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[Cites 3, Cited by 0]

Delhi District Court

Manoj Kumar Thakur vs Govt. Of Nct Of Delhi on 17 March, 2015

        IN THE COURT OF MS. SONAM GUPTA, CIVIL JUDGE: N/W
                                 ROHINI COURTS:DELHI



                                                                             CS No. 580/14/12

Manoj Kumar Thakur
C­126, Vijay Vihar
Phase­II, Delhi - 110 085.                                        ..........  Plaintiff


                                             versus


1. Govt. of NCT of Delhi
    Service effected through its
    The Superintending Engineer
    PWD CBM Circle - M 33 
    Bawana Road, Delhi - 110 042

2. The Executive Engineer
    PWD CBM M 333 (GNCTD) 
    Delhi College of Engg. Campus
    Bawana Road, Delhi - 110 042                                  ..........   Defendants




Date of institution of suit                       :       08.10.2012
Date of judgment                                  :       17.03.2015




Manoj Kumar Thakur   v/s.  Govt. of NCT of Delhi & Anr.       CS No. 580/14/12         Page No. 1/19
                                           JUDGMENT

1. By the present judgment, I shall dispose of the suit for recovery of Rs. 1,75,000/­ filed by the plaintiff on 08.10.2012.

2. In brief the case of the plaintiff is as under:

The plaintiff is registered contractor with CPWD and had entered into an agreement for execution of the work of EOR to Aditi Maha Vidyalaya at Bawana Road, Delhi. SH: Replacement of existing RCC slab and providing water proofing treatment on terrace etc vide agreement no. 56/EE(c)/PWD/M­333/2009­10 with stipulated date of start and completion as 24.09.2009 and 23.03.2010 respectively. The stipulated time allowed to complete the work was six months as provided in the contract agreement. The estimated cost put to tender was Rs. 56,43,594/­ and the tendered amount was Rs. 47,93,669 which is 15.06% below the estimated cost put to tender, however, the gross work done was to the tune of Rs. 71,03,954/­ as per V and final bill. The aforesaid work was awarded to the plaintiff vide award letter No. 54(298)/EE/PWD Div M­333/09­10/1930 dated 09/09/2009. It is stated that the work could not be completed within the stipulated period due to change in the scope of the work and also due to delay in handing over of site as the site where the work was to be executed was in running condition and the site was made available to the plaintiff in five parts and further, the decisions on aspects such as flooring were also not provided to the plaintiff in time. The plaintiff had Manoj Kumar Thakur v/s. Govt. of NCT of Delhi & Anr. CS No. 580/14/12 Page No. 2/19 executed the work at war levels and completed the work on 30.11.2010 and communicated the same to defendant No. 2 vide his letter dated 13.12.2010, however, defendant No. 2 had recorded the completion as 28.12.2010 after manipulating the same from 20.12.2010. It is further stated that the work was executed beyond agreement qualities to the tune of Rs. 9,95,888/­ and further extra items were also executed to the tune of more than Rs. 19,48,000/­ approx. It is stated that the defendants had taken a lot of time in deciding the quantum of extra and substituted work and the work was delayed in approving of extra items, substituted items and deviation and in total sanctioning of revised estimate.

3. It is stated that the work could not be executed in full swing for want of site as the site was in occupation by the client department i.e. Principal of Aditi Maha Vidyalaya and for the said reason also, the work got delayed which was beyond the control of the plaintiff. It is further stated that the plaintiff had duly replied to the notice dated 22/03/2012 vide his letter dated 04/04/2012 explaining the cause of delay in execution of the work, however, defendant No. 1 had not considered nor verified the reasons of delay and had imposed penalty under clause 2 of an agreement vide their letter dated 07.05.2012. It is further stated that the plaintiff had submitted an amount of Rs. 1,67,790/­ in the shape of pay order and an amount of Rs. 503/­ was paid as commission for preparing the said pay order and that the same amount is sought in the present suit along with the commission charges and interest @ 12% p.a. since 17/05/2012.

Manoj Kumar Thakur v/s. Govt. of NCT of Delhi & Anr. CS No. 580/14/12 Page No. 3/19

4. It is further stated that the plaintiff had also filed reasons for delay in part I of EOT Performa. It is stated that the Assistant Engineer in charge of the defendants, who had got the work executed had even justified the delay in execution of the work and had recommended the extension of time without levy of compensation. As per the plaintiff, the work was also got delayed for want of non execution of electrical work. Also, the work of plastering stopped for several days for want of non execution of electrical work of conduit pipes. It is stated that the plaintiff had duly completed the work to the entire satisfaction of the department and for this reason also, defendants had no right to impose penalty on the plaintiff. It is further stated that the work was delayed due to faults and omissions on part of the defendants and the plaintiff had suffered huge losses on idle establishment and watch and ward due to lapses on part of the defendants. It is stated that when the defendants admit delay beyond the control of plaintiff and further when the time does not remain the essence of contract, no extension was granted and work was taken by the defendants from the plaintiff, the defendants had no right to impose penalty upon the plaintiff after getting the work completed from the plaintiff. Hence, the present suit has been filed.

5. Summons for settlement of issues were duly served upon the defendants, consequent to which written statement has been filed by the defendants wherein while denying the averments made in the plaint, it is stated that the major delay Manoj Kumar Thakur v/s. Govt. of NCT of Delhi & Anr. CS No. 580/14/12 Page No. 4/19 was on part of the plaintiff and time extension was considered and granted by the Competent Authority of defendants i.e. Superintending Engineer, PWD Maintenance Circle M­33. Delhi with levy of compensation for Rs. 1,67,790.00 under Clause­2 of the Agreement vide officer letter bearing No. 23(25)/SE/M­ 33/1308­Hindi dated 07.05.2012 after issuing show cause notice to the plaintiff vide office letter bearing No. 23(25) /SE/M­33/69­E dated 22.03.2012. It is stated that the said amount of levy of compensation was for the unjustified period of 70 days out of total delay involved for 280 days time extension (@ 1.5 % per month of delay) to be computed on per day basis on the tendered amount as stipulated under Clause - 2 of the Agreement. It is further stated that in terms of Clause­2 of the Agreement, the decision of the Competent Authority of the defendants i.e. Superintending Engineer, PWD Maintenance Circle M­33 was final and binding upon the plaintiff. It is stated that while applying for extension of time, the plaintiff has given undertaking on the body of the EOT Proforma in Part - I that "I am also part and partial responsible for this delay, if my EOT will be granted upto 28.12.2010 without levy of compensation, I will not claim any extra on this ground as requested above even in Arbitration also", therefore, the defendant is not liable for payment of Rs. 1,67,790.00/­ to the plaintiff and it is prayed that the present suit be dismissed.

6. The plaintiff, through his replication, denied the averments of the defendants made in the written statement and reaffirmed the averments made in the plaint. Manoj Kumar Thakur v/s. Govt. of NCT of Delhi & Anr. CS No. 580/14/12 Page No. 5/19

7. On the basis of pleadings of both the parties, following issues were framed by my Ld. Predecessor vide order dated 04.07.2013:­

1. Whether the plaintiff is entitled to recovery of Rs. 1,75,000/­, as prayed for? (OPP)

2. Whether the plaintiff is entitled for interest, if yes for what period and at what rate? (OPP)

3. Whether the suit of the plaintiff is without any cause of action? (OPD)

4. Relief.

8. In support of his case, the plaintiff has examined himself as PW­1 and tendered his affidavit in evidence Ex. PW­1/A wherein the averments made in the plaint were reiterated. The plaintiff placed on record the letter dated 09/09/09 as Ex. PW1/1, letter dated 13.12.2010 as Ex. PW­1/2, statement of extra work as Ex. PW­1/3, letter dated 04.04.2012 as Ex. PW­1/4, letter dated 07.05.2012 as Ex. PW­1/5, extra item statement & substituted item statement Ex. PW­1/6, reply given by PW­1 as Ex. PW­1/7 and register Ex. PW­1/8. PW1 was duly cross examined by Counsel for the defendant. The plaintiff was confronted with a written letter which is Ex. PW­1/D1.

9. After recording the plaintiff's evidence, the matter was fixed for defendants' Manoj Kumar Thakur v/s. Govt. of NCT of Delhi & Anr. CS No. 580/14/12 Page No. 6/19 evidence.

10. In support of its case, the defendants examined Sh. Mahendra Ram as DW­ 1 by way of an affidavit Ex. DW 1/A and he deposed in consonance with the written statement. DW­1 proved completion certificate as Ex. DW­1/1, site order as Ex. DW­1/2, copy of 5th and final bill as Ex. DW­1/3, EOT case file as Ex. DW­1/4 and extracts of agreement as Ex. DW­1/5. DW 1 was duly cross­examined by the counsel for the plaintiff. Thereafter, the DE was closed vide order dated 16.09.2014 and the matter was fixed for final arguments.

11. I have heard the rival contentions of both the parties and have perused the record carefully. The issue wise findings are as under:­ Issue No. 1 & 2 are decided together.

Issue No. 1 and 2.

The onus to prove these issues was upon the plaintiff. The plaintiff has examined himself as PW­1 to prove his contentions. In para 3 of his affidavit, PW­1 has stated as under:

"3. The work could not be completed in time due to false and ommitions on part of defendant No. 2, as due to change in scope of work, handing over of site, delay in taking decision for laying of Kota Stone instead of CC Flooring as the same was taken only in the month of September, 2010 and thereafter, the work Manoj Kumar Thakur v/s. Govt. of NCT of Delhi & Anr. CS No. 580/14/12 Page No. 7/19 was completed on 30.11.2010 and the same was communicated to defendants on 13.12.2010 vide Ex. PW­1/2. However, the defendant had wrongly recorded the completion as 28.12.2010. That as per MAS register also no cement was isued after 10.11.2012."

12. Ld. Counsel for the defendant has cross examined the witness. In his cross examination, the witness has denied the suggestion that the site was made available to him as per the agreement and the work was delayed due to his fault. He has also denied the suggestion that he could not complete the work due to improper planning and arrangement of material and labour at his end.

13. The defendant, on the other hand, has examined Sh. Mahender Ram, Executive Engineer, Maintenance Division, Govt. of NCT of Delhi as DW1. The witness in para­7 of his affidavit has stated as under:

"7. I say that there has been no delay on the part of the defendants in handing over the site. I say that the site of work was handed over for execution of the work on 24.02.2009 as per site order book. Moreover, as per pre requisite condition, Sl. No. 6 at page 4 of the Agreement, it was stated therein that the site for the work is available/will be available in parts and as per condition Sl. No. 11.1 at page 25 of the Agreement it has been stated that the contractor will have to work according to the programme of work, decided by the Engineer In­charge... No extra claim, whatsoever, beyond the payments due at Agreement rates will be Manoj Kumar Thakur v/s. Govt. of NCT of Delhi & Anr. CS No. 580/14/12 Page No. 8/19 entertained from the Contractor on this account. I say that it is incorrect that there has been any delay on the part of the defendant to take decision regarding Kota stone for flooring. It is incorrect that the plaintiff has executed the work at wall level. The letters dated 13.11.2009, 30.12.2009, 30.04.2010, 14.06.2010, 29.07.2010, 12.10.2010, 23.10.2010, 24.11.2010 and 18.12.2010 written by defendant No. 2 to the plaintiff clearly disclose the slow progress and delay caused by the plaintiff in the completion of the work due to mismanagement and the lack of technical resources of the plaintiff. I say that defendant No. 2 in response to letter dated 13.12.2010 of the plaintiff, sent letter dated 18.12.2010 to the plaintiff clearly stating therein that number of items/work are still incomplete and the plaintiff is required/requested to complete the remaining incomplete items and intimate to Junior Engineer/Assistant Engineer of defendant No. 2, hence, it is denied that the plaintiff has completed the work on 30.11.2010, as alleged by the plaintiff vide its letter dated 13.12.2010. It is denied that the defendants have committed any manipulation in recording the completion of the work as 28.12.2010 and not 20.12.2010. I say that during that time no cement was required as only finishing work was to be completed. Hence, I say that non issuance of cement as alleged, is a ground which is false and misleading and cannot be alleged or relied in context of completion of work. I say that even in the EOT application seeking extension of time, the plaintiff has mentioned the date of actual completion of work as 28.12.2010 and not 20.12.2010."
Manoj Kumar Thakur v/s. Govt. of NCT of Delhi & Anr. CS No. 580/14/12 Page No. 9/19

14. Ld. Counsel for the plaintiff has argued that due to fault of the defendant the site at which the work was to be conducted by the plaintiff was not made available to the plaintiff in time and after the said site was made available to the plaintiff in parts, the plaintiff with his full capacity performed the work as and when the space for work was being provided by the defendant. Due to fault of the defendant the work could not be completed on time. Due to non availability of the site the work could not be completed within the stipulated time. Therefore, the delay is attributed to the defendant and not to the plaintiff. It is argued that the defendant has acted arbitrarily by imposing the penalty on the plaintiff.

15. Ld. Counsel for the defendant, on the other hand, has argued that the site of work was always available to the plaintiff. However, the plaintiff did not have enough resources to complete the work at time. Therefore, the work was delayed due to insufficiency of resources with the plaintiff. The plaintiff had to complete the work within a period of six months. Thus the time was essence of the contract. However the work was completed after a delay. Therefore, the defendant has rightly imposed penalty upon the plaintiff as per law.

16. To decide the issue in controversy it is necessary to find whether the time was essence of the contract. The Hon'ble Supreme Court of India in M/s. Hind Construction Contractors v. State of Maharashtra AIR 1979 SC 720 has discussed the issue as to when time is essence of the contract. The principles Manoj Kumar Thakur v/s. Govt. of NCT of Delhi & Anr. CS No. 580/14/12 Page No. 10/19 relied on by the Hon'ble Court and laid down in this judgment read thus:

"7..... In the latest 4th Edn. of Halsbury's Laws of England in regard to building and engineering contracts the statement of law is to be found in Vol. 4, Para 1179, which runs thus :­ "1179. Where time is of the essence of the contract. The expression time is of the essence means that a breach of the condition as to the time for performance will entitle the innocent party to consider the breach as a repudiation of the contract. Exceptionally, the completion of the work by a specified date may be a condition precedent to the contractor's right to claim payment. The parties may expressly provide that time is of the essence of the contract and where there is power to determine the contract on a failure to complete by the specified date, the stipulation as to time will be fundamental. Other provisions of the contract may, on the construction of the contract, exclude an inference that the completion of the works by a particular date is fundamental, time is not of the essence where a sum is payable for each week that the work remains incomplete after the date fixed, nor where the parties contemplate a postponement of completion. Where time has not been made of the essence of the contract or, by reason of waiver, the time fixed has ceased to be applicable, the employer may by notice fix a reasonable time for the completion of the work and Manoj Kumar Thakur v/s. Govt. of NCT of Delhi & Anr. CS No. 580/14/12 Page No. 11/19 dismiss the contractor on a failure to complete by the date so fixed."

(Emphasis supplied) "8. It will be clear from the aforesaid statement of law that even where the parties have expressly provided that time is of the essence of the contract such a stipulation will have to be read along with other provisions of the contract and such other provisions may, on construction of the contract, exclude the inference that the completion of the work by a particular date was intended to be fundamental; for instance, if the contract were to include clauses providing for extension of time in certain contingencies or for payment of fine or penalty for every day or week the work undertaken remains unfinished on the expiry of the time provided in the contract such clauses would be construed as rendering ineffective the express provision relating to the time being of the essence of contract. The emphasised portion of the aforesaid statement of law is based on Lamprell v. Billericay Union, (1849) 3 Exch 283 at p. 308; Webb v. Hughes, (1870) 10 Eq 281 and Charles Rickards Ltd. v. Oppenhaim, (1950) 1 KB 616...."

17. Thus the Hon'ble Court has held that mere stipulating a date for completion of work does not itself makes the time essence of the contract. It can be decided only after construing the other terms of the contract. In the present case, however, Manoj Kumar Thakur v/s. Govt. of NCT of Delhi & Anr. CS No. 580/14/12 Page No. 12/19 none of the parties have filed the original contract between the parties. Therefore there is no occasion to the court to look into the terms of the contract vide which the penalty has been imposed. Hon'ble High Court of Delhi in Gail (India) Ltd. vs Paramount Ltd., decided on 30th April, 2010, in OMP No. 66/2004 & OMP No. 80/2004, has quoted with approval various judgments to show that in building contracts time is not of the essence of the contract in the absence of express words making it so. It has been held:

"Thus, it is well settled that whether time is the essence would be essentially a question of the intention of the parties to be gathered from the terms of the contract. This intention can be inferred also from the responses, actions and state of readiness of the parties in the fulfilment of the contract.
"6.6 In a judgment reported at AIR 1940 NULL 1 Shambhulal Panalal Vaish vs. Secretary of State, the court placed reliance on an earlier pronouncement of the Privy Council in Burn & Co. vs. Lukhdhirji Morvai State MANU/PR/0025/1925. The Privy Council had held that inclusion of clauses in a contract providing for extension of time in certain contingencies and providing for payment of fine or penalty for every day or week for the work undertaken on the contract remains unfinished on the expiry of the time provided in the contract is inconsistent with time being of the essence of a contract and would be calculated to render ineffective an express provision in a contract to that effect. In this behalf, Manoj Kumar Thakur v/s. Govt. of NCT of Delhi & Anr. CS No. 580/14/12 Page No. 13/19 in para 13 and 17 of Shambhulal Panalal Vaish (supra), the court held as follows :­ "13 ............... In Halsbury's Laws of England, Vol. 3, paras. 378, 379, the law on this question is thus stated:
"In building contracts time is not of the essence of the contract in the absence of express words making it so, as the subject of the contract is not such as to, make the completion of time essential. And the mere insertion of words making time of the essence of the contract will be ineffective if they are inconsistent with other terms of the contract."

xxx "17. xxxxx And this certainly accords with commonsense. To say in one breath that time is of the essence of a contract but that the period provided in the contract may be extended is a contradiction in terms; to say that time is of the essence of a contract and at the same time to provide the levy of a daily or weekly fine or penalty for non completion on due date is no less a contradiction in terms. Confronted with this difficulty the learned Advocate­General has referred us to a passage in Vol. 3 of Halsbury's Laws of England which appears at p. 280 in paragraph 511 which reads thus:

"511. **** In many cases the time fixed by the contract ceases to be applicable on account of some act or default of the employer or his architect. A provision therefore is generally inserted, in order to avoid Manoj Kumar Thakur v/s. Govt. of NCT of Delhi & Anr. CS No. 580/14/12 Page No. 14/19 such acts or defaults destroying the right to liquidated damages, by which the architect is empowered to grant an extension of time in certain specified events, and the contractor is bound, in case such an extension has been properly granted, to complete within the extended time. This has the effect of substituting for the time fixed by the contract a new time from which the liquidated damages are to run. * * * *" But such a new time can only be substituted for the original time, under such a power, where the extension is given under the circumstances and in the events expressly stipulated by the contract. Thus, a power to extend the time in: the event only of strikes or other causes beyond the contractor's control would not authorize an extension of time for delay in giving to the contractor possession of the site....."
"6.7 It is settled law that in construction contracts, generally time is not of the essence of the contract unless special features exist therefore. It was so held in (2006) 11 SCC 181 McDermott International Inc. vs. Burn Standard Co. Ltd. & Ors. Mere incorporation of the term that time is of essence of the contract would not ipso facto render it so if the same is the matter of construction keeping in view the facts and circumstances which are brought out on record.
Manoj Kumar Thakur v/s. Govt. of NCT of Delhi & Anr. CS No. 580/14/12 Page No. 15/19

18. I have gone through the material available on record. On the basis of the material available I am unable to reach at conclusion that the time was essence of the contract. The conduct of the defendant during the execution of the work also does not show that the time was essence of the contract. Thus, the defendant has not proved that the time was of the essence of the contract.

19. Document Ex. PW1/1 is a letter of the defendant dated 09.09.2009 by which the contract was awarded to the plaintiff for the work in question. As per this letter, the work was to be completed within six months from the day of its starting i.e.,24.09.2009. Thus, the plaintiff was required to complete the work by 23.03.2010. It is not disputed that the plaintiff had started the work. The show cause notice dated 22.03.2012 was duly replied by the plaintiff vide letter dated 04.04.2010 which is exhibited as Ex. PW1/4. In this letter the plaintiff has explained the reasons for delay in completion of the work. Perusal of this document would show that the plaintiff has explained day to day delay and its reasons in the letter. The plaintiff has explained, inter­alia, that the work could not be completed due to substitution of the item of the work, non­availability of the site and due to non­availability of the cement.

20. In his cross examination no suggestion has been put to the witness that the department had conducted inquiry after receiving of the letter. There is no material Manoj Kumar Thakur v/s. Govt. of NCT of Delhi & Anr. CS No. 580/14/12 Page No. 16/19 on record to show that any such inquiry was ever conducted by the department. Again, there is no suggestion to the witness that the work was not foreclosed by the defendant.

21. It is not disputed that there was a total delay of 280 days from the stipulated day of completion of work and a penalty for delay of 70 days was imposed upon the plaintiff vide letter dated 07.05.2012. A conjoint reading of Ex. PW­1/8 which is the register for the site and Ex. DW­1/XX1 which is the hindrance register reveals that initially the site was not made available to the plaintiff from 24.09.2009 to 04.11.2009 i.e. 42 days due to the fact that classes were going on at the site and it has also been stated that the site would be made available to the plaintiff in phases. Further, it is also revealed that the work could not be started initially due to non­availability of structural drawings. Work at the site was also held up due to festival programmes and other activities in the college. From the material on record it is also revealed that the site was made available to the plaintiff in parts and on many occasions, the progress of the work at the site was hindered which is attributable to the defendant. Delay also occurred on account of various other reasons viz. Exams being conducted in the classrooms, non­laying of electric conduct in walls, non­handing over a part of site by the college authority as is revealed by Ex. DW­1/XX1.

22. With respect to date of completion of work, it has been admitted by DW­1 in Manoj Kumar Thakur v/s. Govt. of NCT of Delhi & Anr. CS No. 580/14/12 Page No. 17/19 his cross­examination that the date as mentioned in Ex. DW­1/1 which is the measurement book seems to be over written from 20.12.2010 to 28.12.2010. It is also stated in cross­examination of DW­1 that the department has incurred a financial loss due to delay in the exercise of the work and the loss is not in terms of money. It has further been stated that no document has been placed on record to show that the department has incurred any monetary loss. Moreover, Ex. DW­1/4 reveals that the Assistant Engineer had stated in the same that the department has not incurred any financial loss.

23. In the light of the discussion herein above, I am of the considered opinion that the plaintiff has shown on the balance of probability, that the delay in completion of the work is attributable to the factors such as nonavailability of site regularly due to change in the nature of the work, due to non­laying of electric conducts and due to late decision with regard to laying of Kota stone instead of cement concrete. Therefore, these issues are decided in favour of the plaintiff and against the defendant.

Issue No. 3

The onus to prove the said issue was on the defendant. However, the defendant has not led any evidence to show that no cause of action has arisen in favour of the plaintiff. Perusal of material available on record would show that Manoj Kumar Thakur v/s. Govt. of NCT of Delhi & Anr. CS No. 580/14/12 Page No. 18/19 the plaintiff was awarded a contract by the defendant for certain work. It is also admitted that the plaintiff had completed the work. It is also not disputed that the defendant had imposed a penalty of Rs.1,67,790/­ upon the plaintiff. Therefore, the arguments of the defendant that the no cause of action has arisen is without merit. Hence, this issue is decided in favour of the plaintiff and against the defendant. Relief The suit of plaintiff is decreed. The defendant is liable to pay Rs. 1,75,000/­ along with an interest of 9% p.a. from the date of institution of the suit till the date of realization of the decretal amount. Cost of the suit be also awarded to the plaintiff. Decree sheet be prepared accordingly. File be consigned to the record room.

Announced in the open court on 17 March, 2015.

th (SONAM GUPTA) Civil Judge (N/W) Rohini Courts, Delhi 17.03.2015 Manoj Kumar Thakur v/s. Govt. of NCT of Delhi & Anr. CS No. 580/14/12 Page No. 19/19