of the National Textile Policy, 2000, thought of facilitating the textile industry through establishment of apparel park and one of such park was proposed to be developed near Doddaballapur in Bengaluru Rural District and accorded sanction for setting up of the Apparel Park and the responsibility of developing and maintaining the said Apparel Park was assigned to the defendant No.1 and the defendant No.1 invited tender and the scope of the work was mentioned in the notice inviting tender on 24/1/2005. Plaintiff participated in the bid process and submitted its bid and on 8/8/2005 defendant accorded approval to award the tender to the plaintiff. Plaintiff furnished performance bank guarantee for Rs.2,32,40,000/- for establishment and on 25/01/2006 work order was issued in favour of the plaintiff for an amount of Rs.23.24 crores for establishment of the project and Rs.24.61 per kilo liter of influent for operation and maintenance for of 3 years. Agreement was also entered into between the parties detailing the terms and conditions of the project. The defendant No.2 is representative of the 1 st defendant and Project Consultant and the bills raised by the plaintiff had to be certified by the Engineer in Chief. Defendant had assigned the work of bill certification of the project to the Project Consultant. In February 2010 the plaintiff successfully commissioned the project (STP and CETP) meeting the stipulated specifications. Work done 5 CT 1390_Com.O.S.1319-2016_ Judgment.doc certificate dated 7/3/2013 was issued to the plaintiff. During construction of the plant, plaintiff carried out additional work as mentioned in the plaint. Plaintiff originally claimed Rs.93.55 lakhs from the defendant No.1 for carrying out the said additional work, but defendant No.2 approved a sum of Rs.20.5 lakhs for being paid to the plaintiff for the said additional work and on 29/11/2020 directed Chief Engineer and Chief Development Officer of the defendant No.1 to make the said payment of Rs.20.25 lakhs to the plaintiff within a week's time. However the said amount is not paid to the plaintiff till date. Despite completion of the project defendant No.1 did not release payment of plaintiff's RA bill No.41 Rs.57,12,500/- and RA bill No.43 Rs.13,08,000/- which is also claimed by the plaintiff in the present suit. Plaintiff's defects liability period and operation and maintenance obligation under the Agreement came to an end on 13/2/2013. During the period after completion of the project, Security Deposit deducted by the defendant No.1 from each bill paid to the plaintiff was to be refunded as per the clause
3.31 of Section 3 of the General Conditions and Instructions to tenders. The requirement of furnishing bank guarantee was waived by defendant No.1 in pre-bid meeting dated 14/3/2005. However, the defendant has not refunded the said security deposit to plaintiff. In the meeting dated 29/11/2010 it was decided that the tariff rates for operation and maintenance of the project for treatment of effluents shall be Rs.60/- per kilo litres revised from 24.61 per kilo liters 6 CT 1390_Com.O.S.1319-2016_ Judgment.doc with effect from May 2010. Plaintiff was directed to get consent of Karnataka State Pollution Control Board for the operation of the project and the same was obtained on 21/2/2011 and it was valid from 1/3/2009 to 30/6/2011. On 18/2/2011 the Chairman of defendant No.1 approved release of 94.57 lakhs to the plaintiff towards revised operation and maintenance charges from May 2010 and it was ratified in the meeting dated 28/3/2011 and in the same meeting the defendant No.1 decided to hand over the operation and maintenance of CETP and STP to the Industries association of the Apparel Park. Thereafter the defendant No.1 wrote many letters to the association and requested them to take over operation and maintenance of the project. However, despite agreeing earlier, the Association did not take over the operation and maintenance of the project. The operation and maintenance of the plants was becoming increasingly difficult for the plaintiff as the outstanding amounts due and payable to the plaintiff were not being released by the defendant No.1. Defendant No.1 has either partly cleared or has not cleared the plaintiff's bills from January 2011 to June 2012. Total outstanding under this head comes to Rs.78,24,839/-. Plaintiff had been incurring huge costs on manpower, electrical, chemicals, enzyme treatment for which the input cost were several times higher than the amount billed to the defendant No.1. Vide its letter dated 28/6/2012 plaintiff brought the pending issues to the notice of the defendant No.1 and requested the 7 CT 1390_Com.O.S.1319-2016_ Judgment.doc defendant No.1 to clear its outstanding dues before the Apparel Park is handed over to the association. Vide its letter dated 30/7/2012 informed the defendant No.1 of its concerns regarding the due and long outstanding payments. A meeting between the plaintiff and defendant No.1 was held in August 2012. During this meeting, the Chairman of the defendant No.1 issued directions for releasing outstanding dues to the plaintiff. However despite such directions, plaintiff's outstanding dues have not been cleared till date. Officials of the defendant No.1 visited CETP and emphasized that CETP has to be restarted before the same can be handed over to the association and plaintiff by its letter dated 26/11/2012 informed defendant No.1 about the reasons due to which the plant could not be restarted and it was brought to the notice of the defendant No.1 that a similar request was made earlier by the defendant No.1 for which plaintiff had incurred expenses of Rs.23 lakhs. The association did not take over the plant and plaintiff informed the defendant No.1 to clear the outstanding dues and requested for an amended contract work slip before any activity could be undertaken at the project since the plaintiff's contract with the defendant No.1 was over. Thereafter a meeting was held regarding pending issues and plaintiff requested to release an advance of Rs.1 crore out of the outstanding amount for restarting the plant and CEO and EM directed to release Rs.50 lakhs to the plaintiff as an advance against the balance payment due to the plaintiff from the defendant No.1 to start the plant and 8 CT 1390_Com.O.S.1319-2016_ Judgment.doc operate it till end of February 2013. In the meeting also 1 st defendant was directed to release amount of Rs.50 lakhs. Defendant No.2 agreed to inspect the premises and sought a minimum of one week for inspecting and preparing the inventory for handing over the plants to the Association and defendant No.2 carried out inspection of the project to satisfy itself about the completion of the project and on the basis of said inspection, defendant No.2 advised the defendant No.1 to issue completion certificate to the plaintiff as seen in the email dated 18/3/2013. In the subsequent meeting dated 31/1/2013, discussions were held for smooth handing over of the project to the association and it was informed that period of operation and maintenance of the project was getting closed on 10/2/2013. On 14/2/2013 the plaintiff issued a letter to the defendant No.1 stating that period of operation and maintenance got concluded on 13/2/2013 and plaintiff requested the defendant No.1 to take over the project and release all its outstanding dues and also requested defendant No.1 to issue completion certificates. Plaintiff had raised bill in RA No.44 for an amount of Rs.51,87,500/- on the defendant No.1 towards replacement of reverse osmosis membrane replacement, due to change in inlet waste water characteristics. Plaintiff had also informed the defendant by letter dated 28/3/2011 that such replacement will be made inter alia subject to clearance of plaintiff's outstanding dues and recovery of capital investment for replacement of the RO membrane. On 7/3/2013 the defendant No.1 issued work 9 CT 1390_Com.O.S.1319-2016_ Judgment.doc done certificate and certified that the project was commissioned during February 2010. The operation and maintenance of 3 years as per the agreement starts from date of commissioning of the project. Though the plaintiff has given several letters requested for clearing the outstanding payment, but the defendant has not cleared the outstanding. Thereafter plaintiff issued legal notice dated 20/5/2014 for non release of payments and called upon the defendant to pay Rs.12,41,94,897/- and the notice was not replied and again plaintiff wrote letter to the defendant. Thereafter, again meetings were held and issues regarding outstanding payment were discussed, but the payments are not made. Plaintiff issued notice on 21/10/2014 and thereafter meeting was held and plaintiff was assured of action by the defendant No.1 on the issue of plaintiff's outstanding dues. Thereafter on 21/10/2015 plaintiff again wrote a letter to the defendant No.1 with a request to pay the plaintiff a sum of Rs.3,59,60,490/- and the reduction in claim amount was occasioned since the plaintiff foregone some of its claims against the defendant No.1. On the basis of these facts, the plaintiff has made claim in the suit under different heads for capital expenditure during construction of the project and during operation and maintenance. Rs.1,59,29,051/- claim is towards security deposit which is deducted @7.5% from each RA bills, apart from earnest money deposit. Rs.13,08,000/- payment towards RA bill No.43 and Rs.57,12,500/- towards RA bill No.41 and Rs.20,23,439/- towards additional work is 10 CT 1390_Com.O.S.1319-2016_ Judgment.doc also claimed by the plaintiff. During operation and maintenance of the project plaintiff raised a bill in RA No.44 for an amount of Rs.51,87,500/- and this amount is also payable. The outstanding bill towards operation and maintenance of the project amounting to Rs.78,24,839/- is also outstanding. The defendant is also liable to pay interest of Rs.1,88,75,589/- as calculated on Rs.3,79,85,329/-. By considering the interest @12% per annum and by calculating the number of months delay in making payment. With these averments seeking recovery of total Rs.3,79,85,329/- and also interest of Rs.1,88,75,589/- and also interest on the outstanding balance, plaintiff has filed this suit. The suit was filed by the plaintiff as UEM India Private Limited. Subsequently name of the plaintiff is changed as Toshiba Water Solutions Private Limited.
3. Defendant No.1 has filed written statement and stated that the suit is liable to be dismissed and there is no merits in the claim. The defendant has stated that the 1 st defendant is providing industrial infrastructure facilities and other amenities in the industrial area on no profit and no loss basis in the State of Karnataka. Defendant has stated that as per the National Textile Policy, Government of India to facilitate the industry through establishment of apparel parks in various backward areas, proposed to develop apparel park for exports near Doddaballapur by name Apparel Park Industrial Area and KIADB had acquired various lands for the said purpose and Government of Karnataka had given 11 CT 1390_Com.O.S.1319-2016_ Judgment.doc sanction for setting up apparel park and the 1 st defendant board is the developmental agency to develop the apparel park for exports. 1st defendant has stated that setting up of sewage treatment plant and an effluent treatment plant for treating effluent generated from the mills established at apparel park which are mostly textile to tertiary standard level and to recycling of tertiary standard water to apparel park units is one of the requirements of the guidelines of the Government of India. To enable the units in apparel park to meet emerging environmental standards, defendant has invited tender and plaintiff had applied for the same and plaintiff became successful and work order was issued to the plaintiff. Plaintiff commissioning the work and handing over the sites to the plaintiff etc. are also stated by the defendant. It is stated that the contract amount was fixed as Rs.23.24 crores for implementation and Rs.24.61 per kilo liter for of influent for operation and maintenance. It is stated that on 21/8/2007 plaintiff was informed that the cost of the project is reduced from Rs.23.24 crores to 19.49 crores. It is stated that the plaintiff has given bank guarantee which was valid upto 30/6/2009 and the plaintiff was required to make bank guarantee valid upto to the last date of the completion of operation and maintenance and plaintiff has thereby violated the terms of the tender agreement. The date of commencing of the plant is reckoned as February 2010, in the meeting proceeding dated 17/12/2012 and on that basis the operation and maintenance is upto February 2013.
12CT 1390_Com.O.S.1319-2016_ Judgment.doc Defendant has stated that plaintiff has commissioned the production of tertiary treated water in the month of February 2010 and this is considered as commissioning of the plant. It is stated that during this operation and maintenance period plaintiff has to operate the plant continuously, but plant was not operated continuously by the plaintiff and plant was closed in the month of March 2011 until January 2013. It is stated that plaintiff restarted the plant to show that plaint is an operational condition which was not as per the tender conditions. It is stated that the agency has completed the physical works of the project, but the agency as per the tender conditions did not operate the plant continuously during operation and maintenance period. It is stated that the plaintiff has delayed the completion and commissioning of the work of the plants project beyond 3 years and due to this delay and further closure of the plant during operation and maintenance period by the plaintiff has put hardship on the entrepreneurs and loss to the Board. Defendant has denied claim of the plaintiff and also the contents in various paragraphs of the plaint and the allegations made. While admitting few facts about entrusting the work to the plaintiff and plaintiff commissioning the work, it is stated that the plaintiff did not comply the tender agreement terms and conditions and operated the plant continuously during 3 years period. The meeting held between the parties on various dates as mentioned are all admitted by the defendant and it is stated that in the meeting dated 19/12/2012 the 13 CT 1390_Com.O.S.1319-2016_ Judgment.doc plaintiff was directed to produce the indemnity bond at the time of final settlement of the claims after proper security and certification by STUP Consultants and it is stated in the same meeting on the request of the plaintiff, it was agreed to release Rs.50 lakhs as advance against the balance payments to start the plant and operate it till end of February 2013. It is stated that as per the above the defendant board has released Rs.50 lakhs by cheque dated 27/12/2012. It is stated that though the plaintiff has agreed to start the work after receipt of Rs.50 lakhs, plaintiff has not started the plant even in the month of January 2013. It is stated that the proceedings of the meetings show that during operation and maintenance period plaintiff had started the operation of the plant and has abruptly abandoned the plant and not complied the tender conditions. It is stated that as per the turnkey contract plaintiff has to satisfactorily complete the work including operation and maintenance for 3 years and though the plaintiff has physically completed the work, commissioned the plant during February 2010, plaintiff did not operate the plant continuously during operation and maintenance period. It is stated that the work done certificate shows neither their completion nor performance of the work including the operation and maintenance period and it is the certificate issued for the portion of the work completed. It is stated that the completion of the project includes continuous operation of plant throughout the operation and maintenance period. The defendant has stated about releasing Rs.46.60 lakhs towards 14 CT 1390_Com.O.S.1319-2016_ Judgment.doc electricity bill incurred from January 2009 to January 2010 by the plaintiff and stated that in the meeting dated 29/11/2010 board has released Rs.94.57 lakhs to the plaintiff towards the revised O & M charges. The allegation that the defendant No.1 did not release amount of R.A.Bill No.41 and 43 are also denied. It is stated that as the plaintiff had delayed the work and had abruptly abandoned the plant by stopping the operation during the operation and maintenance period, final bill of the project is not prepared. It is stated that after completion of the project the security deposit deducted by the defendant No.1 from each bill paid to the plaintiff was to be refunded is false. It is stated that when the plaintiff has stopped the operation of the plant, defendant has orally instructed the plaintiff to resume the operation and also issued notice to the plaintiff. It is stated that the performance bank guarantee was taken back by the plaintiff. It is stated that the defendant has stated that the plaintiff has not fulfilled the terms and conditions stipulated in the tender agreement and the plaintiff company operated the plant upto secondary level treatment of effluents from January 2009 to January 2010 and the tertiary level treatment of effluents was only started during February 2010. The defendant has stated that the board wanted the plant to be restarted and all the efforts even requesting the association to take over the plant as the plaintiff dishonouring the agreement in running the plant and made the industry to suffer and caused huge loss to them as well as the board and because of the action of the 15 CT 1390_Com.O.S.1319-2016_ Judgment.doc plaintiff in closing the plant during its operation period many industries were not able perform in full capacity. It is stated that in the meeting the plaintiff was asked to hand over the plant in operation running condition with all the spare parts as per the agreement to the association, but the plaintiff had failed to handover the plant to association in fully operation condition. It is stated that the plaintiff has failed to demonstrate to the association that the plant is in fully operational condition. The defendant has also stated about the complaint received about discharge of sewage effluents from apparel park into Bashettahalli lake and also stated about prohibitory orders issued by the Pollution Control Board against the defendant prohibiting it from discharging of effluents or sewage from the apparel park and its CEPT outside the premises. It is stated that because of the plaintiff's negligence and failure in operating of the plants, defendant No.1 received notice. It is stated that the plaintiff has violated the tender conditions and instead considering the effluent effectively as per the agreement the plaintiff was discharging the effluents to adjacent Bashettahalli Lake. It is stated that the plaintiff has delayed the construction of plant and plaintiff should have been commissioned, operated till the O & M period and should have been handed over the plant to the association by December 2009 and plaintiff had delayed the project and also not handed over the plant to association in working conditions. It is stated that the joint inventory report submitted by STUP consultants duly signed 16 CT 1390_Com.O.S.1319-2016_ Judgment.doc by representative of plaintiff shows many shortcomings in the machinery and many of the units of CETP were not in operational condition. It is stated that the plaintiff is solely responsible for design and installation of the plant and hence any failure in RO membrane, the plaintiff is responsible for replacement of the RO membrane and hence request of the plaintiff of Rs.51,87,500/- cannot be admitted. The claim of the plaintiff for return of the deposit amount of Rs.1,59,29,051/- is denied and disputed by the defendant. It is stated that the plaintiff has not handed over the plant to board and O & M of the plant is not executed and plaintiff has abandoned the plant and the plant was not in operational condition and for these reasons work is not finalized. It is stated that the defendant has already released Rs.50 lakhs out of security deposit amount to the plaintiff, but the plaintiff has not mentioned about the receipt of this amount and plaintiff has not given indemnity bond. Claim for Rs.13,08,000/- and Rs.20,23,439/- could be considered only when the work is finalized and duly certified by the PMC. With regard to Rs.57,12,500/-, towards electrical work claimed by the plaintiff, the board had released Rs.29,83,750/- and plaintiff has not completed work as per the tender agreement and conditions. It is stated that the claim under the head of capital expenditure during operation and maintenance of the project, plaintiff raised bill for Rs.51,87,500/- towards RO membrane replacement and the claim is denied. The contention that there is outstanding due 17 CT 1390_Com.O.S.1319-2016_ Judgment.doc of Rs.78,24,839/- from the defendant is denied. The claim of the plaintiff for Rs.3,79,85,329/- is disputed by the 1 st defendant and the claim for interest is also denied.
4.Defendant No.2 has not filed any written statement.
5. On the above pleadings following issues are framed:
1. Whether plaintiff is entitled to recover Rs.1,59,29,051/- from the defendant No.1 which was deducted towards security deposit ?
2. Whether plaintiff is entitled to recover Rs.90,43,939/- from the defendant No.1 as claimed in para 9(A) (a) (ii) of the plaint ?
3. Whether plaintiff is entitled to recover Rs.51,87,500/- from defendant No.1 towards (R.O) Reverse Omsmosis Membrane replacement as claimed in para 9 B of the plaint ?
4. Whether plaintiff is entitled to recover Rs.78,24,839/- from defendant No.1 towards outstanding bills during operation and maintenance of the project as claimed in para 9 C of the plaint ?
5. Whether plaintiff is entitled to recover Rs.1,88,75,589/- from the defendant No.1 towards interest as detailed in para 9 D of the plaint ?
6. What decree or order?
6. In support of the plaintiff's case PW.1 is examined. Ex.P.1 to Ex.P.26 documents are marked. For defendant 18 CT 1390_Com.O.S.1319-2016_ Judgment.doc DW.1 and DW-2 are examined and Ex.D.1 to Ex.D.7 documents are marked.
7. Heard arguments. Counsels have filed written arguments also. Perused records.
8. My answer to the above issues are :
ISSUE No.1 : Partly in the affirmative.
ISSUE No.2 : Partly in the affirmative.
ISSUE No.3 : Partly in the affirmative.
ISSUE No.4 : Partly in the affirmative.
ISSUE No.5 : Partly in the affirmative.
ISSUE No.6 : As per final order for the following:
REASONS
9. ISSUES NOS.1 to 4 : Since all these issues are interlinked with each other, they are taken together for discussion, to avoid repetition.
10. Case of the plaintiff is that the defendant No.1 had called for tender for construction of Sewage Treatment Plant and Common Effluent Treatment plant and plaintiff applied for the same and was successful and work order was issued to the plaintiff and agreement was also executed. In connection with this work order given to the plaintiff, the suit claim amount is stated to be due from the defendants. According to the plaintiff, it has successfully completed the project and also completed operation and maintenance period, but the defendant No.1 has not returned the security deposit amount to the plaintiff and also not made payment of the 3 RA bills amount and also not made payment towards Reverse Osmosis membrane replacement and also the 19 CT 1390_Com.O.S.1319-2016_ Judgment.doc outstanding bill during operation and maintenance of the project. On the outstanding amount, plaintiff has also calculated interest @12% per annum which is arrived at Rs.1,88,75,589/-. Plaintiff has totally claimed Rs.5,68,60,918/- in this suit. Defendant No.1 in the written statement has denied the claim of the plaintiff and its liability to pay the amount and contended about lapses on the part of the plaintiff in operation and maintenance and also stated about some payment made by the defendant No.1 to the plaintiff and also stated that there was delay caused by the plaintiff and has denied its liability to pay the suit claim amount and also the interest. The 2nd defendant STUP Consultants Private Limited is only project consultant for certifying the work done by the plaintiff and is the representative of KIADB and has not filed written statement.
11. For the plaintiff, PW.1 has given evidence and has reiterated its contention taken in the plaint. In the cross examination, witness has stated that he is working with the plaintiff since 2000 and he is Senior Vice President, finance and Legal of the company. He has admitted that the site was handed over to the plaintiff by 1 st defendant on 30/1/2006 and admitted that plaintiff has provided bank guarantee upto 30/6/2009 and admitted that as per the Tender agreement plaintiff was required to provide bank guarantee upto 13/2/2013. He has denied that plaintiff's company has failed to operate and maintain the plant during the O & M period between 2/2/2010 to 2/2/2013. Witness has denied that the 20 CT 1390_Com.O.S.1319-2016_ Judgment.doc plant remained closed from 11/3/2011 to June 2013. Witness denied that the plaintiff has delayed completion and commission of the plant and due to delay and latches on the part of the plaintiff company, 1st defendant has suffered loss. He has denied that during O & M period plaintiff company has not properly operated the plant. He has admitted that as per the terms of the turn key contract, plaintiff company is responsible for the construction, designs and also operating of the plant. He has denied that Ex.P.5 certificate was issued only with respect to the commissioning of the plant during February 2010 and not with respect to completion of the work and denied that Ex.P.5 is given only for the tender purpose. Witness admitted that the defendant has handed over the site to the plaintiff company on 30/1/2006 and plaintiff was required to complete the work within 10 months and denied that there was delay on the part of the plaintiff. Witness has stated that he is not aware that defendant No.1 has paid electricity charges amounting to Rs.46,60,000/- and denied that plaintiff company has provided only below 60% tertiary treated water as against required 81.8% tertiary treated water. Witness denied the suggestion that the Karnataka State Pollution Control Board had written a letter to 1 st defendant stating that plaintiff company has not properly operated the CETP and denied that the plaintiff has released waste water to Bashettihalli lake without treating the same and villagers of Bashettihalli have opposed and complaint was also given. Witness admitted that in the meeting held on 21 CT 1390_Com.O.S.1319-2016_ Judgment.doc 28/3/2011, 1st defendant has instructed the plaintiff company to hand over the plant in running condition with all spare parts. He has denied that the plaintiff has failed to hand over the plant in running condition. He has denied that plaintiff has not properly operated and maintained the plant and has violated the terms and conditions of the tender agreement. Witness admitted that the 1 st defendant has paid sum of Rs.50 lakhs to the plaintiff company on 27/12/2010. He has denied that for any failure of RO membrane, plaintiff company was responsible for replacement of RO membrane. Witness denied that the 2nd defendant has not certified the final bill of the plaintiff company. Witness admitted that Rs.29,83,750/- was released on 22/2/2011 towards electrical works. Witness denied that the plaintiff has operated plant upto secondary level treatment effluent from January 2009 to January 2010. Witness denied that 1 st defendant is not liable to pay Rs.3,79,85,329/- to the plaintiff company. Witness denied that plaintiff has failed to demonstrate the working capacity and work-ability of the plant in operational condition. Witness denied the suggestion that as per the tender agreement plaintiff is required to get CFO from KSPCB. Witness stated that he is not aware that in the meeting dated 20/12/2012 plaintiff had assured to start the plant on or before 13/1/2013.
12. Plaintiff has produced authorization letter given to PW.1 as Ex.P.1. Original agreement and letter of award and work order certificate are produced as Ex.P.2 to Ex.P.4. Work 22 CT 1390_Com.O.S.1319-2016_ Judgment.doc Done Certificate given by defendant No.1 on 7/3/2013 is produced as Ex.P.5. Letters of the defendant are produced as Ex.P.6 and Ex.P.7. These letters are sent to Doddaballapur Apparel Park asking them to take over operation and maintenance of the project with immediate effect. Copy of the proceedings of the meeting dated 19/12/2012 is produced as Ex.P.8. Copy of legal notice are produced as Ex.P.9 and Ex.P.10. Printout of email is marked as Ex.P.11. Copy of meeting notice is produced as Ex.P.12. Letter dated 21/10/2015 given by the plaintiff to the 1 st defendant asking them to make payment of outstanding due of Rs.3,59,60,490/- is produced as Ex.P.13. Account extract is marked as Ex.P.14. Plaintiff has also produced copy of minutes of meeting dated 29/11/2010, 30/7/2012, 20/12/2012 and 7/7/2014 as Ex.P.15 to Ex.P.17 and Ex.P.19. Copy of letter dated 30/7/2012 given by the plaintiff to the defendant is marked as Ex.P.16. Copy of letter issued by the plaintiff dated 14/2/2013 for handing over the plant to KIADB is marked as Ex.P.18. Ex.P.20 and Ex.P.24 are copies of the system application and product document along with summary of statement of account of capital expenditure. Ex.P.21, Ex.P.22 and Ex.P.23 are copy of running account bill No.41, 43 and 44. Amount covered these RA bills are also claimed by the plaintiff in this suit. Copy of running account bill and copy of the work done certificate dated 26/11/2010 issued by 2nd defendant to the 1st defendant are produced as Ex.P.25 and Ex.P.26.
23CT 1390_Com.O.S.1319-2016_ Judgment.doc
13. For the defendant no.1, earlier, witness by name K.S.Kumarappa had filed chief affidavit and that evidence was discarded. Subsequently DW.1 C.N.Murthy has given evidence. That evidence is also discarded on the request of the defendant. Subsequently another witness by name Sri.Sunil.C has given evidence as DW.2. Therefore, DW.2 is the witness examined for the defendant No.1 in the suit. DW.2 in his chief affidavit has reiterated contention of the 1 st defendant taken in the written statement. In the cross examination, witness has stated admitted that they had engaged services of the 2nd defendant as Project Management Consultant and certified bills are submitted by the contractor. He has also stated that it was also part of the work of 2 nd defendant to secure required statutory clearances from concerned authorities through contractor. He has admitted that the 2nd defendant has also obtained consent for operation (CFO) for the 1st defendant on 11/1/2011 from Karnataka State Pollution Control Board. He has stated that after expiry of CFO dated 11/1/2011 2nd defendant has not secured another CFO. DW.2 has stated that they have not taken any action against 2nd defendant for not obtaining CFO after expiry of the first one. Witness has admitted that for operating of the plaint CFO is must. He has stated that in the meeting dated 20/12/2012 second defendant had given instruction in this regard and stated that the instructions were given to both 2nd defendant and plaintiff and stated that the proceedings of the meeting is produced in Ex.P.17. DW.2 24 CT 1390_Com.O.S.1319-2016_ Judgment.doc has stated that according to him, 2 nd defendant along with plaintiff was required to obtain CFO. He has admitted that work of the plaintiff is to operate the plant after receiving CFO. DW.2 has admitted that work done certificate as per Ex.P.5 is issued on 7/3/2013 on the basis of certificate given by the 2nd defendant. He has admitted that as per the agreement, operation and maintenance by the plaintiff was only upto 2013 March. Witness has stated that in Ex.P.5, completion of operation and maintenance is not mentioned and admitted that there is no provision for giving separate work done certificate for completion of operation and maintenance. Witness has admitted that after giving work done certificate final bill is to be cleared. He has stated that for clearing the final bill, availability of the fund and proper commissioning of the plant will also be considered. Witness has stated that they are having power to evaluate completion of the project independently and stated that as per KTPP Act, for the project worth more than Rs.2 crores, independent evaluation from third party is to be made. DW.2 has denied that after issue of work done certificate they have to refund security deposit of Rs.7.5% which has been deducted from RA bills. Witness stated that security deposit amount is tobe refunded after completion of the work and after defect liability period which is of one year from the date of completion of the civil work. Witness stated that Ex.P.5 is issued for completion of civil work and admitted that defect liability period of one year was completed at the time of issuing 25 CT 1390_Com.O.S.1319-2016_ Judgment.doc Ex.P.5. Witness admitted that security deposit amount is not refunded to the plaintiff till now. Witness has admitted that during the period of operation and maintenance, they have sent letter to Industrial Apparel Association, Doddaballapur to take over the plant and stated that they have not taken over the plant as it was not in running condition. Witness admitted that, in Ex.P.8, it is noted that operation and maintenance is not done for the reason of non payment. Witness stated that payment was not made as plaintiff has not operated and maintained it during operation and maintenance period. He has also stated that after this meeting, payment was made on the promise of payment to start the plant. Witness has admitted that RA bill in Ex.P.21 and Ex.P.22 are still pending for payment and stated that they are not yet certified for payment. Witness admitted that the work mentioned in these RA bills are completed. He has admitted that in Ex.P.17, CEO had directed 2 nd defendant to verify the work done with regard to two RA bills and also directed plaintiff to submit indemnity bond and there is also direction issued to BRFL. Witness admitted that the plaintiff had done some extra work. It is also admitted that in Ex.P.15 meeting, there is direction to make payment of Rs.20,25,000/- towards extra work and this payment is also not made till now. DW.2 has admitted that the plaintiff has changed RO membrane to introduce Enzyme Treatment. He has admitted that as inflow characteristic of affluent was changed, Enzyme Treatment is introduced. DW.2 has denied 26 CT 1390_Com.O.S.1319-2016_ Judgment.doc that changed inflow characteristic of affluent was not part of contract. He has admitted that inflow characteristic of affluent existing at the time of entering into contract was different than inflow characteristic of affluent existing at the time of operation and maintenance. Witness admitted that plaintiff has claimed Rs.51,87,500/- for changed RO membrane and they have not made payment for this claim. He has stated that they are not liable to make such payment. Witness has denied the suggestion that though the plaintiff has made operation and maintenance from January 2011 to June 2012, they have not made payment. He has admitted that in the meeting dated 19/12/2012 plaintiff has stated that as payment is not made, they are not in a position to operate and maintain the plant and admitted that in the meeting they were directed to release Rs.50 lakhs and this amount was not released as indemnity bond was not given. Witness has admitted that in the meeting dated 7/7/2014 they were asked to submit a report regarding total dues and admitted that they have not given such report. Witness stated that as they have suffered loss and plant is not operative, they are not liable to pay any amount to the plaintiff.
14. Defendant has produced authorization given to DW.1 as Ex.D.1 and the present DW.2 as Ex.D.7. Letter dated 21/7/2011 issued by Karnataka Pollution Control Board and another letter dated 10/8/2011 and 19/4/2013 are all produced as Ex.D.2, Ex.D.3 and Ex.D.4. Meeting 27 CT 1390_Com.O.S.1319-2016_ Judgment.doc Notice dated 16/7/2014 is produced as Ex.D.5. Ex.D.6 is the letter given by the 1st defendant to the Gram Panchayath on their complaint.
15. On looking to the plaint averments, evidence and the documents produced and also hearing arguments and perusing written arguments submitted by both the counsels, 2nd defendant is only a formal party who was required to certify the bills and was to act as project consultant. There is no dispute that the work was entrusted to the plaintiff by the 1st defendant. Though the work was to be completed within 10 months, there was delay in completion of the work and finally work is completed. Though there are allegations by the defendant No.1 in the written statement to the effect that the delay is caused by the plaintiff, 1st defendant is not making any claim against the plaintiff in the present suit. Moreover, 1st defendant itself has issued Ex.P.5 work done certificate on 7/3/2013 as per Ex.P.5, in which it is mentioned that the STP plant was commissioned during February 2010. For issuing this Ex.P.5, 2nd defendant which is the project consultant had given a certificate on 26/11/2010 as per Ex.P.26 in which it is clearly mentioned that WWTP has been put for secondary level treatment operations from February 2009 and tertiary level treatment from February 2010. It is also mentioned that O & M which is for a period of 3 years as per contract is underway. It is clearly mentioned in Ex.P.26 that, plaintiff has executed the project of establishment of 5.5 MLD capacity WWTP upto tertiary standards required for 28 CT 1390_Com.O.S.1319-2016_ Judgment.doc recycling of treated wastewater to Apparel Park units on turnkey basis and the tertiary level treatment operation from February 2010. On the basis of these and Ex.P.5 dated 7/3/2013 and also the evidence of DW.2, it is clear that the work which was entrusted to the plaintiff is completed in February 2010.
16. As per the Letter of award and the Agreement which are produced as Ex.P.2 and Ex.P.3, there is operation and maintenance period i.e. O & M of 3 years which also is to be completed by the plaintiff. At the time of issuing Ex.P.26 by the 2nd defendant, this O & M period was underway and at the time of issuing Ex.P.5 on 7/3/2013 this 3 years O & M period was over, as in February 2010 itself plant was commissioned. On looking to these documents in Ex.P.5 and Ex.P.26 and in the absence of any other documents to the contrary, contention of the plaintiff that the plaintiff has successfully completed the project work of CETP plant by February 2010 and even the O & M period of 3 years is also expired by the end of February 2013 is sufficiently established in this case.
17. Defendant in the written statement and also in the evidence of DW.2 has taken the contention about failure of the plaintiff in Operation and maintenance and the lapses on the part of the plaintiff during O & M period. This is stated to be the cause for non settling the entire dues of the defendant. It is not in dispute that there is a security deposit given by the plaintiff and also deducted from RA bill of the plaintiff.
29CT 1390_Com.O.S.1319-2016_ Judgment.doc This amount is admittedly not refunded to the plaintiff till now. DW.2 in his cross examination has clearly admitted that the security deposit amount is not returned. Similarly RA bills are also stated to have not been paid to the plaintiff. DW.2 has admitted that RA bill in Ex.P.21 and Ex.P.22 are still pending for payment. Though he has stated that they are not yet certified for payment, witness has submitted that the work mentioned in those RA bills are completed. Since DW.2 has admitted submission of RA bills and Ex.P.26 certificate is given by the 2nd defendant, acknowledging completion of the work, these RA bills amount is also payable to the plaintiff. Admittedly they are not paid.
18. DW.2 has even admitted that in Ex.P.17 also, CEO had directed the 2nd defendant to verify the work done with regard to these RA bills and also directed the plaintiff to submit its stand. Regarding extra work done also claim for Rs.20,25,000/- is admitted to have not been paid to the plaintiff till now. There is admission by DW.2 that in Ex.P.15 there is direction to make payment. On considering this, it is clear that several RA bills connected to the contract work and also bill regarding extra work done are not paid by the defendant to the plaintiff till now. Similarly, security deposit amount is also not paid. Regarding security deposit amount, DW.2 has admitted that it is not paid and stated that the security deposit amount is to be refunded after completion of contract and after defect liability period. However, the same witness has admitted that Ex.P.5 is issued for completion of 30 CT 1390_Com.O.S.1319-2016_ Judgment.doc the civil work and admitted that defect liability period of one year was completed at the time of issuing Ex.P.5. Therefore, at the time of issuing Ex.P.5 itself, security deposit amount had already become payable.
19. Regarding the dispute about O & M period and not operating the plant, there are several admissions found in the cross examination of DW.2. DW.2 has admitted that consent for operation CFO is required to be obtained by the 2 nd defendant and 2nd defendant had obtained the same upto 11/1/2011 and after expiry of this CFO, 2 nd defendant has not secured another CFO and CFO is to be obtained from Karnataka State Pollution Control Board and for operating the plant, CFO is must. He has also admitted that, work of the plaintiff is to operate the plant after receiving CFO. Hence, it is clear that only if CFO is obtained, plaintiff can operate the plant and as admitted by DW.2, CFO was not obtained by the 2nd defendant after 11/1/2011. Therefore, plaintiff cannot be blamed for not operating the plant after 11/1/2011. Apart from this, it is clearly admitted by DW.2 that in the meeting dated 19/12/2012 as per Ex.P.8, plaintiff has stated that operation and maintenance is not possible without making payment. On looking to the evidence, admittedly security deposit amount and 2 RA bills and one bill for extra work and also RO membrane bill were pending with the defendant No.1 and defendant No.1 without clearing those bills, was asking the plaintiff to operate the plant. Still, the plaintiff appears to have made maximum effort to operate 31 CT 1390_Com.O.S.1319-2016_ Judgment.doc the plant during O & M period mentioned in the contract. This is even accepted in Ex.P.5, as on 7/3/2013 this work done certificate is given stating that the plant was commissioned during February 2020 and there is O & M period of 3 years. This 3 years period had also expired by the end of February 2013. If there was some lapses in O & M by the plaintiff, 1st defendant would not have issued work done certificate on 7/3/2013.
20. Apart from this, 1st defendant itself had issued letter on 27/4/2011 as per Ex.P.6 and on 29/3/2012 as per Ex.P.7 to the president of Doddaballapur Apparel park Industries Association, asking them to take the operation and maintenance of CETP and STP in Apparel Park with immediate effect. It is mentioned that in the meeting dated 28/3/2011 and also subsequent meeting, it was resolved that further operation and maintenance of STP and CETP be handed over to the industries association. Therefore, by Ex.P.6 and Ex.P.7, 1st defendant has asked the Industries association to take over the operation and maintenance of the plant and as such, plaintiff cannot be blamed for non operating the plant.
21. On looking to all these documents and the admission of DW.2, it is clear that the issue of O & M cannot come in the way of making payment of the due amount to the plaintiff, who has completed the project and also operated the plant during O & M period, with minor problem here and there due to lapses on the part of the defendant No.1 or due 32 CT 1390_Com.O.S.1319-2016_ Judgment.doc to defendant No.1 asking the Association to take over the operation and maintenance or due to failure of the defendant No.1 to clear the outstanding dues, inspite of several directions being issued by the officers of the 1 st defendant in different meetings and the plaintiff expressing its difficulty on account of non payment of the amount. Therefore, this issue of O & M will not come in the way of plaintiff claiming the amount.
22. Plaintiff's another claim is about replacement of RO membrane which is for Rs.51,87,500/-. In the cross of PW.1, it is suggested to the witness that the failure of RO membrane is not the concern of the 1 st defendant and on failure of RO membrane plaintiff is liable for replacement and 1st defendant is not responsible to pay this amount. However, DW.2 in the cross examination has admitted that the plaintiff has changed RO membrane to introduce Enzyme Treatment. Witness has admitted that inflow characteristic of affluent existing at the time of entering into contract was different than inflow characteristic of affluent existing at the time operation and maintenance. Therefore, when the characteristic of affluent existing at the time when the contract was entered and when the operation and maintenance has started changed, plaintiff cannot be blamed for failure of RO membrane requiring its replacement. As admitted by DW.2, plaintiff has claimed Rs.51,87,500/- for change of RO membrane and this payment is not made by the defendant, though the bill was submitted by the plaintiff 33 CT 1390_Com.O.S.1319-2016_ Judgment.doc claiming this amount. Defendant No.1 appears to have not disputed the entitlement of the plaintiff for this amount, but has raised only other issues of O & M period, not giving bank guarantee till completion of the work etc. There is no such material placed by the defendant No.1 to show that this claim for RO membrane replacement is not tenable and defendant No.1 is not liable to make payment of the same.
23. On looking to the entire evidence and the documents produced, it is clear that the plaintiff has been complaining about non payment of the due amount which has affected its business and regarding this, several meetings were also held and in those meetings time and again, defendant No.1 was asked to make payment and to clear the dues. Inspite of all those meetings, discussions and requests by the plaintiff, defendant No.1 appears to have not made payment of the amount. Though defendant No.1 has issued work done certificate showing that the work was completed in February 2010 and by the time work done certificate is given, O & M period had also expired, still plaintiff retained the security deposit amount and not cleared the RA bills, not cleared the bill for extra work done and also not made payment of RO membrane replacement bill claimed by the plaintiff. Non payment of this amount is even admitted by DW.2 in his cross examination. Contention of the defendant appears to be that as plaintiff has not maintained and operated plant during O & M period and due to financial problem, amount is not paid. DW.2 in the cross examination 34 CT 1390_Com.O.S.1319-2016_ Judgment.doc has also stated that indemnity bond is not given. As per the agreement, indemnity bond is to be given at the time of final settlement. DW.2 has stated that for clearing the bill, availability of the fund and proper commissioning of the plant will also be considered. Witness has admitted that after giving work done certificate final bill is to be cleared.
24. Learned counsel for the plaintiff has relied on the decision of the Hon'ble Supreme Court reported in 2007 (6) SCC 401 (Venkataramana Hebbar (dead by LRs) v. M.Rajagopal Hebbar and others) in which the Hon'ble Supreme Court has held that if a plea which were relevant for the purpose of maintaining the suit had not been specifically traversed, court is entitled to draw inference that same has been admitted and it is also held that the fact admitted in terms of Section 58 of the Evidence Act need not be proved. He has also drawn my attention to a decision of Hon'ble Supreme Court reported in 2004(10) SCC 764 (Commissioner of Central Excise Madras v. Systems & Components Private Limited) in which the Hon'ble Supreme Court has held that it is the basic and settled law that, admitted fact need not be proved. He has also drawn my attention to the decision reported in 2004 (6) SCC 325 (Vice Chairman, Kendriya Vidyalaya Sangatan v. Giridarilal Yadav) in which, Hon'ble Supreme Court has again held that the fact admitted need not be proved and it is held that it is well settled principle of law that the principles of natural 35 CT 1390_Com.O.S.1319-2016_ Judgment.doc justice should not be stretched too far and the same cannot be put in a straitjacket formula.
25. On going through these decisions, Hon'ble Supreme Court in these decisions has considered the effect of admission in a civil dispute. As held by the Hon'ble Supreme Court and as per the provisions of Indian Evidence Act admitted fact need not be proved and when a party do not specifically denies relevant contention, court is entitled to draw an inference that the said fact is admitted. In the present case also much of the contention regarding submission of RA bill, pending of RA bill, non payment of security deposit amount, completion of work, issuance of work done certificate and replacement of RO membrane and change of inflow characteristic are all either admitted by the defendant in the evidence and in the written statement or the contention of the plaintiff are not denied. Therefore, these facts and the contention of the plaintiff are deemed to have been admitted by the defendant and in the cross examination of DW.2 most of these contentions of the plaintiff are even admitted as discussed above. Therefore, admission of the defendant No.1 about issuance of work done certificate, completion of the work and also completion of O & M period and resolution passed to hand over the plant to Association and non payment of the amount, have to be taken into consideration while deciding this suit.
26. On looking to all these aspects, it is very clear that after completion of the work, work done certificate is to be 36 CT 1390_Com.O.S.1319-2016_ Judgment.doc given and same is given by the 1st defendant based on Ex.P.26. As per the agreement, 3 years O & M period is also look out of the plaintiff and the said period is also expired in February 2013 itself. 1 st defendant has even asked the Industries association to take operation and maintenance of the plant by sending two letters after passing the resolution, but the association has not taken the O & M of the plant. Even the defendant No.1 has not cleared the final bill and other pending bills of the plaintiff and even security deposit amount are not returned. Therefore, plaintiff has completed its part of the work as per the agreement and the defendant have to make the payment of the due amount to the plaintiff. In the present suit, plaintiff has stated that there is outstanding security deposit amount of Rs.1,59,29,051/-. Defendant has not produced any document to dispute this security deposit amount shown as lying with the 1 st defendant. In all the letters and also the legal notice, plaintiff has stated about this security deposit amount lying with the 1st defendant and this amount is to be paid to the plaintiff after completion of the work and in this case even O & M period is also expired as seen in Ex.P.5. Therefore, defendant No.1 is not justified in withholding the security deposit amount of Rs.1,59,29,051/-. Therefore, defendant No.1 is liable to pay this amount to the plaintiff. In the cross examination of DW.2 it is suggested that after completing work final bill is to be cleared. It is also stated by DW.2 that the defect liability period of one year is also completed from 37 CT 1390_Com.O.S.1319-2016_ Judgment.doc the date of completion of civil work and witness admitted that security deposit amount is not refunded to the plaintiff till now. It is suggested to DW.2 that as per the contract after issuance of work done certificate, defendant No.1 have to refund security deposit of 7.5% which has been deducted from RA bill. This amount according to the plaintiff is Rs.1,59,29,051/-. Therefore, plaintiff is entitle for this amount.
27. Plaintiff has also made claim for outstanding due of RA bill No.43, 41 and also payment towards additional work which totally comes to Rs.90,43,939/-. In this amount payment towards civil and mechanical final bill of Rs.13,08,000/-, payment towards electrical final bill of Rs.57,12,500/- and claim for additional work of Rs.20,23,439/- is included. Even non payment of these RA bills which include the final RA bill of Rs.57,12,500/- is admitted by DW.2 in the evidence. Even in the notice given by the plaintiff on 21/1/2015 as per Ex.P.13, these claims are made. Even the plaintiff has produced the document in support of these claims as Ex.P.21 and Ex.P.22. Even DW.2 in the cross examination has admitted that in Ex.P.15 there is direction to make payment of Rs.20,25,000/- towards extra work. The amount of Rs.20,23,439/- claimed by the plaintiff in the present suit for the extra work is less than amount admittedly mentioned in Ex.P.25 and stated by DW.2. Therefore, plaintiff is entitle for RA bill amount of 38 CT 1390_Com.O.S.1319-2016_ Judgment.doc Rs.13,08,000/-, Rs.57,12,500/- and also Rs.20,23,439/- which totally comes to Rs.90,43,939/-.
28. Towards capital expenditure during operation and maintenance of the project, plaintiff submitted RA bill No.44 for a sum of Rs.51,87,500/-. This is found in Ex.P.23. Though in the cross examination of PW.1, liability to pay this amount towards RO membrane replacement is denied, DW.2 has admitted that the inflow characteristic of affluent existing at the time of agreement and at the time of operation and maintenance has changed. Defendant cannot deny its liability to pay this amount as plaintiff might not have anticipated the necessity of replacement of RO membrane. RA Bill No.44 is also lying with the defendant No.1 and the payment is not made till now. The bill is submitted on 5/3/2012 as seen in Ex.P.23. Defendant No.1 has failed to establish that it is not liable to pay these amount of bills submitted by the plaintiff. Hence, plaintiff is entitle for this amount from the 1st defendant.
29. Plaintiff has also claimed outstanding bill towards operation and maintenance of the work amounting to Rs.78,24,839/- which is in Ex.P.24 and Ex.P.25. In Ex.P.24 statement of service, bill number and date of the bill, total invoice value and the amount already paid and the balance are clearly shown which comes to Rs.78,24,839/-. However, in Ex.P.13 letter dated 21/10/2015, plaintiff has mentioned the amount as Rs.78 lakhs as due towards cumulative O & M bill for the period from June 2011 to June 2012. Since this 39 CT 1390_Com.O.S.1319-2016_ Judgment.doc amount was claimed by the plaintiff in letter dated 21/10/2015 and this is letter making claim by the plaintiff sent to the 1st defendant, amount mentioned in this letter is to be considered for this purpose. Therefore, though the plaintiff has claimed Rs.78,24,839/- and the same is substantiated by Ex.P.24 and Ex.P.25, in view of the plaintiff claiming Rs.78 lakhs in Ex.P.13, plaintiff would be entitle for Rs.78 lakhs as against the claim of Rs.78,24,839/-.
30. Therefore, plaintiff is entitle for Rs.1,59,29,051/- towards refund of security deposit which was payable on 7/3/2013. Plaintiff is also entitle for Rs.90,43,939/- towards RA bill No.43, 41 and towards additional work. Plaintiff is also entitle for Rs.51,87,500/- towards RO membrane replacement and is also entitle for Rs.78 lakhs towards the outstanding bill during O & M period which was even claimed in Ex.P.13. The total amount to which the plaintiff would be entitle comes to Rs.3,79,60,490/-. In the suit plaintiff has claimed Rs.3,79,85,329/-. Difference of Rs.24,839/- is due to claim of Rs.78,24,839/- in this suit as against claim of Rs.78,00,000/- mentioned in Ex.P.13. Though the plaintiff has claimed Rs.3,79,85,329/- by including, all these amounts of refund of security deposit, outstanding RA bills, due towards additional work, RO membrane replacement and outstanding bills on operation and maintenance, plaintiff has not claimed any amount towards amount incurred due to restart of the plant and rain water flooding as mentioned in Ex.P.13. As stated above 40 CT 1390_Com.O.S.1319-2016_ Judgment.doc Ex.P.13 is the final document in which the plaintiff had made claim from the defendant. In this, in Sl.No.7, Rs.30 lakhs was claimed as amount incurred due to restart of the plant after rain water flooding. This amount is not claimed in the present suit. Hence this amount which is not claimed cannot be awarded. On considering the claim made in the plaint and also in Ex.P.13 dated 21/10/2015, out of Rs.4,09,60,490/- mentioned in this Ex.P.13, Rs.30 lakhs towards amount incurred due to restart of the plant is to be excluded as the same is not claimed in the present suit. On deducting this amount, outstanding amount under various heads as appearing in Ex.P.13 would be Rs.3,79,60,490/-.
31. Plaintiff has also stated about direction given to the defendant No.1 by higher officer to make payment. However, plaintiff has not deducted Rs.50 lakhs which is said to have been paid by the defendant. Initially the plaintiff had issued notice to the defendant claiming Rs.12,41,94,897/- and subsequently by letter dated 21/10/2015 which is Ex.P.13, plaintiff had reduced the claim to Rs.4,09,60,490/- by stating that the plaintiff has foregone some of its claim against defendant No.1. Those foregone claims cannot be claimed in the present suit. Therefore, Ex.P.13 would be the base for the claim. As stated above, one of the amount mentioned in Ex.P.13 is not claimed in the present suit and by deducting that amount, claim of the plaintiff would come down to Rs.3,59,60,490/-. Plaintiff has deducted Rs.50 lakhs as adhoc payment released in November 2012 in Ex.P.13.
41CT 1390_Com.O.S.1319-2016_ Judgment.doc However, this Rs.50 lakhs which is said to have been paid in November 2012 is not considered by the plaintiff in the suit claim amount. Hence out of Rs.3,79,60,490/- which is payable by the defendant as calculated in Ex.P.13, Rs.50 lakhs which is given deduction in Ex.P.13 is to be deducted and on deducting the same, subsequent balance amount would come to Rs.3,29,60,490/-. In Ex.P.13, Rs.30 lakhs amount incurred due to restart of the plant is claimed, but same is not claimed in the present suit. On deducting the said amount in the claims made in Ex.P.13, balance outstanding would be Rs.3,29,60,490/- even as per Ex.P.13. For these reasons plaintiff is entitle for Rs.3,29,60,490/- from the defendant.
32. Since the defendant No.1 has not made payment of this amount, though the bills were already submitted by the plaintiff and even the work is completed and O & M period is also expired, defendant No.1 is liable to pay this amount to the plaintiff. Since out of the total amount covered in Issue No. 1 to 4, which comes to Rs.3,79,85,329/-, plaintiff is entitle for Rs.3,29,60,490/- after deducting Rs.24,839/- of Issue No.4 and Rs.50,00,000/- as paid in November as mentioned in Ex.P.13, Issues No.1 to 4 are answered partly in the affirmative.
33. ISSUE No.5 : Plaintiff has calculated interest on this amount from different dates and the interest calculated by the plaintiff itself comes to Rs.1,88,75,589/-, In respect of security deposit amount plaintiff has claimed interest from 42 CT 1390_Com.O.S.1319-2016_ Judgment.doc March 2011. In respect of RA bills claim is made from Mach 2010. Towards O & M bills interest is claimed from March 2013. On looking to Ex.P.5, Work completion certificate is given on 7/3/2013. As mentioned in this certificate, plant is commissioned in February 2010 and there is 3 years O & M period, which expired by 2013. Therefore, in February 2013, contract comes to an end between the parties. In the cross examination of DW.2, it is suggested that after issuance of work done certificate, security deposit amount is to be repaid. Regarding O & M only after expiry of O & M period the amount become due.
34. By considering all these aspects, since O & M period is also part of the contract, entire amount which is claimed in the suit to which the plaintiff is entitled, are payable on completion of the work which include O & M period. Therefore, in March 2013 these amount are payable. Since the work done certificate is issued on 7/3/2013 and before that, all these bills and the claim of the plaintiff have matured for payment, plaintiff would be entitle for interest from 7/3/2013. Therefore, as against the claim of the plaintiff for interest in respect of different amount from different dates, plaintiff would be entitle for interest from the date of Ex.P.5 which is 7/3/2013. Hence plaintiff is entitle for interest on the total amount of Rs.3,29,60,490/- from 7/3/2013 till date of suit. Plaintiff has claimed interest @12%. Defendant has not placed any material to show that the contract bars payment of interest. Even otherwise, as 43 CT 1390_Com.O.S.1319-2016_ Judgment.doc these amounts have become due as on the date of Work done certificate issued on 7/3/2013, plaintiff would be entitle for reasonable interest on this outstanding amount from the 1 st defendant. The interest of 12% claimed by the plaintiff for the period upto the date of suit is very reasonable. Therefore, plaintiff is entitle for interest @12% per annum from 7/3/2013 till the date of suit i.e. 12/2/2016. On the entire amount so arrived, plaintiff would also be entitle for interest from the date of suit till realization of the entire amount. Though plaintiff has claimed interest of 12% per annum from the date of suit, by exercising discretion it is proper to award interest @9% per annum from the date of suit till realization of the entire amount. Hence as against the claim of the plaintiff for interest of Rs.1,88,75,589/-, plaintiff is entitle for interest @12% per annum on Rs.3,29,60,490/- from 7/3/2013 till 12/2/2016, which is to be calculated separately. Accordingly this issue is answered.
35. ISSUE NO.6 : For the discussion made on above issues, plaintiff is entitle for recovery of Rs.3,29,60,490/- with interest @12% per annum from 7/3/2013 till 12/2/2016. On the principal outstanding amount and the interest thereon as calculated above, plaintiff is entitle for interest @9% per annum from the date of suit till realization of the entire amount. Accordingly following order is passed:
ORDER Suit of the plaintiff is partly decreed with costs.44
CT 1390_Com.O.S.1319-2016_ Judgment.doc The defendant No.1 is liable and is directed to pay Rs.3,29,60,490/- to the plaintiff with interest @12% per annum from 7/3/2013 till 12/2/2016.
The plaintiff is also entitle for interest @9% per annum on the amount so calculated, from the date of suit till realization of the entire amount.
Draw decree accordingly.
[Dictated to the Judgment Writer; transcript thereof corrected and then pronounced by me in the Open Court, on this the 2nd day of June 2023] [Ravindra Hegde] LXXXIII Additional City Civil Judge.
BENGALURU.
ANNEXURE
1. List of witnesses examined on behalf of Plaintiff:
PW.1 : Anil Kumar Chauhan.
2. List of witnesses examined on behalf of Defendants:
DW.1 : K.S.Kumarappa.
DW.2 : Sunil .C
3. List of documents marked on behalf of Plaintiff:
Ex.P.1 : Board Resolution Meeting.
Ex.P.2 : Original Agreement.
Ex.P.3 : Letter of Award.
Ex.P.4 : Work Done Certificate.
Ex.P.5 : Work Done Certificate.
Ex.P.6&7 : Letters.
Ex.P.8 : Copy of the proceedings dt.19/12/2012.
Ex.P.9&10 : Copies of Legal Notice.
Ex.P.11 : Email Printout.
Ex.P.12 : Meeting Notice issued by defendant No.1.
Ex.P.13 : Letter dt.21/10/2015.
45
CT 1390_Com.O.S.1319-2016_ Judgment.doc Ex.P.14 : Account Extract.
Ex.P.15 : Copy of minutes of meeting dt.29/11/2010.
Ex.P.16 : Copy of letter dt.30/7/2012.
Ex.P.17 : Copy of minutes of meeting dt.20/12/2012.
Ex.P.18 : Copy of letter issued by plaintiff dt.14/2/2013
for handing over plant to KIADB.
Ex.P.19 : Copy of letter dt.10/7/2014 along with
minutes of meeting dt.7/7/2014.
Ex.P.20 : Copy of system application and product
document along with summary of statement
of account of capital expenditure.
Ex.P.21 : Copy of running account bill NO.41 with
covering letter dt.31/3/2010.
Ex.P.22 : Copy of running account bill No.43 with
covering letter dt.31/12/2010.
Ex.P.23 : copy of running account bill No.44 with
covering letter dt.5/3/2012.
Ex.P.24 : Copy of system application and product
document along with summary of statement
of account under the head of operation and
maintenance.
Ex.P.25 : Copies of running account bill No.1 to 24.
Ex.P.26 : Copy of work done certificate dt.26/11/2010.
4. List of documents marked on behalf of Defendants:
Ex.D.1 : Authorization letter.
Ex.D.2 : Letter dt.21/7/2011 issued by Karnataka
State Pollution Control Board.
Ex.D.3 : Letter dt.10/8/2011 issued by Karantaka
State Pollution Control Board.
Ex.D.4 : Letter dt.19/4/2013 issued by Karnataka
State Pollution Control Board.
Ex.D.5 : Meeting Notice dt.16/7/2014.
Ex.D.6 : Letter dt.25/8/2014.
Ex.D.7 : Authorization Letter.
[Ravindra Hegde]
LXXXIII Additional City Civil Judge.
BENGALURU.
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CT 1390_Com.O.S.1319-2016_ Judgment.doc